CASE 1: Diamond v. Diehr, 450 U.S.

175 (1981)

FACTS
Respondents file an application for patent for its invention for a process for molding raw, uncured
synthetic rubber into cured precision products. According to the respondents, the industry has not been
able to obtain uniformly accurate cures, because the temperature of the molding press could not be
precisely measured, thus making it difficult to do the necessary computations to determine cure time –
something which their invented process has made possible.

The patent examiner rejected respondents' claims on the ground that they were drawn to non-statutory
subject matter. The Patent and Trademark Office Board of Appeals agreed, but the Court of Customs and
Patent Appeals reversed the decision.

Issue
WON the mathematical algorithm (improved method of calculation) recited with an improved process for
molding rubber articles by solving practical solution for curing synthetic rubber is patentable subject
matter.

Held
Yes. A physical and chemical process for molding precision synthetic rubber products falls within the §
101 categories of possibly patentable subject matter. The claim involves the transformation of an article
into a different state or thing. It described in detail the step by step method for accomplishing such,
beginning with loading or a mold with raw, uncured rubber and ending with the eventual opening of the
press at the conclusion of the cure. Industrial processes such as this are type which has historically been
eligible for patent protection.

In the instant case, the respondents here do not seek to patent a mathematical formula. Instead, they
seek patent protection for a process of curing synthetic rubber. Their process admittedly employs a well-
known mathematical equation, but they do not seek to pre-empt the use of that equation. Rather, they
seek only to foreclose from others the use of that equation in conjunction with all of the other steps in
their claimed process. These include installing rubber in a press, closing the mold, constantly determining
the temperature of the mold, constantly recalculating the appropriate cure time through the use of the
formula and a digital computer, and automatically opening the press at the proper time. Obviously, one
does not need a "computer" to cure natural or synthetic rubber, but if the computer use incorporated in
the process patent significantly lessens the possibility of "overcuring" or "undercuring," the process as a
whole does not thereby become unpatentable subject matter.

Page 1 of 20
 CASE 2: Diamond v. Chakrabarty, 447 U.S. 303 (1980)

TOPIC: Patentability of Living Things-Bacteria

FACTS
In 1972, Chakrabarty, a microbiologist, filed a patent application, assigned to the General Electric Co. The
application asserted 36 claims related to Chakrabarty's invention of "a bacterium from the genus
Pseudomons containing therein at least two stable energy-generating plasmids, each of said plasmids
providing a separate hydrocarbon degradative pathway." This human-made, genetically engineered
bacterium is capable of breaking down multiple components of crude oil.

Chakrabarty's patent claims were of three types: first, process claims for the method of producing the
bacteria; second, claims for an inoculum comprised of a carrier material floating on water, such as straw,
and the new bacteria; and third, claims to the bacteria themselves. The patent examiner allowed the
claims falling into the first two categories, but rejected claims for the bacteria. His decision rested on two
grounds: (1) that micro-organisms are "products of nature," and (2) that, as living things, they are not
patentable subject matter.

ISSUE
Whether or not respondent's micro-organism constitutes a "manufacture" or "composition of matter"
within the meaning of the statute.

HELD
YES. The Court has read the term "manufacture" in § 101 in accordance with its dictionary definition to
mean "the production of articles for use from raw or prepared materials by giving to these materials new
forms, qualities, properties, or combinations, whether by hand labor or by machinery."Similarly,
"composition of matter" has been construed consistent with its common usage to include "all
compositions of two or more substances and all composite articles, whether they be the results of
chemical union, or of mechanical mixture, or whether they be gases, fluids, powders or solids."

In choosing such expansive terms as "manufacture" and "composition of matter," modified by the
comprehensive "any," Congress plainly contemplated that the patent laws would be given wide scope.The
relevant legislative history also supports a broad construction. The Patent Act of 1793, authored by
Thomas Jefferson, defined statutory subject matter as "any new and useful art, machine, manufacture,
or composition of matter, or any new or useful improvement thereof." The laws of nature, physical
phenomena, and abstract ideas have been held not patentable.

Judged in this light, respondent's micro-organism plainly qualifies as patentable subject matter. His claim
is not to a hitherto unknown natural phenomenon, but to a non-naturally occurring manufacture or
composition of matter - a product of human ingenuity "having a distinctive name, character and use."the
patentee has produced a new bacterium with markedly different characteristics from any found in nature,
and one having the potential for significant utility. His discovery is not nature's handiwork, but his own;
accordingly, it is patentable subject matter.

Page 2 of 20
 CASE 3: Parker vs. Flook
Topic: Formula/Equation

FACTS
The Respondent applied for a patent on a “Method for Updating Alarm Limits.” The only novel feature of
the method is a mathematical formula. An “alarm limit” is a number. During catalytic conversion
processes, operating conditions such as temperature, pressure, and flow rates are constantly monitored.
When any of these “process variables” exceeds a predetermined “Alarm Limit”, an alarm may signal the
presence of an abnormal condition indicating either inefficiency or perhaps danger. Fixed alarm limits
may be appropriate for a steady operations, but during transient operating situation, such as start-up, it
may be necessary to “update” the alarm limits periodically.

In essence, the method consists of three (3) steps: an initial step which merely measures the present
value of the process variable i.e. temperature; an intermediate step which uses an algorithm to calculate
an updated alarm-limit value and a final step in which the actual alarm limit is adjusted to the updated
value. The only difference between the conventional methods of changing alarm limits and that described
in respondent’s application rest in the second step – the mathematical algorithm or formula.

