In Re Bilski

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United States Court of Appeals, Federal Circuit. In re Bernard L. BILSKI and Rand A. Warsaw.

No. 2007-1130. Oct. 30, 2008.

Background: Patent applicants challenged denial of patent application for method of hedging risk in field of commodities trading based on lack of patent-eligible subject matter. The Patent and Trademark Office, Board of Patent Appeals and Interferences, 2006 WL 5738364, sustained rejection of all claims in application. Applicants appealed.


Holdings: Following sua sponte order of review en banc, the Court of Appeals, Michel, Chief Judge, held that: (1) machine-or-transformation test, rather than test determining whether claim recited algorithm applied in any manner to physical elements or process steps, was applicable test for determining patent-eligibility of process claims, abrogating, In re Freeman, 573 F.2d 1237, In re Walter, 618 F.2d 758, and In re Abele, 684 F.2d 902; (2) machine-or-transformation test, rather than “useful, concrete and tangible result” inquiry, was proper test to apply to determine patent-eligibility of process claims, abrogating In re Alappat, 33 F.3d 1526, State Street Bank & Trust Co. v. Signature Financial Group, Inc., 149 F.3d 1368, and AT&T Corp. v. Excel Communications, Inc., 172 F.3d 1352; and (3) claim was not drawn to patent-eligible subject matter under transformation branch of machine-or-transformation test.

Affirmed.


Dyk, Circuit Judge, filed opinion concurring, in which Linn, Circuit Judge, joined.


Newman, Circuit Judge, filed opinion dissenting.


Mayer, Circuit Judge, filed opinion dissenting.


Rader, Circuit Judge, filed opinion dissenting.

Before MICHEL, Chief Judge, NEWMAN, MAYER, LOURIE, RADER, SCHALL, BRYSON, GAJARSA, LINN, DYK, PROST, and MOORE, Circuit Judges.


Opinion for the court filed by Chief Judge MICHEL, in which Circuit Judges LOURIE, SCHALL, BRYSON, GAJARSA, LINN, DYK, PROST, and MOORE join. Concurring opinion filed by Circuit Judge DYK, in which Circuit Judge LINN joins. Dissenting opinion filed by Circuit Judge NEWMAN. Dissenting opinion filed by Circuit Judge MAYER. Dissenting opinion filed by Circuit Judge RADER.


MICHEL, Chief Judge.

Bernard L. Bilski and Rand A. Warsaw (collectively, “Applicants”) appeal from the final decision of the Board of Patent Appeals and Interferences (“Board”) sustaining the rejection of all eleven claims of their U.S. Patent Application Serial No. 08/833,892 (“ ′892 application”). See Ex parte Bilski, No.2002-2257, 2006 WL 5738364 (B.P.A.I. Sept. 26, 2006) (“ Board Decision ”). Specifically, Applicants argue that the examiner erroneously rejected the claims as not directed to patent-eligible subject matter under 35 U.S.C. § 101, and that the Board erred in upholding that rejection. The appeal was originally argued before a panel of the court on October 1, 2007. Prior to disposition by the panel, however, we sua sponte ordered en banc review. Oral argument before the en banc court was held on May 8, 2008. We affirm the decision of the Board because we conclude that Applicants' claims are not directed to patent-eligible subject matter, and in doing so, we clarify the standards applicable in determining whether a claimed method constitutes a statutory “process” under § 101.

I. Applicants filed their patent application on April 10, 1997. The application contains eleven claims, which Applicants argue together here. Claim 1 reads:

A method for managing the consumption risk costs of a commodity sold by a commodity provider at a fixed price comprising the steps of:

(a) initiating a series of transactions between said commodity provider and consumers of said commodity wherein said consumers purchase said commodity at a fixed rate based upon historical averages, said fixed rate corresponding to a risk position of said consumer;

(b) identifying market participants for said commodity having a counter-risk position to said consumers; and

(c) initiating a series of transactions between said commodity provider and said market participants at a second fixed rate such that said series of market participant transactions balances the risk position of said series of consumer transactions

′892 application cl.1. In essence, the claim is for a method of hedging risk in the field of commodities trading. For example, coal power plants (i.e., the “consumers”) purchase coal to produce electricity and are averse to the risk of a spike in demand for coal since such a spike would increase the price and their costs. Conversely, coal mining companies (i.e., the “market participants”) are averse to the risk of a sudden drop in demand for coal since such a drop would reduce their sales and depress prices. The claimed method envisions an *950 intermediary, the “commodity provider,” that sells coal to the power plants at a fixed price, thus isolating the power plants from the possibility of a spike in demand increasing the price of coal above the fixed price. The same provider buys coal from mining companies at a second fixed price, thereby isolating the mining companies from the possibility that a drop in demand would lower prices below that fixed price. And the provider has thus hedged its risk; if demand and prices skyrocket, it has sold coal at a disadvantageous price but has bought coal at an advantageous price, and vice versa if demand and prices fall. Importantly, however, the claim is not limited to transactions involving actual commodities, and the application discloses that the recited transactions may simply involve options, i.e., rights to purchase or sell the commodity at a particular price within a particular timeframe. See J.A. at 86-87.

The examiner ultimately rejected claims 1-11 under 35 U.S.C. § 101, stating: “[r]egarding ... claims 1-11, the invention is not implemented on a specific apparatus and merely manipulates [an] abstract idea and solves a purely mathematical problem without any limitation to a practical application, therefore, the invention is not directed to the technological arts.” See Board Decision, slip op. at 3. The examiner noted that Applicants had admitted their claims are not limited to operation on a computer, and he concluded that they were not limited by any specific apparatus. See id. at 4.

On appeal, the Board held that the examiner erred to the extent he relied on a “technological arts” test because the case law does not support such a test. Id. at 41-42. Further, the Board held that the requirement of a specific apparatus was also erroneous because a claim that does not recite a specific apparatus may still be directed to patent-eligible subject matter “if there is a transformation of physical subject matter from one state to another.” Id. at 42. Elaborating further, the Board stated: “ ‘mixing’ two elements or compounds to produce a chemical substance or mixture is clearly a statutory transformation although no apparatus is claimed to perform the step and although the step could be performed manually.” Id. But the Board concluded that Applicants' claims do not involve any patent-eligible transformation, holding that transformation of “non-physical financial risks and legal liabilities of the commodity provider, the consumer, and the market participants” is not patent-eligible subject matter. Id. at 43. The Board also held that Applicants' claims “preempt[ ] any and every possible way of performing the steps of the [claimed process], by human or by any kind of machine or by any combination thereof,” and thus concluded that they only claim an abstract idea ineligible for patent protection. Id. at 46-47. Finally, the Board held that Applicants' process as claimed did not produce a “useful, concrete and tangible result,” and for this reason as well was not drawn to patent-eligible subject matter. Id. at 49-50.

Applicants timely appealed to this court under 35 U.S.C. § 141. We have jurisdiction under 28 U.S.C. § 1295(a)(4)(A).

II. [1] Headnote Citing References[2] Headnote Citing References[3] Headnote Citing References[4] Headnote Citing References Whether a claim is drawn to patent-eligible subject matter under § 101 is a threshold inquiry, and any claim of an application failing the requirements of § 101 must be rejected even if it meets all of the other legal requirements of patentability. In re Comiskey, 499 F.3d 1365, 1371 (Fed.Cir.2007) FN1 (quoting *951 Parker v. Flook, 437 U.S. 584, 593, 98 S.Ct. 2522, 57 L.Ed.2d 451 (1978)); In re Bergy, 596 F.2d 952, 960 (CCPA 1979), vacated as moot sub nom. Diamond v. Chakrabarty, 444 U.S. 1028, 100 S.Ct. 696, 62 L.Ed.2d 664 (1980). Whether a claim is drawn to patent-eligible subject matter under § 101 is an issue of law that we review de novo. Comiskey, 499 F.3d at 1373; AT & T Corp. v. Excel Commc'ns, Inc., 172 F.3d 1352, 1355 (Fed.Cir.1999). Although claim construction, which we also review de novo, is an important first step in a § 101 analysis, see State St. Bank & Trust Co. v. Signature Fin. Group, 149 F.3d 1368, 1370 (Fed.Cir.1998) (noting that whether a claim is invalid under § 101 “is a matter of both claim construction and statutory construction”), there is no claim construction dispute in this appeal. We review issues of statutory interpretation such as this one de novo as well. Id.

   FN1. Although our decision in Comiskey may be misread by some as requiring in every case that the examiner conduct a § 101 analysis before assessing any other issue of patentability, we did not so hold. As with any other patentability requirement, an examiner may reject a claim solely on the basis of § 101. Or, if the examiner deems it appropriate, she may reject the claim on any other ground(s) without addressing § 101. But given that § 101 is a threshold requirement, claims that are clearly drawn to unpatentable subject matter should be identified and rejected on that basis. Thus, an examiner should generally first satisfy herself that the application's claims are drawn to patent-eligible subject matter.


A. As this appeal turns on whether Applicants' invention as claimed meets the requirements set forth in § 101, we begin with the words of the statute:

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.

35 U.S.C. § 101. The statute thus recites four categories of patent-eligible subject matter: processes, machines, manufactures, and compositions of matter. It is undisputed that Applicants' claims are not directed to a machine, manufacture, or composition of matter.FN2 Thus, the issue before us involves what the term “process” in § 101 means, and how to determine whether a given claim-and Applicants' claim 1 in particular-is a “new and useful process.” FN3

   FN2. As a result, we decline to discuss In re Nuijten because that decision primarily concerned whether a claim to an electronic signal was drawn to a patent-eligible manufacture. 500 F.3d 1346, 1356-57 (Fed.Cir.2007). We note that the PTO did not dispute that the process claims in Nuijten were drawn to patent-eligible subject matter under § 101 and allowed those claims.


   FN3. Congress provided a definition of “process” in 35 U.S.C. § 100(b): “The term ‘process' means process, art or method, and includes a new use of a known process, machine, manufacture, composition of matter, or material.” However, this provision is unhelpful given that the definition itself uses the term “process.”


As several amici have argued, the term “process” is ordinarily broad in meaning, at least in general lay usage. In 1952, at the time Congress amended § 101 to include “process,” FN4 the ordinary meaning of *952 the term was: “[a] procedure ... [a] series of actions, motions, or operations definitely conducing to an end, whether voluntary or involuntary.” Webster's New International Dictionary of the English Language 1972 (2d ed.1952). There can be no dispute that Applicants' claim would meet this definition of “process.” But the Supreme Court has held that the meaning of “process” as used in § 101 is narrower than its ordinary meaning. See Flook, 437 U.S. at 588-89, 98 S.Ct. 2522 (“The holding [in Benson ] forecloses a purely literal reading of § 101.”). Specifically, the Court has held that a claim is not a patent-eligible “process” if it claims “laws of nature, natural phenomena, [or] abstract ideas.” Diamond v. Diehr, 450 U.S. 175, 185, 101 S.Ct. 1048, 67 L.Ed.2d 155 (1981) (citing Flook, 437 U.S. at 589, 98 S.Ct. 2522, and Gottschalk v. Benson, 409 U.S. 63, 67, 93 S.Ct. 253, 34 L.Ed.2d 273 (1972)). Such fundamental principles FN5 are “part of the storehouse of knowledge of all men ... free to all men and reserved exclusively to none.” Funk Bros. Seed Co. v. Kalo Inoculant Co., 333 U.S. 127, 130, 68 S.Ct. 440, 92 L.Ed. 588 (1948); see also Le Roy v. Tatham, 55 U.S. (14 How.) 156, 175, 14 L.Ed. 367 (1852) (“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.”). “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.” Benson, 409 U.S. at 67, 93 S.Ct. 253; see also Comiskey, 499 F.3d at 1378-79 (holding that “mental processes,” “processes of human thinking,” and “systems that depend for their operation on human intelligence alone” are not patent-eligible subject matter under Benson ).

   FN4. The Patent Act of 1793 originally used the term “art” rather than “process,” which remained unchanged until Congress enacted the current version of § 101 in 1952. But the Supreme Court has held that this change did not alter the scope of patent eligibility over processes because “[i]n the language of the patent law, [a process] is an art.” Diamond v. Diehr, 450 U.S. 175, 182-84, 101 S.Ct. 1048, 67 L.Ed.2d 155 (1981) (quoting Cochrane v. Deener, 94 U.S. 780, 787-88, 24 L.Ed. 139 (1877)); see also Comiskey, 499 F.3d at 1375.


   FN5. As used in this opinion, “fundamental principles” means “laws of nature, natural phenomena, and abstract ideas.”


The true issue before us then is whether Applicants are seeking to claim a fundamental principle (such as an abstract idea) or a mental process. And the underlying legal question thus presented is what test or set of criteria governs the determination by the Patent and Trademark Office (“PTO”) or courts as to whether a claim to a process is patentable under § 101 or, conversely, is drawn to unpatentable subject matter because it claims only a fundamental principle.

