• Software Patent Eligibility: Inventions that address a need in a simple and precise manner to accomplish the result presents “functional and palpable applications” in the field of computer technology
  • Diagnostic Method Patent Eligibility: The “transformation” of a chemical may establish that a diagnostic method claim does not preempt a fundamental principle after all

December was a big month for major post-Bilski decisions.  On December 8, the Federal Circuit decided Research Corp. Tech. v. Microsoft Corp.,[1] a software patent case.  Then on December 17, the Federal Circuit decided Prometheus Laboratories,[2] a case involving two diagnostic method patents.

Before the Federal Circuit in Research Corp. were software claims directed to “image halftoning technology used in computers and printers. The lower court found the claims at issue that recite “the production of an image as a result of the comparison numbers” to be transformative.[3] (emphasis added)  However, the claims at issue that merely “assembl[ed] … gray scale images to generate final dot profiles” were not transformative because they did not “mandate a further visual display or image….”[4] (emphasis added)

On appeal, the Federal Circuit upheld the patentability of the claims that merely “assembl[ed] … gray scale images to generate final dot profiles” but that were not transformative because they did not “mandate a further visual display or image”; but under arguably yet a new standard for determining the eligibility of a software process for a patent – to wit, a “functional and palpable applications” test.[5] As the court explained “[t]he invention presents functional and palpable applications in the field of computer technology”, because the inventions address a need for halftone rendering of gray scale images in a simple and precise manner to accomplish the halftone rendering.[6] (emphasis added)

We believe the court’s holding of the Research Corp. claims to be patentable subject matter to be faithful to the Supreme Court’s concern that a claim not preempt a fundamental principle. However, a “functional and palpable” standard in defining whether a claim preempts a fundamental idea (“palpable” is defined by Merriam-Webster dictionary to mean “capable of being touched or felt”) provides little guidance on determining the preemption issue and is reminiscent of the phrase made famous by Justice Potter Stewart in the obscenity case of Jacobellis v. Ohio[7] that “I know it when I see it.”  Just as it took years for the Supreme Court to evolve meaningful guidance on what amounts to obscenity as clarified in Miller v. California[8], so too it may take more time for the Federal Circuit to evolve more meaningful guidance on what software subject matter is patent eligible. We believe though that meaningful guidance may lie in the “reaching out and touching” by the electrical signals generated by the software of physical and tangible objects whether physically (i.e., actually) as in Diehr[9] or virtually, that is to say, by electrical signals generated by the software instructions representing physical and tangible objects, as was the case in Research Corp. Tech. (e.g., the electrical signals virtually represent an image of a physical and tangible object)  See Morse[10].  (For more on this topic, see The Future of Software Patents – Reading the Bilski Tea Leaves; The State Street Bank and AT&T Lessons blog dated November 8, 2010.  Also watch for the January 2011 Edition of the IP Litigator exploring the effects of the Supreme Court’s Bilski decision on software patents.)

In Prometheus Laboratories, the Federal Circuit held administering and determining steps in a diagnostic method claim to be transformative and central to the claims rather than merely insignificant extra-solution activity. [11] On June 29, 2010, the Court granted certiorari, vacated the federal circuit’s decision, and remanded, in light of Bilski.[12] On remand, the Federal Circuit again held the method claims to recite patent-eligible matter.  The court explained that the inventive nature of the claimed methods stems not from preemption of all use of these natural processes, but from the application of a natural phenomenon in a series of steps comprising particular methods of treatments.  As the court observed, “[o]ther drugs might be administered to optimize the therapeutic efficacy of the claimed treatment.[13]

The court’s analysis did not end there, however.  The court instead returned to the transformation test it had used in its pre-Bilski decision in explaining that “[i]t is virtually self-evident that a process for a chemical or physical transformation of physical objects or substances is patent-eligible subject matter.”[14] Citing Bilski, 545 F.3d at 962.  In so doing, the federal circuit may have signaled its intent to go back to the transformation test to get to the future of the subject matter patent eligibility of diagnostic method claims that involve a chemical action.  For a more comprehensive discussion of Prometheus and suggested tips for use in drafting diagnostic method claims involving chemical action, go to Jan 2011 Juhasz Advisory – Back to the Future for Diagnostic Method Patents.

The Juhasz Burge PC Firm can help you to better understand the effect of Research Corp. and Prometheus Laboratories on your software and diagnostic patents.  For more information regarding these cases and advice on how these decisions may affect your patents, please contact The Juhasz Burge PC Firm. Your patents may be your most important asset. To help you protect your patents contact Juhasz Burge PC, the firm committed to Positioning Your Patent Beyond The Horizon℠.

For more on Prometheus Laboratories go to the Jan 2011 Juhasz Advisory – Back to the Future for Diagnostic Method Patents.

[1] Research Corp. Techs. v. Microsoft Corp., No. 2010-1037, slip op. (Fed. Cir. 2010); appeal from No. CV-01-658, 2009 WL 2413623. (D. Ariz. July 28, 2009).

[2] Prometheus Laboratories, Inc. v. Mayo Collaborative Services, No. 08-1403, slip op. (Fed. Cir. 2010); remand of 581 F.3d 1336 (Fed. Cir. 2009) on which cert. granted, judgment vacated, and remanded, 78 U.S.L.W. 3254 (U.S. June 29, 2010).

[3] Research Corp. Techs. v. Microsoft Corp., No. CV-01-658, 2009 WL 2413623, at *15. (D. Ariz. July 28, 2009).

[4] Id., at *10.

[5] See Research Corp., slip op., at 15.

[6] Ibid.

[7] Jacobellis v. Ohio, 378 U.S. 184 (1964)

[8] Miller v. California, 413 U.S. 15 (1973).

[9] Diehr, 450 U. S. 175 (1981)

[10] O’Reilly v. Morse, 56 U.S. 62, 82 (1853).

[11] Prometheus, Id., at 16.

[12] Prometheus Laboratories, Inc. v. Mayo Collaborative Services, 581 F.3d 1336 (Fed. Cir. 2009), cert. granted, judgment vacated, and remanded, 78 U.S.L.W. 3254 (U.S. June 29, 2010)

[13] Prometheus, supra, at 16.

[14] Id., at 18.