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I N THE SUPREME COURT OF THE UNI TED STATES
- - - - - - - - - - - - - - - - - x
BERNARD L. BI LSKI AND RAND A. :
WARSAW, :
Pet i t i oner s :
v. : No. 08- 964
DAVI D J . KAPPOS, UNDER :
SECRETARY OF COMMERCE FOR :
I NTELLECTUAL PROPERTY AND :
DI RECTOR, PATENT AND :
TRADEMARK OFFI CE. :
- - - - - - - - - - - - - - - - - x
Washi ngt on, D. C.
Monday, November 9, 2009
The above- ent i t l ed mat t er came on f or or al
ar gument bef or e t he Supr eme Cour t of t he Uni t ed St at es
at 1: 00 p. m.
APPEARANCES:
J . MI CHAEL J AKES, ESQ. , Washi ngt on, D. C. ; on behal f of
t he Pet i t i oner s.
MALCOLM L. STEWART, ESQ. , Deput y Sol i ci t or Gener al ,
Depar t ment of J ust i ce, Washi ngt on, D. C. ; on behal f of
t he Respondent .
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C O N T E N T S
ORAL ARGUMENT OF PAGE
J . MI CHAEL J AKES, ESQ.
On behal f of t he Pet i t i oner s 3
MALCOLM L. STEWART, ESQ.
On behal f of t he Respondent 26
REBUTTAL ARGUMENT OF
J . MI CHAEL J AKES, ESQ.
On behal f of t he Pet i t i oner s 50
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P R O C E E D I N G S
( 1: 00 p. m. )
CHI EF J USTI CE ROBERTS: We wi l l hear
ar gument t hi s af t er noon i n Case 08- 964,
Bi l ski v. Kappos.
Mr . J akes.
ORAL ARGUMENT OF J . MI CHAEL J AKES
ON BEHALF OF THE PETI TI ONERS
MR. J AKES: Mr . Chi ef J ust i ce, and may i t
pl ease t he Cour t :
The Feder al Ci r cui t ' s r i gi d and nar r ow
machi ne- or - t r ansf or mat i on t est f or al l pat ent - el i gi bl e
met hods shoul d be r ever sed. The r equi r ement t hat any
and al l met hods must be ei t her t i ed t o a par t i cul ar
machi ne or t r ansf or mspeci f i c subj ect mat t er doesn' t
f i nd any basi s i n ei t her t he l anguage of Sect i on 101 or
anywher e i n t he pat ent st at ut e.
I t ' s not r equi r ed by t hi s Cour t ' s
pr ecedence, and i t ' s cont r ar y t o t he est abl i shed
pr i nci pl e t hat Sect i on 101 shoul d be r ead br oadl y t o
accommodat e unf or eseen advances i n t he usef ul ar t s.
Ther e ar e r ecogni zed excl usi ons f r omSect i on 101 f r om
t hat br oad l anguage, such as l aws of nat ur e, nat ur al
phenomenon, and abst r act i deas. Those may not be
pat ent ed.
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But t hese except i ons, whi ch ar e dr awn f r om
t he Cour t ' s pr ecedent , i ncl udi ng t hi s Cour t ' s Di ehr
case, al so f i nds suppor t i n t he st at ut or y l anguage,
whi ch says t hat any pr ocess must be new and usef ul .
So t he pr ohi bi t i on agai nst pat ent i ng l aws of
nat ur e or abst r act pr i nci pl es, i t appl i es equal l y t o al l
f our cat egor i es of subj ect mat t er under 101, but , her e,
t he Feder al ci r cui t has cr eat ed a new t est j ust f or
pr ocesses t hat ar e not bound i n t he st at ut e or r equi r ed
by t hi s Cour t ' s deci si on.
J USTI CE SCALI A: Wel l , i f t he gover nment
says t hat t he - - t hat t he t er mon whi ch i t hangs i t s hat
i s t he t er musef ul ar t s and t hat t hat meant , or i gi nal l y,
and st i l l means manuf act ur i ng ar t s, ar t s deal i ng wi t h
wor kmen, wi t h - - you know, i nvent or s, l i ke Lor enzo
J ones, not - - not somebody who wr i t es a book on how t o
wi n f r i ends and i nf l uence peopl e.
What i s wr ong wi t h t hat anal ysi s, t hat
t hat ' s what " usef ul ar t s" meant , t hat i t al ways - -
al ways was t hought t o deal wi t h machi nes and i nvent i ons?
MR. J AKES: Cer t ai nl y, " usef ul ar t s"
encompasses i ndust r i al pr ocesses, manuf act ur i ng
pr ocesses, but i t has never been l i mi t ed j ust t o t hose
t ypes of pr ocesses. I ' l l admi t t hat dur i ng t he
I ndust r i al Revol ut i on most of t he i nvent i ons concer ned
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machi nes and manuf act ur i ng pr ocesses. But we have ci t ed
count er - exampl es t hat show t hat busi ness was al so wi t hi n
t he usef ul ar t s.
I t ' s al so up t o Congr ess t o deci de how t o
i mpl ement t he pat ent syst emand t he st at ut or y - -
J USTI CE BREYER: Wel l , i f you l eave
somet hi ng out , Congr ess can put i t back i n, t ai l or i ng
t he pr ot ect i on t o what t hey f eel i s necessar y. But i f
i t cover s ever yt hi ng under t he sun, I ' ve never seen a
case wher e Congr ess woul d t ake somet hi ng out .
Now, i f we ar e r el yi ng on Congr ess, I guess
t he ci r cui t woul d say, l et ' s go nar r ow, and we
woul dn' t - - you know - - si nce you r ef er r ed t o Congr ess,
I t hought I woul d br i ng t hat up and see what you t hi nk.
MR. J AKES: Congr ess has act ed i n cer t ai n
ci r cumst ances. One of t hemi s i n sect i on 273, t o
pr ovi de pr i or user r i ght s f or busi ness met hods. Anot her
ar ea i s 287( c) , wher e medi cal act i vi t i es ar e al so
exempt ed f r omr emedi es under t he st at ut e.
Ther e has been a bi l l i nt r oduced t o exempt
t ax avoi dance met hods, but t hat has not yet been passed.
J USTI CE GI NSBURG: But you say you woul d say
t ax avoi dance met hods ar e cover ed, j ust as t he pr ocess
her e i s cover ed. So an est at e pl an, t ax avoi dance, how
t o r esi st a cor por at e t akeover , how t o choose a j ur y,
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al l of t hose ar e pat ent abl e?
MR. J AKES: They ar e el i gi bl e f or pat ent i ng
as pr ocesses, assumi ng t hey meet t he ot her st at ut or y
r equi r ement s.
J USTI CE BREYER: So t hat woul d mean t hat
ever y - - ever y busi nessman - - per haps not ever y, but
ever y successf ul busi nessman t ypi cal l y has somet hi ng.
Hi s f i r mwoul dn' t be successf ul i f he di dn' t have
anyt hi ng t hat ot her s di dn' t have. He t hi nks of a new
way t o or gani ze. He t hi nks of a new t hi ng t o say on t he
t el ephone. He t hi nks of somet hi ng. That ' s how he made
hi s money.
And your vi ew woul d be - - and i t ' s new, t oo,
and i t ' s usef ul , made hi ma f or t une - - anyt hi ng t hat
hel ps any busi nessman succeed i s pat ent abl e because we
r educe i t t o a number of st eps, expl ai n i t i n gener al
t er ms, f i l e our appl i cat i on, gr ant ed?
MR. J AKES: I t i s pot ent i al l y pat ent abl e,
yes.
J USTI CE BREYER: Okay. Wel l t hen, i f t hat
wer e so, we go back t o t he or i gi nal pur pose of t he
Const i t ut i on. Do you t hi nk t hat t he f r amer s woul d have
want ed t o r equi r e anyone successf ul i n t hi s gr eat , vast ,
new cont i nent because he t hi nks of somet hi ng new t o have
had t o r un t o Washi ngt on and t o f or ce any possi bl e
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compet i t or t o do a sear ch and t hen st op t he wheel s of
pr ogr ess unl ess t hey get per mi ssi on?
I s t hat a pl ausi bl e vi ew of t he pat ent
cl ause?
MR. J AKES: No, Your Honor . I woul dn' t
char act er i ze i t t hat way, but I do bel i eve t hat - -
J USTI CE SOTOMAYOR: So how do we l i mi t i t t o
somet hi ng t hat i s r easonabl e? Meani ng, i f we don' t
l i mi t i t t o i nvent i ons or t o t echnol ogy, as some ami ci
have, or t o some t i e or t et her , bor r owi ng t he Sol i ci t or
Gener al ' s phr aseol ogy, t o t he sci ences, t o t he usef ul
ar t s, t hen why not pat ent t he met hod of speed dat i ng?
MR. J AKES: Wel l , f i r st of al l , I t hi nk,
l ooki ng at what ar e usef ul ar t s, i t does excl ude some
t hi ngs. I t does excl ude t he f i ne ar t s. Speaki ng,
l i t er at ur e, poems, I t hi nk we al l agr ee t hat t hose ar e
not i ncl uded, and t her e ar e ot her t hi ngs as wel l . For
exampl e, a cor por at i on, a human bei ng, t hese ar e t hi ngs
t hat ar e not cover ed by t he st at ut or y cat egor i es.
J USTI CE SOTOMAYOR: So why ar e human
act i vi t i es cover ed by usef ul ar t s?
MR. J AKES: Human act i vi t i es ar e cover ed.
J USTI CE SOTOMAYOR: Wel l , you ar e sayi ng
t hey ar e cover ed, but why shoul d t hey be?
MR. J AKES: I bel i eve t he st at ut e pr ovi des
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f or t hemt o be cover ed by def i ni ng t hemas a pr ocess. I
can gi ve you a - - one good exampl e, whi ch woul d be a
sur gi cal met hod per f or med by a doct or . Those ar e
pat ent abl e. They ar e pat ent el i gi bl e. I n sect i on
287( c) , Congr ess has car ved out and sai d, you can' t go
af t er t he doct or f or i nf r i ngement , but t hat i s an
ent i r el y human act i vi t y, and i t has l ong been
pat ent abl e.
