In a landmark decision, Ex parte Lundgren, the Board of Patent Appeals and Interferences issued a precedential opinion eliminating the United States Patent and Trademark Office (USPTO) policy of rejecting patents under 35 U.S.C. § 101 as outside the "technological arts."
Prior to Lundgren, the "technological arts" test had been frequently applied by the USPTO to business method patent claims to reject those claims under § 101 as being directed towards nonstatutory subject matter. In practical terms, the "technological arts" requirement created an artificial distinction between those business methods implemented by a computer or other electronic processing device, and those that were not, extending patent protection only to the former category. Under Lundgren, however, patent protection should no longer be limited to business methods that are implemented via computer or other electronic processing device: All business methods are potentially capable of obtaining meaningful patent protection.
In deciding that there was no judicially recognized separate "technological arts" test to determine patent eligibility under § 101, the Board’s decision in Lundgren has put USPTO practice in line with previous rulings by the United States Court of Appeals for the Federal Circuit, most notably State Street Bank v. Signature Financial Group.
The outcome reached in Lundgren required the USPTO to realign its examination process. To help with that endeavor, on October 26, 2005, the USPTO issued new interim guidelines to assist examiners in determining, on a case-by-case basis, whether the subject matter as claimed is eligible for patent protection. While these guidelines were drafted so as to comply with Lundgren, they do not constitute substantive rule-making or have the force and effect of law.
The Board’s decision and the subsequently issued guidelines are binding only upon the USPTO itself; however, Lundgren can be cited as support for the proposition that there is no "technological arts" requirement for a business method claim to be patentable subject matter. Because the courts are not bound by the Lundgren decision, this issue will not be clearly decided until the Federal Circuit or the United States Supreme Court has the opportunity to weigh-in. The Supreme Court may take that opportunity to define the scope of business method patents sooner rather than later.
With the Supreme Court’s decision to grant certiorari in Laboratory Corp. of America Holdings v. Metabolite Laboratories, Inc., the door has been opened for reconsideration of patent eligibility under § 101 for business method patents, among other things. The specific issue to be considered on certiorari in Metabolite Laboratories, Inc. is "[w]hether a method patent setting forth an indefinite, undescribed, and nonenabling step directing a party simply to ‘correlat[e]’ test results can validly claim a monopoly over a basic scientific relationship used in medical treatment such that any doctor necessarily infringes the patent merely by thinking about the relationship after looking at a test result." Because the method at issue does not involve the use of a computer or other electronic processing device, Metabolite Laboratories, Inc. gives the Supreme Court occasion to explore § 101 patent eligibility issues and to clarify what methods and systems can be patented.
Oral arguments in Metabolite Laboratories, Inc. are expected next year. Until a decision, however, patent litigation may be on the rise, especially for those companies whose business method patents are not implemented by a computer or other electronic processing device.
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