“Paul presented a very valuable program on SOPA, copyrights and trademarks—important stuff for anyone working in public relations or corporate communications,” said Beverly Freeman, an IABC member and organizer of the event.

Juhasz also covered copyrights, trademarks and the Stop Online Piracy Act (SOPA); how copyrights differ from trademarks and other forms of intellectual property; copyright value and how it correlates to business strategy; how to register and protect copyrights; and copyright infringement issues.

Regarding the Stop Online Piracy Act (SOPA), Juhasz described its potential impact on creative professionals and accessibility of online content if passed into law. For more information about this presentation, contact The Juhasz Law Firm at www.patenthorizon.com.

About The Juhasz Law Firm

The Juhasz Law Firm is a patent and intellectual property (IP) protection, counseling, licensing and litigation firm. Combining deep patent/IP experience, broad capabilities across a wide spectrum of industries and technologies, and extensive expertise in strategic counseling, The Juhasz Law Firm collaborates with clients to help them better see, understand and realize the potential strategic value from their patents and intellectual property. Paul R. Juhasz has written extensively on matters of software patents, including the Bilski software patent decision, and has published on matters of diagnostic method patents, including an amicus brief recently filed in the Prometheus case before the U.S. Supreme Court.

• Erring on the side of caution, the Supreme Court  turns 35 U.S.C. 101 on its head in Prometheus; opening the door for courts to decide questions of fact in diagnostic method patent claims

On March 20, 2012, in the much anticipated diagnostic method patent claims case of Mayo v. Prometheus, the Supreme Court struck down diagnostic method claims as unpatentable subject matter under 35 U.S.C. 101.  The claims recited a “correlation” between metabolite levels and likely harm or ineffectiveness of thiopurine drugs to treat autoimmune diseases. The claims also required an (1) an “administering” step—administering a drug to a subject; (2) a “determining” step—determining the level of 6-thioguanine in the subject ; and (3) a “wherein” step—describing the need to increase or decrease the amount of the drug based upon the level of the 6-thioguanine concentrations in the blood.

That the Court found the “correlation” step to be a law of nature is not surprising. On the other hand, the Court’s analysis involving the remaining steps of the diagnostic method patent claims, which applied this law of nature, is not only surprising but may arguably have turned the law of 35 U.S. C. 101 subject matter patentability on its head. The Court held that the remaining recited elements of “determining,” and “administrating,”  and the “wherein” recitation are “well known in the art” and so added nothing to the claims for purposes of subject matter patentability.  Slip. Op. 11 Thus, the Court held that the claims preempt the law of nature “correlation” and so are unpatentable subject matter.  Id.

It is hornbook patent law that questions of fact are questions for the jury to decide. By deciding Prometheus on the basis that the recited elements that are applying the “correlation” are “well known in the art,” the Court in effect has introduced a question of fact into the 35 U.S. C. 101 analysis. In addition, the Court has left it to the courts to decide this question of fact; thereby empowering the courts to decide questions which are typically the province of the jury to decide. On both counts, the Court’s precedent in Prometheus  flies in the face of hornbook patent law on 35 U.S.C. 101, which is historically decided as a question of law.

The Prometheus  decision may have been a knee-jerk reaction by the Court to the perceived wrong of upholding diagnostic method patent claims that are “well known in the art,” and the analysis by the Court may have been the best way the Court could think of to strike down those claims and right that wrong. Yet the 35 U.S.C. 101 question of the subject matter patentability of the claims arguably could have been limited to an analysis focusing on whether the claims recite any man made application of — in this case, of a law a nature — under the sun that is not an insignificant extra-solution activity; even if the man-made application is “well known in the art.”

Those Prometheus claims could arguably have been invalidated in a later proceeding by the lower court with the jury deciding whether the claims are “well known,” that is, anticipated or obvious, under 35 U.S. C. 102, 103.  For now though, Prometheus  stands as the law of the land on questions to be decided under 35 U.S. C. 101 involving claims reciting a law of nature, and arguably claims reciting a natural phenomenon or an abstract idea by extension. Until overruled by the Court or Congressional legislation, the take-away from Prometheus  for practitioners is that at least one recitation that is not an extra-solution activity that is crafted into a claim must apply a recited law of nature in a way that that the recited application is not “well known in the art.”

We continue to believe that the “physical” or “virtual” links test provides a viable solution to the Court’s continuing struggle in dealing with subject matter questions that are close to the boundary line that defines what is subject matter patentable. If a law of nature, a fundamental principle, or an abstract idea (the three judicially created exceptions to subject matter patentability) is recited in the claims, the “physical” or “virtual” links test on the claim as a whole will help ensure that these recitations are significant and are being “applied” through man-made “physical or virtual links” or “manipulations” of something physical or tangible to move the application beyond a preemption. Absent the “physical” or “virtual” links, the claims preempt the law of nature, the fundamental principle, or the abstract idea. For more on this approach to claim drafting go to Physical and Virtual Links.

