No. 08-964
================================================================
In The
Supreme Court of the United States
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BERNARD L. BILSKI and RAND A. WARSAW,
Petitioners,
v.
JOHN J. DOLL, ACTING UNDER SECRETARY
OF COMMERCE FOR INTELLECTUAL
PROPERTY AND ACTING DIRECTOR, PATENT
AND TRADEMARK OFFICE,
Respondent.
----------------- ♦ -----------------
On Writ Of Certiorari To The
United States Court Of Appeals
For The Federal Circuit
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BRIEF OF ACCENTURE AND
PITNEY BOWES INC. AS AMICI CURIAE
IN SUPPORT OF PETITIONERS
----------------- ♦ -----------------
WAYNE P. SOBON
MEREDITH MARTIN ADDY
ACCENTURE
Counsel of Record
50 W. San Fernando St.
JOEL W. BENSON
Suite 1200
CHARLES M. MCMAHON
San Jose, CA 95113
BRINKS HOFER GILSON & LIONE
(408) 817-2170
455 N. Cityfront Plaza Dr.
Chicago, IL 60611
STEVEN J. SHAPIRO
(312) 321-4200
PITNEY BOWES INC.
35 Waterview Dr.
Shelton, CT 06484
(203) 924-3880
August 5, 2009
Counsel for Amici Curiae
================================================================
COCKLE LAW BRIEF PRINTING CO. (800) 225-6964
OR CALL COLLECT (402) 342-2831
i
TABLE OF CONTENTS
Page
INTEREST OF THE AMICI CURIAE ...................
1
SUMMARY OF THE ARGUMENT .......................
3
INTRODUCTION ...................................................
5
ARGUMENT ...........................................................
7
I.
AN INVENTIVE PROCESS SATISFIES
SECTION 101 IF IT IS USEFUL ...............
7
A.
The Constitution Establishes the
“Usefulness” Standard for Patentability ..
8
B.
The Patent Statute Mandates the
“Usefulness” Standard ............................. 11
C.
The Court Has Consistently Applied
the “Usefulness” Standard .................... 14
II.
SECTIONS 102, 103, AND 112 – NOT
SECTION 101 – DEFINE THE “CON-
DITIONS AND REQUIREMENTS” FOR
PATENTABILITY ........................................ 18
III. THE FEDERAL CIRCUIT’S RIGID RULE
FOR PATENT ELIGIBILITY HAS NO
REASONABLE BASIS ................................ 23
A. The Court Has Denounced Rigid Rules in
Favor of More Flexible Approaches ...... 24
B.
The Federal Circuit Departs from the
Court’s Flexible Approach to Section 101 .. 26
C.
The Federal Circuit Ignores Recent
Congressional Action Embracing the
Flexible Approach to Section 101 .......... 30
ii
TABLE OF CONTENTS – Continued
Page
IV.
THE “MACHINE-OR-TRANSFORMATION”
TEST IS NOT A RELIABLE INDICATOR
OF USEFULNESS ....................................... 33
A. Useful Processes May or May Not Be Tied
to a Machine or Transform an Article ...... 34
B. The “Machine-or-Transformation” Test
Forecloses Useful Innovation Well
Beyond the Bilski Claims ...................... 38
CONCLUSION ....................................................... 40
iii
TABLE OF AUTHORITIES
Page
CASES
Corning v. Burden,
56 U.S. (15 How.) 252 (1853) .................................. 16
Diamond v. Diehr,
450 U.S. 175 (1981) ......................................... passim
Feist Publ’ns, Inc. v. Rural Tel. Serv. Co.,
499 U.S. 340 (1991) ................................................. 10
Festo Corp. v. Shoketsu Kinzoku Kogyo
Kabushiki Co.,
535 U.S. 722 (2002) ........................................... 25, 30
Funk Bros. Seed Co. v. Kalo Inoculant Co.,
333 U.S. 127 (1948) ................................................. 16
Gottschalk v. Benson,
409 U.S. 63 (1972) ........................................... passim
In re Bergy,
596 F.2d 952 (C.C.P.A. 1979) ............................ 19, 20
In re Bilski,
545 F.3d 943 (Fed. Cir. 2008) .......................... passim
KSR Int’l Co. v. Teleflex Inc.,
550 U.S. 398 (2007) ........................................... 25, 30
Lab. Corp. of Am. Holdings v. Metabolite Labs., Inc.,
126 S. Ct. 2921 (2006) ............................................. 22
Le Roy v. Tatham,
55 U.S. (14 How.) 156 (1852) .................................. 16
O’Reilly v. Morse,
56 U.S. (15 How.) 62 (1853) .............................. 14, 21
iv
TABLE OF AUTHORITIES – Continued
Page
Parker v. Flook,
437 U.S. 584 (1978) ......................................... passim
Quanta Computer, Inc. v. LG Elecs., Inc.,
128 S. Ct. 2109 (2008) ....................................... 25, 26
State St. Bank & Trust Co. v. Signature Fin.
Group, Inc.,
149 F.3d 1368 (Fed. Cir. 1998) .......................... 30, 31
The Telephone Cases,
126 U.S. 1 (1888) ..................................................... 15
Tilghman v. Proctor,
102 U.S. 707 (1880) ........................................... 27, 28
CONSTITUTION
U.S. CONST., art. I, § 8, cl. 8 .......................... 8, 9, 23, 37
STATUTES
35 U.S.C. § 100(b) ....................................................... 13
35 U.S.C. § 101 ................................................... passim
35 U.S.C. § 102 ................................................... passim
35 U.S.C. § 103 ................................................... passim
35 U.S.C. § 112 .................................................... passim
35 U.S.C. § 273 ............................................... 30, 31, 32
Patent Act of 1790,
Ch. 7, 1 Stat. 109-112 (1790) .............................. 7, 11
v
TABLE OF AUTHORITIES – Continued
Page
Patent Act of 1793,
Ch. 11, 1 Stat. 318-323, § 1 (1793) .......................... 12
Patent Act of 1952,
Ch. 950, 66 Stat. 792, § 101 (1952) ................. passim
LEGISLATIVE HISTORY
H.R. CONF. REP. No. 106-464 (1999) .......................... 32
S. REP. No. 82-1979, reprinted in 1952
U.S.C.C.A.N. 2394 ....................................... 13, 14, 20
THE FEDERALIST NO. 43, 288 (James Madison)
(B. Wright ed. 1961) ............................................ 9, 10
RULES
Supreme Court Rule 37 ............................................ 1, 2
OTHER AUTHORITIES
ADEDEJI B. BADIRU, HANDBOOK OF INDUSTRIAL
AND SYSTEMS ENGINEERING
(Taylor & Francis Group 2006) ............................... 37
GEORGE TICKNOR CURTIS, A TREATISE ON THE
LAW OF PATENTS FOR USEFUL INVENTIONS
(1849) ....................................................................... 15
DAVID L. APPLEGATE ET AL., THE TRAVELLING
SALESMAN: A COMPUTATIONAL STUDY
(Princeton University Press 2006) ......................... 33
vi
TABLE OF AUTHORITIES – Continued
Page
GAVRIEL SALENDY, HANDBOOK OF INDUSTRIAL
ENGINEERING
(John Wiley & Sons, Inc., 3d ed. 2001) ................... 36
General Requirements Bulletin for Admission
to the Examination for Registration to Prac-
tice in Patent Cases Before the United States
Patent and Trademark Office (Jan. 2008) ............. 36
MPEP § 706.03(a)(II) ............................................ 33, 34
NOAH WEBSTER, DICTIONARY OF THE ENGLISH
LANGUAGE (11th ed. 1833) ......................................... 9
OXFORD ENGLISH DICTIONARY (2d ed. 1991) .................. 9
RICHARD GUY WILSON ET AL., THE MACHINE AGE
IN AMERICA 1918-1941 (1986) .................................. 23
THOMAS SHERIDAN, GENERAL DICTIONARY OF THE
ENGLISH LANGUAGE (1780) ......................................... 9
WAYNE C. TURNER ET AL., INTRODUCTION TO
INDUSTRIAL AND SYSTEMS ENGINEERING
(Prentice Hall, 3d ed. 1993) .................................... 36
1
INTEREST OF THE AMICI CURIAE1
Accenture and Pitney Bowes Inc. have joined in
this amicus brief to encourage the Court to correct a
serious mistake in the law. Accenture2 is one of the
world’s leading management consulting, technology
services, and outsourcing organizations, serving 96 of
the Fortune Global 100 and more than three-quarters
of the Fortune Global 500.
