reconstructing patent eligibility - american university law

1937

RECONSTRUCTING PATENT ELIGIBILITY

TALHA SYED*

Patent law’s doctrine of ineligible subject matter is widely agreed to be in a bad state of repair. Even those welcoming the Supreme Court’s return to express subject-matter bars have been left disoriented by the Court’s pronouncements in this area. Which subject matter is ineligible, why it is ineligible, and how it might become eligible have all remained enshrouded in mystery.

The nub of the problem, this Article contends, is two-fold. First, from its nineteenth-century origins to the present, courts grappling with ineligibility doctrine have remained in the grip of a series of “physicalist” misconceptions of the object of patent rights, and hence of the subject matter claimed in the patents at issue. In a nutshell, courts have not fully internalized that the object of patent rights is always and only an intangible space of “knowledge of” something, and never some “thing” itself. As a result, they have failed to characterize accurately the content of the ineligible subject-matter categories, much less specify why they are ineligible. Removing these physicalist errors dissipates much of the fog in this area. In its wake emerges a second distinct theme of ineligibility case law: the intimation by the courts of a set of embryonic “functionality” concerns, which seek to restrict patents to zones of applied rather than basic knowledge. But these concerns have remained inchoate, owing to their entanglement in a physicalist web. Thus, reconstructing eligibility doctrine requires extricating incipient functionality concerns from the physicalist thicket, developing their independent

* University of California, Berkeley Law School. Thanks to Shyam Balganesh, Chris Beauchamp, Yochai Benkler, Eric Claeys, Joshua Cohen, Abraham Drassinower, John Duffy, Terry Fisher, Mark Gergen, Wendy Gordon, Justin Hughes, Dimitry Karshtedt, Peter Lee, Mark Lemley, Peter Menell, Rob Merges, Adam Mossoff, Sean O’Connor, Michael Risch, Pam Samuelson, Ted Sichelman, David Simon, James Stern, and participants at the Center for the Protection of Intellectual Property’s 2019 Colloquium on Philosophical Approaches to IP and 2019–2020 Edison workshop, and the 2020 IP Scholars Conference at Stanford Law School, for valuable comments on earlier drafts. Special thanks to Oren Bracha for invaluable conversations and comments on this Article and the larger project of which it is a part.

1938 AMERICAN UNIVERSITY LAW REVIEW [Vol. 70:1937

policy bases, and finally, properly following through on their doctrinal implications.

Doing so yields three large gains. First, it provides the first unified account of this body of law, something that scholars had despaired of realizing. Second, it advances a distinctive “platform” rationale for why basic research should remain outside the patent system, and be sustained instead by publicly funded peer production. Third, it cures each of the three defects marring eligibility’s existing doctrinal framework: (1) under “step one” of the framework, it clarifies what precisely is the content of the ineligible categories; (2) under “step two” of the framework, it radically improves the analysis of how a claim with such ineligible content may be rendered eligible; and (3) finally, when moving from eligibility into an analysis of the substantive requirements of patentability, it clarifies how to follow the courts’ (heretofore nebulous) injunction that claims must be evaluated “as a whole.”

TABLE OF CONTENTS Introduction .............................................................................. 1939 I. The Object of Patent Rights .......................................... 1949

A. Spaces of Knowledge ............................................... 1949 B. “Knowledge of” as Prophylactic .............................. 1956

II. The Ineligibility Categories: Critique .......................... 1958 A. Development of the Categories .............................. 1961

1. “Principles, in the abstract” ................................. 1961 2. “Natural phenomena” ......................................... 1965 3. “Mathematical formulas” ..................................... 1969 4. Erosion and revival of stringent subject-matter bars ............................................. 1972

B. Critique of the Three Categories: The Spell of Physicalism .......................................... 1977

1. The categories: Laws of nature, products of nature, abstract formulas ............................... 1977 2. Critique of the categories: “Knowledge of” laws, products, and formulas ............................. 1978

III. The Ineligibility Categories: Reconstruction ............ 1980 A. Functional Knowledge: Knowing That vs. Knowing How ............................. 1980 B. The Platform Rationale: Basic (Science) vs. Applied (Technology) ............. 1982

1. What the Platform Argument is not ................... 1982 2. What the Platform Argument is .......................... 1985

2021] RECONSTRUCTING PATENT ELIGIBILITY 1939

C. Doctrinal Implications of the Basic/Applied Distinction ................................................................ 2003 1. Step 1: Basic understandings are ineligible ....... 2004 2. Step 2: Applied interventions are eligible .......... 2017 3. Step 3: Evaluating claims “as a whole” ................ 2020 4. Secondary categories: Mental steps, business methods, and software claims .............. 2023

IV. Reconstructing Eligibility’s Statutory and Constitutional Framework ................................... 2027

A. The Standard View: Utility as Substantive Requirement ............................................................ 2027 B. An Additional Role: “Useful” as Delimiting Subject Matter .......................................................... 2029 C. Reconstructing Section 101 ..................................... 2036

Conclusion ................................................................................. 2040

INTRODUCTION

Section 101 of the Patent Act provides that any invented or discovered “process, machine, manufacture, or composition of matter” is eligible for patent protection, and may qualify for such protection if it satisfies the “conditions and requirements” of patentability set out in the remainder of the statute.1 The principal such requirements are of novelty, nonobviousness, and disclosure, as set forth in §§ 102, 103, and 112.2 A central puzzle of patent law has long been whether there are (or should be) any significant restrictions on the subject matter “eligible” to be patented, over and above the “patentability” requirements of §§ 102, 103, and 112. And, if such restrictions exist, whether they are to be based on the statute itself, in its delimitation of the different categories of eligible subject matter, or on “common-law bars,” grounded in stand-alone judicial precedents.

During the interim between the Supreme Court’s 1980 decision Diamond v. Chakrabarty3 and its 2010 opinion Bilski v. Kappos,4 it may have been thought that distinct ineligibility bars were becoming a thing of the past.5 But starting with Bilski and fully crystalizing over the next four years with the Court’s trilogy of Mayo Collaborative Services v.

1. 1952 Pat. Act, ch. 950, 66 Stat. 797 (1952) (codified at 35 U.S.C. § 101). 2. 35 U.S.C. §§ 102, 103, and 112. 3. 447 U.S. 303 (1980). 4. 561 U.S. 593 (2010). 5. Cf. Mark A. Lemley et al., Life After Bilski, 63 STAN. L. REV. 1315 (2011).


Prometheus Laboratories, Inc.,6 Ass’n for Molecular Pathology v. Myriad Genetics, Inc.,7 and Alice Corp. v. CLS Bank International,8 that view has been firmly put to bed, with the Court declaring in ringing terms that subject-matter bars are alive and well.9

Yet, what subject matter is ineligible, why it is ineligible, and how it might become eligible have all remained enshrouded in mystery. Everyone now knows there is an Alice two-step test, but no one knows quite what it means.10 In particular, it is far from clear what counts, under step one, as an ineligible “law of nature, natural phenomenon, or abstract idea”—and the Court isn’t saying. And matters don’t improve much under step two, regarding what counts as a sufficiently “inventive concept” in application to overcome ineligibility—especially if we wish to avoid simply duplicating nonobviousness analysis.

In other words, the current law on ineligible subject matter is in a bad state of repair. Even those welcoming, or at least in principle not opposed to, a return to subject-matter bars have been left disoriented by the Court’s pronouncements in this area.11 Representative of the disquiet in this area is the recent plea by Federal Circuit Judge Lourie for intervention by a higher power:

I believe the law needs clarification by higher authority, perhaps by Congress . . . . [W]hy should there be a step two in an abstract idea analysis at all? If a method is entirely abstract, is it no less abstract because it contains an inventive step? And, if a claim recites “something more,” an “inventive” physical or technological step, it is not an abstract idea, and can be examined under established patentability provisions such as §§ 102 and 103. . . . Resolution of patent-eligibility issues requires higher intervention, hopefully with

6. 566 U.S. 66 (2012). 7. 569 U.S. 576 (2013). 8. 573 U.S. 208 (2014). 9. Mayo, 566 U.S. at 87 (holding that “laws of nature” are patent-ineligible subject matter); Myriad, 569 U.S. at 593 (holding that “products of nature” are patent-ineligible subject matter; Alice, 573 U.S. at 226–27 (holding that “abstract ideas” are patent-ineligible subject matter). 10. Alice, 573 U.S. at 217–18. 11. Thus, David Kappos, head of the Patent and Trademark Office (PTO) at the time it invalidated as ineligible the claims in Bilski, has stated that the Court’s opinions have left this area “a real mess, and you could actually use much stronger language than that.” Ryan Davis, Kappos Calls for Abolition of Section 101 of Patent Act, LAW360 (Apr. 12, 2016, 4:32 AM), https://www.law360.com/articles/783604/kappos-calls-for-abolition-of-section-101-of-patent-act.


ideas reflective of the best thinking that can be brought to bear on the subject.12

Such laments have since been taken up en masse by the Federal Circuit. In a recent denial of a request for an en banc rehearing, owing to its hands being tied by Supreme Court precedent, the court appended eighty-two pages of commentary by individual judges, criticizing the doctrine and calling for judicial or legislative reform.13 Its immediate focus was on the perils of the doctrine for the diagnostic industry;14 however, similar alarm bells have sounded for biotechnology in general,15 and the uncertainties generated by the doctrine are feared to have a chilling effect on innovation overall.16

Scholars, for their part, are agreed that the doctrine is in disarray but not on the right way forward. Some wish to abolish distinct ineligibility bars altogether;17 others to reduce them to overlapping backstops for substantive patentability doctrines;18 still others to retain them as distinct requirements but without being able fully to specify

