“The Implications of In re Bilski on the Field of Biotechnology”

 “The Implications of In re Bilski on the Field of Biotechnology”

Kristen M. Hoover

Patent Engineer

Moxon & Spriegel, LLC

www.mspatentlaw.com

Patent and Trademark Attorneys

August 27, 2009

INTRODUCTION

The field of biotechnology is constantly changing and ever growing.  In any field where new innovations are constantly being developed, securing a patent is an essential step for any company or inventor in protecting their advancements.  Biotechnology is a field where only the surface has been scratched and the possibility of future innovations is limitless.  No one can know with any certainty exactly what will be developed or in what direction the field will go.  In the past, the door to patentability has been wide open, allowing and indeed promoting research and development in a multitude of areas of biotechnology. 

The recent In re Bilski case, which has been granted review by the Supreme Court, some believe, has limited the scope of what is patentable, especially in the field of biotechnology.  The Federal Circuit, acting en banc, held that the “machine-or-transformation” test is the sole test of subject matter eligibility for a claimed process.  Many cases help shape and determine the idea of what is patentable subject matter, but the Bilski case and all its surrounding discussion seem to have the entire field of biotechnology on the edge of their seats wondering if the effects of the decision will stifle the field altogether.

BACKGROUND

          The patent applicants, Bernard L. Bilski and Rand A. Warsaw, filed a patent application in April 1997 to obtain a patent for a method of hedging risk.  This type of patent is a business method patent.  While originally business method patents were not considered patentable subject matter, the decision in State Street Bank & Trust Co. v. Signature Financial Group, Inc. was that if “it produces a useful, concrete and tangible result” then a business method could be patented.[1]  The patent examiner initially rejected the applicants’ claims.  The rejection was then appealed to the Board of Patent Appeals and Interferences (“BPAI”), where the §101 rejection was sustained in March 2006, but on different grounds.  The applicants then appealed to the Federal Circuit, where the rejection was affirmed in October 2008 by the court holding the claims were not directed to “patent-eligible subject matter” under the machine-or-transformation test.[2]  In February 2009, the applicants then petitioned the Supreme Court for writ of certiorari.  The Supreme Court granted certiorari in June 2009.[3]  

A.      PTO Proceedings

The patent examiner of the Bilski invention rejected all the claims under 35 U.S.C. § 101 for not being directed to the “technological arts.”  The examiner denied the patent application under 35 U.S.C. § 101 on the grounds “the invention is not implemented on a specific apparatus and merely manipulates [an] abstract idea and solves a purely mathematical problem without any limitation to a practical application, therefore, the invention is not directed to the technological arts.”[4]  The decision of the examiner relies on a “technological arts” test, specifically the examiner relies on In re Musgrave.[5]  The claims did not refer to a machine or specific apparatus and so the examiner claimed they referred to an abstract idea and were without “practical application in the technological arts.”[6]

The BPAI held the examiner erred by relied on the technological arts test because there is no supporting case law for applying such a test as a “separate and distinct test for statutory subject matter.”[7]  Instead, the BPAI applied the three tests set forth in Ex parte Lundgren[8], (1) the “transformation test”, (2) the “abstract idea test”, and (3) “useful, concrete, and tangible result test.”[9]  The BPAI affirmed the §101 rejection because (1) the claims did not relate to a patentable transformation, (2) the claims are directed to an abstract idea, and (3) the claimed invention did not produce a useful, concrete and tangible result.[10]  The BPAI found that the application failed the State Street Bank test as well.  Thus, even though the rejection was affirmed, the reasoning differed from the examiner’s reasoning.

B.      Federal Circuit Decision

The applicants then appealed to the Federal Circuit.  The Federal Circuit upheld the rejection applying yet another test, the machine-or-transformation test, and finding the applicants’ claims failed said test.[11]  The court identified that the basis for patenting business methods originally stems from 35 U.S.C.S § 101.  While the court recognized that a process could be patented, the meaning of the word “process” when referring to patentable subject matter is narrower than its ordinary meaning and if the process claims “laws of nature, natural phenomena, or abstract ideas,” it will not be patentable.[12]  The court identified the question presented stating:

The true issue before us then is whether Applicants are seeking to claim a fundamental principle (such as an abstract idea) or mental process. And underlying legal question thus presented is what test or set of criteria govern the determination by the Patent and Trademark Office or courts as to whether a claim to a process is patentable under §101 or, conversely, is drawn to unpatentable subject matter because it claims only a fundamental principle.[13]

 

The Federal Circuit looked to Supreme Court precedent to answer whether the applicant’s claims are patentable or not and noted that the machine-or-transformation test of Benson is “the clue to patent-eligibility.”[14]

