Transcript 2013-01-27-laipla-10..

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
35 U.S.C. § 101: “Whoever invents or
discovers any new and useful process,
machine, manufacture, or composition of
matter, or any new and useful improvement
thereof, may obtain a patent therefor, . . .”
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1. A method for managing the consumption risk
costs of a commodity … comprising the steps of:
(a) initiating a series of transactions …
wherein said consumers purchase said commodity
at a fixed rate based upon historical averages, said
fixed rate corresponding to a risk position of said
consumer;
(b) identifying market participants for said
commodity having a counter-risk position to said
consumers; and
(c) initiating a series of transactions … at a
second fixed rate such that said series of market
participant transactions balances the risk position
of said series of consumer transactions.
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
Bilski v. Kappos, 130 S. Ct. 3218, 561 US ___
(2010).
 Hedging risk is an unpatentable abstract idea.
 The claim would wholly preempt the use of this
approach in all fields and grant a monopoly over
an abstract idea.
 Limiting this abstract idea to one field of use or
adding token post-solution steps does not
render the claim compliant with §101.
 The machine-or-transformation test is not the
definitive test of patent eligibility, but is merely
a useful tool in the analysis.
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Cybersource v. Retail Decisions, 654 F.3d 1366 (Fed.
Cir. 2011).
 “[W]e have never suggested that simply reciting the
use of a computer to execute an algorithm that can
be performed entirely in the human mind [is
sufficient].”
Ultramercial, LLC v. Hulu, LLC, 657 F.3d 1323 (Fed. Cir.
2011), vacated sub nom. Wildtangent, Inc. v.
Ultramercial, LLC, --- U.S. ---- 132 S. Ct. 2431 (2012).
 “[A]s a practical application of the general concept of
advertising as currency and an improvement to prior
art technology, the claimed invention is not ‘so
manifestly abstract as to override the statutory
language of section 101.’”
 Vacated by the Supreme Court and remanded to
Federal Circuit in view of Prometheus – en banc
petition denied
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MySpace, Inc. v. GraphOn Corp., 672 F.3d 1250
(Fed. Cir. 2012).
 Majority: Claim anticipated or obvious, no
need to decide patentability.
 Dissent:
o Claims an abstract idea and does not satisfy
§ 101

This case may have signaled a different
approach to the issue – but….
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1. A method of optimizing therapeutic efficacy for
treatment of [a specific] disorder, comprising:
(a) administering a drug providing 6-TG to a subject
having said … disorder; and
(b) determining the level of 6-TG in said subject having
said … disorder,
wherein the level of 6-TG less than about 230 [units]
indicates a need to increase the amount of said drug
subsequently administered to said subject and
wherein the level of 6-TG greater than about 400 [units]
indicates a need to decrease the amount of said drug
subsequently administered to said subject.

Mayo Collaborative Services v. Prometheus
Laboratories, Inc., 566 U.S. ----, 132 S.Ct. 1289
(2012).
 Wherein clause recites a law of nature
 As for administering and detecting steps,
o “Transformation” alone is not sufficient
o Limiting claims to a particular technological field is not
the same as reciting a specific application
o In “stating that the ‘machine-or-transformation’ test is
an ‘important and useful clue’ …, we have neither said
nor implied that the test trumps the ‘law of nature’
exclusion.”
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1. Is claim a method?
2. Does claim include a natural principle?
• Occurs naturally or occurs when man-made product
interacts with naturally occurring substance
• Does not include methods of treatment with novel
diseases or indications

