Table of Contents:

Introduction to the online version


Preface to the printed version

Copyright Overview

Software Copyright

Digital Copyright

Patent Overview

Software Patents

- History

- Benson

- Flook

- Chakrabary and Diehr

- Drawing the Line

- Business Methods

- Other Ways of Claiming

- Printed Matter

- Applying for a Software Patent

Full treatise table of contents

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Chapter 5: Software-Based Inventions

IV.Other Ways of Claiming

Alappat and State Street Bank make it clear that a software-based invention claimed as a machine, even though that machine is a general-purpose computer, is statutory subject matter as long as it performs a useful and specific act. But claiming a software-based invention as a machine seems artificial when what is really being protected is a method or process.

In a concurring opinion in Alappat, {FN55: 33 F.3d 1526, 31 USPQ2d 1545 (1994) (Rader, J., concurring)} Judge Rader clarified that although Alappat’s invention was claimed as a machine, the analysis under Section 101 does not depend on whether the invention is classified as a machine or a process.

   Inventors may express their inventions in any manner they see fit, including mathematical symbols and algorithms. Whether an inventor calls the inven­tion a machine or a process is not nearly as important as the invention itself. Thus, the inventor can describe the invention in terms of a dedicated circuit or a process that emulates that circuit. Indeed, the line of demarca­tion between a dedicated circuit and a computer algorithm accom­plish­ing the identical task is frequently blurred and is becoming increasingly so as the technology develops. In this field, a software process is often interchangeable with a hardware circuit. Thus, the Board’s insistence on reconstruing Alappat’s machine claims as processes is misguided when the technology recog­nizes no difference and the Patent Act treats both as patentable subject matter. {FN56: 33 F.3d at 1583, 31 USPQ2d at 1590-1591}

This is an important observation, because often the most direct way to claim a software-related invention is as a process or method running on a general-purpose computer. The claim recites a general-purpose computer in its preamble, including any special components necessary for the invention (such as disk storage or a network interface). The elements of the claim are then the specific steps of the method. Such a claim does not read on a person performing the method using paper and pencil and, when considered as a whole, is not mathematics standing alone.

However, as we saw in Warmerdam, the fact that a software-based invention runs on a computer does not give it the utility to make it statutory subject matter. In those cases, the invention was not directed to a specific purpose. But should patents be issued only for data processing techniques that have limited purposes, or should techniques that have a wide range of applicability also be protectable? For example, can a method for sorting numbers that has better performance than previous sorting techniques be patented? In light of Benson and Warmerdam, the answer appeared to be no.

But now that the patentability of software-based inventions has been clearly established, the Federal Circuit is beginning to take a closer look at when a method is a statutory process. Recently, in AT&T v. Excel Communications, {FN57: 172 F.3d 1352, 50 USPQ2d 1447 (1999)} Judge Plauger, the same judge who had written the decision in Warmerdam, examined the patentability of a software method for deciding the routing of long distance telephone calls. The claim at issue was:

A method for use in a telecommunications system in which interexchange calls initiated by each subscriber are automatically routed over the facilities of a particular one of a plurality of interexchange carriers associated with that subscriber, said method comprising the steps of:

   generating a message record for an interexchange call between an originating subscriber and a terminating subscriber, and

   including, in said message record, a primary interexchange carrier (PIC) indicator having a value which is a function of whether or not the interexchange carrier associated with said terminating subscriber is a predetermined one of said interexchange carriers.

