in re bilski
DESCRIPTION
In re Bilski. A very SMALL decision on a very BIG issue!. Federal Circuit (2008) (en banc) Decided: October 30, 2008. Claim 1. A method for managing the consumption risk costs of a commodity sold by a commodity provider at a fixed price comprising the steps of: - PowerPoint PPT PresentationTRANSCRIPT
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In re BilskiIn re Bilski
Federal Circuit (2008) (en banc)
Decided: October 30, 2008
A very SMALL decision on A very SMALL decision on
a very BIG issue!a very BIG issue!
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Claim 1A method for managing the consumption risk costs of a commodity sold
by a commodity provider at a fixed price comprising the steps of:
(a) initiating a series of transactions between said commodity provider and consumers of said commodity wherein said consumers purchase said commodity at a fixed rate based upon historical averages, said fixed rate corresponding to a risk position of said consumer;
(b) identifying market participants for said commodity having a counter-risk position to said consumers; and
(c) initiating a series of transactions between said commodity provider and said market participants at a second fixed rate such that said series of market participant transactions balances the risk position of said series of consumer transactions.
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Claim 1: Layman Example
MINE:
Sensitive to lower coal prices
Power Plant:
Sensitive to rising coal prices
TRADERS:
Buy/Sell at fixed cost
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Procedural Posture
• Examiner rejected the claims under § 101(no analysis under §102 or 103)
• BPAI– Affirmed the Rejection– Found that claims were “broad enough to read
on performing the steps without any machine or apparatus”
• Federal Circuit – Affirms § 101 rejection
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Issue Presented
“what the term ‘process’ in §101 means, and how to determine whether a given claim [] is a ‘new and useful process.’”
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Holding
Adopts the machine or transformation test for judging the eligibility of a process for patent protection.
“Therefore, although invited to do so by several amici, we decline to adopt a broad exclusion over software or any other such category of subject matter beyond the exclusion of claims drawn to fundamental principles set forth by the Supreme Court.”
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Machine or Transformation Test
A claimed process is surely patent-eligible
subject matter under § 101 if:
(1) it is tied to a particular machine or apparatus, or
(2) it transforms a particular article into a different state or thing.
Slip op. at 10.
(reasoned from Benson case – SCOTUS)
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Quasi-Holding?
A patentable process is like pornography:
we cannot define it, but
we know it when we see it!*
*not the words of the CFAC
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So what is a “particular machine”?
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Prong 1: Machine
A particular machine is . . .
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Prong 1: Machine
"We leave to future cases the elaboration of the precise contours of machine implementation, as well as the answers to particular questions, such as whether or when recitation of a computer suffices to tie a process claim to a particular machine."
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So what is a satisfactory
“transformation”?
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Prong 2: Transformation
• Must transform a type of “article”
• “must be central to the purpose of the claimed process”
• must “impose meaningful limits on the claim's scope”
• cannot “be insignificant extra-solution activity”
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Court’s Logical Analysis
1. We know that natural principles aren't patentable.2. We know it is difficult to determine what is and what is
not a natural principle.3. The SCOTUS told us that there are two ways to tell if
something is not a natural principle:– A. If it is tied to a machine or– B. If it transforms the subject matter
4. Therefore, the only way for a process to be patent eligible is to be tied to a machine or tranform subject matter.
5. In order to make sure all principles are excluded, insignificant post-solution machines or transformations don't count.
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Where The Judges Came Down
Judge Newman’s Dissent
Judge Rader’s Dissent
Scope of § 101Broad Narrow
Majority + conc.
Judge Mayer’s Dissent
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So How Will the PTO Treat This?
Ex parte Langemyr (post Bilski argument)– “method executed in a computer apparatus”– Process “does not require any physical output
into the real world.” (fails under prong 2)– “the limitation that the method is ‘executed in
a computer apparatus’ does not tie the method to a ‘particular machine.’” (fails prong 1)
– BPAI states that the general applicability to all computers caused it to fail
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Treatment by the PTO (cont.)
Ex parte Wasynczuk– “computer-implemented” process– Broadest claim invalid - “the sole structural limitation
recited is the ‘computer-implemented system’ of the preamble”
– Dependent claim where one step is performed by first “computer” and second step is performed by second “computer” IS ALLOWED!
– two “physical computing devices” operating together “is ‘a particular apparatus’ to which the process is tied”
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Talking Points
• What is sufficient to qualify as a “particular machine”?
• Is data physical such that its transformation should qualify?
• How should software claims be drafted moving forward?