No. 08-964 
———— 
IN THE  
Supreme Court of the United States 
BERNARD L. BILSKI AND RAND A. WARSAW,                                                
Petitioners, 
v. 
JOHN J. DOLL, ACTING UNDER SECRETARY 
OF COMMERCE FOR INTELLECTUAL 
PROPERTY AND ACTING DIRECTOR  
OF THE UNITED STATES PATENT AND 
TRADEMARK OFFICE,                                                                     
Respondent. 
———— 
On Writ of Certiorari to the  
United States Court of Appeals  
for the Federal Circuit 
 
BRIEF OF DOUBLE ROCK CORPORATION, 
ISLAND INTELLECTUAL PROPERTY LLC, 
LIDs CAPITAL LLC, INTRASWEEP LLC, 
ACCESS CONTROL ADVANTAGE, INC., 
ECOMP CONSULTANTS, PIPELINE TRADING 
SYSTEMS LLC, REARDEN CAPITAL 
CORPORATION, CRAIG MOWRY AND PCT 
CAPITAL LLC AS AMICI CURIAE IN 
SUPPORT OF PETITIONERS  
 
Charles R. Macedo 
Counsel of Record 
Anthony F. Lo Cicero 
Norajean McCaffrey 
AMSTER, ROTHSTEIN & EBENSTEIN LLP 
90 Park Avenue 
New York, NY 10016 
(212) 336-8000 
Counsel for Amici Curiae 
LEGAL PRINTERS  LLC, Washington DC !   202-747-2400 !   legalprinters.com
 
 
 
 
 


 
TABLE OF CONTENTS 
TABLE OF AUTHORITIES .....................................iii 
STATEMENT OF INTEREST  
OF AMICI CURIAE ........................................ 1 
SUMMARY OF ARGUMENT.................................... 2 
ARGUMENT .............................................................. 7 
I. 
GENERAL PRINCIPLES GOVERNING 
PATENT-ELIGIBLE SUBJECT MATTER 
BASED ON THIS COURT’S PRECEDENT... 8 
II. THE 
BILSKI MAJORITY ERRONEOUSLY 
DEVIATED FROM THIS COURT’S  
PRECEDENT ................................................ 10 
A. The 
Bilski Majority Erroneously Adopted the 
“Machine-or-Transformation” Test as the Sole 
Governing Test .............................................. 11 
B. The 
Bilski Majority Erroneously Limits the 
Definition of “Process” and Erroneously 
Adopts a Rigid Version of the “Machine-or-
Transformation Test” Contrary To Clear 
Congressional Intent ..................................... 14 
C. The 
Bilski Majority’s Restriction on Patent-
Eligible Transformations Is Contrary to The 
Rationale of this Court’s Precedent .............. 27 
D. 
This Court Should Clarify That a Computer- 
Implemented Invention Which Operates on a 
 
 
 
 

ii 
 
General-Purpose Computer Is Nonetheless 
Patent-Eligible as Long as It Does Not 
Preempt a Fundamental Principle ............... 33 
III. 
BUSINESS- AND COMPUTER-RELATED 
PATENTS ARE AN IMPORTANT AND 
VALUABLE PART OF OUR ECONOMY AND 
PROMOTE THE PROGRESS OF THE 
USEFUL ARTS ............................................. 37 
CONCLUSION......................................................... 44 
APPENDIX A.......................................................... A-1 
 
 
 
 

iii 
 
TABLE OF AUTHORITIES 
CASES 
AT&T Corp. v. Excel Commc’ns, Inc., 172 F.3d 
1352 (Fed. Cir. 1999)............................... 7, 10, 22 
Bob Jones Univ. v. United States, 461 U.S. 
574 (1983) .......................................................... 26 
Cochrane v. Deener, 94 U.S. 780 (1877)...... 17, 20, 26 
Corning v. Burden, 56 U.S. (15 How.) 252 
(1854) ...................................................... 9, 26, 27                                                
Cybersource Corp. v. Retail Decisions, Inc., 
No. C 04-03268, 2009 U.S. Dist. LEXIS 
26056 (N.D. Cal. Mar. 26, 2009)....................... 36 
Dann v. Johnston, 425 U.S. 219 (1976) .................. 13 
DealerTrack, Inc. v. Huber, No. CV 06-2335, 
2009 U.S. Dist. LEXIS 58125 (C.D. Cal. 
July 7, 2009) ...................................................... 36 
Diamond v. Chakrabarty, 447 U.S. 303  
(1980) ....................................... 7, 9, 14, 20, 21, 37 
Diamond v. Diehr, 450 U.S. 175 (1981) .......... passim 
Expanded Metal Co. v. Bradford, 214 U.S. 366 
(1909) ....................................................... 4, 28, 29 
Ex parte Atkin, Appeal 2008-4352, slip. op. at 
18 (BPAI Jan. 30, 2009) ................................... 12 
Ex parte Cornea-Hasegan, No. 2008-4742, slip 
op. at 9-10 (BPAI Jan. 13, 2009) ...................... 35 
 
 
 
 

iv 
 
Ex parte Gutta, No. 2008-3000, slip op. at 5-6 
(BPAI Jan. 15, 2009) ........................................ 35 
Ex parte Hardwick, Appeal 2009-002399, slip 
op. at 6-9 (BPAI June 22, 2009) ....................... 12 
Ex parte Nawathe, No. 2007-3360, 2009 WL 
327520, at *4 (BPAI Feb. 9, 2009) ................... 35 
Festo Corp. v. Shoketsu Kinzoku Kogyo 
Kabushiki Co., 535 U.S. 722 (2002) ................. 37 
Fort Properties, Inc. v. American Master 
Lease, LLC, 609 F.Supp.2d 1052 (C.D. 
Cal. 2009) .......................................................... 13 
Gottschalk v. Benson, 409 U.S. 63                           
(1972) ......................................................... passim 
In re Abele, 684 F.2d 902 (C.C.P.A. 1982) .............. 12 
In re Alappat, 33 F.3d 1526 (Fed. Cir. 1994) .......... 34 
In re Bilski, 545 F.3d 943 (Fed. Cir. 2008) ..... passim 
J.E.M. AG Supply v. Pioneer Hi-Bred 
International, 534 U.S. 124 (2001)............. 20, 21 
John R. Sand & Gravel Co. v. United States, 
552 U.S. 130, 128 S.Ct. 750 (2008)................... 25 
KSR v. Teleflex, 550 U.S. 398 (2007) ...................... 11  
Moskal v. United States, 498 U.S. 103 (1990) ........ 21 
Mountain States Telegraph & Telegraph v. 
Pueblo of Santa Ana, 472 U.S. 237 (1985) ....... 21 
Parker v. Flook, 437 U.S. 584  
(1978) ........................................... 2, 10, 11, 22, 27 
 
 
 
 


 
Patterson v. McLean Credit Union, 491 U.S. 
164 (1989) .......................................................... 25 
Shepard v. United States, 544 U.S. 13 (2005) ........ 25 
State St. Bank & Trust Co. v. Signature 
Fin.Group, Inc., 149 F.3d 1368 (Fed. Cir. 
1998) .......................................................... passim 
Tilghman v. Proctor, 102 U.S. 707 (1881) ........... 3, 20 
TRW Inc. v. Andrews, 534 U.S. 19 (2001)............... 21 
United States v. Dubilier Condenser Corp., 
289 U.S. 178 (1933) ........................................... 21 
 
U.S. CONSTITUTION 
US Const. art. I, § 8, cl. 8............................... 6, 14, 37 
 
FEDERAL STATUTES 
35 U.S.C. §100  ............................................. 17, 18, 19 
35 U.S.C. §101  ................................................. passim 
35 U.S.C. §102 ....................................................... 7, 9 
35 U.S.C. §103  ................................................. 7, 9, 13 
35 U.S.C. §112 ........................................... 7, 9, 13, 28 
35 U.S.C. §273 ......................................... 4, 22, 23, 40 
35 U.S.C.A. 1 (1954 ed.)  .......................................... 19 
 
 
 
 
 

vi 
 
LEGISLATIVE HISTORY 
145 CONG. REC. H6942 (daily ed. Aug. 3, 
1999) .................................................................. 23 
145 CONG. REC. S14717 (daily ed. Nov. 17, 
1999) .................................................................. 23 
H.R. 1908, 110th Cong. § 10 .................................... 25 
H.R. 2365, 110th Cong.. ........................................... 25 
H.R. REP. NO. 82-1923 (1952).............................. 7, 18 
H.R. REP. NO. 106-287, pt. 1 (1999)  ........................ 24 
Patent Act of 1790, § 1 Stat. 109, 110 ..................... 15 
Patent Act of 1793, § 1, 1 Stat. 318-323 ...... 15, 16, 17 
S. 861, 110th Cong. § 303. ....................................... 25 
S. 2369, 110th Cong. ................................................ 25 
S. REP. NO. 82-1979 (1952) ........................................ 7 
 
