In a Federal Register notice today, the USPTO has published interim guidance regarding how examiners are to assess whether an application's patent claims fall within the scope of patentable subject matter defined in § 101 in light of the Supreme Court's decision in Bilski.  Many patent attorneys were concerned when the initial memo to examiners was released, suggesting the machine-or-transformation test was a burden-shifting mechanism and leaving it to an applicant who did not meet the test to prove the claims fell within § 101.  The new guidance should allay these concerns somewhat, and comments are sought on both the guidelines and to provide examples of claims that are perceived to fall both within and without § 101.

The notice provides a background of the Bilski decision, particularly in the context of abstract ideas, given that was the basis for the Court finding Bilski's claims unpatentable.  It then provides details on how examiners are to evaluate claims for § 101 compliance and provides factors to be considered.  Of particular note is the following passage:

Section 101 is merely a coarse filter and thus a determination of eligibility under § 101 is only a threshold question for patentability.  Sections 102, 103, and 112 are typically the primary tools for evaluating patentability unless the claim is truly abstract . . . .

The guidelines also provide how the examiner can make a § 101 rejection such that it can be responded to: 

If a claim is rejected under § 101 on the basis that it is drawn to an abstract idea, the applicant then has the opportunity to explain why the claimed method is not drawn to an abstract idea. Specifically identifying the factors used in the analysis will allow the applicant to make specific arguments in response to the rejection if the applicant believes that the conclusion that the claim is directed to an abstract idea is in error.

The Notice lists various factors that an examiner can use to assist in the determination.  On the whole, this approach should assist both applicants and examiners in addressing § 101 issues in a productive manner, although there will in most cases be room for argument regarding the relative weighing of the factors.

Click below for a listing of the factors identified in the notice as relevant to the § 101 analysis.

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Yesterday, the Supreme Court decided Bilski v. Kappos, the most recent case at the Court probing the boundaries of patentable subject matter under § 101.  Details of the underlying facts of the Bilski case may be found in our post on the Federal Circuit's en banc decision here.

All nine Justices agreed that Bilski's method claims were not patentable.  All nine Justices also agreed the "machine-or-transformation" test, held by the Federal Circuit to be the exclusive test for whether method claims are patentable subject matter, was a useful test, but not the exclusive test for such claims.  In this way, the outcome was similar to KSR.  There, the Federal Circuit had adopted an exclusive test for the question of obviousness.  The Supreme Court then held the test was useful, but not the exclusive test for obviousness.  In addition, all members of the Court at least expressed skepticism that the "useful, concrete, tangible result" test from State Street was a viable test, with the majority stating "nothing in today's opinion should be read as endorsing interpretations of § 101 that the Court of Appeals for the Federal Circuit has used in the past," citing State Street, and the Justice Stevens opinion concurring in the judgment stating it would be a "grave mistake" to assume that all claims meeting this test are patentable. 

The disagreement among the Justices came when considering the question of whether business methods as a more general category fall within the scope of patentable subject matter defined in § 101.  More detail of that disagreement after the jump.

Update: The Court, in its last orders of the Term, has issued a GVR in two § 101 cases, the Prometheus case, relating to methods for measuring the level of certain drug metabolites in the system for the purpose of adjusting the drug administration level, and the Classen case, a nonprecedential opinion relating to a method of selecting a vaccination schedule by comparing alternatives and selecting the alternative with the lower likelihood of autoimmune disorders.  The Federal Circuit will therefore have two opportunities to address § 101 in light of the Court's guidance sooner rather than later.

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This morning, the Supreme Court handed down its opinion in Bilski v. Kappos.  The court affirmed the Federal Circuit's decision.

We'll have more detailed analysis soon.

To read the opinion, click here.

On Monday, the Supreme Court heard oral argument in Bilski v. Kappos in an effort to determine the proper test to be applied to determine whether a claim is patentable subject matter under § 101.  The oral argument transcript is available from the Court's website here.

Click below for our thoughts on the arguments and some of the more interesting quotes from the Justices' questioning.

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This week the USPTO has issued new guidelines to patent examiners on how to handle § 101 patentable subject matter issues in light of the Federal Circuit's ruling in In re Bilski. 

The guidelines are distilled into two flow charts and an instructional memo to examiners on how to conduct the analysis.  Click below to review the materials in more detail.

