1. A
recent decision by the U.S. Court
of Appeals for the Federal Circuit
on the patentability of software and
business methods will likely cause
ripples that may reach across oceans
to impact international patent prosecution and
litigation.
On Oct. 30, the court issued In re Bilski, which
established the “machine-or-transformation” test
as the sole analysis for determining whether a
software or business method is subject to patent
in the United States. —F.3d— (Fed. Cir. Oct. 30,
2008) (en banc).
In adopting this test, the court eschewed other
approaches that arguably might have helped to
better harmonize U.S. law with European and
Japanese law. European law evaluates whether
a software-related invention possesses sufficient
“technical” characteristics while Japanese law
evaluates whether information processed by the
software is “concretely realized” by using hardware
resources. Either approach is arguably consistent
withU.S.caselawandtheConstitution.However,
theFederalCircuitconcludedthatitsowntestmore
closely tracks guidance from the U.S. Supreme
Court and reconciles its own case law.
TheFederalCircuit’sdecisionincidentallycomes
atatimewhentheEuropeanPatentOffice(EPO)is
abouttoaddresssoftwarepatentabilityissuesinview
of,interalia,arecentU.K.courtdecision.Courtsin
theUnitedKingdomhavetendedtotakeanarrower
view of software patentability than the EPO. On
Oct. 8, however, the U.K. Court of Appeal sought
toharmonizeEPOandU.K.lawbytakingabroader
view on software patentability. SeeSymbian Ltd. v.
ComptrollerGen.ofPatents,[2008]EWCACiv1066.
Two weeks later, EPO President Alison Brimelow
submitted four questions to the EPO Enlarged
Board of Appeal seeking to resolve whether and
when software may be patentable. Although this
development may help to better harmonize EPO
and U.K. law, it is not expected to directly address
U.S. and Japanese law.
Counsel would be wise to consider how these
developments may affect international patent
prosecution and litigation. A rational approach
would be to evaluate the current state of the law
in the different jurisdictions and consider some
strategies that might apply across all of them.
Although complete harmonization may be
impracticable, some small measures may help to
achievesuccessindifferentjurisdictionsdespitethe
differing legal standards.
U.S., EPO and U.K. Law
Understanding Bilski is a good starting point
to begin formulating an effective international
strategy for software and business method patents.
The Federal Circuit articulated in Bilski that
claimed subject matter satisfies the machine-or-
transformation test when it is tied to a particular
machine or transforms an article.
In seeking to support this test in U.S. law while
providing some guidance about what it means,
the court pointed to considerations from selected
cases that may be applicable in certain instances.
For example, one consideration is whether
the machine or transformation will impose
meaningful limits on the claim’s scope. A second
consideration is whether use of the machine or
transformation is merely post-solution activity.
The court also emphasized that a software patent
must not preempt fundamental principles such
as abstract ideas or mental processes.
The court expressly declined to provide
further guidance with respect to machines.
With regard to processes, however, the court
went on to explain that sufficient transformation
includes chemically or physically transforming
physical objects or substances, or electronically
transforming data representing specific physical
objects or substances, particularly when limited
to a visual depiction. The court distinguished
insufficient transformations that only add a data
gathering step to an algorithm or that allegedly
transform public or private legal obligations
or relationships, business risks, or other such
abstractions.
Despite the guidance on process claims, the
Federal Circuit’s new test presents some uncharted
water for international patent strategies. This
uncertainty is compounded by the shifting
tides in the United Kingdom and the EPO. In
Symbian, the U.K. Intellectual Property Office
(UKIPO) had refused an application as directed
to nonpatentable subject matter due to the so-
called “computer program exclusion,” which is
found in sections 1(1) and 1(2) of the 1977
U.K. Patents Act (as amended). This exclusion
provides that a method for performing a mental
act or doing business, or a program for a computer
is not patentable “as such.” Similar language
is found in Article 52 of the European Patent
Convention. The EPO and U.K. courts have
determined that for software to be patentable
under these standards, it must make a “technical”
contribution.
