As of October 31, 2013, the Project on Commercializing Innovation is no longer active.
The Project is succeeded by the Hoover IP² Working Group on Intellectual Property, Innovation, and Prosperity. Hoover IP²

Chapter Seven – Statutory Subject Matter

Chapter seven looks at the allowed subject matter for patents.  § 101 gives four broad statutory classes of subject matter.  These classes are broad enough that, like utility, subject matter is not ordinarily a significant hurdle for applicants.  Understanding the history of the interpretation of § 101 is important, however, as recent and pending cases have called into question the validity of many software, business method, and biotechnology patents.

When reading each of the cases in this chapter, look at the patents in question first and consider for yourself whether it would make sense to prevent inventors from receiving such patents.  Who would gain and who would lose?  Is there something special about genetically modified organisms, software, or business methods that makes them either immune to or undeserving of the incentivizing effects of patents?

Updates

  1. The patentability of DNA and related diagnostic and therapeutic methods is also currently in issue.  At present the Federal Circuit has held that purified, isolated DNA is not per se unpatentable, but found that diagnostic methods drawn to comparing DNA sequences were unpatentable because they included no transformative steps and covered only patent ineligible abstract, mental steps.  Assoc. for Molecular Pathology v. Myriad Genetics, 653 F.3d 1329 (Fed. Cir. 2011).  The Supreme Court has vacated the Federal Circuit decision and remanded the case to the Federal Circuit for reconsideration in light of the Court’s decision in Mayo v. Prometheus.  On remand, the Federal Circuit reiterated that purified, isolated DNA is patent eligible.  “The isolated DNA molecules before us are not found in nature. They are obtained in the laboratory and are man-made, the product of human ingenuity.”  Assoc. for Molecular Pathology v. USPTO, ___ F.3d ___, slip op. at 39 (Fed. Cir. 2012).  The court also affirmed that the ‘analyzing’ and ‘comparing’ claims were patent ineligible because they recite “nothing more than the abstract mental steps necessary to compare two different nucleotide sequences.”  Slip op. at 57.  Following the opinion by a divided panel, the Supreme Court granted certiorari with the single question “Are human genes patentable?” 2012 WL 4508118 (Nov. 30, 2012).
  2. In Mayo Collaborative Servs. v. Prometheus Labs., Inc., ___ S. Ct. ___ (Mar. 20, 2012), the Supreme Court held that claims to diagnostic and therapeutic methods based on adjusting the dosage of a drug based on levels of a metabolite in the patient’s blood were invalid because they “effectively claim the underlying laws of nature themselves.”  Slip op. at 24.  “In particular, the steps in the claimed processes (apart from the natural laws them­selves) involve well-understood, routine, conventional activity previously engaged in by researchers in the field.” Slip op. at 4.
  3. Computer-implemented inventions and business methods.  Despite (or perhaps because of) the Supreme Court’s decision in Bilski, the patentability of computer-implemented inventions and business methods remains somewhat confused.  Overall, however, the recent trend has been against the patentability of such inventions.  In Ultramercial, LLC v. Hulu, LLC, the Federal Circuit upheld the patent eligibility of a method for distributing copyrighted materials by allowing free access to the materials in exchange for watching an advertisement.  657 F.3d 1323 (Fed. Cir. 2011).  The Supreme Court then vacated the decision and remanded for further consideration in light of its recent subject matter cases.  WildTangent, Inc. v. Ultramercial, LLC, 132 S.Ct. 2431 (2012).  In Dealertrack, Inc. v. Huber, the Federal Circuit held a computer-based method of operating a credit application and routing system to be an unpatentable abstract idea.  674 F.3d 1315 (Fed. Cir. 2012).  Similarly, in Bancorp Services, LLC v. Sun Life Assurance Co.the Federal Circuit held an electronically implemented system and method for administering and tracking the value of life insurance policies to be directed to abstract ideas.  687 F.3d 1266 (Fed. Cir. 2012).  In CLS Bank International v. Alice Corp. PTY. Ltd.the Federal Circuit initially held that a computerized trading platform designed to eliminate settlement risk was patent eligible, but the court later vacated the decision and took it up for rehearing en banc.  685 F.3d 1341 (Fed. Cir. 2012), vacated and rehearing en banc granted, 2012 WL 4784336 (Oct. 9, 2012).
  4. The British case In the Matter of the Patents Act 1977 (Halliburton Energy Services) contains an excellent treatment of the British law of patent eligibility and the patentability of software-based inventions.  The Canadian Federal Court of Appeal recently upheld the patentability of business methods in Commissioner of Patents v. Amazon, Inc, 2011 FCA 328, holding that business methods are not per seunpatentable but that specific business method patents may claim unpatentable abstract ideas.
  5. The America Invents Act contains one provision affecting statutory subject matter.  Under the Act, a patent cannot issue if it contains one or more claims “directed to or encompassing a human organism.”  Although the Act does not define those terms, recent appropriations bills have contained similar language, and it is not expected to significantly narrow patentable subject matter.

 Additional Source Material