Essentially, the invention sets an indicator bit in the message based on the boolean AND of two pieces of information. The court first pointed out that “a mathematical formula alone, sometimes referred to as a mathematical algorithm, viewed in the abstract, is considered unpatentable subject matter.” But it went on to observe:

   Since the process of manipulation of numbers is a fundamental part of computer technology, we have had to reexamine the rules that govern the patentability of such technology. The sea-changes in both law and technology stand as a testament to the ability of law to adapt to new and innovative concepts, while remaining true to basic principles. {FN58: 172 F.3d at 1356, 50 USPQ2d at 1450}

The court then summarized the key cases we have just examined, noting that State Street Bank had “reassessed the ‘mathematical algorithm’ exception” by finding that:

unpatentable mathematical algorithms are identifiable by showing they are merely abstract ideas constituting disembodied concepts or truths that are not “useful.” {FN59: 149 F.3d at 1373, 47 USPQ2d at 1601}

It then extended the decisions in Alappat and State Street Bank, where the inventions were claimed as machines, to method claims:

Whether stated implicitly or explicitly, we consider the scope of Section 101 to be the same regardless of the form – machine or process – in which a particular claim is drafted. . . . Furthermore, the Supreme Court’s decisions in Diehr, Benson, and Flook, all of which involved method (i.e., process) claims, have provided and supported the principles which we apply to both machine- and process-type claims. Thus, we are comfortable in applying our reasoning in Alappat and State Street to the method claims at issue in this case. {FN60: 172 F.3d at 1357-1358, 50 USPQ2d at 1451}

Next, the court examined the argument that AT&T was using something based on simple boolean algebra, and the effect of that on whether the invention was statutory:

But that is not determinative because AT&T does not claim the Boolean principle as such or attempt to forestall its use in any other application . . . Because the claimed process applies the Boolean principle to produce a useful, concrete, tangible result without pre-empting other uses of the mathematical principle, on its face the claimed process comfortably falls within the scope of Section 101. {FN61: 172 F.3d at 1358, 50 USPQ2d at 1452}

The court then addressed whether methods are limited to things that alter something physical.

   Excel argues that method claims containing mathematical algorithms are patentable subject matter only if there is a “physical transformation” or conversion of subject matter from one state into another. The physical transformation language appears in Diehr, and has been echoed by this court in Schrader.

   The notion of “physical transformation” can be misunderstood. In the first place, it is not an invariable requirement, but merely one example of how a mathematical algorithm may bring about a useful application. As the Supreme Court itself noted, “when [a claimed invention] is performing a function which the patent laws were designed to protect (e.g., transforming or reducing an article to a different state or thing), then the claim satisfies the requirements of Section 101.” The “e.g.” signal denotes an example, not an exclusive requirement. {FN62: 172 F.3d at 1358-1359, 50 USPQ2d at 1452}

Finally, the court commented on the concerns about the patentability of software-based inventions:

   In his dissent in Diehr, Justice Stevens noted two concerns regarding the Section 101 issue, and to which, in his view, federal judges have a duty to respond:

First, the cases considering the patentability of program-related inventions do not establish rules that enable a conscientious patent lawyer to determine with a fair degree of accuracy which, if any, program-related inventions will be patentable. Second, the inclusion of the ambiguous concept of an “algorithm” within the “law of nature” category of unpatentable subject matter has given rise to the concern that almost any process might be so described and therefore held unpatentable.

   Despite the almost twenty years since Justice Stevens wrote, these concerns remain important. His solution was to declare all computer-based programming unpatentable. That has not been the course the law has taken. Rather, it is now clear that computer-based programming constitutes patentable subject matter so long as the basic requirements of Section 101 are met. Justice Stevens’s concerns can be addressed within that framework.

   His first concern, that the rules are not sufficiently clear to enable reasonable prediction of outcomes, should be less of a concern today in light of the refocusing of the Section 101 issue that Alappat and State Street have provided. His second concern, that the ambiguous concept of “algorithm” could be used to make any process unpatentable, can be laid to rest once the focus is understood to be not on whether there is a mathematical algorithm at work, but on whether the algorithm-containing invention, as a whole, produces a tangible, useful, result. {FN63: 172 F.3d at 1360-1361, 50 USPQ2d at 1453 (citations omitted)}

Next section: Printed Matter

Copyright © 2002, Lee A. Hollaar. See information regarding permitted usage.