Nonetheless, with the unintended consequences of the Court’s Prometheus  decision, we also recommend our clients and colleagues to pay close attention to the significant recitations in the claims that apply the law of nature, the fundamental principle, and the abstract idea. Each practitioner crafting claims should play the role of a trier of fact in deciding whether these recitations are “well known in the art.”

Hopefully, going forward, the law on 35 U.S.C. 101 will evolve in a way that will one day return the subject matter patentability question to a question of law; leaving questions of facts to the jury to decide under 35, U.S.C. 102 and 103, where the Court’s analysis in Prometheus arguably more properly belongs.

The Juhasz Law Firm can help you to better understand the effect of Prometheus  on your patents. Your patents may be your most important asset. For more information regarding this cases and advice on how these decisions may affect your patents, and to help protect your patents, contact Juhasz Law, the firm committed to Guiding Your Patent Beyond The Horizon (sm).

• Split Dealertrack  Court sinks abstract clearinghouse method claims reciting a “computer aided method”; but “means-plus-function” claim helps keep other software patent alive for another day[1]

The patent community continues to seek clarification on the post-Bilski boundary.  The Dealertrack v Huber case gets us a little closer.

In Dealertrack, the Federal Circuit provides one more new post-Bilski precedent on what constitutes patentable subject matter; this time in connection with software patents. On January 20, 2012, in a split decision, the Federal Circuit affirmed the invalidity of software patent claims because they preempted a general concept. The two patents before the court U.S. Patent No. 7,181,427 (“’427 Patent”) and U.S. Patent No. 6,587,841 (“’841 Patent”) were directed to a computer aided use of a clearinghouse specifically for car loan applications.

The ‘427 pre-empted the abstract idea of a clearinghouse, the court held, because the term “computer” did nothing more than the general computer in Benson, one of the trilogy of cases relied upon by the Supreme Court in its Bilski decision.  Slip Op. 36

Unlike in its predecessor Ultramercial decision where “the patent claimed [a computer having] a practical application with concrete steps requiring an extensive computer interface,” the claimed computer in Dealertrack was neither a specific computer nor was involved in the method claims, the court explained. Ibid. The recited computer amounted to an extra-solution activity that is not meaningful in the subject matter patentability analysis. Ibid.

With the general computer removed from the subject matter patentability equation, the court found only the restriction of the clearinghouse process to a “car loan” field of use recited in the claims to be of any consequence in the Bilski analysis.  Slip Op. 37  But like the recited computer, the “car loan” field of use restriction was nothing more than an extra-solution activity that, like the recited computer, was not meaningful in the subject matter patentability analysis, the court said.  Ibid. The court found the limitation in the claim of restricting the general clearinghouse method to car loans in Dealertrack to be no different than the limitation in Bilski of restricting the general method of hedging to the energy market. Ibid.  When the claims were stripped of the limitations to a “computer” and the “car loans” field of use restriction, all that remained were claims that recited a general concept; the preemption of which is prohibited and hence is not subject matter patentable under the Bilski precedent.  Slip Op. 35

Just as important for what the Dealertrack court said about the ‘427 patent claims is what the court said about the claims of the ‘841 patent some of which were written in means-plus-function format and which arguably for that reason dodged the Bilski bullet.[2][3]^[4]  As noted by the court, the application-specific algorithms described in the specification and incorporated into the means-plus-function recitation of the ‘841 patent made those ‘means-plus-function’ claims specific computers. “[I]n a means-plus-function claim ‘in which the disclosed structure is a computer, or microprocessor, programmed to carry out an algorithm, the corresponding] structure is not the general purpose computer, but rather the special purpose computer programmed to perform the disclosed algorithm,” the court explained.  Slip. Op. 25  In contrast, the “computer” recited in the ‘427 patent was without the structure of the algorithmic limitations found in the specification. As a general purpose computer that carried no weight in the subject matter patentability analysis, the ‘427 claims amounted to no more than the preemption of the clearinghouse abstraction, the court held.   Slip Op. 36.

Hence, claiming software using means-plus-function language may provide one way to protect the software patent against a Bilski challenge since it can make a computer recited in a claim, “application specific,” as compared to a general purpose computer that may carry little weight in the Bilski analysis. Another may be to draft the claim so that one or more of the recited limitations physically or virtually links the data manipulated by the software to a physical or tangible object. This approach is what we at Juhasz Law have suggested as the test for accurately defining the boundary line beyond which a business, software, or diagnostic method preempts a fundamental idea.  By using the physical or virtual links argument, your claims may also be written much broader than by using means-plus-function language, since you are not limiting the claims to the specification but are allowing the claim to cover any uses to which the claimed invention may be put. For more on this approach to claim drafting go to Physical and Virtual Links.

The Juhasz Law Firm can help you to better understand the effect of Dealertrack on your software patents.  For more information regarding these cases and advice on how these decisions may affect your patents, please contact The Juhasz Law Firm. Your patents may be your most important asset.  To help you protect your patents contact Juhasz Law, the firm committed to Guiding Your Patent Beyond The Horizon℠.

