In re Lowry, 1994

Lowry’s patent application, titled “Data Processing System Having a Data Structure with a Single, Simple Primitive,” related to the storage, use, and management of information residing in a memory. The invention provided an efficient, flexible method of organizing stored data in a computer memory. A memory stores data according to a particular order or arrangement. Application programs use stored data to perform specified functions. A data model provides the framework for organizing and representing information used by an application program. Data models define permissible data structures – organizational structures imposed upon the data used by the application program – compatible with particular data processing systems.

Claims 1 through 5 claimed a memory containing a stored data structure. Claim 1 was representative:

1. A memory for storing data for access by an application program being executed on a data processing system, comprising:
a data structure stored in said memory, said data structure including information resident in a database used by said application program and including:
a plurality of attribute data objects stored in said memory, each of said attribute data objects containing different information from said database;
a single holder attribute data object for each of said attribute data objects, each of said holder attribute data objects being one of said plurality of attribute data objects, a being-held relationship existing between each attribute data object and its holder attribute data object, and each of said attribute data objects having a being-held relationship with only a single other attribute data object, thereby establishing a hierarchy of said plurality of attribute data objects;
a referent attribute data object for at least one of said attribute data objects, said referent attribute data object being nonhierarchically related to a holder attribute data object for the same at least one of said attribute data objects and also being one of said plurality of attribute data objects, attribute data objects for which there exist only holder attribute data objects being called element data objects, and attribute data objects for which there also exist referent attribute data objects being called relation data objects; and
an apex data object stored in said memory and having no being-held relationship with any of said attribute data objects, however, at least one of said attribute data objects having a being-held relationship with said apex data object.

Claims 6 through 19 claimed a data processing system executing an application program, containing a database, a central processing unit (CPU) means for processing the application program, and a memory means for holding the claimed data structure. Claims 20-23, 25, and 28 specified methods of accessing, creating, adding, and erasing ADOs within the data structure. Claim 24 specified a method for creating a data structure. Claims 26, 27, and 29 claimed methods of creating and erasing non-hierarchical relationships between ADOs and referent ADOs.

The USPTO Examiner rejected claims 1 through 5 under 35 U.S.C. Section 101 as non-statutory subject matter. The examiner also rejected claims 1 through 19 under 35 U.S.C. Section 103 as obvious in light of U.S. Patent No. 4,774,661 (Kumpati). Finally, the examiner rejected claims 20 through 29 under 35 U.S.C. Section 102(e) as anticipated by Kumpati. The Board reversed the 35 U.S.C. Section 101 rejection. The Board found that claims l through 5, directed to a memory containing stored information, as a whole, recited an article of manufacture. The Board concluded that the invention claimed in claims 1 through 5 was statutory subject matter. But when evaluating patentability under sections 102 and 103, the Board failed to give patentable weight to the claimed data structure. The Board stated that the claims on appeal specified relationships between the ADOs stored in the memory. The Board analogized Lowry’s data structure to printed matter and relied on this statement from In re Gulack, 703 F.2d 1381, 217 USPQ 401 (Fed. Cir. 1983):
Where the printed matter is not functionally related to the substrate, the printed matter will not distinguish the invention from the prior art in terms of patentability. Although the printed matter must be considered, in that situation it may not be entitled to patentable weight.

The Federal Circuit stated that the Board erroneously extended a printed matter rejection under sections 102 and 103 to a new field in this case, which involves information stored in a memory. The Federal Circuit stated that this case was distinguishable from the printed matter cases because the printed matter cases only “dealt with claims defining as the invention certain novel arrangements of printed lines or characters, useful and intelligible only to the human mind” and have no factual relevance where “the invention as defined by the claims requires that the information be processed not by the mind but by a machine, the computer.” Lowry’s data structures, which according to Lowry greatly facilitate data management by data processing systems, are processed by a machine. Indeed, they are not accessible other than through sophisticated software systems. The Federal Circuit concluded that printed matter cases have no factual relevance here, nor are the data structures analogous to printed matter. Lowry’s ADOs did not represent merely underlying data in a database. ADOs contain both information used by application programs and information regarding their physical interrelationships within a memory. Lowry’s claims dictated how application programs manage information. Thus, Lowry’s claims defined functional characteristics of the memory.

Contrary to the PTO’s assertion, Lowry did not claim merely the information content of a memory. Lowry’s data structures, while including data resident in a database, depended only functionally on information content. While the information content affects the exact sequence of bits stored in accordance with Lowry’s data structures, the claims required specific electronic structural elements which imparted a physical organization on the information stored in memory. Lowry’s invention managed information.

Lowry did not seek to patent the Attributive data model in the abstract. Nor did he seek to patent the content of information resident in a database. Rather, Lowry’s data structures imposed a physical organization on the data.

In Lowry’s invention, the stored data adopted no physical “structure” per se. Rather, the stored data existed as a collection of bits having information about relationships between the ADOs. According to the Federal Circuit, this is the essence of electronic Structure. More than mere abstraction, the data structures are specific electrical or magnetic structural elements in a memory. Lowry’s data structures were physical entities that provide increased efficiency in computer operation. They are not analogous to printed matter.

Even assuming that data objects and data structures are analogous to printed matter, the PTO did not establish that the ADOs, within the context of the entire claims, lacked a new and nonobvious functional relationship with the memory. The ADOs follow a particular sequence that enables more efficient data processing operations on stored data. The ADOs facilitate addition, deletion, and modification of information stored in the memory. In sum, the ADO’s perform a function. Gulack requires no more.

With the foregoing in mind, the court turned to the specific prior art rejections
and noted that the Kumpati reference did not disclose Lowry’s ADOs and their specific hierarchical and non-hierarchical relationships.

Lowry’s claimed invention involved an organization of information and its interrelationships which Kumpati neither discloses nor suggests. Kumpati also did not render Lowry’s claims obvious. The Federal Circuit held that the Board erred in holding otherwise. Claims 1 through 19 are, as a whole, were not obvious in light of Kumpati.

Because Kumpati does not contain all limitations of claims 20 through 29, the Board erred in holding these claims anticipated by Kumpati. Therefore, the Federal Circuit reversed the section 102 rejection of claims 20 through 29.

The Federal Circuit concluded that the Board erred by denying patentable weight to Lowry’s data structure limitations.

In re Warmerdam, 1994

Warmerdam’s patent application was directed to a method and apparatus for controlling the motion robotic machines to avoid collisions.

The technique required determining the shape and position of the edges of the objects to be avoided. The prior art taught that collision avoidance operations could be simplified by assuming that the objects were larger and more regularly shaped than they actually were. This could be done by treating the object as if it were a circle or sphere (called a “bubble”) of sufficient size to enclose the object, and by assuming that any motion that impinged upon the circle would have produced a collision. Appellants’ invention claimed a further refinement of prior art bubble systems. The positions of objects were determined by measuring the locations of artificial circular boundaries, but the measurement process did not end if the machine determines that the circular boundary will be violated in a potential collision. Instead, if a potential collision was detected, appellants further refined the determination of the boundary position by replacing the spherical bubble zone with a set of smaller, more refined bubble zones. Appellants referred to their set of increasingly better defined safety zones as a bubble hierarchy. Warmerdam conceded that the use of bubble hierarchies for collision avoidance was known. The asserted novelty of Warmerdam’s method and apparatus was the generation and placement of the hierarchy of bubbles along the medial axis of the object. The medial axis of an object was defined in the specification to be a line with the same topology as the object itself connecting points which lay midway between boundary centers of the object.

As filed, the application contained seven claims of which only claims 1-6 were at issue in the case. The other claim, claim 7, was indicated by the examiner as allowable. Claims 1-4 were method claims, of which claim 1 was the sole independent claim:
1. A method for generating a data structure which represents the shape of [sic] physical object in a position and/or motion control machine as a hierarchy of bubbles, comprising the steps of:
first locating the medial axis of the object and
then creating a hierarchy of bubbles on the medial axis.

Claim 5 was directed to a machine:
5. A machine having a memory which contains data representing a bubble hierarchy generated by the method of any of Claims 1 through 4.

Claim 6 was directed to a data structure:
6. A data structure generated by the method of any of Claims 1 through 4.

The Federal Circuit noted that the statute equates the term “method” with the term “process,” see 35 U.S.C. Section 100(b), the question becomes what is it that this process does, and in doing it is it other than what the Supreme Court must have understood to be “laws of nature, natural phenomena or abstract ideas”?

The Board concluded that each of the two steps recited in claim 1, involved the solving of a mathematical algorithm. The Commissioner asserted that these conclusions are sustainable on the ground that the preferred method of locating a medial axis identified in the specification was a mathematical procedure known as Hilditch Skeletonization method, and on the ground that the top-down and bottom-up procedures identified in the specification (and claimed in the dependent claims) for creating the bubble hierarchy were likewise mathematical in nature. The Commissioner also pointed to several cases3 in which process steps similar to those recited in claims 1-4, i.e., steps such as computing, determining, cross-correlating, comparing, selecting, initializing, testing, modifying, and identifying, were found to implicitly recite the solving of a mathematical algorithm.

Warmerdam, by contrast, argued that the claims were broad enough to cover methods which involve physically measuring the contour of the object. Thus, according to Warmerdam, the claims did not essentially recite a mathematical algorithm, but only incidentally do so.

The Federal Circuit agreed, and stated that Claim 1 was broad enough to cover methods for locating the medial axis of an object that include physically measuring the contour of the object with a ruler or simply by eyeballing the object, and then creating the bubble hierarchy by manually drawing it. In that sense, it did not necessarily recite the solving of a mathematical algorithm. The fact that the claim covered methods which are essentially mathematical in nature, as discussed infra, is not dispositive. Claims should be evaluated by their limitations, not by what they incidentally cover.

On the other hand, the preferred, and the only practical, embodiment of the claimed method involves steps which are essentially mathematical in nature, i.e., utilization of the Hilditch Skeletonization method to locate the medial axis, followed by utilization of a top-down or bottom-up procedure for creating the bubble hierarchy. In this sense, at least, the claim is mathematical in nature.

The Federal Circuit declined to resolve the issue of the definition of “mathematical algorithm,” because they found that regardless whether the claim can be said to recite indirectly or directly a mathematical algorithm, the dispositive issue for assessing compliance with Section 101 in this case is whether the claim is for a process that goes beyond simply manipulating “abstract ideas” or “natural phenomena.”

The Federal Circuit noted that claim 1 recited the steps of “locating” a medial axis, and “creating” a bubble hierarchy and concluded that these steps described nothing more than the manipulation of basic mathematical constructs, the paradigmatic “abstract idea” and noted that, as the Supreme Court has made clear, [a]n idea of itself is not patentable, Rubber-Tip Pencil Co. v. Howard, 20 U.S. (1 Wall.) 498, 507 (1874); taking several abstract ideas and manipulating them together adds nothing to the basic equation.

Warmerdam’s argument that the claim implies physically measuring the contour of an object missed the point. As a whole, the claim involved no more than the manipulation of abstract ideas. Moreover, from the standpoint of Section 101, a physical measurement step is indistinguishable from the data gathering step which, as was held in In re Grams, 888 F.2d 835, 12 USPQ2d 1824 (Fed. Cir. 1989), was insufficient, standing alone, to impart patentability to a claim.

Warmerdam’s other argument, that the manipulation of data as described in the claims constitutes or represents a sufficient level of physical activity to impart patentability to the claim, was not convincing. The problem with Warmerdam’s argument was that the claims here did not have the effect of requiring more than the manipulation of ideas. The Federal Circuit thus concluded that the Board did not err in sustaining the rejection of claims 1-4 under Section 101.

The Federal Circuit then noted that Claim 5 was for a machine, and was clearly patentable subject matter. The Board denied patentability on the grounds it was indefinite under 35 U.S.C. Section 112, second paragraph and was not in conventional product-by-process format, and the Commissioner repeated this assertion. Warmerdam argued that claim 5 conforms to the conventional product- by-process format, and thus is definite. The Commissioner argued that it was unclear how a memory is produced by the steps recited in claims 1-4. Second, the Commissioner argued that the bubble hierarchy which was created in the recited steps was not an exact, well-defined data structure.

