NEW USES FOR PATENT UTILITY Michael Risch Contents Introduction ............................................................................................................. 1 I. Understanding Utility ......................................................................................... 5 A. Three Categories of Utility ......................................................................... 5 1. Operable Usefulness .......................................................................... 6 2. Practical Usefulness ........................................................................... 6 3. Commercial Usefulness ..................................................................... 7 B. Measuring Usefulness ................................................................................. 8 1. Quantity v. Category ......................................................................... 8 2. Timing is Important ........................................................................... 9 II. Usefulness and Novelty ...................................................................................... 10 III. Usefulness and Patentable Subject Matter ........................................................ 12 A. Usefulness of Abstract Ideas ....................................................................... 13 B. Laws of Nature ............................................................................................ 15 C. Natural Products .......................................................................................... 15 D. Books, Music, and “Ordered Information” ................................................. 17 IV. Usefulness and Obviousness ............................................................................. 21 A. Operable Usefulness and Obviousness ....................................................... 23 B. Practical Usefulness and Obviousness ........................................................ 25 C. Commercial Usefulness and Obviousness .................................................. 26 D. Application .................................................................................................. 27 V. Usefulness and Enablement ............................................................................... 28 A. Usefulness and “How to Use” ..................................................................... 29 1. Practical Utility .................................................................................. 29 2. Operability ......................................................................................... 31 3. Distinguishing Operability, Practicality, and “How to Use” ............. 32 4. Usefulness and “How to Make” ........................................................ 34 B. Usefulness and Claim Scope ....................................................................... 36 VI. Usefulness and Patent Reform .......................................................................... 39 A. Usefulness and Damages ............................................................................ 39 B. Usefulness and First-to-File ........................................................................ 41 Conclusion .............................................................................................................. 43 NEW USES FOR PATENT UTILITY Michael Risch* INTRODUCTION For 220 years, the Patent Act has required patentable inventions to be “new and useful.”1 For almost as long, courts have struggled with doctrinal questions – questions posed more by policy goals than by statutory gaps. The Supreme Court‟s recent opinion in Bilski v. Kappos2 is the most recent example. There, the Court struggled to determine whether a patent eligible “process” under 35 U.S.C. §1013 encompasses methods of doing business. The controversy was not so much that “process” was insolubly ambiguous, because all nine Justices agreed that the generally accepted definition of process is incredibly broad. Instead, the court considered whether courts should reign in this breadth to exclude business methods. Four concurring justices would have banned business methods outright as a matter of history and policy. The majority ruled that business methods might be a patentable “process,” but that Bilski‟s method was too abstract. The irony is that the majority purported to strictly apply the statutory language even though no abstractness exception appears in the statute. The Bilski Court leaves many doctrinal questions, such as how one should determine when a method is too abstract, and whether there should be other (or any) unwritten patent eligibility exceptions. One patent examiner memorably describes the uncertainty: “I'll tell you what, I wish I could write 101 rejections with as little supporting analysis as the Supreme Court did in the Bilski decision. A little discussion of precedential caselaw[], some hand-waving, and the conclusion that the claims at issue are drawn to an abstract idea.”4 * ©2010 Michael Risch, Associate Professor of Law, Villanova University School of Law. The author thanks Tun-Jen Chiang, Colleen Chien, Kevin Collins, Dennis Crouch, John Duffy, Jeanne Fromer, Eric Goldman, Anne Lofaso, Tyler Ochoa, Ted Sichelman, David Schwartz, participants of the Santa Clara Patent Scholars Colloquium, participants in the Villanova Junior Faculty Workshop, and several anonymous peer reviewers. Valuable research assistance was provided by Thomas Huycke and Jenny Maxey. 1 35 U.S.C. §101 (2000) (“Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor…”). 2 561 U.S. __ (2010). 3 Supra, note 1. 4 Bilski Fallout, http://just-n-examiner.livejournal.com/44111.html (June 30, 2010). The quote continues: “Actually, it didn't even seem like a conclusion, it very much seemed as if the decision that the claims were drawn to an abstract idea was the starting point of the 27-Jul-10] New Uses for Patent Utility 2 There are many principled ways to make headway through doctrinal thickets like that presented by Bilski. Some look to economic analysis, others to natural rights, while still others focus primarily on patentability criteria such as newness and disclosure. One helpful overarching principle that has escaped attention is utility – the usefulness of the invention. This article shows how usefulness can provide a principled approach to resolve longstanding policy-based doctrinal questions, resolve close questions of patentability, explain existing rules, or provide meaning to vague requirements. To be sure, usefulness does not answer every question, and in some cases can only provide guidance rather than resolution. Even so, this article presents the first comprehensive illustration of how difficult, fundamental questions become answerable when viewed through the lens of usefulness. Usefulness and the traditional patent utility requirement are technically distinct. Usefulness refers generally to an invention‟s benefits, which might vary by type, quantity, or timing. Usefulness can mean many things, such as how an invention operates, the practical benefits it provides to the public, or its effect on commercial markets such as the supply or demand for a particular product. A subset of usefulness is the traditional patent utility requirement: because patents must be “new and useful,” they must show some usefulness. This article calls the traditional utility requirement “eligibility- usefulness.” The level of eligibility-usefulness currently required is extremely low – the invention need only operate as described and potentially provide some de minimis public benefit. Courts and commentators frequently call eligibility-usefulness “utility” as shorthand. Because this article examines usefulness for more than just eligibility, the term “utility” is treated throughout as meaning usefulness generally, and not just traditional eligibility-usefulness. This article introduces “input-usefulness,” as opposed to “eligibility- usefulness.” Input-usefulness more generally considers all types of an invention‟s benefits, as well as the amount and timing of those benefits. The way that input-usefulness informs patent policy may be quite different than traditional minimal eligibility-usefulness requirement. Eligibility-usefulness considers only two types of usefulness, only at the time of invention, and never by amount. Input-usefulness is unbounded, allowing for a more generalized consideration of an invention‟s benefits. For example, input-usefulness could help lower courts determine whether a claim is abstract as required by Bilski. In Bilski, the representative claim involved the steps of initiating commodities transactions at one price, Court's deliberations. What that means, unfortunately, is that there was no analysis of how they reached that conclusion, and I really would like to have seen that type of analysis.”). 27-Jul-10] New Uses for Patent Utility 3 identifying others who might transact at a different price, and initiating transactions at that price. This, the Supreme Court ruled, was the abstract idea of hedging and thus unpatentable. Principled support for the Court‟s finding, however, is not so clear. The term abstract means generalized as opposed to concrete and specific.5 But Bilski‟s method for trading in commodities requires three specific and concrete steps. It is certainly no less specific and concrete than a general method for making alcohol by mixing molasses and water,6