NEW: U.S. COURT OF APPEALS FOR THE FEDERAL CIRCUIT

King Pharmaceuticals, Inc. v. Eon Labs, Inc., No. 2009-1437, -1438, slip op. (Fed. Cir. Aug. 2, 2010) (Gajarsa, J.). The Federal Circuit held that the district court erred in ruling that four method claims directed to the administration of drug therapy were invalid under 35 U.S.C. § 101, because the district court did not consider the claims as a whole. Slip op. at 18, 24. However, the Federal Circuit affirmed the holding of invalidity on the alternative ground of anticipation. Slip op. at 19, 24, 29.

NEW: U.S. PATENT AND TRADEMARK OFFICE

On July 27, 2010, the PTO released examination guidelines in response to the U.S. Supreme Court’s decision in Bilski v. Kappos. Interim Guidance for Determining Subject Matter Eligibility for Process Claims in View of Bilski v. Kappos, 75 Fed. Reg. 43,922 (Jul. 27, 2010). The notice supplements the previously-issued Interim Examination Instructions for Evaluating Subject Matter Eligibility under 35 U.S.C. § 101, 74 Fed. Reg. 47,780 (Sept. 11, 2009), and the Memorandum, Supreme Court Decision in Bilski v. Kappos, from Robert W. Bahr, Acting Assoc. Comm'r for Patent Examination Policy, US PTO, to Patent Examining Corps (Jun. 28, 2010). The notice includes a reference sheet of factors examiners should consider when analyzing method claims that may be directed to an abstract idea. 75 Fed. Reg. 43,927-28. Comments may be submitted through Sept. 27, 2010. The document is available at www.uspto.gov/patents/law/notices/75fr43922.pdf.
The 2009 Interim Examination Instructions are available at www.uspto.gov/patents/law/comments/2009-08-25_interim_101_instructions.pdf
The June 28, 2010 Memorandum is available at www.uspto.gov/patents/law/exam/bilski_guidance_28jun2010.pdf.

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U.S. SUPREME COURT

Bilski v. Kappos, No. 08-964, slip op. (U.S. Jun. 28, 2010) (Kennedy, J.). Relying on its decisions in Benson, Flook, and Diehr, the Court held that Bilski’s claims, directed to a method for hedging risk in commodities transactions, are ineligible for patent protection under 35 U.S.C. § 101, because they attempt to “patent abstract ideas.” Slip op. at 13. Disagreeing with the Federal Circuit’s analysis in the decision below, the Court also held that the machine-or-transformation test is not the exclusive test for determining the eligibility of a claim to a process, but rather a “useful and important clue, an investigative tool.” Slip op. at 8. In this regard, the Court stated that it was “unaware” of a requirement in the statute that a process must be tied to a machine or transform an article. Slip op. at 7. The Court further stated that business methods are not categorically excluded from § 101. Slip op. at 10-11. Because the Court found that the claims are ineligible as “abstract ideas,” it declined to define the term “process” beyond the definition provided in 35 U.S.C. § 100(b) and the “guideposts” in Benson, Flook, and Diehr. Slip op. at 16. Justices Stevens and Breyer filed separate concurring opinions.

The Court disposed of the cert. petitions in the following three matters on Jun. 29, 2010:

Prometheus Laboratories, Inc. v. Mayo Collaborative Services, 581 F.3d 1336 (Fed. Cir. 2009), cert. granted, judgment vacated, and remanded (U.S. Jun. 29, 2010) (No. 09-490). Mayo sought review of the Federal Circuit’s ruling that claims directed to a method of determining a therapeutically-effective dosage of a pharmaceutical are eligible for patent protection under 35 U.S.C. § 101. Disagreeing with the lower court’s conclusion that the claims recite non-statutory natural phenomena and wholly preempt the use of those phenomena, the Federal Circuit found that the claims satisfy the transformation prong of the test in Bilski. The Federal Circuit stated that “the methods of treatment claimed in the patents in suit squarely fall within the realm of patentable subject matter because they ‘transform an article into a different state or thing,’ and this transformation is ‘central to the purpose of the claimed process.’ ... The transformation is of the human body following administration of a drug and the various chemical and physical changes of the drug’s metabolites....” 581 F.3d at 1345-46, quoting Bilski, 545 F.3d at 962. The petition asserted that the claims “preempt all uses of the natural correlation between patient metabolite levels and patient health.” Petition for Writ of Certiorari, p. 14.
Docket: www.supremecourt.gov/Search.aspx?FileName=/docketfiles/09-490.htm