The Supreme Court last addressed this issue in 1981 in Diehr, which concerned a patent application seeking to claim a process for producing cured synthetic rubber products. 450 U.S. at 177-79, 101 S.Ct. 1048. The claimed process took temperature readings during cure and used a mathematical algorithm, the Arrhenius equation, to calculate the time when curing would be complete. Id. Noting that a mathematical algorithm alone is unpatentable because mathematical relationships are akin to a law of nature, the Court nevertheless held that the claimed process was patent-eligible subject matter, stating:

[The inventors] 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.

  • 953 Id. at 187, 101 S.Ct. 1048 (emphasis added).FN6 The Court declared that while a claim drawn to a fundamental principle is unpatentable, “an application of a law of nature or mathematical formula to a known structure or process may well be deserving of patent protection.” Id. (emphasis in original); see also Mackay Radio & Tel. Co. v. Radio Corp. of Am., 306 U.S. 86, 94, 59 S.Ct. 427, 83 L.Ed. 506 (1939) (“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.”).
   FN6. Mathematical algorithms have, in other cases, been identified instead as abstract ideas rather than laws of nature. See, e.g., State St., 149 F.3d at 1373. Whether either or both views are correct is immaterial since both laws of nature and abstract ideas are unpatentable under § 101. Diehr, 450 U.S. at 185, 101 S.Ct. 1048.


The Court in Diehr thus drew a distinction between those claims that “seek to pre-empt the use of” a fundamental principle, on the one hand, and claims that seek only to foreclose others from using a particular “ application ” of that fundamental principle, on the other. 450 U.S. at 187, 101 S.Ct. 1048. Patents, by definition, grant the power to exclude others from practicing that which the patent claims. Diehr can be understood to suggest that whether a claim is drawn only to a fundamental principle is essentially an inquiry into the scope of that exclusion; i.e., whether the effect of allowing the claim would be to allow the patentee to pre-empt substantially all uses of that fundamental principle. If so, the claim is not drawn to patent-eligible subject matter.

In Diehr, the Court held that the claims at issue did not pre-empt all uses of the Arrhenius equation but rather claimed only “a process for curing rubber ... which incorporates in it a more efficient solution of the equation.” 450 U.S. at 188, 101 S.Ct. 1048. The process as claimed included several specific steps to control the curing of rubber more precisely: “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.” Id. at 187, 101 S.Ct. 1048. Thus, one would still be able to use the Arrhenius equation in any process not involving curing rubber, and more importantly, even in any process to cure rubber that did not include performing “all of the other steps in their claimed process.” See id.; see also Tilghman v. Proctor, 102 U.S. 707, 729, 26 L.Ed. 279 (1880) (holding patentable a process of breaking down fat molecules into fatty acids and glycerine in water specifically requiring both high heat and high pressure since other processes, known or as yet unknown, using the reaction of water and fat molecules were not claimed).

In contrast to Diehr, the earlier Benson case presented the Court with claims drawn to a process of converting data in binary-coded decimal (“BCD”) format to pure binary format via an algorithm programmed onto a digital computer. Benson, 409 U.S. at 65, 93 S.Ct. 253. The Court held the claims to be drawn to unpatentable subject matter:

It is conceded that one may not patent an idea. But in practical effect that would be the result if the formula for converting BCD numerals to pure binary numerals were patented in this case. The mathematical formula involved here has no substantial practical application except in connection with a digital computer, which means that if the judgment below is affirmed, the patent would wholly pre-empt the mathematical formula*954 and in practical effect would be a patent on the algorithm itself.

Id. at 71-72, 93 S.Ct. 253 (emphasis added). Because the algorithm had no uses other than those that would be covered by the claims (i.e., any conversion of BCD to pure binary on a digital computer), the claims pre-empted all uses of the algorithm and thus they were effectively drawn to the algorithm itself. See also O'Reilly v. Morse, 56 U.S. (15 How.) 62, 113, 14 L.Ed. 601 (1853) (holding ineligible a claim pre-empting all uses of electromagnetism to print characters at a distance).

The question before us then is whether Applicants' claim recites a fundamental principle and, if so, whether it would pre-empt substantially all uses of that fundamental principle if allowed. Unfortunately, this inquiry is hardly straightforward. How does one determine whether a given claim would pre-empt all uses of a fundamental principle? Analogizing to the facts of Diehr or Benson is of limited usefulness because the more challenging process claims of the twenty-first century are seldom so clearly limited in scope as the highly specific, plainly corporeal industrial manufacturing process of Diehr; nor are they typically as broadly claimed or purely abstract and mathematical as the algorithm of Benson.

[5] Headnote Citing References[6] Headnote Citing References The Supreme Court, however, has enunciated a definitive test to determine whether a process claim is tailored narrowly enough to encompass only a particular application of a fundamental principle rather than to pre-empt the principle itself. A claimed process is surely patent-eligible under § 101 if: (1) it is tied to a particular machine or apparatus, or (2) it transforms a particular article into a different state or thing. See Benson, 409 U.S. at 70, 93 S.Ct. 253 (“Transformation and reduction of an article ‘to a different state or thing’ is the clue to the patentability of a process claim that does not include particular machines.”); Diehr, 450 U.S. at 192, 101 S.Ct. 1048 (holding that use of mathematical formula in process “transforming or reducing an article to a different state or thing” constitutes patent-eligible subject matter); see also Flook, 437 U.S. at 589 n. 9, 98 S.Ct. 2522 (“An argument can be made [that the Supreme] Court has only recognized a process as within the statutory definition when it either was tied to a particular apparatus or operated to change materials to a ‘different state or thing’ ”); Cochrane v. Deener, 94 U.S. 780, 788, 24 L.Ed. 139 (1876) (“A process is ... an act, or a series of acts, performed upon the subject-matter to be transformed and reduced to a different state or thing.”).FN7 A claimed process involving a fundamental principle that uses a particular machine or apparatus would not pre-empt uses of the principle that do not also use the specified machine or apparatus in the manner claimed. And a claimed process that transforms a particular article to a specified different state or thing by applying a fundamental principle would not pre-empt the use of the principle to transform any other article, to transform the same article but in a manner not covered by the claim, or to do anything other than transform the specified article.

   FN7. While the Court did not give explicit definitions of terms such as “tied to,” “transforms,” or “article,” a careful analysis of its opinions and the subsequent jurisprudence of this court applying those decisions, discussed infra, informs our understanding of the Court's machine-or-transformation test.


The process claimed in Diehr, for example, clearly met both criteria. The process operated on a computerized rubber curing apparatus and transformed raw, uncured rubber into molded, cured rubber products. *955 Diehr, 450 U.S. at 184, 187, 101 S.Ct. 1048. The claim at issue in Flook, in contrast, was directed to using a particular mathematical formula to calculate an “alarm limit”-a value that would indicate an abnormal condition during an unspecified chemical reaction. 437 U.S. at 586, 98 S.Ct. 2522. The Court rejected the claim as drawn to the formula itself because the claim did not include any limitations specifying “how to select the appropriate margin of safety, the weighting factor, or any of the other variables ... the chemical processes at work, the [mechanism for] monitoring of process variables, or the means of setting off an alarm or adjusting an alarm system.” See id. at 586, 595, 98 S.Ct. 2522. The claim thus was not limited to any particular chemical (or other) transformation; nor was it tied to any specific machine or apparatus for any of its process steps, such as the selection or monitoring of variables or the setting off or adjusting of the alarm.FN8 See id.

   FN8. To the extent it may be argued that Flook did not explicitly follow the machine-or-transformation test first articulated in Benson, we note that the more recent decision in Diehr reaffirmed the machine-or-transformation test. See Diehr, 450 U.S. at 191-92, 101 S.Ct. 1048. Moreover, the Diehr Court explained that Flook “presented a similar situation” to Benson and considered it consistent with the holdings of Diehr and Benson. Diehr at 186-87, 189, 191-92, 101 S.Ct. 1048. We thus follow the Diehr Court's understanding of Flook.


A canvas of earlier Supreme Court cases reveals that the results of those decisions were also consistent with the machine-or-transformation test later articulated in Benson and reaffirmed in Diehr. See Tilghman, 102 U.S. at 729 (particular process of transforming fats into constituent compounds held patentable); Cochrane, 94 U.S. at 785-88 (process transforming grain meal into purified flour held patentable); Morse, 56 U.S. (15 How.) at 113 (process of using electromagnetism to print characters at a distance that was not transformative or tied to any particular apparatus held unpatentable). Interestingly, Benson presents a difficult case under its own test in that the claimed process operated on a machine, a digital computer, but was still held to be ineligible subject matter.FN9 However, in Benson, the limitations tying the process to a computer were not actually limiting because the fundamental principle at issue, a particular algorithm, had no utility other than operating on a digital computer. Benson, 409 U.S. at 71-72, 93 S.Ct. 253. Thus, the claim's tie to a digital computer did not reduce the pre-emptive footprint of the claim since all uses of the algorithm were still covered by the claim.

   FN9. We acknowledge that the Supreme Court in Benson stated that the claims at issue “were not limited ... to any particular apparatus or machinery.” 409 U.S. at 64, 93 S.Ct. 253. However, the Court immediately thereafter stated: “[The claims] purported to cover any use of the claimed method in a general-purpose digital computer of any type.” Id. And, as discussed herein, the Court relied for its holding on its understanding that the claimed process pre-empted all uses of the recited algorithm because its only possible use was on a digital computer. Id. at 71-72, 93 S.Ct. 253. The Diehr Court, in discussing Benson, relied only on this latter understanding of the Benson claims. See Diehr, 450 U.S. at 185-87, 101 S.Ct. 1048. We must do the same.


B. Applicants and several amici FN10 have argued that the Supreme Court did not intend the machine-or-transformation test to be the sole test governing § 101 analyses. As already noted, however, the Court explicitly stated in Benson that “[t]ransformation and reduction of an article ‘to a *956 different state or thing’ is the clue to the patentability of a process claim that does not include particular machines.” FN11 409 U.S. at 70, 93 S.Ct. 253 (emphasis added). And the Court itself later noted in Flook that at least so far it had “only recognized a process as within the statutory definition when it either was tied to a particular apparatus or operated to change materials to a ‘different state or thing.’ ” 437 U.S. at 589 n. 9, 98 S.Ct. 2522. Finally, the Court in Diehr once again applied the machine-or-transformation test in its most recent decision regarding the patentability of processes under § 101. 450 U.S. at 184, 101 S.Ct. 1048.

   FN10. See, e.g., Br. of Amicus Curiae Am. Intellectual Prop. Law Ass'n at 17-21; Br. of Amicus Curiae Regulatory Datacorp, Inc. at 10-15.


   FN11. We believe that the Supreme Court spoke of the machine-or-transformation test as the “clue” to patent-eligibility because the test is the tool used to determine whether a claim is drawn to a statutory “process”-the statute does not itself explicitly mention machine implementation or transformation. We do not consider the word “clue” to indicate that the machine-or-implementation test is optional or merely advisory. Rather, the Court described it as the clue, not merely “a” clue. See Benson, 409 U.S. at 70, 93 S.Ct. 253.


We recognize, however, that the Court was initially equivocal in first putting forward this test in Benson. As the Applicants and several amici point out, the Court there stated:

It is argued that a process patent must either be tied to a particular machine or apparatus or must operate to change articles or materials to a ‘different state or thing.’ We do not hold that no process patent could ever qualify if it did not meet the requirements of our prior precedents.

Benson, 409 U.S. at 71, 93 S.Ct. 253. In Flook, the Court took note that this statement had been made in Benson but merely stated: “As in Benson, we assume that a valid process patent may issue even if it does not meet [the machine-or-transformation test].” 437 U.S. at 589 n. 9, 98 S.Ct. 2522 (emphasis added). And this caveat was not repeated in Diehr when the Court reaffirmed the machine-or-transformation test. See Diehr, 450 U.S. at 184, 101 S.Ct. 1048 (quoting Benson, 409 U.S. at 70, 93 S.Ct. 253) (“Transformation and reduction of an article ‘to a different state or thing’ is the clue to the patentability of a process claim that does not include particular machines.”). Therefore, we believe our reliance on the Supreme Court's machine-or-transformation test as the applicable test for § 101 analyses of process claims is sound.

Nevertheless, we agree that future developments in technology and the sciences may present difficult challenges to the machine-or-transformation test, just as the widespread use of computers and the advent of the Internet has begun to challenge it in the past decade. Thus, we recognize that the Supreme Court may ultimately decide to alter or perhaps even set aside this test to accommodate emerging technologies. And we certainly do not rule out the possibility that this court may in the future refine or augment the test or how it is applied. At present, however, and certainly for the present case, we see no need for such a departure and reaffirm that the machine-or-transformation test, properly applied, is the governing test for determining patent eligibility of a process under § 101.FN12

   FN12. The Diehr Court stated: “[W]hen a claim containing a mathematical formula implements or applies that formula in a structure or process which, when considered as a whole, 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 § 101.” 450 U.S at 192, 101 S.Ct. 1048 (emphases added). When read together with Benson and Flook, on which the Diehr Court firmly relied, we believe this statement is consistent with the machine-or-transformation test. But as we noted in AT & T, language such as the use of “e.g.” may indicate the Supreme Court's recognition that the machine-or-transformation test might require modification in the future. See AT & T, 172 F.3d at 1358-59.