Symbian presented the question of whether
software directed to a method of accessing data
in DLL files exhibited a sufficient technical
contribution by allowing a computer to run more
efficiently and reliably than those in the prior art.
The UKIPO refused the application, the High
Court reversed, and the UKIPO appealed based
on its position that any technical contribution
must have a novel effect outside the computer.
On Oct. 8, the U.K. Court of Appeal held that
allowing a computer to run more efficiently and
reliably is sufficient technical contribution to
be patentable. The court, endeavoring to
follow somewhat-inconsistent EPO precedent,
explained that a technical innovation may occur
within or outside the computer.
Questions/Potential Answers
Ms. Alison Brimelow, the EPO President,
sought to give the Enlarged Board an opportunity
to reconcile the apparent inconsistency in its
precedent by posing her four questions, which
concern whether: (1) computer programs, if
expressly claimed as such, are per se excludable;
(2) computer programs tied to machines avoid
exclusion; (3) a claimed invention must result
in a technical effect on a physical entity; and
(4) the activity of programming a computer
necessarily involves technical considerations.
At first blush, it might seem that at least some
of the EPO questions may lend themselves to
SERV
ING THE BE
NCH
AND
BAR SINCE 1
888
Volume 240—NO. 106 Wednesday, December 2, 2008
International Patent Prosecution After ‘In re Bilski’:
Incorporating Limitations
Outside Counsel Expert Analysis
LAWRENCE T. KASS is a partner and BLAKE REESE is
an associate in the intellectual property group of
Milbank, Tweed, Hadley & McCloy.
©2008 ALM Properties, Inc.www.NYLJ.com
By
Lawrence T.
Kass
And
Blake
Reese

2. answers consistent with Bilski. For example, Bilski
suggests that
(1) computer programs should not be per
se excludable;
(2) computer programs sufficiently tied to
machines may be able to avoid exclusion
(e.g., under the “machine” aspect of the
Federal Circuit’s machine-or-transformation
test); and
(3) a claimed invention may not necessarily
require a technical effect on a physical
entity (e.g., under the “transformation”
aspect of the Federal Circuit test, it may
be sufficient to electronically transform
data representing certain physical objects
or substances, particularly if the invention
is tied to a visual depiction).
These answers seem consistent with fairly
well-established U.K. and EPO jurisprudence.
See, e.g., Fujitsu’s Application, [1997] EWCA
1174 (Civ) (March 6, 1997).
Even though some of the EPO questions may
be susceptible of finding answers in Bilski, the
EPO is unlikely to adopt a form of machine-
or-transformation test. Indeed, if the Federal
Circuit’s test seems a bit awkward to some
critical U.S. commentators, it would seem
even more strained as applied to EPO law.
The Enlarged Board is more likely to further
elucidate the kind of technical contribution
an invention must make.
For its part, the Federal Circuit in Bilski
conversely did not gravitate toward a “technical
contribution” test. For machine claims, however,
it remains to be seen whether the Federal Circuit
might consider a requirement of technical
contribution by the software-at-issue. The
court’s ultimate view may depend on whether
such requirement can be relied upon to impose
meaningful limits on the claim’s scope and
avoid preemption of fundamental principles.
An important underlying question for both
the Federal Circuit and the Enlarged Board is
whether patentability is satisfied if the software-
at-issue allows a computer to run more efficiently
and reliably and, if so, whether it matters if the
technical effect is arguably within or outside
the computer.
Japanese Law in the Mix
Under Japanese law, software may be
patentable if it is a creation of technical ideas
using a law of nature. This standard is satisfied
when information processing by software is
concretely realized by using hardware. This
includes claiming a computer that runs (works
“cooperatively” with) software. Concrete
realization includes controlling an apparatus or
processing data based on the physical or technical
properties of an object. Japan Patent Office,
“Examination Guidelines for Patent and Utility
Model in Japan,” Part VII: EXAMINATION
GUIDELINES FOR INVENTIONS IN
SPECIFIC FIELDS, Chapter 2.