12. Berkheimer v. HP Inc., 890 F.3d 1369, 1374–76 (Fed. Cir. 2018) (Lourie, J., concurring in denial of petition for rehearing en banc). 13. Athena Diagnostics, Inc. v. Mayo Collaborative Servs., LLC, 927 F.3d 1333 (Fed. Cir. 2019). 14. See Rebecca S. Eisenberg, Prometheus Rebound: Diagnostics, Nature, and Mathematical Algorithms, 122 YALE L.J. ONLINE 341, 341 (2013) (discussing the uncertainty surrounding diagnostic inventions following Mayo’s lack of clarity). 15. Arti K. Rai, Biomedical Patents at the Supreme Court: A Path Forward, 66 STAN. L. REV. ONLINE 111, 111 (2013). 16. Christopher M. Holman, Editorial: In Myriad the Supreme Court Has, Once Again, Increased the Uncertainty of U.S. Patent Law, 32 BIOTECHNOLOGY L. REP. 289, 289 (2013); David O. Taylor, Patent Eligibility and Investment, 41 CARDOZO L. REV. 2019, 2023 (2020). 17. See Michael Risch, Everything Is Patentable, 75 TENN. L. REV. 591, 591 (2008); John F. Duffy, Rules and Standards on the Forefront of Patentability, 51 WM. & MARY L. REV. 609, 622–23 (2009); Kristen Osenga, Ants, Elephant Guns, and Statutory Subject Matter, 39 ARIZ. ST. L.J. 1087, 1114–17 (2007). 18. See Lemley et al., supra note 5, at 1343 (advancing a “preemption” view of eligibility doctrine that overlaps with other patent doctrines in seeking to reign in overly broad claims); Robin Feldman, A Conversation on Judicial Decision-Making, 5 HASTINGS SCI. & TECH. L.J. 1, 30 (2013) (similar); Mark A. Lemley & Robin Feldman, Patent Licensing, Technology Transfer, and Innovation, 106 AM. ECON. REV. 188 (2016) (similar); see also John M. Golden, Patentable Subject Matter and Institutional Choice, 89 TEX. L. REV. 1041, 1111 (2011) (defending eligibility bars as filters against fundamentally broad claims). For discussion of how the present analysis differs from the preemption and related breadth views taken in these works, see infra text accompanying notes 175 to 180.


what they are and how they should work.19 More generally, they have despaired of providing any coherent account of the doctrine as a whole.20

The nub of the problem, this Article contends, is fundamentally two-fold. First, from its nineteenth-century origins to the present, courts grappling with ineligibility doctrine have remained in thrall to a series of physicalist misconceptions of the object of patent rights and, hence, of the subject matter being claimed in the patents at issue. In a nutshell, courts have not fully internalized that the object of patent rights is always and only an intangible space of “knowledge of” something, and never some tangible “thing” itself. As a result, they have failed to specify clearly what the categories of ineligible subject matter are, much less why they are ineligible. Once we remove these physicalist errors, and get into clearer focus the proper object of patent rights, much of the fog in this area dissipates. In its wake emerges a second distinct theme of ineligibility case-law: the intimation by the courts of a set of embryonic functionality concerns that seek to restrict patents to zones of applied rather than basic knowledge. But these concerns, while promising, have remained inchoate owing to their entanglement in the physicalist web. Reconstructing eligibility doctrine requires, then, extricating incipient functionality concerns from the physicalist thicket, developing their independent basis, and properly following through on their doctrinal implications.

Regarding the first difficulty, a central refrain of courts in this area—reaching back at least to Learned Hand’s 1911 opinion in Parke-Davis

19. See Rebecca S. Eisenberg, Wisdom of the Ages or Dead-Hand Control? Patentable Subject Matter for Diagnostic Methods After In Re Bilski, 3 CASE W. RES. J.L. TECH. &

INTERNET 1, 7–8 (2011) (concluding that eligibility doctrine is “neither entirely distinct from” nor fully reducible to substantive patentability doctrines, but in any case provides “minimal guidance”); Peter S. Menell, Forty Years of Wondering in the Wilderness and No Closer to the Promised Land: Bilski’s Superficial Textualism and the Missed Opportunity to Return Patent Law to its Technology Mooring, 63 STAN. L. REV. 1289, 1291–92 (2011) (lamenting the formally unclear and substantively unpersuasive approach of the Court in this area and providing guideposts for navigating it); John M. Golden, Flook Says One Thing, Diehr Says Another: A Need for Housecleaning in the Law of Patentable Subject Matter, 82 GEO. WASH. L. REV. 1765, 1765 (2014) (similar). 20. See Dennis Crouch & Robert P. Merges, Operating Efficiently Post-Bilski by Ordering Patent Doctrine Decision-Making, 25 BERKELEY TECH. L.J. 1673, 1691 (2010) (doubting that any “clear and consistent set of principles” underlie eligibility doctrine); Kevin Emerson Collins, Patent-Ineligibility as Counteraction, 94 WASH. U. L. REV. 955, 1019 (2017) (doubting the prospects of any unified account of eligibility doctrine); see also sources cited supra note 19.


& Co. v. H.K. Mulford Co.,21 if not the foundational nineteenth-century cases—is that one may not patent “naturally occurring products” (or “products of nature”) because they already exist “out there,” prior to any human ingenuity. And similarly for “naturally occurring processes” (or “laws of nature” or “principles”). Hence, the requirement in Parke-Davis that products such as adrenalin must be “isolated and purified” before they may be patented.22 Or, in a similar vein, the Supreme Court’s declarations that one may not patent “a new mineral discovered in the earth or a new plant found in the wild” (Chakrabarty),23 “naturally occurring, [even] isolated DNA segments” (Myriad),24 or “natural laws or natural phenomena” such as “the correlations between thiopurine metabolite levels and the toxicity and efficacy of thiopurine drug dosages” (Mayo).25

There is only one problem with this line of thinking: it is simply wrong about the object of patent rights and, hence, about the subject matter being claimed in the patents at issue. To think that anyone may obtain a patent on a “product” per se—naturally occurring or otherwise—is simply ill-conceived—at least once we fully internalize that the object of patent rights is intangible. There is no patenting of “adrenalin,” or a “mineral,” “plant,” or “gene,” whether in naturally occurring or “isolated and purified” form—or, for that matter, in genetically modified or purely human-created form. What is a candidate for patent protection is “knowledge of” said adrenalin, plant, gene, etc.—more precisely, knowledge of its structure (and perhaps some of its properties as well). And such knowledge is always a human creation, never simply pre-existing, “out there.”

In other words, underlying these decisions (and many others like them) is a fundamental misconception of the object of patent rights and, thus, of the subject matter of patent claims. Patents always and only obtain in “knowledge of” something, never in some “thing” itself. What is marked out in patent claims is always a space of knowledge. And

21. 189 F. 95 (C.C.S.D.N.Y. 1911), aff’d in part, 196 F. 496 (2d Cir. 1912). 22. See id. at 103. Judge Hand did not himself use the phrase “isolated and purified,” but his opinion emphasized, in different parts, the need for both isolation and purification and it has become standard to convoke the two when referencing his ruling. See, e.g., Utility Examination Guidelines, 66 Fed. Reg. 1092, 1093 (U.S. Pat. & Trademark Off. Jan. 5, 2001). 23. Diamond v. Chakrabarty, 447 U.S. 303, 309 (1980). 24. Ass’n for Molecular Pathology v. Myriad Genetics, Inc., 569 U.S. 576, 594 (2013). 25. Mayo Collaborative Servs. v. Prometheus Lab’ys, Inc., 566 U.S. 66, 76 (2012).


this is as true of so-called product patents (knowledge of the structure and perhaps the property of something) as it is of process patents (knowledge of methods of using, making, or doing something). Yet courts and commentators often speak as if what is being claimed is the thing itself, a persistent “physicalist” misconstrual of the object of patent rights. As a result, they often fail to have in proper focus the actual subject matter being claimed and, hence, its status vis-à-vis “nature” (or the prior art, and so forth).

The corrective to such physicalist misconstruals is to read in “knowledge of” each time one is encountered. Doing so dissipates many of the courts’ pronouncements as simply false if not unintelligible, while others stand exposed as in need of a new supporting rationale. In particular, the notion that they are claims to “naturally occurring” products, processes, or phenomena is no longer available as a ground for invalidating such patents. Rather, they are always and only claims over knowledge of (the structure, properties, or methods of using, making, or doing) such phenomena. Such knowledge always being a human creation, to invalidate claims over it we need to be much clearer about why that knowledge is ineligible for patent protection.

Take, for instance, Myriad. Once we understand that claim 1 in that case was over knowledge of an isolated DNA sequence (and its associated polypeptide), while claim 2 was over knowledge of its corresponding cDNA sequence, the Court’s express (and only) rationale for distinguishing between the two claims for eligibility purposes—namely, that the former claim is “naturally occurring” while the latter one is not26—simply falls flat, as false. In its wake, we need some other rationale, one that can supply either a new reason for distinguishing between the two or—what seems more likely—a new reason for why both should either stand or fall together.

Such problems are not limited to “products” cases. Thus, at issue in Mayo was not a product but a process claim: knowledge of the correlation between blood metabolite levels and drug effects, for the sake of calibrating drug dosage levels.27 Yet, the Court slid easily enough from naturally occurring products to naturally occurring processes, finding the latter equally ineligible, now not as “products of nature,” but rather “laws of nature.”28 The trouble with that, again, is

26. Myriad, 569 U.S. at 594. 27. Mayo, 566 U.S. at 73. 28. Id. at 77.


that what is being claimed is not “the natural correlation” itself (whatever that might mean), but knowledge of the correlation—and said knowledge certainly does not pre-exist human efforts, even if the correlation itself is thought to, as a pre-existing “law of nature” simply “out there” independently of humans. That is, even if one were a full-blooded Platonist about “laws of nature” or “principles,” it would be irrelevant to the patent issue, as patent claims never pertain to the “principle” itself—a notion that is scarcely intelligible—but rather to specific knowledge of the principle, which no one can deny is generated by human activity.29 Of course, we may still wish to deny patent-eligibility for such knowledge, but the grounds for doing so cannot reside in it pre-existing humans.

In other words, we need to internalize that it is not “laws of nature, natural phenomena, or abstract ideas” that are being held ineligible, but rather knowledge of said laws, phenomena, and ideas. But why might such knowledge be ineligible? Not because it is already “out there.” Whether it is knowledge of a “product” or of a “law” of nature, said knowledge is most definitely not pre-existing human intervention. Nor is it, to take another physicalist error infecting this area, because such knowledge, when of an “abstract idea,” covers an intangible space rather than a thing: all patent claims do that.

