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J.E.M. Ag Supply, Inc. v. Pioneer Hi-Bred International, Inc., 534 U.S. 124 (2001) deals with which section of the patent code offers patent protection to plants, specifically hybrids.

Chapter 15 of Title 35 of the US Code deals with plant patents. The J.E.M. case held that even though there is a separate chapter for plant patents, they may also be patented under the usual Section 101. Importantly, Chapter 15 is very strict in that it limits protection to asexually reproduced plants. Conversely, Chapter 15 is lenient in that the disclosure requirement in the patent specification is much less restrictive.

"Hybrid seeds are produced by crossing two inbred corn plants and are especially valuable because they produce strong and vibrant hybrid plants with selected highly desirable characteristics. For instance, Pioneer's hybrid corn plant 3394 is “characterized by superior yield for maturity, excellent seedling vigor, very good roots and stalks, and exceptional stay green.” U.S. Patent No. 5,491,295, cols. 2-3, id., at 29-30. Hybrid plants, however, generally do not reproduce true-to-type, i.e., seeds produced by a hybrid plant do not reliably yield plants with the same hybrid characteristics. Thus, a farmer who wishes to continue growing hybrid plants generally needs to buy more hybrid seed."
The question before us is whether utility patents may be issued for plants pursuant to 35 U.S.C. § 101 (1994 ed.). The text of § 101 provides:
“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, subject to the conditions and requirements of this title.”
As this Court recognized over 20 years ago in Chakrabarty, 447 U.S., at 308, 100 S.Ct. 2204, the language of § 101 is extremely broad. “In choosing such expansive terms as ‘manufacture’ and ‘composition of matter,’ modified by the comprehensive ‘any,’ Congress plainly contemplated that the patent laws would be given wide scope.” Ibid. This Court thus concluded in Chakrabarty that living things were patentable under § 101, and held that a manmade micro-organism fell within the scope of the statute. As Congress recognized, “the relevant distinction was not between living and inanimate things, but between products of nature, whether living or not, and human-made inventions.” Id., at 313, 100 S.Ct. 2204.
In Chakrabarty, the Court also rejected the argument that Congress must expressly authorize protection for new patentable subject matter:
“It is, of course, correct that Congress, not the courts, must define the limits of patentability; but it is equally true that once Congress has spoken it is ‘the province and duty of the judicial department to say what the law is.’ Marbury v. Madison, 1 Cranch 137, 177 [2 L.Ed. 60] (1803). Congress has performed its constitutional role in defining patentable subject matter in § 101; we perform ours in construing the language Congress has employed.... The subject-matter provisions of the patent law have been cast in broad terms to fulfill the constitutional and statutory goal of promoting ‘the Progress of Science and the useful Arts' with all that means for the social and economic benefits envisioned by Jefferson.” Id., at 315, 100 S.Ct. 2204.
Thus, in approaching the question presented by this case, we are mindful that this Court has already spoken clearly concerning the broad scope and applicability of § 101.[2]
Several years after Chakrabarty, the PTO Board of Patent Appeals and Interferences held that plants were within the understood meaning of “manufacture” or “composition of matter” and therefore were within the subject matter of § 101. In re Hibberd, 227 USPQ 443, 444, 1985 WL 71986 (1985). It has been the unbroken practice of the PTO since that time to confer utility patents for plants. To obtain utility patent protection, a plant breeder must show that the plant he has developed is new, useful, and non-obvious. 35 U.S.C. §§ 101-103 (1994 ed. and Supp. V). In addition, the plant must meet the specifications of § 112, which require a written description of the plant and a deposit of seed that is publicly accessible. See 37 CFR §§ 1.801-1.809 (2001).
Petitioners do not allege that Pioneer's patents are invalid for failure to meet the requirements for a utility patent. Nor do they dispute that plants otherwise fall within the terms of § 101's broad language that includes “manufacture” or “composition of matter.” Rather, petitioners argue that the PPA and the PVPA provide the exclusive means of protecting new varieties of plants, and so awarding utility patents for plants upsets the scheme contemplated by Congress. Brief for Petitioners 11. We disagree. Considering the two plant specific statutes in turn, we find that neither forecloses utility patent coverage for plants.

