At the intersection of computer technology and biology, Bilski, Prometheus, and their progeny are restricting what can be claimed in U.S. Patents. The Federal Circuit, however, has pushed back against this tide of patent-ineligibility with CLS Bank Int’l v. Alice Corp.  Some may welcome this decision while others may struggle to harmonize seemingly conflicting case law.
The Supreme Court reaffirmed in Bilski that laws of nature, physical phenomena, and abstract ideas are not patent-eligible subject matter. The claims at issue in Bilski recited computerized methods of hedging commodities in the energy markets. In light of Bilski, subsequent Federal Circuit decisions have held certain computer-implemented claims patent-ineligible. In these cases, implementing abstract ideas on computers was only incidental to the claims (so called “post-solution” claim elements). The Court rejected cleverly drafted claims comprising computers that were, in its view, mere window dressing. Computer-implemented claims must recite more than methods that could be done by people without computers, albeit far less efficiently. The computers must be integral to the claimed invention.
Likewise, the Supreme Court held in Mayo v. Prometheus that one must do more than state a law of nature then add the words “apply it.” The claims at issue were directed to methods of optimizing the efficacy of thiopurine drugs that comprised (1) administering a drug to a subject and (2) determining its levels in the subject. The determined drug levels indicated the amount of further doses. In holding these claims patent-ineligible, the Court found that the administration of the drug did not necessarily make the claims patent-eligible. This step merely identified the “relevant audience” that is likely interested in applying the law of nature (i.e. the amount of drug circulating in the subject). The claims were found to consist of “well-understood, routine, conventional activity already engaged in by the scientific community.” The method steps, when viewed as a whole, were found to add nothing significant beyond the sum of their parts taken separately. While this language sounds a lot like an obviousness analysis, the Court found the claims invalid under 35 U.S.C. §101, the statute that defines patentable subject matter.
The Courts continue to struggle to define and identify abstract ideas. Bilski and Prometheus provide little guidance. Despite prior attempts to define an abstract idea, the majority in Alice stated “the dividing line between inventions that are directed to patent ineligible abstract ideas and those that are not remains elusive.” Alice at *19-21. The Court referred to this as a “serious problem” leading to great uncertainty and devaluing of inventions.
However one identifies an abstract idea, the Alice majority acknowledged that it cannot be transformed into patentable subject matter merely by computer implementation. The addition of a machine must impose a meaningful limit on the scope of the claims and plays a significant role in performing the invention. It cannot be recited as merely a more efficient way of implementing an abstract idea. The majority stated, however, that a claim drawn to a specific way of doing something with a computer is likely to be patent eligible whereas a claim to nothing more than an idea of doing that thing on a computer may not be. The majority held:
“[W]hen—after taking all of the claim recitations into consideration—it is not manifestly evident that a claim is directed to a patent ineligible abstract idea, that claim must not be deemed for that reason to be inadequate under [35 U.S.C. §101].”
Alice at *30-31 (emphasis added). Applying this standard, the majority reversed the District Court and found the claims patent-eligible. The subject matter of the patents in suit relates to trading obligations that arise in stock sales or foreign currency exchanges. The first set of claims in Alice is directed methods for exchanging obligations between parties that hold credit and debit records with exchange institutions. The methods comprise (a) creating shadow credit and debit records for each stakeholder to be held independently by a supervisory institution, (b) obtaining start-of-day balances, (c) adjusting the shadow records with each transaction by the parties, and (d) instructing the exchange institutions to settle the credits and debits. No computer elements are specifically recited in the claims but the majority points to the shadow records as implicitly requiring computers. The second set of claims is data processing systems for carrying out the above-described method. The third set of claims is directed to computer programs for doing the same.
The majority criticized the District Court for ignoring some elements of the patent claims and reducing them to a fundamental truth:
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 35 U.S.C §101.
Alice at *33. The majority held that the computer elements play a significant role in the claimed invention and thus the claims are patent eligible. The reversal of the District Court in favor of patent eligibility demonstrates the difficulty and subjective nature of this analysis. Why are the computer-implemented hedging methods of Bilski patent-ineligible but the obligation exchanges in Alice eligible? This holding also appears to push back on the strictures of Bilski…certainly the dissent appears to think so.
In a vigorous dissent, Judge Prost starts by saying “[t]he majority resists the Supreme Court's unanimous directive to apply the patentable subject matter test with more vigor. Worse yet, it creates an entirely new frame-work that [for] evaluating patent eligibility.” The dissent goes on to criticize the majority’s “resurrection” of the “manifestly evident” standard it said the Supreme Court laid to rest in Prometheus.
The dissent points to the majority’s apparent disregard of the standard laid out in Prometheus: It is not sufficient to put an abstract idea into use with "[p]urely 'conventional or obvious' 'pre-solution activity.'" The dissent states that “[t]he majority has failed to follow the Supreme Court's instructions--not just in its holding, but more importantly in its approach. The majority does not inquire whether the asserted claims include an inventive concept. Alice at *43-45. The dissent points out that the basic idea of “credit intermediation” is not just abstract but literally ancient—dating back to the early Roman Empire. Thus, the dissent would find the method claims patent-ineligible. It would also find the system claims ineligible because the computer-based claim elements are non-inventive, post-solution embodiments. The dissent concludes that district courts and litigants will now face a difficult task in deciphering the law and harmonizing precedent.
Drafting and evaluating personalized medicine, diagnostics, and drug screening claims is now more complicated. Claims containing abstract ideas and laws of nature are not per se unpatentable but they should not unduly preempt the use of those ideas or laws beyond the scope of the actual invention. The safest approach is the most conservative…but that is a matter of perspective.
If you are drafting applications and method claims, assume that you will be held to the more stringent standard of Bilski and Prometheus. They should, of course, embody inventive concepts. It will, however, be an uphill battle getting claims allowed where the point of novelty is a more efficient way of implementing an abstract idea or law of nature. Such method claims will be stronger if the invention comprises novel materials or instruments. If the invention is based on a new computerized method, the specification and claim should make clear that the computerized system is itself novel and necessary to practice the invention.
If you are evaluating method claims from third parties, e.g., for freedom to operate analyses, assume that the claims merely have to pass the lower “manifestly evident” hurdle of Alice. This is because you cannot tell which courts would evaluate the claims – those that follow Bilski and Prometheus, or those that follow Alice. If you are assigning a value to a patent or portfolio for a potential acquisition or licensing deal, you must run both scenarios to evaluate the risk that the patents will be invalidated.
 The Federal Circuit also reaffirmed its prior holding in AMP v. Myriad despite being vacated and remanded by the Supreme Court. See Association for Molecular Pathology v. Myriad Genetics, Inc., __ F.3d __ (Fed. Cir. 2012)
 Prometheus at 1303-04 (“[T]he Government argues that virtually any step beyond a statement of a law of nature itself should transform an unpatentable law of nature into a potentially patentable application… . This approach, however, would make the "law of nature" exception to §101 patentability a dead letter [and is] not consistent with prior law.”)