By Kevin E. Noonan --
In its recent decision in Prometheus Laboratories, Inc. v. Mayo Collaborative Services, the Federal Circuit cited and distinguished its earlier decision in In re Grams, 888 F.2d 835 (Fed. Cir. 1989). A review of the Grams case proves informative, both in understanding the Federal Circuit's reasoning and in better outlining the contours of what form of method claim may be patent-eligible under Supreme Court precedent.
The claim at issue in Grams recited a method for identifying an "abnormality" in a "complex system":
1. A method of diagnosing an abnormal condition in an individual, the individual being characterized by a plurality of correlated parameters of a set of such parameters that is representative of the individual's condition, the parameters comprising data resulting from a plurality of clinical laboratory tests which measure the levels of chemical and biological constituents of the individual [sic] and each parameter having a reference range of values, the method comprising [a] performing said plurality of clinical laboratory tests on the individual to measure the values of the set of parameters; [b] producing from the set of measured parameter values and the reference ranges of values a first quantity representative of the condition of the individual; [c] comparing the first quantity to a first predetermined value to determine whether the individual's condition is abnormal; [d] upon determining from said comparing that the individual's condition is abnormal, successively testing a plurality of different combinations of the constituents of the individual by eliminating parameters from the set to form subsets corresponding to said combinations, producing for each subset a second quantity, and comparing said second quantity with a second predetermined value to detect a non-significant deviation from a normal condition; and [e] identifying as a result of said testing a complementary subset of parameters corresponding to a combination of constituents responsible for the abnormal condition, said complementary subset comprising the parameters eliminated from the set so as to produce a subset having said non-significant deviation from a normal condition.
(emphasis added in opinion). "As disclosed in the specification," the opinion stated, "the invention is applicable to any complex system, whether it be electrical, mechanical, chemical, biological, or combinations thereof."
The Board of Patent Appeals and Interferences held these claims to be directed to non-statutory subject matter, and the Federal Circuit affirmed in an opinion by Judge Archer, joined by Judges Michel and Cowen. The Court's decision was rooted in perceived preclusion of algorithm claims by Gottschalk v. Benson, 409 U.S. 63 (1972), and Parker v. Flook, 437 U.S. 584 (1978), which limited the scope of patent-eligibility. However, the panel also took notice of Supreme Court precedent from Diamond v. Chakrabarty, 447 U.S. 303 (1980), and Diamond v. Diehr, 450 U.S. 175 (1981), where there was recited an expansive reading of the statute with regard to patent-eligibility. The opinion noted a shift in the Supreme Court's thinking, wherein in Chakrabarty, the Supreme Court expressly rejected the argument that "patentability in a new area, 'micro-organisms[,] cannot qualify as patentable subject matter until Congress expressly authorizes such protection.'" Chakrabarty at 314-15; to this panel, this sentiment seemed to "effect a change from Flook's admonition that 'we must proceed cautiously when we are asked to extend patent rights into areas wholly unforeseen by Congress.'" Flook at 596. But the Federal Circuit noted that neither the Chakrabarty nor the Diehr Court had overruled or disapproved Benson, which thus remained the law. It is important to note that, as the Prometheus Court opined to the effect that the mere recitation of a mental step did not preclude patent eligibility, "the mere presence of an algorithm in a claim is not enough [for the Grams Court] to preclude patent-eligibilit" (citing In re Sarkar, 588 F.2d 1130 (C.C.P.A. 1978), and In re Walter, 618 F.2d 758 (C.C.P.A. 1980))."
As quoted in the Prometheus opinion, the Grams Court asserted that "[i]n all instances, this critical question must be answered: 'What did applicants invent?,'" citing In re Abele, 684 F.2d 902, 907 (C.C.P.A. 1982). The Grams Court's answer to this question, again cited by the Prometheus opinion, is that "[e]ach invention must be evaluated as claimed: yet semantogenic considerations preclude a determination based solely on words appearing in the claims. In the final analysis under § 101, the claimed invention, as a whole, must be evaluated for what it is." Not cited in the Prometheus opinion was the completion of the Grams Court analysis, that "[h]ence, the analysis [regarding patent eligibility] requires careful interpretation of each claim in light of its supporting disclosure." And it is this last step that may hold the key distinction between patent-eligibility for the Prometheus claims and patent-ineligibility for the Grams claims.
