Week 8 - Eligible Subject Matter and Utility (I)

Diamond v. Chakrabarty Case Background

Chakrabarty's Oil-Eating Bacterium and the Patent Rejection In 1972, scientist Chakrabarty applied for a patent on a man-made bacterium that can break down crude oil, which could help clean up oil spills. The patent examiner approved his claims for the method and the straw-based delivery mix, but rejected his claim to the bacteria themselves because they were "products of nature" and living things.

Procedural History

The Case Moves Through the Lower Courts The Patent Office appeals board agreed that living things can't be patented, but a patent appeals court reversed, saying it doesn't matter that the bacteria are alive. After a remand in light of Parker v. Flook, the lower court ruled for Chakrabarty again, and the Supreme Court agreed to hear the case.

Legal Standard

Reading the Statute's Words Plainly The Court starts with the words of the statute, gives them their ordinary meaning, and refuses to add limits Congress did not write. Past cases have defined "manufacture" and "composition of matter" very broadly, which shows Congress meant patent law to cover a wide range of things.

History Supports a Broad Reading The patent law's key language goes back to a 1793 law written by Thomas Jefferson, who believed inventiveness should be generously rewarded, and it has stayed mostly the same since. When Congress updated the law in 1952, its reports said patents could cover "anything under the sun that is made by man".

Legal Reasoning

The Narrow Question Before the Court The Court says the case simply asks what the patent statute, Section 101, means. Specifically, it must decide whether Chakrabarty's bacterium counts as a "manufacture" or a "composition of matter".

What Cannot Be Patented, and Why This Bacterium Can Laws of nature, natural phenomena, and abstract ideas can't be patented, so no one could patent a new wild plant, E=mc², or gravity. Chakrabarty's bacterium is different because it does not occur in nature and is a product of human ingenuity.

Comparing This Case to Funk Brothers In Funk, the patent was rejected because the inventor only mixed natural bacteria that kept doing exactly what they always did. Chakrabarty instead created a new bacterium with very different traits from anything in nature, so his invention is "his own" and can be patented.

Denial of Legal Arguments

The Government's First Argument: The Plant Laws The government argued that Congress would not have needed the 1930 and 1970 plant protection laws if living things could already be patented. The Court rejects this, explaining that plants were left out before 1930 because people saw them as natural products, a view traced to an old Patent Office ruling on pine needle fiber.

The Description Problem and Congress's Fix A second barrier was that new plants, which may differ only in color or scent, were hard to describe in writing as patent law requires. Congress fixed both problems in the 1930 Act, and nobody in Congress claimed that living things could never be patented, except one Agriculture Secretary in a letter.

Living vs. Natural Is the Wrong Line The Court gives little weight to the Secretary's view, since he was asked about running the new law and not about what patents can cover. Congress's own reports show the real line is between products of nature and man-made inventions, not between living and nonliving things

The 1970 Plant Variety Act Doesn't Help the Government Seed-grown plants were left out of the 1930 Act only because, at the time, they couldn't be reliably reproduced true to type. Once that became possible, the 1970 Act extended protection, and nothing suggests Congress passed it because Section 101 excluded living things.

Why Bacteria Were Left Out of the 1970 Act Congress gave no reason for excluding bacteria from the 1970 Act, and the exclusion may have simply reflected an earlier court ruling or the fact that bacteria patents were already being issued. Without clear evidence that Congress focused on this issue, the Court won't read its silence as changing the plain meaning of Section 101

The Government's Second Argument: Let Congress Decide The government argued that because Congress never imagined genetic engineering, only Congress should decide whether such organisms can be patented. It relied on Flook, which warned courts to be careful about extending patents into areas Congress never foresaw.

Courts Interpret What Congress Wrote The Court agrees that Congress sets the limits of patent law, but says Congress already did so in Section 101, and the courts' job is to interpret it. The law's broad wording is not unclear, and Flook did not create a rule that unforeseen inventions can't be patented.

