103 model proves 101 reforms solve

VI. The Enactment of § 103 in the 1952 Patent Act Is a Guide for Reform of § 101 Today

Congress should reform § 101 today to correct the misinterpretation of this statute by the Supreme Court in its Alice-Mayo framework. This would return U.S. innovation policy back to its original path, which has been a wellspring for two centuries of growth in the U.S. innovation economy. The problems faced by innovators today under the Alice-Mayo framework are entirely doctrinal—they are the result of a judicial doctrine representing an expansive, non-textual “interpretation” of a statute enacted by Congress.39 This calls for legislative reform.

In reforming § 101, Congress will not tread on new ground. Its enactment of § 103 in the 1952 Patent Act is a model for how Congress can (and should) reform § 101 today.40 Congress enacted § 103 to address the exact same legal and policy problems that innovators face today with the AliceMayo framework.

A. Section 103 Successfully Abrogated a Supreme Court Decision that Undermined the Function of the U.S. Patent System in Promoting Innovation

Similar to the pressing need today to abrogate the Alice-Mayo framework, Congress enacted § 103 in 1952 to abrogate the Supreme Court’s 1941 decision in Cuno Engineering v. Automatic Devices. 41 In that case, the Supreme Court applied a long-standing legal requirement in U.S. patent law that an invention or discovery must be more than new, useful, and fully disclosed to justify patent protection—it must also be a true invention, as opposed to a minor and obvious step forward in a field of art.42 In Cuno Engineering,the Supreme Court ruled that an invention must arise from a “flash of creative genius” to justify patent protection.43

Just as today with the Alice-Mayo framework, the “flash of creative genius” test was an insuperable hurdle for inventors to overcome. Courts dissected patent claims into their individual elements, found each element to be lacking a “flash of creative genius,” and thus invalidated many patents. The Supreme Court did just this in Cuno Engineering: The Courtinvalidated a patent on a new electric-powered cigarette lighter in automobiles (we now use these sockets in our automobiles to power our smartphones). The Cuno Engineering Court assessed each separate element in the claim, identifying how each part was old, such as an electrical circuit, a heating element, and temperature control by a thermostat, among others. Despite the novel, useful, and inventive combination of these old elements into an innovative device that was widely adopted in the marketplace and became a ubiquitous feature in all automobiles, the Court concluded the invention was not the result of a “flash of creative genius” and thus invalidated the patent.

After Cuno Engineering, the Supreme Court was invalidating patents so frequently under the “flash of creative genius” test that Justice Robert Jackson lamented in 1949 that “the only patent that is valid is one which this Court has not been able to get its hands on.”44

Justice Jackson’s complaint could just as easily be said today about patent eligibility doctrine and the Alice-Mayo framework. Not only are courts invalidating patents and the USPTO rejecting patent applications at very high rates, but, just as in the Cuno Engineering decision itself, the Supreme Court invalidated the contested patent claims in its four patent eligibility cases in creating the Alice-Mayo framework.45

Congress responded in 1952 by enacting § 103, and its central purpose was to abrogate the “flash of creative genius” test created 11 years earlier by the Supreme Court in Cuno Engineering. The second sentence in § 103 achieves this goal: “Patentability shall not be negated by the manner in which the invention was made.”46 Having performed this function in relegating the “flash of creative genius” test to the historical dustbin of mistaken legal doctrines, this sentence in § 103 has served no role in patent law since 1952. Congress should do this again: It should abrogate the Alice-Mayo framework, reinstate the primacy of the statutory language it adopted in § 101 in the Patent Act, and return patent eligibility doctrine back to its limited historical role in the patent system.

B. Section 103 of the Patent Act Is a Model for Congress to Reform § 101 Today

Section 103 is also a model for § 101 reform today: It reflects a key feature of the successful U.S. patent system in mandating technology-neutral patentability requirements, and it is simple in both form and substance. Section 103 is two sentences in length with all of the doctrinal work falling within the first sentence. In this sentence, § 103 sets forth several doctrinal requirements to ensure that the restyled “nonobviousness” inquiry would be more predictable and bounded in its application.47 One requirement expressly brought to an end the judicial practice of dissecting claims into their individual elements and then assessing each basic element as being ordinary, routine, or obvious, just as the Supreme Court did in Cuno Engineering. 48 Thus, § 103 mandates that the obviousness of an invention can be determined only by assessing the “invention as a whole” (reframed as the “claimed invention as a whole” in the America Invents Act of 2011).