Algorithms and Computer Programs

The question of the dividing line between patentable subject matter under Section 101, which we normally think of an "inventions" and "algorithms" is not a clear one since for many devices, it is actually the algorithm embedded within it that gives it value. Note, importantly, however, that Section 101 does protect processes:

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, subject to the conditions and requirements of this title.

In Gottschalk v. Benson, 409 U.S. 63 (1972) the Supreme Court held that an algorithm itself is not patentable.

Respondents filed in the Patent Office an application for an invention which was described as being related "to the processing of data by program and more particularly to the programmed conversion of numerical information" in general-purpose digital computers. They claimed a method for converting binary-coded decimal (BCD) numerals into pure binary numerals. The claims were not limited to any particular art or technology, to any particular apparatus or machinery, or to any particular end use.
The Court stated in Mackay Co. v. Radio Corp., 306 U.S. 86, 94 , that "[w]hile 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." That statement followed the longstanding rule that "[a]n idea of itself is not patentable." Rubber-Tip Pencil Co. v. Howard, 20 Wall. 498, 507. "A principle, in the abstract, is a fundamental truth; an original cause; a motive; these cannot be patented, as no one can claim in either of them an exclusive right." Le Roy v. Tatham, 14 How. 156, 175. Phenomena of nature, though just discovered, mental processes, and abstract intellectual concepts are not patentable, as they are the basic tools of scientific and technological work. As we stated in Funk Bros. Seed Co. v. Kalo Co., 333 U.S. 127, 130 , "He who discovers a hitherto unknown phenomenon of nature has no claim to a monopoly of it which the law recognizes. If there is to be invention from such a discovery, it must come from the application of the law of nature to a new and useful end." We dealt there with a "product" claim, while the [409 U.S. 63, 68] present case deals with a "process" claim. But we think the same principle applies.
Here the "process" claim is so abstract and sweeping as to cover both known and unknown uses of the BCD to pure binary conversion. The end use may (1) vary from the operation of a train to verification of drivers' licenses to researching the law books for precedents and (2) be performed through any existing machinery or future-devised machinery or without any apparatus.

In contrast, in Diamond v. Diehr, 450 U.S. 175 (1981) the court considered a patent for a device that aided in curing rubber. At its essence, the invention was an algorithm because it depended on actions taken at precise times during the curing process. Unlike simply converting numbers, the Supreme Court held that such subject matter was patentable.

We granted certiorari to determine whether a process for curing synthetic rubber which includes in several of its steps the use of a mathematical formula and a programmed digital computer is patentable subject matter under 35 U.S.C. § 101.

The court noted in a footnote that for the specific subject at issue, there has been a long history of patent protection.