  • 957 C.

[7] Headnote Citing References[8] Headnote Citing References As a corollary, the Diehr Court also held that mere field-of-use limitations are generally insufficient to render an otherwise ineligible process claim patent-eligible. See 450 U.S. at 191-92, 101 S.Ct. 1048 (noting that ineligibility under § 101 “cannot be circumvented by attempting to limit the use of the formula to a particular technological environment”). We recognize that tension may be seen between this consideration and the Court's overall goal of preventing the wholesale pre-emption of fundamental principles. Why not permit patentees to avoid overbroad pre-emption by limiting claim scope to particular fields of use? This tension is resolved, however, by recalling the purpose behind the Supreme Court's discussion of pre-emption, namely that pre-emption is merely an indication that a claim seeks to cover a fundamental principle itself rather than only a specific application of that principle. See id. at 187, 101 S.Ct. 1048; Benson, 409 U.S. at 71-72, 93 S.Ct. 253. Pre-emption of all uses of a fundamental principle in all fields and pre-emption of all uses of the principle in only one field both indicate that the claim is not limited to a particular application of the principle. See Diehr, 450 U.S. at 193 n. 14, 101 S.Ct. 1048 (“A mathematical formula in the abstract is nonstatutory subject matter regardless of whether the patent is intended to cover all uses of the formula or only limited uses.”) (emphasis added). In contrast, a claim that is tied to a particular machine or brings about a particular transformation of a particular article does not pre-empt all uses of a fundamental principle in any field but rather is limited to a particular use, a specific application. Therefore, it is not drawn to the principle in the abstract.

[9] Headnote Citing References The Diehr Court also reaffirmed a second corollary to the machine-or-transformation test by stating that “insignificant postsolution activity will not transform an unpatentable principle into a patentable process.” Id. at 191-92, 101 S.Ct. 1048; see also Flook, 437 U.S. at 590, 98 S.Ct. 2522 (“The notion that post-solution activity, no matter how conventional or obvious in itself, can transform an unpatentable principle into a patentable process exalts form over substance.”). The Court in Flook reasoned:

A competent draftsman could attach some form of post-solution activity to almost any mathematical formula; the Pythagorean theorem would not have been patentable, or partially patentable, because a patent application contained a final step indicating that the formula, when solved, could be usefully applied to existing surveying techniques.

437 U.S. at 590, 98 S.Ct. 2522.FN13 Therefore, even if a claim recites a specific machine or a particular transformation of a specific article, the recited machine or transformation must not constitute mere “insignificant postsolution activity.” FN14

   FN13. The example of the Pythagorean theorem applied to surveying techniques could also be considered an example of a mere field-of-use limitation.


   FN14. Although the Court spoke of “postsolution” activity, we have recognized that the Court's reasoning is equally applicable to any insignificant extra-solution activity regardless of where and when it appears in the claimed process. See In re Schrader, 22 F.3d 290, 294 (Fed.Cir.1994) (holding a simple recordation step in the middle of the claimed process incapable of imparting patent-eligibility under § 101); In re Grams, 888 F.2d 835, 839-40 (Fed.Cir.1989) (holding a pre-solution step of gathering data incapable of imparting patent-eligibility under § 101).


  • 958 D.

We discern two other important aspects of the Supreme Court's § 101 jurisprudence. First, the Court has held that whether a claimed process is novel or non-obvious is irrelevant to the § 101 analysis. Diehr, 450 U.S. at 188-91, 101 S.Ct. 1048. Rather, such considerations are governed by 35 U.S.C. § 102 (novelty) and § 103 (non-obviousness). Diehr, 450 U.S. at 188-91, 101 S.Ct. 1048. Although § 101 refers to “new and useful” processes, it is overall “a general statement of the type of subject matter that is eligible for patent protection ‘subject to the conditions and requirements of this title.’ ” Diehr, 450 U.S. at 189, 101 S.Ct. 1048 (quoting § 101). As the legislative history of § 101 indicates, Congress did not intend the “new and useful” language of § 101 to constitute an independent requirement of novelty or non-obviousness distinct from the more specific and detailed requirements of §§ 102 and 103, respectively. Diehr, 450 U.S. at 190-91, 101 S.Ct. 1048.FN15 So here, it is irrelevant to the § 101 analysis whether Applicants' claimed process is novel or non-obvious.

   FN15. By the same token, considerations of adequate written description, enablement, best mode, etc., are also irrelevant to the § 101 analysis because they, too, are governed by other provisions of the Patent Act. Section 101 does, however, allow for patents only on useful inventions. Brenner v. Manson, 383 U.S. 519, 532-35, 86 S.Ct. 1033, 16 L.Ed.2d 69 (1966).


[10] Headnote Citing References[11] Headnote Citing References Second, the Court has made clear that it is inappropriate to determine the patent-eligibility of a claim as a whole based on whether selected limitations constitute patent-eligible subject matter. Flook, 437 U.S. at 594, 98 S.Ct. 2522 (“Our approach to respondent's application is, however, not at all inconsistent with the view that a patent claim must be considered as a whole.”); Diehr, 450 U.S. at 188, 101 S.Ct. 1048 (“It is inappropriate to dissect the claims into old and new elements and then to ignore the presence of the old elements in the analysis.”). After all, even though a fundamental principle itself is not patent-eligible, processes incorporating a fundamental principle may be patent-eligible. Thus, it is irrelevant that any individual step or limitation of such processes by itself would be unpatentable under § 101. See In re Alappat, 33 F.3d 1526, 1543-44 (Fed.Cir.1994) (en banc) (citing Diehr, 450 U.S. at 187, 101 S.Ct. 1048).

III. In the years following the Supreme Court's decisions in Benson, Flook, and Diehr, our predecessor court and this court have reviewed numerous cases presenting a wide variety of process claims, some in technology areas unimaginable when those seminal Supreme Court cases were heard. FN16 Looking to these precedents, we find a wealth of detailed guidance and helpful examples on how to determine the patent-eligibility of process claims.

   FN16. We note that the PTO, too, has been active in analyzing § 101 law. See, e.g., Ex parte Lundgren, 76 U.S.P.Q.2d 1385 (B.P.A.I.2004); Interim Guidelines for Examination of Patent Applications for Patent Subject Matter Eligibility, Off. Gaz. Pat. & Trademark Office, Nov. 22, 2005.


A. [12] Headnote Citing References Before we turn to our precedents, however, we first address the issue of whether several other purported articulations of § 101 tests are valid and useful. The first of these is known as the Freeman-Walter-Abele test after the three decisions*959 of our predecessor court that formulated and then refined the test: In re Freeman, 573 F.2d 1237 (CCPA 1978); In re Walter, 618 F.2d 758 (CCPA 1980); and In re Abele, 684 F.2d 902 (CCPA 1982). This test, in its final form, had two steps: (1) determining whether the claim recites an “algorithm” within the meaning of Benson, then (2) determining whether that algorithm is “applied in any manner to physical elements or process steps.” Abele, 684 F.2d at 905-07.

Some may question the continued viability of this test, arguing that it appears to conflict with the Supreme Court's proscription against dissecting a claim and evaluating patent-eligibility on the basis of individual limitations. See Flook, 437 U.S. at 594, 98 S.Ct. 2522 (requiring analysis of claim as a whole in § 101 analysis); see also AT & T, 172 F.3d at 1359; State St., 149 F.3d at 1374. In light of the present opinion, we conclude that the Freeman-Walter-Abele test is inadequate. Indeed, we have already recognized that a claim failing that test may nonetheless be patent-eligible. See In re Grams, 888 F.2d 835, 838-39 (Fed.Cir.1989). Rather, the machine-or-transformation test is the applicable test for patent-eligible subject matter.FN17

   FN17. Therefore, in Abele, Meyer, Grams, Arrhythmia Research Technology, Inc. v. Corazonix Corp., 958 F.2d 1053 (Fed.Cir.1992), and other decisions, those portions relying solely on the Freeman-Walter-Abele test should no longer be relied on.


[13] Headnote Citing References The second articulation we now revisit is the “useful, concrete, and tangible result” language associated with State Street, although first set forth in Alappat. State St., 149 F.3d at 1373 (“Today, we hold that the transformation of data, representing discrete dollar amounts, by a machine through a series of mathematical calculations into a final share price, constitutes a [patent-eligible invention] because it produces ‘a useful, concrete and tangible result’....”); FN18 Alappat, 33 F.3d at 1544 (“This is not a disembodied mathematical concept which may be characterized as an ‘abstract idea,’ but rather a specific machine to produce a useful, concrete, and tangible result.”); see also AT & T, 172 F.3d at 1357 (“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 § 101.”). The basis for this language in State Street and Alappat was that the Supreme Court has explained that “certain types of mathematical subject matter, standing alone, represent nothing more than abstract ideas until reduced to some type of practical application.” Alappat, 33 F.3d at 1543; see also State St., 149 F.3d at 1373. To be sure, a process tied to a particular machine, or transforming or reducing a particular article into a different state or thing, will generally produce a “concrete” and “tangible” result as those terms were used in our prior decisions. But while looking for “a useful, concrete and tangible result” may in many instances provide useful indications of whether a claim is drawn to a fundamental principle or a practical application of such a principle, that inquiry is insufficient to determine whether a claim is patent-eligible under § 101. And it was certainly never intended to supplant the Supreme Court's test. Therefore, we also conclude that the “useful, concrete and tangible result” inquiry*960 is inadequate and reaffirm that the machine-or-transformation test outlined by the Supreme Court is the proper test to apply. FN19

   FN18. In State Street, as is often forgotten, we addressed a claim drawn not to a process but to a machine. 149 F.3d at 1371-72 (holding that the means-plus-function elements of the claims on appeal all corresponded to supporting structures disclosed in the written description).


   FN19. As a result, those portions of our opinions in State Street and AT & T relying solely on a “useful, concrete and tangible result” analysis should no longer be relied on.


We next turn to the so-called “technological arts test” that some amici FN20 urge us to adopt. We perceive that the contours of such a test, however, would be unclear because the meanings of the terms “technological arts” and “technology” are both ambiguous and ever-changing. FN21 And no such test has ever been explicitly adopted by the Supreme Court, this court, or our predecessor court, as the Board correctly observed here. Therefore, we decline to do so and continue to rely on the machine-or-transformation test as articulated by the Supreme Court.

   FN20. See, e.g., Br. of Amicus Curiae Consumers Union et al. at 6-10; Br. of Amicus Curiae William Mitchell Coll. of Law Intellectual Prop. Inst. at 14-15.


   FN21. Compare Appellee's Br. at 24-28 (arguing that patents should be reserved only for “technological” inventions that “involve[ ] the application of science or mathematics,” thereby excluding “non-technological inventions” such as “activities whose ability to achieve their claimed goals depended solely on contract formation”), with Br. of Amicus Curiae Regulatory Datacorp, Inc. at 19-24 (arguing that “innovations in business, finance, and other applied economic fields plainly qualify as ‘technological’ ” since “a fair definition of technological is ‘characterized by the practical application of knowledge in a particular field’ ” and because modern economics has “a closer affinity to physics and engineering than to liberal arts like English literature”).


We further reject calls for categorical exclusions beyond those for fundamental principles already identified by the Supreme Court.FN22 We rejected just such an exclusion in State Street, noting that the so-called “business method exception” was unlawful and that business method claims (and indeed all process claims) are “subject to the same legal requirements for patentability as applied to any other process or method.” 149 F.3d at 1375-76. We reaffirm this conclusion.FN23

   FN22. See, e.g., Br. of Amicus Curiae Fin. Servs. Indus. at 20 (“[E]xtending patent protection to pure methods of doing business ... is contrary to the constitutional and statutory basis for granting patent monopolies....”).


   FN23. Therefore, although invited to do so by several amici, we decline to adopt a broad exclusion over software or any other such category of subject matter beyond the exclusion of claims drawn to fundamental principles set forth by the Supreme Court. See, e.g., Br. of Amicus Curiae End Software Patents; Br. of Amicus Curiae Red Hat, Inc. at 4-7. We also note that the process claim at issue in this appeal is not, in any event, a software claim. Thus, the facts here would be largely unhelpful in illuminating the distinctions between those software claims that are patent-eligible and those that are not.


Lastly, we address a possible misunderstanding of our decision in Comiskey. Some may suggest that Comiskey implicitly applied a new § 101 test that bars any claim reciting a mental process that lacks significant “physical steps.” We did not so hold, nor did we announce any new test at all in Comiskey. Rather, we simply recognized that the Supreme Court has held that mental processes, like fundamental principles, are excluded by § 101 because “ ‘[p]henomena of nature, though just discovered, mental processes, and abstract intellectual concepts ... are the basic tools of scientific and technological work.’ ” Comiskey, 499 F.3d at 1377 (quoting Benson, 409 U.S. at 67, 93 S.Ct. 253) (emphasis added). And we actually applied the machine-or-transformation test to determine whether various claims at issue were *961 drawn to patent-eligible subject matter.FN24 Id. at 1379 (“Comiskey has conceded that these claims do not require a machine, and these claims evidently do not describe a process of manufacture or a process for the alteration of a composition of matter.”). Because those claims failed the machine-or-transformation test, we held that they were drawn solely to a fundamental principle, the mental process of arbitrating a dispute, and were thus not patent-eligible under § 101. Id.