3. Do other claim elements integrate natural
principle in narrowing fashion
• Not routine but not necessarily novel or nonobvious
• Administering prodrug and measuring level of drug
(Prometheus) not enough
1. A method of optimizing therapeutic efficacy for
treatment of [a specific] disorder, comprising:
administering a first amount of a drug
providing 6-TG to a population of patients in need
thereof,
administering an increased amount of the drug
to patients in the population when an amount of 6TG in the patient’s blood is less than 230 [units], and
administering a decreased amount of said drug
to the patient when an amount of 6-TG in the
patient’s blood is greater than 400 [units].
1. A method of optimizing therapeutic efficacy
for treatment of [a specific] disorder,
comprising:
administering a first amount of a drug
providing 6-TG to a population of patients in
need thereof,
administering an increased amount of the
drug to patients in the population responsive
to a determination that an amount of 6-TG in
the patient’s blood is less than 230 [units], and
administering a decreased amount of said
drug to patients in the population responsive
to a determination that an amount of 6-TG in
the patient’s blood is greater than 400 [units].
1. A method of exchanging obligations as between parties, each party
holding a credit record and a debit record with an exchange institution,
the credit records and debit records for exchange of predetermined
obligations, the method comprising the steps of:
(a) creating a shadow credit record and a shadow debit record for
each stakeholder party to be held independently by a supervisory
institution from the exchange institutions;
(b) obtaining from each exchange institution a start-of-day balance
for each shadow credit record and shadow debit record;
(c) for every transaction resulting in an exchange obligation, the
supervisory institution adjusting each respective party's shadow
credit record or shadow debit record, allowing only these
transactions that do not result in the value of the shadow debit
record being less than the value of the shadow credit record at any
time, each said adjustment taking place in chronological order; and
(d) at the end-of-day, the supervisory institution instructing one of
the exchange institutions to exchange credits or debits to the
credit record and debit record of the respective parties in
accordance with the adjustments of the said permitted
transactions, the credits and debits being irrevocable, time
invariant obligations placed on the exchange institutions.

CLS Bank International v. Alice Corp. Pty. Ltd., 685 F.3d 1341 (Fed.
Cir. 2012).


•
Unless the single most reasonable understanding is that a claim is directed
to nothing more than a fundamental truth or disembodied concept, with no
limitations in the claim attaching that idea to a specific application, it is
inappropriate to hold that the claim is directed to a patent ineligible
“abstract idea” under Section 101.
In reaching the conclusion, the court considered:
o All inventions at some level embody, use, reflect, rest upon, or apply
laws of nature, natural phenomena, or abstract ideas.” Prometheus.
o In assessing patent eligibility, a court must consider the asserted claim
as a whole rather than to generalize the invention. Diehr.
o A new combination of known elements may be patentable.
o Ignoring claim limitations in order to abstract a process down to a
fundamental truth is legally impermissible.
HOWEVER, Petition for Rehearing En Banc was granted on October 9, 2012 and
the CLS decision was vacated.

Both parties recently filed en banc briefs (Nov 2012, Jan 2013).
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Bancorp Servs., L.L.C., v. Sun Life Assurance Co., 687 F.3d
1266 (Fed. Cir. 2012).

Managing a stable value protected life insurance policy is an
abstract idea, and can be performed (albeit inefficiently) without
a computer.

Mentioning a computer or referring to, e.g., a “fee calculator for
calculating fees” instead of just “calculating fees” is not
sufficient.

“[U]nder Cybersource and CLS, a machine, system, medium, or
the like may in some cases be equivalent to an abstract mental
process.”

