Chapter 9: Patent Protection of Software:
Patentability Issues Other Than
Statutory Subject Matter


Dann v. Johnston
United States Supreme Court
425 U.S. 219 (1976)

Mr. Justice Marshall delivered the opinion of the Court.

Respondent has applied for a patent on what is described in his patent application as a “machine system for automatic record–keeping of bank checks and deposits.” The system permits a bank to furnish a customer with subtotals of various categories of transactions completed in connection with the customer's single account, thus saving the customer the time and/or expense of conducting this bookkeeping himself. As respondent has noted, the “invention is being sold as a computer program to banks and to other data processing companies so that they can perform these data processing services for depositors.”

Petitioner and respondent, as well as various Amici, have presented lengthy arguments addressed to the question of the general patentability of computer programs. We find no need to treat that question in this case, however, because we conclude that in any event respondent's system is unpatentable on grounds of obviousness. 35 U.S.C. § 103. Since the United States Court of Customs and Patent Appeals (CCPA) found respondent's system to be patentable, the decision of that court is accordingly reversed.

While respondent’s patent application pertains to the highly esoteric field of computer technology, the basic functioning of his invention is not difficult to comprehend. Under respondent’s system a bank customer labels each check that he writes with a numerical category code corresponding to the purpose for which the funds are being expended. For instance, “food expenditures” might be a category coded “123,” “fuel expenditures” a category coded “124,” and “rent” still another category coded “125.” Similarly, on each deposit slip, the customer again, through a category code, indicates the source of the funds that he is depositing. When the checks and deposit slips are processed by the bank, the category codes are entered upon them in magnetic ink characters, just as, under existing procedures, the amount of the check or deposit is entered in such characters. Entries in magnetic ink allow the information associated with them to be “read” by special document-reading devices and then processed by data processors. On being read by such a device, the coded records of the customer's transactions are electronically stored in what respondent terms a “transaction file.” Respondent's application describes the steps from this point as follows:

To process the transaction file, the...system employs a data processor, such as a programmable electronic digital computer, having certain data storage files and a control system. In addition to the transaction file, a master record-keeping file is used to store all of the records required for each customer in accordance with the customer's own chart of accounts. The latter is individually designed to the customer's needs and also constructed to cooperate with the control system in the processing of the customer's transactions. The control system directs the generation of periodic output reports for the customer which present the customer's transaction records in accordance with his own chart of accounts and desired accounting procedures.

Thus, when the time comes for the bank customer’s regular periodic statement to be rendered, the programmed computer sorts out the entries in the various categories and produces a statement which groups the entries according to category and which gives subtotals for each category. The customer can then quickly see how much he spent or received in any given category during the period in question. Moreover, according to respondent, the system can adapt “to whatever variations in ledger format a user may specify.”

Respondent's application sets out a flowchart of a program compatible with an IBM 1400 computer which would effectuate his system. Under respondent's invention, then, a general purpose computer is programmed to provide bank customers with an individualized and categorized breakdown of their transactions during the period in question.

After reviewing respondent’s patent application, the patent examiner rejected all the claims. Respondent appealed to the PTO Board of Appeals. It concluded that respondent's claims were invalid under § 101 because they claimed nonstatutory subject matter. Finally, respondent's claims were rejected on grounds of obviousness. 35 U.S.C. § 103. The Board found that respondent's claims were obvious variations of established uses of digital computers in banking and obvious variations of an invention, developed for use in business organizations, that had already been patented: Dirks U.S. Patent No. 3,343,133.

The CCPA, in a 3-2 ruling, reversed the decision of the Board and held respondent's invention to be patentable. The court began by distinguishing its view of respondent’s invention as a “record-keeping Machine System for financial accounts” from the Board’s rather negative view of the claims as going solely to the “relationship of a bank and its customers.” Dealing with the final area of the Board’s rejection, the CCPA found that neither established banking practice nor the Dirks patent rendered respondent’s system “obvious to one of ordinary skill in the art who did not have [respondent's] specification before him.”

We hold that respondent’s invention was obvious under 35 U.S.C. § 103 and therefore reverse. As a judicial test, “invention” i.e., “an exercise of the inventive faculty,” McClain v. Ortmayer, 141 U.S. 419, 427 (1891) has long been regarded as an absolute prerequisite to patentability. See, e.g., Keystone Driller Co. v. Northwest Engineering Corp., 294 U.S. 42 (1935); Sharp v. Stamping Co., 103 U.S. 250 (1880); Hotchkiss v. Greenwood, 11 How. 248 (1851). However, it was only in 1952 that Congress, in the interest of “uniformity and definiteness,” articulated the requirement in a statute, framing it as a requirement of “nonobviousness.” Section 103 of the Patent Act of 1952, 35 U.S.C. § 103, provides:

A patent may not be obtained though the invention is not identically disclosed or described as set forth in section 102 of this title, if 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. Patentability shall not be negatived by the manner in which the invention was made.

This Court treated the scope of § 103 in detail in Graham v. John Deere Co., 383 U.S. 1 (1966). There, we held that § 103 “was not intended by Congress to change the general level of patentable invention,” but was meant “merely as a codification of judicial precedents...with congressional directions that inquiries into the obviousness of the subject matter sought to be patented are a prerequisite to patentability.” While recognizing the inevitability of difficulty in making the determination in some cases, we also set out in Graham the central factors relevant to any inquiry into obviousness: “the scope and content of the prior art,” the “differences between the prior art and the claims at issue,” and “the level of ordinary skill in the pertinent art.” Guided by these factors, we proceed to an inquiry into the obviousness of respondent’s system.

The PTO Board of Appeals relied on two elements in the prior art in reaching its conclusion that respondent’s system was obvious. We find both to be highly significant. The first was the nature of the current use of data processing equipment and computer programs in the banking industry. As respondent’s application itself observes, that use is extensive:

Automatic data processing equipment employing digital computers have been developed for the handling of much of the record-keeping operations involved in a banking system. The checks and deposit slips are automatically processed by forming those items as machine-readable records... With such machine systems, most of the extensive data handling required in a bank can be performed automatically.

It is through the use of such data processing equipment that periodic statements are ordinarily given to a bank customer on each of the several accounts that he may have at a given bank. Under respondent’s system, what might previously have been separate accounts are treated as a single account, and the customer can see on a single statement the status and progress of each of his “sub-accounts.” Respondent’s “category code” scheme is, we think, closely analogous to a bank’s offering its customers multiple accounts from which to choose for making a deposit or writing a check. Indeed, as noted by the Board, the addition of a category number, varying with the nature of the transaction, to the end of a bank customer’s regular account number, creates “in effect, a series of different and distinct account numbers....” Moreover, we note that banks have long segregated debits attributable to service charges within any given separate account and have rendered their customers subtotals for those charges.

The utilization of automatic data processing equipment in the traditional separate account system, is of course, somewhat different from the system encompassed by respondent’s invention. As the CCPA noted, respondent’s invention does something other than “provide a customer with...a summary sheet consisting of net totals of plural separate accounts which a customer may have at a bank.” However, it must be remembered that the “obviousness” test of § 103 is not one which turns on whether an invention is equivalent to some element in the prior art but rather whether the difference between the prior art and the subject matter in question “is a difference sufficient to render the claimed subject matter unobvious to one skilled in the applicable art....”

There is no need to make the obviousness determination in this case turn solely on the nature of the current use of data processing and computer programming in the banking industry. For, as noted, the Board pointed to as a second factor a Dirks patent which also supports a conclusion of obviousness. The Dirks patent discloses a complex automatic data processing system using a programmed digital computer for use in a large business organization. Under the system transaction and balance files can be kept and updated for each department of the organization. The Dirks system allows a breakdown within each department of various areas, e.g., of different types of expenses. Moreover, the system is sufficiently flexible to provide additional breakdowns of “sub-areas” within the areas and can record and store specially designated information regarding each of any department’s transactions. Thus, for instance, under the Dirks system the disbursing office of a corporation can continually be kept apprised of the precise level and nature of the corporation’s disbursements within various areas or, as the Dirks patent terms them, “Item Groups.”

Again, as was the case with the prior art within the banking industry the Dirks invention is not equivalent to respondent’s system. However, the departments of the business organization and the areas or “Item Groups” under the Dirks system are closely analogous to the bank customers and category number designations respectively under respondent’s system. And each shares a similar capacity to provide breakdowns within its “Item Groups” or category numbers. While the Dirks invention is not designed specifically for application to the banking industry many of its characteristics and capabilities are similar to those of respondent’s system.

In making the determination of “obviousness,” it is important to remember that the criterion is measured not in terms of what would be obvious to a layman, but rather what would be obvious to one “reasonably skilled in [the applicable] art.” In the context of the subject matter of the instant case, it can be assumed that such a hypothetical person would have been aware both of the nature of the extensive use of data processing systems in the banking industry and of the system encompassed in the Dirks patent. While computer technology is an exploding one, “[i]t is but an even-handed application to require that those persons granted the benefit of a patent monopoly be charged with an awareness” of that technology.

Assuming such an awareness, respondent’s system would, we think, have been obvious to one “reasonably skilled in [the applicable] art.” There may be differences between respondent’s invention and the state of the prior art. Respondent makes much of his system’s ability to allow “a large number of small users to get the benefit of large-scale electronic computer equipment and still continue to use their individual ledger format and bookkeeping methods.” It may be that that ability is not possessed to the same extent either by existing machine systems in the banking industry or by the Dirks system. But the mere existence of differences between the prior art and an invention does not establish the invention’s nonobviousness. The gap between the prior art and respondent’s system is simply not so great as to render the system nonobvious to one reasonably skilled in the art.

Accordingly, we reverse the CCPA and remand this case to that court for further proceedings consistent with this opinion.

Notes

1. The Court refers to “the Board’s rather negative view of the claims as going solely to the ‘relationship of a bank and its customers’” and comments — “Petitioner and respondent, as well as various Amici, have presented lengthy arguments addressed to the question of the general patentability of computer programs.” These remarks understate the facts.

