Patent Baristas

Some days, you have to ask yourself if certain patent applications are filed purely for having them rejected and, in doing so, attempting to move back the line of just what is patenable.  Such it seems with the application at hand in In re Stephen w. Comiskey (06-1286).The U.S. Court of Appeals for the Federal Circuit, sitting en banc, heard an appeal from the U.S. Patent and Trademark Office and vacated the earlier judgment in this case.  Stephen Comiskey appealed the earlier decision of the Board of Patent Appeals and Interferences affirming the examiner’s rejection of the patent application as obvious in view of the prior art and therefore unpatentable under 35 U.S.C. § 103.

The Federal Circuit decided not to go with the Board’s obviousness rejection of the independent claims under § 103 but instead held that Comiskey’s independent claims 1 and 32 and most of their dependent claims are unpatentable subject matter under 35 U.S.C. § 101.

Comiskey’s patent application No. 09/461,742 claims a method and system for mandatory arbitration involving legal documents, such as wills or contracts.  That’s right, according to the application, the claimed “program . . . requires resolution by binding arbitration of any challenge or complaint concerning any unilateral document . . . [or] contractual document.”

Independent claim 1 recites a “method for mandatory arbitration resolution regarding one or more unilateral documents” involving the following steps:

First, the unilateral document and its author are enrolled.

Second, arbitration language is incorporated in the unilateral document requiring that any contested issue related to the document be presented to the pre-chosen arbitration program for binding arbitration.

Third, the method “requir[es] a complainant [sic] to submit a request for arbitration resolution.”

Fourth, the method conducts arbitration resolution.

Fifth, the method provides “support to the arbitration.”

Finally, the method determines “an award or decision . . . [that] is final and binding.”

After Comiskey filed his patent application with the USPTO, the examiner rejected certain claims under 35 U.S.C. § 103(a) as unpatentable over Ginter, U.S. Patent No. 6,185,683, in view of Perry, U.S. Patent No. 5,241,466, and Walker, U.S. Patent No. 5,794,207.Ginter discloses an electronic system for securely delivering documents from the sender to the recipient through the electronic equivalent of a “personal document carrier” that can validate transactions as well as actively participate in the transaction by, among other things, providing arbitration.

Walker discloses an electronic system that allows buyers to submit binding purchase offers and sellers to create contracts by accepting a purchase offer on its terms.  It also teaches the inclusion of language in the purchase offers “requiring that both parties submit to binding arbitration of all disputes” and suggests that a “central controller . . . can support the arbitration process by providing an arbiter for each dispute.”

Perry discloses an electronic central depository for secure storage and rapid retrieval of unilateral documents such as wills.

Comiskey filed an amendment after final rejection on August 29, 2001, “to more distinctly claim and particularly point out” the aspects of his invention that he believed were novel, namely pre-enrolling the person in a mandatory arbitration system, including language in the document requiring submission of disputes to this pre-chosen system, and enabling a person to submit a dispute pertaining to the document to this pre-chosen system for binding arbitration.

After finally being rejected and appealed, the Board affirmed the examiner’s rejection, concluding that the combination of Ginter and Walker rendered this claim obvious.

Not happy to let this case go on something as mundane as an obviousness rejection, the Federal Circuit substituted its own rejection by concluding that many of the claims were “barred at the threshold by § 101” under Diamond v. Diehr:

It is well-established that “[t]he first door which must be opened on the difficult path to patentability is § 101.”  State St. Bank & Trust Co. v. Signature Fin. Group, Inc., 149 F.3d 1368, 1372 n.2 (Fed. Cir. 1998) (quoting In re Bergy, 596 F.2d 952, 960 (CCPA 1979)).  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.

It is well-established that “whether the asserted claims . . . are invalid for failure to claim statutory subject matter under 35 U.S.C. § 101, is a question of law which we review without deference.”  AT&T Corp. v. Excel Commc’ns, Inc., 172 F.3d 1352, 1355 (Fed. Cir. 1999).

