Let’s get one thing straight: neither the Federal Circuit nor the Supreme Court has any interest in overseeing the destruction of the patent system. Not only will this decision not overthrow the patent regime, it won’t affect even a discernible percentage of existing patents (with one possible exception discussed at the end).

If the sky is not falling, what then? What did the Supreme Court really do? The key to understanding the real gist of the opinion lies in Justice Breyer’s discussion of Diehr and Flook, and the difference between a specific diagnostic test and a general diagnostic principle. Spoiler alert: the former is still patentable, while the latter is not. To put it another way, you can legitimately claim a specific diagnostic test, but you cannot claim it so broadly that it precludes everyone else from using the theoretical or scientific principle that underlies the test.

In Diehr, the Court upheld a patent that used a law of nature (a mathematical equation) within a larger, multi-step process of treating rubber. The mathematical equation informed the process, but there were additional steps that were necessary and unique to the claimed process. As a result, the unpatentable law of nature was appropriately integrated into a valid invention.

In Flook, the inventor similarly used a law of nature (a novel mathematical algorithm) within a larger process of adjusting alarm limits during a catalytic conversion of hydrocarbons. The difference was that the inventor then attempted to claim the naked algorithm, divorced from any aspect of the alarm system. None of the other steps in the process served to limit the challenged claim, and so the Court held the patent invalid.

The message is that, when a law of nature is employed by an invention, it must play an ancillary role to other aspects of the invention, or at least have a strong supporting cast. It cannot be a solo act.

But how do we know what constitutes a “law of nature”? The cynical view, expressed by some pessimists, is that it is a tautological term for anything that a judge “feels” should belong in the public domain, either because it is “as old as time” or because it is “too big to patent.” The first category is meaningless, they say, because anything that has been known for that long is already in the public domain, and does not require a separate doctrine. Meanwhile, all newly discovered principles are then pushed into the latter camp, which provokes anger because it seems like an arbitrary label set up to disqualify legitimate inventions.

A better view is that a law of nature is a principle that has no inherent utility on its own. A mathematical equation or statistical correlation is not something that one uses without it being incorporated into something else that is tangible. And after all, the purpose of granting patent exclusivity is to reward the development of useful products and processes. The problem with Mayo’s patent was that it failed to contribute anything beyond a pure recitation of the correlation of therapeutic dosage. The fact that the correlation was previously undiscovered did not mean it had patentable utility. On the other hand, a device or diagnostic test that incorporates the correlation, and makes it useable in a specific and applied manner, is fully patentable.

Looking ahead, what developments can we expect to see in the wake of Mayo? The most immediate impact has been the remand of Association of Molecular Pathology v. Myriad Genetics to the Federal Circuit. But that remand was rash and ill-considered. Mayo asks whether any real utility has been added beyond a pure restatement of a law of nature, whereas Myriad’s patents claim tangible, isolated molecules, which have long received idiosyncratic treatment as patentable products. Based on the reasoning of the Federal Circuit’s first opinion in that case, which depended heavily on the specifics of the chemical isolation process as well as the longstanding PTO practice of granting gene patents, it seems highly unlikely that Mayo could have much if any effect on the outcome. The Federal Circuit has already made its determination; it is now up to the Supreme Court to respond.

Looking more generally to the medical diagnostics industry, we might see some increase in the use of trade secrets to protect new diagnostic tests. To take one example, Myriad already conducts all its diagnostic tests within its own proprietary labs. That would be a simple way to prevent competitors from reverse engineering a commercialized diagnostic test. Such efforts may not always be practicable, though, depending on regulatory disclosure requirements, as well as the cost of building and maintaining proprietary labs.

The most intriguing development may be in the software industry, rather than in the medical diagnostics industry. Currently, software patents are too trivial to obtain because there is virtually no minimum standard for what must be disclosed. But Mayo, as extrapolated to software patents, could be interpreted as stating that a disclosure of an algorithm, along with a simple instruction to apply the algorithm to a computer, is not patentable subject matter. Either actual code or pseudocode would be needed to render pure software into a patentable invention. (Less might be needed if the use of the algorithm were attached to a limiting application such as a printer or GPS device.) Attempts to claim exclusive ownership over broad swaths of the internet would become a thing of the past. If so, then Mayo could earn a worthy legacy within the software industry, by offering a fresh path out of a patent thicket that nobody wants.

If anyone is interested in reading the draft before (or after), you can find it at <http://wendy.seltzer.org/drafts/seltzer-softwarepatent.pdf>
Software Patents and/or Software Development

Abstract:
Many contemporary treatments of the patent system begin by recognizing that patents may introduce costs and inefficiencies, but conclude that since patents serve a necessary function as incentives to innovate, we must bear and mitigate their costs.

In the case of software patents, Wendy challenges the incentive side of the equation: Patents do not provide a useful incentive to innovation in the software industry, because the patent promise ill-suits the engineering and development practices and business strategies of software production.

Even an ideally implemented software patent — well examined, fully disclosed and enabling, properly scoped in light of the prior art — would fail to serve the incentive functions intended by the Constitution, the Patent Act, and standard patent theory.

Bio:
Wendy Seltzer is a Fellow with Yale Law School’s Information Society Project, researching “openness” in intellectual property, innovation, privacy, and free expression online. As a Fellow with Harvard’s Berkman Center for Internet & Society, Wendy founded and leads the Chilling Effects Clearinghouse, helping Internet users to understand their rights in response to cease-and-desist threats. She serves on the Board of Directors of The Tor Project, promoting privacy and anonymity research, education, and technology.

She has taught Intellectual Property, Internet Law, Antitrust, Copyright, and Information Privacy at American University Washington College of Law, Northeastern Law School, and Brooklyn Law School and was a Visiting Fellow with the Oxford Internet Institute, teaching a joint course with the Said Business School, Media Strategies for a Networked World. Previously, she was a staff attorney with online civil liberties group Electronic Frontier Foundation, specializing in intellectual property and First Amendment issues, and a litigator with Kramer Levin Naftalis & Frankel.

Wendy speaks and writes on copyright, patent, privacy, free and open source software, and the public interest online, seeking to improve technology policy in support of user-driven innovation. She has an A.B. from Harvard College and J.D. from Harvard Law School, and occasionally takes a break from legal code to program (Perl and MythTV). She blogs occasionally at http://wendy.seltzer.org/blog/ and http://freedom-to-tinker.com/

We look forward to seeing you there.

“Cato, the Competitive Enterprise Institute, and the Reason Foundation—have submitted an amicus brief in the case of Mayo v. Prometheus. As far as I know, this is the first time any of these think tanks has filed an patent-related amicus brief with the Supreme Court, and it couldn’t have come at a better time. I’m listed as a co-author on the Cato site, but the brief was actually written for us by the brilliant Christina Mulligan at Yale’s Information Society Project.”

More here.

Update, dated 9/19: Christina’s Cato brief got mentioned in Techdirt, as well.