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© Practising Law Institute

Chapter 7

Patentable Subject Matter

§ 7:1 Introduction§ 7:2 Legislative Exceptions§ 7:3 Judicial Exceptions: The General Approach§ 7:4 The “Abstract” Exception

§ 7:4.1 What Is “Abstract”?§ 7:4.2 What Is “Significantly More”?§ 7:4.3 Bilski Machine-or-Transformation Test§ 7:4.4 Patent Office Guidelines

[A] Current Guidelines[B] Prior Guidelines

§ 7:4.5 Case Law Post-Bilski§ 7:4.6 Recommendations for Drafting Claims to Avoid Abstractness§ 7:4.7 Pre-Bilski and Pre-Alice Decisions§ 7:4.8 Pre-Bilski Approved Claims for Computer/Software

Inventions[A] Exclude Algorithms from the Claims[B] Include Tangible Elements[C] Transform Something Physical[D] Include Post-Solution Activity[E] Produce a Useful, Concrete, Tangible Result

§ 7:5 Laws of Nature and Natural Phenomena§ 7:5.1 Introduction§ 7:5.2 Recent Supreme Court Cases§ 7:5.3 Federal Circuit Authority§ 7:5.4 The Patent Office Position§ 7:5.5 Recommendation for Drafting Claims Not Directed Merely to

Laws of Nature and Naturally Occurring Substances

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§ 7:1 Introduction

Section 101 of title 35 of the U.S. Code states:

Whoever invents or discovers any new and useful process, machine,manufacture, or composition of matter, or any new and usefulimprovement thereof, may obtain a patent therefor, subject to theconditions and requirements of this title.

Accordingly, an invention has to be the right type of subject matter,that is, a “process, machine, manufacture, or composition of matter,or . . . improvement thereof,” and not fall within any judicially createdexceptions. For example, a claim directed to a paradigm is not directedto patentable subject matter.1

Also, a claim that crosses statutory classes, such as covering bothan apparatus and a method of use of that apparatus, is impermissible.2

The Supreme Court has acknowledged that Congress intendedstatutory subject matter to “include anything under the sun that ismade by man.”3 In spite of this expansive language, there are fivecategories of inventions that are not patentable:

1. Human organisms (see section 7:2)

2. Abstract ideas and mental processes (see section 7:4)

3. Natural phenomena (see section 7:5)

4. Products of nature (see section 7:5)

5. Printed matter

Although printed matter by itself is not patentable,4 printed matterin combination with a tangible object can be patentable if the printedmatter and tangible object are interrelated so as to produce a new anduseful product. For the printed matter to distinguish the inventionfrom the prior art, there must be a functional relationship between theprinted matter and the substrate on which it is printed. If a tangibleobject achieves its purpose without the printed matter, the printedmatter adds nothing to the patentability of the tangible object.5 Datastructures processed by a computer are not “printed matter.”6

1. In re Ferguson, 558 F.3d 1359 (Fed. Cir. 2009).2. IPIXL Holdings, L.L.C. v. Amazon.com, Inc., 430 F.3d 1377 (Fed. Cir.

2005). Cf. Microprocessor Enhancement Corp. v. Tex. Instruments Inc.,520 F.3d 1367 (Fed. Cir. 2008).

3. Diamond v. Chakrabarty, 447 U.S. 303 (1980).4. See In re Miller, 418 F.3d 1392 (C.C.P.A. 1969).5. In re Gulack, 703 F.2d 1381 (Fed. Cir. 1983); In re Ngai, 367 F.3d 1336

(Fed. Cir. 2004); AstraZeneca LP v. Apotex, Inc., 633 F.3d 1042 (Fed. Cir.2010).

6. In re Lowry, 32 F.3d 1579, 32 U.S.P.Q.2d 1031 (Fed. Cir. 1994); In reDiStefano, 808 F.3d 845 (Fed. Cir. 2015).

§ 7:1 HOW TO WRITE A PATENT APPLICATION

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Similarly, an interface application directed to software instructionsindependent of any hardware limitations is not patentable subjectmatter, failing to fall into one of the categories of section 101.7

Unfortunately, the current state of the law regarding abstract ideas,natural phenomena, and products of nature is murky. The law isconstantly changing, and claims that most practitioners at one timeconsidered as being directed to patentable subject matter no longerqualify, particular in view of recent Supreme Court decisions.

Guidance in drafting claims to patentable subject matter is providedin this chapter. However, no guarantees can be provided. Even includ-ing claim language that the Supreme Court has found directed topatentable subject matter is not a guarantee of patentability, becausethe most recent guidelines provided by the Supreme Court and theFederal Circuit are unclear. Even a Federal Circuit decision may notprovide long-term guidance, because of the Supreme Court’s apparentinterest in what exactly is patentable subject matter.

Generally, a claim that satisfies the Federal Circuit machine-or-transformation test (see section 7:4.3) is directed to patentable subjectmatter. If a claim does not satisfy that test, its patentability isuncertain. So the practitioner should, whenever possible, include inan application some claims that satisfy that test.

§ 7:2 Legislative Exceptions

Congress has explicitly removed from patentable subject matter onetype of technology, and it has made it difficult to obtain patents onanother type of technology.

First, “no patent may issue on a claim directed to or encompassing ahuman organism.”8

Second, tax strategies have been made hard to patent. Congresshas stated that “any strategy for reducing, avoiding or deferring taxliability . . . shall be deemed insufficient to differentiate a claimedinvention form the prior art.”9

7. AllVoice Devs. US, LLC v. Microsoft Corp., No. 2014-1258, 2015 WL2445055, ___ F. App’x___ (Fed. Cir. May 22, 2015) (nonprecedential).

8. Leahy-Smith America Invents Act, Pub. L. No. 112-29, § 33 (2011);M.P.E.P. § 2105.

9. Leahy-Smith America Invents Act, Pub. L. No. 112-29, § 14 (2011); seesection 8:2.2.

§ 7:2Patentable Subject Matter

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§ 7:3 Judicial Exceptions: The General Approach

According to the Supreme Court, the general approach taken todetermine if one of the judicial exceptions to patentable subject matterexists (abstract ideas, mental processes, natural phenomena, andproducts of nature) is as follows:

1. Are the claims at issue directed to a patent-ineligible concept?

2. If the answer to question 1 is yes, is there an “inventive concept”in the claims, that is, is there an element or combination ofelements that is “sufficient to ensure that the patent in practiceamounts to significantly more than a patent upon the ineligi-ble concept itself?”10

In the Alice decision, the Supreme Court provided some guidanceas to the second portion of this analysis. What may be patent-eligibleare:

1. Concepts directed to a new and useful end.

2. Integrating a building block of human ingenuity into “some-thing more,” which can provide the transformation necessaryto be patent-eligible.

3. Improving an existing technological process and converting itwith a well-known mathematical equation.

4. Reciting hardware in a systems claim with meaningful limita-tions beyond general linking of use of the method to a par-ticular technological environment.

What are patent-ineligible include:

1. Merely requiring generic computer implementation.

2. Merely reciting an abstract idea and stating “apply it.”

3. Simply appending conventional steps.

4. Simply implementing a mathematical principle on a physicalmachine, such as a computer.

5. Limiting the use of an idea to a particular technologicalenvironment.

6. Performing a conventional, well-understood, routine processon a computer.

10. Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 134 S. Ct. 2347 (2014).


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The Patent Office issued guidelines with regard to the application ofAlice.11 According to the guidelines, the inquiry as to subject mattereligibility remains unchanged in view of Alice and is in accordancewith MPEP 2106(I). This is not true! Many practitioners report thatapplications that were allowed pre-Alice have been withdrawn fromallowance in view of Alice.

According to the guidelines, the following are abstract ideas:

1. Certain methods of organizing human activities.

2. An idea itself.

3. Mathematical relationships/formulas.

According to these guidelines, to convert an abstract idea topatentable subject matter there needs to be something “significantlymore” in the claim. Examples of something that is “significantlymore” are:

1. Improvements to a technological process.

2. Improvements in the functioning of the computer itself.

3. Meaningful limitations beyond general linking of the use of anabstract idea to a particular technological environment.

According to the guidelines, the following are not enough to qualifyas “significantly more” to transform an abstract idea into patentablesubject matter:

1. Adding the words “apply it” or equivalent.

2. Mere instructions to implement an abstract idea on acomputer.

3. Generic computer implementation.

4. Requiring no more than a generic computer to perform genericcomputer functions that are well-understood, routine, andconventional activities previously known to the industry.

5. Limiting the use of an idea to a particular technologicalenvironment.

11. Preliminary Examination Instructions in View of the Supreme CourtDecision in Alice Corporation Pty. Ltd. v. CLS Bank International, et al.(June 25, 2014), www.uspto.gov/patents/announce/alice_pec_25jun2014.pdf.

§ 7:3Patentable Subject Matter

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§ 7:4 The “Abstract” Exception

§ 7:4.1 What Is “Abstract”?Inventions directed to abstract subject matter are not patentable.The same is true of claims directed to mental processes, even if they

are computerized. It is not clear whether the prohibition againstpatenting mental processes is a subpart of the law against patentingof abstract ideas or is, rather, a separate concept. Until that is clarifiedby the courts, the prohibition against patenting mental processes willbe considered to be a subcategory under the law prohibiting patentingof abstract ideas.

In any case, as detailed below, the lack of guidance available withregard to what is abstract is a serious problem for the patent practi-tioner. Even the Federal Circuit has acknowledged the problem:

The abstractness of the “abstract ideas” test of patent eligibilityhas become a serious problem, leading to uncertainty and tothe devaluing of inventions of practical utility and economicpotential.12

An example of the guidance provided by the Federal Circuit, inlanguage that is not particularly helpful, is:

[T]his disqualifying characteristic [abstractness] should exhibititself so manifestly as to override the broad statutory categoriesof eligible subject matter and the statutory context that directsprimary attention on the patentability criteria of the rest of thePatent Act.13

The Supreme Court has not been of much help. In its Alicedecision, it hints that an abstract idea can be a “a fundamental truth;an original cause; a motive” or a mathematical algorithm itself or afundamental economic practice.14

Better guidance is found in the Ultramercial decision,15 where thecourt quoted a dictionary definition of “abstract”: “disassociated fromany specific instance . . . expressing a quality apart from an object.”Accordingly, “[a]n abstract idea is one that has no reference to material

12. CLS Bank Int’l v. Alice Corp. Pty. Ltd., 685 F.3d 1341 (Fed. Cir. 2012); butsee CLS Bank Int’l v. Alice Corp. Pty. Ltd., 717 F.3d 1269 (Fed. Cir. 2013)(en banc), aff ’d, 134 S. Ct. 2347 (2014), discussed below.