After Benson the CCPA refused to give much weight to what some members of the court appeared to consider the uninformed views of amateurs and outsiders. The statement from the opinion below that the Court quoted (in which the CCPA distinguished the invention from Benson’s because it was a “Machine System”) summarizes the CCPA majority’s view that Benson applied precedentially, at most, only to method claims and not to “apparatus” claims such as Johnston’s means-plus-function claims. The CCPA closed its opinion with these words: “[W]e do not find the holding of Benson to be applicable to claims of the [apparatus] type now before us.” (The Federal Circuit definitively abandoned this approach in AT&T Corp. v. Excel Communications, Inc., 172 F.3d 1352, 50 U.S.P.Q.2d 1447 (Fed. Cir. 1999), cert. denied, 120 S. Ct. 368 (1999), stating: “Whether stated implicitly or explicitly, we consider the scope of 101 to be the same regardless of the form — machine or process — in which a particular claim is drafted.”)

The Board of Appeals had also rejected the claims on a variation of the doctrine against patents on methods of doing business. The board said that banking was not within the “technological arts” but was rather to be grouped within such “liberal arts...as social or political sciences, humanities, music, and art.” The CCPA dropped a footnote to its characterization of Johnston’s invention as a para-Bensonian machine system — “We likewise do not agree with the board that banking is a ‘social science.’” Much of the government’s briefing in the Supreme Court argued the unpatentability of methods of doing business.

2. The Supreme Court papers of the government presented the § 103 arguments largely as a makeweight in the last few pages of its briefs (a presentation far shorter than the Court’s extensive analysis in its opinion). The focus of the government’s argument was statutory subject matter and that Benson was not limited to method claims. The obviousness arguments were mainly directed to undermining the status of the would-be patentee’s contribution to the art and thus its entitlement under § 101 to a patent. Explain why this happened. (Similar tactics of advocacy were employed in Benson and Flook but not in Diehr. Does that suggest anything?)

3. Compare the Court’s statement that invention, i.e., an exercise of the inventive faculty, has long been regarded as an absolute prerequisite to patentability with the analysis provided in Bergy (ch. 8–A).

4. Johnston, one of the only four Supreme Court decisions addressing the patentability of computer-related inventions, is the only one addressing obviousness rather than statutory subject matter. It is rarely cited — hardly ever in Federal Circuit opinions. Why?



Northern Telecom, Inc. v. Datapoint Corp.
United States Court of Appeals for the Federal Circuit
908 F.2d 931 (Fed. Cir.), cert. denied, 498 U.S. 920 (1990)

Per Curiam

Northern Telecom, Inc., successor-in-interest to Sycor, Inc. (together herein “Sycor”), appeals the decision of the United States District Court for the Northern District of Texas. Datapoint Corporation has filed a cross-appeal. At issue is validity of U.S. Pat. No. 3,760,375 (“the ’375 patent”) and infringement by Datapoint.

The Invention

The ’375 patent, entitled “Source Data Entry Terminal,” relates to a mode of “batch processing” of data. In batch processing, data are entered by the operator and stored, off-line (i.e., not “on-line” so that under the ’375 patent the terminal is not directly connected to the computer). Hence, the operator is not interacting with the computer but simply with the batch data entry device.

Batch data preparation and entry were not new. Systems in common use at the time this invention was made included the IBM punch card, the paper tape punch, and the key-to-magnetic tape recorder. The invention, a programmable processor-based batch data entry terminal, provided an improved way of entering, verifying, and storing data. Entry and verification of data at the source by persons who understand the data removes a source of error in data processing. The inventors built a major business on the invention.

In accordance with the invention, the data are keyed into a form that is displayed on the screen; the operator is guided by names and instructions on the screen; and certain entries are subject to automatic as well as visual checks and edits. A storage area, or buffer, holds the data as it is entered and, when the buffer holds a complete and correct record, the data are transferred to a magnetic tape cassette.

Sycor filed suit charging Datapoint with infringement of the patent. Datapoint raised numerous defenses and counterclaims. The cause was vigorously litigated, the trial taking seventy days over a six-month period. The district court issued extensive findings of fact and conclusions of law, in a 219 page opinion. Each side appeals certain of the issues that were decided adversely to it.

I. Obviousness—35 U.S.C. § 103

Datapoint appeals the district court’s determination that Datapoint did not prove by clear and convincing evidence facts requiring a holding of invalidity under § 103.

Datapoint relies as prior art on the Lincoln Laboratory Instrument Computer (LINC), developed in 1962 by expert witness Professor Clark, running the Patient Interview program, written by a Dr. Slack. The LINC is described as a stored program computer designed for laboratory use, consisting of a keyboard for data entry and commands to the computer, an electronics cabinet, an oscilloscope information display, and reel-to-reel digital magnetic tape units for storing data and programs.

Claim 40 is as follows:

40. A method of implementing a source data entry terminal device, comprising the steps:

connecting selected input/output peripheral components including at least a keyboard data entry means and a visual data display means to a buffer memory and to a central processor organization, and using said buffer memory for temporary storage of data entered by said keyboard means;

incorporating control logic for all such peripheral components in the central processor and controlling each such component by the central processor, such that said peripheral components need have substantially no local control logic of their own; and

dedicating the terminal to a given operational configuration by incorporating a fixed program in said central processor.

Claims 41, 42, and 44 are dependent upon claim 40, and contain additional limitations.

The district court found that the final step of claim 40, requiring a fixed program, differed from the LINC because the LINC did not employ a fixed program. Datapoint contends on this appeal, as it did at trial, that this difference is a “routine design choice.”

Sycor does not dispute that fixed programs are not new: inventor Irwin, in his testimony, gave the example of a calculator. Sycor describes the invention as a new combination of known steps and elements, that provides a new and commercially successful solution to the problems of batch data entry. Sycor states that this combination was not taught or suggested by the prior art, including the LINC and the LINC as modified by the Patient Interview program.

It is insufficient that the prior art disclosed the components of the patented device, either separately or used in other combinations; there must be some teaching, suggestion, or incentive to make the combination made by the inventor. The district court found that the technology for the invention claimed in the patent existed at the time the invention was made, but correctly declined to engage in hindsight reconstruction of the claimed invention.

Datapoint argues that the differences between the LINC and the invention are “trivial.” The district court observed that the prior art failed to teach the combination and its use as set forth in the patent, and stated that the invention’s “commercial success, although not determinative of the issue, is some indication that the [invention would not have been] obvious,” referring to Graham v. John Deere Co.

The prior art does not suggest the inventors’ solution to the batch data entry problem. The nature of the problem which persisted in the art, and the inventors’ solution, are factors to be considered in determining whether the invention would have been obvious to a person of ordinary skill in that art. Whether the changes from the prior art are “minor,” as Datapoint argues, the changes must be evaluated in terms of the whole invention, including whether the prior art provides any teaching or suggestion to one of ordinary skill in the art to make the changes that would produce the patentee’s method and device.

We affirm the district court’s holding that claims 40-42 and 44 had not been proved invalid on the grounds raised.

II. Anticipation — 35 U.S.C. § 102(b)

Datapoint challenges the district court’s finding that claims 40-42 and 44 were not anticipated by certain “AESOP-B” documents because these documents were not “printed publications” in terms of 35 U.S.C. § 102(b). Whether a document is a “printed publication” is “a legal determination based on underlying fact issues.”

The AESOP-B was a complex military system for on-line distributed computer processing of logistical data such as the positions of aircraft. The documents in question are four reports on aspects of this system, identified as exhibits DX-2 through DX-5. The reports DX-2 through DX-5 were not under security classification, and were distributed to approximately 50 persons or organizations involved in the AESOP-B project. Document DX-5 contained the legend “Reproduction or further dissemination is not authorized...not for public release.”

The district court found that documents DX-2 through DX-4 “may have” contained such notices, the court finding that they “were of the class of documents that would have been distributed with such a notice.” The documents were housed in a library at the Mitre Corporation, the company having principal responsibility for developing AESOP-B. Access to the library was restricted to persons authorized by Mitre.

A document, to serve as a “printed publication,” must be generally available. Garrett Corp. v. United States, 422 F.2d 874, 878 (Ct. Cl. 1970) (“While distribution to government agencies and personnel alone may not constitute publication ... distribution to commercial companies without restriction on use clearly does”); see MIT v. AB Fortia, 774 F.2d 1104, 1109 (Fed. Cir. 1985)(paper orally presented at a scientific meeting open to all persons interested in the subject matter, with written copies distributed without restriction to all who requested it, is a printed publication); In re Wyer, 655 F.2d 221, 226-27 (CCPA 1981) (foreign patent applications that are made known to and are available to the public without restriction are publications).

The district court, referring to “the uncertainties of public access to the AESOP-B documents,” found that Datapoint had failed to prove by clear and convincing evidence facts requiring a conclusion that these documents were “sufficient as prior publications, descriptive of the AESOP-B.” The district court was unable to find that anyone could have had access to the documents by the exercise of reasonable diligence. See MIT, supra. We are unpersuaded that the evidence shows otherwise. Accordingly, we affirm that these documents were not printed publications.

. . .

VI. Enablement—35 U.S.C. § 112

The district court held that the patent specification did not contain an enabling disclosure of the software program used to carry out the claimed invention, stating that “the patent specification’s lack of any information concerning the invention’s programs would require a person reasonably skilled in the art of computer programming to experiment unduly in attempting to write programs for the ’375 device.”

35 U.S.C. § 112 ¶ 1 provides that:

The specification shall contain a written description of the invention, and of the manner and process of making and using it, in such full, clear, concise and exact terms as to enable any person skilled in the art to which it pertains, or with which it is most nearly connected, to make and use the same....

Invalidity for lack of enablement is a conclusion of law and must be supported by facts proved by clear and convincing evidence, for the grant of the patent by the PTO carries with it the presumption of validity including compliance with § 112. A decision on the issue of enablement requires determination of whether a person skilled in the pertinent art, using the knowledge available to such a person and the disclosure in the patent document, could make and use the invention without undue experimentation. It is not fatal if some experimentation is needed, for the patent document is not intended to be a production specification.

When the challenged subject matter is a computer program that implements a claimed device or method, enablement is determined from the viewpoint of a skilled programmer using the knowledge and skill with which such a person is charged. The amount of disclosure that will enable practice of an invention that utilizes a computer program may vary according to the nature of the invention, the role of the program in carrying it out, and the complexity of the contemplated programming, all from the viewpoint of the skilled programmer. As the court observed in In re Sherwood, 613 F.2d 809 (CCPA 1980), the writing of a program may require varying degrees of skill:

In general, writing a computer program may be a task requiring the most sublime of the inventive faculty or it may require only the droning use of clerical skill. The difference between the two extremes lies in the creation of mathematical methodology to bridge the gap between the information one starts with ("the input") and the information that is desired ("the output").