The Patent Examiner rejected the application. He found that the mathematical formula constituted the
only difference between respondent’s claims and the prior art and therefore a patent on this method
“would in practical effect be a patent on the formula or mathematics itself.” The Board of Appeals of the
Patent and Trademark Office sustained the examiner’s rejection. However, in the Court of customs and
Patent Appeals, it reversed the earlier decisions. The Acting Commissioner of Patents and Trademarks
filed a petition for a writ of certiorari with the Supreme Court.

ISSUE
Whether or not the identification of a limited category of useful, though conventional, post-solution
applications of such a formula makes respondent’s method eligible for patent protection

HELD
No. The respondent’s method for updating alarm limits during catalytic conversion processes, in which
the only novel feature is a mathematical formula, held not patentable under 101 of the Patent Act. The
identification of a limited category of useful, though conventional, post-solution applications of such a
formula does not make the method eligible for patent protection, since assuming the formula to be within
prior art, as it must be as in the case of O’Reilly vs Morse, respondent’s application contains no
patentable invention. The chemical processes involved in catalytic conversion are well known, as are the
monitoring of processes variables, the use of alarm limits to trigger alarms, the notion that alarm limit
values must be recomputed and readjusted, and the use of computers for “automatic process
monitoring”.

Page 3 of 20
 CASE4: Anderson's-Black Rock, Inc. v. Pavement Salvage Co.

Topic: Asphalt, Machine

FACTS
Pavement Co. had a patent in which four elements, a radiant-hear burner, a spread, a tamper and screed
are combined on one chassis so that there is no cold joint between strips. There are radiant-heat burners
in prior art, and there are also pavers in which a spread, a tamper and screed are combined on one
chassis. District Court ruled that the combination of the radiant-heat burner and the existing paver made
the patent to Pavement Salvage obvious, thus unpatentable. The CA reversed the judgment of the
District Court.

ISSUE
Does the combination of the old elements create a valid combination patent?

HELD
No. The combination is reasonably obvious to one with ordinary skill in the art, thus the combination is
unpatentable. The combination of putting the burner together with the other elements in one machine
did not produce a new or different function, even though the combination filled a long felt want and has
enjoyed commercial success. It is unconstitutional to issue a patent when there is no innovation,
advancement, or things which add to the sum of useful knowledge.

Page 4 of 20
 CASE 5: Graham v. John Deere Co., 383 U.S. 1 (1966)

Topic: Old and new elements combined

FACTS
In No. 11, Graham v. John Deere Co., petitioners sued for infringement of a patent, consisting of a
combination of old mechanical elements, for a device designed to absorb shock from plow shanks in
rocky soil to prevent damage to the plow. In 1955, the Fifth Circuit held the patent valid, ruling that a
combination is patentable when it produces an "old result in a cheaper and otherwise more advantageous
way." Here, the Eighth Circuit held that, since there was no new result in the combination, the patent
was invalid. Petitioners in Nos. 37 and 43 filed actions for declaratory judgments declaring invalid
respondent's patent relating to a plastic finger sprayer with a "hold-down" cap used as a built-in
dispenser for containers with liquids, principally insecticides. By cross-action, respondent claimed
infringement. The District Court and the Court of Appeals sustained the patent

ISSUE
Whether the patent met the “nonabovious” nature of the subject sought to be patented.

HELD
The patents do not meet the test of the "nonobvious" nature of the "subject matter sought to be
patented" to a person having ordinary skill in the pertinent art, set forth in Sec. 103 of the Patent Act of
1952, and are therefore invalid.

"Under § 103, the scope and content of the prior art are to be determined; differences between
the prior art and the claims at issue are to be ascertained; and the level of ordinary skill in the
pertinent art resolved. Against this background, the obviousness or non-obviousness of the
subject matter is determined. Such secondary considerations as commercial success, long felt but
unsolved needs, failure of others, etc., might be utilized to give light to the circumstances
surrounding the origin of the subject matter sought to be patented."

After a lapse of 15 years, the Court again focuses its attention on the patentability of inventions under
the standard of Art. I, § 8, cl. 8, of the Constitution and under the conditions prescribed by the laws of
the United States. Since our last expression on patent validity, Great A. & P. Tea Co. v. Supermarket
Equipment Corp., 340 U. S. 147 (1950), the Congress has, for the first time, expressly added a third
statutory dimension to the two requirements of novelty and utility that had been the sole statutory test
since the Patent Act of 1793.

This is the test of obviousness, i.e., whether "the subject matter sought to be patented and the prior art
are such that the subject matter as a whole would have been obvious at the time the invention was made
to a person having ordinary skill in the art to which said subject matter pertains. Patentability shall not be
negatived by the manner in which the invention was made."

The questions, involved in each of the companion cases before us, are what effect the 1952 Act had
upon traditional statutory and judicial tests of patentability and what definitive tests are now required.
We have concluded that the 1952 Act was intended to codify judicial precedents embracing the principle
long ago announced by this Court in Hotchkiss v. Greenwood, 11 How. 248 (1851), and that, while the
clear language of § 103 places emphasis on an inquiry into obviousness, the general level of innovation
necessary to sustain patentability remains the same. ###

Page 5 of 20
 CASE 6: U.S. vs. Adams

FACTS
Respondents sued the Government under 28 U.S.C. 1498 charging infringement and breach of contract
to compensate for use of a wet battery on which a patent had been issued to respondent Adams. The
battery consisted of a magnesium electrode (anode) and a cuprous chloride electrode (cathode) placed in
a container with water to be supplied as the electrolyte, providing a constant voltage and current without
the use of acids. Despite initial disbelief in the battery's efficacy by government experts to whose
attention Adams brought his invention the Government ultimately (but without notifying Adams) put the
battery to many uses. In opposition to respondents' suit the Government claimed the device unpatentable
because the use of magnesium and cuprous chloride to perform the function shown by Adams had been
previously well known in the art and their combination represented no significant change compared to
the prior art wet battery designs such as those using a zinc anode and silver chloride cathode for which
magnesium and cuprous chloride were known substitutes. The Court of Claims adopted the Trial
Commissioner's finding that the patent was valid and infringed by some of the accused devices.

