The Federal Circuit Finds Mental Process Unpatentable
By Audrey Millemann
Patentable subject matter (i.e. what kinds of things can be patented) includes processes, machines, articles of manufacture, and compositions of matter. 35 U.S.C. §101. Abstract ideas, natural phenomena, and laws of nature are non-patentable (or non-statutory) subject matter. Computerized methods of doing business are increasingly likely to be rejected as non-patentable subject matter by the PTO, and the courts are becoming more likely to affirm these rejections. In re Comiskey, 499 F.3d 1365 (Fed. Cir. Sept. 20, 2007) is such a case.
Comiskey filed a patent application in 1999, claiming a method for performing mandatory arbitration of one or more documents. Claim 1 contained the following steps: registering the document and its author; inserting an arbitration provision into the document; enabling the complaining party to request arbitration; conducting an arbitration; supporting the arbitration; and determining an arbitration award. Claim 1 did not require the use of a computer, although the specification described an automated system and method and several dependent claims required an Internet connection or other electronic communication.
Not surprisingly, especially to lawyers who have been utilizing arbitration for many years, the PTO rejected most of Comiskey’s claims as obvious under §103 and repeated the rejection in four more office actions through the prosecution of the application. Comiskey appealed to the Board of Patent Appeals and Interferences, who affirmed the examiner’s rejections. Comiskey then appealed to the Federal Circuit.
The appellate court asked Comiskey and the PTO to brief the issue of patentable subject matter under §101. Comiskey contended that the court should not be permitted to rely on a new basis for rejecting the claims, but that even if §101 was considered, the claims satisfied its requirements. The court held that it could decide the case based on §101, even though the examiner had not made a rejection under that section.
The PTO asserted that Comiskey’s claims were not patentable subject matter, arguing that the claims were directed to an abstract idea because they did not require a particular machine and did not alter the state of a starting material. Rather, the PTO argued, Comiskey’s claims dealt with how humans interact in resolving disputes.
The court held that many of Comiskey’s claims were non-patentable subject matter under §101, citing two leading cases on the subject, Diamond v. Diehr, 450 U.S. 175, 188 (1981) and State Street Bank & Trust Co. v. Signature Financial Group, Inc., 149 F.3d 1368, 1372 fn 2 (Fed. Cir. 1998). The court emphasized that the questions of novelty and obviousness are never reached unless §101 is first satisfied. “Only if the requirements of §101 are satisfied is the inventor allowed to pass through to the other requirements for patentability, such as novelty under §102 and, of pertinence to this case, non-obviousness under §103.” Id. at 1371.
The court reviewed the case law dealing with the patentability of business method inventions, emphasizing that the courts have clearly found abstract ideas to be non-patentable. The court identified two key concepts. First, abstract ideas with no practical application are not patentable. Id. at 1376. For example, a method for converting binary-coded decimal numerals into binary numerals was found not patentable because the claim would completely pre-empt the mathematical formula and allow a patent on an idea. Gottschalk v. Benson, 409 U.S. 63 (1972). The court explained that a mathematical algorithm must produce “a useful, concrete, and tangible result” to be patentable. Id. at 1376, quoting AT&T Corp. v. Excel Communications, 172 F.3d 1352 (Fed. Cir. 1999).
Second, in order to be patentable, an abstract idea, as used in a method claim, must be embodied in, or operate, transform, or involve another class of statutory subject matter. As explained by the Supreme Court, an abstract idea as used in a method claim must either be tied to a specific apparatus or operate or transform a machine, article of manufacture, or composition into a different state. See Parker v. Flook, 437 U.S. 584 (1978). In other words, a claim that involves an abstract idea as well as one of the other classes of statutory subject matter may be patentable. Id. at 1377. However, a mental process or a process of human thinking is not patentable standing alone even if it does have a practical application. Id.
Based on this analysis, the appellate court held that Comiskey’s claims were not patentable subject matter. The claimed invention was a business system for arbitration that depended on a mental process. Comiskey’s independent claims did not require a machine and did not describe an alteration in the state of another class of patentable subject matter. According the court, “Comiskey…seek[s] to patent the use of human intelligence in and of itself.” Id. at 1379.
With respect to Comiskey’s claims that did require a use of a machine, the appellate court found these claims to contain patentable subject matter. “When an unpatentable mental process is combined with a machine, the combination may produce patentable subject matter…” Id. However, the court believed that these claims were likely to be unpatentable under §103 as obvious. The court stated, “The routine addition of modern electronics to an otherwise unpatentable invention typically creates a prima facie case of obviousness”. Id. at 1380. The court remanded the case to the PTO to determine whether these claims were nonobvious.