Juhasz Law cites U.S. Supreme Court precedent in Diehr for the “physical links” assertion and the century-old Morse decision for its “virtual links” contention. The firm argues in its 35-page brief that the way out of the Bilski conundrum may be found by determining whether a step central to the Prometheus claim has either a “physical” or a “virtual” link to a specific physical or tangible object.

Juhasz Law argues in the Supreme Court brief that the Prometheus claims contain both a “physical” and also a “virtual” link and thus should be found “subject matter patentable under 35 U.S.C. §101.”

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The U.S. Supreme Court is scheduled to hear oral arguments on December 7, 2011 in this highly anticipated decision that may significantly affect approaches to diagnostic methods including methods critical to the development of personalized medicine.  For a copy of the Juhasz Law amicus filing with the U.S. Supreme Court go to Publications Page.

The Juhasz Law Firm has filed an amicus brief in Mayo Collaborative Services v. Prometheus Laboratories, Inc. The filing brings before the Supreme Court for the first time the argument of “physical” and “virtual” links, a framework for considering the subject matter patentability of an invention. In Prometheus, this determination will be made in connection with diagnostic method patents involving “observed correlations.”

The amicus brief was filed on Tuesday, November 1, 2011 and the U.S. Supreme Court is scheduled to hear oral arguments on December 7. A highly anticipated decision, Prometheus is likely to have significant affect on how the courts approach diagnostic methods patents, including methods critical to the development of personalized medicine.

The “physical link” and “virtual link” patent claim approach was developed by Juhasz Law to help patent holders find a way out of the Bilski conundrum by defining the boundary line beyond which a claim preempts a fundamental principle (i.e., a law of nature, natural phenomenon, or an abstract idea) and within which the claim does not.

Under this approach, the clue to 35 U.S.C. §101 subject matter patentability lies in whether steps that are central to the claim (i.e., not token extra-solution activity) have a “physical” or “virtual” link to a specific physical or tangible object. In support, Juhasz Law cites U.S. Supreme Court precedent in Diamond v. Diehr for the “physical links” assertion and the century-old O’Reilly v. Morse decision for its “virtual links” contention, two of the bedrock cases decided by the Supreme Court in this area of the law. Amicus Juhasz Law argues that the Prometheus claims have both a “physical” and a “virtual” link and so should be subject matter patentable under 35 U.S.C. §101.

While prior considerations of Bilski have referenced the fifth claim of Morse, this argument breaks new ground by focusing on data that is a representation of a physical or tangible object and its manipulation, thus creating a “virtual” link. There is also a symmetry that exists between a “virtual” link (e.g., data manipulating data representing a physical or tangible object) and a “physical” link (e.g., data manipulating a physical or tangible object), such as of the kind that existed in Diehr (e.g., data signaling a device when to open the molding press and remove the cured rubber product) that adds further weight to the argument.

For a copy of Juhasz Law’s amicus filing with the U.S. Supreme Court go to Publications Page.
The Juhasz Law Firm helps patent holders better understand the value of their intellectual property. For more information about “physical” and “virtual” links and how this approach can help patents withstand a post-Bilski challenge, read Virtual Links.

On September 15, 2011, the Federal Circuit rendered its decision in Ultramercial v. Hula, which provides further needed guidance on how to determine whether software claims are subject matter patentable under 35 U.S.C. 101.  In Ultramercial, the Federal Circuit was asked to decide whether a method for distributing copyrighted products over the Internet was subject matter patentable.  In a unanimous decision written by Chief Judge Rader, the Court reversed the lower court in finding the 7,346,545 patent “process” claims to be patent-eligible subject matter within the meaning of 35 U.S.C. 101.

As the Court opined, these claims were subject matter patentable because they required “complex programming” to implement and they recited a “specific application to the Internet and a cyber-market environment”.  Slip Op. 11  The Court explained that “one clear example is the third step, “providing said media products for sale on an Internet website,” and another is that “they must be “restricted” – step four – by complex computer programming as well.”  Id.  The Court was careful to point out that the limitation of a software claim to a “specific application to the Internet” is not a measure of subject matter patentability in all cases; even though this factor is one that contributed to the finding of the Court that the ‘545 patent contains patent-eligible subject matter.  “Complex computer programming”, on the other hand, provides that measure of subject matter patentability the Court impliedly explained when stating that “[t]his court does not define the level of programming complexity required before a computer-implemented method can be patent-eligible.”  Id.  (“Viewing the subject matter as a whole, the invention involves an extensive computer interface.” Id.)

Still, the Court appears reluctant to expressly pronounce “complex computer programming” as the measure for gauging subject matter patentability of software, perhaps wary that limiting the measure to any one test might be viewed as a “bright-line rule” that recent history has shown to find disfavor with the Supreme Court.