ISSUE
Was the patent valid?

HELD
Yes. The Adams patent is valid since it satisfied the separate tests of novelty, nonobviousness, and utility
required for issuance of a patent.

The Adams battery was novel.

(a) The fact that it was water-activated set it apart from the prior art.

(b) The combination of magnesium and cuprous chloride was novel in the light of the prior art.

(c) The use of magnesium for zinc and cuprous chloride for silver chloride did not involve merely
equivalent substitutes, as is evidenced by the fact that the Adams battery had different operating
characteristics from those of the batteries relied upon by the Government.

The Adams battery was nonobvious.

(a) Though each of the battery's elements was well known in the prior art, to combine them as
Adams did required that a person reasonably skilled in that art ignore that open-circuit batteries
which heated in normal use were not practical and that water-activated batteries were successful
only when combined with electrolytes harmful to the use of magnesium.

(b) Noted experts had expressed initial disbelief in the Adams battery.

(c) In a crowded art replete with a century and a half of advance the Patent Office could find no
reference to cite against the Adams application.

Page 6 of 20
 CASE 7: FUNK BROTHERS SEED CO. VS. KALO INOCULANT

FACTS
Kalo Inoculant Co., the herein respondent, filed a patent infringement suit against the Funk Brothers
Seed Co. on the ground of infringing certain mixed cultures of root-nodule bacteria capable of inoculating
the seeds of leguminous plants belonging to several cross-inoculation group (Patent No. 2-200-32). No
one specie will infect the roots of all species of leguminous plants. But will infect well-defined groups of
those plants.

On the other hand, the petitioner filed a counter-claim asking for a declaratory judgment that the entire
patent be adjudged invalid. After due hearing, the District Court held the product claims invalid for want
of invention, and dismissed the complaint. It also dismissed the counterclaim. Both parties appealed. The
Circuit Court of Appeals reversed the ruling of lower court holding that the product claims were valid and
infringed the Kalo’s patent.

ISSUE
Whether or not a certain mixed culture of root-nodule bacteria is patentable.

HELD
NO. Discovery of the fact that certain strains of species of these bacteria can be mixed without harmful
effect on the properties of either is not patentable. It is no more than the discovery of some the
handiwork of nature, hence not patentable. The application of this newly discovered natural principle to
the problem of packaging inoculants was not invention or discovery within the meaning of the patent
laws.

Page 7 of 20
 CASE 8: General Electric Co. v. Jewel Incandescent Lamp Co., 326 U.S. 242 (1945)

FACTS
Petitioner herein is the assignee of Marvin Pipkin The patent relates to a frosted glass bulb for electric
lamps. It is defended here as a product, not a process, patent.
The product is described as follows:

"A glass electric lamp bulb having its interior surface frosted by etching so that the maximum
brightness of an ordinary incandescent lamp comprising such a bulb will be less than twenty-five
percent of that of said lamp with a clear bulb, said interior bulb surface being characterized by
the presence of rounded, as distinguished, from sharp angular, crevices to such an extent that
the strength to resist breakage by impact is greater than twenty percent of that of the clear
bulb."

Many years prior to the Pipkin patent, efforts had been made to reduce the glare produced by the
brilliant filament of an incandescent lamp having a clear bulb. The most common method of reducing the
glare was to frost the outside surface with an acid frosting solution. While bulbs so treated reduced the
glare, the rough outside surface collected dirt and was difficult to clean, with the result that the light
output was further reduced. Twenty-five years before Pipkin, Kennedy (patent No. 733,972 issued July
21, 1903) had showed an inside frosted bulb. But a difficulty appeared. Moreover, Wood (patent No.
1,240,398, issued September 18, 1917) observed that successive acid treatments of glass rounded out
the sharp angular crevices produced by the first etching, and he applied that idea to electric bulbs, as
well as to other glass articles. His patent covered the making of light-diffusing screens.

ISSUE
Whether or not the Pipkin Patent was invalid?

RULING
Yes, it is invalid. A prior product had been created having qualities which were unrecognized at the time
and which were later sought to be patented. In the present case, prior to Pipkin, electric bulbs have been
frosted on the interior with rounded, rather than sharp angular, cervices or pits. But Wood and Kennedy
showed on how to produce and frost the inside of an electric bulb. In view of these disclosures, there
could be invention in frosting either the outside or inside of an electric bulb so as to produce saucer-
shaped, rather than sharp crevices or pits. A product claim describes an article, new and useful.

Also, under the principle of the Ansonia case it would deny the validity of the Pipkin patent if the prior art
disclosed an electric bulb so frosted on the inside as to round out the angular crevices produced by the
first etching, whether the full utility of the bulb had been previously recognized or not because the prior
art discloses the method of making an article having the characteristics of the patented product, though
all the advantageous properties of the product had not been fully appreciated.

Furthermore, Pipkin found latent qualities in an old discovery and adapted it to a useful end. But that did
not advance the frontiers of science in this narrow field so as to satisfy the exacting standards of our
patent system. Where there has been use of an article or where the method of its manufacture is known,
more than a new advantage of the product must be discovered in order to claim invention. It is not
invention to perceive that the product which others had discovered had qualities they failed to detect.