J USTI CE SOTOMAYOR: Do you t hi nk t hat t her e
i s some benef i t t o soci et y f r ompat ent i ng a met hod t o
cur e someone t hat i nvol ves j ust human act i vi t y, as
opposed t o some machi ne, subst ance, or ot her appar at us
t o hel p t hat pr ocess?
MR. J AKES: Yes.
J USTI CE SOTOMAYOR: Do you bel i eve t hat t hat
was t he i nt ent of t he pat ent l aw?
MR. J AKES: I bel i eve t hat f al l s wi t hi n t he
usef ul ar t s, and I bel i eve t hat t her e i s an advant age t o
t hat . Ther e ar e r eal l y t wo advant ages t o t he pat ent
syst em. One i s encour agi ng peopl e t o come up wi t h new
t hi ngs, such as a sur gi cal met hod or met hod of hedgi ng
consumpt i on r i sk.
The ot her i s t he di scl osur e aspect . A
doct or mi ght choose t o keep i t secr et .
J USTI CE BREYER: So you ar e goi ng t o answer
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t hi s quest i on yes. You know, I have a gr eat , wonder f ul ,
r eal l y or i gi nal met hod of t eachi ng ant i t r ust l aw, and i t
kept 80 per cent of t he st udent s awake. They l ear ned
t hi ngs - -
( Laught er . )
J USTI CE BREYER: I t was f abul ous. And I
coul d pr obabl y have r educed i t t o a set of st eps and
ot her t eacher s coul d have f ol l owed i t . That you ar e
goi ng t o say i s pat ent abl e, t oo?
MR. J AKES: Pot ent i al l y.
J USTI CE BREYER: Okay. Fi ne. Now, suppose
I r ej ect t hat vi ew, hypot het i cal l y, and suppose I wer e
t o t ake t he vi ew t hat t hi s i s way t oo f ar , t hat t hat i s
not t he pur pose of t he st at ut e. Suppose f or
hypot het i cal ' s sake I ' mst i l l a l i t t l e ner vous about
t hat - - t hat ci r cui t ' s deci si on t her e. Have you any
suggest i on f or me?
MR. J AKES: I t hi nk t hat we shoul d go back
t o t he f i r st pr i nci pl es t hat wer e enunci at ed i n Di ehr
and ot her cases, t hat abst r act i deas per se ar e not
pat ent abl e. That ' s my posi t i on, and what I woul d
advocat e i n t hi s case and any case, as l ong as you' r e - -
CHI EF J USTI CE ROBERTS: What - - I ' ml ooki ng
at your Cl ai m1, i n J oi nt Appendi x page 19 t o 20. How
i s t hat not an abst r act i dea? You i ni t i at e a ser i es of
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t r ansact i ons bet ween commodi t y pr ovi der s and commodi t y
consumer s. You set a f i xed pr i ce at t he consumer end,
you set a f i xed pr i ce at t he ot her end, and t hat ' s i t .
I mean, I coul d pat ent a pr ocess wher e I do
t he same t hi ng. I i ni t i at e a ser i es of t r ansact i ons
wi t h sel l er s. I i ni t i at e a ser i es of t r ansact i ons wi t h
buyer s. I buy l ow and sel l hi gh. That ' s my pat ent f or
maxi mi zi ng weal t h.
I don' t see how t hat ' s di f f er ent t han your
cl ai mnumber 1.
MR. J AKES: I f t hat was a novel and
unobvi ous met hod, t hen i t shoul d be pat ent abl e, but i t ' s
el i gi bl e as subj ect mat t er - -
CHI EF J USTI CE ROBERTS: Wel l , but your Cl ai m
1 i t seems t o me i s cl assi c commodi t y hedgi ng t hat has
been goi ng on f or cent ur i es.
MR. J AKES: Your Honor , i f t hat wer e t r ue,
t hen we shoul d r un af oul of t he obvi ousness pr ovi si on
under sect i on 103. Now, t he Pat ent Of f i ce di d i ni t i al l y
al l ow some of our cl ai ms over t he pr i or ar t .
J USTI CE KENNEDY: But you know, t he
i nsur ance i ndust r y - - t he i nsur ance busi ness, as we know
i t , r eal l y began i n Engl and i n 1680, when t hey
di scover ed di f f er ent i al cal cul us, and t hey had
expect ancy and act uar i al t abl es, act uar i al f or l i f e,
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expect ancy f or shi ppi ng, and t hi s r eal l y cr eat ed a whol e
new i ndust r y.
I n your vi ew, I t hi nk, cl ear l y t hose woul d
be pat ent abl e, t he - - t he expl anat i on of how t o compi l e
an act uar i al t abl e and - - and appl y i t t o r i sk. That
cer t ai nl y woul d be pat ent abl e under your vi ew, and
i t ' s - - i t ' s di f f i cul t f or me t o t hi nk t hat Congr ess
woul d want t o - - woul d have want ed t o gi ve onl y one
per son t he capaci t y t o i ssue i nsur ance.
MR. J AKES: I t hi nk t hat met hod woul d be
pat ent el i gi bl e. But , as you sai d, i t woul d have t o be
r educed t o a concr et e set of st eps, l i ke our cl ai m1.
Now, cl ai m1 may be wr i t t en i n br oad t er ms and i t may
some day r un i nt o t he pr i or ar t , but i t does r equi r e
peopl e t o do act ual t hi ngs.
I t hi nk even t he Pat ent Of f i ce agr eed t hat
t her e ar e physi cal st eps i n our met hod her e. And i n t he
i nsur ance met hod - -
CHI EF J USTI CE ROBERTS: I ' msor r y.
J ust what ar e t he physi cal st eps? I ni t i at i ng a ser i es
of t r ansact i ons bet ween commodi t y pr ovi der and mar ket
par t i ci pant s?
MR. J AKES: That woul d be one.
CHI EF J USTI CE ROBERTS: You get on t he phone
and you cal l t he baker and you get on t he phone and you
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cal l t he gr ocer and say: I can set up a deal f or bot h
of you?
MR. J AKES: I t coul d be. I t coul d be done
t hat way because i t does t ake a per son act i ng t o do
t hat . I t ' s not pur el y - -
J USTI CE KENNEDY: And so i n t he i nsur ance
case i t t akes a per son t o go over t o t he Bur eau of
St at i st i cs and compi l e st at i st i cs on - - on l i f e - - on
l i f e expect ancy.
MR. J AKES: That coul d be. Now, t he pat ent
on t he dat a, t hat ' s anot her cat egor y t hat ' s not i ncl uded
i n t he subj ect mat t er of t hose f our cat egor i es. The
dat a i t sel f i s not pat ent abl e, but i f i t i s a ser i es of
st eps, i t shoul d be el i gi bl e as l ong as i t meet s t he
ot her st at ut or y r equi r ement s as a pr ocess.
Ther e i s not hi ng i n t he usef ul ar t s - - now,
we have hear d t he wor d " t echnol ogy. " That can be a
di f f i cul t t er m, because t echnol ogy i n i t s br oadest sense
means t he appl i cat i on of knowl edge as opposed t o gener al
knowl edge.
J USTI CE GI NSBURG: I sn' t t hat t he basi s on
whi ch t he pat ent l aw r est s i n Eur ope, i n ot her
count r i es? They do not per mi t busi ness met hod pat ent s.
I t has t o be t i ed t o t echnol ogy, t o sci ence or
t echnol ogy. So i f ot her syst ems ar e abl e t o wor k wi t h
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t he not i on of t echnol ogy- based, why not our s?
MR. J AKES: I woul d agr ee, Your Honor .
Ther e ar e t hose syst ems t hat do have a r equi r ement l i ke
t hat . Our s does not . Our s speaks i n ver y br oad
t er ms about havi ng - -
J USTI CE GI NSBURG: But I was t al ki ng about
- - you sai d t hat t echnol ogy- based, t hat woul dn' t wor k
because t her e ar e so many def i ni t i ons. I ' msi mpl y
aski ng you t he quest i on: Does i t wor k wi t h t hese ot her
syst ems? That t hey - - t hey excl ude busi ness met hods,
t hey i ncl ude t echnol ogy- based - -
MR. J AKES: That ' s r i ght . But t hey have
al so def i ned " t echnol ogy" i n such a way as t o excl ude
busi ness met hods. And I don' t t hi nk we can do t hat .
The f i el ds of oper at i ons r esear ch,
i ndust r i al engi neer i ng, even f i nanci al engi neer i ng,
t her e has been an expl osi on i n t hese par t i cul ar f i el ds,
and t o now cal l t hemnon- t echnol ogi cal because t hey
di dn' t exi st over 100 year s ago woul dn' t make - -
J USTI CE SOTOMAYOR: Ar e you suggest i ng t hey
di dn' t exi st because we di dn' t gi ve t hempat ent s
100 year s ago?
MR. J AKES: No.
J USTI CE SOTOMAYOR: Or t hey exi st because
comput er s have i ncr eased - -
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MR. J AKES: I t ' s ver y much r el at ed t o our
cur r ent economy and st at e of t echnol ogy, wi t h comput er s
and t he I nt er net and t he f r ee f l ow of i nf or mat i on. But
t hat ' s what - -
J USTI CE SOTOMAYOR: But a pat ent l i mi t s t he
f r ee f l ow of i nf or mat i on. I t r equi r es l i censi ng f ees
and ot her st eps, l egal st eps. So you can' t ar gue t hat
your def i ni t i on i s i mpr ovi ng t he f r ee f l ow of
i nf or mat i on.
MR. J AKES: Your Honor , I woul d, because of
t he di scl osur e r equi r ement of t he pat ent l aws. I t
r equi r es peopl e t o di scl ose t hei r i nvent i ons r at her t han
keepi ng t hemsecr et , so t her e i s a second benef i t t o t he
pat ent syst emj ust ot her t han encour agi ng peopl e t o
i nvent , and t hat i s t o have t hat i nf or mat i on get t o t he
publ i c gener al l y. And i n exchange f or t hat - -
J USTI CE SCALI A: Even t hough t he publ i c
can' t use i t , r i ght , unt i l t he pat ent expi r es?
MR. J AKES: Unt i l t he pat ent expi r es, i f a
val i d pat ent i ssues on t hat , yes.
But t hat ' s our syst em. We do gi ve excl usi ve
r i ght s i n exchange f or t hat i nf or mat i on bei ng pr ovi ded
t o t he publ i c.
J USTI CE STEVENS: May I ask t hi s quest i on?
