| CREATE Act, Examination Instructions and Guidelines |
Referenced Items (225, 226, 227, 228, 229, 230, 231, 232, 233, 234, 235, 236, 237, 238, 239, 240, 241, 242, 243, 244) |
(230) DEPARTMENT OF COMMERCE
United States Patent and Trademark Office
[Docket No. PTO-P-2010-0067]
Interim Guidance for
Determining Subject Matter Eligibility for
Process Claims in View of Bilski v. Kappos
AGENCY: United States Patent and Trademark Office, Commerce.
ACTION: Notice; Request for comments.
SUMMARY: The United States Patent and Trademark Office (USPTO or Office)
has prepared Interim Guidance for Determining Subject Matter Eligibility
for Process Claims in view of Bilski v. Kappos (Interim Bilski Guidance)
for its personnel to use when determining subject matter eligibility under
35 U.S.C. 101 in view of the recent decision by the United States Supreme
Court (Supreme Court) in Bilski v. Kappos, No. 08-964 (June 28, 2010). It
is intended to be used by Office personnel as a supplement to the previously
issued Interim Examination Instructions for Evaluating Subject Matter
Eligibility Under 35 U.S.C. 101 dated August 24, 2009 (Interim Instructions)
and the memorandum to the Patent Examining Corps on the Supreme Court
Decision in Bilski v. Kappos dated June 28, 2010. This guidance supersedes
previous guidance on subject matter eligibility that conflicts with the
Interim Bilski Guidance. Any member of the public may submit written comments
on the Interim Bilski Guidance. The Office is especially interested in
receiving comments regarding the scope and extent of the holding in Bilski.
DATES: The Interim Bilski Guidance is effective July 27, 2010. This guidance
applies to all applications filed before, on or after the effective date of
July 27, 2010.
Comment Deadline Date: To be ensured of consideration, written comments
must be received on or before September 27, 2010. No public hearing will be
held.
ADDRESSES: Comments concerning this Interim Bilski Guidance should be
sent by electronic mail message over the Internet addressed to
Bilski_Guidance@uspto.gov or facsimile transmitted to (571) 273-0125.
Comments may also be submitted by mail addressed to: Mail Stop Comments -
Patents, Commissioner for Patents, P.O. Box 1450, Alexandria, VA 22313-1450.
Although comments may be submitted by facsimile or mail, the Office prefers
to receive comments via the Internet.
The comments will be available for public inspection at the Office
of the Commissioner for Patents, located in Madison East, Tenth Floor,
600 Dulany Street, Alexandria, Virginia, and will be available via the
USPTO Internet Web site, (address: http://www.uspto.gov). Because comments
will be available for public inspection, information that is not desired to
be made public, such as an address or phone number, should not be included in
the comments.
FOR FURTHER INFORMATION CONTACT: Caroline D. Dennison, Legal Advisor,
Office of Patent Legal Administration, Office of the Associate Commissioner
for Patent Examination Policy, by telephone at (571) 272-7729, or by mail
addressed to: Mail Stop Comments - Patents, Commissioner for Patents, P.O.
Box 1450, Alexandria, VA 22313-1450, marked to the attention of
Caroline D. Dennison.
SUPPLEMENTARY INFORMATION: The USPTO has prepared interim guidance
(Interim Bilski Guidance) for its personnel to use when determining subject
matter eligibility under 35 U.S.C. 101 in view of the recent decision by the
United States Supreme Court (Supreme Court) in Bilski. It is intended to be
used by Office personnel as a supplement to the previously issued Interim
Examination Instructions for Evaluating Subject Matter Eligibility Under 35
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U.S.C. 101 dated August 24, 2009 (Interim Instructions) and the memorandum to
the Patent Examining Corps on the Supreme Court Decision in Bilski v. Kappos
dated June 28, 2010. The Interim Bilski Guidance is based on the USPTO's
current understanding of the law and is believed to be fully consistent with
the decision in Bilski, the binding precedent of the Supreme Court, the
U.S. Court of Appeals for the Federal Circuit (Federal Circuit) and the
Federal Circuit's predecessor courts. The USPTO has also posted the Interim
Bilski Guidance on its Internet Web site (http://www.uspto.gov).