Accenture collaborates with clients to help them
become high-performance businesses. This strategy
builds on Accenture’s expertise in consulting,
technology and outsourcing to help clients create
sustainable value for their customers and share-
holders. With approximately 177,000 people serving
clients in more than 120 countries, Accenture
generated more than $23 billion in net revenues for
the fiscal year ended August 31, 2008.
Accenture spends annually about $400 million on
research and development. As a result of these
1 In accordance with Supreme Court Rule 37, Accenture and
Pitney Bowes state that this brief was not authored, in whole or
in part by counsel to a party, and that no monetary contribution
to the preparation or submission of this brief was made by any
person or entity other than the amici curiae or their counsel.
2 “Accenture” refers to the Accenture group of companies
including Accenture LLP, an Illinois limited liability partner-
ship, doing business on behalf of Accenture within the United
States, and Accenture Global Services GmbH, a Switzerland
limited liability company, registered owner of many of
Accenture’s U.S. patents.
2
efforts, Accenture has filed more than 600 U.S. patent
applications and obtained more than 360 U.S.
patents. Many of these patents and applications are
directed to methods for managing or improving a
wide variety of business processes within various
industrial and organizational settings.
Pitney Bowes is a Fortune 500 technology
company that delivers service and innovation to more
than two million customers worldwide by managing
the flow of information, mail, documents, and
packages. Pitney Bowes has consistently been an
innovator and a technology leader, with its patent
portfolio dating back over a hundred years.
Today, Pitney Bowes employs about thirty-five
thousand people worldwide with annual revenues of
approximately $6.3 billion. Since 1976, Pitney Bowes
has obtained over 2500 U.S. patents and currently
has about 550 pending U.S. patent applications.
Pitney Bowes’ diverse patent portfolio includes
various hardware and software implemented
technologies, but a significant portion of its portfolio
concerns methods for managing and improving
business operations.
Accenture and Pitney Bowes have no interest in
any party to this litigation or stake in the outcome of
this case, other than their joint desire for a correct
interpretation and application of the United States
Patent Laws.
In accordance with Supreme Court Rule 37,
counsel for the amici curiae provided timely notice to
3
and obtained written consent to the filing of this brief
from counsel of record for the parties. The letters of
consent have been filed with the Clerk of the Court.
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SUMMARY OF THE ARGUMENT
The standard for patent eligible subject matter is
both simple and elegant. Grounded in the
constitutional mandate to promote the useful arts,
the patent statute broadly embraces all manner of
“useful” inventions, including processes, machines,
manufactures, and compositions of matter. 35 U.S.C.
§
101. This straightforward and open standard
ensures that the patent system adapts to embrace
new and innovative technology.
The Court’s decisions have reinforced the
statute’s standard, drawing limits only for claimed
inventions that are not truly useful, such as abstract
ideas. Such fundamental principles, including laws
of nature, physical phenomena, and mathematical
formulas, are not useful in themselves and therefore
are not subject to patent protection. They become
useful only when applied to achieve a practical and
beneficial result in the world. Accordingly, a practical
application of an abstract idea or a mathematical
formula to provide a useful result may be patented,
provided it satisfies the other conditions and
requirements of the patent statute.
Though the “usefulness” test for patent eligibility
is open and flexible, the other conditions and
4
requirements for grant of a patent are far more
restrictive. A patentable invention also must be both
new and nonobvious. In addition, the inventor must
fully and clearly describe the invention to enable
others to understand and practice it. The inventor
also must claim the invention distinctly to inform
the public of its reasonable metes and bounds.
Enforcement of these requirements ensures that,
after examination, granted patents legitimately
promote the useful arts and advance the frontiers of
technology, as the nation’s founders intended.
The Federal Circuit’s en banc decision in In
re Bilski, 545 F.3d 943 (Fed. Cir. 2008), imposes a
single, exclusive, and unbending “machine-or-
transformation” test that arbitrarily limits the scope
of patent eligible processes, disregards contrary
Constitutional and Congressional mandates, and
violates the Court’s precedent. The effect of the Bilski
decision is immediate and sweeping, adversely
impacting current and future patent rights. It
unnecessarily ties the process category of 35 U.S.C.
§ 101 to one of the other categories of that section,
such as the “machine” or “manufacture” category. The
Court should correct the Federal Circuit’s error and
reaffirm the flexible section 101 standard for process
patent eligibility, consistent with the Constitution,
the patent statute, and this Court’s past decisions.
The standard for process patent eligibility is the
straightforward threshold question of usefulness.
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5
INTRODUCTION
The
amici curiae, Accenture and Pitney Bowes,
submit this brief to address the core “usefulness”
standard of process patent eligibility and to provide
a perspective that has received relatively little
attention in the record.
The elegance of the constitutional standard flows
from a single word: “useful.” The concept of
usefulness unites the Constitution, the evolving
patent statute, and over 200 years of the Court’s
precedent regarding patent eligibility. The usefulness
standard ensures that an invention has utility,
meaning that it actually works. Yet, the concept goes
beyond simple utility. It demands that an invention
have practical application in the world. As a result,
abstract ideas are not patentable because they are
not useful. But a practical application of an abstract
idea, which provides a useful result in the world, may
be patentable, provided it satisfies the other
conditions and requirements of patentability.3
Congress implemented the usefulness standard
as part of its constitutional mandate to promote the
3 “Useful” in the constitutional and statutory sense must be
understood to require practical application of ideas in the world.
To be sure, many abstract ideas may be useful in a general
sense. For example, Euclid’s axioms are useful to generate
further geometric theorems or results. However, only a practical
application of Euclidean geometry may produce a useful result
in the world, thereby satisfying the particular “usefulness”
standard of section 101.