13. Research Corp. Techs., Inc. v. Microsoft Corp., 627 F.3d 859, 868 (Fed. Cir.2010).

14. Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 134 S. Ct. 2347 (2014).15. Ultramercial, Inc. v. Hulu, LLC, 722 F.3d 1335 (Fed. Cir. 2013). See also

Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709 (Fed. Cir. 2014) (finding theclaimed subject matter not patent-eligible).


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objects or specific examples—i.e., it is not concrete.” Thus, the courtconcluded that a “claim is not patent eligible only if, instead ofclaiming an application of an abstract idea, the claim is instead tothe abstract idea itself.”16 This analysis is similar to the SupremeCourt’s analysis in the Morse telegraph case (see section 7:5.1), wherean application of a law of nature (electromagnetism) was foundpatentable, but not all uses of electromagnetism.

Even the Ultramercial language provides inadequate guidance.Based on recent cases, it appears whether or not a claim is directedto abstract subject matter depends highly on the particular judgesdeciding the issue in a particular case.

Subsequent to the Alice decision the following were held to beabstract ideas:

1. Process of organizing information through mathematicalcorrelations not tied to a specific structure or machine.17

2. Providing a third-party guarantee for a sales transaction in anon-line environment.18

3. Managing a game of Bingo (similar to methods of organizinghuman activity).19

4. Using advertisement as an exchange for currency where con-sumer receives copyrighted media, and offers the media inexchange for watching the advertisement, displays the adver-tisement, and allows consumer access to media, receivingpayment from the sponsor of the ad.20

5. Method of extracting data from hard copy documents usingscanner, recognizing specific information from the extracteddata, and storing the information in memory.21

6. Tracking financial transactions to determine whether theyexceed a preset spending limit, that is, budgeting.22

7. Customizing webpage information based on informationknown about the user and web navigation data.23

16. Ultramercial, 722 F.3d at 1343.17. Digitech Image Techs., LLC v. Elecs. for Imaging, Inc., 758 F.3d 1344 (Fed.

Cir. 2014).18. buySAFE, Inc. v. Google Inc., 765 F.3d 1350 (Fed. Cir. 2014).19. Planet Bingo, LLC v. VKGS, LLC, 576 F. App’x 1005 (Fed. Cir. 2014).20. Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709 (Fed. Cir. 2014).21. Content Extraction & Transmission LLC v. Wells Fargo Bank, 776 F.3d

1343 (Fed. Cir. 2014).22. Internet Patents Corp. v. Active Network, Inc., 790 F.3d 1343 (Fed. Cir.

2015).23. Id.

§ 7:4.1Patentable Subject Matter

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8. The idea of retaining information in the navigation of onlineforms, with no restriction on how this is achieved. Claimsdirected to the abstract idea were not saved by the “somethingmore” or “inventive concept” requirement. Computer sys-tems, a computer readable storage medium, and generic datacollection steps did not provide “something more.”24

9. Claims concerning computer-implemented price optimizationmethods, which were no more than automation of the funda-mental economic concept of price optimization, were notsaved by coupling with well-understood routine data-gatheringsteps and conventional computer activity.25

10. The abstract idea of determining a price using organizationaland product group hierarchies was not patentable. The claimswere considered similar to the claims in Alice that were directedto abstract idea of intermediate settlement, and the claimsin Bilski that were directed to abstract idea of risk hedging.Adding a computer, even if the machine-or-transformationtest is satisfied, did not provide a meaningful limit on thescope of a claim. The computer must play a significant partin permitting the claimed method to be performed.26

11. Anonymous loan shopping using a conventional computersystem.26.1

12. Utilizing user-selected preset limits on spending that arestored in a database that, when reached, communicates anotification to the user via a device.26.2

13. Customizing webpage content as a function of navigationhistory and information known about the user.26.3

The law is clear as to whether mental processes are patentable. Theanswer is no. Merely computerizing a conventional mental process isnot patentable subject matter. For example, a patent for a computerprogram that helps doctors select treatments for patients was invalidbecause it claimed nothing more than a computerized version ofroutine mental processes used by doctors.27

24. Id.25. OIP Techs., Inc. v. Amazon.com, Inc., 788 F.3d 1359 (Fed. Cir. 2015).26. Versata Dev. Grp., Inc. v. SAP Am., Inc., 793 F.3d 1306 (Fed. Cir. 2015).26.1. Mortg. Grader, Inc. v. First Choice Loan Servs. Inc., ___ F.3d ___, 2016 WL

362415 (Fed. Cir. Jan. 20, 2016).26.2. Intellectual Ventures 1 LLC v. Capital One Bank (USA), 792 F.3d 1363

(Fed. Cir. 2015).26.3. Id.27. SmartGene, Inc. v. Advanced Biological Labs., 555 F. App’x 950 (Fed.

Cir. 2014).

§ 7:4.1 HOW TO WRITE A PATENT APPLICATION

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Unfortunately, Federal Circuit guidance as to what is not abstractunder Alice is not yet available.

§ 7:4.2 What Is “Significantly More”?So far there is little Federal Circuit guidance as to what is “signifi-

cantly more” under Alice so as to render patentable those claims thatare directed to a patent-ineligible concept.

An invention directed to generating a composite webpage combin-ing visual elements of the host website with content of a third-partymerchant, rather than transferring the user to the third-party mer-chant’s website, even if directed to an abstract idea (the court puntedon that issue) provided “significantly more” because the claims werenot merely for the use of the Internet in performing an abstractbusiness practice. Instead, the claims specified how the interactionswith the Internet are manipulated to yield a desired result that over-rides the routine and conventional sequence of events ordinarilytriggered by the click of a hyperlink.28

The use of generic computer components such as an interface,network, and database does not provide “significantly more” to renderan abstract idea patentable subject matter.28.1

§ 7:4.3 Bilski Machine-or-Transformation Test

The Federal Circuit in In re Bilski29 provided a useful test forpatentable subject matter of a process: a process is patent-eligibleunder 35 U.S.C. § 101 if (1) it is tied to a particular machine orapparatus, or (2) it transforms a particular article into a different state.

The Supreme Court affirmed that Federal Circuit decision.30 TheCourt endorsed the Federal Circuit machine-or-transformation test asproviding an “important and useful clue” as to whether an inventionconstitutes patentable subject matter. However, the Court stated thatit is not the only test, and the appropriate test is whether a claim istrying to patent an “abstract idea.” The Court failed to identify whatan “abstract idea” is other than to cite three of its earlier decisions. TheCourt did state that business methods can be patentable, as long as theclaims are not attempting to patent an abstract idea. The Court statedthat the method claimed in Bilski was an unpatentable abstract idea,and the narrowing limitations in dependent claims were insignificantpost-solution components, so that adding these limitations did notmake the claims patent-eligible.

28. DDR Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245 (Fed. Cir. 2014).28.1. Mortg. Grader, Inc. v. First Choice Loan Servs. Inc., ___ F.3d ___, 2016 WL

362415 (Fed. Cir. Jan. 20, 2016).29. In re Bilski, 545 F.3d 943 (Fed. Cir. 2008), aff ’d sub nom. Bilski v. Kappos,

130 S. Ct. 3218 (2010).30. Bilski v. Kappos, 130 S. Ct. 3218 (2010).


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Presenting system or media claims does not avoid Bilski. The Bilskirationale applies even with regard to claims not directed to a method.In particular, system and media claims are treated the same as methodclaims for the patent-eligibility analysis. The form of a claim does notrender an abstract idea patent-eligible.

With regard to the transformation prong, the following guidelinesapply:

1. The transformation must be central to the purpose of theclaimed process.

2. A process for chemical or physical transformations satisfiesthe transformation test, that is, chemical compounds can bearticles.

3. Transformation of data that represents physical and tangibleobjects into a particular visual depiction of a physical objectsatisfies the transformation test. For example, data that repre-sents a structure of bones, organs, and other body tissues can bean “article.”

4. Private legal obligations or relationships, business risks, orother such abstractions are not an “article,” and thus theirtransformation does not satisfy the transformation test.

The following rules were stated in the Bilski decision and laterdecisions:

1. Laws of nature are not patentable.

2. Natural phenomena are not patentable.

3. Abstract ideas are not patentable.

4. Mental processes, that is, processes of human thinking andsystems that depend for their operation on human intelligencealone, are not patentable. A process where all the steps can beperformed in the human mind, or by a human using a penand paper, is not directed to patentable subject matter.31 Suchprocesses are not patentable subject matter because they arenot tied to any machine and do not transform any article intoa different state or thing. Application of human intelligencealone to a solution of a practical problem involves only a claimto a fundamental principle. (In a decision prior to Bilski, theFederal Circuit held that a system for mandatory arbitrationresolution regarding one or more unilateral documents was

31. CyberSource Corp. v. Retail Decisions, Inc., 654 F.3d 1366 (Fed. Cir.2011).


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not patentable subject matter because it depended entirely onthe use of mental processes.32)

5. Preemption of all uses of a fundamental principle in all fieldsis not patentable.

6. Field-of-use limitations do not render a claimed process patent-able, because it would be a preemption of all uses of a funda-mental principle in only one field.

7. Insignificant post-solution activity does not render a claimpatentable.

8. Merely adding a data-gathering step does not render a processpatentable.

9. A claimed process that can be practiced only by a series ofphysical acts is not patentable subject matter if the basic test isnot satisfied.

10. Claim limitations that are present that satisfy the test mustimpose meaningful limitations on the claim’s scope.

11. To determine whether there is patentable subject matter, theclaims as a whole must be considered, and not the individualsteps. It is irrelevant that any individual step or limitation of aprocess by itself is unpatentable subject matter.

12. The patentability of the claimed process under 35 U.S.C.§§ 102 and 103 is not relevant to whether or not there ispatentable subject matter under 35 U.S.C. § 101.