Request for Comments
The Office has received and considered the comments regarding the
Interim Instructions submitted in response to the Request for Comments
on Interim Examination Instructions for Evaluating Patent Subject Matter
Eligibility, 74 FR 47780 (Sept. 11, 2009), 1347 Off. Gaz. Pat. Office 110
(Oct. 13, 2009). See also Additional Period for Comments on Interim
Examination Instructions for Evaluating Patent Subject Matter Eligibility,
74 FR 52184 (Oct. 9, 2009), 1348 Off. Gaz. Pat. Office 42 (Nov. 3, 2009)
(extending the comment period until November 9, 2009).
Members of the public are invited to review the Interim Bilski Guidance
(below) and provide comments. The Office is particularly interested in
receiving comments in response to the following questions:
1. What are examples of claims that do not meet the machine-or-
transformation test but nevertheless remain patent-eligible because
they do not recite an abstract idea?
2. What are examples of claims that meet the machine-or-transformation
test but nevertheless are not patent-eligible because they recite an abstract
idea?
3. The decision in Bilski suggested that it might be possible to "defin[e]
a narrower category or class of patent applications that claim to instruct
how business should be conducted," such that the category itself would be
unpatentable as "an attempt to patent abstract ideas." Bilski slip op. at 12.
Do any such "categories" exist? If so, how does the category itself represent
an "attempt to patent abstract ideas?"
Interim Guidance for Determining Subject Matter Eligibility for Process
Claims in view of Bilski v. Kappos (Interim Bilski Guidance)
I. Overview: This Interim Bilski Guidance is for determining
patent-eligibility of process claims under 35 U.S.C. 101 in view of the
opinion by the Supreme Court in Bilski v. Kappos, 561 U.S. - - - (2010),
which refined the abstract idea exception to subject matter that is eligible
for patenting. A claim to an abstract idea is not a patent-eligible process.
This Interim Bilski Guidance provides factors to consider in
determining subject matter eligibility of method claims in view of the
abstract idea exception. Although this guidance presents a change in existing
examination practice, it is anticipated that subject matter eligibility
determinations will not increase in complexity for the large majority of
examiners, who do not routinely encounter claims that implicate the abstract
idea exception.
Under the principles of compact prosecution, each claim should be
reviewed for compliance with every statutory requirement for patentability
in the initial review of the application, even if one or more claims are
found to be deficient with respect to the patent-eligibility requirement of
35 U.S.C. 101. Thus, Office personnel should state all non-cumulative reasons
and bases for rejecting claims in the first Office action.
Section III of this Interim Bilski Guidance provides guidance on
the abstract idea exception to subject matter eligibility as set forth
in Bilski, and section IV of this Interim Bilski Guidance provides
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guidance on factors relevant to reviewing method claims for subject
matter eligibility in view of Bilski. To aid examiners in implementing
this guidance, a summary sheet of factors which may be useful for
determining subject matter eligibility of a method claim is provided at
the end of this Interim Bilski Guidance.
Section V of this Interim Bilski Guidance discusses how to make the
determination of eligibility. To summarize, in order for the examiner
to make a proper prima facie case of ineligibility, the examiner will
evaluate the claim as a whole and weigh the relevant factors set forth
in Bilski and previous Supreme Court precedent and make a determination
of compliance with the subject matter eligibility prong of § 101. The Office
will then consider rebuttal arguments and evidence supporting subject matter
ligibility.
II. Summary: The Bilski Court underscored that the text of § 101 is
expansive, specifying four independent categories of inventions eligible for
protection, including processes, machines, manufactures, and compositions of
matter. See slip op. at 4 ("In choosing such expansive terms * * * modified
by the comprehensive `any', Congress plainly contemplated that the patent
laws would be given wide scope.") (quoting Diamond v. Chakrabarty, 447 U.S.
303, 308 (1980)). The Court also made clear that business methods are not
"categorically outside of § 101's scope," stating that "a business method is
simply one kind of `method' that is, at least in some circumstances, eligible
for patenting under § 101." Id. at 10-11. Examiners are reminded that § 101
is not the sole tool for determining patentability; where a claim encompasses
an abstract idea, sections 102, 103, and 112 will provide additional tools for
ensuring that the claim meets the conditions for patentability. As the Court
made clear in Bilski:
The § 101 patent-eligibility inquiry is only a threshold
test. Even if an invention qualifies as a process, machine,
manufacture, or composition of matter, in order to receive the
Patent Act's protection the claimed invention must also satisfy
"the conditions and requirements of this title." § 101. Those
requirements include that the invention be novel, see § 102,
nonobvious, see § 103, and fully and particularly described, see
§ 112.