Unforeseen Inventions Deserve Protection Laws are not limited to the specific situations lawmakers had in mind, and this is especially true in patent law. Congress used broad language precisely because the most important inventions are often ones nobody could predict.

Warnings About the Dangers of Genetic Research The government and its supporters described serious risks of genetic research, including pollution, disease, loss of genetic diversity, and less respect for human life. The Court admits these concerns are powerful reminders that people can't always control what they create.

Policy Concerns Belong to Congress, Not Courts The Court says granting or denying patents won't stop genetic research; it may only speed it up or slow it down. More importantly, weighing these risks is a policy choice for Congress and the President, while the Court's job is only to decide what the statute's words mean.

Congress Can Change the Law Congress is free to amend the law to exclude genetically engineered organisms, as it did for atomic weapons inventions, or to write a special law for them. Until it does, the Court must apply Section 101 as written, and that language covers Chakrabarty's invention.

Dissent Main Argument

The Dissent Frames the Question Justice Brennan, joined by three other Justices, agrees the question is narrow because Chakrabarty's process patents are not in dispute. The only issue is whether Congress meant to let him own the living organism itself, and he believes the majority misread the law.

Dissent Legal Argument

The Plant Laws Show Congress's Limits The dissent argues that by passing the 1930 and 1970 plant laws, Congress dealt with patenting living things and chose carefully which ones to protect. In its view, these laws show that Congress understood Section 101 did not cover living organisms, including bacteria.

Why Pass the Plant Laws If They Weren't Needed? If new man-made organisms were already patentable, the dissent reasons, Congress would not have needed new laws to protect new plant varieties. Congress clearly believed it was doing something important, which means it thought anything outside those laws stayed unpatentable.

Congress Deliberately Excluded Bacteria The dissent stresses that the 1970 Act expressly excluded bacteria, showing Congress considered bacteria but chose not to protect them. It criticizes the majority for inventing reasons for this exclusion when the legislative history gives none.

Leave It to Congress The dissent says the majority's ruling extends patents to living material even though Congress clearly believed Section 101 didn't cover it. It concludes that it is Congress's job to broaden patent law, especially on matters of serious public concern like this one.

Dissent Legal Standard

Be Careful About Expanding Patents The dissent says patent law balances the nation's dislike of monopolies against the need to encourage progress, so courts should not stretch patents beyond what Congress allowed. It adds that Congress has not been silent here, so courts are not working in a "legislative vacuum".

Mayo Collaborative Services v. Prometheus Laboratories, Inc. Background

The Medical Dosing Patents at Issue The patents cover methods that help doctors figure out whether a dose of thiopurine drugs, used for autoimmune diseases, is too high or too low. The Court must decide whether these methods turn natural laws into patentable applications, and it concludes that they don't.

How Thiopurine Drugs Work in the Body When patients take thiopurine drugs, their bodies break them down into substances called metabolites, which show up in the blood. Because each person processes the drug differently, doctors have struggled to know whether a given dose is harmful or too weak.

What the Researchers Discovered Scientists already knew that certain metabolite levels were linked to whether a dose was harmful or ineffective, but they didn't know the exact numbers. The two patents identify specific blood levels that signal a dose is likely too high or too low.

The Dispute Between Prometheus and Mayo Prometheus, the exclusive licensee of the patents, sold tests based on them, and Mayo bought those tests until 2004, when it announced its own test using slightly different numbers. Prometheus sued, and the trial court found that Mayo's test infringed because its numbers were too close to the patent's, even if a doctor never actually changed the dose.

Procedural HIstory

The Lower Courts Disagree The trial court still ruled for Mayo because the patents essentially claimed natural laws. The Federal Circuit reversed, reasoning that giving the drug and testing the blood "transform" the body or the blood, which passed its "machine or transformation" test.

The Case Is Sent Back and Returns The Supreme Court sent the case back in light of Bilski, which held that the machine-or-transformation test is only a helpful clue and not the final word. The Federal Circuit reached the same result again, and the Supreme Court agreed to hear the case a second time.