§ 7:4.4 Patent Office Guidelines

In 2009, the PTO issued guidelines regarding evaluating subjectmatter eligibility under 35 U.S.C. § 101.33 The current Patent Officeguidelines are for the most part found in the 2014 Interim Guidanceon Patentable Subject Matter Eligibility, effective December 16,2014.34 These guidelines supersede much of what was in the Manualof Patent Examining Procedure. Not superseded are MPEP sections2103 (III), 2104, 2105 (in part), and 2106 (in part). The following

32. In re Comiskey, 499 F.3d 1365 (Fed. Cir. 2007), withdrawn and supersededby 554 F.3d 967 (Fed. Cir. 2009).

33. Memorandum from Andrew H. Hirshfeld to TC Directors, New InterimPatent Subject Matter Eligibility Examination Instructions (Aug. 24,2009), www.uspto.gov/patents/law/comments/2009-08-25_interim_101_instructions.pdf.

34. 1410 Off. Gaz. Pat. & Trademark Office 50 (Jan. 6, 2015); July 2015Update on Subject Matter Eligibility, 80 Fed. Reg. 45,429 (July 30, 2015);July 2015 Update: Subject Matter Eligibility, www.uspto.gov/sites/default/files/documents/ieg-july-2015-update.pdf.


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discussion integrates useful information from both guidelines andthe July 2015 Update on Subject Matter Eligibility. Although the2014 guidelines supersede earlier guidelines, there was much in the2009 guidelines that was of practical help in drafting claims thatthe Patent Office will likely consider as directed to patentable subjectmatter.

Although the guidelines include the admonishment that rejectionsneed to be based upon substantive law, and a failure to follow theinstructions is neither appealable nor petitionable, for the mostpart, examiners follow the guidelines. It can be expected that if theguidelines are satisfied, a rejection for a lack of patentable subjectmatter will not be received.

[A] Current GuidelinesThe first step of the current guidelines is to determine if the claim is

directed to one of the four patent-eligible subject matter categories,namely a process, machine, manufacture, or composition of matter.If the answer is no, then the claim is not directed to patentable subjectmatter. For example, transitory forms of signal transmission are notpatent-eligible.

The second step is to determine if the claim is directed to a judiciallyrecognized exception, namely a law of nature, a natural phenomenon, oran abstract idea.

Specific examples of judicially recognized exceptions identified are:

• Naturally occurring substances and substances that do not havemarkedly different characteristics compared to what occurs innature.

• Fundamental economic principles.

• Methods of organizing human activities.

• An idea in and of itself.

• Mathematical relationship/formulas.

• Isolated DNA.

• Correlation that a certain compound is metabolized by the bodyand the consequences.

• Using electromagnetism to transmit signals.

• The chemical principle underlying union between fatty ele-ments and water.

The Guidelines divide abstract ideas into four categories andprovide examples of each, as follows.


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Fundamental Economic Practices

• Creating a contractual relationship

• Hedging

• Mitigating settlement risk

An Idea “of Itself”

• Comparing information regarding a sample or test subject to acontrol or target data

• Collecting and comparing known information

• Comparing data to determine a risk level

• Diagnosing an abnormal condition by performing clinical testsand thinking about the results

• Obtaining and comparing intangible data

• Comparing new and stored information and using rules toidentify options

• Using categories to organize, store, and transmit information

• Data recognition and storage

• Organizing information through mathematical correlations

• Displaying an advertisement in exchange for access to copy-righted media

Certain Methods of Organizing Human Activity

• Creating a contractual relationship

• Hedging

• Mitigating settlement risk

• Processing loan information

• Managing an insurance policy

• Managing a game of bingo

• Allowing players to purchase additional objects during a game

• Generating rule-based tasks for processing an insurance claim

• Tax-free investing

• Arbitration

• Using advertising as an exchange or currency

• Structuring a sales force or marketing company


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• Using an algorithm for determining the optimal number ofvisits by a business representative to a client

• Computing a price for the sale of a fixed-income asset andgenerating a financial analysis output

• A mental process that a neurologist should follow when testinga patient for nervous system malfunctions

• Meal planning

Mathematical Relationships/Formulas

• An algorithm for converting binary coded decimal to purebinary

• A formula for computing an alarm limit

• A formula describing certain electromagnetic standing wavephenomena

• The Arrhenius equation

• A mathematical formula for hedging

• Managing a stable-value protected life insurance policy byperforming calculations and manipulating the results

• Reducing the amount of calculations in known and establishedcomputations

• An algorithm for determining the optimal number of visits by abusiness representative to a client

• An algorithm for calculating parameters indicating an abnormalcondition

• Computing a price for the sale of a fixed-income asset andgenerating a financial analysis output

• Calculating the difference between local and average data values

The concept of preemption plays a part in the analysis. Under thecurrent guidelines, if a claim directed to an abstract idea preempts alluses of the idea, the claim is not patent-eligible. However, the absenceof preemption does not guarantee that a claim is patent-eligible.

The third step is to determine if the claim recites additional elements“significantly more” than the judicial exception. If the answer to steptwo is no or the answer to step three is yes, then the claim is directed toeligible subject matter. If the answer to the second question is yes andthe answer is no to the third question, then the claim is not directedto eligible subject matter.


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With regard to the requirement to have “significantly more,” thePatent Office identified the following as limitations that may qualify:

1. Improvements to another technology or technical field.

2. Improvements to the functioning of a computer.

3. Applying the judicial exception by use of a particular machine(the Bilski test).

4. Transform or reduce a particular article to the different stateor thing.

5. Adding a limitation other than that as which is well under-stood, routine or conventional in the field.

6. Adding unconventional steps that combine a claim to a particu-lar useful application.

7. Limitations linking the use of the judicial exception to aparticular technological environment, such as the internet.

Examples of limitations that do not qualify as “significantly more”include:

1. Adding the words “apply it.”

2. Mere instructions to implement an abstract idea in acomputer.

3. Appending well-understood routine and conventional activi-ties previously known to the industry, specified at high levelgenerality. A specific example is requiring no more than ageneric computer to perform generic computer functions.

4. Adding insignificant extra solution activity to the judicialexception.

5. Generally linking the judicial exception to a particular tech-nological environment or field of use, such as the internet.

The Patent Office in its January 2015 and July 2015 guidelinesprovided specific examples with regard to patentable and nonpaten-table subject matter.35 The examples included those relating to “Nat-ure-Based Products.”36 Many examples were not particularly helpful inthat they essentially repeated case law. In its discussions of abstractideas, the Patent Office identified the following claims as patent-eligible:

35. See www.uspto.gov/patents/law/exam/abstract_idea_examples.pdf; www.uspto.gov/sites/default/files/documents/ieg-july-2015-update.pdf.

36. See www.uspto.gov/patents/law/exam/mdc_examples_nature-based_products.pdf.


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1A. A computer-implemented method reciting a series of acts forprotecting a computer from an electronic communicationcontaining malicious code.

1B. The same method claimed as a nontransitory computer-readable medium.37

2. A system useful in outsource provider serving web pagesoffering commercial opportunities, where a consumer canpurchase an item without being redirected to a third-partymerchant affiliate, thus allowing the host to retain controlover the customer.38

3A. A computer-implemented method for half-toning a grayscaleimage requiring using a processor to compare a blue noisemask to a grayscale image. This claim was directed to anabstract idea because it involved a mathematical algorithm.But it was patent-eligible because it had “significantly more.”In particular, it had meaningful limitations beyond the mereconcept of simply retrieving or combining data using a com-puter. Also, the claims provided an ordered step that improvedthe functioning of the claimed computer itself.

3B. The same invention claimed as a nontransitory computer-readable medium with stored instructions.

3C. The same invention claimed as a system comprising a pro-cessor, a first memory, and a second memory.39

4A. Using mathematical formulas, a mobile GPS receiver calcu-lates estimated ranges from the GPS receiver to each satellitein view, based on codes received from the satellites, and thensends the estimate ranges to the server. Using a mathematicalmodel, the location of the mobile receiver position is deter-mined by a server which transmits it to the mobile device fordisplay. Although directed to an abstract idea, the combinationof elements imposed meaningful limits in that the mathe-matical operations are applied to improve existing GPS tech-nology by improving the signal-acquisition sensitivity of areceiver.

4B. A method claim directed to the same subject matter.40

37. Examples 1A and 1B were Patent Office hypotheticals.38. Example 2 was based on DDR Holdings, LLC v. Hotels.com, L.P., 773

F.3d 1245 (Fed. Cir. 2014), which is discussed in section 7:4.2.39. Examples 3A, 3B, and 3C were based on Research Corp. Techs., Inc. v.

Microsoft Corp., 627 F.3d 859 (Fed. Cir. 2010).40. Examples 4A and 4B were based on SiRF Tech., Inc. v. Int’l Trade Comm’n,

601 F.3d 1319 (Fed. Cir. 2010).


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5. Solving an Internet-centric problem with a solution neces-sarily rooted in computer technology.41

6. A claimed method necessarily rooted in computer technologyto overcome a problem specifically arising in graphical userinterfaces.42

The examples identified the following claims to be patent-ineligible:

1. In digital imaging, a method that merely gathers and com-bines data by reciting steps of organizing information throughmathematical relationships, and then generates a device pro-file, without limits to the use of the device profile, was notpatent-eligible.43

2. An automated system for enabling management of the gameof Bingo is an abstract idea because it can be performedmentally or in a computer and is similar to the “organizinghuman activity” at issue in Alice Corp. Claim had nothing butgeneric components so there was nothing significantly morethan the abstract idea itself.44

3. Method for conducting a reliable transaction in e-commerceinvolving a guarantee service. This was patent-ineligible asbeing directed to a fundamental economic practice and failedto provide anything significantly more than the abstractidea.45

4. A process for distributing media and advertisements over theInternet directed to the concept of using advertising as anexchange or currency. This was abstract, being directed tostandard commercial practice, and it failed to add significantlymore.46

The following examples are from the July 2015 Guidelines:

5. Process for distributing stock quotes to selected remotedevices, and organizing and comparing data, which steps can

41. See July 2015 Update Appendix 1, Example 21, www.uspto.gov/sites/default/files/documents/ieg-july-2015-app1.pdf.

42. See July 2015 Update Appendix 1, Example 23, www.uspto.gov/sites/default/files/documents/ieg-july-2015-app1.pdf.

43. This example was based on Digitech Image Tech., LLC v. Elecs. forImaging, Inc., 758 F.3d 1344 (Fed. Cir. 2014).

44. This example was based on Planet Bingo, LLC v. VKGS LLC, 576 F. App’x1005 (Fed. Cir. 2014) (unpublished).

45. This example was based on buySAFE, Inc. v. Google, Inc., 765 F.3d 1350(Fed. Cir. 2014).

46. This example was based on Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709(Fed. Cir. 2014).


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be formed mentally, is an idea of itself; additional limitationsare only at a high level of generality in the Internet environment.

