Machine Might Not be Patentable Subject Matter

Last week I was in Arlington, Virginia, teaching the PLI Patent Bar Review Course, so I was a bit out of touch with what was happening in the patent world as I tried to help a number of would-be patent attorneys and agents get through the PLI immersion course. Like clockwork, during this time out of the office the United States Court of Appeals for the Federal Circuit got into a real battle between and among the judges of the court over what to do with the requested rehearing petition filed in In re Comiskey. On Tuesday, January 13, 2009, as we were starting the patent bar course, in the decision on the petition for rehearing en banc, the Federal Circuit granted a very limited rehearing en banc, which was not a rehearing en banc at all. The majority voted to allow the original panel to withdraw the original decision and issue a new opinion. This lead to heated a heated and vigorous dissent written by Judge Moore, who was joined by Judges Newman and Rader. Judge Newman added her own unique dissent as well, and Judges Newman, Mayer, Rader, Bryson and Moore would have granted a full rehearing en banc with briefing and argument. Talk about a divided court!

Those familiar with this matter will recall that on September 20, 2007, the panel of Judges Michel, Dyk and Prost issued the original decision in In re Comiskey. This decision was rather straight forward and certainly not earth shattering, except perhaps for one issue – namely that the Federal Circuit issued its decision on patentable subject matter grounds without patentable subject matter ever being an issue during prosecution or on appeal. In the case one set of claims were directed to the purely mental process of arbitrating a matter and deciding the outcome. The Federal Circuit did not waste time point out that arbitration is extremely well known and could hardly be considered patentably new or nonobvious, rather they cut to the chase and explained that the law does not allow patents to be issued on particular business systems that depend entirely on the use of mental processes, deciding that “the application of human intelligence to the solution of practical problems is not in and of itself patentable.”

The Comiskey matter was not, however, finished though because to this purely mental process the applicant added an all purpose computer, which apparently was supposed to transform an otherwise unpatentable process into a patentable invention. The Federal Circuit did acknowledge that “when an unpatentable mental process is combined with a machine, the combination may produce patentable subject matter,” but also stated that “the routine addition of modern electronics to an otherwise unpatentable invention typically creates a prima facie case of obviousness.” Ultimately, however, the Federal Circuit was unprepared to reach a final determination on this point, which was reasonable given that it had never been raised at any point in the prosecution or appeal. Thus, because the Federal Circuit decided to use the Comiskey case for its own personal 101 agenda it was necessary to remand to the Patent Office for further consideration.

What caused great concern was the fact that the original Comiskey panel nonchalantly implied that while a machine combined with an unpatentable process might result in patentable subject matter, such a combination would be obvious, which is all well and good except for the pesky little matter of facts and analysis. This lead five of the judges to want to rehear the case with full briefing and argument, while the remainder of the court merely wanted to give the panel the opportunity to issue a decision that makes more sense.

What seems to have cause the dispute between the Judges is that there was real tension over the fact that the panel went off the menu and decided the case on grounds that were not a part of the administrative record, not briefed and not argued. Those that opposed rehearing concluded that the Supreme Court’s decision in Securities & Exchange Commission v. Chenery Corp. allows an appeals court to decide appeals from agencies on any ground they so choose. Judge Moore explained that this reading of Chenery is completely erroneous. She wrote:

The Supreme Court did not intend Chenery to be an open invitation for appellate courts to consider in the first instance any legal ground of its choosing for reviewing agency decisions whether it results in affirmance or not. Chenery holds that an appellate court can reach an alternative legal ground (1) in order to affirm an agency (2) when the agency ground was erroneous because it would be wasteful to remand the case under these circumstances.

Because the original Comiskey panel did not identify anything wrong with the USPTO 103 rejection Chenery just flat out doesn’t apply. Of course, the reason that the original panel didn’t discuss what the USPTO got wrong with respect to 103 is because they never addressed 103. How can an appeal be taken on an issue and both parties focus on an issue and then the appellate court not even discuss the issue on appeal? But that is exactly what happened in the original Comiskey decision. Ridiculous if you ask me.

Of course, Judge Moore is correct that Chenery doesn’t apply for yet another reason. The Supreme Court specifically said that alternatives grounds to affirm an agency are appropriate to save the need for a wasteful remand. But that is exactly what the original Comiskey panel did, and exactly what the revised Comiskey decision orders as well. The case is getting remanded to the USPTO for determination about whether the machine claims in the patent are patentable subject matter. Specifically, here is what the revised Comiskey opinion says:

As to all of these claims, which under the broadest reasonable interpretation recite the use of a machine, we think that the § 101 question should be addressed in the first instance by the PTO. We therefore remand to the PTO to consider whether independent claims 17 and 46 (with dependent claims 18-29, 31, 47-57, and 59) and dependent claims 15, 30, 44, and 58 recite patentable subject matter under § 101.

Can anyone explain to me how a machine could be considered to be unpatentable subject matter? What exactly is the panel in Comiskey thinking? Do Judges Michel, Dyk and Prost actually think that the Patent Office might find that a machine is not patentable subject matter? If they have the authority to ignore the issues on appeal and determine that a mental process is not patentable under 101 because 101 is a question of law, then don’t they also have the authority to say, as a matter of law, that machines are patentable?

To be honest I don’t know what I think any more about the Federal Circuit and the Supreme Court. I know that John White is right when he fears the Supreme Court getting involved, because they just don’t understand patents. If Scalia really thinks patents are gobbledygook, and they are to complicated for him to understand, then he ought to do the appropriate thing and recuse himself from any patent cases. Nevertheless, the number of Federal Circuit judges that do not understand patent law and simple rules of appellate procedure is alarming. Something has to be done, but by who? The Federal Circuit frequently makes matters worse, the Supreme Court always makes matters worse, and Congress is AWOL.

I sure hope President-elect Obama gives us someone to lead the Patent Office that can help, but I am not optimistic about the future of the US patent system, and that is really disappointing.

About the Author

Eugene R. Quinn, Jr. President & Founder of IPWatchdog, Inc. US Patent Attorney (Reg. No. 44,294) B.S. in Electrical Engineering, Rutgers University J.D., Franklin Pierce Law Center L.L.M. in Intellectual Property, Franklin Pierce Law Center Send me an e-mail

Gene is a US Patent Attorney, Law Professor and the founder of IPWatchdog.com. He teaches patent bar review courses and is a member of the Board of Directors of the United Inventors Association. Gene has been quoted in the Wall Street Journal, the New York Times, the LA Times, CNN Money and various other newspapers and magazines worldwide