Wednesday, November 07, 2007

Another Business Method/Patentable Subject Matter Challenge at the CAFC

This week is turning into the "patentable subject matter blog" - over at Patently-O, Dennis posted the most recent challenge to the USPTO's position on patentable subject matter. Specifically, the applicant is challenging the 101 rejection given to the following exemplary claim in the application (09/387,823):

Claim 24. A paradigm for marketing software, comprising:

a marketing company that markets software from a plurality of different independent and autonomous software companies, and carries out and pays for operations associated with marketing of software for all of said different independent and autonomous software companies, in return for a contingent share of a total income stream from marketing of the software from all of said software companies, while allowing all of said software companies to retain their autonomy.

For starters, the Appellant's Brief points out that the PTO, through their Interim Guidelines, is erroneously analyzing patentable subject matter by limiting the analysis only to two specific tests:

The Guidelines allow for two and only two tests for subject matter patentability: 1) concrete useful and tangible result, and 2) transformation of something to a different state or thing . . . However, with all due respect, it is believed that the Guidelines have improperly and overly narrowly interpreted the holdings of these cases. These tests were intended to be non exclusive tests for subject matter patentability. They were not intended to be the ONLY allowable tests for subject matter patentability. In fact, the provision of a single test would seem contrary to Supreme Court cases, e.g. Chakrabarty, supra. This is supported by the plethora of Recent Supreme Court
cases expressing their view that there cannot be rigid rules for patentability. See Ksr International Co.v Teleflex Inc, 550 U. S. ____, 127 S.Ct

Also, the Appellant's Brief provides an interesting distinction for "pure" business method patent claims (i.e., a method for performing a business transaction) over business methods that rely on mathematical algorithms. Specifically, the Appellant asserted that showing a “concrete, useful and tangible result” is only relevant to a claim that recites a law of nature or mathematical algorithm:

Page 15 of Appellee’s brief attempts to establish that a Concrete, Useful and Tangible result is required in order for a claimed process to be subject matter eligible. With all due respect, however, this has never been required unless the claim recites, directly or indirectly, a law of nature/mathematical algorithm. These present claims do not recite such a law of nature/ mathematical algorithm.

Appellee’s brief, page 15, subheading 3, appears to contend this point -- by stating that the “useful concrete and tangible result” test is about “the eligibility of machines and machine-implemented methods employing mathematical algorithms” (emphasis added). This is further confirmed on page 18 of Appellee’s brief. All of the cases cited in favor of the Appellee's arguments, however, were in the context of a claim that recited a mathematical algorithm.

Changes in legal and financial obligations certainly is an invention under the sun that was made by man, and should be patentable for these reasons.

There's much more in the briefs that should ultimately provide much-needed clarification in the world of business method patents. Oral arguments are set for December 5th, with a decision likely in February or March of 2008.

View Appellant's Blue Brief here (link)

View PTO's Red Brief here (link)

View Appellant's Reply Brief here (link)

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