No, the reason knowledge of “laws, phenomena, and ideas” is ineligible for patent protection is because such knowledge is merely knowing that some operation (a “process” or “principle” or “law” or “algorithm”) or some structure (a “product” or “physical phenomenon”) exists in the world—rather than knowing how to do something with said operation or structure. And it is the latter that is the proper domain of patent protection, not the former. Why? Because the former spaces of knowledge are platforms of basic understanding, the domain of science, while the latter are tools of applied interventions, the domain of technology. And while the latter spaces of knowledge, being functional, are apt candidates for patent protection, the former are not: their generation is better suited to the alternative innovation

29. “Platonism” here refers to the view that laws or principles of nature (as well as mathematical formulas) are simply “out there,” eternally fixed and true, irrespective of human perspectives. See MARK BALAGUER, PLATONISM IN METAPHYSICS, STAN. ENCYC. OF PHIL. 1 (Edward N. Zalta et al. eds., 2016), https://plato.stanford.edu/archives/spr2016/entries/platonism.


policy of publicly funded, open science.30 It is this “basic” versus “applied” distinction that lies at the core of ineligibility case law, buried under a thicket of physicalist confusion. Extracting this distinction and working out its conceptual, policy, and doctrinal implications is the central task of reconstructing ineligibility doctrine. Doing so delivers three large sets of benefits.

First, it provides the first unified account of this body of law, something scholars had despaired of realizing.31 The twin central claims of the Article, namely the need to dephysicalize patent law and simultaneously functionalize it, provide the tools for an integrated critical diagnosis of where eligibility doctrine—across all three of its central categories—has gone wrong and prescription for how it might be set aright.32 The result is a dramatic increase in the clarity, consistency, and simplicity of this area of law. Moreover, reconstructing eligibility law in this way also reintegrates this body of common law doctrine with the statutory and constitutional framework of patent law. Once functionality concerns are seen to be what is driving the courts in this area, then judicial restrictions on eligibility can be fully reconciled with the statutory language and constitutional basis of the Patent Act.33

Second, fully developing the functionality basis of ineligibility doctrine yields a powerful new “platform” rationale as the policy basis for why basic research should remain free and clear of all patents. Centering on the distinction between the internally driven character

30. Other scholars have pointed in this direction: Peter Lee, Inverting the Logic of Scientific Discovery: Applying Common Law Patentable Subject Matter Doctrine to Constrain Patents on Biotechnology Research Tools, 19 HARV. J.L. & TECH. 79 (2005); Katherine Strandburg, Much Ado About Preemption, 50 HOUS. L. REV. 563 (2012). However, Professor Lee, while emphasizing the fundamental character of scientific knowledge, ultimately bases his argument on access and preemption-type concerns very distinct in their implications from the present rationale, as discussed infra text accompanying notes 175 to 181. Lee, supra, at 104–06. Professor Strandburg, on the other hand, makes a similarly sharp distinction as here between preemption and eligibility concerns, and also points to the need for an alternative innovation policy argument for the latter, but leaves that to be filled. Strandburg, supra, at 622. The present argument advances a specific and systematic such alternative, one that also provides a unifying account for the central categories of eligibility doctrine (Professor Strandburg takes a more partial view). 31. See references cited supra note 20. 32. The analysis also shows how what it identifies as the three main “secondary” categories of ineligibility doctrine—“mental steps,” business methods, and software—can be integrated within its functionality frame. See infra Section III.C.4. 33. See infra Part IV.


of basic science versus the externally oriented search of applied technology,34 the argument is not only securely grounded in a comparative-institutional argument for the superiority of public funding as the innovation policy for basic research, but it also offers crisp doctrinal guidance for delimiting patent law’s boundaries.35

Finally, the analysis significantly improves the Alice doctrinal framework for eligibility, along each of its three currently flawed dimensions. First, under step one, it makes it easier to identify what is or is not an ineligible “law of nature,” etc. Reading in “knowledge of” removes a series of standard confusions regarding whether a claim is ineligible because its subject matter pre-existed human efforts or is intangible. Instead, we ask whether the claim is for merely knowing that some operation or structure exists in the world, or for actually knowing how to do something—to achieve some function, make some structure, or use some structure. Underpinning this know-that versus know-how distinction, to help us to elaborate and apply it, is the platform rationale: is this space of knowledge the sort of platform of basic understanding that can be expected to be generated by the internal exploratory trajectory of a scientific field’s research program? Or is it instead the sort of tool of applied intervention that is externally oriented, driven by the prospects of practical success?36

Second, under step two, if the claim does indeed involve basic understanding, it nevertheless may be saved so long as the claim delimits its ambit to a zone of practical application. Such a delimitation should, all by itself, suffice to escape ineligibility, without any further need to show either an “inventive concept” in moving from the basic knowledge to the application, or any sort of tangible embodiment in a machine or transformation, or anything else by way of “post-solution” activity. Why? Because only this aligns with the underlying rationale here, namely, to keep basic knowledge out of the patent system.37

Third, when moving beyond eligibility and into analysis of the substantive requirements of patentability, claims should be truly evaluated “as a whole” so that a claim with a nonobvious, basic

34. See infra Section III.B.2. 35. For discussion of how this platform rationale is significantly distinct, in both its underlying policy bases and its doctrinal upshots, from prevailing “preemption” views of eligibility doctrine, see infra Section III.B.1. 36. See infra Section III.C.1. 37. See infra Section III.C.2.


contribution plus an obvious, delimited application should pass muster just as easily as one with a nonobvious application.38

In developing these propositions, the Article seeks to make four key contributions. First, it advances a new, fully dephysicalized conceptualization of the object of patent rights, one that sets patent law on its proper conceptual foundations for the first time, in a way that bears significant implications for a wide variety of patent doctrines and policy questions.39 Second, in the specific context of ineligibility, this conceptualization provides a unifying diagnosis of what has gone wrong with the doctrine, ferreting out a series of discrete physicalist errors infecting each of its main categories, the removal of which allows us to consider afresh both the content of, and possible rationales for, each category. Third, the Article then offers a unified reconstruction of the categories, grounding them in functionality concerns more generally (of delimiting patents to applied technological knowledge) and, more specifically, in a new platform rationale for the ineligibility of basic scientific research.40 Finally, the Article reintegrates the common law of eligibility with the statutory and constitutional framework of patents, reinterpreting key provisions in patent’s law foundational texts in light of the same two modes of dephysicalization and functionality.

The analysis proceeds as follows. Part I develops the conceptual point of the dephysicalized character of the object of patent rights and drives home its implications for our understanding of the subject matter of all patent claims. Part II then turns to a critical diagnosis of ineligibility doctrine, pinpointing the discrete physicalist errors marring its historical development and present-day framework. Next, Part III reconstructs doctrine, elaborating its proper conceptual and policy foundations and working out their doctrinal implications. Part IV then shows how the statutory and constitutional framework of

38. See infra Section III.C.3. 39. These wider implications are pursued in a companion paper. See Talha Syed, Dephysicalizing Patent Law (draft on file with the author). 40. This platform argument builds on a large body of sociological, economic, and legal scholarship on “open science.” Its key contributions are to provide a new synthesis of that literature’s insights within a comparative-institutional framework for analysis of alternative innovation policies, and, crucially, to add a distinctive component of its own of central relevance for patent law, concerning the internally driven character of basic research. See infra Section III.B. It is that distinct component that provides the key pivot for the new doctrinal framework for eligibility set out in Section III.C.


patent law, when viewed through the same dual lenses of dephysicalization and functionality, fully dovetail with the analysis of common law eligibility advanced in Parts II and III. The Article concludes by reflecting on the deep inter-relation between physicalism and functionality in patent law: not only do physicalist errors obstruct proper pursuit of functionality concerns in patent law, but it is precisely the functional aspects of patents’ subject matter that tend to generate physicalist misnomers.

I. THE OBJECT OF PATENT RIGHTS

The present Part develops two arguments. The first is a conceptual claim regarding the proper object of patent rights, namely that such rights always and only obtain in a space of knowledge and never in some tangible thing. While some may find this claim obvious, others may think it obviously wrong. But it is neither, I think, and so the present discussion (in subsection A) develops and defends the claim with some care. The view that it is obvious finds support in the fact that the basis of the claim lies simply in the grounding legal and economic conceptualizations of the field, namely as an area of intellectual property, dealing with rights in intangible objects, or of innovation policy, dealing with informational goods. Yet the claim’s implications for patent law and policy have not been fully driven home and worked out before, and so this Part begins that task.

The view that the claim is obviously wrong finds prima facie support from the language of the key texts of patent law: physicalist construals of the subject matter of patents abound in the Patent Act, patent claims, and court decisions. And so, Section B of this Part begins the task of reconciling this language with the conceptual point, by developing the following constructive suggestion: each time we are faced with a physicalist formulation in a patent text, we should read in “knowledge of,” to serve as a prophylactic safeguard against physicalist error.

A. Spaces of Knowledge

The object of patent rights is always and only “knowledge of” something and never something itself. Patent rights obtain, that is, always in some intangible space of knowledge, and never in some tangible “thing.” Why? Because to think otherwise would be to fail to internalize what it means to understand patents as a regime of intellectual property,


obtaining in intangible objects.41 Or, in a related vein, to understand patents as a regime of innovation policy, dealing with informational goods.42 To say that the object of patents is always and only a space of knowledge is simply to say that the “innovation” being enabled by patent rights is precisely that, an “intellectual” creation of something “intangible.” To think otherwise would be to miss the distinguishing characteristics of patent law as a distinct field of property law and social policy: namely, that it deals with intangible as opposed to tangible objects, or informational as opposed to other kinds of goods. The present assertion, then, is a basic conceptual claim, the justification for which is plainly stated: it is simply what it means to follow through on the legal concept of intellectual property, as rights in “intangible” objects, or the economic one that such rights pertain to innovations, understood as “informational” goods. Any alternative conceptualization would fail to remain in touch with the core distinctions that set off patents as an area of property law and social policy.

Flowing out of this foundational claim is a pair of auxiliary ones. First, if the object of patents is always intangible knowledge, then the claimed subject matter of patents must always consist of a “space of knowledge” of something, and never some “thing” itself. Second, in addition to the covered subject matter always being a space of knowledge, so the infringing conduct that patents protect against should always implicate the use of said knowledge, and never merely amount to the use of some tangible thing per se.

