CAFC Walks Away From Comiskey During En Banc Review

In Re Comiskey, 06-1286, January 13, 2009

In a controversial move, the CAFC decided today to reject en banc review of Comiskey, where claims directed to "a method for mandatory arbitration resolution regarding one or more unilateral documents" were held to be non-statutory subject matter under 35 U.S.C. § 101. In addition to the denial, the CAFC vacated its earlier decision and remanded the application back to the PTO:

Acting en banc, the court today vacated the September 20, 2007, judgment in this case, and the panel’s original opinion . . . was withdrawn.

[W]e conclude that Comiskey’s independent [method] claims 1 and 32 and most of their dependent claims are unpatentable subject matter under 35 U.S.C. § 101. With respect to independent [systems] claims 17 and 46 . . . we remand to the PTO to consider the § 101 question in the first instance. We therefore affirm-in-part, vacate-in-part, and remand.

To fully understand the controversy, it is important to note that Comiskey originally appeared before the CAFC to appeal an obviousness rejection. After oral arguments, the CAFC requested supplemental briefing to address issues relating to 35 U.S.C. § 101, despite the fact that the PTO did not reject the claims on this basis. Seizing the opportunity, the PTO urged the court to resolve the case on this ground to "give the Office needed guidance in this area." The CAFC obliged, and when the original Comiskey opinion was issued (see here), only issues relating to §101 were addressed.

While the majority (Michel, Dyk, Prost, Lourie) claimed the CAFC had the authourity to resolve such legal issues sua sponte, the dissent argued that the opinion is "not consistent with the need to respect and recognize agency expertise or the interests of agency or judicial economy." In any event, with regard to patentable subject matter, the CAFC concluded:

It is thus clear that the present statute does not allow patents to be issued on particular business systems—such as a particular type of arbitration—that depend entirely on the use of mental processes. In other words, the patent statute does not allow patents on particular systems that depend for their operation on human intelligence alone, a field of endeavor that both the framers and Congress intended to be beyond the reach of patentable subject matter. Thus, it is established that the application of human intelligence to the solution of practical problems is not in and of itself patentable.

While the method claims were held unpatentable, the court punted on the system claims, which recited the use of "modules":

These claims, under the broadest reasonable interpretation, could require the use of a machine as part of Comiskey’s arbitration system . . . Similarly, even though Comiskey did not separately argue his dependent claims, our decision is based on a different ground than the Board’s, and we think it is appropriate to separately consider dependent claims 15, 30, 44, and 58. Each of these claims adds the following limitation to its corresponding independent claim: "wherein access to the mandatory arbitration is established through the Internet, intranet, World Wide Web, software applications, telephone, television, cable, video [or radio], magnetic, electronic communication, or other communications means."

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.

Read the order (link), which includes the following opinions:

Dyk, Michel, Prost (concurring) - "Contrary to Judge Moore’s dissent, the panel decision is entirely consistent with precedent allowing an appellate tribunal to affirm an agency on alternative legal grounds or to remand to the agency to consider an alternative ground. This authority is, in fact, so well-established that the petition for rehearing did not even raise the issue. "

Lourie (concurring) - "I am sympathetic to Judge Moore’s dissent . . . However, having rendered the decision that it did, and which it now reaffirms as to the method claims, I do not believe we need to unwind the panel decision as to those claims in order to review the § 103 rejections. "

Moore, Newman, Rader (dissenting) - "Particularly puzzling is the panel’s decision to remand the § 101 issue to the PTO with regard to the machine claims, but not the process claims . . . The original panel opinion which held these machine claims were directed to patentable subject matter cited Federal Circuit and Supreme Court precedent. None of this precedent has changed."

"[R]ather than reach out to decide an issue not raised, and remand some of the claims to the PTO with a mandate that they consider an issue of our choosing, I believe we had an obligation to decide the only issue actually decided by the PTO – are Mr. Comiskey’s claims obvious? The PTO, an expert agency, is charged with examining patent applications. Courts, like us, are charged with reviewing agency determinations. There must be some limit to appellate court authority to review agency action, and in my opinion this court in Comiskey crossed the line."

Newman (dissenting): "Reconsideration of this appeal was stayed while the en banc court decided In re Bilski, 545 F.3d 943 (Fed. Cir. 2008), and although the original Comiskey opinion was withdrawn because it was producing "misunderstanding," id. at 960, the revised opinion does not clarify, changes no result, adds no analysis, but simply deletes its reasoning, leaving silence rather than understanding. The court continues to present a broad and ill-defined exclusion of "business methods" from access to the patent system, an exclusion that is poorly adapted to today’s new and creative modalities of data handling and knowledge utilization. I must protest this further contribution to the uncertainty that this court’s decisions are producing."