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001 FUNK BROTHERS v. CALO (VILLAVICENCIO) will infect well defined groups of those plants.

February 16, 1948 | Douglas, J. | Natural products and substances 7. Each species of root nodule bacteria is made up of distinct strains which vary in
efficiency.
PETITIONER: Funk Brothers Seed Company 8. Methods of selecting the strong strains and of producing a bacterial culture from
RESPONDENTS: Kalo Inoculant Company them have long been known. The bacteria produced by the laboratory methods of
culture are placed in a powder or liquid base and packaged for sale to and use by
SUMMARY: Bond discovered that there are strains of each species of root nodule agriculturists in the inoculation of the seeds of leguminous plants. This also has
bacteria that do not exert a mutually inhibitive effect on each other (Bond’s Patent). long been well known.
It was the general practice, prior to the Bond patent, to manufacture and sell 9. It was the general practice, prior to the Bond patent, to manufacture and sell
inoculants containing only one species of root nodule bacteria. Different species of inoculants containing only one species of root nodule bacteria.
the Rhizobia bacteria produced an inhibitory effect on each other when mixed in a 10. If a farmer had crops of clover, alfalfa, and soybeans, he would have to use three
common base, with the result that their efficiency was reduced. Hence, it has been separate inoculants.
assumed that the different species were mutually inhibitive. In this case, Kalo filed a 11. Different species of the Rhizobia bacteria produced an inhibitory effect on each
suit of patent infringement against Funk Brothers for using the same technique of other when mixed in a common base, with the result that their efficiency was
Bond covered in Bond’s patent, specifically Patent No. 2,200,532. The District Court reduced. Hence, it has been assumed that the different species were mutually
held the product claims invalid for want of invention, and dismissed the complaint. inhibitive.
The Circuit Court of Appeals reversed, holding that the product claims were valid 12. BOND’S PATENT: Bond discovered that there are strains of each species of root
and infringed. WoN Bond’s patent is a valid patent – NO, because it is a discovery nodule bacteria that do not exert a mutually inhibitive effect on each other.
of a phenomenon of nature. The combination of species produces no new bacteria, 13. He also ascertained that those mutually noninhibitive strains can, by certain
no change in the six species of bacteria, and no enlargement of the range of their methods of selection and testing, be isolated and used in mixed cultures. Thus, he
utility. Each species has the same effect it always had. The bacteria perform in their provided a mixed culture of Rhizobia capable of inoculating the seeds of plants
natural way. Their use in combination does not improve in any way their natural belonging to several cross-inoculation groups.
functioning. (See concurring and dissenting opinions.)
ISSUE/s:
DOCTRINE: Discovery of the fact that certain strains of each species of these 1. WoN Bond’s patent is a valid patent – NO, because it is a discovery of a
bacteria can be mixed without harmful effect on the properties of either is not phenomenon of nature.
patentable, since it is no more than the discovery of a phenomenon of nature.
RULING: Reversed Circuit Court of Appeals.

RATIO:
FACTS: 1. Bond does not create state of inhibition or of noninhibition in the bacteria. Their
1. This is a patent infringement suit brought by Kalo Company. The charge of qualities are the work of nature. Those qualities are, of course, not patentable. For
infringement is limited to certain product claims of Patent No. 2,200,532 issued patents cannot issue for the discovery of the phenomena of nature.
to Bond on May 14, 1940. 2. The qualities of these bacteria, like the heat of the sun, electricity, or the qualities
2. Funk Brothers filed a counterclaim asking for a declaratory judgment that the of metals, are part of the storehouse of knowledge of all men.
entire patent be adjudged invalid. 3. They are manifestations of laws of nature, free to all men and reserved exclusively
3. The District Court held the product claims invalid for want of invention, and to none.
dismissed the complaint. It also dismissed the counterclaim. 4. The Circuit Court of Appeals thought that Bond did much more than discover a
4. The Circuit Court of Appeals reversed, holding that the product claims were valid law of nature, since he made an new and different composition of noninhibitive
and infringed. strains which contributed utility and economy to the manufacture and distribution
5. The process that was discussed in this case was about leguminous plants. of commercial inoculants.
Leguminous plants are able to take nitrogen from the air and fix it in the plant for 5. The Supreme Court thinks that that aggregation of species fell short of invention
conversion to organic nitrogenous compounds. The ability of these plants to fix within the meaning of the patent statutes.
nitrogen from the air depends on the presence of bacteria of the genus Rhizobium 6. The combination of species produces no new bacteria, no change in the six species
which infect the roots of the plant and form nodules on them. of bacteria, and no enlargement of the range of their utility. Each species has the
6. These root nodule bacteria of the genus Rhizobium fall into at least six species. same effect it always had. The bacteria perform in their natural way. Their use in
No one species will infect the roots of all species of leguminous plants. But each
combination does not improve in any way their natural functioning. groups named in the opinion of the Court.
7. There is, of course, an advantage in the combination. The farmer need not buy six 20. The record thus indicates that the description is sufficiently full, clear, concise,
different packages for six different crops. He can buy one package and use it for and exact to enable persons skilled in the art or science to
any or all of his crops of leguminous plants which this discovery appertains or with which it is most nearly connected to make,
8. But a product must be more than new and useful to be patented; it must also satisfy construct, compound, and use the same.
the requirements of invention or discovery.

Mr. Justice Frankfurter, concurring:

9. If this is a correct analysis of Bond's endeavors, two different claims of originality


are involved: (1) the idea that there are compatible strains, and (2) the
experimental demonstration that there were in fact some compatible strains.
10. Insofar as the court below concluded that the packaging of a particular mixture of
compatible strains is an invention, and, as such, patentable, Frankfurter agrees,
provided not only that a new and useful property results from their combination,
but also that the particular strains are identifiable and adequately identified.
11. Frankfurter does not find that Bond's combination of strains satisfies these
requirements. The strains by which Bond secured compatibility are not identified,
and are identifiable only by their compatibility.
12. The Circuit Court of Appeals seems to have proceeded on the assumption that
only "a particular composite culture" was devised and patented by Bond, and then
applies it to "any composite culture" arrived at by deletion of mutually inhibiting
strains, but strains which may be quite different from Bond's composite culture.
13. The consequences of such a conclusion call for its rejection.
14. Its acceptance would require, for instance, in the field of alloys, that if one
discovered a particular mixture of metals which, when alloyed, had some
particular desirable properties, he could patent not merely this particular mixture,
but the idea of alloying metals for this purpose, and thus exclude everyone else
from contriving some other combination of metals which, when alloyed, had the
same desirable properties

Mr. Justice Burton, with whom Mr. Justice Jackson concurs, dissenting:

15. They agree with agree with MR. JUSTICE FRANKFURTER that the
combinations so produced satisfied the statutory requirements of invention or
discovery.
16. However, they do not agree that the patent issued for such products is invalid for
want of a clear, concise description of how the combinations were made and used.
17. The completeness and character of the description must vary with the subject to
be described.
18. In the present case, the patentee has defined the combinations in terms of their
mutually inhibiting and noninhibiting effects upon their respective abilities to take
free nitrogen from the air and place it in the soil.
19. It is these effects that differentiate them from the other bacteria heretofore
generally identified only as common members of the same species, and not
commercially valuable for use with leguminous plants of more than one of the
002 PARKE-DAVIS & CO. v. H.K. MULFORD & CO. (GUECO) form and the other in the form of sodium chloride solution of the boric acid
April 28, 1911 | Billings Learned Hand, J. | Patentability of Adrenaline salt of the dry powder.
2. The crucial step which Takamine discovered was that the base, though with
PETITIONER: Parke-Davis & Co. some impurities, could be directly precipitated by an addition of ammonia or
RESPONDENTS: H.K. Mulford & Co. strictly of caustic alkali and ammonium chloride, which together liberate the
ammonia, and in turn effects precipitation. This substance, ammonium
SUMMARY: Takamine, a Japanese chemist, discovered a way to isolate and magnesium phosphate, is a new and inorganic substance arising from the
purify the hormone, adrenaline, from the suprarenal glands of animals. When he regrouping of atoms which have been a part of the gland-tissue, but which
initially applied for a patent on the adrenaline, it was rejected by the examiner on have been broken from the molecules which constituted their original form.
the ground that, a discovery, which merely separates the hormone from its natural (Human language: Takamine found a way to isolate and purify the hormone,
surroundings and without introducing any changes, is unpatentable. Because of adrenaline, from the suprarenal glands of animals. The purified adrenaline
this, Takamine changed the chemical nature of the extracted adrenaline by that he “invented” was more or less free from inert and associated gland
changing it from salt (which is the natural form found in the suprarenal gland) tissue.)
into a base. He filed a patent application for such entitled as “Glandular Extractive 3. Takamine was able to do this because he followed John Jacob Abel’s1 method
Product”. This patent application was granted. for removing fat and protein by partitioning a concentrated extract with
acidified water and then precipitating the active principle with ammonia.
Subsequently, however, Mulford, the rival company of Parke-Davis (where 4. When Takamine originally applied for a patent, the examiner rejected his
Takamine worked), began selling a similar product called Adrin. When Parke- claim because no patent could be granted if the discovery was merely
Davis and Takamine knew of this, they sued Mulford for patent infringement. separated from its natural surroundings and remained unchanged. Because of
Mulford argues that the patent issued to Takamine was invalid because this, Takamine changed the chemical nature of the extracted adrenaline by
adrenaline, a naturally occurring hormone in the body, is unpatentable. ISSUE: changing it from salt (which is the natural form found in the suprarenal gland)
WoN a patent could be obtained for the isolation of a purified substance that is a into a base. He filed a patent application for such entitled as “Glandular
naturally occurring product of nature—YES. THE COURT TOOK NOTE OF Extractive Product”.
THE FACT THAT TAKAMINE’S PURIFIED ADRENALINE WAS NOVEL 5. This was granted.
AND THAT IT WAS SUITABLE FOR CERTAIN THERAPEUTIC USES 6. He also obtained British and Japanese patent rights on the said drug.
WHICH THE PREVIOUS FORMS OF ADRENALINE DID NOT AND 7. Later on, however, H.K. Mulford, a rival company of Parke, Davis (company
COULD NOT EFFECTUATE. RULING: What Takamine had invented was where Takamine worked for), sold a similar product called Adrin.
unique and therefore deserves an important distinction. The base which Takamine 8. Parke-Davis sued Mulford for patent infringement.
had created was an original production. It differs from previous forms of 9. Mulford attacked Takamine’s patent with the argument that the hormone
adrenaline in that the latter were not suitable for commercial or therapeutic uses, covered by his patent existed in nature or was naturally occurring in the body;
whereas Takamine’s adrenaline was suitable for such purposes. The invention hence, unpatentable.
was, therefore, novel. While it can be argued that it is merely a purification of the ISSUE/s:
principle, still his invention introduced a practical purpose that can be used 2. WoN a patent could be obtained for isolation of a purified substance that is a
commercially and therapeutically. naturally occurring product of nature—YES. THE COURT TOOK NOTE
OF THE FACT THAT TAKAMINE’S PURIFIED ADRENALINE WAS
DOCTRINE: Patents on purified naturally occurring substances are valid, and NOVEL AND THAT IT WAS SUITABLE FOR CERTAIN
the creation of a new invention that has commercial and therapeutic novelty is THERAPEUTIC USES WHICH THE PREVIOUS FORMS OF
patentable. ADRENALINE DID NOT AND COULD NOT EFFECTUATE.

RATIO:
FACTS: 21. Judge Learned Hand ruled in favor of Takamine and Parke-Davis. He points
1. Dr. Jokichi Takamine applied for and was granted a patent for Adrenaline.
out that what Takamine had invented was unique and therefore deserves an
His invention came in two versions (both patented)—one in the dry powder
important distinction.

1
An American biochemist and pharmacologist who took great interest in isolating pure form of internal While he was impriving this process of extraction, Takamine, who visited his lab was able to successfully
gland hormones. He conducted an extraction once and thought that he had isolated ephinephrine from an isolate the neutral base of ephinephrine by adding ammonium to a concentrated extract. Dito na nagstart
adrenal medulla, but it turns out that he was only able to isolate a monobenzoyl derivative of epinephrine. yung sa adrenaline.
22. According to Learned Hand, the base which Takamine had created was an
original production. It differs from previous forms of adrenaline in that the
latter were not suitable for commercial or therapeutic uses, whereas
Takamine’s adrenaline was suitable for such purposes.
23. The invention was, therefore, novel. While it can be argued that it is merely
a purification of the principle, still his invention introduced a practical
purpose that can be used commercially and therapeutically.
24. The transformation that took place was a result of human ingenuity, which
produces a product, an innovation as socially marketable and publicly useful
is deserving of a patent grant.
25. The line between different substances and degrees of the same substance is
to be drawn from the common usages of men than from nice considerations
of dialectic.
003 ASSOCIATION FOR MOLECULAR PATHOLOGY vs. MYRIAD 3. Once it found the location and sequence of the BRCA1and BRCA2 genes, Myriad
GENETICS INC. (HIRANG) sought and obtained a number of patents. Nine composition claims from three (3)
June 13, 2013 |Thomas, J. | Patentable/Non-Patentable of those patents are at issue in this case (Claims 1, 2 and 5)
4. Claim 1 - asserts the patent over the isolated DNA code that tells a cell to produce
a string of BRCA 1 amino acids
PETITIONER: ASSOCIATION FOR MOLECULAR PATHOLOGY 5. Claim 2 – asserts the patent over Complementary DNA (cDNA)
RESPONDENTS: MYRIAD GENETICS INC. a. Here only the exons are present instead of both exons and introns
which compose a full DNA sequence (Parang hiniwalay nila tapos
SUMMARY: Myriad Genetics was able to precisely locate the BRCA 1 and 2 genes yung natira lang is yung exons part ng DNA and not both exons and
which are responsible for dramatically increasing an individual’s risk of developing introns)
breast and ovarian cancer. Myriad was able to locate them on chromosomes 17 and 6. Claim 5 (together with Claim 6 perahas lng sila ng laman but claim 5 is for
13 of a human’s DNA. Myriad sought and obtained a number of patent and 3 of those DNA under Claim 1 and Claim 6 is for cDNA under claim 2) – asserts patent
claims are the issue in this case (Please see Facts 3-6). Dr. Ostrer (Researcher in the over an isolated DNA having at least 15 nucleotides of the DNA of claim 1
New York University School of Medicine), along with medical patients, advocacy (DNA) and claim 2 (cDNA)
groups, and other doctors, filed this lawsuit seeking a declaration that Myriad’s 7. Myriad’s patents would, if valid, give it the exclusive right to isolate an
patents are invalid under 35 U. S. C. §101. The District Court ruled that both the individual’s BRCA1 and BRCA2 genes. The patents would also give Myriad
isolated DNA and the cDNA are non-patentable as they are naturally occuring. The the exclusive right to synthetically create BRCA cDNA.
Federal Circuit Court on the other hand ruled that the isolated DNA and the cDNA 8. Dr. Ostrer (Researcher in the New York University School of Medicine),
are patent eligible. (See Fact #10) The issue in this case is WoN the isolated DNA along with medical patients, advocacy groups, and other doctors, filed this
and the cDNA are patent eligible. The court ruled that the isolated DNA is not patent lawsuit seeking a declaration that Myriad’s patents are invalid under 35 U. S.
eligible while the cDNA is patent eligible. As for the isolated DNA, the court ruled C. §101
that Myriad did not create or alter any new gene, genetic structure or genetic 9. The district court first ruled in their favor stating that both the claims over the
information. The principal contribution of Myriad was to precisely locating the isolation of DNA and that of the cDNA cannot be patented as both are
BRCA 1 and 2 genes using the isolated DNA. The court said that such already existed products of nature
even before the discovery of Myriad. Myriad did not create anything. To be sure, it 10. The Federal Circuit on the other hand ruled that both the claims over the DNA
found an important and useful gene, but separating that gene from its surrounding and the cDNA are patent eligible stating that:
genetic material is not an act of invention. As for cDNA, the court ruled that such is a. Isolating the DNA is an inventive act that entitles the individuals
not naturally occuring as only the exons part are left from the DNA and not both who firsts isolates it to patent
exons and introns which make up the whole DNA sequence. Such is done in a b. The process of isolating the DNA technically creates new molecules
laboratory without which such separation wouldn’t occur. Even though the cDNA with unique chemical compostions
retains the naturally occuring exons, the court ruled that it is already distinct from c. Isolating a particular strand of the DNA creates a nonnaturally
the DNA is was derived from. occuring molecule, even though the chemical alteration does not
change the information transmitted
DOCTRINE: In order to be considered as patentable, it must not be just an unknown d. The United States Patent and Trademark Office has a practice of
natural phenomenon but it must instead be a nonnaturally occuring manufacture or granting such patents
composition of matter – a product of human ingenuity ‘having a distinctive name, e. As for the cDNA, all of the judges agreed that such is a nonnaturally
characted and use. occuring because it must be created in the laboratory since the
introns that are found in the native gene are removed from the cDNA
segment – yung exons nalang matitira
FACTS:
1. This case involves patents filed by Myriad after it discovered the precise location ISSUE/s:
and sequence of what are now known as the BRCA 1 and BRCA 2 genes. - WoN a naturally occurring segment of DNA is patent eligible by virtue of its
2. BRCA 1 and 2 are the genes responsible for dramatically increasing an isolation from the human genome – No, the court ruled that the DNA, even
individual’s risk of developing breast and ovarian cancer. Myriad was able to if isolated, is still considered as a product of nature thus, non-patentable
locate them on chromosomes 17 and 13 of a human’s DNA
- WoN the Complementary DNA (cDNA) is patentable – Yes, court ruled that 4. As a result, cDNA is considered not a product of nature
the cDNA is not a naturally occuring and therefore within the bounds of
what can be patented. Note: Court also discussed the fact that Myriad did not file a claim for creating an
innovative method of manipulating genes while looking for BRCA 1 and 2 genes
RULING: For the foregoing reasons, the judgement of the Federal Circuit is affiremed The process of isolating the DNA which was used by Myriad is the same method that
in part and reversed in part. other geneticists are using. Moreover, such was not the issue in the case. The main
issue remains to be the patentability of the isolated DNA and the creation of the cDNA.