What do you t hi nk t he st r ongest case f r omour
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j ur i spr udence i s t o suppor t your posi t i on?
MR. J AKES: I woul d say i t ' s t he Di ehr case.
J USTI CE STEVENS: Whi ch one?
MR. J AKES: Di ehr . Di amond v. Di ehr .
J USTI CE STEVENS: Di ehr ?
MR. J AKES: Yes.
J USTI CE STEVENS: That was not hi ng l i ke t hi s
pat ent .
MR. J AKES: No, i t ' s not , but I t hi nk i t - -
J USTI CE STEVENS: Ther e' s l anguage i n t he
opi ni on.
MR. J AKES: I t out l i nes t he gener al
pr i nci pl es and al so t el l s us t hat t her e ar e onl y t hese
speci f i c t hi ngs t hat ar e not i ncl uded wi t hi n t he subj ect
mat t er .
J USTI CE STEVENS: But i s i t cor r ect t hat
t her e' s none - - none of our cases have ever appr oved a
r ul e such as you advocat e?
MR. J AKES: I don' t t hi nk t hi s par t i cul ar
subj ect mat t er has been r ul ed on by t he Cour t .
Now, i n Dann v. J ohnst on i n t he 70s, t her e
was a case t hat coul d have been deci ded on t he gr ounds
t hat i t was a met hod of doi ng busi ness, and i nst ead t he
Cour t cl ose t o deci de t hat case based on obvi ousness.
And r eal l y - -
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J USTI CE SCALI A: You know, you ment i on t hat
t her e ar e al l t hese - - t hese new ar eas t hat di dn' t exi st
i n t he past because of moder n busi ness and what - not , but
t her e ar e al so ar eas t hat exi st ed i n t he past t hat don' t
exi st t oday. Let ' s t ake t r ai ni ng hor ses. Don' t you
t hi nk t hat - - t hat some peopl e, hor se whi sper er s or
ot her s, had some, you know, some i nsi ght s i nt o t he best
way t o t r ai n hor ses? And t hat shoul d have been
pat ent abl e on your t heor y.
MR. J AKES: They mi ght have, yes.
J USTI CE SCALI A: Wel l , why di dn' t anybody
pat ent t hose t hi ngs?
MR. J AKES: I t hi nk our economy was based on
i ndust r i al pr ocess.
J USTI CE SCALI A: I t was based on hor ses, f or
Pet e' s sake. You - - I woul d r eal l y have t hought
somebody woul d have pat ent ed t hat .
MR. J AKES: Ther e ar e al so i ssues wi t h
enf or cement . I can' t r eal l y answer why somebody
woul dn' t have.
Ther e ar e t eachi ng met hods t hat wer e
pat ent ed. Ther e ar e a number of t hemt hat we' ve
i ncl uded i n our br i ef wher e t her e wer e pat ent s i ssued
f or t eachi ng met hods, and I don' t t hi nk t hat we' ve had a
ser i ous enf or cement pr obl emwi t h peopl e bei ng sued f or
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usi ng t eachi ng met hods. But t her e have been t hose
peopl e who have sought t o pat ent t hemr at her t han keep
t hemas secr et s or j ust use t hem.
J USTI CE SCALI A: How ol d - - how ol d wer e
t hose, t hose cases?
MR. J AKES: They r ange. Some of t hemgo
back qui t e a ways, t o t he l ast cent ur y.
J USTI CE STEVENS: May I ask t hi s gener al
quest i on, t oo? I have al ways admi r ed J udge Ri ch, who
was ver y act i ve i n dr af t i ng t he ' 52 amendment s.
MR. J AKES: Yes.
J USTI CE STEVENS: Has he wr i t t en anyt hi ng on
t hi s par t i cul ar i ssue.
MR. J AKES: He has wr i t t en a number of
t hi ngs. And I t hi nk one of t he t hi ngs t hat t he
Sol i ci t or Gener al quot es i n t hei r br i ef i s f r oman
ar t i cl e t hat he wr ot e.
But he al so wr ot e t he Al appat deci si on and
t he St at e St r eet Bank case as wel l . And t hose I t hi nk,
st and as hi s vi ews, hi s l at est vi ews on what was
pat ent - el i gi bl e subj ect mat t er , l ooki ng at t he St at e
St r eet Bank case.
J USTI CE KENNEDY: I n t he Di ehr case, t he
Cour t sai d t hat i n t he end t he abst r act i dea must be i n
a pr ocess t hat , oh, i mpl ement s a pr oposal t hat t he
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pat ent l aws wer e desi gned t o pr ot ect , whi ch br i ngs you
al most back t o t he begi nni ng.
MR. J AKES: I t does.
J USTI CE KENNEDY: You don' t - - you don' t
know much f r omt hat l anguage. But t hat was somet hi ng
t hat you coul d t ouch, t hat you coul d see, t hat l ooked
l i ke a machi ne, t he subst ance was di f f er ent bef or e t he
pr ocess and af t er t he pr ocess. And - - and none of
t hat ' s appl i cabl e her e. I t ' s - -
MR. J AKES: The Di ehr i nvent i on was an
i ndust r i al pr ocess of t he convent i onal t ype, because i t
was a met hod of cur i ng r ubber . But t oday t he r aw
mat er i al s ar e j ust as l i kel y t o be i nf or mat i on or
el ect r oni c si gnal s, and t o si mpl y r oot us i n t he
i ndust r i al er a because t hat ' s what we knew I t hi nk woul d
be wr ong and cont r ar y t o t he f or war d- l ooki ng aspect of
t he pat ent l aw.
J USTI CE SOTOMAYOR: Wel l , i sn' t t he
mani pul at i on of el ect r oni c si gnal s a subst ance t hat i s
di f f er ent i n ki nd f r omj ust a met hod of how t o go about
doi ng busi ness or a met hod of how t o appr oach a
par t i cul ar pr obl em?
I sn' t t her e - - i sn' t t hat what t he Feder al
Ci r cui t was t r yi ng t o expl ai n, whi ch i s t hat t her e has
t o be somet hi ng mor e subst ant i ve t han t he mer e exchange
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of i nf or mat i on; t hat i t has t o i nvol ve - - i t used t he
wor d " t r ansf or mat i on. " I t hasn' t def i ned t he out er
l i mi t s of what i t means by t hat .
MR. J AKES: I t hi nk t her e i s a di f f er ence.
But by r i gi dl y l ooki ng at t hat t r ansf or mat i on t est , what
you do i s you excl ude l ot s of ot her t hi ngs wher e t he
t r ansf or mat i on i s not r equi r ed - -
J USTI CE BREYER: That ' s exact l y what I - -
maybe I can get you t o i nadver t ent l y hel p my - - my
hypot hesi s you don' t l i ke. That ' s why I say i t ' s
i nadver t ent .
You sai d t her e ar e t wo t hi ngs. Ther e ar e
act ual l y f our t hi ngs i n t he pat ent l aw whi ch ever yone
accept s. Ther e ar e t wo t hat ar e pl us and t wo t hat ar e
mi nus. And t he t wo t hat ar e pl us i s by gi vi ng peopl e a
monopol y, you get t hemt o pr oduce mor e. As you sai d,
you get t hemt o di scl ose.
The t wo mi nuses ar e t hey char ge a hi gher
pr i ce, so peopl e use t he pr oduct l ess; and mor eover , t he
act of get t i ng per mi ssi ons and havi ng t o get per mi ssi on
can r eal l y sl ow t hi ngs down and dest r oy advance. So
t her e i s a bal ance.
I n t he ni net eent h cent ur y, t hey made i t one
way wi t h r espect t o machi nes. Now you' r e t el l i ng us:
Make i t t oday i n r espect t o i nf or mat i on. And i f you ask
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me as a per son how t o make t hat bal ance i n r espect t o
i nf or mat i on, i f I amhonest , I have t o t el l you: I
don' t know. And I don' t know whet her acr oss t he boar d
or i n t hi s ar ea or t hat ar ea pat ent pr ot ect i on wi l l do
no har mor mor e har mt han good.
So t hat ' s t he t r ue si t uat i on i n whi ch I f i nd
mysel f i n r espect t o your ar gument . And i t ' s i n r espect
t o t hat , I woul d say: Al l r i ght , so what do I do?
MR. J AKES: I t hi nk t he answer i s t o f ol l ow
t he st at ut e.
J USTI CE BREYER: Wel l , t hank you. I t hought
t hat was t he i ssue, not t he answer .
( Laught er . )
MR. J AKES: Congr ess has spoken i n br oad
t er ms and gi ven us t hose f our cat egor i es, and by l ooki ng
at t hose I t hi nk t hat answer s t he quest i on.
J USTI CE SOTOMAYOR: But i t doesn' t , because
we don' t wor k i n a vacuum. We wor k i n a cont ext .
MR. J AKES: Yes.
J USTI CE SOTOMAYOR: And so i t begs t he
quest i on, because we go ar ound i n a ci r cl e: What does
" pr ocess" mean i n a pat ent l aw t hat was passed i n 1952
t hat had one set of manuf act ur i ng and ot her i t ems t hat
ar e t echnol ogi cal l y t i ed and t hi s i s not ? So how do we
di scer n Congr ess' s i nt ent , ot her t han by t he use of t he
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wor d " pr ocess" i n cont ext ?
MR. J AKES: I t hi nk t hat " pr ocess" i s not by
i t sel f . I t says " any new and usef ul pr ocess. " And so
we have - - we can l ook at t hose wor ds and under st and
t hat nat ur al phenomena, l aws of nat ur e, whi ch ar e not
r eal l y new because t hey ar e par t of t he st or ehouse of
knowl edge avai l abl e t o ever yone, and " usef ul , " meani ng
t her e has t o be a pr act i cal appl i cat i on.
J USTI CE SOTOMAYOR: But t he wor d " knowl edge"
i s not used i n t her e. So i t ' s not j ust usef ul
knowl edge.
MR. J AKES: No.
J USTI CE SOTOMAYOR: I t ' s usef ul knowl edge i n
r el at i onshi p t o somet hi ng.