We note that as early as 1854 this Court approvingly referred to patent eligibility of processes for curing rubber. See id., at 267; n. 7, supra. In Tilghman v. Proctor, 102 U.S. 707, 26 L.Ed. 279 (1881) we referred to the original patent Charles Goodyear received on his process for “vulcanizing” or curing rubber. We stated:
“That a patent can be granted for a process, there can be no doubt. The patent law is not confined to new machines and new compositions of matter, but extends to any new and useful art or manufacture. A manufacturing process is clearly an art, within the meaning of the law. Goodyear's patent was for a process, namely, the process of vulcanizing india-rubber by subjecting it to a high degree of heat when mixed with sulphur and a mineral salt. The apparatus for performing the process was not patented, and was not material. The patent pointed out how the process could be effected, and that was deemed sufficient.” Id., at 722.
Analyzing respondents' claims according to the above statements from our cases, we think that a physical and chemical process for molding precision synthetic rubber products falls within the § 101 categories of possibly patentable subject matter. That respondents' claims involve the transformation of an article, in this case raw, uncured synthetic rubber, into a different state or thing cannot be disputed. The respondents' claims describe in detail a step-by-step method for accomplishing such, beginning with the loading of a mold with raw, uncured rubber and ending with the eventual opening of the press at the conclusion of the cure. Industrial processes such as this are the types which have historically been eligible to receive the protection of our patent laws.[8]
Our conclusion regarding respondents' claims is not altered by the fact that in several steps of the process a mathematical equation and a programmed digital computer are used. This Court has undoubtedly recognized limits to § 101 and every discovery is not embraced within the statutory terms. Excluded from such patent protection are laws of nature, natural phenomena, and abstract ideas. See Parker v. Flook, 437 U.S. 584, 98 S.Ct. 2522, 57 L.Ed.2d 451 (1978); Gottschalk v. Benson, supra, at 67, 93 S.Ct., at 255; Funk Bros. Seed Co. v. Kalo Inoculant Co., 333 U.S. 127, 130, 68 S.Ct. 440, 441, 92 L.Ed. 588 (1948). “An idea of itself is not patentable,” Rubber-Tip Pencil Co. v. Howard, 20 Wall. 498, 507, 22 L.Ed. 410 (1874). “A principle, in the abstract, is a fundamental truth; an original cause; a motive; these cannot be patented, as no one can claim in either of them an exclusive right.” Le Roy v. Tatham, 14 How. 156, 175, 14 L.Ed. 367 (1853). Only last Term, we explained:
“[A] new mineral discovered in the earth or a new plant found in the wild is not patentable subject matter. Likewise, Einstein could not patent his celebrated law that E = mc2; nor could Newton have patented the law of gravity. Such discoveries are ‘manifestations of ... nature, free to all men and reserved exclusively to none.’ ” Diamond v. Chakrabarty, 447 U.S., at 309, 100 S.Ct., at 2208, quoting Funk Bros. Seed Co. v. Kalo Inoculant Co., supra, at 130, 68 S.Ct., at 441.
Our recent holdings in Gottschalk v. Benson, supra, and Parker v. Flook, supra, both of which are computer-related, stand for no more than these long-established principles. In Benson, we held unpatentable claims for an algorithm used to convert binary code decimal numbers to equivalent pure binary numbers. The sole practical application of the algorithm was in connection with the programming of a general purpose digital computer. We defined “algorithm” as a “procedure for solving a given type of mathematical problem,” and we concluded that such an algorithm, or mathematical formula, is like a law of nature, which cannot be the subject of a patent.[9]
Parker v. Flook, supra, presented a similar situation. The claims were drawn to a method for computing an “alarm limit.” An “alarm limit” is simply a number and the Court concluded that the application sought to protect a formula for computing this number. Using this formula, the updated alarm limit could be calculated if several other variables were known. The application, however, did not purport to explain how these other variables were to be determined,[10] nor did it purport “to contain any disclosure relating to the chemical processes at work, the monitoring of process variables, or the means of setting off an alarm or adjusting an alarm system. All that it provides is a formula for computing an updated alarm limit.” 437 U.S., at 586, 98 S.Ct., at 2523.
In contrast, the respondents here do not seek to patent a mathematical formula. Instead, they seek patent protection for a process of curing synthetic rubber. Their process admittedly employs a well-known mathematical equation, but they do not seek to pre-empt the use of that equation. Rather, they seek only to foreclose from others the use of that equation in conjunction with all of the other steps in their claimed process. These include installing rubber in a press, closing the mold, constantly determining the temperature of the mold, constantly recalculating the appropriate cure time through the use of the formula and a digital computer, and automatically opening the press at the proper time. Obviously, one does not need a “computer” to cure natural or synthetic rubber, but if the computer use incorporated in the process patent significantly lessens the possibility of “overcuring” or “undercuring,” the process as a whole does not thereby become unpatentable subject matter.

