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Federal Circuit Revisits Comiskey

Posted in Patent Law

By Audrey A. Millemann  

In another attempt to address the question of the patentability of business methods, the Federal Circuit Court of Appeals has vacated its September 2007 decision in In re Comiskey (499 F.3d 1365).

  

The patent application filed by Comiskey, in 1999, claimed a method for mandatory arbitration and a system, using a computer, for performing the method. The PTO examiner rejected both the method and system claims as obvious under § 103. Comiskey appealed to the Board of Patent Appeals and Interferences, who affirmed the rejections. 
 

On appeal to the Federal Circuit, Comiskey argued that his claims were not obvious. The Court of Appeals, however, on its own, raised the issue of whether the claims constituted patentable subject matter under § 101. In its decision in September 2007, the court held that the method claims were not patentable subject matter as they depended on a mental process, but that the system claims, which required a machine, might be patentable subject matter. The court remanded the system claims to the PTO to determine obviousness. 

Comiskey then filed a petition for rehearing by the Federal Circuit en banc. The court granted the rehearing for the limited purpose of authorizing the original panel to revise its opinion. On January 13, 2009, the court vacated the September 2007 judgment, ordered the panel’s opinion withdrawn, and ordered the case reassigned to the original panel. On the same day, the panel issued its revised decision.

 

In the revised decision, by four judges in two concurring opinions, the panel reached a different conclusion than it had in its September 2007 decision. In the revised decision, the court ordered the system claims remanded to the PTO to determine whether they were patentable subject matter under § 101. 

 

In two dissenting opinions, three judges strongly criticized the panel’s decision for failing to decide the issue raised by the parties (obviousness under § 103) and instead raising a new issue (patentable subject matter under § 101) and rejecting the method claims on those grounds. In her dissent, Judge Moore stated:

“Despite being the only ground upon which the patent was ever rejected and the only ground argued by the PTO, the court in Comiskey did not review the PTO’s determination that the system and process claims were obvious. Instead, the court on its own initiative considered whether the claims were directed to patentable subject matter pursuant to § 101 – a rejection made by the agency or presented on appeal.”

Judge Moore expressed concern that the panel chose to take on the issue of patentable subject matter in the first place:

“Instead of reviewing what appears to be a straight-forward obviousness rejection based upon prior art, the panel decided one of the broadest, most sweeping issues in patent law – one whose impact will far exceed this case – the contours of patentable subject matter.”

 

            Judge Moore also noted that the panel’s decision resulted in a wasteful remand:

 

“The PTO and the applicant spent nearly a decade fighting over the obviousness of the system claims. The obviousness of the system claims was the only basis for rejection of the system claims in the PTO, affirmance by the Board, and appeal to this court. This court did not decide the fully briefed and argued issue of whether the system claims were properly rejected as obvious. Instead the court decides that the PTO should consider whether the system claims can be rejected as unpatentable subject matter under § 101. Given that the PTO’s original obviousness rejection still stands, there can be no conclusion but that the panel’s choice resulted in exactly the sort of wasteful remand that Chenery sought to avoid. The panel decision forces Mr. Comiskey, the PTO and the courts to continue litigating the very issues that they have already been litigating for ten years and that were squarely presented to this court for decision.”

 

The dissent further pointed out that the court had a duty to resolve the case and decide the issue properly brought before it.

“Our task is to review a PTO decision, not to direct its examination…Our court is now apparently doing more than reviewing on the record; it is directing the examination, failing to review the decision the PTO has rendered and telling it what alternative possible ground of rejection should be evaluated. With all due respect, I do not believe we have a roving commission to manage the examination process.”

 

The dissent acknowledged that there may be cases where the appellate court should decline to decide a complicated issue and instead affirm on simpler grounds. However, Judge Moore emphasized that the question of patentable subject matter under § 101 is not a simpler grounds than obviousness. Rather, § 101 issue is “far reaching,” as evidenced by the more than thirty amicus briefs filed in In re Bilski (545 F.3d. 943 (Fed. Cir. 2008)), the court’s key decision setting forth the test for patentability of business methods.

 

In the second dissenting opinion, Judge Newman stated: “the revised opinion does not clarify, changes no result, adds no analysis, but simply deletes its reasoning, leaving silence rather than understanding. The court continues to present a broad and ill-defined exclusion of ‘business methods’ from access to the patent system…” Judge Newman concluded that the panel’s decision further limited the patentability of business methods and that this was a disincentive to innovation. 

 

The three judges who dissented and two other judges were in favor of granting rehearing en banc with full briefing and argument on the issues.