Each of these ancillary claims may seem to give rise to an objection of its own. For the first, how do we square the claim of the exclusively intangible character of the protected subject matter of patents with the fact that patent claims are often drawn to some physical apparatus or substance, at least for claims in the statutory subject matter of

41. The foundational work in this respect is Yochai Benkler, Intellectual Property and the Organization of Information Production, (Oct. 1999) (draft), http://www.benkler.org/Ipec99.pdf (final draft published at 22 INT’L REV. L. & ECON. 81 (2002)); see also Amy Kapczynski & Talha Syed, The Continuum of Excludability and the Limits of Patents, 122 YALE L.J. 1900 (2013); Oren Bracha & Talha Syed, Beyond the Incentive-Access Paradigm? Product Differentiation & Copyright Revisited, 92 TEX. L. REV. 1841 (2014); Daniel J. Hemel & Lisa Larrimore Ouellette, Knowledge Goods and Nation-States, 101 MINN. L. REV. 167 (2016). 42. See CARL SHAPIRO & HAL R. VARIAN, INFORMATION RULES: A STRATEGIC GUIDE TO

THE NETWORK ECONOMY 4–5 (1999).


“machine[s], manufacture[s], or composition of matter”?43 As for the second, how does it square with the fact that we may wish to limit the reach of patent rights to find as infringing only that conduct which involves some external manifestation of the knowledge, over and above merely taking some internal “mental steps”?44

As a brief consideration of parallel issues in copyright should reveal, however, neither of these points troubles the conceptual claims. Unlike patent law, copyright law does in fact require that to be protectable subject matter, a work of authorship must be “fixed in [a] tangible medium of expression.”45 And the copyright statute also requires, as the patent one does not, that to qualify as infringing conduct, unauthorized copying must be tangibly fixed as well.46 Yet a moment’s thought should reveal that neither requirement undoes the point that the underlying object of protection in copyright is not any tangible matter. Rather, it is an intangible “form of expression,” one that may be made manifest in various tangible ways, including not only close paraphrasing beyond verbatim copying,47 but also various higher reaches in the levels of “abstraction[]” such as well-rounded characters or filled-out plot lines,48 and even entirely different expressive genres, such as a trivia game “based” on a television show.49 In other words, the fact that copyright law imposes, as a mandatory requirement, that its protected expressive forms always be tangibly fixed does not change the fact that the underlying focus of protection remains an intangible form of expression.

Similarly for patents: just as the underlying object of copyright’s tangibly fixed expressive form remains an intangible form of expression, so the object of a tangibly embodied knowledge space remains an intangible space of knowledge. In fact, patent law does not even impose a strict “embodiment” requirement in parallel to copyright’s “fixation” one. But suppose it did. Suppose, that is, that it

43. 35 U.S.C. § 101. 44. See infra Section III.C.4 (discussing “mental steps” as a possible secondary category of ineligible subject matter). 45. 17 U.S.C. § 102(a). 46. Id. § 106 (providing that the copyright owner has “the exclusive right[] . . . to reproduce the copyrighted work in copies”); § 101 (defining “copies” as “material objects . . . in which a work is fixed”). 47. See, e.g., Salinger v. Random House, Inc., 811 F.2d 90, 99 (2d Cir. 1987). 48. See Nichols v. Universal Pictures Corp., 45 F.2d 119, 121 (2d Cir. 1930). 49. See, e.g., Castle Rock Ent. Inc. v. Carol Publ’g Grp., 150 F.3d 132, 139–40 (2d Cir. 1998).


was mandatory for patent claims always to be “embodied” spaces of knowledge—i.e., for claims always to be tied to some physical apparatus or substance (“machine”) or to affect some physically instantiated process (“transformation”).50 Would that then render false the claim that patents always and only obtain in “knowledge of” something and never some thing itself? And instead make true the claim that patents always obtain in “knowledge of” something and some “thing” itself? No.

Even in the case of knowledge-embodied-in-a-thing (“embodied knowledge” here on in), it is not the case that patent rights obtain in a space of knowledge “and a thing.” Rather, they obtain in a space of embodied knowledge—a quite different matter. Recall the case of copyright: simply because there is a mandatory requirement of tangible fixation does not mean that copyright obtains in a form of expression “and a thing”: rather, copyright always (and only) obtains in a form of embodied expression. And what that means is two-fold: (1) to assert copyright in some claimed subject matter, said subject matter must not only be a form of expression, but a form of embodied—meaning, tangibly fixed—expression; and (2) to assert that said copyright is being infringed by some conduct, said conduct must not only implicate the form of expression, but do so in an embodied way.51 But none of this changes the fact that the object of the rights—the protected subject matter that is the focus of infringement analysis—is always and only the intangible form of expression, not a thing. And similarly, in the case of patents: even with a requirement of embodiment in place, patents would still only obtain in “knowledge of” something, never some thing itself. “Embodied knowledge” remains, for all that, knowledge.

In sum, suppose we were to require patent claims always to be directed to some physical embodiment or tangible instantiation of the knowledge, and hold that patent rights could only be infringed by conduct that involves use of such knowledge in an externally manifest way, over and above simple internal use. Even so, these requirements

50. Such a strict “machine or transformation” requirement for “process” claims was of course imposed by the Federal Circuit in Bilski, only to be rejected by the Supreme Court. See infra note 153 and accompanying text. 51. And, from the other side, said conduct must not only take embodied form but also involve an expressive activity, or implicate the use of the intangible expressive form itself, rather than be a purely physical activity, sans any expressive aspect. C.f. ABRAHAM DRASSINOWER, WHAT’S WRONG WITH COPYING? 101–05 (2015) (observing that a copyright holder’s reproduction right is in the intangible expressive work and not in the material form in which the work is fixed).


would only establish that patents obtain solely in embodied knowledge, and patent rights apply solely to externally manifested uses of knowledge. They would not alter that the objects and rights of patents always and only pertain to knowledge.

A pair of simple Venn diagrams may help illustrate these points. Figure 1—Claims depicts the overlap between “spaces of knowledge” and “physical embodiments.” Even if we were to make it a strict requirement of patent law that all claims must occupy the overlapping space—of “embodied knowledge”—it would remain the case that the object of the patent rights, or the subject matter marked out in the claims, is a space of (now embodied) knowledge, never purely “physical embodiments” sans knowledge. That is, even if we chose to disallow protection for the “disembodied” spaces of knowledge area, it would remain that protection not extend to the pure “physical embodiments” area. Zones 1 and 2 may be the object of protection; Zone 3 may not.

And the same goes for infringement analysis. Figure 2—Infringing

Activity depicts the overlap between “spaces of knowledge” and “external manifestation.” Even if we were to make it a strict requirement of patent law that all infringing conduct must occupy the overlapping space, of “manifested knowledge,” it would remain the

1

Space of Knowledge

2

Embodied Knowledge

3

Physical Embodiment

FIGURE 1: CLAIMS


case that the conduct covered by patent rights is the use of knowledge, never purely external use of a thing or process sans knowledge. That is, even if we chose to disallow protection for the “internal” spaces of knowledge area, it would remain that protection should not extend to the pure “external” conduct area. Zones 1 and 2 may be the focus of protection, but Zone 3 should not.52

52. One might object that for evidentiary and related administrability concerns we should not only always require manifestation—Zone 2—but in fact only require it, to tread into Zone 3, so as to include as infringing some conduct that merely uses a physical embodiment, without implicating in any way the space of knowledge marked out in the claims. Two points about this objection bear making here. First, for present purposes it may simply be conceded and cabined. That is, conceding this point would not change the present analysis, which is focused on the implications of getting right the subject matter of patent claims for purposes of ineligibility analysis: even if we were to accept that matters stand differently for infringement analysis, the present argument would still stand. Second, however, in a companion paper I argue against making this concession and for retaining in infringement analysis a focus on ensuring that the conduct actually implicate the use of the knowledge marked out in the claims—by either directly deploying it or indirectly benefiting from it—rather than merely involving the use of a tangible thing. See Syed, supra note 39. That argument generalizes from related ones regarding inherent anticipation in patent and infringement analysis in copyright. Dan L. Burk & Mark A. Lemley, Inherency, 47 WM. & MARY L. REV. 371, 373–74 (2005); DRASSINOWER, supra note 51, at 101–05.

FIGURE 2: INFRINGING ACTIVITY

1

Space of Knowledge

2

Manifested Knowledge

3

External Conduct


The preceding considerations should also address a third possible objection that may arise (in addition to those concerning embodiment requirements and infringement analysis): given that third parties are free during the life of the patent to read and learn from the patent disclosure—and, thus, in that sense “use” the knowledge contained therein—while steering clear of infringing the patentee’s rights, surely, it might be thought, the subject matter protected by the patent cannot be merely knowledge? Hopefully, the reply to this is already apparent. First, the claim here is not that the use of any knowledge of the invention constitutes infringement: it must be of knowledge that falls within the space particularly marked out by the claims. If the patentee reveals more knowledge in the disclosure than what they stake out in the claims, so much the worse for them (and better for the public domain). Second, the claim here is also not that any use of the knowledge of the invention constitutes infringement. As previously stated, we may wish to limit, for reasons of administrability or even principle, as potentially infringing only that conduct that involves externally manifest uses of the knowledge. But such conduct remains, for all that, use of knowledge. In sum: while patents do not cover all uses of disclosed knowledge—but only some uses of claimed knowledge—nevertheless what they cover does remain use of knowledge.

A fourth possible objection: do not patent claims cover actually doing, rather than merely knowing, something? In other words, are not patent claims directed to the “practice of” some space of knowledge, rather than, if you will, merely its “theory”? To be sure. But that patents are directed to the practice of knowledge does not alter the point that their object remains, for all that, an intangible space of knowledge.

A final point of clarification. To say that the object of patent rights is always and only a space of knowledge is not, of course, to say that simply being a space of knowledge suffices for patent protection. Whether a particular piece of knowledge is eligible and qualifies for patent protection is a matter to be determined by the various substantive doctrines of patent law. Not all spaces of knowledge may be candidates for patent protection, nor may all eligible candidates actually qualify for such protection. The former issue goes, of course, to eligibility doctrine, the topic of the remainder of this Article, while the latter issue goes to the substantive requirements of patentability such as novelty, nonobviousness, disclosure, and so forth. Nothing in the present analysis should be taken to prejudge the answers to be given under those doctrines. Put another way, the present claim is simply a minimal conceptual claim about the proper object of patent


rights, as always obtaining in an intangible space of knowledge—it does not answer the further questions of what specific spaces of knowledge should be eligible and qualify for patent protection, these being matters for substantive analysis of patent doctrines and policy.