Scientific Facts

Arrhythmia Research Technology, Inc. v. Corazonix Corp., 958 F.2d 1053 (1992) deals with math, scientific fact, etc.

Thus computers came to be generally recognized as devices capable of performing or implementing process steps, or serving as components of an apparatus, without negating patentability of the process or the apparatus. In Diamond v. Diehr the Court explained that non-statutory status under section 101 derives from the “abstract”, rather than the “sweeping”, nature of a claim that contains a mathematical algorithm. The Court stated:
“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.”
This analysis has been designated the Freeman-Walter-Abele test for statutory subject matter. It is first determined whether a mathematical algorithm is recited directly or indirectly in the claim. If so, it is next determined whether the claimed invention as a whole is no more than the algorithm itself; that is, whether the claim is directed to a mathematical algorithm that is not applied to or limited by physical elements or process steps. Such claims are nonstatutory. However, when the mathematical algorithm is applied in one or more steps of an otherwise statutory process claim, or one or more elements of an otherwise statutory apparatus claim, the requirements of section 101 are met. The court explained in Abele, 684 F.2d at 907, 214 USPQ at 686:
[P]atentable subject matter [is not limited] to claims in which structural relationships or process steps are defined, limited or refined by the application of the algorithm.
Rather, Walter should be read as requiring no more than that the algorithm be “applied in any manner to physical elements or process steps,” provided that its application is circumscribed by more than a field of use limitation or non-essential post-solution activity.
Although mathematical calculations are involved in carrying out the claimed process, Arrhythmia Research argues that the claims are directed to a method of detection of a certain heart condition by a novel method of analyzing a portion of the electrocardiographically measured heart cycle. This is accomplished by procedures conducted by means of electronic equipment programmed to perform mathematical computation.
Applying the Freeman-Walter-Abele protocol, we accept for the purposes of this analysis the proposition that a mathematical algorithm is included in the subject matter of the process claims in that some claimed steps are described in the specification by mathematical formulae. See In re Johnson, 589 F.2d 1070, 1078, 200 USPQ 199, 208 (CCPA 1979) (“Reference to the specification must be made to determine whether [claimed] terms indirectly recite mathematical calculations, formulae, or equations.”) We thus proceed to the second stage of the analysis, to determine whether the claimed process is otherwise statutory; that is, we determine what the claimed steps do, independent of how they are implemented.
Simson's process is claimed as a “method for analyzing electrocardiograph signals to determine the presence or absence of a predetermined level of high-frequency energy in the late QRS signal”. This claim limitation is not ignored in determining whether the subject matter as a whole is statutory, for all of the claim steps are in implementation of this method. The electrocardiograph signals are first transformed from analog form, in which they are obtained, to the corresponding digital signal. These input signals are not abstractions; they are related to the patient's heart function. The anterior portion of the QRS signal is then processed, as the next step, by the procedure known as reverse time order filtration. The digital filter design selected by Dr. Simson for this purpose, known as the Butterworth filter, is one of several known procedures for frequency filtering of digital waveforms. The filtered signal is further analyzed to determine its average magnitude, as described in the specification, by the root mean square technique. Comparison of the resulting output to a predetermined level determines whether late potentials reside in the anterior portion of the QRS segment, thus indicating whether the patient is at high risk for ventricular tachycardia. The resultant output is not an abstract number, but is a signal related to the patient's heart activity.
These claimed steps of “converting”, “applying”, “determining”, and “comparing” are physical process steps that transform one physical, electrical signal into another. The view that “there is nothing necessarily physical about ‘signals' ” is incorrect. In re Taner, 681 F.2d 787, 790, 214 USPQ 678, 681 (CCPA 1982) (holding statutory claims to a method of seismic exploration including the mathematically described steps of “summing” and “simulating from”). The Freeman-Walter-Abele standard is met, for the steps of Simson's claimed method comprise an otherwise statutory process whose mathematical procedures are applied to physical process steps.
The '459 invention manipulates electrocardiogram readings to render a useful result. While many steps in the '459 process involve the mathematical manipulation of data, the claims do not describe a law of nature or a natural phenomenon. Furthermore, the claims do not disclose mere abstract ideas, but a practical and potentially life-saving process. Regardless of whether performed by a computer, these steps comprise a “process” within the meaning of section 101.