MR. J AKES: Pr act i cal l y appl i ed, yes, i n t he
r eal wor l d, whet her t hat ' s t he exchange of i nf or mat i on
or el ect r oni c dat a t r ansf or mat i on. One of t he pr obl ems
wi t h t he t r ansf or mat i on t est i s t hat i t woul d excl ude
some val uabl e i nvent i ons t hat I t hi nk ever yone woul d
agr ee ar e t echnol ogi cal under any t est such as dat a
compr essi on, such as FM r adi o. Even Bel l ' s cl ai m, t he
cl ai mt o t r ansmi t t i ng sound usi ng undul at i ng cur r ent ,
woul dn' t necessar i l y pass t he t r ansf or mat i on t est . So I
t hi nk we need t o l ook at - -
J USTI CE KENNEDY: But i t woul d be di f f er ent ,
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i t seems t o me, t han what you ar e - - l et ' s assume you
can' t pat ent an al phabet . I assume t hat i s t r ue. And
you can t ake an al phabet t o make beaut i f ul wor ds, and - -
and so f or t h. You - - you want t o say t hat t hese - -
t hese el ect r oni c si gnal s can be used i n a way j ust l i ke
t he al phabet can be used.
And many of t he sci ent i f i c br i ef s say t hat
t hei r pr ocess i s di f f er ent , t hat t hey ar e t aki ng
el ect r oni c si gnal s and t ur ni ng t hemi nt o some ot her sor t
of si gnal . But t hat ' s not what you ar e doi ng.
MR. J AKES: That may be, but t hose si gnal s
coul d al so be t r ansmi t t ed. On - - on your quest i on about
t he al phabet you sai d l ook at t he Mor se cl ai m5, whi ch
was an al phabet t o Mor se Code. That ' s exact l y what i t
was.
CHI EF J USTI CE ROBERTS: So you r ej ect - - you
r ej ect t he subst i t ut e. You t hi nk you can pat ent an
al phabet because i t i s a pr ocess of f or mi ng wor ds.
MR. J AKES: I t coul d be, yes. Now, I t hi nk
you r un i nt o al l ki nds of ot her pr obl ems. And t hat ' s
r eal l y wher e t he f ocus of t he pat ent st at ut e shoul d be,
so t hat we have t he f ai r gi ve- and- t ake, t he bar gai n t hat
i s necessar y, t hat we - - t oo much over pat ent i ng as
opposed t o t oo l i t t l e. The t est t her e i s obvi ousness.
That ' s wher e i t t akes pl ace, not at t hi s t hr eshol d.
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J USTI CE SOTOMAYOR: Mor se' s Code was not
obvi ous.
MR. J AKES: What i s t hat ?
J USTI CE SOTOMAYOR: Mor se' s Code was not
obvi ous, and yet - -
MR. J AKES: No, i t wasn' t .
J USTI CE SOTOMAYOR: As I under st and t hat
case, t he onl y t hi ng pat ent ed was t he use of hi s code
wi t h r espect t o t he t el egr aph machi ne t hat he pr oposed.
The Pat ent Of f i ce r ej ect ed - - maybe I amr eadi ng t he
case wr ong, but i t r ej ect ed al l of t he cl ai ms except
t hose t hat r el at ed t o t he use of t he code wi t h a
par t i cul ar machi ne.
MR. J AKES: I t - - i t does say used i n
connect i on wi t h t el egr aphy.
J USTI CE SOTOMAYOR: Of hi s cl ai ms - -
MR. J AKES: Yes.
J USTI CE SOTOMAYOR: - - t hat was t he onl y one
t hat was accept ed, cor r ect ?
MR. J AKES: Ri ght .
J USTI CE SOTOMAYOR: The same t hi ng wi t h - -
wel l , Bel l ' s pat ent was - -
MR. J AKES: I n Mor se' s cl ai ms, I bel i eve i t
was cl ai m8 was t he one t hat was r ej ect ed, and t he r est
of t hemwer e accept ed. Cl ai m8 was t he ver y br oad cl ai m
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t o t r ansmi t t i ng i nf or mat i on over a di st ance, however
accompl i shed.
J USTI CE SOTOMAYOR: Let ' s not ski p over
t hat , because t he r est of t he cl ai mi n Bel l r el at ed t o
how t o t r ansmi t over t he wi r e, cor r ect ?
MR. J AKES: Hi s di scl osur e di d, but hi s
act ual cl ai mwas i nt er pr et ed as bei ng usi ng undul at i ng
cur r ent t o t r ansmi t sound, however t hat was
accompl i shed. I t was ver y br oad, and t hat ' s why - -
J USTI CE SOTOMAYOR: And t hat was what was
r ej ect ed.
MR. J AKES: No. Bel l ' s cl ai mwas not
r ej ect ed. That one was appr oved, yes. The Mor se cl ai m,
cl ai m8, was t he br oad cl ai mt hat r eal l y we woul d
pr obabl y l ook at t oday as bei ng - - as havi ng i nadequat e
di scl osur e because - -
J USTI CE SCALI A: Wel l , i t was - - i t was
t r ansf or mi ng sound i nt o el ect r i cal cur r ent and t hen at
t he ot her end el ect r i cal cur r ent back i nt o sound. I
mean i t met t he t r ansf or mat i on t est , di dn' t i t ?
MR. J AKES: I t mi ght have. I t mi ght have.
J USTI CE SCALI A: I t cl ear l y di d.
MR. J AKES: Wel l , i t ' s not t hat cl ear f r om
t he Feder al Ci r cui t ' s t r ansf or mat i on t est whet her t hat
woul d appl y or not , because al t hough t he Feder al Ci r cui t
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has sai d t r ansf or mat i on of dat a mi ght qual i f y, i t sai d
i t has t o r epr esent somet hi ng physi cal , somet hi ng - - a
r eal obj ect . And sound doesn' t necessar i l y have t o be
t hat . Sound can be gener at ed ar t i f i ci al l y. So - -
J USTI CE SCALI A: Sound - - sound i s not
physi cal , and el ect r i c cur r ent i s not physi cal ?
MR. J AKES: I t hi nk el ect r i c cur r ent i s
physi cal .
J USTI CE SCALI A: Yes, I t hi nk so.
MR. J AKES: Yes.
J USTI CE SCALI A: Sound i s, t oo.
MR. J AKES: I t can be, but when i t ' s
t r ansmi t t ed over a wi r e, i t ' s not . I t ' s somet hi ng el se.
I t ' s an el ect r i cal cur r ent t hen.
J USTI CE SCALI A: Sound i s not t r ansmi t t ed
over t he wi r es. Sound has been t r ansf or med i nt o
cur r ent , and cur r ent i s t r ansmi t t ed over t he wi r e and
t hen t r ansf or med back at t he ot her end i nt o sound.
MR. J AKES: Yes, and I woul d agr ee - -
J USTI CE SCALI A: I t hi nk i t cl ear l y - -
cl ear l y woul d have been cover ed by - - by t he t est t he
gover nment - -
MR. J AKES: I t hi nk t hat ' s mor e i n t he
nat ur e of t r ansmi ssi on, much l i ke our dat a t r ansmi ssi on.
You mi ght t r ansmi t dat a i n a packet wi t hout act ual l y
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changi ng t he under l yi ng dat a, and t hat shoul d be al l owed
as wel l .
I f t her e ar e no quest i ons, I wi l l r eser ve
t he r est of my t i me. Thank you.
CHI EF J USTI CE ROBERTS: Thank you, Mr .
J akes.
Mr . St ewar t .
ORAL ARGUMENT OF MALCOLM L. STEWART
ON BEHALF OF THE RESPONDENT
MR. STEWART: Mr . Chi ef J ust i ce, and may i t
pl ease t he Cour t :
Let me st ar t by f ol l owi ng up on t he
di scussi on of t he Mor se and t he t el ephone cases, because
i t ' s cer t ai nl y our vi ew t hat t hose woul d come out t he
same way under our t est as - - as t hey act ual l y di d i n
pr act i ce.
J USTI CE SCALI A: I cer t ai nl y hope so.
MR. STEWART: And you know, J ust i ce Scal i a,
you ment i oned how t o wi n f r i ends and i nf l uence peopl e.
I t hi nk at a cer t ai n l evel of gener al i t y you coul d
descr i be bot h Dal e Car negi e and Al exander Gr ahamBel l as
peopl e who devi sed met hods of communi cat i ng mor e
ef f ect i vel y.
The r eason t hat Bel l ' s met hod was pat ent abl e
was t hat i t oper at ed i n t he r eal mof t he physi cal . Bel l
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had devi sed a pr ocess i mpl ement ed t hr ough machi nes by
whi ch sound was t r ansf or med i nt o el ect r oni c cur r ent .
The cur r ent was t hen t r ansmi t t ed over a di st ance and
t r ansf or med back i nt o sound.
I nnovat i ons as t o new t echni ques of publ i c
speaki ng, new t echni ques of negot i at i ons, t echni ques
t hat go t o t he subst ance of what i s sai d may be
i nnovat i ve. They may be val uabl e. They ar e not pat ent
el i gi bl e because t hey don' t deal i n t he r eal mof t he
physi cal - -
So whi l e t he i ndust r i al pr ocesses t hat we
di scussed at some l engt h i n our br i ef wer e at t he t i me
of t he f r ami ng t he par adi gmat i c pat ent el i gi bl e
pr ocesses, t hey wer e - - t hey ar e not t he onl y pr ocesses
t hat can be pat ent ed.
J USTI CE ALI TO: Near - - near t he end of your
br i ef you ar gue t hat - - t hat t he pat ent her e i s - - i s
not - - i s unpat ent abl e on t he i ndependent gr ound t hat i t
woul d pr eempt t he abst r act i dea of hedgi ng consumpt i on
- - consumpt i on r i sk. I f you - - i f you ar e r i ght about
t hat , i s t hi s a good case f or us t o get i nt o t he - - i nt o
t he ver y br oad i ssue t hat Pet i t i oner has r ai sed?
MR. STEWART: I - - I t hi nk we woul d
cer t ai nl y pr ef er t o wi n on our pr i mar y gr ound, and l et
me say a coupl e of t hi ngs about t hat . Fi r st , we woul d
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f ai r l y vi gor ousl y r esi st t he not i on t hat t he r ul e t hat
was announced by t he Feder al ci r cui t i s r i gi d or
i nf l exi bl e. That i s, al l t hat t he Feder al ci r cui t has
r eal l y sai d i s t hat t o have a pat ent - el i gi bl e pr ocess
you have t o i dent i f y some l i nk t o a machi ne or a
t r ansf or mat i on of mat t er . And t he Feder al ci r cui t has
sai d wi t h r espect t o some pr ocesses t he l i nk t o t he
machi ne may be so at t enuat ed, t he machi ne par t of t he
pr ocess may be such a smal l segment of t he pr ocess as a
whol e, t hat t hi s woul dn' t be enough. But t he Feder al
ci r cui t sai d: We l eave f or anot her day t he har d
quest i ons t hat wi l l ar i se when par t of t he pr ocess i s
machi ne- i mpl ement ed and anot her par t i s not .