Id. at 5.
Therefore, examiners should avoid focusing on issues of patent-
eligibility under § 101 to the detriment of considering an application for
compliance with the requirements of §§ 102, 103, and 112, and should avoid
treating an application solely on the basis of patent-eligibility under § 101
except in the most extreme cases.
III. The Abstract Idea Exception to Subject Matter Eligibility:
There are limits on the scope of patent-eligibility. In particular, the
Supreme Court has identified three specific exceptions to § 101's broad
patent-eligibility principles: Laws of nature, physical phenomena, and
abstract ideas. See id.
The Office has been using the so-called "machine-or-transformation" test
used by the Federal Circuit to evaluate whether a method claim qualifies as a
statutory patent-eligible process. See Interim Examination Instructions For
Evaluating Subject Matter Eligibility Under 35 U.S.C. 101 dated August 24,
2009 ("2009 Interim Instructions"). The Supreme Court stated in Bilski that
the machine-or-transformation test is a "useful and important clue" and
"investigative tool" for determining whether some claimed methods are
statutory processes, but it "is not the sole test for deciding whether
an invention is a patent-eligible `process.'" Slip op. at 8. Its primary
objection was to the elevation of the machine-or-transformation test - which
it considered to be "atextual" - as the "sole test" for patent-eligibility.
Slip op. at 6-8, 16. To date, no court, presented with a subject matter
eligibility issue, has ever ruled that a method claim that lacked a machine
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or a transformation was patent-eligible. However, Bilski held open the
possibility that some claims that do not meet the machine-or-transformation
test might nevertheless be patent-eligible.
Prior to adoption of the machine-or-transformation test, the Office
had used the "abstract idea" exception in cases where a claimed
"method" did not sufficiently recite a physical instantiation. See,
e.g., Ex parte Bilski, No. 2002-2257, slip op. at 46-49 (B.P.A.I. Sept.
26, 2006) (informative), http://www.uspto.gov/ip/boards/bpai/decisions/
inform/fd022257.pdf. Following Bilski, such an approach remains proper.
A claim that attempts to patent an abstract idea is ineligible subject
matter under 35 U.S.C. 101. See slip op. at 13 ("[A]ll members of the
Court agree that the patent application at issue here falls outside of
§ 101 because it claims an abstract idea."). The abstract idea exception
has deep roots in the Supreme Court's jurisprudence. See id. at 5 (citing
Le Roy v. Tatham, 55 U.S. (14 How.) 156, 174-175 (1853)).
Bilski reaffirmed Diehr's holding that "while an abstract idea,
law of nature, or mathematical formula could not be patented, `an application
of a law of nature or mathematical formula to a known structure or process
may well be deserving of patent protection.'" Id. at 14 (quoting Diamond v.
Diehr, 450 U.S. 175, 187 (1981)) (emphasis in original). The recitation of
some structure, such as a machine, or the recitation of some transformative
component will in most cases limit the claim to such an application. However,
not all such recitations necessarily save the claim: "Flook established that
limiting an abstract idea to one field of use or adding token postsolution
components did not make the concept patentable." Id. at 15. Moreover, the
fact that the steps of a claim might occur in the "real world" does not
necessarily save it from a section 101 rejection. Thus, the Bilski claims
were said to be drawn to an "abstract idea" despite the fact that they
included steps drawn to initiating transactions. The "abstractness" is in the
sense that there are no limitations as to the mechanism for entering into the
transactions.
Consistent with the foregoing, Bilski holds that the following
claim is abstract:
1. A method for managing the consumption risk costs of a commodity
sold by a commodity provider at a fixed price comprising the steps of:
(a) Initiating a series of transactions between said commodity
provider and consumers of said commodity wherein said consumers
purchase said commodity at a fixed rate based upon historical averages,
said fixed rate corresponding to a risk position of said consumer;
(b) Identifying market participants for said commodity having a
counter-risk position to said consumers; and
(c) Initiating a series of transactions between said commodity
provider and said market participants at a second fixed rate such that
said series of market participant transactions balances the risk
position of said series of consumer transactions.