RATIO:
For the DNA : Non-Patentable

1. Laws of nature, natural phenomena, and abstract ideas are not patentable.
Rather, “‘they are the basic tools of scientific and technological work’” that
lie beyond the domain of patent protection.
2. Without this exception there would be a considerable danger that the grant of
patents would “tie up” the use of such tools and thereby “inhibit future
innovation premised upon them.”
3. It is undisputed that Myriad did not create or alter any of the genetic
information encoded in the BRCA 1 and 2 genes. The location and order of
the nucleotides existed in nature before Myriad found them
4. Nor did Myriad create or alter the genetic structure of the DNA.
5. The principal contribution of Myriad was uncovering the precise location and
the genetic sequence of the BRCA 1 and 2 genes within chromosomes 17 and
13
6. As explained in the case of Chakrabarty, in order to be considered as
patentable, it must not be just an unknown natural phenomenon but it must
instead be a nonnaturally occuring manufacture or composition of matter – a
product of human ingenuity ‘having a distinctive name, characted and use.
7. In this case, by contrast, Myriad did not create anything. To be sure, it found
an important and useful gene, but separating that gene from its surrounding
genetic material is not an act of invention
8. Groundbreaking, innovative, or even brilliant discovery does not by itself
satisfy the §101 inquiry.
9. Myriad found the location of the BRCA1 and BRCA2 genes, but that
discovery, by itself, does not render the BRCA genes “new . . . composition[s]
of matter,” §101,that are patent eligible.

For the cDNA : Patentable

1. cDNA does not present the same obstacles to patentability as naturally


occurring, isolated DNA segments. As provided, the creation of the cDNA
which results to an exons-only molecule that is not naturally occuring.
2. In the process of creating the cDNA, the non-coding regions of the DNA are
removed
3. Even of the cDNA retains the naturally occuring exons of a DNA, it is distinct
for the DNA from which it was derived.
001 GOTTSCHALK v. BENSON (VICENCIO) FACTS:
Nov. 20, 1972 | Douglas, J. | Definition of a Computer Program 10. Benson et al. filed in the Patent Office an application for an invention which
was described as being related “to the processing of data by program and
PETITIONER: Gottschalk more particularly to the programmed conversion of numerical information"
RESPONDENTS: Benson, et al. in general purpose digital computers.
11. They claimed a method for converting binary-coded decimal (BCD)
SUMMARY: Benson et al. filed applied for an invention with the Patent Office. It numerals into pure binary numerals. The claims were not limited to any
was described as being related “to the processing of data by program and more particular art or technology, to any particular apparatus or machinery, or to
particularly to the programmed conversion of numerical information” in general any particular end use.
purpose digital computers. They claimed a method for converting binary-coded 12. They purported to cover any use of the claimed method in a general purpose
decimal (BCD) numerals into pure binary numerals. The claims were not limited to digital computer of any type.
any particular art or technology, to any particular apparatus or machinery, or to any 13. Claims 8 and 132 were rejected by the Patent Office but sustained by the
particular end use. They purported to cover any use of the claimed method in a Court of Customs and Patent Appeals. The case is here on a petition for a writ
general purpose digital computer of any type. Claims 8 and 13 were rejected by the of certiorari. (Note: These are the only facts from the case)
Patent Office but sustained by the Court of Customs and Patent Appeals.
ISSUE/s:
The Court reverses the lower court decision. Benson et al.’s method for converting 1. WoN the method described and claimed is a “process” within the meaning of
numerical information from binary-coded decimal numbers into pure binary the Patent Act. – NO, the mathematical formula involved here has no
numbers, is merely a series of mathematical calculations or mental steps, and substantial practical application except in connection with a digital computer,
does not constitute a patentable “process” within the meaning of the Patent Act, and if the judgment is affirmed, the patent would wholly preempt the
35 U.S.C. § 100(b). The mathematical formula involved here has no substantial mathematical formula and, in practical effect, would be a patent of the
practical application except in connection with a digital computer, which means that, algorithm itself.
if the judgment below is affirmed, the patent would wholly preempt the mathematical
formula and, in practical effect, would be a patent of the algorithm itself. One cannot RULING: Reversed the Court of Customs and Patent Appeals decision.
patent an idea. Copyright protection for these programs are available.
RATIO:
DOCTRINE (from reviewer): Scientific Truth (ST) or Mathematical Expression 1. A digital computer, as distinguished from an analog computer, operates on
(ME) Not Patentable – While a scientific truth, or the mathematical expression of it, data expressed in digits, solving a problem by doing arithmetic as a person
is not a patentable invention, a novel and useful structure created with the aid of would do it by head and hand. Some of the digits are stored as components
knowledge of scientific truth MAY be. of the computer. Others are introduced into the computer in a form which it
is designed to recognize. The computer operates then upon both new and
Must Apply ST or ME into New and Useful Invention - If there is to be invention previously stored data. The general purpose computer is designed to perform
from such discovery, it must come from the application of the law of nature to a new operations under many different programs.
and useful end. 2. The method or program is a sequence of coded instructions for a digital
computer.

2 (1) testing each binary digit position '1,' beginning with the least significant binary digit position, of the
Claim 8 reads: The method of converting signals from binary coded decimal form into binary which
most significant decimal digit representation for a binary '0' or a binary '1';
comprises the steps of:
(2) if a binary '0' is detected, repeating step (1) for the next least significant binary digit position of said
(1) storing the binary coded decimal signals in a reentrant shift register, (2) shifting the signals to the right
most significant decimal digit representation;
by at least three places, until there is a binary '1' in the second position of said register,
(3) if a binary '1' is detected, adding a binary '1' at the (i+1)th and (i+3)th least significant binary digit
(3) masking out said binary '1' in said second position of said register,
positions of the next lesser significant decimal digit representation, and repeating step (1) for the next least
(4) adding a binary '1' to the first position of said register,
significant binary digit position of said most significant decimal digit representation;
(5) shifting the signals to the left by two positions,
(4) upon exhausting the binary digit positions of said most significant decimal digit representation, repeating
(7) shifting the signals to the right by at least three positions in preparation
steps (1) through (3) for the next lesser significant decimal digit representation as modified by the previous
for a succeeding binary '1' in the second position of said register.
execution of steps (1) through (3); and
(5) repeating steps (1) through (4) until the second least significant decimal digit representation has been so
Claim 13 reads: A data processing method for converting binary coded decimal number representations into
processed.
binary number representations, comprising the steps of:
3. The patent sought is on a method of programming a general purpose symbolism for writing the multiplier used in some steps, and by taking
digital computer to convert signals from binary-coded decimal form into subtotals after each successive operation. The mathematical procedures
pure binary form. can be carried out in existing computers long in use, no new machinery
4. A procedure for solving a given type of mathematical problem is known as being necessary. And, as noted, they can also be performed without a
an "algorithm." The procedures set forth in the present claims are of that kind; computer.
that is to say, they are a generalized formulation for programs to solve 12. The Court stated in Mackay Co. v. Radio Corp. that, “[w]hile a scientific
mathematical problems of converting one form of numerical representation truth, or the mathematical expression of it, is not a patentable invention,
to another. From the generic formulation, programs may be developed as a novel and useful structure created with the aid of knowledge of
specific applications. scientific truth may be.”
5. The decimal system uses as digits the 10 symbols 0, 1, 2, 3, 4, 5, 6, 7, 8, and 13. That statement followed the longstanding rule that “[a]n idea, of itself, is not
9. The value represented by any digit depends, as it does in any positional patentable.” (Rubber-Tip Pencil Co. v. Howard)
system of notation, both on its individual value and on its relative position in 14. “A principle, in the abstract, is a fundamental truth; an original cause; a
the numeral. motive; these cannot be patented, as no one can claim in either of them an
6. Decimal numerals are written by placing digits in the appropriate positions exclusive right.”
or columns of the numerical sequence, i.e., "unit" (10^0), "tens" (10^1), 15. Le Roy v. Tatham: Phenomena of nature, though just discovered, mental
"hundreds" (10^2), "thousands" (10^3), etc. Accordingly, the numeral 1492 processes, and abstract intellectual concepts are not patentable, as they are
signifies (1 x 10^3)+(4 x 10^2)+(9 x 10^1)+(2 x 10^0). the basic tools of scientific and technological work.
7. The pure binary system of positional notation uses two symbols as digits -- 0 16. As we stated in Funk Bros. Seed Co. v. Kalo Co., “He who discovers a
and 1, placed in a numerical sequence with values based on consecutively hitherto unknown phenomenon of nature has no claim to a monopoly of it
ascending powers of 2. In pure binary notation, what would be the tens which the law recognizes. If there is to be invention from such a discovery, it
position is the twos position; what would be hundreds position is the fours must come from the application of the law of nature to a new and useful end.”
position; what would be the thousands position is the eights. 17. We dealt there with a “product” claim, while the present case deals with
8. Any decimal number from 0 to 10 can be represented in the binary system a “process” claim. But we think the same principle applies.
with four digits or positions as indicated in the following table. 18. Here the “process” claim is so abstract and sweeping as to cover both
Shown as the sum of powers of 2 known and unknown uses of the BCD to pure binary conversion.
2^3 2^2 2^1 2^0 19. The end use may (1) vary from the operation of a train to verification of
Decimal (8) (4) (2) (1) Pure Binary drivers' licenses to researching the law books for precedents and (2) be
0 = 0 0 0 0 = 0000 performed through any existing machinery or future-devised machinery
1 = 0 0 0 2^0 = 0001
2 = 0 0 2^1 0 = 0010
or without any apparatus.
3 = 0 0 2^1 2^0 = 0011 20. (Note: The Court enumerated jurisprudence related to the matter. Placing
4 = 0 2^2 0 0 = 0100 them here in small font just for basis)
5 = 0 2^2 0 2^0 = 0101 21. In O'Reilly v. Morse, Morse was allowed a patent for a process of using electromagnetism to
produce distinguishable signs for telegraphy. But the Court denied the eighth claim in which
6 = 0 2^2 2^1 0 = 0110
Morse claimed the use of “electro magnetism, however developed for marking or printing
7 = 0 2^2 2^1 2^0 = 0111 intelligible characters, signs, or letters, at any distances.”
8 = 2^3 0 0 0 = 1000 22. The Court, in disallowing that claim, said, “If this claim can be maintained, it matters not by
9 = 2^3 0 0 2^0 = 1001 what process or machinery the result is accomplished. For aught that we now know, some
10 = 2^3 0 2^1 0 = 1010 future inventor, in the onward march of science, may discover a mode of writing or printing at a
9. The BCD system using decimal numerals replaces the character for each distance by means of the electric or galvanic current, without using any part of the process or
combination set forth in the plaintiff's specification. His invention may be less complicated --
component decimal digit in the decimal numeral with the corresponding four-
less liable to get out of order -- less expensive in construction, and in its operation. But yet, if it
digit binary numeral, shown in the right-hand column of the table. is covered by this patent, the inventor could not use it, nor the public have the benefit of it,
10. Thus, decimal 53 is represented as 0101 0011 in BCD, because decimal 5 is without the permission of this patentee."
equal to binary 0101 and decimal 3 is equivalent to binary 0011. In pure 23. In The Telephone Cases, Bell's invention was the use of electric current to transmit vocal or other
sounds. The claim was not “for the use of a current of electricity in its natural state as it comes
binary notation, however, decimal 53 equals binary 110101. The conversion
from the battery, but for putting a continuous current in a closed circuit into a certain specified
of BCD numerals to pure binary numerals can be done mentally through use condition suited to the transmission of vocal and other sounds, and using it in that condition for
of the foregoing table. that purpose.”
11. The method sought to be patented varies the ordinary arithmetic steps a 24. The claim, in other words, was not “one for the use of electricity distinct from the particular
process with which it is connected in his patent.” The patent was for that use of electricity “both
human would use by changing the order of the steps, changing the
for the magneto and variable resistance methods.” Bell's claim, in other words, was not one for might be attacked as freezing the progress of technology since the ruling here
all telephonic use of electricity.
can be applied for all programs, hampering patents of programs for both
25. In Corning v. Burden, the Court said, “One may discover a new and useful improvement in the
process of tanning, dyeing, etc., irrespective of any particular form of machinery or mechanical analog and digital computers. The Court however clarified that from the start,
device.” The examples given were the “arts of tanning, dyeing, making waterproof cloth, they have already proclaimed that this Ruling is only applicable for digital
vulcanizing India rubber, smelting ores.” computers).
26. Those are instances, however, where the use of chemical substances or physical acts, such as
temperature control, changes articles or materials. The chemical process or the physical acts
36. It is conceded that one may not patent an idea. But, in practical effect,
which transform the raw material are, however, sufficiently definite to confine the patent that would be the result if the formula for converting BCD numerals to
monopoly within rather definite bounds. pure binary numerals were patented in this case.
27. Cochrane v. Deener involved a process for manufacturing flour so as to improve its quality. The 37. The mathematical formula involved here has no substantial practical
process first separated the superfine flour and then removed impurities from the middlings by
blasts of air, reground the middlings, and then combined the product with the superfine. The
application except in connection with a digital computer, which means
claim was not limited to any special arrangement of machinery. that, if the judgment below is affirmed, the patent would wholly preempt
28. The Court said, “That a process may be patentable, irrespective of the particular form of the mathematical formula and, in practical effect, would be a patent of
the instrumentalities used, cannot be disputed. If one of the steps of a process be that a certain the algorithm itself.
substance is to be reduced to a powder, it may not be at all material what instrument or machinery
is used to effect that object, whether a hammer, a pestle and mortar, or a mill. Either may be
38. It may be that the patent laws should be extended to cover these
pointed out; but if the patent is not confined to that particular tool or machine, the use of programs, a policy matter to which we are not competent to speak.
the others would be an infringement, the general process being the same. A process is a 39. The President's Commission on the Patent System rejected the proposal that
mode of treatment of certain materials to produce a given result. It is an act, or a series of acts, these programs be patentable: “Uncertainty now exists as to whether the
performed upon the subject matter to be transformed and reduced to a different state or thing.”
statute permits a valid patent to be granted on programs. Direct attempts to
29. Transformation and reduction of an article “to a different state or thing” is the clue to the
patentability of a process claim that does not include particular machines. So it is that a patent in patent programs have been rejected on the ground of nonstatutory subject
the process of “manufacturing fat acids and glycerine from fatty bodies by the action of water at matter. Indirect attempts to obtain patents and avoid the rejection, by
a high temperature and pressure” was sustained in Tilghman v. Proctor. drafting claims as a process, or a machine or components thereof
30. The Court said, “The chemical principle or scientific fact upon which it is founded is that the
programmed in a given manner, rather than as a program itself, have confused
elements of neutral fat require to be severally united with an atomic equivalent of water in order
to separate from each other and become free. This chemical fact was not discovered by Tilghman. the issue further, and should not be permitted.”
He only claims to have invented a particular mode of bringing about the desired chemical union 40. “The Patent Office now cannot examine applications for programs
between the fatty elements and water.” because of a lack of a classification technique and the requisite search
31. Expanded Metal Co. v. Bradford sustained a patent on a “process” for expanding metal. A
process “involving mechanical operations, and producing a new and useful result,” was held to
files. Even if these were available, reliable searches would not be feasible
be a patentable process, process patents not being limited to chemical action. or economic because of the tremendous volume of prior art being
32. Smith v. Snow, and Taxham v. Smith: involved a process for setting eggs in staged incubation generated. Without this search, the patenting of programs would be
and applying mechanically circulated currents of air to the eggs. tantamount to mere registration, and the presumption of validity would be all
33. The Court, in sustaining the function performed (the hatching of eggs) and the means or process
but nonexistent.”
by which that is done, said: “By the use of materials in a particular manner, he secured the
performance of the function by a means which had never occurred in nature, and had not 41. “It is noted that the creation of programs has undergone substantial and
been anticipated by the prior art; this is a patentable method or process. . . . A method satisfactory growth in the absence of patent protection, and that
which may be patented irrespective of the particular form of the mechanism which may be COPYRIGHT protection for programs is presently available.”
availed of for carrying it into operation is not to be rejected as 'functional' merely because the
42. If these programs are to be patentable, considerable problems are raised
specifications show a machine capable of using it.”
34. It is argued that a process patent must either be tied to a particular which only committees of Congress can manage, for broad powers of
machine or apparatus or must operate to change articles or materials to investigation are needed, including hearings which canvass the wide variety
a “different state or thing.” We do not hold that no process patent could of views which those operating in this field entertain. The technological
ever qualify if it did not meet the requirements of our prior precedents. problems tendered in the many briefs before usindicate to us that considered
It is said that the decision precludes a patent for any program servicing a action by the Congress is needed.
computer. We do not so hold.
35. It is said that we have before us a program for a digital computer but extend
our holding to programs for analog computers. We have, however, made clear
from the start that we deal with a program only for digital computers. It is
said we freeze process patents to old technologies, leaving no room for the
revelations of the new, onrushing technology. Such is not our purpose. (Note:
My translation of this paragraph into understandable words: This Decision
002 PARKER v. FLOOK (ARCENAS)
June 22, 1978 | Stevens, J. | Definition of a computer program3 DOCTRINE: The obligation to determine what type of discovery is sought to be
patented must precede the determination of whether that discovery is, in fact, new or
PETITIONER Parker, Acting Commissioner of Patents and Trademarks obvious. Even though a phenomenon of nature or mathematical formula may be well
RESPONDENT: Flook known, an inventive application of the principle may be patented. Conversely, the
discovery of such a phenomenon cannot support a patent unless there is some other
SUMMARY: Flook applied for a patent on a "Method for Updating Alarm Limits”. inventive concept in its application.
In essence, the method consists of three steps: an initial step - which merely measures
the present value of the process variable (e.g., the temperature); an intermediate step DOCTRINE 2: (Not much was said about computer programs except sa footnote)
- which uses an algorithm to calculate an updated alarm limit value; and a final step The term "software" is used in the industry to describe computer programs. The value
- in which the actual alarm limit is adjusted to the updated value. The only difference of computer programs in use in the United States in 1976 was placed at $43.1 billion,
between the conventional methods of changing alarm limits and that described in and projected at $70.7 billion by 1980 according to one industry estimate. See Brief
Flook’s application rests in the second step -- the mathematical algorithm or formula. for the Computer & Business Equipment Manufacturers Assn. as Amicus Curiae 17-
The patent examiner rejected the application which was upheld by the Board of 18, n. 16.
Appeals of the Patent and Trademark Office. However, the Court of Customs and
Patent Appeals reversed. Hence, the Acting Commissioner of Patents and FACTS:
Trademarks (Parker) filed a petition for a writ of certiorari, urging that the decision 1. In Gottschalk v. Benson, we held that the discovery of a novel and useful
of the Court of Customs and Patent Appeals will have a debilitating effect on the mathematical formula may not be patented.
rapidly expanding computer "software" industry. 2. An "alarm limit" is a number. During catalytic conversion processes,
operating conditions such as temperature, pressure, and flow rates are
The issue before the court is whether the identification of a limited category of useful, constantly monitored. When any of these "process variables" exceeds a
though conventional, post-solution applications of such a formula makes Flook's predetermined "alarm limit," an alarm may signal the presence of an
method eligible for patent protection. The court held that it was not patentable. A abnormal condition indicating either inefficiency or perhaps danger.
process is not unpatentable simply because it contains a law of nature or a a. Fixed alarm limits may be appropriate for a steady operation, but
mathematical algorithm; Flook's process is unpatentable under § 101 not because it during transient operating situations, such as start-up, it may be
contains a mathematical algorithm as one component, but because, once that necessary to "update" the alarm limits periodically.
algorithm is assumed to be within the prior art, the application, considered as a whole, 3. Flook applied for a patent on a "Method for Updating Alarm Limits”. In
contains no patentable invention. essence, the method consists of three steps:
a. an initial step - which merely measures the present value of the
Flook’s method for updating alarm limits during catalytic conversion processes, in process variable (e.g., the temperature);
which the only novel feature is a mathematical formula, held not patentable under § b. an intermediate step - which uses an algorithm to calculate an
101 of the Patent Act. The identification of a limited category of useful, though updated alarm limit value; and
conventional, post-solution applications of such a formula does not make the method c. a final step - in which the actual alarm limit is adjusted to the
eligible for patent protection, since, assuming the formula to be within prior art, as it updated value.
must be, Flook’s application contains no patentable invention. The chemical 4. The only difference between the conventional methods of changing alarm
processes involved in catalytic conversion are well known, as are the monitoring of limits and that described in Flook’s application rests in the second step --
process variables, the use of alarm limits to trigger alarms, the notion that alarm limit the mathematical algorithm or formula.
values must be recomputed and readjusted, and the use of computers for "automatic d. Using the formula, an operator can calculate an updated alarm limit
process monitoring." Flook's application simply provides a new and presumably once he knows the original alarm base, the appropriate margin of
better method for calculating alarm limit values. As the Court of Customs and Patent safety, the time interval that should elapse between each updating,
Appeals has explained, "if a claim is directed essentially to a method of calculating, the current temperature (or other process variable), and the
using a mathematical formula, even if the solution is for a specific purpose, the appropriate weighting factor to be used to average the original alarm
claimed method is nonstatutory." base and the current temperature.