And i n or der f or t he PTO and t he Feder al
ci r cui t t o go about t he busi ness of devi si ng mor e
pr eci se r ul es as t o when par t i cul ar l i nks t o machi nes
ar e suf f i ci ent t o cr eat e pat ent el i gi bi l i t y, we f i r st
need t o est abl i sh t he - - t he basi c pr i nci pl e t hat some
l i nk t o a machi ne or t r ansf or mat i on i s necessar y. So I
t hi nk we - - we have made t he al t er nat i ve ar gument i n our
br i ef , and I t hi nk i t i s a basi s f or af f i r mance.
But i f t he Cour t deci ded t he case on t hat
basi s, we woul d l ose at l east t he - - t he l i mi t ed cl ar i t y
t hat t he Feder al ci r cui t ' s opi ni on has pr ovi ded; t hat
i s, i t woul d st i l l be open t o peopl e i n t he f ut ur e t o
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devi se new cont r act ual ar r angement s desi gned t o al l ocat e
r i sks, new met hods of t eachi ng ant i t r ust , and - -
J USTI CE SOTOMAYOR: How about i f we say
somet hi ng as si mpl e as pat ent l aw doesn' t cover busi ness
mat t er s i nst ead of what t he Feder al ci r cui t has begun t o
say, whi ch i s t echnol ogy i s t i ed t o a machi ne or a
t r ansf or mat i on of t he subst ance, but I have no i dea what
t he l i mi t s of t hat r ul i ng wi l l i mpose i n t he comput er
wor l d, i n t he bi omedi cal wor l d, al l of t he ami ci who ar e
t al ki ng about how i t wi l l dest r oy i ndust r i es? I f we ar
unsur e about t hat , woul dn' t t he saf er pr act i ce be si mpl y
t o say i t doesn' t i nvol ve busi ness met hods?
MR. STEWART: I t hi nk t hat woul d be
i ncor r ect , and i t woul d cr eat e pr obl ems of i t s own.
That i s, t he - - t he i nnovat i on t hat was hel d t o be
pat ent el i gi bl e i n St at e St r eet Bank was not a pr ocess.
The Feder al ci r cui t was not const r ui ng t he st at ut or y
t er m" pr ocess. " I t was const r ui ng t he st at ut or y t er m
" machi ne. " And i t sai d, i n essence, a comput er t hat has
been pr ogr ammed t o per f or mvar i ous cal cul at i ons i n
connect i on wi t h t he oper at i on of t hi s busi ness i s a
machi ne.
I t went on t o say t he opposi ng par t y i n t hat
case had not r ai sed any obj ect i on under sect i on 102 or
103, and, t her ef or e, t he Feder al ci r cui t - -
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J USTI CE SOTOMAYOR: No r ul i ng i n t hi s case
i s goi ng t o change St at e St r eet . I t wasn' t l ooki ng at
pr ocess or t he meani ng of " pr ocess. " I t was l ooki ng at
somet hi ng el se.
MR. STEWART: Wel l , agai n, I t hi nk t hat t he
i nvent i on t hat was hel d t o be pat ent el i gi bl e i n St at e
St r eet i s commonl y descr i bed as a busi ness met hod, even
t hough i t was hel d t o be pat ent el i gi bl e as a machi ne
r at her t han as a pr ocess.
So t o say t hat busi ness met hods ar e
cat egor i cal l y i nel i gi bl e f or pat ent pr ot ect i on woul d
el i mi nat e new machi nes, i ncl udi ng pr ogr ammed comput er s,
t hat ar e usef ul because of t hei r cont r i but i ons t o t he
oper at i on of busi nesses. And si mi l ar l y, t he cour t - -
t he Feder al Ci r cui t i n ot her cases has hel d t hat a cl ai m
t o new and i nnovat i ve comput er sof t war e may be hel d
pat ent abl e as a pr ocess, as a met hod of accompl i shi ng
par t i cul ar t asks t hr ough t he use of a comput er and t hose
mi ght be busi ness- r el at ed t asks. So t o say t hat
busi ness met hods wer e r ul ed out woul d i t sel f be a f ai r l y
sweepi ng hol di ng.
J USTI CE SCALI A: Al so you coul d say busi ness
met hods apar t f r ommachi nes ar e not pat ent abl e. How
about t hat ?
MR. STEWART: I f t he Cour t sai d t hat i n t he
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l i mi t ed ar ea of busi ness met hods, i f t her e i s no machi ne
or t r ansf or mat i on t her e i s no pat ent el i gi bi l i t y - -
J USTI CE BREYER: Suppose you say t hi s. I ' m
j ust sor t of t est i ng t hi ngs out . St ar t wi t h Di ehr . I
mean, and Di ehr has t hese wor ds i n i t , si mi l ar wor ds, i t
j ust says e. g. - - ar e you f ol l owi ng me?
MR. STEWART: Yes.
J USTI CE BREYER: Now, you say what i s i t
t hey have done i n t hi s case i n t he Feder al Ci r cui t ?
They have pul l ed back. That ' s a move. That ' s a move.
They pul l ed back i nsof ar as t hey ar e pul l i ng back f r om
busi ness met hods, not machi nes, dah, dah, dah, dah, dah.
Okay, we see no pr obl emwi t h t hat .
Now, t hey have l ef t much unr esol ved. One,
t r ansf or mat i on; how br oad or nar r ow i s t hat ? We don' t
know. Many peopl e' s pr obl ems wi l l be sol ved i f i t ' s
br oad on t he one hand or nar r ow i n t he ot her .
Two, ar e you aut omat i cal l y pat ent ed - - i n
t he pat ent st at ut e, i f you j ust sor t of r educe t hi s t o a
machi ne by addi ng a comput er on at t he end? They' ve
f l agged t hat as a pr obl em. They haven' t answer ed i t .
Coul d t her e ever be a si t uat i on wher e i t doesn' t meet
t hi s t est but st i l l i s pat ent abl e? We ar e not sur e.
MR. STEWART: Let me t ake t hose poi nt s - -
J USTI CE BREYER: Do you see what I ' mt r yi ng
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t o do? I ' mt r yi ng t o not e t he t hi ngs t hat have been
r ai sed i n t hese 80 br i ef s, i nsof ar as possi bl e say t her e
i s a l ot t her e f or t he f ut ur e t hat we can' t r eal l y
deci de but say as a pul l back, okay.
MR. STEWART: Let me addr ess t hose poi nt s i n
or der . The f i r st t hi ng i s t hat i n Di ehr when you had
t he e. g. ci t e, i t was " e. g. t r ansf or mi ng an ar t i cl e i nt o
a di f f er ent " st at e of - - st at e or t hi ng. And I t hi nk
t he obvi ous i nf er ence i s " e. g. " was used because t he
ot her pr ong of t he machi ne- or - t r ansf or mat i on t est i s use
as a machi ne. That i s, i n t he cont ext of Mr . Mor se' s
i nvent i on or Mr . Bel l ' s i nvent i on, t her e i s
t r ansf or mat i on of a sor t , but i t woul dn' t nat ur al l y be
char act er i zed as t r ansf or mat i on of mat t er .
Those t hi ngs wer e hel d t o be pat ent el i gi bl e
not because t hey t r ansf or med mat t er , but because t hey
i nvol ved t he use of a machi ne. And so, what t he Cour t
i n Di ehr sai d t r ansf or mat i on of a mat t er or an ar t i cl e
i nt o a di f f er ent st at e or t hi ng i s t he cl ue t o t he
pat ent abi l i t y of a pr ocess t hat doesn' t i nvol ve a
par t i cul ar machi ne.
And t he - - t he t ype of pr ocess i t had i n
mi nd was t he pr ocess t hat was descr i bed i n Cor ni ng v.
Bur den or t he pr ocess i n Cochr ane v. Deener , si t uat i ons
i n whi ch an i ndi vi dual had devi sed a met hod of , i n one
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sense - - one case, i t was manuf act ur i ng f l our , and i n
anot her case i t was r ol l i ng puddl e bowl s, of
manuf act ur i ng i t ems. And t hat per son sai d, her e i s t he
ser i es of st eps t hat you have t o go t hr ough, but i t i s
not essent i al t hat you use any par t i cul ar t ool or
machi ne f or each of t hese st eps. That was why t he
wor d - -
CHI EF J USTI CE ROBERTS: Mr . St ewar t , I
t hought I under st ood your ar gument up unt i l t he ver y
l ast f oot not e i n your br i ef . And you say t hi s i s not - -
si mpl y t he met hod i sn' t pat ent abl e because i t doesn' t
i nvol ve a machi ne. But t hen you say but i t mi ght be i f
you use a comput er t o i dent i f y t he par t i es t hat you ar e
set t i ng a pr i ce bet ween and i f you used a mi cr opr ocessor
t o cal cul at e t he pr i ce. That ' s l i ke sayi ng i f you use a
t ypewr i t er t o t ype out t he - - t he pr ocess t hen i t i s
pat ent abl e. I - - I - - i t - - t hat t akes away ever yt hi ng
t hat you spent 53 pages est abl i shi ng.
MR. STEWART: Wel l , I guess t her e - - t her e
wer e t wo di f f er ent pl aces, I bel i eve, at whi ch we
i dent i f i ed ways i n whi ch t hi s sor t of hedgi ng scheme
mi ght be made pat ent el i gi bl e. The f i r st i s we
descr i bed a hypot het i cal i nt er act i ve websi t e i n whi ch
peopl e - - par t i es and count er par t i es coul d essent i al l y
f i nd each ot her by t he comput er and coul d agr ee t o t er ms
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on t hat basi s. And i n t hat si t uat i on, t he - - t he
comput er woul d be at t he hear t of t he i nnovat i on. I t
woul d be - -
CHI EF J USTI CE ROBERTS: No, no. That ' s j ust
sayi ng i nst ead of l ooki ng at t he - - i n t he Yel l ow Pages,
you l ook on t he comput er ; and t hat makes al l t he
di f f er ence t o you?