Ultramercial is also significant in the absence of any discussion of the “functional and palpable test”, which was articulated by Chief Judge Rader in Research Tech last December for use in determining subject matter patentability questions.  This may indicate a growing realization of the Court about the subjectivity of the “functional and palpable test” for use as a yardstick for measuring subject matter patentability questions; a concern that we voiced as well in our Juhasz Law Blog on Research Tech.  While more subjective than the “functional and palpable test”, the “complex computer programming test” of Ultramercial still begs the question of just what amount of programming is required before the computer programming may be deemed to be “complex computer programming” sufficient to allow the software claims to pass through the subject matter patentability filter.  In our Juhasz Blog on Cybersource, we voiced the same concern with the “performed in the human mind, or by a human using a pen and paper” test espoused by the Court in Cybersource (i.e., just how many calculations must the claim perform before a software claim satisfies that test).  Thus, Ultramercial, like its predecessor Cybersource, is likely to go down only as an important next step in the evolution of jurisprudence in this area toward a test that can be more objectively applied and lead to more consistent results.

At Juhasz Law, we have suggested in the past that the test for accurately defining the boundary line beyond which a business, software, or diagnostic method preempts a fundamental idea may lie in whether the method steps recite a physical or virtual link to something real. There must be a physical or virtual link of data manipulated by the software, for instance, to a physical or tangible object.  That is, a real or tangible object must be manipulated by data as in Diehr.  Or data representing a real or tangible object must be manipulated as in the Fifth claim of Morse. Both Ultramercial and Cybersource cases appear to support this view that the link of data to, that is, the manipulation of, something “real” may provide the clue to the patent eligibility of a business, software, or diagnostic method.  For more on “virtual links” and “physical links” and their use, go to Physical and Virtual Links.

As yet another sign that the Court may be stepping away from the use of “bright-line” rules in Federal Circuit jurisprudence is Chief Judge’s discussion in Ultramercial of the role of claim construction in determining subject matter patentability questions.  As Chief Judge Rader explained, “[t]his court has never set forth a bright line rule requiring district courts to construe claims before determining subject matter eligibility” (Slip Op. 4, 5), before the Court went on to deciding that the subject matter of the ‘545 patent does not require claim construction.  Id.  At Juhasz Law, we believe that claim construction helps to clearly frame the Bilski subject matter patentability question.  For that reason, we draft claims for our clients with this in mind; specifically building into the claims the physical and virtual links that we believe minimize the exposure of the claims to a Bilski challenge.

The Juhasz Law Firm can help you to better understand the effect of Ultramercial on your software patents.  For more information regarding these cases and advice on how these decisions may affect your patents, please contact The Juhasz Law Firm. Your patents may be your most important asset. To help you protect your patents contact Juhasz Law, the firm committed to Guiding Your Patent Beyond The Horizon℠.

On August 31, 2011, the Federal Circuit rendered its decision in Classen v. Biogen Idec. which may become the gold standard for making subject matter patentability determinations in cases involving transformative steps; squarely addressing the issue of “insignificant or token activity” (e.g., “insignificant post solution activity”) raised by the Supreme Court in Bilski  but now in connection with subject matter involving transformations.  

In Classen, the Federal Circuit was asked to decide whether three patents on a method for improving an immunization schedule involving method claims directed to identifying a safe vaccine regimen and involving a step of immunizing mammals is patentable subject matter.  The patents before the Court were U.S. Pat. Nos.  6,638,739; 6,420,139; and 5,723,283.

In a 2-1 majority, the Court reversed the lower court in finding the ‘139 and ‘739 patents to contain subject matter patentable under 35 U.S.C. 101 while affirming the lower court finding that the ‘283 patent is not patentable subject matter.  Following an unremarkable analysis of the case under its “functional and palpable test” (“If the specified method is “functional and palpable,” the court stated, the claims are drawn to statutory subject matter.” Slip Op. 17), the Classen court went on to analyze the claims in what may be the real take-away from this decision – namely, the implied replacement of the traditional notion that generally all transformative steps are patentable subject matter with a “subject matter patentability filter” through which all transformation steps in a claim must pass. Slip Op. 19  In Classen, claims of one of the three patents before the court, the ‘283 patent, failed to pass the “subject matter patentability filter” impliedly because they amounted to an insignificant or token activity.  Id.  As the court explained, “[t]he “immunizing” in the ’283 patent refers [only] to the gathering of published data, while the immunizing of the ’139 and ’739 patent claims is the physical implementation of the mental step claimed in the ’283 patent.”  Id.

The different treatment given by the Court to the two sets of patents turned on how the immunization step was construed by the Court.  In the ‘139 and ‘739 patents the recitation occurred after a screening step was performed to derive an immunization schedule for use in the immunization step and in the ‘283 the immunization step was recited before a comparing step to generate data for use in the comparison step.  While facially both sets of patents recited “immunization steps” that were transformative, the court opined that the “immunizing step” of the ‘283 patent failed to pass through the “subject matter patentability filter”   Slip Op. 19, 20.  A transformation for data gathering purposes to develop a body of knowledge as was recited in the ‘283 is not patentable the court held while a transformation that “puts this knowledge to practical use” as was recited in the ‘139 and ‘739 patents comports with 35 U.S.C. 101. Slip Op. 21  As explained by the court, “The principles applied in Prometheus support the patent eligibility of the Classen claims that include such transformative steps, but are not relevant to claims that require no more than referring to known information but do not include immunization in light of that information.” Slip Op. 22

In her dissent, Judge Moore found disfavor with the court’s use of the “functional and palpable” test pointedly questioning: “How do we determine whether any given method or claim is “functional” or “palpable?”  Dissent 12.  In our Juhasz Blog on Research Tech, we too posed the same question.  There we said that this “functional and pulpable” standard in defining whether a claim preempts a fundamental idea (“palpable” is defined by Merriam-Webster dictionary to mean “capable of being touched or felt”) provides little guidance on determining the preemption issue and is reminiscent of the phrase made famous by Justice Potter Stewart in the obscenity case of Jacobellis v. Ohio that “I know it when I see it”. 

