1. 1
Patent Eligibility’s ‘Common Stock’ Theory
Robert M. DeWitty
‘Patent eligibility’ refers to the right of an
invention to obtain patent status, i.e., exclusive legal
protection under the laws if statutory criteria are met.
The issue of patent eligible subject matter has been called
“... one of the most difficult and controversial issues in
patent law”.1
The issue continues to arise in reaction to
new technological developments, requiring courts to
continually ask “Are these new technologies eligible for
patenting?” Whereas the developments are new, the tools
used to analyze eligibility are not as such tools are based
on the foundations of patent law. But numerous court cases
show that the courts have failed to develop a consistent
methodology for addressing the patent eligibility issue.
Below is presented a test for determining patent
eligibility of inventions per se, called the ‘Common Stock’
Theory. A key benefit of the Theory is a methodology for
addressing patent eligibility issues by requiring the
decision-maker to ask, firstly, ‘Is the invention eligible
for patenting?’ and secondly, ‘Should the invention be
eligible for a patent?’ This method is applicable
regardless of the technology, and is grounded on the
fundamental principles of patent law.
1. U.S. courts continue to struggle with the issue of
patent eligibility.
In re Petrus A.C.M. Nuijten, 500 F.3d 1346 (Fed. Cir.
2007) is a recent showing of a U.S. court attempting to
grasp the issue of patent eligibility. During oral
arguments, judicial questions were respectfully broad,
ranging from asking about the abstract-ness of the claim at
issue to asking about the physical nature of the subject
matter to hypothesizing how the claim could be infringed.2
A key question of contemporary patent jurisprudence
involving patent eligibility is do such questions provide
1
In the matter of the application of William C. Walter, 618 F.2d 758, 764 (1980).
2
U.S. Court of Appeals for the Federal Circuit, September 20, 2007, In re Petrus A.C.M. Nuijten
(transcript) [As specific examples, “Why is [claim 14] any less abstract than a claim to an algorithm …?”
(assuming an algorithm to be abstract); “What is physical form?” (in this question, the physical-lity of
subject matter was questioned); “If I put a binary signal on paper and superimpose a watermark … does
that infringe claim 14?” (it may be legitimate to question what affect possible infringement may have on
patent eligibility); Claim 14 in the patent application read as follows: “A signal with embedded
supplemental data, the signal being encoded in accordance with a given encoding process and selected
samples of the signal representing the supplemental data, and at least one of the samples preceding the
selected samples is different from the sample corresponding to the given encoding process.]

2. 2
the proper focus for determining whether an invention is
eligible for a patent?3
Nuijten involved an invention relating to a signal
that had been modified through the addition of a watermark.
The watermark was positioned within the signal so that
distortion during reproduction of the signal was minimized
(when compared to the prior art).4
Signal per se claims in
the patent application were rejected based on being non-
statutory subject matter, i.e., “patent ineligible”. The
rejection was sustained by the Board of Patent Appeals and
Interferences on the reasoning that “... [t]he signal ...
has no physical attributes and merely describes the
abstract characteristics of the signal ...” and “... the
claims at issues f[a]ll into none of the four statutory
categories of patent subject matter ...”.5
a. The Court of Appeals limitation of patentable
subject matter to four categories doesn’t comport
with modern-day innovation.
In upholding the rejection of the signal per se
claims, the Court of Appeals expressly limited patent
eligibility to four categories and held such a signal
invention did not fit therein.6
Through Nuijten, the Court presented the premise that
inventions must fit into one of four statutory holes to be
3
U.S. Court of Appeals for the Federal Circuit, September 20, 2007, In re Petrus A.C.M. Nuijten (500 F.3d
1346) [The strongly worded dissenting opinion in Nuijten deserves attention, “I appreciate the majority’s
desire to draw an exclusionary line. However … I respectfully disagree that the majority’s holding is
compelled by or consistent with precedent or the language of the statute. Indeed I fear that it risks further
confusing an already uncertain set of doctrines.”]
4
In re Petrus A.C.M. Nuijten, supra, note 3 at 1349, [“This ability to encode additional data into a signal is
useul to publishers of sound and video recordings, who can use watermarks to embed in the media they
distribute information intended to protect that media against unauthorized copying. For these publishers
and others, watermarking represents a trade-off: the desired additional data is encoded directly into the
signal, but like any change to a signal, the watermark introduces some level of distortion. Thus, a key goal
of watermarking techniques is to minimize the distortion so that the resulting diminution in signal quality is
as minimal as possible.”].
5
Supra, note 3 at 1352, [quoting, Board of Patent Appeals and Interferences, January 24, 2006, Ex Parte
Petrus A.C.M. Nuijten (84 U.S.P.Q. 1335) [“Rather than invent reasons why this different type of subject
matter may be statutory and open up a whole new type of subject matter for patenting, we leave it to our
reviewing court, the U.S. Court of Appeals for the Federal Circuit to make this decision.”].
6
Supra, note 3 at 1352, [35 U.S.C. §101 states “Whoever invents or discovers any new and useful process,
machine, manufacture, or composition of matter, or any new and useful improvements thereof, may obtain
a patent therefore, subject to the conditions and requirements of this title.”; supra, at 1353 “The four
categories together describe the exclusive reach of patentable subject matter. If a claim covers material not
found in any of the four statutory categories, that claim falls outside the plainly expressed scope of §101
even if the subject matter is new and useful.”]