LAW REVIEW ARTICLES 
Julie E. Cohen & Mark A. Lemley, Patent 
Scope and Innovation in the Software 
Industry, 89 Cal. L. Rev. 1 (2001) .................... 40 
 
Giles S. Rich, The Principles of Patentability, 
42 J. Pat. Off. Soc'y 75 (1960)........................... 39 
 
 
 
 
 

vii 
 
John A. Squires and Thomas S. Biemer, 
Patent Law 101: Does A Grudging 
Lundgren Panel Decision Mean That The 
USPTO Is Finally Getting The Statutory 
Subject Matter Question Right?, 46 IDEA 
561 (2006) .......................................................... 42 
INTERNET RESOURCES 
Letter from Patti McClanahan, Managing 
Director, SIFMA, to IRS (Jan. 31, 2008), 
available at 
http://www.regulations.gov/fdmspublic/co
mponent/main?main=DcumentDetail&o=
09000064803a89dd ........................................... 43 
 
Letters from Arlen Specter, to Hon. Henry 
Paulson, Secretary of Treasury (Feb. 1, 
2008)  (“Specter Letter”), available at 
http://www.regulations.gov/fdmspublic/co
mponent/main?main=DocketDetail&o=09
00064803ba1a6  .......................................... 26, 39 
 
A USPTO White Paper (ver. 1.43), available 
at http://www.uspto.gov/ 
web/menu/busmethp/whitepaper.pdf ............... 33 
 
MISCELLANEOUS 
5 LIFE AND WORKS OF ABRAHAM LINCOLN, 
Speeches and Presidential Addresses, 
1859-1865 .......................................................... 38 
 
 
 
 
 

viii 
 
5 WRITINGS OF THOMAS JEFFERSON 75-76 
(Washington ed. 1871)  ..................................... 15 
 
75 J. Pat. & Trademark Off. Soc'y 161 (1993)  . 18, 19 
 
PATENTS 
U.S. Patent No. 871, patented Aug. 3, 1838, 
entitled “Bank Note” ........................................ 31 
 
U.S. Patent No. 1700, issued July 18, 1840, 
entitled “Improvement in the 
Mathematical Operation of Drawing 
Lottery-Schemes” ............................................. 31 
 
U.S. Patent No. 6,469 filed Mar. 10, 1849, 
entitled “Buoying Vessels Over Shoals”........... 38 
 
U.S. Patent No. 389,818, filed Jan. 19, 1888, 
entitled “Complemental Accident 
Insurance Policy” .............................................. 31 
 
U.S. Reissue Patent No. RE11,270, filed July 
21, 1892, entitled “Means For Insuring 
Travelers Against Loss By Accident” ............... 31 
 
U.S. Patent No. 883,380, filed Apr. 12, 1906, 
entitled “Check” ................................................ 31 
 
U.S. Patent No. 918,280, filed Aug. 15, 1907, 
entitled “Fractional-Insurance Policy”............. 32 
 
 
 
 
 

ix 
 
U.S. Patent No. 1,045,331, filed July 19, 1911, 
entitled “Cigar Container”................................ 32 
 
U.S. Patent No. 1,150,708, filed Mar. 9, 1914, 
entitled “Method of Marketing Trees” ............. 32 
 
U.S. Patent No. 1,254,870, filed Sept. 9, 1916, 
entitled “Means Used In Accounting” .............. 32 
 
U.S. Patent No. 1,419,739, filed June 17, 1920, 
entitled “Marketing Bag”.................................. 32 
 
 
 
 
 



 
STATEMENT OF INTEREST OF AMICI CURIAE1 
The various amici curiae sponsoring this 
submission (“Amici Curiae”) reflect mid-sized and 
smaller members of the financial service, e-
commerce, and computer-related industries.  While 
Amici Curiae do not advocate that the claims at 
issue are entitled to be patented, each believe it is 
important to maintain a strong patent system that 
allows for all types of innovations that do not pre-
empt a fundamental principle to remain patent-
eligible subject matter.  A detailed explanation of 
each Amici Curiae is provided in Appendix A. 
 
 
                                            
1  The parties have consented to the filing of this brief and 
letters of consent have been filed with the Clerk.  Pursuant to 
Rule 37.6, no counsel for a party authored this brief in whole or 
in part, and no counsel or party made a monetary contribution 
intended to fund the preparation or submission of this brief.  
No person other than Amici Curiae, its members, or its counsel 
made a monetary contribution to its preparation or submission. 
 
 
 
 
 


 
SUMMARY OF ARGUMENT 
This Court’s precedent provides broad 
guidelines on what constitutes patent-eligible 
subject matter:  
1. 
the claimed subject matter must fall within 
one of the four statutory categories of patent-
eligible subject matter–process, machine, 
manufacture or composition of matter (or any 
improvement thereof); and 
2. 
the claimed subject matter must not preempt 
what the Bilski majority calls “fundamental 
principles”2 – laws of nature, natural 
phenomena, or abstract ideas. 
See Diamond v. Diehr, 450 U.S. 175, 185 (1981) 
(citing  Parker v. Flook, 437 U.S. 584, 589 (1978) and 
Gottschalk v. Benson, 409 U.S. 63, 67 (1972)). 
While this Court has found certain safe 
harbors that have met these broad guidelines, it has 
also repeatedly refused, over centuries of such 
precedent, to turn such safe harbors into rigid tests.  
See, e.g.,  Flook,  437 U.S. at 589 n.9 (rejecting 
argument that “this 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,’”; 
this Court “assume[s] that a valid process patent 
may issue even if it does not meet one of these 
qualifications of our earlier precedents.”) (citations 
                                            
2 See In re Bilski, 545 F.3d 943, 952 n.5 (Fed.Cir. 2008), cert. 
granted, 129 S.Ct. 2735 (2009). 
 
 
 
 
 


 
omitted); Benson, 409 U.S. at 71 (rejecting argument 
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’” since “[w]e do not hold that no process patent 
could ever qualify if it did not meet the requirements 
of our prior precedents.”); Tilghman v. Proctor, 102 
U.S. 707, 722 (1881) (“The patent law is not confined 
to new machines and new compositions of matter, 
but extends to any new and useful art or 
manufacture.  A manufacturing process is clearly an 
art, within the meaning of the law.”) (quoted in 
Diehr, 450 U.S. at 184 n.8). 
Even the Bilski majority opinion by the 
Federal Circuit below recognized that other efforts to 
adopt rigid rules for determining whether a claim is 
patent-eligible subject matter, like the so-called 
“technological arts” test suggested by the U.S. 
Patent and Trademark Office (“USPTO”) and other 
tests, proved “inadequate” and “insufficient.”  See 
Bilski, 545 F.3d at 958-61. 
While much of the majority decision correctly 
describes this Court’s binding precedent in this area, 
the  Bilski majority nonetheless deviates from this 
Court’s precedent and errs in the following 
important respects, which Amici Curiae respectfully 
submit that this Court should correct: 
1. 
In the Federal Circuit’s quest to find a “test or 
set of criteria” to “govern” the USPTO and 
courts in determining patent-eligibility, the 
Bilski majority erroneously adopts as the 
“governing test” a mechanical version of the 
 
 
 
 
 


 
so-called “machine-or-transformation” test. 
Bilski, 545 F.3d at 952, 956.   Adoption of this 
rigid rule has wreaked havoc on the stability 
and reliability of hundreds of thousands of 
issued patents (as evidenced by litigations 
that have begun to sprout since Bilski) and 
uncounted pending applications (as evidenced 
by increasingly rigid rules coming out of 
decisions of the Board of Patent Appeals and 
Interferences (“BPAI”) at the USPTO).   Amici 
Curiae respectfully request this Court to quiet 
title on meritorious inventions and refocus the 
inquiry on whether the claimed invention is 
novel, non-obvious, useful and sufficiently 
well-defined, as contemplated by the Patent 
Act.  
2. 
The  Bilski majority also departs from this 
Court’s precedent and the broad statutory 
construction intended by Congress by ignoring 
the statutory definition of “process” in the 
Patent Act and engrafting extra-statutory 
limitations on patent-eligible processes. Cf. 
Bilski, 545 F.3d at 951 n.3.  The majority 
decision also erred in failing to address the 
effect of the adoption of the prior user right 
(35 U.S.C. §273) in response to State Street 
Bank & Trust Co. v. Signature Financial 
Group, Inc., 149 F.3d 1368 (Fed.Cir. 1998), 
and Congress’ legislative acquiescence to the 
Federal Circuit’s holding in that case. 
3. 
The  Bilski majority’s blanket exclusion of 
“electronic signals and electronically-
manipulated data” and “business methods,” 
 
 
 