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In re Ferguson, 558 F.3d 1359 (Fed. Cir. 2009), cert. denied (U.S. Jun. 29, 2010) (No. 08-1501). The Federal Circuit held that claims directed to a method for marketing a product are not drawn to statutory subject matter under 35 U.S.C. § 101, as they failed both prongs of the machine-or-transformation test of Bilski. The court also held that claims directed to a “marketing paradigm for bringing products to market” are not drawn to patentable subject matter, as a “paradigm” does not fall within any of the four categories of § 101 (In re Nuijten), but rather is an abstract idea. In response to Ferguson’s petition, the Solicitor General had asked the Court to hold the petition pending a decision in Bilski.
Docket: www.supremecourt.gov/Search.aspx?FileName=/docketfiles/08-1501.htm

Classen Immunotherapies, Inc. v. Biogen IDEC, No. 2006-1634, -1649, slip. op. (Fed. Cir. Dec. 19, 2008), cert. granted, judgment vacated, and remanded (U.S. Jun. 29, 2010) (No. 08-1509). In a non-precedential opinion, the Federal Circuit affirmed a District of Maryland grant of summary judgment of invalidity under 35 U.S.C. § 101 of claims directed to methods for evaluating and improving the safety of immunization schedules, in view of the test in In re Bilski. The Federal Circuit stated that that the “claims are neither ‘tied to a particular machine or apparatus’ nor do they ‘transform[ ] a particular article into a different state or thing.’”
Docket: www.supremecourt.gov/Search.aspx?FileName=/docketfiles/08-1509.htm

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U.S. COURT OF APPEALS FOR THE FEDERAL CIRCUIT

Association for Molecular Pathology v. U.S. Patent and Trademark Office, No. 09-cv-4515, slip op. (S.D.N.Y. Mar. 29, 2010, amended Apr. 5, 2010) (Sweet, J.), appeal docketed, No. 2010-1406 (Fed. Cir. Jun. 22, 2010) (appeal from final judgment partially granting plaintiffs’ motion for summary judgment, denying defendant-appellant Myriad Genetics’ motion to dismiss the complaint, and granting defendant PTO’s motion for judgment on the pleadings). In the decision below, the district court held that composition claims directed to isolated DNA, containing sequences that are “products of nature,” are not drawn to patentable subject matter under 35 U.S.C. § 101. Slip op. at 103, 134-35. Distinguishing the method claims found statutory by the Federal Circuit in Prometheus Laboratories, Inc. v. Mayo Collaborative Services (see below), the court held that the method claims at issue here are also not drawn to patentable subject matter. Slip op. at 140, 135-49. The court stated that the claims are “directed only to the abstract mental processes of ‘analyzing’ and ‘comparing’ gene sequences,” slip op. at 141, and do not satisfy the transformation prong of the machine-or-transformation test of In re Bilski, slip op. at 143-49.
Next scheduled action: appellant’s brief due Aug. 23, 2010 (PACER).