3. 3
eligible for a patent. However, modern-day research and
development does not often result in easily categorized
inventions. Should society tell inventors, ‘Great job, but
your work doesn’t fit’? Does such a society believe all
that has been done is all that is needed, and everything
following is mere modification thereof? The answer to both
questions is likely ‘No’, inventions that do not
statutorily fit should probably still be patent eligible
and future developments will rarely exactly fit into one
exact hole. However, contemporary courts often issue
patent ineligible decisions when inventions come forth that
are new developments that don’t fit into a statutory hole.
Indeed, in Nuijten, the Courts reasoning was based on the
premise that signals are transitory, and transitory
embodiments are not directed to statutory subject matter.7
What is the reasoning behind the dichotomy of society’s
needs and the Court’s inability to support incentive so
that such needs are fulfilled? Likely, the lack of a
clear, applicable test for determining the eligibility of
inventions.
b. Scope of article.
This article attempts to organize the patent
eligibility debate via the proposed ‘Common Stock’ Theory
(Theory). Following setting forth the roots of the Theory,
and the Theory itself, it will be applied to several well-
known patent eligibility cases to measure its usefulness
and effectiveness. The Theory will also be measured
against other patent eligibility tests and standards. This
article is intended to aid courts, lawyers, and patent
examiners, for whom the patent eligibility issue has become
muddled.
2. The ‘Common Stock’ Theory is founded on
Jeffersonian philosophy and contemporary case law.
Presenting the ‘Common Stock’ Theory can begin with
comments from a modern case, Diamond v. Chakrabarty.8
In
Chakrabarty, the U.S. Supreme Court, upon approving the
patent eligibility of man-made microorganisms, began by
reiterating the U.S. Constitution’s mandate to,
7
Supra, note 3 at 1353 [But see, dissenting opinion at 1359 “… the majority concludes that manufactures
must be “tangible”, a definition that excludes “[a] transient electric or electromagnetic transmission”
…With all due respect, I believe these conclusions are erroneous.”]
8
U.S. Supreme Court, June 16, 1980, Diamond v. Chakrabarty (447 U.S. 303).

4. 4
“promote the progress of Science and useful Arts ...”9
and asserting the continuity of Thomas Jefferson’s
philosophy in U.S. patent law,
“The Act embodied Jefferson’s philosophy that “ingenuity
should receive a liberal encouragement” ... In 1952, when
the patent laws were recodified, Congress replaced the word
“art” with “process”, but otherwise left Jefferson’s
language intact”.10
a. Diamond v. Chakrabarty reiterated the decades-long
premise that patent eligibility should be
expansive, but failed to create a practical
test.
While a fundamental decision for patent eligibility,
Chakrabarty did not provide a clear test for determining
patent eligibility, hence inconsistent lower court
decisions have continued. What Chakrabarty did was to
provide the need for a test, consistent with the decision
and easily applicable to future eligibility issues. By
extending farther back from the signing of the
Constitution, the enumeration of a test emerges.
b. From the late-18th
Century to the signing of the
Constitution (1790), Jefferson’s view of
monopolies was consistent and expanded to the
protection of new inventions.
Thomas Jefferson was a key figure in the development
of U.S. patent theory.11
From 1784 to the signing of the
Constitution (1790), Jefferson’s abhorrence of monopolies
9
United States Constitution, September 17, 1787, Article 1, §8, clause 8.
10
Diamond v. Chakrabarty, supra, note 8 at 308-9 [“The Act embodied Jefferson’s philosophy that
“ingenuity should receive a liberal encouragement”… Subsequent patent statutes in 1836, 1870, and 1874
employed this same broad language. In 1952, when the patent laws were recodified, Congress replaced the
word “art” with “process”, but otherwise left Jefferson’s language intact.”].
11
see, A. Mossoff, Who cares what Thomas Jefferson thought about Patents? Reevaluating the Patent
“Privlege” in Historical Context in 92 Cornell L. Rev. 953 (2007) [While numerous articles have been
written contesting Jefferson’s impact on U.S. patent law, such criticisms have acknowledged that courts,
including the U.S. Supreme Court, have accepted Jefferson’s philosophy as central to the patent law,
(“Jefferson’s hegemony over the history of American patent law is as indisputable as it is wrong”, A.
Mossoff at 955); (“The [Graham] Court justified its sweeping discussion of Jefferson’s views on patents
because, it claimed, Jefferson was an important figure in early American patent law: he was the “moving
spirit” in implementing the 1790 Patent Act and “he was also the author of the 1793 Patent Act”, A.
Mossoff. at 960). Therefore, for the purposes herein, we will assume Jefferson’s philosophy to be a
cornerstone in U.S. patent law.]