State Street (1998)

Relatively recently, in State Street Bank & Trust Co. v. Signature Financial Group, Inc., 149 F.3d 1368 (1998), the CAFC substantially broadened what is patentable under Section 101.

Signature Financial Group, Inc. (Signature) appeals from the decision of the United States District Court for the District of Massachusetts granting a motion for summary judgment in favor of State Street Bank & Trust Co. (State Street), finding U.S. Patent No. 5,193,056 (the '056 patent) invalid on the ground that the claimed subject matter is not encompassed by 35 U.S.C. § 101 (1994).

The case dealt with the following.

The following facts pertinent to the statutory subject matter issue are either undisputed or represent the version alleged by the nonmovant. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). The patented invention relates generally to a system that allows an administrator to monitor and record the financial information flow and make all calculations necessary for maintaining a partner fund financial services configuration. As previously mentioned, a partner fund financial services configuration essentially allows several mutual funds, or “Spokes,” to pool their investment funds into a single portfolio, or “Hub,” allowing for consolidation of, inter alia, the costs of administering the fund combined with the tax advantages of a partnership. In particular, this system provides means for a daily allocation of assets for two or more Spokes that are invested in the same Hub. The system determines the percentage share that each Spoke maintains in the Hub, while taking into consideration daily changes both in the value of the Hub's investment securities and in the concomitant amount of each Spoke's assets.
In determining daily changes, the system also allows for the allocation among the Spokes of the Hub's daily income, expenses, and net realized and unrealized gain or loss, calculating each day's total investments based on the concept of a book capital account. This enables the determination of a true asset value of each Spoke and accurate calculation of allocation ratios between or among the Spokes. The system additionally tracks all the relevant data determined on a daily basis for the Hub and each Spoke, so that aggregate year end income, expenses, and capital gain or loss can be determined for accounting and for tax purposes for the Hub and, as a result, for each publicly traded Spoke.
It is essential that these calculations are quickly and accurately performed. In large part this is required because each Spoke sells shares to the public and the price of those shares is substantially based on the Spoke's percentage interest in the portfolio. In some instances, a mutual fund administrator is required to calculate the value of the shares to the nearest penny within as little as an hour and a half after the market closes. Given the complexity of the calculations, a computer or equivalent device is a virtual necessity to perform the task.
The '056 patent application was filed 11 March 1991. It initially contained six “machine” claims, which incorporated means-plus-function clauses, and six method claims. According to Signature, during prosecution the examiner contemplated a § 101 rejection for failure to claim statutory subject matter. However, upon cancellation of the six method claims, the examiner issued a notice of allowance for the remaining present six claims on appeal. Only claim 1 is an independent claim.
The district court began its analysis by construing the claims to be directed to a process, with each “means” clause merely representing a step in that process. However, “machine” claims having “means” clauses may only be reasonably viewed as process claims if there is no supporting structure in the written description that corresponds to the claimed “means” elements. See In re Alappat, 33 F.3d 1526, 1540-41, 31 USPQ2d 1545, 1554 (Fed.Cir.1994) ( in banc ). This is not the case now before us.
When independent claim 1 is properly construed in accordance with § 112, ¶ 6, it is directed to a machine, as demonstrated below, where representative claim 1 is set forth, the subject matter in brackets stating the structure the written description discloses as corresponding to the respective “means” recited in the claims.
1. A data processing system for managing a financial services configuration of a portfolio established as a partnership, each partner being one of a plurality of funds, comprising:
(a) computer processor means [a personal computer including a CPU] for processing data;
(b) storage means [a data disk] for storing data on a storage medium;