3
Flook was reaffirmed in another case saying that simply implementing an abstract idea on a computer
could not confer patent eligibility
e. The patent claims cover any use of Flook’s formula for updating the mathematical algorithm as one component, but because, once that algorithm
value of an alarm limit on any process variable involved in a process is assumed to be within the prior art, the application, considered as a whole,
comprising the catalytic chemical conversion of hydrocarbons. contains no patentable invention.
f. Since there are numerous processes of that kind in the petrochemical
and oil-refining industries, the claims cover a broad range of RULING: The judgment of the Court of Customs and Patent Appeals is Reversed.
potential uses of the method. They do not, however, cover every RATIO:
conceivable application of the formula. 1. This case turns entirely on the proper construction of § 101 of the Patent Act,
g. The patent application does not purport to explain how to select the which describes the subject matter that is eligible for patent protection.
appropriate margin of safety, the weighting factor, or any of the a. The plain language of § 101 does not answer the question whether
other variables. Nor does it purport to contain any disclosure relating the discovery of this feature makes an otherwise conventional
to the chemical processes at work, the monitoring of process method eligible for patent protection.
variables, or the means of setting off an alarm or adjusting an alarm b. The holding that the discovery of that method could not be
system. patented as a "process" forecloses a purely literal reading of §
5. The patent examiner rejected the application. The examiner concluded 101. Reasoning that an algorithm, or mathematical formula, is
that the claims did not describe a discovery that was eligible for patent like a law of nature, Benson applied the established rule that a
protection. law of nature cannot be the subject of a patent. Quoting from
h. He found that the mathematical formula constituted the only earlier cases, we said:
difference between Flook’s claims and the prior art (referring to i. “A principle, in the abstract, is a fundamental truth; an
previous systems), and therefore a patent on this method "would, in original cause; a motive; these cannot be patented, as no
practical effect, be a patent on the formula or mathematics itself." one can claim in either of them an exclusive right.
6. The Board of Appeals of the Patent and Trademark Office sustained the Phenomena of nature, though just discovered, mental
examiner's rejection. processes, and abstract intellectual concepts are not
i. The Board also concluded that the "point of novelty in [Flook's] patentable, as they are the basic tools of scientific and
claimed method" lay in the formula or algorithm described in the technological work."
claims, a subject matter that was unpatentable under Benson case. 2. The line between a patentable "process" and an unpatentable "principle" is
2. The Court of Customs and Patent Appeals reversed. not always clear. Both are "conception[s] of the mind, seen only by [their]
a. It read Benson as applying only to claims that entirely preempt a effects when being executed or performed."
mathematical formula or algorithm, and noted that Flook was only a. In Benson, we concluded that the process application in fact sought
claiming on the use of his method to update alarm limits in a process to patent an idea, noting that "[t]he mathematical formula involved
comprising the catalytic chemical conversion of hydrocarbons. here has no substantial practical application except in connection
b. The court reasoned that, since the mere solution of the algorithm with a digital computer, which means that, if the judgment below
would not constitute infringement of the claims, a patent on the is affirmed, the patent would wholly preempt the mathematical
method would not preempt the formula. formula and, in practical effect, would be a patent on the
3. The Acting Commissioner of Patents and Trademarks (Parker) filed a algorithm itself."
petition for a writ of certiorari, urging that the decision of the Court of 3. Flook correctly points out that this language does not apply to his claims.
Customs and Patent Appeals will have a debilitating effect on the rapidly a. It is true, as Flook argues, that his method is a "process" in the
expanding computer "software" industry, and will require him to process ordinary sense of the word. But that was also true of the algorithm,
thousands of additional patent applications. Because of the importance of the which described a method for converting binary-coded decimal
question, we granted certiorari. numerals into pure binary numerals, that was involved in Gottschalk
v. Benson.
ISSUE/s: 4. He does not seek to "wholly preempt the mathematical formula," since
3. whether the identification of a limited category of useful, though there are uses of his formula outside the petrochemical and oil refining
conventional, post-solution applications of such a formula makes Flook's industries that remain in the public domain.
method eligible for patent protection – NO. Process is not unpatentable a. And he argues that the presence of specific "post-solution" activity
simply because it contains a law of nature or a mathematical algorithm; -- the adjustment of the alarm limit to the figure computed according
Flook's process is unpatentable under § 101 not because it contains a
to the formula -- distinguishes this case from Benson and makes b. In reviewing earlier cases applying the rule that a scientific principle
his process patentable. cannot be patented, the Court placed particular emphasis on the
5. SC did not agree. The notion that post-solution activity, no matter how English case of Neilson v. Harford4. The English court rejected the
conventional or obvious in itself, can transform an unpatentable principle into argument that the patent merely covered the principle that furnace
a patentable process exalts form over substance (i.e. the Court did not agree temperature could be increased by injecting hot air, instead of cold
with Flook's assertion that the existence of a limitation to a specific field into the furnace. That court's explanation of its decision was relied
of use made the formula patent-eligible) on by this Court in Morse:
a. A competent draftsman could attach some form of post-solution i. "'It is very difficult to distinguish it [the Neilson patent]
activity to almost any mathematical formula; the Pythagorean from the specification of a patent for a principle, and this
theorem would not have been patentable, or partially patentable, at first created in the minds of the court much difficulty;
because a patent application contained a final step indicating that the but after full consideration, we think that the plaintiff does
formula, when solved, could be usefully applied to existing not merely claim a principle, but a machine, embodying
surveying techniques. a principle, and a very valuable one…”
6. (Not all patent applications involving formulas are patent-ineligible by 9. Flook argues that this approach improperly imports into § 101 the
saying) Yet it is equally clear that a process is not unpatentable simply considerations of "inventiveness" which are the proper concerns of §§ 102
because it contains a law of nature or a mathematical algorithm. and 103. This argument is based on two fundamental misconceptions, thus
a. For instance, in Mackay Radio & Telegraph Co. v. Radio Corp. of were held untenable by the SC.
America, the applicant sought a patent on a directional antenna a. First, Flook incorrectly assumes, if a process application implements
system in which the wire arrangement was determined by the logical a principle in some specific fashion, it automatically falls within the
application of a mathematical formula: patentable subject matter of § 101 and the substantive patentability
i. "While a scientific truth, or the mathematical expression of of the particular process can then be determined by the conditions
it, is not patentable invention, a novel and useful structure of §§ 102 and 103.
created with the aid of knowledge of scientific truth may i. It would make the determination of patentable subject
be." matter depend simply on the draftsman's art, and would ill
b. Funk Bros. Seed Co. v. Kalo Co., expresses a similar approach: serve the principles underlying the prohibition against
i. "He who discovers a hitherto unknown phenomenon of patents for "ideas" or phenomena of nature.
nature has no claim to a monopoly of it which the law ii. The rule that the discovery of a law of nature cannot be
recognizes. If there is to be invention from such a patented rests not on the notion that natural phenomena
discovery, it must come from the application of the law are not processes, but rather on the more fundamental
of nature to a new and useful end." understanding that they are not the kind of "discoveries"
7. Mackay Radio and Funk Bros. point to the proper analysis for this case: the that the statute was enacted to protect.
process itself, not merely the mathematical algorithm, must be new and b. Second, Flook assumes that the fatal objection to his application is
useful. the fact that one of its components -- the mathematical formula --
a. Indeed, the novelty of the mathematical algorithm is not a consists of unpatentable subject matter.
determining factor at all. i. Our approach to Flook's application is, however, not at all
b. Whether the algorithm was in fact known or unknown at the time inconsistent with the view that a patent claim must be
of the claimed invention, as one of the "basic tools of scientific and considered as a whole.
technological work," it is treated as though it were a familiar part ii. Flook's process is unpatentable under § 101 not because it
of the prior art. contains a mathematical algorithm as one component, but
8. This is also the teaching of our landmark decision in O'Reilly v. Morse. because, once that algorithm is assumed to be within the
a. In that case, the Court rejected Samuel Morse's broad claim prior art, the application, considered as a whole, contains
covering any use of electromagnetism for printing intelligible no patentable invention.
signs, characters, or letters at a distance. 10. SC RULING: Here it is absolutely clear that Flook's application contains
no claim of patentable invention.