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and monarchies was consistent and was likely enhanced due
to exposure to the beginnings of the French Revolution and
disdain from England’s king.12
In a letter to the Count de
Vergenes regarding the monopoly exercised over the purchase
of American tobacco, Jefferson wrote:
“... The monopoly of the purchase of tobacco by
France discourages both the French and American
merchant ... It is contrary to the spirit of
trade, and to the dispositions of merchants...”13
continuing,
“... from the suppression of the monopoly on
tobacco, we have also reason to hope some
advantages ... [T]he advantage I principally
expect is an increase of consumption. This will
give us a vent for so much more, and of
consequence, find employment for so many more
cultivators of the earth;”14
In response to the draft Constitution forwarded to
Jefferson, while in France, from Madison, Jefferson
asserted:15
“... I will tell you what I do not like. First,
the omission of a bill of rights, providing
clearly, and without the aid of sophism, for ...
restriction of monopolies ... Let me add, that a
bill of rights is what people are entitled to
against every government on earth ...”16
Concomitant with the severe distrust of monopolies,
Jefferson possessed a belief in invention and new
12
Jefferson, T., “Autobiography of Thomas Jefferson”, libertyonline.hypermall.com/Jefferson/
Autobiography.html, accessed 29/08/2008 [“Other Powers appearing indifferent, we did not think it proper
to press them … They were ignorant of our commerce, which had been always monopolized by England
…”; “I accordingly left for Paris on the 1st
of March [1786], and on my arrival in London we agreed on a
very summary form of a treaty … On my presentation as usual to the King and Queen at their levees, it was
impossible for anything to be more ungracious than their notice of Mr. Adams & myself. I saw at once that
the ulcerations in the narrow mind of that mulish being left nothing to be expected on the subject of my
attendance …”; “The pecuniary distresses of France produced this year a measure of which there had been
no example for near two centuries, & the consequences of which, good and evil, are not yet calculable.”]
13
Jefferson, T., Letter to the Count de Vergennes, August 15, 1785 in The Life and Selected Writings of
Thomas Jefferson, (1994), ed. A. Koch and W. Peden (1944).
14
Supra.
15
Supra, at note 12, [“The Convention met at Philadelphia on the 25th
of May ’87 … I received a copy
early in November, and read and contemplated its provisions with great satisfaction. As not a member of
the Convention, however … I … found articles which I though objectionable.”]
16
Supra at note 12, Jefferson, T., Letter to James Madison, Paris, December 20, 1787.

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development.17
In one correspondence, Jefferson remarked
upon inventors and their inventions,
“...I think two of our countrymen have presented
the most important inventions. Mr Paine ... has
invented an iron bridge, which promises to be
cheaper by a great deal than stone and admit
a much greater arch ... The return of La
Peyrose ... will probably add to our knowledge in
Geography, Botany and Natural History ... We have
spent the prime of our lives in procuring them
the blessings of liberty. Let them spend theirs
in showing that it is the great parent of science
and of virtue.18
Jefferson was aware that there should be a way of
influencing invention creation and protecting it.19
The
issue hinged on how much he, or rather society, was willing
to give to create sufficient influence. Jefferson likely,
though begrudgingly, accepted that some type of exclusive
power was what society had to give,
“... The saying there shall be no monopolies,
lessens the incitements to ingenuity, which is
spurred on by the hope of a monopoly for a
limited time, as of fourteen years; but the
benefit of even limited monopolies is too
doubtful, to be opposed to that of their
general suppression”20
Whereas monopoly was the price for invention, the return
for the monopoly, knowledge dissemination, was clearly a
benefit,
“... I think by far the most important bill in
our whole code, is that for the diffusion of
knowledge among the people. No other foundation
can be devised, for the preservation of freedom
and happiness”21
17
Jefferson, T., Letter to Mon. de L’hommande, Paris, August 9, 1787, “American Memory from the
Library of Congress” memory.loc.gov (accessed October 20, 2008), [“Every discovery of which multiples
the subsistence of man must be a matter of joy to every friend of humanity.”]
18
Supra at note 12, Jefferson, T., Letter to Doctor Joseph Willard, Paris, March 24, 1789.
19
Supra at note 12, Jefferson, T., Letter to Monsieur de Creve-coeur, Paris, January 15, 1787 [“… I see by
the Journal of this morning, that they are robbing us of another of our inventions to give to the English …
You, who write French well and readily, should write a line for the Journal, to reclaim the honor of our
farmers.”]
20
Supra at note 12, Jefferson, T., Letter to James Madison, Paris, July 31, 1788.
21
Supra at note 12, Jefferson, T., Letter to Mr. Wythe, Paris, August 13, 1786.

