Academic journal article Harvard Journal of Law & Technology

A Quantitative Approach to Determining Patentable Subject Matter

Academic journal article Harvard Journal of Law & Technology

A Quantitative Approach to Determining Patentable Subject Matter

Article excerpt

                        TABLE OF CONTENTS  I. INTRODUCTION                                                  630 II. FACTORS CONSIDERED FOR A QUANTITATIVE MODEL TO     DETERMINE PATENTABLE SUBJECT MATTER                          632     A. R&D Costs Are a Measure of the Benefits Arising from        Granting Patents                                          633        1. Creation of Inventions                                 633        2. Disclosure of Inventions                               634        3. Development and Commercialization of Inventions        634     B. The Costs of Imitation Can Serve as a Measure for        Benefits Arising from Granting Patents                    637        1. Inventions with Low Imitation Costs Need Patent           Protection to Fend Off Copycats                        637        2. Inventions with High Imitation Costs Need Patents to           Draw Out the Disclosure of Inventions                  638     C. The Social Cost of Granting Patents Is a Function of the        Resulting Taxation on Future Innovation                   640 III. A QUANTITATIVE COST-BENEFIT ANALYSIS MODEL                  641      A. Benefits                                                 641         1. Quantification of R&D Costs                           641         2. Quantification of Cost of Imitation                   643     C. Cost: Quantification of Patents' Taxation on Future         Innovation                                               645     D. Cost-Benefit Model                                        645 IV. APPLICATIONS                                                 646     A. Isolated Human Genes                                      647     B. Software                                                  648     C. Business Methods                                          650 V. CONCLUSION                                                    652 

I. INTRODUCTION

The Patent Act has historically adopted broad language on the issue of patentable subject matter. Section 101 of the Patent Act states that "[w]hoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor." (1) In the committee reports accompanying the 1952 Patent Act, Congress claimed it intended the statutory subject matter of patents to "include anything under the sun that is made by man." (2) In reality, however, that broad scope has been narrowed by three judge-made exceptions, each established by a long line of cases: (3) laws of nature, natural phenomena, and abstract ideas. (4) These three terms are typically used by the courts to cover the basic tools of scientific and technological work, such as scientific principles, mathematical algorithms, and mental processes. The judicial exceptions are powerful in that an invention could be patent-ineligible, even if it satisfies one of the categories of eligibility specified in Section 101 of the Patent Act. Even though the Supreme Court recites that patentable subject matter is "only a threshold test," (5) determining patent eligibility has proved to be a long struggle for the judicial system, especially regarding the exceptions, because of a lack of judicial guidance. For example, the Federal Circuit at one time used the machine-or-transformation test (6) to determine whether a claimed process fell within the judicial exceptions. The Supreme Court struck down the sole existing test to determine patent-eligibility of a claimed process, but the Court offered no clear alternative. (7) Instead, the Court simply looked to a handful of precedent processes and declared whether the claimed process fell within the exceptions. (8) Both the precedents selected and the comparisons seemed arbitrary and offered little guidance for future cases. As Justice Stevens observed, "[t]he Court... never provides a satisfying account of what constitutes an unpatentable abstract idea. …

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