What can Practitioners do in light of Alappat , Lowry , Trovato and similar cases?

TABLE OF CONTENTS

I. INTRODUCTION: OLD QUESTIONS ANSWERED AND NEW QUESTIONS RAISED

II. THE PRIMARY AUTHORITIES: BENSON, FLOOK, CHAKRABARTY, AND DIEHR

A. Benson: Unapplied Mathematical Processes Are Not Patentable

B. Flook: A Mathematical Formula To Set Alarm Limits Is Nonstatutory

C. Chakrabarty: New Technology Is Not Excluded By 101

D. Diehr: Process For Curing Synthetic Rubber Which Includes The Use Of A Mathematical Formula And A Digital Computer Is Statutory

III. SECTION 101 DECISIONS FRAMED IN TERMS OF A MATHEMATICAL ALGORITHM AND THE DEVELOPMENT OF THE FREEMAN-WALTER-ABELE TWO-STEP TEST

A. Freeman: The Initial Statement of the Two-Step Test

B. Walter: Restricts The Two-Step Test

C. Abele: Expands The Scope of Statutory Inventions

IV. THE USE OF 6 IN 101 DETERMINATIONS

A. The Walter Burden (or Test)

B. Iwahashi Uses 6 To Read Digital Circuits Disclosed In The Specification Into The Claims

C. Arrhythmia: Dr. Simson Survives the Walter Test

D. Donaldson: 6 Applies To The PTO's Examination Of Patent Applications At Least In the Context Of 102 And 103

V. DISSATISFACTION WITH THE TWO-STEP TEST AND ITS

RELIANCE ON "MATHEMATICAL ALGORITHMS"

A. Arrhythmia: Rader's Concurring Opinion

B. Schrader Stretches The Two-Step Test Too Far

VI. ALAPPAT: SHIFTING FOCUS FROM THE "MATHEMATICAL ALGORITHM" TO RELIANCE ON THE PRIMARY AUTHORITIES

A. Paragraph 6 Applies To The PTO

B. The Dissent Rejects The Majority's Use Of 6

C. Both The Majority And The Dissent Focus On The Primary

Authorities

VII. IS DATA STORED IN MEMORY STATUTORY SUBJECT

MATTER?

A. Warmerdam: Data Structures Are Statutory

1. Warmerdam's Hierarchy of Bubbles

2. Court "Eschews" The Mathematical Algorithm Test

3. Warmerdam's Data Structure Is Statutory And Definite

B. Lowry Holds Stored Data Structure To Be Statutory

1. Lowry's Data Structure: Data Organized In Accordance With "Attributive Data Model"

2. Printed Matter Rejection Does Not Apply To Recited Data Structure

3. The Criteria For Statutory Data Structures

C. Beauregard: Computer Program Product Claims Are Patentable!

D. The Federal Circuit's Remand of Beauregard Answers Some Questions But Leaves Other Questions Unanswered

E. Where Is The "Magic Dividing Line"?

VIII. ALAPPAT LEAVES UNANSWERED QUESTIONS: IS THE TWO-STEP TEST STILL GOOD LAW? HOW WILL 6 BE APPLIED?

A. Trovato: Only Discloses A Software Embodiment

B. Fraenkel: Discloses Both Hardware And Software Embodiments

IX. THE USE OF 6 TO DETERMINE THE SCOPE OF A CLAIM

A. The Dual Nature of 6

B. "Insignificant" Structure

C. The Consequences Of Applying 6

D. How Should 6 Be Applied In A 101 Analysis?

E. The PTO Gives A Peek At Its New Guidelines

X. CONCLUSION: SOUND SPECIFICATION AND CLAIM DRAFTING IS THE KEY TO OBTAINING STATUTORY PATENTS

I. INTRODUCTION: OLD QUESTIONS ANSWERED AND NEW QUESTIONS RAISED

The past sixteen (16) months have been a banner season for decisions which considered whether software can be proper subject matter for patents under 35 U.S.C. 101. Like waves striking the beach at high tide, no less than eight (8) decisions and orders have rolled out of the Federal Circuit. First, there was In re Donaldson,[1] followed in succession by In re Schrader,[2] In re Alappat,[3] In re Warmerdam,[4] In re Lowry,[5] In re Trovato,[6] In re Fraenkel[7] and In re Beauregard.[8] As each of the decisions or orders was issued, old questions were answered and new questions were raised. This paper will attempt to describe the present state of the law in terms of the questions answered and raised by these new decisions.

These new decisions demonstrate that the United States Court of Appeals for the Federal Circuit (herein the "Federal Circuit") repeatedly has struggled with the issue of determining whether software related inventions pass muster under 101. First, the Federal Circuit struggled with the issue of how to analyze the claims under 35 U.S.C. 112 6. Secondly, the Federal Circuit struggled over the issue of whether software related claims, as properly interpreted under 6, fit one of the definitions stated in 101 as proper subject matter for patentability.

Section 101 defines which inventions are proper subject matter for patentability as follows:

Whoever invents or discovers any new and useful process, machine, manufacturer, 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.

The Federal Circuit and its predecessor, the Court of Customs and Patent Appeals (C.C.P.A.), have often stated that 101 analyses must be made in terms of the invention as claimed. To determine what a claim means, we need to turn to 6 which reads:

An element in a claim for a combination may be expressed as a means or step for performing a specified function without the recital of structure, material, or acts in support thereof, and such claim shall be construed to cover the corresponding structure, material, or acts described in the specification and equivalents thereof.

Curiously, much of the case law interpreting 101 has not dealt with defining the four (4) categories of statutory invention listed in that section. Rather, an early framework for 101 determinations evolved around a two-step test, which arose from a series of decisions of the C.C.P.A., including, In re Freeman,[9] In re Walter,[10] and In re Abele.[11]

Under fire from the press for allegedly issuing patents on obvious and/or nonstatutory inventions in the computer field,[12] the Patent and Trademark Office (herein the "PTO") published an "analysis,"[13] to "tighten up" its standards under the Freeman-Walter-Abele two-step test for determining which mathematical algorithms and computer programs are statutory. The Patentable Subject Matter Guidelines have well served the patent bar, instructing the patent drafter how to prepare an application to avoid the pitfalls of 101, and the PTO, instructing Patent Examiners how to identify statutory inventions.

However, a problem soon emerged as to how the PTO applied 6 to determine subject matter patentability under 101. At least as early as Walter, the C.C.P.A. had recognized that the underlying nature of the specification could influence how 6 would be applied. Walter argued in effect that 6 permitted him to convert the step recitations of his method claims which had been held nonstatutory into apparatus claims, by merely inserting "means for" in front the nonstatutory step recitations. Walter argued that such apparatus claims must, as the name implied, be drawn to apparatus and therefore such claims were the proper subject matter for patents under 101. The C.C.P.A referred to the specification of the patent application, as required by 6, to determine whether the "means plus function" clauses of his nominal apparatus claim did in fact recite a "specific" structure or apparatus. However, the Walter court concluded that Walter's claims did not recite the required "specific apparatus" and therefore were nonstatutory. This conclusion was based on the courts analysis that Walter's specification contained only computer programs, which according to the Walter court were not "specific apparatus." Thus means plus function clauses supported by computer programs were potentially nonstatutory, unless the applicant met the burden, the Walter burden if you will, of showing that real structure was included in the specification.

Despite the language of 6 and the Federal Circuit's reference to the specification in Walter, the PTO refused to use 6 to determine whether a claimed invention passed muster under 101. The Federal Circuit then issued two decisions in November of 1989, In re Grams[14] and In re Iwahashi[15], both of which involved 101. To the dismay of the PTO, the Federal Circuit in Iwahashi interpreted 6 to permit the use of a patent's specification in a 101 analysis of the claimed invention. Responding to Iwahashi, the PTO published in March, 1990, its "Notice Interpreting In Re Iwahashi (Fed. Cir. 1989)".[16] The clear import of the Iwahashi Notice was that patent applicants will not be permitted to use their specifications to interpret their claims during examination before PTO.

The power struggle between the PTO and the Federal Circuit ended abruptly when the court decided Donaldson and Alappat. The Federal Circuit, sitting in banc, unequivocally held that the PTO could not ignore 6 when examining applications pending before it. Donaldson applied 6 to anticipation and obviousness determinations under 102 and 103. Alappat applied 6 to statutory matter determinations under 101.

While Alappat answered the question of whether 6 should be applied to 101 determinations in the affirmative, it left unanswered how that section should be applied. On the one hand, both Judge Rich, writing for the majority, and Chief Judge Archer, for the dissent, would use 6 to identify the portions of the specification corresponding to each means plus function recitation of a claim and then "correlate" any "structure" disclosed in that related portion to such recitation. On the other hand, the majority and the dissent disagreed on how to apply the specifications under 6 to determine if the claims were proper subject matter for patents under 101. Chief Judge Archer, writing for the dissent, concluded that the majority did not go far enough in determining whether the correlated structure disclosed in the specifications was in fact significant to the invention recited in the claims.

The most recent decisions coming before the Federal Circuit involving 6 were Fraenkel and Trovato. The Federal Circuit characterized Trovato's specification as primarily containing computer programs with only minimal structure. Based on that characterization, the court held Trovato's claims to be nonstatutory. By contrast, the Fraenkel specification first disclosed a hardware embodiment in terms of functional block diagrams and a second embodiment in terms of a programmed general purpose computer. Fraenkel relied on Alappat, arguing that he had a hardware disclosure and that his means plus function claims must be construed under 6 to recite specific structure. Since the appealed decision of the PTO's Board of Appeals and Patent Interferences (herein the "Board") did not include a 6 analysis of the underlying specification to interpret Trovato's means plus function apparatus claims, the court ordered on May 12, 1995 that the appeal be returned to the Board to perform the require analysis under 6. The court's remand clearly raises the question as to how the underlying specification should be analyzed under 6. Should the mere presence of the well known digital circuits such as were present in Iwahashi and Alappat be a sufficient basis for holding the claims so supported to be statutory? Or, as urged by the PTO in Fraenkel and Chief Judge Archer in his Alappat dissent, should there be a further analysis of the underlying specification as to the nature of the disclosed functional block diagrams or to the significance of the disclosed circuits to determine what the applicant actually has invented? As discussed below, these questions remain unanswered.

To date, the Federal Circuit and the PTO have largely ignored the last phrase of 6 which requires a determination of what are the "equivalents" of the correlated structure or steps disclosed in the specification. Consideration of the "equivalents thereof" would undoubtedly broaden claims and tend to render them nonstatutory.

In Alappat, the Federal Circuit refocused the test used to determine subject matter patentability under 101. The court did not mention the Freeman-Walter-Abele two-step test by name. Rather, both the Alappat majority and dissent stated that 101 determinations must be made in accordance with the "primary authorities", that is, the language of 101 and the trilogy of Supreme Court decisions Gottschalk v. Benson,[17] Parker v. Flook[18] and Diamond v. Diehr.[19] In Warmerdam, Judge Plager "eschewed" the search for a mathematical algorithm required by the two-step test in favor of a determination of whether Warmerdam's method of constructing his data structure was merely that "abstract idea" proscribed by Diehr. Trovato has clarified that the oft used Freeman-Walter-Abele two-step test is not the only protocol available for determinations under 101. The Trovato court, after it applied the oft used two-step test, further used the "manipulation of abstract ideas" test employed in Warmerdam indicating that it was an acceptable "alternative analysis" under 101.

In Lowry and Beauregard, the Federal Circuit has given the green light to claims which merely recite the storage of information on a memory. Though both the Lowry and Beauregard claims indicated that the data is intended to processed by a machine, namely a computer, these claims do not positively recite the computer. The Federal Circuit has in Beauregard and Lowry discarded the use of the printed matter rejection at least to claims reciting stored data which is intended to be used by a machine, but has failed to set any limits for such stored data claims, much less detailed how such claims should be examined under the Freeman-Walter-Abele two-step test or the "alternative analysis" of Warmerdam. This raises the question of whether the Federal Circuit has now declared an open season for the patenting of music or the spoken word stored on a CD as anticipated by the Board's decision in Beauregard or Chief Judge Archer in his Alappat dissent.

