Carney

The court changed directions in 1994, ending an era characterized by artful claim drafting in an attempt to avoid rejection. In re Alappat involved a claim that included a mathematical algorithm for converting raw data into other numbers that could be used to plot a graph on a display screen.[46] The inventor drafted the claims in such a way so as to tie the algorithm to the various components of a computer in an attempt to pass the Freeman-Walter-Abele test.[47] After the PTO rejected the claim, the Federal Circuit reversed that decision and held that the invention “produce[d] a useful, concrete, and tangible result” and was therefore patentable.[48] The court further concluded that computer software “creates a new machine, because a general purpose computer in effect becomes a special purpose computer once it is programmed to perform particular functions pursuant to instructions from program software.”[49] This represented a significant departure from the formalistic Freeman-Walter-Abele test.

State Street Bank v. Signature Financial Group[50] represented a further broadening of the scope of patent eligibility for processes. Prior to 1999, pure business methods not tied to a particular machine were considered nonstatutory.[51] State Street pitted that rule and the recent Alappat opinion against one another; Alappat won.[52] State Street involved a claim for an accounting system that solved many of the calculation and reporting problems inherent in the “Hub and Spoke” investment strategy.[53] Rejected by the PTO, the claim was approved by the Federal Circuit as producing a “useful, concrete, and tangible result,” the requirement announced in Alappat.[54] Going one step farther, the court explicitly rejected the prohibition on business method patents.[55] Patent eligibility for computer software was virtually presumptive after State Street, even when claimed in business method format without any recitation of a computer.[56]

D. The Federal Circuit’s Narrowing View

In 2008, In re Bilski[57] marked the culmination of a series of decisions that narrowed the scope of patent eligibility for processes down to its current, unclear status. The claim at issue in Bilski involved a process for hedging risk in the buying and selling of commodities.[58] No computer was recited; the claim was a pure business method.[59] Overruling both the old “Freeman-Walter-Abele” test and the newer “useful, concrete, and tangible result” test of Alappat and State Street, the court instead announced that the test for determining whether a process is patent eligible is the “machine or transformation” test.[60] The “machine or transformation” test requires that any process be either tied to a particular machine, or transform an article to a different state or thing.[61] The court cited cases from the Supreme Court to support its reasoning, most notably Benson.[62] Applying the test to the claim at issue, the court found that no article was transformed to a different state or thing because the process dealt only with making transactions to hedge the price fluctuations of commodities; because no machine was recited either, the claim was rejected.[63]

The state of patent eligibility for computer software after Bilski is unclear; pure business methods seem to fall outside the scope of patent eligibility due to the court’s analysis of what qualifies as an “article” to satisfy the “transformation” prong of the test. This could herald the return of the artful drafting that characterized the “Freeman-Walter-Abele” days, where all of the basic components of the computer are recited over and over in software patent claims. While, the language of the machine-or-transformation test seems to indicate that software running on a general purpose computer passes the test, the court, however, expressly reserved judgment on that issue.[64]

III. Analysis

This section begins with a critical analysis of the Federal Circuit’s recent jurisprudence on the scope of patent eligibility of processes, specifically In re Bilski. Next, several tests for the proper determination of a patentable “process” are analyzed with particular attention paid to how computer software might be included or excluded as patentable subject matter under each test. Finally, several policy arguments for and against allowing software to be patented are analyzed.

A. In re Bilski

The Federal Circuit stated in In re Bilski that “the underlying legal question thus presented is what test or set of criteria governs the determination by the Patent and Trademark Office . . . or courts as to whether a claim to a process is unpatentable under § 101, or, conversely, is drawn to unpatentable subject matter because it claims only a fundamental principle.”[65] The court noted that Diehr draws a distinction “between those claims that ‘seek to pre-empt the use of’ a fundamental principle, on the one hand, and claims that seek only to foreclose others from using a particular ‘application’ of that fundamental principle on the other.”[66] The test that Bilski adopts to address this concern regarding patentable processes is the machine-or-transformation test: “an applicant may show that a process claim satisfies § 101 either by showing that his claim is tied to a particular machine, or by showing that his claim transforms an article.”[67] As justification for adopting the machine-or-transformation test, the court cites Benson for the proposition that “transformation and reduction of an article ‘to a different state or thing’ is the clue to patentability of a process claim that does not include particular machines,” and proceeds to construe this language into a mandatory “machine-or-transformation” test due in large part to the Supreme Court’s choice of the phrase “the clue” clue instead of a looser phrase like “a clue.”[68]

The court focuses on the wrong word; use of the word “clue” defeats the court’s purpose. The word “clue” cannot reasonably be interpreted as a reliable signal that what follows is a “definitive test.” While the court cites several other Supreme Court cases that mention a similar “machine-or-transformation” test, in none of these cases is that test announced as the “definitive test.”[69] In fact, in two of those cases the Supreme Court was equivocal in its reliance on the test, including the very same Benson case sited by the court as the source of the test.[70] In Benson, the Supreme Court noted:

It is argued that a process patent must either be tied to a particular machine or apparatus or must operate to change articles or materials to a ‘different state or thing.’ We do not hold that no process patent could ever qualify if it did not meet the requirements of our prior precedents.[71]

A similar caveat was included later in Flook.[72] The Federal Circuit, in adopting the machine-or-transformation test as the definitive test in Bilski, seemingly relies entirely on the fact that no such qualification was used later in Diehr.[73]

Diehr, however, contains direct citations to the same equivocal language in Benson and Flook that the Bilski court discounts, while making no express alteration to the machine-or-transformation test laid out in those earlier cases.[74] This fact did not go unnoticed by the Bilski court, which acknowledged the equivocal language[75] and then proceeded to adopt the machine-or-transformation test anyway, even taking the additional step of elevating it to “definitive” status in the process.[76]

Bilski addressed a potential way around the machine-or-transformation test: so-called “insufficient postsolution activity.”[77] Raised initially in Flook, this concept involves claiming a mathematical formula, law of nature, abstract idea, or other unpatentable subject matter, and adding some patentable subject matter to the end of the process specifically in an effort to pass a judicial test for patentability, even though the individually patentable and unpatentable subject matter are not inextricably bound together.[78] Bilski expressly rejects such practice, stating: “even if a claim recites a specific machine or a particular transformation of a specific article, the recited machine or transformation must not constitute mere insignificant postsolution activity.”[79]

Bilski does not attempt to put any “meat” on the bones of machine branch; indeed, the court explicitly reserves the question of whether adding a computer to a process claim makes the subject statutory.[80] As for the transformation branch, the court expressly states:

[T]he transformation of raw data into a particular visual depiction of a physical object on a display was sufficient to render that more narrowly-claimed process patent-eligible. We further note for clarity that the electronic transformation of the data itself into a visual depiction in Abele was sufficient; the claim was not required to involve any transformation of the underlying physical object that the data represented. We believe this is faithful to the concern the Supreme Court articulated as the basis for the machine-or-transformation test, namely the prevention of pre-emption of fundamental principles.[81]

The claim at issue in Bilski involved a process for hedging risk that comes along with fluctuations in the price of commodities.[82] The claim did not recite any machine; rather, it was drafted as a pure business method and would have to pass the “transformation” prong of the machine-or-transformation test.[83] Applying the machine-or-transformation test to the claim at issue, the Bilski court rejected the claim because it does not facilitate the transformation of an article.[84]

The Bilski claim does actually transform something, though – it shifts ownership of certain business obligations between multiple parties. The main issue is the definition of “article.” The Bilski court reasoned that because the claim transferred only legal obligations, which are not representative of anything real, it did not qualify,[85] seemingly excluding all legal obligations from the scope of “article.” However, this exclusion does not stand on firm ground when compared to the claim that was allowed in Abele. Moreover, this is contrary to the language earlier in the opinion that stated “the claim was not required to involve any transformation of the underlying physical object that the data represented.”[86] In this case, the claim did transform the underlying physical object – the legal obligations. Finally, the Bilski court seems to hedge by admitting the possibility that adding a machine might qualify the claim under the machine prong, though it reserved final judgment.[87]

B. Statutory Mis-Interpretation

Any decision about the scope of patentable subject matter is an exercise in statutory interpretation. In its current form, the list of eligible subject matter has existed for more than 50 years.[88] Similar statutes have been around longer than this country, however, and the interpretation put forth by the court in Bilski is not supported by any of them. From a misunderstanding about processes in general, to a revisionist approach to legislative history, to complete disregard for a related section of the Patent Act itself, the court has set off down a path that “redifin[es] the word ‘process’ in the patent statute.”[89]

While the majority opinion may have misinterpreted Supreme Court precedent,[90] Judge Dyk’s concurring opinion in Bilski set out to provide some statutory basis for the decision, noting that “the unpatentability of processes not involving manufactures, machines, or compositions of matter has been firmly embedded in the statute since the time of the Patent Act of 1793 . . . .”[91] Judge Dyk examined the history of the English Statute of Monopolies, and its role as the predecessor and inspiration for the U.S. patent statute.[92] At the time the original patent statutes in this country were passed, our common law essentially implemented the Statute of Monopolies.[93] Judge Dyk analyzes many process-type patents issued under the Statute of Monopolies, and concludes “the only processes that were patentable were processes for using or creating manufactures, machines, and compositions of matter.”[94] Since the Statute of Monopolies did not recognize the kind of processes at issue in Bilski, according to Judge Dyk, the processes should not be recognized now because of the canon of statutory interpretation that when statutes are enacted to codify common law, the common law in force at the time of enactment informs the court’s interpretation of the law.[95]

In a vigorous dissent, Judge Newman confronts the factual accuracy of these claims, finding that “no English decision supports this court’s new restrictive definition of ‘process.’”[96] While the first Patent Acts granted patent eligibility to machines, manufactures, compositions of matter, and arts, the Statute of Monopolies mentions only manufactures.[97] Even with this textual incongruity between the statutes, the English took an expansive view of the term “manufactures” that included processes.[98] Indeed, the scope of processes upon which the English were willing to grant patents included what can only be considered “business methods,” processes not tied to the transformation of any article or the use of any machine.[99] Even in America, “business method” patents were being issued as early as 1799 by the very architects of the first Patent Acts.[100]