 
 


 
involving,  e.g., manipulation of “legal 
obligations, organizational relationships, and 
business risks”–today’s “raw materials” of 
innovation–from being patent-eligible subject 
matter unless tied to a computer or some 
other machine (see Bilski, 545 F.3d at 962) is 
the result of a wooden analysis that is 
contrary to this Court’s rationale in 
developing the transformation prong of the 
“machine-or-transformation” test.   See 
Expanded Metal Co. v. Bradford, 214 U.S. 366 
(1909).  While Amici Curiae agree that 
definiteness requirements may preclude 
claims directed to purely mental steps from 
being patent-eligible subject matter, the 
patent-eligibility test under 35 U.S.C. §101 
should turn only on whether the claim 
preempts an abstract idea or other 
fundamental principle, not on what type of 
transformation occurs. 
4. 
The majority decision, which in some respects 
helped clarify this Court’s prior precedent in 
Benson, nonetheless failed to adequately 
clarify whether a distinction should be drawn 
between a computer-implemented invention 
that is implemented on a general-purpose 
computer rather than on a specific-purpose 
computer.  Unfortunately, much confusion has 
ensued at least at the BPAI and in the district 
courts, where mechanical distinctions have 
been drawn that are contrary to the 
underlying principles set forth in Benson and 
this Court’s other governing precedent.  Amici 
 
 
 
 
 


 
Curiae respectfully request that this Court 
clarify that such distinctions are misplaced. 
The role of patents related to financial 
services, e-commerce, and computers in the U.S. 
economy is vital.   Such patents, when appropriately 
awarded, encourage innovation and transparency, 
and advance the Constitutional goal of “promot[ing] 
the Progress of Science and useful Arts.” U.S. Const., 
art. I, §8, cl.8.  This Court should resist temptation 
to bow to the outspoken minority who would 
undermine a system that our founding fathers 
thought was so important that they included it in 
Article I of the Constitution and enacted it into one 
of its earliest public laws, and which has been 
maintained ever since.  Amici Curiae respectfully 
submit that this Court should reaffirm the broad 
scope of patent-eligible subject matter under §101. 
 
 
 
 
 


 
ARGUMENT 
In 1998, the Federal Circuit had the 
forethought and insight to recognize that the 
revolution in information technology and availability 
of the Internet would radically change the way that 
the world does business and that U.S. patent law 
would  need to adapt to this new technological and 
commercial reality by confirming the availability of 
patent protection for so-called “business method” 
patents.   First,  in  State Street, and later in AT&T  
Corp. v. Excel Communications, Inc., 172 F.3d 1352 
(Fed.Cir. 1999), the Federal Circuit followed this 
Court’s lead in Diamond v. Chakrabarty to recognize 
that patent-eligible subject matter should be broadly 
construed to “include anything under the sun that is 
made by man.”  447 U.S. 303, 308-09 (1980) (quoting 
S. REP. NO. 82-1979, at 5 (1952); H.R. REP. NO. 82-
1923, at 6 (1952)).  These decisions, an inevitable 
evolution in patent law based on this Court’s binding 
precedent, fostered a renaissance in patent law.  
However, as more and more business-related 
and computer-related patents were sought, the 
USPTO started to become overwhelmed.  A number 
of “dubious quality” patents  issued and were 
litigated.  Scrutiny from the press, Congress and this 
Court ensued.  At the core, the problems caused by 
these patents were based on their failure to comply 
with §§112, 102 and 103 of the Patent Act, rather 
than by any real dispute over whether those patents 
were patent-eligible subject matter. 
A vocal minority now cries that this Court 
should throw the baby out with the bath water–and 
 
 
 
 
 


 
improperly restrict the scope of patent-eligible 
subject matter–because some poor quality business 
method patents have issued.  This Court should 
resist that temptation.  Patents play an important 
and useful role in our economy by fostering 
innovation and adding to the public storehouse of 
knowledge.  So-called “business method” patents also 
have, since the founding of our nation, played an 
important role in our nation’s development and 
economy.  The development of the Internet and a 
digital economy makes that role even more 
important.   
 
I. 
GENERAL PRINCIPLES GOVERNING 
PATENT-ELIGIBLE SUBJECT MATTER 
BASED ON THIS COURT’S PRECEDENT 
The inquiry into what constitutes patent-
eligible subject matter begins with the Patent Act, 
which reads as follows: 
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. 
35 U.S.C. §101. 
Thus, when an invention falls within at least 
one of the four enumerated categories of patent-
eligible subject matter – “process,” “machine,” 
 
 
 
 
 


 
“manufacture,” or “composition of matter” – with but 
three exceptions, such invention is patent-eligible 
subject matter, and must be considered under the 
other provisions of the patent law, e.g., 35 U.S.C. 
§§102, 103, 112.  See, e.g., Diehr, 450 U.S. at 185.  
The only three exceptions are “laws of nature, 
natural phenomena, and abstract ideas.”  Diehr, 450 
U.S. at 185 (“Excluded from such patent protection 
are laws of nature, natural phenomena, and abstract 
ideas.”); Chakrabarty, 447 U.S. at 309. 
In Diehr, this Court recognized the difference 
between an invention “of some practical method or 
means of producing a beneficial result or effect,” 
which is patent-eligible subject matter, and “the 
result or effect itself,” which is not patent-eligible 
subject matter.  See  Diehr, 450 U.S. at 182 n.7 
(quoting Corning v. Burden, 56 U.S. (15 How.) 252, 
267-68 (1854)).  
Diehr concluded its analysis by confirming 
that, although a claim to a mathematical formula in 
the abstract is not patent-eligible subject matter 
since it is merely an “abstract idea,” by contrast a 
claim containing a mathematical formula could be 
patent-eligible subject matter as follows: 
On the other hand, 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 
 
 
 
 
 

10 
 
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).   
Significantly, as the Federal Circuit 
previously recognized in AT&T: 
The ‘e.g.’ signal denotes an example, not 
an exclusive requirement.   
172 F.3d at 1358-59.   
This list was not intended to be exhaustive, as 
even the USPTO recognizes in its prior submission 
to the Federal Circuit (USPTO Fed.Cir. Supp. Br. at 
8, 25), and this Court confirmed in its precedent.  
See Benson, 409 U.S. at 71; Flook, 437 U.S. at 589 
n.9.  Cf. Bilski, 545 F.3d at 956 n.12.   
 
II. 
THE 
BILSKI MAJORITY 
ERRONEOUSLY DEVIATED FROM 
 
THIS COURT’S PRECEDENT  
While  Amici Curiae do not endorse the 
patentability of the particular patent claim at issue 
here, Amici Curiae believe that the Bilksi  majority 
at the Federal Circuit erred in several fundamental 
ways that should be addressed and corrected by this 
Court.  
 
 
 
 
 
 

11 
 
A. 
The  Bilski Majority Erroneously Adopted 
the “Machine-or-Transformation” Test as 
the Sole Governing Test 
In seeking to find a “test or set of criteria” to 
“govern”  the USPTO and courts in determining 
patent-eligibility, the Bilski majority erroneously 
adopts as the “governing test” a mechanical version 
of the “machine-or-transformation” test.  See  Bilski, 
545 F.3d at 952, 956.  This is the same type of error 
that the Federal Circuit was chastised for making in 
KSR International Co. v. Teleflex, Inc., after it 
adopted the TSM test as a “rigid” rule limiting the 
obviousness inquiry:  
We begin by rejecting the rigid 
approach of the Court of Appeals. 
550 U.S. 398, 419 (2007). 
As discussed in Section I, the “machine-or-
transformation” test is not “the” only way to 
establish patent-eligible subject matter, but is 
merely an exemplary safe-harbor recognized by this 
Court.  The proper test is whether the claimed 
subject matter falls within one of the four statutory 
classes of subject matter, and does not preempt a so-
called fundamental principle.  As Diehr explained, 
Flook and Benson “stand for no more than these 
long-established principles.” 450 U.S. at 185. 
Further, in attempting to apply this rigid rule, 
the BPAI at the USPTO and lower courts have 
ended up adopting even more rigid rules without 
 
 
 
 
 

12 
 
making an effort to consider the underlying rationale 
that guided this Court’s decisions.   
For example, the BPAI recently rejected a 
claim for synthesizing speech signals, which 
included computing steps, and in which two sets of 
signals were transformed to produce speech 
signals.  The BPAI’s analysis fails to directly address 
whether the claim merely preempts a fundamental 
principle as this Court directs.  Instead it applies a 
wooden analysis of specific prior holdings from In re 
Abele, 684 F.2d 902 (C.C.P.A. 1982), as discussed by 
the Bilski majority, 545 F.3d at 962-63, to reject the 
patent-eligibility of this claimed process, even 
though it was not an abstract idea by any 
means.   See  Ex parte Hardwick, Appeal 2009-
002399, slip op. at 6-9 (BPAI June 22, 2009).  The 
test set forth in Abele and its prior precedent (the so-
called “Freeman-Walter-Abele test”) was one of the 
tests expressly rejected in Bilski, 545 F.3d at 958-59. 
Similarly, the BPAI has sought to apply the 
“machine-or-transformation” test as a rigid rule to 
system claims, despite the Federal Circuit’s warning 
that “[i]n State Street, as is often forgotten, we 
addressed a claim drawn not to a process but to a 
machine” Bilski, 545 F.3d at 960 n.18. See Ex parte 
Atkin, Appeal 2008-4352, slip. op. at 18 (BPAI Jan. 
30, 2009) (broadly applying Bilski  to  reject  not  only 
method claims but systems claims, finding that the 
system claims encompassed “any and all structures 
for performing the recited functions” and therefore 
the system claims were “at least as broad as method 
claims ... which we have determined recite patent 
ineligible subject matter under Bilski ”;  Making this 
 
