C.Business Methods

In re Bilski

United States Court of Appeals for the Federal Circuit

545 F.3d 943 (Fed.Cir.2008)

MICHEL,CHIEF JUDGE.

Bernard L.Bilski and Rand A.Warsaw (the Applicants) … filed their patent application on April 10,1997.The application contains eleven claims,which Applicants argue together here.Claim 1 reads:

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

In essence,the claim is for a method of hedging risk in the field of commodities trading.For example,coal power plants (i.e.,the“consumers”) purchase coal to produce electricity and are averse to the risk of a spike in demand for coal since such a spike would increase the price and their costs.Conversely,coal mining companies (i.e.,the“market participants”) are averse to the risk of a sudden drop in demand for coal since such a drop would reduce their sales and depress prices.

The claimed method envisions an intermediary,the“commodity provider,”that sells coal to the power plants at a fixed price,thus isolating the power plants from the possibility of a spike in demand increasing the price of coal above the fixed price.The same provider buys coal from mining companies at a second fixed price,thereby isolating the mining companies from the possibility that a drop in demand would lower prices below that fixed price.And the provider has thus hedged its risk; if demand and prices skyrocket,it has sold coal at a disadvantageous price but has bought coal at an advantageous price,and vice versa if demand and prices fall.Importantly,however,the claim is not limited to transactions involving actual commodities,and the application discloses that the recited transactions may simply involve options,i.e.,rights to purchase or sell the commodity at a particular price within a particular timeframe.

The examiner ultimately rejected claims 1～11 under 35 U.S.C.§ 101,stating:

[r]egarding … claims 1～11,the invention is not implemented on a specific apparatus and merely manipulates [an] abstract idea and solves a purely mathematical problem without any limitation to a practical application,therefore,the invention is not directed to the technological arts.

The examiner noted that Applicants had admitted their claims are not limited to operation on a computer,and he concluded that they were not limited by any specific apparatus.

On appeal,the Board held that the examiner erred to the extent he relied on a“technological arts”test because the case law does not support such a test.Further,the Board held that the requirement of a specific apparatus was also erroneous because a claim that does not recite a specific apparatus may still be directed to patent-eligible subject matter“if there is a transformation of physical subject matter from one state to another.”Elaborating further,the Board stated:“‘mixing’two elements or compounds to produce a chemical substance or mixture is clearly a statutory transformation although no apparatus is claimed to perform the step and although the step could be performed manually.”But the Board concluded that Applicants’ claims do not involve any patent-eligible transformation,holding that transformation of“non-physical financial risks and legal liabilities of the commodity provider,the consumer,and the market participants”is not patenteligible subject matter.The Board also held that Applicants’ claims“preempt[]any and every possible way of performing the steps of the [claimed process],by human or by any kind of machine or by any combination thereof,”and thus concluded that they only claim an abstract idea ineligible for patent protection.Finally,the Board held that Applicants’ process as claimed did not produce a“useful,concrete and tangible result,”and for this reason as well was not drawn to patent-eligible subject matter.

II

Whether a claim is drawn to patent-eligible subject matter under § 101 is a threshold inquiry,and any claim of an application failing the requirements of §101 must be rejected even if it meets all of the other legal requirements of patentability.Whether a claim is drawn to patent-eligible subject matter under § 101 is an issue of law that we review de novo.Although claim construction,which we also review de novo,is an important first step in a § 101 analysis,there is no claim construction dispute in this appeal.

As with any other patentability requirement,an examiner may reject a claim solely on the basis of § 101.Or,if the examiner deems it appropriate,she may reject the claim on any other ground(s) without addressing § 101.But given that§ 101 is a threshold requirement,claims that are clearly drawn to unpatentable subject matter should be identified and rejected on that basis.Thus,an examiner should generally first satisfy herself that the application’s claims are drawn to patent-eligible subject matter.

A

As this appeal turns on whether Applicants’ invention as claimed meets the requirements set forth in § 101,we begin with the words of the statute:

Whoever invents or discovers any new and useful process,machine,manufacture,or composition of matter,or any new and useful improvement thereof,may obtain a patent therefor,subject to the conditions and requirements of this title.