7. 7
c. Quantification of Jefferson’s philosophy.
Jefferson’s philosophical equation for an invention
creation system can be presented as a balancing act, with
one side holding limited monopolies and the other side
holding invention (ingenuity), knowledge dissemination, and
work created,22
LM = I + KD + WC (1)
where,
LM = limited monopoly
I = Invention, including discoveries and creations
KD = knowledge disseminated
WC = work created
When viewed as a function of “type”(t) of invention, i.e.,
subject matter, equation 1 modifies,
t(LM) = t(I) + t(KD) + t(WC) (2)
where,
t(LM) = type of limited monopoly
t(I) = type of Invention
t(KD) = type of knowledge disseminated
t(WC) = type of work created
Thus, according to equation 2, as the types of invention,
knowledge disseminated, and work created increase, which is
good, the types of limited monopolies also increase, which
is bad.23
A limit should logically be placed on the types
of limited monopolies; to achieve this limit, a temper to
the types of invention should be applied, thus negatively
impacting the increase in the types of limited monopolies.
Jefferson’s temper is described below,
“... Whenever there are in any country
uncultivated lands and unemployed poor, it is
clear that the laws of property have been so far
22
Whereas the letters chosen were selective, it is believed they are a fair representation of Jefferson’s
ideaology. See also, Letter to Abigail Adams (February 22, 1787), Letter to Hogendorp (October 13,
1785), Letter to James Rumsey (October 14, 1789), “American Memory from the Library of Congress”
memory.loc.gov (accessed October 20, 2008).
23
We do not consider the conversion ratio between types of limited monopolies to types of inventions,
disseminated knowledge, and work created, however as Jefferson desired to severely restrict monopolies,
the ratio is likely uneven, i.e., not “1:1”, rather more influence is likely given to the types of invention,
disseminated knowledge, and work created side of the equation. This would reflect Jefferson’s belief that a
small, limited monopoly would severely weigh on society. To accomplish this, a factor “x” would be
multiplied with LM, with “x” being less than “1”. Further study should be made on what values of “x” are
suitable to satisfy Jefferson’s philosophical ends.

8. 8
extended as to violate natural right. The earth
is given as a common stock for man to labor and
live on. If for the encouragement of industry
we allow it to be appropriated, we must
take care that other employment be provided
as to those excluded from the appropriation. If
we do not, the fundamental right to labor the
earth returns to the unemployed.”24
Extending Jefferson’s above belief to intangible property,
such as patents, what emerges is the ‘Common Stock’ Theory,
shown in equation 3:
t(LM) = t(I-CS) + t(KD) + t(WC) (3)
where,
t(LM) = type of limited monopoly
I = inventions, including discoveries and creations
CS = common stock
t(KD) = type of knowledge disseminated
t(WC) = type of work created
The Theory operates by subtracting ‘common stock’
inventions from the field of inventions prior to
calculating the type of limited monopolies.25
Thus, common
stock inventions fail to become the subject of a monopoly.
d. Contemporary support for the ‘Common Stock’ Theory
While being firstly enumerated, and quantified,
herein, the ‘Common Stock’ Theory is supported by
contemporary case law. Judged Learned Hand likely relied
upon a common stock belief when asserting patent
eligibility for a purified compound (“Nor is the patent
only for a degree of purity ... [I]t does not include a
salt, and no one had ever isolated a substance which was
not in salt form ... Indeed, Sadtler supposes it to exist
as a natural salt, and that the base was an original
production of Takamine’s. That was distinction not in
degree, but in kind. [The inventor] was the first to make
it available for any use by removing it from the other
gland-tissue in which it was found, and while it is of
course possible logically to call this a purification of
the principle, it became for every practical purpose a new
24
Jefferson, T., Letter to Reverend James Madison, Fontainebleau, October 28, 1785, “American Memory
from the Library of Congress” memory.loc.gov (accessed October 20, 2008).
25
The Theory does not preclude a society from subtracting other types of invention from the overall field of
invention, thereby further reducing the types of limited monopolies.