The Classen court provides further useful insight as to what the “functional and palpable test” means when it predicated its analysis under the test using phrases like “specific, tangible application” (Slip Op. 18) and “concrete, physical step (Slip Op. 20).   In her dissent, again critical of such reasoning, Judge Moore pointedly questioned: “Is this a return to the rejected notions of “useful, concrete, and tangible?”  We too find the Court’s use of  “concrete, physical step” and the “specific, tangible application” type of analytical framework in its analysis to be eerily reminiscent of the “useful, concrete, and tangible result” test that the court used in deciding State Street and AT&T, a decision that the dicta of the Supreme Court in Bilski made clear that “nothing in today’s opinion should be read as endorsing interpretations of §101 that the Court of Appeals for the Federal Circuit has used in the past. See, e.g., State Street, 149 F. 3d, at 1373; AT&T Corp., 172 F. 3d, at 1357.”  For more go to Juhasz Law Blog on State Street Bank and AT&T Lessons.

The Classen decision showcases the continuing struggle of the Court to define the boundary line beyond which a claim preempts a fundamental principle.  The problem, as the Court explained is that “[t[he Court in Bilski v. Kappos did not define “abstract,” and Justice Stevens observed in concurrence that “[t]he Court, in sum, never provides a satisfying account of what constitutes an unpatentable abstract idea,” 130 S. Ct. at 3236.”  Slip. Op. 16.  The solution in the eyes of the Federal Circuit is the “functional and palpable” test which provides that definition. Slip Op. 17.

Still, Classen is likely to become the gold standard for making subject matter patentability determinations in cases involving transformative steps; squarely addressing the issue of “insignificant or token activity” (e.g., “insignificant post solution activity”) raised by the Supreme Court in Bilski  but now in connection with subject matter involving transformations. Classen impliedly may have signaled the end to the general presumptive patentability of transformation claims.  Transformative steps that are mere data gathering steps may now be treated no differently than a general computer is treated in a software patent, that is, as an insignificant post-solution activity.  Classen also points to the wisdom of the Supreme Court in striking down the Federal Circuit’s “machine-or-transformation” test as the exclusive test for determining subject matter patentability.  The transformative step that was deemed to be unpatentable subject matter under Classen could likely have been found to be patentable subject matter under the MOT test. 

In reforming the treatment of transformation steps, Classen is likely to have a big impact on diagnostic methods and chemical process patents by extension. Classen Immuno v. Biogen Idec is a must read for practitioners dealing with Bilski issues.  For a more comprehensive discussion of Classen Immuno v. Biogen Idec and take-aways including suggested tips for use in drafting diagnostic and chemical method claims, go to the September 2011 Juhasz Law Advisory.

The Juhasz Law Firm can help you to better understand the effect of Classen Immuno v. Biogen Idec on your biotechnology, diagnostic, and chemical patents.  For more information regarding these cases and advice on how these decisions may affect your patents, please contact The Juhasz Law Firm. Your patents may be your most important asset. To help you protect your patents contact Juhasz Law, the firm committed to Guiding Your Patent Beyond The Horizon℠.

On August 16, 2011, the Federal Circuit rendered its decision in Cybersource v. Retail Decisions which provides needed guidance on how to determine whether claims are subject matter patentable under 35 U.S.C. 101.  In Cybersource, the Federal Circuit was asked to decide whether a method and a Beauregard claim directed to detecting credit card fraud which utilizes information relating credit card transactions to particular “Internet addresses” was subject matter patentable.  In a unanimous decision, the Court affirmed the lower court in finding claims 2 and 3 of the 6,029,154 patent invalid under 35 USC 101 for failing to recite patent-eligible subject matter. 

Following an unremarkable machine-or-transformation test analysis, the Cybersource  Court went on to analyze the claims in what may be the real take-away from this decision – namely, an analysis of claims for subject matter patentability using the model provided by the Bilski  Supreme Court.  That model involves defining the patentability boundary line for these claims beyond which claims of this type preempt a fundamental principle and within which these claims may be patentable subject matter.  The court defined that boundary line with these claims by the question “Can it be performed in the human mind, or by a human using a pen and paper?” 