The statute thus recites four categories of patent-eligible subject matter: processes,machines,manufactures,and compositions of matter.It is undisputed that Applicants’ claims are not directed to a machine,manufacture,or composition of matter.[7] Thus,the issue before us involves what the term“process”in § 101 means,and how to determine whether a given claim – and Applicants’ claim 1 in particular – is a“new and useful process.”[8]

As several amici have argued,the term“process”is ordinarily broad in meaning,at least in general lay usage.In 1952,at the time Congress amended § 101 to include“process,”[9] the ordinary meaning of the term was:“[a] procedure … [a]series of actions,motions,or operations definitely conducing to an end,whether voluntary or involuntary.”Webster’s New International Dictionary Of The English Language 1972 (2d ed.1952).There can be no dispute that Applicants’ claim would meet this definition of“process.”But the Supreme Court has held that the meaning of“process”as used in § 101 is narrower than its ordinary meaning.Specifically,the Court has held that a claim is not a patent-eligible“process”if it claims“laws of nature,natural phenomena,[or] abstract ideas.”Such fundamental principles[10] are“part of the storehouse of knowledge of all men … free to all men and reserved exclusively to none.”

The true issue before us then is whether Applicants are seeking to claim a fundamental principle (such as an abstract idea) or a mental process.And the underlying legal question thus presented is what test or set of criteria governs the determination by the Patent and Trademark Office (“PTO”) or courts as to whether a claim to a process is patentable under § 101 or,conversely,is drawn to unpatentable subject matter because it claims only a fundamental principle.

The Supreme Court last addressed this issue in 1981 in Diehr,which concerned a patent application seeking to claim a process for producing cured synthetic rubber products.The claimed process took temperature readings during cure and used a mathematical algorithm,the Arrhenius equation,to calculate the time when curing would be complete.Noting that a mathematical algorithm alone is unpatentable because mathematical relationships are akin to a law of nature,the Court nevertheless held that the claimed process was patent-eligible subject matter,stating:

[The inventors] do not seek to patent a mathematical formula.Instead,they seek patent protection for a process of curing synthetic rubber.Their process admittedly employs a well-known mathematical equation,but they do not seek to pre-empt the use of that equation.Rather,they seek only to foreclose from others the use of that equation in conjunction with all of the other steps in their claimed process.

The Court declared that while a claim drawn to a fundamental principle is unpatentable,“an application of a law of nature or mathematical formula to a known structure or process may well be deserving of patent protection.”

The Court in Diehr thus drew a distinction between those claims that“seek to preempt the use of”a fundamental principle,on the one hand,and claims that seek only to foreclose others from using a particular“application”of that fundamental principle,on the other.Patents,by definition,grant the power to exclude others from practicing that which the patent claims.Diehr can be understood to suggest that whether a claim is drawn only to a fundamental principle is essentially an inquiry into the scope of that exclusion; i.e., whether the effect of allowing the claim would be to allow the patentee to pre-empt substantially all uses of that fundamental principle.If so,the claim is not drawn to patent-eligible subject matter.

In Diehr,the Court held that the claims at issue did not pre-empt all uses of the Arrhenius equation but rather claimed only“a process for curing rubber …which incorporates in it a more efficient solution of the equation.”The process as claimed included several specific steps to control the curing of rubber more precisely:“These include installing rubber in a press,closing the mold,constantly determining the temperature of the mold,constantly recalculating the appropriate cure time through the use of the formula and a digital computer,and automatically opening the press at the proper time.”Thus,one would still be able to use the Arrhenius equation in any process not involving curing rubber,and more importantly,even in any process to cure rubber that did not include performing“all of the other steps in their claimed process.”

The question before us then is whether Applicants’ claim recites a fundamental principle and,if so,whether it would pre-empt substantially all uses of that fundamental principle if allowed.Unfortunately,this inquiry is hardly straightforward….