6
advance of the useful arts, broadly drafting the patent
statute without technological exclusions, ready to
embrace yet unknown innovations. Since then, the
Court has consistently applied this open and flexible
“usefulness” standard in determining subject matter
eligibility for all sorts of inventions, including
processes.
Sadly,
the
en banc Bilski decision takes a
monumental step backwards. Misinterpreting this
Court’s precedent, the Federal Circuit rigidly
proclaims that a process is patentable subject matter
only if “(1) it is tied to a particular machine or
apparatus, or (2) it transforms a particular article
into a different state or thing.” Bilski, 545 F.3d at
954. So, in this age when the usefulness of our
inventions and the vitality of our economy
increasingly depend on the creative and innovative
use of information and services, it seems almost
inconceivable that the court forced our patent system
to recognize only specific prior, time-worn
technologies. The cases construing the statute do not
require or imply any type of rigid rule regarding
required technology for a patent eligible invention.
Indeed, the cases counsel a more flexible approach.
The usefulness of the invention, as a practical
application of ideas in the world, is the fundamental
key for patent eligibility, not the particular means
(i.e. machines or material transformations) employed
to implement the invention. Promoting the “useful
7
arts” is as important today as it was when the
founding fathers drafted the Constitution. Innovative
processes have driven this nation’s economy for
centuries, and they continue to do so. Though
“useful,” many of these processes have not involved
any particular machine or transformation. Nothing
in the Constitution, the patent statute, or this Court’s
precedent justifies excluding such processes from
patent eligibility.
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ARGUMENT
I. AN INVENTIVE PROCESS SATISFIES
SECTION 101 IF IT IS USEFUL
An invention is eligible for patent protection if it
is useful. This standard applies equally to any
invention, whether it is a process, a machine, a
manufacture, or a composition of matter. 35 U.S.C.
§ 101.
The
“usefulness”
standard is rooted in the
Constitution and has appeared in every patent
statute since the original Patent Act of 1790. It
provides a compact rule for identifying patent-eligible
subject matter. Nothing in the Constitution, the
statute, or the Court’s prior decisions justifies
changing this standard.
8
Of course, section 101 presents only the
threshold inquiry of eligible subject matter; ultimate
patentability is subject to the other conditions and
requirements of Title 35. Id. Congress codified these
other conditions and requirements in 35 U.S.C.
§§ 102, 103, and 112, which ensure that patentable
inventions are novel, nonobvious, sufficiently
described, and distinctly claimed. For purposes of the
present case, however, the focus must remain on
section 101 and the historically open “usefulness”
standard for eligible subject matter.
A.
The Constitution Establishes the
“Usefulness” Standard for Patentability
The usefulness standard for patent eligibility
flows from the Constitution, which empowered
Congress to establish a patent system:
To promote the Progress of Science and
useful Arts, by securing for limited Times to
Authors and Inventors the exclusive Right to
their respective Writings and Discoveries.
U.S. CONST., art. I, § 8, cl. 8. From the beginning, the
founders intended that the patent system would
protect inventions to promote the useful arts. The
eighteenth century meaning of this phrase, “useful
Arts,” included but was in fact broader than what we
now might consider “technology,” and embraced all
9
manner of practical applications of skill or craft that
achieve useful results.4
By contrast, the copyright system, which was
authorized by the same constitutional clause, was
designed to promote “Science” by providing authors
with exclusive rights to their writings. U.S. CONST.,
art. I, § 8, cl. 8. Eighteenth century usage of the term
“Science” referred to knowledge generally, not just
hard sciences.5
In the Federalist Papers, James Madison
justified both the patent and copyright systems,
4 See THOMAS SHERIDAN, GENERAL DICTIONARY OF THE
ENGLISH LANGUAGE (1780) (useful: “convenient, profitable to any
end, conducive or helpful to any purpose;” art: “the power of
doing something not taught by nature and instinct; a science, as
the liberal arts; a trade; artfulness; skill; dexterity; cunning;”).
The original sense of “technology” derives from the Greek
“techné,” the primary meaning of which is simply “art, craft” (as
opposed to “episteme,” which referred to “scientific knowledge, a
system of understanding”). See OXFORD ENGLISH DICTIONARY, Vol.
V. 338, Vol. XVII 705 (2d ed. 1991); see also NOAH WEBSTER,
DICTIONARY OF THE ENGLISH LANGUAGE 35 (11th ed. 1833).
Indeed, the term “technology” was much broader than its
current meaning but rather matched the breadth encompassed
by the “useful arts.” SHERIDAN, supra (technology: “a treatise on
the arts, and explanation of terms of art”). Nothing in these
definitions limits “useful arts” or “technology” to machines or
physical transformations.
5 SHERIDAN, supra note 3, gives “knowledge” as the first
definition of “science.” Science therefore broadly encompasses
the exposition and development of abstract ideas, which are also
the raw fodder for developing practical applications and the
useful arts.
10
emphasizing that patentable inventions must be
useful:
The utility of this power will scarcely be
questioned. The copy right of authors has
been solemnly adjudged in Great Britain to
be a right at common law. The right to useful
inventions seems with equal reason to belong
to the inventors.
THE FEDERALIST NO. 43, 288 (James Madison) (B.
Wright ed. 1961) (emphasis added).
Neither the copyright system nor the patent
system provides exclusive rights in abstract ideas
themselves. Copyright may protect an original
expression of an abstract idea, but not the idea itself.
See Feist Publ’ns, Inc. v. Rural Tel. Serv. Co., 499 U.S.
340, 348 (1991). Similarly, a patent may protect a
practical application of an abstract idea that yields a
useful result, but also not the idea itself. Thus, ideas,
though neither copyrightable nor patentable in their
own right, provide the background from which spring
copyrightable expressions and patentable inventions.
For example, Einstein’s formula, E=mc2, is a law
of nature in the abstract – available to all, and not
protectable by copyright or patent. A copyright,
however, may protect a physics textbook that
expresses the formula and its effects in an original
way. Likewise, a patent may protect a practical
application of the formula that produces a useful
11
result. To be patentable, the invention must satisfy
additional conditions,6 but to satisfy the threshold
constitutional eligibility requirement, the invention
must simply be “useful.”
B. The Patent Statute Mandates the
“Usefulness” Standard
Since the original Patent Act of 1790, Congress
has sustained and emphasized the constitutionally
broad scope of patentable subject matter. The title of
the 1790 Act, “An Act to Promote Progress of the
Useful Arts,” echoed the Constitution’s “usefulness”
standard for patent eligible subject matter. Patent
Act of 1790, Ch. 7, 1 Stat. 109-112 (1790) (current
version at 35 U.S.C. § 101 et seq.). The 1790 Act
authorized issuance of letters patent to an inventor
who has “invented or discovered any useful art,
manufacture, engine, machine, or device, or any
improvement therein not before known or used, . . . ”
Id., § 1 (emphasis added).
Three years later, Congress enacted a new patent
act, authorizing grant of a patent to an inventor who
has “invented any new and useful art, machine,
6 Sections 102, 103, and 112 of the present patent statute
define the conditions and requirements for patentability (i.e.,
novelty, nonobviousness, sufficient description, and claim
definiteness). 35 U.S.C. §§ 102, 103, 112. Section II, infra,
addresses these conditions and requirements, which are
separate from the eligible subject matter requirement of section
101.