In holding claim 3 to fall outside the patentability boundary line and so to preempt an abstract idea, the Court explained that “[a]ll of claim 3’s method steps can be performed in the human mind, or by a human using a pen and paper. Claim 3 does not limit its scope to any particular fraud detection algorithm, and no algorithms are disclosed in the ’154 patent’s specification. Rather, the broad scope of claim 3 extends to essentially any method of detecting credit card fraud based on information relating past transactions to a particular “Internet address,” even methods that can be performed in the human mind.” Slip Op. 12.

In holding the Beauregard claim 2 to be unpatentable, the court explained that the claim recites nothing more than a computer readable medium containing program instructions for executing the method of claim 3.  Slip Op. 16  The method underlying claim 2 being clearly the same method of fraud detection recited in claim 3, the Court held claim 2 to be likewise invalid as unpatentable subject matter.

The court was unpersuaded by the argument that the Beauregard claim was a 35 U.S.C. §101 “machine” and not a “process” on which Bilski was decided.  The court deemed the Beauregard claim ultimately to be a claim on a process and the recited computer readable medium an insignificant post-solution activity. Slip Op. 17, 18.  “Here, the incidental use of a computer to perform the mental process of claim 3 does not impose a sufficiently meaningful limit on the claim’s scope. Slip 19  In so holding, the court appears to be heeding the Bilski Supreme Court caveat that “[t]o hold otherwise would allow a competent draftsman to evade the recognized limitations on the type of subject matter eligible for patent protection”.  For more on the likely spill-over effects of Bilski into categories of subject matter other than a “process”, read Juhasz White Paper - Bilski and Software.

The Federal Circuit seems intent on adhering to its “functional and palpable test”, a test that was articulated in Research Tech for use in determining subject matter patentability questions.  The Court in a contemporaneous case Classen made this crystal clear when it stated that “[i]f the specified method is “functional and palpable, the claims are drawn to statutory subject matter.” Classen, Slip Op. 17  But by deciding the software claims based on whether the steps of the software can be performed in the human mind, or by a human using a pen and paper and not on whether the software method was “functional and palpable”, the Cybersource Court may be indicating its own concern about the subjectivity of the “functional and palpable test” for use as a yardstick for measuring subject matter patentability questions.  In our Juhasz Law Blog on Research Tech, we voiced the same concern.  There we said that that the “functional and palpable” standard in defining whether a claim preempts a fundamental idea (“palpable” is defined by Merriam-Webster dictionary to mean “capable of being touched or felt”) provides little guidance on determining the preemption issue and is reminiscent of the phrase made famous by Justice Potter Stewart in the obscenity case of Jacobellis v. Ohio that “I know it when I see it”.  By analyzing these software claims in this way, Cybersource may be signaling the morphing of the very subjective “functional and palpable test” into arguably a more objective standard of “can it be performed in the human mind, or by a human using a pen and paper test”.

Still, Cybersource begs the question of just how many calculations must the claim perform before it is deemed to contain patentable subject matter because it cannot be “performed in the human mind, or by a human using a pen and paper”.  Thus, Cybersource is likely to go down only as an important next step in the evolution of jurisprudence in this area toward a test that can be more objectively applied and lead to more consistent results.

At Juhasz Law, we have suggested in the past that the test for accurately defining the boundary line beyond which a business, software, or diagnostic method preempts a fundamental idea may lie in whether the method provides a physical or virtual link to something real. There must be a physical or virtual link to a physical or tangible object.  That is, a real or tangible object must be manipulated by data as in Diehr.  Or data representing a real or tangible object must be manipulated as in the Fifth claim of Morse. Both Cybersource and Classen cases appear to support this view that the link of data to, that is, the manipulation of, something “real” may provide the clue to the patent eligibility of a business, software, or diagnostic method.  For more on “virtual links” and “physical links” and their use, go to Physical and Virtual Links.

Cybersource is a must read for practitioners dealing with Bilski issues.  For a more comprehensive discussion of Cybersource and take-aways including suggested tips for use in drafting diagnostic method claims, go to the September 2011 Juhasz Law Advisory.

The Juhasz Law Firm can help you to better understand the effect of Cybersource on your software patents.  For more information regarding these cases and advice on how these decisions may affect your patents, please contact The Juhasz Law Firm. Your patents may be your most important asset. To help you protect your patents contact Juhasz Law, the firm committed to Guiding Your Patent Beyond The Horizon℠.

In Association for Molecular Pathology[1], a decision rendered on July 29, 2011, the Federal Circuit was asked to decide whether isolated DNA containing naturally-occurring human BRCA1/2 gene sequences linked to breast and ovarian cancer, on which the USPTO issued a patent in accordance with its nearly 30 year practice of granting patents on DNA sequences so long as those sequences are claimed in the form of “isolated DNA”[2], constitutes patentable subject matter under 35 U.S.C. §101.  In a 2-1 majority, the Court decided that isolated DNA indeed is subject matter patentable but the majority was unable to agree on the reason why – if new, is it per se patentable? Or does it also require a demonstration of “new usefulness” to be patentable.