B. “Knowledge of” as Prophylactic

Brushing against the grain of this conceptual point, regarding the intangible space of patent rights, is the language abounding in the key texts of patent law. The Patent Act, drafted claims, and court decisions are all rife with physicalist construals of the subject matter being claimed and of the activities possibly held infringing. Often such construals may just be harmless verbal slips, carrying with them no conceptual confusions or concomitant costs for doctrinal or policy analysis. At other times, however, they are far from innocent and instead betray the spell of physicalist misconstruals that come with significant drawbacks in terms of the clarity and consistency of doctrine and the soundness of its underlying rationales. Consequently, as a corrective against such misconstruals, it is necessary to read in the phrase “knowledge of” (a product or process) each time one is encountered. Doing so works as a prophylactic safeguard against physicalist error, serving as a first step to fully internalizing a dephysicalized conception of the object of patents.

The present section applies this corrective step to the statutory categories of eligible subject matter, unpacking their dephysicalized content. Part II then does the same for the common law categories of ineligible subject matter, to remove physicalist errors in how the courts have construed patent claims when developing ineligibility doctrine so as to clear the way for Part III’s reconstruction.

The Patent Act opens, in § 101, by providing that patent rights may obtain in any qualifying “process, machine, manufacture, or composition of matter.”53 Right off the bat, then, we would seem to face a discrepancy between the present claim and the language of the statute: how can the object of patent rights always be an intangible “space of knowledge” when the statute itself provides that patents may obtain in a “machine . . . “ etc.? On the present analysis, the statutory clause would seem to be a misstatement, since patent rights actually only obtain in “knowledge of” a “process, machine, manufacture, or composition of matter.”54 Or, to put it less favorably, the statutory

53. 35 U.S.C. § 101. 54. Id.


clause would seem simply to negate the present conceptual claim, expressly providing for what the claim says cannot hold. But in fact, there is a simple enough fix: we can reconcile the conceptual claim with the statutory language by recalling that § 101 prefaces its list with the clause that “whoever invents or discovers any” such “machine,” etc., is eligible to obtain rights therein.55 Thus, the actual object of the patent rights is the “invention” or “discovery” of any such “process, machine, manufacture, or composition of matter”—i.e., the intellectual creation that generates “knowledge of” such a “process, machine,” etc., as an innovation.56 Hence, to construe the statute properly we need, as a first step, to read in “knowledge of” at the front of § 101’s list.

Indeed, we should go further, beyond simply tacking “knowledge of” onto the front of the list and unpack what that phrase means when applied to the different categories, so as to result in distinct types of patents. The standard taxonomy of patent types is to distinguish between “product” claims (“machine, manufacture, or composition of matter”) and “method” claims (“process”).57 What is now clear, however, is that “product” claims are actually claims over the “knowledge of” the structure and (and at least one) property of a “machine, manufacture, or composition.”58 “Method” claims, meanwhile, standardly subdivide as follows:

(1) Method-of-making process claims: knowledge of some particular way of producing something. (2) Method-of-using process claims: knowledge of some particular way of using something.

Thus far, this yields three main types of patents: (1) product, or “knowledge of” structure and property claims; (2) process, or “knowledge of” method-of-making claims; and (3) process, or “knowledge of” method-of-using claims. To these we must add a fourth: so-called “functional” claims, which we can now see to be, at their root, a third form of “process” or method claim:

55. Id. (emphasis added). 56. Id. 57. MPEP § 2106 (9th ed. Rev. 10, June 2020), https://www.uspto.gov/web/offices/pac/mpep/s2106.html [https://perma.cc/ZKX5-9VQD]. 58. The full explanation for why “products” claims resolve into knowledge of not merely the structure but also “at least one property” of a machine, etc. will have to wait until Section IV.C. below. And similarly for the unpacking of “process” claims into ways of making, using, or doing something. See infra text following note 347. 58 With “product-by-process” claims being a combination of (1) and (2).


(3) Method-of-doing process patents: knowledge of some particular way of doing something.

We arrive, then, at a recasting of the statutory list into four main types of patents as follows:

(1) “Knowledge of” something, its structure and at least one property (“product” claims) (2) “Knowledge of” a way of making something (method-of-making process patent)59 (3) “Knowledge of” a way of using something (method-of-use process patent) (4) “Knowledge of” a way of doing something (functional claims)

Thus, instead of the standard taxonomy of patents—three types of product patents plus one of process—we have the reverse, with three distinct types of process patents plus one of products. “Product” claims are for knowledge of the structure and at least one property of something and “process” ones are for knowledge of ways of doing, using, or making something.

With these conceptions in tow, we can now turn to the law on patent-eligible subject matter.

II. THE INELIGIBILITY CATEGORIES: CRITIQUE

Since its 1980 decision in Diamond v. Chakrabarty, the Supreme Court’s jurisprudence on ineligible subject matter has been broadly framed by two propositions. First, the statutorily eligible categories listed in § 101—“process, machine, manufacture, or composition of matter”—are to be capaciously construed, to include “anything under the sun that is made by man,” per the legislative history of the 1952 Patent Act.60 Second, however, there also exist certain exceptions of long-standing judicial provenance—principally, “laws of nature,” “products of nature,” and “abstract ideas”—that are to remain categorically exempt from, or ineligible for, patent protection.61

59. With “product-by-process” claims being a combination of (1) and (2). 60. See S. REP. NO. 82-1979, at 5 (1952); H.R. REP. NO. 82-1923, at 6 (1952), cited in Diamond v. Chakrabarty, 447 U.S. 303, 309 (1980); 35 U.S.C. § 101. 61. Chakrabarty, 447 U.S. at 306, 309; Diamond v. Diehr, 450 U.S. 175, 185 (1981); Bilski v. Kappos, 561 U.S. 593, 601–02 (2010); Mayo Collaborative Servs. v. Prometheus Lab’ys, Inc., 566 U.S. 66, 70–71 (2012); Ass’n for Molecular Pathology v. Myriad Genetics, Inc., 569 U.S. 576, 589 (2013); Alice Corp. v. CLS Bank Int’l, 573 U.S. 208, 216 (2014). The Diehr list of the three ineligible categories adopted by the Mayo trilogy—“laws of nature, natural phenomena, and abstract ideas”—differs in one


A welter of questions is raised by these propositions, including: (1) Precisely how many separate categories of ineligible subject matter are there, and what is the content of each?62 (2) Are the categories best understood as distinct ineligibility bars under § 101 or as duplicative, and perhaps redundant, shorthand for the substantive requirements of patentability under §§ 102, 103 and 112 (e.g., novelty, nonobviousness, and disclosure)?63 (3) If they are § 101 doctrines, are they based on judicial construal of the statutory language or on more free-standing development of common law principles?64 and (4) If they are common-law doctrines, what is their underlying rationale,65—and how, if at all, can they be reconciled with the legislative framework and history?66

On each of these questions strongly contrasting positions, each having merit, may be found in the case law and literature. And while the analysis that follows will seek to account for the principal contenders on each score,67 it will do so in the course of advancing three distinctive propositions of its own regarding this body of law.

First, analysis of the emergence of the categories, from their origins in “principles,” onto “phenomena of nature,” and finally “abstract ideas,” reveals three central themes swirling together: (a) First, the spell

respect from the one given in Chakrabarty and cited in Bilski: it swaps out Chakrabarty’s middle term “physical phenomena” for “natural phenomena.” For reasons given below, the present analysis will adopt “products of nature” as the best label for this third category, one clearer on its own and also more clearly distinct from the other two. See infra note 164 and accompanying text. 62. See infra Section II.B.1 (enumerating anywhere between two to five distinct possible categories). 63. See Mayo, 566 U.S. at 89 (stating that the idea that eligibility analysis under 101 serves similar functions to patentability inquiries under §§ 102, 103, and 112 is inconsistent with prior law). 64. Compare Parker v. Flook, 437 U.S. 584, 598 (1978) (Stewart, J., dissenting) (implying that the categories of ineligible subject matter directly flow out of the statutory language of § 101), and Chakrabarty, 447 U.S. at 307 (framing the question of eligible subject matter as “a narrow one of statutory interpretation requiring us to construe 35 U.S.C. § 101”), with Bilski, 561 U.S. at 601–02 (stating that while the “three specific exceptions to § 101’s broad patent-eligibility principles . . . are not required by the statutory text, they are consistent with” it “[a]nd, in any case, these exceptions have defined the reach of the statute as a matter of statutory stare decisis going back 150 years”). 65. See infra Sections III.A, III.B (elaborating the conceptual and policy bases of the rationale for ineligibility doctrine). 66. See infra Part IV. 67. See infra Section II.A.


of physicalism: for each of the three distinct categories that emerge—“laws of nature,” “products of nature,” and “abstract ideas”—the courts’ view of their ineligibility has been radically infected, from start to finish, by physicalist error, albeit a different error for each category. (b) Second, proto-functionality: yet side-by-side these errors, indeed often cheek-by-jowl in the very same passages, the courts have also expressed a plausible set of embryonic functionality concerns—of seeking to ensure that patents only obtain in “applied” knowledge, and remain free and clear of “basic” building blocks—but have given such concerns only intermittent, often inchoate and one-sided articulation, and in any case have not followed through on them doctrinally. (c) Third, patentability issues: finally, alongside distinctive eligibility-type concerns, also present in many of the cases are more standard substantive patentability issues (of novelty, claim breadth, etc.), although in virtually no leading case do they plausibly comprise the whole story.

Second, issuing from the foregoing are two tasks, one critical and one reconstructive: (a) Dephysicalization: first, we need to expunge all lingering physicalism in the characterization of the categories and claims at issue, by reading in “knowledge of” and following through on its implications for construing the claims at issue. (b) Functionality: second, once we have extricated embryonic functionality concerns from physicalist error, it remains to properly elaborate the most plausible rationale for such concerns, and then systematically follow through on its doctrinal implications (including in a manner that remains distinct from standard issues of patentability).

Finally, an eligibility doctrine reconstructed along these lines can, I hope to show, be reconciled with the statutory and constitutional framework of patent law in this area. A reading of the relevant statutory and constitutional language that bears in mind the dual concerns of dephysicalization and functionality, discloses an understanding of statutorily eligible subject matter that closely converges with the common law doctrine.

The discussion proceeds as follows. Section II.A. traces the historical emergence of the distinct categories of patent-ineligible subject matter, highlighting the central role of three factors in their development: physicalist errors, embryonic functionality concerns, and substantive patentability concerns. Section II.B. then distills the present-day content of the three ineligibility categories, and ferrets out the pernicious role of physicalism marring the analysis of each. Section III.A. turns to developing the most plausible alternative basis for


ineligibility restrictions, in the form of a functionality concern with patenting “basic” as opposed to “applied” knowledge. Section III.B. returns to doctrine and works out the implications of this basic/applied distinction for reconstructing the Alice framework for eligibility. Finally, Part IV integrates the preceding analysis of the common law and policy bases of eligibility doctrine with its statutory and constitutional framework.

