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University of Minnesota Law School
Cotter, Thomas F.

Patents Outline
Professor Tom Cotter
Fall 2010
Introduction and overview; pp. 1-55
A.    Historical Overview of Patent Law
·   Patent: document issued by U.S. government (the sovereign) that confers on inventor the RIGHT TO EXCLUDE.
Negative right- it's not a property right
·   Patent is a public record- want them to eventually become public domain
·   A lot of patent law is judge made law
·   Policy
I invented x, it belongs to me
·         Locke: labor + property = property
Personal v. Public Property
Ideas should be shared by everyone (Thomas Jefferson)
Social Benefits- utilitarian: promoting social good
·         Invention
·         Disclosure (public benefit!)
·         Innovation (protect, promote)
·         Financing (patent portfolios)
·         Coordination (avoid unnecessary duplication)
·         Growth
·         Improvement (if not in public, wouldn’t know how to put improvements on it)
·         Public Benefits (not all trade secrets)
Social Costs
·         Novelty_Nonobviousness are too difficult for judges to figure out
·         Individual honors can cause health of community to suffer
·         Stifles competition
·         Administrative cost
·         Access
·   However, it may also reduce invention for things for which there is not a large market (by adding costs onto producing a product)
·   License fragmentation
·   If patents last too long- royalty stacking
·         Monopoly
·   Lack of competition
·   COUNTER: most patents are not economic monopolies…
Advantages of the Patent System
Decentralization – no one “deciding” what should be invented – market decides
Alternatives to Patent System
·         Contracts
·   sell to you and promise not to duplicate
·   Can patent default rules be overcome by contract rules?
·         Trade Secrets
·   weaker & more vulnerable to lose
·   does not provide public benefit of disclosure
·         Gov spending, tax breaks on R/D
·         Private/Gov Prizes
B.      The Architecture of a Modern Patent
C.      Basics of Claim Drafting
D.      Overview of the Patent System
1. Patent Prosecution
a.       File application with USPTO
b.       Patent examiner decides if it fits statutory requirements
c.        Usually publish patents 18 months after filed
d.       Prosecution process takes about 3 years (18 hrs spent on e/ app)
e.        Grant: on that date it becomes enforceable
f.        Expire: 20 years after the date of filing
g.        Rejection: U.S. PTO (Board of Patent Appeals & Interferences)  US COA for Fed Cir (specialized Appellate Court)  USSC
2. Enforcement Actions
a.       Infringement & Declaratory Judgment Actions  US District Courts  US COA for Fed Cir.  USSC
Patentable Subject Matter (p67-187; Supp p1-26)
A.    Introduction to the Patent Act
§ 101. Inventions Patentable
·         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.
·         PSM Categories
1. Processes (methods)
2. Machines (apparatus)
3. Articles of manufacturing
4. Compositions of matter
·         Patent Types
1. Utility Patents (protects the way an article is used or works)
2. Plant Patents
3. Design Patents (protects the way an article looks)
·         Non-patentable Categories
1. Abstract Ideas
2. Naturally Occurring Physical Phenomenon (found by man)
3. Laws of Nature
Diamond v. Chakrabarty (1980—p68)- expands view of § 101
·         Patentee tried to claim bacteria- patent examiner said it was not patentable because it was a product of nature
·         § 101: Invention of any new and useful process… — just legislative judgment
·         “includes anything under the sun made by man”
·         statutory interp- Congress deliberately chose broad language
“composition of matter = all compositions of two or more substances and…all composite articles, whether they be the results of chemical union, or of mechanical mixture, or whether they be gases, fluids, powders, or solids”
Example of expansive language
·         Congress focus on products of nature v. non-products of nature NOT living things v. non-living things
·         “The claim is to a non-naturally occurring manufacture or composition of matter – a product of human ingenuity”
·         RULE: all living things can be protected under general patent statute by utility patents
·         broad view of what is or not patentable
B.     The Bar to Patenting Laws of Nature, Physical Phenomena and Abstract Ideas
1.       Historical Foundations
O’Reilly v. Morse (1854—p79)
·         8th Controversial Claim: I do not propose to limit myself to the specific machinery or parts of machinery described in the foregoing specs and claims; the essence of my invention being the use of the motive power of the electric or galvanic current, which I call electro-magnetism, however developed
·         “however developed”
·         not limiting claims to his own invention
·         tried to cover too many improvements
·         broader than invention disclosed in patent specs (enablement problem?)