For the claimed process to be patentable under the machine-or-transformation test, it must either (1) be tied to a particular machine or apparatus or (2) transform a particular article into a different state or thing.[15]  The Federal Circuit noted that the machine implementation prong of the test was not at issue as the applicants admitted that the language of the claim did not limit any process step to any particular machine or apparatus and left the “elaboration of the precise contours of machine implementation” test to future cases.[16]  With regard to the second prong of the transformation test, the Federal Circuit explained that the transformation must be central to the purpose of the claimed process and the article must be a physical object or substance, or representative of a physical object or substance.[17]  Abstractions cannot pass the test because “they are not physical objects or substances, and they are not representative of physical objects or substances.”[18]  The court found that the applicants’ claims failed the second prong because “the process at most incorporates only such ineligible transformations.”[19]      

The Federal Circuit held that the machine-or-transformation test is the “only applicable test” when evaluating the patent eligibility of process claims.[20]  The validity of other tests is also considered, particularly: the Freeman-Walter-Abele test[21], the State Street test[22], the technological arts test[23], and the physical steps test[24].[25]  The court ultimately found these tests to be insufficient in determining patent-eligibility of process claims.

The court found the Freeman-Walter-Abele test inadequate because it evaluates “on the basis of individual limitations.”[26]  The court noted that the State Street test provided clues as to whether a claim is a fundamental principle or a practical application of a fundamental principle, but concluded that the test was not sufficient to determine patent-eligibility under section 101.[27]  The technological arts test was rejected because the meanings of the words “technology” and “technological arts” are constantly changing and ambiguous and no court has ever adopted the test.[28]  Finally, the court clarified that the physical steps test was not actually meant to be a new test, the case was simply noting that the Supreme Court has held mental processes not patentable, and that the machine-or-transformation test had actually been applied.[29]

In supporting their conclusion that the machine-or-transformation test is the correct test, the court pointed out that two corollaries to the machine-or-transformation test flowed from Diamond v. Diehr.[30]  First, Diehr stated that mere limitations to the field of use are insufficient to create eligibility for an ineligible process.[31]  Second, Diehr also recognized that insignificant post-solution activity would not create eligibility in an otherwise ineligible process.[32]    

The court also clarified that Bilski only deals with a section 101 analysis and there are still other factors to consider in analysis of other sections from the Patent Act.  For example, Bilski noted that in considering patent-eligibility an examination of novelty and non-obviousness are unnecessary as those elements are irrelevant in a section 101 analysis.[33]  The court reiterated that patent-eligibility must still be determined by considering the patent as a whole.[34] 

In his concurring opinion, Judge Dyk discusses the ever-changing landscape of technology, but how important it is to stay true to the intent of the framers of the Constitution as the patentability of new technologies is examined.  Judge Dyk emphasizes that the judiciary is not meant to rewrite statutes to allow for the patenting of “methods for organizing human activity that do not involve manufactures, machines, or compositions of matter.”[35]  Judge Dyk points to the intent of Congress and believed methods like those claimed in Bilski were never meant to enjoy patent protection.[36]  The concurrence agrees with the majority that the machine-or-transformation test is the correct test and the claims fail that test.

Judge Newman, the only judge who believed that the Bilski method claimed patent-eligible subject matter, dissented contending that the majority’s decision was an improper restriction on process inventions under Section 101.[37]  Judge Newman stated that the majority’s opinion and the statutory history along with prior interpretations are in conflict.  She stated the court has improperly redefined “process” and “it is inconceivable that the drafters of the Patent Act intended to impose the limitations on ‘process’ now created by this court.”[38]  She points to Benson[39], Flook[40], and Chakrabarty[41] to show that courts have held the meaning of process to be broad and encompassing.[42]  A broader interpretation of the word process would allow the Bilski claims under section 101.  Her conclusion is that if the claims are to be rejected it should be on a different ground because only section 101 has been examined. 

In another dissent, Judge Rader agreed with the majority that the Bilski claims were directed to unpatentable, but urged a simpler approach. He states the decision should have been one sentence “Because Bilski claims merely an abstract idea, this court affirms the Board’s rejection.”[43]  Judge Rader believes the majority’s long opinion and discussion only “disrupts settled and wise principles of law.”[44]  He would instead turn to the plain language of the Patent Act, where he sees no exclusion of any type of method in the use of the word “process.”[45]  This would mean there is nothing wrong with business method patents or natural phenomenon patents.  Justice Rader believes the majority only “propagates unanswerable questions.”[46]   

The dissent by Judge Mayer discusses the Bilski claims’ ineligibility simply by being business method patents, claiming they lack constitutional support because they “hinder rather than promote innovation and usurps that which rightfully belongs in the public domain.”[47]  He calls for an explicit overrule of State Street[48] stating, the “time is ripe to repudiate State Street and to recalibrate the standards for patent eligibility.”[49]    

C.      Supreme Court

The applicants’ petitioned for a writ of certiorari seeking to overturn the decision.  The petition criticized the machine-or-transformation test set forth by the Federal Circuit as too strict “despite [the] Court’s precedent declining to limit the broad statutory grant of patent eligibility.”[50]  Several brief of amici curiae were filed supporting the petitioners’ writ of certiorari and asking the court to throw out the machine-or-transformation test as it conflicts with precedent and unnecessarily and unfairly narrows the scope of eligibility.  The Supreme Court granted the writ of certiorari in June of 2009.[51]  Due to the limiting test set in place by the Federal Circuit, the petitioners claim the time is right for the Supreme Court to weigh in.[52]     