Research Corporation Technologies, Inc. v. Microsoft Corp., No. 01-cv-658, slip op. (D. Ariz. Jul. 28, 2009), appeal docketed, No. 2010-1037 (Fed. Cir. Oct. 22, 2009) (appeal from order granting partial summary judgment). The district court had invalidated various method and apparatus claims in six patents directed to halftoning technology for color and grayscale images under 35 U.S.C. § 101, in view of the machine-or-transformation test of In re Bilski. Certain method claims were held valid under the transformation prong in light of the Federal Circuit’s discussion of In re Abele in Bilski. Slip op. at 14-25. At oral argument on Jun. 9, 2010, there was extensive colloquy concerning the § 101 issue (mp3 audio file available at oralarguments.cafc.uscourts.gov/mp3/2010-1037.mp3).
Next scheduled action: oral argument heard on Jun. 9, 2010; awaiting decision (PACER).

SIRF Technology, Inc. v. International Trade Commission, No. 2009-1262, slip op. (Fed. Cir. Apr. 12, 2010) (Michel, Clevenger, Dyk (author), JJ.). Method claims directed to GPS technology are eligible for protection under 35 U.S.C. § 101, as they satisfy the machine prong of the machine-or-transformation test of In re Bilski. The Federal Circuit held that “the claims at issue are properly directed to patentable subject matter as they explicitly require the use of a particular machine (a GPS receiver) and could not be performed without the use of such a receiver.” Slip op. at 23.

NOTE: The following five CAFC appeals had been stayed in view of the Supreme Court’s then-pending review of In re Bilski. The appellants in the respective matters must now submit a plan for further proceedings.

FuzzySharp Technologies. Inc. v. 3D Labs Inc., Ltd., No. C-07-5948 (N.D. Cal. Dec. 11, 2009), appeal stayed, No. 2010-1160 (Fed. Cir. Mar. 25, 2010) (appeal from order granting summary judgment). The district court held that method claims of U.S. Patent Nos. 6,172,679 and 6,618,047, directed to “visible surface detection” for three-dimensional computer graphics, are invalid under 35 U.S.C. § 101, as they do not satisfy the machine prong of the machine-or-transformation test of Bilski (the patent owner did not contend that the transformation prong applied, slip op. at 6).

DealerTrack, Inc. v. Huber, No. 06-cv-2335, slip op. (C.D. Cal. Jul. 7, 2009), appeals stayed, No. 2009-1566 and No. 2009-1588 (Fed. Cir. Oct. 27, 2009) (appeal from order granting summary judgment). The district court had ruled that the claims of U.S. Pat. No. 7,181,427, for a “computer aided method of managing a credit application,” are ineligible under 35 U.S.C. § 101 as they fail the machine prong of the machine-or-transformation test of In re Bilski. In light of its claim construction order and the specification, the district court found that the claims do not require a “particular machine.” According to the lower court opinion, the patent owner had conceded that the claims did not satisfy the transformation prong. Slip op. at 5.

Every Penny Counts, Inc., v. Bank of America Corp., No. 2:07-cv-042, slip op. (M.D. Fla. May 27, 2009), appeal stayed, No. 2009-1442 (Fed. Cir. Aug. 31, 2009) (appeal from order granting summary judgment). The patent asserted in the matter below concerns a “system for consumer payors to save and donate whenever they use cash at a point of sale terminal, write a check, use an ATM machine, or use a credit or debit card.” U.S. Pat. No. 6,112,191, abstract. Although the sole claim at issue recites a “system,” the district court construed the claim to be a process and held that it was not valid under 35 U.S.C. § 101, as it does not satisfy the machine-or-transformation test of Bilski.

CyberSource Corp. v. Retail Decisions, Inc., No. 3:04-cv-03268, slip op. (N.D. Cal. Mar. 27, 2009), appeal stayed, No. 2009-1358 (Fed. Cir. Jul. 30, 2009) (appeal from order granting summary judgment). In the matter below, the district court held that a claim directed to a method for detecting Internet credit card fraud and a claim directed to a computer-readable medium containing instructions for the method are invalid under the machine-or-transformation test of Bilski; a “Beauregard claim” is not exempt from this test.