 
 
 
 

13 
 
determination even though the system claims were 
more appropriately considered under §112 and also 
rejected on that ground.). 
Rigid application by courts of the “governing” 
rule from Bilski has also resulted in other previously 
approved claimed methods being found to no longer 
be patent-eligible.  For example, in Fort Properties, 
Inc. v. American Master Lease, LLC, 609 F.Supp.2d 
1052 (C.D.Cal. 2009), based on a wooden analysis of 
the “governing” test, the district court invalidated 
various issued method claims in a patent relating to 
real estate transactions in which legal obligations 
are transformed and evidenced by deed 
shares.  Again, the court did not address whether 
the claim, which clearly claimed one of the four 
statutory classes of subject matter–a process–fell 
into one of the exceptions, e.g., was merely 
preempting an abstract idea. 
Regardless of whether these claims have other 
failings, the adoption of the rigid “machine-or-
transformation” test in Bilski has resulted in courts 
and the USPTO missing the point and using §101 as 
a gatekeeper in a manner in which it was never 
intended by the Patent Act as enacted by Congress 
or interpreted by this Court to be used. Cf. Dann v. 
Johnston, 425 U.S. 219, 221 (1976) (avoiding §101 
issue in favor of §103 analysis). 
 
 
 
 
 
 
 

14 
 
B. 
The Bilski Majority Erroneously Limits the 
Definition of “Process” and Erroneously 
Adopts a Rigid Version of the “Machine-or-
Transformation Test” Contrary To Clear 
Congressional Intent  
As this Court is well aware, it is the role of 
Congress to set policy when it enacts statutes, the 
role of the executive branch (including the USPTO) 
to carry out the laws as enacted, and the role of the 
courts (including this Court and the Federal Circuit) 
to interpret the law. See, e.g., Chakrabarty, 447 U.S. 
at 315.  This Court does not (and the Federal Circuit 
should not) set new policies, even if it disagrees with 
the policies set by current statutes.  Any problems 
with those policies is the province of Congress. 
In this regard, since this country’s inception, a 
fundamental policy of our government has been to 
establish a patent system to promote the progress of 
the useful arts.  This policy was Constitutionally set, 
when Congress was given the power to enact patent 
laws: 
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. Constitution Article I, §8, cl. 8. 
This power was promptly exercised in 1790 
when Congress enacted the first patent act, which 
 
 
 
 
 

15 
 
originally defined the scope of patent-eligible subject 
matter as follows: 
[A]ny useful art, manufacture, engine, 
machine, or device, or any improvement 
therein not before known or used. 
Patent Act of 1790, 1 Stat. 109, 110, §1 (1790). 
Shortly thereafter, in 1793, Congress revised 
the scope of patent-eligible subject matter to read as 
follows: 
[A]ny new and useful art, machine, 
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, 1 Stat. 318-323, §1 (1793).3 
This broad language has been left intact by 
Congress in every subsequent patent statute, with 
but small modifications in the Patent Act of 1952, 
resulting in the current language of §101, which 
read as follows: 
Whoever invents or discovers any new 
and useful process, machine, 
                                            
3  Thomas Jefferson, the driving force behind early patent 
policy, incorporated his philosophy that “ingenuity should 
receive a liberal encouragement” into the patent acts.  5 
WRITINGS OF THOMAS JEFFERSON 75-76 (Washington ed. 1871). 
 
 
 
 
 

16 
 
manufacture, or composition of matter, 
or any new and useful improvement 
thereof, may obtain a patent, subject to 
the conditions and requirements of this 
title. 
35 U.S.C. §101.   
The 1793 version included the term “arts” 
instead of “process,” but the case law made clear that 
the 18th Century meaning of the term “arts” was 
intended to include “process”: 
That a process may be patentable, 
irrespective of the particular form of the 
instrumentalities used, cannot be 
disputed. ... A process is a mode of 
treatment of certain materials to 
produce a given result. It is an act, or a 
series of acts, performed upon the 
subject-matter to be transformed and 
reduced to a different state or thing. If 
new and useful, it is just as patentable 
as is a piece of machinery. In the 
language of the patent law, it is an art.  
The machinery pointed out as suitable 
to perform the process may or may not 
be new or patentable; whilst the process 
itself may be altogether new, and 
produce an entirely new result. The 
process requires that certain things 
should be done with certain substances, 
and in a certain order; but the tools to 
 
 
 
 
 

17 
 
be used in doing this may be of 
secondary consequence. 
Cochrane v. Deener, 94 U.S. 780, 787-788 (1877).  
See also Diehr, 450 U.S. at 182 (“[A] process has 
historically enjoyed patent protection because it was 
considered a form of ‘art’ as that term was used in 
the 1793 Act.”).   
Indeed, the 1952 Act, when changing the 
language, made clear both by its statutory terms and 
its legislative history that “process” was to be 
broadly construed. 
In particular, the term “process” is statutorily 
defined in broad terms as follows: 
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). 
The  Bilski majority mistakenly characterizes 
this  statutory definition of “process” as “unhelpful” 
(Bilski, 545 F.3d at 951 n.3), rather than recognize 
that it is an unrestricted definition that was 
intended to be broad, not merely circular. 
This point is made by the Committee Reports 
accompanying the 1952 Act which confirm that 
Congress intended statutory subject matter to be 
very broad, when it stated: 
 
 
 
 
 

18 
 
The definition of “process” has been 
added in section 100 to make it clear 
that ‘process or method’ is meant, and 
also to clarify the present law as to the 
patentability of certain types of 
processes or methods as to which some 
insubstantial doubts have been 
expressed. 
H.R. REP. NO. 82-1923 at 6 (1952).  
P.J. Federico, one of the authors of the 1952 
Act, explained the rationale at the time as follows: 
This language [of §101] (other than the 
terminal phrase) closely follows the 
wording of the corresponding part of the 
old statute, with the exceptions that the 
reference to plant patents has been 
omitted for inclusion in another section, 
and the word “process” is used in place 
of the word “art” which appeared in the 
old statute. The word “art” in the 
corresponding section of the old statute 
had been interpreted by the courts as 
being practically synonymous with 
process or method, and the same word 
also appeared in several other sections 
of the statute but with somewhat 
different connotations (it still appears 
in two other sections of the new code, 
with different meanings). The word 
“process” has been used in section 101 
as its meaning is more rapidly grasped 
than “art” which would here require 
 
 
 
 
 

19 
 
some interpretation. The first part of 
the definition of process in section 
100(b) states that the word “process” 
means process or method, as these 
words have long been interchangeably 
used in patent law, and through same 
superabundance of caution by someone 
who feared that there might possibly be 
some loss of a shade of meaning in 
dropping the word “art”, it was restored 
in the definition so that it reads “The 
term ‘process’ means process, art or 
method, ....” 
35 U.S.C.A. 1 (1954 ed.), reprinted in  75  J.  Pat.  & 
Trademark Off. Soc'y 161, 214 (1993).   
Judge Newman in her dissent summed up the 
Bilski majority’s error in failing to recognize that the 
statutory definition of “process” is not limited and is 
intended to be very broad as follows:   
The definition of ‘process’ provided at 
35 U.S.C. § 100(b) is not ‘unhelpful,’ as 
this court now states, but rather points 
up the errors in the court’s new 
statutory interpretation. Section 100(b) 
incorporates the prior usage ‘art’ and 
the term ‘method,’ and places no 
restriction on the definition. This 
court’s redefinition of ‘process’ as 
limiting access to the patent system to 
those processes that use specific 
machinery or that transform matter, is 
 
 
 
 
 

20 
 
contrary to two centuries of statutory 
definition. 
Bilski, 545 F.3d at 978 (Newman, J. dissenting) 
(internal citations omitted).   
This Court has always understood the broad 
breadth that was intended to be applied to that term 
as relating to patent-eligible subject matter. See, 
e.g., Chakrabarty, 447 U.S. at 315 (noting that “[t]he 
subject-matter provisions of the patent law have 
been cast in broad terms to fulfill the constitutional 
and statutory goal of promoting ‘the Progress of 
Science and the useful Arts’ with all that means for 
the social and economic benefits envisioned by 
Jefferson” and that “[b]road general language is not 
necessarily ambiguous when congressional objectives 
require broad terms.”); J.E.M. Ag Supply v. Pioneer 
Hi-Bred Int’l, 534 U.S. 124, 130 (2001) (“As this 
Court recognized over 20 years ago in Chakrabarty, 
447 U.S. at 308, the language of § 101 is extremely 
broad.”);  Diehr, 450 U.S. at 182; State Street, 149 
F.3d at 1373.  
For more than a century, this Court has made 
clear that “[t]he patent law is not confined to new 
machines and new compositions of matter, but 
extends to any new and useful art or manufacture.  
A manufacturing process is clearly an art, within the 
meaning of the law.”  Tilghman, 102 U.S. at 722, 
quoted in Diehr, 450 U.S. at 184 n.8 (emphasis 
added); see also Cochrane, 94 U.S. at 787-88 (“In the 
language of the patent law, [a process] is an art.”), 
quoted in Id. at 183. 
 