ANALYSIS

Clearly, Bilski is a case fraught with differing opinions.  Through every step, different tests have been used to analyze the patent-eligibility of the claims.  While, thus far, the conclusion has been to reject the claims despite the test applied, it is obvious from the Federal Circuit’s dissents that there remains a dispute as to whether business methods can be or should be patented at all.  A decision disallowing patents for business methods would certainly change the face of the patent system in general.  It would also greatly influence the field of biotechnology, though exactly what changes are open to speculation.

The newest advancements in science and fields that are on are the rise makes up a group of emerging technologies.  Emerging technologies often experiment and develop ideas that would be beyond the imagination of most.[53]  With the exponential growth of capabilities of new technologies and computers’ abilities to perform faster and faster, technology and ideas from Star Trek and science fiction novels become reality.[54]  The field is so popular there are endless amounts of magazines, blogs, and conferences dedicated to the vast field of emerging technologies.  Due to the exponential rate of development, it is not possible to know or anticipate exactly what ideas and possibilities in technologies will be the cutting-edge explored next or what the next five, ten, fifteen years will bring us in the way of developments.  As technology develops into unfamiliar areas, a balance must be struck between the legislation involving those technologies and accommodating for growth in the field of emerging technologies.  After all, the legislation is not meant to stifle innovation, but to “promote the Progress of Science and useful Arts.”[55] 

A.      Bilski Is Too Strict

The petitioners’ recognize that “frontier technologies have always challenged the PTO and the courts.”[56]  The petitioners’ contend “mounting uncertainty over how the PTO and courts will apply the ‘machine-or-transformation’ test threatens innovation in established fields that are central to the U.S. economy, such as computer software and biotechnology.”[57]  Any uncertainty in the ability for frontier technologies to patent their newest developments stifles their ability to grow.  Other countries will be quick to step in and take over those fields, while the United States sits back watches its dominance in science and innovation dwindle and slowly disappear altogether.

In a rapidly growing field like biotechnology, the cost of development and research is incredibly high and also difficult to calculate.[58]  One of the incentives to invest in such an expensive endeavor is patent protection.  The power to grant patents was put into the United States Constitution with that very idea in mind, “to promote the Progress of Science and useful Arts.”[59]  Patents have thus become a sort of life-blood for any field of innovation and biotechnology is no different.  Patents are the “DNA for biosciences companies.”[60]  For an industry so heavily reliant on the patent system, any decision that severely limits patent eligibility would predictably have serious repercussions.  Some industry members believe that without patent protection the biotechnology world’s business model collapses.[61]  The promise of patent protection, and its limited monopoly, is unrivalled when talking about incentives for investing in developing technologies.  The limited monopoly is a reward for the inventor for investing his time and money.  Without the promise of a patent to reward investment, there would almost certainly be a decline in innovations.  A drastic decline could essentially cripple the industry because no one would be willing to waste his or her time and money with the risk of losing it all.  Part of the appeal of a patent is that it provides an opportunity to make back money invested and to capitalize on being the first to invent.  By limiting what is patentable, the courts are changing the patent system and “in the end the patent system will determine whether we as an industry will survive.”[62] 

Looking beyond the effects on the general field of biotechnology, specific subgroups may take an even harder hit.  MediStem Inc. is a biotechnology company that’s “mission is to discover, develop and commercialize technologies related to adult stem cell extraction and manipulation for use in treating inflammatory and degenerative diseases.”[63]  MediStem works in a new and emerging area of biotechnology and, like any company involved in emerging technology, depend on patent protection.  With the weight of patent protection behind a company, it is a more attractive company to investors.  MediStem believes the Bilski decision is too restrictive and asks the court to step in and correct the situation.

MediStem recognized the potential devastation to the field and was one of the companies filing amicus curiae in Bilski’s petition for writ of certiorari stating:

Like many biotech companies, MediStem relies on the ability to obtain enforceable patent protection for the results of its research and development efforts.  Having patent protection allows MediStem to obtain investment capital to fund its research and development efforts.[64]

MediStem believes the machine-or-transformation test limits the scope of patent protection available for all process-related patents.[65]  The opinion did not limit the applicability of the machine-or-transformation test to business method patents, even though that is the type of method claimed in Bilski. The court instead discusses process patents in general, thereby narrowing “the scope of subject matter eligible for patent protection for the entire category of ‘process’ patents including patents relating to biotechnology.”[66]  MediStem also points to Judge Rader’s dissent and notes “excluding patent protection for methods of using discovered biological or physiological correlations will ‘undermine and discourage future research for diagnostic tools.’”[67]  The argument is that by limiting what is patentable, there will be a decline in research and development in the entire field.  Patent protection is key in ascertaining investment because it grants a limited monopoly, a time for the inventor to capitalize on their invention.  If MediStem and other companies cannot make a return on their investment, the amount of investments will steadily drop until perhaps the amount of investment drops to zero.  Research and development cannot be sustained without investment, that means research and development would grind to a halt.  Without companies devoted to developing and discovering new technology, the United States would fall desperately behind in the field of innovation compared to the rest of the world.