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In an order today, the Supreme Court agreed to hear an appeal in Bilski v. Doll regarding the patentability of method claims.  Back in October, the Federal Circuit decided In re Bilski, adopting the "machine-or-transformation" test as the exclusive test to determine whether a method is drawn to patentable subject matter.

Bilski filed a petition for certiorari in January.  Some thought the Court may take the case given its recent interest in the area of patentable subject matter, specifically the Laboratory Corp. v. Metabolite Laboratories, Inc. case where certiorari was dismissed as improvidently granted after oral argument was held.  Although the Court did not render a decision in that case, three justices (Breyer, Stevens, and Souter) dissented from the dismissal of certiorari and would have held the claims directed to nonstatutory subject matter.  SCOTUS Blog had the case among its petitions to watch for last Friday's conference, which compiles the cases the authors believe have a reasonable chance of being heard by the Court. 

When the Laboratory Corp. case was pending, many believed the Court was looking to rein in abstract method claims.  The granting of certiorari may be an indication that this is still the case, and the Court was simply waiting for the issue to be better presented.  However, at least one of the previous votes to restrict the permissible scope of method claims, Justice Souter, will not be on the Court when the case is considered next term.  Whether this will make a difference in the outcome remains to be seen.  Of course, until the Court renders a decision in the case (probably not until sometime in 2010), the Federal Circuit's decision remains the law, and the machine-or-transformation test is the sole test for whether a method claim meets the requirements of § 101.

More from SCOTUS Blog here.

In a recent decision, the Federal Circuit applied the machine-or-transformation test from Bilski to affirm the rejection of all pending claims in a patent application by the Board of Patent Appeals and Interferences.  The claims at issue related to methods of marketing products and "paradigms" for marketing software.  The Board held all claims were not directed to patentable subject matter because they were directed to an "abstract idea."

The Federal Circuit, armed with the machine-or-transformation test, had little trouble affirming the Board.  The court observed Bilski was dispositive on the method claims, as there was no "particular machine or apparatus," nor did the methods "transform any article into a different state or thing."

Similarly, the paradigm claims failed to recite statutory subject matter.  The applicants argued the "company" recited in the claims was analogous to a "machine," and therefore statutory.  The court disagreed, citing In re Nuijten, noting the claims recite no "concrete thing, consisting of parts, or of certain devices and combination of devices."

Of note, the court confirmed its rejection of the "useful, concrete, and tangible result" test from State Street.  The parties had focused on that test in their briefing (which was complete before Bilski was decided).

More detail of In re Freguson after the jump.

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As we reported Thursday, the Federal Circuit has decided In re Bilski, an en banc decision regarding the scope of patentable subject matter.  Specifically, the court addressed what is necessary for a method to fall within the scope of patentable subject matter under § 101.

The court, after examining the relevant Supreme Court cases on the subject (such as Diehr, Benson, and Flook), the court adopted the "machine-or-transformation" test as the applicable test for patent-eligible methods.  In so doing, the court rejected the Freeman-Walter-Abele test (regarding algorithms), the "useful, concrete, and tangible result" test articulated in State Street, and the "technological arts" test described in, for example, Ex parte Lundgren.

As stated by the court:

The machine-or-transformation test is a two-branched inquiry; an applicant may show that a process claim satisfies § 101 either by showing that his claim is tied to a particular machine, or by showing that his claim transforms an article.

The machine or transformation must also "impose meaningful limits on the claim's scope" and "must not merely be insignificant extra-solution activity."

The final vote was 9-3, with Judge Dyk writing a concurrence joined by Judge Linn, and Judges Newman, Mayer, and Rader authoring separate dissents.

More detail of In re Bilski and links to coverage from the media and blogs after the jump.

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The decision is available here.  It adopts the "machine-or-transformation" test for patentable subject matter.  As stated by the majority:

The machine-or-transformation test is a two-branched inquiry; an applicant may show that a process claim satisfies § 101 either by showing that his claim is tied to a particular machine, or by showing that his claim transforms an article.

Click below for some quotes from the majority opinion.  We'll have a more complete analysis soon.

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This Thursday, the Federal Circuit will hear oral arguments en banc in In re Bilski (No. 2007-1130), a case that will help define the scope of patentable subject matter.  Numerous amicus briefs have been filed in the case, and perhaps most interestingly, two of the amici, Bank of America and Regulatory DataCorp, have been granted permission to participate in the oral arguments.

More information about the case and its possible implications after the jump.

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