The claimed invention of the ’375 patent is not in the details of the program writing, but in the apparatus and method whose patentability is based on the claimed combination of components or steps. Further, experts for both sides testified that an experienced programmer could, without unreasonable effort, write a program to carry out the invention. The possible design of superior software, or whether each programmer would work out the details in the identical way, is not relevant in determining whether the inventor has complied with the enablement requirement.

Expert witnesses testifying for Datapoint agreed that there were various ways of writing a program that would perform the invention. Gordon Bell, Earle Pughe, and Fernando Corbato all testified that it would be relatively straightforward for a skilled computer programmer to design a program to carry out the claimed invention.

Fernando Corbato, a Datapoint expert, testified:

[T]here is a tremendous amount of lore and understanding that one must have in order to carry it out which depending on who you are dealing with may or may not be state of the art. To someone a skilled computer designer, it would appear to be very, very straightforward to do anything that was described in the patent. He probably would have felt that he had already been doing that. The problem was I don’t think the patent describes any novel configuration.

The district court referred in its opinion to the testimony of Kay Magleby that one skilled in the art of computer programming would be hindered because such a person could not tell where the program format would be loaded, what would be a typical program format, what characters would be used, or what would be the range or limitations of the format program. Sycor points out that the patent specification states that the format program is stored in the delay line buffer memory. On cross-examination, Magleby acknowledged that the specification contains a description of how the format program is entered into the delay line buffer memory:

    So here [in the patent] I see a description of how, whatever this format program is, is entered into the delay line and stored on cassette tape.

Another exchange with Magleby:

    Q. Would one of ordinary skill have any difficulty in determining what the instruction format would be?

    A. I think one of ordinary skill could develop a product that would satisfy the claims of the patent.

    However, if there's something unique about this particular product as represented in the claims, then I think it should be explained clearly enough in the specification so that we can understand what's unique.

The format program is described in the specification as “character codes which are representative of and which initiate machine control functions.” Datapoint’s witness Professor Clark testified that additional information such as detailed flowcharts, block diagrams, or source code listings were necessary in order to avoid spending experimental time. However, as noted in Sherwood, a description of such information may be adequate to a skilled programmer:

In assessing any computer-related invention, it must be remembered that the programming is done in a computer language. The computer language is not a conjuration of some black art, it is simply a highly structured language.... [T]he conversion of a complete thought (as expressed in English and mathematics, i.e., the known input, the desired output, the mathematical expressions needed and the methods of using those expressions) into a language a machine understands is necessarily a mere clerical function to a skilled programmer.

Although there have been circumstances wherein production of the computer program was not routine, as in White Consol. Indus., Inc. v. Vega Servo-Control, Inc., 713 F.2d 788 (Fed. Cir. 1983), where the production of the program required 1½-2 person-years of work, such circumstances were not shown or suggested for the ’375 invention.

The great weight of the expert testimony on both sides was that a programmer of reasonable skill could write a satisfactory program with ordinary effort. This requires the conclusion that the programs here involved were, to a skilled programmer, routine. The district court’s finding that undue experimentation was necessary to write the program is clear error. The holding that the claims are invalid for lack of enablement is reversed.

Notes

1. Consider the following passage from the part of the court’s opinion that addresses obviousness:

The prior art does not suggest the inventors' solution to the batch data entry problem. ...Whether the changes from the prior art are "minor," as Datapoint argues, the changes must be evaluated in terms of the whole invention, including whether the prior art provides any teaching or suggestion to one of ordinary skill in the art to make the changes that would produce the patentee's method and device.

This passage reflects a doctrine that the Federal Circuit began to develop in the early 1980s. In its present form, it is that before the disclosures of two or more prior art references can be combined in order to establish obviousness, there must be some specific teaching, suggestion, or motivation for doing so, found either in the references themselves or in the knowledge generally available to one of ordinary skill in the art. See In re Dembiczak, 175 F.3d 994, 50 U.S.P.Q.2d 1614 (Fed. Cir. 1999); ATD Corp. v. Lydall, Inc., 159 F.3d 534, 546, 48 U.S.P.Q.2d 1321 (Fed. Cir. 1998); In re Rouffet, 149 F.3d 1350, 1355, 47 U.S.P.Q.2d 1453 (Fed. Cir. 1998; Heidelberger Druckmaschinen AG v. Hantscho Commercial Prods., Inc., 21 F.3d 1068, 1072 (Fed. Cir. 1994) (“When the patented invention is made by combining known components to achieve a new system, the prior art must provide a suggestion or motivation to make such a combination.”); In re Jones, 958 F.2d 347, 351 (Fed. Cir. 1992). For a further elaboration on the scope of this principle, see the concurring opinion of Judge Nies in Oetiker, which follows next.

2. Datapoint’s problems with the AESOP-B documents illustrates a problem encountered with software inventions in proving that a patentee’s alleged invention was in use before the patentee filed its patent application. Publicly available documentation is often hard to come by, not only because DoD keeps things secret (as here) but because software features are often undocumented, at least outside company files. How would you show that (and when) undocumented features of Windows were part of programming knowledge or were in public use, say in 1995?

3. Would it surprise you if a court, given similar facts, first held the AESOP-B documents not admissible evidence of anticipation under § 102 and then held the same AESOP-B documents admissible for purposes of § 103 as some evidence of what persons of ordinary skill in the art at the time of the invention knew and what expedients were obvious to them? Documents that do not qualify as prior art, because they are not printed publications or because their date is slightly too late, sometimes are considered under § 103. See, e.g., Newell Cos. v. Kenney Mfg. Co., 864 F.2d 757, 766 n.12 (Fed. Cir. 1988), cert. denied, 493 U.S. 814 (1989) (holding an unpublished internal memorandum not “technically prior art’” but still admissible to show that persons of ordinary skill in the art suggested solutions to the problem that the patent addressed which were similar to those of the patent); Orthopedic Equip. Co. v. United States, 702 F.2d 1005, 1011-12 (Fed. Cir. 1983) (evidence “can be probative on the issue of the level of skill in the pertinent art even if it be considered inadequate to establish the existence of a § 102 defense”). In In re Farrenkopf, 713 F.2d 714, 720 (Fed. Cir. 1983), a Parsons Affidavit was offered in a reissue proceeding against the validity of the patent. In the affidavit Parsons described his work in late 1976 leading to manufacture and sale of the patented product. The patentee then showed by its affidavit that it made the invention almost a year before that date. The court held that the Parsons Affidavit was “some evidence of the level of skill in the art reasonably contemporaneous with” the invention, and upheld the PTO's rejection of claims as obvious. Fogarty v. United States, 225 U.S.P.Q. 298, 305 n.18 (Cl. Ct. 1984), aff’d, 770 F.2d 182 (Fed. Cir. 1985), presented a fact pattern very similar to that of Northern Telecom. The Claims Court (an Article I federal court that tries claims against the U.S. Government) held that “these [government] reports, even if classified, are indicative of the general level of skill in the art.”

4. The twist that the court placed on the testimony of the expert Fernando Corbato illustrates an advocacy problem in cases in which an accused infringer wants to argue both obviousness and lack of enablement. How do you proffer testimony that patented software was obvious without causing the same testimony to demolish any non-enablement defense?

5. The court’s discussion of the standard of enablement for software is frequently quoted. Does it provide a bright-line standard? Compare it to the standard for exercise of due care.

Can you articulate a more informative standard for such enablement?



In re Oetiker (Concurrence)
United States Court of Appeals for the Federal Circuit
977 F.2d 1443 (Fed. Cir. 1992)

Nies, Chief Judge, concurring.

I agree with the panel decision and write only to express my understanding of the language that there must be some teaching, reason, suggestion, or motivation found “in the prior art” or “in the prior art references” to make a combination to render an invention obvious within the meaning of 35 U.S.C. § 103. Similar language appears in a number of opinions and if taken literally would mean that an invention cannot be held to have been obvious unless something specific in a prior art reference would lead an inventor to combine the teachings therein with another piece of prior art.

This restrictive understanding of the concept of obviousness is clearly wrong. Other statements in opinions express the idea more generally. We have stated, for example, that the test is: “whether the teachings of the prior art, taken as a whole, would have made obvious the claimed invention,” and “what the combined teachings would have suggested to one of ordinary skill in the art.” We have also stated that “the prior art as a whole must suggest the desirability of making the combination.”

I believe that it would better reflect the concept of obviousness to speak in terms of “from the prior art” rather than simply “in the prior art.” The word “from” expresses the idea of the statute that we must look at the obviousness issue through the eyes of one of ordinary skill in the art and what one would be presumed to know with that background. What would be obvious to one of skill in the art is a different question from what would be obvious to a layman. An artisan is likely to extract more than a layman from reading a reference.

In any event, variance in the language used in opinions does not change the nature of the statutory inquiry. Under § 103, subject matter is unpatentable if it “would have been obvious to a person having ordinary skill in the art.” While there must be some teaching, reason, suggestion, or motivation to combine existing elements to produce the claimed device, it is not necessary that the cited references or prior art specifically suggest making the combination. Such suggestion or motivation to combine prior art teachings can derive solely from the existence of a teaching, which one of ordinary skill in the art would be presumed to know, and the use of that teaching to solve the same or similar problem which it addresses.

In sum, it is off the mark for litigants to argue, as many do, that an invention cannot be held to have been obvious unless a suggestion to combine prior art teachings is found in a specific reference.

Note

Assume that your client is being sued for infringement of a patent like that of the Alappat case or the Arrhythmia case. No single prior art software product has all of the elements of the claimed system, but two earlier commercial software products, between them, include all the claimed elements.

How would you try to show, in the manner that Judge Nies proposes, that the patented system was obvious? How would you rebut?



In re Lee
United States Court of Appeals for the Federal Circuit
277 F.3d 1338 (Fed Cir. 2002)

Before Pauline Newman, Clevinger, and Dyk, Circuit Judges.
PAULINE NEWMAN, Circuit Judge.