The Federal Circuit noted that the legal standard for definiteness is whether a claim reasonably apprises those of skill in the art of its scope, and then concluded that
Claim 5 satisfies this test. It covers any machine (presumably including a known computer) having a memory which contains any data representing a bubble hierarchy determined by any of the methods of claims 1-4. The Federal Circuit stated that there is no requirement that a claim for a machine which incorporates process steps, such as claim 5, must conform to the conventional definition of a product-by-process claim.

The Federal Circuit stated that the ideas expressed in claims 1 through 4 are well known mathematical constructs, and lend themselves to manipulation through known computer technology. There was no showing that one skilled in the art would have had any particular difficulty in determining whether a machine having a memory containing data representing a bubble hierarchy was or was not within the scope of claim 5. The Board’s point, that the claim leaves unclear the technique of how the memory was configured with the data, had no bearing on this issue. The claim plainly covered all such techniques. The Federal Circuit concluded the Board erred in sustaining the rejection of claim 5 for indefiniteness.

The Court then concluded that the data structure claim was non-statutory. Warmerdam argued that a data structure was one of the categories of patentable subject matter recited in Section 101, and thus that the Board erred in sustaining the rejection of claim 6 under Section 101. The Commissioner, by contrast, citing Kewanee Oil Co. v. Bicron Corp., 416 U.S. 470 (1974), argued that the rejection should be sustained because the claim is not one of the categories of subject matter recited in Section 101, to wit, a process, machine, manufacture, composition of matter, or an improvement thereof. The Federal Circuit agreed with the Commissioner. In the IEEE Standard Computer Dictionary (1991), the phrase “data structure” is defined as [a] physical or logical relationship among data elements, designed to support specific data manipulation functions. Since the “data structure” of claim 6 was nothing more than another way of describing the manipulation of ideas contained in claims 1-4, it suffered from the same fatal defect they did, according to the Federal Circuit.

In re Alappat, 1994

This case went a long way towards making it possible to obtain patents on software-related inventions, at least for apparatus claims drafted in means-plus-function format, and if digital hardware equivalents were disclosed in the specification. Specific hardware structures were disclosed in the specification, but the Federal Circuit held that the claim could also read on a general purpose computer programmed to carry out the invention, without a 35 U.S.C. 101 problem.

Alappat’s invention related generally to a means for creating a smooth waveform display in a digital oscilloscope. The screen of an oscilloscope was the front of a cathode-ray tube (CRT), whose screen presented an array (or raster) of pixels arranged at intersections of vertical columns and horizontal rows. Each column in the array represented a different time period, and each row represented a different magnitude. An input signal to the oscilloscope was sampled and digitized to provide a waveform data sequence (vector list), wherein each successive element of the sequence represented the magnitude of the waveform at a successively later time. The waveform data sequence was then processed to provide a bit map, which was a stored data array indicating which pixels are to be illuminated. The waveform ultimately displayed was formed by a group of vectors, wherein each vector has a straight line trajectory between two points on the screen at elevations representing the magnitudes of two successive input signal samples and at horizontal positions representing the timing of the two samples. Because a CRT screen contains a finite number of pixels, rapidly rising and falling portions of a waveform can appear discontinuous or jagged. In addition, the presence of “noise” in an input signal can cause portions of the waveform to oscillate between contiguous pixel rows when the magnitude of the input signal lies between values represented by the elevations of the two rows. Moreover, the vertical resolution of the display may be limited by the number of rows of pixels on the screen. The noticeability and appearance of these effects is known as aliasing. To overcome these effects, Alappat’s invention employed an anti-aliasing system wherein each vector making up the waveform is represented by modulating the illumination intensity of pixels having center points bounding the trajectory of the vector. The intensity at which each of the pixels was illuminated depended upon the distance of the center point of each pixel from the trajectory of the vector. Pixels lying squarely on the waveform trace received maximum illumination, whereas pixels lying along an edge of the trace received illumination decreasing in intensity proportional to the increase in the distance of the center point of the pixel from the vector trajectory. Employing this anti-aliasing technique eliminates any apparent discontinuity, jaggedness, or oscillation in the waveform, thus giving the visual appearance of a smooth continuous waveform.

Claim 15, the only independent claim in issue at the Federal Circuit, read:
A rasterizer for converting vector list data representing sample magnitudes of an input waveform into anti-aliased pixel illumination intensity data to be displayed on a display means comprising:
(a) means for determining the vertical distance between the endpoints of each of the vectors in the data list;
(b) means for determining the elevation of a row of pixels that is spanned by the vector;
(c) means for normalizing the vertical distance and elevation; and
(d) means for outputting illumination intensity data as a predetermined function of the normalized vertical distance and elevation.

The USPTO Examiner finally rejected claims under 35 U.S.C. Section 101 as being directed to non-statutory subject matter. Alappat appealed this rejection to the Board, and a three-member panel reversed the Examiner’s non-statutory subject matter rejection. The Examiner then requested reconsideration of this decision, stating that the panel’s decision conflicted with PTO policy. The Examiner further requested that such reconsideration be carried out by an expanded panel.

An expanded panel reconsidered the decision. The expanded panel was made up of eight members including the PTO Commissioner, the PTO Deputy Commissioner, the PTO Assistant Commissioner, the Board Chairman, the Board Vice-Chairman, and the three members of the original panel. This seemed like “board stacking.” The expanded eight-member panel affirmed the Examiner’s Section 101 rejection, ruling contrary to the decision of the original three-member panel. The expanded panel had held that the independent apparatus claim, which was written in “means-plus-function” language, was merely a process claim wherein each element represented a step in that process. The panel reasoned that the claim was broad enough to cover an appropriately programmed general purpose computer and, therefore, held that the claimed process was a “mathematical algorithm” which was not eligible for patent protection. The three members of the original panel dissented.

The Federal Circuit first considered the following question: When a three-member panel of the Board has rendered its decision, does the Commissioner have the authority to constitute a new panel for purposes of reconsideration? The Federal Circuit held that the answer to this first question was Yes. The Federal Circuit noted that 35 U.S.C. Section 7 (a) plainly and unambiguously provides that the Commissioner, the Deputy Commissioner, and the Assistant Commissioners are members of the Board. Section 7(b) plainly and unambiguously requires that the Commissioner designate “at least three” Board members to hear each appeal. By use of the language “at least three,” Congress expressly granted the Commissioner the authority to designate expanded Board panels made up of more than three Board members. There was no evidence in the legislative history of Section 7, or Title 35 as a whole, clearly indicating that Congress intended to impose any statutory limitations regarding which Board members the Commissioner may appoint to an expanded panel or when the Commissioner may convene such a panel. The last sentence of Section 7(b) provided: “Only the Board of Patent Appeals and Interferences has the authority to grant rehearings.” The Commissioner contended that the reconsideration action taken in this case constituted a type of “rehearing” as mentioned in the last sentence of Section 7(b). The Federal Circuit found the Commissioner’s interpretation of Section 7 to have been a reasonable one entitled to deference, given that neither the statute itself nor the legislative history thereof indicated Congressional intent to the contrary. The fact that Section 7 referred to “rehearings” whereas 37 C.F.R. 1.197 (PTO Rule 197) referred to “reconsideration” was of no significance. The differing terminology appeared to be nothing more than the result of imprecise regulation drafting.

The Federal Circuit then turned to the merits of the case.

The majority opinion, by Judge Rich, joined by Judges Newman, Lourie, Michel, Plager and Rader, reversed the expanded panel’s decision.

The majority stated that the reconsideration panel erred by refusing to interpret the means-for-function clauses properly. These clauses related to specific structures disclosed in the specification – two ALUs, two barrel shifters, and a ROM – and their equivalents, and that the original panel was correct in its construction of claim 15. Thus, pursuant to Section 112, Para. 6, and in view of the specification, the claims did recite specific digital circuitry structures. The majority concluded that because the claim recites connected structures, the claim “unquestionably recites a machine.”

The majority went further and stated that Finally, the court concludes that if the claimed “rasterizer” were equivalent to a “general purpose digital computer” programmed to perform the calculations performed by the rasterizer, such programmed computer would be the invention of a “new machine” within Section 101.

A dissent by Chief Judge Archer, joined by Judge Nies, characterized Alappat’s invention as “newly discovered mathematics and not the invention or discovery of a process or product applying it.”

Judge Newman, concurring, noted that:
Old law is often adapted to new needs: “If Congress has made a choice of language which fairly brings a given situation within a statute, it is unimportant that the particular application may not have been contemplated by the legislators.” Barr v. United States, 324 U.S. 83, 90 (1945). In Diamond v. Chakrabarty, 447 U.S. 303, 206 USPQ 193 (1980) the Court emphasized that the patent system is available to serve all fruits of human ingenuity.

In an address before the Economic Club of Detroit, Irving S. Shapiro, Chairman, E.I. duPont de Nemours & Co., discussing “Technology’s Decline”, stated:
What seems to be missing in our country is an understanding that, no matter how much money we spend on research and development, the findings are not going to benefit the public unless there are suitable incentives to invest in commercialization. That means a chance of reasonable profits from risk taking and a chance to hold onto one’s original ideas once they are created.
XLV Vital Speeches of the Day, 360, 364 (1979). To bar such inventions as Alappat’s rasterizer from access to the patent system is to eliminate the incentive provided by this law, disserving not only technological industry, but the public benefit of improved technology. One must have a powerful reason to exclude technology from the scope of Title 35. Indeed, the importance of the patent incentive in industrial innovation was the principal factor in the formation of the Federal Circuit. It is thus appropriate constructively to apply statute, precedent, and policy to the variety of inventions that the information age has generated, and to remove the cloud on whether these inventions may participate in the benefits and obligations of the patent system.

In re Schrader, 1994

Schrader’s application was directed to a method for competitively bidding on a plurality of related items, such as contiguous tracts of land or the like. After the items have been offered to bidders, bids on one, some, or all of the items are received and entered into a “record.” Then, the combination of winning bids is determined by assembling a “completion” from all the entered bids. A completion is the particular combination of bids which “would complete a sale of all of the items being offered at the highest offered total price.” The items are then sold in accordance with the “completion.”

For example, in an auction involving two contiguous tracts of land, tracts 1 and 2, the following bids might be received and recorded: Bid 1 – $100,000 for tract 1 by bidder A; Bid 2 – $200,000 for tract 2 by bidder B; and Bid 3 – $250,000 for both tracts 1 and 2 by bidder C. The combination of bids that maximizes the revenue to the seller, and thus the combination of bids that forms the “completion,” would be bids 1 and 2.

Schrader claimed that his method constitutes a novel way of conducting auctions. According to Schrader, the type of bids that are normally offered at auctions is dictated solely by the way in which the auctioneer organizes or groups the items to be sold. Through his method, claims Schrader, bids on any combination of the items being auctioned off are offered at the discretion of the bidder. The purported benefit is greater sales revenue or profit to the seller. This is illustrated by the previous example, in which bids were offered on each of the individual tracts as well as on both tracts together. As a result, the seller attained total sales revenue of $300,000. If the seller had only been offered bids on the combined tracts, i.e., Bid 3, the seller would have derived $250,000 in revenue.

Claim 1 was representative:

1. A method of competitively bidding on a plurality of items comprising the steps of identifying a plurality of related items in a record, offering said plurality of items to a plurality of potential bidders, receiving bids from said bidders for both individual ones of said items and a plurality of groups of said items, each of said groups including one or more of said items, said items and groups being any number of all of said individual ones and all of the possible combinations of said items, entering said bids in said record, indexing each of said bids to one of said individual ones or said groups of said items, and assembling a completion of all said bids on said items and groups, said completion identifying a bid for all of said items at a prevailing total price, identifying in said record all of said bids corresponding to said prevailing total price.