   FN24. Our statement in Comiskey that “a claim reciting an algorithm or abstract idea can state statutory subject matter only if, as employed in the process, it is embodied in, operates on, transforms, or otherwise involves another class of statutory subject matter, i.e., a machine, manufacture, or composition of matter,” 499 F.3d at 1376, was simply a summarization of the Supreme Court's machine-or-transformation test and should not be understood as altering that test.


[14] Headnote Citing References[15] Headnote Citing References Further, not only did we not rely on a “physical steps” test in Comiskey, but we have criticized such an approach to the § 101 analysis in earlier decisions. In AT & T, we rejected a “physical limitations” test and noted that “the mere fact that a claimed invention involves inputting numbers, calculating numbers, outputting numbers, and storing numbers, in and of itself, would not render it nonstatutory subject matter.” 172 F.3d at 1359 (quoting State St., 149 F.3d at 1374). The same reasoning applies when the claim at issue recites fundamental principles other than mathematical algorithms. Thus, the proper inquiry under § 101 is not whether the process claim recites sufficient “physical steps,” but rather whether the claim meets the machine-or-transformation test.FN25 As a result, even a claim that recites “physical steps” but neither recites a particular machine or apparatus, nor transforms any article into a different state or thing, is not drawn to patent-eligible subject matter. Conversely, a claim that purportedly lacks any “physical steps” but is still tied to a machine or achieves an eligible transformation passes muster under § 101. FN26

   FN25. Thus, it is simply inapposite to the § 101 analysis whether process steps performed by software on a computer are sufficiently “physical.”


   FN26. Of course, a claimed process wherein all of the process steps may be performed entirely in the human mind is obviously not tied to any machine and does not transform any article into a different state or thing. As a result, it would not be patent-eligible under § 101.


B. With these preliminary issues resolved, we now turn to how our case law elaborates on the § 101 analysis set forth by the Supreme Court. To the extent that some of the reasoning in these decisions relied on considerations or tests, such as “useful, concrete and tangible result,” that are no longer valid as explained above, those aspects of the decisions should no longer be relied on. Thus, we reexamine the facts of certain cases under the correct test to glean greater guidance as to how to perform the § 101 analysis using the machine-or-transformation test.

[16] Headnote Citing References[17] Headnote Citing References[18] Headnote Citing References The machine-or-transformation test is a two-branched inquiry; an applicant may show that a process claim satisfies § 101 either by showing that his claim is tied to a particular machine, or by showing that his claim transforms an article. See Benson, 409 U.S. at 70, 93 S.Ct. 253. Certain considerations are applicable to analysis under either branch. First, as illustrated by Benson and discussed below, the use of a specific machine or transformation of an article must impose meaningful limits on the claim's scope to impart patent-eligibility. See *962 Benson, 409 U.S. at 71-72, 93 S.Ct. 253. Second, the involvement of the machine or transformation in the claimed process must not merely be insignificant extra-solution activity. See Flook, 437 U.S. at 590, 98 S.Ct. 2522.

As to machine implementation, Applicants themselves admit that the language of claim 1 does not limit any process step to any specific machine or apparatus. See Appellants' Br. at 11. As a result, issues specific to the machine implementation part of the test are not before us today. We leave to future cases the elaboration of the precise contours of machine implementation, as well as the answers to particular questions, such as whether or when recitation of a computer suffices to tie a process claim to a particular machine.

[19] Headnote Citing References[20] Headnote Citing References We will, however, consider some of our past cases to gain insight into the transformation part of the test. A claimed process is patent-eligible if it transforms an article into a different state or thing. This transformation must be central to the purpose of the claimed process. But the main aspect of the transformation test that requires clarification here is what sorts of things constitute “articles” such that their transformation is sufficient to impart patent-eligibility under § 101. It is virtually self-evident that a process for a chemical or physical transformation of physical objects or substances is patent-eligible subject matter. As the Supreme Court stated in Benson:

[T]he arts of tanning, dyeing, making waterproof cloth, vulcanizing India rubber, smelting ores ... are instances, however, where the use of chemical substances or physical acts, such as temperature control, changes articles or materials. The chemical process or the physical acts which transform the raw material are, however, sufficiently definite to confine the patent monopoly within rather definite bounds.

409 U.S. at 70, 93 S.Ct. 253 (quoting Corning v. Burden, 56 U.S. (15 How.) 252, 267-68, 14 L.Ed. 683 (1854)); see also Diehr, 450 U.S. at 184, 101 S.Ct. 1048 (process of curing rubber); Tilghman, 102 U.S. at 729 (process of reducing fats into constituent acids and glycerine).

The raw materials of many information-age processes, however, are electronic signals and electronically-manipulated data. And some so-called business methods, such as that claimed in the present case, involve the manipulation of even more abstract constructs such as legal obligations, organizational relationships, and business risks. Which, if any, of these processes qualify as a transformation or reduction of an article into a different state or thing constituting patent-eligible subject matter?

Our case law has taken a measured approach to this question, and we see no reason here to expand the boundaries of what constitutes patent-eligible transformations of articles.

Our predecessor court's mixed result in Abele illustrates this point. There, we held unpatentable a broad independent claim reciting a process of graphically displaying variances of data from average values. Abele, 684 F.2d at 909. That claim did not specify any particular type or nature of data; nor did it specify how or from where the data was obtained or what the data represented. Id.; see also In re Meyer, 688 F.2d 789, 792-93 (CCPA 1982) (process claim involving undefined “complex system” and indeterminate “factors” drawn from unspecified “testing” not patent-eligible). In contrast, we held one of Abele's dependent claims to be drawn to patent-eligible subject matter where it specified that “said data is X-ray attenuation data produced in a two dimensional field by a computed tomography scanner.” Abele, 684 F.2d at 908-09. This data *963 clearly represented physical and tangible objects, namely the structure of bones, organs, and other body tissues. Thus, the transformation of that raw data into a particular visual depiction of a physical object on a display was sufficient to render that more narrowly-claimed process patent-eligible.

We further note for clarity that the electronic transformation of the data itself into a visual depiction in Abele was sufficient; the claim was not required to involve any transformation of the underlying physical object that the data represented. We believe this is faithful to the concern the Supreme Court articulated as the basis for the machine-or-transformation test, namely the prevention of pre-emption of fundamental principles. So long as the claimed process is limited to a practical application of a fundamental principle to transform specific data, and the claim is limited to a visual depiction that represents specific physical objects or substances, there is no danger that the scope of the claim would wholly pre-empt all uses of the principle.

This court and our predecessor court have frequently stated that adding a data-gathering step to an algorithm is insufficient to convert that algorithm into a patent-eligible process. E.g., Grams, 888 F.2d at 840 (step of “deriv[ing] data for the algorithm will not render the claim statutory”); Meyer, 688 F.2d at 794 (“[data-gathering] step[s] cannot make an otherwise nonstatutory claim statutory”). For example, in Grams we held unpatentable a process of performing a clinical test and, based on the data from that test, determining if an abnormality existed and possible causes of any abnormality. 888 F.2d at 837, 841. We rejected the claim because it was merely an algorithm combined with a data-gathering step. Id. at 839-41. We note that, at least in most cases, gathering data would not constitute a transformation of any article. A requirement simply that data inputs be gathered-without specifying how-is a meaningless limit on a claim to an algorithm because every algorithm inherently requires the gathering of data inputs. Grams, 888 F.2d at 839-40. Further, the inherent step of gathering data can also fairly be characterized as insignificant extra-solution activity. See Flook, 437 U.S. at 590, 98 S.Ct. 2522.

Similarly, In re Schrader presented claims directed to a method of conducting an auction of multiple items in which the winning bids were selected in a manner that maximized the total price of all the items (rather than to the highest individual bid for each item separately). 22 F.3d 290, 291 (Fed.Cir.1994). We held the claims to be drawn to unpatentable subject matter, namely a mathematical optimization algorithm. Id. at 293-94. No specific machine or apparatus was recited. The claimed method did require a step of recording the bids on each item, though no particular manner of recording (e.g., on paper, on a computer) was specified. Id. But, relying on Flook, we held that this step constituted insignificant extra-solution activity. Id. at 294.


IV. We now turn to the facts of this case. As outlined above, the operative question before this court is whether Applicants' claim 1 satisfies the transformation branch of the machine-or-transformation test.

[21] Headnote Citing References[22] Headnote Citing References We hold that the Applicants' process as claimed does not transform any article to a different state or thing. Purported transformations or manipulations simply of public or private legal obligations or relationships, business risks, or other such abstractions cannot meet the test because they are not physical objects or substances, and they are not representative of physical objects or substances. Applicants'*964 process at most incorporates only such ineligible transformations. See Appellants' Br. at 11 (“[The claimed process] transforms the relationships between the commodity provider, the consumers and market participants ....”) As discussed earlier, the process as claimed encompasses the exchange of only options, which are simply legal rights to purchase some commodity at a given price in a given time period. See J.A. at 86-87. The claim only refers to “transactions” involving the exchange of these legal rights at a “fixed rate corresponding to a risk position.” See ′892 application cl.1. Thus, claim 1 does not involve the transformation of any physical object or substance, or an electronic signal representative of any physical object or substance. Given its admitted failure to meet the machine implementation part of the test as well, the claim entirely fails the machine-or-transformation test and is not drawn to patent-eligible subject matter.

Applicants' arguments are unavailing because they rely on incorrect or insufficient considerations and do not address their claim's failure to meet the requirements of the Supreme Court's machine-or-transformation test. First, they argue that claim 1 produces “useful, concrete and tangible results.” But as already discussed, this is insufficient to establish patent-eligibility under § 101. Applicants also argue that their claimed process does not comprise only “steps that are totally or substantially practiced in the mind but clearly require physical activity which have [sic] a tangible result.” Appellants' Br. at 9. But as previously discussed, the correct analysis is whether the claim meets the machine-or-transformation test, not whether it recites “physical steps.” Even if it is true that Applicant's claim “can only be practiced by a series of physical acts” as they argue, see id. at 9, its clear failure to satisfy the machine-or-transformation test is fatal. Thus, while we agree with Applicants that the only limit to patent-eligibility imposed by Congress is that the invention fall within one of the four categories enumerated in § 101, we must apply the Supreme Court's test to determine whether a claim to a process is drawn to a statutory “process” within the meaning of § 101. Applied here, Applicants' claim fails that test so it is not drawn to a “process” under § 101 as that term has been interpreted.

On the other hand, while we agree with the PTO that the machine-or-transformation test is the correct test to apply in determining whether a process claim is patent-eligible under § 101, we do not agree, as discussed earlier, that this amounts to a “technological arts” test. See Appellee's Br. at 24-28. Neither the PTO nor the courts may pay short shrift to the machine-or-transformation test by using purported equivalents or shortcuts such as a “technological arts” requirement. Rather, the machine-or-transformation test is the only applicable test and must be applied, in light of the guidance provided by the Supreme Court and this court, when evaluating the patent-eligibility of process claims. When we do so here, however, we must conclude, as the PTO did, that Applicants' claim fails the test.

Applicants' claim is similar to the claims we held unpatentable under § 101 in Comiskey. There, the applicant claimed a process for mandatory arbitration of disputes regarding unilateral documents and bilateral “contractual” documents in which arbitration was required by the language of the document, a dispute regarding the document was arbitrated, and a binding decision resulted from the arbitration. Comiskey, 499 F.3d at 1368-69. We held the broadest process claims unpatentable under § 101 because “these claims do not require a machine, and these claims evidently do not describe a process of manufacture*965 or a process for the alteration of a composition of matter.” Id. at 1379. We concluded that the claims were instead drawn to the “mental process” of arbitrating disputes, and that claims to such an “application of [only] human intelligence to the solution of practical problems” is no more than a claim to a fundamental principle. Id. at 1377-79 (quoting Benson, 409 U.S. at 67, 93 S.Ct. 253 (“[M]ental processes, and abstract intellectual concepts are not patentable, as they are the basic tools of scientific and technological work.”)).

Just as the Comiskey claims as a whole were directed to the mental process of arbitrating a dispute to decide its resolution, the claimed process here as a whole is directed to the mental and mathematical process of identifying transactions that would hedge risk. The fact that the claim requires the identified transactions actually to be made does no more to alter the character of the claim as a whole than the fact that the claims in Comiskey required a decision to actually be rendered in the arbitration-i.e., in neither case do the claims require the use of any particular machine or achieve any eligible transformation.

