Nathan Potter, Associate Member, University of Cincinnati Law Review
- Introduction
In the four years since Alice Corp. Pty. v. CLS Bank Int’l[1], district and federal circuit courts have struggled to correctly apply Alice’s modification of the Mayo[2] test. Courts appear to be falling in-line with the “I know it when I see it” view (borrowed from Obscenity and other areas of law) when they determine whether an invention transforms a “law of nature,[3] physical phenomena,[4] or abstract idea[5]” into patent-eligible subject matter.[6] This issue frustrates the purpose of the Federal Circuit in its exclusive oversight over cases concerning appeals on patent litigation.[7]
In Exergen Corp. v. Kaz USA, Inc., the Federal Circuit Court of Appeals, in a two-to-one split-decision, unintentionally highlights the likeliness of misapplying the Mayo/Alice test (a two-pronged test to see if an invention is an exception to a normally patent-ineligible concept).[8] The United States District Court for the District of Massachusetts denied a defendant’s motion for judgement as a matter of law,[9] which claimed the plaintiff’s patent was ineligible under 35 U.S.C § 101.[10] The Federal Circuit panel of three judges affirmed this motion by the District Court.[11] This Article will review the majority opinion and dissenting opinion of the decision by the Federal Circuit Court of Appeals. Part II outlines the (more recent) background in this area of law which culminated with the Mayo test, Alice’s impact on that test, and how some other decisions have applied Mayo/Alice. Part III will review the facts of the case and explain the majority’s and dissent’s applications of the Mayo/Alice test. Part IV analyzes those interpretations and applications of the Mayo/Alice test. Part V explains why the dissent is the proper interpretation of the Mayo/Alice test, why the majority’s interpretation is inferior, and introduces a potential solution courts may develop.
- Background
The United States Constitution grants Congress the power “[t]o promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries.”[12] Patent law attempts to balance the conflict between monetarily incentivizing invention and preventing the “undue” hinderance of further innovation.[13] An inventor is granted a patent in exchange for disclosing his invention to the public through the United States Patent and Trademark Office (USPTO). A patent is viewed as a functional pseudo-monopoly which grants exclusionary rights to the inventor to make, use, sell, or import the patented subject matter.[14] Patent law has been important to our economy and country since the inception of our constitution. Patent cases are not often argued before the United States Supreme Court; therefore, when the Court provides insight into interpreting this complex area of law, it is vital that district and federal circuit courts correctly understand and apply the principles of the holding.
Mayo Collaborative Servs. v. Prometheus Labs., Inc. is the most profound guidance, concerning patent-eligible subject matter, the Supreme Court has granted to lower courts in the last fifty years. The Mayo decision provided lower courts with a framework to determine if an invention is an exception to normally patent-ineligible subject matters.[15] Specifically, under the Mayo test, inventors are able to more successfully be granted patents for inventions involving laws of nature, physical phenomena, or abstract ideas.[16]
The Mayo test has two prongs, and each prong must be affirmatively answered for an inventor to receive a patent on normally patent-ineligible subject matter.[17] The first prong of the Mayo test asks whether the patent’s claims[18] “are directed to a patent-ineligible concept.”[19] Again, patent-ineligible concepts[20] are laws of nature, physical phenomena, and abstract ideas. Some examples of patent-ineligible subject matter include: a process to determine appropriate drug doses for patients based on metabolites in their blood,[21] a computer process to exchange financial obligations between two parties using a computer intermediary,[22] an algorithm to convert binary code decimal numbers to pure binary numbers,[23] and a method for updating alarm limits during a catalytic conversion process.[24] The above inventions were found patent-ineligible under 35 U.S.C § 101 because they were deemed little more than a convenient means to an end. Specifically, they only satisfied the first prong of the Mayo test.