During prosecution, the examiner rejected the claims for lack of statutory subject matter under 35 U.S.C. Section 101. After this rejection was made final, Schrader appealed to the Board. On appeal, the Board sustained the rejection on three different grounds.

Schrader appealed to the Federal Circuit and argued that the Board incorrectly invoked the rule that a patent cannot be obtained for a mathematical algorithm in the abstract.

Schrader’s first point was that there was no mathematical algorithm implicit in the claim. The Federal Circuit disagreed. Benson defined a “mathematical algorithm” for purposes of Section 101 as a “procedure for solving a given type of mathematical problem… .” The claim language “assembling a completion” is such a procedure because it describes the solving of a mathematical problem: determining the optimal combination of bids. This conclusion is supported by an admission in Schrader’s brief that the following two-step mathematical process is inherent in the phrase:

Perform a mathematical calculation which

a)determines possible combinations of items and/or groups with the provision that each item only appear once in each combination.

b)selects the combination with prevailing (i.e. highest or lowest) value.

This process, although expressed in general terms, is within or similar to a class of well-known mathematical optimization procedures commonly applied to business problems called linear programming7. Thus, a mathematical algorithm is implicit in the claim.

Schrader further argued that the claim implies no more than the step of summing, hardly a mathematical algorithm in Schrader’s view. The Federal Circuit believed that this was too narrow a view. The claim implied a procedure for determining the optimal combination of bids. While that procedure may have involved summing, it was not limited to it. In any event, even simple summing may be an algorithm.

Schrader’s next point was that, even if a mathematical algorithm is implicit in the claim, the claim recites or implies sufficient physical activity to meet the second prong of the Freeman-Walter-Abele test. Thus, he argued the method physically regroups raw bids into new groupings and ultimately ‘completions’; physically transforms bid data into completion data or display data; and makes physical changes to a “display.” Schrader said that the claim envisages an auction environment in which “all of the bidders are assembled in one large room with a display in front of the room” or with the bidders “assembled in several rooms either adjacent or in different cities interconnected by a closed-circuit television system or the like using large screen displays.”

The Federal Circuit found this argument unpersuasive. The word “display” was nowhere mentioned in the claim. Moreover, there was nothing physical about bids per se. Thus, the grouping or regrouping of bids cannot constitute a physical change, effect, or result. Also, the terms “bid data,” “completion data,” or “display data” are nowhere mentioned in the claim and there was no basis to read them into the claim. Finally, the notion of bidders assembled in a single location in front of a display, or in several locations interconnected by closed-circuit television through a large-screen display was not recited in the claim.

The only physical effect or result which was required by the claim was the entering of bids in a “record,” a step that can be accomplished simply by writing the bids on a piece of paper or a chalkboard. For purposes of Section 101, such activity is indistinguishable from the data gathering steps which according to In re Grams, were insufficient to impart patentability to a claim involving the solving of a mathematical algorithm.

Moreover, the step of entering data into a “record” is implicit in any application of a mathematical algorithm. The recitation of such a step in a claim involving the solving of a mathematical algorithm merely makes explicit what had been implicit. A conclusion that such activity is sufficient to impart patentability to a claim involving the solving of a mathematical algorithm would exalt form over substance. A similar point was recognized in Flook, in which the Court concluded that the recitation of insignificant post-solution activity in a claim involving the solving of a mathematical algorithm could not impart patentability to the claim.

The Federal Circuit found that Schrader’s claims were thus not patentable.

After this case, practitioners such as myself tried to overcome 101 rejections by citing something physical in patent claims. Reciting output devices or displays would often not overcome rejections though.

Arrhythmia Research Technology Inc. v. Corazonix Corp., 1992

The invention was directed to the analysis of electrocardiographic signals in order to determine certain characteristics of the heart function. Dr. Simson, a cardiologist, had sought a solution to the problem of determining which heart attack victims are at high risk for ventricular tachycardia, so that these persons can be carefully monitored and appropriately treated.

Certain steps of the invention were described as being conducted with the aid of a digital computer, and the patent specification set forth the mathematical formulae that were used to configure (program) the computer. The specification stated that dedicated, specific purpose equipment or hard wired logic circuitry can also be used.

The district court held that the method and apparatus claims of the Simpson patent are directed to a mathematical algorithm, and thus do not define statutory subject matter. Claim 1 was the broadest method claim:

1. A method for analyzing electrocardiograph signals to determine the presence or absence of a predetermined level of high frequency energy in the late QRS signal, comprising the steps of:
converting a series of QRS signals to time segments, each segment having a digital value equivalent to the analog value of said signals at said time;
applying a portion of said time segments in reverse time order to high pass filter means;
determining an arithmetic value of the amplitude of the output of said filter; and
comparing said value with said predetermined level.

Claim 7 was a representative apparatus claim:

7. Apparatus for analyzing electrocardiograph signals to determine the level of high frequency energy in the late QRS signal comprising:
means for converting X, Y, and Z lead electrocardiographic input signals to digital valued time segments;
means for examining said X, Y, and Z digital valued time segments and selecting therefrom the QRS waveform portions thereof;
means for signal averaging a multiplicity of said selected QRS waveforms for each of said X, Y, and Z inputs and providing composite, digital X, Y, and Z QRS waveforms;
high pass filter means;
means for applying to said filter means, in reverse time order, the anterior portion of each said digital X, Y, and Z waveform; and
means for comparing the output of said filter means with a predetermined level to obtain an indication of the presence of a high frequency, low level, energy component in the filter output of said anterior portions.

The Patent and Trademark Office had granted the patent without questioning that its claims were directed to statutory subject matter under Section 101.

The Federal Circuit stated that whether a claim is directed to statutory subject matter is a question of law.

The Federal Circuit recognized that Supreme Court has observed that Congress intended section 101 to include “anything under the sun that is made by man.” Diamond v. Chakrabarty, 447 U.S. 303, 309, 206 USPQ 193, 197 (1980), quoting S. Rep. No. 1979, 82d Cong., 2d Sess., 5 (1952); H.R. Rep. No. 1923, 82d Cong., 2d Sess., 6 (1952). There are, however, qualifications to the apparent sweep of this statement. Excluded from patentability is subject matter in the categories of “laws of nature, physical phenomena, and abstract ideas”. Diamond v. Diehr,450 U.S. 175, 185, 209 USPQ 1, 7 (1981). A mathematical formula may describe a law of nature, a scientific truth, or an abstract idea. As courts have recognized, mathematics may also be used to describe steps of a statutory method or elements of a statutory apparatus. The exceptions to patentable subject matter derive from a lengthy jurisprudence, but their meaning was probed anew with the advent of computer-related inventions.

The Federal Circuit then noted that in Gottschalk v. Benson, 409 U.S. 63, 72, 175 USPQ 673, 676 (1972) the Court held that a patent claim that “wholly pre-empts” a mathematical formula used in a general purpose digital computer is directed solely to a mathematical algorithm, and therefore does not define statutory subject matter under section 101. The Court described the mathematical process claimed in Benson as “so abstract and sweeping as to cover both known and unknown uses of the BCD [binary coded decimal] to pure binary conversion.”

The court then noted that in Parker v. Flook, 437 U.S. 584, 591, 198 USPQ 193, 198 (1978) the Court explained that the criterion for patentability of a claim that requires the use of mathematical procedures is not simply whether the claim “wholly pre-empts” a mathematical algorithm, but whether the claim is directed to a new and useful process, independent of whether the mathematical algorithm required for its performance is novel. Applying these criteria the Court held nonstatutory a method claim for computer-calculating “alarm limits” for use in a catalytic conversion process, on the basis that “once that algorithm is assumed to be within the prior art, the application, considered as a whole, contains no patentable invention.” Flook, 437 U.S. at 594, 198 USPQ at 199.

The Federal Circuit then noted that in Diamond v. Diehr the Court explained that non-statutory status under section 101 derives from the “abstract”, rather than the “sweeping”, nature of a claim that contains a mathematical algorithm. The Court stated:
“While a scientific truth, or the mathematical expression of it, is not a patentable invention, a novel and useful structure created with the aid of knowledge of scientific truth may be.”

The mathematical algorithm in Diehr was the known Arrhenius equation, and the Court held that when the algorithm was incorporated in a useful process, the subject matter was statutory. The Court confirmed the rule that process steps or apparatus functions that entail computer-performed calculations, whether the calculations are described in mathematical symbols or in words, do not of themselves render a claim nonstatutory. In Diehr, the Court clarified its earlier holdings, stating that “[I]t is inappropriate to dissect the claims into old and new elements and then to ignore the presence of the old elements in the [section 101] analysis.”

The Court thus placed the patentability of computer-aided inventions in the mainstream of the law. The ensuing mode of analysis of such inventions was summarized in In re Meyer, 688 F.2d 789, 795, 215 USPQ 193, 198 (CCPA 1982):

In considering a claim for compliance with 35 USC 101, it must be determined whether a scientific principle, law of nature, idea, or mental process, which may be represented by a mathematical algorithm, is included in the subject matter of the claim. If it is, it must then be determined whether such principle, law, idea, or mental process is applied in an invention of a type set forth in 35 USC 101.

The law crystallized about the principle that claims directed solely to an abstract mathematical formula or equation, including the mathematical expression of scientific truth or a law of nature, whether directly or indirectly stated, are nonstatutory under section 101; whereas claims to a specific process or apparatus that is implemented in accordance with a mathematical algorithm will generally satisfy section 101.

In applying this principle to an invention whose process steps or apparatus elements are described at least in part in terms of mathematical procedures, the mathematical procedures are considered in the context of the claimed invention as a whole. Determination of statutory subject matter has been conveniently conducted in two stages, following a protocol initiated by the Court of Customs and Patent Appeals in In re Freeman, 573 F.2d 1237, 197 USPQ 464 (CCPA 1978); modified after the Court’s Flook decision by In re Walter, 618 F.2d 758, 205 USPQ 397 (CCPA 1980); and again after the Court’s Diehr decision by In re Abele, 684 F.2d 902, 214 USPQ 682 (CCPA 1982).

This analysis has been designated the Freeman-Walter-Abele test for statutory subject matter. It is first determined whether a mathematical algorithm is recited directly or indirectly in the claim. If so, it is next determined whether the claimed invention as a whole is no more than the algorithm itself; that is, whether the claim is directed to a mathematical algorithm that is not applied to or limited by physical elements or process steps. Such claims are nonstatutory. However, when the mathematical algorithm is applied in one or more steps of an otherwise statutory process claim, or one or more elements of an otherwise statutory apparatus claim, the requirements of section 101 are met. The court in Abele explained that:
Walter should be read as requiring no more than that the algorithm be “applied in any manner to physical elements or process steps,” provided that its application is circumscribed by more than a field of use limitation or non-essential post-solution activity.

Although the Freeman-Walter-Abele analysis is not the only test for statutory subject matter, and the Federal Circuit stated that failure to meet that test may not always defeat the claim, the Federal Circuit found that this analytic procedure was conveniently applied to the Simson invention.

Applying the Freeman-Walter-Abele protocol to the process claims, the Federal Circuit accepted the proposition that a mathematical algorithm is included in the subject matter of the process claims in that some claimed steps are described in the specification by mathematical formulae. The Court thus proceeded to the second stage of the analysis, to determine whether the claimed process is otherwise statutory.

Simson’s process was claimed as a “method for analyzing electrocardiograph signals to determine the presence or absence of a predetermined level of high-frequency energy in the late QRS signal”. This claim limitation was not ignored in determining whether the subject matter as a whole is statutory, for all of the claim steps are in implementation of this method. The electrocardiograph signals are first transformed from analog form, in which they are obtained, to the corresponding digital signal. These input signals are not abstractions; they are related to the patient’s heart function.