In the course of the Beauregard proceedings, the PTO has indicated that it is in the process of preparing new Guidelines (herein the "New Guidelines"), which would hopefully answer these posed questions and, in the process, help the patent Examiner and drafter to produce statutory patents.

II. THE PRIMARY AUTHORITIES: BENSON, FLOOK, CHAKRABARTY, AND DIEHR

Although there was strong disagreement between the majority and the dissent in Alappat on whether Alappat's claims were proper subject matter for patents under 101, the Federal Circuit continued the trend of narrowing exceptions to statutory s ubject matter by referring to what the court considered were the primary authorities, namely, the language of 101 and Supreme Court decisions. The Supreme Court specifically addressed the issue of whether computer program related inventions are proper subject matter for patenting in three decisions, Gottschalk v. Benson[20], Parker v. Flook[21], and Diamond v. Diehr[22]. These decisions, along with the Supreme Court's decision in Diamond v. Chakrabarty[23], demonstrate a trend by the Court that 101 should be read broadly and should not be construed to exclude new technology, including software.

A. Benson: Unapplied Mathematical Processes Are Not Patentable

In Gottschalk v. Benson[24], the Supreme Court first considered the patentability of a computer program. The patent application involved a method of programming a general-purpose digital computer to convert signals from binary-coded decimal form into pure binary form. An example of the BCD system is shown as follows:

Shown as the sum of powers of 2

2<3>

2<2>

2<1>

2<0>

Pure Binary

Decimal

(8)

(4)

(2)

(1)

0 =

0 +

= 0000

1 =

0 +

0 0

2<0> = 0001

2 =

0 +

0 2<1>

0 = 0010

3 =

0 +

0 2<1>

2<0> = 0011

The application involved method claims[25] only. The PTO rejected the application for lack of patentable subject matter, which was reversed by the C.C.P.A. The government obtained certiorari.

The Supreme Court reinstated the rejection of the claims under 101. In its opinion, the Court noted that the application attempted to claim a mathematical formula and the analytical steps involved in solving the formula.[26] The Court pointed out that the claims were "not limited to any particular embodiment" and that conversion of BCD numerals to pure binary numerals "can be done mentally" through use of the table shown above[27].

The Court found that the claims fell within one of the limited exceptions to the definition of patentable subject matter under 101. In its review of precedents, the Court found that as a general rule that "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." The Court, relying upon Funk Bros. Seed Co. v. Kalo Inoculant Co.[28], concluded "If there is to be invention from such a discovery, it must come from the application of the law of nature to a new and useful end."[29]

The Court held that the claims were unpatentable because they were "so abstract and sweeping as to cover both known and unknown uses" with or without any apparatus[30]. In that light, the method claims were drawn to the principle of the mathematic conversion itself rather than a physical embodiment or a "transformation and reduction of an article 'to a different state or thing.'" The Court concluded that the claims in question would have the "practical effect" of wholly pre-empting any use of the mathematical steps in the conversion formula.[31]

The Court expressly stated in Benson that its holding should not be construed as excluding computer programming from patentable subject matter:

It is said that the decision precludes a patent for any program servicing a computer. We do not so hold. It is said that we have before us a program for a digital computer but extend our holding to programs for analog computers. We have, however, made clear from the start that we deal with a program only for digital computers. 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. What we come down to in a nutshell is the following.

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. . .[32]

Despite this language, Benson had the consequence of suggesting that a computer program is unpatentable.

B. Flook: A Mathematical Formula To Set Alarm Limits Is Nonstatutory

Flook[33] analyzed a method claim[34] for updating an alarm limit of at least one variable involved in a process for the catalytic conversion of hydrocarbons. The sole novelty in Flook's claims resided in the mathematical algorithm for calculating the updated alarm limit.

The PTO contended that the only novelty was the use of a newly-identified formula that permitted calculation of the appropriate alarm limit for the catalytic process under varying conditions. The C.C.P.A. reversed on the ground that the claims were limited to the use of the new formula to update continuously alarm limits in the specific catalytic processing of hydrocarbons. The PTO sought review to avoid the need to "process thousands of additional patent applications" on computer programs.

Flook urged that his method was not applicable to all updating processes but only to those related to the catalytic conversion process recited in the preamble of his claim. Flook also argued that his post-solution activity, i.e., the adjustment of the alarm limit to the figure computed according to the formula, would make his process patentable. The Court rejected these arguments, holding that a claim need not "wholly preempt" all uses of a mathematical algorithm to be nonstatutory.

The Flook decision is based on two rationales. First, applying the so-called "point of novelty test," the Supreme Court held that the discovery of a "phenomenon" such as Flook's mathematical algorithm "cannot support a patent unless there is some other inventive concept in its application."[35] Though now discarded, the "point of novelty test" assumed for the purposes of the 101 analysis that the recitation of any mathematical algorithm was part of the prior art. If the remainder of the claim was new and obvious, the claim was deemed statutory. Because novelty often resides in the functions defined by the mathematical algorithm, the "point of novelty test" had the chilling effect of denying patent protection to many, if not most, inventions involving a mathematical algorithm. Secondly, the Supreme Court held that Flook's post-solution activity would not save his process, stating:

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. 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.[36]

Analyzing the Flook claim in light of subsequent cases, it is easy to see why his method was held nonstatutory. The sole reference to his catalytic conversion process is found in the preamble as a "field of use" limitation. All of the recited steps in the claim, including his post-solution activity, make no reference to his field of use. The output of the claimed process, the "alarm limit", is a number. Flook's specification did not support an expansive reading of his claims. The Supreme Court characterized his specification as failing to explain the nature of the variables of the Flook algorithm, how the chemical process worked, how the variables were monitored, or what the means were for setting or adjusting the alarm limit; all that was described was the mathematical algorithm.

The Court emphasized in Flook that the mere fact that a claim may contain an algorithm does not render the entire claim unpatentable.[37] In fact, the Court noted in Flook, which the Court later emphasized in Diehr, that claims must be considered as a whole. Even if certain components of a claim may be nonstatutory subject matter by themselves, the combinations and functions recited in the claim may be patentable if the combinations create a new and useful invention[38]. The Court noted that the claims recited in Flook, when considered as a whole, were directed to a method of calculating[39], which clearly is nonstatutory.

C. Chakrabarty: New Technology Is Not Excluded By 101

The Chakrabarty[40] decision did not involve software; however, the decision is important in appreciating the Court's trend and emphasis on limiting judicially created exceptions to patentable subject matter under 101.

In Chakrabarty, the Court held that a live, human-made micro-organism is patentable subject matter under 101. The Board had determined that 101 was not intended to cover living things such as laboratory created micro-organisms. The C.C.P.A. reserved the Board's ruling; however, the PTO obtained certiorari.

The PTO argued that the judiciary could not extend patent rights to technology which was unforeseen by Congress. Therefore, new technology, such as genetic engineering, could not qualify as patentable subject matter until Congress expressly authorized such protection[41].

The Court rejected the PTO's argument. The Supreme Court found that Chakrabarty's claimed invention constituted a "manufacture" and "composition of matter", which fall squarely as patentable subject matter under 101[42].

The Court pointed out that Congress' choice of the term "any" to identify a new and useful process, machine, manufacture, or composition of matter which would be proper subject matter indicated that "Congress plainly contemplated that the patent laws would be given wide scope."[43] The Court noted that the relevant legislative history supported the philosophy of Thomas Jefferson, who authored the Patent Act of 1793, that "ingenuity should receive a liberal encouragement." The Committee Reports accompanying the 1952 Act "inform us that Congress intended statutory subject matter to 'include anything under the sun that is made by man.'"[44] The Court re-emphasized the limited exceptions to patentable subject matter: laws of nature, physical phenomena and abstract ideas. The Court then restated its admonition that "courts should not read into the patent laws limitations and conditions which the legislature has not expressed."

The Court rejected the Board's argument that Flook stood for the proposition that the judiciary could not extend patent rights to technology which was unforeseen by Congress[45]. The Supreme Court noted:

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.

To read that concept into Flook would frustrate the purposes of the patent law. This Court frequently has observed that a statute is not to be confined to the "particular applications . . . contemplated by the legislators. . . . (citations omitted)." This is especially true in the field of patent law. A rule that unanticipated inventions are without protection would conflict with the core concept of the patent law that anticipation undermines patentability.[46]

Thus, Chakrabarty emphasized that (a) 101 should be construed broadly to determine patentable subject matter, (b) laws of nature, physical phenomena and abstract ideas are the only exception to patentable subject matter under 101 and (c) courts should not judicially create additional exceptions to the definition of patentable subject matter under 101.

D. Diehr: Process For Curing Synthetic Rubber Which Includes The Use Of A

Mathematical Formula And A Digital Computer Is Statutory

Although the Supreme Court in Benson and Flook cautioned that these decisions did not deny protection to all computer programs, Diamond v. Diehr[47], was the first decisions of the Supreme Court specifically holding a computer process to be statutory subject matter within the definition of 101. Diehr claimed an invention related to a "method of operating a rubber-molding press" by using the well known Arrhenius equation to control the cure time of synthetic rubber.[48] Prior efforts to predict, accurately, cure conditions were limited by the inability to assess instantaneous changes in the temperature inside the molding press. Diehr's invention "continuously measure[ed] the actual temperature in the closed press through the use of a thermocouple," and, then, using the instantaneous value of temperature in a known standard formula, calculated continuously the predicted time when the cure should be completed. Diehr urged that his method represented an improvement over the prior art.

The PTO rejected the claims under 101. On reversing, the C.C.P.A. held that the claims as drawn recited an improvement in the process previously done manually by the addition of the computer program.

The Supreme Court affirmed the claims patentability under 101. The Court enunciated a set of guidelines for distinguishing statutory and nonstatutory inventions and then, applied these guidelines to the Diehr invention. First, the Court defined nonstatutory subject matter as,

Excluded from such patent protection are laws of nature, physical phenomena and abstract ideas (citations omitted). An idea of itself is not patentable. 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.[49]

Referring to its previous Benson and Flook decisions, the Court noted that an algorithm programmed for execution by a general purpose digital computer was like a law of nature, which cannot be the subject of a patent. The algorithm in question was narrowly defined as one for "solving a given type of mathematical problem." On the other hand, a "claim drawn to subject matter otherwise statutory does not become nonstatutory simply because it uses a mathematical formula, computer program or digital computer."[50] While excluding laws of nature and ideas of themselves, the Court stated that

An application of a law of nature or mathematical formula to a known structure or process may well be deserving of patent protection.

To determine whether the algorithm in question is directed to such an application, the Court offered the following guidelines:

In determining the eligibility of respondents' claimed process for patent protection under Section 101, their claims must be considered as a whole. 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. This is particularly true in a process claim because a new combination of steps in a process may be patentable even though all the constituents of the combination were well known and in common use before the combination was made. The "novelty" of any element or steps in a process, or even of the process itself, is of no relevance in determining whether the subject matter of a claim falls within the section 101 categories of possibly patentable subject matter[51].

Clearly, the decision process involves an analysis of the claim recitations to determine the relationship of the claimed mathematical algorithm to the other steps of the process or elements of the apparatus. The "transforming or reducing an article to a different state or thing" is evidence of statutory subject matter. However, the Court warned that the mere limiting of a claimed formula or mathematical algorithm "to a particular technological environment" or the recitation of "insignificant post solution activity will not transform an unpatentable principle into a patentable process."