9. 9
thing commercially and therapeutically”).26
Further
supporting cases include Graham v. Deere (“[Jefferson]
rejected a natural-rights theory in intellectual property
rights and clearly recognized the social and economic
rationale of the patent system”),27
Gottschalk v. Benson et
al. (“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”),28
Funk Brothers Seed Co. v. Kalo
Inoculant Co. (“The qualities of these bacteria, like the
heat of the sun, electricity, or the qualities of metals,
are part of the storehouse of knowledge of all men. They
are manifestations of laws of nature, free to all men and
reserved exclusively to none”),29
and Parker v. Flook (“The
rule that the discovery of a law of nature cannot be
patented rests ... on the ... fundamental understanding
that they are not the kind of “discoveries” that the
statute was enacted to protect”).30
In fact, a common stock
philosophy extends to other types of intellectual
properties, such as copyright (“Because it is virtually
impossible to write about a particular historical era or
fictional theme without employing certain “stock” or
standard literary devices, we have held that scenes a faire
are not copyrightable as a matter of law”).31
e. What can be considered ‘common stock’?
A brief discussion should be made on what can be
considered ‘common stock’, as the breadth of this will
determine by how much the overall field of invention, which
includes discoveries and developments, will be reduced.
‘Common Stock’ can be thought of as per se that which was
here, is here, or will forever be here, without man’s
influence. As an example, chemical element would be
considered common stock as they have existed, continue to
exist, and likely will always exist without man’s
influence. Mathematical formulas may also be considered
common stock as they have always been present; we may
simply have not known about them. Genes, whether human or
26
Parke-Davis & Co. v. H.K. Mulford Co., 189 F. 95 (C.C.S.D.N.Y. 1911).
27
383 U.S. 1, 8 (1966).
28
409 U.S. 63, 67 (1972).
29
333 U.S. 127, 130 (1948).
30
437 U.S. 584 (1978), quoting P. Rosenberg, Patent Law Fundamentals, §4, p. 13 (1975) [“Patentable
subject matter must be new (novel); not merely heretofore unknown. There is a very compelling reason for
this rule. The reason is founded upon the proposition that in granting patent rights, the public must not be
deprived of any rights that it theretofore freely enjoyed.”]
31
Hoehling v. Universal City Studios, Inc., 618 F.2d 972 (1980).

10. 10
not, would be considered common stock, as they have always
been here, however not in isolated form; thus isolated
genes are not common stock.32
3. The ‘Common Stock’ Theory test: ‘Is the invention
eligible for patenting?’
The ‘Common Stock’ Theory (Theory) creates a practical
test for determining if an invention is eligible for
patenting, taking into account that which is ‘common stock’
and excluding that which has been modified or developed.
The Theory is applied by asking and answering the question
‘Is the invention eligible for patenting?’ This requires
studying the invention per se, outside of any other
considerations and determining if it is part of the common
stock or not.
a. The first, fundamental barrier to patenting an
invention.
The Theory sets the first, fundamental barrier to
patenting inventions within a society. It is first because
failure to be eligible for patenting makes it unnecessary
to consider ‘Should the invention be eligible for
patenting?’, as well as other statutory considerations.33
It is fundamental because it only looks at the inventions
per se and requires consideration of the public policy
principle of patents.
32
See, Parke Davis & Co. v. H.K. Mulford & Co., 189 F. 95 (C.C.S.D.N.Y. 1911) note 26; see also,
Directive 98/44/EC on the legal protection of biotechnological inventions (6 July 1998) Article 3.2
[“Biological material which is isolated from its natural environment … may be the subject of an invention
even if it previously occurred in nature”].
33
‘Should an invention be patented?’ requires consideration of other societal factors, such as moral order or
religious norms. Oftentimes, ‘should’ for invention eligibility is set apart in a country’s patent statute, for
example “Neither a patent nor … certificate shall be granted for (i) plant or animal research …; (ii)
chemical inventions related to foodstuffs …; (iv) inventions related to national defense; (v) inventions
which … would be contrary to public policy and morality (Federal Law No. 44 of 1992 for Organizing and
Protection of Industrial Property for Patents, Designs and Industrial Models: United Arabs Emirates). In
the United States, it is the courts that have often set forth which inventions ‘should not’ be eligible for
patenting, however numerous cases have exhibited courts increasingly confusing ‘Is an invention eligible
for a patent?’ with ‘Should an invention be eligible for a patent?’. Statutory consideration in most regimes
relates to determining whether the invention is new, has an inventive step (non-obviousness), and possesses
a sufficient written description. In the U.S., these statutory considerations are embodied in statutes 35
U.S.C. §§ 102, 103, and 112, respectively.

