GLR readers will recall that just last summer the Supreme Court passed-up a major opportunity to clarify the status of method or process patents. The patentability of business methods, computer-implemented processes, and diagnostic and other medical methods has long been both controversial and uncertain. In Bilski v. Kappos, the Court confronted a method for hedging against fluctuations in commodities prices. All nine justices thought the method was too abstract to comprise patentable subject matter as defined in section 101 of the Patent Act, but they couldn’t agree on why. The five-member majority held that the machine-or-transformation test (which states that the method must be tied to a particular machine or change something into a different state) propounded by the Federal Circuit in its initial Bilski decision could not be the exclusive test for patentability, but it failed to come up with a test of its own.
The day after issuing its decision in Bilski, the Supreme Court dealt, temporarily, with another closely watched case, Prometheus v. Mayo. In Prometheus, the Federal Circuit used Bilski’s machine-or-transformation test to uphold a method for administering a drug, measuring its level in the body, and then adjusting the dosage. The Supreme Court granted certiorari in Prometheus, as well as in a similar biotechnology method case (Classen Immunotherapies v. Biogen IDEC), and then immediately vacated both decisions and remanded the cases to the Federal Circuit for reconsideration in light of Bilski. Neither of those decisions have yet been issued by the Federal Circuit.
While the legal world awaits Prometheus and Classen, and their hoped-for clarification of the patentability of business and medical methods, the Federal Circuit has just issued its first post-Bilski method patent decision in the field of computer-implemented processes. In Research Corporation Technology, Inc. v. Microsoft Corporation (pdf), decided December 8, 2010, the court upheld the patentable subject matter status of RCT’s “method for the halftoning of gray scale images.” The method uses mathematical algorithms to make pixel-by-pixel comparisons of a target image and something called a “blue noise mask” in order to improve the representation of color pictures on computer screens and printouts. In infringement litigation against Microsoft that has been going on since 2001, the Federal Circuit reversed a lower court ruling that RCT’s claim did not encompass statutory subject matter.
A Threshold Test is Made Easier. RCT may contain some interesting clues for those interested in predicting where the Federal Circuit may go with medical methods—for example, the patent at issue in Prometheus and the claims in the Myriad case on comparing breast cancer genes with and without suspect mutations and using the results for predictive purposes.
The most important thing that the RCT court stressed was that the section 101 test is a relatively easy one to satisfy. In an opinion by Chief Judge Rader (who dissented from the machine-or-transformation test in Bilski that foreshadowed the Supreme Court majority opinion), the Federal Circuit read Bilski and other Supreme Court cases as saying that any “process, machine, manufacture, or composition of matter” (the language of section 101) is patentable subject matter unless the patent claims laws of nature, natural phenomena (often called products of nature), or abstract ideas.
In rejecting the argument that RCT’s invention was merely an abstract idea, the court wrote that “this disqualifying characteristic [abstractness] should exhibit itself so manifestly as to override the broad statutory categories of eligible subject matter.” Here, by contrast, the court found that the invention presents “functional and palpable applications in the field of computer technology.” Even though algorithms and formulas—usually treated as laws of nature when standing alone—are “admittedly a significant part of the claimed combination, [they] do not bring this invention even close to abstractness” because the claimed methods are applications of the algorithms, not the algorithms themselves. Perhaps the invention in Bilski will be deemed to exhibit a forbidden level of manifest abstractness.
Shifting the Burden from Section 101. The Federal Circuit also emphasized that the statutory subject matter inquiry “is only a threshold test.” Other sections of the Patent Act, according to the court, are available to do the heavy lifting in screening out unpatentable inventions. The court mentioned specifically “analysis related to prior art [which takes place under sections 102 and 103],” as well as section 112’s requirement that the invention be disclosed with enough detail to enable someone else to make and use it, which should “weed out” many claims that are vague, indefinite, or otherwise abstract. According to the Federal Circuit, a court should let the application of these other standards unfold and not get ahead of itself by using section 101 “to reject subject matter categorically because it finds that a claim is not worthy of a patent.”
Reading Between RCT’s Lines. So what message can those of us interested in medical and biotechnology method patents take away from RCT? Possibly that the Federal Circuit is going to become more generous in giving passing grades on the subject matter test. That is, it may be a good bet that the Prometheus and Myriad patents, and others like them, will survive section 101.
But this does not mean that those same inventions will ultimately be held patentable. The reason is that the RCT court also hinted that even as it relaxes the subject matter standard, it may be preparing to tighten up on other requirements. This is consistent with an observation we’ve made in the past concerning gene patents: while everyone’s attention is focused on whether isolated genes are patentable subject matter, the Federal Circuit has been steadily using other provisions (like the section 103 obviousness test and the section 112 disclosure requirement) to cut back on gene and gene-related patents. RCT seems to threaten more of the same.
To conclude, one cautionary note: this is an opinion by a single three-judge panel of the Federal Circuit, and the fact that it includes the Chief Judge is not very significant. On many occasions in the past, panels have disagreed with each other, necessitating the reconsideration of issues en banc (before all [usually 12] active members of the court). That could well happen with method patents. So don’t bet the entire ranch on our prediction, at least not yet.