6. Meal planning using a computer system, where additionalclaim elements are stated at the highest level of generalityusing well-known, routine computer functions with a data-base performing only its basic function.

7. Rubber molding when a claim includes meaningful limitationson the use of a mathematical relationship such as opening of apress based on calculations and determination of the tempera-ture of a mold.

8. Calculating a scaling factor for a graphical user interface usinga mathematical algorithm where the preamble states anintended use of the invention, which is not considered a claimlimitation.

[B] Prior GuidelinesThe 2009 Patent Office guidelines are helpful with regard to the

application of the Bilski test, so they are included here.Specifically, a particular machine or transformation must impose

a meaningful limit on the claim scope. Also, the use of the particularmachine or the transformation of a particular article must involvemore than insignificant “extra-solution” activity. The guidelines pro-vide the following guidance regarding satisfying the Bilski test:

1. The machine shall implement the process, and not merely bean object upon which the process operates.

2. The language “a machine implemented process” alone isinsufficient, but rather the claim needs to be clear how themachine implements the process.

3. Use of the machine must impose a meaningful limitation onthe claim scope.

4. The article can be a physical object or substance, and alsoelectronic data that represents a physical object or substance.

5. Transformation requires that the article change to a differentstate or thing, that is, more than simply using an article orchanging the location of an article.

6. Purely mental processes on which thoughts or human-basedactions are changed are not a transformation of a particulararticle.

7. Mathematical manipulation per se is not a transformation.


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8. Transformation of electronic data is a sufficient transforma-tion when the nature of the data has been changed so it has adifferent function or is suitable for a different use.

9. For a machine to be “particular,” it has to be a specific machineor article, and not any and all machines or articles.

10. If the machine is a general-purpose computer, it needs to beprogrammed to perform the process steps.

11. A field-of-use limitation does not impose actual boundarieson the scope of the claimed invention.

12. Insignificant extra-solution activity is activity that is notcentral to the purpose of the method invented.

Following the Supreme Court’s decision in Bilski, the Patent Officeissued interim guidance for determining subject eligibility for processclaims.47 According to these guidelines, if the Federal Circuit machine-or-transformation test is satisfied, the claims are less likely to be drawnto an abstract idea. If not, they are more likely to be drawn to an abstractidea.

The Patent Office provided the following specific guidance forwhether method claims are patent-eligible.

Factors Weighing Toward Eligibility

• Recitation of a machine or transformation (either express orinherent).

○ Machine or transformation is particular.

○ Machine or transformation meaningfully limits theexecution of the steps.

○ Machine implements the claimed steps.

○ The article being transformed is particular.

○ The article undergoes a change in state or thing (e.g.,objectively different function or use).

○ The article being transformed is an object or substance.

• The claim is directed toward applying a law of nature.

○ Law of nature is practically applied.

○ The application of the law of nature meaningfully limitsthe execution of the steps.

47. Interim Guidance for Determining Subject Matter Eligibility for ProcessClaims in View of Bilski v. Kappos, 75 Fed. Reg. 43,922 (July 27, 2010).


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• The claim is more than a mere statement of a concept.

○ The claim describes a particular solution to a problemto be solved.

○ The claim implements a concept in some tangible way.

○ The performance of the steps is observable andverifiable.

Factors Weighing Against Eligibility

• No recitation of a machine or transformation (either expressor inherent).

• Insufficient recitation of a machine or transformation.

○ Involvement of machine, or transformation, with thesteps is merely nominally, insignificantly, or tangen-tially related to the performance of the steps; e.g., datagathering, or merely recites a field in which the methodis intended to be applied.

○ Machine is generically recited such that it covers anymachine capable of performing the claimed step(s).

○ Machine is merely an object on which the methodoperates.

○ Transformation involves only a change in position orlocation of article.

○ “Article” is merely a general concept [see below].

• The claim is not directed to an application of a law of nature.

○ The claim would monopolize a natural force or patent ascientific fact; e.g., by claiming every mode of producingan effect of that law of nature.

○ Law of nature is applied in a merely subjective deter-mination.

○ Law of nature is merely nominally, insignificantly, ortangentially related to the performance of the steps.

• The claim is a mere statement of a general concept [seebelow].

○ Use of the concept, as expressed in the method, wouldeffectively grant a monopoly over the concept.

○ Both known and unknown uses of the concept arecovered, and can be performed through any existingor future-devised machinery, or even without anyapparatus.

○ The claim only states a problem to be solved.

○ The general concept is disembodied.


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○ The mechanism(s) by which the steps are implementedis subjective or imperceptible.48

The Patent Office added the following examples of “generalconcepts” that are generally not patentable subject matter (not anexclusive list):

• Basic economic practices or theories (e.g., hedging, insurance,financial transactions, marketing);

• Basic legal theories (e.g., contracts, dispute resolution, rulesof law);

• Mathematical concepts (e.g., algorithms, spatial relation-ships, geometry);

• Mental activity (e.g., forming a judgment, observation, eval-uation, or opinion);

• Interpersonal interactions or relationships (e.g., conversing,dating);

• Teaching concepts (e.g., memorization, repetition);

• Human behavior (e.g., exercising, wearing clothing, follow-ing rules or instructions);

• Instructing “how business should be conducted.”49

§ 7:4.5 Case Law Post-BilskiThe Board of Patent Appeals and Interferences (renamed the Patent

Trial and Appeal Board in 2012) took a stringent view of Bilski inseveral cases. For example, the Board held that a method using ageneral-purpose computer does not satisfy the “particular machine orapparatus” prong of the Bilski test.50

Accordingly, recitation of a “programmed computer method” in aclaim for identifying trade secrets does not render the claim statutorysubject matter. According to the Board, recitation of “programmedcomputer method” fails to provide any meaningful limitations and aninsufficient field of use. However, in the same patent, an apparatusclaim directed to the programmed computer itself using “means for”language was patentable subject matter. But this did not help theapplicant, because the apparatus claims were held to be indefiniteunder 35 U.S.C. § 112(b), in that no particular structure was definedin the specification corresponding to the “means for” language. The

48. Id. at 43,927.49. Id.50. Ex parte Langemyr, Appeal No. 2007-3300 (B.P.A.I. 2008), www.uspto.gov/

web/offices/dcom/bpai/prec/fd073300.pdf.


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Board wanted the specification to include the algorithm for program-ming the computer.51

XML documents are not an article that can be transformed, but arerather merely data, and thus their transformation does not satisfy thesecond prong of the Bilski test.52

The Board applied the following test to determine whether aclaimed machine or article of manufacture involving a mathematicalalgorithm is directed to patentable subject matter:

(1) Is the claim limited to a tangible practical application, inwhich the mathematical algorithm is applied, that results ina real-world use (e.g., “not a mere field-of-use label having nosignificance”)?

(2) Is the claim limited so as to not encompass substantiallyall practical applications of the mathematical algorithm,either “in all fields” of use of the algorithm, or even in“only one field”?53

If a claim fails either part of this two-prong inquiry, the claim is notdirected to patentable subject matter.

There are some positive decisions. For example, although a general-purpose computer is an insufficient machine under the Bilski test, themachine prong most likely is satisfied if the claim is tied to a particularcomputer specifically programmed for executing the steps of theclaimed method.54

Some more recent cases provide guidance on how to write claimsdirected to patentable subject matter. Other cases, however, are lesshelpful.

Merely adding “computer-aided” to a claim, where the steps of theclaims by themselves would not be directed to patentable subjectmatter, does not render the claim directed to patentable subjectmatter.55

In CLS Bank International v. Alice Corp.,56 the Federal Circuit in anen banc decision had the opportunity to add clarity to the issue of whatis abstract. It did not. There was no majority opinion. The multipleopinions of the court indicate that a system claim is more likely to be

51. Ex parte Halligan, Appeal No. 2008-1588 (B.P.A.I. Nov. 24, 2008).52. Ex parte Nawathe, Appeal No. 2007-3360 (B.P.A.I. Feb. 9, 2009).53. Ex parte Gutta, 93 U.S.P.Q.2d 1025, 1026 (B.P.A.I. 2009).54. Ex parte Nawathe, Appeal No. 2007-3360 (B.P.A.I. Feb. 9, 2009).55. Dealertrack, Inc. v. Huber, 674 F.3d 1315, 1333–34, 101 U.S.P.Q.2d 1325,

1339–40 (Fed. Cir. 2012).56. CLS Bank Int’l v. Alice Corp. Pty. Ltd., 717 F.3d 1269 (Fed. Cir. 2013),

aff ’d, 134 S. Ct. 2347 (2014).


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directed to patentable subject than a method claim or a claim tocomputer-readable media. The claims in the case were directed to acomputerized trading platform for conducting financial transactions,basically using an escrow agent.

Ultramercial, Inc. v. Hulu, LLC57 involved a claimed method fordistributing copyrighted products such as song, movies, and booksover the Internet where the consumer receives a copyrighted productfor free in exchange for viewing an advertisement, while the advertiserpays for the copyrighted content. The claims were held to be directedto patentable subject matter.

Standard Beauregard claims (claims to computer-readable storagemedia) are not patent-eligible, because they can encompass transitorysignals.58 Thus, such claims need to be written to expressly excludetransitory signals by adding “non-transitory.” The Patent Office willallow such an amendment even without support in the specification.

A claim directed to a sequence of steps that can be performed by ahuman is drawn to patent-ineligible subject matter.59

§ 7:4.6 Recommendations for Drafting Claims to AvoidAbstractness

For one preparing a patent application with the aim of havingclaims being directed to nonabstract patentable subject matter, thereare lessons to be learned from the CLS Bank decision, other courtdecisions, rulings of the Patent Trial and Appeal Board, and the PTOguidelines. Those lessons are the following.