Sang-Su Lee appeals the decision of the Board of Patent Appeals and Interferences of the United States Patent and Trademark Office, rejecting all of the claims of Lee's patent application Serial No. 07/631,210 entitled "Self- Diagnosis and Sequential-Display Method of Every Function." We vacate the Board's decision for failure to meet the adjudicative standards for review under the Administrative Procedure Act, and remand for further proceedings.

The Prosecution Record

Mr. Lee's patent application is directed to a method of automatically displaying the functions of a video display device and demonstrating how to select and adjust the functions in order to facilitate response by the user. The display and demonstration are achieved using computer-managed electronics, including pulse-width modulation and auto-fine-tuning pulses, in accordance with procedures described in the specification.

The examiner rejected the claims on the ground of obviousness, citing the combination of two references: United States Patent No. 4,626,892 to Nortrup, and the Thunderchopper Helicopter Operations Handbook for a video game. The Nortrup reference describes a television set having a menu display by which the user can adjust various picture and audio functions; however, the Nortrup display does not include a demonstration of how to adjust the functions. The Thunderchopper Handbook describes the Thunderchopper game's video display as having a "demonstration mode" showing how to play the game; however, the Thunderchopper Handbook makes no mention of the adjustment of picture or audio functions. The examiner held that it would have been obvious to a person of ordinary skill to combine the teachings of these references to produce the Lee system.

Lee appealed to the Board, arguing that the Thunderchopper Handbook simply explained how to play the Thunderchopper game, and that the prior art provided no teaching or motivation or suggestion to combine this reference with Nortrup, or that such combination would produce the Lee invention. The Board held that it was not necessary to present a source of a teaching, suggestion, or motivation to combine these references or their teachings. The Board stated:

The conclusion of obviousness may be made from common knowledge and common sense of a person of ordinary skill in the art without any specific hint or suggestion in a particular reference.

The Board did not explain the "common knowledge and common sense" on which it relied for its conclusion that "the combined teachings of Nortrup and Thunderchopper would have suggested the claimed invention to those of ordinary skill in the art."

Lee filed a request for reconsideration, to which the Board responded after five years. The Board reaffirmed its decision, stating that the Thunderchopper Handbook was "analogous art" because it was "from the same field of endeavor" as the Lee invention, and that the field of video games was "reasonably pertinent" to the problem of adjusting display functions because the Thunderchopper Handbook showed video demonstrations of the "features" of the game. On the matter of motivation to combine the Nortrup and Thunderchopper references, the Board stated that "we maintain the position that we stated in our prior decision" and that the Examiner's Answer provided "a well reasoned discussion of why there is sufficient motivation to combine the references." The Board did not state the examiner's reasoning, and review of the Examiner's Answer reveals that the examiner merely stated that both the Nortrup function menu and the Thunderchopper demonstration mode are program features and that the Thunderchopper mode "is user-friendly" and it functions as a tutorial, and that it would have been obvious to combine them.

Lee had pressed the examiner during prosecution for some teaching, suggestion, or motivation in the prior art to select and combine the references that were relied on to show obviousness. The Examiner's Answer before the Board, plus a Supplemental Answer, stated that the combination of Thunderchopper with Nortrup "would have been obvious to one of ordinary skill in the art since the demonstration mode is just a programmable feature which can be used in many different device[s] for providing automatic introduction by adding the proper programming software," and that "another motivation would be that the automatic demonstration mode is user friendly and it functions as a tutorial." The Board adopted the examiner's answer, stating "the examiner has provided a well reasoned discussion of these references and how the combination of these references meets the claim limitations." However, perhaps recognizing that the examiner had provided insufficient justification to support combining the Nortrup and Thunderchopper references, the Board held, as stated supra, that a "specific hint or suggestion" of motivation to combine was not required.

This appeal followed.

Judicial Review

Tribunals of the PTO are governed by the Administrative Procedure Act, and their rulings receive the same judicial deference as do tribunals of other administrative agencies. Dickinson v. Zurko, 527 U.S. 150, 119 S.Ct. 1816, 144 L.Ed.2d 143, 50 USPQ2d 1930 (1999). Thus on appeal we review a PTO Board's findings and conclusions in accordance with the following criteria:

5 U.S.C. § 706(2) The reviewing court shall– (2) hold unlawful and set aside agency actions, findings, and conclusions found to be–
(A) arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law;
* * *
(E) unsupported by substantial evidence in a case subject to sections 556 and 557 of this title or otherwise reviewed on the record of an agency hearing provided by statute;

For judicial review to be meaningfully achieved within these strictures, the agency tribunal must present a full and reasoned explanation of its decision. The agency tribunal must set forth its findings and the grounds thereof, as supported by the agency record, and explain its application of the law to the found facts. The Court has often explained:

The Administrative Procedure Act, which governs the proceedings of administrative agencies and related judicial review, establishes a scheme of "reasoned decisionmaking." Not only must an agency's decreed result be within the scope of its lawful authority, but the process by which it reaches that result must be logical and rational.

Allentown Mack Sales and Service, Inc. v. National Labor Relations Bd., 522 U.S. 359, 374 (1998). This standard requires that the agency not only have reached a sound decision, but have articulated the reasons for that decision. The reviewing court is thus enabled to perform meaningful review within the strictures of the APA, for the court will have a basis on which to determine "whether the decision was based on the relevant factors and whether there has been a clear error of judgment." Citizens to Preserve Overton Park v. Volpe, 401 U.S. 402, 416 (1971). Judicial review of a Board decision denying an application for patent is thus founded on the obligation of the agency to make the necessary findings and to provide an administrative record showing the evidence on which the findings are based, accompanied by the agency's reasoning in reaching its conclusions. See In re Zurko, 258 F.3d 1379, 1386 (Fed. Cir. 2001) (review is on the administrative record); In re Gartside, 203 F.3d 1305, 1314 (Fed. Cir. 2000) (Board decision "must be justified within the four corners of the record").

As applied to the determination of patentability vel non when the issue is obviousness, "it is fundamental that rejections under 35 U.S.C. § 103 must be based on evidence comprehended by the language of that section." In re Grasselli, 713 F.2d 731, 739 (Fed. Cir. 1983). The essential factual evidence on the issue of obviousness is set forth in Graham v. John Deere Co., 383 U.S. 1, 17-18 (1966), and extensive ensuing precedent. The patent examination process centers on prior art and the analysis thereof. When patentability turns on the question of obviousness, the search for and analysis of the prior art includes evidence relevant to the finding of whether there is a teaching, motivation, or suggestion to select and combine the references relied on as evidence of obviousness. See, e.g., McGinley v. Franklin Sports, Inc., 262 F.3d 1339, 1351-52 (Fed. Cir. 2001) ("the central question is whether there is reason to combine [the] references," a question of fact drawing on the Graham factors).

"The factual inquiry whether to combine references must be thorough and searching." Id. It must be based on objective evidence of record. This precedent has been reinforced in myriad decisions, and cannot be dispensed with. See, e.g., Brown & Williamson Tobacco Corp. v. Philip Morris Inc., 229 F.3d 1120, 1124-25 (Fed. Cir. 2000) ("a showing of a suggestion, teaching, or motivation to combine the prior art references is an 'essential component of an obviousness holding'"); In re Dembiczak, 175 F.3d 994, 999 (Fed.Cir.1999) ("Our case law makes clear that the best defense against the subtle but powerful attraction of a hindsight-based obviousness analysis is rigorous application of the requirement for a showing of the teaching or motivation to combine prior art references."); In re Dance, 160 F.3d 1339, 1343 (Fed. Cir. 1998) (there must be some motivation, suggestion, or teaching of the desirability of making the specific combination that was made by the applicant); In re Fine, 837 F.2d 1071, 1075 (Fed. Cir. 1988) ("teachings of references can be combined only if there is some suggestion or incentive to do so."); ACS Hosp. Sys., Inc. v. Montefiore Hosp., 732 F.2d 1572, 1577 (Fed. Cir. 1984)).

The need for specificity pervades this authority. See, e.g., In re Kotzab, 217 F.3d 1365, 1371 (Fed. Cir. 2000) ("particular findings must be made as to the reason the skilled artisan, with no knowledge of the claimed invention, would have selected these components for combination in the manner claimed"); In re Rouffet, 149 F.3d 1350, 1359 (Fed. Cir. 1998) ("even when the level of skill in the art is high, the Board must identify specifically the principle, known to one of ordinary skill, that suggests the claimed combination. In other words, the Board must explain the reasons one of ordinary skill in the art would have been motivated to select the references and to combine them to render the claimed invention obvious."); In re Fritch, 972 F.2d 1260, 1265 (Fed. Cir. 1992) (the examiner can satisfy the burden of showing obviousness of the combination "only by showing some objective teaching in the prior art or that knowledge generally available to one of ordinary skill in the art would lead that individual to combine the relevant teachings of the references").

With respect to Lee's application, neither the examiner nor the Board adequately supported the selection and combination of the Nortrup and Thunderchopper references to render obvious that which Lee described. The examiner's conclusory statements that "the demonstration mode is just a programmable feature which can be used in many different device[s] for providing automatic introduction by adding the proper programming software" and that "another motivation would be that the automatic demonstration mode is user friendly and it functions as a tutorial" do not adequately address the issue of motivation to combine. This factual question of motivation is material to patentability, and could not be resolved on subjective belief and unknown authority. It is improper, in determining whether a person of ordinary skill would have been led to this combination of references, simply to "[use] that which the inventor taught against its teacher." W.L. Gore v. Garlock, Inc., 721 F.2d 1540, 1553 (Fed. Cir. 1983). Thus the Board must not only assure that the requisite findings are made, based on evidence of record, but must also explain the reasoning by which the findings are deemed to support the agency's conclusion.

Deferential judicial review under the Administrative Procedure Act does not relieve the agency of its obligation to develop an evidentiary basis for its findings. To the contrary, the Administrative Procedure Act reinforces this obligation. See, e.g., Motor Vehicle Manufacturers Ass'n v. State Farm Mutual Automobile Ins. Co., 463 U.S. 29, 43 (1983) ("the agency must examine the relevant data and articulate a satisfactory explanation for its action including a 'rational connection between the facts found and the choice made.'") (quoting Burlington Truck Lines v. United States, 371 U.S. 156, 168 (1962)); Securities & Exchange Comm'n v. Chenery Corp., 318 U.S. 80, 94 (1943) ("The orderly function of the process of review requires that the grounds upon which the administrative agency acted are clearly disclosed and adequately sustained.").

