Patentability of business methods The Federal Circuit Court of Appeals sometimes seems to like to keep people guessing. Case in point: its recent revised opinion in In re Comiskey. In the latest round of an appeal regarding a business method patent rejected for obviousness, the court stuck by its controversial decision not to actually address obviousness, instead reaching its decision on grounds not raised by the parties on appeal. The revised opinion vacates the court’s original decision, while upholding its original position that the method claims were unpatentable. On other system claims, which the court had expressly found presented patentable subject matter, the court remanded the issue of whether the system claims were proper patentable subject matter to the U.S. Patent and Trademark Office (PTO). Round 1: Method vs. System claims The original decision was seen as a predecessor to the Federal Circuit’s significant decision in In re Bilski. In Bilski, the court declared the “machine-or-transformation” test to be the definitive test for determining the patentability of methods. In the first Comiskey opinion, a three-judge panel considered an appeal of the rejection of a patent for a method and system for mandatory arbitration involving legal documents such as wills and contracts. In particular, the court examined two sets of independent claims and their dependent claims: Claims 1 and 32 and Claims 17 and 46. Although the appeal was made on grounds of obviousness, the court addressed only the issue of patentability. The court raised the issue itself, without a request from either party, but the PTO subsequently urged the court to resolve the case on patentability grounds “to give the Office needed guidance in this area.” The court found that method Claims 1 and 32, which did not reference the use of a mechanical device, were for a mental process of resolving a legal dispute through a human arbitrator’s decision. Because the method claims sought “to patent the use of human intelligence in and of itself,” the court held them unpatentable. System Claims 17 and 46, however, were patentable because they could require the use of a computer. The court remanded Claims 17 and 46 for determination of whether the addition of computers and communication devices to the otherwise unpatentable mental process method would have been obvious. In January 2009, though, the full court of the Federal Circuit vacated the 2007 judgment and withdrew the original opinion. It reassigned the opinion to the original panel for revision. Round 2: System claims vs. Sec. 101 In the revised opinion, the court updated its analysis of whether an abstract-idea business method with a practical application can constitute a patentable process under Section 101 of the Patent Act. Without expressly citing the Bilski decision, the Comiskey court reiterated the “machine-or-transformation” test from Bilski based on an analysis of U.S. Supreme Court precedent that recognized two situations where such a method may qualify as a patentable process: 1. If the process is tied to a particular apparatus, or 2. If the process operated to change materials to a “different state or thing.” In addition to adopting the “machine-or-transformation” test, the revised opinion in Comiskey emphasized that mental processes alone aren’t patentable even if they have a practical application. Likewise, particular business systems that depend entirely on the use of mental processes or human intelligence, such as a particular type of arbitration, aren’t patentable. When the court turned to Comiskey’s application, it began with method Claims 1 and 32, which cover a “method for mandatory arbitration resolution.” The claims do not require a machine or describe a process of manufacture or a process for altering a composition of matter. Rather, they claim the mental process of resolving a legal dispute by the decision of an arbitrator. The court concluded, again, that method Claims 1 and 32 sought to patent the use of human intelligence in and of itself and were, therefore, unpatentable. The main attraction System Claims 17 and 46, on the other hand, require the use of several “modules” and include “a means for selecting an arbitrator from an arbitrator database.” Citing a definition of “module” as a “self-contained hardware or software component that interacts with a larger system,” the court found the system claims could require the use of a machine. Additionally, four of the dependent claims explicitly require the use of a computer or other machine. While the court in its original opinion had found that system Claims 17 and 46 presented patentable subject matter, the revised opinion ducks this issue by finding that the question of patentable subject matter should be “addressed in the first instance by the PTO.” The court then remanded this issue back to the PTO. Further uncertainty Regarding the patentability of business methods, one of the three dissenting judges argued that the latest decision marked a “further contribution to the uncertainty that this court’s decisions are producing.” Perhaps the U.S. Supreme Court will agree and add some clarity in the near future. In the meantime, Comiskey will have to work its way back through the PTO before we can see any opportunity for Round Three in this continuing saga. • |