The Federal Circuit took the position that the claimed steps of “converting”, “applying”, “determining”, and “comparing” were physical process steps that transform one physical, electrical signal into another and that the Freeman-Walter-Abele standard was met, for the steps of Simson’s claimed method comprise an otherwise statutory process whose mathematical procedures are applied to physical process steps.

The apparatus claims require a means for converting the electrocardiograph signals from the analog form in which they are generated into digital form.

The use of mathematical formulae or relationships to describe the electronic structure and operation of an apparatus does not make it nonstatutory. Iwahashi, 888 F.2d at 1375, 12 USPQ2d at 1911.

The Federal Circuit therefore concluded that the Simson apparatus claims satisfied the criteria for statutory subject matter.

After this case was decided, practitioners such as myself went out of our way to include A-D or D-A converters in our application. Many examiners, however, still would routinely issue 101 rejections if they saw an algorithm in a patent application.

The concurrence to this case by Judge Rader was also quite interesting:

Nearly twenty years ago, in Gottschalk v. Benson, 409 U.S. 63 [175 USPQ 458] (1972), the Supreme Court dealt with a computer process for conversion of binary coded decimals into pure binary numbers was not patentable subject matter. Benson held this mathematical algorithm ineligible for patent protection. 409 U.S. at 65, 71-72. Because computer programs rely heavily on mathematical algorithms, commentators saw dire implications in the Supreme Court’s opinion for patent protection of computer software. For instance, one treatise, citing Benson, stated:

[A] recent Supreme Court decision seemingly eliminated patent protection for computer software.

Donald S. Chisum, Patents Section 1.01 (1991); see also id. at Section 1.03 [6].

The court upholds the ‘459 patent by applying a permutation of the Benson algorithm rule. In reaching this result, the court adds another cord to the twisted knot of precedent encircling and confining the Benson rule. While fully concurring in the court’s result and commending its ability to trace legal strands through the tangle of post-Benson caselaw, I read later Supreme Court opinions to have cut the Gordian knot. The Supreme Court cut the knot by strictly limiting Benson.

Relying on the language of the patent statute, the Supreme Court in Diamond v. Diehr, 450 U.S. 175 [209 USPQ 1] (1981), turned away from the Benson algorithm rule. Thus, I too conclude that the ‘459 patent claims patentable subject matter – not on the basis of a two-step post-Benson test, but on the basis of the patentable subject matter standards in title 35. Rather than perpetuate a non-statutory standard, I would find that the subject matter of the ‘459 patent satisfies the statutory standards of the Patent Act.

Patent Office Solicitor’s Legal Analysis, 1989

In 1989, Associate Solicitor Lee E. Barrett, an attorney in the Office of the Solicitor of the Patent and Trademark Office, performed a legal analysis on the subject of the patentability of mathematical algorithms and computer programs. The analysis was stated to have been published for the benefit of the public. Patent Examiners at the time were still anti-software patent.

August 9, 1989. FRED E. McKELVEY, Solicitor

Table of Contents

I. STATUTORY SUBJECT MATTER: 35 U.S.C. $ 101

II. MATHEMATICAL ALGORITHMS

A. Mathematical algorithms per se are not a statutory “process”
under $ 101

B. Evolution of the two-part test for mathematical
algorithm-statutory subject matter

C. Application of the two-part test
1. Step 1 — presence of a mathematical algorithm
a. Mathematical algorithm
b. “Process” versus “apparatus” claims
c. Form of the mathematical algorithm
2. Step 2 — is the mathematical algorithm “applied in any
manner to physical elements or process steps?”
a. Post-solution activity
b. Field of use limitations
c. Data-gathering steps
d. Transformation of something physical
e. Structural limitations in process claims

D. Examples
1. Diamond v. Diehr
2. Parker v. Floor
3. In re Abele

III. COMPUTER PROGRAMS

A. “Computer programs” versus “computer processes”

B. Statutory nature of computer processes
1. The Supreme Court has not ruled on the patentability of
computer programs
2. The CCPA has held that computer processes are statutory
unless they fall within a judicially determined exception

Discussion

I. Statutory Subject Matter: 35 U.S.C. $ 101

Inventions may be patented only if they fall within one of the four statutory classes of subject matter of 35 U.S.C. $ 101: “process, machine, manufacture, or composition of matter.” See Kewanee Oil Co. v. Bicron Corp., 416 U.S. 470, 483, 181 USPQ 673, 679 (1974):

[N]o patent is available for a discovery, however useful, novel, and nonobvious, unless it falls within one of the express categories of patentable subject matter of 35 U.S.C. $ 101.

Subject matter that does not fall within one of the statutory classes of 35 U.S.C. $ 101 is said to be “nonstatutory” or to be “unpatentable subject matter.” The broad language of $ 101 is intended to delineate a “general industrial boundary” of patentable invention. In re Bergy, 596 F.2d 952, 974 n.11, 201 USPQ 352, 372 n.11 (CCPA 1979), vacated, 444 U.S. 1028, aff’d sub nom., Diamond v. Chakrabarty, 447 U.S. 303, 206 USPQ 193 (1980). The first statutory class, process, is defined in 35 U.S.C. $ 100(b) and refers to acts, while the last three classes, machine, manufacture and composition of matter, refer to physical things; therefore, the general field of patentable invention consists of new acts and new things. Id. The classes relevant to this discussion are “process” and “machine.” A “process” is equivalent to a “method.” Bergy 596 F.2d at 965, 201 USPQ at 364. The term “machine” is used interchangeably with “apparatus.” In re Prater, 415 F.2d 1393, 1395 n.11,
162 USPQ 541, 543 n.11 (CCPA 1969).

The question of whether a claimed invention satisfies the other conditions for patentability is “wholly apart from whether the invention falls into a category of statutory subject matter” (emphasis deleted). Diamond v. Diehr, 450 U.S. 175, 190, 209 USPQ 1, 9 (1981) (citing Bergy, 596 F.2d at 961, 201 USPQ at 361). As stated in Parker v. Flook, 437 U.S. 584, 593, 198 USPQ 193, 198-99 (1978):

The obligation to determine what type of discovery is sought to be patented must precede the determination of whether that discovery is, in fact, new [i.e., novel under $ 102] or obvious [$ 103].

See also In re Sarkar, 588 F.2d 1330, 1333 n.10, 200 USPQ 132, 137 n.10 (CCPA 1978) (“If the subject matter as claimed is subject to patenting, i.e., if it falls within $ 101, it must them be examined for compliance with $$ 102 and 103”). Legislative history indicates that Congress contemplated that the subject matter provisions be given a broad construction and were intended to “include anything under the sun that is made by man.” Diamond v. Chakrabarry, 447 U.S. at 309, 206 USPQ at 197. Any process, machine, manufacture, or composition of matter constitutes statutory subject matter unless it falls within a judicially determined exception to $ 101. In re Pardo, 684 F.2d 912, 916, 214 USPQ 673, 677 (CCPA 1982). Exceptions include laws of nature, physical phenomena and abstract ideas. Diehr, 450 U.S. at 185, 209 USPQ at 7, and cases cited therein. This analysis addresses whether mathematical algorithms and computer programs are statutory subject matter.

II. Mathematical Algorithms

A. Mathematical algorithms per se are not a statutory “process” under $ 101

A mathematical algorithm is defined as a “procedure for solving a given type of mathematical problem.” Gottschalk v. Benson, 409 U.S. 63, 65, 175 USPQ 673, 674 (1972); Flook, 437 U.S. at 585 n.1. 198 USPQ at 195 n.1: Diehr, 450 U.S. at 186, 209 USPQ at 8. Mathematical algorithms are non- statutory because they have been determined not to fall within the $ 101 statutory class of a “process.” Benson. “[A]n algorithm, or mathematical formula, is like a law of nature, which cannot be the subject of a patent.” Diehr, 450 U.S. at 186, 209 USPQ at 8. The exception applies only to mathematical algorithms since any process is an ” algorithm” in the sense that it is a step-by-step procedure to arrive at a given result. In re Walter, 618 F.2d 758, 764 n.4, 205 USPQ 397, 405 n.4, (CCPA 1980); Pardo, 684 F.2d at 915,
214 USPQ at 676.

Although mathematical algorithms per se are nonstatutory, as stated in Diehr, 450 U.S. at 187-88, 209 USPQ at 8-9:

[A] claim drawn to subject matter otherwise statutory does not become nonstatutory simply because it uses a mathematical formula, computer program, or digital computer. . . .

[I]n Parker v. Flook we stated that “a process is not unpatentable simply because it contains a law of nature or a mathematical algorithm. ” 437 U.S. at 590. It is now commonplace that an application of a law of nature or mathematical formula to a known structure or process may well be deserving of patent protection. As Justice Stone explained four decades ago: “While a scientific truth, or the mathematical expression of it, is not a patentable invention, a novel and useful structure created with the aid and knowledge of scientific truth may be.”

Mackay Radio & Telegraph Co. v. Radio Corp. of America, 306 U.S. 86, 94 (1939). [Citations omitted]. The Supreme Court thus recognizes that mathematical algorithms are “the basic tools of scientific and technological work.” Benson, 409 U.S. at 67, 175 USPQ at 674, and should not be the subject of exclusive rights, whereas technological application of scientific principles and mathematical algorithms furthers the constitutional purpose of promoting “the Progress of . . . Useful arts.” U.S. Const. art. I, $ 8. It is also recognized that mathematical algorithms may be the most precise way to described the invention.

Where claims involve mathematical algorithms, as stated in In re Abele, 684 F.2d 902, 907, 214 USPQ 687 (CCPA 1982): The goal is to answer the question “What did applicants invent?” If the claimed invention is a mathematical algorithm, it is improper subject matter for patent protection, whereas if the claimed invention is an application of the algorithm, $ 101 will not bar the grant of a patent.

The tests for determining whether claims containing mathematical algorithms are statutory have gradually evolved in the courts since the Supreme Court’s decision in Benson in 1972.

B. Evolution of the two-part test for mathematical algorithm

-statutory subject matter

The proper legal analysis of mathematical algorithm

-statutory subject matter cases is the two-part test of In re Freeman, 573 F.2d 1237, 197 USPQ 464 (CCPA 1978), as modified by Walter and Abele. See In re Meyer, 688 F.2d 789, 796, 215 USPQ 193, 198 (CCPA 1982) (“A more comprehensive test for cases involving mathematical algorithms is set forth In re Abele”). A review of the evolution of the analysis provides some useful insights into the application of the test.

In Benson, the Supreme Court concluded that claims directed to a particular algorithm for converting binary coded decimal numbers to binary numbers was not statutory subject matter. The Supreme Court further concluded that any patent issued on those claims “would wholly preempt the mathematical formula and in practical effect would be a patent on the algorithm itself.” 409 U.S. at 72. 175 USPQ at 676. These two conclusions formed the basis for the two-part analysis of the Court of Customs and Patent Appeals (CCPA) in Freeman, 573 F.2d at 1245, 197 USPQ at 471:

First, it must be determined whether the claim directly or indirectly recites an ” algorithm” in the Benson sense of that term, for a claim which fails even to recite an algorithm clearly cannot wholly preempt an algorithm.

Second, the claim must be further analyzed to ascertain whether in its entirety it wholly preempts that algorithm. In 1978, the Supreme Court held in Flook that a claim need “not . . . cover every conceivable application of the formula,” to be nonstatutory, 437 U.S. at 586, 198 USPQ at 196. This decision left undefined what constitutes statutory subject matter. In Walter, the CCPA modified the second step of Freeman to require a more positive approach to determining what is claimed, 618 F.2d at 767, 205 USPQ at 407:

If it appears that the mathematical algorithm is implemented in a specific manner to define structural relationships between the physical elements of the claim (in apparatus claims) or to refine or limit claim steps (in process claims), the claim being otherwise statutory, the claim passes muster under $ 101. If, however, the mathematical algorithm is merely presented and solved by the claimed invention, as was the case in Benson and Flook, and is not applied in any manner to physical elements or process steps, no amount of post-solution activity will render the claim statutory; nor is it saved by a preamble merely reciting the field of use of the
mathematical algorithm.