The Supreme Court,however,has enunciated a definitive test to determine whether a process claim is tailored narrowly enough to encompass only a particular application of a fundamental principle rather than to pre-empt the principle itself.A claimed process is surely patent-eligible under § 101 if: (1) it is tied to a particular machine or apparatus,or (2) it transforms a particular article into a different state or thing,[Benson,Diehr,Flook,Cochrane v.Deener,citation omitted).[11] A claimed process involving a fundamental principle that uses a particular machine or apparatus would not preempt uses of the principle that do not also use the specified machine or apparatus in the manner claimed.And a claimed process that transforms a particular article to a specified different state or thing by applying a fundamental principle would not pre-empt the use of the principle to transform any other article,to transform the same article but in a manner not covered by the claim,or to do anything other than transform the specified article.

[W]e agree that future developments in technology and the sciences may present difficult challenges to the machine-or-transformation test,just as the widespread use of computers and the advent of the Internet has begun to challenge it in the past decade.Thus,we recognize that the Supreme Court may ultimately decide to alter or perhaps even set aside this test to accommodate emerging technologies.And we certainly do not rule out the possibility that this court may in the future refine or augment the test or how it is applied.At present,however,and certainly for the present case,we see no need for such a departure and reaffirm that the machine-or-transformation test,properly applied,is the governing test for determining patent eligibility of a process under § 101.

D

We discern two other important aspects of the Supreme Court’s § 101 jurisprudence.First,the Court has held that whether a claimed process is novel or non-obvious is irrelevant to the § 101 analysis.Although § 101 refers to“new and useful”processes,it is overall“a general statement of the type of subject matter that is eligible for patent protection ‘subject to the conditions and requirements of this title.’”As the legislative history of § 101 indicates,Congress did not intend the“new and useful”language of § 101 to constitute an independent requirement of novelty or non-obviousness distinct from the more specific and detailed requirements of §§ 102 and 103,respectively.[12] So here,it is irrelevant to the § 101 analysis whether Applicants’ claimed process is novel or non-obvious.

Second,the Court has made clear that it is inappropriate to determine the patent-eligibility of a claim as a whole based on whether selected limitations constitute patent-eligible subject matter.After all,even though a fundamental principle itself is not patent-eligible,processes incorporating a fundamental principle may be patent-eligible.Thus,it is irrelevant that any individual step or limitation of such processes by itself would be unpatentable under § 101.

III

A

Before we turn to our precedents,however,we first address the issue of whether several other purported articulations of § 101 tests are valid and useful.The first of these is known as the Freeman-Walter-Abele test after the three decisions of our predecessor court that formulated and then refined the test.This test,in its final form,had two steps: (1) determining whether the claim recites an“algorithm”within the meaning of Benson,then (2) determining whether that algorithm is“applied in any manner to physical elements or process steps.”

Some may question the continued viability of this test,arguing that it appears to conflict with the Supreme Court’s proscription against dissecting a claim and evaluating patent-eligibility on the basis of individual limitations.In light of the present opinion,we conclude that the Freeman-Walter-Abele test is inadequate.Rather,the machine-or-transformation test is the applicable test for patent-eligible subject matter.

The second articulation we now revisit is the“useful,concrete,and tangible result”language associated with State Street,[13] although first set forth in Alappat….To be sure,a process tied to a particular machine,or transforming or reducing a particular article into a different state or thing,will generally produce a“concrete”and“tangible”result as those terms were used in our prior decisions.But while looking for“a useful,concrete and tangible result”may in many instances provide useful indications of whether a claim is drawn to a fundamental principle or a practical application of such a principle,that inquiry is insufficient to determine whether a claim is patent-eligible under § 101.And it was certainly never intended to supplant the Supreme Court’s test.Therefore,we also conclude that the“useful,concrete and tangible result”inquiry is inadequate and reaffirm that the machine-or-transformation test outlined by the Supreme Court is the proper test to apply.[14]

We next turn to the so-called“technological arts test”that some amici urge us to adopt.We perceive that the contours of such a test,however,would be unclear because the meanings of the terms“technological arts”and“technology”are both ambiguous and ever-changing.And no such test has ever been explicitly adopted by the Supreme Court,this court,or our predecessor court,as the Board correctly observed here.Therefore,we decline to do so and continue to rely on the machine-or-transformation test as articulated by the Supreme Court.

