In re Ferguson (Fed. Cir. 2009)
Scott Harris has been discussed several times on Patently-O. Harris is a former Fish & Richardson partner. Fish handles the most patent litigation of any firm in the country. In addition to being a patent attorney, Harris is an inventor. He has contracted with the plaintiffs firm Niro Scavone in several actions to enforce patents against Google and other companies. Harris is one of the named inventors of the Ferguson application and he handled the [futile] appeal.
The claimed invention focuses on a "method of marketing a product" and a "paradigm for marketing software." These claims focus on methods and structures for operating a business.
Methods Under Bilski: Claim 1 reads as follows:
A method of marketing a product, comprising:
developing a shared marketing force, said shared marketing force including at least marketing channels, which enable marketing a number of related products;
using said shared marketing force to market a plurality of different products that are made by a plurality of different autonomous producing company, so that different autonomous companies, having different ownerships, respectively produce said related products;
obtaining a share of total profits from each of said plurality of different autonomous producing companies in return for said using; and
obtaining an exclusive right to market each of said plurality of products in return for said using.
Under Bilski, this case is open and shut. The claim is not even arguably tied to a machine -- especially under the Nuijten construction of machine to be a "concrete thing, consisting of parts, or of certain devices and combination of devices [including] every mechanical device or combination of mechanical powers and devices to perform some function and produce a certain effect or result." (Quoting Burr v. Duryee, 68 U.S. (1 Wall.) 531, 570 (1863)). Thus, the 1863 touchability definition of machine appears to hold weight. On the second Bilski prong, the claim does not require transformation of any article into a different state or thing. The only transformation is that of legal rights and organizational relationships that were explicitly excluded in the Bilski decision: "transformations or manipulations simply of public or private legal obligations or relationships, business risks, or other such abstractions cannot meet the test because they are not physical objects or substances, and they are not representative of physical objects or substances.”
Harris asked the court to consider a different test of patentable subject matter: “Does the claimed subject matter require that the product or process has more than a scintilla of interaction with the real world in a specific way?” The CAFC panel rejected that proposal primarily based on the precedential value of Bilski: "In light of this court’s clear statements that the “sole,” “definitive,” “applicable,” “governing,” and “proper” test for a process claim under § 101 is the Supreme Court’s machine-or-transformation test, see Bilski, passim, we are reluctant to consider Applicants’ proposed test." The court went on to determine that the "scintilla" test would create too much ambiguity as well.
Non Method Claims: The application also included claims directed to a "paradigm for marketing software" made up of a marketing company that markets software in return for a contingent share of income. Although "instructive," the Federal Circuit did not directly follow Bilski. Rather, the court looked to determine whether the claimed paradigm fit within one of the four statutory classes listed in Section 101:
Inventions Patentable: "... any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof..."
In a gentle Koan, the Court stated that it "need not resolve the particular class of statutory subject matter into which Applicants' paradigm claims fall, [however], the claims must satisfy at least one category." In fact, the court did attempt to resolve the particular class, but was unable to fit the paradigm claim into any of the four.
Applicants’ paradigm claims are not directed to processes, as “no act or series of acts” is required. Nuijten, 500 F.3d at 1355. Applicants do not argue otherwise. Applicants’ marketing company paradigm is also not a manufacture, because although a marketing company may own or produce tangible articles or commodities, it clearly cannot itself be an “‘article’ resulting from the process of manufacture.” Nuijten, 500 F.3d at 1356. Again, Applicants do not argue otherwise. And Applicants’ marketing company paradigm is certainly not a composition of matter. Applicants do not argue otherwise.
Again applying the touchability notion of machine, the Court also rejected the notion that the company paradigm could be a machine:
Applicants do assert, however, that “[a] company is a physical thing, and as such analogous to a machine.” But the paradigm claims do not recite “a concrete thing, consisting of parts, or of certain devices and combination of devices,” Nuijtent, and as Applicants conceded during oral argument, “you cannot touch the company.”
Ending in a flourish, the court found that in fact, the Ferguson paradigm claims are "drawn quite literally to the paradigmatic abstract idea." (quoting Warmerdam).
Judge Newman offers a poignant concurring opinion.