12
manufacture or composition of matter, or any new
and useful improvement on any art, machine,
manufacture or composition of matter, not known or
used before the application.” Patent Act of 1793,
Ch. 11, 1 Stat. 318-323, § 1 (1793) (current version at
35 U.S.C. § 101 et seq.) (emphasis added). Congress
changed the language slightly, specifying that the
invention had to be “new,”7 but the “usefulness”
standard for patent eligibility remained.
Throughout its evolution, the patent statute
always has defined “useful” inventions as the proper
subject matter for patent protection. In relevant part,
the statute remains largely unchanged from the 1793
Act. Even the Patent Act of 1952, which significantly
revised and restructured the statute, left the
“usefulness” standard untouched. Patent Act of 1952,
Ch. 950, 66 Stat. 792, § 101 (1952) (current version at
35 U.S.C. § 101).
One noteworthy change in the 1952 Act was
substitution of the word “process” in place of “art” in
what is now known as section 101:
Whoever invents or discovers any new and
useful process, machine, manufacture, or
composition of matter, or any new and useful
improvement thereof, may obtain a patent
therefor, subject to the conditions and
requirements of this title.
7 “New” here simply restates the requirement for “in-
vention” or “discovery” in the prior act.
13
35 U.S.C. § 101 (emphasis added). The 1952 Act also
introduced a definition for “process”:
The term “process” means process, art, or
method, and includes a new use of a known
process, machine, manufacture, composition
of matter, or material.
35 U.S.C. § 100(b).8
The Committee Report for the new statute
acknowledged the sweeping breadth of potentially
8 The legislative history accompanying the 1952 Act
explains the substitution of “process” in place of the
longstanding term “art”:
Referring first to section 101, this section specifies the
type of material which can be the subject matter of a
patent. The present law states that any person who
has invented or discovered any ‘‘new and useful art,
machine, manufacture, or composition of matter, or
any new or useful improvement thereof ’’ may obtain a
patent. That language has been preserved except that
the word ‘‘art’’ which appears in the present statute
has been changed to the word ‘‘process.’’ ‘‘Art’’ in this
place in the present statute has a different meaning
than the words ‘‘useful art’’ in the Constitution, and a
different meaning than the use of the word ‘‘art’’ in
other places in the statutes, and it is interpreted by
the courts to be practically synonymous with process or
method. The word ‘‘process’’ has been used to avoid the
necessity of explanation that the word ‘‘art’’ as used in
this place means ‘‘process or method,’’ and that it does
not mean the same thing as the word ‘‘art’’ in other
places.
S. REP. No. 82-1979, at 5 (1952), reprinted in 1952 U.S.C.C.A.N.
2394, 2398 (emphasis added).
14
patentable subject matter contemplated by section
101, stressing that it “may include anything under
the sun that is made by man. . . .”9 S. REP. No. 82-
1979, at 5, reprinted in 1952 U.S.C.C.A.N. 2394, 2399
(emphasis added).
Hence, section 101 defines processes as a
category of invention on par with machines,
manufactures, and compositions of matter, and it
applies the “usefulness” standard for patent eligibility
equally to all. The statute imposes no more particular
patent eligibility requirements on processes than it
does on the other categories of patentable inventions.
Nor has this Court or any other court imposed
additional limitations on the patent eligibility
standard for process inventions, at least not prior to
Bilski.
C. The Court Has Consistently Applied
the “Usefulness” Standard
Long before Congress passed the 1952 Act, the
Court recognized useful processes as eligible for
patent protection. In O’Reilly v. Morse, 56 U.S. (15
How.) 62, 130 (1853), the Court explained: “[a] new
and useful art or a new and useful improvement on
any known art is as much entitled to the protection of
9 The Senate Committee Report further notes that, though
an invention may satisfy the broad standard of section 101, it is
not patentable unless the other conditions of Title 35 are
fulfilled. See section II, infra.
15
the law as a machine or manufacture.” Elaborating
on the connection between the terms “art” and
“process,” the Court further noted that “ ‘the term art
applies . . . to all those cases where the result, effect,
or manufactured article is old, but the invention
consists in a new process or method of producing such
result, effect, or manufacture.’ ” Id. (quoting GEORGE
TICKNOR CURTIS, A TREATISE ON THE LAW OF PATENTS
FOR USEFUL INVENTIONS (1849)).
Twenty-five years later, the Court reaffirmed
that a process which produces a useful result is
patentable, regardless of the means by which it
produces the result:
[I]t is only useful arts – arts which may be
used to advantage – that can be made the
subject of a patent. . . . Thus, an art – a
process – which is useful, is as much the
subject of a patent as a machine,
manufacture, or composition of matter.
The Telephone Cases, 126 U.S. 1, 533 (1888)
(emphasis added). In other words, a patentable
process must achieve an advantageous result in the
world.
Most recently, the Court reaffirmed both the
broad usefulness standard for patent eligibility and
its applicability to process claims in Diamond v.
Diehr, 450 U.S. 175 (1981):
“It is for the discovery or invention of some
practical method or means of producing a
beneficial result or effect, that a patent is
16
granted, and not for the result or effect itself.
It is when the term process is used to
represent the means or method of producing
a result that it is patentable, and it will
include all methods or means which are not
effected by mechanism or mechanical
combinations.”
Id. at 182, n.7 (quoting Corning v. Burden, 56 U.S.
(15 How.) 252, 267-68 (1853)) (emphasis added).
Of course, the Court has recognized certain
exceptions to the scope of patentable subject matter.
Abstract ideas, mathematical formulas, laws of
nature, and natural phenomena are not proper
subject matter for a patent. The Court has repeatedly
held that section 101 precludes any claim that would
wholly preempt such a fundamental principle. Funk
Bros. Seed Co. v. Kalo Inoculant Co., 333 U.S. 127,
130 (1948); Diehr, 450 U.S. at 185 (“A principle, in the
abstract, is a fundamental truth; an original cause; a
motive; these cannot be patented, as no one can claim
in either of them an exclusive right.”) (quoting Le Roy
v. Tatham, 55 U.S. (14 How.) 156, 175 (1852)).
These exclusions remain consistent with the
usefulness requirement of the patent statute and its
constitutional origins. Abstract ideas, mathematical
formulas, laws of nature, and natural phenomena are
not useful in isolation, and therefore, they are not
patent-eligible subject matter. However, a practical
application of such a principle, which provides a
useful result in the world, satisfies the usefulness
requirement. Funk Bros., 333 U.S. at 130 (product
17
claim applying a law of nature to a new and useful
end is patentable).
The Court applied this principle equally to
process claims in Gottschalk v. Benson, 409 U.S. 63,
67-68 (1972). The Court in Benson rejected a claim to
the general idea of converting signals from binary-
coded decimal (“BCD”) form into pure binary form. Id.
at 65. In practical effect, the Court held the claim to
be directed simply to an abstract idea, the
mathematical formula for converting from BCD form
to binary form. Id. at 71-72. Likewise, in Parker v.
Flook, 437 U.S. 584, 594 (1978), the Court rejected
claims involving a mathematical formula, holding
that they failed to recite an inventive application of
the formula.