We have in fact consistently rejected claims like those in the present appeal and in Comiskey. For example, in Meyer, the applicant sought to patent a method of diagnosing the location of a malfunction in an unspecified multi-component system that assigned a numerical value, a “factor,” to each component and updated that value based on diagnostic tests of each component. 688 F.2d at 792-93. The locations of any malfunctions could thus be deduced from reviewing these “factors.” The diagnostic tests were not identified, and the “factors” were not tied to any particular measurement; indeed they could be arbitrary. Id. at 790. We held that the claim was effectively drawn only to “a mathematical algorithm representing a mental process,” and we affirmed the PTO's rejection on § 101 grounds. Id. at 796. No machine was recited in the claim, and the only potential “transformation” was of the disembodied “factors” from one number to another. Thus, the claim effectively sought to pre-empt the fundamental mental process of diagnosing the location of a malfunction in a system by noticing that the condition of a particular component had changed. And as discussed earlier, a similar claim was rejected in Grams.FN27 See 888 F.2d at 839-40 (rejecting claim to process of diagnosing “abnormal condition” in person by identifying and noticing discrepancies in results of unspecified clinical tests of different parts of body).

   FN27. We note that several Justices of the Supreme Court, in a dissent to a dismissal of a writ of certiorari, expressed their view that a similar claim in Laboratory Corp. of America Holdings v. Metabolite Laboratories, Inc. was drawn to unpatentable subject matter. 548 U.S. 124, 126 S.Ct. 2921, 2927-28, 165 L.Ed.2d 399 (2006) (Breyer, J., dissenting; joined by Stevens, J., and Souter, J.). There, the claimed process only comprised the steps of: (1) “assaying a body fluid for an elevated level of total homocysteine,” and (2) “correlating an elevated level of total homocysteine in said body fluid with a deficiency of cobalamin or folate.” Id. at 2924.


Similarly to the situations in Meyer and Grams, Applicants here seek to claim a non-transformative process that encompasses a purely mental process of performing requisite mathematical calculations without the aid of a computer or any other device, mentally identifying those transactions that the calculations have revealed would hedge each other's risks, and performing the post-solution step of consummating those transactions. Therefore, claim 1 would effectively pre-empt any application of the fundamental concept of hedging and mathematical calculations inherent*966 in hedging (not even limited to any particular mathematical formula). And while Applicants argue that the scope of this pre-emption is limited to hedging as applied in the area of consumable commodities, the Supreme Court's reasoning has made clear that effective pre-emption of all applications of hedging even just within the area of consumable commodities is impermissible. See Diehr, 450 U.S. at 191-92, 101 S.Ct. 1048 (holding that field-of-use limitations are insufficient to impart patent-eligibility to otherwise unpatentable claims drawn to fundamental principles). Moreover, while the claimed process contains physical steps (initiating, identifying), it does not involve transforming an article into a different state or thing. Therefore, Applicants' claim is not drawn to patent-eligible subject matter under § 101.

CONCLUSION Because the applicable test to determine whether a claim is drawn to a patent-eligible process under § 101 is the machine-or-transformation test set forth by the Supreme Court and clarified herein, and Applicants' claim here plainly fails that test, the decision of the Board is

AFFIRMED.

DYK, Circuit Judge, with whom LINN, Circuit Judge, joins, concurring.

While I fully join the majority opinion, I write separately to respond to the claim in the two dissents that the majority's opinion is not grounded in the statute, but rather “usurps the legislative role.” FN1 In fact, the unpatentability of processes not involving manufactures, machines, or compositions of matter has been firmly embedded in the statute since the time of the Patent Act of 1793, ch. 11, 1 Stat. 318 (1793). It is our dissenting colleagues who would legislate by expanding patentable subject matter far beyond what is allowed by the statute.

   FN1. The dissents fault the majority for “ventur[ing] away from the statute,” Rader, J., dissenting op. at 1013, and “usurp[ing] the legislative role,” Newman, J., dissenting op. at 997.

I Section 101 now 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.

35 U.S.C. § 101 (emphases added).

The current version of § 101 can be traced back to the Patent Act of 1793. In relevant part, the 1793 Act stated that a patent may be granted to any person or persons who:

shall allege that he or they have invented any new and useful art, machine, manufacture or composition of matter, or any new and useful improvement on any art, machine, manufacture or composition of matter....

1 Stat. 318, 319 § 1 (1793) (emphases added). The criteria for patentability established by the 1793 Act remained essentially unchanged until 1952, when Congress amended § 101 by replacing the word “art” with “process” and providing in § 100(b) a definition of the term “process.” The Supreme Court has made clear that this change did not alter the substantive understanding of the statute; it did not broaden the scope of patentable subject matter.FN2 Thus, our interpretation of § 101 *967 must begin with a consideration of what the drafters of the early patent statutes understood the patentability standard to require in 1793. See Diehr, 450 U.S. at 182-83, 101 S.Ct. 1048 (looking to the 1793 Act).

   FN2. See Diamond v. Diehr, 450 U.S. 175, 182, 101 S.Ct. 1048, 67 L.Ed.2d 155 (1981) (“[A] process has historically enjoyed patent protection because it was considered a form of ‘art’ as that term was used in the 1793 Act.”); Diamond v. Chakrabarty, 447 U.S. 303, 309, 100 S.Ct. 2204, 65 L.Ed.2d 144 (1980). Rather, the 1952 Act simply affirmed the prior judicial understanding, as set forth in Corning v. Burden, 56 U.S. (15 How.) 252, 14 L.Ed. 683 (1853), that Congress in 1793 had provided for the patentability of a “process” under the term “art.” Diehr, 450 U.S. at 182, 101 S.Ct. 1048.

A The patentability criteria of the 1793 Act were to a significant extent the same in the 1790 Act.FN3 The 1790 “statute was largely based on and incorporated” features of the English system and reveals a sophisticated knowledge of the English patent law and practice.FN4 This is reflected in Senate committee report FN5 for the bill that became the 1790 Act, which expressly noted the drafters' reliance on the English practice:

   FN3. In relevant part, the 1790 Act permitted patents upon “any useful art, manufacture, engine, machine, or device, or any improvement therein not before known or used.” Ch. 11, § 1, 1 Stat. 109, 110 (1790).
   FN4. Edward C. Walterscheid, To Promote the Progress of Useful Arts: American Patent Law & Administration, 1798-1836 109 (1998) (hereinafter To Promote the Progress ); see also Edward C. Walterscheid, The Early Evolution of the United States Patent Law: Antecedents (Part 1), 76 J. Pat. & Trademark Off. Soc'y 697, 698 (1994) (“[T]he English common law relating to patents was what was best known in the infant United States.”).
   FN5. Senate Committee Report Accompanying Proposed Amendments to H.R. 41, reprinted in Proceedings in Congress During the Years 1789 & 1790 Relating to the First Patent & Copyright Laws, 22 J. Pat. Off. Soc'y 352, 363 (1940).

The Bill depending before the House of Representatives for the Promotion of useful Arts is framed according to the Course of Practice in the English Patent Office except in two Instances- 22 J. Pat. Off. Soc'y at 363 (emphasis added).FN6 Likewise, the legislative history of the 1793 Patent Act reflects the same keen understanding of English patent practice. During a debate in the House over the creation of a Patent Office, for example, the Representative who introduced the bill noted that its principles were “an imitation of the Patent System of Great Britain.” 3 Annals of Congress 855 (1793).FN7

   FN6. Neither of those two instances related to patentable subject matter or was adopted in the enacted statute. The first proposed departure from the English practice was a novelty provision protecting the inventor against those who derived their knowledge of the invention from the true inventor; the second was in a requirement that patentees make a “Public Advertisement” of their invention. Such a requirement was thought necessary “in so extensive a Country as the United States.” Senate Report, reprinted in 22 J. Pat. Off. Soc'y at 363-64.
   The American statute ultimately differed in some other respects. For example, Congress rejected the English rule that the invention need only be novel in England. The American statute required novelty against the whole world and did not permit “patents of importation.” See To Promote the Progress, supra n. 4 at 95-97, 137-38. 
   FN7. Even the opposing view-urging departure from the English practice in particular respects-recognized that the English practice provided considerable guidance. See 3 Annals of Congress at 855-56 (“[Great Britain] had afforded, it was true, much experience on the subject; but regulations adopted there would not exactly comport in all respects either with the situation of this country, or with the rights of the citizen here. The minds of some members had taken a wrong direction, he conceived, from the view in which they had taken up the subject under its analogy with the doctrine of patents in England.”); see also To Promote the Progress, supra n. 4 at 216-17.
  • 968 Later, Justice Story, writing for the Supreme Court, recognized the profound influence of the English practice on these early patent laws, which in many respects codified the common law:

It is obvious to the careful inquirer, that many of the provisions of our patent act are derived from the principles and practice which have prevailed in the construction of that of England .... The language of [the patent clause of the Statute of Monopolies] is not, as we shall presently see, identical with ours; but the construction of it adopted by the English courts, and the principles and practice which have long regulated the grants of their patents, as they must have been known and are tacitly referred to in some of the provisions of our own statute, afford materials to illustrate it.

Pennock v. Dialogue, 27 U.S. 1, 18, 2 Pet. 1, 7 L.Ed. 327 (1829) (emphases added); see also Graham v. John Deere Co., 383 U.S. 1, 5, 86 S.Ct. 684, 15 L.Ed.2d 545 (1966) (noting that first patent statute was written against the “backdrop” of English monopoly practices); Sears, Roebuck & Co. v. Stiffel Co., 376 U.S. 225, 230 n. 6, 84 S.Ct. 784, 11 L.Ed.2d 661 (1964) (“Much American patent law derives from English patent law.”).

While Congress departed from the English practice in certain limited respects, in many respects Congress simply adopted the English practice without change. Both the 1790 and the 1793 Acts, for example, adopted the same 14-year patent term as in England. Both also required inventors to file a written specification-a requirement recognized by the English common law courts in the mid-eighteenth century.FN8 In addition, as discussed below, the categories of patentable subject matter closely tracked the English approach, and in certain respects reflected a deliberate choice between competing views prevalent in England at the time.

   FN8. See Christine MacLeod, Inventing the Industrial Revolution: The English Patent System, 1660-1800 48-49 (2002); To Promote the Progress, supra n. 4 at 400, 404.

B The English practice in 1793, imported into the American statutes, explicitly recognized a limit on patentable subject matter. As the Supreme Court recounted in Graham v. John Deere, the English concern about limiting the allowable scope of patents arose from an aversion to the odious Crown practice of granting patents on particular types of businesses to court favorites. 383 U.S. 1, 5, 86 S.Ct. 684, 15 L.Ed.2d 545 (1966); see also MacLeod, supra n. 8 at 15 (“But most offensive of all was the granting of monopoly powers in established industries, as a form of patronage, to courtiers whom the crown could not otherwise afford to reward.”). Parliament responded to the Crown's abuses in 1623 by passing the Statute of Monopolies, prohibiting the Crown from granting these despised industry-type monopolies. Not all monopolies were prohibited, however: the Statute expressly exempted invention-type patent monopolies. Section 6 of the Statute exempted from its prohibitions “letters patent and grants of privilege for the term of fourteen years or under, hereafter to be made, of the sole working or making of any manner of new manufactures within this realm, to the true and first inventor and inventors of such manufactures....” 21 Jac. 1. c.3, s.6 (emphases added).

Each of the five categories of patentable subject matter recognized by the 1793 Patent Act-(1) “manufacture,” (2) “machine,” (3) “composition of matter,” (4) “any new and useful improvement,” and (5) “art”-*969 was drawn either from the Statute of Monopolies and the common law refinement of its interpretation or resolved competing views being debated in England at the time. See To Promote the Progress, supra n. 4 at 239.

“ Manufacture.” At the most basic level, the 1793 Act, like the Statute of Monopolies, expressly provided for the patentability of “manufactures.” This language was not accidental, but rather reflected a conscious adoption of that term as it was used in the English practice. Id. (“It is clear that the Congress sought to incorporate into the U.S. statutory scheme in 1793 at least as much of the common law interpretation of ‘new manufactures' as was understood at the time.”).

“ Machine.” Likewise, the category of “machines” in the 1793 Act had long been understood to be within the term “manufactures” as used in the English statute. See id.; see, e.g., Morris v. Bramson, 1 Carp. P.C. 30, 31 (K.B.1776) (sustaining a patent “for an engine or machine on which is fixed a set of working needles ... for the making of eyelet-holes”) (emphasis added); MacLeod, supra n. 8 at 101 (noting, among numerous other early machine patents, seven patents on “machinery to raise coal and ores” before 1750).

“ Composition of Matter.” Although the 1790 statute did not explicitly include “compositions of matter,” this was remedied in the 1793 statute. At the time, “compositions of matter” were already understood to be a type of manufacture patentable under the English statute. See To Promote the Progress, supra n. 4, at 224 n. 4. One example is found in Liardet v. Johnson, 1 Carp. P.C. 35 (K.B.1778), a case involving a patent on a “composition” of stucco (a composition of matter). Lord Mansfield's jury instructions noted that by the time of that trial he had decided “several cases” involving compositions: “But if ... the specification of the composition gives no proportions, there is an end of his patent.... I have determined, [in] several cases here, the specification must state, where there is a composition, the proportions....” FN9

   FN9. Edward C. Walterscheid, The Nature of the Intellectual Property Clause: A Study in Historical Perspective 55 (2002) (quoting E. Wyndham Hulme, On the History of the Patent Laws in the Seventeenth and Eighteenth Centuries, 18 L.Q. Rev. 280, 285 (1902)).

