Patent Eligible Subject Matter: Where Are We
Now?
A Presentation to CPTCLA
September 23, 2011
Mike Connor
Alston & Bird LLP
Atlanta | Brussels | Charlotte | Dallas | Los Angeles | New York
Research Triangle | Silicon Valley | Ventura County | Washington D.C.
Presentation Outline
 Patent Statutes
 In re Bilski in the Federal Circuit
 In re Bilski in the United States Supreme Court
 Treatment of Process (and other) Claims After Bilski
 Questions
-2-
What is Patentable?
 35 U.S.C. § 101
 Whoever invents or discovers any new and useful process, machine, manufacture,
or composition of matter, or any new and useful improvement thereof, may obtain a
patent therefor, subject to the conditions and requirements of this title.
 35 U.S.C. § 100(b) Definitions
 The term “process” means process, art or method, and includes a new use of a
known process, machine, manufacture, composition of matter, or material.
 Statutory subject matter “may include anything under the sun that is
made by man”

S.R. REP. NO. 82-1979 (1952), reprinted in 1952 U.S.C.C.A.N. 2394, 2399.
 Exceptions:

laws of nature, natural phenomena, and abstract ideas
-3-
Federal Circuit- Bilski v. Kappos
 Bernard Bilski and Rand Warsaw appealed PTO’s rejection of their
claim for a method for handling energy hedge funds
 Patent examiner held that invention was not patentable subject matter under § 101
 B.P.A.I. affirms
 In 2008, the Federal Circuit affirmed rejection of patent claims
 Federal Circuit reiterated the machine-or-transformation test as the test for patent
eligible subject matter
 “A claimed process is surely patent-eligible under § 101 if: (1) it is tied to a
particular machine or apparatus, or (2) it transforms a particular article into a
different state or thing.”
 The machine or transformation “must impose meaningful limits on the claim’s scope . . . .”
 The machine or transformation “must not merely be insignificant extra-solution activity.”
-4-
Supreme Court – Bilski v. Kappos
 In June 28, 2010 opinion,
SCOTUS held:
 Bilski’s claims are not patentable
 “abstract ideas” are not patentable
 “machine or transformation test” –
while useful – is not the exclusive test
for determining whether a business
method is patentable
 declined to adopt a test to determine
patentability of a business method
-5-
-6-
-7-
-8-
-9-
-10-
-11-
-12-
-13-
-14-
Bilski-related Financial cases
 Graff/Ross Holdings LLP v. Federal Home Loan Mort. Corp.,
(D.D.C. Aug. 27, 2010) (Process for generating a purchase price
for at least one component of property using a computer)
 Bancorp Services, L.L.C. v. Sun Life Assur. Co. of Canada,
(E.D.Mo. Feb. 14, 2011) (A system for administering and tracking
the value of separate account life insurance policies)
 CLS Bank Intern. v. Alice Corp. Pty. Ltd., (D.D.C. Mar. 9, 2011)
(Patents directed to help reduce the settlement risk of trades of
financial instruments using a computer system)
-15-
Bilski-related Financial cases continued…
 Accenture Global Services, GmbH v.
Guidewire Software, Inc.,
(D.Del. May 31, 2011)(Software
capable of performing tasks relating
to insurance transactions)
 CyberSource Corp. v. Retail
Decisions, Inc., (Fed. Cir. (Cal.) Aug.
16, 2011) (Method and system for
detecting fraud in credit card
transaction between consumer and
merchant over the Internet)
-16-
Bilski-related Cases: Medical
 The Ass'n For Molecular Pathology v. U.S. Patent and Trademark
Office, (Fed.Cir.(N.Y.) Jul 29, 2011) (Patents for isolated DNA
sequences, methods for identifying mutations)
 Prometheus Laboratories, Inc. v. Mayo Collaborative Services,
(Fed.Cir. (Ca.) Dec 17, 2010) (Methods for calibrating proper dosage
of drugs)
 Intervet Inc. v. Merial Ltd., (Fed.Cir.(Dist.Col.) Aug 04, 2010) (DNA
encoding of a type of porcine circovirus)
 King Pharmaceuticals, Inc. v. Eon Labs, Inc., (Fed.Cir.(N.Y.) Aug 02,
2010) (Methods of informing patients about and administering muscle
relaxant)
 Classen Immunotherapies Inc. v. Biogen Idec et al., (Fed. Cir. (Md.)
Aug. 31, 2011) (Evaluating a vaccine immunization schedule)
-17-
Bilski-related Computer cases
 Research Corp. Technologies, Inc. v.
Microsoft Corp.,
(Fed.Cir.(Ariz.) Dec 08, 2010)
(Method/apparatus for rendering a
half-tone digital image)
 Ultramercial, LLC v. Hulu, LLC,
(C.D.Cal. Aug 13, 2010)
(Distributing copyrighted material
over the Internet)
 Glory Licensing LLC v. Toys R Us,
(D.N.J. May 16, 2011) (A system for
processing information from a
template file to an application)
-18-
Bilski Take Aways
 M-O-T test is still the principal test for patent eligibility of processes
 “A claimed process is surely patent-eligible under § 101 if: (1) it is tied to a particular machine
or apparatus, or (2) it transforms a particular article into a different state or thing.”