In addition, MediStem believes the decision to use the machine-or-transformation test as the sole test conflicts with the court’s precedents.[68]  MediStem points to Judge Newman’s dissent for support.  It also states “methods of ‘selecting’ biological materials to use in treatment protocols to effect a therapy are often products of human ingenuity.  They apply principles of nature.”[69]  This indicates that in the field of diagnostic and treatment methods, methods would likely fail the machine-or-transformation test.  However, in Diamond v. Chakrabarty, the court said that Congress’s intent was to allow patent eligibility for “anything under the sun that is made by man.”[70]  “Anything under the sun” is certainly a broad interpretation of what is patent-eligible, but would most certainly include diagnostic and treatment methods, especially as a “new and useful process” under section 101.  In biotechnology, especially with respect to diagnostic and treatment methods and personalized medicine, method patents are certainly predominant.  MediStem warns “if unchecked, Bilski’s test has the potential of creating a disincentive to innovate” and claims “a strong intellectual property system is necessary to stimulate investment in innovation.”[71]   

Without the ability to rely on patent protection, innovators will be forced to utilize other forms of protection like trade secrets.  While the U.S. Constitution, which specifically provides for patent law, does not expressly say patents are rewards, case law makes it clear, that was the intent.[72]  Once a patent is obtained, the owner has the right to exclude everyone else from practicing his or her invention, for a limited time, and whether the other person stole the technology or came up with it independently is inconsequential.  The dilemma with trade secrets is that they seem to impede innovation.  Patents require full disclosure of the invention so that society benefits from the knowledge.  Trade secrets are by their very definition a secret.  The idea is to keep innovations within the company as protection.  If an innovator is relying solely on trade secret protection, there is no safeguard if another independently creates the same invention.  Patent protection is a stronger form of intellectual property protection and thus gives greater assurance to investors allowing them to justify substantial investments.

MediStem’s final concern is that the court reviewed the case in an en banc decision.  En banc decisions usually become the “law of the land.”[73]  “Only this Court, an Act of Congress, or a subsequent en banc panel of the Federal Circuit can alter the ruling.”[74]  As it stands, Bilski’s decision makes the machine-or-transformation test the sole test to determine patent- eligibility for process inventions.  The argument is that there’s no wiggle room to see if a new and useful process created by human ingenuity deserves patent protection if they do not pass the machine-or-transformation test.  In a field that changes so rapidly it seems unwise to impose such a strict test.

B.      There are Some Who Support the Machine-or-Transformation Test

Not everyone believes the machine-or-transformation test was applied incorrectly.  The Bilski decision seems to leave open-ended whether the test applies to all process patents or simply business methods patents.  As process patents are widely used in a multiplicity of fields, a test that is applied to a process claim in the field of business could have devastating effects on a process claim in biotechnology, especially if it is too strict.

The U.S. Solicitor General purports to claim that the machine-or-transformation test allows for any unforeseen developments in emerging technologies.  In particular she sites to portion of the Bilski opinion stating:

[We] agree that future developments in technology and the sciences may present difficult challenges to the machine-or-transformation test, just as the widespread use of computers and the advent of the Internet has begun to challenge it in the past decade. … And we certainly do not rule out the possibility that this court may in the future refine or augment he test or how it is applied.[75]

She also iterates in a footnote, “nothing in the decision below threatens the eligibility of biotechnological or chemical inventions for patent protection, as long as they involve a transformation.”[76]  The point being driven home is that the Bilski claims are for a business method and not in a field of frontier technologies. The fact that the opinion notes the possibility for adapting the test in the future seems enough to the U.S. Solicitor General so as not to adversely affect the emerging technologies field. 

          The U.S. Solicitor General’s argument, however, fails to recognize the vast reaches the decision in Bilski could have.  The court only approaches process patents in a general sense.  Process patents can be found in many different areas.  Business method patents have historically been pinpointed as a type of process patents, the patent-eligibility of which has always been hotly debated.  The dilemma is in distinguishing types of process patents.  By setting up a strict, blanket test for all process patents, as the Federal Circuit has done in Bilski, the door is slammed shut in the face of many viable process patents in all fields.  The price society will pay is the paralysis of the field of emerging technologies.

C.      Possible Positive Effects of Bilski Do Not Outweigh the Harm

While some view the Bilski decision as being a clear test that will have positive influences, the test sacrifices promotion of innovation for clarity.  As noted by Judge Newman, a test that restricts patent eligibility to what ahs been done in the past and forecloses what might be done in the future, is antithetical to promote innovation. 