Moreover, Judge Newman does not concede that our current understanding of which processes are patentable should be forever tied to the understanding of patentable processes in England prior to the Patent Act of 1793. Citing Flook[101] and Chakrabarty[102], Judge Newman reasons that “[t]he meaning of the statutory term ‘process’ is not limited by particular examples from more than two hundred years ago.”[103] The very nature of patent law – to promote technological process – demands such an understanding. An attempt by the majority to accord “second-class” status to processes by recognizing their patent eligibility only by virtue of their relation to another § 101 class of patent eligible material – machines or articles of manufacture – is an attempt to add a restriction that has no basis in the statutory language.

In Chakrabarty, the Supreme Court noted that limitations and conditions not expressed by the legislature should not be read into the statutory text when construing it.[104] While considering the legislative history of § 101, the Court quoted the committee reports from 1952 Act, stating “Congress intended statutory subject matter to ‘include anything under the sun that is made by man.’”[105] Considering that Congress included “process” in § 101, and considering that Congress included no “qualification” that processes must be tied to other, independently patentable subject, the majority in Bilski is engrafting second-class status on process inventions when “there is plainly no basis for such a restriction.”[106]

Finally, there is considerable support in the Patent Act itself that Congress did not just intend that pure methods patents – those not tied to a machine, article of manufacture, or any other §101 category – be patentable; rather, Congress made express provisions therefor.[107] Section 273 of the Patent Act was added in 1999, and is entirely drafted to various infringement defenses relating to business method patents. Moreover, the term “method” is expressly defined in the statute: “’method’ means a method of doing or conducting business . . . .”[108] By announcing the machine-or-transformation test as the definitive test for determining whether a process is drawn to statutory subject matter, the majority turns a blind eye to § 273, ignoring statutory support for business methods in favor of a test with roots in pre-industrial revolution, pre-revolutionary war England.

The majority’s adoption of the machine-or-transformation test is contrary to text of the statute, the expressed will of Congress, and Supreme Court precedent regarding statutory interpretation. The analysis in the concurrence relies on, not to mention misinterprets, centuries-old statutes and factual scenarios from England. In the end, the new test is not backed by statutory authority and appears to be an entirely new interpretation by the Federal Circuit.

C. Alternative Definitions and Tests

Several alternatives to the machine-or-transformation test have been suggested or implemented in the past. The three alternative tests that follow have, at one time or another, been announced by either the Supreme Court or the Federal Circuit (or its predecessor.) They include the Freeman-Walter-Able test, the Useful, Tangible, and Concrete Result test, and the modified Anything Under the Sun Made By Man test. For any test to be taken seriously, however, first the key terms must be defined, and in the context of the tests described below, the key term is “process.”

1. The Definition of “Process”

In prior years, the Federal Circuit has realized that the term “process” actually comprises two different concepts: “the method or process of making” and “the method or process of using . . . .”[109] A single patent can include both product claims (machine, manufacture, or composition of matter) and process claims. Within process claims, both methods of making and methods of using can be claimed.[110]

Some commentators have suggested – in interpreting the parallel construction of the Constitutional intellectual property clause[111] – that the distinction between the “useful arts” (or, in today’s terms, technology) and science (knowledge), and therefore the distinction between the patent system and the copyright system, requires some kind of “physical transformation or machine” test. If an invention does not result in any kind of physical transformation, the more appropriate protection is copyright.[112] The Federal Circuit previously dismissed such an interpretation, however, noting that the phrase “physical transformation” can be misinterpreted.[113] “In the first place, it is not an invariable requirement, but merely one example of how a mathematical algorithm may bring about a useful application.”[114] To support its reasoning, Judge Rich pointed to Diehr, in which the Supreme Court stated that “transforming or reducing an article to a different state or thing” was merely an example, “not an exclusive requirement.[115]

2. The “Freeman-Walter-Abele” Test

A common target of process patents is algorithms. The Freeman-Walter-Abele test, developed over the course of several years and three key cases, was formulated to deal with the problem of patenting algorithms, especially those that include mathematical formulas.[116] The test comprises two steps: first, it must be determined whether the claim at issue recites an “algorithm” within the meaning of Benson.[117] If the claim does recite an algorithm, it must be determined whether that algorithm is “applied in any manner to physical elements or process steps.”[118]

To see the Freeman-Walter-Abele test in action, consider Arrhythmia Research Technology Inc. v. Corazonix Corp.[119] In Arrhythmia Research, the plaintiff/patentee was enforcing a patent for analyzing the electrical signals of the heart.[120] The district court found the patent invalid for failure to claim patentable subject matter under § 101.[121] Assuming, arguendo, that the algorithm made use of certain mathematical formulas, thereby satisfying the first prong, the court proceeded to analyze the second prong.[122] Arrhythmia employed the use of the mathematical formulas in its algorithm in order to convert analog input signals into digital signals, and then to compare the digital signals to certain predetermined levels in order to determine the risk of ventricular tachycardia.[123] The court held that the claimed steps of “’converting,’ ‘applying,’ ‘determining,’ and ‘comparing’ are physical process steps that transform one physical electrical signal into another,” thereby satisfying the second prong of the Freeman-Walter-Abele test.[124]

