Ex parte Lundgren, Appeal No. 2003-2088 (BPAI 2005).
In a landmark decision, the Board of Patent Appeals and Interferences has issued a precedential opinion eliminating the Patent Office procedure of rejecting patents under 35 U.S.C. § 101 as outside of the “technological arts”
Our determination is that there is currently no judicially recognized separate "technological arts" test to determine patent eligible subject matter under § 101. We decline to create one. Therefore, it is apparent that the examiner's rejection can not be sustained.
This decision will once again expand the role of business method patents by freeing them from being tied to a computer or other electronic device. At the same time, this decision widens the gap between the US and many other countries who are still debating patentability of software.
It is unclear at this point whether the PTO solicitor will ask the Federal Circuit to review this case.
The Majority Opinion:
Lundgren had claimed a “method of compensating a manager” that involved several steps of calculating a proper compensation based on performance criteria and then transferring payment to the manager. The examiner rejected the claims arguing that they were “outside the technical arts, namely an economic theory expressed as a mathematical algorithm without the disclosure or suggestion of a computer, automated means, apparatus of any kind, the invention as claimed is found non-statutory.”
A five member panel reviewed this action, and three signed on to the per curiam majority opinion that found the claim to “produce a useful, concrete, tangible result” without being a “law of nature, physical phenomenon or abstract idea.” Regarding the PTO “technological arts” test, the majority found that such a test does not exist under the law.
Rejection reversed, there is no judicially recognized "technological arts" test for patentability.
Dissent by Judge Smith:
Judge Smith dissented, arguing that the “technological arts” standard is simply the modern lexical equivalent to the phrase “useful arts” found in the US Constitution. He then argued that Congress does not have power to pass patent laws that expand beyond those “useful arts.”
While I do not question the power of Congress to pass laws to carry out this mandate, whatever law passed by the Congress cannot be applied in such a manner as to enlarge the constitutional mandate. Thus, any laws passed by the Congress to grant patents should be applied in a manner that is consistent with the constitutional mandate.
The dissent then implicitly calls for the Federal Circuit to review the case and explicitly calls fro Congress to “step in and clarify the limits of 35 U.S.C. § 101.”
Dissent by Judge Barrett:
In a 78 page dissent, Judge Barrett suggests a new test under section 101 that would require some transformation of physical matter.
Link. Read more about Dr. Lundgren.