11. 11
b. The Theory is a continuation of the public policy
principle of patents.
“Public policy” can be defined as government policies
that serve to benefit the public, preferably by serving
most of the population.34
That patents are public policy is
established by Jeffersonian philosophy, wherein ingenuity
(invention), knowledge dissemination, and work creation,
all good for most of the population, are balanced against
the merest existence of a limited monopoly, which benefits
only a few. The Theory considers the public policy of
patents by setting a class of invention aside that, if
allowed to be patented, would severely offset Jefferson’s
equation in favor of few in the population. Stated another
way, as a matter of public policy, if ‘common stock’
inventions were eligible for patenting, the majority would
be unable to use that which is made available for their
livelihood.35
4. The Theory’s low-bar, bright-line nature leads to
increasing the types of patentable inventions and
the first step in hierarchical analysis.
The Theory creates a low-bar barrier as the majority
of inventions are not of the ‘common stock’, even if they
utilize elements from the ‘common stock’. But through the
Theory, a bright-line is created as inventions are either
of the ‘common stock’ or not. Because of the Theory’s low-
bar, bright line nature, two effects will likely occur.
The first effect would be an increase in the types of
invention eligible for patenting. The low-bar aspect of
the Theory, caused by its exclusion of only inventions that
are of the ‘common stock’, causes this.36
This effect,
however, is in line with Jefferson’s philosophy and the
public policy principle as an increase in the types of
eligible invention will increase the types of knowledge
disseminated and the types of work created.
34
C. Archer, International Organizations 2nd
ed.,, London, 1992, at pg. 12 [“What the French-and indeed
the American- Revolution did was to make the states more responsive to the needs of a wider section of the
population.”]
35
Supra, note 24.
36
Examples of inventions that may be considered of the common stock are mathematical theories, whereby
man discovers they exist as opposed to creating them, sounds , whereby man is merely an observer, and
un-manifested ideas, which arise from biochemical reactions within man’s brain organ, such chemicals
bringing about the biochemical reactions already being present prior to the idea.

12. 12
A second effect will be the application of a clear,
first step to determining patent eligibility by courts and
patent examiners. This first step will require asking ‘Is
the invention eligible for patenting?’ Hence, every
invention is either part of or not part of the ‘common
stock’. This first step does not negate other
considerations, such as ‘Should the invention be eligible
for patenting’, but it does create a deviation between ‘Is
it patent eligible’ and ‘Should it be eligible’, allowing
courts to consider both issues separately, logically, and
fully.
5. Criticisms of the Theory are largely unwarranted.
Criticisms of the ‘Common Stock’ Theory will likely
multi-fold. Example criticisms may include:
i. “Under your Theory, I understand that isolated genes are
patent eligible, but upon application to a patient, is a
produced amino acid or protein patent eligible?
Under the Theory, if the coded-for amino acid or protein is
of common stock, i.e., it has always existed inside a
mammal’s body, then it would not be patent eligible. The
process of bringing about the amino acid or protein
utilizing the isolated gene would be patent eligible, but
not the amino acid or protein in situ.
ii. “Suppose I invent an abstract idea, such as a mental
mind game, is this patent eligible under the Theory?”
If the principle of Reduction to Practice under U.S. law is
satisfied, under the Theory, the mental mind game would be
patent eligible.37
In comparison, under EU law the mind
game would have to be utilized with an apparatus or
technical process to be patent eligible.38
iii. “Patenting of known processes, such as business
methods, would occur”
Under the Theory, as business methods are not part of the
‘common stock’, they would be eligible for patenting.
However, the Theory does not address or preclude the issue
‘Should business methods be eligible for patenting’, as
37
Manual of Patent Examining Procedure, Eight Edition, U.S. Department of Commerce, United States
Patent and Trademark Office, §2138.01 (2004) (“Reduction to Practice” under U.S. Patent Law occurs
when the invention is sufficiently completed such that one with ordinary skill in the art knows “how to use”
and “how to make” the invention).
38
Guidelines for Examination in the European Patent Office, December 2007, Chapter IV, 2.3.5.