Legal Reasoning

The Patents Describe Laws of Nature The Court says the patents describe natural relationships between metabolite levels and drug effects, and those relationships exist apart from any human action. The real question is whether the claims add enough to these natural relationships to become patentable applications, and the Court says no.

Breaking Down the Three Steps The "administering" step only identifies doctors who were already using these drugs, and the "wherein" step only tells doctors about the natural laws and trusts them to use that knowledge. The "determining" step tells doctors to measure metabolite levels with methods that were already well known and routinely used.

Together, the Steps Still Add Nothing Routine, obvious activity usually can't turn a natural law into a patentable invention, and combining the three steps adds nothing beyond what each step adds alone. In short, the claims just tell doctors to gather data and apply the natural correlations, which isn't enough for a patent.

This Patent Is Weaker Than Diehr The Court finds Prometheus's claim weaker than the claim upheld in Diehr and no stronger than the claim rejected in Flook. It simply tells doctors to measure, apply the natural law, and reconsider the dose, which amounts to "apply the law somehow".

Why Tying Up Natural Laws Is Dangerous Laws of nature are the basic tools of science, so patents that lock them up can block future innovation, especially when a patent just says "apply the law". Even though these laws are narrow, the patents tie up a doctor's treatment decisions whether or not the doctor changes the dose.

The Patents Reach Too Far The patents could block better treatment methods, like Mayo's test, and they cover any future way of measuring metabolites. Unlike a typical drug patent, these claims aren't limited to specific uses, which further supports the conclusion that they can't be patented.

Patents Are a Two-Edged Sword Patents encourage invention by offering rewards, but they can also slow progress by raising costs and requiring expensive searches and licensing deals. Because patent rules apply across many fields, courts should be careful about changing general rules, and Congress is better placed to write tailored rules if needed.

Denial of Legal Arguments

Rejecting the "Transformation" Argument The Court rejects the Federal Circuit's view that giving the drug and testing the blood "transform" things enough to make the claims patentable. Giving the drug only identifies the audience, blood testing might someday not require any transformation, and in any case the transformation test never overrides the natural-law rule.

Rejecting the "Narrow Law" Argument Prometheus argued that its natural laws are narrow and specific, but the Court says even narrow laws can block research, and their discovery adds less creative value. Courts aren't well equipped to sort natural laws by how narrow they are, so the cases use a clear, simple ban on patenting laws of nature.

Rejecting the Government's "Other Rules Will Screen It" Argument The government argued that other patent requirements, such as newness, non-obviousness, and clear description, could screen out weak claims like these. The Court says this would make the natural-law exception meaningless, create more legal uncertainty, and ask those other rules to do work they aren't designed for.

The Policy Debate Over Medical Research Prometheus and its supporters warned that denying these patents would hurt costly diagnostic research that has made the United States a world leader. Major medical groups disagreed, warning that such patents would create a "thicket" of rights over vital scientific data that doctors need.

Legal Standard

Saying "Apply the Law" Is Not Enough A process that recites a law of nature can't be patented unless it has extra features showing it is more than an attempt to own the law itself. Einstein couldn't patent his law just by telling operators to use it, and Archimedes couldn't patent his flotation principle just by telling boat builders to consult it.

The Diehr Rubber-Molding Case In Diehr, the Court upheld a patent on a rubber-molding process that used a known math equation to decide when to open the mold. The process was patentable because its other steps worked the equation into a larger, inventive process, rather than claiming the equation itself.

The Flook Alarm-Limit Case In Flook, the Court rejected a patent on a method of updating alarm limits in a chemical process using a math formula. The claim essentially gave only a formula, and its other steps were so well known that there was no inventive concept.

The Bilski Hedging Case In Bilski, the Court held that the idea of hedging against price changes was an abstract idea that could not be patented. Limiting the idea to certain markets or adding minor extra steps didn't change that result.

Don't Block Future Discoveries: The Morse Example The Court has repeatedly worried that patents should not tie up the future use of laws of nature. For example, Samuel Morse could not patent every use of electric current for long-distance messaging, because that would have blocked better inventions by others.