We further reject calls for categorical exclusions beyond those for fundamental principles already identified by the Supreme Court.We rejected just such an exclusion in State Street,noting that the so-called“business method exception”was unlawful and that business method claims (and indeed all process claims) are“subject to the same legal requirements for patentability as applied to any other process or method.”We reaffirm this conclusion.

Lastly,we address a possible misunderstanding of our decision in Comiskey.Some may suggest that Comiskey implicitly applied a new § 101 test that bars any claim reciting a mental process that lacks significant“physical steps.”We did not so hold,nor did we announce any new test at all in Comiskey.Rather,we simply recognized that the Supreme Court has held that mental processes,like fundamental principles,are excluded by § 101 because“‘[p]henomena of nature,though just discovered,mental processes,and abstract intellectual concepts …are the basic tools of scientific and technological work.’”And we actually applied the machine-or-transformation test to determine whether various claims at issue were drawn to patent-eligible subject matter.[15] Because those claims failed the machine-or-transformation test,we held that they were drawn solely to a fundamental principle,the mental process of arbitrating a dispute,and were thus not patent-eligible under § 101.

Further,not only did we not rely on a“physical steps”test in Comiskey,but we have criticized such an approach to the § 101 analysis in earlier decisions.In AT&T,we rejected a“physical limitations”test and noted that“the mere fact that a claimed invention involves inputting numbers,calculating numbers,outputting numbers,and storing numbers,in and of itself,would not render it nonstatutory subject matter.”The same reasoning applies when the claim at issue recites fundamental principles other than mathematical algorithms.Thus,the proper inquiry under § 101 is not whether the process claim recites sufficient“physical steps,”but rather whether the claim meets the machine-or-transformation test.[16] As a result,even a claim that recites“physical steps”but neither recites a particular machine or apparatus,nor transforms any article into a different state or thing,is not drawn to patent-eligible subject matter.Conversely,a claim that purportedly lacks any“physical steps”but is still tied to a machine or achieves an eligible transformation passes muster under § 101.[17]

B

[W]e now turn to how our case law elaborates on the § 101 analysis set forth by the Supreme Court.To the extent that some of the reasoning in these decisions relied on considerations or tests,such as“useful,concrete and tangible result,”that are no longer valid as explained above,those aspects of the decisions should no longer be relied on.Thus,we reexamine the facts of certain cases under the correct test to glean greater guidance as to how to perform the § 101 analysis using the machine-or-transformation test.

The machine-or-transformation test is a two-branched inquiry; an applicant may show that a process claim satisfies § 101 either by showing that his claim is tied to a particular machine,or by showing that his claim transforms an article.Certain considerations are applicable to analysis under either branch.First,as illustrated by Benson and discussed below,the use of a specific machine or transformation of an article must impose meaningful limits on the claim’s scope to impart patent-eligibility.Second,the involvement of the machine or transformation in the claimed process must not merely be insignificant extra-solution activity.

As to machine implementation,Applicants themselves admit that the language of claim 1 does not limit any process step to any specific machine or apparatus.As a result,issues specific to the machine implementation part of the test are not before us today.We leave to future cases the elaboration of the precise contours of machine implementation,as well as the answers to particular questions,such as whether or when recitation of a computer suffices to tie a process claim to a particular machine.

We will,however,consider some of our past cases to gain insight into the transformation part of the test.A claimed process is patent-eligible if it transforms an article into a different state or thing.This transformation must be central to the purpose of the claimed process.But the main aspect of the transformation test that requires clarification here is what sorts of things constitute“articles”such that their transformation is sufficient to impart patent-eligibility under § 101.It is virtually self-evident that a process for a chemical or physical transformation of physical objects or substances is patent-eligible subject matter.

The raw materials of many information-age processes,however,are electronic signals and electronically-manipulated data.And some so-called business methods,such as that claimed in the present case,involve the manipulation of even more abstract constructs such as legal obligations,organizational relationships,and business risks.Which,if any,of these processes qualify as a transformation or reduction of an article into a different state or thing constituting patenteligible subject matter?