Congress adopted the “claimed invention as a whole” requirement in § 103, because this is a basic legal requirement that is fundamental to many provisions of the Patent Act in ensuring proper protection of the rights of inventors and the predictable application of the law.49 As the Supreme Court recognized almost four decades ago in a significant patent eligibility case that has been ignored since 2014, it is “inappropriate to dissect the claims” down into their component elements, because an unpatentable abstract idea or law of nature may be used in part of a claim on a process, such as “a mathematical formula,” but “the process as a whole does not thereby become unpatentable subject matter” simply because of this single element.50

The point is that the patent claims an invention—a drug, a diagnostic method, a machine, or a software program—and the courts should interpret and apply the claimed invention in its entirety, and not engage in pettifoggery in dissecting it down into individual words or phrases that are abstract ideas or otherwise meaningless out of context from the rest of the claimed elements of the invention. This is long-settled patent law, and courts even state this legal rule in patent eligibility decisions today, at least in the abstract—before deciding otherwise.51 Even in the Supreme Court’s 2012 decision in Mayo Collaborative Services v. Prometheus Laboratories, it cautioned that “too broad an interpretation of this exclusionary principle [under § 101] could eviscerate patent law,” because “all inventions at some level embody, use, reflect, rest upon, or apply laws of nature, natural phenomena, or abstract ideas.”52 This is true of combustion engines that rely on the laws of thermodynamics, as well as drugs that rely on the natural phenomena of how molecules are processed by and affect the human body, and of the software programs performing valuable functions in modern computers that rely on abstract ideas of mathematical algorithms. Each of these innovations—engines, drugs, and software programs—have long been recognized by the courts as representing real-world innovations deserving of patent protection as long as they are novel, useful, and fully disclosed. At least, this was the law before the Alice-Mayo framework was developed by the Supreme Court and applied by lower courts since 2014.

A significant reason for the high rates of invalidation of issued patents and of rejection of patent applications is that courts and examiners are dissecting claims down into their component elements and invalidating them under the Alice-Mayo framework as covering unpatentable subject matter with no nonobvious, inventive contributions in these specific elements. For example, the Federal Circuit did exactly this in its recent decision in which it invalidated a patent on the method of making and operating an axle in an automobile engine, ignoring express language in the patent that detailed the working of the axle and instead concluding the patent claimed “some unarticulated number of possible natural laws.”53

The problem is with the Alice-Mayo framework. The Supreme Court expressly authorized courts and the USPTO to do this in its 2014 decision in Alice Corporation v. CLS Bank International. Contradicting long-standing and settled patent law in assessing or applying a claim as a whole, the Court in Alice said that “we consider the elements of each claim both individually and ‘as an ordered combination.’”54 Who could blame courts and examiners for feeling justified in considering elements “individually” and disintegrating patents down to their underlying (unpatentable) laws of nature or abstract ideas when the Supreme Court instructed them to do so in the Alice-Mayo framework?

There are too many examples to review in detail, and thus one illustrative court opinion should suffice. In a recent patent eligibility decision in TDE Petroleum Data Solutions v. AKM Enterprises, the district court and the Federal Circuit both concluded that a patent on a computer-operated process for running an oil drilling rig was invalid for claiming an “abstract idea.”55 In that case, the Federal Circuit and the district court dissected the patent claim into separate elements and ignored other express elements that comprised the claimed invention as a whole. In its opinion, the Federal Circuit focused solely on a single element in the patent claim, and then asserted that the invention as a whole performed only the “generic computer functions” of this single element.56 Thus, the Federal Circuit disintegrated the claimed invention into a single element—reducing it to the single abstract idea of generic and abstract data analysis—and ignored other claim elements, such as the express terms “well operation” in the claim and other language in the patent that made it clear the claimed invention as a whole was for an industrial process in running an oil-drilling operation on an oil rig. The echoes of Cuno Engineering and its improper methodology in disintegrating claims into unpatentable ideas are clear. Congress should abrogate the Alice-Mayo framework—just as it rightly abrogated Cuno Engineering in enacting § 103.

Even worse, the TDE Petroleum decision directly contradicts the Supreme Court’s 1981 decision in Diamond v. Diehr that affirmed the patent eligibility under § 101 of an almost identically structured patent claim covering a computer-operated industrial rubber curing process.57 In Diehr, the data processing element in the claim referred to a well-known equation that had long been used for many years in the even older 150-year-old process of curing rubber. For this reason, the Supreme Court recognized this data processing element in the claim was not patentable by itself. 58 Yet the Supreme Court concluded that the invention was patent eligible under § 101 precisely because the claimed invention as a whole was an industrial process.59 Unfortunately, the contradiction between Diehr and TDE Petroleum in the § 101 case law has become very common today as courts decide willy-nilly how and in what ways they will dissect claims into their component parts in determining if the claims fall within the judicially created exclusionary principle in the Alice-Mayo framework.

Congressional reform of § 101 in abrogating the Alice-Mayo framework should return the U.S. patent system back to its original constitutional function in securing to “Inventors the exclusive Right to their…Discoveries.”60 In aggressively applying the Alice-Mayo framework today, courts are misapplying what was historically understood to be merely a threshold test. They are also now dissecting claims into their component parts and then focusing on one or two elements that are deemed to represent the “focus” of the entire claim as a whole.61 Courts thus easily conclude that this single element (or two) is ineligible for patent protection as an abstract idea or law of nature and end up invalidating the patent claim as a whole.