 
 
 
 

21 
 
Moreover, this Court recognizes that the use 
of the term “any” in §101 demonstrates the broad 
breadth that statutory subject matter is intended to 
cover.  See  J.E.M.,  534 U.S. at 130; Chakrabarty, 
447 U.S. at 308 (In modifying the terms of §101 “by 
the comprehensive ‘any,’ Congress plainly 
contemplated that the patent laws would be given 
wide scope.”).  
Further, this Court has made clear “that 
courts ‘should not read into the patent laws 
limitations and conditions which the legislature has 
not expressed.’”  Chakrabarty, 447 U.S. at 308 
(quoting United States v. Dubilier Condenser Corp., 
289 U.S. 178, 199 (1933)). See also, e.g., TRW Inc. v. 
Andrews, 534 U.S. 19, 31 (2001) (“It is ‘a cardinal 
principle of statutory construction’ that ‘a statute 
ought, upon the whole, to be so construed that ... no 
clause, sentence, or word shall be superfluous, void, 
or insignificant.’” (citation omitted)); Moskal v. 
United States, 498 U.S. 103, 109 (1990) (“[A] court 
should ‘give effect, if possible, to every clause and 
word of a statute.’” (citations omitted)); Mountain 
States Tel. & Tel. Co. v. Pueblo of Santa Ana, 472 
U.S. 237, 249 (1985) (“’[A] statute should be 
interpreted so as not to render one part inoperative.’” 
(citation omitted)). 
It is this broad definition of the term “process” 
that was applied by the Federal Circuit in State 
Street and which was understood to be the definition 
governing that term in the statutory construction 
until the Bilski decision at issue here.  The Federal 
Circuit’s engrafting of new limitations on what 
constitutes patent-eligible processes in Bilski is 
 
 
 
 
 

22 
 
contrary to the statute itself, to the congressional 
intent, and to this Court’s precedent on the subject. 
The only limitation on the definition of 
“process” that this Court mandates is that a process 
is not patent-eligible if it preempts “laws of nature, 
natural phenomena, [or] abstract ideas,” in contrast 
to claiming a practical application thereof.  Diehr, 
450 U.S. at 185 (citing inter alia Flook, 437 U.S. at 
589 and Benson, 409 U.S. at 67). 
The Federal Circuit in Bilski did not address 
whether Congress in essence legislatively acquiesced 
to the State Street decision when it adopted the prior 
user rights for “methods of doing or conducting 
business” (see 35 U.S.C. §273) in response to that 
decision and has since considered, but did not adopt, 
any other changes to the patent-eligibility standard.  
While some of this Court’s members have expressed 
doubt in the “useful, concrete and tangible results” 
test, the test stated was consistent with 
congressional intent (as the State Street decision 
was written by Judge Rich, another author of the 
Patent Act of 1952), and has support in this Court’s 
precedent and §101, from which the test was 
derived. 
In particular, Congress made clear, following 
the  State Street and  AT&T cases, that the patent 
law contemplates “a method of doing or conducting 
business” as a type of “method” that can be patent-
eligible subject matter in adopting the earlier 
inventor infringement defense. 
 See 35 U.S.C. 
§273(a)(3).   Indeed, the legislative history for 35 
 
 
 
 
 

23 
 
U.S.C. §273 confirms that Congress contemplated 
the State Street case and acted accordingly:  
•  145 CONG. REC. H6942 (daily ed. Aug. 3, 
1999): 
Ms. LOFGREN ... In title II there is a 
first inventor defense that is limited to 
methods of doing or conducting 
business, and I need to understand why, 
what the impact of that would be and 
why it merits our support .... 
 
 
Mr. COBLE. Mr. Speaker, it is limited ... 
to the State Street Bank case. 
•  145 CONG. REC. S14717 (daily ed. Nov. 17, 
1999): 
As the Court [in State Street] noted, the 
reference to the business method 
exception had been improperly applied 
to a wide variety of processes, blurring 
the essential question of whether the 
invention produced a “useful, concrete, 
and tangible result.” 
* * * 
In order to protect inventors and to 
encourage proper disclosure, this 
subtitle focuses on methods for doing 
and conducting business, including 
methods used in connection with 
internal commercial operations as well 
as those used in connection with the 
sale or transfer of useful end results–
 
 
 
 
 

24 
 
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. REP. NO. 106-287, pt. 1, at 46-47 (1999): 
[T]he first inventor defense is of 
particular significance to [the financial 
services] industry, and the industry 
serves as a prime illustration of the 
need for the defense. The State Street 
decision has brought that industry 
abruptly to the forefront of cutting-edge 
patent law protection for subject matter 
that previously had been thought to be 
unpatentable. The State Street court 
came down on the side of a very broad 
scope of subject matter that qualifies for 
patent protection. State Street clarifies 
that the characterization of subject 
matter as a method of doing business 
does not render it unpatentable. One 
consequence is that the “back office” 
processes and methods that are 
fundamental to the delivery of many 
financial services, but transparent to 
the end user of the services, are now 
fair game for patent protection. 
See also  Pet. Open. Br. at 30-33. 
 
 
 
 
 

25 
 
Thus, at a minimum, the actions of Congress 
are contrary to the wholesale view that a patent-
eligible process must be tied to a computer or some 
other machine, and evidence that §101 should not be 
as narrowly construed as advanced by the Bilski 
majority.   Cf.  John R. Sand & Gravel Co. v. United 
States, 552 U.S. 130, 128 S.Ct. 750, 756-57 (2008) 
(refusing to overturn the precedents because “stare 
decisis in respect to statutory interpretation has 
‘special force,’ for ‘Congress remains free to alter 
what we have done’”; “Congress has long acquiesced 
in the interpretation [the Court has] given” (citations 
omitted)); Shepard v. United States, 544 U.S. 13, 23 
(2005) (explaining that there was not “sufficient 
justification for upsetting precedent here” since the 
issue was one of statutory interpretation, “and the 
claim to adhere to case law is generally powerful 
once a decision has settled statutory meaning.  In 
this instance, time has enhanced even the usual 
precedential force, nearly 15 years having passed 
since [the precedent] came down, without any action 
by Congress to modify the statute ....” (citations 
omitted and emphasis added)); Patterson v. McLean 
Credit Union, 491 U.S. 164, 172-73 (1989) 
(“Considerations of stare decisis have special force in 
the area of statutory interpretation, for here ... the 
legislative power is implicated, and Congress 
remains free to alter what we have done.”). 
Indeed, Congress’s failure to alter the scope of 
patent-eligible subject matter in light of State Street, 
despite having opportunities on multiple occasions to 
consider various proposals (see, e.g., S. 2369, 110th 
Cong.; H.R. 1908, 110th Cong. §10; S. 861, 110th 
Cong. §303; H.R. 2365, 110th Cong.), is further 
 
 
 
 
 

26 
 
probative of the legislature’s intent on this subject.4  
Cf. Bob Jones Univ. v. United States, 461 U.S. 574, 
600-01 (1983) (finding congressional acquiescence in 
the agency’s statutory interpretation based on 
Congress’ failure to act on no fewer than thirteen 
bills introduced to overturn the agency’s 
interpretation during twelve years). 
Additionally, in Diehr, this Court’s latest 
binding pronouncement on this subject, this Court 
recognized principles consistent with the “useful, 
concrete and tangible results” test, which found its 
roots in hoary Supreme Court precedent.  In 
addressing its concern over whether a process falls 
within one of the three enumerated exceptions to 
patent-eligible subject matter, i.e., “laws of nature, 
natural phenomena, and abstract ideas” (see  Diehr, 
450 U.S. at 185), the Court recognized that a patent-
eligible process should be any “act, or a series of 
acts” that produces “a beneficial result or effect,” as 
defined by this Court in Diehr, 450 U.S. at 183-84 
n.7 (quoting Cochrane, 94 U.S. at 787-788 and 
Corning, 56 U.S. at 267-68).  Further, this Court 
went on to explain that it has long recognized that 
                                            
4 In this regard, Senator Specter has already cautioned other 
branches of Government against impinging upon Congressional 
authority to regulate the appropriate scope of patent-eligible 
subject matter.  See, e.g., Letter from Arlen Specter, to Hon. 
Henry Paulson, Secretary of Treasury (Feb. 1, 2008) (“Specter 
Letter”), 
available at 
http://www.regulations.gov/fdmspublic/component/main?main=
DocumentDetail&o=09000064803ba1a6 (cautioning the IRS 
against taking steps to regulate “tax strategy” patents because 
“the proposed regulations have been developed without 
consideration given to steps Congress is taking to address the 
issue”). 
 