1. What may work:

a. System claims are more likely to pass muster thanmethod claims.

b. A system claim should include as many computercomponents as possible without unduly limiting theclaim scope.

c. Write system claims using language different from thatof the method claims so it is not possible for anexaminer or a court to say it is merely a computer-implemented version of the abstract idea of the methodclaim.60

57. Ultramercial, Inc. v. Hulu, LLC, 722 F.3d 1335 (Fed. Cir. 2013).58. Ex parte Mewherter, 2013 WL 3291360 (P.T.A.B. May 8, 2013).59. Ex parte Xu, 2013 WL 3363011 (P.T.A.B. May 20, 2013).60. Accenture Glob. Servs., GmbH v. Guidewire Software, Inc., 728 F.3d 1336

(Fed. Cir. 2013) (for a system claim to be patentable when a corresponding


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d. Include meaningful substantive limitations that narrow,confine, or otherwise tie down the claim so that it doesnot cover the full abstract idea itself.

e. Include limitations beyond those that are essential topracticing the abstract idea.

f. Include steps that are not routine and convention inimplementing the abstract idea.

g. Satisfy the Bilski machine-or-transformation test.

h. For computer-implemented claims, include in the claims:

i. A specific way of doing something with thecomputer

ii. A specific computer

iii. The computer is part or integral to the solution

iv. An improvement in computer technology

v. Include limitations so that a claimed methodcannot be performed by a human

vi. A special-purpose computer specially designed toimplement a method

i. Connect data recited in a claim to a real-world physicalobject.

j. Use apparatus claims with a “means for” structurewhere the specification includes an algorithm for pro-gramming a general-purpose computer to satisfy therequirements of 35 U.S.C. § 112.

k. Include a transformation step in the claims, such asmanipulating visual depictions.

l. Include claim limitations that resulted in the SupremeCourt finding patentable subject matter (see section7:4.7).

m. Tie a particular machine/apparatus, other than ageneral-purpose computer, to at least one of the stepsof the process claim.

method claim is patent-ineligible, the system claim has to offer “mean-ingful limitations” beyond the method claims; system claims need morethan linking the use of the method to a particular technological environ-ment).


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2. Merely rewriting a method claim as a claim for a computer-readable media (Beauregard format) programmed to performthe method will not result in patentable subject matter if themethod claim is not directed to patentable subject matter.

3. Do not claim a mere statement of a general concept such as:

a. Basic economic practices or theories

b. Basic legal theories

c. Mental activity

d. Teaching concepts

e. Human behavior

f. Mathematical concepts

g. Instructing “how business should be conducted”

h. Interpersonal interactions or relationships

4. Limitations that by themselves will not work are:

a. Limitations necessary to every practical use of theabstract idea

b. Well-understood, routine, conventional activity pre-viously used by researchers in the field

c. Merely requiring computer implementation to providespeed or efficiency

d. Token or trivial activities

e. Vague limitations

f. Mere field-of-use limitations

g. Insignificant or token pre- or post-solution activity

§ 7:4.7 Pre-Bilski and Pre-Alice DecisionsThe following discussion is based on pre-Bilski and pre-Alice deci-

sions. Any Supreme Court decision discussed below is probably goodlaw and provides guidance as to what is patentable subject matter.However, any other decisions, to the extent they find certain claimsbeing directed to patentable subject matter, may no longer be good law.At a minimum, the State Street Bank test discussed below is of ques-tionable vitality. The Bilski decision found that the “useful, concreteand tangible result” test of State Street is inadequate.


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In an early case involving an algorithm, In re Freeman,61 the CCPAdefined a two-step test to determine whether a claim recites patentablesubject matter:

1. First, does the claim directly or indirectly recite a mathema-tical algorithm? A mathematical algorithm comprises mathe-matical calculations, formulae, or equations representeddirectly in mathematical symbols or indirectly in prose form.

2. If a mathematical algorithm is recited, the claim must befurther analyzed to ascertain whether in its entirety it whollypreempts use of the mathematical algorithm. A claim is notwholly preemptive if the mathematical algorithm is imple-mented in a specific manner to define structural relationshipsbetween the physical elements of the claim (in apparatusclaims) or to refine or limit claim steps (in process claims).62

In Diamond v. Diehr,63 the Supreme Court modified and endorsedthis CCPA test. The Court held:

When a claim containing a mathematical formula implements orapplies that formula in a structure or process, which, whenconsidered as a whole, is performing a function which the patentlaws were designed to protect (e.g., transforming or reducing anarticle to a different state or thing) then the claim satisfies therequirements of § 101.64

In In re Grams, the Federal Circuit attempted to reconcile the Diehrtest with the CCPA’s two-step Freeman test.65 Under the FederalCircuit test, the threshold question remains the same, that is, doesthe claim recite a mathematical algorithm? However, once a mathe-matical algorithm is found, the inquiry then branches into twoseparate strands. The claim is patentable if:

(1) The subject matter outside the mathematical algorithm ispatentable by itself. In other words, if the mathematicalalgorithm is carved out of the claim, and the remaining stepsor elements recited in the claims define patentable subjectmatter, then the claim is patentable; or

61. In re Freeman, 573 F.2d 1237, 1245–46 (C.C.P.A. 1977); see alsoGottschalk v. Benson, 409 U.S. 63 (1972).

62. In re Walter, 618 F.2d 758, 767 (C.C.P.A. 1978).63. Diamond v. Diehr, 450 U.S. 175 (1981).64. Id. at 192.65. In re Grams, 888 F.2d 835 (Fed. Cir. 1989).


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(2) The mathematical algorithm limits or refines a process stepor defines a structural relationship between the physicalelements of an apparatus claim.66

The test typically used to determine patentability of computerprograms was the Freeman two-step test discussed above; however,the Federal Circuit in 1998 essentially repudiated it, introducing whatis known as the State Street Bank67 test:

1. Is the claim directed to at least one of the four enumer-ated categories of patentable subject matter of section 101,typically—in the case of a software invention—a machine orprocess?

2. If the claim is directed to one of the categories of patentablesubject matter, does it fall into one of the judicially createdexceptions, such as abstract ideas, natural phenomena, laws ofnature, and mathematical algorithms? (The mathematicalalgorithm exception is really a subset of the abstract ideaexception.)

3. As to mathematical algorithms, is the claim directed to subjectmatter representing nothing more than abstract ideas, or is thealgorithm applied in a “useful” way, such as transformation ofdata into a useful, concrete, and tangible result?

Moreover, State Street Bank repudiated another rationale that hadbeen used to reject software claims; the business method exceptionwas put to rest as “ill-conceived.”68 Similarly, the printed matterexception has been seriously questioned by the Federal Circuit.69

The Federal Circuit has also held that the State Street Bank testis equally applicable to process and machine claims: whether theinvention claimed is a machine or process is not relevant to theanalysis.70

§ 7:4.8 Pre-Bilski Approved Claims for Computer/Software Inventions

The following discussion was written prior to the Federal Circuit’sBilski decision. Accordingly, some of the claims presented below may

66. Id. at 838–39.67. State St. Bank & Tr. Co. v. Signature Fin. Grp., Inc., 149 F.3d 1368, 47

U.S.P.Q.2d 1596 (Fed. Cir. 1998).68. Id.69. In re Gulack, 703 F.2d 1381 (Fed. Cir. 1983); see also In re Lowry, 32 F.3d

1579 (Fed. Cir. 1994) (holding that the term “manufacture” includes acomputer memory on which is stored a particular piece of software).

70. AT&T Corp. v. Excel Commc’ns, Inc., 172 F.3d 1352, 50 U.S.P.Q.2d 1447(Fed. Cir. 1999).


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not satisfy the Bilski test for patentable subject matter. They doprovide some guidance as to claim structures that may be directed topatentable subject matter.

Use the following suggested claims for guidance, but be sure todetermine if they pass the Bilski machine-or-transformation test.The Supreme Court decision in Bilski has no real practical signifi-cance, as long as the claims satisfy the Federal Circuit machine-or-transformation test. If they do, the claims are likely to be consideredto be directed to patentable subject matter, and if they do not, therewill be a significant uphill battle in the Patent Office to obtainallowance.

Discussed below are specific examples of techniques for avoiding arejection based on nonstatutory subject matter.

[A] Exclude Algorithms from the Claims

When mathematical algorithms are not included in the claim,either explicitly nor implicitly, then there is less likelihood of anissue of lack of statutory subject matter. Inclusion of nonnumericalitems or symbols can help avoid a claim being considered as mathe-matical. For example, a claim can include manipulation of text,symbols, graphics, or sound. Examples of nonmathematical algo-rithms include:

• A process for converting a source program into an objectprogram (see example 1 below);71

• A process for translating a source natural language, for example,Russian, into a target natural language like English (see example2 below);72

• A method of operating a system of a manufacturing plant (seeexample 4 below);73 and

• A method of assigning priorities within a computer.74

The following examples are based on reported decisions includingclaims for computer programs that were determined to be statutorysubject matter because a mathematical algorithm was not recited inthe claims.

71. In re Pardo, 684 F.2d 912, 214 U.S.P.Q. 673 (C.C.P.A. 1982).72. In re Toma, 575 F.2d 872, 197 U.S.P.Q. 852 (C.C.P.A. 1978).73. In re Deutsch, 553 F.2d 689, 193 U.S.P.Q. 645 (C.C.P.A. 1977).74. In re Chatfield, 545 F.2d 152, 191 U.S.P.Q. 730 (C.C.P.A. 1976), cert.

denied, 434 U.S. 875, 195 U.S.P.Q. 465 (1977).


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Example 1. A computer program for converting a source programinto an object program was held to be statutory subject matter.75 Theclaim at issue was:

A process of operating a general purpose data processor of knowntype to enable the data processor to execute formulas in an objectprogram comprising a plurality of formulas, such that the sameresults will be produced when using the same given data, regard-less of the sequence in which said formulas are presented in saidobject program, comprising the steps of:

(a) examining each of said formulas in a storage area of the dataprocessor to determine which formulas can be designated asdefined;

(b) executing, in the sequence in which each formula is desig-nated as defined, said formulas designated as defined;

(c) repeating steps (a) and (b) for at least undefined formulas asmany times as required until all said formulas have beendesignated as defined and have been executed; whereby toproduce the same results upon execution of the formulas inthe sequence recited in step (b) when using the same givendata, regardless of the order in which said formulas werepresented in the object program prior to said process.

Example 2. A process for translating a source natural language, forexample, Russian, into a target natural language, for example, English,was held to be directed to patentable subject matter.76 The claim inquestion was:

A method for translation between source and target naturallanguages using a programmable digital computer system, thesteps comprising:

(a) storing in a main memory of the computer system a sourcetext to be translated;

(b) scanning and comparing such stored source text words withdictionaries of source language words stored in a memoryand for each such source text word for which a match isfound, storing in a file in main memory each word and inassociation with each such word, coded information derivedfrom such dictionary for use in translation of such word, thecoded information including memory offset address linkagesto a memory in the computer system where grammar andtarget language translation for the word are stored;

75. In re Pardo, 684 F.2d 912, 214 U.S.P.Q. 673 (C.C.P.A. 1982).76. In re Toma, 575 F.2d 872, 197 U.S.P.Q. 852 (C.C.P.A. 1978).


