1. Protecting Engineering,
BioTech, and Computer Patents

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Can Living Organisms be Patented?
 US Patent Office said no, and rejected case.
 1930s Plant Act only covered asexually
reproduced plants as being covered under patents
 1970s Plant Variety Protection Act allowed some
sexually reproduced plants, but excluded bacteria
 Applicant appealed, and court reversed, and
provided foundation for all modern patents on
living organisms (Diamond v Chakrabarty,
1980) – new form of bacteria created.
 Creation of new life form can be patented

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Funk Case and Merck Case
 Funk Brothers Seed Co v. Kalo Inoculant Co.
 Discovered combination of bacteria in mix that
protected seed strains better than ever before
 Court rejected patent claim as naturally occurring
organisms which are not able to be patented
 “Can not patent trees or grass”, 1947 case
 Merck & Co. v Olin Mathieson Chemical,
1958
 Isolated active substance in cow liver with benefits
 Vitamin B12 patentable, even though natural
 “Composition & concentration never before seen”

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Example of Difficult BioTech
Case
 Doctor discovers patient has brain tumor.
 He successfully removes this new type of fast
growing tumor, and does tests on it in his lab.
 Shares cells with friend, who finds way to isolate
genetic material from cells to develop cancer cure.
 Can the new type of cells from the tumor be
patented? Can the modified genetic material
from those cells be patented? Can protein
discovered that cures cancer be patented?

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Human Cells: Property or Patent?
 Do cells taken from Humans belong to the
original owner of these cells? Are removed
body parts or cells owned by research labs?
 Concerns about ownership rights of cells
 Can doctors patent naturally occurring cells
which are unusual and discovered?
 General rule on discovery versus creation in
patent law says that discovered plants, minerals,
or objects can not be patented.

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Software and Computer “Process”
Patents
 Some notable patents have been issued on
computer processes and software
innovations
 Amazon.dot one click patent

Overturned after lengthy legal battle by Supreme Court
 Morse Code innovation on message coding

Overturned by courts after being issued as too broad
 Software program designed for data encryption

Overturned by Supreme Court as being concept or idea
 Microsoft patent issued on “electronic commerce”
 Overturned for being too broad and against public policy

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Difference between an IDEA versus
a Process Innovation in Software
 An IDEA or CONCEPT can not be patented,
but implementation of ideas can be patented
as a product using an innovative idea.
 Unfortunately, it is hard to figure out where
the idea stops and product starts in software.
 Most courts lean towards rejecting software
patents when implemented only in code.
 However, software plus hardware bundled
innovation can be successfully patented.

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Software Patents Case Law - 1
 Parker v. Flook (1978) – Method of updating
alarm limits using a computer to monitor
temperature and pressure and trigger alarm
 Not patentable subject matter, as the NOVEL part
of the patented invention was the mathematical
formula used to calculate the alarm limits
 Yet, court said that a process is not unpatentable
simply because it contains a law of nature or
mathematical algorithm.
 Algorithms treated as part of “common knowledge”
or prior art, and not viewed as NOVEL

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Software Patents Case Law - 2
 Bernhart (1969) – Bundled hardware and
software in proprietary apparatus providing
an improved way to depict three-dimensional
objects in two-dimensional form.
 Assertion was that the software transformed the
common hardware platform into a new and
NOVEL devise that was able to be patented.
 Court found that “if a machine is programmed in a
certain new and unobvious way, it is physically
different from the machine without that program”

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Software Patents Case Law - 3
 Diamond v. Diehr (1981) – Process for curing
synthetic rubber which includes in several
steps the use of a mathematical formula and
a programmed computer.
 Supreme Court ruled that “this was not a patent
application for a mathematical formula, but for a
process of curing rubber, which uses as part of the
process and programmed equation”
 Patent was grated on the process described, with
the provision that others could use the formulas
and ideas described for other applications

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Software Patents Case Law – 4
 Iwahashi (1989) – pattern recognition, with
specific application to human speech, using a
proprietary ROM device and computer
system
 Federal Appeals court (not Supreme Court) found
that “means plus function” was permitted as
patentable subject matter, and referred multiple
times to the ROM hardware which was essentially
nothing more than a very fast lookup table of data
 Ruling was criticized by many patent attorneys as
being “wrong” to convert “any software solution”
into a patentable solution via nominal hardware.

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Software Patents (1989-1994)
 While the courts continued to debate whether
software alone could be patented or not, or
whether all standalone software was simply
various forms of algorithms and mathematics
 Most patents issued during this period on software
were “cloaked” in other terms, describing the
patent application as a process, machine, or
system in which software was only a component
 By 1994, there were an estimated 14,000 patents
issued in which software was a large portion of the
value added of products or processes patented

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Software Patents Case Law – 5
 In re Alappat (Supreme Court, 1994) –
Invention of means to create smooth
waveform display in a digital oscilloscope.
 Patent office rejected application, stating that
digital signal processing using software that
provided the core value of the system was purely
a mathematical formula and algorithm, so not
patentable subject matter and not NOVEL
 Supreme Court overruled, and said that novel
applications involving mathematical formulas may
be patented, even if only implemented in software

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New Patent Office Guidelines
 In response to Alappat and to several
conflicting cases which both affirmed and
rejected software patents with similar fact
patterns in Federal courts (different judges
had interpreted prior statutory and case law
on software patentability differently), the US
Patent Office issued new guidelines in 1996
 Requires NOVEL innovation in practical
application
 Computer program itself is NOT A PROCESS

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Software Patents Case Law - 6
 State Street Bank & Trust v. Signature (1998)
– Patentability of “Data Processing System for
Hub and Spoke Financial Services
Configuration” was disputed, and trial court
dismissed patent as invalid subject matter
 Appeals court reversed, stating that software could
not be dismissed as invalid subject matter when it
is used as part of a business process that would
otherwise be eligible for patent protection
 “Means” PLUS “Function” important to ruling.

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Software Patents Case Law - 7
 Lockwood v. American Airlines, Inc. (1997) –
SABRE reservation system violated
Lockwood patents on automated interactive
sales terminals that facilitate ordering goods
online
 Court found that Lockwood system was obvious in
light of prior art, and innovations were not NOVEL
 SABRE introduced 1962, Lockwood patent 1982.
 Devise need not be “disclosed” to public to be
prior art; “usage” of trade secrets is enough.