A Patent Showdown Is Brewing Between the Federal Circuit and the Supreme Court

Since as long ago as the famous case of O’Reilly v. “For aught that we now know some future inventor, in the [1] onward march of science, may discover a mode of writing Morse, the US Supreme Court has disparaged the or printing at a distance by means of the electric or galvanic notion that a patent could be obtained on claims current, without using any part of the process or combination to a “result” or “effect” (inMorse , the printing of set forth in the plaintiff’s specification. His invention may be less complicated – less liable to get out of order – less expensive intelligible characters at a distance). in construction, and in its operation. But yet if it is covered by This principle, while sometimes appearing in different guises, runs this patent the inventor could not use it, nor the public have the true up and through the Supreme Court’s decision in Halliburton Oil benefit of it without the permission of this patentee.”[6] [2] Well Cementing Co. v. Walker, which invalidated a claim reciting a The basic principle recited in Morse, i.e., barring patent claims tuning mechanism that performed the functions of a sound filter. The directed to a result, does not appear to have engendered Federal Circuit, however, has been unwilling to honor the principle controversy within the court. Indeed, the same principle was stated established by these cases, setting up another showdown between in the earlier case of Le Roy v. Tatham.[7] And, it was repeated in the Federal Circuit and Supreme Court, with potentially significant Corning v. Burden,[8] a case decided just three days prior to Morse implications for patentability challenges based on indefiniteness involving a machine for rolling wrought iron “puddle balls.” Although under 35 U.S.C. § 112 and patent eligibility challenges under 35 the claim at issue was ultimately upheld, the court prefaced its U.S.C. § 101. decision by noting that “[i]t is for the discovery or invention of some practicable method or means of producing a beneficial result The Two Strands of Supreme Court or effect, that a patent is granted, and not for the result or effect Cases on Functional Claiming itself.”[9] Two decades later, the court took the law as settled, The Supreme Court’s distaste for purely functional patent claims is explaining that a patent “will not be sustained if the claim is for a manifested in two separate strands of cases. result, the established rule being that the invention, if any, within the meaning of the Patent Act, consists in the means or apparatus The Morse Case and Progeny by which the result is obtained.”[10] The first strand of cases traces back toO’Reilly v. Morse. In The Morse line of cases seems to turn on questions of patent- that case, as the Supreme Court noted, it was “impossible to eligibility – indeed, the Supreme Court cited Morse in the Bilski/ misunderstand the extent of” Morse’s claim, namely: all applications Mayo/Alice trilogy of cases[11] regarding claims that are patent- of electric current in which “the result is the marking or printing ineligible because directed to abstract ideas. intelligible characters, signs, or letters at a distance.”[3] Such a claim to any means by which a “result is accomplished” was “too broad, and not warranted by law.”[4] The court used the analogy of steam- powered cotton gins or boats, noting that no valid claims could have issued for “the right to exclusive use of steam as a motive power for the purpose of producing such effects.”[5] The court grounded its decision in public policy that would not sound unfamiliar to followers of today’s Supreme Court:

[1] 56 U.S. 62 (1854). [7] 55 U.S. 156, 175 (1853) (“A patent is not good for an effect, or the result of a [2] 329 U.S. 1 (1946). certain process” because such patents “would prohibit all other persons from making the same thing by any means whatsoever.”). [3] 56 U.S. at 112. [8] 56 U.S. 252 (1854). [4] Id. at 113. [9] Id. at 268. [5] Id. [10] Fuller v. Yentzer, 94 U.S. 288, 288 (1877). [6] Id. Compare Impression Products, Inc. v. Lexmark International, Inc., 137 S.Ct. 1523, 1532 (2017) (“‘restraint[s] ... [on] further alienation’ after an initial sale ... are [11] Bilski v. Kappos, 561 U.S. 593 (2010); Mayo Collaborative Servs. v. Prometheus ‘obnoxious to the public interest’ ... and extending [] patent rights beyond the first Labs., Inc., 132 U.S. 1289 (2012) Alice Corp. Pty. Ltd. v. CLS Bank International, sale would clog the channels of commerce ... ”) (citations omitted). 134 S. Ct. 2347 (2014). Holland Furniture and Progeny The 1952 Patent Act and the Rule The next strand of cases focuses on the inherent lack of Against Functional Claiming specificity of claims merely describing the function or effect of a Six years after Halliburton, Congress passed the Patent Act of 1952 given machine. (1952 Act), which was the last major revision to the patent statutes In Holland Furniture Co. v. Perkins Glue Co.,[12] the Supreme Court prior to the America Invents Act of 2011. held that a claim that merely “describe[s] a patentable device or Although the 1952 Act’s new provision (35 U.S.C. § 112 para. 6) machine in terms of its function” (here, a claim to a glue “having permitting patent applicants to express their inventions “as a means [13] substantially the properties of animal glue” ) cannot stand. In or step for performing a specified function without the recital of [14] General Electric Co. v. Wabash Appliance Corp., the court held that structure, material, or acts in support” is generally understood to a claim to an incandescent light filament “composed substantially have been precipitated by the Halliburton decision,[23] the 1952 of tungsten and made up mainly of a number of comparatively large Act retained the language requiring the patentee to “particularly grains of such size and contour as to prevent substantial sagging point out and distinctly claim” his invention that is the principal and offsetting” was invalid under 35 U.S.C. § 33 (the predecessor foundation on which the Holland Furniture line of cases discrediting to current § 112(b)) for describing “the function of the grains to the functional claiming rests.[24] Indeed, the relevant language of the [15] exclusion of any structural definition.” According to the court, such so-called “definiteness” requirement has changed little through a claim fails to meet the Patent Act’s directive to “particularly point multiple iterations of the Patent Act over the past 175 years.[25] out and distinctly claim” the subject matter of the invention and is therefore “invalid on its face” as not “sufficiently definite.”[16] Further, the new “means-plus-function” provision did not overturn the Supreme Court’s precedent “outlaw[ing] ... broad ‘ends’ or [17] In United Carbon Co. v. Binney & Smith Co., the court held that function claiming as inconsistent with the purposes of the Patent [18] claims to “substantially pure carbon black” in terms of certain Statute” but only “softened” it.[26] As the Supreme Court itself attributes (“commercially uniform,” and “comparatively small, has said, “Congress enacted § 112 para. 6” as “a targeted cure” rounded, smooth aggregates” with “a spongy or porous interior”) to a “specific problem,” i.e., the “‘means’ claims” invalidated in were “but inaccurate suggestions of the function of the product” the Halliburton case.[27] Section 112 para. 6 allows such claims that “fall afoul of the rule that a patentee may not broaden his but “limit[s]” them to the “actual means shown in the patent” for [19] claims by describing the product in terms of function.” Finally, in performing the function.[28] In short, § 112 para. 6 allows patentees Halliburton Oil Well Cementing Co. v. Walker, the court invalidated to rehabilitate purely functional claims by using the specification a claim reciting a “tuned acoustical means which performs the to provide structure missing from the claims. It does not, however, [20] functions of a sound filter” for describing the invention“ excuse the absence of structure for claims that fail to invoke its in terms of what it will do rather than in terms of its own limited protections. Such claims still fail as a matter of law under [21] physical characteristics.” controlling Supreme Court precedent. The Halliburton court’s formulation of the concern is strikingly similar to that in Morse: “[U]nless frightened from the course of experimentation by broad functional claims like these, inventive genius may evolve many more devices to accomplish the same purpose.”[22] Thus, the Holland Furniture line of cases, while arguably focusing on a different ground of invalidity than the Morse line of cases, echoes the same public interest concerns laid out in Morse.