“ Any new and useful improvement.” The reference to “any new and useful improvement” in the 1793 Act also adopted a consensus recently reached by the English courts. The common law courts had first ruled in Bircot's Case in the early seventeenth century that an improvement to an existing machine could not be the proper subject of a patent under the Statute of Monopolies. See Boulton v. Bull, 2 H. Bl. 463, 488 (C.P.1795). In 1776 that line of cases was overruled in Morris v. Bramson, because such a reading of the statute “would go to repeal almost every patent that was ever granted.” FN10

   FN10. Morris, 1 Carp. P.C. at 34; see also Boulton, 2 H.Bl. at 489 (“Since [ Morris v. Bramson ], it has been the generally received opinion in Westminster Hall, that a patent for an addition is good.”).

“ Art.” As the Supreme Court has recognized, a process “was considered a form of ‘art’ as that term was used in the 1793 Act.” Diehr, 450 U.S. at 182, 101 S.Ct. 1048 (citing Corning v. Burden, 56 U.S. at 267-268). The language of the Statute of Monopolies permitted patents on that which could be characterized as the “working or making of any manner of new manufactures within this realm.” 21 Jac. 1. c.3, s.6. While this language plainly applied to tangible “new manufactures” (such as machines or compositions of matter), it *970 also appeared to allow patenting of manufacturing processes as the “ working or making of any manner of new manufactures.” Thus, under the Statute of Monopolies patents could be had on the “working or making of any manner of new manufactures.” Numerous method patents had issued by 1793, including James Watt's famous 1769 patent on a “ [m]ethod of diminishing the consumption of fuel in [steam]-engines.” FN11 However, the English courts in the mid-eighteenth century had not yet resolved whether processes for manufacturing were themselves patentable under the statute, and as discussed below, the issue was being actively litigated in the English courts. In the 1793 Act Congress resolved this question by including the term “art” in the statute, adopting the practice of the English law officers and the views of those in England who favored process patents.

   FN11. Walterscheid, supra n. 9 at 355-56 (emphasis added); see also Boulton, 2 H. Bl. at 494-95 (1795) (noting that many method patents had issued).

II The question remains as to what processes were considered to be patentable in England at the time of the 1793 Act. Examination of the relevant sources leads to the conclusion that the method Bilski seeks to claim would not have been considered patentable subject matter as a process under the English statute.

A First, the language of the Statute of Monopolies-“ working or making of any manner of new manufactures ”-suggests that only processes that related to “manufactures” (including machines or compositions of matter) could be patented.

Second, the English patent practice before and contemporaneous with the 1793 Act confirms the notion that patentable subject matter was limited by the term “manufacture” in the Statute of Monopolies and required a relation to the other categories of patentable subject matter. The organization of human activity was not within its bounds. Rather, the patents registered in England under the Statute of Monopolies before 1793 were limited to articles of manufacture, machines for manufacturing, compositions of matter, and related processes. A complete list of such patents (with a few missing patents from the 17th century) was published in the mid-1800s by Bennet Woodcroft, the first head of the English Patent Office.FN12 Representative examples of patented processes at the time include: “Method of making a more easy and perfect division in stocking frame-work manufactures,” No. 1417 to John Webb (1784); “Making and preparing potashes and pearl-ashes of materials not before used for the purpose,” No. 1223 to Richard Shannon (1779); “Making salt from sea-water or brine, by steam,” No. 1006 to Daniel Scott (1772); “Milling raw hides and skins so as to be equally good for leather as if tanned,” No. 893 to George Merchant (1768); “Making salt, and removing the corrosive nature of the same, by a separate preparation of the brine,” No. 416 to George Campbell (1717); and “Making good and merchantable tough iron ... with one-fifth of the expense of charcoal as now used,” No. 113 to Sir Phillibert Vernatt (1637).

   FN12. Bennet Woodcroft, Alphabetical Index of Patentees of Inventions, from March 2, 1617 (14 James I) to October 1, 1852 (16 Victoriae) (2d ed. 1857).

Nothing in Woodcroft's list suggests that any of these hundreds of patents was on a method for organizing human activity, save for one aberrational patent discussed *971 below. Rather, the established practice reflects the understanding that only processes related to manufacturing or “manufactures” were within the statute. The English cases before 1793 recognized that the practice followed in issuing patents was directly relevant to the construction of the statute. See, e.g., Morris, 1 Carp. P.C. at 34 (declining to read the statute in such a way that “would go to repeal almost every patent that was ever granted”).

Third, nearly contemporaneous English cases following shortly after the 1793 Act lend further insight into what processes were thought to be patentable under the English practice at the time the statute was enacted. Although the issue of the validity of process patents had not conclusively been settled in the English common law before 1793, the question was brought before the courts in the landmark case of Boulton v. Bull, 2 H. Bl. 463, 465 (C.P.1795), which involved James Watt's patent for a “method of lessening the consumption of steam, and consequently fuel in [steam] engines.” FN13 In 1795, the court rendered a split decision, with two judges on each side. Boulton, 2 H. Bl. at 463 (1795). Those who viewed process patents as invalid, as did Justice Buller, urged that a method was merely an unpatentable principle: “A patent must be for some new production from [elements of nature], and not for the elements themselves.” Id. at 485. He thought “it impossible to support a patent for a method only, without having carried it into effect and produced some new substance.” Id. at 486. Justice Health similarly found that the “new invented method for lessening the consumption of steam and fuel in [steam] engines” (i.e., the Watt patent), being neither “machinery” nor a “substance [ ] (such as medicine[ ] ) formed by chemical and other processes,” was not within the Statute of Monopolies. Id. at 481-82. In contrast, Lord Chief Justice Eyres, who believed processes had long been a valid subject of patents, urged that “two-thirds, I believe I might say three-fourths, of all patents granted since the statute [of Monopolies] passed, are for methods of operating and of manufacturing.... ” Id. at 494-95 (emphasis added). He agreed that “[u]ndoubtedly there can be no patent for a mere principle; but for a principle so far embodied and connected with corporeal substances ... I think there may be a patent.” Id. at 495 (emphasis added). Justice Rooke also noted that Watt's method was within the statute because it was connected with machinery: “What method can there be of saving steam or fuel in engines, but by some variation in the construction of them?” Id. at 478. The Justices who believed process patents were valid spoke in terms of manufacturing, machines, and compositions of matter, because the processes they believed fell within the statute were processes that “embodied and connected with corporeal substances.” Id. at 495.

   FN13. The Supreme Court has in several opinions noted Boulton v. Bull in connection with its consideration of English patent practice. See, e.g., Markman v. Westview Instruments, Inc., 517 U.S. 370, 381 n. 6, 116 S.Ct. 1384, 134 L.Ed.2d 577 (1996); Evans v. Eaton, 20 U.S. (7 Wheat.) 356, 388 n. 2-3, 5 L.Ed. 472 (1822).

In 1799, on appeal from another case involving the same Watt patent, the validity of such process patents were upheld. Hornblower v. Boulton (K.B.1799), 8 T.R. 95. There, Chief Justice Lord Kenyon stated that “it evidently appears that the patentee claims a monopoly for an engine or machine, composed of material parts, which are to produce the effect described; and that the mode of producing this is so described, as to enable mechanics to produce it.... I have no doubt in saying, that this is a patent for a manufacture, which I *972 understand to be something made by the hands of man.” Id. at 99. Justice Grose agreed, finding that “Mr. Watt had invented a method of lessening the consumption of steam and fuel in [steam] engines”, and this was “not a patent for a mere principle, but for the working and making of a new manufacture within the words and meaning of the statute.” Id. at 101-02. He further noted, however, that “This method ... if not effected or accompanied by a manufacture, I should hardly consider as within the [statute].” Id. at 102-03 (emphasis added). Justice Lawrence similarly found such process patents to be permissible: “Engine and method mean the same thing, and may be the subject of a patent. ‘Method,’ properly speaking, is only placing several things and performing several operations in the most convenient order....” Id. at 106.

There is no suggestion in any of this early consideration of process patents that processes for organizing human activity were or ever had been patentable. Rather, the uniform assumption was that the only processes that were patentable were processes for using or creating manufactures, machines, and compositions of matter.

B The dissenters here, by implication at least, appear to assume that this consistent English practice should somehow be ignored in interpreting the current statute because of technological change.FN14 There are several responses to this.

   FN14. See, e.g., Rader, J., dissenting op. at 1011 (“[T]his court ties our patent system to dicta from an industrial age decades removed from the bleeding edge.”); id. (“[T]his court ... links patent eligibility to the age of iron and steel at a time of subatomic particles and terabytes....”); Newman, J., dissenting op. at 1011 (“[T]his court now adopts a redefinition of ‘process' in Section 101 that excludes forms of information-based and software-implemented inventions arising from new technological capabilities....”).

The first of these is that the Supreme Court has made clear that when Congress intends to codify existing law, as was the case with the 1793 statute, the law must be interpreted in light of the practice at the time of codification. In Schmuck v. United States, 489 U.S. 705, 718-19, 109 S.Ct. 1443, 103 L.Ed.2d 734 (1989), for example, the Court considered the proper interpretation of Rule 31(c) of the Federal Rules of Criminal Procedure. The rule, “which ha [d] not been amended since its adoption in 1944,” was a restatement of an 1872 Act “codif[ying] the common law for federal criminal trials.” Because of this fact, the Court found that the “prevailing practice at the time of the Rule's promulgation informs our understanding of its terms.” Id.; see also, e.g., Eldred v. Ashcroft, 537 U.S. 186, 200 n. 5, 123 S.Ct. 769, 154 L.Ed.2d 683 (2003) (considering the English practice at the time of the enactment of the 1790 copyright act); Tome v. United States, 513 U.S. 150, 159-60, 166, 115 S.Ct. 696, 130 L.Ed.2d 574 (1995) (looking to practice and noting that “a majority of common-law courts were performing [a task required by the common law] for well over a century” in interpreting a Federal Rule of Evidence that “was intended to carry over the common-law”); Harper & Row Publishers, Inc. v. Nation Enters., 471 U.S. 539, 549-554, 105 S.Ct. 2218, 85 L.Ed.2d 588 (1985) (relying on the history and practice of copyright fair-use when statutory provision reflected the “intent of Congress to codify the common-law doctrine”); Sprague v. Ticonic Nat'l Bank, 307 U.S. 161, 164-65, 59 S.Ct. 777, 83 L.Ed. 1184 (1939) (considering the English practice “which theretofore had been evolved in the English Court of Chancery” at the time of the 1789 Judiciary Act in *973 determining availability of costs under equity jurisdiction).

Second, the Supreme Court language upon which the dissents rely FN15 offers no warrant for rewriting the 1793 Act. To be sure, Congress intended the courts to have some latitude in interpreting § 101 to cover emerging technologies, Chakrabarty, 447 U.S. at 316, 100 S.Ct. 2204, and the categorical terms chosen are sufficiently broad to encompass a wide range of new technologies. But there is no evidence that Congress intended to confer upon the courts latitude to extend the categories of patentable subject matter in a significant way. To the contrary, the Supreme Court made clear that “Congress has performed its constitutional role in defining patentable subject matter in § 101; we perform ours in construing the language Congress has employed. In so doing, our obligation is to take statutes as we find them, guided, if ambiguity appears, by the legislative history and statutory purpose.” Id. at 315, 100 S.Ct. 2204. In Benson, the Court rejected the argument that its decision would “freeze process patents to old technologies, leaving no room for the revelations of the new, onrushing technology.” Gottschalk v. Benson, 409 U.S. 63, 71, 93 S.Ct. 253, 34 L.Ed.2d 273 (1972). Instead, the Court explained that it “may be that the patent laws should be extended to cover [such onrushing technology], a policy matter to which we are not competent to speak” but that “considered action by the Congress is needed.” Id. at 72-73, 93 S.Ct. 253.

   FN15. See, e.g., Newman, J., dissenting op. at 981 (“ ‘[C]ourts should not read into the patent laws limitations and conditions which the legislature has not expressed.’ ” (quoting Diehr, 450 U.S. at 182, 101 S.Ct. 1048)); Rader, J., dissenting op. at 1012 (same).

Third, we are not dealing here with a type of subject matter unknown in 1793. One commentator has noted:

The absence of business method patents cannot be explained by an absence of entrepreneurial creativity in Great Britain during the century before the American Revolution. On the contrary, 1720 is widely hailed as the beginning of a new era in English public finance and the beginning of major innovations in business organization.