·         use of magnetism w/o regard to particular process with which it was connected in patent could not be claimed- its use in that connection could be patentable.
·         RULE: laws of nature are not patentable!
·         this might not be entirely accurate…
·         He could get a patent on the application of the principle.  Even if used in a generic way – that might be a way to cover multiple embodiments.
The Telephone Cases (1888—p92)
·         Bell did NOT claim electricity in its natural state, but putting a continuous current in a closed circuit – without particular change in its condition, it cannot serve as a medium for speech.
·         kept claims tightly correlated to his own contribution to the art
·         Bell patented application of principle __ Morse tried to patent the principle
Lab Corp of America v. Metabolite Labs, Inc. (2006—p98)
·         SC asks the question on their own whether a method patent can claim a monopoly over basic scientific relationships? (cert. eventually dismissed, but some dissenting commentary)
·         Fed Circuit affirmed the lower ruling, upholding the claim as vali
·         Correlation b/t high levels of homocysteine in the blood and vitamin deficiency
·         Claim 13 – is the correlation just a phenomenon of nature than cannot be patented?
·         Testing (by any method)
·         Correlation
·         Mental processes, abstract intellectual concepts
·         DISSENT: it is just a natural phenomenon
·         Respondents try to argue that it’s a “process”- just instructions on how to read numbers in light of medical knowledge.
·         While the dissent thinks the claim is too broad – I think that by just including a few more steps – the claim would arguably be patentable, yet yield very little to no ground than claim 13
·         Suing Lab Corp for inducing doctors to infringe
2.      Patenting Natural Substances and Living Things
a. Patenting of Purified Natural Substances
Parke-Davis & Co. v. H.K. Mulford & Co. (1912—p106)
·         Invention on purifying a naturally occurring substance is a PSM – is actually for the purified product
·         inventor created something that we don’t find in nature…modified version of naturally occurring substance (thought to only exist as a salt – inventor purified a base-only version)
·         has new utility and new application
·         the opinion emphasized that the purification really created a new thing – as such, the difference is in kind and NOT in purity
·         Application: patents on DNA sequences…
·         Other Issues: Purified substance have a new function? Or is a new quality or function which it does not possess in its natural condition?
·         This is really current law.
b.       Patenting of Simple Organisms and Plants
Funk Bros. Seed Co. v. Kalo Inoculant Co. (1948—p113)- more about obviousness??
·         Bacteria qualities, heat of the sun, electricity are part of the “storehouse of knowledge of all men.”
·         Product patent was for an aggregation of species – combination did not produce new bacteria – each species had the same effect it always had; the bacteria perform in their natural way
·         The invention was new and useful, but did not satisfy the requirements of invention or discovery.
·         “Nature’s Library”- once discovered law of nature- application is obvious—what about telephone cases???
·         Possibly really only a distinction in degree between this and Chakrabarty – the amount of human intervention needed to produce the end product
c.        Patenting of Multicellular Creatures and Higher Life Forms
·         Myriad Case (YEAR)
·         Oncomouse
·         Professor Newman’s patent on human-animal chimeras
·         PTO response- invention is PSM if it ‘embraces a human being’
3.      The Software Controversy: Benson and Its Progeny
·   Patent law not meant to accommodate software
Copyright/Trade Secrets- other possible ways to protect
·         Copyright- minimal protection- only for copying not for ideas
·         Trade Secret- can still decompile/reverse engineer
·   PSM- just math formulas?
Gottschalk v. Benson (1972—p131)
·         Invention: process of converting data in binary-coded decimal format to pure binary format via an algorithm programmed into a digital computer
Algorithm had no other use; claims pre-empted all uses of algorithm
·         Algorithm (procedure/method for converting numbers) was NOT patentable
·         Like law of nature- no practical application or limited to specific use/end result
·         Process claim too abstract and sweeping- covers both unknown and known uses of the BCD to pure binary conversion
·         Idea is not patentable
·         Basic tools of scientific and technological work
·         Limited to just these facts, not the entire software field.