Writing for the majority decision, Judge Lourie concluded that the challenged claims are drawn to patentable subject matter because the claims cover molecules that are markedly different—have a distinctive chemical identity and nature—from molecules that exist in nature.  Slip Op. 41  What made isolated DNA markedly different, according to Judge Lourie, is that “[i]solated DNA has been cleaved (i.e., had covalent bonds in its backbone chemically severed) or synthesized to consist of just a fraction of a naturally occurring DNA molecule. (emphasis added)  Slip Op. 42   Once cleaved, an isolated DNA molecule is no longer a purified form of a natural material, but a distinct chemical entity.  Slip Op.  43, 44  (emphasis added)

In so deciding, Judge Lourie seems to be implying that if a chemical structure is “markedly different” than it per se satisfies both “new” and “useful” prongs of 35 U.S.C. 101; although he never seems to address how the marked differences in chemical structure of the different sequences claimed satisfy the “useful” prong of 35 U.S.C. 101 other than by stating that “isolating genes to provide useful diagnostic tools and medicines is surely what the patent laws are intended to encourage and protect”. Slip Op. 47

In Judge Moore’s opinion, the different chemical structure does not alone as Judge Lourie opined make isolated DNA markedly different. (“[A]lthough the different chemical structure does suggest that claimed DNA is not a product of nature, I do not think this difference alone necessarily makes isolated DNA so “markedly different,” Chakrabarty, 447 U.S. at 310, from chromosomal DNA so as to be per se patentable subject matter. Cf. Funk Bros., 333 U.S. at 130-31 (Creation of “a new and different composition” of bacterial strains was nevertheless not patentable subject matter).) (emphasis added) Slip Op. Moore, 14, 15.

According to Judge Moore, “markedly different” also requires the isolated DNA to have the potential for “significant utility”.  Citing the teaching that “[i]n Chakrabarty the intervention of man resulted in bacteria with “markedly different characteristics” from nature and “the potential for significant utility,” resulting in patentable subject matter,” (447 U.S. at 309-310; Funk Bros., 333 U.S. at 131)(emphasis added), Judge Moore explained that, “I analyze the isolated DNA claims to determine whether they have markedly different characteristics with the potential for significant utility, e.g., an “enlargement of the range of . . . utility” as compared to nature”. (emphasis added)  Moore 7    Given these structural differences, the Court must, in the words of Judge Moore, “as precedent instructs, consider whether these differences impart a new utility which makes the molecules markedly different from nature.” (emphasis added) Id. 

The shorter isolated DNA sequences imparted such a “new utility”, opined Judge Moore, since shorter isolated DNA sequences have a variety of applications and uses in isolation that are new and distinct as compared to the sequence as it occurs in nature and so are subject matter patentable.  Moore  15, 16  On the other hand, long isolated DNA have no such clear new utility as compared to nature, Judge Moore explained, and so should be unpatentable.  Id.  Nonetheless, Judge Moore decided that they too are patentable since they have become immunized from subject matter patentability challenge given the settled expectations and extensive property rights. Moore 17-19  (“The patents in this case might well deserve to be excluded from the patent system, but that is a debate for Congress to resolve.”  Moore 31)

In his dissent, Judge Bryson found the structural differences between isolated and natural DNA to be irrelevant and opined that “[t]he use to which the genetic material can be put, i.e., determining its sequence in a clinical setting, is not a new use; it is only a consequence of possession”  (emphasis added)  Dissent 13.  

As to diagnostic method claims, the Court held the method claims reciting “comparing” and “analyzing” two gene sequences to fall outside the scope of 35 USC 101 because they claim only abstract mental processes.  Slip Op. 49, 50 As the Federal Circuit observed,   “[t]his claim thus recites nothing more than the abstract mental steps necessary to compare two different nucleotide sequences: look at the first position in a first sequence; determine the nucleotide sequence at that first position; look at the first position in a second sequence; determine the nucleotide sequence at that first position; determine if the nucleotide at the first position in the first sequence and the first position in the second sequence are the same or different, wherein the latter indicates an alternation; and repeat for the next position.”  Slip Op. 50  The Court distinguished the recited “determining step” in Prometheus on the basis that here, the claims called for nothing more than a visual inspection of the results unlike in Prometheus where the metabolite levels could not be determined by mere inspection alone, the determining step requiring a transformation.  Slip Op. 52.  (e.g., such as by a high pressure liquid chromatography method or some other modification of the substances to be measured.)

The Court did reverse the lower court, however, on the method claims directed to screening potential cancer therapeutics via changes in cell growth rates, holding them to be patentable subject matter. Slip Op. 53   The Court found the steps of “growing”, “determining”, “comparing” to be central to the invention and ruled out these steps as being abstract mental steps because each was “transformative” in nature; which the Court stated was an “important clue” that it is drawn to patent-eligible process citing Bilski.  Slip Op. 53

Finally, on the threshold issue of declaratory judgment jurisdiction, the Court unanimously affirmed the district court’s decision to exercise declaratory judgment jurisdiction; but only as to Dr. Ostrer with jurisdiction as to the others reversed.  Myriad’s ten-year silence on enforcement of a patent Myriad had asserted but never took off the table did not extinguish the declaratory judgment right under the totality of circumstances.  Slip Op. 31

For a more comprehensive discussion of Association for Molecular Pathology and take-aways including suggested tips for use in drafting diagnostic method claims, go to the August 2011 Juhasz Law Advisory.

