February 1, 2009 (Vol. 29, No. 3)

Innovation Could Be Hampered by “Machine or Transformation

On October 30, 2008, the en banc Federal Circuit issued a decision in In re Bilski. The opinion addresses the eligibility of patent subject matter under 35 U.S.C. §101. Although the claims at issue in Bilski relate to business methods, the court articulates a test for subject matter eligibility that may be applied to claims drawn to biotechnological and medical processes. Companies with inventions in these areas cannot afford to ignore Bilski’s potential effect, both on claim drafting and enforcement actions.

In its majority opinion, the Federal Circuit adopts the “machine or transformation” test for patent eligibility. In this process, an invention will meet the requirements for patentability if (1) it is tied to a particular machine or apparatus, or (2) it transforms a particular article into a different state or thing.

To impart patent eligibility, “the use of a specific machine or transformation of an article must impose meaningful limits on the claim’s scope.” The transformation of an article “must be central to the purpose of the claimed process.” In most cases, merely “gathering data would not constitute a transformation of any article.”

Jeffrey D. Hsi

Elizabeth N. Spar


The claims at issue in Bilski relate to a method of hedging risk in the field of commodities trading. The court characterized the claimed subject matter as a “nontransformative process that encompasses a purely mental process of performing requisite mathematical calculations without the aid of a computer or any other device.” The court also held that the claim would effectively preempt any application of the fundamental concept of hedging and mathematical calculations inherent in hedging.

Implications for Biotechnology

The Federal Circuit acknowledged that the machine or transformation test (and/or its application) may need to be altered or even supplanted in certain instances by the Supreme Court, or even the United States Court of Appeals for the Federal Circuit (CAFC) itself. “Future developments in technology and the sciences may present difficult challenges to the machine or transformation test…we recognize that the Supreme Court may ultimately decide to alter or perhaps set aside this test to accommodate emerging technologies. And we certainly do not rule out the possibility that this court may, in the future, refine or augment the test or how it is applied.”

Although the opinion does not state explicitly that biotechnological processes will be assessed according to the machine or transformation test, the Federal Circuit does not distinguish such processes from the business methods at issue in Bilski

Further, the Federal Circuit’s footnote 26 suggests indirectly that the patentability of certain medical diagnostic process claims could be challenged under Bilski.   The court notes that “of course, a claimed process, wherein all of the process steps may be performed entirely in the human mind, is obviously not tied to any machine and does not transform any article into a different state.”

In Classen Immunotherapies, Inc. v.  Biogen IDEC, Fed. Cir. No. 2006-1634 (December 19, 2008 ) process claims related to risk-assessment of protocols for vaccination followed by immunization were found to be invalid for not meeting either of requirements (1) or (2) under Bilski. The Classen decision is nonprecedential however, and the single paragraph opinion leaves many speculating how to interpret it.

The ultimate effect on biotechnology and medical diagnostics may not become clearer until the Federal Circuit renders decisions in one or more pending cases. In particular:

•   Prometheus Laboratories, Inc. v.  Mayo Collaborative Services, Fed. Cir.  No. 2008–1403, patentability of claims to measuring metabolite levels in patients after administration of a drug to avoid toxic side effects; and

•   Ariad Pharmaceuticals, Inc. v. Eli Lilly & Company, Fed. Cir. No. 2009–1023, patent eligibility of claims relating to methods of inhibiting expression of a gene. 

Life Science Issues

While Bilski was heard en banc, it was not unanimous. Judges Newman, Mayer, and Rader dissented, adding insights relevant to the life sciences industry. Both Judges Newman and Rader argued that innovation would be hampered by the machine or transformation test. Judge Newman appeared to be concerned with the uncertainties created by the decision, noting that “uncertainty is the enemy of innovation.”

Judge Rader specifically addressed the effect on medical science. “Denial of patent protection for this innovation—precisely because of its elegance and simplicity (the chief aims of good science)—would undermine and discourage future research for diagnostic tools.”

Judge Mayer distinguished between business innovation and innovation in pharmaceuticals. “Although patents are not a prerequisite to business innovation, they are of undeniable importance in promoting technological advances. Only patent protection can make the innovator’s substantial investment in development and clinical testing economically rational.”  

Future of Biotech/Medical Claims

The practical effects that the Bilski decision may have on biotechnology and medical diagnosis claims is not yet clear. What is clear are the many unanswered questions the decision poses for such claims. These questions include:

•  When is a process tied to a particular machine or apparatus? 

•  What constitutes a transformation sufficient for such a claim to qualify as patentable subject matter under 35 U.S.C.  §101? 

•  At what point does the use of a specific machine or transformation of an article impose meaningful limits on the claim’s scope so as to impart patent eligibility?

•  What is a transformation that is central to the purpose of the claimed process? 

Claims may be prone to challenges on the basis of 35 U.S.C. §101, not only by examiners in the course of prosecution, but also for issued patents by accused infringers or potential and existing licensees. 

Going forward, a process or method patent application should include claims that either recite a nexus between the process and a machine, or emphasize a transformation step leading to a useful, concrete, and tangible result.

The precise impact of Bilski on biotechnology and medical diagnostic claims remains to be further elucidated by the CAFC, and possibly the U.S. Supreme Court, in the coming months and years. As its nuances are enumerated further, the effects of the application of Bilski’s machine and transformation test on biotechnological and medical diagnosis process claims will become more apparent.

Jeffrey D. Hsi ([email protected]) is a partner and Elizabeth N. Spar is an associate at Edwards Angell Palmer & Dodge. Web: www.eapdlaw.com.

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