Fort Properties, Inc. v. American Master Lease, LLC, No. 8:07-cv-365, slip op. (C.D. Cal. Jan. 22, 2009), appeal stayed, No. 2009-1242 (Fed. Cir. Jun. 11, 2009) (appeal from order granting summary judgment). The claims at issue are directed to methods for performing tax-deferred real estate exchanges and were allowed by the PTO under the “useful, concrete, and tangible” standard (slip op. at 5) (U.S. Pat. No. 6,292,788). The district court held that the claims are invalid under 35 U.S.C. § 101, as they do not satisfy the transformation prong of the machine-or-transformation test of Bilski (the patent owner did not contend that the machine prong applied).

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U.S. DISTRICT COURT

Accenture Global Services GmbH v. Guidewire Software, Inc., No. 07-826, slip op. (D. Del. Mar. 5, 2010) (Robinson, J.) (motion for summary judgment of invalidity stayed pending the U.S. Supreme Court’s decision in Bilski). The court discussed the subject matter eligibility of the claims in two patents, U.S. Patent No. 7,013,284, titled “Component based interface to handle tasks during claim processing,” and U.S. Patent No. 7,017,111, titled “Insurance file note generation method and system.” With regard to the transformation prong, the court found that the claims did not recite physical and tangible objects that could be the subject of a transformation. As to the machine prong, the court stated that, “it is not self evident that the patents are drawn to tangible inventions rather than to concepts, in violation of the ‘machine’ prong of Bilski.“ Slip op at 38.

Abstrax, Inc. v. Dell, Inc., No. 2:07-CV-221, slip op. (E.D.Tex. Oct. 7, 2009) (Folsom, J.) (order adopting Magistrate Judge’s report and recommendation). The patent at issue here, U.S. Pat. No. 6,240,328, is directed to a method of product assembly where assembly instructions are dynamically generated, based upon a product configuration model. In response to a motion for summary judgment of invalidity, the Magistrate Judge concluded that the claims are drawn to statutory subject matter under 35 U.S.C. § 101, as they satisfy the transformation prong of the machine-or-transformation test of In re Bilski. Report and Recommendation, slip op. at 5-6 (Sept. 11, 2009) (Everingham, U.S. Mag. J.). The district court agreed in light of the CCPA’s decision in In re Abele, finding that the configuration model “represents physical and tangible objects and their respective structures,” i.e., a particular article that can be transformed into a different state or thing. Slip op. at 6.

Automated Business Companies v. ENC Technology Corp., No. H-06-1032, slip op. (S.D.Tex. Sept. 30, 2009) (Lake, J.) (claim construction order). In construing method claims from U.S. Pat. No. 6,999,945, the court stated that the step of monitoring payments did not render the claims non-statutory even though the step could be performed by a person, relying upon In re Bilski, 554 F.3d 943, 958 (Fed. Cir. 2008) (“[I]t is inappropriate to determine the patent-eligibility of a claim as a whole based on whether selected limitations constitute patent-eligible subject matter.”). The court also found that the method claims in question satisfied the machine prong of the machine-or-transformation test, as they are tied to at least three machines. Slip op. at 69-70.

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U.S. PATENT AND TRADEMARK OFFICE

In January 2010, the PTO released a notice proposing a remedy for claims directed to computer readable-media, rejected under 35 U.S.C. § 101 on the grounds that the claims cover a signal, non-statutory subject matter under In re Nuijten. U.S. Patent & Trademark Office, Subject Matter Eligibility of Computer Readable Media (Jan. 26, 2010). The notice suggests that applicants add the limitation “non-transitory” to the claim, stating that typically, such an amendment should not introduce new matter. The notice is available at www.uspto.gov/patents/law/notices/101_crm_20100127.pdf, reprinted in 1351 U.S. Pat. & Trademark Off. Official Gaz. 212 (Feb. 23, 2010), available at www.uspto.gov/web/offices/com/sol/og/2010/week08/TOC.htm#ref20.

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