The Juhasz Law Firm can help you to better understand the effect of Association for Molecular Pathology on your biotechnology and diagnostic patents.  For more information regarding these cases and advice on how these decisions may affect your patents, please contact The Juhasz Law Firm. Your patents may be your most important asset. To help you protect your patents contact Juhasz Law, the firm committed to Positioning Your Patent Beyond The Horizon℠.

For more on Association for Molecular Pathology go to the August 2011 Juhasz Law Advisory.

Stanford v. Roche

In Stanford v. Roche, Cetus developed methods for quantifying blood-borne levels of human immunodeficiency virus (HIV), the virus that causes AIDS.  Cetus began to collaborate with Stanford.  Dr. Holodniy joined Stanford and signed an agreement with Stanford to assign his “right, title, and interest in” inventions resulting from his employment at Stanford.  In collaborating with Cetus, to gain access to Cetus, Dr. Holodniy signed an agreement stating that he “will assign and do(es) hereby assign” to Cetus his “right, title, and interest in . . . the ideas, inventions, and improvements” made “as a consequence of [his] access” to Cetus.  Together with Cetus, Dr. Holodniy devised a PCR-based procedure for measuring the amount of HIV in a patient’s blood which the successor company to Cetus through acquisition, Roche, commercialized.  Stanford filed for patents on the inventions and sued Roche.  Roche countered that its agreement with Dr. Holodniy gave it co-ownership of the patents, and thus Stanford had no standing to sue.  Stanford responded that Dr. Holodniy had no rights to assign because the University had superior rights under the Bayh-Dole Act.

The District Court held that the Bayh-Dole Act trumped the employer agreements.  The Federal Circuit disagreed, concluding that the Bayh-Dole Act did not divest an inventor of his rights in federally funded inventions.  Because as between Stanford and Cetus, Stanford only had an agreement to assign whereas Cetus had an actual assignment, the Federal Circuit held that Dr. Holodniy assigned his rights to Cetus and thus to Roche.

The only question before the Court in Stanford was whether the Bayh-Dole Act displaces the norm and automatically vests title to federally funded inventions in federal contractors.  The Supreme Court held that it did not.

The Court began its analysis with the fundamental tenet that under US patent law, the rights in an invention belong to the inventor.  The Court explained that while an invention may be assigned, employment alone does not give rise to assignment. Since the first Patent Act, the basic idea that inventors have the right to patent their invention has not changed.  Mere employment is insufficient to vest title to an employee’s invention in the employer.  An employee agreement is required.   Slip Op. 10.

The Bayh-Dole Act applied here because the invention flowed from federally funded research.  However, the Court held that the Bayh-Dole Act does not reorder this priority of inventors by moving the inventor from the front of the line to the back by vesting title to federally funded inventions in the inventor’s employer – the federal contractor.  Slip op. 8. There is no unambiguous language in the Bayh-Dole Act of the kind that Congress uses to divest inventors of their rights in inventions by specifying that inventions created pursuant to federal contracts becomes the property of the contractors or United States or anyone else .  Slip Op. 8.  Indeed, the Act reinforces that title vests in the inventor by providing that contractors may “elect to retain title”. Slip Op. 11.  In other words, they may keep title to whatever they may already have.  Slip Op. 11.  Here, Stanford never had the patent that it could “elect to retain” because Stanford never got an assignment of the invention from Dr. Holodniy. 

In short, only when an invention belongs to the contractor does the Act come into play.  Slip Op. 12  As the Court explained, “[t]he Act clarifies the order of priority of rights between the Federal Government and a federal contractor in a federally funded invention that already belongs to the contractor.  Nothing more.” (emphasis added) Slip op. 12

It is for this reason, the Court maintained, that universities typically enter into agreements with their employees requiring the assignment to the university of rights in inventions.  With an effective assignment, those inventions – if federally funded – become “subject inventions” under the Act, and the statute works the way Stanford says it should.  Slip op. 15.  It does so without violence to the basic principle of patent law that inventors own their inventions.  Slip Op. 15.

Here, Stanford did not have such an assignment in place and so the Bayh-Dole Act does not apply.

The Juhasz Law Firm can help you to better understand the effect of Stanford on your patents. For more information regarding Stanford and advice on how this decision may affect your patents, please contact The Juhasz Law Firm.

Your patents may be your most important asset. To help you protect your patents contact Juhasz Law, the firm committed to Positioning Your Patent Beyond The Horizon℠.

For an analysis on Prometheus v. Mayo go to Supreme Court Round-up – Part 1 of 3:  Certiorari Granted in Prometheus.

For an analysis on Global-Tech Appliance v. SEB go to Supreme Court Round-up – Part 2 of 3:  “Willful Blindness” Induced Infringement as Culpable as Actual Knowledge in Global-Tech.