Apparatus may be abstract idea in determining patent eligibility

Basics on Patent Eligible Subject Matter

Section 101 of the Patent Act defines patentable subject matter, stating that 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 therefore. These are broad categories and encompass most if not all types of ideas. However, the Supreme Court has carved out three exceptions which are ineligible for patent protections: laws of nature, physical phenomena and abstract ideas based on the reasoning that they are basic tools of scientific and technological work and should be available to all.

Holding of Bancorp v. Sunlife

Bancorp v. Sunlife is another case discussing the scope of patent eligible subject matter in relation to the abstract idea exception. The issue in that case was whether a method is eligible for patent protection when the claims recite an abstract method implemented on a computer. The Federal Circuit held that the claimed method is not eligible for patent protection for merely reciting a computer in the claims. The claimed method also did not not satisfy the machine or transformation test even though the steps required the use of a computer because the Federal Circuit looks to the underlying invention to determine whether the ‘invention’ satisfies the machine or transformation test and not to whether the claims recited some form of apparatus (i.e., computer).

Underlying invention determines whether subject matter is eligible for patent protection

The Federal Circuit recognized that in In re Alappat (Fed. Cir. 1994), they had declined to decide whether a claimed apparatus could be unpatentably abstract under Section 101. Since In re Alappat, the court opined on Cybersource and CLS which looked to the underlying invention for patent eligibility purposes. As such, the Federal Circuit held that an apparatus claim could be directed to an abstract idea because the patent eligibility analysis is directed to the underlying invention. Here, the claims of the patent at issue were directed to a known accounting process on a computer. As such, the Federal Circuit affirmed the district court’s approach of treating the apparatus claims no differently from the method claims for patent eligibility purposes.

Computer technology is eligible for patent protection

The court admitted that computer technology is eligible for patent protection but that in the instant case, the patentee attempted to patent the use of the abstract idea of managing a stable value protected life insurance policy and then instruct the use of well-known calculations to help establish some of the inputs into the equation. The computer implementation merely helped the process to be more efficient. The court compared the instant case to Research Corp. in which a patent protected computer implemented printing process producing higher quality halftone images while using less processing power and memory space was held to be patent eligible subject matter.

Set aside insignificant limitations to determine eligibility based on remaining features

In analyzing the claims of the patent at issue, the Federal Circuit explained that when the insignificant computer based limitations were set aside, the question under Section 101 reduced to an analysis of what additional features remain in the claims. The Federal Circuit found each of the limitations were merely mathematical computations, and thus, the claims were directed to the abstract idea of managing a stable value protected life insurance policy by performing calculations and manipulating the results.

It is now more important to discuss the invention with a patent attorney who is familiar with the various rules and current case law to draft and highlight the invention to the patent examiner in a unique manner, and ultimately, to the judge and jury in the event the patent is litigated.

I invite you to contact me with your patent questions at (949) 433-0900 or Please feel free to forward this article to your friends. As an Orange County Patent Lawyer, I serve Orange County, Irvine, Los Angeles, San Diego and surrounding cities.

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James Yang is a patent attorney whose practice encompasses all areas of intellectual property law including patents, trademarks, copyrights and trade secrets.

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James Yang is an Orange County patent lawyer and welcomes potential clients throughout California including Orange County, Riverside County, Los Angeles, San Diego, Santa Ana, Irvine, Orange, Anaheim, Newport Beach, Huntington Beach, Tustin, Brea, Fullerton, Buena Park, Mission Viejo, Lake Forest, Laguna Niguel, Stanton, San Clemente, Laguna Hills, Laguna Niguel, Cypress, Laguna Beach, Coto de Caza, Costa Mesa, Aliso Viejo, Ladera Ranch, Dana Point and Foothill Ranch.