A. Development of the Categories

In broad sweep, the arc of eligibility doctrine may be distilled in terms of four key stages: nineteenth-century foundations, mid-twentieth-century extensions, late twentieth-century erosion, and early twenty-first-century revival. And at each step, driving its development have been three themes in an ever-more entangled thicket: physicalist error, proto-functionality concerns, and standard patentability issues.

1. “Principles, in the abstract” The origins of modern subject-matter doctrine lie in a series of

nineteenth-century-era cases concerning the eligibility of “principles,” stretching from the turn-of-the-century Boulton & Watt v. Bull68 (1795) to the mid-century cluster of Neilson v. Harford69 (1841), Le Roy v. Tatham70 (1852) and O’Reilly v. Morse71 (1854) through to the Telephone Cases72 (1888) nearing its end. These foundational cases pivot around three central concerns raised by such “principles”—namely, suspicion toward their “abstract” as dephysicalized character, suspicion toward their “abstract” as “unapplied” character, and concerns regarding claim breadth.

The first concern took center stage in the early British case of Boulton & Watt and its American counterpart Le Roy.73 At issue in both were

68. 126 Eng. Rep. 651 (1795). 69. 151 Eng. Rep. 1266 (1841). 70. 55 U.S. (14 How.) 156 (1852). 71. 56 U.S. (15 How.) 62 (1854). 72. 126 U.S. 1 (1888). 73. My analysis of Boulton & Watt and Le Roy is indebted to Oren Bracha’s penetrating historical treatment of these cases. Oren Bracha, Owning Ideas: A History of Anglo-American Intellectual Property 75–87 (June 2005) (S.J.D. Dissertation, Harvard Law School), https://law.utexas.edu/faculty/obracha/dissertation [https://perma.cc/HG4U-6LCC] (analyzing Boulton & Watt); OREN BRACHA, OWNING IDEAS: THE INTELLECTUAL ORIGINS OF AMERICAN INTELLECTUAL PROPERTY, 1790–1909, at 265–67 (2016) (analyzing Le Roy).


methods for improving industrial processes by way of the discovery and application of new principles, and in both the central worry of those Justices skeptical of their eligibility was that such principles were too “abstract” in the sense of disembodied, or not tied to any physical apparatus.74 That is, on the mistaken physicalist premise that patents must obtain in some tangible thing, such principles raised in stark form the worrisome specter of dephysicalization (claims directed to machines, by contrast, had an embodied character that enabled the lull of physicalist notions to continue). In Boulton & Watt, this specter was suppressed by Justice Heath’s re-physicalizing demand that, to be patentable, any such principles must be embodied in the “organization of a machine,”75 while in Le Roy, the majority insisted that to be saved the claim be construed not as going to an “abstract,” albeit applied, principle, but rather as firmly tied to “the combination of . . . machinery.”76 Over the protest of a minority of Justices who, internalizing the dephysicalized character of the object of patents, held that applied principles were eligible for protection,77 these cases thus birthed the notion that a “principle, in the abstract”78 may not be patented, even when it is restricted to an industrial application.79 They bequeathed, in other words, purely physicalist grounds for ineligibility.

Although such physicalist notions continued to linger in what is perhaps the leading case in all of Anglo-American eligibility jurisprudence, Neilson v. Harford, they were also conjoined there with a distinct theme that lends this case its touchstone status.80 As in Boulton

74. Boulton & Watt v. Bull, 126 Eng. Rep. 651, 651 (1795); Le Roy, 55 U.S. at 172. 75. Boulton & Watt, 126 Eng. Rep. at 661. 76. Le Roy, 55 U.S. at 177. 77. Boulton & Watt, 126 Eng. Rep. at 666–67 (Eyre, C.J.) (a patent for a “new manner of using” is valid even when “detached from all physical existence whatever”); Le Roy, 55 U.S. at 183 (Nelson, J., dissenting) (upholding as valid a claim construed as an application of a new principle, and “not simply for the apparatus employed by the patentees”). 78. Le Roy, 55 U.S. at 175. 79. Boulton & Watt, 126 Eng. Rep. at 661 (“[T]he organization of a machine may be the subject of a patent, but principles cannot . . . . [T]he patent for the application of the principle must be as bad as the patent for the principle itself.”). 80. Neilson has been a central reference for leading American eligibility decisions, from Le Roy, 55 U.S. at 175–76, 180–82, and O’Reilly v. Morse, 56 U.S. 62, 114–18, 131–32 (1854), through to Parker v. Flook, 437 U.S. 584, 592 (1978) and Mayo Collaborative Servs. v. Prometheus Lab’ys, Inc., 566 U.S. 66, 82–84 (2012); see also 1 PETER S. MENELL, MARK A. LEMLEY & ROBERT P. MERGES, INTELLECTUAL PROPERTY IN THE

NEW TECHNOLOGICAL AGE: 2018, 256, 276–77, 296 (2018) (according Neilson central status in the development and present shape of American eligibility doctrine).


& Watt and Le Roy, the case involved a method for improving an industrial process—namely, injecting pre-heated rather than cold air into iron furnaces so as to reduce their energy requirements—via the discovery and application of a new principle—namely, that hot air promotes ignition better than cold. Struggling with how properly to construe the patent at issue, the court settled on the view that it was not for the aforementioned principle itself, but rather for “a mode of applying it” to a delimited zone of industrial purposes—namely, in conjunction with hot-blast furnaces, however constructed.81 This then would seem to stand for a distinct new proposition: principles, even broad and dephysicalized ones, may be eligible for protection so long as they are delimited to a zone of industrial application. Yet, in every instance of its articulation of what saved the patent, the court entangled considerations of industrial “application” with those of physical “embodiment.” As the following key passage illustrates, the two considerations were inextricably swirled:

[A]fter full consideration, we think that the plaintiff does not merely claim a principle, but a machine embodying a principle, and a very valuable one. We think the case must be considered as if, the principle being well known, the plaintiff had first invented a mode of applying it by a mechanical apparatus to furnaces.82

The ambiguity of Neilson forms a central part of its legacy. Specifically, the case can and has been read to stand for any of three quite distinct propositions: (1) Although a principle itself is not eligible for protection, its embodied application is. This is the interpretation given the case by Le Roy and carried forward, in their various ways, by Benson,83 Diamond v. Diehr,84 and the Federal Circuit in In re Bilski.85 (2) Although a principle itself is not eligible for protection, its delimitation to a zone of industrial applications is, irrespective of the particulars of any physical embodiment.86 On this interpretation, the one given by Morse and the Telephone Cases, there may still arise a further question as to whether a broad zone of applications is commensurate with the patentee’s actual

81. Neilson v. Harford, 151 Eng. Rep. 1266, 1273–75 (1841). 82. Id. at 1273 (emphasis added). 83. 409 U.S. 63 (1972). 84. 450 U.S. 175 (1981). 85. Le Roy, 55 U.S. (14 How.) at 175–77; Benson, 409 U.S. at 70; Diehr, 450 U.S. at 184; In re Bilski, 545 F.3d 943, 954 (Fed. Cir. 2008) (en banc), aff’d sub nom., Bilski v. Kappos, 561 U.S. 593 (2010). 86. O’Reilly v. Morse, 56 U.S. (15 How.) 62, 115–16 (1854).


contribution.87 But that would be a distinct matter from eligibility, going instead to substantive patentability considerations of claim breadth.88 (3) Finally, a third possible proposition coming out of the case is that although a principle itself is not eligible for protection, an “inventive” mode of applying it is. This is the interpretation given by Flook89 and its progeny, as discussed below.90

By the end of the nineteenth century, then, two views regarding the ineligibility of principles, often deeply entangled, were jostling for sway: (1) Principles were ineligible because they were “abstract” in the sense of being dephysicalized, and so to become eligible, they had to be embodied in some machine, substance, or other physical apparatus. (2) Principles were ineligible because they were “abstract” in the sense of being unapplied, and so to become eligible, they had to be delimited to a zone of application. And what presently needs to be emphasized is that a key feature of the second position was that no reason was offered for why unapplied principles were ineligible. (On the first view the reason was clear, lying in misplaced physicalism.) Rather, this point was simply taken for granted, with little more than Delphic pronouncements in this regard.91 Why does this matter? For two reasons. First, without any clear rationale for why unapplied principles are ineligible, it becomes harder to know what falls within or outside the restriction. Second, into the vacuum left by this silence on the underlying rationale will, we might well fear, enter further physicalist misnomers.

87. Compare Morse, 56 U.S. (15 How.) at 117 (emphasizing that a patent is too broad when it claims more than the patentee originally invented), with The Telephone Cases, 126 U.S. 1, 539 (1888) acknowledging that a patent for an invention as large as the telephone “is not to be confined to the mere means he improvised to prove the reality of his conception”). 88. This bears underlining as it is sometimes suggested that Morse is better read as a case not about eligibility, but rather simply about substantive patentability concerns of claim breadth. See, e.g., Lemley et. al, supra note 5, at 1332. 89. 437 U.S. 584 (1978). 90. For critical discussion of the basis on which this interpretation of Neilson rests, see infra note 131. 91. This applies to not only those striking down the patents on this ground, such as the majority in Morse, but also those who would uphold them, such as Justice Grier dissenting in Morse and Baron Parke in Neilson.


2. “Natural phenomena” Precisely that is what transpired during the twentieth-century

extensions of ineligibility doctrine, first from “principles” to “natural phenomena” in Funk Brothers Seed Co. v. Kalo Inoculant Co.92 (1948) and then onto “algorithms” or “abstract ideas” in Benson (1972) and Flook (1978). Three features of these cases, foundational for the Mayo/Alice framework, are especially germane here. First, in each we continue to see the invocation of physicalist misnomers as the basis for their ineligibility. Nevertheless, and second, alongside these we also see an articulation for the first time of the kernels of a more explicit, if still embryonic, functionality basis for exclusion, namely that that subject matter is ineligible which is part of “the storehouse of knowledge of all men,”93 serving as “the basic tools of scientific and technological work,”94 with only an “application”95 of these to be eligible for protection. However, and third, this basic/applied distinction remained undeveloped in its underlying basis and, being fully enmeshed within the physicalist underbrush, was not followed through on doctrinally.