 
 
 
 

27 
 
patent-eligible subject matter includes “one or more 
processes ... to produce a certain result or 
manufacture” and that “[i]t is for the discovery or 
invention of some practical method or means of 
producing a beneficial result or effect, that a patent 
is granted ....”  Diehr, 450 U.S. at 184 n.7 (quoting 
Corning, 56 U.S. at 267-68).   
In addition, the “useful” requirement of the 
“useful, concrete and tangible results” test set forth 
in State Street is consistent with §101 which states 
“[w]hoever invents or discovers any new and useful 
process ....”  35 U.S.C. §101.  Similarly, the “concrete 
and tangible” requirement, i.e., the converse to 
“abstract ideas,” is consistent with this Court’s 
mandate that a patent-eligible process cannot claim 
merely “laws of nature, natural phenomena, [or] 
abstract ideas.”  See Diehr, 450 U.S. at 185 (citing 
inter alia Flook, 437 U.S. at 589 and Benson, 409 
U.S. at 67). 
 
C. 
The  Bilski Majority’s Restriction on 
Patent-Eligible Transformations Is 
Contrary to The Rationale of this Court’s 
Precedent 
The Bilski majority’s limitation on the types of 
transformations that can be patent-eligible processes 
(cf. 545 F.3d at 962-63) is also error and contrary to 
the rationale of this Court’s precedent.  
In particular, the rationale for the majority’s 
blanket exclusion of “electronic signals and 
electronically-manipulated data” and “business 
 
 
 
 
 

28 
 
methods,” involving, for example, manipulation of 
“legal obligations, organizational relationships, and 
business risks”–today’s “raw materials” of 
innovation–as patent-eligible subject matter unless 
tied to a computer or some other machine (see Bilski, 
545 F.3d at 962) is contrary to the rationale used by 
this Court in developing the transformation prong of 
the “machine-or-transformation” test that the Bilski 
majority seeks to apply.   See  Bradford, 214 U.S. 
383-86.  While definiteness requirements (§112) may 
preclude claims directed to purely mental steps from 
being patent-eligible subject matter, the patent-
eligibility test under §101 should not turn on what 
type of transformation occurs. 
This Court addressed a similar issue a 
century ago in Bradford, when raw materials of a 
mechanical nature raised issues regarding the scope 
of patent-eligible subject matter which had 
previously been contemplated in the context of 
chemical processes.   
In arguing against a narrow interpretation of 
patent-eligible processes, the Respondent explained: 
The doctrine that processes are 
not patentable unless they involve 
chemical reactions and elemental 
changes is unjust and contrary to the 
spirit of the Constitution and the intent 
of the patent laws.  
If it be conceded–and it cannot be 
logically denied–that an exercise of the 
inventive faculties can be involved in 
the discovery of a combination of 
 
 
 
 
 

29 
 
functions, acts or operations, by which a 
new and useful result is obtained, then 
to deny the patentability of such 
inventions is to establish a false 
standard of patentability, and to 
exclude a large class of meritorious 
inventors from the protection of the 
patent laws. 
Bradford, 214 U.S. at 370 (Syllabus)(emphasis 
added)(citations omitted). 
In response to this compelling argument, this 
Court held that it “did not intend to limit process 
patents to those showing chemical action or similar 
elemental changes” and that “an invention or 
discovery of a process or method involving 
mechanical operations, and producing a new and 
useful result, may be within the protection of the 
Federal statute, and entitle the inventor to a patent 
for his discovery.” Bradford, 214 U.S. at 384-86.5    
Similarly, patent-eligibility for today’s 
building blocks, existing in the form of, for example, 
legal obligations and financial transactions, should 
not be foreclosed by rigid rules or “false standard of 
                                            
5  
Indeed, a rule which categorically proscribes human-
implemented methods from being patent-eligible subject matter 
is contrary to long standing Supreme Court precedent.  For 
example, in reaching its decision in Bradford, this Court 
approvingly quoted Walker on Patents as hornbook law: “valid 
process patents may be granted for ‘operations which consist 
entirely of mechanical transactions, but which may be 
performed by hand or by any of several different mechanisms 
or machines.’”  Id. at 383 (citation omitted) (emphasis added). 
 
 
 
 
 

30 
 
patentability” like those that this Court refused to 
adopt a century ago.   
Judge Newman’s dissent below summarizes 
this point:  
The breadth of Section 101 and its 
predecessor provisions reflects the 
legislative intention to accommodate 
not only known fields of creativity, but 
also the unknown future. The 
[Supreme] Court has consistently 
refrained from imposing unwarranted 
restrictions on statutory eligibility, and 
for computer-implemented processes 
the Court has explicitly rejected the 
direction now taken. Nonetheless, [the 
majority] now adopts a redefinition of 
‘process’ in Section 101 that excludes 
forms of information-based and 
software-implemented inventions 
arising from new technological 
capabilities, [erroneously] stating that 
this result is required by the [Supreme] 
Court’s computer-related cases. 
Bilski, 545 F.3d at 978 (Newman, J. dissenting). 
The majority’s limited view that 
transformations of legal obligations are somehow not 
patent-eligible is also contrary to over two centuries 
of patent practice at the USPTO.  Indeed, long before 
State Street, or even Diehr, the USPTO issued 
countless patents directed to the so-called “liberal” 
 
 
 
 
 

31 
 
arts of “law” (like insurance and contracts) and 
“marketing”: 
• 
U.S. Patent No. 871, “Bank Note” (issued Aug. 
3, 1838) (directed to a process of “engraving, 
printing or any way expressing the sum in 
large letters, words or figures on the face of 
the note ....”); 
• 
U.S. Patent No. 1700, “Improvement in the 
Mathematical Operation of Drawing Lottery-
Schemes” (issued July 18, 1840) (claim 
directed to a process of “making [lottery] 
tickets [using an algorithm], diminishing the 
number of tickets ... and regulating the 
drawing ....”); 
• 
U.S. Patent No. 389,818, “Complemental 
Accident Insurance Policy” (filed Jan. 19, 
1888) (claims directed to a “complemental 
insurance policy”); 
• 
U.S. Reissue Patent No. RE11,270, “Means 
For Insuring Travelers Against Loss By 
Accident” (filed July 21, 1892) (claims directed 
to a “means for insuring travelers and others 
against loss by accident”);  
• 
U.S. Patent No. 883,380, “Check” (filed Apr. 
12, 1906) (claims directed to a “check having 
on each face a contract portion and a series of 
value designations”); 
 
 
 
 
 

32 
 
• 
U.S. Patent No. 918,280, “Fractional-
Insurance Policy” (filed Aug. 15, 1907) (claims 
directed to a “fractional insurance policy”);  
• 
U.S. Patent No. 1,045,331, “Cigar Container” 
(filed July 19, 1911) (claims directed to a 
“cigar container” that is described in the 
patent as being “especially useful in 
marketing cigars in original packages,” col. 1, 
ll. 33-34); 
• 
U.S. Patent No. 1,150,708, “Method of 
Marketing Trees” (filed Mar. 9, 1914) (claims 
directed to a “method of preparing and 
marketing trees”); 
• 
U.S. Patent No. 1,254,870, “Means Used In 
Accounting” (filed Sept. 9, 1916) (claims 
directed to a “triplicate invoice and receipt”); 
• 
U.S. Patent No. 1,419,739, “Marketing Bag” 
(filed June 17, 1920) (claim directed to an 
“open topped bag adapted for marketing”). 
The significance of these examples lies not in 
whether each individual patent was good or bad, but 
in demonstrating that the concept of “patent-eligible” 
subject matter has long recognized any “useful” 
invention, regardless of whether the use was in a 
“liberal” art (like law or marketing) or a 
“mechanical” or “chemical” art. 
In particular, the USPTO previously 
explained in “A USPTO White Paper” entitled 
“Automated Financial or Management Data 
 
 
 
 
 

33 
 
Processing Methods (Business Methods),” the 
following: 
Financial apparatus and method 
patents date back to [the 1790s]. ... The 
first fifty years of the U.S. Patent Office 
saw the granting of forty-one financial 
patents in the arts of bank notes (2 
patents), bills of credit (1), bills of 
exchange (1), check blanks (4); 
detecting and preventing counterfeiting 
(10), coin counting (1), interest 
calculation tables (5), and lotteries (17).  
Financial patents in the paper-based 
technologies have been granted 
continuously for over two-hundred 
years. 
A USPTO White Paper, at 2 (ver. 1.43), available at 
www.uspto.gov/web/menu/busmethp/whitepaper.pdf. 
The  Bilski majority’s new judicial carve-outs 
from the scope of patent-eligible subject matter 
should be rejected again by this Court. 
 