The Bilski court, upon analyzing the Freeman-Walter-Abele test and its new machine-or-transformation test, has declared the Freeman-Walter-Abele test “inadequate,” declaring that it and other decisions based upon its reasoning “should no longer be relied on.”[125] However, the continued viability of the test was already in doubt before the Bilski decision. The next test, however, was very much “viable” at the time of the Bilski decision.

3. The “Useful, Concrete, and Tangible Result” Test

In Alappat, the court held that algorithmic processes are statutory subject matter so long as they produce a “useful, concrete, and tangible result.”[126] In 1998, the Federal Circuit had occasion to revisit its Alappat decision.[127] In State Street Bank, an algorithm for a computerized accounting and mutual fund management system came before the court, the district court having found it invalid as non-statutory subject matter.[128] The court took the opportunity to reaffirm the Alappat test, and, in addition, to seemingly put to rest the notion that business methods were not patent eligible under § 101.[129] “Today, we hold that the transformation of data, representing discrete dollar amounts, by a machine through a series of mathematical calculations into a final share price, constitutes a [patent-eligible invention] because it produces ‘a useful, concrete and tangible result’ . . . .”[130]

Once again, the Bilski court explicitly overrules this test. Reasoning that the test was simply an aid in determining if an algorithm comprised merely an abstract idea, the Court determined that the entirety of the test was subsumed within the new machine-or-transformation test, and therefore supplanted by it.[131] As a result, the Bilski court concluded that “the ‘useful, concrete and tangible result’ inquiry is inadequate and [we] reaffirm that the machine-or-transformation test outlined by the Supreme Court is the proper test to apply.”[132]

The Bilski court, having broken from years of statutory interpretation, its own precedent, as well as that of the Supreme Court, has done everything it can to install the machine-or-transformation test as the definitive test for patent eligibility of processes.

D. Policy Considerations

The theoretical and public policy underpinnings of patent law fall into a few well-known philosophical frameworks. The “natural rights” philosophy characterized by writings of John Locke and endorsed in Europe holds that we all own the fruits of our labor.[133] The “utilitarian” philosophy endorsed by the patent and copyright clause of the Constitution holds that patent rights are granted in order to promote progress.[134] Finally, the uniqueness of software has spawned its own philosophy of property rights that is sometimes in harmony with and sometimes at odds with the natural rights and utilitarian theories: the open source movement.

1. Natural Rights

Locke believed that once a person pulls something out of the common and mixes his labor with it, he has an ownership stake in that thing; his labor has “attached” to it, and if anyone were to take it without permission or compensation, that person would have taken the owner’s labor as well.[135] At the same time, Locke added a proviso that even though people own their own bodies, as well as the fruits of their labor through the attachment theory, when something is removed from the common, there must remain “enough and as good” left in the common for others.[136] This is one justification for the patent system. During the process of invention, inventors mix their labor with certain raw materials to produce the new invention. The inventors have attached their labor to the invention; indeed, it is their labor that is the glue holding the raw materials together. When inventors “pull something out of the common” – get a government-backed monopoly for their invention in the form of a patent – they must provide full disclosure to promote a robust public domain and ensure that the ideas are still available to all.[137]

2. Utilitarian

The Constitution takes a different approach to intellectual property – a distinctly utilitarian one. The prefatory clause of the patent and copyright provision expressly states that the purpose of the patent system is “to promote the Progress of Science and the useful Arts . . . .”[138] This comports closely with the utilitarian mantra of maximizing social utility. In this case, the government-backed monopolies – in the form of patents – tend to do some harm to the overall free market system of this country by stifling competing for a period of time. However, the benefits realized by the constant innovation have been deemed to outweigh the harm done to free market competition. Patent monopolies thus maximize social utility by creating an incentive for inventors to innovate. One of the major counter arguments to utilitarian theory is that people do not necessarily invent in order to gain monetary rewards.

3. Open Source

The “open source” – or “free software” – community opposes software patents, along with copyright and all other forms of property rights in software. However, the common perception that “open source” means simply that the software is free of charge is not accurate.[139] Richard Stallman, creator of the ubiquitous GNU General Public License for open source software, describes open source as being “a matter of freedom, not price, so think of ‘free speech,’ not ‘free beer.’”[140]

The open source movement rests on a philosophical foundation rooted in the distinction between physical objects, like machines, and the more ephemeral reality that software inhabits. By emphasizing this difference, open source advocates refute the application of natural rights theory to software.[141] While open source advocates are quick to agree with natural rights theorists that the taking of another’s private property is also the taking of their labor, especially in the case of an invention, software is different in the sense that it can be taken, copied, and redistributed countless times without any adverse effect on the specific copy of the software that creator maintains.[142] Indeed, the only affect at all is on the profitability of software as a commercial product.[143] Additionally, by emphasizing the social utility of sharing and cooperation, the open source community has put a utilitarian spin on the free software movement.[144] by implicitly judging those qualities to be more worthy policy considerations than the stimulation of technological progress.