4 which involved the circulation of heated air in a furnace system to increase its efficiency
a. The chemical processes involved in catalytic conversion of "where F is a predetermined number greater than zero and less than 1.0;"
hydrocarbons are well known, as are the practice of monitoring the
chemical process variables, the use of alarm limits to trigger alarms, "(3) Determining an updated alarm limit which is defined as B1 + K; and
the notion that alarm limit values must be recomputed and thereafter"
readjusted, and the use of computers for "automatic monitoring "(4) Adjusting said alarm limit to said updated alarm limit value."
alarming."
11. Flook's application simply provides a new and presumably better 2. In order to use Flook's method for computing a new limit, the operator
method for calculating alarm limit values. As the Court of Customs and must make four decisions.
Patent Appeals has explained, "if a claim is directed essentially to a a. Based on his knowledge of normal operating conditions, he first
method of calculating, using a mathematical formula, even if the solution selects the original "alarm base" (Bo); if a temperature of 400
is for a specific purpose, the claimed method is nonstatutory." degrees is normal, that may be the alarm base. He next decides on
a. In re Richman, 563 F.2d 1026, 1030 (1977). an appropriate margin of safety, perhaps 50 degrees; that is his
i. To a large extent, our conclusion is based on reasoning "alarm offset" (K). The sum of the alarm base and the alarm offset
derived from opinions written before the modern business equals the alarm limit. Then he decides on the time interval that will
of developing programs for computers was conceived. The elapse between each updating; that interval has no effect on the
youth of the industry may explain the complete absence computation, although it may, of course, be of great practical
of precedent supporting patentability. Neither the dearth importance. Finally, he selects a weighting factor (F), which may be
of precedent nor this decision should therefore be any number between 99% and 1% and which is used in the updating
interpreted as reflecting a judgment that patent protection calculation.
of certain novel and useful computer programs will not 3. If the operator has decided in advance to use an original alarm base (Bo) of
promote the progress of science and the useful arts, or that 400 degrees, a constant alarm offset (K) of 50 degrees, and a weighting factor
such protection is undesirable as a matter of policy. (F) of 80%, the only additional information he needs in order to compute an
Difficult questions of policy concerning the kinds of updated alarm limit (UAV), is the present value of the process variable
programs that may be appropriate for patent protection and (PVL). The computation of the updated alarm limit according to Flook's
the form and duration of such protection can be answered method involves these three steps:
by Congress on the basis of current empirical data not a. First, at the predetermined interval, the process variable is
equally available to this tribunal. measured; if we assume the temperature is then 425 degrees, PVL
b. It is our duty to construe the patent statutes as they now read, in light will then equal 425.
of our prior precedents, and we must proceed cautiously when we b. Second, the solution of Flook's novel formula will produce a new
are asked to extend patent rights into areas wholly unforeseen by alarm base (B1) that will be a weighted average of the preceding
Congress. alarm base (Bo) of 400 degrees and the current temperature (PIL) of
425. It will be closer to one or the other, depending on the value of
APPENDIX TO OPINION OF THE COURT (technical explanation of Flook’s patent, the weighting factor (F) selected by the operator. If F is 80%, that
can totally skip) percentage of 425 (340) plus 20% (1-F) of 400 (80) will produce a
Claim 1 of the patent describes the method as follows: new alarm base of 420 degrees.
1. "A method for updating the value of at least one alarm limit on at least one c. Third, the alarm offset (K) of 50 degrees is then added to the new
process variable involved in a process comprising the catalytic chemical alarm base (B1) of 420 to produce the updated alarm limit (UAV)
conversion of hydrocarbons wherein said alarm limit has a current value of" of 470.
"Bo + K" 4. The process is repeated at the selected time intervals. In each updating
"wherein Bo is the current alarm base and K is a predetermined alarm offset which computation, the most recently calculated alarm base and the current
comprises: " measurement of the process variable will be substituted for the corresponding
"(1) Determining the present value of said process variable, said present value numbers in the original calculation, but the alarm offset and the weighting
being defined as PVL;" factor will remain constant.
"(2) Determining a new alarm base B1, using the following equation:" * More precisely, it is defined as a number greater than 0, but less than 1.

"B1=Bo(1.0-F) + PVL(F)"
003 DIAMOND v. DIEHR (PELIÑO) formula implements or applies that formula in a structure or process which, when
March 3, 1981| Rehnquist, J. | Computer Program considered as a whole, is performing a function which the patent laws were designed to
protect, then the claim satisfies the requirements.
PETITIONER: Diamond and the Commissioner of Patents and Trademarks
RESPONDENT: Diehr and Lutton FACTS:
1. A patent application was filed by Diehr on August 6, 1975. The claimed invention
SUMMARY: Diehr and Lutton filed a patent application for the invention of a process for is a process for molding raw, uncured synthetic rubber into cured precision
molding raw, uncured synthetic rubber into cured precision products. They characterized products.
their contribution to the art to reside in the process of constantly measuring the actual a. The process uses a mold for precisely shaping the uncured material under
temperature inside the mold. So the temp measurements are automatically fed into a heat and pressure and then curing the synthetic rubber in the mold so that the
computer which repeatedly recalculates the cure time by using the Arrhebius equation. product will retain the shape and be functionally operative after the molding
When the recalculated time equals the actual time that has elapsed since the press was
is completed.
closed, the computer signals a device to open the press. The continuous measuring of the
2. Diehr claims the following:
temp inside the mold cavity, the feeding of this info to a digital computer which constantly
recalculates the cure time, and the singaling by the computer to open the press are all new a. Their process ensures the production of molded articles which are properly
in the art. In essence, this is the process: installing rubber in press  closing mold  cured.
constantly determining temp of mold  constantly recalculating the appropriate cure time
i. Achieving the perfect cure depends upon several factors: thickness of
through the use of the formula and a digital computer  automatically opening the press
the article to be molded, the temperature of the molding process,
at the proper time. The patent examiner rejected Diehr’s claims since the remaining steps, amount of time that the article is allowed to remain in the press.
like installing rubber in the press and closing the press, were conventional and necessary to ii. It is possible using well-known time, temp, and cure relationships, to
the process and can’t be the basis of patentability. The Patent and Trademark Office Board calculate by means of the Arrhenius equation5 when to open the
of Appeals agreed with the examiner, but the Court of Customs and Patent Appeals press and remove the cured product.
reversed, saying that Diehr’s claims were not directed to a mathematic algorithm or an b. That the industry has not been able to obtain uniformly accurate cures
improved method of calculation, rather, it recited an improved process for molding rubber because the temperature of the molding press could not be measured
articles by solving a practical problem which had arisen in the molding of rubber products. precisely.
Hence, this petition. The issue in this case is whether or not a process for curing synthetic i. Because the temperature inside the press has been seen as an
rubber, which includes in several of its steps the use of a mathematical formula and a uncontrollable variable, the conventional industry practice has been
programmed digital computer, is patentable subject matter. The SC held in the affirmative. to calculate the cure time as the shortest time in which all parts of the
The SC defined process as an act or a series of acts performed upon the subject matter to product will definitely be cured.
be transformed and reduced to a different state or thing. If new and useful, it is just as ii. But the shortcoming of this is that operating with an uncontrollable
patentable as is a piece of machinery. And in this case, the process being claimed by Diehr variable led in some instances to overestimating the mold-opening
and Lutton, have historically been eligible to receive patent law protection. Second, while time and sometimes underestimating the time.
a mathematical formula cannot be the subject of a patent, Diehr and Lutton do not seek to c. They characterized their contribution to the art to reside in the process of
patent the formula, rather, they seek protection for the process of curing synthetic rubber. constantly measuring the actual temperature inside the mold.
Although their process uses the Arrhenius equation, they do not seek to preempt the use of
i. The temperature measurements are automatically fed into a computer
such, except in conjunction with all of the other steps in their claimed process. The
which repeatedly recalculates the cure time by using the Arrhenius
questions of whether a particular invention meets the novelty requirement do not affect the
determination of whether the invention falls into a category of subject matter that is eligible equation. When the recalculated time equals the actual time that has
for patent protection. Lastly, when a claim containing a mathematical formula implements elapsed since the press was closed, the computer signals a device to
or applies the formula in a structure or process, which, when considered as a whole, is open the press.
performing a function which the patent laws were designed to protect, then the claim ii. The continuous measuring of the temperature inside the mold cavity,
satisfies Section 101’s requirements. the feeding of this info to a digital computer which constantly
recalculates the cure time, and the signaling by the computer to open
DOCTRINE: When a claim recites a math formula, scientific principle, or a the press are all new in the art.
phenomenon of nature, an inquiry must be made into whether the claim is seeking 3. The patent examiner rejected Diehr’s claims on the sole ground that they were
patent protection for that formula in the abstract. It is to be remembered that math drawn to nonstatutory subject matter. He determined that:
formulas are not protected under patent laws. However, when a claim containing a math a. Steps in Diehr’s claims are carried out by a computer under control of a
stored program constituted nonstatutory subject matter under the Gottschalk

5
ln v = CZ + x (ln v – total required cure time; C – activation constant; Z – temp of te mold; x – constant
dependent on the geometry of the particular mold in the press
v. Benson decision. in a certain order, but the tools to be used may be of secondary consequence.
b. The remaining steps, like installing rubber in the press and closing the press, c. Cochrane v. Deener: Transformation and reduction of an article to a different
were conventional and necessary to the process and can’t be the basis of state or thing is the clue to the patentability of a process claim that does not
patentability. Thus, Diehr’s claims defined and sought protection of a include particular machines.
computer program for operating a rubber-molding rpess. 3. In this case, the Court thinks that physical and chemical process for molding
4. The Patent and Trademark Office Board of Appeals agreed with the examiner, precision synthetic rubber products fall within Sec. 101 categories of
but the Court of Customs and Patent Appeals reversed. possibly patentable subject matter.
a. The Court of Customs and Patent Appeals said that Diehr’s claims were not a. Their claims involve the transformation of a raw uncured synthetic rubber
directed to a mathematic algorithm or an improved method of calculation, into a different thing.
rather, it recited an improved process for molding rubber articles by solving b. Diehr’s claims describe in detail a step-by-step method for
a practical problem which had arisen in the molding of rubber products. accomplishing such, beginning with the loading of a mold with raw,
5. Hence, this petition. uncured rubber and ending with the eventual opening of the press at the
conclusion of the cure.
ISSUE/s: c. Industrial processes such as this are the types which have historically
1. WON a process for curing synthetic rubber, which includes in several of its steps been eligible to receive the protection of our patent laws.
the use of a mathematical formula and a programmed digital computer, is 4. The Court’s finding is not altered by the fact that several of the steps use a
patentable subject matter. – YES, the process being claimed by Diehr and Lutton, mathematical equation and a programmed digital computer.
have historically been eligible to receive patent law protection. Second, while a a. Excluded from patent protection: laws of nature, natural phenomena, abstract
mathematical formula cannot be the subject of a patent, Diehr and Lutton do not seek ideas.
to patent the formula, rather, they seek protection for the process of curing synthetic b. Rubber-Tip Pencil Co. v. Howard: A principle in the abstract, is a
rubber. Although their process uses the Arrhenius equation, they do not seek to fundamental truth; an original cause, a motive; these cannot be patented, as
preempt the use of such, except in conjunction with all of the other steps in their no one can claim in either of them an exclusive right.
claimed process. The questions of whether a particular invention meets the novelty c. Le Roy v. Tatham: New mineral discovered in the earth or a new planet is
requirement do not affect the determination of whether the invention falls into a not patentable subject matter. And Einstein couldn’t patent E=mc2 or
category of subject matter that is eligible for patent protection.
Newton’s laws on gravity since these discoveries are manifestations of
nature.
RULING: We AFFIRM the judgment of the Court of Customs and Patent Appeals. d. Gottschalk v. Benson: Claims for an algorithm used to convert the binary
code decimal numbers to equivalent pure numbers are unpatentable, since
RATIO: the sole practical application of the algorithm was in connection with the
On whether a process for curing synthetic rubber which includes the use of a mathematical programming of a general purpose digital computer. The Court here defined
formula and a programmed digital computer is patentable subject matter algorithm – procedure for solving a given type of mathematical problem, and
1. The historical purpose for patent laws is found in Diamond v. Chakrabarty, that: that it’s like a law of nature, so it can’t be the subject of a patent.
whoever invents or discovers any new and useful process, machine, manufacture, e. Parker v. Flook: Alarm limit – number; application sought to protect a
or composition of matter, or any new and useful improvement thereof, may obtain formula for computing this number. Using this formula, the updated alarm
a patent therefor, subject to the conditions and requirements of this title. limit could be calculated if several other variables were known.
2. The Patent Act of 1973 defined ‘statutory subject matter’ – any new and useful 5. The difference between the mentioned cases and the case of Diehr is that
art, machine, manufacture or composition of matter, or any new or useful Diehr, et. al. do not seek to patent a mathematical formula. What they seek
improvement. Congress later changed art with process. patent protection for is the process of curing synthetic rubber. Their process
a. Although ‘process’ was not added until 1952, a process has historically admittedly employs a well-known mathematical equation, but they do not
enjoyed patent protection because it was considered a form of “art”. seek to preempt the use of that equation, rather, they seek only to foreclose
b. Nature of a patentable process: A process is a mode of treatment of certain from others the use of that equation in conjunction with all the other steps
materials to produce a given result; it is an act or a series of acts, performed in their claimed process.6
upon the subject matter to be transformed and reduced to a different state or a. One does not need the computer to cure natural or synthetic rubber, but if
thing; if new and useful, it is just as patentable as is a piece of machinery. such is incorporated, then it lessens the problem of either overcuring or
Process requires that certain things should be done with certain substances, undercuring. The process, as a whole, does not become unpatentable subject

6
Installing rubber in press  closing mold  constantly determining temp of mold  constantly
recalculating the appropriate cure time through the use of the formula and a digital computer 
automatically opening the press at the proper time.
matter. anything new about the process for curing synthetic rubber.
6. Parker v. Flook: A process is not unpatentable simply because it contains a a. It teaches nothing about the chemistry of the synthetic rubber curing process,
law of nature or a mathematical algorithm. nothing about the raw materials to be used in curing synthetic rubber, nothing
a. An application of a law of nature or mathematical formula to a known about the equipment to be used in the process, and nothing about the
structure or process may well be deserving of patent protection. significance or effect of any process variable.
b. Moreover, in another case, the Court has already said that while a scientific 4. Their discovery is an improved method of calculating the time that the mold
truth or mathematical expression is not a patentable invention, a novel and should remain closed during the curing process.
useful structure created with the aid of such can be. 5. 3 reasons why he doesn’t agree that Diehr discovered a new method:
7. Arrhenius’ equation is not patentable but when a process for curing rubber a. Not a word in the patent application that suggests that there is anything
is devised which incorporates in it a more efficient solution of the equation, unusual about the temp reading devices used in this process-or indeed that
that process is, at the very least, not barred at the threshold by Sec. 101. any particular species of temp reading device should be used in it.
a. When a claim containing a mathematical formula implements or applies the b. Since devices for constantly measuring actual temps have been familiar
formula in a structure or process, which, when considered as a whole, is articles for quite some time, he finds it difficult to believe that a patent
performing a function which the patent laws were designed to protect, then application filed in 1975 was premised on the notion that “a process of
the claim satisfies Section 101’s requirements. constantly measuring the actual temperature” had just been discovered.
8. In determining the eligibility of Diehr’s claimed process for patent protection, c. Patent and Trademark Office Board of Appeals found that the only
their claims must be considered as a whole; it is inappropriate to dissect the claims difference between the conventional methods of operating a molding press
into old and new elements and then ignore the presence of the old elements in the and that claimed by Diehr in their application rests in those steps of the
analysis. claims which related to the calculation incident to the solution of the math
a. A new combination of steps in a process may be patentable even though problem or formula.
all the constituents of the combinaton were well known and in common 6. Reading the application, it’s clear that what Diehr and Lutton claim to have
use before the combination was made. discovered is a method of using a digital computer to determine the amount of
b. “Novelty” of any element or steps in a process or even the process itself is time that a rubber molding press should remain closed during the synthetic rubber
of no relevance in determining whether the subject matter of a claim falls process.
within Sec. 101 categories of possibly patentable subject matter. a. There is no suggestion that there is anything novel in the instrumentation of
c. The questions of whether a particular invention meets the novelty the mold, actuating a timer when the press is closed, etc.
requirement do not affect the determination of whether the invention falls b. The application likewise doesn’t suggest that Diehr and Lutton have
into a category of subject matter that is eligible for patent protection. discovered anything about the temperatures in the mold or the amount of
9. In conclusion, the Court views Diehr’s claims as nothing more than a process curing time that will produce the best cure.
for molding rubber products and not as an attempt to patent a math c. What they claim to have discovered, in essence, is a method of updating
formula. When a claim recites a math formula, scientific principle, or a the original estimated curing time by repetitively calcultating that time
phenomenon of nature, an inquiry must be made into whether the claim is pursuant to a well-known math formula.
seeking patent protection for that formula in the abstract. d. He finds that what they are trying to patent here is similar to that in Parker
a. It is to be remembered that math formulas are not protected under patent v. Flook, where a digital computer repetitively recalculated the alarm limit –
laws. However, when a claim containing a math formula implements or a number that might signal the need to terminate or modify the catalytic
applies that formula in a structure or process which, when considered as a conversion process.
whole, is performing a function which the patent laws were designed to
protect, then the claim satisfies the requirements.

