Center for Advanced Study & Research on Innovation Policy


CASRIP Newsletter - Fall 1994, Volume 1, Issue 1

United States

Donald S. Chisum

United States: The 1994 Software Patent Cases

1994 has been a fruitful year for appellate decisions on software patents, business methods and printed matter in the United States. Shader, Alappat, and Warmerdam addressed the "Section 101" issue -- i.e. whether the claimed "processes" and "machines" were the type of subject matter for which a patent could issue. Lowry addressed a related issue -- whether the information content of claimed subject matter should be considered in determining whether the subject matter is novel and unobvious. Also of interest is Epstein, which concerns the PTO's ability to rely on "hearsay" data base information on what software systems are in the prior art.

These cases touch on a matter of great importance to the patent system: to what extent will the system extend beyond the traditional technologies of chemistry, mechanics, and electronics into the new "information" industries (multimeida, information infrastructure, etc.) -- and possibly also into older ones, such as financial services, marketing and instruction.

The following is a summary of these five cases:


A novel auction method, in the abstract, is not patentable subject matter -- but it probably would be so with the addition of a step, such as physically displaying the data. The status of the "business methods" exclusion is left undecided (by the majority).


A divided en banc Federal Circuit holds that a "machine" functionally defined by its ability to manipulate data for use in an oscilloscope display is patentable subject matter. The Supreme Court's Benson, Flook and Diehr decisions exclude patents on abstract ideas, laws of nature and natural phenomenon; they do not create a fourth exclusion for mathematical concepts.


A method for generating a "data structure," which helps robots avoid collisions, is a nonstatutory method for manipulating ideas, but a "machine" having a memory with such a data structre is statutory subject matter.


In determining whether a claim to a computer memory with a novel heirarchical and relational data structure that combines the advantages of prior art functional and structural data structures is patentably novel, the PTO may not disregard the novel data structure as constituting, or being analogous to, "printed matter." The data structure is functional and usable by a machine, not merely intelligible to humans.


Evidence rules, such as the ban on hearsay, do not preclude the PTO from rejecting a patent application claiming a computerized multiple vendor warehouse system, as prima facie anticipated or obvious in view of abstracts retrieved from a data base, the abstracts being published after the patent application was filed but reporting on systems "first released" or "installed" more than a year before that filing.

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