It is true that ambiguities in the law are constantly a source of frustration.  Patent law is no different and places a high value on predictability in the law.[77]  Anytime a client asks whether their invention will be patentable, the most desirable response from an attorney’s point of view has to be a response that they can stand behind with some authority.  It can be extremely frustrating for all involved if the answer is an emphatic “maybe.”  The machine-or-transformation test provides “uniform expectations” which in turn encourage innovation.[78]  Similar to the concept of leveling the playing field, having a test in place that sets up what is necessary lets the field know what to expect.  Consider the field “pre-test” to be covered in a kind of fog.  It can be a daunting task to navigate a field with no sense of direction.  The test clears the “fog” allowing a clear view of the field and any necessary paths.  Once the fog dissipates, the idea of venturing into the field is a less daunting endeavor. 

As noted before, research and development are vital to emerging technologies and investments are necessary to continue research and development.  Most investors are not likely to invest large quantities into an uncertain or high-risk research and development endeavor. 

A primary motive in business investment is the will to increase the firm’s capacity for production. Investment in research and development is believed to further such a goal when it increases the firm’s confidence in the outcome of future events (specifically, the economically successful outcome of the research).[79]

By knowing the test that will be applied ahead of time, firms can make and achieve goals more efficiently.  Confidently being able to stand behind the goals set will make firms more attractive to potential investors and will give the investors additional confidence in financially backing research projects.  By minimizing variables, certainty is increased and the easier it is to predict technology’s patentability, the easier it is to get investors to give money.[80]  Ultimately, the added assurance should stimulate the amount of research and development in the field, which would thus increase the amount of new innovations. 

Bilski sets “a single positive rule that establishes a predictable means by which practitioners and inventors can determine, to a reasonable degree, if an invented process is patentable.”[81]  Before the Bilski decision, there were so many possible tests and various rules to apply floating around that there could be no certainty in what processes would meet the requirements for patentability.  Simply considering the various tests applied to the Bilski claims from the patent examiner to the BPAI to the Federal Circuit and even the tests discussed in the dissents, it is plain to see that there was plenty of uncertainty as to which test to apply let alone whether the patentability requirements could be satisfied.  Now any uncertainty to which test applies is gone because Bilski determined the machine-or-transformation test is the test to determine whether a process is patentable.

The machine-or-transformation test should be applied with reference to objective standards to encourage innovation by increasing the certainty of patent law.[82]  The issue should be one of fact and prior case law helps establish what meets the terms of the test. Transformative processes are discussed in Benson as chemical processes and mechanical processes.[83]  As technology advanced, the court adapted its view of what constitutes a “transformative process to include physical transformations of electronic signals, seismic waves, and any other physical transformation not apparent to the naked eye.”[84]  Even in Bilski, the court further developed the idea of physical transformations that are not apparent to the naked eye.[85]  Perhaps even more clear is what constitutes a machine-implemented process.  Benson provides that a process “tied to a particular machine or apparatus” is patentable.[86]  “However, this seemingly simple standard has traditionally been limited by three conditions: (1) the recitation of a machine may not solely represent a restriction on the field of an invention’s use, (2) a machine may not merely represent a system for data gathering, and (3) an apparatus that represents insignificant extra-solution activity is insufficient, by itself, to bring an invention into the scope of statutory subject matter.”[87]  If a process claim is viewed objectively in light of the machine-or-transformation test, the applicant should have a fairly certain idea of whether or not it will pass the test and be patent-eligible. 

It may seem hard to argue that the idea that one test to determine the eligibility of process patents would not be beneficial; however there are a few questions that come to mind.  Are all process patents capable of being measured under one definitive test?  Is the machine-or-transformation test indeed the correct test to apply?  Of course it would be nice to simplify life to yes or no, right or wrong, black or white, but very rarely is this a possibility.  This kind of oversimplification can even be dangerous when addressing something like process patents that cover such a variety of fields.

As mentioned, there are many types of process patents across many different fields.  Given the variety of process patents, one must consider whether or not they can all be examined under one test.  In trying to make one test applicable to all process patents, the test has become too general.  The machine-or-transformation test turns into more of a brick wall than a hurdle one can overcome.  It seems more likely that the test will keep out more patents that it will allow, if it allows any at all.  So yes, the test does provide for a clear view of what will be patentable subject matter, the answer is nothing.  That hardly seems beneficial to any field, especially one that relies so heavily on patent protection.

D.      Impact of Bilski and Upcoming Decisions

The Bilski decision will be heavily relied upon in many cases.  Indeed, cases have already followed and cited BilskiTransamerica Life Ins. Co. v. Lincoln Nat’l Life Ins. Co. has interpreted Bilski to “clarify which one of several tests previously applied by the courts should apply to determine “patent-eligible subject matter,” rather than to make a new test out of whole cloth.”[88]  The claims in that case refer to “a method and system for administering retirement income benefits.”[89]  It is easy to see why Bilski would be relevant to another business method claim; however, the cases do not solely deal with business methods.