D. 
This Court Should Clarify That a 
Computer-Implemented Invention Which 
Operates on a General-Purpose Computer 
Is Nonetheless Patent-Eligible as Long as 
It Does Not Preempt a Fundamental 
Principle 
Benson held that the claimed method of 
converting a signal from “binary coded decimal” to 
 
 
 
 
 

34 
 
“binary” in a general-purpose digital computer of any 
type was not patent-eligible subject matter. Benson, 
409 U.S. at 64, 71-72.  As the Bilski majority 
recognized, “the claimed process operated on a 
machine, a digital computer, but was still held to be 
ineligible subject matter.” 545 F.3d at 955.   Thus, 
the determinative factor concerning patent-eligibility 
was not whether the process was tied to a machine, 
as called for by the “machine-or transformation” test, 
but rather that a “fundamental principle [was] at 
issue.”  Id.   The  Benson Court found the claim 
objectionable because it sought to, in essence, 
preempt a fundamental principle for an entire field 
of use, as the Bilski majority explained.  See id.   
However, there has been much confusion 
generated over the “general-purpose computer” 
language used in Benson as compared to a so-called 
“special-purpose computer.”  See Benson, 409 U.S. at 
65.  For more than fifteen years, the law seemed to 
have been settled by In re Alappat, 33 F.3d 1526 
(Fed.Cir. 1994) (en banc), where the Federal Circuit 
explained that “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.” Id. 
at 1545.  Yet, as Judge Newman explains in her 
dissent, the Bilski majority’s holding again raises 
“uncertainty” in this area: 
[In the majority’s opinion, w]e aren’t 
told when, or if, software instructions 
implemented on a general purpose 
computer are deemed “tied” to a 
“particular machine,” for if Alappat’s 
 
 
 
 
 

35 
 
guidance that software converts a 
general purpose computer into a special 
purpose machine remains applicable, 
there is no need for the present ruling. 
For the thousands of inventors who 
obtained patents under the court’s now-
discarded criteria, their property rights 
are now vulnerable. 
Bilski, 545 F.3d at 994-95 (Newman, J., dissenting). 
This uncertainty has been further exacerbated 
by the BPAI, which has drawn nonsensical 
distinctions between general-purpose computers and 
specific-purpose computers: 
•  Ex parte Gutta, No. 2008-3000, slip op. at 5-6 
(BPAI Jan. 15, 2009) (rejecting under §101 a 
claim reciting a “computerized method 
performed by a data processor”);  
•  Ex parte Nawathe, No. 2007-3360, 2009 WL 
327520, at *4 (BPAI Feb. 9, 2009) (rejecting 
under §101 a claim reciting a “computerized 
method” of inputting and representing XML 
documents as insufficiently tied to “a 
particular computer specifically programmed 
for executing the steps of the claimed 
method”);  
•  Ex parte Cornea-Hasegan, No. 2008-4742, slip 
op. at 9-10 (BPAI Jan. 13, 2009) (rejecting 
under §101 a claimed method for predicting 
results of mathematical operations, finding 
that “[t]he recitation of a ‘processor’ 
 
 
 
 
 

36 
 
performing various functions is nothing more 
than a general purpose computer that has 
been programmed in an unspecified manner to 
implement the functional steps recited in the 
claims”).  
This confusion has been further compounded 
with district court decisions that have used this non-
sensical reasoning as a basis to declare computer 
implemented claims which can operate on any 
computer, but must perform specific delineated 
steps, as being patent-ineligible.  E.g., DealerTrack, 
Inc. v. Huber, No. CV 06-2335, 2009 U.S. Dist. 
LEXIS 58125, at *12-13 (C.D.Cal. July 7, 2009) 
(finding the patent invalid under Bilski based on the 
court’s findings that the patent did “not specify 
precisely how the computer hardware and database 
[were] ‘specially programmed,’ and the claimed 
central processor [was] nothing more than a general 
purpose computer that has been programmed in 
some unspecified manner,” which “[u]nder Bilski  
and the recent decisions interpreting it [could not] 
constitute a ‘particular machine’”); Cybersource 
Corp. v. Retail Decisions, Inc., No. C 04-03268, 2009 
U.S. Dist. LEXIS 26056, at *20-21 (N.D.Cal. Mar. 
26, 2009). 
Such confusion and “uncertainty” would be 
eliminated, however, if the inquiry for patent-
eligibility was appropriately focused on whether the 
claimed subject matter falls within one of the four 
statutory classes and whether it preempts a 
fundamental principle.   
 
 
 
 
 

37 
 
In today’s world, where virtually every 
special-purpose software is written to run on 
general-purpose computers as we as a society desire, 
this confusing distinction should be rejected once 
and for all by this Court. 
 
III. 
BUSINESS- AND COMPUTER-RELATED 
PATENTS ARE AN IMPORTANT AND 
VALUABLE PART OF OUR ECONOMY 
AND PROMOTE THE PROGRESS OF 
THE USEFUL ARTS 
Patents play an important role in promoting 
the “progress” of the “useful Arts” and stimulating 
innovation, and a patent system can promote such 
progress in a variety of ways.   
First, as this Court has recognized, it can 
promote progress by rewarding innovation with 
patent rights.  See, e.g.,  Festo Corp. v. Shoketsu 
Kinzoku Kogyo Kabushiki Co., 535 U.S. 722, 730-31 
(2002) (“The patent laws ‘promote the Progress of 
Science and useful Arts’ by rewarding innovation 
with a temporary monopoly.” (quoting U.S. Const. 
art. I, §8, cl. 8)); Chakrabarty, 447 U.S. at 307 
(explaining that “[t]he Constitution grants Congress 
broad power to legislate 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.’  Art. I, 
§ 8, cl. 8” and that “[t]he patent laws promote this 
progress by offering inventors exclusive rights for a 
limited period as an incentive for their inventiveness 
and research efforts”). 
 
 
 
 
 

38 
 
President Lincoln described the development 
of a patent system as one of the three most 
important developments in the world’s history “on 
account of [its] great efficiency in facilitating all 
other inventions and discoveries,” and explained: 
Next came the patent laws. These 
began in England in 1624, and in this 
country with the adoption of our 
Constitution. Before then any man 
[might] instantly use what another man 
had invented, so that the inventor had 
no special advantage from his 
invention. The patent system changed 
this, secured to the inventor for a 
limited time exclusive use of his 
inventions, and thereby added the fuel 
of interest to the fire of genius in the 
discovery and production of new and 
useful things. 
Abraham Lincoln, Lecture on “Discoveries, 
Inventions and Improvements,” delivered before the 
Library Association of Springfield, Illinois, Feb. 22, 
1860,  reprinted in 5 LIFE AND WORKS OF ABRAHAM 
LINCOLN,  Speeches and Presidential Addresses, 
1859–1865 13 (Marion Mills Miller ed., centenary 
ed.) (1907).6 
But this is not the only way patent systems 
“promote progress.”  Public disclosure in patents is 
                                            
6 Besides being the sixteenth president of the United States, Mr. 
Lincoln was the inventor on U.S. Patent No. 6,469, entitled 
“Buoying Vessels Over Shoals,” (filed Mar. 10, 1849). 
 
 
 
 
 

39 
 
another important way that progress is promoted.7  
Shortly after the 1952 Act was passed, Judge Rich 
presented a series of lectures on the then-new Act, 
which provides useful insight into the varying 
purposes of patent laws.   With respect to the role 
our patent laws serve regarding “incremental 
inventions” and “becom[ing] part of the technical 
literature,” Judge Rich stated: 
In the remote corners of the most 
crowded arts, progress is made by the 
proliferation of ideas, different and 
unobvious ways of doing the same thing, 
so that the reservoir of inventions fills 
up.  It should never be forgotten that 
patented inventions are published and 
become a part of the technical literature.  
This publication itself promotes 
progress in the useful arts and it is the 
prospect of patent rights which induces 
the disclosure and the issuance of the 
patent which makes it available. 
Giles S. Rich, The Principles of Patentability, 42 J. 
Pat. Off. Soc’y 75, 83 (1960) (emphasis added). 
These words of wisdom from almost half a 
century ago ring particularly true when it comes to 
software and financial service-related inventions.   
Prior to State Street and the “great flood” of 
                                            
7 As Senator Specter has recently explained:  
U.S. patent policy has historically sought to 
balance the goal of encouraging innovation with 
the need for public disclosure.   
Specter Letter, supra note 4, at 1. 
 
 
 
 
 

40 
 
“business method” patents, there was a dearth of 
prior art available as to computer software and 
financial service innovations.8   
It is perhaps ironic that the greatest 
complaint levied against these types of patents is 
that so many applications–disclosing the previously 
withheld secrets of these industries–are being 
submitted to the USPTO, and are becoming part of 
our public literature.  Thus, the greatest complaint 
against these types of patents is perhaps the 
greatest justification for them.   
One industry participant aptly explained how 
in the financial service industry the need for patent 
protection of financial service products and the 
resulting benefits of transparency have evolved out 
of State Street and its progeny: 
Two additional factors seemed to 
conspire further to drive financial 
service firms to the patent office – 
                                            
8 Congress addressed this void with the prior user right of §273 
for patents which cover “a method of doing or conducting 
business,” because prior to that time these industries did not 
disclose what they did and how they did it.  See Julie E. Cohen 
& Mark A. Lemley, Patent Scope and Innovation in the 
Software Industry, 89 Cal. L. Rev. 1, 13 (2001) (“prior art in 
this particular industry may simply be difficult or, in some 
cases, impossible to find because of the nature of the software 
business”; “Unlike inventions in more established engineering 
fields, most software inventions are not described in published 
journals.  Software innovations exist in the source code of 
commercial products and services that are available to 
customers.  This source code is hard to catalog or search for 
ideas.”).   
 