13. 13
well as statutory considerations.39
Being patent eligible
under the Theory doesn’t make an invention patentable.
6. When compared with other standards and tests, the Theory
shows clear benefits.
U.S. case law has produced a variety of tests and
standards to be applied for determining patent
eligibility.40
When compared to the existing tests, the
‘Common Stock’ Theory is an improvement because it
initiates an hierarchical methodology for addressing patent
eligibility issues, first requiring asking ‘Is the
invention eligible for patenting?’, which may be followed
by addressing ‘Should the invention be eligible for
patenting?’41
One standard set forth by the U.S. Supreme Court is
that “Laws of Nature, physical phenomena, and abstract
ideas are not patentable”.42
The test excludes things of
nature and abstract ideas for being eligible for patent.
While apparently concise, lower courts have had difficulty
in correctly applying this standard, likely because it
requires considering inventions of nature as well as
inventions not of nature but still ineligible due to
39
Supra, note 33.
40
A short listing of applicable cases would include AT&T v. Excel Communications, Inc., 172 F.3d 1352
(Fed. Cir. 1999) [“…our inquiry here focuses on whether the mathematical algorithm is applied in a
practical manner to produce a useful result”], State Street Bank & Trust Co., v. Signature Financial Group,
Inc., 149 F.3d 1368 (Fed. Cir. 1998), In re Thomas P.H. Warmerdam, 33 F.3d 1354 (Fed. Cir. 1994)
[“Despite the oft-quoted statement in the legislative history of the 1952 Patent Act that Congress intended
that statutory subject matter “include anything under the sun that is made by man,” … Congress did not so
mandate. Congress included in patentable subject matter only those things that qualify as “any … process,
machine, manufacture, or composition of matter, or any … improvement thereof …”. To include some
things is to exclude others.”], In re Ralph R. Grams, 888 F.2d 835 (Fed. Cir. 1989) [“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 … or to refine or limit claim steps … the claim passes muster under 35 U.S.C. §
101”], Diamond v. Chakrabarty, 447 U.S. 303 (1980) [“This is not to suggest that § 101 has no limits, or
that it embraces every discovery. The laws of nature, physical phenomena, and abstract ideas have been
held not patentable”], Diamond v. Diehr, 450 U.S. 175 (1980), Parker v. Flook, 437 U.S. 584 (1978)
[“Respondent’s process in unpatentable under § 101, not because it contains a mathematical algorithm as
one component, but because once that algorithm is assumed to be within the prior art, the application,
considered as a whole, contains no patentable invention”], and Gottschalk v. Benson, 409 U.S. 63 (1972)
[“It is conceded that one may not patent an idea. But in practical effect that would be the result … The
mathematical formula involved here has no substantial practical application except in connection with a
digital computer, which means that … [a] patent would wholly pre-empt the mathematical formula and in
practical effect would be a patent on the algorithm itself”.]
41
This hierarchical methodology requires viewing the ‘invention per se’ before taking into consideration
societal concerns.
42
see, Diamond v. Chakrabarty, 447 U.S. 303 (1980).

14. 14
societal values.43
While the ‘Common Stock’ Theory adheres
to the philosophy of the “Laws of Nature ...” test, the
Theory is more fundamental, focusing only on the subject
matter that is of ‘common stock’. Thus, the Theory is more
easily applicable.
Another patent eligibility test mandates that ‘due to
human intervention, an invention is not a product of nature
and therefore is eligible for patent as it falls within the
broadly defined concepts of manufacture or composition of
matter’.44
An issue with this test is the degree of human
intervention must be considered. Does human intervention
require physical touching an object in order to bring it
within the concepts of manufacture or composition? What if
a computer is used, has human intervention occurred? In
comparison, the Theory requires only consideration of the
invention ‘per se’. As previously stated, this creates a
hierarchical methodology whereby societal considerations
can be addressed after the invention itself is considered
eligible to be patented.
Yet another test that has been enumerated is the ‘four
statutory category’ test. As described in Nuijten, the
test requires the subject matter to fall within one of the
four statutory categories to obtain patent eligibility.45
While argument can be made this test adheres to the letter
of the statute, it goes against the underlying philosophy
behind the patent system by strictly categorizing
inventions.46
Under this test, many inventions whose
category is unclear will not be eligible for patenting.
This has the effect of decreasing the types of invention,
decreasing the types of knowledge disseminated, and
decreasing the types of work created, all of which goes
against Jefferson’s reason for agreeing to limited
monopolies. In comparison, the Theory is in line with
Jefferson’s philosophy by limiting patent eligibility to
only those inventions that are not of ‘common stock’, thus
broadening the types of invention, disseminated knowledge,
and work created.
7. Applying the Theory to previously decided cases results
43
see, AT&T v. Excel Communications, 172 F.3d 1352 (Fed. Cir. 1999) [“As the brief review suggests,
this Court (and its predecessor) has struggled to make our understanding of the scope of §101 [35 U.S.C.
§101] responsive to the needs of the modern world”].
44
C.A. Nard, The Law of Patents¸Wolters Kluwer, London, 2008. pg. 119.
45
Supra, note 6.
46
Supra, note 10.