Basic digital computation is interchangeable with certain mental
processes, so the use of a computer in an otherwise patentineligible process for no more than the basic function of making
calculations or computations fails to avoid the prohibition
against patenting abstract ideas and mental processes.
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A method for verifying the validity of a credit card transaction
over the Internet comprising the steps of:
a) obtaining information about other transactions that have
utilized an Internet address that is identified with the [ ]
credit card transaction;
b) constructing a map of credit card numbers based upon the
other transactions; and
c) utilizing, by a computing system comprising one or more
processors, the map of credit card numbers to determine if
the credit card transaction is valid.
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A computer system comprising:
one or more hardware processors in communication with a computer
readable medium storing software modules including instructions that are
executable by the one or more hardware processors, the software modules
including at least:
a current transaction computer module configured to obtain electronic data
transmitted over a computer network about an Internet credit card
transaction and at least one Internet address associated with the credit
card transaction;
a past transaction computer module configured to access electronic data
stored in computer storage about other transactions that have utilized an
Internet address that is associated with the credit card transaction;
a mapping computer module configured to construct a map in computer
memory of credit card numbers based upon the other transactions; and
a transaction validity analysis computer module configured to use the map
of credit card numbers to determine if the credit card transaction is valid.
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Isolated DNA Claims
1. An isolated DNA coding for a BRCA1 polypeptide [of] SEQ ID NO:2.
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Method Claims
2. A method for detecting a germline alteration in a BRCA1 gene
comprising analyzing a sequence of a BRCA1 gene or BRCA1 RNA or
cDNA from a human sample.
3. A method for screening a tumor sample from a human subject for a
somatic alteration in a BRCA1 gene comprising comparing a first
sequence made from mRNA from said tumor sample with a second
sequence.
4. A method for screening potential cancer therapeutics comprising:
growing a transformed eukaryotic host cell with an altered BRCA1 gene
in presence and absence of a compound, determining the rate of
growth, wherein a slower growth in the presence of said compound
indicates a cancer therapeutic.
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Myriad Genetics - Ass'n for Molecular Pathology v. U.S. Patent &
Trademark Office, 653 F.3d 1329 (Fed. Cir. 2011), reh'g denied (Sept.
13, 2011), reh'g denied (Sept. 16, 2011), cert. granted, judgment
vacated sub nom. Ass'n for Molecular Pathology v. Myriad Genetics, Inc.,
132 S. Ct. 1794, 182 L. Ed. 2d 613 (U.S. 2012) and opinion vacated,
appeal reinstated, 467 F. App'x 890 (Fed. Cir. 2012), cert granted 133 S.
Ct. 694 (2012)

First Federal Circuit Decision
◦ DNA claims upheld
◦ Comparing/analyzing method claims unpatentable as
mental process
◦ Screening claims upheld (growing cells transformative)

Vacated and remanded by Supreme Court in view of
Prometheus
Second Federal Circuit Decision
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Supreme Court grants cert.
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◦ Unchanged
◦ Are human genes patentable?
1.
2.
3.
Isolated, purified compound X.
An orally-administered capsule comprising:
isolated, purified compound X, and a
pharmaceutically acceptable carrier.
A method of treating cancer comprising:
administering the compound X to a patient in
need thereof.
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PerkinElmer, Inc. v. Intema Ltd., 2011-1577, 2012 WL 5861658
(Fed. Cir. Nov. 20, 2012)
Method of determining risk of Down’s syndrome in fetus
 Measuring level of a first screening marker in first
trimester
o
(Conventional pre-solution activity)
o
(Conventional pre-solution activity)
o
(Mental abstraction or law of nature)
 Measuring level of a second screening marker in second
trimester
 Determining risk of Down’s syndrome by comparing
markers with relative frequencies of markers in
pregnancies with Down’s syndrome and control
pregnancies.
 Another suggestion: Performing an abortion on some but
not other subjects in a population according to the
determined level of risk.
•
Patent litigation has spiked
•
NPE assertion:
o
o
o
cost US economy $320B in last 4 years
2011: $29B in direct cost
59% of NPE litigation directed to SMB

SMB bear 37% of aggregate costs
This is a substantial drag on innovation
•
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Not all patents are equal
Software patents:
o 20.8% of patents litigated once
o 74.1% of the most litigated patents (8 or more
suits since 2000)
o 62% of patents asserted by NPEs from 19902010 are software patents
•
Common software patent problems that fuel
litigation
o
o
o
•
o
obviousness
vague, unclear scope
overbreadth
abstractness
The hard work is in writing the code how to implement the function
o ideas are easier to come by than working
implementations
o abstract claims are a tax on the hard part
o abstract claims hinder innovation
•
Application of 101 can reduce abstract claims
o Require claims to recite a concrete application of an
abstract idea
o Apply Prometheus framework to software
o guideposts for determining 101 compliance:
(1) adding steps or elements that are conventional or
obvious is insufficient to confer patent-eligibility;
(2) adding general and non-specific steps or elements
that do not significantly limit the claim's scope is
insufficient;
(3) limiting an idea to a particular technological
environment- such as a computerized environment is
insufficient; and
(4) claims that fail the machine-or-transformation test
are likewise dubious.

Divergent interests
• Non-profit or third world health care
• Biotech diagnostic companies

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Many countries limit or prohibit diagnostic
methods by statute (India, China)
Does Prometheus achieve the right balance
for the US?
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