The second prong of the Mayo test examines the elements of the patent claims, both individually and “as an ordered combination,” to determine whether an invention “transform[s] the nature of the claims” sufficiently to convert a concept, that would not normally be patent-eligible, into an invention that may be patented.[25] This is often referred to as the “inventive concept” prong. The claims at issue in Mayo concerned a method for measuring metabolites in the bloodstream to calibrate the appropriate dosage of a drug used to treat autoimmune diseases.[26] The patent owner in Mayo asserted that the claims were a “patent-eligible application of [the laws of nature]” because they provided information that allowed a physician to determine the likelihood that a particular dose would be harmful or ineffective for a patient.[27] The Court determined that the method utilized by the invention was “well known in the [field of autoimmune treatment]” and that the invention did “nothing significantly more than [provide] an instruction to doctors to apply the applicable laws [of nature] when treating the patient.”[28] This is crucial because patent cases are judged based upon the subjective understanding of someone who has ordinary skill in the field at the time of invention (pre-America Invents Act) or at the time of the filing date (post-America Invents Act).
As a final background note, it is important to remember that patent cases are fact-driven endeavors. Holdings almost always rely on the narrow set of facts and assertions provided to the court reviewing the case. Mayo is a prime example of patent-ineligibility for an invention which sought to apply a law of nature,[29] while Alice shows us that adding a computer into the patent claims does not alter the Mayo analysis.[30]
With this history and development of the law in mind, review the below opinions of the Exergen’s majority and dissent.
III. Contrasting the Majority and Dissent of Exergen Corp. v. Kaz USA, Inc.
- Background of the Case
Exergen Corp. v. Kaz USA, Inc. involves two utility patents, the second of which was filed ten years after the first as a further development in the technology.[31][32] The claimed invention: (1) detects the skin temperature on the forehead of a patient; (2) detects the ambient temperature; and (3) then calculates the core temperature of the body based upon a formula that uses the measurements from (1) and (2).[33] The patents explained that prior art[34] temperature detectors did not “provide the unique combination of elements which enable consistent measurements of core temperature by scanning above the superficial artery.”[35] Additionally, the patent asserted that prior art temperature detectors were not adapted to scan across a target surface by taking multiple samples per second or were based on a pivotal scan rather than a lateral scan.[36]
Exergen Corp. (the plaintiff and patent owner) brought separate infringement suits against Kaz USA, Inc. (the defendant) and two other competitors (Brooklands Inc. and Thermomedics Inc.) in front of three different district court judges.[37] The district court judges from Brooklands and Thermomedics granted each defendant’s motion for summary judgement[38] which stated multiple claims of Exergen’s invention were patent-ineligible.[39] Kaz presented a motion for judgement as a matter of law[40] on the patent-ineligibility issue, but the district court denied this motion.[41] After trial, and a damages award of almost $15 million dollars, Kaz appealed the patent-ineligibility issue and the Federal Circuit Court of Appeals released their decision on March 8, 2018.[42]
- The Majority Opinion
The majority upheld the district court’s finding that the invention was a patent-eligible application of patent-ineligible subject matter; therefore, Kaz was found to have infringed upon Exergen’s patent.[43] The majority correctly recited the Mayo test, but focused upon only one way to determine whether a claimed invention contained an “inventive concept.”[44] The majority’s position centered upon the language in Mayo and Alice regarding prior art or processes that are “well known in the art.”[45] The majority states that the “case turns entirely on whether the combination of elements was well-understood, routine, and conventional at the time of the invention.”[46] Further, the majority concludes that the second prong of the Mayo/Alice test is completely satisfied when the claim limitations “involve more than performance of ‘well-understood, routine, [and] conventional activities previously known to the industry.”[47]
The majority recognized that there was no dispute that Exergen’s invention involved claims which include laws of nature.[48] Next, the majority acknowledged that a significant portion of the claims were dedicated to deriving the mathematical equations to calculate core temperature based on ambient and skin temperature readings.[49] In the majority’s view, the dispute between the parties is whether Exergen’s patented invention calculates core body temperature in a new and unique enough process to transform the invention into a patent-eligible application of a law of nature.[50]
The district court, relying heavily on Diamond v. Diehr, determined that while the techniques utilized by Exergen’s claimed invention were used in prior art, those techniques were not utilized in the combination, or for the purpose, set forth in Exergen’s patent.[51] The majority explained that the district court’s conclusion that the claimed elements of the invention “were not well-understood, routine, and conventional” was a factual conclusion, and must be given deference unless there was a clear error of fact.[52] Based on these findings, the majority upheld the district court’s denial of Kaz’s motion for judgement as a matter of law.[53]
- The Dissenting Opinion