The Court elaborated on these exclusions in
Diehr:
This Court has undoubtedly recognized
limits to § 101 and every discovery is not
embraced within the statutory terms.
Excluded from such patent protection are
laws of nature, natural phenomena, and
abstract ideas. “An idea of itself is not
patentable.” “A principle, in the abstract, is a
fundamental truth; an original cause; a
motive; these cannot be patented, as no one
can claim in either of them an exclusive
right.”
450 U.S. at 185 (internal citations omitted).
18
The
Diehr majority took pains to emphasize that
the Court’s holdings in Benson and Flook “stand for
no more than these long-established principles.” Id.
Addressing each of the Benson and Flook decisions in
detail, the Diehr majority explained why the claims
in those cases were not patent-eligible. In each case,
the applicant sought to patent a mathematical
formula, which, “like a law of nature, . . . cannot be
the subject of a patent.” Id. at 185-86. The issue did
not turn on machines or transformation, but on
usefulness and preemption of an abstract idea.
These cases weave a common thread that patent
eligibility does not extend to certain fundamental
principles, including abstract ideas, laws of nature,
and mathematical formulas. Nor does it depend on
the statutory category or the type of technology.
Rather, the cases reflect the Court’s understanding
that the section 101 analysis of a process claim
requires an open and flexible approach focused on
practical applications that achieve useful results.
II. Sections 102, 103, and 112 – Not Section
101 – Define the “Conditions and Require-
ments” for Patentability
Some defenders of the Federal Circuit’s Bilski
decision and the exclusive machine-or-transformation
test will argue the test is necessary to prevent the
issuance of plainly invalid patents. There have been
examples of such patents in recent years – patents
that never should have issued because they claim old
19
and well-known ideas, they claim more than the
inventor actually invented, or they claim hopelessly
vague or broad subject matter. Some believe that the
machine-or-transformation test provides the means to
eliminate such plainly invalid patents by summarily
rejecting broad categories of process claims as patent
ineligible. However, excluding entire categories of
invention from statutory protection is improper. It
undermines the patent system, discourages innova-
tion, and is contrary to long-established law.
Section 101 simply provides “a general statement
of the type of subject matter that is eligible for patent
protection ‘subject to the conditions and requirements
of this title.’ ” Diehr, 450 U.S. at 189 (quoting § 101)
(emphasis added). The more substantive require-
ments for whether a particular invention is novel
(section 102) and nonobvious (section 103) stand
“ ‘wholly apart from whether the invention falls into a
category of statutory subject matter.’ ” Id. at 189-90
(quoting In re Bergy, 596 F.2d 952, 961 (C.C.P.A.
1979)).
The late Judge Giles Sutherland Rich, who co-
authored the Patent Act of 1952, described sections
101, 102, and 103 as doors on the path to
patentability, each requiring a separate key. Bergy,
596 F.2d at 960-62. A claim directed to eligible subject
matter satisfies section 101, but that alone will not
justify issuance of a patent. The applicant still must
provide the keys to sections 102 and 103.
20
Section “101 was never intended to be a
‘standard of patentability’; the standards, or
conditions as the statute calls them, are in § 102 and
§ 103.” Bergy, 596 F.2d at 963. This is consistent with
the legislative history accompanying the 1952 act,
which explains “[s]ection 101 sets forth the subject
matter that can be patented, ‘subject to the conditions
and requirements of this title.’ The conditions under
which a patent may be obtained follow, and Section
102 covers the conditions relating to novelty.” S. REP.
No. 82-1979, at 5 (1952), reprinted in 1952
U.S.C.C.A.N. 2394, 2399.
Thus, section 101 is not the proper vehicle for
controlling the quality of patents. Rather, properly
enforcing the novelty and nonobviousness
requirements of sections 102 and 103 will prevent
issuance of patents that claim old and well-known
processes. See Bergy, 596 F.2d at 960 (describing
sections 102 and 103 as the second and third doors to
patentability).
Section 101 also is not intended to protect
against overbroad or unsupported claims. Section 112
provides these protections and serves as yet another
door on the path to patentability, requiring that the
inventor clearly describe and distinctly claim the
invention. 35 U.S.C. § 112, ¶¶ 1, 2. Hence, if an
inventor submits claims so broad or abstract as to
improperly preempt activities outside the reasonable
scope of the invention, that must be corrected by
proper application of section 112, not section 101.
21
Although prior to the restructuring of the 1952
Act, the Court’s 1853 analysis of Samuel Morse’s
eighth patent claim perhaps more closely tracks
modern-day section 112 than section 101. Morse, 56
U.S. (15 How.) at 112-13. In Morse, the court held
that “[w]e perceive no well-founded objection to the
description which is given of the whole invention and
its separate parts, nor to his right to a patent for the
first seven inventions set forth in the specification of
his claims. The difficulty arises on the eighth.” 56
U.S. (15 How.) at 112 (emphasis added). The Court
held that the eighth claim was too broad:
In fine he claims an exclusive right to use a
manner and process which he has not
described and indeed had not invented, and
therefore could not describe when he
obtained his patent. The court is of the
opinion that the claim is too broad, and not
warranted by law.
Id. at 113 (emphasis added).10 Ultimately, Morse may
be less about statutory subject matter, and more
10 A review of Morse’s fifth claim illustrates the flaw in
adopting an exclusive machine-or-transformation test:
“the system of signs, consisting of dots and spaces,
and horizontal lines, for numerals, letters, words or
sentences, substantially as herein set forth and
illustrated, for telegraphic purposes.”
Morse, 56 U.S. (15 How.) at 86, 101. The subject matter of this
claim, which the Court held to be patentable, is not tied to a
particular machine, nor does it transform an article to a
different state or thing.
22
about the scope of the claims compared with the
underlying description of the invention. Since the
1952 Act, courts analyze that issue under section 112
in the form of written description and enablement.
Section 112, not section 101, is the proper vehicle for
preventing overbroad claims.
Reliance on sections 102, 103, and 112 to control
patent quality also addresses the concerns expressed
in Lab. Corp. of Am. Holdings v. Metabolite Labs.,
Inc., 126 S. Ct. 2921 (2006) (Breyer, J., dissenting
from dismissal for improvidently granted review)
about the harm to innovation that will occur if
patents are too easily granted. As explained above,
concerns about improvidently granted patents must
be resolved by proper case-by-case and fact-specific
application of the standards set out in sections 102,
103, and 112, which define the “conditions and
requirements” for patentability. Brusquely limiting
the scope of eligible subject matter under section 101
risks foreclosing valuable existing and unforeseeable
future innovations; this is not a reasonable solution
to the problem of improvidently granted patents.
23
III. THE FEDERAL CIRCUIT’S RIGID RULE
FOR PATENT ELIGIBILITY HAS NO
REASONABLE BASIS
Rigid application of the “machine-or-transformation”
test as the sole standard for process patent eligibility
disregards the Constitution, the plain words of the
patent statute, and this Court’s interpretation of
section 101. The Bilski majority has taken the
Court’s flexible approach to section 101 and boiled
it down to a single, unbending mantra that limits
patentable processes to those that employ
particular types of technology (specific machines or
transformations of articles). As the sole means to
determine patent eligibility for process claims, the
machine-or-transformation test finds no basis in law.