[12] 277 U.S. 245, 257-258 (1928). [24] Cf. TC Heartland LLC v. Kraft Foods Group Brands LLC, 137 S.Ct. 1514, [13] The full claim read: “28. A glue comprising cassava carbohydrate rendered 1517 (2017) (holding that historic Supreme Court precedents controlled the semifluid by digestion and having substantially the properties of animal glue.” interpretation of a statute where subsequent amendments did not modify the Id. at 250. statute’s meaning). [14] 304 U.S. 364 (1938). [25] The 1836 Patent Act did not explicitly require claims; but, the patentee was required to “particularly specify and point out” the central features of the [15] Id. at 371. invention. Patent Act of 1836, ch. 357, § 6, 5 Stat. 117, 119. The 1870 Patent Act [16] Id. at 368. explicitly required claims; and, a patentee was required to “particularly point out [17] 317 U.S. 228 (1942). and distinctly claim the part, improvement, or combination which he claims as his invention or discovery.” Patent Act of 1870, ch. 230, § 26, 16 Stat. 198, 201 [18] A product with many uses but at the “most extensive of its many uses [was] [] as (later codified at 35 U.S.C. § 33). a binder in automobile tires.” Id. at 229. [26] Amdocs (Isr.) Ltd. v. Openet Telecom Inc., 841 F.3d 1288, 1295 (Fed. Cir. 2016); [19] Id. at 234. see also Ex parte Miyazaki, 89 U.S.P.Q.2d 1207, 1217 (B.P.A.I. 2008) (the [20] Halliburton, 329 U.S. at 7. Halliburton rule “remains viable”); Sanada v. Reynolds, 67 U.S.P.Q. 2d 1459, 2003 [21] Id. at 9. Pat. App. LEXIS 6, at *6 (B.P.A.I. 2003) (same). [22] Id. at 12. [27] Warner-Jenkinson, 520 U.S. at 27. [23] Warner-Jenkinson Co. v. Hilton Davis Chem. Co., 520 U.S. 17, 27 (1997). [28] Id. The Coming Showdown Between the and opining that “[c]laims that fail to recite how a desired goal Federal Circuit and Supreme Court on is accomplished do not recite an inventive concept” under the Supreme Court’s two-step test for patent-eligibility under § 101. Functional or Result-Based Claiming [36] The majority took issue with Judge Reyna’s focus on “means” Although the precise timing and context is not predictable, there are and “ends,” noting that “years ago the Supreme Court [in the a number of signs that a clash between the Federal Circuit and the Halliburton case] outlawed such broad ‘ends’ or function claiming Supreme Court on functional or result-based claiming is inevitable. as inconsistent with the purposes of the Patent Statute” though the rule was “later softened” by the 1952 Act’s addition of 35 U.S.C. First, the Supreme Court’s many recent decisions reversing the § 112 para. 6 (now § 112(f)).[37] The majority found Judge Reyna’s Federal Circuit on patent issues have underscored the ongoing paradigm to be a flawed, though “creative,” use of “well-known [29] vitality of historic Supreme Court patent law precedent. If the doctrine,”[38] perhaps signaling further dispute regarding the Federal Circuit is called to, but persistently fails to, engage with applicability of Supreme Court precedent prohibiting results-based Supreme Court cases such as Halliburton, that in and of itself will claiming to both § 101 and § 112. likely lead inexorably to Supreme Court review. Second, at least one Federal Circuit judge, Judge Jimmie Reyna, Conclusion has suggested revisiting the Supreme Court precedent on functional Long-standing Supreme Court precedent prohibits inventions claiming. In Williamson v. Citrix Online LLC,[30] a case concerning claimed purely in terms of the result or effect they produce. Yet, the the standards for determining when claim language not written Federal Circuit has not come to grips with this precedent, despite it using the word “means” should be governed by Section 112, para. having been raised in several recent cases in which it arguably could 6, Judge Reyna noted that there was foundation in Halliburton for have been applied. Judge Reyna’s separate opinions in Williamson holding that “all claims that do not recite sufficient structure for and Amdocs, however, may lead the full court to a more searching performing the recited function” are invalid and that “the continued examination of these precedents, including analysis of the extent viability of this rationale, and its impact on how this court applies to which the principle embodied by the precedents overlaps with § 112, para. 6 merits attention.”[31] At least two cert petitions in the Sections 101 and 112 and whether the principle’s application can be last two years have referenced Judge Reyna’s opinion in Williamson reconciled with the Federal Circuit’s evolving jurisprudence under in support of requests for Supreme Court review of Federal Circuit those sections. If the Federal Circuit does not act, the Supreme decisions permitting claims that were allegedly impermissible under Court is bound to intercede at some point, most likely in a case in the rule against functional claiming.[32] which the public policy concerns of failing to apply the principle Finally, there appears to be an increasing convergence of reasoning would be glaring. Whether that case is Amdocs, in which a petition between the lines of cases under § 101 and § 112. Several recent for certiorari is currently pending, or some future case, it seems decisions on § 101 challenges echo reasoning from the Supreme inevitable that the Supreme Court will weigh in on this Court’s historic jurisprudence concerning the illegitimacy of important issue. results-based claiming.[33] For example, the panel in Electric Power This article was originally published in October 2017 in Law360. Group LLC v. Alstom emphasized the result-oriented nature of the claims in that case (systems and methods for performing real-time Contact performance monitoring of an electric power grid), finding that “claims, defining a desirable ... result and not limited to inventive Bryan A. Schwartz [34] means of achieving the result, fail under § 101.” Principal, Cleveland Recently, in Amdocs (Isr.) Ltd. v. Openet Telecom Inc., Judge T +1 216 479 8009 Reyna’s dissenting opinion invoked the Morse case as support for E [email protected] “reserv[ing] patent protection for means rather than for ends”[35]

[29] See e.g., TC Heartland, 137 S.Ct. at 1520; Lexmark, 137 S.Ct. at 1532-33 (reciting [33] At least one commentator has found this convergence troubling. See Lewis Supreme Court precedent on patent exhaustion stemming from the English rule Hudnell, “The Post-Alice Blend of Eligibility and Patentability,” Law360 (July 26, against limiting the alienation of chattels). 2017) (“The Federal Circuit added further uncertainty to the [§ 101] inquiry by [30] 792 F.3d 1339 (Fed. Cir. 2015) (en banc in part). frequently applying § 112 considerations to its eligibility determinations.”). [31] Id. at 1358 (Reyna, J., concurring in part). [34] 830 F.3d 1350, 1351 (Fed. Cir. 2016). [32] Cox. Communs., Inc. v. Sprint Commun. Co. LP, No. 16-1106, 2017 U.S. S. Ct. [35] 841 F.3d 1288, 1309 (Fed. Cir. 2016) (Reyna, J., dissenting). Briefs LEXIS 924, at *63 (Mar. 13, 2017); Nautilus, Inc. v. Biosig Instruments, Inc., [36] Id. at 1311. No. 15-561, 2015 U.S. S. Ct. Briefs LEXIS 3876, at *30 (Oct. 30, 2015). [37] Id. at 1295 (majority opinion). [38] Id.

The contents of this update are not intended to serve as legal advice related to individual situations or as legal opinions concerning such situations, nor should they be considered a substitute for taking legal advice.

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