15. 15
in consistent holdings based on different reasoning
and inconsistent holdings.
The Theory will now be applied to several previous
court cases to gauge its effectiveness.
As stated previously, Diamond v. Chakrabarty, 447 U.S.
303 addressed patent eligibility for a man-made organism.47
The case drew from the inventor filing a patent application
for a bacterium.48
In its discussion, the court made
reference to the premise that the “... laws of nature,
physical phenomena, and abstract ideas ...” cannot be
patented.49
In holding that the inventor’s man-made
bacterium is patentable, the Court based its reasoning on
it being a “...non-naturally occurring manufacture or
composition of matter ...”.50
If the ‘Common Stock’ Theory were applied to the facts
of Chakrabarty, the Court would likely have found the man-
made bacteria to be patent eligible as well. This would
have proceeded by asking the question ‘Is the invention
eligible for patent?’ As the bacterium was not of the
‘common stock’, the answer would have been ‘yes’. However,
in contrast the Court would likely have proceeded to a
second issue, ‘Should the invention be eligible for
patenting?’ A discussion on society’s views on patenting
living matter would have insued. Such a discussion may
have better guided future court discussions on patenting
living matter.
Gottschalk v. Benson, 409 U.S. 63 (1972), related to
an attempt to patent a method for converting binary-coded
decimal numbers into pure binary numbers for programming
digital computers.51
As accepted by the Court, a table was
provided explaining how a decimal number from 0 to 10 can
be represented by a binary number with four digits.52
The
47
Supra, note 8.
48
477 U.S. at 305 [“… a bacterium from the genus Pseudomnas”].
49
Id. at 309 [“Such discoveries are “manifestations of … nature, free to all men and reserved exclusively to
none.” (quoting, Funk Brothers Seed Co. v. Kalo Inoculant Co., 333 U.S. 127 (1948)).
50
Id. at 310. [The Court additionally quoted from Hartranft v. Wiegrann, 121 U.S. 609 “… having a
distinctive name, character [and] use.” This begs the question of is it required that inventions have
distinctive name, character, and use to fully satisfy patent eligibility. At first blush, it appears as though
such requirements address other statutory requirements, such as sufficient disclosure, novelty, and
nonobviousness (inventive step)].
51
409 U.S. 63 (1972).
52
Id at 65 [“In pure binary notation, what would be the tens position [of a decimal number] is the twos
position; what would be [the] hundreds position is the fours position; what would be the thousands position
is the eights.”]

16. 16
Court noted that, whereas the invention changes the
ordinary steps a human would used by changing the order,
the invention can still be performed mentally utilizing the
table.53
In holding the method not patentable, the Court
asserted that if it were able to be patented, the method
would “... wholly pre-empt [a] mathematical formula and in
practical effect [give] a patent on the algorithm itself.”54
This reasoning was based on the Court’s belief that the
mathematical formula of the method had no substantial
practical application except in connection with a digital
computer.55
If the Theory herein were applied to the facts of
Gottschalk, the resultant holding would have been similar,
i.e., the process would have been determined not eligible
for patenting, but the reasoning would differ. Key to the
holding would be the fact that the process can be performed
mentally by a human. Who can question whether another has
already performed the process, is performing the process,
or may in the future perform the process mentally? While
this question hints of prior art statutory rejections,
crucial is that it would be against public policy to
monopolize a process other humans can mentally perform
using their biologically provided for tools. Such a
process can be considered of ‘common stock’ because of the
tools used to perform it, such as neurons.56
Thus, such a
mental process monopolization would take from the public
that which they are allowed to utilize for their
livelihood.
Lastly, the Theory will be applied to Nuijten, the
catalyst for this Article.
As discussed earlier, Nuijten involved an attempt to
patent signals per se.57
The Court of Appeals supported the
rejection of the inventor’s signal claims on the grounds
that they did not fit within one of the four statutory
categories.58
If applied to Nuijten, the proposed Theory
would result in a different holding.
The signal per se claims in Nuijten represent a
modification to already existing signals. Whereas the
53
Id. at 66.
54
Id. at 71 [Previously, the Court had defined “algorithm” as a procedure for solving a given type of
mathematical problem]
55
Id.
56
The brain consists of more than 100 billion cells, called neurons. They have the ability to transmit
electrochemical signals over long distances, passing messages to each other. [not yet complete]
57
Supra, note 4.
58
Supra, note 6.

17. 17
original signals, whether analog or digital, can be
considered of ‘common stock’, the modified signal is not
because it contains a watermark positioned at specific
intervals within. As such the signal is not ‘of creation’.
Thus, to the question of ‘Is the signal per se eligible for
patenting?’, the holding would have been ‘yes’.
The proposed Theory presented in this article is not
intended to replace existing patent eligibility tests and
standards, but rather to supplement them by creating an
initiation point for all patent eligibility issues.
Subsequent articles to this subject will continue building
on the hierarchical methodology for patent eligibility
determination.