Stevens, J. Dissenting (Justice Brennan, Marshall, and Blackmun also join):


**He cited several jurisprudence with regard to the mental steps doctrine and the function
of a machine doctrine, where there were decisions rejecting the mental steps doctrine, and
also how the Court has decided on several cases which are similar to this, like involving
processes and algorithms, but the most important cases are Gottschalk and Flook**
1. Mental steps doctrine – a scientific concept or mere idea cannot be the subject of
a valid patent.
2. Function of a machine doctrine – a process which amounted to nothing more than
a description of the function of a machine was unpatentable.
3. Justice Stevens dissents, in that Diehr and Lutton do not claim to have discovered
004 IN RE BILSKI v. KAPPOS (PUNSALAN) sold by a commodity provider at a fixed price comprising the steps of:
Oct. 30, 2008 | Michel, J. | Patent-eligible invention (a) initiating a series of transactions between said commodity provider
and consumers of said commodity wherein said consumers purchase
PETITIONER: Bernard Bilski and Rand Warsaw said commodity at a fixed rate based upon historical averages, said
RESPONDENTS: Patent Examiner Kappos, Board of Patent Appeals and fixed rate corresponding to a risk position of said consumer;
Interferences
(b) identifying market participants for said commodity having a
SUMMARY: Applicants Bernard Bilski and Rand Warsaw submitted a patent counter-risk position to said consumers; and
application containing 11 claims related to a method for managing consumption risk
of a consumer commodity. They admitted that the commodity may not be a physical (c) initiating a series of transactions between said commodity provider
commodity but could be options for future purchases. The examiner determined the and said market participants at a second fixed rate such that said series
method was manipulating an abstract idea, did not involve specific equipment, of market participant transactions balances the risk position of said
and therefore was not directed to the "technological arts." The examiner rejected series of consumer transactions
all 11 claims of the application. Bilski et al. appealed to the Board, which held that
the examiner had applied the wrong test when using the "technological arts" test 8. In essence, the claim is for a method of hedging risk in the field of
and should not have required specific equipment because "transformation" of physical
commodities trading. (through fixed bill system)
subject matter was eligible for patent and may not require specific equipment. The
9. This is illustrated in an example where coal power plants (consumers)
Board sustained the rejection, but, on the grounds the claims did not involve a
purchase coal to produce electricity and are averse to the risk of a spike in
transformation, attempted to patent an abstract idea, and did not produce a
"useful, concrete and tangible result." demand for coal since a spike would increase the price and costs. Or that coal
mining companies (market participants) are averse to the risk of a sudden
ISSUE: WoN the claimed method by Bilski is a patent-eligible "process," as the patent drop in demand for coal since it would reduce their sales and depress prices.
statute (35 U.S.C. § 101) uses that term – NO a. The claimed method envisions an intermediary, the “commodity
The SC considered the Machine-or-transformation test (MOTT) as the best test to provider,” that sells coal to the power plants at a fixed price, thus
determine patent-eligibility. MOTT: A claimed process is surely patent-eligible isolating the power plants from the possibility of a spike in demand
under § 101 (sec 101 is the Patent Statute) if: (1) it is tied to a particular machine or increasing the price of coal above the fixed price.
apparatus, or (2) it transforms a particular article into a different state or thing (this b. The same provider buys coal from mining companies at a second
supports past case decisions accdg to the court) fixed price, thereby isolating the mining companies from the
possibility that a drop in demand would lower prices below that
Applied in this case, Bilski’s process as claimed does not transform any artcle to a fixed price, and vice versa if demand and prices fall
different state or thing. Purported transformations or manipulations simply of c. Claim is not limited to transactions involving actual commodities; it
public or private legal obligations or relationships, business risks, or other such may simply involve options (ex. Rights to purchase or sell the
abstractions cannot meet the test because they are not physical objects or substances, commodity at a particular price within a particular timeframe)
and they are not representative of physical objects or substances. Applicants process 10. Unfortunately, the Patent Examiner rejected the claims as “the invention is
at most incorporates only such ineligible transformations. not implemented on a specific apparatus and merely manipulates [an]
abstract idea and solves a purely mathematical problem without any
DOCTRINE: A claim is NOT a patent-eligible “process” if it claims “laws of
limitation to a practical application, therefore, the invention is not directed to
nature, natural phenomena, or abstract ideas.” Although the only limit to patent-
eligibility imposed by Congress is that the invention fall within one of the four
the technological arts.”
categories enumerated in § 101, we must apply the Supreme Court's test (machine- 11. The Board of Patent Appeals and Interferences (Board) upheld the rejection
or-transformation test) to determine whether a claim to a process is drawn to a of the claims of Bilski and Warsaw but on different grounds:
statutory “process” within the meaning of § 101. a. The Board held that the examiner erred to the extent he relied on a
"technological arts" test because the case law does not support such
a test.
FACTS: b. The requirement of a specific apparatus was also erroneous because
6. Applicants Bernard Bilski and Rand Warsaw filed their application on April a claim that does not recite a specific apparatus may still be
10, 1997. directed to patent-eligible subject matter "if there is a
7. The application contains 11 claims. Claim 1 reads:
transformation of physical subject matter from one state to
A method for managing the consumption risk costs of a commodity
another." Claim 1, in particular) is a “new and useful process.”
c. (IMPT) The Board concluded that Bilski and Warsaw’s claims did 4. Congress defined the ordinary meaning of “process” which is “procedure, a
not involve any patent-eligible transformation, holding that series of actions, motions, or operations definitely conducing to an end,
transformation of "non-physical financial risks and legal whether involuntary or voluntary.” (Webster Dictionary sila kumuha ng
liabilities of the commodity provider, the consumer, and the definition)
market participants" is not patent-eligible subject matter. 5. But, the SC has held that the meaning of “process” in the provision is
d. The Board also held that applicants Bilski and Warsaw’s claims narrower than its ordinary meaning. The Court has held that a claim is not a
"pre-empt[] any and every possible way of performing the steps of patent-eligible “process” if it claims “laws of nature, natural phenomena,
the [claimed process], by human or by any kind of machine or by or abstract ideas.”
any combination thereof," and thus only claim an abstract idea a. Such fundamental principles are “part of the storehouse of
ineligible for patent protection. knowledge of all men… free to all men and reserved exclusively to
e. Finally, the Board held that Applicants' process as claimed did not none.”
produce a "useful, concrete and tangible result," and for this
reason as well was not drawn to patent-eligible subject matter. Whether Bilski et al are seeking to claim a fundamental principle or a mental process
12. The applicants appealed the rejection to the Federal Circuit. They also 6. The SC cited different cases (Diehr, Flook, and Benson) but the facts of the
affirmed the rejection. case were of limited usefulness because they represented polar cases on the
abstraction and concreteness spectrum.
ISSUE/s: 7. Patents grant the power to exclude others from practicing that which the
1. WoN Bilski et al is seeking to claim a fundamental principle/mental process patent claims.
– YES, the claim only refers to “transactions” involving the exchange of these a. Diehr suggested that whether a claim is drawn only to a
legal rights at a fixed rate corresponding to a risk position. Claim 1 does not fundamental principle is essentially an inquiry into the scope of
involve the transformation of any physical object or substance, or an that exclusion; i.e., whether the effect of allowing the claim would
electronic signal representative of any physical object or substance. be to allow the patentee to pre-empt substantially all uses of that
2. (main) WoN the claimed method by Bilski is a patent-eligible "process," as fundamental principle. If so, the claim is not drawn to patent-
the patent statute (35 U.S.C. § 101) uses that term– NO, because although the eligible subject matter.
only limit imposed by Congress is that the invention fall within one of the 4 8. The SC has enunciated a definitive test to determine whether a process claim
categories in the statute, it does not pass the machine-or-transformation test is tailored narrowly enough to encompass only a particular application of a
provided by the SC in which definition of “process” is within the law’s fundamental principle ranther than to pre-empt the principle itself. (The
statutory meaning. machine-or-transformation test or MOTT)
3. What test governs the determination as to whether a claim to a process is 9. MOTT: A claimed process is surely patent-eligible under § 101 if: (1) it is
patentable under Patent Statute aforementioned – Machine or Transformation tied to a particular machine or apparatus, or (2) it transforms a particular
Test article into a different state or thing (this supports past case decisions accdg
to the court)
RULING: Judgment in question is affirmed. a. It is only deemed as a process within the statutory definition
when it is either tied to a particular apparatus or operated to change
RATIO: materials to a different state or thing.
Patent Statute 35 U.S.C. § 101 b. The use of a specific machine or transformation of an article must
1. The statute states: “Whoever invents or discovers any new and useful impose meaningful limits on the claim’s scope to be patent-eligible.
process, machine, manufacture, or composition of matter, or any new c. Also, the involvement of the machine or transformation in the
and useful improvement thereof, may obtain a patent therefor, subject to claimed process must not merely be an insignificant extra-solution
the conditions and requirements of this title.” activity. This transformation must be central to the purpose of the
2. The statute recites four categories of patent-eligible subject matter: (1) claimed process.
processes, (2) machines, (3) manufacturers, and (4) compositions of matter. 10. The court then turned their attention to whether this two-branch test should
3. It is undisputed that Bilski’s claims are not directed to a machine, be considered all-inclusive, that is, as stating indispensable conditions of
manufacturer or a composition of matter so the main issue involves what the patent-eligibility. It concluded that the answer was affirmative, even though
term “process” means and how to determine whether a given claim (Bilski’s much of the language in the Supreme Court's patent-eligibility trilogy was
more reserved c. Some Federal Circuit decisions, however, had held some
11. Among several other tests is the "technological arts" test (a patent-eligible transformations of signals and data patent-eligible.
advance must be "technological" in nature) and the SC rejected it on i. For example, the Abele decision approved a dependent
several grounds: claim to a method transforming X-ray attenuation data
a. The meanings of "technological arts" and "technology" are disputed produced in a X-Y field by an X-ray tomographic scanner
and ambiguous. No court has ever adopted the test. to an image of body organs and bones — while at the same
b. The technological-arts test is not an equivalent of or "shortcut," time the Abele court rejected a more generic and abstract
the court insisted, that can be used instead of the transformation- independent claim to a process of graphically displaying
machine test. "Rather, the machine-or-transformation test is the variances from their average values of unspecified data
only applicable test and must be applied, in light of the guidance obtained in an unspecified manner.
provided by the Supreme Court and this court, when evaluating 16. (IMPT) Bilski’s process as claimed does not transform any artcle to a
the patent-eligibility of process claims." different state or thing.
12. There was also a Useful, Concrete, Tangible Results Test but such was a. Purported transformations or manipulations simply of public or
inadequate. This was useful in determining whether an application is seeking private legal obligations or relationships, business risks, or
to patent a fundamental principles however Machine-or-transformation test other such abstractions cannot meet the test because they are not
is a better test to take. physical objects or substances, and they are not representative of
13. The Court refused to adopt a test that barred business methods. While physical objects or substances
the court stated that the machine-or-transformation test was the applicable b. Applicants process at most incorporates only such ineligible
test, the SC in Benson had stated that there could be cases where a claim that transformations.
fails the "requirements of its prior precedents" may still nonetheless be 17. The process as claimed encompasses the exchange of only options, which are
patent-eligible subject matter. simply legal rights to purchase some commodity at a given price in a given time
14. Software could not categorically be excluded. The court stated that future period. The claim only refers to “transactions” involving the exchange of these
developments may alter the standing or the application of the test. legal rights at a “fixed rate corresponding to a risk position.”
18. Thus, claim 1 does not involve the transformation of any physical object or
With regard to Bilski’s method substance, or an electronic signal representative of any physical object or
15. It is patent-ineligible. substance. Given its admitted failure to meet the machine implementation part of
a. Bilski did not argue that the rejected claims recited any specific the test as well, the claim entirely fails the machine-or-transformation test and is
or "particular" machine, so that the court found it unnecessary not drawn to patent-eligible subject matter.
to decide any issues relating to the machine-implementation 19. Bilski’s argument is unavailing:
branch of the test. "We leave to future cases the elaboration of the a. They argue that claim 1 produces useful, concrete and tangible
precise contours of machine implementation, as well as the answers results. But this is insufficient to establish patent-eligibility under §
to particular questions, such as whether or when recitation of a 101.
computer suffices to tie a process claim to a particular machine." b. They also argue that their claimed process does not comprise only
b. (NOTE: you can skip (b) and (c) of this number if you want; medj “steps that are totally or substantially practiced in the mind but
informational lang ito sa point) The court turned to transformation clearly require physical activity which has a tangible result.” But the
of articles from one thing or state to another and Benson, in correct analysis is whether the claim meets the Machine or
defining “article,” had made it clear that tanning hides, smelting Transformation Test, not whether it recites “physical steps.”
ores, and vulcanizing rubber were all instances of transforming c. Its clear failure to satisfy the test is fatal despite the argument that
articles. the claim can only be practiced by a series of physical acts.
i. Some amici curiae articulated it: one physical substance is 20. Thus, while we agree with Applicants that the only limit to patent-eligibility
transformed into a second physical substance. imposed by Congress is that the invention fall within one of the four
ii. But what of electronic signals and electronically categories enumerated in § 101, we must apply the Supreme Court's test
manipulated data? Or even more abstract constructs to determine whether a claim to a process is drawn to a statutory
such as legal obligations, which the Bilski case “process” within the meaning of § 101.
involved? No Supreme Court precedents addressed a. Applied here, Bilski's claim fails that test so it is not drawn to a
such entities. “process” under § 101 as that term has been interpreted.
005 BILSKI v. KAPPOS 2010 case (RAYOS) DOCTRINE: The machine-or-transformation test is not the only test for patent
June 28, 2010 | Kennedy J. | Machine transformation test eligibility under § 101 of the Patent Act. Section 101: Whoever invents or discovers
any new and useful process, machine, manufacture, or composition of matter, or any
PETITIONER: Bilski et. al new and useful improvement thereof may obtain a patent therefor, subject to the
RESPONDENTS: Kappos (undersecretary of commerce for IP & patent, Trade Mark conditions and requirements of this title. Three exceptions section 101’s broad patent-
office eligibility principles: laws of nature, physical henomena and abstract ideas.
While the Bilski opinion clearly states that the “machine-or-transformation” test is not
SUMMARY: Bilski et. al developed a method to hedge against price fluctuations in the sole test for whether a process claim encompasses patentable subject matter, the
the energy market, which included a simple mathematical concept and familiar decision has seemingly done little in the way of giving lower courts further guidance
statistical approaches. They applied for a patent on their claimed invention, but the in making this determination. Additionally, the decision leaves the question of the
patent examiner rejected the application, claiming it involved an abstract idea and was extent to which business methods claims are patentable up to later decisions.
not implemented on a specific apparatus. They appealed and the Federal Circuit
affirmed. The Federal Circuit held the test for patentability under § 101 was the FACTS:
machine-or-transformation test: (1) the claimed process was tied to a particular 1. Petitioners’ patent application seeks protection for a claimed invention that
machine; or (2) the process transformed an article into something else. One of the explains how commodities buyers and sellers in the energy market can
dissenting judges argued it failed because it was a method of conduction business. A protect, or hedge, against the risk of price changes.
second dissenting judge argued the invention was an abstract idea and therefore 2. The key claims are claim 1, which describes a series of steps instructing how
unpatentable. A third dissenter would have remanded to determine patentability under to hedge risk, and claim 4, which places the claim 1 concept into a simple
other provisions. Petitioners appealed and the United States Supreme Court granted mathematical formula.
certiorari. Issue: Is the machine-or-transformation test the only test for patent 3. The remaining claims explain how claims 1 and 4 can be applied to allow
eligibility under § 101 of the Patent Act? No. The machine-or-transformation test is energy suppliers and consumers to minimize the risks resulting from
not the only test for patent eligibility under § 101 of the Patent Act. The Patent Act § fluctuations in market demand for energy.
101 defines patent eligibility with exceptions for “laws of nature, physical phenomena, 4. The patent examiner rejected the application on the grounds that the
and abstract ideas.” Section 101 is a threshold test and the claimed invention must also invention is not implemented on a specific apparatus, merely manipulates an
be novel, nonobvious, and fully described. The invention here is claimed to be a abstract idea, and solves a purely mathematical problem without any
“process” under § 101. “Process is defined within the Patent Act at § 101(b). The limitation to a practical application, therefore, the invention is not directed to
Federal Circuit adopted the machine-or-transformation test as the sole test for what the technological arts.
constitutes a “process.” Section 100(b) explicitly defines “process”, so the Federal 5. The Board of Patent Appeals and Interferences agreed and affirmed. They
Circuit’s further definition and limitation is unnecessary and does not apply here. concluded that the application involved only MENTAL STEPS that do not
Adopting such an exclusionary rule creates uncertainty for the patentability of computer transform physical matter and was directed to an ABSTRACT IDEA. The
software and other emerging technologies. Similarly, the definition of “process” does Federal Circuit, in turn, affirmed.
not exclude business methods. Federal law explicitly contemplates at least some 6. The en banc court rejected its prior test for determining whether a claimed
business method patents as a “method” eligible for a patent under § 101. The invention was a patentable “process” under Patent Act, 35 U. S. C. §101—
limitations of novelty, nonobviousness, and full description protects against unjustified i.e., whether the invention produced a “useful, concrete, and tangible result,”
patents. W/N it is patentable? NO, NOT PATENTABLE. Their process, however, holding instead that a claimed process is patent eligible if: (1) it is tied to a
may not be a “process” under § 101 because it claims an abstract idea. The majority, particular machine or apparatus, or (2) it transforms a particular article