Malla Pollack, The Multiple Unconstitutionality of Business Method Patents, 28 Rutgers Computer & Tech. L.J. 61, 96 (2002) (footnotes omitted). FN16 In the hundreds of patents in Woodcroft's exhaustive list of English patents granted from 1612 to 1793, there appears to be only a single patent akin to the type of method Bilski seeks to claim. That sole exception was a patent granted to John Knox in 1778 on a “Plan for assurances on lives of persons from 10 to 80 years of age.” FN17 Later commentators have viewed this single patent as clearly contrary to the Statute of Monopolies:

   FN16. Similarly, another commentator states: “it might be wondered why none of the many ingenious schemes of insurance has ever been protected by patenting it.” D.F. Renn, John Knox's Plan for Insuring Lives: A Patent of Invention in 1778, 101 J. Inst. Actuaries 285 (1974), available at http:// www. actuaries. org. uk/ _data/assets/pdf_file/0006/25278/0285-0289.pdf (last visited Oct. 3, 2008).
   FN17. Woodcroft, supra n. 12 at 324.

Such protection of an idea should be impossible.... It is difficult to understand how Knox's plan for insuring lives could be regarded as ‘a new manner of manufacture’; perhaps the Law Officer was in a very good humour that day, or perhaps he had forgotten the wording of the statute; most likely he was concerned only with the promised ‘very considerable Consumption of [Revenue] *974 Stamps' which, Knox declared, would ‘contribute to the increase of the Public Revenues.’ Renn, supra n. 16 at 285. There is no indication that Knox's patent was ever enforced or its validity tested, or that this example led to other patents or efforts to patent similar activities. But the existence of the Knox patent suggests that as of 1793 the potential advantage of patenting such activities was well-understood. In short, the need to accommodate technological change in no way suggests that the judiciary is charged with rewriting the statute to include methods for organizing human activity that do not involve manufactures, machines, or compositions of matter.

C Since the 1793 statute was reenacted in 1952, it is finally important also to inquire whether between 1793 and 1952 the U.S. Patent Office and the courts in this country had departed from the English practice and allowed patents such as those sought by Bilski. In fact, the U.S. Patent Office operating under the 1793 Act hewed closely to the original understanding of the statute. As in the English practice of the time, there is no evidence that patents were granted under the 1793 Act on methods of organizing human activity not involving manufactures, machines or the creation of compositions of matter. The amicus briefs have addressed the early American practice, and some of them claim that human activity patents were allowed in the early period. To the contrary, the patents cited in the briefs are plainly distinguishable.

The earliest claimed human activity patent cited in the briefs issued in 1840, entitled “Improvement in the Mathematical Operation of Drawing Lottery-Schemes.” Br. of Amicus Curiae Regulatory Datacorp 23 n.54. But that patent is fundamentally unlike the Bilski claim, since it does not claim a method of organizing human activity not involving manufactures, machines or the creation of compositions of matter. See U.S. Patent No. 1700 (issued July 18, 1840). Rather, it is directed to a scheme of combining different combinations of numbers onto a large number of physical lottery tickets (i.e., a method for manufacturing lottery tickets). Id. col.1. The other early-issued patents cited in the amicus briefs are similarly distinguishable.FN18

   FN18. See, e.g., Complemental Accident Insurance Policy, U.S. Patent No. 389,818 (issued Sept. 18, 1888) (claiming a “complemental insurance policy” as an apparatus consisting of two separate cards secured together); Insurance System, U.S. Patent No. 853,852 (issued May 14, 1907) (claiming a “two-part insurance policy” as “an article of manufacture”).
   A number of the amici also refer to the discussion and the patents cited in “A USPTO White Paper” (the “White Paper”) to establish the historical foundation of business method patents. See, e.g., Br. of Amicus Curiae Accenture 14-15 n. 11. As Judge Mayer notes, dissenting op. at 1001-02 n. 4, the White Paper does not show this proposition. As the White Paper itself recognizes, the early financial patents it discusses were largely mechanical products and methods related to financial paper, not methods for organizing human activity. White Paper at 2. Thus, while the White Paper shows that inventions in the business realm of finance and management historically enjoyed patent protection, it does little to establish that business methods directed to the organization of human activity not involving manufactures, machines or the creation of compositions of matter were similarly patentable. 

Likewise, Supreme Court decisions before the 1952 Patent Act assumed that the only processes that were patentable were those involving other types of patentable subject matter. In later cases the Supreme Court has recognized that these cases set forth the standard for process *975 patents in the pre-1952 period. Diehr, 450 U.S. at 182-84, 101 S.Ct. 1048; Gottschalk, 409 U.S. at 69-70, 93 S.Ct. 253. The leading case is Corning v. Burden, 56 U.S. 252, 15 How. 252, 14 L.Ed. 683 (1853). There, the Supreme Court discussed the patentability of processes:

A process, eo nomine, is not made the subject of a patent in our act of Congress. It is included under the general term ‘useful art.’ An art may require one or more processes or machines in order to produce a certain result or manufacture. The term machine includes every mechanical device or combination of mechanical powers and devices to perform some function and produce a certain effect or result. But where the result or effect is produced by chemical action, by the operation or application of some element or power of nature, or of one substance to another, such modes, methods, or operations, are called ‘processes.’ A new process is usually the result of discovery; a machine, of invention. The arts of tanning, dyeing, making water-proof cloth, vulcanizing India rubber, smelting ores, and numerous others are usually carried on by processes, as distinguished from machines.... It is for the discovery or invention of some practicable method or means of producing a beneficial result or effect that a patent is granted, and not for the result or effect itself. It is when the term process is used to represent the means or method of producing a result that it is patentable, and it will include all methods or means which are not effected by mechanism or mechanical combinations.

Id. at 267-68 (emphases added). In Cochrane v. Deener, the Court clarified its understanding of a patentable “process”:

That a process may be patentable, irrespective of the particular form of the instrumentalities used, cannot be disputed.... A process is a mode of treatment of certain materials to produce a given result. It is an act, or a series of acts, performed upon the subject-matter to be transformed and reduced to a different state or thing. If new and useful, it is just as patentable as is a piece of machinery. In the language of the patent law, it is an art. The machinery pointed out as suitable to perform the process may or may not be new or patentable; whilst the process itself may be altogether new, and produce an entirely new result. The process requires that certain things should be done with certain substances, and in a certain order; but the tools to be used in doing this may be of secondary consequence.

94 U.S. 780, 787-88, 24 L.Ed. 139 (1876) (emphases added). Finally, in Tilghman v. Proctor, 102 U.S. 707, 722, 26 L.Ed. 279 (1880), the Court noted:

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.

(Emphasis added). The Court's definition of a patentable process was well-accepted and consistently applied by the courts of appeals. See, e.g., P.E. Sharpless Co. v. Crawford Farms, 287 F. 655, 658-59 (2nd Cir.1923); Chicago Sugar-Refining Co. v. Charles Pope Glucose Co., 84 F. 977, 982 (7th Cir.1898).

Finally, nothing in the legislative history of the 1952 Act suggests that Congress intended to enlarge the category of patentable subject matter to include patents such as the method Bilski attempts to claim. As discussed above, the only change made by the 1952 Act was in replacing the word *976 “art” with the word “process.” The Supreme Court has already concluded that this change did not alter the substantive understanding of the statute. See Diehr, 450 U.S. at 182, 101 S.Ct. 1048 (“[A] process has historically enjoyed patent protection because it was considered a form of ‘art’ as that term was used in the 1793 Act.”).

The House Report accompanying the 1952 bill includes the now-famous reference to “anything under the sun made by man”:

A person may have “invented” a machine or a manufacture, which may include anything under the sun made by man, but it is not necessarily patentable under section 101 unless the conditions of the title are fulfilled.

H.R.1923 at 7. Although this passage has been used by our court in past cases to justify a broad interpretation of patentable subject matter, I agree with Judge Mayer that, when read in context, the statement undercuts the notion that Congress intended to expand the scope of § 101. See Mayer, J., dissenting op. at 1000. It refers to things “made by man,” not to methods of organizing human activity. In this respect, the language is reminiscent of the 1799 use of the phrase “something made by the hands of man” by Chief Justice Lord Kenyon as a limitation on patentable subject matter under the Statute of Monopolies. The idea that an invention must be “made by man” was used to distinguish “a philosophical principle only, neither organized or capable of being organized” from a patentable manufacture. Hornblower, 8 T.R. at 98. Lord Kenyon held that the patent before him was not based on a mere principle, but was rather “a patent for a manufacture, which I understand to be something made by the hands of man.” Id. at 98 (emphases added); accord American Fruit Growers v. Brogdex Co., 283 U.S. 1, 11, 51 S.Ct. 328, 75 L.Ed. 801 (1931) (giving “anything made for use from raw or prepared materials” as one definition of “manufacture”).

In short, the history of § 101 fully supports the majority's holding that Bilski's claim does not recite patentable subject matter. Our decision does not reflect “legislative” work, but rather careful and respectful adherence to the Congressional purpose.

NEWMAN, Circuit Judge, dissenting.

The court today acts en banc to impose a new and far-reaching restriction on the kinds of inventions that are eligible to participate in the patent system. The court achieves this result by redefining the word “process” in the patent statute, to exclude all processes that do not transform physical matter or that are not performed by machines. The court thus excludes many of the kinds of inventions that apply today's electronic and photonic technologies, as well as other processes that handle data and information in novel ways. Such processes have long been patent eligible, and contribute to the vigor and variety of today's Information Age. This exclusion of process inventions is contrary to statute, contrary to precedent, and a negation of the constitutional mandate. Its impact on the future, as well as on the thousands of patents already granted, is unknown.

This exclusion is imposed at the threshold, before it is determined whether the excluded process is new, non-obvious, enabled, described, particularly claimed, etc.; that is, before the new process is examined for patentability. For example, we do not know whether the Bilski process would be found patentable under the statutory criteria, for they were never applied.

The innovations of the “knowledge economy”-of “digital prosperity”-have been dominant contributors to today's economic *977 growth and societal change. Revision of the commercial structure affecting major aspects of today's industry should be approached with care, for there has been significant reliance on the law as it has existed, as many amici curiae pointed out. Indeed, the full reach of today's change of law is not clear, and the majority opinion states that many existing situations may require reassessment under the new criteria.

Uncertainty is the enemy of innovation. These new uncertainties not only diminish the incentives available to new enterprise, but disrupt the settled expectations of those who relied on the law as it existed. I respectfully dissent.

DISCUSSION The court's exclusion of specified process inventions from access to the patent system is achieved by redefining the word “process” in the patent statute. However, the court's redefinition is contrary to statute and to explicit rulings of the Supreme Court and this court. I start with the statute:

Section 101 is the statement of statutory eligibility From the first United States patent act in 1790, the subject matter of the “useful arts” has been stated broadly, lest advance restraints inhibit the unknown future. The nature of patent-eligible subject matter has received judicial attention over the years, as new issues arose with advances in science and technology. The Supreme Court has consistently confirmed the constitutional and legislative purpose of providing a broadly applicable incentive to commerce and creativity, through this system of limited exclusivity. Concurrently, the Court early explained the limits of patentable subject matter, in that “fundamental truths” were not intended to be included in a system of exclusive rights, for they are the general foundations of knowledge. Thus laws of nature, natural phenomena, and abstract ideas are not subject to patenting. Several rulings of the Court have reviewed patent eligibility in light of these fundamentals. However, the Court explicitly negated today's restrictions. My colleagues in the majority are mistaken in finding that decisions of the Court require the per se limits to patent eligibility that the Federal Circuit today imposes. The patent statute and the Court's decisions neither establish nor support the exclusionary criteria now adopted.

The court today holds that any process that does not transform physical matter or require performance by machine is not within the definition of “process” in any of the patent statutes since 1790. All of the statutes contained a broad definition of patent-eligible subject matter, like that in the current Patent Act of 1952:

35 U.S.C § 101 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 Diamond v. Diehr, 450 U.S. 175, 101 S.Ct. 1048, 67 L.Ed.2d 155 (1981) the Court explained that Section 101 is not an independent condition of patentability, but a general statement of subject matter eligibility. The Court stated:

Section 101, however, is a general statement of the type of subject matter that is eligible for patent protection “subject to the conditions and requirements of this title.” Specific conditions for patentability follow and § 102 covers in detail the conditions relating to novelty. The question therefore of whether a particular invention is novel is “wholly apart *978 from whether the invention falls in a category of statutory subject matter.”

Id. at 189-90, 101 S.Ct. 1048 (footnote omitted) (quoting In re Bergy, 596 F.2d 952, 961 (C.C.P.A.1979)).

“Process” is defined in the 1952 statute as follows:

35 U.S.C. § 100(b) The term “process” means process, art or method, and includes a new use of a known process, machine, manufacture, composition of matter, or material.

The 1952 Patent Act replaced the word “art” in prior statutes with the word “process,” while the rest of Section 101 was unchanged from earlier statutes. The legislative history for the 1952 Act explained that “art” had been “interpreted by courts to be practically synonymous with process or method.” S.Rep. No. 82-1979 (1952), reprinted in 1952 U.S.C.C.A.N. 2394, 2398, 2409-10. In Diehr the Court explained that a process “has historically enjoyed patent protection because it was considered a form of ‘art’ as that term was used in the 1793 Act.” 450 U.S. at 182, 101 S.Ct. 1048.