We further note for clarity that the electronic transformation of the data itself into a visual depiction in Abele was sufficient; the claim was not required to involve any transformation of the underlying physical object that the data represented.We believe this is faithful to the concern the Supreme Court articulated as the basis for the machine-or-transformation test,namely the prevention of preemption of fundamental principles.So long as the claimed process is limited to a practical application of a fundamental principle to transform specific data,and the claim is limited to a visual depiction that represents specific physical objects or substances,there is no danger that the scope of the claim would wholly preempt all uses of the principle.

IV

We now turn to the facts of this case.As outlined above,the operative question before this court is whether Applicants’ claim 1 satisfies the transformation branch of the machine-or-transformation test.

We hold that the Applicants’ process as claimed does not transform any article to a different state or thing.Purported transformations or manipulations simply of public or private legal obligations or relationships,business risks,or other such abstractions cannot meet the test because they are not physical objects or substances,and they are not representative of physical objects or substances.Applicants’ process at most incorporates only such ineligible transformations.As discussed earlier,the process as claimed encompasses the exchange of only options,which are simply legal rights to purchase some commodity at a given price in a given time period.The claim only refers to“transactions”involving the exchange of these legal rights at a“fixed rate corresponding to a risk position.”Thus,claim 1 does not involve the transformation of any physical object or substance,or an electronic signal representative of any physical object or substance.Given its admitted failure to meet the machine implementation part of the test as well,the claim entirely fails the machine-or-transformation test and is not drawn to patent-eligible subject matter.

Applicants’ arguments are unavailing because they rely on incorrect or insufficient considerations and do not address their claim’s failure to meet the requirements of the Supreme Court’s machine-or-transformation test.First,they argue that claim 1 produces“useful,concrete and tangible results.”But as already discussed,this is insufficient to establish patent-eligibility under § 101.Applicants also argue that their claimed process does not comprise only“steps that are totally or substantially practiced in the mind but clearly require physical activity which have [sic] a tangible result.”But as previously discussed,the correct analysis is whether the claim meets the machine-or-transformation test,not whether it recites“physical steps.”Even if it is true that Applicant’s claim“can only be practiced by a series of physical acts”as they argue,its clear failure to satisfy the machineor-transformation test is fatal.Thus,while we agree with Applicants that the only limit to patent-eligibility imposed by Congress is that the invention fall within one of the four categories enumerated in § 101,we must apply the Supreme Court’s test to determine whether a claim to a process is drawn to a statutory“process”within the meaning of § 101.Applied here,Applicants’ claim fails that test so it is not drawn to a“process”under § 101 as that term has been interpreted.

On the other hand,while we agree with the PTO that the machine-or-transformation test is the correct test to apply in determining whether a process claim is patent-eligible under § 101,we do not agree,as discussed earlier,that this amounts to a“technological arts”test.Neither the PTO nor the courts may pay short shrift to the machine-or-transformation test by using purported equivalents or shortcuts such as a“technological arts”requirement.Rather,the machine-or-transformation test is the only applicable test and must be applied,in light of the guidance provided by the Supreme Court and this court,when evaluating the patent-eligibility of process claims.When we do so here,however,we must conclude,as the PTO did,that Applicants’ claim fails the test.

Applicants’ claim is similar to the claims we held unpatentable under § 101 in Comiskey.There,the applicant claimed a process for mandatory arbitration of disputes regarding unilateral documents and bilateral“contractual”documents in which arbitration was required by the language of the document,a dispute regarding the document was arbitrated,and a binding decision resulted from the arbitration.We held the broadest process claims unpatentable under § 101 because“these claims do not require a machine,and these claims evidently do not describe a process of manufacture or a process for the alteration of a composition of matter.”We concluded that the claims were instead drawn to the“mental process”of arbitrating disputes,and that claims to such an“application of [only]human intelligence to the solution of practical problems”is no more than a claim to a fundamental principle.

Conclusion

Because the applicable test to determine whether a claim is drawn to a patent-eligible process under § 101 is the machine-or-transformation test set forth by the Supreme Court and clarified herein,and Applicants’ claim here plainly fails that test,the decision of the Board is

Affirmed.