The CCPA noted that while the second step of Freeman was “stated in terms of preemption” it had consistently been applied “in the spirit of the foregoing principles.” 618 F.2d at 767, 205 USPQ at 407.

In Abele, the CCPA further modified the second part of the test to provide a more comprehensive test. 684 F.2d at 906- 7, 214 USPQ at 686:

Appellants summarize the Walter test as setting forth two ends of a spectrum: what is now clearly nonstatutory, i.e., claims in which an algorithm is merely presented and solved by the claimed invention (preemption), and what is clearly statutory, i.e., claims in which an algorithm is implemented in a specific manner to define structural
relationships between the physical elements of the claim (in an apparatus claim) or to refine or limit steps (in a process).

Appellants urge that the statement of the test in Walter fails to provide a useful tool for analyzing claims in the “gray area” which falls between the two ends of that spectrum. We agree that the board’s understanding and application of the Walter analysis justifies appellant’s position. However, the Walter analysis quoted above does not limit patentable subject matter only to claims in which structural relationships or process steps are defined, limited or refined by the application of the algorithm. Rather, Walter should be read as requiring no more than the algorithm be “applied in any manner to physical elements or process steps,” provided that its
application is circumscribed by more than a field of use limitation or non-essential post-solution activity. Thus, if the claim would be “otherwise statutory,” id., albeit inoperative or less useful without the algorithm, the claim likewise presents statutory subject matter when the algorithm is included.

This broad reading of Walter, we conclude, is in accord with the Supreme Court decisions [holding “that a claim drawn to subject matter otherwise statutory does not become nonstatutory simply because it uses a mathematical formula, computer program, or digital computer.” Diamond v. Diehr, 450 U.S. at 187, 209 USPQ at 8].

The reason for the modification of the test was because, as noted in Abele, 684 F.2d at 909, 214 USPQ at 688:

The algorithm [in Abele] does not necessarily refine or limit the earlier steps of production and detection as would be required to achieve the status of patentable subject matter by the board’s narrow reading of Walter.

The second test of Abele suggests that the determination of whether the algorithm is “applied in any manner to physical element or process steps” may be made by viewing the claims without the algorithm and determining whether what remains is “otherwise statutory.” This analysis focuses on identifying the statutory process in the claim and is consistent with previous cases such as Walter, 618 F.2d at 769, 205 USPQ at 409 (“Examination of each claim demonstrates that each has no substance apart from the calculations involved” ). The technique of viewing the claim without the mathematical algorithm is not inconsistent with the requirement that claims must be considered “as a whole” under $ 101.

The requirement that claims be considered “as a whole” arose out of the now rejected “point of novelty” approach to statutory subject matter. Under the “point of novelty” approach, if a claim considered without the nonstatutory subject matter was unpatentable over the prior art (i.e., if the algorithm was at the “point of novelty” of the claim), the claims were found to not recite statutory subject matter. This approach was consistently rejected by the CCPA. See In re Chatfield, 545 F.2d 152, 191 USPQ 730 (CCPA 1976), cert. denied, 434 U.S. 875 (1977); In re Deutsch, 553 F.2d 689, 193 USPQ 645 (CCPA 1977); In re de Castelet, 562 F.2d 1236, 195 USPQ 439 (CCPA 1977); Freeman; Sarkar; Walter. The point of novelty approach was finally put to
rest in Diehr, 450 U.S. at 188-89, 209 USPQ at 9:

In determining the eligibility of respondents’ claimed process for patent protection under $ 101, their claims must be considered as a whole. It is inappropriate to dissect the claims into old and new elements and then to ignore the presence of the old elements in the analysis. . . . The “novelty” of any element or steps in a process, or even of the process itself, is of no relevance in determining whether the subject matter of a claim falls within the $ 101 categories of possibly patentable subject matter.

Under the second test of Abele, the claims are considered without the algorithm to determine whether what remains is “otherwise statutory,” not to determine whether what remains is novel and nonobvious.
C. Application of the two-part test

1. Step 1 — presence of a mathematical algorithm

a. Mathematical algorithm

A mathematical algorithm is a “procedure for solving a given type of mathematical problem.” In this sense, a mathematical algorithm refers “to methods of calculation, mathematical formulas, and mathematical procedures generally.” Walter, 618 F.2d at 764-65 n.4, 205 USPQ at 405 n.4. “The type of mathematical computation involved does not determine whether a procedure is statutory or nonstatutory.” In re Gelnovatch, 595 F.2d 32, 41.201 USPQ 136, 145 (CCPA 1979). A “claim for an improved method of calculation, even when tied to a specific end use, is unpatentable subject matter under $101.” Flook, 437 U.S. at 595 n.18, 198 USPQ at 199 n.18. Mathematical algorithms may represent scientific principles, laws of nature, or ideas or mental processes for solving complex problems. See Meyer, 688 F.2d at 794-95, 215 USPQ at 197:

Scientific principles, such as the relationship between mass and energy [E =mc^2], and laws of nature, such as the acceleration of gravity, namely a =32 ft/sec.^2, can be represented in mathematical format. However, some mathematical algorithms and formulae do not represent ideas or mental processes and are simply logical vehicles for communicating possible solutions to complex problems. See also Safe Flight Instrument Corp. v. Sundstrand Data Control, Inc., 706 F.Supp. 1146, 10 USPQ2d 1733 (D.Del. 1989) (mathematical algorithm representing a natural phenomenon, windshear).
No distinction is made between mathematical algorithms invented by man, and mathematical algorithms representing discoveries of scientific principles and laws of nature which reveal a relationship that has always existed.

b. “Process” versus “appears” claims

Since mathematical algorithms have been determined not to fall within the $101 statutory class of a “process,” attempts have been made to circumvent the nonstatutory subject matter rejection by drafting mathematical algorithms as “machine” claims. The technique used is to draft the method steps in terms of “means for” language permitted by 35 U.S.C. $ 112, sixth paragraph. While such a claim is technically a “machine” or “apparatus” claim, the courts have held that form of the claim does not control whether the subject matter is statutory. See In re Maucorps, 609 F.2d 481, 485, 203 USPQ 812, 815-16 (CCPA 1979):

Labels are not determinative $ 101 inquiries. “Benson applies equally whether an invention is claimed as an apparatus or process, because the form of the claim is often an exercise in drafting.” In re Johnson, 589 F.2d 1070, 1077, 200 USPQ 199, 206 ([CCPA] 1978). “Though a claim expressed in ‘means for (functional) terms [under 35 U.S.C. $ 112, sixth paragraph] is said to be an apparatus claim, the subject matter as a whole of that claim may be indistinguishable from that of a method claim drawn to the steps performed by the ‘means,'” In re Freeman, 573 F.2d at 1247, 197 USPQ at 472. Moreover, that the claimed computing system may be a “machine” within “the ordinary sense of the word,” as appellant argues, is irrelevant. The holding in Benson “forecloses a purely literal reading of $ 101.”

The test for determining whether “means for” apparatus claims should be treated as method claims is stated in Walter, 618 F.2d at 768, 205 USPQ at 408:

If the functionally-defined disclosed means and their equivalents are so broad that they encompass any and every means for performing the recited functions, the apparatus claim is an attempt to exalt form over substance since the claim is really to the method or series of functions itself . . . . In such cases the burden must be placed on the applicant to demonstrate that the claims are truly drawn to specific apparatus distinct from other apparatus capable of performing the identical functions.

If this burden has not been discharged, the apparatus claim will be treated as if it were drawn to the method or process which encompasses all of the claimed “means.” See In re Maucorps, 609 F.2d at 485, 203 USPQ at 815-816: In re Johnson, 589 F.2d at 1077, 200 USPQ at 206: In re Freeman, 573 F.2d at 1247, 197 USPQ at 472. The statutory nature of the claim under $ 101 will then depend on whether the corresponding method is statutory.

See also Meyer, 688 F.2d at 795 n.3, 215 USPQ at 198 n.3; Abele, 684 F.2d at 909, 214 USPQ at 688; Pardo. 684 F.2d at 916 n.6. 214 USPQ at 677 n.6; Arshal v. United States, 621 F.2d 421, 427-28, 208 USPQ 397, 404 (Ct. Cl. 1980), cert. denied, 449 U.S. 1077 (1981), reh’g denied, 450 U.S. 1050 (1981). In Maucorps, the limitation of various “means” in claim 1 to include certain “electric circuits” did not prevent the claim from being treated as a method. A claim is not presumed to be statutory simply because it is in apparatus form.

c. Form of the mathematical algorithm

The first step of the analysis is to determine whether the claim directly or indirectly recites a mathematical algorithm. A mathematical algorithm can appear in many forms. As stated in Freeman, 573 F.2d at 1246, 197 USPQ at 471:

The manner in which a claim recites a mathematical algorithm may vary considerably. In some claims, a formula or equation may be expressed in traditional mathematical symbols so as to be immediately recognizable as a mathematical algorithm. See e.g., In re Richman, 563 F.2d 1026, 195 USPQ 340 ([CCPA] 1977); In re Flook, 559 F.2d 21, 195 USPQ 9([CCPA] 1977), cert. granted such nom, Parker v. Flook, [437 U.S. 584] (1978). Other claims may use prose to express a mathematical computation or to indirectly recite a mathematical equation or formula by means of a prose equivalent therefor. See, e.g., In re de Castelet, supra (claims 6 and 7); In re Waldhaum, 559
F.2d 611, 194 USPQ 465 ([CCPA] 1977). A claim which substitutes, for a mathematical formula in algebraic form, “words which mean the same thing,” nonetheless recites an algorithm in the Benson sense. In re Richman, supra 563 F.2d at 1030, 195 USPQ at 344. Indeed, the claims at issue on Benson did not contain a formula equation expressed in mathematical symbols.

Claims which include mathematical formulas or calculations expressed in mathematical symbols clearly include a mathematical algorithm. Mathematical algorithms in prose form may be expressed as literal translations of the mathematical algorithm (e.g., substituting the expression “division” or “taking the ratio” for a diversion sign) or may be expressed in words which indicate the mathematical algorithm. See Safe Flight Instrument, 706 F.Supp. at 1148, 10 USPQ at 1734 (subtracting); Abele, 684 F.2d at 908 n. 8, 214 USPQ at 687 n.8 (“The algorithm, calculating the difference, is defined in the specification as a Gaussian weighting function”): In re Taner, 681 F.2d 787, 790, 214 USPQ 678, 681 (CCPA 1982) (summing); In re Johnson, 589 F.2d 1070, 1079, 200 USPQ 199, 208 (CCPA (1978) (“‘computing’ connotes the execution of the one of a sequence of mathematical operations”); In re Waldbaum, 559 F.2d 611, 194 USPQ 465 (CCPA 1977) (method of claim 1 “to count” the number of busy lines “solves a mathematical problem, to wit, counting a number of busy lines in a telephone system.” In re Bradley, 600 F.2d 807, 810 n. 4, 202 USPQ 480, 484 n.4 (CCPA 1979), aff’d by an equally divided court sub nom.

Diamond v. Bradley, 450 U.S. 381, 209 USPQ 97 (1981)).

It is not always possible to determine by inspection of the claim whether it indirectly recites a mathematical algorithm; in such instances the analysis “requires careful interpretation of each claim in the light of its supporting disclosure.” Johnson, 589 F.2d at 1079, 200 USPQ at 208. See also id. at 1078-79, 200 USPQ at 208 (“the flow diagrams which form part of the specification disclose explicit mathematical equations which are to be used in conjunction with each of these [claimed] steps [of ‘determining’ or ‘correlating’]”); Waldbaum, 559 F.2d 611, 194 USPQ 465 (“series of steps for manipulating binary numbers within a procedure for calculating the number of binary 1’s and 0’s present” was considered a mathematical algorithm. Gelnovatch, 595 F.2d at 39, 2001 USPQ at 143); In re Sherwood, 613 F.2d 809, 818, 204 USPQ 537, 545 (CCPA 1980), cert. denied, 450 U.S. 994 (1981) (“claims must be said to include the indirect recitation of a mathematical equation”); Meyer, 688 F.2d at 795, 215 USPQ at 198 (claims indirectly “recite a mathematical algorithm, which represents a mental process that a neurologist should follow”).