Alice Corporation Pty. v. CLS Bank International Background

The Question and the Court's Answer In an opinion by Justice Thomas, the Court considers patents on a computer-run system that reduces "settlement risk," meaning the risk that only one side of a financial deal will pay. The Court holds that the claims cover the abstract idea of using a middleman to settle deals, and that simply running it on a generic computer doesn't make it patentable.

Alice's Patents Alice Corporation owns several patents on schemes for managing certain kinds of financial risk. The patents describe the invention as methods and equipment, including computers and data systems, applied to finance and risk management.

How the Scheme Works The claims use a computer as a neutral middleman that keeps "shadow" records mirroring each party's real bank accounts and updates them as deals come in. The computer allows only deals the parties can afford, and at the end of the day it tells the banks to carry them out, which lowers the risk that only one side pays.

The Sample Method Claim The representative claim spells out the steps of creating shadow records, getting start-of-day balances, and adjusting the records for each deal while blocking deals that would overdraw an account. At the end of the day, the middleman instructs the banks to make the final, irreversible transfers.

Three Kinds of Claims, All Using a Computer The patents claim the method, a computer system that performs the method, and a computer-readable medium holding the program code. All of the claims depend on a computer, and the parties agreed that even the method claims require one.

Procedural History

The Lawsuit Begins CLS Bank, which runs a global currency-trading network, sued in 2007 to have Alice's patents declared invalid or not infringed, and Alice countersued for infringement. After the Bilski decision, the trial court ruled that all of the claims cover an abstract idea and can't be patented.

The Federal Circuit Splits A three-judge appeals panel first reversed, but the full Federal Circuit reheard the case and upheld the trial court in a one-paragraph ruling. Seven of ten judges agreed that the method and media claims were unpatentable, but the judges split evenly on the system claims.

Judge Lourie's View Judge Lourie, writing for five judges, applied Mayo by first identifying the abstract idea and then asking whether the rest of the claim adds "significantly more". He found the claims rested on the abstract idea of reducing settlement risk through a middleman, and that the computer added nothing meaningful.

Legal Standard

Why the Exception Exists and Its Limits The main worry is "pre-emption": giving one person control over basic tools of science and technology could block innovation instead of encouraging it. But since every invention uses these ideas at some level, an invention isn't ruled out just because it involves an abstract idea, and a useful application can still be patented.

Building Blocks vs. Something More Courts must separate patents that claim the basic building blocks themselves from patents that turn those building blocks into something more. The first type could lock up the underlying ideas and can't be patented, while the second type poses no such risk and can be.

The Two-Step Test from Mayo First, the Court asks whether the claims are aimed at an unpatentable concept, like an abstract idea. If so, it then looks at the rest of the claim, step by step and as a whole, for an "inventive concept" that makes the patent significantly more than the idea itself.

Legal Reasoning

Step One: Earlier Abstract-Idea Cases The Court concludes that the claims are aimed at the abstract idea of intermediated settlement, and it notes that a bare idea has never been patentable. It points to Benson, which rejected a patent on a number-conversion algorithm, and Flook, which rejected a formula for computing alarm limits.

The Bilski Hedging Case In Bilski, the claims described steps for hedging against price swings, and one claim turned the idea into a simple math formula. The whole Court agreed that hedging was an abstract idea because it is a basic economic practice taught in any introductory finance class.

Intermediated Settlement Is an Abstract Idea Alice's claims use a third-party middleman with shadow records to make sure only affordable deals go through, which is simply the idea of intermediated settlement. Like hedging, using a middleman or "clearing house" to reduce payment risk is an old, basic business practice, so it is an abstract idea.

Step Two: Looking for an Inventive Concept At step two, a claim built on an abstract idea needs extra features showing it is more than a clever attempt to own the idea, and just adding "apply it" isn't enough. In Mayo, for example, adding well-known, routine steps to natural laws about drug dosing failed to supply an inventive concept.