Leading the way in expanding the categories was Funk Brothers, which extended the bar from natural laws or “principles,” to naturally occurring products or “phenomena of nature.”96 At issue in the case were claims over a mix of naturally occurring strains of bacteria, in such a combination that the individual strains would no longer cancel out each other’s symbiotic effectiveness for individual legumes, in terms of enabling the plants to convert nitrogen in the air into a form usable in soil.97 Although it was already known at the time of the invention that individual strains of the bacteria existed in natural

92. 333 U.S. 127 (1948). 93. Id. at 130. 94. Gottschalk v. Benson, 409 U.S. 63, 67 (1972) (emphasis added). 95. Funk Brothers, 333 U.S. at 130 (emphasis added). 96. Id. Funk Brothers was not the first Supreme Court decision to deal with the eligibility of natural products. Two key nineteenth-century precedents were American Wood-Paper Co. v. Fibre Disintegrating Co., 90 U.S. (23 Wall.) 566 (1874) and, though not reaching the Court, Ex parte Latimer, 1889 Dec. Comm’r Pat. 123. However, both American Wood-Paper and Ex parte Latimer simply took for granted the ineligibility of patents over natural products, on physicalist grounds of the sort also displayed in Funk Brothers (as discussed next in the text). What gives Funk Brothers its leading status are two further points: first, alongside its physicalist misnomers, the decision also elaborated in incipient form a distinct, functionality, basis for ineligibility and, second, it laid the foundations for the doctrinal analysis of eligibility that is in place today. 97. Funk Brothers, 333 U.S. at 128, 128 n.1.


symbiosis with individual plants—and the practice of mixing individual strains with individual plants was common—what was lacking was a single product that could be applied to all legumes, since an indiscriminate mix of the bacteria would result in some inhibiting the effects of others.98 What the patentee claimed to discover was that some strains were “mutually non-inhibiti[ng]” and hence could be effectively combined into a single product.99

In a majority opinion authored by Justice Douglas, the Court characterized the claims to be over the “state of inhibition or of non-inhibition in the bacteria” themselves.100 These states being “qualities [that] are the work of nature,” the Court flatly declared such “qualities” to be “of course not patentable,” being “the handiwork of nature” rather than the creation of the patentee.101 The physicalist error here should be plain: it is not “states of inhibition or non-inhibition” that are themselves being claimed—a notion that is scarcely intelligible—but rather knowledge of such states or qualities, and such knowledge is of course not the handiwork of nature but the product of human effort or ingenuity. In other words, the claims at issue were claims over the knowledge of certain (naturally occurring) properties, not “the properties” themselves (whatever that may mean). And while we may still wish to hold such knowledge to be ineligible for patent protection, doing so cannot be based on a physicalist misunderstanding of it as a “handiwork of nature.” In a nutshell, the physicalist error in the case of “products” is the reverse of the one operating in the case of “principles” above: there, the error was to think that the object of patent rights may not be intangible, and hence to require that claims must always take the form of embodied knowledge; here, the error is to think that the object of patent rights may be tangible, and hence to forget that claims taking embodied form are, nevertheless, always for embodied knowledge.

Yet no sooner had the Court finished mischaracterizing the innovation in physicalist terms, than it went on to recognize (albeit implicitly) its intangible character as, indeed, an informational good. In the immediately following sentence, the Court characterized the innovation as the “discovery of the phenomena of nature.”102 Since any

98. Id. at 129. 99. Id. at 130. 100. Id. 101. Id. at 127, 130. 102. Id. at 130.


such discovery or knowledge is not, unlike the physical phenomenon itself, simply the “handiwork of nature,” this raises the question: why should it be ineligible for protection?

In a brief passage of great significance for the subsequent shape of ineligibility jurisprudence, the Court held that while the patentee may indeed have “discover[ed] a hitherto unknown phenomenon of nature,” nevertheless this discovery was ineligible on account of it being “part of the storehouse of knowledge of all men,” being a “manifestation[] of laws of nature, free to all men and reserved exclusively to none.”103 Contained in these few words are two points of lasting influence. First, the Court formed an express bridge between “laws of nature” (or “principles”) and “products of nature” (or “phenomena”), as equally ineligible. Second, it adduced, albeit in highly elliptical form, a new reason for their shared ineligibility, alongside the (inverse) physicalist ones operative in each—namely, that they form part of “the storehouse of knowledge” that should be “free to all . . . and reserved . . . to none.”

Two points about this “storehouse of knowledge” rationale merit emphasis. First, it provided at least some explicit articulation of what remained wholly tacit in the nineteenth-century Delphic pronouncements of Neilson and Morse as to why unapplied “principles” were ineligible.104 Second, however, this articulation remained admittedly modest: both what counted as an ineligible contribution to “the storehouse of knowledge” and why, indeed, such contributions should be ineligible remained unclear. Nevertheless, Funk Brothers’ “storehouse of knowledge” provided the seedbed for what later flowered, in Benson and Mayo, as the “building block” rationale, of keeping “basic tools” of knowledge free and clear of patents.105

Finally, the third legacy of Funk Brothers comes from its answer for how a claim involving a “phenomenon” or “law” of nature may be rendered eligible. Here again, the Court approached a functionality

103. Id. (emphasis added). 104. See supra note 91 and accompanying text. 105. Gottschalk v. Benson, 409 U.S. 63, 67 (1972) (citing Funk Brothers in support of the proposition that “[p]henomena of nature, though just discovered, . . . are not patentable, as they are the basic tools of scientific and technological work” (emphasis added)); Mayo Collaborative Servs. v. Prometheus Lab’ys, Inc., 566 U.S. 66, 71, 89 (2012) (citing Funk Brothers and Benson as providing the leading rationales for ineligibility case law and labeling the rationale for ineligibility as “the underlying ‘building-block’ concern”); Alice Corp. v. CLS Bank Int’l, 573 U.S. 208, 216–17, 220 (2014) (repeatedly referencing Mayo’s “building block” concern).


breakthrough, only to retreat under cover of physicalist brush. Intuiting the operative distinction to be that between “basic” versus “applied” knowledge, the Court stated that eligibility for a “discovery . . . must come from the application of the law of nature to a new and useful end.”106 Shades, then, of the Morse and the Telephone Cases interpretation of Neilson, whereby claims over “principles” may be rendered eligible so long as they are duly “applied.”107 However, by its appending of “new and useful” to “application,” the Court ran together here considerations of eligibility with the substantive requirements of patentability (novelty and utility).

Its conflation was complete when it added that to qualify as eligible, an application “must be more than new and useful . . . it must also satisfy the requirements of invention or discovery.”108 The Court cited in this respect its then-recent Cuno Engineering Corp. v. Automatic Devices Corp.109 decision, which had adopted a particularly strong interpretation of the common law requirement that to qualify for patent protection an invention not only had to be new and useful, but also involve some “ingenuity” or “inventive[ness].”110 Frequently known as the “inventive step” requirement in other jurisdictions,111 in the United States this doctrine was soon codified under the sobriquet of “non-obviousness” by the 1952 Patent Act, which also distanced itself from the stringent Cuno view of its meaning.112 But whether labeled “inventive step” or “non-obviousness,” and whether given a more or less stringent interpretation, this requirement remains a substantive requirement of patentability that all claims, to be valid, must meet.

For the Court in Funk Brothers to impose “inventiveness” as a distinct eligibility requirement only causes confusion, by either (1) collapsing eligibility analysis into that of substantive patentability or (2) imposing, as a kind of double-counting, the requirement that claims involving

106. Funk Brothers, 333 U.S. at 130 (emphasis added). 107. See supra note 86 and accompanying text. 108. Funk Brothers, 333 U.S. at 131–32. 109. 314 U.S. 84 (1941). 110. Id. at 90–91. 111. See, e.g., Convention on the Grant of European Patents arts. 52(1), 56, Oct. 5, 1973, 1065 U.N.T.S 271, 273; Agreement on Trade-Related Aspects of Intellectual Property Rights art. 27.1 n.5, Apr. 15, 1994, Marrakesh Agreement Establishing the World Trade Organization, Annex 1C, 1869 U.N.T.S. 299, 311 (1995) (“[T]he term[] ‘inventive step’ . . . may be deemed by a Member to be synonymous with the term[] ‘non-obvious.’”). 112. 35 U.S.C. § 103; Graham v. John Deere Co., 383 U.S. 1, 15 (1966).


“laws” or “phenomena” of nature not only be new, useful, non-obvious, and restricted to applications of such laws or phenomena, but, further, that the applications themselves also be new, useful, and non-obvious. But what reason could there be for such double counting? The Court itself offered none, but operating in the background was again the mistaken physicalist premise that it is the phenomenon or law itself that is being claimed, rather than “knowledge of” it: since such phenomena or laws are thought already to exist prior to any human ingenuity, then claims involving them must be not only applications of (new, useful, and non-obvious “knowledge of”) such laws or phenomena, but also new, useful and non-obvious applications themselves.113 In any case, whatever the explanation of the Court’s move in this regard, it proved to be a fateful one: the requirement of “inventiveness” in application was to be picked up, and given a new basis, in Flook.

3. “Mathematical formulas” The doctrinal template put in place by Funk Brothers was then

consolidated by two cases, Benson and Flook, that, against the rise of software patents and attendant controversies,114 extended the ineligibility bar to a third category, from “principles” (or natural laws) and “phenomena” (or natural products), to “mathematical formulas” (or algorithms). Three features of these cases are pertinent here. First, they gave a slightly more elaborated formulation of the functionality basis for ineligibility, with Benson providing what has since become, through its extension in Mayo and Alice, one of the canonical formulations of the “building block” rationale for ineligibility. Second, however, this basis remained incompletely developed, both in its underlying rationale and in its doctrinal implications, leaving it open for Flook further to entrench Funk Brothers’s “inventive concept” in application requirement, one subsequently adopted by Mayo and Alice. Finally, physicalist concerns continued to swirl in both cases, clouding the analysis in each.