Page 8 of 20
 CASE 9: Bilski v. Kappos561 U.S. 593 (2014)

TOPIC: Test for patent eligibility

FACTS
Petitioners developed a method to hedge against price fluctuations in the energy market, which included
a simple mathematical concept and familiar statistical approaches. Petitioners applied for a patent on
their claimed invention, but the patent examiner rejected the application, claiming it involved an abstract
idea and was not implemented on a specific apparatus. Petitioners appealed and the Federal Circuit
affirmed. The Federal Circuit held the test for patentability under § 101 was the machine-or-
transformation test: (1) the claimed process was tied to a particular machine; or (2) the process
transformed an article into something else. One of the dissenting judges argued it failed because it was
a method of conduction business. A second dissenting judge argued the invention was an abstract idea
and therefore unpatentable. A third dissenter would have remanded to determine patentability under
other provisions. Petitioners appealed and the United States Supreme Court granted certiorari.

ISSUE
Whether or not the machine-or-transformation test the only test for patent eligibility under Section 101 of
the Patent Act?

HELD
NO. The machine-or-transformation test is not the only test for patent eligibility under Sec. 101 of the
Patent Act. The Patent Act Sec. 101 defines patent eligibility with exceptions for “laws of nature, physical
phenomena, and abstract ideas.” Section 101 is a threshold test and the claimed invention must also be
novel, nonobvious, and fully described. The invention here is claimed to be a “process” under Sec. 101.
“Process” is defined within the Patent Act at Sec. 101(b). The Federal Circuit adopted the machine-or-
transformation test as the sole test for what constitutes a “process.” Section 100(b) explicitly defines
“process,” so the Federal Circuit’s further definition and limitation is unnecessary and does not apply
here. Adopting such an exclusionary rule creates uncertainty for the patentability of computer software
and other emerging technologies. Similarly, the definition of “process” does not exclude business
methods. Federal law explicitly contemplates at least some business method patents as a “method”
eligible for a patent under Sec. 101. The limitations of novelty, nonobviousness, and full description
protects against unjustified patents. Petitioners’ process, however, may not be a “process” under Sec.
101 because it claims an abstract idea.

Page 9 of 20
 CASE 10: KSR INTERNATIONAL CO., v. TELEFLEX INC. et al.

FACTS
The patent at issue is entitled “Adjustable Pedal Assembly With Electronic Throttle Control.” and the
patentee is Steven J. Engelgau, and the patent is referred to as "the Engelgau patent” which was
assigned to Teleflex on May 29 2001.

Upon learning of KSR's design for GM (General Motors Corp.), Teleflex (a rival to KSR in the design and
manufacture of adjustable pedals ) sent a warning letter informing KSR (a Canadian company which
manufactures and supplies auto parts, including pedal systems) that its proposal would violate the
Engelgau patent. Teleflex believes that any supplier of a product that combines an adjustable pedal with
an electronic throttle control necessarily employs technology covered by one or more of Teleflex’s
patents. KSR refused to enter a royalty arrangement with Teleflex so Teleflex sued for infringement,
asserting KSR's pedal infringed the Engelgau patent and two other patents. Teleflex later abandoned its
claims regarding the other patents and dedicated the patents to the public. The remaining contention
was that KSR's pedal system for GM infringed claim 4 of the Engelgau patent which describes:

“A vehicle control pedal apparatus comprising: a support adapted to be mounted to a vehicle

structure; an adjustable pedal assembly having a pedal arm moveable in fore and aft directions
with respect to said support; a pivot for pivotally supporting said adjustable pedal assembly with
respect to said support and defining a pivot axis; and an electronic control attached to said
support for controlling a vehicle system; said apparatus characterized by said electronic control
being responsive to said pivot for providing a signal that corresponds to pedal arm position as
said pedal arm pivots about said pivot axis between rest and applied positions wherein the
position of said pivot remains constant while said pedal arm moves in fore and aft directions with
respect to said pivot."

KSR countered that claim 4 was invalid under the Patent Act, 35 U.S.C. § 103 because its subject matter
was obvious.

Section 103(a) forbids issuance of a patent when "the differences between the subject matter
sought to be patented and the prior art are such that the subject matter as a whole would have
been obvious at the time the invention was made to a person having ordinary skill in the art to
which said subject matter pertains.

In Graham v. John Deere Co. of Kansas City, the Court set out a framework for applying the statutory
language of § 103, language itself based on the logic of the earlier decision in Hotchkiss v. Greenwood.
The analysis is objective:

"Under § 103, the scope and content of the prior art are to be determined; differences between
the prior art and the claims at issue are to be ascertained; and the level of ordinary skill in the
pertinent art resolved. Against this background, the obviousness or non-obviousness of the
subject matter is determined. Such secondary considerations as commercial success, long felt but
unsolved needs, failure of others, etc., might be utilized to give light to the circumstances
surrounding the origin of the subject matter sought to be patented."

The District Court granted summary judgment in KSR's favor in light of the prior art in existence when
the claimed subject matter was invented. The court determined that the level of ordinary skill in pedal
design was an undergraduate degree in mechanical engineering (or an equivalent amount of industry
experience) and familiarity with pedal control systems for vehicles. The court then set forth the relevant
prior art, including the patents and pedal designs already described.

Following Graham's direction, the court compared the teachings of the prior art to the claims of Engelgau
and found little difference. Asano patent taught everything contained in claim 4 except the use of a

Page 10 of 20
sensor to detect the pedal's position and transmit it to the computer controlling the throttle. That
additional aspect was revealed in sources.

The Court was required also to apply the "teaching, suggestion, or motivation" test (TSM test - under
which a patent claim is only proved obvious if some motivation or suggestion to combine the prior art
teachings can be found in the prior art, the nature of the problem, or the knowledge of a person having
ordinary skill in the art.). The District Court held KSR had satisfied the test. It reasoned (1) the state of
the industry would lead inevitably to combinations of electronic sensors and adjustable pedals, (2) Rixon
patent provided the basis for these developments, and (3) Smith patent taught a solution to the wire
chafing problems in Rixon, namely, locating the sensor on the fixed structure of the pedal. This could
lead to the combination of Asano patent, or a pedal like it, with a pedal position sensor.