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(c) analyzing the source text words in its file of words, a com-plete sentence at a time, and converting the same into asentence in the target language utilizing the coded informa-tion and including the steps of

(1) utilizing the memory offset address linkages for obtain-ing the target [sic language] translations of words froma memory; and

(2) reordering the target language translation into theproper target language sequence.

Example 3. A process for preparing architectural specificationswas held directed to patentable subject matter.77 The claim beforethe court was:

A process for preparing an architectural specification comprising:storing recorded signals representative of instruction data on aninstruction data file; storing recorded signals representative of aplurality of phrases with associated code on a specification datafile, whereby a specifier by writing code may determine thesequence and relation of said phrases; programming a data pro-cessor to receive input code representative of a predeterminedsequence of said phrases and to check said input code to deter-mine whether it contains any errors which would prevent furtherprocessing of said input code and, if not, to prepare an editedinput file of said code; programming said processor to process thecode on said edited input file and to prepare a printed specificationfrom said specification data file according to the code sequencedby a specifier and to prepare a set of signals on a [sic] instructioninput file, said last named signals being correlated with saidphrases through said input code; and programming said dataprocessor to operate on said instruction input file to prepare aset of instructions from said instruction data file; said instructionsbeing associated with corresponding data on said printedspecification.

Example 4. A claim for a method for operating a system ofmanufacturing plants was held to be directed to patentable subjectmatter.78 The claim in question was:

The method of operating a system of multi-plants which producefinished products from material derived from a plurality of sourcesat fluctuating costs for delivery to markets of variable prices, eachof said plants having a different, unique, cost function in

77. In re Phillips, 608 F.2d 879, 203 U.S.P.Q. 971 (C.C.P.A. 1979).78. In re Deutsch, 553 F.2d 689, 193 U.S.P.Q. 645 (C.C.P.A. 1977).


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producing the products, said method comprising operating com-puting apparatus to automatically perform the steps of:

(a) establishing optimized control points for process units in afirst plant;

(b) substantially continuously feeding material and energy costdata, product price data, and variable process data to theoptimized controls for said process units to maintain themat operating conditions dependent upon said data;

(c) periodically modifying cost and process data fed to thecontrol for said first plant to set operating points for saidprocess units in said first plant dependent upon optimumoperation of said first plant; and

(d) periodically modifying cost and price data fed to the controlfor said system to set an operating point for said plantdependent upon optimum operation of said system.

[B] Include Tangible Elements

By including tangible apparatus elements (not just “means for”elements) in the claims, even if a mathematical algorithm is present ina claim, a claim can include statutory subject matter.79

It is good strategy to incorporate as much hardware as possible intothe claims, and certainly into the specification. Preferably, the claimsshould include physical elements, and not just “means for” clauses.However, the Federal Circuit has held that “means for” clauses aloneare sufficient to have statutory subject matter if the specificationdescribes physical embodiments of the elements performing the“means for” function.80

Examples of hardware that can be included in the claims are shiftregister, memory, screen, keyboard, disk, and motor. Also include inthe claims input and output. All computer systems have data orcommands input and provide some sort of output.

Inserting the words “computer-based” before the word “method” inmethod claims, before “system” in system claims, and before “appa-ratus” in apparatus claims is recommended for computer program-related inventions. A claim reading on a general-purpose computerprogrammed to perform means steps can be statutory subject matter,

79. In re Iwahashi, 888 F.2d 1370 (Fed. Cir. 1989).80. Arrhythmia Research Tech., Inc. v. Corazonix Corp., 958 F.2d 1053, 22

U.S.P.Q.2d 1033 (Fed. Cir. 1992). To determine the statutory nature of“means for” language, reference is made to the description in the patentspecification pursuant to 35 U.S.C. § 112.


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because a general-purpose computer in effect becomes a special-purpose computer when programmed to perform a particular functionpursuant to instructions from program software.81

Even where process claims are directed to an unpatentable idea, aproduct-by-process claim defining a machine having a memory con-taining the data defined by the unpatentable process can definepatentable subject matter.82

Even a database can be patentable subject matter when claimed as“a memory for storing data for access by an application program beingexecuted on a data processing system.”83

Specifying in the claim that the algorithm is applied in a “useful”way, such as transforming data into a useful, concrete, and tangibleresult, results in a claim directed to patentable subject matter.84

Two sets of claims should be used, one in “means for” format andanother where specific hardware components are substituted for the“means for” language.

Example 5. Although the following claim recited an algorithm, itwas held patentable because it also recited apparatus such as theelectronic ROM (read-only memory) unit.85

An auto-correlation unit for providing auto-correlation coeffi-cients for use as feature parameters in pattern recognition forN pieces of sampled input values Xn (n = 0 to N–1), said unitcomprising:

(a) means for extracting N pieces of sample input values Xnfrom a series of sample values in an input pattern expressedwith an accuracy of optional multi-bits;

(b) means for calculating the sum of the sample values Xn andXn–Z (t = O–P, Pn + Xn–Z)2;

81. In re Alappat, 33 F.3d 1526, 31 U.S.P.Q.2d 1545 (Fed. Cir. 1994), wherethe Federal Circuit held, en banc, that an apparatus claim defining fourmeans elements, which comprised electronic circuitry elements, wasstatutory subject matter. The claimed subject matter implemented amathematical algorithm to make an oscilloscope display clearer. Theclaims read on a general-purpose computer programmed to perform themeans steps.

82. In re Warmerdam, 33 F.3d 1354, 31 U.S.P.Q.2d 1754 (Fed. Cir. 1994).The claim at issue called for “A machine having a memory whichcontains data . . . generated by the method of any of Claims 1 through4,” where the method as claimed was unpatentable because it was foran abstract idea.

83. In re Lowry, 32 F.3d 1579, 32 U.S.P.Q.2d 1031 (Fed. Cir. 1994).84. State St. Bank & Tr. Co. v. Signature Fin. Grp., Inc., 149 F.3d 1368, 47

U.S.P.Q.2d 1596 (Fed. Cir. 1998).85. In re Iwahashi, 888 F.2d 1370 (Fed. Cir. 1989).


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(c) a read only memory associated with said means forcalculating;

(d) means for feeding to said read only memory the sum of thesampled input values as an address signal;

(e) means for storing in said read only memory the squaredvalue of each sum, (Xn + Xn–Z)2;

(f) means for fetching and outputting the squared values of eachsuch sum of the sample input values from said read onlymemory when said memory is addressed by the sum of thesample input values; . . . .

Example 6. An apparatus claim was held to contain patentablesubject matter because of “means for” clauses. The claim at issue was:

Apparatus for analyzing electrocardiograph signals to deter-mine the level of high frequency energy in the late QRS signalcomprising:

means for converting X, Y, and Z lead electrocardiographicinput signals to digital valued time segments;

means for examining said X, Y, and Z digital valued time segmentsand selecting therefrom the QRS waveform portions thereof;

means for signal averaging an multiplicity of said selected QRSwaveforms for each of said X, Y, and Z inputs and providingcomposite, digital X, Y, and Z QRS waveforms;

high pass filter means;

means for applying to said filter means, in reverse time order, theanterior portion of each said digital X, Y, and Z waveform; andmeans for comparing the output of said filter means with apredetermined level to obtain an indication of the presence of ahigh frequency, low level, energy component in the filter outputof said anterior portions.86

Example 7.

A memory for storing data for access by an application programbeing executed on a data processing system comprising:

a data structure stored in said memory, said data structure . . .

including:

86. Arrhythmia Research Tech., Inc. v. Corazonix Corp., 958 F.2d 1053, 22U.S.P.Q.2d 1033 (Fed. Cir. 1992). To determine the statutory nature of“means for” language, reference is made to the description in the patentspecifications pursuant to 35 U.S.C. § 112.


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plurality of ADOs (attribute data objects) stored in saidmemory . . . ;

a single holder ADO for each said ADOs . . . ;

a referent ADO for at least one of said ADOs . . . ; and

an apex data object stored in said memory . . . .87

[C] Transform Something Physical

A claim can be directed to statutory subject matter if the claim isdirected to the transformation of something physical into a differentform, such as transforming a “signal” from one physical state to adifferent physical state.88 Examples include transforming sound toa different type of sound by filtering, transforming numbers intosound, and transforming numbers into pictures and displaying themon a screen.

For example, a device for detecting and measuring electrocardio-graphic activity is statutory subject matter.89 Also, because the trans-formation of a particular input electrical signal into a different outputsignal involved physical steps to transform one physical electricalsignal into another, the transformation process was statutory subjectmatter.90 The following examples present claims determined to bestatutory subject matter because of a transformation limitation.

Example 8. Conversion of “substantially spherical seismic sig-nals” into “a form representing the earth’s responses to cylindrical orplane waves” was held to be statutory subject matter.91 The claim inissue was:

A method of seismic exploration by simulating from substantiallyspherical seismic waves the reflection response of the earth toseismic energy having a substantially continuous wavefront overan extent of an area being explored having at least one dimensionwhich is large relative to a seismic wavelength, comprising thesteps of:

(a) imparting the spherical seismic energy waves into the earthfrom a seismic source at a source position;

(b) generating a plurality of reflection signals in response to theseismic energy waves at a set of receiver positions spaced inan array over an extent having at least one dimension whichis large relative to a seismic wavelength; and

87. In re Lowry, 32 F.3d 1579, 32 U.S.P.Q.2d 1031 (Fed. Cir. 1994).88. Arrhythmia Research Tech., Inc. v. Corazonix Corp., 958 F.2d 1053, 22

U.S.P.Q.2d 1033 (Fed. Cir. 1992).89. Id.90. In re Veldhuis, No. 92-1102 (B.P.A.I. July 21, 1992).91. In re Taner, 681 F.2d 687, 214 U.S.P.Q. 678 (C.C.P.A. 1982).

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(c) summing the reflection signals to form the source position asignal simulating the reflection response of the earth toseismic energy having a substantially continuous wavefrontover at least one dimension which is large relative to aseismic energy wavelength.