DYK,with whom LINN,Circuit Judges concurring.

While I fully join the majority opinion,I write separately to respond to the claim in the two dissents that the majority’s opinion is not grounded in the statute,but rather“usurps the legislative role.”In fact,the unpatentability of processes not involving manufactures,machines,or compositions of matter has been firmly embedded in the statute since the time of the Patent Act of 1793.It is our dissenting colleagues who would legislate by expanding patentable subject matter far beyond what is allowed by the statute.

I

A

The patentability criteria of the 1793 Act were to a significant extent the same in the 1790 Act.The 1790“statute was largely based on and incorporated”features of the English system and reveals a sophisticated knowledge of the English patent law and practice.This is reflected in Senate committee report for the bill that became the 1790 Act,which expressly noted the drafters’ reliance on the English practice:

The Bill depending before the House of Representatives for the Promotion of useful Arts is framed according to the Course of Practice in the English Patent Office ….

The American statute ultimately differed in some other respects.For example,Congress rejected the English rule that the invention need only be novel in England.The American statute required novelty against the whole world and did not permit“patents of importation.”Even the opposing view – urging departure from the English practice in particular respects – recognized that the English practice provided considerable guidance.

Later,Justice Story,writing for the Supreme Court,recognized the profound influence of the English practice on these early patent laws,which in many respects codified the common law:

It is obvious to the careful inquirer,that many of the provisions of our patent act are derived from the principles and practice which have prevailed in the construction of that of England….The language of [the patent clause of the Statute of Monopolies] is not,as we shall presently see,identical with ours; but the construction of it adopted by the English courts,and the principles and practice which have long regulated the grants of their patents,as they must have been known and are tacitly referred to in some of the provisions of our own statute,afford materials to illustrate it.

While Congress departed from the English practice in certain limited respects,in many respects Congress simply adopted the English practice without change.Both the 1790 and the 1793 Acts,for example,adopted the same 14-year patent term as in England.Both also required inventors to file a written specification – a requirement recognized by the English common law courts in the mid-eighteenth century.In addition,as discussed below,the categories of patentable subject matter closely tracked the English approach,and in certain respects reflected a deliberate choice between competing views prevalent in England at the time.

B

The English practice in 1793,imported into the American statutes,explicitly recognized a limit on patentable subject matter.As the Supreme Court recounted in Graham v.John Deere Co.,the English concern about limiting the allowable scope of patents arose from an aversion to the odious Crown practice of granting patents on particular types of businesses to court favorites.Parliament responded to the Crown’s abuses in 1623 by passing the Statute of Monopolies,prohibiting the Crown from granting these despised industry-type monopolies.Not all monopolies were prohibited,however: the Statute expressly exempted invention-type patent monopolies.Section 6 of the Statute exempted from its prohibitions“letters patent and grants of privilege for the term of fourteen years or under,hereafter to be made,of the sole working or making of any manner of new manufactures within this realm,to the true and first inventor and inventors of such manufactures ….”

Each of the five categories of patentable subject matter recognized by the 1793 Patent Act – (1)“manufacture,”(2)“machine,”(3)“composition of matter,”(4)“any new and useful improvement,”and (5)“art”– was drawn either from the Statute of Monopolies and the common law refinement of its interpretation or resolved competing views being debated in England at the time.

“Manufacture.”At the most basic level,the 1793 Act,like the Statute of Monopolies,expressly provided for the patentability of“manufactures.”This language was not accidental,but rather reflected a conscious adoption of that term as it was used in the English practice.

“Machine.”Likewise,the category of“machines”in the 1793 Act had long been understood to be within the term“manufactures”as used in the English statute.

Although the 1790 statute did not explicitly include“compositions of matter,”this was remedied in the 1793 statute.At the time,“compositions of matter”were already understood to be a type of manufacture patentable under the English statute.One example is found in Liardet v.Johnson,1 Carp.P.C.35 (K.B.1778),a case involving a patent on a“composition”of stucco (a composition of matter).Lord Mansfield’s jury instructions noted that by the time of that trial he had decided“several cases”involving compositions:“But if … the specification of the composition gives no proportions,there is an end of his patent….I have determined,[in] several cases here,the specification must state,where there is a composition,the proportions ….”