·         CONCLUSION: “mental processes,” “processes of human thinking,” and “systems that depend for their operation on human intelligence alone” are not patent-eligible subject matter
Could be something of an abstract idea or a law of nature
Additionally, there might be some hints of overbreadth in the claims (think Morse) – maybe doesn’t fit within the concrete (definite), tangible (non-abstract), and useful (has utility)
Parker v. Flook (not in casebook 1978)- limited view on PSM for software
·         Court found process involving an initial measurement step for updating alarm limits with a catalytic conversion process still unpatentable
·         Only inventive part was algorithm
·         This was still much closer tied to invention

cts or substances
·         Do not represent physical objects or substances
·         Mental/math process of identifying transactions that would hedge risk
·         Pre-empt any application of the fundamental concept of hedging and mathematical calculations inherent in hedging
·         Types of Transformation that is Sufficient
·         Chemical or physical transformation of physical objects or substances
·         Raw materials of information age (electronic signals and e-manipulated data)???
·         Abele: transformation of raw data into a particular visual depiction of a physical object on a display
·         Electronic transformation of data itself into a visual depiction that represent special physical objects or substance would have been enough- not pre-empt all uses of that principle
·         Not enough: adding data-gathering step to algorithm
·         Grams: performing clinical test – based on data – determining if abnormality exists (every algorithm inherently requires gathering of data)
3.       Caveat – NO!
·         Caveat that valid process patent might issue with machine-or-transofrmation test not repeated in Diehr.
·         Recognize that SC might ultimately decide to alter or perhaps set aside this test to accommodate emerging technologies
·         Other Considerations:
1.       Nonobviousness & utility have no place in § 101 considerations
2.       Inappropriate to determine the patent-eligibility of a claim as a whole based on whether selected limitations constitute patent-eligible subject matter
·         Flook: patent claim must be considered as a whole
·         Even if a fundamental principle itself is not patent-eligible, processes incorporating a fundamental principle may be patent-eligible
o    XXX
·         REJECTED
o    Freeman-Walter-Abele Test
1.       Determine whether claim recites an “algorithm” within meaning in Benson
2.       Determining whether that algorithm is “applied in any manner to physical elements or process steps”
o    UCT  Test (State Street, set forth in Alappat)
o    “Technological Arts” Test
·         too much confusion on what is “technological”
·         ambiguous and ever changing
o    Categorical Exclusions
·         Business method exceptions (State Street)
o    Comiskey’s Physical Steps
·         “bars any claim reciting a mental process that lacks significant ‘physical steps’ ”
·         Misunderstanding
·         Machine-or-transformation test applied
·         AT&T: reject a “physical limitation” test
·         Input, calculate, output, and storing numbers- not render it nonstatutory subject matter
·         Court rejects idea that a mentally-practiced invention is unpatentable
·         Still Left Unanswered
o    Tied to a Particular Machine
·         Elaboration of the precise contours of machine implementation
·         Whether or when recitation of a computer suffices to tie a process claim to a particular machine
·         Main Crux: pre-emption of all uses of principle
CONCLUSION: Business methods and Software can be patentable
·         Algorithms are the inventive part and software is a specific application of a law of nature
·         Promotion v. Reward
·         How can you patent thoughts?  — intrusive on human liberty/autonomy?
·         Maybe PSM deficiencies are covered in other areas: utility, nonobviousness, etc.
·         Business Method: how do you define this?
o    If A keeps it BM a trade secret and B later patents it, A gets excluded
·         In U.S., A does not get “prior user rights”- inequitable
C.    Field Restrictions: Business Methods, Medical Procedures, and Other Disfavored Areas
Article 27: Patentable Subject Matter
1.      Business Methods: Part 2 of State Street
State Street Bank & Trust Co. v. Signature Financial Group, Inc. (1996—p166)
State Street Bank & Trust Co. v. Signature Financial Group, Inc. (1998—p167)
2.      Medical Procedures
§ 287(c)
·         Congress allows patents on medical procuedures
o    does not apply to doctors/health care providers: no remedy
§ 281/284/285
·         damages/injxn/atty fees                               
3.      Software
Article 52- Patentable Inventions
4.      Sports Moves
·         Post-Bilski: if the sports tool is a particular machine or apparatus- it can be patentable