Adding a Computer Doesn't Change Things: Benson Bringing a computer into the claim doesn't change the step-two analysis. In Benson, running an algorithm on an ordinary computer did not make it patentable, because simply putting a math principle on a machine is not enough.

The Same Lesson from Flook In Flook, the alarm-limit formula was an abstract idea, and using a computer for automatic monitoring was already common. The case stands for the rule that limiting an abstract idea to a particular technical setting doesn't get around the ban.

Why Diehr Came Out Differently In Diehr, a computer-assisted rubber-curing process was patentable because it solved a real industrial problem, including taking constant temperature readings inside the mold that the industry couldn't previously get. It was eligible because it improved an existing technical process, not because it used a computer.

Apply It with a Computer" Is Not Enough Saying "apply it with a computer" just combines two already-insufficient moves, so a generic computer can't make an abstract idea patentable. If it could, anyone could patent any principle simply by claiming a computer set up to carry it out, which would let clever wording decide what can be patented.

Denial of Legal Arguments

Rejecting Alice's "Fundamental Truth" Argument Alice argued that abstract ideas include only timeless truths, like math formulas, that exist apart from human action. The Court disagrees, noting that hedging in Bilski was a way of organizing human activity rather than a truth about nature, and the case turned on hedging being a basic economic practice.

Alice's Method Steps and Its Main Argument The method claim's steps are creating shadow records, getting start-of-day balances, adjusting records as deals come in, and sending end-of-day instructions. Alice argued that the computer plays a substantial role and is itself the middleman, so the question is whether the claims do more than tell someone to run the idea on a generic computer.

Each Step Is Ordinary Computer Work Looked at one by one, each step uses the computer for routine tasks like electronic recordkeeping, getting data, updating balances, and sending automated instructions. In short, each step just has a generic computer do generic computer things.

The Steps Together Add Nothing Taken together, the steps simply describe intermediated settlement done by a generic computer, and they don't improve the computer itself or any other technology. They amount to nothing more than an instruction to apply the idea with an unspecified computer, which isn't enough for a patent.

The System and Media Claims Fail Too Alice admitted that its media claims stand or fall with its method claims, and it argued that the system claims recite specific hardware. The Court says the listed parts, like a "communications controller" and "data storage unit," are generic parts found in nearly every computer and add no meaningful limit.

Same Idea, Different Wording The system claims are really the same as the method claims, just described as a few generic computer parts set up to carry out the same idea. Allowing them would let clever drafting decide what can be patented, so the system and media claims are also unpatentable.

Contour IP Holding LLC v. GoPro, Inc. Background

Contour's Two Patents Contour owns two related patents, the '954 and the '694, and the second continues from the first. Because the two share nearly identical descriptions, the court refers to the '954 patent's description for both.

Point-of-View Cameras and Their Problem The patents cover hands-free point-of-view (POV) cameras, a fairly new product at the time, which action sports fans used to record scenes from their own perspective. When the camera is mounted somewhere the user can't see, such as a skier's helmet, the user can't watch what is being recorded or easily change the settings.

The Wireless Solution The patents add wireless technology so the camera can send live video to a device such as a cell phone, letting the user see what is being recorded. From the phone, the user can also adjust settings like lighting and audio before or during an activity.

The "Dual Recording" Feature In a key version, the camera records two videos at once, a high-quality one and a low-quality one, and streams only the low-quality version to the phone so it doesn't overload the wireless connection. The high-quality version is saved on the camera for later, and both claims at issue, with claim 11 treated as representative, reflect this feature.

Procedural History

The Case in Brief Contour sued GoPro, claiming that several GoPro point-of-view video cameras infringed its patents. After five years of litigation, the trial court ruled that Contour's claims couldn't be patented, but the Federal Circuit, in an opinion by Judge Reyna, reversed and sent the case back.

GoPro Challenges Eligibility In 2021, after the trial court had already found that GoPro's products infringed claim 11, GoPro argued that both claims couldn't be patented. GoPro relied heavily on Yu v. Apple, where the court held that camera claims covered the abstract idea of taking two pictures and using one to improve the other.