penned by Justice Kennedy, affirmed the ruling of the Federal Circuit that Bilski’s into a different state or thing. Concluding that this “machine-or-
claims were unpatentable, while holding that the Federal Circuit was incorrect in setting transformation test” is the sole test for determining patent eligibility of a
out the “machine-or-transformation” test as the sole test for whether a process claim “process” under §101, the court applied the test and held that the application
encompasses patentable subject matter. The majority further explained that while was not patent eligible.
business method patents are not categorically outside the realm of patentable subject 7. Hence this petition by Bilski.
matter, the specific claims in the Bilski application were not patentable subject matter.
The claims, which were directed to a method of hedging risk in commodities trading in ISSUES:
general, and energy markets in particular, were unpatentable because they encompassed 1. Whether or not the Machine-Or-Transformation Test is the sole test to
an abstract idea. determine patent eligibility for a process? No, not the only test. But it is
a useful and important clue, an investigative tool, for determining whether
some claimed inventions are processes under § 101, but not the sole test in
making the determination. 1. The majority further reasoned that categorically denying the
2. Whether or not business methods can be patentable? Yes, patentable. patentability of business methods would render meaningless 35 U.S.C. §
The majority further concluded that business methods are within the realm of 273 which explicitly refers to “methods of doing or conducting business.”
patentable subject matter. Similar to the reasoning used to evaluate the Even so, the majority does show a certain level of skepticism towards
“machine-or-transformation” test, the majority found that the “ordinary, business patents, stating, “Finally, while § 273 appears to leave open the
contemporary, common meaning” of “process” does not exclude business possibility of some business method patents, it does not suggest broad
methods. patentability of such claimed inventions.”
3. Whether or not Bilski’s application is a patentable subject matter? NO, 2. While Section 273 appears to leave open the possibility of some business
not patentable. Even though the “machine-or-transformation” test is not the method patents, it does not suggest broad patentability of such claimed
sole test for whether a process is patentable subject matter, and business inventions.
methods may at times be patentable, the majority still found the Bilski claims
unpatentable as falling into one of the judicially created exceptions to the Bilski’s application not patentable
patentable subject matter. Specifically, the Court found the Bilski claims as 1. The majority felt that the claims simply “explain the concept of hedging
encompassing an abstract idea. or protecting against risk,” and this is nothing more than an abstract
idea.
RULING: The judgement of the Court of appeals is affirmed. 2. The Court affirmed the judgment of the Federal Circuit in In re Bilski, the
(case digest by Casey). However, it rejected the machine-or-transformation
RATIO: test as a sole test of patentability based on an interpretation of the language
Machine-Or-Transformation Test of § 101. The Court rejected the Federal Circuit's statutory
1. Under the “machine-or-transformation” test a process is patentable if: “ interpretation regarding the word "process," finding the definition in §
a. (1) it is tied to a particular machine or apparatus, or 100(b) to be sufficient without turning to the canon of noscitur a sociis.[4]
b. (2) it transforms a particular article into a different state or thing.” Section 100(b) defines process as a "process, art or method, and includes
2. The majority concluded that the test is improper as the sole test for whether a new use of a known process, machine, manufacture, composition of
process claims are patentable subject matter because doing so would “impose matter, or material."
limitations on the Patent Act that are inconsistent with the Act’s text.” 3. The Court looked to Gottschalk v. Benson and Parker v. Flook, and noted
3. The Court was unaware of any “ordinary, contemporary, common meaning” that both had explicitly refused to rely on the machine-or-transformation test
of a process as defined in the Patent Act that requires a process to be tied to as the sole test for patent eligibility.
a machine, or to transform an article. Accordingly, the Court declined to a. Benson case – pure binary code was a process. A principle, in
impose these added limitations on process claims. the abstract, is a fundamental truth; an original cause; a motive;
4. The majority also makes clear that while they disagreed with the Federal these cannot be patented, as no one can claim in either of them
Circuit’s decision with regard to sole use of the “machine-or-transformation” an exclusive right. The application at issue was not a process but
test, it was not the majority’s intent to “foreclose the Federal Circuit’s an unpatentable abstract idea.
development of other limiting criteria that further the purposes of the Patent b. Flook case – The applicant here attempted to apatent a
Act and are not inconsistent with its text.” procedure for monitoring the conditions during the catalytic
5. In discussing the usefulness of the “machine-or-transformation” test, Justices conversion process in the petrochemical & oil-refining
Kennedy, Alito, Thomas and the Chief Justice take care to note that the industries. The application’s only innovation was reliance on a
opinion should not be read as commenting on the patentability of mathematical algorithm. The invention was not a patentable
technologies other than those represented in the Bilski claims, particularly process because considered as a whole it contained no
emerging technologies. The four Justices suggest that new inquiries may patentable invention.
be required to evaluate the patentability of “Information Age” c. Dieht case – While an abstract idea, law of nature, or
technologies, such as software, advanced diagnostic medicine techniques, mathematical formula could not be patented, “an application of
and inventions based on linear programming, data compression, and the a law of nature or mathematical formula to a known structure
manipulation of digital signals. or process may well be deserving of patent protection.”
4. Regarding Bilski's claimed subject matter, the Court found that his
Business Methods Can be Patentable method of optimizing a fixed bill system for energy markets was an
unpatentable abstract idea. Despite taking a broader reading of patent 3. The history of patent law contains strong norms against patenting either of
eligibility for processes, according to the majority opinion "this Court these two categories of subject matter, and such history provides a much clear
by no means desires to preclude the Federal Circuit’s development of resolution to the issue presented here. That history strongly supports the
other limiting criteria that further the Patent Act’s purposes and are not conclusion that a method of doing business is not a “process” under § 101.
inconsistent with its text." Early on, patents were used to protect industrial innovations, not those in
5. In the plurality sections of Kennedy's opinion, an overall Court minority business or finance, and by the early 20th century, it was established that a
opinion as not joined by Scalia, he notes that strict adherence to only series of steps for conducting business could not be patented. This
"the machine-or-transformation test would create uncertainty as to the understanding was carried into the 1952 Patent Act. Also, the legislative
patentability of software, advanced diagnostic medicine techniques, and history does not support an interpretation of the 1952 Act that means that
inventions based on linear programming, data compression, and the anything created by man is patentable. To the contrary, the legislative history
manipulation of digital signals" but "the Court today is not commenting should be understood to mean that not everything created by man is
on the patentability of any particular invention, let alone holding that patentable. Even though people have been developing better and better ways
any of the above-mentioned technologies from the Information Age to conduct business throughout history, it has never been understood that
should or should not receive patent protection." Kennedy also suggests these ways of conducting business were patentable.
that a categorical exclusion of some types of business methods from 4. Although it may be hard to define what exactly a patentable “process” is
patent eligibility might be legitimate if that rule was based on the idea under § 101, the historical clues unite on one conclusion: A business method
that purely abstract ideas are not patentable. is not a “process.” The constitutionally mandated purpose and function of
the patent laws also support this conclusion. One of the purposes of patents,
through the grant of a limited monopoly, is to promote innovation that
Stevens, J. Concurring opinion: would be stifled without the grant of the patent. It is generally agreed
1. The Court’s opinion requires some clarifications. First, the Court’s opinion that when innovation is expensive, risky, and easily copied, inventors are
should not be read literally to mean that the terms in the Patent Act must be less likely to undertake the guaranteed costs of innovation in order to
read as lay speakers use those terms, and not as they have been understood obtain the mere possibility of an invention that others can copy.
traditionally in the context of patent law. To do otherwise would lead to
ridiculous results. In addition, the opinion should not be interpreted to mean Breyer, J. Concurring Opinion:
that the machine-or-transformation test cannot be applied to digital
technologies. Rather, it should be read as holding that few, if any, processes 1. Justice Stevens is correct that this case should have been decided on the
cannot effectively be evaluated using the test’s criteria. Plus, the Court does grounds that business methods are not patentable. With that being said, it is
not provide a clear account of what constitutes an unpatentable abstract idea. also important to clarify the patent law principles on which the majority of
Instead, the Court artificially limits the claims at bar to hedging, and Justices agree.
then concludes that hedging is an abstract idea rather than a term that a. First, although the text of § 101 is broad, it is not without limit.
describes a category of processes including the claims. Therefore, the b. Second, the transformation and reduction of an article to a different
Court fails to show how its conclusion follows clearly from precedents in this state or thing is the clue to the patentability of a process claim that
area. does not include particular machines. T
2. Consequently, one might conclude that the Court’s analysis means that any c. hird, although the machine-or-transformation test has always been a
process that utilizes an abstract idea is itself an unpatentable, abstract idea, useful and important clue that helps in determining whether a
but such a rule has never been suggested; if this were the rule, it would process is patentable, this test has never been the “sole test”for
undermine a host of patentable processes. Looking to the language of § determining patentability.
101, clearly it should not be interpreted to mean, in a lay sense, that the d. Finally, although the machine-or-transformation test is not the only
word “process” constitutes any series of steps. Instead, “process” has a test for patentability, this by no means indicates that anything that
distinctive, term-of-art meaning in patent law that does not encompass produces a useful, concrete, and tangible result is patentable.
any series of steps or any way to do anything. Therefore, the Court makes Therefore, in reemphasizing that the “machine-or-transformation”
a serious interpretive error by its willingness to exclude general principles test is not necessarily the only test of patentability, the court does
from the provision’ reach while apparently willing to include steps for not intend to deemphasize the test’s usefulness or to suggest that
conducting business. many patentable processes lie beyond its reach.
006 ALICE CORP v. CLS BANK (TIMBOL) a) The invention enables the management of risk relating to specified,
June 19, 2014 | Thomas J. | Programs for Computers yet unknown, future events
b) The specification further explains that the invention relates to
PETITIONER: Alice Corporation PTY. LTD methods and apparatues, including electrical computers and data
RESPONDENTS: CLS Bank International processing systems applied to financial matters and risk
management
SUMMARY: ALICE is the assignee of several patents that disclose schemes to 15. The claims at issue relate to a computerized scheme for mitigating
manage certains forms of financial risk. Basically, the computer ask as a intermediary “settlement risk”. In particular:
to facilitate the exchange of financial obligations between two parties by creating a) The claims are designed to facilitate the exchange of financial
“shadow” debit and credit records; and at the end of the day, the computer wil instruct obligations between two parties by using a computer system as a
the relevant institutions to carry out the permitted transactions. CLS BANK operates third-party intermediary
a global network that facilitates currency trnasactions and filed a suit against ALICE b) The intermediary creates “shadow” credit and debit records that
arguing that the patent claims are invalid and unenforceable. As counterclaim, mirror the balances in the parties’ real-world accounts at “exchange
ALICE alleged infringement. The District Court ruled in favor of CLS BANK ruling institutions”
that the claims a patent ineligible because they are directed to the abstract idea of c) The intermediary updates the shadow records in real time as
employing a neutral intermediary to facilitate exchange of obligationsto minize risk. transactions are entered, allowing “only those transactions for which
On appeal, the CA affirmed the ruling further stating that the abstract idea and the the parties’ updated shadow records indicate sufficient resources to
use of the computer added nothing to such. Hence this petition. satisfy their mutual obligations”
d) At the end of the day, the intermediary instructs the relevant
Whether or not the claims of ALICE are patent eligible under Section 101 of the financial institutions to carry out the “permitted” transactions in
Patent Act accordance wih the updated shadow records, thus mitiagating te risk
that only one party will perfrom the agree-upon exchange
The SC held that the claims of ALICE are not patent eligible. The claims were simply 16. In sum, the patents in suit claim:
drawn from an abstract idea, and that requiring the use of generic computer does not a) The foregoing method for exchanging obligations (the method
transform that idea into a patent eligble invention. Such use of computer added claims);
nothing more to the abstract idea; rather the use of an intermediary (i.e. computer) b) A computer system configured to carry out the method for
was a common economic practice, and building block of the modern economy. exchanging obligations (the system claims); and
Moreover, the computer components adds nothing to that of the existing line of c) A computer-readable medium containing program code for
computers long in use. If the Court would have allowed the claims to be patent- performing the method of exchanging obligations (the media claims
eligible, it would go against the purpose of patents – which is to promote innovation. 17. CLS Bank International (BANK) operate a global network that facilitates
currency transactions
The Court also disussed, as in several jurisprudence, that generally the use of a) BANK filed suit against ALICE, seeking a declaratory judgment
computers does not transform an abstract idea into patent-eligible. However, the that the claims at issue are invalid, unenforceable, or not infringed
exception is when such use of computer provides an additional feature such as in the b) ALICE counterclaimed, alleging infringement
case of Diehr. 18. The District Court held that all of the claims are patent ineligible because
they are directed to the abstract idea of employing a neutral intermediary to
DOCTRINE: At some level, all inventions embody, use, reflect, rest upon, or apply facilitate simultaneous exchange of obligations in order to minimize risk
laws of nature, natural phenomena, or abstract ideas. Thus, an invention is not 19. On appeal, CA held that ALICE’s claims draw on the abstract idea of
rendered ineligible for patent simply because it involes an abstract concept reducing settlement risk by effecting trades through a third-party
Applications of such concepts to a new and useful end, remain eligible for patent intermediary,” and that the use of a computer to maintain, adjust, and
protection reconcile shadow accounts added nothing of substance to that abstract idea
20. Hence this petition
FACTS: ISSUE/s:
14. Alice Corporation (ALICE) is the assignee of several patents that disclose 4. WoN ALICE’s claims are patent eligible under Sec. 101 of the Patent Act–
schemes to manage certain forms of financial risk: NO, the claims at issue are drawn to the abstract idea of intermediated
settlement, and that merely requiring generic computer implementation fails combiniation to determine whether the additional
to transform that abstract idea into a patent-eligible invention elements transform the nature of the claim into a
patent-eligible application
RULING: For the foregoing reasons, the judgment of the Court of Appeals for the 2. Second, search for an “inventive concept – i.e., an element or
Federal Circuit is affirmed. combination of elements that is sufficient to ensure that the
patent in practice amounts to significantly more than a patent
RATIO: upon the ineligible concept itself
26. Sec. 101 of the Patent Act defines the subject matter eligible for patent
protection: The claims are drawn to the abstract idea of intermediated settlement
1. “Whoever invents or discovers any new and useful process, 1. The abstract ideas category embodies the longstanding rule that an idea of
machine, manufacture, or composition of matter, or any new itself is not patentable
and useful improvement thereof, may obtain a patent therefor, 2. Bilski v. Kappos: Specifically, the claims described “the basic concept of
subject to the conditions and requirements of this title hedging, or protecting against risk”
27. We have long held that this provision contains an important implicit 1. The Court explained that “hedging is a fundamental economic
exception: practice long prevalent in our system of commerce and taught in any
1. Laws of nature, natural phenomena, and abstract ideas are not introductory finance class
patentable 2. The concept of hedging as recited by the claims in suit was therefore
2. Because these are considered the basic tools of scientific and a patent-ineligbile abstract idea, just like the algorithms at issue in
technological work Benson and Flook
28. Monopolization of those tools through the grant of a petnet might tend 3. Thus, ALICE’s claims are directed to an abstract idea.
to impede innovation more than it would tend to promote it,” thereby 1. The claims involve a method of exchanging financial obligations
thwarting the primary object of the patent laws between two parties using a third-party intermediary to mitigate
29. At the same time, we tread carefully in construing this exclusionary principle settlement risk
lest it swallow all of patent law 2. The intermediary creats and updates “shadow” records to reflect the
1. At some level, all inventions embody, use, reflect, rest upon, or value of each aprty’s actual accounts held at “exchange institutions,”
apply laws of nature, natural phenomena, or abstract ideas thereby permitting only those transactions for which the aprteis have
2. Thus, an invention is not rendered ineligible for patent simply sufficient resources
because it involes an abstract concept 3. At the end of the day, the intermediary issues irrevocable instruction
3. Applications of such concepts to a new and useful end, remain sto the exchange institutions to carry out the permitted transactions
eligible for patent protection 4. Like the risk heding in Bilski, the concept of intermediated settlement
30. Accordingly, in applying Sec. 101 exception, we must distinguish between is a fundamental economic practice long prevalent in our system of
patents that claim the building blocks of human ingenuity and those that commerce
integrate the building blocks into something more, thereby transforming them 5. The use of a third-party intermediary (or clearing house) is also
into patent-eligible invention a building block of the modern economy
31. Mayo Collaborative Services v. Prometheus Laboratories Inc, sets forth a 6. Thus, intermediated settlement, like hedging, is an abstract idea
frameowork for distinguishing patents that claim laws of nature, natural beyond the scope of Section 101
phenomena, and abstract ideas from those that claim patent-eligible
applications of those concepts: The use of generic computer implementation fail to transform that abstract idea into
1. First, we determine whether the claims at issue are directed to a patent-eligible invention
one of those patent-ineligible concepts 1. At Mayo7 step two, we must examine the elements of the claim to determine
1. If so, we then ask, “what else is there in the claims whether it contains an inventive concept sufficient to transform the claimed
before us? abstract idea into a patent-eligible application
2. To answer that questions, we consider the elements of
each claim both individually and as an ordered