The conclusion that the Engelgau design was obvious was supported, in the District Court's view, by the
PTO's rejection of the broader version of claim 4. Had Engelgau included Asano in his patent application,
it reasoned, the PTO would have found claim 4 to be an obvious combination of patents’ Asano and
Smith, as it had found the broader version an obvious combination of another patents, namely, Redding
and Smith. The Court of Appeals reversed.

ISSUE
WON the CA’s decision is correct?

HELD
No. Claim 4 must be found obvious. The Court adopted the District Court's recitation of the relevant prior
art and its determination of the level of ordinary skill in the field. There is little difference between the
teachings of Asano and Smith and the adjustable electronic pedal disclosed in claim 4 of the Engelgau
patent. A person having ordinary skill in the art could have combined Asano with a pedal position sensor
in a fashion encompassed by claim 4, and would have seen the benefits of doing so.

KSR provided convincing evidence that mounting a modular sensor on a fixed pivot point of the Asano
pedal was a design step well within the grasp of a person of ordinary skill in the relevant art. Its
arguments, and the record, demonstrate that claim 4 of the Engelgau patent is obvious. In rejecting the
District Court's rulings, the Court of Appeals analyzed the issue in a narrow, rigid manner inconsistent
with § 103 and our precedent

In addressing the question of obviousness, the courts apply an expansive and flexible approach and not
the rigid approach of the CA.

A patent for a combination which only unites old elements with no change in their respective functions
obviously withdraws what already is known into the field of its monopoly and diminishes the resources
available to skillful men.

This is a principal reason for declining to allow patents for what is obvious. The combination of familiar
elements according to known methods is likely to be obvious when it does no more than yield predictable
results.

When a work is available in one field of endeavor, design incentives and other market forces can prompt
variations of it, either in the same field or a different one. If a person of ordinary skill can implement a
predictable variation, § 103 likely bars its patentability. For the same reason, if a technique has been
used to improve one device, and a person of ordinary skill in the art would recognize that it would
improve similar devices in the same way, using the technique is obvious unless its actual application is
beyond his or her skill.

Often, it will be necessary for a court to look to interrelated teachings of multiple patents; the effects of
demands known to the design community or present in the marketplace; and the background knowledge

Page 11 of 20
possessed by a person having ordinary skill in the art, all in order to determine whether there was an
apparent reason to combine the known elements in the fashion claimed by the patent at issue.

A patent composed of several elements is not proved obvious merely by demonstrating that each of its
elements was, independently, known in the prior art. Although common sense directs one to look with
care at a patent application that claims as innovation the combination of two known devices according to
their established functions, it can be important to identify a reason that would have prompted a person of
ordinary skill in the relevant field to combine the elements in the way the claimed new invention does.
This is because inventions in most, if not all, instances rely upon building blocks long since uncovered,
and claimed discoveries almost of necessity will be combinations of what, in some sense, is already
known.

The obviousness analysis cannot be confined by a formalistic conception of the words teaching,
suggestion, and motivation, or by overemphasis on the importance of published articles and the explicit
content of issued patents. The diversity of inventive pursuits and of modern technology counsels against
limiting the analysis in this way. In many fields it may be that there is little discussion of obvious
techniques or combinations, and it often may be the case that market demand, rather than scientific
literature, will drive design trends. Granting patent protection to advances that would occur in the
ordinary course without real innovation retards progress and may, in the case of patents combining
previously known elements, deprive prior inventions of their value or utility.

In determining whether the subject matter of a patent claim is obvious, neither the particular motivation
nor the avowed purpose of the patentee controls. What matters is the objective reach of the claim. If the
claim extends to what is obvious, it is invalid under § 103. One of the ways in which a patent's subject
matter can be proved obvious is by noting that there existed at the time of invention a known problem
for which there was an obvious solution encompassed by the patent's claims.

The question is whether the combination was obvious to a person with ordinary skill in the art. Under the
correct analysis, any need or problem known in the field of endeavor at the time of invention and
addressed by the patent can provide a reason for combining the elements in the manner claimed.

The primary purpose of Asano was solving the constant ratio problem; so, the court concluded, an
inventor considering how to put a sensor on an adjustable pedal would have no reason to consider
putting it on the Asano pedal. Common sense teaches, however, that familiar items may have obvious
uses beyond their primary purposes, and in many cases a person of ordinary skill will be able to fit the
teachings of multiple patents together like pieces of a puzzle. Regardless of Asano's primary purpose, the
design provided an obvious example of an adjustable pedal with a fixed pivot point; and the prior art was
replete with patents indicating that a fixed pivot point was an ideal mount for a sensor. The idea that a
designer hoping to make an adjustable electronic pedal would ignore Asano because Asano was designed
to solve the constant ratio problem makes little sense. A person of ordinary skill is also a person of
ordinary creativity, not an automaton.

When there is a design need or market pressure to solve a problem and there are a finite number of
identified, predictable solutions, a person of ordinary skill has good reason to pursue the known options
within his or her technical grasp. If this leads to the anticipated success, it is likely the product not of
innovation but of ordinary skill and common sense. In that instance the fact that a combination was
obvious to try might show that it was obvious under § 103.

A fact finder should be aware, of course, of the distortion caused by hindsight bias and must be cautious
of arguments reliant upon ex post reasoning. Rigid preventative rules that deny fact finders recourse to
common sense, however, are neither necessary under our case law nor consistent with it.

The judgment of the CA is reversed, and the case is remanded for further proceedings.