4. The Federal Circuit

The test announced by the Bilski court ties the patentability of processes to a notion arising in the pre-industrial and industrial age. Such a test – that processes must be tied to a machine or result in the transformation of an article – finds little foundational support in either the natural rights or utilitarian theory. It seems, in essence, to be a practical rather than policy-driven approach. One reason for precluding mathematical and other natural principles from patent eligibility is the fact that they have always existed.[145] Furthermore, this would remove ideas from the public domain, and therefore may result in many existing products becoming infringing products.[146] On the other hand, however, is the text of the Constitution and the Patent Act providing protection for discoveries.[147] Bilski is not asking for patent protection for a mathematical or other natural principle, however; instead, he is asking for protection for a pure business method.[148]

There is an entire industry – a truly global industry – that has sprung up in reliance upon patenting of business methods and software in the United States.[149] By declaring that processes must be tied to a machine or result in the physical transformation of an article, thousands of issued business method patents are in danger of being invalidated.[150] Likewise, without any further guidance as to what, exactly, “tied to a machine” means for the thousands of issued software patents, an entire industry has been thrown into a state of uncertainty.

Finally, also unknown is how the machine-or-transformation test announced in Bilski will affect the § 100 definition of process: “[t]he term ‘process’ means process, art or method, and includes a new use of a known process, machine, manufacture, composition of matter, or material.”[151] Conceivably, new uses for known materials, for example, that don’t result in any physical transformation are now unpatentable, a result that seems to be at odds with the plain meaning of statutory text.

IV. Recommendation

The machine or transformation test laid out by the Bilski court is at odds with the plain meaning of the statutory text it purports to interpret, years of Federal Circuit and Supreme Court precedent, and hundreds of years of patent policy and law. Moreover, it is out of touch with the current information-based economy that United States relies on today, instead basing patent eligibility on a test more appropriate for an industrial or pre-industrial economy at a time when incentives to innovate seem more important than at any time in decades.

What is proposed in this Note is a return to the test first announced in Alappat and reaffirmed in State Street: processes are patent eligible under §101 if they produce useful, concrete, and tangible results. The reasons for this return to the past are threefold.

First, § 101 provides patent eligibility for new uses of existing statutory subject matter. Under the Bilski machine-or-transformation test, new uses for known materials are now upatentable when those new uses don’t result in any physical transformation. This result is at odds with the plain meaning of statutory text. Moreover, software, at its core, does indeed provide a new use for an existing machine – whether it is a general purpose computer or a more specialized processing device.

Second, a brief thought experiment demands such a conclusion. What if someone, for example, invented a new machine that could sort, store, and retrieve physical cards with specialized information printed on them? Such an invention would of course be patent eligible subject matter under § 101 as a new machine, even if it eventually did not pass patent examination due to novelty issues. Patent eligibility is distinct from novelty. Why should a business method or piece of software that stores, sorts, and retrieves records in a database not be considered patent eligible subject matter? Moreover, why shouldn’t the process itself be patent-eligible under § 101 just because it is drawn to a different category – process – than the machine is? Indeed, the Supreme Court has held that an invention need not be placed in any particular category to be patent eligible, so long as it is could be placed in at least one.[152] No authority has ever treated processes as second-class subject matter by requiring the presence of other independently patentable subject matter in order to pass the threshold §101 requirement.

Third, there exists already a statutory requirement for excluding an entire swath of objectionable business methods and software – nonobviousness.[153] If a piece of software running on a general purpose computer is analyzed under § 101, it should pass as a patentable process. If it meets each of the requirements of §102, then it should be considered novel. However, if the combination of the software and a general purpose computer would have been obvious to someone of normal skill in the technological art of computer programming, then the patent application should be rejected. The rejection would properly be a § 103 rejection, however, rather than a §101 rejection. Deeper analysis of how often software should be analyzed for satisfying the § 103 nonobviousness test is beyond the scope of this Note.

V. Conclusion

Process patents have been recognized as patent-eligible for hundreds of years, and have been expressly considered patent eligible in the statutory text for more than fifty years. The Supreme Court has recognized this in its most relevant decisions, as did the Federal Circuit until recently. With In re Bilski, however, the Federal Circuit changed what had been a well-settled point of law by holding that processes are unique among patent eligible subject matter in that they are not patent eligible by themselves; rather, they must be tied to other independently patent eligible subject matter. The Bilski court is the first and only authority to adopt such a two-tiered approach.

The second class status that processes have now been accorded is also contrary to the major schools of policy thought. No utilitarian promotion of innovation and no respected of the labor of others can be found in the new standard. Even open source philosophy rests on notions of freedom and sharing, not in a lack of “transforming an article to a different state or thing.”