The tools with which an invention is
implemented may give some assurance or clue that
the invention operates in the world, as it should, and
is not just an abstract idea, but the usefulness of the
invention provides the fundamental touchstone for
patent eligibility. U.S. CONST., art. I, § 8, cl. 8; 35
U.S.C. § 101. The limited machine-or-transformation
test harkens back to the early 20th century, its words
reminiscent of the “Machine Age,” when steel mills,
automobile plants, and skyscrapers were in their
heyday.11 Never before has a test for patent eligibility
11 See RICHARD GUY WILSON ET AL., THE MACHINE AGE IN
AMERICA 1918-1941 25 (1986).
24
reflected a particular age of history, much less a
bygone era.
A. The Court Has Denounced Rigid Rules
in Favor of More Flexible Approaches
Throughout its patent law decisions, the Court
has favored flexible, common-sense approaches over
rigid, unbending rules. Patent eligibility under
section 101 is no exception.
In
Benson, the Court discussed the machine-or-
transformation test as the “clue” to patent eligibility.
409 U.S. at 70. Indeed, the test provides a useful clue
in that it demonstrates the invention was achieved by
physical processes that are not in themselves
abstract. At the same time, the Court explicitly
declined to establish this test as the one and only
path to process patent eligibility. Id. at 71. The focus
remained, as it has been for more than two hundred
years, on whether the claim was directed to a useful
application of an abstract idea as opposed to the
underlying idea itself. Id. at 71-72.
The Court rejected the claims in Flook, as in
Benson, because they were directed to abstract
mathematical formulas. Id.; Flook, 437 U.S. at 594.
By contrast, the applicant in Diehr did not seek to
patent an abstract idea. 450 U.S. at 187. The majority
in Diehr considered the machine-or-transformation
test, and it included Benson’s “clue” quote, id. at 184,
but its focus remained on the broader question of
25
whether the claim at issue was directed to a useful
process. Id. at 185-92; see also section I.C, supra.
In the 28 years since Diehr, the Court has not
revisited section 101. Yet, the Court’s recent decisions
on other patent issues maintain the same practical
preference for flexible, common-sense analyses over
unbending, bright-line rules. Rigid rules may be
easier to apply, but the Court has repeatedly rejected
such shortcuts in patent cases.
The Court emphasized the importance of the
flexible approach to patent law in KSR Int’l Co. v.
Teleflex Inc., 550 U.S. 398 (2007). There, the Court
rejected the Federal Circuit’s rigid “teaching,
suggestion or motivation (TSM)” test as the sole test
for obviousness under section 103. Id. at 407, 415.
The unanimous Court explained that section 103
“must not be confined within a test or formulation too
constrained to serve its purpose.” Id. at 427.
In another recent case, Festo Corp. v. Shoketsu
Kinzoku Kogyo Kabushiki Co., 535 U.S. 722 (2002),
the Court rejected the Federal Circuit’s “complete bar
test,” an unbending approach to the doctrine of
prosecution history estoppel. Again speaking
unanimously, the Court cautioned, “we have
consistently applied the doctrine in a flexible way, not
a rigid one.” Id. at 738.
In its most recent patent decision, the Court
rejected an inflexible rule excluding method claims
from the doctrine of patent exhaustion. Quanta
Computer, Inc. v. LG Elecs., Inc., 128 S. Ct. 2109
26
(2008). The unanimous Court noted, “[o]ur precedents
do not differentiate transactions involving
embodiments of patented methods or processes from
those involving patented apparatuses or materials.”
Id. at 2117. The Federal Circuit had erred by rigidly
limiting patent exhaustion to apparatus claims. Id. at
2117-18. This Court concluded that the patent
exhaustion analysis for a process claim depends on
the facts of the particular case, just as it does for an
apparatus claim. Id. at 2118.
As
in
Quanta, the Federal Circuit’s decision in
Bilski to treat process claims differently from
apparatus claims by establishing its rigid machine-or-
transformation test improperly restricts the scope of
patent eligibility established in section 101.
B. The Federal Circuit Departs from the
Court’s Flexible Approach to Section 101
The Federal Circuit’s new interpretation of
section 101 directly conflicts with the Court’s
controlling decisions. The Court has never held the
machine-or-transformation test to be the sole
standard of process patent eligibility. See, e.g.,
Benson, 409 U.S. at 71 (declining to hold that no
process patent could ever qualify if it does not satisfy
the machine-or-transformation test). Bilski is yet
another example of the Federal Circuit departing
from the Court’s established, flexible approach in
favor of a rigid, bright-line rule.
27
The
Bilski majority relied heavily on its
particular interpretation of Benson, Flook, and Diehr.
Indeed, as discussed above, the Court considered the
machine-or-transformation test in each of these three
cases. The Federal Circuit’s mistake, however, was
adopting this as the only test for process patent
eligibility. Rather, the Court has consistently held the
machine-or-transformation test as only an example of
how a process may satisfy section 101’s usefulness
requirement. Rather than dictating one particular
rigid and age-anchored test, the Court’s section 101
decisions consistently require a flexible patent
eligibility analysis that adapts to new inventions that
achieve useful results:
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.
Benson, 409 U.S. at 71 (emphasis added).
Nor did the Court in Flook establish the
machine-or-transformation test as the touchstone of
patent eligibility. Indeed, the Flook Court noted that
“[t]he line between a patentable ‘process’ and an
unpatentable ‘principle’ is not always clear. Both are
‘conception[s] of the mind, seen only by [their] effects
when being executed or performed.’ ” 437 U.S. at 589
(quoting Tilghman v. Proctor, 102 U.S. 707, 728
(1880)). This hardly supports the exclusive and
28
inflexible rule the Federal Circuit has now imposed.
Rather, it again demonstrates that the practical
application of the invention, its “effects when being
executed or performed,” is key to differentiating an
un-patentable abstract idea from a useful and patent-
eligible process. Id.
The
Bilski majority focuses on one particular
sentence in a footnote of the Flook opinion: “[a]n
argument can be made [that the Supreme] 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.’ ” Bilski, 545 F.3d at 979-80
(quoting Flook, 437 U.S. at 589 n.9). However, the
Court squarely rejected that interpretation in the
next sentence: “[a]s in Benson, we assume that a
valid process patent may issue even if it does not meet
one of these qualifications of our earlier precedents.”
Flook, 437 U.S. at 589 n.9 (emphasis added).
In its analysis of Diehr, the Federal Circuit again
focused too narrowly on the machine-or-transformation
test as the only “clue” to patent eligibility. Bilski, 545
F.3d at 956 (quoting Diehr, 450 U.S. at 184). In doing
so, the Federal Circuit missed the broader, flexible
approach that the majority applied in Diehr – the
same approach the Court had used in Benson and
Flook.
29
The majority in Diehr described the machine-or-
transformation test, not as the test for patent
eligibility, but as one example of such a test:
when a claim containing a mathematical
formula implements or applies that formula
in a structure or process which, when
considered as a whole, is performing a
function which the patent laws 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.