Page 12 of 20
 CASE 11: State Street Bank and Trust Company v. Signature Financial Group, Inc.,

Facts
Signature is the assignee of U.S. Patent No. 5,193,056 (the '056 patent), entitled "Data Processing
System for Hub and Spoke Financial Services Configuration." The '056 patent is generally directed to a
data processing system for implementing an investment structure which was developed for use in
Signature's business as an administrator and accounting agent for mutual funds. The data processing
system facilitates a structure wherein mutual funds pool their assets into an investment portfolio
organized as a partnership, providing the administrator of the mutual fund with the combination of
economies of scale in administering investments and the tax advantages of a partnership.

The '056 patent application initially contained six machine claims and six method claims. During
prosecution the examiner contemplated a § 101 rejection for failure to claim statutory subject matter.
However, upon cancellation of the six method claims, the examiner allowed the remaining six machine
claims.

State Street brought a declaratory judgment action asserting invalidity, unenforceability, and
noninfringement, and then filed a motion for partial summary judgment of patent invalidity for failure to
claim subject matter encompassed by § 101. The motion was granted because the district court
concluded that the claimed subject matter fell into one of two alternative judicially-created exceptions to
statutory subject matter, the "mathematical algorithm" exception or the "business method" exception.

Issues
1. Whether the district court erred in holding that the transformation of data, representing discrete
dollar amounts, through a series of mathematical calculations, by a machine, into a final share
price, does not constitute a practical application of a mathematical algorithm, formula or
calculation.

2. Whether the district court erred in holding that this transformation should be excluded from
eligible subject matter because it falls under the business method exception to statutory subject
matter.

Held
1. Yes. This transformation constitutes a practical application of a mathematical algorithm, formula,
or calculation because it produces a useful, concrete, and tangible result. Hence, the
transformation is eligible subject matter because it passes the test for utility.

2. 2. Yes. Judge Rich for the Federal Circuit laid the "ill-conceived" business methods exception to
rest.

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CASE 12: Ariosa Diagnostics, Inc. (Plaintiff-Appelles) vs. Sequenom, Inc., Sequenom Center for
Molecular Medicine (Defendant-Appellants)

Facts
Appellant, thru Drs. Dennis Lo and James Wainscoat discovered (1996) cell-free fetal DNA (cffDNA) in
maternal plasma and serum, the portion of maternal blood samples that other researchers had previously
discarded as medical waste. In 2001, they obtained the US Patent No. 6,258,540 (otherwise known as
540 patent), which relates to this discovery. The invention, commercialized by Sequenom is MaterniT21
test, an alternative for prenatal diagnosis of fetal DNA that avoids the risks of widely-used techniques
that took samples from the fetus of placenta. It can also determine fetal characteristics, such as gender.

Plaintiff Ariosa, in response to the letters threatening claims of infringement, filed declaratory judgment
against Sequenom alleging that they did not infringe the ‘540 patent. Defendant counterclaimed alleging
infringement. Defendant filed a motion seeking to preliminarily enjoin Plaintiff from selling the accused
Harmony Prenatal Test (plaintiff’s product). In July 2012, District Court (DC) denied defendant’s motion
for preliminary injunction and further found, that there was a substantial question over whether the
subject matter of the asserted claims was directed to eligible subject matter. Defendant appealed to SC.
SC remanded the case to DC to examine the subject matter eligibility.

The claims of the ‘540 patent that are at issue in this appeal are method claims. Methods are generally
eligible subject matter. In this case, the asserted claims of the defendant are directed to a multistep
method that starts with cffDNA taken from a sample of maternal plasma or serum- a naturally occurring
non-cellular fetal DNA that circulates freely in the blood streem of a pregnant woman. The defendant’s
method ends with paternally inherited cffDNA, which is also a natural phenomenon. The method
therefore begins and ends with a natural phenomenon. Thus, claims are directed to matter that is
naturally occurring. An examination was conducted to determine the elements of the claim to determine
whether the claim contains an inventive concept sufficient to “transform” the claimed naturally occurring
phenomenon into a patent eligible application. Turned out, the practice of the method claims does not
result in an inventive concept that transforms the natural phenomenon of cffDNA into a patentable one.

Appellants argue that there are numerous other uses of cffDNA aside from those claimed in the 540
patent, and thus, the 540 patent does not pre-empt all uses of cffDNA. Plaintiff argues that the claimed
methods are not, as Sequenom asserts, limited and specific. District Court favored the plaintiffs, thus, the
appeal.

Issue
Whether or not the identification of limited category of useful, though conventional, post-solution
applications of such a formula makes respondent’s method eligible for patent protection?

Held
No. While pre-emption may signal patent ineligible subject matter, the absence of complete pre-emption
does not demonstrate patent eligibility. Appellant’s attempt to limit the breadth of the claims by showing
alternative uses of cffDNA outside of the scope of the claims does not change the conclusion that the
claims are directed to patent ineligible subject matter. Further, because the practice of the method claims
does not result in an inventive concept that transforms the natural phenomenon of cffDNA into a
patentable one. The case are directed to naturally occurring phenomena, the SC cited Mayo’s Framework
(earlier jurisprudence). In the second step, we examine the elements of the claim to determine whether
the claim contains an inventive concept sufficient to “transform” the claimed naturally occurring
phenomenon into a patent eligible application.

‘540 Patent does not merely claim uses or applications of cffDNA, it claims methods for detecting the
natural phenomenon. Because generally one must be able to find a natural phenomenon to use it and
apply it, claims covering the only commercially viable way of detecting that phenomenon do carry a
substantial risk of pre-empting all practical uses of it.

Page 14 of 20
We do not disagree that detecting cffDNA in maternal plasma or serum that before was discarded as
waste material is a positive and valuable contribution to science. But even such valuable contributions
can fall short of statutory patentable subject matter.