The definition of “process” provided at 35 U.S.C. § 100(b) is not “unhelpful,” as this court now states, maj. op. at 951 n. 3, but rather points up the errors in the court's new statutory interpretation. Section 100(b) incorporates the prior usage “art” and the term “method,” and places no restriction on the definition. This court's redefinition of “process” as limiting access to the patent system to those processes that use specific machinery or that transform matter, is contrary to two centuries of statutory definition.

The breadth of Section 101 and its predecessor provisions reflects the legislative intention to accommodate not only known fields of creativity, but also the unknown future. The Court has consistently refrained from imposing unwarranted restrictions on statutory eligibility, and for computer-implemented processes the Court has explicitly rejected the direction now taken. Nonetheless, this court now adopts a redefinition of “process” in Section 101 that excludes forms of information-based and software-implemented inventions arising from new technological capabilities, stating that this result is required by the Court's computer-related cases, starting with Gottschalk v. Benson, 409 U.S. 63, 93 S.Ct. 253, 34 L.Ed.2d 273 (1972). However, the Court in Benson rejected the restriction that is imposed today:

This court's new definition of “process” was rejected in Gottschalk v. Benson In Benson the claimed invention was a mathematical process for converting binary-coded decimal numerals into pure binary numbers. The Court explained that a mathematical formula unlimited to a specific use was simply an abstract idea of the nature of “fundamental truths,” “phenomena of nature,” and “abstract intellectual concepts,” as have traditionally been outside of patent systems. 409 U.S. at 67, 93 S.Ct. 253. However, the Court explicitly declined to limit patent-eligible processes in the manner now adopted by this court, stating:

It is argued that a process patent must either be tied to a particular machine or apparatus or must operate to change articles or materials to a “different state or thing.” We do not hold that no process patent could ever qualify if it did not meet the requirements of our prior precedents. It is said that the decision precludes a patent for any program servicing a computer. We do not so hold.

Id. at 71, 93 S.Ct. 253. The Court explained that “the requirements of our prior precedents” did not preclude patents on computer programs, despite the statement *979 drawn from Cochrane v. Deener, 94 U.S. 780, 787-88, 24 L.Ed. 139 (1876), that “[t]ransformation and reduction of an article ‘to a different state or thing’ is the clue to the patentability of a process claim that does not include particular machines.” Benson, 409 U.S. at 70, 93 S.Ct. 253. Although this same statement is now relied upon by this court as requiring its present ruling, maj. op at 956 & n. 11, the Court in Benson was explicit that: “We do not hold that no process patent could ever qualify if it did not meet [the Court's] prior precedents.” The Court recognized that Cochrane's statement was made in the context of a mechanical process and a past era, and protested:

It is said we freeze process patents to old technologies, leaving no room for the revelations of the new, onrushing technology. Such is not our purpose.

Benson, 409 U.S. at 71, 93 S.Ct. 253. Instead, the Court made clear that it was not barring patents on computer programs, and rejected the “argu[ment] that a process patent must either be tied to a particular machine or apparatus or must operate to change articles or materials to a ‘different state or thing’ ” in order to satisfy Section 101. Id. Although my colleagues now describe these statements as “equivocal,” maj. op. at 956, there is nothing equivocal about “We do not so hold.” Benson, 409 U.S. at 71, 93 S.Ct. 253. Nonetheless, this court now so holds.

In Parker v. Flook the Court again rejected today's restrictions The eligibility of mathematical processes next reached the Court in Parker v. Flook, 437 U.S. 584, 98 S.Ct. 2522, 57 L.Ed.2d 451 (1978), where the Court held that the “process” category of Section 101 was not met by a claim to a mathematical formula for calculation of alarm limits for use in connection with catalytic conversion of hydrocarbons and, as in Benson, the claim was essentially for the mathematical formula. The Court later summarized its Flook holding, stating in Diamond v. Diehr that:

The [Flook] application, however, did not purport to explain how these other variables were to be determined, nor did it purport “to contain any disclosure relating to the chemical processes at work, the monitoring of the process variables, nor 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.”

Diehr, 450 U.S. at 186-87, 101 S.Ct. 1048 (quoting Flook, 437 U.S. at 586, 98 S.Ct. 2522).

The Court explained in Flook that a field-of-use restriction to catalytic conversion did not distinguish Flook's mathematical process from that in Benson. However, the Court reiterated that patent eligibility of computer-directed processes is not controlled by the “qualifications of our earlier precedents,” again negating any limiting effect of the usages of the past, on which this court now places heavy reliance. The Court stated:

The statutory definition of “process” is broad. An argument can be made, however, that this Court has only recognized a process as within the statutory definition when it either was tied to a particular apparatus or operated to change materials to a “different state or thing.” As in Benson, we assume that a valid process patent may issue even if it does not meet one of these qualifications of our earlier precedents.[FN1]

   FN1. My colleagues cite only part of this quotation as the Court's holding in Flook, maj. op. at 955, ignoring the qualifying words “[a]n argument can be made” as well as the next sentence clarifying that this argument was rejected by the Court in Benson and is now again rejected in Flook.
  • 980 Flook, 437 U.S. at 589 n. 9, 98 S.Ct. 2522 (quoting Cochrane, 94 U.S. at 787). This statement directly contravenes this court's new requirement that all processes must meet the court's “machine-or-transformation test” or be barred from access to the patent system.

The Court in Flook discussed that abstractions and fundamental principles have never been subject to patenting, but recognized the “unclear line” between an abstract principle and the application of such principle:

The line between a patentable “process” and an unpatentable “principle” is not always clear. Both are “conception[s] of the mind, seen only by [their] effects when being executed or performed.”

Flook, 437 U.S. at 589, 98 S.Ct. 2522 (alterations in original) (quoting Tilghman v. Proctor, 102 U.S. 707, 728, 26 L.Ed. 279 (1880)).

The decision in Flook has been recognized as a step in the evolution of the Court's thinking about computers. See Arrhythmia Res. Tech., Inc. v. Corazonix Corp., 958 F.2d 1053, 1057 n. 4 (Fed.Cir.1992) (“it appears to be generally agreed that these decisions represent evolving views of the Court”) (citing R.L. Gable & J.B. Leaheey, The Strength of Patent Protection for Computer Products, 17 Rutgers Computer & Tech. L.J. 87 (1991); D. Chisum, The Patentability of Algorithms, 47 U. Pitt. L.Rev. 959 (1986)). That Flook does not support today's per se exclusion of forms of process inventions from access to the patent system is reinforced in the next Section 101 case decided by the Court:

In Diamond v. Chakrabarty the Court again rejected per se exclusions of subject matter from Section 101 In Diamond v. Chakrabarty, 447 U.S. 303, 100 S.Ct. 2204, 65 L.Ed.2d 144 (1980), the scope of Section 101 was challenged as applied to the new fields of biotechnology and genetic engineering, with respect to the patent eligibility of a new bacterial “life form.” The Court explained the reason for the broad terms of Section 101:

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. Broad general language is not necessarily ambiguous when congressional objectives require broad terms.

Id. at 315, 100 S.Ct. 2204 (quoting U.S. Const., art. I, § 8). The Court referred to the use of “any” in Section 101 (“Whoever invents or discovers any new and useful process ... or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title”), and reiterated that the statutory language shows that Congress “plainly contemplated that the patent laws would be given wide scope.” Id. at 308, 100 S.Ct. 2204. The Court referred to the legislative intent to include within the scope of Section 101 “anything under the sun that is made by man,” id. at 309, 100 S.Ct. 2204 (citing S. Rep. 82-1979, at 5, U.S.Code Cong. & Admin.News 1952, pp. 2394, 2399; H.R. Rep. 82-1923, at 6 (1952)), and stated that the unforeseeable future should not be inhibited by judicial restriction of the “broad general language” of Section 101:

A rule that unanticipated inventions are without protection would conflict with the core concept of the patent law that anticipation undermines patentability. Mr. Justice Douglas reminded that the *981 inventions most benefiting mankind are those that push back the frontiers of chemistry, physics, and the like. Congress employed broad general language in drafting § 101 precisely because such inventions are often unforeseeable.

Id. at 315-16, 100 S.Ct. 2204 (citations and internal quotation marks omitted). The Court emphasized that its precedents did not alter this understanding of Section 101's breadth, stating that “ Flook did not announce a new principle that inventions in areas not contemplated by Congress when the patent laws were enacted are unpatentable per se.” Id. at 315, 100 S.Ct. 2204.

Whether the applications of physics and chemistry that are manifested in advances in computer hardware and software were more or less foreseeable than the advances in biology and biotechnology is debatable, but it is not debatable that these fields of endeavor have become primary contributors to today's economy and culture, as well as offering an untold potential for future advances. My colleagues offer no reason now to adopt a policy of exclusion of the unknown future from the subject matter now embraced in Section 101.

Soon after Chakrabarty was decided, the Court returned to patentability issues arising from computer capabilities:

In Diamond v. Diehr the Court directly held that computer-implemented processes are included in Section 101 The invention presented to the Court in Diehr was a “physical and chemical process for molding precision synthetic rubber products” where the process steps included using a mathematical formula. The Court held that the invention fit the “process” category of Section 101 although mathematical calculations were involved, and repeated its observation in Chakrabarty that “courts should not read into the patent laws limitations and conditions which the legislature has not expressed.” Diehr, 450 U.S. at 182, 101 S.Ct. 1048 (internal quotation marks omitted) (citing Chakrabarty, 447 U.S. at 308, 100 S.Ct. 2204).

The Court distinguished a claim that would cover all uses of a mathematical formula and thus is an abstract construct, as in Benson, from a claim that applies a mathematical calculation for a specified purpose, as in Diehr. The Court stated that “a claim drawn to subject matter otherwise statutory does not become nonstatutory simply because it uses a mathematical formula, computer program, or digital computer,” id. at 187, 101 S.Ct. 1048, and explained that the line between statutory and nonstatutory processes depends on whether the process is directed to a specific purpose, see id. (“It is now commonplace that an application of a law of nature or mathematical formula to a known structure or process may well be deserving of patent protection.” (emphasis in original)). The Court clarified that Flook did not hold that claims may be dissected into old and new parts to assess their patent eligibility. Id. at 189 n. 12, 101 S.Ct. 1048.

However, the Court did not propose the “machine-or-transformation” test that this court now insists was “enunciated” in Diehr as a specific limit to Section 101. Maj. op. at 953-54. In Diehr there was no issue of machine or transformation, for the Diehr process both employed a machine and produced a chemical transformation: the process was conducted in “an openable rubber molding press,” and it cured the rubber. In discussing the known mathematical formula used by Diehr to calculate the relation between temperature and the rate of a chemical reaction, the Court recited the traditional exceptions of “laws of nature, natural phenomena, and abstract ideas,” 450 U.S. at 185, 101 S.Ct. 1048, and explained that the entirety of the process *982 must be considered, not an individual mathematical step.

The Court characterized the holdings in Benson and Flook as standing for no more than the continued relevance of these “long-established” judicial exclusions, id., and repeated that a practical application of pure science or mathematics may be patentable, citing Mackay Radio & Telegraph Co. v. Radio Corp. of America, 306 U.S. 86, 94, 59 S.Ct. 427, 83 L.Ed. 506 (1939) ( “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 and scientific truth may be.”). The Court explained that the presence of a mathematical formula does not preclude patentability when the structure or process is performing a function within the scope of the patent system, stating:

[W]hen a claim containing a mathematical formula implements or applies that formula in a structure or process which, when considered as a whole, 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 § 101.

450 U.S. at 192, 101 S.Ct. 1048. This statement's parenthetical “ e.g.” is relied on by the majority for its statement that Diehr requires today's “machine-or-transformation” test. However, this “ e.g.” does not purport to state the only “function which the patent laws were designed to protect.” Id. This “ e.g.” indeed describes the process in Diehr, but it does not exclude all other processes from access to patenting.

It cannot be inferred that the Court intended, by this “ e.g.” parenthetical, to require the far-reaching exclusions now attributed to it. To the contrary, the Court in Diehr was explicit that “an application of a law of nature or mathematical formula” may merit patent protection, 450 U.S. at 187, 101 S.Ct. 1048 (emphasis in original), and that the claimed process must be considered as a whole, id. at 188, 101 S.Ct. 1048. The Court recognized that a process claim may combine steps that were separately known, and that abstract ideas such as mathematical formulae may be combined with other steps to produce a patentable process. Id. at 187, 101 S.Ct. 1048. The steps are not to be “dissect[ed]” into new and old steps; it is the entire process that frames the Section 101 inquiry. Id. at 188, 101 S.Ct. 1048.

The Diehr Court did not hold, as the majority opinion states, that transformation of physical state is a requirement of eligibility set by Section 101 unless the process is performed by a machine. It cannot be inferred that the Court silently imposed such a rule. See maj. op. at 956 (relying on lack of repetition in Diehr of the Benson and Flook disclaimers of requiring machine or transformation, as an implicit rejection of these disclaimers and tacit adoption of the requirement). There was no issue in Diehr of the need for either machine or transformation, for both were undisputedly present in the process of curing rubber. It cannot be said that the Court “enunciated” today's “definitive test” in Diehr.FN2