In its decision on Lee's patent application, the Board rejected the need for "any specific hint or suggestion in a particular reference" to support the combination of the Nortrup and Thunderchopper references. Omission of a relevant factor required by precedent is both legal error and arbitrary agency action. See Motor Vehicle Manufacturers, 463 U.S. at 43 ("an agency rule would be arbitrary and capricious if the agency ... entirely failed to consider an important aspect of the problem"); Mullins v. Department of Energy, 50 F.3d 990, 992 (Fed. Cir. 1995) ("It is well established that agencies have a duty to provide reviewing courts with a sufficient explanation for their decisions so that those decisions may be judged against the relevant statutory standards, and that failure to provide such an explanation is grounds for striking down the action.").

The foundation of the principle of judicial deference to the rulings of agency tribunals is that the tribunal has specialized knowledge and expertise, such that when reasoned findings are made, a reviewing court may confidently defer to the agency's application of its knowledge in its area of expertise. Reasoned findings are critical to the performance of agency functions and judicial reliance on agency competence. See Baltimore and Ohio R.R. Co. v. Aberdeen & Rockfish R.R. Co., 393 U.S. 87, 91-92 (1968) (absent reasoned findings based on substantial evidence effective review would become lost "in the haze of so-called expertise"). The "common knowledge and common sense" on which the Board relied in rejecting Lee's application are not the specialized knowledge and expertise contemplated by the Administrative Procedure Act. Conclusory statements such as those here provided do not fulfill the agency's obligation. This court explained in Zurko, 258 F.3d at 1385 that "deficiencies of the cited references cannot be remedied by the Board's general conclusions about what is 'basic knowledge' or 'common sense.'" The Board's findings must extend to all material facts and must be documented on the record, lest the "haze of so- called expertise" acquire insulation from accountability. "Common knowledge and common sense," even if assumed to derive from the agency's expertise, do not substitute for authority when the law requires authority. See Allentown Mack, 522 U.S. at 376 ("Because reasoned decisionmaking demands it, and because the systemic consequences of any other approach are unacceptable, the Board must be required to apply in fact the clearly understood legal standards that it enunciates in principle....").

The case on which the Board relies for its departure from precedent, In re Bozek, 416 F.2d 1385 (CCPA 1969), indeed mentions "common knowledge and common sense," the CCPA stating that the phrase was used by the Solicitor to support the Board's conclusion of obviousness based on evidence in the prior art. Bozek did not hold that common knowledge and common sense are a substitute for evidence, but only that they may be applied to analysis of the evidence. Bozek did not hold that objective analysis, proper authority, and reasoned findings can be omitted from Board decisions. Nor does Bozek, after thirty-two years of isolation, outweigh the dozens of rulings of the Federal Circuit and the Court of Customs and Patent Appeals that determination of patentability must be based on evidence.

The determination of patentability on the ground of unobviousness is ultimately one of judgment. In furtherance of the judgmental process, the patent examination procedure serves both to find, and to place on the official record, that which has been considered with respect to patentability. The patent examiner and the Board are deemed to have experience in the field of the invention; however, this experience, insofar as applied to the determination of patentability, must be applied from the viewpoint of "the person having ordinary skill in the art to which said subject matter pertains," the words of section 103. In finding the relevant facts, in assessing the significance of the prior art, and in making the ultimate determination of the issue of obviousness, the examiner and the Board are presumed to act from this viewpoint. Thus when they rely on what they assert to be general knowledge to negate patentability, that knowledge must be articulated and placed on the record. The failure to do so is not consistent with either effective administrative procedure or effective judicial review. The board cannot rely on conclusory statements when dealing with particular combinations of prior art and specific claims, but must set forth the rationale on which it relies.

Alternative Grounds

At oral argument the PTO Solicitor proposed alternative grounds on which this courtmight affirm the Board's decision. However, as stated in Burlington Truck Lines, Inc. v. United States, 371 U.S. 156, 168 (1962), "courts may not accept appellate counsel's post hoc rationalization for agency action." Consideration by the appellate tribunal of new agency justifications deprives the aggrieved party of a fair opportunity to support its position; thus review of an administrative decision must be made on the grounds relied on by the agency. "If those grounds are inadequate or improper, the court is powerless to affirm the administrative action by substituting what it considers to be a more adequate or proper basis." SEC v. Chenery Corp., 332 U.S. 194, 196 (1947). As reiterated in Federal Election Comm'n v. Akins, 524 U.S. 11, 25 (1998), "If a reviewing court agrees that the agency misinterpreted the law, it will set aside the agency's action and remand the case – even though the agency (like a new jury after a mistrial) might later, in the exercise of its lawful discretion, reach the same result for a different reason." Thus we decline to consider alternative grounds that might support the Board's decision.

VACATED AND REMANDED.

Notes

1. In the Zurko case, to which the Lee opinion refers, the Board rejected as obvious a claim to a method of improving security in computer systems, based on the disclosures of the UNIX IDS and FILER2 references. The PTO conceded that one of the elements of the claimed method – communication along a "trusted path" – could be found in neither reference. Nevertheless, the PTO insisted, four other (previously uncited) references disclosed UNIX systems usingboth trusted and untrusted paths. The Federal Circuit pointed out the rule of SEC v. Chenery, mentioned in the Lee opinion, that the grounds on which a court upholds an agency order must be the same grounds as the agency stated, not appellate counsel's afterthoughts about what the agency could or should have said. The PTO also said that the deficiencies of the cited UNIX IDS and FILER2 references could be ignored because "it is basic knowledge that communication in trusted environments is performed over trusted paths" and also using a trusted path here is "nothing more than good common sense." Zurko, 258 F.3d at 1385. The Federal Circuit rejected the argument:

We cannot accept these findings by the Board. The assessment of basic knowledge and common sense was not based on any evidence in the record and, therefore, lacks substantial evidence support. ...With respect to core factual findings in a determination of patentability, however, the Board cannot simply reach conclusions based on its own understanding or experience – or on its assessment of what would be basic knowledge or common sense. Rather, the Board must point to some concrete evidence in the record in support of these findings. To hold otherwise would render the process of appellate review for substantial evidence on the record a meaningless exercise. ...Accordingly, we cannot accept the Board’s unsupported assessment of the prior art.

2. In 2006, a different panel of the Federal Circuit took a different view of how much support in the record the PTO needed to pass muster on appeal of a rejection. According to In re Kahn, - F.3d - (Fed. Cir. March 22, 2006), all that the PTO needs is that "there must be some articulated reasoning with some rational underpinning to support the legal conclusion of obviousness." The court emphasized that the PTO was required to find obviousness only by a preponderance of evidence, which the court thought could be scraped together from this record. It concluded, "Although a reasonable person might reach the opposite conclusion, there is far more than a 'mere scintilla' of evidence present from which a reasonable mind could find a motivation to combine." Thus, a record with more than a scintilla of evidence satisfies the substantial evidence test. The court found the case unlike Lee, where the PTO failed to make any factual record at all on motivation to combine references. "In this case, motivation to combine was articulated and placed on the record" – at least to an extent somewhat beyond a scintilla of evidence.

Harmonize the Lee and Kahn decisions.



In re Epstein
United States Court of Appeals for the Federal Circuit
32 F.3d 1559 (Fed. Cir. 1994)

Before Plager, Circuit Judge, Cowen, Senior Circuit Judge, and Schall, Circuit Judge. Schall, Circuit Judge.

This appeal is from a decision of the PTO Board of Patent Appeals and Interferences (Board). The Board affirmed the examiner’s rejection of all pending claims in appellant Epstein’s patent application for an “Integrated Electronic Parts Warehousing and Distribution System and Method.” All claims stand rejected as obvious under 35 U.S.C. § 103 by the Control System software product, either alone or in combination with various references. We affirm.

Background

Appellant’s patent application is directed generally toward a computerized multi–vendor central parts warehouse. The concept is that parts of any type (e.g., fasteners, electronic parts, office supplies, and the like), or at least information on the parts, from a number of vendors are stored in a single warehouse system. The system enables a buyer to do one-stop parts shopping via computer link to the system. The system has computerized features for handling various aspects of the buying, selling, and storage and retrieval of parts in or from the warehouse system.

Application claim 1 is illustrative; it reads:

1. A method for electrically ordering selected physical items, said method comprising the steps of: 1. A method for electrically ordering selected physical items, said method comprising the steps of::

(a) providing a computer with data storage and retrieval equipment at a first station;

(b) providing a buyer input/output (“I/O”) device with a display screen at each of a plurality of buyer stations, each of which is remote from said first station and at least one other of said buyer stations;

(c) providing a buyer input/output (“I/O”) device with a display screen at each of a plurality of buyer stations, each of which is remote from said first station and at least one other of said buyer stations;

(d) storing in a single warehouse system the goods of a plurality of vendors;

(e) storing in said computer the identities of said vendors and the items stored by said vendors in said warehouse system;

(f) displaying on said screen of one of said buyer I/O devices a list of vendors who store a predetermined item in said warehouse system; and

(g) placing an order for said item from a selected one of the vendors listed by transmitting a signal to said computer.

In the preferred embodiment, both buyers and vendors can communicate electronically with a central computer from remote terminals. Vendors can list parts available from them, and buyers can determine which vendors offer parts they seek and place their orders electronically.

Discussion

I. Issues

The issue of greatest import in this case is whether there is clear error in the Board’s fact finding in support of its legal conclusion that various third-party software products were “in public use or on sale” more than one year before appellant’s filing date, and thus were properly considered prior art. These software products are described in various abstracts that, as the PTO admits, are not prior art publications (in that they were published less than a year before Epstein filed this patent application); however, the abstracts do indicate that the products were “first installed” or “released” prior to one year before appellant’s filing date. Appellant argues that, with only the abstracts as evidence, the PTO has not met its evidentiary burden of proving the “in public use or on sale” status of the third-party software products by a preponderance of the evidence. Closely related to this issue is whether there is clear error, as appellant argues there is, in the Board’s fact finding that the abstracts evidence the level of ordinary skill in the art at the time the invention was made.

Also at issue in this case is whether the Board erred as a matter of law in concluding that the publications used by the examiner are sufficiently enabling of the features for which they are cited. Finally, there is the issue of whether the Board clearly erred, as appellant claims it did, in sustaining the examiner’s rejection of the claims at issue as either obvious or anticipated.