The Supreme Court concluded:

Their process admittedly employs a well known mathematical equation, but they do not seek to pre-empt the use of that equation. Rather, they seek only to foreclose from others the use of that equation in conjunction with all of the other steps in their claimed process. These include installing rubber in a press, closing the mold, constantly determining the temperature of the mold, constantly recalculating the appropriate cure time through the use of the formula and a digital computer, and automatically opening the press at the proper time.[52]

Thus the Court held that the Diehr process, as claimed, to be statutory subject matter, concluding that, "the respondents here do not seek a patent to a mathematical formula. Instead, they seek patent protection for a process of curing synthetic rubber."[53]

What can be determined from the Court's decisions in Benson, Flook, Chakrabarty and Diehr are the following: (1) computer programs are not per se, unpatentable subject matter, (2) claims should be considered as a whole, (3) 101 should be construed broadly to determine patentable subject matter, with only laws of nature, physical phenomena and abstract ideas as being nonstatutory, and (4) courts are admonished from reading into 101 exceptions to patentable subject matter. However, as discussed below, these admonitions have not always been followed faithfully.

III. SECTION 101 DECISIONS FRAMED IN TERMS OF A MATHEMATICAL ALGORITHM AND THE DEVELOPMENT OF THE FREEMAN-WALTER-ABELE TWO-STEP TEST

A. Freeman: The Initial Statement of the Two-Step Test

Picking up a cue from Benson that claims which pre-empt a mathematical algorithm are not patentable, the C.C.P.A. in Freeman[54] enunciated its two-step test as follows:

Determination of whether a claim preempts nonstatutory subject matter as a whole, in the light of Benson, requires a two-step analysis. First, it must be determined whether the claim directly or indirectly recites an "algorithm" in the Benson sense of that term, for a claim which fails even to recite an algorithm clearly cannot wholly preempt an algorithm. Second, the claim must be further analyzed to ascertain whether in its entirety it wholly preempts that algorithm.[55]

The court clarified that the algorithm of concern in Benson was limited to a mathematical algorithm, as opposed to a broader definition of an algorithm as any step-by-step procedure for solving a problem.

Freeman disclosed a typesetting system particularly adapted for retrieving mathematical characters or symbols from a font library memory and spatially orienting them with respect to each other in a manner to be displayed and printed. While noting that only the specification of Freeman disclosed that his claimed invention was implemented with computer programs, the court initially focused the two-step test on the claim language. The C.C.P.A. clearly interpreted the claimed process of "assigning concatenation points to each character to be displayed" and of "generating position signals specifying the relative position of the characters to the concatenation points" in light of that "local positioning algorithm" described in the Freeman specification. While Freeman used the term "algorithm" in his specification to describe his processing, the court concluded that Freeman's "local positioning algorithm" was not an algorithm in the Benson sense and, therefore, the claimed invention of Freeman was held statutory without any need to consider the second step.

B. Walter: Restricts The Two-Step Test

Walter[56] restricted the scope of the second step. The Walter invention related to a method of seismic prospecting and surveying, including the steps of transmitting seismic source waves into the earth, sensing and converting the reflected waves by a "method of correlating" to a more usable form which were recited in his claims [57] as "partial product signals". The C.C.P.A. restated the second step of its Freeman two-step test as follows:

Once a mathematical algorithm has been found, the claim as a whole must be further analyzed. If it appears that the mathematical algorithm is implemented in a specific manner to define structural relationships between the physical elements of the claim (in apparatus claims) or to refine or limit claim steps (in process claims), the claim being otherwise statutory, the claim passes muster under 101. If, however, the mathematical algorithm is merely presented and solved by the claimed invention, as was the case in Benson and Flook, and is not applied in any manner to physical elements or process steps, no amount of post-solution activity will render the claim statutory; nor is it saved by a preamble merely reciting the field of use of the mathematical algorithm.[58]

The C.C.P.A. first focused on Walter's method claims for seismic exploration and held them nonstatutory under the restricted second step. The court acknowledged that the Walter method claims clearly recited a mathematical algorithm, and then proceeded to determine whether the recited mathematical algorithm was applied to physical elements or process steps. The court noted that most of the claims were in a Jepson format, wherein the claim's preamble sets forth the environment of "seismic surveying" in which the improved "method of correlating" operates.[59]

The court deemed the step of "correlating" to be essentially mathematical in nature, and characterized the positively-claimed invention, i.e., the steps of the correlating method, as a mathematical method for interpreting the results of seismic prospecting.[60] Walter's method claims, when analyzed, contained data-gathering steps, an essentially mathematical method of correlating, and "post-solution activity", namely, the outputting of "partial product signals", which the court did not find particularly physical.

Walter's main argument was that his method claims were not directed to a mathematical procedure, i.e., did not meet the requirements of the second step, but rather were a method of producing his partial product signals, which represent physical phenomena, i.e., "the characteristics of subterranean geostructure." Finding that "the nature of the resulting 'partial product signals' is not clear," the court turned to the Walter specification, which "states that the 'signals' comprise 'a record somewhat similar to that which would have been produced if the original seismic wave had been in the form of an impulse'." In holding that Walter's "partial product signals" were "a mathematical result", the court reasoned that "a simulation of something physical is produced by a process akin to mathematical modeling."[61]

Walter is instructive as much for its conclusion that his claims of seismic exploration were nonstatutory, as for the court's methodology in reaching that conclusion. Implicit in the Walter analysis is the premise that the court will, at least in the first instance, examine the invention in terms of its claims. Only if the claim language is unclear, then the specification will be used to clarify the meaning of the language. Unable to find that Walter's "partial product signals" related to a physical structure, the court concluded that his claims were nonstatutory.

C. Abele: Expands The Scope of Statutory Inventions

Abele[62] expands the scope of inventions included in 101, and shows how the specification is used to interpret the claims in a 101 analysis.

Abele's invention, as disclosed in his specification, related to computed tomography for displaying an image representing a transverse slice or section of a patient's body. An X-ray source disposed on one side of the section and a sensor on the other, were rotated about the perimeter of the section. The sensor detected the X-rays passing through the section and provided a signal indicative of the features of the section. An object such as rib may interfere with X-ray transmission to reproduce an artifact within the displayed image. Abele's invention used a weighting function to process the output of the sensor, whereby artifacts may be eliminated.[63]

Abele's method claims 5 and 6 read:

5. A method of displaying data in a field comprising the steps of calculating the difference between the local value of the data at a data point in the field and the average value of the data in a region of the field which surrounds said point for each point in said field, and displaying the value of said difference as a signed gray scale at a point in a picture which corresponds to said data point.

6. The method of claim 5 wherein said data is X-ray attenuation data produced in a two dimensional field by a computed tomography scanner.[64]

The C.C.P.A. analyzed claims 5 and 6 above, concluding that "calculating the difference" was a mathematical algorithm, thus satisfying the first step and requiring the application of the second step to these claims. The court expanded the scope of the second step holding that Walter did not limit patentable subject matter to only those claims in which the recited algorithm defined the structural relation between the elements or limited or refined process steps. The C.C.P.A. found the Abele claims were statutory, even though the claimed algorithm did not clearly limit or refine its process. The C.C.P.A. clarified its Walter decision, stating:

Rather, Walter should be read as requiring no more than that the algorithm be "applied in any manner to physical elements or process steps," provided that its application is circumscribed by more than a field of use limitation or non-essential post-solution activity. Thus, if the claim would be "otherwise statutory," albeit inoperative or less useful without the algorithm, the claim likewise presents statutory subject matter when the algorithm is included.[65]

The court then applied its redefined second step, holding claim 5 directed solely to a mathematical algorithm, but reaching the opposite conclusion with respect to claim 6. The court's analysis of claim 6 is instructive:

The method of claim 6, unlike that of claim 5, requires "X-ray attenuation data." The specification indicates that such attenuation data is available only when an X-ray beam is produced by a CAT scanner, passed through an object, and detected upon its exit. Only after these steps have been completed is the algorithm performed, and the resultant modified data displayed in the required format.

Were we to view the claim absent the algorithm, the production, detection and display steps would still be present and would result in a conventional CAT-scan process. Accordingly, production and detection cannot be considered mere antecedent steps to obtain values for solving the algorithm as in In re Richman, cited by the examiner. Indeed, claim 6 presents data gathering steps not dictated by the algorithm but by other limitations which require certain antecedent steps. It is these antecedent steps that dictate what type of data must be obtained.[66]

The court concluded that claim 6 does not necessarily refine or limit the earlier steps of production and detection, but does adequately recite "an application of an algorithm to process steps which are themselves part of an overall process which is statutory."[67]

By contrast, the C.C.P.A. characterized claim 5 as follows:

This claim presents no more than the calculation of a number and display of the result, albeit in a particular format.

The specification provides no greater meaning to "data in a field" than a matrix of numbers regardless of by what method generated. Thus, the algorithm is neither explicit nor implicitly applied to any certain process.[68]

The difference between claims 5 and 6 is that the step of calculating the difference is not performed on any data as recited in claim 5, but on "X-ray attenuation data produced in a two dimensional field by a computed tomography scanner" as recited in claim 6.

IV. THE USE OF 6 IN 101 DETERMINATIONS

A. The Walter Burden (or Test)

In an attempt to save his apparatus claims from the nonstatutory fate of his method claims, Walter relied on 112 6. Walter's apparatus claims differed from his method claims only by the recitation of "means for" before each process step. Though 6 permits a "means plus function" recitation to cover the corresponding structure described in the specification and all equivalents thereof, the court could find nothing in the Walter specification that would save his apparatus claims, stating:

Both the examiner and the board refused to separately consider appellant's apparatus claims because the method and apparatus claims were deemed indistinguishable. This problem arises in computer-arts inventions when the structure in apparatus claims is defined only as "means for" performing specified functions as sanctioned by 35 U.S.C. 112, sixth paragraph. If the functionally-defined disclosed means and their equivalents are so broad that they encompass any and every means for performing the recited functions, the apparatus claim is an attempt to exalt form over substance since the claim is really to the method or series of functions itself. In computer-related inventions, the recited means often perform the function of "number crunching" (solving mathematical algorithms and making calculations). In such cases the burden must be placed on the applicant to demonstrate that the claims are truly drawn to specific apparatus distinct from other apparatus capable of performing the identical functions.

If this burden has not been discharged, the apparatus claim will be treated as if it were drawn to the method or process which encompasses all of the claimed "means." [Citations omitted] The statutory nature of the claim under 101 will then depend on whether the corresponding method is statutory.

We agreed with the PTO that all of appellant's claims should be treated as method claims. The apparatus claims differ from the method claims only in that the term "means for" has been inserted before each process step to convert the step into the "means" for performing it, wherefore they do not have separate meaning as apparatus claims.[69]

Walter attempted to clarify the meaning of his apparatus claims. The Walter decision does not describe the specification at length other than to infer that it is a computer program and does not indicate that Walter attempted to identify or correlate a particular means plus function recitation with a particular portion of his specification. At best, Walter pointed out that his specification described that his apparatus could be loaded onto a vehicle and thus was unitary. In the end, the court concluded that Walter had not met his burden of demonstrating that his apparatus was "truly drawn to specific apparatus." Thus his apparatus claims would be treated the same as his method claims, which the court had previously held to be nonstatutory. The above quote provides, as the following discussion will illustrate, a basis for a test that the Federal Circuit will apply to determine whether apparatus claims drafted in the means plus function format permitted by 6 are no more than method claims drafted in the "guise of apparatus claims."

B. Iwahashi Uses 6 To Read Digital Circuits Disclosed In The Specification

Into The Claims

Iwahashi[70] gave the Federal Circuit the opportunity to deal with 6 where means plus function recitations were related or, as stated by the court, correlated to functional block diagrams representative of well known circuits. The PTO raises the problem that even though such means plus function recitations may be correlated to well known circuits described in the specification, the functional claim recitations per se are so broad that they do not require much less describe the well known circuits.

In Iwahashi, the invention was described as a device for pattern recognition and, in particular, as a voice recognition device.[71] The application contained only one claim,[72] i.e., an apparatus claim reciting the elements in "means plus function" language, except for a "read only memory" (ROM). Though each of the "means plus function" clauses could be correlated to conventional electronic circuitry described in the specification, e.g., an adder, an analog-to-digital converter, and a calculating circuit, the claim language was not limited to such circuitry except for the noted ROM recitation.