The dissent asserts that the claimed invention begins and ends with a law of nature.[54] The opinion takes note that the core body temperature is a function of the ambient and skin temperatures.[55] The invention’s output is merely a “mathematical representation of the law of nature that governs the relationship between skin, air, and core temperatures.”[56] Further, the dissent rebuts the district court’s and majority’s views that Diehr’s holding weighs in favor of Exergen.[57] In Diehr, the patentable invention used Arrhenius’s equation[58] as an intermediate step in a rubber-curing process.[59] The dissent poses that Exergen is not implementing any sort of process, Exergen is doing nothing more than using observations of a natural phenomenon to produce information regarding a patent-ineligible law of nature.[60]
The dissent also argues that the majority is not properly applying the second prong of the Mayo test and is arriving at an incorrect conclusion even under a deferential standard of review.[61] Specifically, the dissent states that the district court was incorrect in finding that Exergen’s patents embodied an “inventive concept.”[62] The dissent asserted compelling facts, that were known to the district court, about a similar invention commercially sold by Exergen named DermaTemp.[63] This device scanned multiple times per second and tracked peak temperatures (just like the device claimed in the patents at issue in the case).[64] The dissent concludes that Exergen’s claimed invention is patent-ineligible because it is nothing more than a combination of the technology utilized by DermaTemp and a heat-balancing equation.[65] Finally, the dissent further reinforces its position, while commenting on the majority’s incongruency, by pointing out the court previously rejected identical reasoning for patent-eligibility in Ariosa Diagnostics, Inc. v. Sequenom, Inc.[66](As a note, the majority claims the Ariosa decision was not based on the same reasoning as this case.)
- Discussion
Patent law provides an economic incentive for the progression of science. An inventor informs the public about his or her invention in exchange for the right to exclude others from profiting from that invention for a set amount of time. The public, gaining information through the patent disclosure, may further progress science through innovation, improvement, or transformation of patented subject matter. Often, an inventor, or other individual, will repeatedly improve an invention in order to: market a new version of the invention, improve or add functionality to the invention, apply the concepts in the invention to other areas, and more. This is where Exergen highlights both an inventor’s over-eagerness in attempting to receive a patent for something that is ineligible and the legal system’s inconsistencies in resolving 35 U.S.C. § 101 disputes.
The majority highlights and works through a very disjointed Mayo analysis. The first prong of Mayo is not difficult to answer. Does the patent concern patent-ineligible subject matter? The answer for both the majority and dissent is “yes” (although the dissent argued that the majority barely addressed this inquiry). The difference between the majority and dissent is how to analyze and apply the second prong of the Mayo analysis. The second prong seeks to determine if the patent contains an “inventive concept,” something that transforms or adds to the patent-ineligible subject matter so that the patent is about more than just the concept. The majority makes a two-step analysis of this second prong. First, the majority determines that an “inventive process” may satisfy the second prong of Mayo if the claimed elements of the invention “were not well-understood, routine, and conventional.” Second, the majority defers this determination to the district court, explaining that: (1) this was a factual issue best determined by the district court; and (2) that they saw no clear error in the district court’s conclusion.
The dissent appears to take significant issue with the majority’s analysis and conclusion for several reasons. First, the dissent argues that the invention at issue was “well-understood, routine, and conventional.” Exergen had been commercially selling a very similar device (the DermaTemp) for years. The greatest difference between the old and new devices is that the new device calculated core body temp based upon ambient and skin temperatures. Shockingly, Exergen’s old device, DermaTemp (Derma being another term for “dermis” or “the skin” and Temp being short for “temperature”), was a device that took skin temperature readings. This was combined with another prior art which records ambient temperature readings (commonly known as a thermometer). Finally, the third of three components of the claimed invention is a computer that would calculate the core body temperate based upon the readings of the ambient and skin temperatures.
To fully express the dissent’s point, the following analysis breaks down the claimed invention further. This is an invention essentially comprised of: (1) a DermaTemp, (2) a thermometer, and (3) a computer which will take the readings of (1) and (2) in order to produce a number which represents the core body temperature. Numbers (1) and (2) are certainly prior art. Leaving (3) which is merely a generic computer that runs a program, equation, or algorithm. Alice has set the standard that the addition of a computer does not make an abstract idea (a program, equation, algorithm, etc.) patent-eligible subject matter. According to Alice, this is especially true if the program could be performed by a generic computer. This means, Exergen’s patent should have been invalidated. Therefore, the Federal Circuit should have sided with Kaz because there can be no infringement if there is no valid patent.