7
The case involved a claim of a method for measuring metabolites in the blood stream in order to calibrate
the appropriate dosage of thipurine drugs in the treatment of autoimmune diseases
2. A claim that recits an abstract idea must include “additional features” iii. “Adjusting” the shadow records as traansactions are entered,
to ensure that the claim is more than drafting effort designed to allowing only those transactios for which the parties have sufficient
monopolize the abstract idea resources; and
i. Simply appending conventional steps, specified at a high level of iv. “Issuing” irrevocable end of day instructions to the exchange
generality, was not enough to supply an inventive step institutions to carry out the permitted transactions
3. The introduction of a computer into the claims does nto alter the analysis at 2. As stipulated, the claimed method requires the use of a computer to create
Mayo step two electronic records, track multiple transactions, and issue simultaneous
i. In Benson, for example, we considered a patent that claimed an instricutions; in other words, the computer is itself the intermediary
algorithim implemented on a general purpose digital computer. But 3. Taking the claim elements separately, the function performed by the
the computer implementation did not supply the necessary computerat each step of the process is purely conventional
inventicve cocpet; the process could be carried out in existing 4. Using a omputer to create and maintain “shadow” accounts amounts to
computers long in use electronic recordkeeping – one of the most basic functions of a computer
ii. In Flook, the prohibition against patenting abstract ideas cannot be a. In short, each step does not more than require a generic computer to
circumvented by attempting to limit the use of the idea to a particular perform generic computer functions
technological environment 5. Considered as an ordered combination, the computer components of
iii. In Diehr, by contrast, we held that a computer-implemented process ALICE’s method add nothing that is not already present when the steps
for curing rubber was patent eligible, but not because it involved a are considered separately
computer. The claim employed a well-known mathematical 6. Instead the claims at issue amount to nothing significantly more than an
equiation, but it used that equation in a process designed to solve a instruction to apply the abstract idea of intermediated settlement using some
technological problem in conventional industry practice specified, generic computer
4. These cases demonstrate that the mere recitation of a generic computer 7. Moreover, none of the hardware recited by the system claims “offers a
cannot transform a patent-ineligible abstract idea into a patent-eligible meaningful limitation beyond generally linking the use of the method to a
invention particular technological environment, that is implementation via computeres
5. Given the ubiquity of computers, wholly generic computer implementation 8. Put another way, the system claims are no different from the method
is not generally the sort of additional feature that provides any practical claims in substance. The method claims recite the abstract idea
assurance that the process is more than a drafting effort designed to implemented on a generic computer; the system claims recite a handful
monopolize the abstract idea itself of generic computer components configured to implement the same idea
6. There is no dispute that a computer is a tangible system or that many
computer-implemented claims are formally addressed to patent-eligible
subject matter
i. But if that were the end of the Section 101 inquiry, an applicant
could claim any principle of the physical or social sciences by
reciting a computer system configured to implement the relevant
concept
ii. Such a result would make the determination of patent eligibility
depend simply on the drafts-man’s art, thereby eviscerating the rule
that “laws of nature, natural phenomena, and abstract ideas are not
patentable

The claims do not do more than simply instruct the practitioner to implement the
abstract idea of intermeiediate settlement on a generic computer
1. The representative method claim in this case recites the following steps:
i. “Creating” shadow records for each counterparty to a transaction;
ii. “Obtaining” start of day balances based on the parties’ real world
accounts at exchange institutions;
007 STATE STREET BANK & TRUST CO. v. SIGNATURE while taking into consideration daily changes both in the value of the
FINANCIAL GROUP (SAN PEDRO) Hub's investment securities and in the concomitant amount of each
July 23, 1998| Circuit Judge Rich | Methods of Doing Business Spoke's assets.
2. The '056 patent application was filed 11 March 1991. It initially contained
PLAINTIFF-APPELLEE: State Street Bank & Trust Co. six “machine” claims, which incorporated means-plus-function clauses, and
DEFENDANT-APPELLANT: Signature Financial Group, Inc. six method claims.
a. According to Signature, during prosecution the examiner contemplated
SUMMARY: Signature is the assignee of the ‘056 patent entitled “Data a § 101 rejection for failure to claim statutory subject matter. However,
Processing System for Hub and Spoke Financial Services Configuration.” a. upon cancellation of the six method claims, the examiner issued a notice
In essence, the system, identified by the proprietary name Hub and of allowance for the remaining present six claims on appeal. Only claim
Spoke®, facilitates a structure whereby mutual funds (Spokes) pool their assets 1 is an independent claim.
in an investment portfolio (Hub) organized as a partnership. In particular, this 3. State Street and Signature are both in the business of acting as accounting
system provides means for a daily allocation of assets for two or more Spokes agents for partnership fund financial services. State Street negotiated with
that are invested in the same Hub State Street negotiated with Signature for a Signature for a license to use its patented data processing system described
license to use its patented data processing system. When negotiations broke and claimed in the '056 patent. When negotiations broke down, State Street
down, State Street filed an action in Court to invalidate the patent. The District brought a declaratory judgment action asserting invalidity, unenforceability,
Court ruled that the patent was invalid on the ground that the claimed subject and noninfringement in Massachusetts district court. The district court ruled
matter, as a mathematical algorithm and a business method, is not encompassed that the patent was invalid on the ground that the claimed subject matter is
by 35 U.S.C. § 10. The issue is WON mathematical algorithms or business not encompassed by 35 U.S.C. § 101 (1994).
methods are patentable. On WON mathematical algorithms are patentable, the 4. Hence this appeal.
Court held that it is patentable if it is useful. In the past, the Court has held that
mathematical algorithms are not patentable subject matter to the extent that they ISSUE/s:
are merely abstract ideas. Thus, if proven to be useful, they are patentable. In this 1. WON mathematical algorithms, such as the aforementioned system, are
case, the subject patent is useful, to wit “the transformation of data, representing patentable (not the main issue in the syllabus but very relevant) – IT
discrete dollar amounts, by a machine through a series of mathematical DEPENDS IF IT IS USEFUL, SO IN THIS CASE YES
calculations into a final share price, constitutes a practical application of a 2. WON business methods, such as the aforementioned system, are patentable.
mathematical algorithm, because it produces “a useful, concrete and tangible – IT DEPENDS AGAIN IF IT IS USEFUL,
result”-a final share price momentarily fixed for recording and reporting purposes
and even accepted and relied upon by regulatory authorities and in subsequent RULING: The appealed decision is reversed and the case is remanded to the district
trades.” On WON business methods are patentable, the Court held that Claims court for further proceedings consistent with this opinion..
should not be categorized as methods of doing business. Instead such claims
should be treated like any other process claims. RATIO:
On whether mathematical algorithms are patentable. “The Mathematical Algortihms
DOCTRINE: A claimed invention is eligible for protection by a patent in the Exception”
United States if it involved some practical application and "it produces a 1. The Supreme Court has identified three categories of subject matter that are
useful, concrete and tangible result." unpatentable, namely “laws of nature, natural phenomena, and abstract
ideas.”
FACTS: 2. In the past, the Court has held that mathematical algorithms are not patentable
1. Signature is the assignee of the '056 patent which is entitled “Data Processing subject matter to the extent that they are merely abstract ideas constituting
System for Hub and Spoke Financial Services Configuration.” disembodied concepts or truths that are not “useful.”
a. In essence, the system, identified by the proprietary name Hub and 3. From a practical standpoint, this means that to be patentable an
Spoke®, facilitates a structure whereby mutual funds (Spokes) pool their algorithm must be applied in a “useful” way.
assets in an investment portfolio (Hub) organized as a partnership. a. In Alappat, we held that data, transformed by a machine through a series
b. In particular, this system provides means for a daily allocation of assets of mathematical calculations to produce a smooth waveform display on
for two or more Spokes that are invested in the same Hub. The system a rasterizer monitor, constituted a practical application of an abstract idea
determines the percentage share that each Spoke maintains in the Hub,
(a mathematical algorithm, formula, or calculation), because it produced b. Illustrative is the CCPA's analysis in In re Howard, wherein the court
“a useful, concrete and tangible result”-the smooth waveform. affirmed the Board of Appeals' rejection of the claims for lack of novelty
b. In Arrhythmia Research Technology Inc. v. Corazonix Corp, we held and found it unnecessary to reach the Board's section 101 ground that a
that the transformation of electrocardiograph signals from a patient's method of doing business is “inherently unpatentable
heartbeat by a machine through a series of mathematical calculations 9. The district court invalidated the patent because the claimed subject matter is
constituted a practical application of an abstract idea (a mathematical not encompassed by § 101;
algorithm, formula, or calculation), because it corresponded to a useful, a. The district court stated that If Signature's invention were patentable, any
concrete or tangible thing-the condition of a patient's heart. financial institution desirous of implementing a multi-tiered funding
4. Today, we hold that the transformation of data, representing discrete complex modelled (sic) on a Hub and Spoke configuration would be
dollar amounts, by a machine through a series of mathematical required to seek Signature's permission before embarking on such a
calculations into a final share price, constitutes a practical application of project. This is so because the '056 Patent is claimed [sic] sufficiently
a mathematical algorithm, formula, or calculation, because it produces broadly to foreclose virtually any computer-implemented accounting
“a useful, concrete and tangible result”-a final share price momentarily method necessary to manage this type of financial structure.
fixed for recording and reporting purposes and even accepted and relied 10. However, this Court believes that Whether the patent's claims are too broad
upon by regulatory authorities and in subsequent trades. to be patentable is not to be judged under § 101, but rather under §§ 102,
5. The district court erred by applying the Freeman-Walter-Abele test (process, 103 and 112. Assuming the above statement to be correct, it has nothing to
machine, manufacture, or composition of matter) to determine whether the do with whether what is claimed is statutory subject matter
claimed subject matter was an unpatentable abstract idea. 11. Office personnel have had difficulty in properly treating claims directed to
a. The question of whether a claim encompasses statutory subject matter methods of doing business. Claims should not be categorized as methods
should not focus on which of the four categories of subject matter a claim of doing business. Instead such claims should be treated like any other
is directed to 9 -process, machine, manufacture, or composition of process claims.
matter-but rather on the essential characteristics of the subject matter, in
particular, its practical utility. Section 101 specifies that statutory
subject matter must also satisfy the other “conditions and requirements”
of Title 35, including novelty, nonobviousness, and adequacy of
disclosure and notice. For purpose of our analysis, as noted above,
claim 1 is directed to a machine programmed with the Hub and Spoke
software and admittedly produces a “useful, concrete, and tangible
result.” . This renders it statutory subject matter, even if the useful
result is expressed in numbers, such as price, profit, percentage, cost, or
loss.
On whether business methods are patentable. “The Business Method Exception”
6. The District Court also invalidated the patent based on the judicially-created,
so-called “business method” exception to statutory subject matter.
7. We take this opportunity to lay this ill-conceived exception to rest.
8. Since its inception, the “business method” exception has merely represented
the application of some general, but no longer applicable legal principle,
perhaps arising out of the “requirement for invention”-which was eliminated
by § 103. Since the 1952 Patent Act, business methods have been, and
should have been, subject to the same legal requirements for
patentability as applied to any other process or method.
a. The business method exception has never been invoked by this court, or
the CCPA, to deem an invention unpatentable. Application of this
particular exception has always been preceded by a ruling based on some
clearer concept of Title 35 or, more commonly, application of the
abstract idea exception based on finding a mathematical algorithm
001 PALLIN v. SINGER (VILLAVICENCIO) surgery procedure claimed in the '111 patent prior to the date on which Pallin first
May 1, 1995 | Billings, J. | Medical Procedure performed an operation using the technique of a substantially self-sealing incision.
6. Pallin has filed opposition claiming that the prior work of others does not
PETITIONER: Samuel L. Pallin, M.D. invalidate his patent and that the subject matter of his patent is both novel and
RESPONDENTS: Jack A. Singer, M.D. and the Hitchcock Clinic nonobvious
7. Cataract surgery is necessary when the natural lens of the eye becomes cloudy
SUMMARY: Pallin alleged that Singer and Hitchcock are infringing on a patented and can no longer effectively pass light through to the light and image sensing
surgical technique developed by Pallin for use during cataract surgery. Pallin portion of the eye. The surgery is accomplished by making an incision into the
allegedly developed a method for making the surgical incision in the eye in a manner eye and removing the cloudy natural lens through the incision. Once the natural
that would allow the wound to be “substantially self-sealing,” i.e., requiring no lens has been removed, a plastic replacement lens (an “IOL”) is commonly placed
sutures to heal. Traditionally, upon completion of cataract surgery, surgeons used into the space where the natural lens used to be to restore the patient's vision.
sutures to close the incision. Sutures were necessary to prevent “wound separation” 8. The incision is made into the area of the eye known as the “sclera,” or the white
due to pressure from both within and without the eye. Sutures, however, often cause of the eye. The location of the incision is generally measured from the limbus,
the patient to develop an astigmatism. The patented invention, as characterized by which is the “narrow annular region of tissue that defines the transition between
Pallin, is an incision that: (a) substantially self-seals; (b) is located 1.5 to 3.0 the cornea and the sclera.”
millimeters from the limbus; and (c) diverges from the limbus from a central location 9. Traditionally, upon completion of cataract surgery, surgeons used sutures to close
to form a shape resembling a chevron or frown. Singer and Hitchcock assert that the incision. Sutures were necessary to prevent “wound separation” due to
other surgeons performed the same cataract surgery procedure claimed in the '111 pressure from both within and without the eye. Sutures, however, often cause the
patent prior to the date on which Pallin first performed an operation using the patient to develop an astigmatism.
technique of a substantially self-sealing incision. WoN Palin has a valid patent claim 10. The patented invention, as characterized by Pallin, is an incision that: (a)
– YES, because US patent is presumed to valid. WoN Summary Judgment is valid – substantially self-seals; (b) is located 1.5 to 3.0 millimeters from the limbus; and
NO, because there are issues as to the material facts of the case, which are the similar (c) diverges from the limbus from a central location to form a shape resembling a
practices of Drs. McFarland, Gills, and Singer. chevron or frown.
11. According to the patent, the configuration of the incision allows it to seal as the
DOCTRINE: Summary judgment is appropriate when the Court finds that there is eye is inflated following surgery, eliminating the need for sutures.
no genuine issue as to any material fact and the moving party is entitled to judgment 12. Pallin was not, however, the only ocular surgeon working towards the
as a matter of law. Although the ultimate question of patent validity is one of law, development of a sutureless technique for use in cataract surgery in 1990. There
this determination is based on an assessment of the facts. was Dr. McFarland, Dr. Gills, and Dr. Singer.