Specifically, the Court explains:
The concept of hedging, described in claim 1 and reduced to a
mathematical formula in claim 4, is an unpatentable abstract idea,
just like the algorithms at issue in Benson and Flook. Allowing
petitioners to patent risk hedging would preempt use of this
approach in all fields, and would effectively grant a monopoly over
an abstract idea.
Slip op. at 15.
Bilski also held that the additional, narrowing, limitations in the
dependent claims were mere field of use limitations or insignificant
postsolution components, and that adding these limitations did not make
the claims patent-eligible. See id. Claims 1-9 in Bilski are attached
as examples of claims that run afoul of the abstract idea exception.
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The day after deciding Bilski, the Supreme Court denied certiorari
in Ferguson v. Kappos, U.S. Supreme Court No. 09-1501, while granting,
vacating, and remanding two other Federal Circuit section 101 cases.
The denial of certiorari left intact the rejection of all of Ferguson's
claims. Although the Federal Circuit had applied the machine-or-
transformation test to reject Ferguson's process claims, the Supreme
Court's disposition of Ferguson makes it likely that the Ferguson
claims also run afoul of the abstract idea exception. A representative
Ferguson claim is:
1. A method of marketing a product, comprising:
Developing a shared marketing force, said shared marketing force
including at least marketing channels, which enable marketing a
number of related products;
Using said shared marketing force to market a plurality of
different products that are made by a plurality of different
autonomous producing company [sic], so that different autonomous
companies, having different ownerships, respectively produce said
related products;
Obtaining a share of total profits from each of said plurality
of different autonomous producing companies in return for said
using; and
Obtaining an exclusive right to market each of said plurality of
products in return for said using.
The following guidance presents factors that are to be considered
when evaluating patent-eligibility of method claims. The factors include
inquiries from the machine-or-transformation test, which remains a useful
investigative tool, and inquiries gleaned from Supreme Court precedent. While
the Supreme Court in Bilski did not set forth detailed guidance, there are
many factors to be considered when determining whether there is sufficient
evidence to support a determination that a method claim is directed to an
abstract idea. The following factors are intended to be useful examples and
are not intended to be exclusive or limiting. It is recognized that new
factors may be developed, particularly for emerging technologies. It is
anticipated that the factors will be modified and changed to take into
account developments in precedential case law and to accommodate
prosecution issues that may arise in implementing this new practice.
Additional guidance in the form of expanded explanation and specific
examples will follow in due course.
IV. Evaluating Method Claims for Eligibility: Where the claim is
written in the form of a method and is potentially a patentable
process, as defined in 35 U.S.C. 100(b), the claim is patent-eligible
so long as it is not disqualified as one of the exceptions to
§ 101's broad patent-eligibility principles; i.e., laws of nature,
physical phenomena, and abstract ideas.
Taking into account the following factors, the examiner should
determine whether the claimed invention, viewed as a whole, is disqualified
as being a claim to an abstract idea. Relevant factors - both those in favor
of patent-eligibility and those against such a finding - should be weighed in
making the determination. Factors that weigh in favor of patent-eligibility
satisfy the criteria of the machine-or-transformation test or provide evidence
that the abstract idea has been practically applied. Factors that weigh
against patent-eligibility neither satisfy the criteria of the machine-or-
transformation test nor provide evidence that the abstract idea has been
practically applied. Each case will present different factors, and it is
likely that only some of the factors will be present in each application. It
would be improper to make a conclusion based on one factor while ignoring
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other factors.
This additional guidance, which builds upon the 2009 Interim Instructions,
is a factor-based inquiry. Although the following approach is a change, it is
anticipated that subject matter eligibility determinations will not increase
in complexity, particularly for examiners who do not routinely encounter
claims that implicate the abstract idea exception. Examiners will recognize
that the machine-or-transformation test set forth in Section II(B) of the
2009 Interim Instructions, although not the sole test for evaluating the
subject matter eligibility of a method claim, is still pertinent in making
determinations pursuant to the factors listed below. Examiners are referred
to the summary sheet of factors provided at the end of this Interim Bilski
Guidance which may be useful in determining subject matter eligibility of a
method claim.
Factors To Be Considered in an Abstract Idea Determination of a Method Claim
A. Whether the method involves or is executed by a particular
machine or apparatus. If so, the claims are less likely to be drawn to
an abstract idea; if not, they are more likely to be so drawn. Where a
machine or apparatus is recited or inherent in a patent claim, the
following factors are relevant:
(1) The particularity or generality of the elements of the machine
or apparatus; i.e., the degree to which the machine in the claim can be
specifically identified (not any and all machines). Incorporation of a
particular machine or apparatus into the claimed method steps weighs
toward eligibility.