Page 15 of 20
 CASE 13: Association for Molecular Pathology v. Myriad Genetics, Inc.

FACTS
Respondent Myriad Genetics, Inc. (Myriad), discovered the precise location and sequence of two human
genes, mutations of which can substantially increase the risks of breast and ovarian cancer. Myriad
obtained a number of patents based upon its discovery. This case involves claims from three of them and
requires us to resolve whether a naturally occurring segment of deoxyribonucleic acid (DNA) is patent
eligible under 35 U. S. C. §101 by virtue of its isolation from the rest of the human genome. We also
address the patent eligibility of synthetically created DNA known as complementary DNA (cDNA), which
contains the same protein-coding information found in a segment of natural DNA but omits portions
within the DNA segment that do not code for proteins.

ISSUE/S
Whether a naturally occurring segment of deoxy ribonucleic acid (DNA) is patent eligible.
Whether complementary DNA is patentable.

HELD
The Court held that a naturally occurring DNA segment is a product of nature and not patent eligible
merely because it has been isolated, but that cDNA is patent eligible because it is not naturally occurring.
###

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 CASE 14: Mayo Collaborative Services vs. Prometheus Laboratories, Inc.

FACTS
Prometheus Laboratories, Inc. (Plaintiff) was the one and only licensee of two patents that concerned the
use of thiopurine drugs to treat autoimmune diseases. The body metabolizes the ingested drugs,
producing metabolites in the bloodstream. Because patients metabolize these drugs differently, doctors
have found it hard to determine whether a particular patient’s dose is too high, risking harmful side
effects, or two low, making it ineffective. The patent claims for the patents set forth processes
embodying researchers’ findings that identified correlations between metabolite levels and likely harm or
ineffectiveness with precision. Each claim recited (1) an “administering” step—instructing a doctor to
administer the drug to his or her patient; (2) a “determining” step—telling the doctor to measure the
resulting metabolite levels in the patient’s blood; and (3) a “wherein” step—describing the metabolite
concentrations above which there is a likelihood of harmful side effects and below which it is likely that
the drug dosage is ineffective, and informing the doctor that metabolite concentrations above or below
these thresholds “indicate a need” to decrease or increase (respectively) the drug dosage. Plaintiff sold
diagnostic tests incorporating these processes. For awhile, Mayo Collaborative Services and Mayo Clinic
Rochester (collectively “Mayo”) (Defendant) bought and used Plaintiff tests, but then decided to market
and sell its own similar tests using metabolite levels somewhat higher to determine toxicity. Plaintiff
brought suit against Defendant for patent infringement. The district court, although concluding that
Defendant infringed the patents at issue, still held that the patents were invalid as laws of nature under §
101 of the Patent Act. The Federal Circuit reversed, holding that the processes were patent eligible
under the “machine or transformation test” as they included steps that involve the transformation of the
human body or blood taken from it. That holding was appealed to the United States Supreme Court,
and, on remand from the Supreme Court for reconsideration in light of Bilski v. Kappos, 130 S. Ct. 3218
(2010), which clarified that the “machine or transformation test” is not a definitive test of patent
eligibility, the Federal Circuit reaffirmed its earlier conclusion. The United States Supreme Court granted
certiorari.
ISSUE
Is a patent invalid as a natural law where steps in the claimed processes involve, in addition to natural
laws themselves, well-understood, routine, conventional activity previously participated in by researchers
in the field and where upholding the patent would risk disproportionately tying up the use of the
underlying natural laws, inhibiting their use in the making of further discoveries?

RULING
Yes. Under § 101 of the Patent Act, a patent is invalid as a natural law where steps in the claimed
processes involve, in addition to natural laws themselves, well-understood, routine, conventional activity
previously participated in by researchers in the field and where upholding the patent would risk
disproportionately tying up the use of the underlying natural laws, inhibiting their use in the making of
further discoveries. Because the laws of nature recited by Prometheus’ patent claims—the relationships
between concentrations of certain metabolites in the blood and the likelihood that a thiopurine drug
dosage will prove ineffective or cause harm—are not themselves patentable, the claimed processes are
not patentable unless they have added features that provide practical assurance that the processes are
genuine applications of those laws rather than drafting efforts designed to monopolize the correlations.
The three additional steps in the claimed processes here are not themselves natural laws but are also not
enough to transform the nature of the claims. The “administering” step simply identifies the audience
that will be interested in the correlations, namely, doctors who used thiopurine drugs to treat patients
suffering from autoimmune disorders. Doctors had been using these drugs for this purpose long before
these patents existed. In addition, a prohibition against patenting abstract ideas cannot be circumvented
by trying to limit the use of the formula to a particular technological environment.

Page 17 of 20
CASE 15: CRESER PRECISION SYSTEMS, INC. VS. CA AND FLORO INTERNATIONAL
CORPORATION

FACTS
Private respondent was granted by the BPTTT a Letters of Patent No. UM-9386 covering an aerial fuze.
Sometime in November 1993, the private respondent discovered that petitioner submitted samples of its
patented aerial fuze to the AFP for testing claiming the aforesaid aerial fuze as its own and planning to
bid and manufacture the same without license of authority from private respondent. To protect its right,
private respondent warned petitioner for possible court action.

In response to the respondent’s demand, petitioner filed a complaint for injunction and damages arising
from the alleged infringement before RTC-QC claiming among others that the petitioner is the first, true
and actual inventor of an aerial fuze. Private respondent, on the other hand, alleged that the petitioner
has no cause of action to file a complaint for infringement against it since it has no patent for the aerial
fuze which it claims to have invented.

After due consideration, the RTC issued an Order for the issuance of a writ of preliminary injunction
against private respondent. On appeal, the CA reversed the trial court’s order. Hence, this appeal.