MR. STEWART: I t hi nk an - - an i nt er act i ve
comput er t echni que, one i n whi ch you si gn on and can
f i nd peopl e wi t hout t r acki ng t hemdown speci f i cal l y, can
si mpl y i dent i f y your sel f on t he websi t e as somebody
whose i nt er est ed i n engagi ng i n a par t i cul ar t r ansact i on
and a pot ent i al count er par t y can f i nd you, i s di f f er ent
f r omt he Yel l ow Pages.
But I guess t he f undament al poi nt I woul d
make i s - - and t hi s i s r eal l y r esponsi ve t o t he second
par t of J ust i ce Br eyer ' s quest i on - - I t hi nk i t i s bot h
a vi r t ue and a vi ce of t he t est t hat t he Feder al Ci r cui t
has announced and t hat we ar e advocat i ng t hat i t doesn' t
sol ve al l t he har d quest i ons. That i s, t he Feder al
Ci r cui t has sai d si nce t hi s par t i cul ar pat ent appl i cant
di dn' t i dent i f y any machi ne or any t r ansf or mat i on t hat
woul d be necessar y t o t he accompl i shment of i t s met hod,
t hat per son i s out of l uck, and t her ef or e, i t ' s
i nappr opr i at e f or us t o go on t o deci de ki nd of t he
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pr eci se l evel of subst ant i al i t y t hat a
machi ne- or - t r ansf or mat i on must pl ay - -
CHI EF J USTI CE ROBERTS: But i f you l ook at
your f oot not e, t hat i nvol ves t he most t angent i al and
i nsi gni f i cant use of a machi ne. And yet you say t hat
mi ght be enough t o t ake somet hi ng f r ompat ent abi l i t y t o
not pat ent abl e.
MR. STEWART: And al l we' ve sai d i s t hat i t
mi ght be enough; t hat i s, har d quest i ons wi l l ar i se down
t he r oad as t o wher e do you dr aw t he l i ne, t o what
ext ent must t he machi ne or t he t r ansf or mat i on be
cent r al - -
CHI EF J USTI CE ROBERTS: So you t hi nk i t ' s a
har d quest i on. I f you devel op a pr ocess t hat says l ook
t o t he hi st or i cal aver ages of oi l consumpt i on over a
cer t ai n per i od and di vi de i t by 2, t hat pr ocess woul d
not be pat ent abl e. But i f you say use a cal cul at or ,
t hen i t - - t hen i t i s?
MR. STEWART: I t hi nk i f i t ' s si mpl y usi ng a
cal cul at or f or i t s pr eexi st i ng f unct i onal i t y t o cr unch
number s, ver y l i kel y t hat woul d not be enough. But what
we see i n some anal ogous ar eas i s t hat t he comput er wi l l
be pr ogr ammed wi t h new sof t war e, i t wi l l be gi ven
f unct i onal i t y i t di dn' t have bef or e i n or der t o al l ow i t
t o per f or ma ser i es of cal cul at i ons, and t hat get s
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cl oser t o t he l i ne. And agai n - -
CHI EF J USTI CE ROBERTS: Wel l , your
f oot not e - - I don' t mean t o dwel l on i t - - i t says t o
i dent i f y count er par t i es t o t he t r ansact i ons. So t hat i f
what you' r e t r yi ng t o get i s t he - - t he baker who sel l s
br ead, because you ar e goi ng t o hook hi mup wi t h t he
gr ocer who sel l s, you know, i n t he gr ocer y st or e, i f you
punched i n i n your sear ch st at i on, you know, gi ve me al l
t he baker s i n Washi ngt on, t hat woul d make i t pat ent abl e?
MR. STEWART: Agai n, we ar e - - we ar e not
sayi ng i t woul d be pat ent el i gi bl e. We woul d have t o
r evi ew t hose f act s, and t he PTO woul d have t o r evi ew
t hose f act s i n t he cont ext of an act ual appl i cat i on.
I guess t he poi nt I ' mt r yi ng t o make i s
si mpl y t hat we don' t want t he Cour t , f or i nst ance, i n
t he ar ea of sof t war e i nnovat i ons or medi cal di agnost i c
t echni ques t o be t r yi ng t o use t hi s case as t he vehi cl e
f or i dent i f yi ng t he ci r cumst ances i n whi ch i nnovat i ons
of t hat sor t woul d and woul d not be pat ent el i gi bl e,
because t he case r eal l y doesn' t pr esent any - - any
quest i on r egar di ng t hose t echnol ogi es. And t her ef or e,
we - -
J USTI CE SOTOMAYOR: Now, i f i t veer s t he
ot her way, whi ch i s by sayi ng t hat we excl usi vel y r el y
on t he machi ne- or - t r ansf or mat i on t est , t hat we' r e
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pr ecl udi ng appl i cat i ons of t he pat ent l aw i n t hose
f i el ds, t he t hi ngs we can' t i magi ne. Once you announce
an excl usi ve t est , you' r e shoe- hor ni ng t echnol ogi es t hat
mi ght be di f f er ent .
MR. STEWART: I guess I woul d say a coupl e
of di f f er ent t hi ngs. The f i r st i s t hat i t seems
unl i kel y, even wi t h new and r api dl y emer gi ng
t echnol ogi es, t hat somebody woul d come up wi t h a syst em
t hat seems f or pat ent pur poses anal ogous t o t he
i nvent i ons t hat have been pat ent el i gi bl e i n t he past
t hat di dn' t i nvol ve any machi ne and t hat di dn' t i nvol ve
any t r ansf or mat i on.
Havi ng sai d t hat , I woul d not e t hat i n bot h
Benson and i n Fl ook t he Cour t hel d open t he possi bi l i t y
t hat some unf or eseen event coul d t ake pl ace t hat
woul d - - as t o whi ch t he appl i cat i on woul d be pat ent
el i gi bl e, even t hough t he machi ne- or - t r ansf or mat i on
t est - -
J USTI CE SOTOMAYOR: So hel p us wi t h a t est
t hat doesn' t go t o t he ext r eme t he Feder al Ci r cui t di d,
whi ch i s t o pr ecl ude any ot her i t ems, somet hi ng we hel d
open expl i ci t l y i n t wo ot her cases, so we woul d have t o
backt r ack and say now we ar e r ul i ng t hat we wer e wr ong,
and st i l l get at somet hi ng l i ke t hi s?
MR. STEWART: Wel l , I t hi nk t he Cour t coul d
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say - - coul d do essent i al l y what was done i n Benson and
Fl ook, namel y acknowl edge t hat t her e had never been a
case up t o t hi s poi nt i n whi ch a pr ocess had been hel d
pat ent el i gi bl e t hat di dn' t i nvol ve a machi ne or a
t r ansf or mat i on. I t coul d l eave open t he possi bi l i t y
t hat some new and as yet unf or eseen t echnol ogy coul d
necessi t at e t he cr eat i on of an except i on.
But - - and t he poi nt we woul d al so make i s
t hi s seems t o be a ver y unl i kel y candi dat e f or such an
except i on, because t he hedgi ng met hod t hat Pet i t i oner s
have - - f or whi ch t hey have sought a pat ent i s i n no
sense di f f er ent i n ki nd f r omr i sk management t echni ques
t hat have been under t aken f or cent ur i es.
J USTI CE SOTOMAYOR: Wel l , t hat - - t hat goes
back t o, not 101 but 102 and 103. That goes back t o
obvi ousness or t he st andar d weedi ng mechani sms f or
pat ent .
MR. STEWART: Wel l , t hi s may or may not be a
novel or nonobvi ous met hod. But even i f we assume t hat
t hi s i s obvi ous f or pur poses of Sect i on 103, i n t hat i t
r epr esent as suf f i ci ent advance over t he pr i or ar t , t hat
peopl e ski l l ed i n t he ar t woul d not necessar i l y have
come up wi t h i t , i t st i l l i s a di f f er ent i n ki nd f r om
r i sk management t echni ques t hat have t aken pl ace i n t hi s
count r y f or - - f or 200 year s. I t i s - - i t i s - -
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J USTI CE GI NSBURG: Mr . St ewar t , di d you - -
does t he gover nment put f or war d t hi s
machi ne- or - t r ansf or mat i on t est ? Was t hat your t est , or
was i t t he Feder al ci r cui t ' s on i t s own?
MR. STEWART: The Feder al ci r cui t , sua
spont e, set t he case f or hear i ng en banc. I bel i eve t he
case had been ar gued t o a panel , but had not been
deci ded, and t he Feder al ci r cui t set t he case f or
r ear gument en banc, posed a number of quest i ons t o
t he - - t he par t i es and t he gover nment di d advocat e t he
machi ne- or - t r ansf or mat i on t est .
J USTI CE GI NSBURG: Tel l me what - -
CHI EF J USTI CE ROBERTS: I ' msor r y. Di d or
di d not ?
MR. STEWART: Di d, i t di d advocat e t he
machi ne- or - t r ansf or mat i on.
J USTI CE GI NSBURG: You di d - - and i f you
r ead J udge Mayer ' s opi ni on, i t has a si mpl i ci t y t o i t .
I t says, i f i t ' s t echnol ogy, t hen i t s wi t hi n t he r eal m
of pat ent , and i f i t ' s not t echnol ogy, i t i sn' t , i f i t
i s based on sci ence or t echnol ogy, and t hat seems t o be
what i s used i n ot her pl aces.
MR. STEWART: I don' t know t hat our t est s - -
I t hi nk our t est , i n a sense, has a shor t hand ver si on of
t hat . I don' t know t hat f ocusi ng t he i nqui r y di r ect l y
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on whet her t echnol ogy i s i nvol ved woul d make t he i nqui r y
easi er , and t hat i s so f or t wo r easons.
Fi r st , peopl e coul d di sput e whet her
par t i cul ar advances ar e pr oper l y r egar ded as
t echnol ogi cal advances, and second, we woul d st i l l have
t he di f f i cul t pr obl ems t hat t he Chi ef J ust i ce has
r ef er r ed t o, wher e you have a pr ocess t hat i s descr i bed
as i nvol vi ng t echnol ogy at some st ep al ong t he way, and
cour t s wi l l st i l l have t o make t he det er mi nat i on, i s
t hat suf f i ci ent l y subst ant i al st ep t o make t he pr ocess,
as a whol e, a t echnol ogi cal one.
