Ultramercial v. Hulu and Wildtangent (CAFC 2010-1544) precedential; Judges Rader (author), Lourie, O'Malley

The paternalistic CAFC doesn't require its underlings to properly adjudicate; sloppy bias is just fine.

This court has never set forth a bright line rule requiring district courts to construe claims before determining subject matter eligibility. Indeed, because eligibility is a "coarse" gauge of the suitability of broad subject matter categories for patent protection, Research Corp. Techs., Inc. v. Microsoft Corp., 627 F.3d 859, 869 (Fed. Cir. 2010), claim construction may not always be necessary for a § 101 analysis. See, e.g., Bilski v. Kappos, 130 S. Ct. 3218, 3231 (2010) (finding subject matter ineligible for patent protection without claim construction). On many occasions, however, a definition of the invention via claim construction can clarify the basic character of the subject matter of the invention. Thus, claim meaning may clarify the actual subject matter at stake in the invention and can enlighten, or even answer, questions about subject matter abstractness. In this case, the subject matter at stake and its eligibility does not require claim construction.

Not needing to perform claim construction before ruling a patent invalid is a legal obscenity. But the CAFC itself regularly acts as above the law in its practices. The courts merely cover themselves with a polite fiction of facile legality.

The instant litany on §101. "An application of an abstract idea may well be deserving of patent protection." Every conceptualization is abstract. That is the nature of conceptualization.  Every §101-worthy patent claim is an application of an abstract idea.

"[I]nventions with specific applications or improvements to technologies in the marketplace are not likely to be so abstract that they override the statutory language and framework of the Patent Act." Research Corp., 627 F.3d at 869.

The long-winded version, where the CAFC descends to formulaic woolly-headed vacuity as a means to keep options open.

35 U.S.C. § 101 sets forth the categories of subject matter that are eligible for patent protection: "[w]hoever 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, subject to the conditions and requirements of this title" (emphasis added). In Bilski, the Supreme Court explained that "[i]n choosing such expansive terms modified by the comprehensive 'any,' Congress plainly contemplated that the patent laws would be given wide scope." 130 S. Ct. at 3225 (quoting Diamond v. Chakrabarty, 447 U.S. 303, 308 (1980)). After all, the purpose of the Patent Act is to encourage innovation, and the use of broadly inclusive categories of statutory subject matter ensures that "ingenuity . . . receive[s] a liberal encouragement." Chakrabarty, 447 U.S. at 308.

More importantly, as § 101 itself expresses, subject matter eligibility is merely a threshold check; claim patentability ultimately depends on "the conditions and requirements of this title," such as novelty, nonobviousness, and adequate disclosure. 35 U.S.C. § 101; see Classen Immunotherapies, Inc. v. Biogen IDEC, Nos. 2006-1634, 2006-1649, 2011 WL 3835409, at *6 (Fed. Cir. Aug. 31, 2011) (pointing out the difference between "the threshold inquiry of patent-eligibility, and the substantive conditions of patentability"). By directing attention to these substantive criteria for patentability, the language of § 101 makes clear that the categories of patent-eligible subject matter are no more than a "coarse eligibility filter." Research Corp., 627 F.3d at 869. In other words, the expansive categories--process, machine, article of manufacture, and composition of matter--are certainly not substitutes for the substantive patentability requirements set forth in § 102, § 103, and § 112 and invoked expressly by § 101 itself. Moreover, title 35 does not list a single ineligible category, suggesting that any new, non-obvious, and fully disclosed technical advance is eligible for protection, subject to the following limited judicially created exceptions.

In line with the broadly permissive nature of § 101's subject matter eligibility principles, judicial case law has created only three categories of subject matter outside the eligibility bounds of § 101--laws of nature, physical phenomena, and abstract ideas. Bilski, 130 S. Ct. at 3225. Indeed, laws of nature and physical phenomena cannot be invented. Abstractness, however, has presented a different set of interpretive problems, particularly for the § 101 "process" category. Actually, the term "process" has a statutory definition that, again, admits of no express subject matter limitation: a title 35 "process" is a "process, art or method, and includes a new use of a known process, machine, manufacture, composition of matter, or material." 35 U.S.C. § 100(b). Indeed, the Supreme Court recently examined this definition and found that the ordinary, contemporary, common meaning of "method" may include even methods of doing business. See Bilski, 130 S. Ct. at 3228. Accordingly, the Court refused to deem business methods ineligible for patent protection and cautioned against "read[ing] into the patent laws limitations and conditions which the legislature has not expressed." Id. at 3226 (quoting Diamond v. Diehr, 450 U.S. 175, 182 (1981)). And this court detects no limitations or conditions on subject matter eligibility expressed in statutory language. See, e.g., Ass'n for Molecular Pathology v. U.S. Patent & Trademark Office, No. 2010-1406, 2011 WL 3211513, at *14 (Fed. Cir. July 29, 2011) (patent-ineligible categories of subject matter are "judicially created exceptions"); Prometheus Labs., Inc. v. Mayo Collaborative Servs., 628 F.3d 1347, 1353 (Fed. Cir. 2010), cert. granted, 130 S.Ct. 3543 (2010) (patent-ineligible categories are "not compelled by the statutory text"); see also Bilski, 130 S. Ct. at 3225 (Supreme Court acknowledging that judge-created "exceptions are not required by the statutory text").