The majority may argue that it is not the individual elements, but rather the combination of the elements of the claimed invention which constitutes a process that is not “well-understood, routine, and conventional.” They would be right to assert this argument because the Mayo analysis looks at the claims both individually and “as an ordered combination,” to determine whether it “transforms the nature of the claims” sufficiently enough to make the claimed law of nature, physical phenomena, or abstract idea “into a patent-eligible application.” Unfortunately for the majority, this argument still fails to pass muster. At the heart of this invention is a device that detects temperatures (ambient and skin), puts those readings into an equation, and displays a calculated result (core body temp). The majority focuses on the way the invention records the skin temperature, by moving progressively across the skin while the invention takes several readings. According to the claims, the device is merely taking a range of temperatures and using the peak temperature for the equation. This functionality is essentially identical to the method of using a DermaTemp. DermaTemp is used to detect injury, in horses for example, by using an infrared surface scanner. Someone using a DermaTemp and a thermometer could acquire the data necessary to determine core body temperature, the same way the claimed invention would do with its calculation. Again, if a person or generic computer could use the same mathematical formula to perform the task of a claimed invention, it is likely that the Alice precedence would deem the patent invalid.
- Conclusion
Patent law is filled with uncertainty. Receiving a patent may be partially based on the writing skill of the inventor or patent attorney. Patent litigation may be determined by which party submitted the better brief, or provided a better expert witness, or got lucky. In general, (and for more reasons than there is space to write about on this blog) patents and the body of law surrounding them are inconsistent. Therefore, district courts and, especially, the Federal Circuit Court of Appeals, having complete jurisdiction over patent appeals, must reach congruity in applying the few pieces of guidance they have received from the United States Supreme Court.
The dissent points out that the majority has essentially given Exergen a patent for the relationship between two laws of nature. Patent cases are vital. An incorrect ruling on a patent case is a possible hindrance to the progression of science and the useful arts. In the two other cases Exergen brought in conjunction with this case, the district court judges granted each respective defendants’ motion for summary judgement of invalidity under 35 U.S.C. § 101.[68] This further validates the dissent’s opinion.
Moving forward, courts may consider using the following non-definitive test. With an appreciation of Alice, the courts could deem a claimed invention as patent-ineligible under 35 U.S.C. § 101 if the calculation being performed can be easily and efficiently resolved by a human. This simple test would show that the program, calculation, algorithm, etc. is likely an abstract idea, and thus patent-ineligible. This test is admittedly very subjective to the skill level of the individual performing the calculation; therefore, the court should evaluate the answer from the perspective of someone having ordinary skill in the profession. Such a distinction is common in patent law and the endeavor may provide guidance to the courts concerning eligibility. The easier and quicker it is to calculate the solution to the equation, the less likely the abstract idea contains a patent-eligible “inventive concept.”
[1] Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 134 S. Ct. 2347 (2014).
[2] Mayo Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66 (2012).
[3] A law of nature “revels a relationship that has always existed.” An example of this would be the laws of gravity or thermodynamics. Parker v. Flook, 437 U.S. 584, 593 n.15 (1978).
[4] Physical phenomena (sometimes also called natural phenomena) are often similar or related to laws of nature; however, physical phenomena focus on items that are a product of nature. An example is DNA that is naturally replicated in our bodies. See What is Physical Phenomena?, http://www.svw.co.za/what-is-physical-phenomena.
[5] Abstract ideas are less defined than laws of nature or physical phenomena. Most often, an abstract idea is something separate from the physical embodiment of the invention. For example: an economic practice, a mathematical equation, or a software process. See Audrey A. Millemann, More Patent Invalidated as Abstract Ideas, The IP Law Blog (March 30, 2017), https://www.theiplawblog.com/2017/03/articles/patent-law/more-patent-invalidated-as-abstract-ideas/.
[6] In patent law, “patent-eligible subject matter” refers to a process, machine, manufacture, or composition of matter than can be patented.