Diehr, 450 U.S. at 192 (emphasis added). The “e.g.” in
this passage demonstrates that the machine-or-
transformation test is just an example, not an
exclusive test.
The remainder of the Diehr opinion reaffirms this
distinction. If the machine-or-transformation test had
been the touchstone of patent eligibility, the majority
could have ended its opinion after section II. See
Diehr, 450 U.S. at 184. Instead, the Diehr majority
continued with sections III and IV, analyzing the
claim in detail to determine whether it improperly
covered an abstract mathematical formula or
properly covered a practical application of the
formula to a new and useful end. Id. at 185-92.
None of the Court’s decisions have turned on a
rigid application of the machine-or-transformation
test. Indeed, this test may have guided the Court in
Benson and Diehr, but the Court has never adopted it
30
as the one and only standard for process patent
eligibility.12 Rather than following this Court’s guid-
ance, the Bilski decision has disregarded precedent.
In the face of not only the Benson, Flook, and Diehr
decisions, but also the Court’s more recent rejections
of narrow rules in KSR and Festo, the Federal Circuit
in Bilski adopted yet another rigid rule.
C. The Federal Circuit Ignores Recent
Congressional Action Embracing the
Flexible Approach to Section 101
The Federal Circuit’s decision to require a rigid
machine-or-transformation test also ignores the
intent of Congress, as expressed in the legislative
history of 35 U.S.C. §
273. In the immediate
aftermath of State St. Bank & Trust Co. v. Signature
12 The Federal Circuit’s view of this Court’s decisions is
curious and disturbing. The Federal Circuit noted that the Court
was “equivocal” in the Benson and Flook decisions when it
expressly declined to hold that no process could ever be
patentable without satisfying the machine-or-transformation
test. Bilski, 545 F.3d at 956. The Federal Circuit reasoned, “this
caveat was not repeated in Diehr when the Court reaffirmed the
machine-or-transformation test.” Id. (emphasis in original).
Under the Federal Circuit’s logic, the Court must repeat every
caveat in every subsequent opinion to ensure lower courts do not
interpret the Court’s silence as overruling its previous decision.
Such analysis also ignores the Court’s use of the “e.g.” signal in
Diehr, which was consistent with the express holdings and
flexible analysis in Benson and Flook.
31
Fin. Group, Inc., 149 F.3d 1368 (Fed. Cir. 1998),
Congress enacted section 273 to limit liability for
infringement of a business method patent by a prior
inventor. Congress dealt with this enforcement issue
by passing narrowly drawn legislation that did not
limit the scope of patent eligibility for business
methods. Indeed, Congress explicitly recognized the
eligibility of business methods for patent protection.
See 35 U.S.C. §§ 273(a)(3), 273(b)(1). The majority
opinion in Bilski makes no mention of this
Congressional action, let alone wrestles with its
implications.
Important for purposes of the present case,
Congress acknowledged and embraced the Federal
Circuit’s prior, reasoned “usefulness” test for patent
eligibility, from State Street Bank. That test mirrored
this Court’s long-standing flexible approach to patent
eligible subject matter. See State St. Bank, 149 F.3d
at 1373 (“Unpatentable mathematical algorithms are
identifiable by showing they are merely abstract
ideas constituting disembodied concepts or truths
that are not ‘useful.’ From a practical standpoint, this
means that to be patentable an algorithm must be
applied in a ‘useful’ way.”) (emphasis added). At that
time, the Federal Circuit noted that “[i]t is improper
to read limitations into § 101 on the subject matter
that may be patented where the legislative history
32
indicates that Congress clearly did not intend such
limitations.” Id.13
When it enacted section 273, Congress embraced
this flexible approach in its Joint Conference report
as the “essential question” of patent eligibility. H.R.
CONF. REP. No. 106-464, at 122 (1999). It is ironic that
the Federal Circuit has now abandoned this test, less
than ten years after crafting it to mirror the Court’s
precedent and receiving Congressional approval.14
13 The Federal Circuit’s now-abandoned usefulness test
(referred to as the “useful, concrete, and tangible result” test)
compactly summarizes the appropriate boundary between
abstract idea and useful application. “Usefulness” is the core
constitutional and statutory test. The Federal Circuit added
“concrete” and “tangible” modifiers to its formulation. Though
not expressed in the statute, the Federal Circuit may have
added these modifiers to note that the application must be
reasonably specific and occur in the world and not, for example,
solely in one’s mind. These principles are bound up in the
statutory meaning of “useful.”
14 When it enacted section 273, Congress accepted and
embraced a variety of patentable methods and processes, many
of which would fail the new machine-or-transformation test:
In order to protect inventors and to encourage proper
disclosure, this subtitle focuses on methods for doing
and conducting business, including methods used
with internal commercial operations as well as those
used in connection with the sale or transfer of useful
end results – whether in the form of physical
products, or in the form of services, or in the form
of some other useful results; for example, results
produced through the manipulation of data or other
inputs to produce a useful result.
H.R. CONF. REP. NO. 106-464, at 122 (emphasis added).
33
IV. THE
“MACHINE-OR-TRANSFORMATION”
TEST IS NOT A RELIABLE INDICATOR
OF USEFULNESS
In effect, the Federal Circuit’s Bilski decision
excludes many useful business-related processes from
patent eligibility. These innovative methods, though
useful, are not tied to any particular machine and do
not transform any article to a different state or thing.
Yet, in today’s information economy, these methods
demonstrate their usefulness in many ways.15
Wholesale prohibition of patent applications for
business-related methods, regardless of whether they
satisfy the requirements of sections 102, 103, and
112, runs counter to the founders’ mandate to
promote the useful arts – the very foundation of our
patent system.16
15 The “traveling salesman problem” (TSP) provides a
helpful example. The TSP is an abstract idea in combinatorial
optimization. See DAVID L. APPLEGATE ET AL., THE TRAVELLING
SALESMAN: A COMPUTATIONAL STUDY (Princeton University Press
2006). The idea is to identify the shortest possible route that
enables a salesman to visit each of a list of cities only once, given
the distance between each pair of cities. Engineers have
developed practical and useful applications of the TSP to
optimize delivery and service routing, microchip manufacturing,
and genome sequencing, to name a few of the myriad of useful
applications.
16 Ironically, the machine-or-transformation test is not only
under-inclusive, but also over-inclusive. Some processes
involving machines are not useful at all. The Manual of Patent
Examining Procedure instructs PTO examiners to reject claims
directed to perpetual motion under section 101 because the
intended result is physically impossible and therefore lacks
(Continued on following page)
34
A. Useful
Processes
May
or May Not Be Tied
to a Machine or Transform an Article
Innovative, useful processes thrive in many areas
beyond the “traditional” scientific and engineering
fields. To remain competitive in today’s information
economy, companies and governments rely on new
and useful business processes, whether as methods
for managing organizations of people; as processes
provided through software, internet, and computer
interfaces; or as other innovative methods of
promoting their business ends. Business processes
affect the activities of both people and organizations
by applying scientific, mathematical, and engineering
principles to achieve practical results, operating on
real entities in the world.
The
amici curiae develop innovative processes
that benefit businesses and governments every day.