The previous test, first announced in Alappat and reaffirmed in State Street, is the proper test for judging the patentability of processes: they must produce a useful, concrete, and tangible result, but not necessarily a physical result. Readopting this test is true to the history and plain text meaning of the Patent Act and also avoids the surprising two-tiered system of patent eligible subject matter, while still keeping processes possessing no inventive merit out of the patent system.

[1] J.D., University of Illinois College of Law, 2010; B.S., Computer Science, DePaul University, 2007.

[2] Mark Twain, A Connecticut Yankee in King Arthur’s Court 64 (Harper & Brothers 1889).

[3] See id. (“a country without a patent office and good patent laws [i]s just a crab, and c[a]n't travel any way but sideways or backwards”).

[4] Abraham Lincoln, Second Lecture on Discoveries and Inventions (Feb. 11, 1859), available at http://quod.lib.umich.edu/l/lincoln/ (follow “Browse” hyperlink, then follow “Collected Works of Abraham Lincoln Volume 3” hyperlink, then follow “Second Lecture on Discoveries and Inventions” hyperlink) (asserting that the exclusive rights granted by the patent system “added the fuel of interest to the fire of genius, in the discovery and production of new and useful things”).

[5] See Roger E. Schechter & John R. Thomas, Principles of Patent Law 14 (2004) (noting that innovations relating to fourteenth century Tyrolean mines were rewarded with privileges similar in some ways to those of our current patent system).

[6] See Diamond v. Chakrabarty, 447 U.S. 303 (1980) (holding that genetically altered organisms are “not nature's handiwork, but rather the inventor’s” and are therefore patent-eligible as either “compositions of matter” or “manufactures”); see also U.S. Patent No. 6,013,857 (filed Jan. 11, 2000) (showing that genetically altered organisms are still patent-eligible 20 years after the landmark decision in Chakrabarty since it was issued with a claim for a genetically altered cow).

[7] John F. Duffy, The Death of Google’s Patents?, http://www.patentlyo.com/patent/2008/07/the-death-of-go.html (last visited Nov. 20, 2008).

[8] In re Comiskey, 499 F.3d 1365, 1371 (Fed. Cir. 2007).

[9] 35 U.S.C. §§ 102-103 (2000); see also In re Comiskey, 499 F.3d 1365, 1371 (Fed. Cir. 2007).

[10] 35 U.S.C. § 112 (2000).

[11] Roger E. Schechter & John R. Thomas, Principles of Patent Law 14 (2004).

[12] Id.

[13] Id.

[14] Office of Public Sector Information, Statute of Monopolies 1623, http://www.opsi.gov.uk/RevisedStatutes/Acts/aep/1623/caep_16230003_en_1 (last visited Nov. 20, 2008).

[15] U.S. Const. art. I, § 8, cl. 8.

[16] The U.S. Constitution was ratified in 1788.

[17] 35 U.S.C. § 101 (2000).

[18] Id..

[19] Diamond v. Chakrabarty, 447 U.S. 303, 308 (1980) (citing S.Rep.No.1979, 82d Cong., 2d Sess., 5 (1952); H.R.Rep.No.1923, 82d Cong., 2d Sess., 6 (1952)).

[20] Id. at 309.

[21] Id. (citing Parker v. Flook, 437 U.S. 584 (1978); Gottschalk v. Benson, 409 U.S. 63, 67 (1972); Funk Brothers Seed Co. v. Kalo Inoculant Co., 333 U.S. 127, 130 (1948); O'Reilly v. Morse, 15 How. 62, 112-121 (1854); Le Roy v. Tatham, 14 How. 156, 175 (1853)).

The Court went on to explain by way of example:

[A] new mineral discovered in the earth or a new plant found in the wild is not patentable subject matter. Likewise, Einstein could not patent his celebrated law that E=mc 2; nor could Newton have patented the law of gravity. Such discoveries are “manifestations of . . . nature, free to all men and reserved exclusively to none.”

Diamond v. Chakrabarty, 447 U.S. 303, 309 (1980) (citing Funk Brothers Seed Co. v. Kalo Inoculant Co., 333 U.S. 127, 130 (1948)).

[22] Rubber-Tip Pencil Co. v. Howard, 87 U.S. 498, 507 (1874) (“[a]n idea of itself is not patentable”).

[23] 35 U.S.C. § 101 (2000) (emphasis added).

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

[25] Le Roy v. Tatham, 55 U.S. 156 (1852).

[26] Id. at 175.

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

[28] O’Reilly v. Morse, 56 U.S. 62 (1853).

[29] Id.

[30] Id. at 112-13.

[31] Gottschalk v. Benson, 409 U.S. 63 (1972) (“Phenomena of nature, though just discovered, mental processes, and abstract intellectual concepts are not patentable . . . .”).

[32] Id.

[33] See, e.g., id. (1972) (rejecting a claim involving a binary conversion algorithm); Parker v. Flook, 437 U.S. 584 (1978) (rejecting a claim involving mathematical calculation of alarm limits).