Comiskey’s application may be viewed as falling within the general category of “business method” patents.  The Federal Circuit felt it necessary to lay out how things have changed:

At one time, “[t]hough seemingly within the category of process or method, a method of doing business [was] rejected as not being within the statutory classes.”  State St. Bank, 149 F.3d at 1377 (quoting MPEP § 706.03(a) (1994)).  In State Street Bank, we addressed the “business method” exception to statutory subject matter, and stated that “[w]e take this opportunity to lay this ill-conceived exception to rest.”  Id. at 1375.  State Street Bank involved “a data processing system for managing a financial services configuration of a portfolio established as a partnership,” and “[g]iven the complexity of the calculations, a computer or equivalent device [wa]s a virtual necessity to perform the task.”  Id. at 1371.  We held that this system was patentable, concluding that patentability does “not turn on whether the claimed subject matter does ‘business’ instead of something else.”  Id. at 1377.

Patentable subject matter under the 1952 Patent Act is extremely broad.  Given the breadth of the categories listed in § 101, it is not surprising that the legislative history of the 1952 Act noted that “Congress intended statutory subject matter to include anything under the sun that is made by man.”  Chakrabarty, 447 U.S. at 309.  On the other hand, the Supreme Court has made clear that this statement does “not . . . suggest that § 101 has no limits or that it embraces every discovery.”

“Abstract ideas” are one type of subject matter that the Supreme Court has consistently held fall beyond the broad reaches of patentable subject matter under § 101.  The prohibition against the patenting of abstract ideas has two distinct (though related) aspects.  First, when an abstract concept has no claimed practical application, it is not patentable.  The Supreme Court has held that “[a]n idea of itself is not patentable.”

Where a claim was for a method of converting binary-coded decimal numerals into pure binary numerals that was “not limited to any particular art or technology, to any particular apparatus or machinery, or to any particular end use,” the claim would therefore “wholly pre-empt the mathematical formula and in practical effect would be a patent on the algorithm itself,” the claim was unpatentable because its “practical effect” was to “patent an idea” in the abstract.

Second, the abstract concept may have a practical application.

Here, the Federal Circuit frames it as such:

The Supreme Court has reviewed process patents reciting algorithms or abstract concepts in claims directed to industrial processes.  In that context, the Supreme Court has held that a claim reciting an algorithm or abstract idea can state statutory subject matter only if, as employed in the process, it is embodied in, operates on, transforms, or otherwise involves another class of statutory subject matter, i.e., a machine, manufacture, or composition of matter.  35 U.S.C. § 101.

Thus, a claim that involves both a mental process and one of the other categories of statutory subject matter (i.e., a machine, manufacture, or composition) may be patentable under § 101.  See Diehr, 450 U.S. at 184 (holding a process that involved calculations using the “Arrhenius equation” patentable because the claim “involve[d] the transformation of an article, in this case raw, uncured synthetic rubber, into a different state or thing”).  For example, we have found processes involving mathematical algorithms used in computer technology patentable because they claimed practical applications and were tied to specific machines.

However, mental processes—or processes of human thinking—standing alone are not patentable even if they have practical application.  The Supreme Court has stated that “[p]henomena of nature, though just discovered, mental processes, and abstract intellectual concepts are not patentable, as they are the basic tools of scientific and technological work.”

So, what about Comiskey’s application?  It was deflated as the court held:

Comiskey has conceded that these claims do not require a machine, and these claims evidently do not describe a process of manufacture or a process for the alteration of a composition of matter.  Comiskey’s independent claims 1 and 32 claim the mental process of resolving a legal dispute between two parties by the decision of a human arbitrator.

Thus, like the claims that the Supreme Court found unpatentable in Benson and Flook and the claims found unpatentable in our own cases, Comiskey’s independent claims 1 and 32 seek to patent the use of human intelligence in and of itself.

For the record, the USPTO had stated that if the application came back to them, they would have smacked it with a  § 101 rejection.