PATENT OFFICE FLIPS SUPREME COURT THE BIRD

David Kappos, the Director of the U.S. Patent and Trademark Office, has in effect flipped the U.S. Supreme Court the bird. In a recent web-posting, Director Kappos all but explicitly said that he does not intend to have his agency fully abide by two recent U.S. Supreme Court decisions on patent law. In the decisions, the Court attempted to clarify the limits on what processes are patentable under U.S. patent law, specifically under Section 101 of Title 35 of the U.S. Code. But Director Kappos seems unimpressed with the Court’s efforts.

Processes are one of the four categories of inventions or discoveries that Section 101 lists as eligible for patents. The other three categories are machines, manufactures, and compositions of matter. The process category has become a venue for thrust and parry over the patentability of some Information Age developments such as increases in business method patents, software patents, and patents on various intangibles.

The Court’s recent decisions were Bilski v. Kappos in 2010 and Mayo Collaborative Services v. Prometheus Laboratories in March of this year. In the Bilski decision, the Court held that a process for hedging against the risk of price changes in the energy market was an abstract idea and consequently not a patentable process under Section 101. All nine Justices agreed with this result but were not in agreement with the rationale. Consequently, three different opinions were written, and one member of the Court, Justice Scalia, performed a judicial minuet in picking portions of two of the opinions to agree with.

In the Mayo decision, a unanimous Court held in a single decision that simply applying a law of nature did not amount to a patentable process. Findings by researchers that identified correlations between a drug (thiopurine) used to treat autoimmune diseases and harmful levels of metabolites in the bloodstream constituted the law of nature. The process for which a patent had been granted had three steps: first, administering the drug; second, determining metabolite levels in the bloodstream; and third, informing the doctor that metabolite levels above or below specified thresholds indicated a need to decrease or increase the drug usage. To the Court, this process was no more than stating a law of nature and adding the words “apply it,” and was not sufficient for the grant of a patent.

The Patent Office has provided guidelines to its Patent Examiners on applying the Court’s rulings in the examination of patent applications. Nevertheless, nebulous, wordy, unclear descriptions of processes and intangibles continue to pour forth from the Office each week as approved patents. Perhaps a reason is that the Patent Office’s heart is not really into the curtailing of process patents.

In late July 2012, Director Kappos posted an entry in his Director’s Forum. The title of the entry was “Some Thoughts on Patentability.” A recent decision of a lower federal court, the Court of Appeals for the Federal Circuit, had contained language and an analysis that arguably downgraded Section 101’s role as a threshold test of patent eligibility. The decision was CLS Bank International v. Alice Corporation.

Director Kappos described the court’s decision as saying that other sections of patent law did the substantive work of disqualifying inventions not worthy of a patent and that Section 101 was merely a general statement of the type of subject matter eligible for patenting. Moreover, the exceptions to patent eligibility recognized by the Supreme Court—laws of nature, natural phenomenon, and abstract ideas—should arise infrequently. The Director’s solution to the patent eligibility issue was more tightly drawn patent applications.

“Anything under the sun that is made by man" is one view of what can be patented under U.S. patent law. The phrase was in a report of a U.S. Congressional Committee and in 1980 was noted with apparent approval by the U.S. Supreme Court. The view that patentability encompasses pretty much anything is the predominant view in the U.S. patent community of inventors, patent lawyers, the Patent Office, and corporate holders of multiple patents. To adherents of this view, including apparently Director Kappos, the patent eligibility issue should be of little concern. After all, if properly and fully described, anything made by man should be patentable.

But as evidenced by its two recent patent decisions, today’s Supreme Court does believe that patentability has limits. The Court is not certain about what those limits are, but seems certain they exist. And as a majority of the Justices recognized in Bilski, the difficulty of finding the limits has been exacerbated over the last several decades as the Industrial Age has given way to the Information Age. The Industrial Age was a time of tangibles, of physicality, of inventions and improvements thereof that in most cases could be seen, felt, and handled. But in the Information Age, intangibles, both as processes and as products, have become commonplace.

The problem with considering intangibles no different than tangibles for patent purposes is that when an “invention” is only an intangible process or product, the necessary limiting and defining descriptions become much more difficult to achieve. The degree of detailed certainty that can be provided for a tangible invention is in many cases unreachable for an intangible invention.

A saying one sometimes comes across in the patent world is that a patent is an invention and words describing the invention. But with intangible processes or products, the invention and the words describing it merge all too easily, resulting in a patent being granted for just the words. Perhaps those words are entitled to some sort of legal protection. But providing the degree of protection that a patent enjoys seems far too generous.

The Supreme Court has decided that Section 101 has a substantive role to play in patent analysis. Director Kappos appears to have a different view. And the output of the Patent Office seems to reflect his view. Among the patents granted each week are a substantial number that involve vague intangible processes or products. So, Honorable Justices, just because you say what the law is doesn’t mean everybody’s listening.