Not surprisingly, Bilski has had an effect on cases in other fields.  In a one paragraph, nonprecedential opinion, the decision in Classen Immunotherapies v. Biogen IDEC relied completely on Bilski.[90]  The claims were found to be invalid because they (1) were not tied to a particular machine or apparatus and (2) did not transform a particular article into a different state or thing.[91]  The patent at issue involved a “method and composition for an early vaccine to protect against both common infectious diseases and chronic immune mediated disorders or their sequelae.”[92]  This clearly falls within the realm of biotechnology.  By relying on Bilski, the process patent was denied.  This cements the concerns and fears being raised in the biotechnology world that Bilski will limit the patentability of the innovations outside of business methods patents, specifically in emerging technologies and biotechnology in particular. 

There has been speculation as to how the reasoning in Bilski would have functioned in recent cases as well.  Lab. Corp. of Am. Holdings v. Metabolite Labs., Inc., was a patent infringement case dealing with a patent for a method for determining levels of sulfhydryl amino acids, and methods for distinguishing cobalamin from folic acid deficiency using an assay for total homocysteine levels in conjunction with an assay for methylmalonic acid.[93]  The Supreme Court granted certiorari and heard arguments, but then dismissed the case as improvidently granted without reaching a discussion on the merits.   

Metabolite tries to persuade the court in their brief that invalidating the patent could lead to an invalidation of all drug patents because the inventors “merely discovered that certain chemicals interact with the human body in ways directed by chemistry.”[94]  While patentable subject was not specifically addressed because the case was dismissed on other grounds, speculation has surfaced as to whether this biotechnology process patent would have held up under the Bilski test.  Additionally, there was a dissent in the case by Justice Breyer, joined by Justice Stevens and Justice Souter.  The dissent explored the claim in question and believed it was not patentable subject matter.[95]  The dissent recognized the importance of considering the right test to determine patent-eligibility in process patents.[96]  The interesting point in the dissent is that in examining the patentability of the claims, the dissent considers multiple tests.  This could be a clue to how the Supreme Court will decide when they hear Bilski.

In an article from Biotech Watch, it is stated, “the majority opinion [in Bilski] specifically would reject the claim at issue in Laboratory Corporation of America Holdings.”[97]  The claim at issue “represents a step in the prior art and then a correlation step, and the latter would not pass the transformation test.”[98]  Similarly another speculates:

Date gathering is implicit in the application of any correlation… Such is the nature of sampling and testing… The sole purpose of the testing is to provide raw data (the homocysteine level) such that it can be applied to a correlation (the connection of elevated homocysteine levels and vitamin deficiencies). Thus, since the sole process step that provides for a machine or transformation is merely a data gathering step (and thus imparts no substantial limitations on the claim), this claim would fail under the Machine or Transformation standard.[99]

The application of the machine-or-transformation test seems pretty straightforward. While these predictions are mere speculation with no way of actually knowing the answer, both predictions give the same result. On its face the test appears clear and unambiguous. Looking deeper, it is clear the test is too restrictive that there is no way to pass the test.

CONCLUSION

The patent system is meant to “promote the progress of science and the useful arts,” but when patentability tests become insurmountable, the patent system becomes an albatross stifling innovation.  Process patents have become widely used across many fields, fields that are diverse within in and of themselves and as compared to each other.  The presence of such a range begs the question: is one test the answer?  The difficulty then becomes assigning different tests to different fields and drawing distinctions between fields.  This would inevitably be a daunting and complex solution and quite possibly inadequate; one could understand why the Supreme Court would not want to take that route.  If the Supreme Court instead decides to apply one test to all process patents, the challenge will be to apply a test that strikes a balance between allowing for growth in technology and restricting process patents to patent-eligible subject matter.

The machine-or-transformation test does not allow room for advancement and emerging technologies.  Upon review, the Supreme Court should be wary of the far-reaching implications that the application of the machine-or-transformation test can have.  They should also be cognizant of the diversity in the fields that obtain process patents.  While it would be wonderful to have one definitive test, that may not be possible.  It may not be practical to employ one test to cover such diverse topics.  The resulting test ends up too generic to be of any use and ends up doing more harm than good.  If the Supreme Court decides to have one test apply to all process patents, the machine-or-transformation test should not be that test as it is too restrictive.  In order to keep the United States a competitive country in emerging fields and allow for growth in those fields, the test(s) employed must effectively weed out unpatentable claims while still granting patentable subject matter protection.  It is a fine line, but clearly an important decision that will most definitely change the face of the patent system.


[1] State Street Bank & Trust Co. v. Signature Financial Group, Inc., 149 F.3d 1368 (Fed. Cir. 1998).

[2] In re Bilski, 545 F.3d 943, 956 (Fed. Cir. 2008). 

[3] Bilski v. Doll, 129 S. Ct. 2735 (U.S. 2009).