It is petitioner’s contention that it can file under Sec. 42 of the Patent Law, an action for infringement not
as a patentee but as an entity in possession of right, title or interest in and to the patented invention.
Hence, he has cause of action to file the case.

ISSUE
Whether or not the contention of petitioner is correct.

HELD
The SC held that the arguments untenable. The phrase “anyone possessing any right, title or
interest in and to the patented invention in Sec. 42 of R.A 15 refers only to the patentee’s successor-in-
interest, assignees or grantees” since actions for infringement of patent may be brought in the name of
the person or persons interested, whether as patentee, assignees, or as grantees, of the exclusive rights.

Moreover, there can be no infringement of patent until a patent has been issued, since whatever right
has to the invention covered by the patent arises alone from the grant of patent. In short, a person or
entity who has not been granted letters of patent over an invention and has not acquired any right or
title thereto either as assignee or as licensee, has no cause of action for infringement because the right
to maintain an infringement suit depends on the existence of the patent.

Page 18 of 20
CASE 16: DOMICIANO A. AGUAS, petitioner, vs. CONRADO G. DE LEON and COURT OF
APPEALS, respondents

FACTS
Conrado G. de Leon filed a complaint for infringement of patent against petitioner Domiciano A. Aguas by
making, using and selling tiles embodying said patent invention and F.H. Aquino and Sons is guilty of
infringement by making and furnishing to petitioner Aguas the engravings, castings and devices designed
and intended for use and actually used in apparatus for the making of tiles embodying plaintiff’s patented
invention. De Leon has given direct and personal notice to the defendants of their said acts of
infringement and requested them to desist, but nevertheless, defendants have refused and neglected to
desist and have disregarded such request, and continue to so infringe causing great and irreparable
damage to plaintiff.

Respondent De Leon alleged that being the original first and sole inventor of certain new and useful
improvements in the process of making mosaic pre-cast tiles, he lawfully filed and prosecuted an
application for Philippine patent, and having complied in all respects with the statute and the rules of the
Philippine Patent Office, Patent No. 658 was lawfully granted and issued to him; that said invention was
new, useful, not known or used by others in this country before his invention thereof, not patented or
described in any printed publication anywhere before his invention thereof, or more than one year prior
to his application for patent therefor, not patented in any foreign country by him or his legal
representatives on application filed more than one year prior to his application in this country; that
plaintiff has the exclusive license to make, use and sell throughout the Philippines the improvements set
forth in said Letters Patent No. 658; that the invention patented by said Patent No. 658 is of great utility
and of great value to plaintiff and of great benefit to the public who has demanded and purchased tiles
embodying the said invention in very large quantities and in very rapidly increasing quantities; that he
has complied with the Philippine statutes relating to marking patented tiles sold by him; that the public
has in general acknowledged the validity of said Patent No. 658.

ISSUE
1. Whether the patent issued by the Philippine Patent Office to de Leon was invalid?
2. Whether or not the letters-patent of de Leon was actually a patent for the old and non patentable
process of making mosaic pre-cast tiles?
3. Whether the improvement introduced by de Leon is not patentable?

RULING

1. No. The validity of the patent issued by the Philippines Patent Office in favor of the private
respondent and the question over the inventiveness, novelty and usefulness of the improved
process therein specified and described are matters which are better determined by the
Philippines Patent Office. The technical staffs of the Philippines Patent Office, composed of
experts in their field, has, by the issuance of the patent in question, accepted the thinness of the
private respondent’s new tiles as a discovery. There is a presumption that the Philippines Patent
Office has correctly determined the patentability of the improvement by the private respondent of
the process in question.

2. The letters-patent of de Leon was actually a patent for the old and non-patentable
process of making mosaic pre-cast tiles is devoid of merit. De Leon never claimed to have
invented the process of tile-making. The Claims and Specifications of Patent No. 658 show that
although some of the steps or parts of the old process of tile making were described therein,
there were novel and inventive features mentioned in the process. Some of the novel features of
the private respondent’s improvements are the following: critical depth, with corresponding
easement and lip width to such degree as leaves the tile as thin as 1/8 of an inch at its thinnest
portion, ideal composition of cement and fine river sand, among other ingredients that makes

Page 19 of 20
 possible the production of tough and durable wall tiles, though thin and light; the engraving of
deep designs in such a way as to make the tiles decorative, artistic and suitable for wall
ornamentation, and the fact that the tiles can be mass produced in commercial quantities and
can be conveniently stock-piled, handled and packed without any intolerable incidence of
breakages.

3. The petitioner’s contention is without merit. The records disclose that de Leon’s process is
an improvement of the old process of tile making. The tiles produced from de Leon’s process are
suitable for construction and ornamentation, which previously had not been achieved by tiles
made out of the old process of tile making. De Leon’s invention has therefore brought about a
new and useful kind of tile. The old types of tiles were usually intended for floors although there
is nothing to prevent one from using them for walling purposes. These tiles are neither artistic
nor ornamental. They are heavy and massive. The respondent’s improvement is indeed inventive
and goes beyond the exercise of mechanical skill. He has introduced a new kind of tile for a new
purpose. He has improved the old method of making tiles and pre-cast articles which were not
satisfactory because of an intolerable number of breakages, especially if deep engravings are
made on the tile. He has overcome the problem of producing decorative tiles with deep
engraving, but with sufficient durability. Durability inspite of the thinness and lightness of the tile,
is assured, provided that a certain critical depth is maintained in relation to the dimensions of the
tile.

Furthermore, there is no similarity between the Pomona Tiles and de Leon’s tiles. The Pomona
tiles are made of ceramics. The process involved in making cement tiles is different from ceramic
tiles. Cement tiles are made with the use of water, while in ceramics fire is used.

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