2. Step 2 — is the mathematical algorithm “applied in any manner to physical elements or process steps?” The second test is to determine whether the mathematical algorithm is “applied in any manner to physical elements or process steps.” The guideline for the analysis should be the CCPA’s suggestion in Abele to view the claim without the mathematical algorithm to determine whether what remains is “otherwise statutory”; if it is, it does not become nonstatutory simply because it uses a mathematical algorithm. It is recognized that “[t]he line between a patentable ‘process’ and an unpatentable ‘principle’ is not always clear.” Flook, 437 U.S. at 589, 198 USPQ at 197.

There are no definitive “tests for determining whether a claim positively recites statutory subject matter.” Meyer, 688 F.2d at 796 n.4, 215 USPQ at 198 n.4. Nevertheless, some useful guidelines may be synthesized out of the court decisions.

a. Post-solution activity

If the only limitation aside from the mathematical algorithm is insignificant or non-essential “post-solution activity,” the claimed subject matter is nonstatutory, Flook, 437 U.S. at 5900, 198 USPQ at 197:

The notion that post-solution activity . . . can transform an unpatentable principle into a patentable process exalts form over substance. A competent draftsman could attach some form of post-solution activity to almost any mathematical formula; the Pythagorean theorem would not have been patentable, or partially patentable, because a patent application contained a final step indicating that the formula, when solved, could be usefully applied to existing surveying techniques.

Insignificant post-solution activity by itself is insufficient to constitute a statutory process. In Flook, the final step of adjusting an alarm limit was not sufficient. See also Safe Flight (final step of “means for processing and windshear signal to provide an indication representing the magnitude thereof” not sufficient); Abele, 684 F.2d at 909, 214 USPQ at 688 (final step of display; “that the result is displayed as a shade of gray rather than as simply a number provides no greater or better information, considering the broad range of applications encompassed by the claims”); Walter, 618 F.2d at 770, 205 USPQ at 4009 (final step in dependent claim of
magnetic recording: “If $ 101 could be satisfied by the mere recordation of the results of a nonstatutory process on some record medium, even the most unskilled patent draftsman could provide for such a step”); Gelnovatch, 595 F.2d at 41 n.7, 201 USPQ at 145 n.7 (final step of storing outputs: “each of the steps of the claimed process, except perhaps the final step of equating the process outputs to the values of the last set of process inputs, directly or indirectly recites a mathematical computation”); Sarkar, 588 F.2d at 1332 n.6, 200 USPQ at 136 n.6 (final step of constructing an obstruction at a location determined by a mathematical model: “Sarkar no longer relies upon bridge of dam construction as post-solution activity steps effective to bring his process within $ 101”); de Castelet, 562 F.2d at 1244, 195 USPQ at 446 (final step of transmitting; “That the computer is instructed to transmit electrical signals, representing the result of its calculations . . . does not transform the claim into one for a process merely using an algorithm” ). The absence of post-solution activity to the fact that any post-solution activity may be trivial is only one factor to be considered. On one hand, as stated in Walter, 618 F.2d at 767-68, 205 USPQ at 407: if the end-product of a claimed invention is a pure number, as in Benson and Flook, the invention is nonstatutory regardless of any post-solution activity which makes it available for use by a person or machine for other purposes.

On the other hand, as stated in Abele, 684 F.2d at 908 n.9, 214 USPQ at 687 n.9:
“the fact that [the] equation is the final step is not determinative of the section 101 issue.” In re Richman, 563 F.2d at 1030, 195 USPQ at 343. Accord, In re Taner, 681 F.2d 787 ([CCPA] (1982), overruling In re Christensen, 478 F.2d 1392, 178 USPQ 35 ([CCPA] 1973). The particular order of the steps should not be determinative of the statutory subject matter inquiry.

b. Field of use limitations

A mathematical algorithm is not made statutory by “attempting to limit the use of the formula to a particular technological environment.” Diehr, 450 U.S. at 191, 209 USPQ at 10. Thus, “field of use” or “end use” limitations in the claim preamble are insufficient to constitute a statutory process. This is consistent with the usual treatment of preambles as merely setting forth the environment. See Flook (the preamble while limiting the application of the claimed method to “a process comprising the catalytic chemical conversion of hydrocarbons” did not serve to render the method statutory); Walter, 618 F.2d at 769, 205 USPQ at 409 (“Although the claim
preambles relate the claimed invention to the art of seismic prospecting, the claims themselves are not drawn to methods of or apparatus for seismic prospecting”); de Castelet, 562 F.2d at 1244 n.6. 195 USPQ at 446 n.6 (“The potential for misconstruction of preamble language requires that compelling reason exist before that language may be given weight”). Compare Waldbaum, 559 F.2d at 616 n.6. 194 USPQ 469 n.6 (portion of preambles referred to in method portion of claims “are necessary for completeness of the claims and are proper limitations thereto”).

c. Data-gathering steps

If the only limitations in the claims in addition to the mathematical algorithm are data-gathering steps which “merely determine values for the variables used in the mathematical formulae used in making the calculations.” Such antecedent steps are insufficient to change a nonstatutory method of calculation into a statutory process. See In re Richman, 563 F.2d at 1030. 195 USPQ at 343; Sarkar. 588 F.2d at 1335. 200
USPQ at 139 (“If the steps of gathering and substituting values were alone sufficient, every mathematical equation, formula, or algorithm having any practical use would be per se subject to patenting as a ‘process’ under $ 101”): Gelnovatch, 595 F.2d at 41 n.7. 201 USPQ at 145 n.7 (“claimed step of perturbing the values of a set of process inputs (step 3), in addition to being a mathematical operation, appears to be a data-gathering step”). Where the claim “presents data gathering steps not dictated by the algorithm but by other limitations which require certain antecedent steps” the claim may present statutory subject matter. Abele, 684 F.2d at 908, 214 USPQ at 687.

d. Transformation of something physical

In determining whether the claim recites a statutory process or a nonstatutory mathematical algorithm, it is useful to analyze whether there is transformation of something physical into a different form. One distinction is made between transformation of physical “signals” from one physical state to a different physical state, a statutory process in the electrical arts, and mere mathematical manipulation of “data” which, by itself, is not a statutory process. Compare Tuner (conversion of
“substantially spherical seismic signals” into “a form representing the earth’s response to cylindrical or plane waves” was statutory process): Sherwood 613 F.2d at 819, 204 USPQ at 546 (conversion of amplitude-versus-time seismic traces into amplitude-versus-depth seismic traces was statutory process because it “converts one physical thing into another physical thing just as any other electrical circuitry would do”); and Johnson (technique for removing unwanted noise from a seismic trace was statutory process); with Walter, 618 F.2d at 768, 770, 205 USPQ at 407, 409 (if “the claimed invention produces a physical thing . . . the fact that it is represented in numerical form does not render the claim nonstatutory” but finding that the “signals” claimed “may represent either physical quantities or abstract quantities” and thus were to the algorithm itself and not a particular application); Richman (method of calculating airborne radar boresight correction angle from ‘a plurality of signal sets” not statutory); Gelnovatch, 595 F.2d at 42, 201 USPQ at 145 (where “the claims solely recite a method whereby a set of numbers is computed from a different set of numbers by merely performing a series of mathematical computations, the claims do not set forth a statutory process”); and Benson (conversion of binary coded decimal numbers into pure binary numbers not statutory). It is manifest that the statutory nature of the subject matter does not depend on the labels “signals” or “data.”

e. Structural limitations in process claims

Another issue is the effect of structural limitations in method claims. While structural limitations in method claims are not improper, they are usually not entitled to patentable weight unless they somehow affect or form an essential part of the process. See Benson, 409 U.S. at 73, 175 USPQ at 677 (claim 8 recited use of a “reentrant shift register”): Waldbaum, 559 F.2d at 66, 194 USPQ at 469 (machine limitations in data processor method claims); de Castelet, 562 F.2d at 1244, 195 USPQ at 47 (“Claims to nonstatutory processes do not automatically and invariably become patentable upon incorporation of reference to apparatus”). The related problem of specific structural language in apparatus claims has been treated. supra, in section II.C.1.b.

D. Examples

1. Diamond v. Diehr

The following claim was held to recite statutory subject matter.

1. A method of operating a rubber-molding press for precision molded compound with the aid of a digital computer, comprising:

providing said computer with a data base for said press including at least. natural logarithm conversion data (ln); the activation energy constant (C) unique to each batch of said compounded being molded;
and

a constant (x) dependent upon the geometry of the particular mold of the press;

initiating an interval timer in said computer upon the closure of
the press for monitoring the elapsed time of said closure;

constantly determining the temperature (Z) of the mold at a location
closely adjacent to the mold cavity in the press during molding;

constantly providing the computer with the temperature (Z);

respectively calculating in the computer, at frequent intervals
during each cure, the Arrhenius equation for reaction time during
the cure, which is ln v=CZ+x, where v is the total required cure
time. repetitively comparing in the computer at said frequent
intervals during the cure each said calculation of the total
required cure time calculated with the Arrhenius equation and said
elapsed time, and opening the press automatically when a said
comparison indicates equivalence.

Step 1 The claim contains an equation for controlling the in-mold time: In v=CZ + x.

Step 2 The claimed subject matter is statutory because it recites an “otherwise statutory” process in addition to the mathematical algorithm. As stated in Abele, 684 F.2d at 907. 214 USPQ at 686:

In Diehr, were the claims to be read without the algorithm, the process would still be a process for curing rubber, although it might not work as well since the in-mold time would not be as accurately controlled. The steps in the process, 450 U.S. at 187, 209 USPQ at 8: include installing rubber in a press, closing the mold, constantly determining the temperature of the mold, constantly recalculating the appropriate cure time through the use of the formula and a digital computer, and automatically opening the press at the proper time. The statutory nature of the claim is not based on the post-solution activity of opening the press, but on the application of the mathematical algorithm to the whole process.

2. Parker v. Flook

The following claim in Flook was held to recite nonstatutory subject matter.

1. A method for updating the value of at least one alarm limit on at least one process variable involved in a process comprising the catalytic chemical conversion of hydrocarbons wherein said alarm limit has a current value of Bo + K wherein Bo is the current alarm base and K is a predetermined alarm offset which comprises:

(1) determining the present value of said process variable said
present value being defined as PVL:

(2) determining a new alarm base B1 using the following equation:

B1 = Bo(1.0 – F) + PVL(F)

where F is a predetermined number greater than zero and less than
1.0:

(3) determining an updated alarm limit which is defined as B1 + K:
and thereafter

(4) adjusting said alarm limit to said updated alarm limit value.

Step 1 The claim contains a mathematical algorithm comprising determining a new alarm base in step (2) and computing an “alarm limit” in step (3).

Step 2 When viewed without the steps of the mathematical algorithm, steps (2) and (3), the only limitations remaining are the preamble limitation restricting the field of use to “a process comprising the catalytic chemical conversion of hydrocarbons;” the data- gathering step of step (1); and the post-solution step of step (4). None of these limitations comprises an “otherwise statutory” process. The claim seeks to protect a method for computing an “alarm limit” rather than the application of the computation within an otherwise statutory process.

3. In re Abele

In Abele, claim 5 was held to recite nonstatutory subject matter under $ 101 whereas dependent claim 6 was statutory.

5. A method of displaying data in a field comprising the steps of calculating the difference between the local value of the data at a data point in the field and the average value of the data in a region of the field which surrounds said point for each point in said field, and displaying the value of said difference as a signed gray scale at a point in a picture which corresponds to said data point.