[4] In re Bilski, 545 F.3d 943, 950 (Fed. Cir. 2008). 

[5] In re Musgrave, 431 F.2d 882, 893 (C.C.P.A. 1970). 

[6] In re Bilski, 545 F.3d 943, 950 (Fed. Cir. 2008).

[7] Id

[8] Ex parte Lundgren, 76 U.S.P.Q.2d (BNA) 1385, 1393-1429.

[9] In re Bilski, 545 F.3d 943, 950 (Fed. Cir. 2008). 

[10] Id

[11] Id. at 966. 

[12] In re Bilski, 545 F.3d 943, 952 (Fed. Cir. 2008) (citing Diamond v. Diehr, 450 U.S. 175, 185 (U.S. 1981)). 

[13] In re Bilski, 545 F.3d 943, 952 (Fed. Cir. 2008). 

[14] Gottschalk v. Benson, 409 U.S. 63, 66 (U.S. 1972). 

[15] In re Bilski, 545 F.3d 943, 954 (Fed. Cir. 2008) (citing Gottschalk v. Benson, 409 U.S. 63, 70 (U.S. 1972)). 

[16] In re Bilski, 545 F.3d 943, 962 (Fed. Cir. 2008). 

[17] Id. at 962-63. 

[18] Id. at 963.   

[19] Id. at 964.

[20] Id.

[21] Test created by three decisions: In re Freeman, 573 F.2d 1237 (CCPA 1978); In re Walter, 618 F.2d 758 (CCPA 1980); and In re Abele, 684 F.2d 902 (CCPA 1982). This test has two steps: (1) determining if the claim recites an “algorithm” as defined under Benson and (2) determining whether that algorithm is applied in any manner to physical elements or process steps.” Abele, 684 F.2d 902, 905-07.

[22] Process must produce a “useful, concrete and tangible result” State St. Bank & Trust Co. v. Signature Fin. Group, 149 F.3d 1368, 1373 (Fed. Cir. 1998).

[23] Brief of Amicus Curiae Consumers Union et al. at 6-10; Brief of Amicus Curiae William Mitchell Coll. of Law Intellectual Prop. Inst. at 14-15.

[24] In re Comiskey, 499 F.3d 1365 (Fed. Cir. 2007).

[25] In re Bilski, 545 F.3d 943, 958-61 (Fed. Cir. 2008). 

[26] Id. at 959. 

[27] Id.

[28] Id. at 960. 

[29] Id.

[30] Id. at 957. 

[31]Diamond v. Diehr, 450 U.S. 175, 191-192 (U.S. 1981). 

[32] Id.

[33] In re Bilski, 545 F.3d 943, 958 (Fed. Cir. 2008). 

[34] Id.

[35] In re Bilski, 545 F.3d 943, 974 (Fed. Cir. 2008) (Dyk, J. concurring). 

[36] Id. at 975.

[37] In re Bilski, 545 F.3d 943, 997 (Fed. Cir. 2008) (Newman, J. dissenting). 

[38] Id. at 987. 

[39] Gottschalk v. Benson, 409 U.S. 63 (U.S. 1972).

[40] Parker v. Flook, 437 U.S. 584 (U.S. 1978).

[41] Diamond v. Chakrabarty, 447 U.S. 303 (U.S 1980).

[42] In re Bilski, 545 F.3d 943, 978 (Fed. Cir. 2008) (Newman, J. dissenting). 

[43] In re Bilski, 545 F.3d 943, 1011 (Fed. Cir. 2008) (Rader, J. dissenting). 

[44] Id.

[45] Id. at 1012.

[46] Id. at 1015

[47] In re Bilski, 545 F.3d 943, 998 (Fed. Cir. 2008) (Mayer, J. dissenting). 

[48] State St. Bank & Trust Co. v. Signature Fin. Group, 149 F.3d 1368 (Fed. Cir. 1998)

[49] In re Bilski, 545 F.3d 943, 1011 (Fed. Cir. 2008) (Mayer, J. dissenting).

[50] Petition for Writ of Certiorari at i, Bilski v. Doll, 129 S. Ct. 2735 (U.S. 2009) (No. 08-964). 

[51] Bilski v. Doll, 129 S. Ct. 2735 (U.S. 2009). 

[52] Petition for Writ of Certiorari at 35, Bilski v. Doll, 129 S. Ct. 2735 (U.S. 2009) (No. 08-964).

[53] Converging Technologies for Improving Human Performance (Mihail C. Roco and William Sims Bainbridge, National Science Foundation, eds.) (2002). 

[54] Bill Joy, Why the Future Doesn’t Need Us, Wired (2000). 

[55] U.S. Const. art. I, § 8, cl. 8.

[56] Petition for Writ of Certiorari at 26, Bilski v. Doll, 129 S. Ct. 2735 (U.S. 2009) (No. 08-964). 

[57] Id. at 25. 

[58] Jeffery J. Stewart et al., Putting a Price on Biotechnology, Nature Biotechnology (September 2001). 