For example, Accenture has developed and
implemented supply chain systems that manage
transportation logistics for moving products from
manufacturing sites to retail stores. In the huge and
growing industry of business process outsourcing,
Accenture has automated management reporting
methods for outsourced business operations.
Accenture also has integrated telecommunications
utility. MPEP §
706.03(a)(II). Thus, even if it involves a
machine, a process intended to achieve perpetual motion is still
not patent-eligible because it lacks utility; it simply cannot be
useful under section 101.
35
services for cable, telephone and the Internet, all
operating together with enhanced capabilities and
convenience.
Pitney Bowes operates as a leader in an industry
that manages the flow of information, mail, docu-
ments, and packages to customers worldwide. To
maintain its leadership role, Pitney Bowes constantly
innovates and invents in such areas as secure funds
transactions, data management, and material han-
dling workflow processes, providing improvements in
productivity, efficiency, and security.
These innovations are not exhaustive, but they
demonstrate that Accenture and Pitney Bowes are
not in the business of promoting abstract ideas. Each
and every one of these processes and hundreds of
others provide economic value and advantage in the
world, though they often require neither machine nor
transformation.
Many of the processes that Accenture and Pitney
Bowes develop come from a field known as industrial
engineering, which has a long history of process
innovation. Broadly speaking, industrial engineering
involves the practical application of mathematics,
logic, economics, operations research, engineering,
and social sciences to improve the operations of
integrated systems in industry, finance, and business
management.
36
The American Institute of Industrial Engineers
defines “industrial engineering” as:
concerned with the design, improvement and
installation of integrated systems of people,
materials, equipment and energy. It draws
upon specialized knowledge and skill in the
mathematical, physical and social sciences
together with the principles and methods of
engineering analysis and design to specify,
predict and evaluate the results to be
obtained from such systems.
GAVRIEL SALENDY, HANDBOOK OF INDUSTRIAL ENGI-
NEERING 5 (John Wiley & Sons, Inc., 3d ed. 2001).
Industrial engineers focus their applied scientific,
mathematical, and engineering improvements upon
systems of human organizations (“enterprises”), which
can be anything from a single person’s activity to a
larger corporate, nonprofit, or governmental organi-
zation. “[T]he systems designed by industrial engi-
neers involve people as basic components.” WAYNE C.
TURNER ET AL., INTRODUCTION TO INDUSTRIAL AND SYS-
TEMS ENGINEERING 3 (Prentice Hall, 3d ed. 1993)
(hereinafter “INTRODUCTION TO INDUSTRIAL AND SYS-
TEMS ENGINEERING”) (emphasis added). The PTO has
long accepted “industrial engineering” as a “recog-
nized technical subject” for eligibility to become a
patent attorney. See U.S. Patent & Trademark Office,
General Requirements Bulletin for Admission to the
Examination for Registration to Practice in Patent
37
Cases Before the United States Patent and Trade-
mark Office (Jan. 2008) http://www.uspto.gov/web/
offices/dcom/olia/oed/grb.pdf.
Advances in industrial engineering have
produced countless useful processes, many of which
are not tied to a particular machine and do not
transform any article to a different state or thing. See
INTRODUCTION
TO
INDUSTRIAL
AND
SYSTEMS
ENGINEERING at 13-15; ADEDEJI B. BADIRU, HANDBOOK
OF INDUSTRIAL AND SYSTEMS ENGINEERING 4-8 (Taylor
& Francis Group 2006) (describing the development
of industrial and systems engineering from the year
1440 to the present). Yet, the unquestioned economic
progress that these innovative, practical applications
of science and engineering to business organizations
and processes has produced, especially for the United
States, underscores its importance to the “[p]rogress
of . . . useful [a]rts,” U.S. CONST. art. I, § 8, cl. 8.
The Federal Circuit’s new machine or
transformation test risks making these particular,
practical fruits of human progress uniquely un-
patentable. But neither the patent statute nor this
Court require that result. So long as the steps of a
new and useful business-related method taken as a
whole represent more than just an abstract principle,
the business-related method should be eligible for
patent protection under section 101. If the process
further satisfies the conditions and requirements of
sections 102, 103, and 112, then its inventor should
be granted a patent for the invention.
38
B. The “Machine-or-Transformation” Test
Forecloses Useful Innovation Well
Beyond the Bilski Claims
The Bilski patent application discloses and
claims a process for reducing risk in hedge fund
transactions, including transactions between sepa-
rate market participants. Although the Federal Cir-
cuit rejected the Bilski claims for not satisfying the
machine-or-transformation test, the claims appear to
recite a specific and useful application of a hedging
process between market participants in the world.17
The management of risk and optimization of
financial reward is an essential part of the modern
economy. If a process provides a beneficial way of
managing risk, then it is useful regardless of whether
it employs a machine or transformation. Accenture
operates in an industry that requires very sophisti-
cated analyses of risks and rewards across a range of
businesses, including insurance claim analysis, en-
ergy commodities transactions, and credit risk man-
agement, among others. Accenture develops and sells
management and control processes in these indus-
tries against considerable competition worldwide.
17 Whether the Bilski claims satisfy the other conditions
and requirements for patentability, including novelty, non-
obviousness, enablement, and definiteness, should be considered
under sections 102, 103, and 112, not section 101. See section II,
supra. Moreover, whether the Bilski claims are patentable at the
end of examination is irrelevant for purposes of identifying the
correct process patent eligibility standard.
39
Accenture’s new and useful inventions enhance
productivity, efficiency, and income for its clients.
Pitney Bowes’ developments in the areas of secure
funds transactions, material handling processing, and
data management provide similar benefits and
advantages. Yet, these useful results frequently can
be achieved with processes that do not require any
particular machine or transformation of matter.
The exclusive machine-or-transformation test
also forecloses patent protection for other broad
categories of cutting edge innovation. The modern
software, financial, and life science industries, among
others, all rely on process patents to protect their
investment in research and development. Section 101
embraces these 21st century processes, which employ
useful, specific applications of general principles, and
yet frequently do not involve particular machines or
material transformations. As the Court has
acknowledged, neither it nor Congress intends to
“freeze process patents to old technologies, leaving no
room for the revelations of the new, onrushing
technology.” Benson, 409 U.S. at 71.
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40
CONCLUSION
For the foregoing reasons, Accenture and Pitney
Bowes respectfully request that the Court preserve
broad access to the U.S. patent system by reaffirming
the flexible “usefulness” test, including the
prohibition on patenting abstract ideas, natural
phenomena, and laws of nature.
Respectfully submitted,
WAYNE P. SOBON
MEREDITH MARTIN ADDY
ACCENTURE
Counsel of Record
50 W. San Fernando St.
JOEL W. BENSON
Suite 1200
CHARLES M. MCMAHON
San Jose, CA 95113
BRINKS HOFER GILSON & LIONE
(408) 817-2170
455 N. Cityfront Plaza Dr.
Chicago, IL 60611
STEVEN J. SHAPIRO
(312) 321-4200
PITNEY BOWES INC.
35 Waterview Dr.
Shelton, CT 06484
(203) 924-3880
Counsel for Amici Curiae
Accenture & Pitney Bowes