The Iwahashi decision includes numerous references to Iwahashi's specification. The field of the invention is noted as including "an auto-correlation unit for use in pattern recognition."[73] Reference is made to the prior art, which included units for calculating auto-correlation coefficients, to demonstrate that the Iwahashi invention relates to a well-recognized technical art.[74] The decision relies particularly on two functional block diagrams, which correspond to Figures 1 and 2 of the Iwahashi specification. and are reproduced below:

The decision further extracts from the solicitors brief the following correlation of the recitations of the appealed claims to the well-known circuits of Figures 1 and 2 reproduced above:

[a] An auto-correlation unit for providing auto-correlation coefficients for use as feature parameters in pattern recognition for N pieces of sampled input values Xn (n=0 to N-1), said unit comprising:

[b] means for extracting N pieces of sample input values Xn from a series of sample values in an input pattern expressed with an accuracy of optional multi-bits; (analog to digital converter);

[c] means for calculating the sum of the sample values Xn and Xn-r (t=0-P, P N); (adder 1);

[d] a read only memory associated with said means for calculating; (ROM 2);

[e] means for feeding to said read only memory the sum of the sampled input values as an address signal; (signal path connecting adder 1 to ROM 22);

[f] means for storing in said read only memory the squared value of each sum, (Xn + Xn-r)2 (ROM 2 with stored squared values);

[g] means for fetching and outputting the squared values of each such sum of the sample input values from said read only memory when said memory is addressed by the sum of the sample input values; and (timing generator for applying pulses f1 or f2 to ROM 15);

[h] means responsive to the output (X2 + Xn-r)2 of said read only memory for providing an auto-correlation coefficient for use as a feature parameter according to the following formula:

N-1

(Xn + Xn-r)2

n=0 - 1 (calculating circuit 5)

N-1

2 - Xn2

n=0

Referring to this correlation, the court found that the claim recited interrelated means that, in combination, defined statutory subject matter falling under either of two 101 categories: machine or manufacture. Judge Rich observed that "means plus function" claims are not to be interpreted to cover all means to perform the function, but should be interpreted to cover the means disclosed in the specification and all equivalents thereof which perform the recited function. "Section 112 6 cannot be ignored when a claim is before the PTO any more than when it is before the courts in an issued patent."[75] Thus, in the final analysis, the fact that each "means plus function" recitation of the Iwahashi claim could be correlated to a described, well-known electrical circuit, convinced the court that the claimed invention was statutory.

Judge Rich's decision failed to analyze the Iwahashi claim other than to reproduce the Solicitor's reproduction showing how each means plus function recitation could be analyzed in a "correlation" fashion to a well known circuit described in the specification. Evaluation of the Iwahashi claim per se or with the aid of the underlying specification, would not necessarily lead to the conclusion that it was statutory. The underlying Iwahashi specification[76] is silent as to the nature or as to how the recited "sample values" are obtained, as well as to the significance of the outputted "autocorrelation coefficients."

C. Arrhythmia: Dr. Simson Survives the Walter Test

Arrhythmia Research Technology v. Corazonix Corp.[77] dealt with defendant Corazonix's argument that the Simson patent did not meet the Walter burden. The subject matter of this appeal was U.S. Patent No. 4,422,459 of Dr. Simson, which was assigned to Arrhythmia Research Technology (ART). The Simson patent described an invention for monitoring a patient's heart (electrocardiograph) signals for the presence of "high frequency energy" in a trailing portion of the QRS complexes to predict the patient's susceptibility to often fatal ventricular tachycardia (VT). Simson's invention[78] is illustrated in Figure 1 of his patent, which is reproduced:

ART argued that "electrocardiograph signals" are physical electrical signals, and that the recited steps operated to "refine" those electrical signals. Defendant Corazonix countered that the output of the claims is not a "refined" heart signal, but rather a pure number to be compared with another number. Thus, according to Corazonix, the claimed output was no more than the condemned binary numbers of Benson or the updated "alarm limit" of Flook. Further argued Corazonix, the inputting of the heart signal was a mere data-gathering step, and the outputting of the number from the filter means was an insignificant post-solution activity. Relying on Walter, Corazonix argued that the Simson apparatus claims were also nonstatutory unless "it is demonstrated that the [apparatus] claims are drawn to specific apparatus distinct from other apparatus capable of performing the identical functions."[79]

Since all of the means clauses in the Simson claims were supported in his specification by flowcharts and formulas, the only structure disclosed was the computer, except for the analog-to-digital converter. Paragraph 6 required that the "means plus function" clause be construed to cover the specific means disclosed in the specification and equivalents. Corazonix contended that any computer could be theoretically programmed to perform the functions of the computer claimed by Simson. Therefore, there was no limit to the scope of these claims, and ART had failed to show any specific structure for performing the functions of the Simson claims.

The Arrhythmia court did not directly respond to this argument. If the court could have successfully correlated the means plus function clauses of Simson's apparatus claim to "specific structure," that finding would have ended the 101 determination and the claimed invention of Dr. Simson would have been held statutory without further consideration. A reasonable explanation for the court's failure to respond to the Walter burden argument is that the specification of Simson did not describe a "specific apparatus."

Though acknowledging that the Freeman-Walter-Abele protocol was not the only one, the court proceeded to apply this protocol to the claimed invention of Simson and held it to be statutory.[80] The court examined the method claims first. Without identifying the mathematical algorithm, the court applied the first step of the protocol and concluded that the method claims contained such an algorithm "in that some claimed steps are described in the specification by mathematical formulae." The court then moved to the second step of the analysis. After examining each step of the method claim, the court stated:

These claimed steps of "converting", "applying", "determining", and "comparing" are physical process steps that transform one physical, electrical signal into another. The view that "there is nothing necessarily physical about 'signals'" is incorrect. In re Taner, 681 F.2d 787, 790, 214 U.S.P.Q. 678, 681 (C.C.P.A. 1982) (holding statutory claims to a method of seismic exploration including the mathematically described steps of "summing" and "simulating from"). The Freeman-Walter-Abele standard is met, for the steps of Simson's claimed method comprise an otherwise statutory process whose mathematical procedures are applied to physical process steps.[81]

The court disagreed with Corazonix's argument that the claimed output was merely a pure number, stating:

[T]he number obtained is not a mathematical abstraction; it is a measure in microvolts of a specified heart activity, an indicator of the risk of ventricular tachycardia. That the product is numerical is not a criterion of whether the claim is directed to statutory subject matter.[82]

The determination of the second step of whether the claim wholly preempts the mathematical algorithm is akin to 35 U.S.C. 112 2, which requires that claims be definite and not "abstract". If the invention which is claimed is broader than what the invention is, then there is not only a 2 problem, but also a 101 problem. Cautioning that "abstract" claims may be nonstatutory, the court said:

In Diamond v. Diehr the Court explained that non-statutory status under 101 derives from the "abstract", rather than the "sweeping", nature of a claim that contains a mathematical algorithm. The Court stated:

While a scientific truth, or the mathematical expression of it, is not a patentable invention, a novel and useful structure created with the aid of knowledge of scientific truth may be.[83]

It is noted that the court recognized in the course of its two-step analysis, that the Supreme Court had also indicated that a 101 determination could be expressed in terms of being "abstract" or not. That recognition was perhaps a vision of the "alternative analysis" to evolve from the Alappat and Warmerdam decisions.

The court summarized the law as to 101 determinations as follows:

The law crystallized about the principle that claims directed solely to an abstract mathematical formula or equation, including the mathematical expression of scientific truth or a law of nature, whether directly or indirectly stated, are nonstatutory under 101; whereas claims to a specific process or apparatus that is implemented in accordance with a mathematical algorithm will generally satisfy 101.[84]

D. Donaldson: 6 Applies To The PTO's Examination Of Patent Applications At Least In the Context Of 102 And 103

Donaldson[85] involved the re-examination of U.S. Patent No. 4,395,269 of Schuler and posed the question of whether the PTO was obliged to follow 6 during the examination of patent applications by the Office not in the context of 101 but of 102 and 103. The Schuler patent relates to a "dust collector" for removing dust or particulate matter from the air. To prevent dust buildup in the hopper, Schuler constructs his hopper with a downwardly-sloping surface made of a flexible material and provides pressurized air jets to cause a periodic pressure buildup, which expands and contracts the flexible sloping surface to discharge the collected dust from the hopper.[86]

Schuler's apparatus claim recited such a flexible sloping surface as: "means, responsive to pressure increases . . . for moving particulate matter in a downward direction to a bottommost point in said (lowermost) portion for subsequent transfer to a location exterior to said assembly."[87] The Board confirmed the obviousness rejection on prior art, which showed a dust collector with a similar hopper except that its sloping surface was made of a rigid material. Though acknowledging that the Schuler specification described such a flexible sloping surface and that the prior art did not, the Board held that the above means clause did not require such a feature, and further "that particular features or limitations appearing in the specification are not to be read into the claims of an application."[88] Donaldson asserted that the Board erred by not applying that "statutory method" required by 6 to evaluate his means clause. The Board further failed, according to Donaldson, to make the factual finding to support its nonobviousness holding that the prior art corresponded to that flexible sloped surface described in his specification and "equivalents thereof".

Judge Rich speaking for the Federal Circuit reversed the Board and held that based upon the "plain and precise language of 6," means plus function recitations in a claim must be interpreted "in light of the corresponding structure, material, or acts described (in the specification), and equivalents thereof" regardless of whether that interpretation is made "as part of a patentability determination in the PTO or as part of a validity or infringement determination in a court."

Commenting on the relationship between 1, 2 and 6 of 112, the court stated,

Although paragraph 6 statutorily provides that one may use means-plus-function language in a claim, one is still subject to the requirement that a claim "particularly point out and distinctly claim" the invention. Therefore, if one employs means-plus-function language in a claim, one must set forth in the specification an adequate disclosure showing what is meant by that language. If an applicant fails to set forth an adequate disclosure, the applicant has in effect failed to particularly point out and distinctly claim the invention as required by the second paragraph of 112.[89]

The court limited the applicability of 6 to language actually found in the claim, stating,

The Commissioner confuses impermissibly inputing limitations from the specification into a claim with properly referring to the specification to determine the meaning of a particular word or phrase recited in a claim. . . What we are dealing with in this case is the construction of a limitation already in the claim in the form of a means-plus-function clause and a statutory mandate on how that clause must be constructed.[90]

After confirming the applicability of 6, the court identified that the "means, responsive to pressure increases in said chamber -- for moving particulate matter in a downward direction" corresponded to a flexible wall which expanded outward upon pressure increases in the filter chamber. Upon consideration of the patent relied upon by the PTO, the court concluded that the prior art patent neither taught nor suggested the flexible wall.[91]

The PTO has distributed guidelines[92] detailing a new examining practice and procedure for the analysis of means plus function and step recitations as imposed by Donaldson's interpretation of 6. When making determinations of patentability under 102 and 103, the Examiner has the initial burden to show that a prior art reference "teaches identity of function to that specified in a claim."[93] Having made that showing and if the applicant's specification does not exclude that function taught by the prior art, the Examiner has established a prime facie case that the claimed limitation is anticipated by the reference sought to be applied. The burden then shifts to the applicant to show that the element shown in the prior art is not an equivalent of the structure, material or acts disclosed in the application.[94]

The applicant may respond by challenging the inference of equivalency based on these and other indicia. Applicant can submit objective evidence by way of Rule 132 affidavits or argue based on his specification or the prior art that there is no equivalency. Alternatively, the applicant has the opportunity to amend his claims to recite a function or a specific structure which differs from that of the prior art reference.