(2) Whether the machine or apparatus implements the steps of the
method. Integral use of a machine or apparatus to achieve performance
of the method weighs toward eligibility, as compared to where the
machine or apparatus is merely an object on which the method operates,
which weighs against eligibility.
(3) Whether its involvement is extrasolution activity or a field-
of-use, i.e., the extent to which (or how) the machine or apparatus
imposes meaningful limits on the execution of the claimed method steps.
Use of a machine or apparatus that contributes only nominally or
insignificantly to the execution of the claimed method (e.g., in a data
gathering step or in a field-of-use limitation) would weigh against
eligibility.
B. Whether performance of the claimed method results in or
otherwise involves a transformation of a particular article. If such a
transformation exists, the claims are less likely to be drawn to an
abstract idea; if not, they are more likely to be so drawn. Where a
transformation occurs, the following factors are relevant:
(1) The particularity or generality of the transformation. A more
particular transformation would weigh in favor of eligibility.
(2) The degree to which the recited article is particular; i.e.,
can be specifically identified (not any and all articles). A
transformation applied to a generically recited article would weigh
against eligibility.
(3) The nature of the transformation in terms of the type or extent
of change in state or thing, for instance by having a different
function or use, which would weigh toward eligibility, compared to
merely having a different location, which would weigh against
eligibility.
(4) The nature of the article transformed, i.e., whether it is an
object or substance, weighing toward eligibility, compared to a concept
such as a contractual obligation or mental judgment, which would weigh
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against eligibility.
(5) Whether its involvement is extrasolution activity or a field-
of-use, i.e., the extent to which (or how) the transformation imposes
meaningful limits on the execution of the claimed method steps. A
transformation that contributes only nominally or insignificantly to
the execution of the claimed method (e.g., in a data gathering step or
in a field-of-use limitation) would weigh against eligibility.
C. Whether performance of the claimed method involves an
application of a law of nature, even in the absence of a particular
machine, apparatus, or transformation. If such an application exists,
the claims are less likely to be drawn to an abstract idea; if not,
they are more likely to be so drawn. Where such an application is
present, the following factors are relevant:
(1) The particularity or generality of the application. Application
of a law of nature having broad applicability across many fields of
endeavor weighs against eligibility, such as where the claim
generically recites an effect of the law of nature or claims every mode
of accomplishing that effect, such that the claim would monopolize a
natural force or patent a scientific fact. (As an example, claiming
"the use of electromagnetism for transmitting signals at a
distance.")
(2) Whether the claimed method recites an application of a law of
nature solely involving subjective determinations; e.g., ways to think
about the law of nature. Application of a law of nature to a particular
way of thinking about, or reacting to, a law of nature would weigh
against eligibility.
(3) Whether its involvement is extrasolution activity or a field-
of-use, i.e., the extent to which (or how) the application imposes
meaningful limits on the execution of the claimed method steps. An
application of the law of nature that contributes only nominally or
insignificantly to the execution of the claimed method (e.g., in a data
gathering step or in a field-of-use limitation) would weigh against
eligibility.
D. Whether a general concept (which could also be recognized in
such terms as a principle, theory, plan or scheme) is involved in
executing the steps of the method. The presence of such a general
concept can be a clue that the claim is drawn to an abstract idea.
Where a general concept is present, the following factors are relevant:
(1) The extent to which use of the concept, as expressed in the
method, would preempt its use in other fields; i.e., that the claim
would effectively grant a monopoly over the concept.
(2) The extent to which the claim is so abstract and sweeping as to
cover both known and unknown uses of the concept, and be performed
through any existing or future-devised machinery, or even without any
apparatus.
(3) The extent to which the claim would effectively cover all
possible solutions to a particular problem; i.e., that the claim is a
statement of the problem versus a description of a particular solution
to the problem.
(4) Whether the concept is disembodied or whether it is
instantiated; i.e., implemented, in some tangible way. Note, however,
that limiting an abstract idea to one field of use or adding token
postsolution components does not make the concept patentable. A concept
that is well-instantiated weighs in favor of eligibility.
(5) The mechanism(s) by which the steps are implemented; e.g.,
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whether the performance of the process is observable and verifiable
rather than subjective or imperceptible. Steps that are observable and
verifiable weigh in favor of eligibility.
