In Ex parte Lundgren, (BPAI October 2005), the U.S. Board of Patent Appeals and Interferences formally recognized that "there is currently no judicially recognized separate "technological arts" test to determine patent eligible subject matter under § 101." The claims involved a method of compensating a manager including steps such as "determining a performance comparison base based on said set of comparison firm absolute performance measures by calculating a weighted average of said set of comparison firm absolute performance measures." According to the Board,
[C]laim 1 on appeal is directed to a process. Thus, one may wonder why there is any issue regarding whether claim 1 is directed to statutory subject matter. The issue arises because the Supreme Court has ". . . recognized limits to § 101 and every discovery is not embraced within the statutory terms. Excluded from such patent protection are laws of nature, physical phenomena and abstract ideas." Diamond v. Diehr, 450 U.S. 175, 185, 209 USPQ 1, 7 (1981). However, in this appeal, the examiner has not taken the position that claim 1 is directed to a law of nature, physical phenomena or an abstract idea, the judicially recognized exceptions to date to § 101. Rather, the examiner has found a separate "technological arts" test in the law and has determined that claim 1 does not meet this separate test.
The examiner finds the separate "technological arts" test in In re Musgrave, 431 F.2d 882, 167 USPQ 280 (CCPA 1970); In re Toma, 575 F.2d 872, 197 USPQ 852 (CCPA 1978); and Ex parte Bowman, 61 USPQ2d 1669 (Bd. Pat. App. & Int. 2001)(nonprecedential). We have reviewed these three cases and do not find that they support the examiner's separate "technological arts" test. . . . We have also considered Ex parte Bowman, cited by the examiner. Bowman is a non-precedential opinion and thus, not binding.
According to Tim Wall in 2004, the Board's older view of non-statutory subject matter rejections under Bowman appeared to parallel the "technical character" approach of the European, U.K., and Japanese Patent Offices. In essence, the Board had required a "useful, concrete and tangible result," having "clear world value," for method claims in the U.S. that are not "tied to a technological art or environment." The USPTO's Examination Guidelines in this area will now have to be rewritten.
According to Steve Kunin, former deputy commissioner for patent examination policy at the USPTO, the ruling may not be as far-reaching as first thought. "This will not open the floodgates for non-computer-based business method patents," Kunin reportedly told Managing Intellectual Property last week. "All it will do is cause a minor detour for the USPTO. . . . While the technological arts test is not viable, the practical application test is viable on non-computer-based applications."
"What is amazing about Lundgren," writes Professor Wegner in his paper on Recent Software Protection Trends, "is not the unremarkable holding but, rather, that the entire set of opinions comprises more than 35,000 words and is a work that was many years in the making, all conducted in camera since a first decision of the Board in 1999 with subsequent shenanigans including intervention from PTO officials that led to the stacked deck enlarged panel. Interestingly, out of roughly sixty board members, the five member panel included the Chief Administrative Patent Judge and the Vice-Chief Administrative Patent Judge, both appointed by the PTO administration and hardly anything like a random panel selection." He then goes on to discuss his current views on the software patenting problem in the U.S., including, weaker patent standards in the software area, broadly interpreted ambiguous claims, generic claims based on simple enablement, and the standard of "motivation" to combine for obviousness.
For a copy of Professor Wegner's paper and/or more information on latest USPTO happenings, please contact the author of this update, William F. Heinze (email@example.com) at Thomas, Kayden, Horstemeyer & Risley LLP in Atlanta, Georgia USA.
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