V. DISSATISFACTION WITH THE TWO-STEP TEST AND ITS RELIANCE ON

"MATHEMATICAL ALGORITHMS"

A. Arrhythmia: Rader's Concurring Opinion

In Arrhythmia Research Technology v. Corazonix Corp.[95], Judge Rader gave an early call to refocus 101 determinations on the language per se of 101. As Judge Rader observed, 101 conveys no implication that the patent laws extend patent protection to some subcategories of machines or processes and not others.[96] Judge Rader noted:

The limits on patentable subject matter within section 101 focus not on subcategories of machines or processes, but on characteristics, such as newness and usefulness. Section 101 also specifies that, in addition to newness and usefulness, an invention or discovery must satisfy other "conditions and requirements." These other "conditions and requirements" encompass characteristics like nonobviousness under 35 U.S.C. 103, or requirements like those in 35 U.S.C. 112. . . . the Act, by its terms, extends patent protection to "any" machine or process which satisfies the other conditions of patentability.[97]

Thus, Judge Rader raised concern that the courts and the PTO were creating new exceptions to patentable subject which were not authorized under 101 or by Supreme Court decisions.

B. Schrader Stretches The Two-Step Test Too Far

In Schrader,[98] the members of the Federal Circuit continued to raise their concern about expanding judicially created exceptions to patentable subject matter under 101. The Schrader invention related to a method of competitively bidding on a plurality of items such as tracts of land. A single bid may be made to purchase one or any combination of the items. Bids from the prospective buyers are entered into a "record". The object of the method is to optimize the total sum of the prices for all of the items. The bidding method is optimized for the seller by maximizing the total purchase price and, conversely for a purchaser, by minimizing the total price. A "completion" is defined in Schrader's specification as that combination of bids which results in the optimum total price. As long as bids may be entered, the "completion" will change. The items are then sold in accordance with the final "completion".

Schrader argued that his claims[99] contained no mathematical algorithm and therefore fell outside the first step of the Freemen-Walter-Abele test. The court disagreed, commenting:

The claim language "assembling a completion" is such a procedure because it describes the solving of a mathematical problem: determining the optimal combination of bids.

. . . This process, although expressed in general terms, is within or similar to a class of well-known mathematical optimization procedures commonly applied to business problems called linear programming.[100]

Schrader conceded that though his claim implicitly involved summing, mere summing was not a mathematical algorithm in the sense of 101. Again, the court disagreed. First, "the claim implies a procedure for determining the optimal combination of bids."[101] Second, the court concluded that "even simple summing may be an algorithm."[102] While the Schrader invention has optimized the profits to the seller, the Federal Circuit has minimized the threshold presence of a mathematical algorithm required to satisfy the first step.

Schrader further contended that his claim recited or implied sufficient physical activity to satisfy the second step. In particular, he contended that his claim "physically regrouped raw bids into new groupings and ultimately 'completions'; physically transforms bid data into completion data or display data; and makes physical changes to a 'display'."[103]

The court was unconvinced. The court noted that Schrader's claim recited "bid" but not "display", "bid data," "completion data," or "display data." The court stated that, "there is nothing physical about bids per se. Thus, the grouping or regrouping of bids cannot constitute a physical change, effect, or result."[104] According to the court, Schrader's claims were devoid of "any kind of data transformation" which would satisfy the second step defined in Walter. Thus, the court concluded that the claimed invention of Schrader was nonstatutory based on its analysis of the claim recitations per se and its finding that his claim was void of any transformation of a physical activity or object.

The court seemed to hold out the hope that inventions like that of Schrader could be patented, if the required transformation was reflected in the specification and the claims. Schrader had argued that his invention was statutory based on "the notion of bidders assembled in a single location in front of a display, or in several locations interconnected by closed-circuit televisions through a large-screen display."[105] However, Schrader had not recited these features in his claims. Though holding the Schrader invention to be nonstatutory, the court suggests that a statutory transformation could be carried out on "electrical signals and data." The court provided the following examples of the statutory transformation of electrical signals:

In Arrhythmia, it was electrocardiograph signals representative of human cardiac activity; in Abele, it was x-ray attenuation data representative of CAT scan images of physical objects; and in Taner it was seismic reflection signals representative of discontinuities below the earth's surface.[106]

Judge Newman dissented on the basis that something more than such simple or incidental calculations should be required. She declared:

Schrader's claimed process requires the performance of specified steps and procedures, including calculations, to achieve a technologically useful result; it is not a mathematical abstraction. As stated in Diamond v. Diehr, 450 U.S. at 187, 209 U.S.P.Q. at 8, subject matter does not become nonstatutory "simply because it uses a mathematical formula" in an otherwise statutory process.[107]

The effect of Schrader is to expose all kinds of technology, even methods of doing business, to the Freeman-Walter-Abel test. It is difficult to imagine that most methods of doing business would not include some simple, perhaps incidental calculation. Furthermore, Judge Newman declared that the method of doing business exception was "fuzzy" and should be discarded.[108] Unlike the analysis in the mathematical algorithm cases, there has been no explicit definition in any decision of what constitutes a method of doing business.[109] She complains that the Federal Circuit has avoided the method of doing business issue in every appeal presented to it. When that exception has been dealt with, the form of the claim seems to be of vital importance in deciding whether a program is merely a method of doing business or is statutory subject matter.

VI. ALAPPAT: SHIFTING FOCUS FROM THE "MATHEMATICAL ALGORITHM" TO RELIANCE ON THE PRIMARY AUTHORITIES

A. Paragraph 6 Applies To The PTO

In Alappat,[110] an original panel of the Board of Patent Appeals and Interferences had reversed the PTO Examiner's rejection of Alappat's invention as being nonstatutory. The Examiner petitioned for reconsideration of the original panel's decision and for expansion of the panel.[111] This petition was granted, and the panel was expanded to include the Commissioner, the Assistant Commissioner, the Deputy Commissioner, the Chairman of the Board, and the Vice Chairman of the Board. The expanded panel reversed the decision of the original panel and affirmed the Examiner's decision that the invention was nonstatutory.

Alappat's invention was for a rasterizer, which processed a digitally-sampled input waveform to provide "anti-aliased pixel illumination intensity data" for display on a cathode ray tube. The rasterizer processed the input data to display a continuous series of connected lines or vectors, and to remove and smooth jagged corners of the displayed waveform by selectively illuminating pixels associated with the vectors.

All of the claims in issue are apparatus claims, which are expressed in the "means plus function" format permitted by 6. Each such clause recited a mathematical operation and corresponded to the description within the Alappat application of conventional circuitry, i.e., an arithmetic logic unit, a barrel shifter, and a read only memory (ROM)[112]. These elements are described at pages 11-16 of Alappat's specification and shown in his Figure 3, which is reproduced below:

The expanded panel of the Board refused to rely on 6 to interpret Alappat's means clauses with reference to the circuitry shown in his FIG. 3, reasoning that, "it would be improper claim interpretation to read the structures and connection interrelationships disclosed in the specification into claim 15."[113] The expanded panel concluded that claim 15 was not drawn to specific apparatus,[114] and then proceeded to apply the two-step Freeman-Walter-Abele test. In applying the second step of this test, the "illumination intensity data" recited in the last element of the claim was not treated as a physical thing, and the reference in the claim's preamble to displaying "anti-aliased pixel illumination intensity data" on a "display device" was given no weight.[115] Thus, the expanded panel came to the conclusion that apparatus claim 15 was nonstatutory.

In the final analysis, whether or not 6 was used was determinative of whether the claimed invention was held statutory. The expanded panel of the Board refused to use 6, and held the Alappat invention nonstatutory. By contrast, the Federal Circuit used 6 and held the Iwahashi invention statutory.

A divided Federal Circuit issued In re Alappat[116] on July 29, 1994, which reversed the decision of the expanded panel of the Board[117] and held the Alappat invention to be statutory. Judge Rich joined by Judges Newman, Lourie, Michel, Plager and Rader issued the majority opinion, from which Chief Judge Archer and Judge Nies dissented and Judges Mayer, Clevenger and Schall abstained.

The majority based its decision on two rationales. First, the specification of the Alappat application clearly describes well known digital circuits which may be correlated to each "means plus function" recitation of the claims in question. Second, the majority analyses the language of apparatus claim 15, the sole independent claim, finding that it transforms data into "anti-aliased, pixel illumination data." The dissent challenges both of these rationales.

While differing on the outcome, both the majority[118] and dissent[119] agreed on at least two significant points. First, 6, requires the PTO at the examination stage to interpret "means plus function" and step recitations in view of the corresponding structure and acts described in the specification and equivalents thereof. The expanded panel erred by ignoring Alappat's specification in reaching its 101 decision. It would appear to be settled beyond doubt that the Office in the course of its examination of patent applications must consider the specification as required by 6 in 101, as well as 102 and 103 determinations.[120] Second, the majority and the dissent based their reasoning on the primary authorities governing statutory subject matter decisions, namely the language of 101 and the trilogy of Supreme Court decisions, Gottschalk v. Benson,[121] Parker v. Flook,[122] and Diamond v. Diehr.[123] As one would suspect, the majority and dissent treated these primary authorities quite differently.

The majority construed Alappat's claim 15 as follows:

A rasterizer [a "machine"] for converting vector list data representing sample magnitudes of an input waveform into anti-aliased pixel illumination intensity data to be displayed on a display means comprising:

(a) [an arithmetic logic circuit configured to perform an absolute value function, or an equivalent thereof for] determining the vertical distance between the endpoints of each of the vectors in the data list;

(b) [an arithmetic logic circuit configured to perform an absolute value function, or an equivalent thereof] for determining the elevation of a row of pixels that is spanned by the vector;

(d) [a read only memory (ROM) containing illumination intensity data, or an equivalent thereof] for outputting illumination intensity data as a predetermined function of the normalized vertical distance and elevation.[124]

The bracketed matter represents the structure disclosed in Alappat's specification which corresponds or correlates to these "means plus function" recitations. Paragraph 6 requires claim 15 to be interpreted to cover such structure and equivalents thereof.[125] The majority reasoned that the structure covered by claim 15 and that the functions performed by Alappat's claimed "rasterizer" are similar to those of prior art rasterizers, and therefore concludes, "Because claim 15 is directed to a 'machine,' which is one of the four categories of patentable subject matter enumerated in 101, claim 15 appears on its face to be directed to 101 subject matter."[126]

In response to the interpretation of Iwahashi[127] by the expanded panel of the Board (and apparently to the Iwahashi Notice), the majority stated, "The Iwahashi court clearly did not find patentable subject matter merely because a ROM was recited in the claim at issue ----. It was not the ROM alone that carried the day."[128] The dissent might then inquire if the recitation of "the ROM alone" did not save the claim, why then should the further recitation of "two ALUs" and "the two barrel shifters" make the claim statutory.

The majority implied that 6 may be of a limited value to render claims statutory, which are supported by a specification describing a programmed computer. With reference to In re Walter[129] (among other decisions), the majority warned that, "given the apparent lack of any supporting structure [other than a general purpose programmed\digital computer] in the specification corresponding to the claimed 'means' elements, the court reasonably concluded that the claims at issue in effect recite nothing more than process claims in the guise of apparatus claims" and, thus, were nonstatutory.[130] Noting that the Walter specification "merely" disclosed a programmed general purpose computer, applicants with such disclosure bear an added burden in establishing the statutory nature of such inventions.