(c) first means [an arithmetic logic circuit configured to prepare the data disk to magnetically store selected data] for initializing the storage medium;
(d) second means [an arithmetic logic circuit configured to retrieve information from a specific file, calculate incremental increases or decreases based on specific input, allocate the results on a percentage basis, and store the output in a separate file] for processing data regarding assets in the portfolio and each of the funds from a previous day and data regarding increases or decreases in each of the funds, [sic, funds'] assets and for allocating the percentage share that each fund holds in the portfolio;
(e) third means [an arithmetic logic circuit configured to retrieve information from a specific file, calculate incremental increases and decreases based on specific input, allocate the results on a percentage basis and store the output in a separate file] for processing data regarding daily incremental income, expenses, and net realized gain or loss for the portfolio and for allocating such data among each fund;
(f) fourth means [an arithmetic logic circuit configured to retrieve information from a specific file, calculate incremental increases and decreases based on specific input, allocate the results on a percentage basis and store the output in a separate file] for processing data regarding daily net unrealized gain or loss for the portfolio and for allocating such data among each fund; and
(g) fifth means [an arithmetic logic circuit configured to retrieve information from specific files, calculate that information on an aggregate basis and store the output in a separate file] for processing data regarding aggregate year-end income, expenses, and capital gain or loss for the portfolio and each of the funds.
Each claim component, recited as a “means” plus its function, is to be read, of course, pursuant to § 112, ¶ 6, as inclusive of the “equivalents” of the structures disclosed in the written description portion of the specification. Thus, claim 1, properly construed, claims a machine, namely, a data processing system for managing a financial services configuration of a portfolio established as a partnership, which machine is made up of, at the very least, the specific structures disclosed in the written description and corresponding to the means-plus-function elements (a)-(g) recited in the claim. A “machine” is proper statutory subject matter under § 101. We note that, for the purposes of a § 101 analysis, it is of little relevance whether claim 1 is directed to a “machine” or a “process,” as long as it falls within at least one of the four enumerated categories of patentable subject matter, “machine” and “process” being such categories.
The Supreme Court has identified three categories of subject matter that are unpatentable, namely “laws of nature, natural phenomena, and abstract ideas.” Diehr, 450 U.S. at 185, 101 S.Ct. 1048. Of particular relevance to this case, the Court has held that mathematical algorithms are not patentable subject matter to the extent that they are merely abstract ideas.
The question of whether a claim encompasses statutory subject matter should not focus on which of the four categories of subject matter a claim is directed to-process, machine, manufacture, or composition of matter-but rather on the essential characteristics of the subject matter, in particular, its practical utility. Section 101 specifies that statutory subject matter must also satisfy the other “conditions and requirements” of Title 35, including novelty, nonobviousness, and adequacy of disclosure and notice. See In re Warmerdam, 33 F.3d 1354, 1359, 31 USPQ2d 1754, 1757-58 (Fed.Cir.1994). For purpose of our analysis, as noted above, claim 1 is directed to a machine programmed with the Hub and Spoke software and admittedly produces a “useful, concrete, and tangible result.” Alappat, 33 F.3d at 1544, 31 USPQ2d at 1557. This renders it statutory subject matter, even if the useful result is expressed in numbers, such as price, profit, percentage, cost, or loss.
As an alternative ground for invalidating the '056 patent under § 101, the court relied on the judicially-created, so-called “business method” exception to statutory subject matter. We take this opportunity to lay this ill-conceived exception to rest. Since its inception, the “business method” exception has merely represented the application of some general, but no longer applicable legal principle, perhaps arising out of the “requirement for invention”-which was eliminated by § 103. Since the 1952 Patent Act, business methods have been, and should have been, subject to the same legal requirements for patentability as applied to any other process or method.