Bilski applied to kill another patent application

In Re Ferguson (Federal Circuit, March 6, 2009)

The Federal Circuit made another decision applying Bilski, this time from an appeal from the PTO's BPAI. Here, there were two claims at issue:

A method of marketing a product, comprising:
developing a shared marketing force, said shared
marketing force including at least marketing channels, which enable marketing a
number of related products;

using said shared marketing force to market a
plurality of different products that are made by a plurality of different
autonomous producing company, so that different autonomous companies, having
different ownerships, respectively produce said related products;

obtaining a share of total profits from each of said
plurality of different autonomous producing companies in return for said using;
and

obtaining an exclusive right to market each of said
plurality of products in return for said using.

A paradigm for marketing software, comprising:
a marketing company that markets software from a
plurality of different independent and autonomous software companies, and
carries out and pays for operations associated with marketing of software for
all of said different independent and autonomous software companies, in return
for a contingent share of a total income stream from marketing of the software
from all of said software companies, while allowing all of said software
companies to retain their autonomy.

The BPAI reversed the Examiner's 102 and 103 rejection and entered a new ground of rejection under 101 applying Bilski. The Federal Circuit held that the method claim although a process failed the machine or transformation test laid out in Bilski. The stated, that the method claim is "not tied to any particular machine or apparatus." The Federal Circuit defined what counts as a machine relying upon In re Nujiten, "As this court recently stated in In re Nuijten, 500 F.3d 1346 (Fed. Cir. 2007), a machine is a “‘concrete thing, consisting of parts, or of certain devices and combination of devices.’ This ‘includes every mechanical device or combination of mechanical powers and devices to perform some function and produce a certain effect or result." The court explained, "Applicants’ method claims are not tied to any concrete parts, devices, or combination of devices."

"Nor do Applicants’ methods, as claimed, transform any article into a different state or thing. At best it can be said that Applicants’ methods are directed to organizing business or legal relationships in the structuring of a sales force (or marketing company). But as this court stated in Bilski, “[p]urported transformations or manipulations simply of public or private legal obligations or relationships, business risks, or other such abstractions cannot meet the test because they are not physical objects or substances, and they are not representative of physical objects or substances.” 545 F.3d at 963."

Applicants argued that their "paradigm" claim is a company and as such is "analagous to a machine." The Federal Circuit rejected this argument. "But the paradigm claims do not recite “a concrete thing, consisting of parts, or of certain devices and combination of devices,” Nuijten, 500 F.3d at 1355, and as Applicants conceded during oral argument, “you cannot touch the company.” The called the "paradigm" an abstract idea--"a business model for an intangible marketing company."

Newman concurred in the judgment in that she would have affirmed the Examiner's 103 rejection. Newman is concerned about the policy effects of the way Bilski is being used to strike down innovation. She would have found the paradigm to satisfy 101 because it is concrete and limited but found them invalid under 103. Newman remarked:

"This court’s retreat into the methods of the past is
unworthy of our responsibility to support innovation in the future. Major
adjustment in established law should be based on changing industrial or
intellectual or equitable needs – of which no evidence is before this court. The only need of
which I am aware is that of the current harsh economic times, when the need is
of enhanced incentives to innovation and investment in new things and new
industries, not reduction in the existing incentives."

Case can be found here