(6) Examples of general concepts include, but are not limited to:
Basic economic practices or theories (e.g., hedging, insurance,
financial transactions, marketing);
Basic legal theories (e.g., contracts, dispute resolution, rules of
law);
Mathematical concepts (e.g., algorithms, spatial relationships,
geometry);
Mental activity (e.g., forming a judgment, observation, evaluation,
or opinion);
Interpersonal interactions or relationships (e.g., conversing, dating);
Teaching concepts (e.g., memorization, repetition);
Human behavior (e.g., exercising, wearing clothing, following rules
or instructions);
Instructing "how business should be conducted," Bilski, slip op. at 12.
V. Making the Determination of Eligibility: Each of the factors
relevant to the particular patent application should be weighed to
determine whether the method is claiming an abstract idea by covering a
general concept, or combination of concepts, or whether the method is
limited to a particular practical application of the concept. The
presence or absence of a single factor will not be determinative as the
relevant factors need to be considered and weighed to make a proper
determination as to whether the claim as a whole is drawn to an
abstract idea such that the claim would effectively grant a monopoly
over an abstract idea and be ineligible for patent protection.
If the factors indicate that the method claim is not merely
covering an abstract idea, the claim is eligible for patent protection
under § 101 and must be further evaluated for patentability under
all of the statutory requirements, including utility and double
patenting (§ 101); novelty ( 102); non-obviousness (§ 103); and
definiteness and adequate description, enablement, and best mode (§ 112).
Section 101 is merely a coarse filter and thus a determination of eligibility
under § 101 is only a threshold question for patentability. Sections 102,
103, and 112 are typically the primary tools for evaluating patentability
unless the claim is truly abstract, see, e.g., Bilski, slip op. at 12
("[S]ome business method patents raise special problems in terms of vagueness
and suspect validity.").
If the factors indicate that the method claim is attempting to cover an
abstract idea, the examiner will reject the claim under § 101, providing
clear rationale supporting the determination that an abstract idea has been
claimed, such that the examiner establishes a prima facie case of patent-
ineligibility. The conclusion made by the examiner must be based on the
evidence as a whole. In making a rejection or if presenting reasons for
allowance when appropriate, the examiner should specifically point out the
factors that are relied upon in making the determination. If a claim is
rejected under § 101 on the basis that it is drawn to an abstract idea, the
applicant then has the opportunity to explain why the claimed method is not
drawn to an abstract idea. Specifically identifying the factors used in the
analysis will allow the applicant to make specific arguments in response
to the rejection if the applicant believes that the conclusion that the claim
is directed to an abstract idea is in error.
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The Interim Bilski Guidance is for examination guidance in light of
the recent decision in Bilski. This guidance does not constitute
substantive rule making and hence does not have the force and effect of
law. Rejections will continue to be based upon the substantive law, and
it is these rejections that are appealable. Consequently, any perceived
failure by Office personnel to follow this guidance is neither
appealable nor petitionable.
The Interim Bilski Guidance merely updates USPTO examination
practice for consistency with the USPTO's current understanding of the
case law regarding patent subject matter eligibility under 35 U.S.C.
101 in light of Bilski. Therefore, the Interim Bilski Guidance relates
only to interpretative rules, general statements of policy, or rules of
agency organization, procedure, or practice. The USPTO is providing
this opportunity for public comment because the USPTO desires the
benefit of public comment on the Interim Bilski Guidance; however,
notice and an opportunity for public comment are not required under 5
U.S.C. 553(b) or any other law. See Cooper Techs. Co. v. Dudas, 536
F.3d 1330, 1336-37, 87 U.S.P.Q.2d 1705, 1710 (Fed. Cir. 2008) (stating
that 5 U.S.C. 553, and thus 35 U.S.C. 2(b)(2)(B), does not require
notice and comment rule making for "`interpretative rules, general
statements of policy, or rules of agency organization, procedure, or
practice."' (quoting 5 U.S.C. 553(b)(A))). Persons submitting written
comments should note that the USPTO may not provide a "comment and
response" analysis of such comments as notice and an opportunity for
public comment are not required under 5 U.S.C. 553(b) or any other law.