 
 
 
 

41 
 
adoption of internet-based technologies 
to interact with clients and new 
regulations demanding financial, tax 
and accounting transparency. While the 
internet transformed many companies 
and even entire industries, few 
industries felt the effects more 
dramatically than financial services.  
Aside from effectively replacing the 
telephone, the internet fundamentally 
transformed the back office as well. Far 
from just a matter of automation, firms 
took pains to think through their entire 
value chains and re-engineer how they 
did business with their clients. Entire 
new processes and systems were being 
invented at a break-neck pace and the 
effects on the industry and the economy 
were breathtaking .... Of course, 
virtually inherent with the rise of the 
internet, there was a concomitant loss 
of the ability to effectively maintain 
trade-secrets protection, and therefore, 
less of an ability to retain proprietary 
rights in all the inventive activity the 
internet became unleashed. 
Second, particularly in the area 
of new financial products, transparency 
became essential  as  a  result  of  U.S. 
Treasury and IRS regulations designed 
to combat a growing problem with 
corporate tax shelters.  Under the 
regulations, any financial structure 
offered having U.S. tax consequences 
 
 
 
 
 

42 
 
was subject to being registered as a 
corporate tax shelter if the client or 
potential client was bound to confidence 
regarding the structure. Accordingly, 
confidentiality agreements were 
regarded as a regulatory kiss-of-death 
for such offerings and trade secret 
protection as a predominant form of 
intellectual property protection 
disappeared virtually overnight. Thus, 
a regulatory push for transparency 
coupled with an internet-fueled pull for 
process re-engineering dictated the 
solution – have it both ways – that is, 
keep rights proprietary and at the same 
time embrace transparency: seek a 
patent. 
John A. Squires and Thomas S. Biemer, Patent Law 
101: Does A Grudging Lundgren Panel Decision 
Mean That The USPTO Is Finally Getting The 
Statutory Subject Matter Question Right?, 46 IDEA 
561, 565 (2006) (emphasis added).  
Others in the financial service industry have 
also emphasized the importance of patents to the 
industry in a submission in response to a proposed 
IRS Regulation that would discourage so-called “tax 
strategy” patents as follows: 
Beginning in the late 1990’s, 
patent issues became of increasing 
importance in the financial services 
industry primarily as a result of 
information technology advances, 
 
 
 
 
 

43 
 
deployment of those technologies by 
SIFMA [Securities Industry and 
Financial Markets Association] 
members and new legal precedent 
confirming an expansive U.S. patent 
regime.   From the outset, SIFMA and 
its predecessor organizations have been 
active voices in advocating for a patent 
system that achieves and maintains a 
balance between the rights of patent 
holders and the public’s right to access 
fundamental structures, and that 
promotes interoperability between the 
complex technologies comprising much 
of the financial services industry and 
financial market infrastructure.  
Letter from Patti McClanahan, Managing Director, 
SIFMA, to IRS (Jan. 31, 2008), available at 
http://www.regulations.gov/fdmspublic/component/m
ain?main=DocumentDetail&o=09000064803a89dd 
(emphasis added). 
The role of patents related to financial 
transactions, e-commerce and internet related 
activities in the economy is important.   Such 
patents, when deserved, should be awarded to 
encourage innovation, transparency, and add to the 
public warehouse of knowledge. 
 
 
 
 
 

44 
 
CONCLUSION 
While the Bilski majority did restate much of 
the relevant law on patent-eligible subject matter 
correctly, Amici Curiae respectfully submit that the 
majority deviates from this Court’s precedent and 
Congress’s mandate as discussed herein.  The 
appropriate analysis for determining patent-
eligibility of processes should not be limited to 
applications that are either tied to a computer or 
other machine or require a strict physical 
transformation.  A process under §101 is “an act or 
series of acts” which does not preempt a 
“fundamental principle.”  This Court should reject 
any effort to create a rigid short-hand analysis or 
other “governing” test. 
 
 
 
 
Respectfully submitted, 
 
 
 
 
Charles R. Macedo 
Counsel of Record 
Anthony F. Lo Cicero 
Norajean McCaffrey 
AMSTER, ROTHSTEIN & 
EBENSTEIN LLP 
90 Park Avenue 
New York, NY 10016 
(212) 336-8000 
Counsel for Amici Curiae 
August 6, 2009
 
 
 
 
 

A-1 
 
APPENDIX A 
DESCRIPTION OF AMICI CURIAE 
The various amici curiae sponsoring this 
submission (“Amici Curiae”) reflect mid-sized and 
smaller members of the financial service, e-
commerce, and computer-related industries.  While 
Amici Curiae do not advocate that the claims at 
issue are entitled to be patented, as reflected by the 
present submission, each of these Amici Curiae 
believe it is important to maintain a strong patent 
system that allows for all types of innovations that 
do not pre-empt a fundamental principle to remain 
patent-eligible subject matter. 
Double Rock Corporation is an industry leader 
in providing cash management services and 
technology solutions to the banking, broker-dealer, 
qualified plan and retail markets.  The principals of 
Double Rock developed an innovative product known 
as “insured deposits,” which provides financial 
institutions, including broker dealers and asset 
managers, with the ability to offer customers FDIC-
insured, interest bearing demand accounts, with 
unlimited checking.  Over the past decade, Double 
Rock has developed many improvements for systems 
and methods used to implement these and other 
financial service products.  These and other financial 
products are offered by its affiliates, LIDs Capital 
LLC, Intrasweep LLC and Access Control 
Advantage, Inc.  Double Rock's subsidiary, Island 
Intellectual Property LLC, owns and manages 
Double Rock's patent portfolio for its insured deposit 
products.  Without the promise of patent protection, 
 

A-2 
 
it would be difficult for Double Rock, as a relatively 
smaller player in the financial service industry, to 
invest in these innovative products. 
eComp Consultants is an intellectual property 
consulting and litigation support firm providing 
professional services in the areas of internet, 
telecommunications, and information technology. 
eComp Consultants consists of a collaborative staff 
of senior industry experts and executives to provide 
technology research, expert reports, deposition, trial 
testimony. 
 eComp Consultants specializes in 
advising attorneys and their clients on the technical 
aspects of patent infringement and portfolio 
valuation. eComp Consultants has a vested interest 
protecting the value of intellectual property and 
ensuring that patent law is forward looking and 
promoting innovation in all areas. 
Pipeline Trading Systems LLC operates the 
Pipeline Alternative Trading System (ATS) that 
enables institutions and brokerage firms to quickly 
and efficiently trade blocks of NYSE-listed 
companies, NASDAQ stocks, ADRs, and Exchange 
Traded Funds. Pipeline’s block execution system 
increases control, saves time and empowers the 
institutional trader to achieve unmatched execution 
performance on large orders. The Algorithm 
Switching Engine™ revolutionizes access to dark 
and displayed liquidity, predicting on a minute-by-
minute basis the best algorithm to implement the 
trader’s instructions. Its patent-pending predictive 
technology minimizes market impact while accessing 
significant sources of liquidity. 
 

A-3 
 
 
Rearden Capital Corporation is an investment 
company in a wide range of innovative technology.  
The principal of Rearden is an inventor on multiple 
issued patents and pending applications in a wide 
variety of subject matters ranging from systems and 
method for e-commerce, to renewable energy 
systems, communication devices, among other 
technologies.  Rearden has a strong belief that the 
patent system equalizes the small inventors and 
allows them an opportunity to contribute to the 
storehouse of human knowledge with less resources.   
Craig Mowry is an independent inventor and 
filmmaker living in New York.  Mr. Mowry has 
developed a wide range of inventions that are the 
subject of many pending patent applications and 
issued patents. 
 His inventions for interactive 
communication are revolutionary systems and 
methods which will improve the avenues for 
connecting internet users with relevant information 
and people of interest. These innovations will also 
allow the individual to participate in the visuals and 
programming seen by other people, around the 
world. His unique technology and methods for 
building these bridges through multi-media 
platforms rely on patent protection in funding and 
enabling their creation and ongoing improvement.   
PCT Capital, LLC, is an advisory and asset 
management firm focused on an emerging 
intellectual property (IP). PCT Capital recognizes 
that in the last 30 years, there has been a shift from 
a labor-driven economy to a knowledge-based 
 

A-4 
 
economy and that intangible assets such as IP have 
overtaken traditional capital assets such as real 
property, plant and equipment.   As a result, PCT 
Capital’s IP advisory team provides services to help 
companies (directly or via venture, private equity, 
buy-out and turn-around funds who invest in them) 
create, acquire, manage, dispose and monetize IP 
assets.