The Court of Customs and Patent Appeals (CCPA) held thatalthough the claim directly recited a mathematical algorithm (sum-ming), it did not patent the algorithm in the abstract. The claiminstead was drawn to a technique of seismic exploration simulatingthe response of the subsurface earth formations to cylindrical or plainwaves. Since the process involved converting electrical signals intoanother form, the CCPA held the claim to be statutory. The CCPAviewed those signals as physical and the claimed process as one ofconverting them into a different state. An important holding was thatthe conversion of electrical signals, even though by a process includinga mathematical algorithm, is statutory.

Example 9. Conversion of amplitude-versus-time seismic tracesinto amplitude-versus-depth seismic traces was held to be statutorysubject matter because the subject matter of the claim converted onephysical thing into another physical thing, just as any electricalcircuitry would do.92 One of the claims at issue stated:

An apparatus for converting a seismic time section consisting of aplurality of amplitude-versus-time seismic traces, into a pluralityof machine generated, amplitude-versus-depth representations, sothat events on the time section are migrated, both vertically andhorizontally, according to the depth and horizontal coordinates ofthe seismic reflectors within a subsurface earth formation, [sic]they represent, comprising:

(a) automated data processing means for sonogramming saidamplitude-versus-time traces, a group of traces at a time, toproduce a plurality of sonograms each identified by andindexed through a respective horizontal pivot coordinateand a represented moveout,

(b) automated means for machine dividing each of said individ-ual sonograms into a series of segments in accordance with aseismic velocity function characteristic of the subsurfaceunderstudy, and for each of a series of zonelets representingportions of said subsurface under study, said automateddividing means including separate means for placing, storingand indexing also in accordance with said seismic velocity

92. In re Sherwood, 613 F.2d 809, 204 U.S.P.Q. 537 (C.C.P.A. 1980), cert.denied, 450 U.S. 994, 210 U.S.P.Q. 776 (1981).

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function, said series of segments into said zonelets to providesaid plurality of machine generated, amplitude-versus-depthrepresentations.

Example 10. A technique for removing unwanted noise from aseismic trace was held to be directed to patentable subject matter.93

The claim at issue stated:

A machine implemented method for enhancing digital data in aseismic record, said data having a coherent signal componentcomprising a measure of the similarity between spatially relatedtime series data, and a [noise] component, and for improving thesignal to noise ratio thereof, comprising the steps of:

determining, for a search window defined about a selected time ona selected seismic reference trace, the coherent signal associatedwith said reference trace and a plurality of adjacent seismic traces;computing, by use of said coherent signal, the component of saidcoherent signal extant in said reference trace and replacing in timealignment with said reference trace on an output signal recordmedium, that portion of said reference trace included in saidsearch window with said component of the reference trace com-prising said coherent signal portion; replacing, in time alignmentwith said reference trace on an output noise record medium, thatportion of said reference trace included in said search window,with the remainder of said reference trace which does not com-prise said coheren signal portion; and repeating the above stepsfor other selected times and other selected reference traces untilall data comprising said record is so processed.

Example 11. A method for detection of a certain heart condition byanalyzing a portion of the electrocardiogram was held to be patentablesubject matter, because the method included a physical, electricalsignal that was transformed into another physical, electrical signal.The claim at issue stated:

A method for analyzing electrocardiograph signals to determinethe presence or absence of a predetermined level of high frequencyenergy in the late QRS signals comprising the steps of:

converting a series of QRS signals to time segments, each segmenthaving the digital value equipment to the analog of said signals atsaid time;

applying a portion of said time segments in reverse time order tohigh pass filter means;

93. In re Johnson, 589 F.2d 1070, 200 U.S.P.Q. 199 (C.C.P.A. 1978).

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determining an arithmetic value of the output of said filter; and

comparing said value with said predetermined level.94

[D] Include Post-Solution Activity

By including significant post-solution activity (that is, activityfollowing the solution to the algorithm) in a claim containing analgorithm, the claim can be directed to statutory subject matter.However, if the post-solution activity is merely insignificant, thenthe claim is nonstatutory. Unfortunately, the degree of post-solutionactivity that rises to the level of significance cannot be specified,because the precedents only provide examples of insignificant post-solution activity.95

[E] Produce a Useful, Concrete, Tangible Result

Under the State Street Bank test, all that is needed to have statutorysubject matter is to claim a statutory class defined in section 101 andproduce a useful, concrete, tangible result without preempting all useof an algorithm, independent of whether a machine or process isclaimed or whether the result is no more than mere transformation ofdata. The following examples illustrate claims meeting the State StreetBank test.

Example 12. A data processing system for administering andaccounting for mutual funds was patentable subject matter.96 Theclaim at issue stated:

1. A data processing system for managing a financial servicesconfiguration of a portfolio established as a partnership, eachpartner being one of a plurality of funds, comprising:

(a) computer processor means for processing data;

(b) storage means for storing data on a storage medium;

94. Arrhythmia Research Tech., Inc. v. Corazonix Corp., 958 F.2d 1053, 22U.S.P.Q.2d 1033 (Fed. Cir. 1992).

95. In Parker v. Flook, 437 U.S. 584, 589, 590 (1978), the post-solutionactivity of adjusting to an alarm limit was insufficient. In Safe FlightInstruments Corp. v. Sundstrand Data Control, Inc., 706 F. Supp. 1146(D. Del. 1989), the final step of “means for processing said windshearsignal to provide an indication representing the magnitude thereof” washeld insufficient. In In re Abele, 684 F.2d 902, 909 (C.C.P.A. 1982), thefinal step of displaying the result was insufficient. Also, the final step ofrecording the output or result was insufficient in In re Gelnovatch, 595F.2d 32, 41 n.7 (C.C.P.A. 1979). But the absence of post-solution activity orthe triviality thereof is only one factor to consider.

96. State St. Bank & Tr. Co. v. Signature Fin. Grp., Inc., 149 F.3d 1368, 47U.S.P.Q.2d 1596 (Fed. Cir. 1998).

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(c) first means for initializing the storage medium;

(d) second means for processing data regarding assets inthe portfolio and each of the funds from a previous dayand data regarding increases or decreases in each of thefund’s assets and for allocating the percentage sharethat each fund holds in the portfolio;

(e) third means for processing data regarding daily incre-mental income, expenses, and net realized gain or lossfor the portfolio and for allocating such data amongeach fund;

(f) fourth means for processing data regarding daily netunrealized gain or loss for the portfolio and for allocat-ing such data among each fund; and

(g) fifth means for processing data regarding aggregateyearend income, expenses, and capital gain or loss forthe portfolio and each of the funds.

Example 13. A method for producing message records forlong-distance telephone calls, enhanced by the addition of a primaryinterexchange carrier indicator, was held to be patentable subjectmatter.97 The claim at issue stated:

1. A method for use in a telecommunications system in whichinterexchange calls initiated by each subscriber are auto-matically routed over the facilities of a particular one of aplurality of interexchange carriers associated with that sub-scriber, said method comprising the steps of: generatinga message record for an interexchange call between anoriginating subscriber and a terminating subscriber, andincluding, in said message record, a primary interexchangecarrier (PIC) indicator having a value which is a functionof whether or not the interexchange carrier associated withsaid terminating subscriber is a predetermined one of saidinterexchange carriers.

§ 7:5 Laws of Nature and Natural Phenomena

§ 7:5.1 Introduction

Laws of nature and natural phenomena are not patentable subjectmatter, says the Supreme Court. The first case establishing thisprinciple involved Samuel Morse’s telegraph, where he claimed:

97. AT&T Corp. v. Excel Commc’ns, Inc., 172 F.3d 1352, 50 U.S.P.Q.2d 1447(Fed. Cir. 1999).

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use of the motive power of the electric or galvanic current, whichI call electro-magnetism, however developed for marking or print-ing intelligible characters, signs, or letters, at any distances.

The Supreme Court found this claim invalid, one reason being that itclaimed all possible applications of a physical phenomenon, not aspecific implementation of the phenomenon.98

The recent leading cases applying this principle are in the biotech-nology arena, although clearly the principle applies to all technology.For example, it is not possible to broadly claim the natural phenomenaof gravity or naturally occurring table salt (sodium chloride). It is onlythe use or practical application of naturally occurring phenomena andmaterials that is patentable.

Claims directed to non–naturally occurring living organisms aredirected to patentable subject matter, as long as those organisms arenonhuman. The Patent Office issued a policy decision that it wouldissue patents directed to “non-naturally occurring non-human multi-cellular living organisms,” including animals. The decision stemsfrom interpretation of earlier cases.99 Consistent with this policy, apatent was issued for a transgenic mouse having a genetically intro-duced susceptibility to cancer.100 Reaction to this policy has beenstrong, including objections by religious, farm-based, and animalactivist groups. Congress, in fact, imposed a moratorium on issuinganimal patents to provide time for further governmental studies onvarious issues presented by such patents, as well as acts to createinfringement exceptions for farmers and researchers. The moratoriumexpired. Consistent with its policy regarding animals, the Patent Officewill also issue patents for seeds, plants, and tissue cultures.101

Although a plant may be protectable under the Plant Variety ProtectionAct102 and/or the Plant Protection Act,103 that fact does not precludeutility patent protection.104

§ 7:5.2 Recent Supreme Court Cases

In biotechnology, method claims and claims directed to naturallyoccurring substances such as genes are being attacked as directed to

98. O’Reilly v. Morse, 56 U.S. (15 How.) 62 (1853).99. E.g., Diamond v. Chakrabarty, 447 U.S. 303 (1980); Ex parte Allen, 2

U.S.P.Q.2d 1425 (B.P.A.I. 1987), aff ’d, 846 F.2d 77 (Fed. Cir. 1988).100. U.S. Patent No. 4,736,866 (Transgenic Non-Human Mammals, Leder

et al.).101. Ex parte Hibberd, 227 U.S.P.Q. 443 (B.P.A.I. 1985).102. 7 U.S.C. § 2321 et seq.103. 35 U.S.C. §§ 161–64.104. J.E.M. Ag Supply, Inc. v. Pioneer Hi-Bred Int’l, Inc., 534 U.S. 124 (2001).

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nonpatentable subject matter. For example, in Mayo CollaborativeServices v. Prometheus Laboratories, Inc., the Supreme Court heldthat a claim directed to optimizing therapeutic efficacy of treatment ofan immune-mediated disorder was directed to nothing more than alaw of nature. The Court found that the steps surrounding the use ofthe law of nature were no more than that which is “well-understood,routine, conventional activity.” The Court also noted that “post-solution activity” that is purely “conventional or obvious” cannottransform an unpatentable principle into a patentable process. For aprocess that uses a law of nature to be patentable, it is necessary that aclaim contain limitations to provide an inventive concept thatamounts to something “significantly more” than a patent on thenatural law itself.105 The challenge to the practitioner is that thisdecision mixes in novelty and nonobviousness concepts with regard towhat is patentable subject matter.