July 4, 2010 DAVID J. KAPPOS
Under Secretary of Commerce for
Intellectual Property and Director of the
United States Patent and Trademark Office
Bilski Claims
1. A method for managing the consumption risk costs of a commodity sold
by a commodity provider at a fixed price comprising the steps of:
(a) Initiating a series of transactions between said commodity
provider and consumers of said commodity wherein said consumers
purchase said commodity at a fixed rate based upon historical
averages, said fixed rate corresponding to a risk position of said
consumers;
(b) Identifying market participants for said commodity having a
counter-risk position to said consumers; and
(c) Initiating a series of transactions between said commodity
provider and said market participants at a second fixed rate such
that said series of market participant transactions balances the
risk position of said series of consumer transactions.
2. The method of claim 1 wherein said commodity is energy and
said market participants are transmission distributors.
3. The method of claim 2 wherein said consumption risk is a
weather-related price risk.
4. The method of claim 3 wherein the fixed price for the
consumer transaction is determined by the relationship:
Fixed Bill Price = Fi + [(Ci + Ti+
LDi) x ([alpha] + [szlig]E(Wi)]
wherein,
Fi = fixed costs in period i;
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Ci = variable costs in period i;
Ti = variable long distance transportation costs in period i;
LDi = variable local delivery costs in period i;
E(Wi) = estimated location-specific weather indicator in period i; and
[alpha] and [beta] are constants.
5. The method of claim 4 wherein said location-specific weather
indicator is at least one of heating degree days and cooling degree days.
6. The method of claim 4 wherein said energy provider seeks a
swap receipt to cover the marginal weather-driven cost.
7. The method of claim 4 wherein the energy price is determined
by the steps of:
(a) Evaluating the usage and all costs for a prospective transaction;
(b) Performing a Monte Carlo simulation across all transactions
at all locations for a predetermined plurality of years of weather
patterns and establishing the payoffs from each transaction under
each historical weather pattern;
(c) Assuming that the summed payoffs are normally distributed;
(d) Performing one-tail tests to determine the marginal
likelihood of losing money on the deal and the marginal likelihood
of retaining at least the design margin included in the initial
evaluation of the fixed bill price; and
(e) Adjusting the margin of the fixed bill price if the
transaction as initially priced leads to a reduced expected margin
or increases the likelihood of a loss until the expected portfolio
margin and the likelihood of portfolio loss is acceptable.
8. The method of claim 4 wherein a cap on the weather-influenced
pricing is established by the steps of:
(a) Evaluating the usage equation and all costs for a prospective
transaction;
(b) Performing a Monte Carlo simulation across all transactions at all
locations for a predetermined plurality of years of weather patterns and
establishing the payoffs from each transaction under each historical weather
pattern assuming that the price in the transaction being priced floats down
when the weather is below normal;
(c) Assuming that the summed payoffs are normally distributed;
(d) Performing one-tail tests to determine the marginal likelihood of
losing money on the transaction and the marginal likelihood of retaining at
least the design margin included in the initial evaluation of the fixed
price bill;
(e) Continuing to reprice the margin in the transaction until the
expected portfolio margin and likelihood of portfolio loss is acceptable; and
(f) Establishing the margin as a call option on weather at a
predetermined location.
9. The method of claim 1 wherein said commodity provider seeks a
swap receipt to cover the price risk of the consumer transaction.
101 Method Eligibility Quick Reference Sheet
The factors below should be considered when analyzing the claim
as a whole to evaluate whether a method claim is directed to an
abstract idea. However, not every factor will be relevant to every
claim and, as such, need not be considered in every analysis. When
it is determined that the claim is patent-eligible, the analysis may
be concluded. In those instances where patent-eligibility cannot
easily be identified, every relevant factor should be carefully
weighed before making a conclusion. Additionally, no factor is
conclusive by itself, and the weight accorded each factor will vary
based upon the facts of the application. These factors are not
intended to be exclusive or exhaustive as there may be more
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pertinent factors depending on the particular technology of the
claim. For assistance in applying these factors, please consult the
accompanying "Interim Guidance" memo and TC management.
Factors Weighing Toward Eligibility
Recitation of a machine or transformation (either express or inherent).
[cir] Machine or transformation is particular.
[cir] Machine or transformation meaningfully limits the
execution of the steps.
[cir] Machine implements the claimed steps.
[cir] The article being transformed is particular.
[cir] The article undergoes a change in state or thing (e.g.,
objectively different function or use).