So I don' t t hi nk t hat , by adopt i ng a
t echnol ogi cal ar t s t est , t he Cour t woul d avoi d t he
di f f i cul t i es t hat i t has appr opr i at el y i dent i f i ed wi t h
t he machi ne- or - t r ansf or mat i on t est . The ot her t hi ng I
woul d say about t he machi ne- or - t r ansf or mat i on t est i s
t hi s i s not a gover nment posi t i on of r ecent vi nt age;
t hat i s, t he gover nment ' s br i ef t o t hi s cour t i n
Got t schal k v. Benson, or i t s r epl y br i ef whi ch was f i l ed
ar ound 1971, basi cal l y sai d t hat , al t hough t hi s Cour t
has never announced machi ne- or - t r ansf or mat i on of t he
t est , t hat i s t he pr i nci pl e t hat can be abst r act ed f r om
t he t ot al i t y of t he Cour t ' s deci si ons.
J USTI CE KENNEDY: Was t he St at e St r eet case
a machi ne- or - t r ansf or mat i on t est ?
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MR. STEWART: I t woul d.
J USTI CE KENNEDY: You t al k about t he St at e
St r eet case i n your br i ef , and i t ' s compl i cat ed because
of t he Feder al st at ut e t hat f ol l ows i t , but i f you had
j ust t he f act s of St at e St r eet bef or e us, and f or get t i ng
t he Feder al st at ut e was enact ed af t er i t , how woul d you
deci de t hi s case?
MR. STEWART: Oh, i t woul d come out t he same
way. I mean, St at e St r eet Bank - -
J USTI CE KENNEDY: That ' s what I t hought .
And i s i t - - i s i t machi ne- or - t r ansf or mat i on, i n your
vi ew?
MR. STEWART: Wel l , i t was machi ne - - t hat
i s, i n St at e St r eet Bank, t he cl ai mwas not t o a pr ocess
wi t hi n t he meani ng of Sect i on 101. The cl ai mwas not t o
a met hod of accompl i shi ng t hi ngs by means of a comput er ,
whi ch woul d be, pot ent i al l y, a pr ocess. I t was t o t he
comput er i t sel f , t he pr ogr ammed comput er , t hat t he
i nnovat i on i n St at e St r eet Bank was t hat t he devi si ng of
new comput er pr ogr ams t hat al l owed t he comput er t o
per f or mvar i ous t asks i n associ at i on wi t h t he car r yi ng
out of t he hub- and- spokes i nvest ment - - i nvest ment
met hod. And, cer t ai nl y - -
CHI EF J USTI CE ROBERTS: So what di d t hat - -
what di d t hat t r ansf or m?
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MR. STEWART: I t di dn' t t r ansf or manyt hi ng,
but i t woul d f i t - - t he t r ansf or mat i on par t woul d be
i r r el evant because t he machi ne- or - t r ansf or mat i on t est
i s, i n our vi ew, t he appr opr i at e r ubr i c t o appl y i n
const r ui ng t he st at ut or y t er mpr ocess, t hat i s, when t he
per son doesn' t say, I have i nvent ed a new machi ne, but ,
r at her , says, I ' ve i dent i f i ed a new pr ocess f or
accompl i shi ng t hi ngs.
I f a per son cl ai ms t o be - - t o have i nvent ed
a new machi ne, t hen t hat - - i t i s ei t her a machi ne or i t
i sn' t . A comput er i s cer t ai nl y a machi ne. Real l y, t he
onl y - - I t hi nk t he - -
J USTI CE STEVENS: I don' t under st and how
t hat can be a pat ent on a machi ne i f t he onl y t hi ng
novel i s t he pr ocess t hat t he machi ne i s usi ng.
I sn' t - - i sn' t t he quest i on - - r eal l y, t he quest i on
t her e was whet her t he new pr ocess was pat ent abl e.
MR. STEWART: Wel l , I t hi nk what - - t he
ar gument t hat t he ot her si de, t he per son chal l engi ng t he
pat ent i n St at e St r eet coul d have made, but appar ent l y
di dn' t , was t he per son coul d have sai d, of cour se, t he
comput er i s a machi ne, but a comput er pr ogr ammed wi t h
new sof t war e t o per f or mdi f f er ent f unct i ons i s not a new
machi ne.
I t ' s not a di f f er ent machi ne f r omt he one
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t hat has al ways - - not al ways, but t hat has al r eady
exi st ed, and t her ef or e, i t doesn' t sat i sf y Sect i on 1 or
Sect i on - - 102 or Sect i on 103, but t hat - -
J USTI CE KENNEDY: Wel l , t hat was one of t he
r easons I asked you about i t , I suppose. J ust l ooki ng
at t he whol e case, do you t hi nk t he St at e St r eet
hol di ng - - t he St at e St r eet i nvent i on was pat ent abl e?
MR. STEWART: I t was - - t he way I woul d put
i t i s: The St at e St r eet Bank anal ysi s of t he quest i on
t hat was act ual l y pr esent ed t o i t was cor r ect ; t hat i s,
t he ar gued was made, t he pr ogr ammed comput er i s
pat ent abl e as a - -
J USTI CE KENNEDY: How woul d you come out i n
t he St at e St r eet case t oday, i f al l of t he ar gument s
wer e made under your t est ?
MR. STEWART: Wel l , under our t est , we woul d
come out t he same way because t he comput er woul d be a
machi ne. The onl y quest i on woul d be whet her t he
pr ogr ammi ng of t he comput er wi t h new sof t war e caused i t
t o be a pat ent abl e di f f er ent machi ne f r omt he one t hat
exi st ed pr evi ousl y.
Now - - now, we do t hi nk t hat sof t war e
i nnovat i ons can have t he ef f ect of causi ng t he comput er
t o be a di f f er ent , speci al pur pose comput er , as t he
phr ase - -
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J USTI CE STEVENS: I ' msor r y. I must be
awf ul l y st upi d. You say i t woul d come out t he same way.
I n t he same way t he cour t di d or t hi s way you ar gued?
MR. STEWART: I t hi nk t he same - - t he
Feder al ci r cui t ' s deci si on i n St at e St r eet woul d come
out t he same way under our t est .
J USTI CE STEVENS: And you t hi nk i t shoul d?
You t hi nk i t shoul d?
MR. STEWART: Yes, but , agai n, t he poi nt I
woul d emphasi ze - -
J USTI CE STEVENS: I don' t under st and why
t hat i sn' t j ust t he appl i cat i on of a pr ocess, whi ch - -
whi ch i s not i t sel f pat ent abl e subj ect mat t er , t o a
par t i cul ar machi ne t hat can use pr ocess - -
J USTI CE KENNEDY: That ' s - - t hat ' s a pr obl em
I have.
MR. STEWART: Wel l , I guess - - l et me
backt r ack. I f you l ook at t he t ext of t he st at ut e t hat
i s r epr oduced at Page 2 of - - of t he Bl ue Br i ef , and i t
says - - i t ' s r i ght i n t he mi ddl e of t he page. " Whoever
i nvent s or di scover s any new and usef ul pr ocess,
machi ne, manuf act ur e, or composi t i on of mat t er i s
pot ent i al l y ent i t l ed t o" - -
J USTI CE BREYER: So I t hought you wer e
sayi ng t hat t he cor r ect ar gument f or t he peopl e
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at t acki ng t he pat ent i n t hat case was t o say, t hi s i s
not a machi ne. The machi ne t her e i s a comput er . Thi s
i s a pr ogr amt hat changes swi t ches, and t hat i s a
di f f er ent pr ocess f or t he use of t he machi ne.
Now, whet her t hat pr ocess i s or i s not
pat ent abl e depends upon a l ot of t hi ngs t hat we don' t
have t o go i nt o i n t hi s case. I s t hat r i ght ?
MR. STEWART: I don' t - - no.
J USTI CE BREYER: Okay. Wel l , t hen what i s
r i ght ?
MR. STEWART: I don' t t hi nk t hat ' s what I
saw sayi ng. What I was sayi ng i s t hat - - and I guess
t he - - t he f i r st poi nt I woul d make i s, when somebody
cl ai ms t o have i nvent ed a new machi ne, t he
t r ansf or mat i on t est r eal l y has not hi ng t o do wi t h t he
i nqui r y because a - - a bet t er t el evi si on or a bet t er DVD
pl ayer can be pat ent ed as a machi ne, even t hough
t r ansf or mat i on of mat t er i s no - -
J USTI CE STEVENS: I t ' s not on a comput er ,
whi ch t he onl y di f f er ence f r omt he ol d comput er i s i t ' s
usi ng a new pr ogr am. You can' t say t hat ' s a new
machi ne.
MR. STEWART: Wel l , but my - - I t hi nk - -
f i r st , I t hi nk you can because I t hi nk i f you - - i f you
i mpr oved t he har dwar e of t he comput er i n or der t o enabl e
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i t t o per f or m- -
J USTI CE STEVENS: But t hat pat ent di dn' t
r equi r e any change i n t he har dwar e, as I r emember i t
cor r ect l y.
MR. STEWART: But I - - but I t hi nk t he
ar gument t hat has been made wi t h success - - and PTO
agr ees wi t h t hi s - - i s t hat pr ogr ammi ng a comput er by
means of sof t war e t o pr oduce - - t o per f or mnew f unct i ons
can cr eat e a novel - -
J USTI CE BREYER: But t hen al l we do i s ever y
exampl e t hat I j ust gave, t hat I t hought wer e exampl es
t hat cer t ai nl y woul d not be pat ent ed, you si mpl y pat ent
t hem. Al l you do i s j ust have a set of i nst r uct i ons f or
sayi ng how t o set a comput er t o do i t . Anyone can do
t hat . Now, i t ' s a machi ne.
So al l t he busi ness pat ent s ar e al l r i ght
back i n. Now, t hat - - what I t hi nk we wer e l ooki ng
f or was - - or at l east I was - - was why t hat i sn' t so,
and how you ar e goi ng t o l at er , down t he r oad, deal wi t h
t hi s si t uat i on of al l you do i s you get somebody who
knows comput er s, and you t ur n ever y busi ness pat ent i nt o
a set t i ng of swi t ches on t he machi ne because t her e ar e
no busi nesses t hat don' t use t hose machi nes.