 The machine or transformation “must impose meaningful limits on the claim’s scope . . . .”
 The machine or transformation “must not merely be insignificant extra-solution activity.”
 Courts then look at whether the claimed subject matter is drawn to
unpatentable subject matter
 “laws of nature, physical phenomena, and abstract ideas” are not patentable
 Mental Processes are considered abstract ideas
 Mental Processes, performed in the human mind or with pen and paper, are abstract
ideas (Cybersource)
-19-
Machine Prong
 a machine “must play a significant part in permitting the claimed
method to be performed”
 CyberSource Corp. v. Retail Decisions, Inc., (Fed.Cir.(Cal.) Aug 16, 2011) (citing
SiRF Tech., Inc. v. Int’l Trad. Comm’n)
 A “facilitator” is too broad of a term; “Internet” is not a machine
 Ultramercial, LLC v. Hulu, LLC, (C.D.Cal. Aug 13, 2010) (Distributing
copyrighted material over the Internet)
 If the machine is merely an object where the method operates, then that
will weigh against patentability
 Graff/Ross Holdings LLP v. Federal Home Loan Mortg. Corp., (D.D.C. Aug 27,
2010) (Process for generating a purchase price for at least one component of
property using a computer)
-20-
Machine Prong continued…
 Simply reciting the use of a programmed computer does not satisfy the
machine prong since it adds nothing more than a general purpose
computer that has been programmed in an unspecified manner to
implement functional steps in the claim
 Glory Licensing LLC v. Toys R Us, (D.N.J. May 16, 2011) (A system for
processing information from a template file to an application)
 Coupling of an unpatentable mental process with a machine or
manufacture does not make the invention patentable
 CyberSource Corp. v. Retail Decisions, Inc., (Fed.Cir.(Cal.) Aug 16, 2011)
(Method and system for detecting fraud in credit card transaction between
consumer and merchant over the Internet)
-21-
Transformation Prong
 “analyzing” and “comparing” two gene sequences were abstract ideas;
Steps of “growing cells” were deemed transformative
 The Ass'n For Molecular Pathology v. U.S. Patent and Trademark Office
(Fed.Cir.(N.Y.) Jul 29, 2011) (Patents for isolated DNA sequences, methods for
identifying mutations)
 “administering” drugs is a transformative; “determining” the levels of
drugs in a subject also involves transformation since the step involves a
manipulation of the bodily sample
 Prometheus Laboratories, Inc. v. Mayo Collaborative Services, (Fed.Cir.
(C.A.) Dec 17, 2010)
 King Pharmaceuticals, Inc. v. Eon Labs, Inc., (Fed.Cir.(N.Y.) Aug 02, 2010)
-22-
Transformation Prong continued…
 Claim directed at variations in immunization schedules does not
include a transformation, however including the subsequent act of
immunization is a transformation
 Classen Immunotherapies Inc. v. Biogen Idec et al., (Fed. Cir. (Md.) Aug. 31,
2011) (Evaluating a vaccine immunization schedule)
 Transferring of data between computers is not transformative
 Ultramercial, LLC v. Hulu, LLC, (C.D.Cal. Aug 13, 2010)
 Glory Licensing LLC v. Toys R Us, (D.N.J. May 16, 2011)
 Gathering data is not transformative
 Bancorp Services, L.L.C. v. Sun Life Assur. Co. of Canada, (E.D.Mo. Feb 14,
2011)
 Collection and organization of data is not transformative
 CyberSource Corp. v. Retail Decisions, Inc., (Fed.Cir.(Cal.) Aug 16, 2011)
-23-
Abstract Ideas
 Mental processes, processes that can be
done without the aid of a machine and can
be done in the human mind, are considered
abstract ideas
 Example from CyberSource
 Mental processes include (1) obtaining
information about transactions which can be
done by a human reading records; (2)
constructing a map of the records can be done
by hand; and (3) using the map to determine
whether the credit card is valid can also be done
by a person (CyberSource Corp. v. Retail
Decisions, Inc., (Fed.Cir.(Cal.) Aug 16, 2011)
-24-
Abstract Ideas continued…
 Method reciting “computing a price” was
held to be abstract
 Graff/Ross Holdings LLP v. Federal Home Loan
Mortg. Corp., (D.D.C. Aug 27, 2010)
 Inventions with specific applications or
improvements in technology “are not likely
to be so abstract…”
 Research Corp. Technologies, Inc. v. Microsoft
Corp., (Fed.Cir.(Ariz.) Dec 08, 2010) (stating
the patent made it more efficient to render halftone images using a computer)
-25-
Questions
-26-
THE END
-27-