7. The method of claim 5 wherein said data is X-ray attenuation data produced in a two dimensional field by a computed tomography scanner. Step 1 Claim 5 contains a mathematical algorithm, “calculating the difference,” which is defined in the specification as a Gaussian weighting function. Step 2 When claim 5 is viewed without the mathematical algorithm, the only remaining limitation is the post- solution activity of displaying the result. The display by itself did not constitute an “otherwise statutory” process. The court held that “the algorithm is neither explicitly nor implicitly applied to any certain process.” 684 F.2d at 909, 214 USPQ at 688. However, when dependent claim 6 is added to the limitations of claim 5,
684 F.2d at 908, 214 USPQ at 687-88:

Were we to view the claim absent the algorithm, the production, detection and display steps would still be present and would result in a conventional CAT-scan process. . . . [W]e view the production, detection, and display steps as manifestly statutory subject matter and are not swayed from this conclusion by the presence of an algorithm in the claimed method.

III. Computer Programs

A. “Computer programs” versus “computer processes”

A “process” or ” algorithm” is a step-by-step procedure to arrive at a given result. In the patent area, a “computer process” or “computer algorithm” is a process, i.e., a series of steps, which is performed by a computer. A “[computer] program is a sequence of coded instructions for a digital computer. Benson, 409 U.S. at 65. 175 USPQ at 674. Computer programs are equivalently known as “software.” Unfortunately for discussion in this area, “[b]oth the series of steps performed by a computer, and the software directing those steps, have acquired the name “computer program.”
Gelnovatch, 595 F.2d at 45 n.5, 201 USPQ at 148 n.5 (Markey, C.J., dissenting). What is sought to be protected by patent is the underlying process. As stated in Gelnovatch, 595 F.2d at 44, 201 USPQ at 147: Confusion may be avoided if it be realized that what is at issue is not the “program,” i.e., the software, but the process steps which the software directs the computer to perform.

See, e.g., Maucorps, 609 F.2d at 483, 203 USPQ at 814 (“The [claimed] invention is implemented via a computer program written in FORTRAN IV, either built into the calculating machine, or loaded into a general purpose computer”).

B. Statutory nature of computer processes

1. The Supreme Court has not ruled on the patentability of computer programs.

The Supreme Court has not ruled on whether computer process are per se statutory or nonstatutory. The decisions in Benson, Flook and Diehr all dealt with claims viewed as mathematical algorithms. In Benson and Diehr, the claims contained mathematical algorithms implemented by a computer.

In Benson, the Court held that the claims preempted the use of the mathematical algorithm, but did not hold that “any program servicing a computer” would be nonstatutory. In Diehr, the Court held that the claims otherwise defined a statutory process for curing rubber, and that the inclusion of a mathematical algorithm or computer program did not make claim nonstatutory. The claim in Flook did not involve a computer process.

In Dann v. Johnson, 425 U.S. 219, 189 USPQ 257 (1976), rev’g on other grounds, In re Johnson, 502 F.2d 765, 183 USPQ 172 (CCPA 1974), which involved a “machine system for automatic record-keeping of bank checks and deposits,” the Court declined to discuss the $ 101 issue of the general patentability of computer programs, 425 U.S. at 220, 189 USPQ at 258:

We find no need to treat that question in this case, however, because we conclude that in any event respondent’s system is unpatentable on grounds of obviousness. 35 U.S.C. $ 103.

In Diamond v. Bradley, an equally divided Supreme Court affirmed the CCPA’s decision in Bradley. The claims were directed to computer “firmware,” which refers to microinstructions permanently embodied in hardware elements, and not to a computer application or process. The CCPA found that the claims literally recited a machine and that, in applying the two-part test of Freeman, the claims did not recite a mathematical algorithm.

2. The CCPA has held that computer processes are statutory unless they fall within a judicially determined exemption. In Pardo, the most recent CCPA case on computer processes, the CCPA stated that, 684 F.2d at 916, 214 USPQ at 677: any process, machine, manufacture, or composition of matter constitutes statutory subject matter unless it falls within a judicially determined exception to section 101. The major (and perhaps only) exception in the area of computer processes is the mathematical algorithm. Although not binding precedent on the Federal Circuit, the district court in Paine, Webber, Jackson & Curtis, Inc. v. Merill, Lynch, Lynch, Pierce, Fenner &
Smith, 564 F.Supp. 1358, 1367, 218 USPQ 212, 218 (D. Del. 1983) stated:

The CCPA [has] . . . held that a computer algorithm, as opposed to a mathematical algorithm, is patentable subject matter.

If a computer process claim does not contain a mathematical algorithm in the Benson sense, the second step of the Freeman-Walter-Abele test is not reached, and the claimed subject matter will usually be statutory.

The traditional approach by the CCPA to the PTO’s rejection of computer processes as nonstatutory subject matter has been to apply the two-part test for mathematical algorithms and to find statutory subject matter if the claims do not recite a mathematical algorithm. See Pardo, 684 F.2d at 916, 214 USPQ at 676 (process for converting source program into object program: “we are unable to find any mathematical formula, calculation, or algorithm either directly or indirectly recited in the claimed steps of examining, compiling, storing, and executing”); In re Toma, 575 F.2d 872, 877, 197 USPQ 852, 856 (CCPA 1978) (process for translating a source natural language, e.g., Russian, to a target natural language, e.g., English: “[we] are unable to find any direct or indirect recitation of a procedure for solving a mathematical problem”); In re Phillips, 608 F.2d 879, 883, 203 USPQ 971, 975 (CCPA 1979) (process for preparing architectural specifications: “Our analysis of the claims on appeal reveals no recitation, directly or indirectly, of an algorithm in the Benson and Flook sense”); Freeman, 573 F.2d at 1246, 197 USPQ at 471 (“The method
claims here at issue do not recite process steps which are themselves mathematical calculations, formulae, or equations”); Deutsch, 553 F.2d 689, 692, 193 USPQ 645, 648
(CCPA 1977) (method of operating a system of manufacturing plants: “Nothing in the methods claimed by Deutsch preempts a mathematical formula, an algorithm, or any specific computer program”); Chatfield, 545 F.2d at 158, 191 USPQ at 736 (method of reassigning priorities within a computer. “[the] independent claims contain neither a mathematical formula nor a mathematical algorithm” ).

If the computer process is found to contain a mathematical algorithm, it must then pass the second part of the Freeman- Walter-Abele test for statutory subject matter. See. e.g., Sherwood; Maucorps; Gelnovatch.

Arguably, other exceptions such as “methods of doing business” and “mental steps” may be raised if a claim is not a true computer process but merely recites that an otherwise nonstatutory process is performed on a computer. de Castelet, 562 F.2d at 1244, 195 USPQ at 447 (“Claims to nonstatutory processes do not automatically and invariable become patentable upon incorporation of reference to apparatus”). These would appear to be exceptions with very narrow application to claims which are not limited to implementation by a machine. For example, while a “method of doing business” per se is not statutory subject matter, “a method of operation on a computer to effectuate a business activity” has been held to be statutory subject
matter. Paine, Webber v. Merrill Lynch, 564 F.Supp. at 1369, 218 USPQ at 220. See also Deutsch, 553 F.2d at 692 n.5. 193 USPQ at 648 n.5 (claims were not a method of doing business because “[t]hey do not merely facilitate business dealings”); Johnston, rev’d on other grounds. Dann v. Johnston (apparatus claims directed to system for automatic record-keeping of bank checks and deposits did not cover a method of doing business). Similarly, machine or computer implementation of “mental steps” is statutory subject matter. Prater: In re Bernhart, 417 F.2d 1395, 163 USPQ 611 (CCPA 1969); In re Musgrave, 431 F.2d 882, 167 USPQ 280 (CCPA 1970). See also Toma (computer implemented method for translation of natural languages is statutory).

Chronological Order Case List

In re Prater, 415 F.2d 1393, 162 USPQ 541 (CCPA 1969)

In re Bernhart, 417 F.2d 1395, 163 USPQ 611 (CCPA 1969)

In re Musgrave, 431 F.2d 882, 167 USPQ 280 (CCPA 1970)

Gottschalk v. Benson, 409 U.S. 63, 175 USPQ 673 (1972)

In re Christensen, 478 F.2d 1392, 178 USPQ 35 (CCPA 1973)

Dann v. Johnston, 425 U.S. 219, 189 USPQ 257 (1976), rev’d on other grounds.

In re Johnston, 502 F.2d 765, 183 USPQ 172 (CCPA 1974)

In re Noll, 545 F.2d 141, 191 USPQ 721 (CCPA 1976), cert, denied, 434 U.S.
875, 195 USPQ 465 (1977)

In re Chattield, 545 F.2d 152, 191 USPQ 730 (CCPA 1976). cert. denied, 434
U.S. 875, 195 USPQ 465 (1977)

In re Deutsch, 553 F.2d 689, 193 USPQ 645 (CCPA 1977)

In re Waldbaum, 559 F.2d 611, 194 USPQ 465 (CCPA 1977)

In re Richman, 563 F.2d 1026, 195 USPQ 340 (CCPA 1977)

In re de Castelet, 562 F.2d 1236, 195 USPQ 439 (CCPA 1977)

In re Freeman, 573 F.2d 1237, 197 USPQ 464 (CCPA 1978)

In re Toma, 575 F.2d 872, 197 USPQ 852 (CCPA 1978)

Parker v. Flook, 437 U.S. 584, 198 USPQ 193 (1978)

In re Sarkar, 588 F.2d 1330, 200 USPQ 132 (CCPA 1978)

Hirschfeld v. Banner, 462 F.Supp. 135, 200 USPQ 276 (D.D.C. 198), aff’d
without opinion, 615 F.2d 1368 (D.C. Cir. 1980). cert. denied, 450 U.S.
994, 210 USPQ 776 (1981)

In re Gelnovatch, 595 F.2d 32, 201 USPQ 136 (CCPA 1979)

In re Maucorps, 609 F.2d 481, 203 USPQ 812 (CCPA 1979)

In re Phillips, 608 F.2d 879, 203 USPQ 971 (CCPA 1979)

In re Sherwood, 613 F.2d 809, 204 USPQ 537 (CCPA 1980). cert. denied, 450
U.S. 994, 210 USPQ 776 (1981)

In re Walter, 618 F.2d 758, 205 USPQ 397 (CCPA 1980)

Arshal v. United States, 621 F.2d 421, 208 USPQ 397 (Ct. Cl.
1980), cert. denied, 449 U.S. 1088 (1981). reh’g denied, 450
U.S. 1050 (1981)

Diamond v. Diehr, 450 U.S. 175, 209 USPQ 1 (1981)

Diamond v. Bradley, 45 U.S. 381, 209 USPQ 97 (1981). aff’g
by an equals divided Court. In re Bradley, 600 F.2d 807, 202
USPQ 480 (CCPA 1979)

In re Pardo, 684 F.2d 912, 214 USPQ 673 (CCPA 1982)

In re Taner, 681 F.2d 787, 214 USPQ 678 (CCPA 1982)

In re Abele, 684 F.2d 902, 214 USPQ 682 (CCPA 1982)

In re Meyer, 688 F.2d 789, 215 USPQ 193 (CCPA 1982)

Paine, Webber, Jackson & Curtis, Inc. v. Merrill Lynch,

Pierce, Fenner & Smith, 564 F.Supp. 1358, 218 USPQ 212 (D. Del. 1983)

Safe Flight Instrument Corp. v. Sundstrand Data Control Inc., 706 F.Supp.
1146, 10 USPQ2d 1733 (D. Del. 1989)

In re Iwahashi, 1989

This case marked quite a change from earlier positions. In this case, the Federal Circuit held that a general purpose computer, running an new algorithm for pattern recognition, could be patentable subject matter.