One may query, however, whether there may be some inconsistency in the majority's opinion. On the one hand, the majority first implied that a specification merely describing a programmed general purpose digital computer does not describe "any supporting structure" and then, in a further breadth, stated that "we have held that such programming creates a new machine, because a general purpose computer in effect becomes a special purpose computer once it is programmed to perform particular functions pursuant to instructions from program software."[131]

B. The Dissent Rejects The Majority's Use Of 6

While the dissent agreed with the majority that Alappat's claim 15 covers "two ALUs, the two barrel shifters, and the ROM" and equivalents thereof, the dissent added, "The presence of structure on the face of the claims does not ipso facto make the claimed invention or discovery one of statutory subject matter."[132] To the extent that precedent of the C.C.P.A. held that only claims which "wholly preempt" or recite "in its entirety mathematics,"[133] i.e., claims which did not recite any structure, were beyond the pale of 101,[134] the dissent would hold that such precedent conflicts with Flook.[135] According to the dissent, the Supreme court in Flook "expressly reversed the court's wholesale preemption test" and "concluded that the claimed discovery was nonstatutory even though the applicant's claim did not wholly preempt the mathematical function involved."[136]

The dissent began to explore the dilemma created when 6 is applied to 101 determinations. Alappat argued and the majority agrees that his claim 15 should cover by virtue of 6 a programmed general purpose digital computer, i.e., such a computer is an equivalent of the means recited in claim 15. The dissent notes that Alappat argues that, "'[a]ny employable circuit designer could readily design around claims --- limited' to two ALUs, two barrel shifters, and one ROM."[137] "Yet Alappat also concedes that a claim drawn to 'a method which amounted to a mathematical algorithm [without] any disclosed hardware or structure, other than a programmed general purpose computer,' is nonstatutory."[138] Ah, here is the rub! Alappat (and the majority) used 6 to conclude that his claim 15 covers well known digital circuits and is therefore statutory and, at the same time, covers a programmed general purpose computer, even though such a computer could not be claimed directly.[139] The dissent dismissed such reasoning, stating:

Alappat cannot have it both ways. If a programmed general purpose digital computer is not statutory subject matter, then a claim cannot be drawn to that subject matter whether outright or by application of equivalents under 35 U.S.C. 112, 6. Paragraph 6 of 112 is not a magical way to expand patent protection into nonstatutory subject matter.

As to equivalency, finding equivalency in a programmed general purpose computer proves the nonstatutory nature of Alappat's purported invention or discovery. Alappat argues that the electrical circuitry of the "rasterizer" is equivalent to a programmed general purpose computer because "powerful, inexpensive microprocessors" are equivalent to discrete digital components, such as AND, OR, NAND, etc., gates, registers, latches, and the like" are equivalent to "analog components, such as transistors, operational amplifiers, and resistors." They are all equivalents, in Alappat's view, because they all may achieve the same effect: performing the particular mathematics that is the claimed rasterizer.[140]

Underlying the above quote is the recognition of the two-fold nature of 6. The specific structure described in the application corresponding to the "means plus function" recitations tend to narrow the claim scope and to render it statutory. On the other hand, equivalency tends to broaden the claim and render it nonstatutory. Thus, the dissent reached the conclusion that the Alappat invention was not statutory based on his argument that his claim 15 would cover by equivalency a programmed general purpose digital computer. If by such argument, it is seen that there is no effective limit to the scope of Alappat's "means plus function" recitations, then those claims are nonstatutory. If an applicant is going to rely on 6 for 101 purposes, then he or she may need to spell out in the specification as filed the equivalents or range of equivalents which are intended for the specifically described structure (or acts). As the dissent reminds us, the applicant "can not have it both ways."[141]

C. Both The Majority And The Dissent Focus On The Primary Authorities

Neither the majority nor the dissent specifically applied the oft used Freeman-Walter-Abele two-step test to determine statutory subject matter based on the presence of a mathematical algorithm, even though the briefs of both Alappat and the Office framed their arguments in accordance with that test. Rather, both the majority and the dissent reach their different conclusions based on the trilogy of Supreme Court decisions.[142] Both the majority and the dissent accept that Diehr would not permit patent protection for "laws of nature, natural phenomena, and abstract ideas."[143] [144] However, the majority recognized a fourth prohibited category, mathematical algorithms; it commented,

[t]he Supreme Court also has held that certain mathematical subject matter is not, standing alone, entitled to patent protection. (Citations omitted) A close analysis of Diehr, Flook, and Benson reveals that the Supreme Court never intended to create an overly broad, fourth category of subject matter excluded from 101. Rather, at the core of the Court's analysis in each of these cases lies an attempt by the Court to explain a rather straightforward concept, namely, that certain types of mathematical subject matter, standing alone, represent nothing more than abstract ideas until reduced to some type of practical application, and thus that subject matter is not, in and of itself, entitled to patent protection.[145]

By contrast the dissent would limit its analysis to whether the claimed invention fell into one of the three categories named by Diehr.[146] Refusing to define what constitutes a mathematical algorithm, the dissent stated,

It is unnecessary to discuss what is or is not a "mathematical algorithm," as opposed to being a mathematical "relationship," "formula," "operation," "function," "principle," "theory," or the like. The Supreme Court did not arrive at its holdings in Benson, Flook, and Diehr, discussed infra, by creating a new rule about "algorithms" and finding in two cases algorithms and in the other no algorithm. Rather, the holdings are expressly based upon the axioms that abstract ideas, principles, and laws of nature are not patentable subject matter, but that their useful applications may be. Mathematic operations, like ideas and laws of nature, are not useful applications and therefore not statutory subject matter. The hypertechnical distinction between calling something a mathematical "algorithm" versus another mathematic noun is without legal distinction.[147]

Using a "wholly preempted" rational not unlike the second step of the Freeman-Walter-Abele test, the majority holds claim 15 statutory based on the following rationale:

[C]laim 15 is limited to the use of a particularly claimed combination of elements performing the particularly claimed combination of calculations to transform, i.e., rasterize, digitized waveforms (data) into anti-aliased, pixel illumination data to produce a smooth waveform.

Furthermore, the claim preamble's recitation that the subject matter for which Alappat seeks patent protection is a rasterizer for creating a smooth waveform is not a mere field-of-use label having no significance. Indeed, the preamble specifically recites that the claimed rasterizer converts waveform data into output illumination data for a display, and the means elements recited in the body of the claim make reference not only to the inputted waveform data recited in the preamble but also to the output illumination data also recited in the preamble. Claim 15 thus defines a combination of elements constituting a machine for producing an anti-aliased waveform.[148]

The dissent squarely rested its conclusion on the trilogy of Supreme Court decisions, stating "Under Benson, Flook and Diehr the posing and solution of a mathematic function is nonstatutory subject matter."[149] This is so even if the mathematical algorithm is carried out on a particular general purpose computer or digital circuitry. In reaching the conclusion that Alappat's claim 15 is no more than the prohibited "posing and solution", the dissent notes that claim 15 recites merely a "rasterizer" in contrast to an "oscillator" which would include a display, e.g., a cathode ray tube.[150] Characterizing the claimed invention, the dissent states that,

The "rasterizer" as claimed is an arrangement of circuitry elements for converting data into other data according to a particular mathematical operation. The rasterizer begins with vector data--two numbers. [I]t does not matter how they are ascertained.[151] The two numbers, as they might to any algebra study, "represent" endpoints of a line.

The claimed "rasterizer" ends with other specific "data"--an array of numbers, as the original and reconsideration panels of the board both expressly agreed. The end-data of the "rasterizer" are a predetermined and claimed mathematic function of the two input numbers.[152]

Focusing on the claim's preamble, the dissent comments "The preamble calls the data 'anti-aliased pixel illumination intensity data.' Of course, no matter how many adjectives the claim uses to describe data, data are still data -- i.e., pure numbers."[153] In the end, the dissent concludes that,

Claim 15 as a whole thus claims old circuitry elements in an arrangement defined by a mathematical operation, which only performs the very mathematical operation that defines it. Rather than claiming the mathematics itself, which of course Alappat cannot do, Alappat claims the mathematically defined structure. But as a whole there is no "application" apart from the mathematical operation that is asserted to be the invention or discovery.[154]

VII. IS DATA STORED IN MEMORY STATUTORY SUBJECT MATTER?

A. Warmerdam: Data Structures Are Statutory

1. Warmerdam's Hierarchy of Bubbles

In In re Warmerdam,[155] the Federal Circuit dealt with the question of whether a data structure defined as a hierarchy of bubbles is statutory. Warmerdam's invention was intended to be used with robots to avoid collision with other moving or stationary objects. The prior art had taught that the envelope of the space occupied by the objects could be approximated by a sphere or bubble of sufficient size to enclose the object. A collision between the robot and object could be predicted if a path defining the robot's movement intersected that sphere. The accuracy of collision prediction could be improved by replacing the single, large sphere with a hierarchy or series of sets of spheres, each set having decreasing radii. Improved collision prediction is achieved by employing initially the set of largest spheres of the series and determining whether the object path intersects those spheres and, if intersection occurs, employing the next set of smaller spheres to again determine intersection. A sequence of intersection determinations is made with successively smaller sets of spheres until no intersection is detected and collision avoidance indicated or intersection is determined with the set of smallest spheres of the series to thereby predict a collision.[156]

Warmerdam conceded that this series of spheres was also known in the prior art, but asserted that his method of generating such a series was novel. According to that method, a "medial axis of the object" whose envelope is to be defined, is critically oriented. The medial axis is described in Warmerdam's specification as "a line with the same topology as the object itself connecting points which lie midway between boundary centers of the object."[157] Next, the series of bubbles is created on the medial axis, i.e., spheres with differing radii according to the successive sets are generated, all with centers lying on the medial line. According to Warmerdam, generating the hierarchy of spheres on the medial axis is computationally more efficient.[158]

Of the appealed claims 1-6, claim 1 is the sole independent claim:

1. A method for generating a data structure which represents the shape of [sic] physical object in a position and/or motion control machine as a hierarchy of bubbles, comprising the steps of:

first locating the medial axis of the object, and

then creating a hierarchy of bubbles on the medial axis.[159]

Claims 2-4 depend from and further recite the top-down and bottom-up procedures for creating the sphere hierarchy. Claim 5 recites:

5. A machine having a memory which contains data representing a bubble hierarchy generated by the method of any of Claims 1 through 4.[160]

Claim 6 is directed to a data structure:

6. A data structure generated by the method of any of Claims 1 through 4."[161]

The Solicitor sought to sustain the rejection of claims 1-4 as nonstatutory on the "accepted legal analysis of mathematical algorithm subject matter"[162] as provided by the Freeman-Walter-Abele test. The Solicitor argued that claim 5 was indefinite under 35 U.S.C. 112, 2, for failing to explain how a memory is made or produced by the steps of the prior claims 1-4. Claim 6 was rejected as failing to fall within one of the categories listed in 101, namely a "process," a "machine," a "manufacture," a "composition of matter," or an "improvement thereof."[163]

2. Court "Eschews" The Mathematical Algorithm Test

The Federal Circuit sustained the rejection of claims 1-4 as nonstatutory but not on the argued rational that it preempted the mathematical algorithm prescribed by the Freeman-Walter-Abele test. In the trend that began in Alappat,[164] the court commented that it sought with "Supreme Court guidance" to find "more precise definitions for the things excluded" from 101.[165] The court noted that not all of its attempts for greater precision had met with "complete success," for example In re Schrader.[166] In Schrader, the court applied the Freeman-Walter-Abele test finding (without much difficulty) a mathematical algorithm,[167] "namely summing."[168] According to the court, the trouble with this oft used test "is that there is no clear agreement as to what is a 'mathematical algorithm', which makes rather dicey the determination of whether the claim as a whole is no more than that."[169] Instead, the court suggested:

An alternative to creating these arbitrary definitional terms which deviate from those used in the statute may lie simply in returning to the language of the statute and the Supreme Court's basic principles as enunciated in Diehr, and eschewing efforts to describe nonstatutory subject matter in other terms.[170]

The court pointed out that Warmerdam was a good example of the difficulty in identifying whether a claim, here claim 1, recited an algorithm or not. On the one hand, the Solicitor argued that the specification described that "locating a medial axis" is determined by a mathematical procedure know as the Hilditch Skeletonization method, and the court acknowledged that such a method is the only practical embodiment.[171] On the other hand, Warmerdam argued that claim 1 is broad enough to cover the measuring of the contour of the object by hand and, in any event, claim 1 does not require the Hilditch Skeletonization method described in the specification. Agreeing with Warmerdam, the court concluded that "[t]he fact that the claim covers methods which are essentially mathematical in nature, as discussed infra, is not dispositive. Claims should be evaluated by their limitations, not by what they incidentally cover."[172]

