[DMCA-Activists] "Tech Art" Requirement Struck Down for Biz Method Patents

[Seth Johnson]

(I actually think in a perhaps perverse, almost dialectical way,
this may be good.  The reason being that while business methods
may remain patentable, we may now see cases argued against
software patents on the right bases -- not that they are business
methods, and now, not that insufficient "technology" is involved,
but rather that they represent math, logic, pure abstraction. 
While they are processes, they cannot in principle be
distinguished from non-statutory subject matter *even when
computer programs are not explicitly excluded.*  Or that's the
notion that comes into my head, anyway . . .  -- Seth)


> http://patentlaw.typepad.com/patent/2005/10/patent_board_el.html


Oct 16, 2005

Patent Board Eliminates "Technological Arts" Requirement For
Business Method Patents

Ex parte Lundgren, Appeal No. 2003-2088 (BPAI 2005).


In a landmark decision, the Board of Patent Appeals and
Interferences has issued a precedential opinion eliminating the
Patent Office procedure of rejecting patents under 35 U.S.C. §
101 as outside of the "technological arts"

    Our determination is that there is currently no judicially
recognized separate "technological arts" test to determine patent
eligible subject matter under § 101.  We decline to create one.
Therefore, it is apparent that the examiner's rejection can not
be sustained.  

This decision will once again expand the role of business method
patents by freeing them from being tied to a computer or other
electronic device.  At the same time, this decision widens the
gap between the US and many other countries who are still
debating patentability of software.

It is unclear at this point whether the PTO solicitor will ask
the Federal Circuit to review this case.

The Majority Opinion:

Lundgren had claimed a "method of compensating a manager" that
involved several steps of calculating a proper compensation based
on performance criteria and then transferring payment to the
manager. The examiner rejected the claims arguing that they were
"outside the technical arts, namely an economic theory expressed
as a mathematical algorithm without the disclosure or suggestion
of a computer, automated means, apparatus of any kind, the
invention as claimed is found non-statutory."

A five member panel reviewed this action, and three signed on to
the per curiam majority opinion that found the claim to "produce
a useful, concrete, tangible result" without being a "law of
nature, physical phenomenon or abstract idea."  Regarding the PTO
"technological arts" test, the majority found that such a test
does not exist under the law.

Rejection reversed, there is no judicially recognized
"technological arts" test for patentability.

Dissent by Judge Smith:

Judge Smith dissented, arguing that the "technological arts"
standard is simply the modern lexical equivalent to the phrase
"useful arts" found in the US Constitution. He then argued that
Congress does not have power to pass patent laws that expand
beyond those "useful arts."

    While I do not question the power of Congress to pass laws to
carry out this mandate, whatever law passed by the Congress
cannot be applied in such a manner as to enlarge the
constitutional mandate.  Thus, any laws passed by the Congress to
grant patents should be applied in a manner that is consistent
with the constitutional mandate.  

The dissent then implicitly calls for the Federal Circuit to
review the case and explicitly calls fro Congress to "step in and
clarify the limits of 35 U.S.C. § 101."

Dissent by Judge Barrett:

In a 78 page dissent, Judge Barrett suggests a new test under
section 101 that would require some transformation of physical
matter.

Notes:

    * The BPAI holds its appeals in secret — and the Ex parte
Lundgren opinion is yet to be officially released by the Board. 
I published this article on the case after receiving copies of
the opinion from reliable sources. Opinion.v1
(http://patentlaw.typepad.com/patent/lundgren.doc); Opinion.v2
(http://patentlaw.typepad.com/patent/Appeal_201_2D92_20CL_2D4.rtf).
    * Link (http://valmarpro.com/rel_1b.html). Read more about
Dr. Lundgren.