[7] See S. Rep. No. 97-275, at 5 (1981) (“The creation of the Court of Appeals for the Federal Circuit will produce desirable uniformity in this area of … [patent] law.”).
[8] Exergen Corp. v. Kaz USA, Inc., 725 F. Appx. 959 (Fed. Cir. 2018).
[9] A motion for judgement as a matter of law (JMOL) is made, during trial, by party A who claims that party B has not provided enough evidence to support party B’s case; therefore, the judge should rule for party A. Fed. R. Civ. P. 50(a).
[10] 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. 35 U.S.C. § 101 (1952).
[11] Exergen, 725 F. Appx. at 972.
[12] U.S. Const. art. I, §8, cl. 8.
[13] Dmitry Karshtedt, Upstream Patents, 56 B.C. L. REV. 949 (2015).
[14] Janice M. Mueller, Patent Law 25-26 (5th ed. 2016).
[15] Mayo, 566 U.S. at 89.
[16] Id. at 71.
[17] Id. at 77.
[18] Patent claims are single-sentence definitions that provide the scope of the protection, sought by the patent applicant, to exclude others from making, using, selling, offering to sell, or importing the patent applicant’s claimed invention. Claims should list all elements of an invention and how those elements interact with one another. Janice M. Mueller, Patent Law 118-120 (5th ed. 2016).
[19] Mayo, 566 U.S. at 77.
[20] Some courts use “concept” and “subject matter” almost interchangeably.
[21] Mayo, 566 U.S. at 82.
[22] Alice, 134 S. Ct. at 2349.
[23] Gottschalk v. Benson, 409 U.S. 63, 64 (1972).
[24] Parker v. Flook, 437 U.S. 584, 594 (1978).
[25] Mayo, 566 U.S. at 78.
[26] Id. at 82.
[27] Id. at 77.
[28] Id. at 79 (emphasis added).
[29] See generally Id.
[30] Alice, 134 S. Ct. at 2351.
[31] U.S. Patent No. 6,292,685 (issued Sep. 18, 2001).
[32] U.S. Patent No. 7,787,938 (issued Aug. 31, 2010).
[33] Exergen, 725 F. Appx. at 973.
[34] Prior art refers to a previous technology or event that will be compared to the invention in the patent application. If the claimed invention is the same as the prior art, or does not include a new or useful improvement, the patent application will be denied or invalidated if it was granted. Janice M. Mueller, Patent Law 983 (5th ed. 2016).
[35] Exergen, 725 F. Appx. at 961.
[36] Id. at 962.
[37] Id.
[38] A motion for summary judgement is granted for party A when there are no genuine issues of material facts; when party A is entitled to judgement as a matter of law; and the court finds there is no reasonable way a judge or jury could rule for party B. Fed R. Civ. P. 56.
[39] Id.
[40] A motion for judgement as a matter of law is denied if the court determines a reasonable jury could rule in favor of the party who is not presenting the motion. Fed. R. Civ. P. 50(a).
[41] Exergen, 725 F. Appx. at 962.
[42] Id. at 961.
[43] Id. at 972.
[44] Id. at 963.
[45] Id. at 966.
[46] Id. at 963.
[47] Id.
[48] Id. at 964.
[49] Id.
[50] Id.
[51] Id.
[52] Id. at 965.
[53] Id. at 972.
[54] Id. at 973.
[55] Id.
[56] Id.
[57] Id.
[58] Arrhenius’s equation is a formula used to identify the rate of a reaction and the activation energy requirement of a chemical reaction. Keith J. Laidler, Chemical Kinetics (3rd ed. 1987).
[59] Id.
[60] Id.
[61] Id. at 974.
[62] Id. (citing Ariosa Diagnostics, Inc. v. Sequenom, Inc., 788 F.3d 1371, 1378 (Fed. Cir. 2015)).
[63] Id.
[64] Id.
[65] Id.
[66] Id. at 975.
[67] Id. at 966.
[68] See Exergen Corp. v. Brooklands Inc., 125 F. Supp. 3d 307, 312-17 (D. Mass. 2015). See also Exergen Corp. v. Thermomedics, Inc., 132 F. Supp. 3d 200, 203-08 (D. Mass. 2015).
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