II.   Subsequently Published Abstracts As Evidence of “in
Public Use or on Sale” Prior Art and Level of Skill in the Art

The cited prior art software products are described in abstracts. The PTO concedes that the abstracts themselves are not prior art under the “printed publication” provision of section 102(b). Each of the abstracts, however, asserts a “release” or “first installation” date for its respective software product of more than one year before appellant filed his patent application. The PTO therefore contends that the abstracts evidence the following: (1) that the software products described in the abstracts were “in public use or on sale” within the meaning of section 102(b) and thus properly considered prior art, and (2) the level of skill in the art at the time the invention was made.

Before the examiner and the Board, appellant steadfastly maintained that the PTO could not meet its evidentiary burden with only the abstracts as evidence. In support of its position, appellant made arguments as to why the abstracts were insufficient, and also speculated as to reasons why the information in the abstracts might not be accurate or reliable. Appellant, however, proffered no evidence in support of his contentions. Consequently, the Board held:

In the absence of evidence that the dates printed in the abstracts are not true dates of public use of the systems described therein, we will accept the abstracts as evidence of prior art and of the level of ordinary skill in the art.

35 U.S.C. § 102(b) provides in pertinent part:

A person shall be entitled to a patent unless...the invention was...in public use or on sale in this country, more than one year prior to the date of the application for patent in the United States....

The § 102(b) “public use” and “on sale” bars are not limited to sales or uses by the inventor or one under the inventor’s control, but may result from activities of a third party which anticipate the invention, or render it obvious.

“[P]reponderance of the evidence is the standard that must be met by the PTO in making rejections....” We have reviewed the abstracts and note the following about them. Each abstract contains a description of its particular software product, including the various features relied upon by the examiner in rejecting appellant’s claims. Each abstract identifies the software vendor by name and provides the vendor’s address and phone number. Each abstract provides information useful to potential buyers, including who to contact, price terms, documentation, warranties, training and maintenance. Each abstract states the date that the product was first released or installed. Finally, the abstracts disclose the number of current users; these range in number from 10 to 58.

Appellant’s primary argument on appeal is that, because the “release” and “first installed” dates listed in the abstracts are hearsay not within any exception to hearsay rules, the Board could not properly rely on the dates as proof that the software products noted were “in public use or on sale” at a time prior to the date the abstracts were published, or more particularly, a time prior to the critical date. For the same reason, appellant argues that such evidence also cannot establish the level of skill in the art at the time appellant’s invention was made. Appellant attempts to illustrate the reliability problem by arguing that software suppliers have an incentive to exaggerate their claims to attract potential buyers.

We agree with appellant that the statements of “release” and “first installation” in the abstracts are, generally speaking, hearsay statements. The statements are out-of-court written assertions offered by the PTO to prove the truth of the matter asserted, namely, that the various software products were “in public use or on sale” at a time some two years before the date that the abstracts were published. We do not accept, however, the per se rule that hearsay statements can never be relied upon to establish facts necessary to support a rejection.

The general rule is that administrative agencies like the PTO are not bound by the rules of evidence that govern judicial proceedings. The inapplicability of hearsay evidence rules in ex parte PTO examination is appropriate in light of the purpose and reason for the hearsay rule. As has been articulated by Professor Wigmore, “[t]he theory of the hearsay rule is that the many possible sources of inaccuracy and untrustworthiness which may lie underneath the bare untested assertion of a witness can best be brought to light and exposed, if they exist, by the test of cross_examination.” During ex parte PTO examination, applicants are free to investigate hearsay assertions relied upon by an examiner during the three to six month period available to respond to an office action. They also have the right to introduce rebuttal evidence under 37 C.F.R. § 1.132. Accordingly, we reject appellant’s argument that the PTO can never rely upon hearsay evidence in making rejections.

Moreover, as articulated by Professor Wigmore, the “test or security [of cross-examination] may in a given instance be superfluous; it may be sufficiently clear, in that instance, that the statement offered is free enough from the risk of inaccuracy and untrustworthiness, so that the test of cross–examination would be a work of supererogation.” Here, we have no reason to believe that the abstracts and the statements of “release” and “first installed” appearing in the abstracts are inaccurate or that the authors of the statements are untrustworthy. There is nothing on the face of the documents that suggests the information has been altered in any way. Although it may be that the abstracts were prepared by the vendors of the various software products, we do not think that this necessarily makes them unreliable. Appellant, as we have indicated above, contends that marketers of such software products have an incentive to exaggerate the products’ capabilities and that, therefore, assertions in the abstracts are unreliable. We acknowledge that such an incentive exists; however, we do not accept the proposition that because the incentive exists the assertions therefore must be inaccurate or unreliable. To flatly reject the abstracts as unreliable would require us to assume that the vendors are engaging in false or misleading advertising, which — in the absence of evidence supporting such — we will not assume.

Thus, because the abstracts appear on their face to be accurate and reliable, and because appellant has failed to proffer any evidence to support his arguments to the contrary, we assume the truthfulness of the various assertions in the abstracts. Accordingly, we find no clear error in the Board’s fact finding with respect to the issues of public use/on sale and the level of skill in the art. Further, the facts — as set forth in, and inferred from, the abstracts — support the legal conclusion that the products, including the features upon which the PTO has relied to reject the claims, were “in public use or on sale” within the meaning of section 102(b) prior to the critical date.

III. Competence and Enablement of the References

Appellant argues that the later-published abstracted descriptions of the software products fail to make enabling disclosures of the features for which they have been cited.

Turning first to the prior art software products described in the later-published abstracts, the parties’ arguments focus upon whether the later-published abstracts make enabling disclosures. These arguments are misdirected. First off, it is the software products, not the abstracts, that are the prior art. Further, we held earlier in this opinion that the Board did not clearly err in finding that the products, including the features upon which the examiner relied in rejecting the claims, were in public use or on sale. Beyond this “in public use or on sale” finding, there is no requirement for an enablement-type inquiry. Our precedent holds that the question is not whether the sale, even a third party sale, discloses the invention at the time of the sale, but whether the sale relates to a device that embodies the invention.

With respect to the prior art printed publications, these references must be enabling, thus placing the allegedly disclosed matter in the possession of the public. Akzo N.V. v. United States Int’l Trade Comm’n, 808 F.2d 1471, 1479 (Fed. Cir. 1986), cert. denied, 482 U.S. 909 (1987). As we have stated in the context of whether a specification sufficiently enables a claim under 35 U.S.C. § 112, ¶ 1, enablement is a question of law reviewed de novo, which may involve subsidiary questions of fact reviewed for clear error. The enablement issue in the context of whether a prior art reference is enabling of the features for which it has been cited is likewise a mixed question of law and fact.

On the issue of enablement of the references (as well as the abstracts of the software products), the Board found as follows:

With respect to appellant’s argument that the publications lack diagrams, flow charts, and source codes that would enable one of ordinary skill in the art to practice the systems described in the publications, we find that the disclosure of appellant’s system fails to provide the same detailed information concerning the claimed invention. In the absence of such a specific description, we assume that anyone desiring to carry out such computerized warehousing and inventory control systems would know of the equipment and techniques to be used.

Appellant argues that this ruling is clearly erroneous because it contains the tacit admission that the references would not be enabling but for the fact that appellant’s own specification also lacks an enabling disclosure. We disagree with this characterization of the Board’s finding. Appellant’s claims were not rejected under 35 U.S.C. § 112, ¶ 1, as lacking an enabling disclosure. Nor did the Board indicate that appellant’s specification lacks such an enabling disclosure. Rather, the Board’s observation that appellant did not provide the type of detail in his specification that he now argues is necessary in prior art references supports the Board’s finding that one skilled in the art would have known how to implement the features of the references and would have concluded that the reference disclosures would have been enabling.

Aside from his misdirected assignment of error, appellant makes no attempt to address why the description would have been non-enabling of the features for which it has been cited — namely, an electronic ordering system for a plurality of vendors (which inherently would have a plurality of buyer stations) and the ability to view a list of vendors. Appellant, therefore, has not met his burden to rebut the board’s conclusion of enablement.

Conclusion

For the foregoing reasons, the decision of the Board is affirmed.

Plager, Circuit Judge, with whom Cowen, Senior Circuit Judge, joins, concurring.

I join the opinion of the majority. I write because there is an anomaly here. Logic would dictate that when an applicant seeks a grant of property from the government the applicant bears the burden of establishing entitlement to that grant. That, however, is not the rule in patent law; the rule is that the burden of persuasion is on the PTO to show why the applicant is not entitled to a patent.

Perhaps the explanation lies in the way that the statute is written: “A person shall be entitled to a patent unless...” 35 U.S.C. § 102. Whether a different rule would prevail if the statute said, “To be entitled to a patent, an applicant shall establish...” is a question that purists can debate. Whatever the case, the rule is now well established.

In an attempt to relieve the PTO of the full impact of this rule, there are various other rules that require the applicant to tell what he knows and to deal in good faith with the PTO. But there are problems in enforcing these requirements, and their efficacy may be questioned. As a practical matter, the primary corrective for the anomaly is the practice referred to as the “prima facie case.” The name is a misnomer, although the practice and the classic meaning of prima facie have similarities. Under the PTO practice, the PTO may meet its burden of persuasion initially by showing reasons why the applicant is not entitled to a patent. This shifts the burden of producing evidence to the applicant to show why the PTO is wrong — to rebut the prima facie case.

A function of the PTO’s prima facie case practice is to relieve the PTO of the responsibility to know all there is to know about everything. It is not unreasonable to expect the applicant to know more about the prior work in the relevant art than the PTO examiner. Is it unreasonable to require the applicant to do the necessary legwork to assure the PTO that legitimate questions about that prior work are answered? The alternative — argued here by the applicant — is to require the PTO examiners to do any investigation suggested by available information. Since more and more information is now available on computer databases, that could require a staff of investigators far in excess of the resources currently available to the PTO. At bottom, the issue in this case is who is to bear the cost of further investigation when further investigation is thought warranted.

The solution agreed to by the panel, and with which I concur, is at least for now to allow the PTO to use its immediately available data sources to identify legitimate questions that need answering, and then to place upon the applicant the burden of finding those answers. In legalese, this means that the PTO has met its burden of production, and now the burden of production or going forward shifts to the applicant. The ease with which the PTO can do this in some measure may undercut the rule placing the initial burden on the PTO, and that may be as it should.

