The Subject Matter of Patents IIThe Subject Matter of Patents II

Class Notes: April 8, 2003Class Notes: April 8, 2003

Law 677 | Patent Law | Spring 2003Law 677 | Patent Law | Spring 2003

Professor WagnerProfessor Wagner

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Today’s AgendaToday’s Agenda

1.1. The Subject Matter of Patents:The Subject Matter of Patents: The The Supreme Court’s most recent Supreme Court’s most recent statementsstatements

2.2. The Federal Circuit’s ResponseThe Federal Circuit’s Response

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Statutory Subject MatterStatutory Subject Matter

Diamond v ChakrabartyDiamond v Chakrabarty (1980) (1980)• Claims:

[1] process of producing a bacterial organism[2] method of using a bacterial organism[3] the bacterial organism itselfWhy does the examiner allow [1] and [2] but not [3]? (Does this make practical sense?)

• As a matter of statutory construction, is a bacterial organism a ‘composition of matter’ or ‘manufacture’?o What does the Court suggest is the ‘real’ issue here?

• So what is the ‘rule’ of Chakrabarty? (What living things are patentable? Which are not?)

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Statutory Subject MatterStatutory Subject Matter

Diamond v DiehrDiamond v Diehr (1981) (1981)• Claim: process for curing synthetic rubber

(includes the use of a formula)• What is the ‘rule’ of Diehr?

a) Cannot patent mathematical formulas ‘in the abstract”?

b) “When a claim containing a mathematical formula implements or applies that formula in a structure or process which, when considered as a whole, is performing a function which the patent laws are designed to protect (e.g., transforming or reducing an article to a different state or thing), then the claim satisfies the requirements of § 101.”

a)After Diehr, is software patentable? Business models?

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Statutory Subject MatterStatutory Subject Matter

The Supreme Court’s ApproachThe Supreme Court’s Approach

Two categories of impermissible subject matter:Two categories of impermissible subject matter:

1.1. Living thingsLiving things• What does the court mean by ‘living things’?• See, e.g., Diamond v Chakrabarty

2.2. Abstract ideasAbstract ideas• What does the court mean by ‘abstract ideas’?• See, e.g., Diamond v Diehr

What, if anything, do these categories have in What, if anything, do these categories have in common? Is § 101 the right place to hang such common? Is § 101 the right place to hang such

a concern?a concern?

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The Federal Circuit’s ResponseThe Federal Circuit’s Response

In re AlappatIn re Alappat (Fed Cir. 1994) (Fed Cir. 1994)• What is the claimed invention?• Is it an algorithm? (A ‘mathematical algorithm’? )

o What does the court say about the ‘mathematical algorithm exception?

• Why does the court suggest this claim is patentable?o Is this consistent with the rule of Diamond v Diehr? o Why do you think the court places weight on the

machine vs process distinction?

• The court suggests that software is easily patentable on pp 798-99. Do you agree with the reasoning? (Again, is this consistent with Diehr?)

• Consider the Archer dissent: after Alappat, can you patent music? (How? Any problem with this?)

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The Federal Circuit’s ResponseThe Federal Circuit’s Response

State Street BankState Street Bank (Fed. Cir. 1998) (Fed. Cir. 1998)• What is the claimed invention? • What is the claim format? (Is this important?)• The court considers two “exceptions” to statutory

subject matter:o The ‘business’ method exceptiono The ‘mathematical algorithm’ exception

– What is the ‘test’ for this exception? (How does the calculation of share prices meet that test?)

– How does this differ from the analysis in Alappat? Is it closer -- or further -- from Diehr? What does the court say about ‘transformations’?

o Does the focus on whether the claim does something “useful” suggest anything about the scope of the § 101 subject matter requirement?

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The Federal Circuit’s ResponseThe Federal Circuit’s Response

AT&T v ExcelAT&T v Excel (Fed. Cir. 1999) (Fed. Cir. 1999)• What is the claimed invention? (What is the

claim format?)• Why is this claim not subject to the § 101

exceptions?• What was the AT&T court trying to do in its

lengthy discussion of the caselaw? (Do you agree with its conclusion?)

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Overview of Subject Matter Overview of Subject Matter ExceptionsExceptions

Two basic categories of exceptions:Two basic categories of exceptions:

1. Natural phenomena1. Living things: e.g., natural organisms

• But see Chakrabarty, allowing non-natural (isolated, purified) living organisms to be patented

2. Laws of nature: e.g., Einstein’s theory of relativity• Basic theory of exclusion: lack of novelty, concerns

about overbreadth

2. Abstract ideas1. Mathematical algorithms

• But see AT&T/State Street, allowing “useful” algorithms to be patented

2. Basic theory of exclusion: concerns about lack of utility, overbreadth

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Why have Subject Matter Why have Subject Matter Exceptions?Exceptions?

Is there an affirmative case for more Is there an affirmative case for more robust subject matter exceptions?robust subject matter exceptions?

1. Norms-based objections

2. Industry custom (e.g., financial industry)

3. Economic concerns: “certain technologies

are better innovated without patents”

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Next ClassNext Class

Patent Economics II Patent Economics II Approaches to the Patent System Approaches to the Patent System