This article on ‘Landmark cases regulating patents in the US‘ was written by Rishabh Tyagi an intern at Legal Upanishad.
This article deals with the case laws which molded the domain of law related to patents in the United States. The system that is in work in the United States in relation to patent infringement, registration, disputes, etc. is considered to be among the most efficacious systems. The perception regarding the patents changed due to a number of major and a few minor judgments and the subsequent changes in the statutory laws. Few of the cases have had such an impact that the patent-granting mechanism in the United States became very reliable and the simultaneous evolution has made the system reach near perfection.
The areas that changed in lieu of such judgments include- voidability or invalidity of the patent, cases where a decree could or couldn’t be issued by the Court, differentiation between reconstruction and fixing of a patented product, and the concept of patent exhaustion and its scope.
What is patentable and what is not is lucidly mentioned and defined under the US patent law by the United States Patent and Trademark Office (USPTO). Section 101 of the Act (35 U.S.C. 101) deals with the eligibility to fulfill the criteria for getting an invention patented. Under the said section, it stated that the patent can be obtained for new and practical manufacturing processes, machines, processes, and unique compositions of matter. Patenting of laws of nature, vague ideas, and naturally occurring phenomena is prohibited by the section.
In the past two decades, patents in relation to software and IT have come under greater probe in the United States and the path hasn’t been smooth. The reason is that there have been a number of unconventional cases in relation to this domain. The companies due to a plethora of changes time and again filed to get patents for their products but the claims have been put on hold as is seen in the decisions of the Supreme Court.
In present times, software-related innovations are patentable if they are unique and confinable to a machine. The core idea or focal point of the patentability requirements for any new invention is its obviousness or non-obviousness. The same is the situation with the software. It must provide some significant improvement over the prior versions and shouldn’t be something that can be done on a regular computer.
Major Case Laws
- Diamond v. Chakrabarty (1980)
This dealt with the issue of whether genetically modified organisms can be patented or not. The respondent was the creator of the bacterium which was derived from the Pseudomonas genus. The bacteria were used in the oil spills for treatment. The respondent worked for a company named General Electric. At the time under Section 101 living things were not considered to be patentable so when the company applied for the patent it wasn’t granted.
On appeal, the Court of Customs and Patent Appeals ruled in favour of the respondent. Then the decision was appealed by the appellant (Commissioner of Patents and Trademarks) in the Supreme Court. The Court ruled in favour of the respondent stating that a live microorganism made by humans is patentable under section 101. Also, the microorganism in contention in the case covers the criteria of the composition of matter and manufacture as provided under the Act.
- State Street Bank vs. Signature Financial (1998)
The case law made the business models eligible to be patentable. It was stated that under section 101 such innovation was patentable as the data transformation, by a number of calculations by a machine to calculate a final share price, is a practical application of the formula as it produces a concrete and tangible result. It was further held that software is a patentable subject even though there is no tangible or material change in an object. The result of this decision was such that there was a massive increase in the number of applications in the United States for patenting the business models.
- Lab Corp of America v. Metabolite Inc. (2006)
This case was related to the patentability of scientific principles. The facts of the case were that the respondent sued the appellant for the infringement of a patent covering diagnostic tests. The jury ordered the appellant to pay 4.7 million dollars as damages and this was upheld. The appellant argued that the processes used were natural and patent should not have been granted for the same. An appeal was made to the Supreme Court but the case was eventually dismissed.
During the hearings, a contention was raised by Metabolite that overturning the patent would lead to the invalidity of all such patents as it would be said that the inventor merely found some chemical that reacted with the human body in line with the principles of chemistry.
- Mayo vs. Prometheus (2012)
The untied knots left in the Metabolite case were dealt with in this case. The use of natural laws and their utilization or subsequent implementation is regulated by the precedent set by this case. In this case, the Supreme Court bench in a consentient decision held that the methods of giving drugs to a patient, measuring the metabolites of a drug, and with sufficient knowledge of the consequences, deciding to increase or decrease the drug dosage are not eligible to be patented. Such things according to the Court were basic and fundamental principles of the field and granting an exclusive patent would be against the spirit of granting patents.
It was made clear in the judgment of the case that the use of natural law can be patented only if it is applied rather than just pre-empting it. This means that the claim should not be something involving steps that are merely conventional or routine.
- Enfish, LLC v. Microsoft Corp. (2016)
In this case, the patent eligibility was upheld by the Court of Appeals. The claim for the patent in contention, in this case, was related to a logical model for a database. The appellant’s logical model was quite different from the conventional usage of such a model. The respondent was sued and the district court held the claim to be abstract and invalidated the patent.
On appeal, however, the Federal Circuit keeping in mind the judgment of the Alice Corp. v. CLS Bank held that the claim was not abstract as the usage of the logical model in the case provided for a specific type of improvement to the way a system operates. A specific functionality was the target of the method used by the appellant and it showed improvements in the computer system.
- Quanta Computer, Inc v. LG Electronics, Inc (2008)
The validity of the patent exhaustion doctrine was upheld by the US Supreme Court in the decision of this. Patent exhaustion means that when the owner of a patent sells the patented product to the buyer of such product, the buyer is free to use the product without the headache of getting sued for the infringement of the patent by the owner.
In a nutshell, there was an agreement between LG (owner of the patent here) and Intel which stated that the latter shall give its customer notice that the patent license does not allow or extend to combine a microprocessor made by intel with any other product. Also, it was stated that such a breach won’t affect the agreement. So, from the language of the agreement, it was evident that LG wanted Intel’s customers to allow such infringement only if royalty was paid to get such right.
Quanta Computers (appellant) got into an agreement with Intel to use microprocessors to manufacture computers. Then a suit was filed by LG. District Court ruled in favour of the appellant but on appeal, the decision was overturned. Finally on appeal to the Supreme Court held that the concept of patent exhaustion was applicable to this case. The decision consequently supports the competitive atmosphere in the market.
The aforementioned case laws are in no way exhaustive, but they do provide an idea as to how the trajectory of patent regulations has changed by the judgments of the Courts and become one of the most reliable and efficient in actual practice. The basic requirement for a claim to become patentable is that it should not be something very obvious and abstract. The more unique and useful it is the better the chances of getting a patent for such an invention. It is important for an owner to properly define what is unique about his/her invention and what it improves upon when it is used in a pragmatic way.
The domain of software technology has seen a significant improvement in the chances of getting a patent granted. Such changes are owed to the important judgments that have been given in the past and they continue to come up as these decisions are the major factor that molds the entire structure and even the statutory laws for regulation are made keeping in mind such decisions and demands of the market.
- [Greyb]. (9 December 2022). 14 Famous Patent Infringement Cases that changed the US Patent Law. Retrieved: https://www.greyb.com/blog/famous-patent-infringement-cases/
- Dhruv Kaushik. (9 December 2022). Top Landmark Cases that have led to a Robust Patent Prosecution System in the U.S. Retrieved: https://sagaciousresearch.com/blog/top-landmark-cases-that-led-to-robust-patent-prosecution-system-in-the-us/
- [Bitlaw]. (9 December 2022). IMPORTANT PATENT CASE LAW DECISIONS. Retrieved: https://www.bitlaw.com/source/cases/patent/index.html