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

[35] Id.

[36] Id. at 71-72.

[37] Diamond v. Diehr, 450 U.S. 175 (1981).

[38] The Arrhenius equation is k=A*exp^(-Ea/R*T).

[39] Diamond v. Diehr, 450 U.S. 175 (1981).

[40] Id. at 187.

[41] Id.

[42] See In re Freeman, 573 F.2d 1237 (C.C.P.A. 1978); In re Walter, 618 F.2d 758 (C.C.P.A. 1980); In re Abele, 684 F.2d 758 (C.C.P.A. 1982).

[43] In re Bilski, 545 F.3d 943, 954 (Fed. Cir. 2008).

[44] Id.

[45] Id.

[46] In re Alappat, 33 F.3d 1526 (Fed. Cir. 1994).

[47] Roger E. Schechter & John R. Thomas, Principles of Patent Law 47-48 (2004).

[48] In re Alappat, 33 F.3d 1526, 1544 (Fed. Cir. 1994).

[49] Id. at 1545.

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

[51] Roger E. Schechter & John R. Thomas, Principles of Patent Law 52-53 (2004).

[52] Id.

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

[54] Id. at 1373.

[55] Id. at 1375.

[56] Roger E. Schechter & John R. Thomas, Principles of Patent Law 58-60 (2004).

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

[58] Id. at 949.

[59] Id. .

[60] Id. at 961.

[61] Id.

[62] Id. at 960 (Fed. Cir. 2008) (citing Gottschalk v. Benson, 409 U.S. 63, 70 (1972)).

[63] Id. at 964.

[64] Id. at 956.

[65] Id. at 952.

[66] Id. at 953 (citing Diamond v. Diehr, 450 U.S. 175, 187 (1981)).

[67] Id. at 961.

[68] Id. at 954 (citing Gottschalk v. Benson, 409 U.S. 63, 70 (1972)).

[69] Id. (citing Diamond v. Diehr, 450 U.S. 175 (1981); Parker v. Flook, 437 U.S. 584 (1978); Gottschalk v. Benson, 409 U.S. 63, 70 (1972)).

[70] See Parker v. Flook, 437 U.S. 584, 589 n.9 (1978) (“An argument can be made that the Court has only recognized a process as within the statutory definition when it either was tied to a particular apparatus or operated to change materials to a ‘different state or thing’”); Gottschalk v. Benson, 409 U.S. 63, 70 (1972) (“Transformation and reduction of an article ‘to a different state or thing’ is the clued to the patentability of a process claim that does not include particular machines.”).

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

[72] Parker v. Flook, 437 U.S. 584, 589 n.9 (1978).

[73] In re Bilski, 545 F.3d 943, 956 (Fed. Cir. 2008) (“[T]his caveat was not repeated in Diehr when the Court reaffirmed the machine or transformation test.”) (emphasis in original).

[74] Diamond v. Diehr, 450 U.S. 175, 184 (1981).

[75] In re Bilski, 545 F.3d 943, 956 n.12 (Fed. Cir. 2008) (noting that such language “may indicate the Supreme Court’s recognition that the machine-or-transformation test might require modification in the future.”).

[76] Id. at 954.

[77] Id. at 957.

[78] Parker v. Flook, 437 U.S. 584, 590 (1978).

[79] In re Bilski, 545 F.3d 943, 957 (Fed. Cir. 2008).

[80] Id. at 956.

[81] Id. at 963.

[82] Claim 1 reads:

A method for managing the consumption risk costs of a commodity sold by a commodity provider at a fixed price comprising the steps of:

(a) initiating a series of transactions between said commodity provider and consumers of said commodity wherein said consumers purchase said commodity at a fixed rate based upon historical averages, said fixed rate corresponding to a risk position of said consumer;

(b) identifying market participants for said commodity having a counter-risk position to said consumers; and

(c) initiating a series of transactions between said commodity provider and said market participants at a second fixed rate such that said series of market participant transactions balances the risk position of said series of consumer transactions.

Id. at 949.

[83] Id.

[84] Id. at 963.

[85] Id.

[86] Id.

[87] Id. at 965.

[88] Patent Act of 1952 § 101, 35 U.S.C. § 101 (2000)

[89] In re Bilski, 545 F.3d 943, 976 (Fed. Cir. 2008) (Newman, J., dissenting).

[90] Supra, section II.A.

[91] In re Bilski, 545 F.3d 943, 966 (Fed. Cir. 2008) (Dyk, J., concurring) (emphasis added).

[92] Id. at 968.

[93] See Id. at 967 (citing Congressional debates prior to passage of the Patent Act of 1790, where the representative introducing the bill noted that it was an “imitation” of England’s patent system.).

[94] Id. at 972.

[95] Id. at 968.

[96] Id. at 976.

[97] Id. at 985.

[98] Id. at 986.