The practice could also be subject to abuse. That is something against which the PTO and this court will have to guard.

Notes

1. It is typically difficult to show when a software product became a part of the prior art. Here, the PTO has no convenient — perhaps no feasible — way to do this. The Federal Circuit therefore allows it to utilize available information that is less than perfect. Here, the available information is advertising material from vendors. To justify use of such data, where nothing better seems available, the majority opinion points to the opportunity of the applicant to investigate the material, if it wishes, in order to rebut it. The concurrence points to the likelihood that the applicant knows more about what is going on or has gone on in the software industry than the PTO and its examiners do. (“It is not unreasonable to expect the applicant to know more about the prior work in the relevant art than the PTO examiner.”) Do you agree?

2. The court ruled that, to the extent that the abstracts were relied upon to show what was on the market, there was no issue of enabling disclosure. All a commercial computer program has to do to be prior art is be on sale, as object code on a floppy disk, for example. The abstract is just evidence of the fact that the given computer program was on sale.

The court also ruled that, to the extent that the abstracts were relied upon as prior–art publications, they had to be enabling. Here, the PTO was perhaps not in a strong position to make a finding of what was enablement, given its degree of expertise. (See quoted “we assume” statement of board.) However, the PTO had an ace in the hole — and it often has this ace in the hole for cases involving a software–related patent application.

This is the tu quoque (“you did it too”) argument. The patent application has no more enabling detail than the references do. But, as the court points out, this is not phrased as a § 112 § 1 rejection. For the PTO to do that could be a serious tactical error. Instead, the PTO treats the applicant’s specification with a scanty enabling disclosure as an admission of what is enabling, or as evidence bolstering the PTO’s independent finding (or assumption) that the amount of enablement needed here is the same as that of the patent application. (The legal standard for what is enabling for an applicant’s patent application is the same as that for a reference.)

This line of reasoning is particularly helpful to the PTO in the software field. Why?



In re Lowry
United States Court of Appeals for the Federal Circuit
32 F.3d 1579 (Fed. Cir. 1994)

Before Rich, Circuit Judge, Skelton, Senior Circuit Judge, and Rader, Circuit Judge. Rader, Circuit Judge.

Background

Lowry’s patent application — “Data Processing System Having a Data Structure with a Single, Simple Primitive” — relates to the storage, use, and management of information residing in a memory. The PTO does not dispute the features and advantages of Lowry’s claimed invention. The invention provides an efficient, flexible method of organizing stored data in a computer memory.

A memory stores data according to a particular order or arrangement. Application programs use stored data to perform specified functions. A data model provides the framework for organizing and representing information used by an application program. Data models define permissible data structures — organizational structures imposed upon the data used by the application program — compatible with particular data processing systems. Data structures are the physical implementation of a data model’s organization of the data. Data structures are often shared by more than one application program.

The prior art contains data models and data structures. Prior art data models are generally one of two kinds: functionally expressive or structurally expressive data models. Functionally expressive data models enable complex nested operations using large blocks of data. These data models, however, are limited to a narrow class of applications and generally require more complex interfaces to functionality. Structurally expressive data models, on the other hand, define more varied data structures capable of representing accurately complex information. These data models, however, make complex nested operations on large blocks of data quite difficult.

Lowry’s invention seeks to optimize both structural and functional expressiveness. Lowry discloses a data structure accessible by many different application programs. Lowry’s data structure is based upon the “Attributive data model.” The Attributive data model represents complex information in terms of attributes and relationships between attributes. According to Lowry’s specification, “[a]n attribute expresses the idea that one thing is attributed to another thing.” Thus, the Attributive data model capitalizes on the concept that a database is a collection of attributions, whereby information is represented in terms of its characteristics and relationships to other information.

In accordance with the Attributive data model, Lowry’s data structure comprises a plurality of attribute data objects (ADOs) stored in memory. An ADO is a single primitive data element “compris[ing] sequences of bits which are stored in the memory as electrical (or magnetic) signals that represent information.” It contains information used by the application program and information regarding its relationship with other ADOs. Lowry asserts that his data structure is functionally expressive by virtue of its representation of information in terms of attributes. Lowry also states that “[s]tructural expressiveness is achieved by making that primitive data object extremely simple and allowing for highly unconstrained interconnections between attribute instances.”

According to the claimed invention, ADOs have both hierarchical and non-hierarchical interrelationships. A few specific rules govern these relationships. Because the claimed invention uses single ADOs governed by simple organizational rules, Lowry asserts that it may flexibly and accurately represent complex objects and relationships. The hierarchical relationships form a conceptual pyramidal structure. Hierarchical correlations describe “holding” or “being held” relationships. An ADO can “hold” one or more other ADOs. Each ADO, however, can “be held” by only one other ADO. Thus, while capable of holding many others, an ADO can be held by only one other ADO. One ADO, called the apex ADO, holds at least one other ADO but is held by no other ADO. This apex ADO is the only ADO that lacks a being-held relationship. From the apex ADO, the hierarchical relationships fan out in a pyramidal structure.

ADOs also have non-hierarchical relationships. These are essentially “pointing” relationships between ADOs. There are two basic types of ADOs: (1) element data objects, which refer to only themselves, and (2) relation data objects, which refer to one other ADO, called a referent ADO. A referent ADO is merely an ADO that a relation data object refers to. Each ADO can be a referent ADO for more than one ADO. According to Lowry’s specification, this arrangement of hierarchically and non-hierarchically related single primitive ADOs facilitates software operations such as retrieval, addition, and removal of information in the data structure.

Claims 1 through 5 claim a memory containing a stored data structure. Claim 1 is representative:

1. A memory for storing data for access by an application program being executed on a data processing system, comprising:

a data structure stored in said memory, said data structure including information resident in a database used by said application program and including:

a plurality of attribute data objects stored in said memory, each of said attribute data objects containing different information from said database;

a single holder attribute data object for each of said attribute data objects, each of said holder attribute data objects being one of said plurality of attribute data objects, a being-held relationship existing between each attribute data object and its holder attribute data object, and each of said attribute data objects having a being-held relationship with only a single other attribute data object, thereby establishing a hierarchy of said plurality of attribute data objects;

a referent attribute data object for at least one of said attribute data objects, said referent attribute data object being nonhierarchically related to a holder attribute data object for the same at least one of said attribute data objects and also being one of said plurality of attribute data objects, attribute data objects for which there exist only holder attribute data objects being called element data objects, and attribute data objects for which there also exist referent attribute data objects being called relation data objects; and

an apex data object stored in said memory and having no being-held relationship with any of said attribute data objects, however, at least one of said attribute data objects having a being-held relationship with said apex data object.

Claims 6 through 19 claim a data processing system executing an application program, containing a database, a central processing unit (CPU) means for processing the application program, and a memory means for holding the claimed data structure. Claims 20-23, 25, and 28 specify methods of accessing, creating, adding, and erasing ADOs within the data structure. Claim 24 specifies a method for creating a data structure. Claims 26, 27, and 29 claim methods of creating and erasing non-hierarchical relationships between ADOs and referent ADOs.

The examiner rejected claims 1 through 5 under 35 U.S.C. § 101 as non-statutory subject matter. The examiner also rejected claims 1 through 19 under 35 U.S.C. § 103 as obvious in light of U.S. Patent No. 4,774,661 (Kumpati). Finally, the examiner rejected claims 20 through 29 under 35 U.S.C. § 102(e) as anticipated by Kumpati.

The board reversed the 35 U.S.C. § 101 rejection. The board found that claims 1 through 5, directed to a memory containing stored information, as a whole, recited an article of manufacture. The board concluded that the invention claimed in claims 1 through 5 was statutory subject matter.

When evaluating patentability under §§ 102 and 103, the board failed to give patentable weight to the claimed data structure. The board stated that the claims on appeal specify relationships between the ADOs stored in the memory. The board analogized Lowry’s data structure comprised of ADOs to printed matter and relied on this statement from In re Gulack, 703 F.2d 1381, 1385 (Fed. Cir. 1983):

Where the printed matter is not functionally related to the substrate, the printed matter will not distinguish the invention from the prior art in terms of patentability. Although the printed matter must be considered, in that situation it may not be entitled to patentable weight.

In Gulack, this court concluded that “the critical question is whether there exists any new and unobvious functional relationship between the printed matter and the substrate.” The board therefore framed the question as whether a new, nonobvious functional relationship exists between the printed matter (data structure with ADOs) and the substrate (memory). The board determined that Lowry did not show such a functional relationship. Thus, the board agreed with the examiner that the data structure could not distinguish the claimed invention from the prior art. The board held that Kumpati, disclosing a CPU using a memory and containing stored data in a data structure, rendered all claims either anticipated or obvious. Lowry appealed.

Discussion

The PTO must consider all claim limitations when determining patentability of an invention over the prior art. The PTO may not disregard claim limitations comprised of printed matter. This court in Gulack, however, would not give patentable weight to printed matter absent a new and unobvious functional relationship between the printed matter and the substrate. The board in this case determined that Lowry’s data structures were analogous to printed matter and therefore the specific features of the constituent ADOs deserved no patentable weight without a functional printed matter-substrate relationship. Finding no such functional relationship between the ADOs and the memory, the board refused to consider the specific data structure limitations.

As an initial matter, this court notes that Gulack cautioned against a liberal use of “printed matter rejections” under § 103:

A “printed matter rejection” under § 103 stands on questionable legal and logical footing. Standing alone, the description of an element of the invention as printed matter tells nothing about the differences between the invention and the prior art or about whether that invention was suggested by the prior art.... [The CCPA], notably weary of reiterating this point, clearly stated that printed matter may well constitute structural limitations upon which patentability can be predicated.

Despite this cautioning, the board erroneously extended a printed matter rejection under §§ 102 and 103 to a new field in this case, which involves information stored in a memory. This case, moreover, is distinguishable from the printed matter cases. The printed matter cases dealt with claims defining as the invention certain novel arrangements of printed lines or characters, useful and intelligible only to the human mind. The printed matter cases have no factual relevance where the invention as defined by the claims requires that the information be processed not by the mind but by a machine, the computer. Lowry’s data structures, which according to Lowry greatly facilitate data management by data processing systems, are processed by a machine. Indeed, they are not accessible other than through sophisticated software systems. The printed matter cases have no factual relevance here.