In an effort to grapple with the non-statutory "abstractness" limit, this court at one point set forth a machine-or-transformation test as the exclusive metric for determining the subject matter eligibility of processes. In re Bilski, 545 F.3d 943, 956 (Fed. Cir. 2008), aff'd on other grounds, Bilski, 130 S.Ct. 3218. The Supreme Court rejected this approach in Bilski, noting that the machine-or-transformation test is simply "a useful and important clue, an investigative tool, for determining whether some claimed inventions are processes under § 101" and is not "the sole test for deciding whether an invention is a patent-eligible 'process.'" 130 S. Ct. at 3227 (emphasis added). While machine-or-transformation logic served well as a tool to evaluate the subject matter of Industrial Age processes, that test has far less application to the inventions of the Information Age. See id. at 3227-28 ("[I]n deciding whether previously unforeseen inventions qualify as patentable 'processes,' it may not make sense to require courts to confine themselves to asking the questions posed by the machine-or-transformation test. Section 101's terms suggest that new technologies may call for new inquiries."). Technology without anchors in physical structures and mechanical steps simply defy easy classification under the machine-or-transformation categories. As the Supreme Court suggests, mechanically applying that physical test "risk[s] obscuring the larger object of securing patents for valuable inventions without transgressing the public domain." Id. at 3228.

Both members of the Supreme Court and this court have recognized the difficulty of providing a precise formula or definition for the judge-made ineligible category of abstractness. See id. at 3236 (Stevens, J., concurring) ("The Court . . . [has] never provide[d] a satisfying account of what constitutes an unpatentable abstract idea."); Research Corp., 627 F.3d at 868. Because technology is ever-changing and evolves in unforeseeable ways, this court gives substantial weight to the statutory reluctance to list any new, non-obvious, and fully disclosed subject matter as beyond the reach of title 35. In sum, § 101 is a "dynamic provision designed to encompass new and unforeseen inventions." J.E.M. Ag Supply, Inc. v. Pioneer Hi-Bred Int'l, Inc., 534 U.S. 124, 135 (2001). With this in mind, this court does "not presume to define 'abstract' beyond the recognition that this disqualifying characteristic should exhibit itself so manifestly as to override the broad statutory categories of eligible subject matter and the statutory context that directs primary attention on the patentability criteria of the rest of the Patent Act." Research Corp., 627 F.3d at 868.

Although abstract principles are not eligible for patent protection, an application of an abstract idea may well be deserving of patent protection. See Diehr, 450 U.S. at 187 ("an application of a law of nature or mathematical formula to a known structure or process may well be deserving of patent protection"); Parker v. Flook, 437 U.S. 584, 591 (1978) ("While a scientific truth, or the mathematical expression of it, is not a patentable invention, a novel and useful structure created with the aid of knowledge of scientific truth may be."). The application of an abstract idea to a "new and useful end" is the type of invention that the Supreme Court has described as deserving of patent protection. Gottschalk v. Benson, 409 U.S. 63, 67 (1972). After all, unlike the Copyright Act which divides idea from expression, the Patent Act covers and protects any new and useful technical advance, including applied ideas.

On to '545 -

Turning to the '545 patent, the claimed invention is a method for monetizing and distributing copyrighted products over the Internet. As a method, it satisfies § 100's definition of "process" and thus falls within a § 101 category of patent-eligible subject matter.

This court understands that the broadly claimed method in the '545 patent does not specify a particular mechanism for delivering media content to the consumer (i.e., FTP downloads, email, or real-time streaming). This breadth and lack of specificity does not render the claimed subject matter impermissibly abstract. Assuming the patent provides sufficient disclosure to enable a person of ordinary skill in the art to practice the invention and to satisfy the written description requirement, the disclosure need not detail the particular instrumentalities for each step in the process.

That a process may be patentable, irrespective of the particular form of the instrumentalities used, cannot be disputed. If one of the steps of a process be that a certain substance is to be reduced to a powder, it may not be at all material what instrument or machinery is used to effect that object, whether a hammer, a pestle and mortar, or a mill.

Benson, 409 U.S. at 69-70 (quoting Cochrane v. Deener, 94 U.S. 780, 787-88 (1876)). Moreover, written description and enablement are conditions for patentability that title 35 sets "wholly apart from whether the invention falls into a category of statutory subject matter." Diehr, 450 U.S. at 190 (quoting In re Bergy, 596 F.2d 952, 961 (C.C.P.A. 1979)). The "coarse eligibility filter" of § 101 should not be used to invalidate patents based on concerns about vagueness, indefinite disclosure, or lack of enablement, as these infirmities are expressly addressed by § 112. See 35 U.S.C. § 112; see also Research Corp., 627 F.3d at 869 ("In section 112, the Patent Act provides powerful tools to weed out claims that may present a vague or indefinite disclosure of the invention.").

Having given one heavy hint of how to invalidate the claims, the CAFC gives its nuanced nod that the judge ought to kill these claims with a different tool.

This decision does not opine at all on the patentability of the claimed invention under the substantive criteria set forth in § 102, § 103, and § 112.

Reversed and remanded.

This case will be back before the CAFC in a few years, to appeal '545's invalidation. The fix is in.