[99] Id. at 989 (citing English patents granted under the Statute of Monopolies for processes including a “[p]lan for assurances of lives of persons from 10 to 80 years of age,” [s]ecuring to the purchasers of shares and chances of state-lottery tickets any prize drawn in their favor,” “[s]ecuring the property of person purchasing shares of State-lottery tickets,” and “[a]scertaining and checking the number of checks or tickets which have been used and marked, applicable for railway officers.”).

[100] Id.

[101] Diamond v. Chakrabarty, 447 U.S. 303 (1980) (“[A] statute is not to be confined to the particular applications . . . contemplated by legislators. This is especially true in the field of patent law.”).

[102] Parker v. Flook, 437 U.S. 584 (1978) (“As in Benson, we assume that a valid process patent may issue even if it does not meet one of the qualifications of our earlier precedents.”).

[103] In re Bilski, 545 F.3d 943, 989 (Fed. Cir. 2008) (Newman, J., dissenting)

[104] Diamond v. Chakrabarty, 447 U.S. 303, 308 (1980) (citing U.S. v. Dubilier Condenser Corp., 289 U.S. 37, 42 (1979)).

[105] Id. at 308 (citing S.Rep.No.1979, 82d Cong., 2d Sess., 5 (1952); H.R.Rep.No.1923, 82d Cong., 2d Sess., 6 (1952)).

[106] In re Bilski, 545 F.3d 943, 990 (Fed. Cir. 2008) (Newman, J., dissenting)

[107] 35 U.S.C. § 273.

[108] Id. at § 273(a)(3).

[109] In re Pleuddemann, 910 F.2d 823, 825 (Fed. Cir. 1990).

[110] Roger E. Schechter & John R. Thomas, Principles of Patent Law 26 (2004).

[111] U.S. Const. Art I, sec 8, cl 8.

[112] Roger E. Schechter & John R. Thomas, Principles of Patent Law 29 (2004).

[113] AT&T Corp. v. Excel Communications, Inc., 172 F.3d 1352, 1358 (Fed. Cir. 1999).

[114] Id. (emphasis added).

[115] Id. at 1358-59 (“As the Supreme Court itself noted, ‘when [a claimed invention] is performing a function which the patent laws were designed to protect (e.g., transforming or reducing an article to a different state or thing), then the claim satisfies the requirements of § 101.’ The ‘e.g.’ signal denotes an example, not an exclusive requirement.”) (citations omitted).

[116] In re Freeman, 573 F.2d 1237 (C.C.P.A. 1978); In re Walter, 618 F.2d 758 (C.C.P.A. 1980); In re Abele, 684 F.2d 902 (C.C.P.A. 1982).

[117] Gottschalk v. Benson, 409 U.S. 63, 65 (1972) (“A procedure for solving a given type of mathematical problem is known as an algorithm. . . . [T]hey are a generalized formulation for programs to solve mathematical problems of converting one form of numerical representation to another. From the generic formulation, programs may be developed as specific applications.”)

[118] In re Bilski, 545 F.3d 943, 959 (Fed. Cir. 2008)

[119] Arrhythmia Research Technology, Inc. v. Corazonix Corp., 958 F.2d 1053 (Fed. Cir. 1992).

[120] Id.

[121] Id.

[122] Id.

[123] Id.

[124] Id.

[125] In re Bilski, 545 F.3d 943, 961 (Fed. Cir. 2008).

[126] In re Alappat, 33 F.3d 1525, 1544 (Fed. Cir. 1994).

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

[128] Id.

[129] Id.

[130] Id. at 1373.

[131] In re Bilski, 545 F.3d 943, 959-60 (Fed. Cir. 2008).

[132] Id.

[133] Roger E. Schechter & John R. Thomas, Principles of Patent Law 7 (2004).

[134] U.S. Const. Art. I, sec. 8, cl. 8.

[135] Roger E. Schechter & John R. Thomas, Principles of Patent Law 7 (2004).

[136] Id.

[137] Id.

[138] U.S. Const. Art. I, sec. 8, cl. 8.

[139] Richard Stallman, Why “Open Source” Misses the Point of Free Software, http://www.gnu.org/philosophy/open-source-misses-the-point.html (last visited March 12, 2009).

[140] Id.

[141] Richard Stallman, Why Software Should Not Have Owners, http://www.gnu.org/philosophy/why-free.html (last visited March 12, 2009).

[142] Id.

[143] Id.

[144] Id.

[145] Roger E. Schechter & John R. Thomas, Principles of Patent Law 27 (2004).

[146] This point has some natural-rights support.

[147] Le Roy v. Tatham, 55 U.S. 156, 159 (1852).

[148] In re Bilski, 545 F.3d 943, 949 (Fed. Cir. 2008).

[149] Id. at 994-95 (Newman, J., dissenting).

[150] Id.

[151] 35 U.S.C. § 100(b).

[152] Diamond v. Chakrabarty, 447 U.S. 303, 308 (1980)

[153] See 35 U.S.C. § 103 (2000) (stating that a novel invention may nevertheless be unpatentable when “the differences between the subject matter sought to be patented and the prior art are such that the subject matter as a whole would have been obvious at the time the invention was made to a person having ordinary skill in the art to which said subject matter pertains.”)