[cir] The article being transformed is an object or substance.
The claim is directed toward applying a law of nature.
[cir] Law of nature is practically applied.
[cir] The application of the law of nature meaningfully limits
the execution of the steps.
The claim is more than a mere statement of a concept.
[cir] The claim describes a particular solution to a problem to be solved.
[cir] The claim implements a concept in some tangible way.
[cir] The performance of the steps is observable and verifiable.
Factors Weighing Against Eligibility
No recitation of a machine or transformation (either express or
inherent).
Insufficient recitation of a machine or transformation.
[cir] Involvement of machine, or transformation, with the steps
is merely nominally, insignificantly, or tangentially related to
the performance of the steps, e.g., data gathering, or merely
recites a field in which the method is intended to be applied.
[cir] Machine is generically recited such that it covers any
machine capable of performing the claimed step(s).
[cir] Machine is merely an object on which the method operates.
[cir] Transformation involves only a change in position or
location of article.
[cir] "Article" is merely a general concept (see notes below).
The claim is not directed to an application of a law of nature.
[cir] The claim would monopolize a natural force or patent a
scientific fact; e.g., by claiming every mode of producing an
effect of that law of nature.
[cir] Law of nature is applied in a merely subjective determination.
[cir] Law of nature is merely nominally, insignificantly, or
tangentially related to the performance of the steps.
The claim is a mere statement of a general concept (see notes below for
examples).
[cir] Use of the concept, as expressed in the method, would
effectively grant a monopoly over the concept.
[cir] Both known and unknown uses of the concept are covered,
and can be performed through any existing or future-devised
machinery, or even without any apparatus.
[cir] The claim only states a problem to be solved.
[cir] The general concept is disembodied.
[cir] The mechanism(s) by which the steps are implemented is
subjective or imperceptible.
Notes
(1) Examples of general concepts include, but are not limited, to:
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Basic economic practices or theories (e.g., hedging, insurance,
financial transactions, marketing);
Basic legal theories (e.g., contracts, dispute resolution, rules of
law);
Mathematical concepts (e.g., algorithms, spatial relationships,
geometry);
Mental activity (e.g., forming a judgment, observation, evaluation, or
opinion);
Interpersonal interactions or relationships (e.g., conversing, dating);
Teaching concepts (e.g., memorization, repetition);
Human behavior (e.g., exercising, wearing clothing, following rules or
instructions);
Instructing "how business should be conducted."
(2) For a detailed explanation of the terms machine, transformation,
article, particular, extrasolution activity, and field-of-use, please refer
to the Interim Patent Subject Matter Eligibility Examination Instructions oF
August 24, 2009.
(3) When making a subject matter eligibility determination, the relevant
factors should be weighed with respect to the claim as a whole to evaluate
whether the claim is patent-eligible or whether the abstract idea exception
renders the claim ineligible. When it is determined that the claim is
patent-eligible, the analysis may be concluded. In those instances where
patent-eligibility cannot be easily identified, every relevant factor should
be carefully weighed before making a conclusion. Not every factor will be
relevant to every claim. While no factor is conclusive by itself, the weight
accorded each factor will vary based upon the facts of the application. These
factors are not intended to be exclusive or exhaustive as there may be more
pertinent factors depending on the particular technology of the claim.
(4) Sample Form Paragraphs:
a. Based upon consideration of all of the relevant factors with respect
the claim as a whole, claim(s) [1] held to claim an abstract idea, and is
therefore rejected as ineligible subject matter under 35 U.S.C. 101. The
rationale for this finding is explained below: [2] 1. In bracket 2, identify
the decisive factors weighing against patent-eligibility, and explain the
manner in which these factors support a conclusion of ineligibility. The
explanation needs to be sufficient to establish a prima facie case of
ineligibility under 35 U.S.C. 101.
b. Dependent claim(s) [1] when analyzed as a whole are held to be
ineligible subject matter and are rejected under 35 U.S.C. 101 because the
additional recited limitation(s) fail(s) to establish that the claim is not
directed to an abstract idea, as detailed below: [2] 1. In bracket 2, provide
an explanation as to why the claim is directed to an abstract idea; for
instance, that the additional limitations are no more than a field of use or
merely involve insignificant extrasolution activity; e.g., data gathering.
The explanation needs to be sufficient to establish a prima facie case of
ineligibility under 35 U.S.C. 101.
[1357 OG 188]