“Any new and useful improvement.”The reference to“any new and useful improvement”in the 1793 Act also adopted a consensus recently reached by the English courts.The common law courts had first ruled in Bircot’s Case in the early seventeenth century that an improvement to an existing machine could not be the proper subject of a patent under the Statute of Monopolies.In 1776 that line of cases was overruled in Morris v.Bramson,because such a reading of the statute“would go to repeal almost every patent that was ever granted.”

“Art.”As the Supreme Court has recognized,a process“was considered a form of ‘art’ as that term was used in the 1793 Act.”(Diehr).The language of the Statute of Monopolies permitted patents on that which could be characterized as the“working or making of any manner of new manufactures within this realm.”While this language plainly applied to tangible“new manufactures”(such as machines or compositions of matter),it also appeared to allow patenting of manufacturing processes as the“working or making of any manner of new manufactures.”Thus,under the Statute of Monopolies patents could be had on the“working or making of any manner of new manufactures.”Numerous method patents had issued by 1793,including James Watt’s famous 1769 patent on a“[m]ethod of diminishing the consumption of fuel in [steam] engines.”However,the English courts in the mid-eighteenth century had not yet resolved whether processes for manufacturing were themselves patentable under the statute,and as discussed below,the issue was being actively litigated in the English courts.In the 1793 Act Congress resolved this question by including the term“art”in the statute,adopting the practice of the English law officers and the views of those in England who favored process patents.

The question remains as to what processes were considered to be patentable in England at the time of the 1793 Act.Examination of the relevant sources leads to the conclusion that the method Bilski seeks to claim would not have been considered patentable subject matter as a process under the English statute.

II

A

First,the language of the Statute of Monopolies –“working or making of any manner of new manufactures”– suggests that only processes that related to“manufactures”(including machines or compositions of matter) could be patented.

Second,the English patent practice before and contemporaneous with the 1793 Act confirms the notion that patentable subject matter was limited by the term“manufacture”in the Statute of Monopolies and required a relation to the other categories of patentable subject matter.The organization of human activity was not within its bounds.Rather,the patents registered in England under the Statute of Monopolies before 1793 were limited to articles of manufacture,machines for manufacturing,compositions of matter,and related processes.

…

There is no suggestion in any of this early consideration of process patents that processes for organizing human activity were or ever had been patentable.Rather,the uniform assumption was that the only processes that were patentable were processes for using or creating manufactures,machines,and compositions of matter.

B

…

Since the 1793 statute was reenacted in 1952,it is finally important also to inquire whether between 1793 and 1952 the U.S.Patent Office and the courts in this country had departed from the English practice and allowed patents such as those sought by Bilski.In fact,the U.S.Patent Office operating under the 1793 Act hewed closely to the original understanding of the statute.As in the English practice of the time,there is no evidence that patents were granted under the 1793 Act on methods of organizing human activity not involving manufactures,machines or the creation of compositions of matter.The amicus briefs have addressed the early American practice,and some of them claim that human activity patents were allowed in the early period.To the contrary,the patents cited in the briefs are plainly distinguishable.

Finally,nothing in the legislative history of the 1952 Act suggests that Congress intended to enlarge the category of patentable subject matter to include patents such as the method Bilski attempts to claim.As discussed above,the only change made by the 1952 Act was in replacing the word“art”with the word“process.”The Supreme Court has already concluded that this change did not alter the substantive understanding of the statute.

The House Report accompanying the 1952 bill includes the now-famous reference to“anything under the sun made by man”:

A person may have“invented”a machine or a manufacture,which may include anything under the sun made by man,but it is not necessarily patentable under section 101 unless the conditions of the title are fulfilled.

In short,the history of § 101 fully supports the majority’s holding that Bilski’s claim does not recite patentable subject matter.Our decision does not reflect“legislative”work,but rather careful and respectful adherence to the Congressional purpose.