Examples of nonstatutory subject matter
include economic laws, arbitrary arrangements,
mathematical methods, and mental activity.
Mere data gathering, presenting information,
or post-solution activity are insufficient. Japanese
law further defines pure business method claims
as nonstatutory subject matter, but software
programs that implement business methods may
be patentable if the claims otherwise satisfy the
concretely realized standard.
Comparing Paradigms
A logical next step in formulating effective
international prosecution and litigation
strategies is to compare patentability
requirements from the different jurisdictions.
Following Bilski, the most striking similarity
is the common prohibition against patents
for pure business methods, which are
unrelated to machines (computers) and/or
technical effects.
One may argue that Japan, the EPO and
United Kingdom are somewhat alike in taking
the same approach to patentability regardless
of claim form. This contrasts with the Federal
Circuit, which is apparently inclined to apply
different standards depending on whether the
claim is styled as a machine or a process. The
court’s approach may leave open the possibility
of some harmonization for machine claims. Like
the Japanese approach, an analysis of machine
claims under Federal Circuit law at least since
In re Alappat, 33 F.3d 1526 (Fed. Cir. 1994) (en
banc), evaluates whether the claimed subject
matter is tied to hardware or physical objects.
See also Lawrence Kass, “Computer Software
Patentability and the Role of Means-Plus-
Function Format in Computer Software Claims,”
15 Pace L. Rev. 787 (1995). Accordingly, there
seems to be some harmony with Japanese law
in this regard.
On the other hand, like the EPO and the
United Kingdom, the Bilski machine-or-
transformation test seems to leave open the
opportunity to emphasize technical contribution,
at least in machine claims. The technical
contribution inquiry may in fact be appropriate,
for example, to analyze machine claims that cover
a computer programmed to run more efficiently
and reliably. It remains to be seen, however,
whether patentability of such machine claims
will hinge on whether the technical innovation
resides within or outside the computer.
Navigating Uncharted Waters
For practitioners, the pragmatic effect of these
developments is the desirability of satisfying all of
the differing requirements when prosecuting and
litigating an international patent portfolio. In
general, such practitioners may seek to emphasize
interactions between the claimed subject
matter and any physical instrumentalities or
transformations as well as any beneficial technical
effects, such as improvement in computer
performance. Practitioners might demonstrate,
when applicable, that these attributes genuinely
impose meaningful limits on claim scope.
Practitioners may minimize any attributes that
can be construed as merely post-solution activity
or as preempting fundamental principles such
as abstract ideas or mental processes. Beneficial
technical effects both within and outside the
computer can also be described and touted.
Moreover, prosecutors should draft and
litigators should assert both process and machine
claims. For machine claims, practitioners should
highlight the relationship of the claimed
software/business processes with the hardware-
related aspects of the invention. These hardware-
related aspects may include common computer
components, such as memory and programmed
processors, as well as specialized components.
Insofar as the computer and its components
are common, they may be characterized as
specialized when programmed as claimed. For
process claims, practitioners may emphasize
any chemical or physical transformation, any
electronic transformation of data representing
physical objects or substances, and any visual
depiction of such representations.
Conclusion
Following Bilski, prosecutors may avoid
claiming pure business methods and even
reissue existing patents to incorporate helpful
limitations as above. Litigators may seek support
in the specification for construing claims to
include such limitations. In the United States,
construing claims in view of the specification is
often in tension with concern over incorporating
limitations from the specification into the claims,
which is impermissible. Litigators can expect this
to be among the many hotly contested issues yet
to arise in this area.
Wednesday, December 2, 2008
Reprinted with permission from the December 2, 2008 edition
oftheNewYorkLawJournal.©2008ALMProperties,
Inc.Allrightsreserved.Furtherduplicationwithoutpermissionis
prohibited. For information, contact 877-257-3382 or reprint-
scustomerservice@incisivemedia.com. ALM is now Incisive
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Japanese law evaluates whether
information processed by the
software is“concretely realized”
by using hardware resources.