Nor are the data structures analogous to printed matter. Lowry’s ADOs do not represent merely underlying data in a database. ADOs contain both information used by application programs and information regarding their physical interrelationships within a memory. Lowry’s claims dictate how application programs manage information. Thus, Lowry’s claims define functional characteristics of the memory.

Contrary to the PTO’s assertion, Lowry does not claim merely the information content of a memory. Lowry’s data structures, while including data resident in a database, depend only functionally on information content. While the information content affects the exact sequence of bits stored in accordance with Lowry’s data structures, the claims require specific electronic structural elements which impart a physical organization on the information stored in memory. Lowry’s invention manages information. As Lowry notes, the data structures provide increased computing efficiency.

Indeed, Lowry does not seek to patent the Attributive data model in the abstract. Nor does he seek to patent the content of information resident in a database. Rather, Lowry’s data structures impose a physical organization on the data.

In Lowry’s invention, the stored data adopt no physical “structure” per se. Rather, the stored data exist as a collection of bits having information about relationships between the ADOs. Yet this is the essence of electronic structure.

More than mere abstraction, the data structures are specific electrical or magnetic structural elements in a memory. According to Lowry, the data structures provide tangible benefits: data stored in accordance with the claimed data structures are more easily accessed, stored, and erased. Lowry further notes that, unlike prior art data structures, Lowry’s data structures simultaneously represent complex data accurately and enable powerful nested operations. In short, Lowry’s data structures are physical entities that provide increased efficiency in computer operation. They are not analogous to printed matter. The board is not at liberty to ignore such limitations.

Even assuming, arguendo, that data objects and data structures are analogous to printed matter, the board erred in its reliance on Gulack. As part of its burden to establish a prima facie case of obviousness, the burden of establishing the absence of a novel, nonobvious functional relationship rests with the PTO. If examination at the initial stage does not produce a prima facie case of unpatentability, then without more the applicant is entitled to grant of the patent. The PTO did not establish that the ADOs, within the context of the entire claims, lack a new and nonobvious functional relationship with the memory. The ADOs follow a particular sequence that enables more efficient data processing operations on stored data. The ADOs facilitate addition, deletion, and modification of information stored in the memory. In sum, the ADO’s perform a function. Gulack requires no more.

With the foregoing in mind, this court now turns to the specific prior art rejections. The board rejected claims 1-19 under § 103 as obvious over Kumpati. The board found that claims 20-29 were anticipated by Kumpati. Claims 1-19 include a memory, comprising the claimed data structure, for storing data for access by an application program. Claims 20-29 describe methods of performing data management operations with respect to the claimed data structure.

The Kumpati patent, entitled “Database Management System with Active Data Dictionary,” discloses a database management system containing an active data dictionary that the user can access and modify. Kumpati’s data dictionary contains information about the structure and usage of the data stored in the database management system.

Kumpati discloses a data model within a database management system complete with hierarchical and relational interrelationships. Kumpati further defines an “attribute” as a “function that maps an entity set or relationship set into one or more value sets.” A value set, in turn, “further identifies (or defines) the entity by populating these attributes with specific items of data which define these characteristics.”

Kumpati does not, however, disclose Lowry’s ADOs and their specific hierarchical and non-hierarchical relationships. More specifically, Kumpati does not disclose the claimed pyramidal arrangement of hierarchically arranged ADOs, complete with apex ADO. Kumpati’s relationship sets are different from Lowry’s relation data objects, having non-hierarchical relationships with other ADOs. Neither are Kumpati’s “attributes,” performing a mapping function, equivalent to Lowry’s ADOs, containing information used by the application program as well as information regarding its interrelationships with other ADOs.

Lowry’s claimed invention involves an organization of information and its interrelationships which Kumpati neither discloses nor suggests. Kumpati also does not render Lowry’s claims obvious. The board erred in holding otherwise. Claims 1 through 19 are, as a whole, not obvious in light of Kumpati.

Because Kumpati does not contain all limitations of claims 20 through 29, the board erred in holding these claims anticipated by Kumpati. Therefore, this court reverses the § 102 rejection of claims 20 through 29.

Conclusion

The board erred by denying patentable weight to Lowry’s data structure limitations. This court reverses the board’s determination that claims 1 through 19 are obvious. This court also reverses the board’s decision that claims 20 through 29 are anticipated under § 102.

Notes

1. The PTO’s position before the Lowry decision was that a data structure is like an empty glass into which you pour water (data) when you want to or like a blank sheet of paper on which you can write or print whatever data is appropriate.

Is that a § 101 argument or a § 103 argument?

2. The PTO unsuccessfully sought rehearing en banc in Lowry. See Towel. The PTO also tried to persuade the Solicitor General to file a certiorari petition, but was turned down on grounds that “this is not the right case to take up.” After that, the PTO issued the software guidelines referred to in chapter 8.

3. The specific rejection the court addresses here is a § 103 rejection. The rejection is that no weight for § 103 purposes will be given to the identity of the information imprinted on a substrate when the only difference between the alleged “new” article and the prior art is the identity of the information. According to the Gulack decision, the new information must interact with the substrate in a new and unobvious way for the article to be non–obvious.

The Lowry court said:

The printed matter cases have no factual relevance where the invention as defined by the claims requires that the information be processed not by the mind but by a machine, the computer. Lowry's data structures, which according to Lowry greatly facilitate data management by data processing systems, are processed by a machine.

Is that statement too broad? How does it apply to machine-readable piano rolls, music CDs, and videotaped performances?

At least one of the prior printed matter cases involved a machine-readable product. In In re Jones, 373 F.2d 1007 (CCPA 1967), the inventor imprinted markings on a disk — successive opaque and transparent regions — so that light would or would not pass through the disk, depending on the angle of rotation of the disk. That permitted analog-to-digital conversion of the angle of rotation. The court held that the imprinted information functionally cooperated with the disk, and that therefore the combination was patentable. Had such functional cooperation been absent, the imprinted disk would have been unpatentable printed matter rather than patentable printed matter. (Alternatively, of course, one can use the term “printed matter” to mean only unpatentable subject matter, and then by definition things like the patentable imprinted markings of the Jones case are not printed matter. What are they?)

4. The printed matter rule effectively served as a rule against patents on information as such. How the information was readable was not the point. If every element of a claim is old and conventional, if all elements cooperate in an old, conventional manner, and if the only thing novel in the whole claim is the identity of the information, then a patent on that combination of elements amounts to a patent on the new information. That was the point of the printed matter rule.

Did Lowry represent a case in which a patent was sought on information as such? What was the information? What did the court say? Or was Lowry a case in which a patent was sought on a particular way of arranging a particular kind of information, although the particular information expression was not claimed? Does that matter in regard to the purpose or policy of the printed matter rule?

5. The court states, “Lowry does not seek to patent the Attributive data model in the abstract.” Instead: “More than mere abstraction, the data structures are specific electrical or magnetic structural elements in a memory.” What does that mean? Is it more than a reference to 1s and 0s encoded in a semiconductor memory device (e.g., a DRAM chip providing a computer with RAM)?

6. The court holds that the PTO did not establish a prima facie case of obviousness. The court says that to do that the PTO would have needed to establish that the ADOs, as claimed, “lack a new and nonobvious functional relationship with the memory.” How should the PTO have done this? For example, suppose that hypothetical applicant Alexander G. Bell proposes representing addresses and telephone numbers on a display screen in two modes — (1) alphabetical by name of subscriber and (2) organized by street address of subscriber. The user uses Alt-X to toggle between them. How would the PTO establish that this system lacks a functional relationship with the memory? (Never mind the new and nonobvious part. Assume that the Alt-X toggle supplies that.)

Given the reasoning of In re Epstein and the concurrence in that case, why should the PTO have to establish absence of a functional relationship instead of the applicant at least identifying it and perhaps establishing that the relationship is functional? (Perhaps even explaining also how the functional relationship is new and nonobvious?) But what of the word “unless” at the beginning of § 102?

7. In the telephone number hypothetical of the preceding note, does the organization system enable more efficient retrieval of a telephone number in response to a query? Does it facilitate addition, deletion, and modification of information as to telephone listings? In sum does it perform a function? How is that different from any other organizing principle for data? Do all organizing principles for data satisfy the Gulack test?

8. Compare Lowry’s discussion of Kumpati with Johnston’s discussion of Dirks and the banking industry’s use of data processing systems.

9. For an example of human-readable printed matter, see 1998 U.S. Pat. 5,732,464 (method of informing users how to configure disc drive by putting label on shield). (The product was highly successful commercially and was marketed under the name SeaShieldTM.) Is there interaction between substrate and information? What is it?

You can view the text of the patent by using this link or this second link (PDF image file). The following quotations are from the detailed description section of the specification. As you read them, ask yourself why the draftsman of the specification chose this particular language. (Italics have been added here for pedagogic purposes.)

A central feature of the invention is the co-action and cooperation between the shield and the kind of information placed on it. The shield thus acts both as a shield and as a substrate for information concerning the shielded product, such as installation and system configuration information. These two functions are combined to provide added product reliability and user convenience, which would not be available absent the combination provided by the invention. As described in more detail hereinafter, the combination provided in the invention and resulting functional interaction between the shield/substrate and the information imprinted thereon makes it possible to overcome problems, difficulties, and inconvenience previously encountered in handling, installing, and using disc drive assemblies and other static-sensitive electronic products.

It should be understood that the inventor does not assert novelty and nonobviousness of the specific printed matter on the substrate, nor novelty and unobviousness of the particular anti-static shielding technology used here. The inventor regards his invention to be the combination of this kind of printed matter and this kind of substrate (an anti-static shield) for use in facilitating installation and use of disc drive assemblies and similar products which both need anti-static shielding and need the provision of instructive information material in a manner such that installers (who may be consumer end users) can easily and conveniently install and use the products. In short, the invention is the provision of a novel and nonobvious functional relationship between the substrate (which is also a shield for a printed circuit board for a disc drive or similar product) and the information imprinted on it, in order to accomplish a useful result in the technological field of installation and use of disc drives and similar products.

During prosecution, what cases do you suppose the patent solicitor kept harping on in response to the Examiner's objections against allowing a patent?

How is this combination of elements different from that of the Rubber-Tip Pencil Case discussed in connection with Benson?



Link to chapter 10

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