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Apr 24, 2023

Are Drill Bits Now Abstract Ideas Too?

The following is a really wonderful Guest Post from UC San Francisco Law School

The following is a really wonderful Guest Post from UC San Francisco Law School Professor Jeffrey Lefstin focusing on a recent ITC decision finding a claimed drill bit abstract because of its functional limitations.

by Jeffrey Lefstin

Not too long after the Supreme Court decided Mayo v. Prometheus, I wrote an article suggesting, based on some of the history that followed Funk Brothers, that patents on ordinary industrial processes and compositions could become ineligible in Mayo's wake. As the Federal Circuit has interpreted Mayo and Alice, some of that has come to pass. In the controversial case of American Axle v. Neapco, the Federal Circuit held claims to a process of manufacturing automobile driveshafts ineligible under § 101, because the claims were directed to ‘laws of nature’ and nothing more. And in Yu v. Apple, the Federal Circuit held claims directed to a digital camera ineligible as "abstract ideas."

The latest development in that trend is the International Trade Commission's decision in a section 337 investigation, In The Matter of Certain Polycrystalline Diamond Compacts and Articles Containing Same. [2022-10-26 [DI 783166].Commission Opinion] Affirming the Initial Determination, the ITC found that all of the asserted claims, directed to diamond composites that can be used in drill bits, were ineligible ‘abstract ideas’ under § 101.

The claims in the case were directed to polycrystalline diamond compacts (PDCs), which can be used as the cutting elements in tools such rotary drill bits. A PDC is composed of a diamond-containing layer (a "table") bonded to a substrate. The diamond table is fabricated by mixing diamond grains with a metal-solvent catalyst, usually including cobalt. When the substrate and the diamond-catalyst mixture is subjected to heat and pressure, the diamond grains become bonded to each other and to the substrate.

The patents are based on the technique of fabricating the PDC at elevated pressures, at least 7.5 GPa. According to the patent specifications, PDCs fabricated under those conditions show improved diamond bonding and density, resulting in higher thermal stability and resistance to wear.

The asserted claims define the diamond table in terms of three kinds of properties: (i) structural properties, such as the size of the diamond grains; (ii) performance measures, such as the degree of thermal stability or wear resistance achieved in a compact; and (iii) other parameters, such as electrical conductivity or magnetic coercivity of the table, that are said to reflect the amount of remaining metal-solvent catalyst or the distance between the diamond grains in the table.[1] A representative claim is from patent US10507565, with the claim limitations at issue in the case highlighted:

18. A polycrystalline diamond compact, comprising:

a polycrystalline diamond table, at least an unleached portion of the polycrystalline diamond table including:

a plurality of diamond grains directly bonded together via diamond-to-diamond bonding to define interstitial regions, the plurality of diamond grains exhibiting an average grain size of about 30 μm or less;

a catalyst occupying at least a portion of the interstitial regions;

wherein the unleached portion of the polycrystalline diamond table exhibits a coercivity of about 115 Oe to about 175 Oe;

wherein the unleached portion of the polycrystalline diamond table exhibits an average electrical conductivity of less than about 1200 S/m; and

wherein the unleached portion of the polycrystalline diamond table exhibits a thermal stability, as determined by distance cut, prior to failure in a vertical lathe test, of at least about 1300 m.

All the asserted claims were upheld against enablement challenges under § 112. However, the Initial Determination found, and the Commission affirmed, that all the asserted claims were directed to "abstract ideas" and thus not patent-eligible subject matter under § 101.

How could the ITC reach such a result? While the reasoning is not always easy to follow (the Initial Determination dismissed the electrical and magnetic properties recited by the claim as "gratuitous rather than inventive"), the crux of the Commission's decision is its finding that the claims recite desired properties but not the way to achieve those properties:

The claims here cover a set of goals for the PDCs that the specifications posit may be derived from enhanced diamond-to-diamond bonding. The claims do not recite a way of achieving the claimed characteristics; they simply recite the desired range of values for each characteristic.

The Commission acknowledged that the specification may have taught the conditions and input materials needed to make PDCs with the recited properties – consistent with its finding that lack of enablement had not been shown. But those conditions were not recited by the claims. According to the Commission, under the Federal Circuit's decision in American Axle v. Neapco, "unclaimed features of the manufacturing process ‘cannot function to remove [the claims] from the realm of ineligible subject matter.’" (quoting American Axle). The claims were therefore directed only to the result or goal of a diamond table with the desired properties – an abstract idea under § 101.