MR. STEWART: Wel l , f i r st of al l t he onl y
r ul i ng t hat we' r e - - backt r ack a bi t , t o say, we oppose,
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si r , i n t hi s case because we r ecogni ze t hat t her e ar e
di f f i cul t pr obl ems out t her e i n t er ms of pat ent abi l i t y
of sof t war e i nnovat i ons and medi cal di agnost i cs.
J USTI CE KENNEDY: You t hought we - - you
t hought we woul d mess i t up.
MR. STEWART: I di dn' t t hi nk - -
( Laught er . )
MR. STEWART: We di dn' t t hi nk t he Cour t
woul d mess i t up. We t hought t hat t hi s case woul d
pr ovi de an unsui t abl e vehi cl e f or r esol vi ng t he har d
quest i ons because t he case doesn' t i nvol ve comput er
sof t war e or medi cal di agnost i c t echni ques, and
t her ef or e, we t hought t he Cour t woul d ar r i ve at t he
posi t i on t hat I t hi nk, at l east some member s ar e f eel i ng
t hat you have ar r i ved at , t hat you wi l l deci de t hi s
case, and most of t he har d quest i ons r emai n unr esol ved.
And, f r ankl y, we t hi nk t hat ' s t r ue.
J USTI CE GI NSBURG: But t hi s case coul d be
deci ded wi t hout maki ng any bol d st eps.
MR. STEWART: Agai n, I don' t - - I don' t
t hi nk i t woul d be a bol d st ep t o say t hat
machi ne- or - t r ansf or mat i on i s t he t est . That i s, we have
gone f or - -
J USTI CE GI NSBURG: But even t he Feder al
ci r cui t di dn' t say i t was a r et est . I t sai d i t i s f or
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now. We know t hat t hi ngs t hat we haven' t yet
cont empl at ed may be ar ound t he cor ner , and when t hey
happen, we wi l l deal wi t h t hem.
MR. STEWART: And we woul d - - we woul d be
ent i r el y cont ent wi t h a r ul i ng l i ke t hat . And we woul d
say t hat t he cl ai med hedgi ng met hod her e i s not t he sor t
of Space Age i nnovat i on t hat mi ght cause J ust i ces t o
say: Thi s i s j ust di f f er ent i n ki nd f r omanyt hi ng t hat
t he dr af t er s of t he pat ent st at ut e coul d have i magi ned.
The ot her poi nt I woul d make about t he
pr ogr ammed comput er i s, t o f ol l ow up on my t el evi si on
and DVD exampl e, t hat when you cl ai ma machi ne or a
manuf act ur e, as t he commi t t ee r epor t s t o t he 1952 act
sai d, t hose wor ds ar e br oad. They encompass ever yt hi ng
under t he sun t hat i s made by man. And so a t el evi si on
i s i ndi sput abl y a machi ne, even t hough i t s f unct i on i s
not t o t r ansf or mmat t er . I t ' s onl y when you get t o t he
t er m" pr ocess" t hat you ar e l ef t wi t h - - t hat t he
machi ne- or - t r ansf or mat i on t est ki cks i n.
And r eal l y, t he ar gument on t he ot her si de
i s: The t er m" pr ocess" i n or di nar y speech i s ext r emel y
br oad. I t can l i t er al l y be r ead t o encompass any ser i es
of st eps, whet her or not l i nked t o t echnol ogy, whet her
or not l i nked t o a machi ne or t r ansf or mat i on. And t he
ot her si de ar gues you shoul d const r ue i t t hat way i n t he
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pat ent st at ut e.
I guess t he - - t he t hr ee r easons we woul d
say t hat ' s not so ar e: Fi r st , under t he canon of
nosci t ur a soci i s, i t i s appr opr i at e t o const r ue t he
t er m" pr ocess" i n conj unct i on wi t h t he ot her t er ms.
Those ot her t er ms ar e br oad, but t hey al l r ef er t o
physi cal obj ect s t hat don' t exi st i n nat ur e and ar e
cr eat ed by man. And a huge ar r ay of ver y pr oduct i ve,
i nnovat i ve act i vi t y doesn' t cul mi nat e i n t he cr eat i on of
any new physi cal subst ance, and t he wor d " pr ocess"
sur el y was i nt ended t o add somet hi ng, but i t woul d be
qui t e st r ange t o const r ue t he wor d " pr ocess" t o
encompass t he whol e r ange of human endeavor when t he
ot her wor ds ar e l i mi t ed t o t he cr eat i on of new t hi ngs i n
t he physi cal .
The second t hi ng i s t hat when t hi s Cour t i n
t he past has expl ai ned t he t er m" pr ocess, " i t ' s al ways
l i nked i t t o t he oper at i on of machi nes, as i n t he
t el ephone cases i n Mor se, or t o t he t r ansf or mat i on of
mat t er i n ways t hat may not be dependent on a par t i cul ar
machi ne.
And t he t hi r d t hi ng I woul d say i s t hat i n a
sense, t her e i s a st r ong dog t hat di dn' t bar k i n t he
ni ght qual i t y t o our ar gument . That i s, even t hough t he
Cour t has never sai d i n so many wor ds t hat a met hod of
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al l ocat i ng r i sk by cont r act i s a pat ent - el i gi bl e
pr ocess, t he economi c hi st or y of t hi s count r y r eal l y
woul d have been f undament al l y di f f er ent i f i t had been
bel i eved f r omt he out set t hat i nnovat i ons of t hi s
char act er coul d be pat ent ed and pot ent i al compet i t or s
coul d be f or ecl osed f r omengagi ng i n t he same met hod.
I f t he Cour t has not hi ng f ur t her ?
CHI EF J USTI CE ROBERTS: Thank you, Counsel .
Mr . J akes, you have f our mi nut es r emai ni ng.
REBUTTAL ARGUMENT OF J . MI CHAEL J AKES
ON BEHALF OF THE PETI TI ONER
MR. J AKES: Thank you, Mr . Chi ef J ust i ce.
The Feder al Ci r cui t di d announce t hi s t est
as t he sol e t est f or al l pr ocesses. I t sai d i t appl i ed
no mat t er what t he pr ocess was, so we do have t o f ace
t hese di f f i cul t quest i ons.
I t hi nk t he quest i on can be avoi ded, because
we don' t need a r i gi d t est of t hi s t ype based on
machi ne- or - t r ansf or mat i on. The quest i on we ar e l ooki ng
at and shoul d be l ooki ng at i s: Ar e we t r yi ng t o pat ent
an abst r act i dea?
Now, t he gover nment has gone f ar t her t han
t hat and r eal l y want s t o excl ude met hods of or gani zi ng
human behavi or . I t hi nk t hat ' s t he way t hey descr i be
i t . That ' s r eal l y t he busi ness met hod r ej ect i on i n
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ot her wor ds. And I t hi nk t hat r uns cont r ar y t o sect i on
273 of t he st at ut e, whi ch r ecogni zed t hat t her e wer e
busi ness met hods t hat coul d f al l wi t hi n t he pat ent
st at ut e, and as a r esul t pr i or user r i ght s shoul d be
gr ant ed.
To speak br i ef l y about t he St at e St r eet Bank
case t hat was a t ype of busi ness met hod t hat was
i mpl ement ed on a machi ne. The Feder al Ci r cui t sai d i t
di dn' t mat t er . They wer en' t l ooki ng at whet her i t was
i n machi ne f or mor met hod f or m. Thei r r easoni ng woul d
have appl i ed t he same ei t her way, and t o do ot her wi se
woul d be t o pl ace f or mover subst ance. And i n a sense,
t hat ' s what some of t he t r ansf or mat i on debat e i s about .
I t ' s f or mover subst ance. Why shoul d t r ansf or mat i on be
t he key? The key shoul d be: I s i t a pr act i cal
appl i cat i on of a usef ul r esul t ?
Our met hod, we bel i eve, i s a pr act i cal
appl i cat i on. As t he pat ent of f i ce has sai d, i t does
i nvol ve physi cal st eps. I t hi nk t hat was one of t he
cl ues t hat t he pat ent of f i ce has r el i ed on i n sayi ng
whet her or not somet hi ng i s abst r act . Si nce i t i s not
an abst r act met hod, i t ' s r oot ed i n t he r eal wor l d, we
t hi nk i t shoul d be el i gi bl e t o have i t s exami nat i on at
t he pat ent of f i ce and i t shoul dn' t be t hr own out on an
ar bi t r ar y t est .
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Official - Subject to Final Review
CHI EF J USTI CE ROBERTS: The - - t he physi cal
st ep t hat your pr ocess i nvol ves i s pi cki ng - - pi cki ng up
t he phone and cal l i ng peopl e on bot h si des of t he
t r ansact i on.
MR. J AKES: I t coul d be. I t al so r equi r es
t he sal e of a commodi t y on a f i xed pr i ce. That i s
somet hi ng t hat t akes pl ace i n t he r eal wor l d as opposed
t o a ment al pr ocess wi t hi n somebody' s head. Pur el y
ment al pr ocesses t hat ar e done j ust sol el y i n someone' s
mi nd, I t hi nk we al l agr ee, t hose ar e not
pat ent - el i gi bl e. That ' s not our met hod.
CHI EF J USTI CE ROBERTS: Thank you, Counsel .
The case i s submi t t ed.
( Wher eupon, at 1: 55 p. m. , t he case i n t he
above- ent i t l ed mat t er was submi t t ed. )
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Alderson Reporting Company Alderson Reporting Company
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Alderson Reporting Company
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Alderson Reporting Company
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Alderson Reporting Company
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Alderson Reporting Company
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58
Alderson Reporting Company
Official - Subject to Final Review
29:1,2 30:12 open28:25 17:13 18:22 42:17 43:7,12 phenomena
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59
Alderson Reporting Company
Official - Subject to Final Review
44:23 22:18 27:1 28:24 range17:6 rejection50:25
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60
Alderson Reporting Company
Official - Subject to Final Review
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61
Alderson Reporting Company
Official - Subject to Final Review
37:5,25 38:18 sufficiently 27:6,6 36:17 47:22 48:19 50:17,24 51:1
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62
Alderson Reporting Company
Official - Subject to Final Review
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63
Alderson Reporting Company

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