The court felt no need to find the "proper meaning of the label mathematical algorithm,"[173] but rather stated that "the dispositive issue for assessing compliance with 101 in this case is whether the claim is for a process that goes beyond simply manipulating 'abstract ideas' or 'natural phenomena.'"[174]

In other words, the proper test is not finding the elusive mathematical algorithm, but rather determining whether the claimed invention, considered as a whole, is one of those three categories prescribed by Diehr, namely "laws of nature, natural phenomena, and abstract ideas."[175] Thus, the court concluded that "[t]he body of claim 1 recites the steps of 'locating' a medial axis, and 'creating' a bubble hierarchy. These steps describe nothing more than the manipulation of basic mathematical constructs, the paradigmatic 'abstract idea.'"[176]

3. Warmerdam's Data Structure Is Statutory And Definite

Further, the court held that, "Claim 5 is for a machine, and is clearly patentable subject matter."[177] According to the court, "[t]he legal standard for definiteness is whether a claim reasonably apprises those of skill in the art of its scope."[178] Concluding that claim 5 met that test, the court stated that "[i]t covers any machine (presumably including a known computer) having a memory which contains any data representing a bubble hierarchy determined by any of the methods of claims 1-4."[179]

Unpersuaded by the Board's position and the Solicitor's argument, the court noted:

The ideas expressed in claims 1 through 4 are well known mathematical constructs, and lend themselves to manipulation through known computer technology. There has been no showing that one skilled in the art would have any particular difficulty in determining whether a machine having a memory containing data representing a bubble hierarchy is or is not within the scope of claim 5. The Board's point, that the claim leaves unclear the technique of how the memory is configured with the data, has no bearing on this issue. The claim plainly covers all such techniques.[180]

The court concluded that there is nothing magical about the term "data structure." Relying on its brief recitations, the court held claim 6 nonstatutory stating, "[s]ince the 'data structure' of claim 6 is nothing more than another way of describing the manipulation of ideas contained in claims 1-4, it suffers from the same fatal defect they do."[181]

B. Lowry Holds Stored Data Structure To Be Statutory

1. Lowry's Data Structure: Data Organized In Accordance With "Attributive Data Model"

Approximately two weeks after its decision in Warmerdam, the Federal Circuit issued In re Lowry,[182] which holds for the first time that a claim reciting essentially a memory with data stored thereon, is patentable subject matter. The stored data is recited as a data structure which organizes the information in a database in accordance with an "attributive data model." According to Lowry's specification, an "[a]ttribute expresses the idea that one thing is attributed to another thing."[183] In such a model, information to be used by one or more application programs is organized in terms of attributes and the relationships of each attribute to the other attributes stored in the database.

The primitive data element in this model is an "attribute data object" (ADO), which contains the information to be used by the application program and the information regarding its relationship with other ADOs. The relationships of ADOs to each other are hierarchical and non-hierarchical. Simple rules as to how the ADO to ADO relationships are defined, construct the hierarchy as a pyramid. Within that pyramidal structure, the relationship of one ADO to another is described as "holding" or "being held." According to the rules, one ADO can hold one or more ADOs, while that one ADO can be held by only one other ADO. Each pyramidal structure includes a plurality of ADOs, but only one of that plurality can be an apex ADO. As to the apex ADO, the rules require that it can hold one or more other ADOs, but can be held by no other ADO. Thus, the constraints placed on the hierarchial relationships between ADOs by these rules shape the structure as the pyramid with the other ADOs fanning out from the one apex ADO. The non-hierarchical relationships are essentially "pointing" relationships between ADOs. There are two types of ADOs. The first are element data objects, which refer only to themselves. The second are relation data objects, which refer to one other ADO, which is termed a referent ADP, i.e., an ADO to which a relation data object refers to. Each ADO can be a referent ADO for more than one ADO.[184]

Of claims 1-30 on appeal, only independent claim 1 and claims 2-5 dependent therefrom recite a memory for storing the data structure described above. Independent claim 1 reads:

1. A memory for storing data for access by an application program being executed on a data processing system, comprising:

a data structure stored in said memory, said data structure including information resident in a database used by said application program and including:

a plurality of attribute data objects stored in said memory, each of said attribute data objects containing different information from said database;

a single holder attribute data object for each of said attribute data objects, each of said holder attribute data objects being one of said plurality of attribute data objects, a being-held relationship existing between each attribute data object and its holder attribute data object, and each of said attribute data objects having a being-held relationship with only a single other attribute data object, thereby establishing a hierarchy of said plurality of attribute data objects;

a referent attribute data object for at least one of said attribute data objects, said referent attribute data object being nonhierarchically related to a holder attribute data object for the same at least one of said attribute data objects and also being one of said plurality of attribute data objects, attribute data objects for which there exist only holder attribute data objects being called element data objects, and attribute data objects for which there also exist referent attribute data objects being called relation data objects; and

an apex data object stored in said memory and having no being-held relationship with any of said attribute data objects, however, at least one of said attribute data objects having a being-held relationship with said apex data object.[185]

The examiner had rejected claims 1-5 as being nonstatutory under 101 and as being obvious under 103 over U.S. Patent No. 4,774,661 of Kumpati. The Board reversed the nonstatutory rejection, concluding instead that the claimed memory storing the data structure was an article of manufacture. However, the Board sustained the 103 rejection relying on In re Gulack[186] to disregard any recitation to the data structure. The court summarized the rationale of the Board as follows:

In Gulack, this court concluded that "the critical question is whether there exists any new and unobvious functional relationship between the printed matter and the substrate." Id. at 1369 (footnote omitted). The Board therefore framed the question as whether a new, unobvious functional relationship exists between the printed matter (data structure with ADOs) and the substrate (memory). The Board determined that Lowry did not show such a functional relationship. Thus, the Board agreed with the examiner that the data structure could not distinguish the claimed invention from the prior art. The Board held that Kumpati, disclosing a CPU using a memory and containing stored data in a data structure, rendered all claims either anticipated or obvious. Lowry appealed.[187]

Even though Lowry deals with an obviousness rejection, the significance of this decision is related to its discussion of statutory subject matter. First, it deals with "printed matter" rejections which have, at least previously, been considered a category of nonstatutory matter. Second, this case may be important for what it did not hold, namely, that the Federal Circuit did not expressly abandon "printed matter" as a category of nonstatutory subject matter, even though both Alappat and Warmerdam seem to have deliberately avoided definitions of statutory subject matter other than those named in Diehr and 101, itself. Third, in accordance with this trend, the court demonstrates its preference for the "article of manufacture" definition over the "printed matter" definition of statutory subject matter. Fourth, even though the court decides the fate of claims 1-5 based upon 103, it offers comments which seem to be relevant to determining statutory subject matter under 101.

2. Printed Matter Rejection Does Not Apply To Recited Data Structure

First, the court explained why the printing matter cases were not relevant to the claimed data structures, stating:

The printed matter cases have no factual relevance where "the invention as defined by the claims requires that the information be processed not by the mind but by a machine, the computer." (Citation omitted.) Lowry's data structures, which according to Lowry greatly facilitate data management by data processing systems, are processed by a machine. Indeed, they are not accessible other than through sophisticated software systems. The printed matter cases have no factual relevance here.

Nor are the data structures analogous to printed matter. Lowry's ADOs do not represent merely underlying data in a database. ADOs contain both information used by application programs and information regarding their physical interrelationships within a memory. Lowry's claims dictate how application programs manage information. Thus, Lowry's claims define functional characteristics of the memory.[188]

Though no statutory subject matter rejection is at issue, the court explained why Lowry's claimed memory is not merely an "abstract idea":

Contrary to the PTO's assertion, Lowry does not claim merely the information content of a memory. Lowry's data structures, while including data resident in a database, depend only functionally on information content. While the information content affects the exact sequence of bits stored in accordance with Lowry's data structures, the claims require specific electronic structural elements which impart a physical organization on the information stored in memory. Lowry's invention manages information. As Lowry notes, the data structures provide increased computing efficiency.

Indeed, Lowry does not seek to patent the attributive data model in the abstract. Nor does he seek to patent the content of information resident in a database. Rather, Lowry's data structures impose a physical organization on the data.[189]

Next the court demonstrated that the claimed invention of Lowry is really that article of manufacture listed in 101,

In Lowry's invention, the stored data adopt no physical "structure" per se. Rather, the stored data exist as a collection of bits having information about relationships between the ADO's. Yet this is the essence of electronic structure. In Bernhart, this court's predecessor noted:

There is one further rationale used by both the board and the examiner, namely, that the provision of new signals to be stored by the computer does not make it a new machine, i.e., it is structurally the same, no matter how new, useful and unobvious the result . . . . To this question we say that if a machine is programmed in a certain new and unobvious way, it is physically different from the machine without that program; its memory elements are differently arranged. The fact that these physical changes are invisible to the eye should not tempt us to conclude that the machine has not been changed.

Bernhart, 417 F.2d at 1400 (emphasis added).[190]

More than mere abstraction, the data structures are specific electrical or magnetic structural elements in a memory. According to Lowry, the data structures provide tangible benefits: data stored in accordance with the claimed data structures are more easily accessed, stored, and erased. Lowry further notes that, unlike prior art data structures, Lowry's data structures simultaneously represent complex data accurately and enable powerful nested operations. In short, Lowry's data structures are physical entities that provide increased efficiency in computer operation. [191]

3. The Criteria For Statutory Data Structures

These comments, although directed to the "printed subject matter" issue, provide guidance for drafting claims to memories with data structures or, perhaps, an application program stored therein, to avoid 101 problems. A claim reciting a memory for storing "mere data" would not be allowed in view of the above comments at least under a "printed matter" rejection, if not a 101 rejection. Though something more than "mere data" is required, the operative question is what is that something? First, it need not be that "relation between" the data and the memory which was required by the Board. Rather, the Federal Circuit only requires a "physical organization on the data stored in memory." In the example provided by Lowry's data structure, the "organization" comprised at least his data arranged functionally in a pyramidal structure comprising a plurality of attribute data objects (ADOs) with an apex data object at the top and the remaining ADOs "fanning out" therefrom in hierarchical ADO to ADO relationships defined by rules and also non-hierarchical relationships. Second, to avoid the "printed matter" rejection, the claim must "require" that the stored data be processed by a machine, e.g., a computer.

Could the data structure of Warmerdam be protected in the memory/data claim structure approved in Lowry? Both Lowry and Warmerdam data structures are of a hierarchical configuration. Warmerdam's data structure[192] comprises a hierarchy of spheres, which Warmerdam admitted to be old; Warmerdam only asserted that his method of generating the spheres was novel. Even if novel, the data stored to define such a hierarchy of spheres may only comprise for each level of the hierarchy a set of coordinates defining the sphere centers and the corresponding radii. Unless that data was stored in some functional relation either to the computer using that data or to the data itself, such sets of coordinates and radii might well be deemed the unpatentable "mere data." The dicta in Warmerdam that his machine claim 5 was statutory seems to be distinguishable from the holding in Lowry that his data structure/memory claims 1-5 were patentable. First, Warmerdam deals with 101 and Lowry with 102 and 103. Second and more to the point, claim 5 of Warmerdam recites a machine comprising a memory, whereas claims 1-4 of Lowry merely recite a memory for storing his data structure. It is the explicit absence of a machine or computer recitation that renders claims in the Lowry format of significant commercial interest.

C. Beauregard: Computer Program Product Claims Are Patentable!

Beauregard[193] claimed a "computer program product" that is used in a computer system to perform the method of filling a polygon displayed on a graphics display device. The invention minimizes the time it takes to fill the pixels in a polygon contained on a graphics display. The significance of this application is in the structure of the claims. All of the claims are apparatus claims reciting variously an "article of manufacture," a "computer program product," or a "program storage device." Although these claims and the specification make clear that the computer program would be executed by a computer, no computer is explicitly recited in the claims.