Iwahashi’s invention related to an auto-correlation unit for use in a pattern recognition to obtain auto-correlation coefficients as for stored signal samples. One particular embodiment related to using pattern recognition in voice recognition.

The claim on appeal was:
[a] An auto-correlation unit for providing auto-correlation coefficients for use as feature parameters in pattern recognition for N pieces of sampled input values Xn(n = 0 to N – 1), said unit comprising:

[b] means for extracting N pieces of sample input values Xn from a series of sample values in an input pattern expressed with an accuracy of optional multi-bits;

[c] means for calculating the sum of the sample values Xn and Xn-r (t = 0 – P, P ≤ N);

[d] a read-only memory associated with said means for calculating;

[e] means for feeding to said read-only memory the sum of the sampled input values as an address signal;

[f] means for storing in said read-only memory the squared value of each sum, (Xn + Xn-r )2;

[g] means for fetching and outputting the squared values of each sum of the sample input values from said read-only memory when said memory is addressed by the sum of the sample input values; and

[h] means responsive to the output (Xn + Xn-r)2 of said read-only memory for providing an auto-correlation coefficient for use as a feature parameter according to …[a certain formula].

The Court stated that this case was one more in the line of cases stemming from the Supreme Court decision in Gottschalk v. Benson, decided by the Federal Circuit’s predecessor, the CCPA. Out of these cases came the Freeman-Walter test to determine whether a claim defines nonstatutory subject matter. It was stated in Freeman as follows:

Determination of whether a claim preempts nonstatutory subject matter as a whole, in the light of Benson, requires a two-step analysis. First, it must be determined whether the claim directly or indirectly recites an “algorithm” in the Benson sense of that term, for a claim which fails even to recite an algorithm clearly cannot wholly preempt an algorithm. Second, the claim must be further analyzed to ascertain whether in its entirety it wholly preempts that algorithm.

The opinion next discussed the meaning of “algorithm”:

Over-concentration on the word “algorithm” alone, for example, may mislead. The Supreme Court carefully supplied a definition of the particular algorithm before it [in Benson], i.e., “[a] procedure for solving a given type of mathematical problem.” The broader definition of algorithm is “a step-by-step procedure for solving a problem or accomplishing some end.”

The Federal Circuit stated that the claim as a whole certainly defined apparatus in the form of a combination of interrelated means and the Court could not discern any logical reason why it should not be deemed statutory subject matter as either a machine or a manufacture as specified in § 101. The fact that the apparatus operates according to an algorithm does not make it nonstatutory. The Court referred to Abele, and also to the discussion of that case in Grams. We Court therefore held that the claim was directed to statutory subject matter.

The Federal Circuit noted that the Solicitor’s brief the summary of argument stated that the claim “encompasses any and every means for performing the functions recited therein.” The Federal Circuit pointed out that the claim is a combination of means all but one of which is a means-plus-function limitation, the one exception being the ROM, clause [d], which is a specific piece of apparatus. The claim is therefore subject to the limitation stated in 35 U.S.C. § 112 ¶ 6 that each means-plus-function definition “shall be construed to cover the corresponding structure, material, or acts described in the specification and equivalents thereof.” This provision precludes the Solicitor’s interpretation of the claim. The Solicitor’s summary also contends that since the claim should be interpreted as he does, the Court should regard it as though it were a method claim.

The Court then stated that since the Solicitor was wrong on the first score, he was wrong on the second.

The Federal Circuit, in its decision In re Iwahashi, effectively opened up the doors of the patent system to algorithms, particularly if some hardware, such as a ROM, was recited.

In response to this case, the U.S. Patent and Trademark Office issued their own interpretation of this case in 1122 O.G. 445. They were not very happy with this case and still tended to reject applications that contained algorithms. US patent attorneys would go out of our way to avoid using words such as “algorithm” anywhere in an application. Some of us older patent attorneys still tend to cross out the word algorithm when we see it in draft patent applications.

In re Grams, 1989

The invention in this case related to a method of testing a complex system to determine whether the system condition is normal or abnormal and, if it is abnormal, to determine the cause of the abnormality. As disclosed in the specification, the invention is applicable to any complex system, whether it be electrical, mechanical, chemical, biological, or combinations thereof.

The Federal Circuit stated that, intuitively, one might conclude that § 101’s “any…process” would include the diagnostic method claimed by the applicants. Indeed, even without physical step present in the claims, application of the algorithm in other steps of the claim seemed to be a type of “process” that the Supreme Court recognized as much in Flook.

The Federal Circuit stated that Flook made clear, however, as did its forerunner, Benson, that even though the application of an algorithm to data is a “process” in the literal sense, it is not one that is contemplated by § 101, i.e., it is “nonstatutory subject matter.” Thus, mathematical algorithms join the list of non-patentable subject matter not within the scope of § 101, including methods of doing business, naturally occurring phenomenon [sic], and laws of nature. Construing § 101 as excluding mathematical algorithms seems somewhat at odds with the liberal view of that section expressed in a more recent Supreme Court opinion, Diamond v. Chakrabarty. There, the Court decided that a living man-made microorganism fell within the terms manufacture” or “composition of matter” in § 101. In choosing such “expansive terms,” stated the Court, “modified by the comprehensive word ‘any,’ Congress plainly contemplated that the patent laws would be given wide scope.” The Court went so far as to note that Congress intended statutory subject matter to include “anything under the sun that is made by man.”

Chakrabarty expressly rejects the argument that patentability in a new area, “microorganisms, cannot qualify as patentable subject matter until Congress expressly authorizes such protection.” Although the Court distinguished Flook in its opinion, the court’s rejection of this argument seems to reflect a change from Flook’s admonition that “we must proceed cautiously when we are asked to extend patent rights into areas wholly unforeseen by Congress.”

The Federal Circuit noted that another case, Diehr, repeats the “anything under the sun” statement of Chakrabarty but then went on to say that notwithstanding those statements in Diehr and Chakrabarty, Benson remains the law. Indeed, it is cited in both Diehr and Chakrabarty, with no apparent attempt to overrule or disapprove of it. Thus, “an algorithm, or mathematical formula … like a law of nature … cannot be the subject of a patent.”

The Federal Circuit stated that on the other hand, the mere presence of a mathematical exercise, as a step or steps in a process involving nonmathematical steps, should not slam the door of the PTO upon an applicant. Thus, if there are physical steps included in the claim in addition to the algorithm, the claim might be eligible for patent protection. As stated in In re Walter:

Once a mathematical algorithm has been found, the claim as a whole must be further analyzed. If it appears that the mathematical algorithm is implemented in a specific manner to define structural relationships between the physical elements of the claim (in apparatus claims) or to refine or limit claim steps (in process claims), the claim being otherwise statutory, the claim passes muster under § 101.

Though satisfaction of the Walter test necessarily depicts statutory subject matter, failure to meet that test does not necessarily doom the claim. As stated in Abele, “Walter should be read as requiring no more than that the algorithm be ‘applied in any manner to elements or process steps,'” That statement is followed by this proviso: “provided that its application is circumscribed by more than a field of use limitation or non-essential post-solution activity.” Thus, if the claim would be “otherwise statutory,” albeit inoperative or less useful without the algorithm, the claim likewise presents statutory subject matter when the algorithm is included.

In all instances, this critical question must be answered: “What did applicants invent?” And in answering this inquiry:

Each invention must be evaluated as claimed: yet semantogenic considerations preclude a determination based solely on words appearing in the claims. In the final analysis under § 101, the claimed invention, as a whole must be evaluated for what it is. Hence, the analysis requires careful interpretation of each claim in light of its supporting disclosure.

The Court stated that, though that analysis can be difficult, it is facilitated somewhat if, as here, the only physical step involves merely gathering data for the algorithm. As stated in In re Christensen, 478 F.2d 1392, 1394 (CCPA 1973):

Given that the method of solving a mathematical equation may not be the subject of patent protection, it follows that the addition of the old and necessary antecedent steps of establishing values for the variables in the equation cannot convert the unpatentable method to patentable subject matter.

The reason for this was explained in In re Sarkar, 588 F.2d at 1335:

No mathematical equation can be used, as a practical matter, without establishing and substituting values for the variables expressed therein. Substitution of values dictated by the formula has thus been viewed as a form of mathematical step. If the steps of gathering and substituting values were alone sufficient, every mathematical equation, formula, or algorithm having any practical use would be per se subject to patenting as a “process” under § 101. Consideration of whether the substitution of specific values is enough to convert the disembodied ideas present in the formula into an embodiment of those ideas, or into an application of the formula, is foreclosed by the current state of the law.

Whether § 101 precludes patentability in every case where the physical step of obtaining data for the algorithm is the only other significant element in mathematical algorithm–containing claims is a question we need not answer. Analysis in that area depends on the claims as a whole and the circumstances of each case. Rather, we address only the claims and other circumstances involved here.

The sole physical process step in Grams’ claim 1 is step [a], i.e., performing clinical tests on individuals to obtain data. The specification does not bulge with disclosure on those tests. To the contrary, it focuses on the algorithm itself, although it briefly refers to, without describing, the clinical tests that provide data. Thus, it states: “The [computer] program was written to analyze the results of up to eighteen clinical laboratory tests produced by a standard chemical analyzer that measures the levels of the chemical and biological components listed.” The specification also states that “[t]he invention is applicable to any complex system, whether it be electrical, mechanical, chemical or biological, or combinations thereof.” From the specification and the claim, it is clear to us that applicants are, in essence, claiming the mathematical algorithm, which they cannot do under Benson. The presence of a physical step in the claim to derive data for the algorithm will not render the claim statutory.

The Court then distinguished Abele. Allowed claim 6 in Abele required operation of an algorithm on X-ray attenuation data, with a subsequent display. The data were available for the algorithm only after the production and detection steps, i.e., after an X-ray beam was passed through an object using a CAT scanner, and detected upon exit. The court concluded that in the absence of the algorithm, “the production, detection, and display steps would still be present and would result in a conventional CAT-scan process.” Thus, the production and detection steps were not viewed as mere antecedent steps to obtain values to solve the algorithm. In Abele, therefore, the algorithm served to improve the CAT-scan process. As such, the algorithm satisfied the Walter guideline of “refining a step in a process that is otherwise statutory,” and hence, it presented statutory subject matter. In this case, because algorithm steps [b]-[e] do not operate to change any aspect of the physical process of step [a], the claim does not satisfy the Walter guideline. Though this by itself is not dispositive (see discussion of Walter, supra), patentability here is precluded by the fact that physical step [a] merely provides data for the algorithm.

In re Meyer, 1982

Meyer’s invention related to a system for aiding a neurologist in diagnosing patients. Meyer’s claims were directed to a method of storing and correlating test responses on a complex system.

The CCPA upheld the Board of Patent Appeals and Interferences’ affirmance of an Examiner’s rejection of Meyer’s claims as being unstatutory under 35 USC § 101.

The court applied the first part of the two-part Freeman-Walter test to the Meyer claims, relying on the applicants’ specification and arguments, and found that the invention was concerned with partly replacing the thinking processes of a neurologist with a computer. The court then concluded that a mathematical algorithm was involved in the claims.

With respect to the second part of the Freeman-Walter test, the Court stated that Walter had modified Freeman to require an inquiry into whether the algorithm is implemented in a specific manner to define steps in process claims. The court stated that Walter was not intended to be an exclusive test, but that a more comprehensive test is to be found in Abele.

The Court state that the question should be whether the mental process is applied to physical elements or process steps in an otherwise statutory process, machine, manufacture, or composition of matter.

Applying this analysis to the Meyer claims, the Court found that the algorithm of the applicants’ claims had not been applied to physical elements or process steps and were not to an otherwise statutory process or apparatus.

In re Pardo, 1982

In this case, the CCPA stated that any process, machine, manufacture, or composition of matter constitutes statutory subject matter unless it falls within a judicially determined exception to section 101.

This was an case in which the CCPA took the position that an invention can be statutory whether or not the novelty resides in the software.

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