Along the same theme, the Supreme Court in Association forMolecular Pathology v. Myriad Genetics, Inc.106 held that isolatedDNA, merely because bonds were broken in isolating it, is notpatentable subject matter because isolated naturally occurring DNAis a “product of nature.” However, cDNA, being synthetically created,is patent-eligible if it is different from naturally occurring DNA.

Although the Myriad decision was limited to DNA, it may beapplicable to other naturally occurring substances such as prokaryoticgenes, genomic biomarker sequences, therapeutic ribosomal RNAs,and genomic sequences differentially regulated by epigeneticmechanisms.

§ 7:5.3 Federal Circuit Authority

In its first attempt to implement the Supreme Court’s Mayodecision, the Federal Circuit found that claims for prenatal diagnostictesting for Down syndrome were directed to nonpatentable subjectmatter because of the similarity of the claims to the Mayo claims. TheFederal Circuit found that the diagnostic claims were directed tomental steps and natural laws and nothing more. For diagnosticmethod claims to survive, it appears that they need to be narrowand specific, encompass particular assay and detection steps, andencompass some patentable feature in addition to a naturally occur-ring correlation between a marker and a disease.107

Following the Supreme Court Myriad decision, the Federal Circuitdetermined that claims directed to primers, namely short, synthetic

105. Mayo Collaborative Servs. v. Prometheus Labs., Inc., 132 S. Ct. 1289 (2012).106. Ass’n for Molecular Pathology v. Myriad Genetics, Inc., 569 U.S. ___, 133

S. Ct. 2107 (2013).107. PerkinElmer, Inc. v. Intema Ltd., 496 F. App’x 65 (Fed. Cir. 2012).

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single-stranded DNA molecules that bind specifically to intended tar-get nucleotide sequences, were patent-ineligible since they claimedthe same nucleotide sequences of naturally occurring DNA.108

Claims directed to utilizing the existence of paternally inheritedcell-free fetal DNA in the maternal blood stream is patent-ineligible asdirected to a natural phenomenon. The claims lacked “significantlymore” than the natural phenomenon, because the claims involvedonly well-understood, routine, and conventional activity beyond theunderlying natural phenomenon. With regard to preemption, the courtsaid that the existence of preemption may signal ineligible subjectmatter, but the absence of complete preemption does not demonstratepatent eligibility.109

Kit claims are commonly used for diagnostic procedures where a kitof chemicals, including instructions, is provided. The printed matterinstructions do not add to the patentability of the claims. As notedearlier (section 7:1), printed matter is generally nonpatentable unlessthere is a functional relationship between the printed matter and itssubstrate.110

The Federal Circuit in In re Bilski111 (discussed in detail in section7:4.2) raised hurdles for patentable subject matter for biotech inven-tions. Under Bilski, it is recommended that all claims, includingbiotech claims (other than composition claims), should be “tied to aparticular machine or apparatus” or “transform a particular articleinto a different state or thing.”112

In another decision, the Federal Circuit broadly interpreted whatqualifies as patentable subject matter, with regard to claims directed tochoosing an immunization schedule that reduces the later occurrenceof chronic immune-mediated disorders. Claims that included animmunization step were held to be directed to patentable subjectmatter, while claims that did not were held to be unpatentable subjectmatter because they were directed to an abstract idea not fettered toany physical steps.113

108. In re BRCA1- and BRCA2-Based Hereditary Cancer Test Patent Litig.(Univ. of Utah Research Found. v. Ambry Genetics Corp.), 774 F.3d 755(Fed. Cir. 2014).

109. Ariosa Diagnostics, Inc. v. Sequenom, Inc., 788 F.3d 1371, reh’g en bancdenied, 809 F.3d 1282 (Fed. Cir. 2015).

110. AstraZeneca LP v. Apotex, Inc., 633 F.3d 1042 (Fed. Cir. 2010).111. In re Bilski, 545 F.3d 943 (Fed. Cir. 2008), aff ’d sub nom. Bilski v. Kappos,

130 S. Ct. 3218 (2010).112. The Supreme Court found this machine-or-transformation test an

“important and useful clue” as to whether the invention constitutespatentable subject matter. Bilski v. Kappos, 130 S. Ct. 3218 (2010).

113. Classen Immunotherapies, Inc. v. Biogen IDEC, 659 F.3d 1057 (Fed. Cir.2011).

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§ 7:5.4 The Patent Office Position

The Patent Office issued guidelines114 for application of SupremeCourt decisions dealing with laws of nature, natural principles, natu-ral phenomena, and natural products, including Association forMolecular Pathology v. Myriad Genetics, Inc.115 The overall guidelineswere updated in July 2015 with further guidance provided for laws ofnature and natural phenomenon.116 In general, the three steps used todetermine if a claim is directed to patent-eligible subject matter arethose described in section 7:4.4[A]. Of interest is that step 2 is used todetermine whether a claim is directed to a product of nature, ratherthan using step 3 to determine whether the claim recites “significantlymore.”

According to these guidelines, if a patent claim involves a law ofnature, natural principals, natural phenomena, or natural products(“judicial exceptions”), the claim as a whole must recite something“significantly different” than these judicial exceptions. In general, tobe significantly different, a claim needs to add “significantly more” thanthe judicial exception or include features or steps that demonstratethe claimed subject matter is “markedly different” from what existsin nature.

In guidelines from March 4, 2014, the Patent Office identified sixfactors that weigh toward eligibility and six factors that weighagainst eligibility.

The six factors that weigh toward eligibility are:

1. The claimed product is non–naturally occurring and has amarkedly different structure from naturally occurringproducts.

2. The claim includes elements or steps that impose meaningfullimitations on the claim scope so that others are not substan-tially foreclosed from using the judicial exception.

3. The element or steps of the claim are more than nominally,insignificantly, or tangentially related to the judicial exception.

4. The claim includes elements or steps that do more thandescribe the judicial exception with general instruction toapply or use the judicial exception.

114. 2014 Interim Guidance on Patent Subject Matter Eligibility (Dec. 16, 2014),www.gpo.gov/fdsys/pkg/FR-2014-12-16/pdf/2014-29414.pdf.

115. Ass’n for Molecular Pathology v. Myriad Genetics, Inc., 569 U.S. _____,133 S. Ct. 2107 (2013).

116. July 2015 Update on Subject Matter Eligibility, 80 Fed. Reg. 45,429(July 30, 2015); July 2015 Update: Subject Matter Eligibility, www.uspto.gov/sites/default/files/documents/ieg-july-2015-update.pdf.

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5. The claim satisfies the particular machine-or-transformation-of-a-particular-article test (see section 7:4.2).

6. The claim includes elements or steps that add a feature thatis more than being well-understood, purely conventional, orroutine in the relevant field.

The factors that weigh against eligibility are:

1. The claimed product is not markedly different in structurefrom a naturally occurring product.

2. The additional elements or steps in the claim to the judicialexception are at such a high level of generality that the claimcovers substantially all practical applications of the judicialexception.

3. The additional elements or steps in the claim beyond the judi-cial exception are those that must be used or taken by othersto apply the judicial exception.

4. The additional elements or steps to the judicial exception arewell-understood, purely conventional, or routine in the rele-vant field.

5. The additional elements or steps to the judicial exception areinsignificant extra-solution activity, for example, are merelyappended to the judicial exception.

6. The additional elements or steps to the judicial exceptionamount to nothing more than the mere field of use.

The guidelines also note that a marked difference can result fromroutine activity or human manipulation of a natural process. Justbecause the activity is routine does not prevent the marked differ-ence from weighing in favor of patent-eligibility. A specific examplegiven is that cDNA having a nucleotide sequence markedly differentfrom naturally occurring DNA is eligible subject matter even thoughthe process of making DNA is routine.

The guidelines provide specific examples of patent-ineligible andpatent-eligible claims. Examples of claims that are patent-eligible are:

1. A bacterium genetically modified to include more plasmidsthan found in the naturally occurring bacteria and function-ally different in that the bacterium is able to degrade twodifferent hydrocarbons where the naturally occurring bacteriacan only degrade a single hydrocarbon.

2. A methyl derivative of naturally occurring material signifi-cantly more effective in treating cancer than the naturallyoccurring material.

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3. Treating colon cancer with purified naturally occurring mate-rial with a dose substantially less than would be required withthe nonpurified natural occurring material.

4. A claim directed to new naturally occurring materials withadditional elements forming a structure in which naturallyoccurring materials are physically integrated.

5. A method for determining when a patient has a disease X bydetermining whether a misfolded protein is present, using aparticular antibody and using photocytometry for the analysis.

6. Treating a new disorder in a human patient with filtered whitelight at a specified distance for a specified amount of time.

§ 7:5.5 Recommendation for Drafting Claims NotDirected Merely to Laws of Nature and NaturallyOccurring Substances

The following are recommendations to try to avoid a rejection, oreven worse, a finding of invalidity of a claim, on the basis that it is notdirected to patentable subject matter because it merely claims a law ofnature or a naturally occurring substance:

1. Include method and system claims utilizing the law of nature.

2. Include method and system claims using the naturally occur-ring substance rather than just claiming the composition.

3. Have the claims satisfy the Bilski machine-or-transformationtest (see section 7:4.2).

4. Include one or more patent-eligible factors specified by thePatent Office (see section 7:5.4).

5. Claim more than a product that is merely isolated fromnature.

6. Include steps beyond those that anyone wanting to use the lawof nature would necessarily use.

7. Claim a chemically synthesized or recombinantly producedmolecule that cannot be found in nature. For example, claimDNA molecules as part of an expression construct, includingpromoters or enhancers so the claim includes a sequencedifferent from a naturally occurring sequence.

8. Where a product in nature is bound to other entities, claim theproduct as being free of the entities.

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9. Claim a product in a concentration not found in nature.

10. Claim a product with an additional ingredient such as astabilizer or part of a culture medium.

11. When claiming a genetic replica of something found in nature,claim a group of the animals having a genetic complimentidentical to every other member. A single animal, such as“Dolly,” the cloned sheep, does not qualify as patentable sub-ject matter.117

117. In re Roslin Inst. (Edinburgh), 750 F.3d 1333 (Fed. Cir. 2014).

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