The First Challenge Is Denied Applying the Alice two-step test, the trial court denied GoPro's early motion and noted Contour's claimed solution of streaming low-quality video to a phone while storing high-quality video. It left the door open for GoPro to raise the issue again at summary judgment based on a full factual record

The Trial Court Sides with GoPro On GoPro's second try, the trial court found that the claim covered the abstract idea of creating and sending video at two resolutions and adjusting settings remotely. It also found that the camera parts only did basic, generic tasks, so it entered judgment for GoPro, and Contour appealed.

Legal Standard

The Basic Rules and Alice Step One Section 101 allows patents on new and useful inventions, but laws of nature, natural phenomena, and abstract ideas can't be patented. Under Alice step one, courts ask whether the claims are aimed at an abstract idea, and if they aren't, the analysis ends there.

Alice Step Two If the claims are aimed at an abstract idea, courts move to step two and ask whether the claims add "significantly more" than the idea itself. This means checking whether the claims include elements that turn them into a patentable application.

How to Analyze Step One The Federal Circuit disagrees with the trial court's step-one conclusion. At step one, courts look at what the claimed advance really is and must avoid describing the claims too vaguely or apart from their actual wording.

Results vs. Specific Methods Claims must focus on a specific way of improving technology, not just a desired result, because a better result alone isn't enough. Claims that cover results without saying how to achieve them raise concern because they could block everyone else from reaching the same result by any means

Legal Reasoning

Claim 11 Improves Camera Technology Read as a whole, claim 11 describes a specific way to improve POV cameras by recording low- and high-quality streams at the same time and sending the low-quality stream wirelessly. This lets users watch and adjust the recording live without hitting wireless bandwidth limits, which is a real technological improvement.

In Parallel" Narrows the Claim The trial court itself interpreted "generate" in claim 11 to mean recording the streams "in parallel," so the claim doesn't cover other methods, like recording them one after another. That makes the claim a specific method that improves the technology.

The Trial Court Was Too General The appeals court says the trial court described the claims so broadly that it ignored the specific technical means they recite. Describing claims that vaguely risks letting the exceptions swallow the rule, and here it led to the wrong conclusion.

Known Parts Don't Settle Step One GoPro argued that the claims just use known, conventional parts, but the court says that alone doesn't make a claim abstract at step one. The court also rejects GoPro's argument that earlier cases, especially Yu, decide this case.

Why Yu Is Different In Yu, everyone agreed that using multiple photos to improve each other had been a basic photography practice for over a century. Here, GoPro didn't argue that recording two streams at once and streaming the lower-quality one for live viewing was a long-known, basic practice.

Why ChargePoint Is Different In ChargePoint, claims for networked electric-car charging stations covered only the abstract idea of communicating over a network. Those claims didn't improve the charging station itself, while Contour's claim does more than send data wirelessly in a particular setting.

The Court's Holding Claim 11 makes the camera work differently than it otherwise could, offering a technical solution to a technical problem that the patent's description supports. Because the claims aren't aimed at an abstract idea, the court skips step two and reverses and sends the case back to the trial court.

Class Notes

35 USC 101

• New and useful process, machine, manufacture, or composition of matter, or any new and useful improvement

• Caveat: 14 and 33(a) of the AIA, doesn’t appear/codified in the federal code

• Process (method of making or method of using)

• Product: Apparatus (Machine or Device), Manufacture (made by hand), Composition of Matter (large overlap with other types of products)

• Improvement

DIamond v. Chakrabarty

• “anything under the sun that is made by man”

Patenting Biotechnology

• Purification and isolation of biotech only patentable if something different from derived matter

Computer Software

• Claim containing formula implements forumula in a structure or process

Business Methods

• State Street v. Signature: Useful and tangible result valid method patent

Mayo

• the steps add nothing of significance to the natural laws themselves

• anything to do with diagnostic is hard to patent