Each of the "article of manufacture" and "product" claims recites a "computer usable medium having computer readable program code means embodied therein" and a plurality of the code means, each specifying a particular function of the computer program for generating graphic displays by filing in a space bounded by a definable boundary. The format of such claims may be generalized as follows:

A computer program product (or article of manufacture) comprising:

a computer usable medium having computer readable program code means embodied therein for causing (general description of the functions of the particular "packaged software"), the computer readable program code means in said computer program product comprising:

a series of - computer readable program code means for causing a computer to effect - followed by the corresponding function. (herein "FORMAT A")[194]

Alternatively, one claim on appeal recites a series of method steps in the following format:

A program storage device readable by a machine tangibly embodying a program of instruction executable by the machine to perform method steps for (general description of the steps of the particular "packaged software"), said method steps comprising:

a series of - steps for carrying out the method of the "packaged software." (herein "FORMAT B")

The single storage device claim differs from the article and product claims by reciting that the storage device tangibly embodies a "program of instructions executable by the machine to perform method steps" and a plurality of method steps for implementing a graphic generating and displaying program.

In a 4 to 3 vote, the Board of Patent Appeals and Interferences ("Board") affirmed the Examiner's final rejection of all ten pending claims, numbers 22, 31, 33, 34, 36, 37 and 41-43. The Board agreed with the Examiner that the computer product claims were "printed matter" and, therefore, rejected these claims as being nonstatutory under 35 U.S.C. 101 and obvious under 35 U.S.C. 103.[195]

In its analysis of the printed matter rejection under 101, the Board equated the program code as nothing more than the text of a book, and the computer usable medium (such as a diskette) as nothing more than the paper which contained the text. Thus, by applying this analysis, the Board concluded that Beauregard claimed "text on paper" which was unpatentable "printed matter."[196]

In support of its argument in favor of the "printed matter" rejection, the Board found that the claims recited no functions which would constitute patentable subject matter. The Board reached this conclusion despite the fact that the Beauregard claims expressly provided that the program code would "cause" the "computer to effect" certain functions in the computer. The Board applied this analysis in its rejection of the claims under 101 and 103. By focusing on the "printed matter" aspect of the invention, the Board failed to consider the claims as a whole. The Board said "the claims recited no functional relationship between the printed matter and the computer," but only recited a "prospective functional relationship which will occur only when the printed substrate is entered into the machine."[197]

In its 103 analysis, the Board concluded that the program code --- deemed as printed matter --- was required to cause a new and unobvious functional relationship between the program and the underlying substrate in order to be patentable, relying on the Federal Circuit decision of In re Gulack[198]. The Board completely disregarded the recitations in the claims which called for the code effecting the recited functions in the computer. Instead, the Board determined that the claims called for storing the code on a usable medium, which was well known in the art. The Board concluded that since the programming code did not create a new and unobvious functional change to the medium --- such as a diskette --- the claims were obvious and unpatentable.

Perhaps at the heart of the Board's opinion was the Board's inability to find what it defined as the "clear dividing line" between unpatentable text stored on paper, compared to claims which included the storage of computer program code on a medium, such as a diskette. The Board applied the same concern raised by Judge Archer in his dissenting opinion in Alappat, equating the computer program product claims in Beauregard to information such as music or the text of a book stored on a medium:

Even appellants at the oral hearing admitted that claims to phonograph records would be nonstatutory because the only difference from one record to another is in the informational content of the record, be it music or some other meritorious subject matter, such as classroom lectures, advertising formulas, experimental data, etc. . . .

. . . CD's are now used to introduce music, video information, program information, or all three at the same time into a computer. Therefore, we fail to see how a computer program embodied on a substrate is any different from any other informational source. Accordingly, we reject the implication of the minority that computer programs are somehow different from sound recordings or conventional printed matter, exemplified by the pages of a book, such as the Bible. Accordingly we ask "Where is the magic dividing line between music, or voice, or video, or computer programming, when they are all the same thing.?" The answer, of course, is that there is no dividing line.[199]

The greatest flaw in the Board's decision was its failure to consider the claims as a whole. Section 103 expressly requires that obviousness determinations be made with respect to the "the subject matter as a whole."[200] The same principle has been carried over to 101 determinations. Beginning with Flook[201] and subsequently reinforced in Diehr, the Supreme Court has stated that the "claims as a whole" approach must be used when determining whether the claimed inventions fall within one of the categories listed in 101.[202] In fact, the Supreme Court declared in Diehr:

A claim drawn to subject matter otherwise statutory does not become nonstatutory simply because it uses a mathematical formula, computer program or digital computer.[203]

By applying the "printed matter" matter rejection to all claims, the Board did not need to refer to any particular prior art because the claimed invention, without the recited functions of the program, could be met by any of the thousand of patents classified in Classes 365 and 395. Even though the recitations remaining in such claims, i.e., any memory capable of storing a computer program, were met by the prior art, the methodology for reaching that conclusion was fatally flawed.

The Lowry decision further forecasted doom for the Board's application of the "printed matter" rejection in Beauregard. As discussed above, the Federal Circuit reversed a "printed matter" rejection under 103 in Lowry. The Lowry invention involved a "data structure" stored on a memory (compared to Beauregard, which involved a computer program product stored on a memory). The Federal Circuit held the 103 "printed matter" rejection relied upon by the PTO did not apply to "information stored in memory" if "the invention as defined by the claims requires that the information be processed not by the mind but by a machine, the computer."[204] Thus, as the PTO later acknowledged, the "computer program product" claims in Beauregard as well as the data structure claims of Lowry both require that the stored information be processed by a computer. Accordingly, under Lowry, the "printed matter rejection" simply was not applicable. As the court noted in Lowry:

. . . the Board erroneously extended a printed matter rejection under sections 102 and 103 to a new field in this case, which involves information stored in a memory. This case, moreover, is distinguishable from the printed matter cases. The printed matter cases "dealt with claims defining as the invention certain novel arrangements of printed lines or characters, useful and intelligible only to the human mind . . . The printed matter cases have no factual relevance where "the invention as defined by the claims requires that the information be processed not by the mind but by a machine, the computer.[205]

IBM appealed the Board's decision to the United States Court of Appeals for the Federal Circuit on October 4, 1994.[206]

D. The Federal Circuit's Remand of Beauregard Answers Some Questions But Leaves Other Questions Unanswered

On March 15, 1995, the PTO requested that the Federal Circuit remand Beauregard to the Board. The PTO stated that the Board's rejection of the Beauregard claims under the "printed matter" doctrine "is apparently inconsistent with the precedent of this Court."[207] The Commissioner pointed out that the Federal Circuit "has held that 'the printed matter cases have no factual relevance where the invention as defined by the claims requires that the information be processed not by the mind but by a machine, the computer.'"[208] The Commissioner concluded that the Beauregard application should be remanded "for further consideration by the Office not inconsistent with Lowry."[209]

The Federal Circuit rejected the Commissioner's Motion to Remand. The Commission tried again on April 26, 1995, moving to dismiss the Beauregard appeal for lack of jurisdiction. In an accompanying memorandum, the Commissioner acknowledged that "the Commissioner agrees with the appellants that the outstanding rejections presented to the Court should be reversed."[210] The Commissioner pointed out that the Federal Circuit's decision in Lowry made clear that "the printed matter doctrine has no relevance to a claimed invention which requires that the information sorted in a memory be processed by a computer."[211] The Commissioner concluded:

After a careful review of this Court's precedent, including Lowry, the Commissioner is preparing guidelines for the patent examining corps, advising the corps that computer programs embodied in a tangible medium, such as a floppy diskette, are patentable subject matter under 35 U.S.C. 101 and must be examined under 35 U.S.C. 102 and 103. That is the situation in Beauregard. Thus, the only rejections before the Court in this appeal must be withdrawn.

The Commissioner is prepared to allow all of the claims on appeal in their present form except claim 22. Claim 22 may not be patentable, even when the software limitations are considered, in view of a newly discovered prior art reference not presently before the Court.[212]

IBM essentially agreed with the PTO's decision to withdraw the "printed matter" rejection; however, IBM desired that the Federal Circuit retain jurisdiction over the appeal. However, on May 12, 1995, the Federal Circuit, in an Order by Judge Archer, vacated the Board's decision and remanded Beauregard to the "in accordance with the Commissioner's concessions."[213] The "concession" pointed out in Judge Archer's Order was as follows:

The Commissioner now states "that computer programs embodied in a tangible medium, such as floppy diskettes, are patentable subject matter under 35 U.S.C. 101 and must be examined under 35 U.S.C. 102 and 103." The Commissioner states that he agrees with Beauregard's position on appeal that the printed matter doctrine is not applicable.[214]

The Order resolved certain --- but not all --- questions raised in Beauregard regarding how to determine the subject matter patentability of computer program products. From a narrow perspective, the Order made conclusive that the Beauregard claims are patentable subject matter under 101. Further, consideration of the Beauregard claims in the PTO will be limited to 102 and 103 (as noted above, the PTO indicated that it would allow all of the Beauregard claims except Claim 22, which the PTO contends is obvious by virtue of newly discovered prior art).

From a broader perspective, the Order makes clear that the "printed matter" rejection does not apply to computer program product claims. As in Lowry, the invention as defined by the claims requires that the information be processed not by the mind but by a machine, the computer and, therefore, the "printed matter" rejection is not applicable.

The Order further mandates that the Beauregard claims be "examined under 35 U.S.C. 102 and 103"[215]. Implicit in this order is the requirement set forth in Diehr that the claims be considered as a whole. Thus, computer program product claims must be examined by reviewing the "code means" clauses recited in the claims and the corresponding functions these means carry out, such as, "computer readable program code means for causing computer to effect" (then state the function) as demonstrated in Format A above. Computer program product method claims, such as Format A shown above, requires a review of recitation of the steps which define what a program is doing, as shown in Format B.

On the other hand, the Beauregard decision leaves unanswered the question on how to determine whether a computer program product is patentable subject matter under 101. The Order in Beauregard causes some confusion because it embraces the PTO's language "that computer programs embodied in a tangible medium, such as floppy diskettes, are patentable subject matter under 35 U.S.C. 101." Does this broad language suggest that any computer program embodied in a tangible medium is per se patentable subject matter? Some recent news media publications suggest that it does.[216] Was this broad interpretation intended by the PTO and the Federal Circuit? Probably not.

It is doubtful whether the PTO or the Federal intended such a sweeping result. Clearly, such an interpretation would eviscerate the very purpose of Section 101. If the Order in Beauregard was not intended to reach a sweeping conclusion on whether computer program products are patentable subject matter under 101, then the question on how does one determine the "magic dividing line" remains unanswered.

E. Where Is The "Magic Dividing Line"?

Perhaps the most vexing questions left unanswered in Beauregard is defining the "Magic Dividing Line" which distinguish computer program product claims from music or text stored on a CD. As noted above, the Board majority rationalized its 101 rejection by referring to a set of CDs, one containing music and a second with voice, and comparing them with the "computer product claims" at issue in this appeal.

Chief Judge Archer also used the example of a CD as a conceptual aid in his 101 determinations.[217] In the dissenting opinion in Alappat, he raised the question of whether music stored on a CD was statutory and concluded it was not.[218]

The writers suggest that the dividing line can be readily determined by looking at the accepted tests under 101. First, do the computer program product claims, when viewed as a whole, recite a "new and useful" invention under 101? Second, does the invention fall within one of the definitions enumerated in 101, or, conversely, claim one of the unpatentable exceptions under 101 enumerated in Diehr, i.e., "laws of nature, natural phenomena and abstract ideas." Third, does the claimed invention pass muster under the two-part test of Freeman-Walter-Abele?

Since 101 determinations are made on inventions as claimed, the following set of hypothetical claims for memories with differing content embedded therein will help illustrate how to draw that "magic dividing line" which the Board majority could not. For example, a claim drawn to the CD with music as may have been contemplated by Judge Archer could well read:

An article of manufacture comprising:

a storage medium having embodied therein machine readable code for causing a sound device to reproduce music without change, the machine readable code comprising the following musical notes:

This hypothetical claim calls for no more than the storage of the first two measures of Beethoven's famous Fifth Symphony.