The Three Types of Abstract Ideas

Abstract

Since the Supreme Court's announcement of the Alice-Mayo patent eligibility test, the Federal Circuit has issued over 100 precedential decisions applying its principles. This jurisprudence has created a clear taxonomy of what is and is not eligible for patenting, and largely restores eligibility law as it existed before the CCPA began uprooting it in the 1970s. To the extent that there is some confusion in the labels being used, it is because Alice-Mayo's overly concise formulation forces the courts to place three fundamentally different eligibility limits under the common heading "abstract ideas." The first category of "abstract ideas" reflects how the term was used during the 19th and 20th centuries: it denotes scientific principles claimed in the abstract, without regard to a practical application. The second category of "abstract ideas" was created in 2010 by the Bilski decision: it describes business methods and other sociological innovations. An invention in this category is inherently ineligible--it cannot be patented even if it is novel and nonobvious, fully described, and practically applied. This category of "abstract ideas" has come to encompass economic practices, methods of data display and content selection, fraud prevention, and games and human conditioning. The third category of "abstract ideas" restores the courts' old "function of a machine" test, which holds that even a patent in a technological field must claim means and steps rather than just results, effects, or field of use. This test, although controversial with contemporary commentators, has deep roots going back a century and a half in the Supreme Court's jurisprudence. Two areas of eligibility law remain problematic. The categorical exclusion of medical diagnostics from patent protection is a direct outgrowth of the 1948 Funk Brothers decision, which held that when an invention is grounded in a new scientific discovery the law requires the discovery to be assumed to have already been known in the art. Funk Bros. is irreconcilable with the century of case law that preceded it, which all recognized that practical applications of scientific discoveries can be patented. Finally, the very recent revival of the mental steps doctrine has received little attention or analysis. This test has its origins in 1950s court of appeals decisions that themselves lacked any substantial legal foundation or compelling reasoning. If the old mental steps test (and its close cousin, the ban on claiming "algorithms") were brought fully back to life, then all computer operations and a host of useful industrial processes would become ineligible subject matter.

Keywords: Patent Eligibility, Abstract Ideas, Business Methods, Function of a Machine, Mental Steps, Medical Diagnostics, Alice/Mayo

JEL Classification: 034