ISSUE/s:
FACTS: 5. WoN Palin has a valid patent claim – YES, because US patent is presumed to
1. This is an action for patent infringement. Plaintiff Dr. Samuel Pallin (“Pallin”) valid.
alleges that Defendants Dr. Jack Singer (“Singer”) and the Hitchcock Associates 6. WoN Summary Judgment is valid – NO, because there are issues as to the material
of Randolph (“Hitchcock”) are infringing on a patented surgical technique facts of the case, which are the similar practices of Drs. McFarland, Gills, and
developed by Pallin for use during cataract surgery. Singer.
2. Pallin allegedly developed a method for making the surgical incision in the eye in
a manner that would allow the wound to be “substantially self-sealing,” i.e., RULING: In light of the foregoing, we hereby DENY Defendants' Motion for
requiring no sutures to heal. Plallin obtained patent number 5,080,111 (“the '111 Summary Judgment of Patent Invalidity.
SO ORDERED.
patent”) for the technique.
3. Pallin’s complaint alleges that Singer and Hitchcock have carried out hundreds of
RATIO:
operations that infringe on the '111 patentand that Singer and Hitchcock have 32. Under 35 U.S.C. § 282, a United States patent is presumed valid. The party
further induced violation of the patent by teaching the technique to other ocular asserting invalidity must overcome this presumption by clear and convincing
surgeons. evidence establishing facts which support the conclusion of invalidity.
4. Now pending before the Court is Singer and Hitchcock's Motion for Summary 33. Summary judgment is appropriate when the Court finds that there is no genuine
Judgment of Patent Invalidity. Singer and Hitchcock argue that the patent's claims issue as to any material fact and the moving party is entitled to judgment as a
are invalid matter of law.
5. Singer and Hitchcock assert that other surgeons performed the same cataract
34. Although the ultimate question of patent validity is one of law, this determination
is based on an assessment of the facts.
35. In the case before us, we find that complex factual disputes exist and we therefore
decline to grant summary judgment on the issue of patent invalidity.
36. Under § 102(g), a patent is invalid if it was previously made in this country by
another who had not abandoned, suppressed, or concealed it. The patentee need
not have knowledge of the prior art.
37. Our comparison of the surgical techniques practiced by Drs. McFarland, Gills and
Singer with the asserted claims of the '111 patent reveals that genuine issues of
material fact exist as to whether the works of any one of these doctors fully
anticipated Pallin's claims.
38. Issues: whether Dr. McFarland's straight line incision and vertical cuts fall within
the ambit of Pallin's claims; whether the distance from the limbus of the incisions
made by Dr. Gills during the March 1990 surgeries falls within the 1.5 to 3.0
millimeter range advocated by Pallin's patent; and whether the incision made by
Dr. Singer in his March 1990 surgery was capable of self-sealing.
39. Because we find that Singer and Hitchcock have failed to meet their burden of
demonstrating that no factual issues exist as to whether Pallin's patent was
previously made in this country by another, we need not address the issue of
abandonment, suppression or concealment.

40. In determining whether an invention would have been obvious at the time it was
made, section 103 requires a Court to: (1) determine the scope and content of the
prior art; (2) ascertain the differences between the prior art and the claims at issue;
and (3) resolve the level of ordinary skill in the pertinent art.
41. We conclude, therefore, that Singer and Hitchcock have failed to meet their
burden of proof under the summary judgment standard to establish that there is
no genuine issue of material fact as to obviousness.

002 NOVARTIS v. UNION OF INDIA (GUECO) the two and avoid patents being used as strategic instruments in competitive
April 1, 2013 | Aftab Alam, J. | Patentability of Gleevec in India, Evergreening, practices.
Incremental Innovations

PETITIONER: Novartis
RESPONDENTS: Union of India
FACTS:
SUMMARY: Novartis applied for and was granted a patent for the drug imatinib 1. Novartis filed and was granted a patent application in the US for a drug
(used to treat chronic leukemia) in the United States. He then applied for another containing imatinib.8
patent, this time for the beta crystalline form of imatinib mesylate (basta a new 2. Subsequently, Novartis filed another patent application, this time for the
form of the imatinib that he had originally patented). This application was “beta crystalline” form of the imatinib mesylate salt. This application was
likewise granted. He then started obtaining patent for the said drug in other also granted.
countries and offered it for sale as “Gleevec”. 3. Novartis marketed the drug as “Gleevec”, and he obtained several patents for
the beta crystalline form of imatinib mesylate in other countries.
When the Patent Law of India was amended to protect product patents, Novartis 4. At the time, India did not allow protection for product patents, and no patent
took this opportunity to patent his drug. His application was, however, rejected, protection for imatinib was obtained in India.
on the ground that it was not novel under Section 3(d) of Indian Patent Act (see 5. However, when India’s patent laws changed, Novartis sought patent
footnote #2). Novartis sought to prove the novelty of his drug by arguing that: (1) protection for the beta crystalline form of imatinib mesylate.
the beta crystalline form is a polymorph (one of the several forms) of imatinib 6. The application was processed in 2005 (this was when Indian laws allowed
mesylate, and inventors have to research it further; (2) Gleevec had an enhanced for product patents). The application, however, was rejected in 2006 on the
efficacy as compared to the normal imatinib, and; (3) Gleeve had more beneficial ground that it failed to satisfy novelty and non-obviousness requirements.
flow properties, better thermodynamic stability, lower hygroscopicity and 7. Novartis lodged appeals before the Madras High Court, which was then
increased bioavailability. ISSUE: WON the patent for the beta crystalline form transferred to the then newly formed Intellectual Property Appellate Board.
of imatinib mesylate should be granted—NO BECAUSE IT FAILED TO MEET The Appellate Board stated that the patent application had to be rejected
THE REQUIREMENTS OF AN INVENTION AS LAID DOWN IN THE because the invention was not a new substance, but an amended form of a
INDIAN PATENTS ACT. RULING: Section 3(d) of the Indian Patent Act does known compound and that Novartis was unable to show increase in efficacy
not allow patent to be granted to inventions involving new forms of a known as laid down in section 3(d) of the Indian Patents Act. 9
substance unless it differs significantly in properties with regards to therapeutic 8. Novartis then appealed directly to the Supreme Court through a Special
efficacy. Pursuant to this provision, the Court examined whether Novartis’s drug, Leave Petition, due to urgency, as the patent if granted on appeal would
Gleevec, would satisfy the test of efficacy under Section 3(d). It failed in this case expire by 2018.
because the claimed flow properties, thermodynamic stability and 9. In arguing that his invention was novel, he claims that there is no prior art
hygroscopicity, etc. which Norvartis relied on to overcome the existence of prior since the beta crystalline form was a polymorph of imatinib mesylate and
art, had nothing to do with therapeutic efficacy. inventors therefore had to research it further. Further, the beta crystalline
form had enhanced efficacy in comparison to imatinib and imatinib mesylate.
DOCTRINE: Evergreening is a term used to label practices that have developed In terms of efficacy, he argues that the beta crystalline form had more
in certain jurisdictions wherein a trifling change is made to an existing product beneficial flow properties, better thermodynamic stability, lower
and claimed as a new invention. The coverage/protection afforded by the alleged hygroscopicity and increased bioavailability.
new invention is then used to extend the patentee’s exclusive rights over the
product, preventing competition. What should be borne in mind is that there is a ISSUE:
difference between incremental innovations that confer real advantages and those
1. WON the patent for the beta crystalline form of imatinib mesylate should be
that offer no therapeutic improvements. It is important to differentiate between
granted—NO BECAUSE IT FAILED TO MEET THE REQUIREMENTS
OF AN INVENTION AS LAID DOWN IN THE INDIAN PATENTS ACT.

8
Used to treat chronic myelogenous leukemia (CML). use for a known substance or of the mere use of a known process, machine or apparatus unless such known
9
Section 3(d) says that the mere discovery of a new form of a known substance which does not result in process results in a new product or employs at least one new reactant, is not patentable.
the enhancement of the known efficacy of that substance or the mere discovery of any new property or new
RATIO: new invention is then used to extend the patentee’s exclusive rights over the
product, preventing competition”.
1. On the basis of the documents presented, the Court concluded that the prior 9. Whilst incremental innovation has been disregarded as trivial by critics, most
patents and literature constitute as prior art against the beta crystalline form innovation is incremental by nature as progression of technology, especially
of imatinib mesylate, and it therefore did not meet the requirements of an in the pharmaceutical sector, occurs in steps. What should be borne in mind
“invention” as laid down in the Indian Patents Act. is that there is a difference between incremental innovations that confer real
2. Section 3(d) of the Indian Patents Act says that, “the mere discovery of a new advantages and those that offer no therapeutic improvements. It is important
form of a known substance which does not result in the enhancement of the to differentiate between the two and avoid patents being used as strategic
known efficacy of that substance or the mere discovery of any new property instruments in competitive practices.
or new use for a known substance or of the mere use of a known process, 10. The question to be asked is, “When does an incrementally improved
machine or apparatus unless such known process results in a new product or invention of a first patented invention become eligible for a separate patent?”
employs at least one new reactant, is not patentable.” In this regard, each invention will have to be examined on its merits based on
3. The above provision does not allow patent to be granted to inventions the usual patenting criteria of novelty and inventiveness and should be able
involving new forms of a known substance unless it differs significantly in to withstand the scrutiny thereafter. As was seen in the Novartis case, the
properties with regards to therapeutic efficacy. It restricts the grant of patent Supreme Court held that novelty was not proven on the facts, and the drug
for "incremental innovations" in many drugs unless it provides significant would have failed the patentability test on this basis alone. Some, as was seen
therapeutic advantages to existing molecules. with the Indian legislature’s intention, believe that additional criteria such as
4. Pursuant to this, the Court examined the efficacy of Gleevec to see if it would therapeutic efficacy should be used during this examination for patentability.
pass the test required by law. The Court held that “the test of efficacy would 11. The goal of any patent regime is to promote innovation by rewarding the
depend upon the function, utility or the purpose of the product under inventor for disclosing his invention to the public through the award of
consideration...in the case of a medicine that claims to cure a disease, the exclusive rights for a period of time, thereby disseminating knowledge and
test of efficacy can only be ‘therapeutic efficacy’...With regard to the genesis improving the welfare of society. Intellectual property protection is of greater
of section 3(d), and more particularly the circumstances in which section 3(d) importance to the pharmaceutical industry as the research and development
was amended to make it even more constrictive than before, we have no doubt process is both costly and time-consuming. The importance of striking a
that the ‘therapeutic efficacy’ of a medicine must be judged strictly and balance between research and development and access to healthcare for the
narrowly”. public is once again highlighted.
5. The Court then held that the claimed flow properties, thermodynamic
stability and hygroscopicity, which Norvartis relied on to overcome the
existence of prior art, had nothing to do with therapeutic efficacy.
6. Novartis claims that there is an increased bioavailability. However, the Court
found that the increase in bioavailability of the beta crystalline form was not
comparable to the known and previously marketed mesylate salt form of the
drug which was soluble; rather in comparison to the free base form which
was not marketed as it was not highly soluble. On the facts, increased
bioavailability was not proven, and the efficacy test was not met.
7. The Court therefore rejected the Novartis patent application. The Court held
that the purpose behind section 3(d) is specific i.e. “The amended portion of
Section 3(d) clearly sets up a second tier of qualifying standards for chemical
substances/pharmaceutical products in order to leave the door open for true
and genuine inventions but, at the same time, to check any attempt at
repetitive patenting or extension of the patent term on spurious grounds.”
8. Evergreening: It was stated that the primary purpose of section 3(d) as
evidenced from the legislative history, was to prevent “evergreening”.
“Evergreening is a term used to label practices that have developed in certain
jurisdictions wherein a trifling change is made to an existing product and
claimed as a new invention. The coverage/protection afforded by the alleged