The Commission thus held that a composition of matter or manufacture claim, which defines subject matter in part by effect or result, is patent-eligible under § 101 only if it additionally recites the process by which the claimed material is made. Otherwise, the claim is only directed to the abstract idea of achieving that result.

That is a remarkable proposition, and would represent a drastic change in the law. For it has long been settled that composition or manufacture claims may be defined in part by function or result, so long as the claims meet the definiteness and disclosure requirements now embodied in § 112.

It is true that for a time after the Supreme Court's condemnation of "conveniently functional language at the exact point of novelty" in General Electric v. Wabash Appliance, 304 U.S. 364 (1938), the Patent Office and the courts were hostile to the use of ‘functional’ limitations to define compositions. In In re Fullam, 161 F2d. 247 (CCPA 1947), the Court of Customs and Patent Appeals considered a claim to a method for polishing a baked resin finish, which recited the use of a novel abrasive powder – the powder being characterized in the claim only by the property of forming flocculates with the abraded material. The CCPA held that when a claim defines a material "not in terms of what it is, but of what it does," the claim was ‘functional’ and therefore unpatentable under General Electric. This theory survived through In re Fisher, 307 F.2d 948 (CCPA 1962), where the CCPA affirmed the rejection of a claim to a hormone concentrate defined by its potency. Now framed as a question of indefiniteness under of § 112 under the 1952 Act, (now § 112(b)), the court found the claim invalid because it defined "what that concentrate will do rather than what it is." The courts did not invalidate these claims because the boundaries of the claim were unclear, or because the claims were broader than the disclosure. Rather, any use of functional language to define a composition was sufficient to invalidate a claim.

But after casting doubt on the Fullam doctrine in In re Fuetterer, 319 F.2d 259 (CCPA 1963)[2], the CCPA settled the issue conclusively in favor of such claims in In re Swinehart, 439 F.2d 210 (CCPA 1971). Swinehart considered the following claim to an infrared-transparent crystal (useful, among other things, for the front window of heat-seeking missiles):

24. A new composition of matter, transparent to infra-red rays and resistant to thermal shock, the same being a solidified melt of two components present in proportion approximately eutectic, one of said components being BaF2 and the other being CaF2.

Notably, eutectic compositions of barium fluoride and calcium fluoride were known in the prior art. The desirable properties of infrared transparency and thermal resistance arose from the conditions for preparation described in the disclosure. The disclosure even stated: "The essential feature of the present invention is the growing of the instant bodies under controlled conditions."[3] Thus exactly like the claims in Polycrystalline Diamond Compacts, the claim recited desired characteristics of the crystal, but did not state how those characteristics were achieved.

The Patent Office rejected the claim as "functional," because not all eutectic mixtures of BaF2 and CaF2 would have the properties of infrared transparency and thermal resistance recited by the claim. Reversing the rejection (and explicitly overruling Fisher), the CCPA held that there was nothing intrinsically wrong in defining a composition "by what it does rather than by what it is." The court explained that the only issues from using such a mode of definition were (1) possible lack of novelty, where the functional characteristics were inherent in the prior art; (2) possible indefiniteness under § 112, where the language was not sufficiently precise to delineate the subject matter embraced by the claim, and (3) possible insufficient disclosure under § 112, where the breadth of the claim raised questions such as scope of enablement.

Subsequent cases confirmed that claims could define compositions by results or effects, where the results depended on the unclaimed manufacturing process rather than being derived solely from the chemical or structural properties recited by the claim. For example, in In re Miller, 441 F.2d 689 (CCPA 1971), the claim at issue recited a powdered PFTE composition defined in part by desired results (such as tensile strength when sintered), and in part by ‘gratuitous’ properties (such as dielectric strength), where the recited properties arose from the process of grinding the powder. The inclusion of properties that derived from the preparation did not even raise any issue at the Patent Office, the issue in the case being whether the powder could be defined by properties manifested only when the powder was sintered in a mold[4]. Likewise, in In re Roberts, 470 F.2d 1399 (CCPA 1973) the court approved of a claim to "Corrugated polyethylene terephthalate film having a surface coefficient of friction of less than about 0.40 as determined by the Bell test," where the claimed reduction in friction arose from production steps disclosed in the specification but absent from the claim. According to the CCPA, "the absence in the claim of specific steps which would bring about the desired friction property is no defect. The claims define the limits of the claimed invention, and it is the function of the specification to detail how this invention is to be practiced."