[59] U.S. Const. art. I, § 8, cl. 8.

[60] Joyce E. Cutler, Upswing in Litigation, Role of Patents In Spurring Biotech Explored at FTC Hearing, BioTech Watch (May 7, 2009). 

[61] Id

[62] Id.

[63] MediStem Laboratories Inc., Stem Cells… The Future of Medicine, http://www.medisteminc.com/ (accessed May 2009). 

[64] Brief for MediStem, Inc. as Amici Curiae Supporting Petitioners, In re Bilski, 545 F.3d 943 (Fed. Cir. 2008) (No. 08-964). 

[65] Id. at 5. 

[66] Id. at 5-6. 

[67] Brief for MediStem, Inc. as Amici Curiae Supporting Petitioners, In re Bilski, 545 F.3d 943 (Fed. Cir. 2008) (No. 08-964). 

[68] Id. at 7. 

[69] Id. at 9 (emphasis in original). 

[70] Diamond v. Chakrabarty, 447 U.S. 303, 309 (U.S. 1980). 

[71] Brief for MediStem, Inc. as Amici Curiae Supporting Petitioners, In re Bilski, 545 F.3d 943 (Fed. Cir. 2008) (No. 08-964).

[72] Grant v. Raymond, 31 U.S. 218, 242 (U.S. 1832) 

[73] Brief for MediStem, Inc. as Amici Curiae Supporting Petitioners, In re Bilski, 545 F.3d 943 (Fed. Cir. 2008) (No. 08-964). 

[74] Id. at 12. 

[75] In re Bilski, 545 F.3d 943, 956 (Fed. Cir. 2008). 

[76] Brief of Respondents at 17 n.4, In re Bilski, 545 F.3d 943 (Fed. Cir. 2008) (No. 08-964). 

[77] W. Michael Schuster, Predictability and Patentable Processes: The Federal Circuit’s In re Bilski Decision and Its Effect on the Incentive to Invent, SSRN 33 (March 4, 2009). Columbia Science and Technology Law Review, forthcoming. (Available at SSRN: http://ssrn.com/abstract=1353604).

[78]Id. at 36. 

[79] Id.

[80] Id. at 35. 

[81] Id. at 36.

[82] Id. at 41. 

[83] Gottschalk v. Benson, 409 U.S. 63, 70 (1972)

[84] W. Michael Schuster, Predictability and Patentable Processes: The Federal Circuit’s In re Bilski Decision and Its Effect on the Incentive to Invent, SSRN 33, 42 (March 4, 2009). Columbia Science and Technology Law Review, forthcoming. (Available at SSRN: http://ssrn.com/abstract=1353604).

[85] Id. at 43. 

[86] Gottschalk v. Benson, 409 U.S. 63, 71 (U.S. 1972) 

[87] W. Michael Schuster, Predictability and Patentable Processes: The Federal Circuit’s In re Bilski Decision and Its Effect on the Incentive to Invent, SSRN 41  (March 4, 2009). Columbia Science and Technology Law Review, forthcoming. (Available at SSRN: http://ssrn.com/abstract=1353604). Citing Diamond v. Diehr, 450 U.S. 175, 191 (1981); In re Meyer, 668 F. 2d 789, 794 (C.C.P.A. 1982) and In re Schrader, 22 F.3d 290, 294 (Fed. Cir. 1994)

[88] Transamerica Life Ins. Co. v. Lincoln Nat’l Life Ins. Co., 590 F. Supp. 2d 1093, 1103 (N.D. Iowa 2008). 

[89] U.S. Patent No. 7,089,201 (filed Sept. 24, 1999 & issued Aug. 8, 2006).

[90] Classen Immunotherapies v. Biogen IDEC, 304 Fed. Appx. 866, 867 (Fed. Cir. 2008). 

[91] Id.

[92] U.S. Patent No. 5,723,283 (filed May 31, 1995 & issued Mar. 3, 1998). 

[93] Lab. Corp. of Am. Holdings v. Metabolite Labs., Inc., 548 U.S. 124 (U.S. 2006). 

[94] Lab. Corp. of Am. Holdings v. Metabolite Labs., Inc., Brief for Respondents, 2004 U.S. Briefs 607, 46 (U.S. Feb. 6, 2006). 

[95] Lab. Corp. of Am. Holdings v. Metabolite Labs., Inc., 548 U.S. 124, 135 (U.S. 2006). 

[96] Id., at 126. 

[97] Tony Dutra, Amici, Practitioners Have Mixed Reactions to Federal Circuit’s Bilski Decision, BioTech Watch (Nov 3, 2008). 

[98] Id.

[99] W. Michael Schuster, Predictability and Patentable Processes: The Federal Circuit’s In re Bilski Decision and Its Effect on the Incentive to Invent, SSRN 49 (March 4, 2009). Columbia Science and Technology Law Review, forthcoming. (Available at SSRN: http://ssrn.com/abstract=1353604).

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