by Robert M. Hunter, Registered Patent Agent

News about patents, licensing and seed capital sources for inventors and innovating organizations.


In an unpublished decision, the U.S. Patent and Trademark Office Board of Patent Appeals and Interferences recently decided that biotechnologies can be claimed as machines with living elements. Patent agent Robert M. Hunter appealed a decision of the USPTO Examiner to reject as unpatentable apparatus claims in an application entitled, "Apparatus for Microbial Dehalogenation." The Examiner had held that "the microorganism(s) recited in the claims are not proper structural elements of an apparatus claim. . . ." The Board reversed the Examiner's rejection of the claims pointing out that, "An apparatus which does not contain a methanogen differs from an apparatus which [does] contain a methanogen." The Board also presented a simple but powerful analogy "to explain the error in the Examiner's ways."

The Board's decision is important because this approach can be used to claim any kind of apparatus that is made up of at least one living element. For example, the approach could be used in claiming novel computers that use living cells as elements (e.g., as switches) or in claiming the devices used to practice classical biotechnological processes as well as those that involve genetic engineering or cell fusion. Claiming biotechological inventions as "machines" as well as "processes" gives patent owners the ability to enforce their patents against the parties that actually manufacture the infringing devices or systems (e.g., a diagnostic test kit). In that a claimed process is likely to be practiced by relatively "innocent" purchasers of the infringing devices, denying patent owners the ability to claim machines with living elements as such would require them to sue their potential customers to enforce their patent rights, a consequence unintended by U.S. patent law. (The above information was released with the permission of the patent owner.)


In its recent decision in AT&T Corp. V. Excel Communications, the U.S. Federal Court of Appeals for the Federal Circuit, the federal appeals court that handles patent cases, made it clear that the software processes can be patented in the U.S. The computer-implemented invention addressed in the previous (and now famous) State Street decision was claimed as a "system" or "machine." The AT&T Corp. decision illustrates how the State Street test for patentability can be applied to a computer-related invention that is claimed as a "process" or "method."

The patent at issue, U.S. Patent 5,333,184, entitled "Call Message Recording for Telephone Systems," was granted to AT&T Corp. in 1994. It involves generating a message record for long-distance telephone calls and enhancing the record by the addition of a primary interexchange carrier ("PIC") indicator. The addition of the indicator aids long-distance carriers in providing differential billing treatment for subscribers. The claimed process accepts subscribers' and call recipients' PICs as data, applies Boolean algebra to those data to determine the value of the PIC indicator, and applies that value through switching and recording mechanisms to create a signal useful for billing purposes.

In 1996 AT&T asserted ten of the patent's method claims against Excel in a patent infringement suit. Responding to the suit, Excel asserted that the claims were invalid because the subject matter of the claimed methods was not patentable. Excel argued that method claims containing mathematical algorithms are patentable subject matter only if there is a "physical transformation" or conversion of subject matter from one state into another. In affirming the validity of the claimed software method claims, the Court noted that a "physical transformation" is only one example of a useful result. It reiterated that a patentability enquiry must focus on whether a "mathematical algorithm is applied in a practical manner to produce a useful result." It contrasted the claimed invention with "mere laws of nature, natural phenomena, and abstract ideas [which] are not within the categories of inventions or discoveries that may be patented. . . ."

Excel also contended that the claims were not patentable subject matter because the process claims at issue lacked the physical limitations (structural features) set forth in the patent. The Court reminded Excel that, while valid machine claims written in means-plus-function language must contain such limitations, method claims need not and that "a structural inquiry is unnecessary" with claims written in a method format. This point will not be lost on those who are charged with crafting broadly enforceable claims for software inventions.

The Court concluded that ". . . it is now clear that computer-based programming constitutes patentable subject matter so long as the basic requirements of [U.S. patent law] are met." It asserted that "the focus is understood to be not on whether there is a mathematical algorithm at work, but on whether the algorithm-containing invention, as a whole, produces a tangible, useful, result." A method that included the step of "including, in said message record, a primary interexchange carrier (PIC) indicator" was found to meet this test.


The SBIR programs of the larger Federal Government departments and agencies are an excellent source of seed capital for small business technology development projects. Links to helpful SBIR sites are available on the Web Patent web site.
Robert M. (Bob) Hunter, Ph.D., P.E.
Registered Patent Agent
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