This line of authority is hardly obsolete. As recently as 2017, in BASF v. Johnson Matthey, 875 F.3d 1360 (Fed. Cir. 2017) the Federal Circuit relied on Swinehart to reverse a district court which had invalidated claims that defined a composition with functional language. Very much like the Commission in this case, the district court invalidated the claims for indefiniteness because they "recite a performance property the composition must display, rather than its actual composition." The Federal Circuit reversed, holding that functional language was permissible so long as the claim satisfied the Nautilus standard of reasonable certainty.

But all that was before today's regime of patent-eligibility, and before the Federal Circuit decided American Axle. When Professor Peter Menell and I filed our amicus brief urging the Supreme Court to grant certiorari in American Axle, one of the points we made was that, by making a claim's alleged failure to describe how to carry out an invention a question of § 101, the Federal Circuit had effectively supplanted § 112. Whereas § 112 requires factual inquiries about what the disclosure teaches, American Axle teaches that under § 101 the only question is whether the "claim on its face" describes a way to reach a particular result.

At least in American Axle there might have been questions whether the claims met the requirements of § 112.[5] So perhaps we could justify the outcome in American Axle as an I-know-it-when-I-see-it test for lack patentability under § 112, much as Alice has become an I-know-it-when-I-see-it test for lack of patentability § 103. Yet in Polycrystalline Diamond Compacts the Commission specifically found that lack of enablement had not been proven. The claims were nonetheless invalid under § 101 as directed to results rather than solutions.

While perhaps surprising, the Commission's decision is a logical development of American Axle's approach. To quote American Axle, "features not claimed are irrelevant to step 1 or step 2 of the Mayo/Alice analysis." The CCPA's articulation of the basic truth of patent law in Roberts – that the claims define the limits of the invention, and the specification details how the invention is to be practiced – is arguably no longer good law following American Axle.

Rather ironically, the Commission's patent-eligibility analysis begins with this quote from Classen Immunotherapies:[6] "The statement of patent-eligible subject matter has been substantially unchanged since the first Patent Act in 1790." But if the Commission is correct in its application of American Axle, the Supreme Court and the Federal Circuit have swept away decades of patent jurisprudence. No doubt the judges of the CCPA would have been surprised to learn that the claims in Fuetterer, Swinehart, Miller, Roberts, and similar cases I have not mentioned here, were all "abstract ideas," because the claims recited functions depending on "features not claimed."

And when courts wrestled with the enablement of biotechnology claims in cases like In re Fisher, 427 F.2d 833 (CCPA 1970), or Amgen v. Chugai, 927 F.2d 1200 (Fed. Cir. 1991), where the claims recited molecules defined by their biological activity, the judges could have avoided painstaking inquiry into the facts of enablement, because the claims failed to recite how to achieve the desired activities. And today the Supreme Court can save itself a great deal of time in in the pending enablement case of Amgen v. Sanofi, because the claims are clearly directed to the ‘abstract idea’ of antibodies that block the interaction of the PSCK9 and LDLR proteins, without identifying how those antibodies are achieved.

The Commission's decision is currently on appeal. No doubt the Federal Circuit could resolve the case, if it is so inclined, with an ad hoc rule that claims to compositions of matter are not directed to abstract ideas – much as Vanda imposed an ad hoc rule that methods of treatment are not directed to laws of nature.[7] But without addressing the deeper doctrinal and historical errors of American Axle (and ultimately Mayo), the courts may find themselves endlessly plugging their fingers in the leaking holes of today's patent-eligibility regime. At some point we might come to think that the whole edifice is built upon a rotten foundation, and perhaps would be better swept away.

= = = = =

[1] Less remaining catalyst and shorter grain-grain distances are both advantageous.

[2] Fuetterer cited the 1952 Act's new provision on functional claiming that now appears as § 112(f). Some, but not all, of the CCPA's subsequent case law on compositions relied on this provision as well. Swinehart was not based on this provision, but the court took it as evidence that its approach was consistent with Congress's intent. The CCPA extended the use of functional claiming to the radical group of a compound (as compared to an ingredient in a composition) in In re Barr, 444 F.2d 588 (CCPA 1971).

[3] U.S. Patent 3,766,080. Those techniques were described in the disclosure as "conventional crystal-growing techniques."

[4] It could be so defined, according to the CCPA.

[5] In American Axle the district court denied the defendants’ indefiniteness challenge, and the defendants did not raise lack of enablement or written disclosure.

[6] 659 F.3d 1057, 1063 (Fed. Cir. 2011).

[7] But ominously, the Federal Circuit's recent decision in Chromadex applies the Mayo/Alice two-step inquiry to a composition claim as an alternative analysis.

Law Professor at the University of Missouri School of Law. View all posts by Dennis Crouch →