For Grams' claims, the Federal Circuit found that the clinical testing steps were "mere data-gathering" and thus did not convert a patent-ineligible algorithm claim to a patent-eligible method claim. The rationale for excluding data-gathering steps from conferring patent eligibility was cited from In re Sarker:
No mathematical equation can be used, as a practical matter, without establishing and substituting values for the variables expressed therein. Substitution of values dictated by the formula has thus been viewed as a form of mathematical step. If the steps of gathering and substituting values were alone sufficient, every mathematical equation, formula, or algorithm having any practical use would be per se subject to patenting as a "process" under § 101. Consideration of whether the substitution of specific values is enough to convert the disembodied ideas present in the formula into an embodiment of those ideas, or into an application of the formula, is foreclosed by the current state of the law.
Also part of the Court's determination that Grams' claims were patent-ineligible stemmed from the limited disclosure in the specification coupled with the broad scope of the claims. "As disclosed in the specification, the invention is applicable to any complex system, whether it be electrical, mechanical, chemical, biological, or combinations thereof," as characterized by the Court (emphasis added). In contrast to the broad and expansive scope of applicability of the claimed methods, the Court characterized the specification as "not bulg[ing] with disclosure on those [clinical] tests." Rather, the specification "focuse[d] on the algorithm itself, although it briefly refer[red] to, without describing, the clinical tests that provide data." The Court illustrated this differential in disclosure of the clinical tests and disclosure of the algorithm by citing the specification in this regard specifically: "The [computer] program was written to analyze the results of up to eighteen clinical laboratory tests produced by a standard chemical analyzer that measures the levels of the chemical biological components listed."
Thus, at least part of the rationale for the Grams Court to determine that the claims were not patent-eligible had to do with the differences between how the invention was described and how it was claimed. This distinction is reminiscent in the Supreme Court's reasoning in Funk Brothers Seed Co. v. Kalo Inoculant Co., 333 U.S. 127 (1948), as explained in Justice Frankfurter's concurring opinion: at least a part of the patent-eligibility deficiencies in those claims were that they were not limited to the specific combinations of strains to be mixed, but encompassed all mixtures (and thus attempted to claim a natural phenomenon):
Insofar as the court below concluded that the packaging of a particular mixture of compatible strains is an invention and as such patentable, I agree, provided not only that a new and useful property results from their combination, but also that the particular strains are identifiable and adequately identified. I do not find that Bond's combination of strains satisfies these requirements. The strains by which Bond secured compatibility are not identified and are identifiable only by their compatibility. . . . [The patentee] appears to claim that since he was the originator of the idea that there might be mutually compatible strains and had practically demonstrated that some such strains exist, everyone else is forbidden to use a combination of strains whether they are or are not identical with the combinations that Bond selected and packaged together. It was this claim that, as I understand it, the District Court found not to be patentable, but which, if valid, had been infringed. . . . The consequences of such a conclusion call for its rejection. Its acceptance would require, for instance in the field of alloys, that if one discovered a particular mixture of metals, which when alloyed had some particular desirable properties, he could patent not merely this particular mixture but the idea of alloying metals for this purpose, and thus exclude everyone else from contriving some other combination of metals which, when alloyed, had the same desirable properties. In patenting an alloy, I assume that both the qualities of the product and its specific composition would need to be specified. The strains that Bond put together in the product which he patented can be specified only by the properties of the mixture.
Id. at 133-34. Just as in the Funk Brothers claims, here the Grams claims were overbroad in comparison with their disclosure (as well as that disclosure being directed almost solely towards the algorithm rather than the steps reciting the methods for performing the clinical assays).
The Grams Court also did not reach the lengths to which some may wish to assert its holding, specifically disclaiming any broad legal or philosophical position on patent eligibility:
Whether section 101 precludes patentability in every case where the physical step of obtaining data for the algorithm is the only other significant element in mathematical algorithm-containing claims is a question we need not answer. Analysis in that area depends on the claims as a whole and the circumstances of each case. Rather, we address only the claims and other circumstances involved here.
This is consistent with the opinion's earlier assertion that, in deciding patent eligibility, "the analysis requires careful interpretation of each claim in light of its supporting disclosure." The precedential value of In re Grams, in view of the Federal Circuit's Prometheus decision, is to provide an example of how a method claim, particularly a diagnostic method claim, can be patent-ineligible (at least insofar as the claim is directed primarily to steps constituting an algorithm). In this its value per se may be limited; however, it serves as one piece in the mosaic the Federal Circuit is constructing consistent with the Supreme Court's direction that the appellate court develop this area of the law based on its "special expertise." Whether the Supreme Court ultimately approves the contours of patent eligibility that the Federal Circuit produces cannot be predicted; however, the way the Federal Circuit is approaching this task is much more in line with the case-by-case, "totality of the circumstances" approach favored by the High Court, and does not resemble the bright line rules that have caused the Supreme Court to spend the last decade overturning the patent law edifice that it took the Federal Circuit a generation to erect.