At issue in Benson were claims for a method of converting signals from (human-friendly) “binary-coded” decimal form into” (computer-

113. Funk Brothers, 333 U.S. at 130. 114. For this background, see Pamela Samuelson, Benson Revisited: The Case Against Patent Protection for Algorithms and Other Computer Program-Related Inventions, 39 EMORY

L.J. 1025, 1025, 1029–30 (1990).


readable) “pure binary form.”115 Consisting of a series of iterative steps, the core of the method was a modified version of the well-known mathematical principle of factoring.116 Characterizing the claims as, alternately, over a “mathematical formula,” an “algorithm,” or an “abstract intellectual concept[],”117 the Court held them ineligible as “basic tools of scientific and technological work.”118 In so doing, the Court forged two significant moves: first, it assimilated a new category to the traditional ones of principles and phenomena, that of “abstract . . . concepts” or “algorithms”; second, it offered a unifying rationale for all three, developing Funk Brothers’s “storehouse of knowledge” into a “basic tools” view that would merge into the canonical “building block” conception in Mayo and Alice.119 But when it came to articulating precisely why the claims before it were ineligible or how they could be rendered eligible, the Court’s reasoning was “not so clear.”120 Specifically, the Court shifted between two views: a physicalist one that “[t]ransformation and reduction of an article ‘to a different state or thing,’” while not strictly necessary for protection, was “the clue to . . . patentability”121 and not met here; and a substantive patentability concern that the claims as formulated were overbroad.122

Six years later in Flook the Court affirmed the first two aspects of Benson but transformed its third. The case involved a claim for an algorithmic procedure for updating alarm limits in monitoring certain chemical processes consisting of three steps: (1) measuring the present value of a process variable such as temperature; (2) inputting the new value into an equation to calculate an update alarm limit; and (3) then adjusting the alarm limit to the updated value.123 The equation at the core of the method employed the well-known concept of taking a weighted average, updating the alarm base by applying a predetermined weight to the updated measure of the process variable.124 Although the precise equation involved may have been

115. Gottschalk v. Benson, 409 U.S. 63, 65 (1972). 116. ROBERT P. MERGES & JOHN F. DUFFY, PATENT LAW AND POLICY 154–55 (7th ed. 2017). 117. Benson, 409 U.S. at 65, 67, 71–72. 118. Id. at 67. 119. See supra note 105. 120. MERGES & DUFFY, supra note 116, at 155. 121. Benson, 409 U.S. at 69–71. 122. Id. at 68, 71–72. 123. Parker v. Flook, 437 U.S. 584, 585 (1978). 124. Id. at 596–97.


novel,125 the actual weights to be used in it were not specified.126 Characterizing the claim as for a “mathematical algorithm or formula,”127 the Court held these ineligible for the Benson reason that they were “basic tools of scientific and technological work.”128 But in articulating the test for how a claim involving such subject matter may become eligible, the Court dropped any Benson-type physical transformation test129 in favor of a Funk Brothers-type “inventive concept in . . . application” requirement,130 now shoring up that requirement by (mistakenly) reading it back into Neilson.131 And as in Funk Brothers, so here the Court’s imposition of this added requirement worked against a physicalist backdrop: the Court thought it apt to approach the case “as if the . . . mathematical formula were well known” because it took the view that the claim was for the formula itself (whatever that may mean), rather than “knowledge of” it.132 And on the Court’s view that the formula “reveals a relationship that has always existed,” to claim “it” was to take something pre-existing, thereby depriving the public of “rights that it theretofore freely enjoyed.”133 The physicalist mistake here is plain: what is being claimed is “knowledge of” a specific relationship, and that was not already enjoyed.

So things stood circa 1980: three distinct categories of ineligible subject matter had emerged—natural “principles,” “natural phenomena,” and “mathematical formulas”—with claims involving

125. Id. at 588, 594–95. 126. Id. at 586, 597. 127. Id. at 586. 128. Id. at 591–92 (citing Gottschalk v. Benson, 409 U.S. 63, 67 (1972)). 129. Id. at 590. 130. Id. at 591, 594. 131. Id. at 592. The basis upon which Flook, and then Mayo in its wake, see infra note 161, advanced this interpretation of Neilson was the passage in Nielson in which the court stated: “We think the case must be considered as if, the principle being well known, the plaintiff had first invented a mode of applying it.” Neilson v. Harford, 151 Eng. Rep. 1266, 1273 (1841). But the court in Nielson was “merely postulating a counter-factual scenario” so as to analogize to a precedent case. MENELL ET AL., supra note 80, at 296. In fact, the principle that heated air better promotes ignition was not well known at the time but was Neilson’s discovery, while the application of that principle to furnaces by first heating the air before inserting it was unlikely to be very “inventive” once the principle itself was known—especially since the particulars of any effective or ineffective heating receptacles were not specified by Neilson. MERGES &

DUFFY, supra note 116, at 114–15. See generally Jeffrey A. Lefstin, Inventive Application: A History, 67 FLA. L. REV. 565 (2015). 132. Flook, 437 U.S. at 592–93. 133. Id. at 593 n.15 (internal citation omitted).


these needing, for eligibility, some further “inventive concept” in application, against the background premise that the principle, phenomenon, or formula “already existed.”

4. Erosion and revival of stringent subject-matter bars The final two chapters of the tale may be told more briefly,

consisting, as they primarily do, of shifting emphases and rearrangements of the preceding component parts. In a first phase, the Diamond pair of cases—Chakrabarty in 1980 and Diehr in 1981—seemed to signal an erosion of stringent subject-matter bars, by upholding eligibility for claims over, respectively, a bacterial organism and an algorithmic industrial process embedding a mathematical equation.134 Widely seen to herald a shift toward a more lax approach to eligibility, these cases were taken as a green light for biotech and software patents.135 The ensuing three decades witnessed a flood of these, alongside those for business methods, aided by Federal Circuit decisions that took an increasingly expansive view of eligible subject matter, as notoriously emblemized by 1998’s State Street Bank & Trust Co. v. Signature Financial Group, Inc.136 decision that upheld a patent for managing financial transactions, with the Supreme Court denying certiorari.137 An initial turn of the tide was signaled in 2010, with the Court reentering the fray in Bilski to strike down the validity of a patent for a method of hedging risk as an ineligible “abstract idea,” thereby affirming the continued existence of eligibility bars, but without saying much more by way of their underlying rationale or doctrinal contours.138 Soon enough, however, came a tidal wave in the other direction, with the triumvirate of Mayo (2012), Myriad (2013), and Alice (2014), all sounding the trumpets that distinct and stringent subject-matter bars were alive and well, each affirming one of the three categories—of “laws of nature” (Mayo), “products of nature” (Myriad) and “abstract ideas” (Alice)—and together resurrecting the basic doctrinal framework put in place by Funk Brothers and Flook, as undergirded by the rationale set forth in Benson.

134. Diamond v. Chakrabarty, 447 U.S. 303, 309–10 (1980); Diamond v. Diehr, 450 U.S. 175, 191–93 (1981). 135. See Rebecca S. Eisenberg, The Story of Diamond v. Chakrabarty: Technological Change and the Subject Matter Boundaries of the Patent System (Patents), in INTELLECTUAL

PROPERTY STORIES 327, 357 (Jane C. Ginbsurg & Rochelle C. Dreyfuss eds., 2006). 136. 149 F.3d 1368 (Fed. Cir. 1998), cert. denied 525 U.S. 1093 (1999). 137. State St. Bank & Trust Co. v. Signature Fin. Grp., 525 U.S. 1093 (1999). 138. Bilski v. Kappos, 561 U.S. 593, 612 (2010).


The “erosion” phase signaled by the Diamond pair doctrinally centered on four key aspects. First, in terms of the formal categories, each decision adopted the “abstract ideas” formulation of the third category given by Justice Stewart in his Flook dissent139 and offered similar variants of the other two: Chakrabarty framing them as “laws of nature, physical phenomena, and abstract ideas,” and Diehr giving the now-canonical formulation since adopted by the Mayo trilogy, of “laws of nature, natural phenomena, and abstract ideas.”140 Second, in terms of the stringency of the categories’ requirements, each decision offered something to proponents of both weak and strong eligibility bars. Thus, in Chakrabarty the Court emphasized, as warrant for adopting an expansive approach to the statutory categories of § 101, the legislative history of the 1952 Act, pointing to a famous snippet in the House and Senate reports to suggest that Congress had intended “anything under the sun that is made by man” to be eligible for patent protection.141 Yet, at the same time, the Court notably did not renounce its historical ineligibility categories, but rather explicitly affirmed their continued existence as a constraint on interpreting § 101.142 Similarly in Diehr, while upholding the specific claims at issue, the Court nevertheless affirmed that Benson’s bar on “algorithm[s]” remained intact.143 At the same time, however, it essentially dropped Flook’s eligibility requirement—of an “inventive concept” in application—in favor of a more lax Benson-type physicalist requirement, of “[t]ransformation . . . ‘to a different state or thing’” as the key to patentability.144 Ultimately, any internal tension in the two cases was resolved in favor of a more expansive approach to eligibility,145 owing in part to two further aspects of each that displaced functionality concerns from the center of eligibility law. One was the persistence of physicalist misnomers clouding over underlying functionality issues.146 Another was that the facts of each presented a more conducive case for eligibility than key predecessors, not only on physicalist but also

139. Parker v. Flook, 437 U.S. 584, 598 (Stewart, J., dissenting). 140. Diamond v. Chakrabarty, 447 U.S. 303, 309 (1980); Diamond v. Diehr, 450 U.S. 175, 185 (1981). 141. Chakrabarty, 447 U.S. at 309. 142. Id. 143. Diehr, 450 U.S. at 185, 191. 144. Id. at 184 (quoting Gottschalk v. Benson, 409 U.S. 63, 70 (1972)). 145. See MENELL ET AL., supra note 80, at 281. 146. Chakrabarty, 447 U.S. at 309–10; Diehr, 450 U.S. at 187.


functionality grounds.147 As a result, while functionality concerns were implicitly alleviated, they were not explicitly articulated.

The Diamond pair having opened the gates, the next three decades witnessed a flood of not only biotech and software patents, but also those involving business methods. The permissive high watermark was reached in 1998, with the Federal Circuit’s majority decision in State Street, which upheld the eligibility of financial methods claims under a “useful, concrete, and tangible result” test that dispensed with any Benson-type “physical” requirements for algorithms or software, and eschewed any categorical bar against business methods.148

A decade later, in the face of mounting criticism and concerns,149 the Federal Circuit sought to change course and stem the tide with its en banc decision in Bilski.150 Repudiating State Street’s “useful, concrete, and tangible” test,151 the court revived a Benson-type physicalist approach to eligibility, requiring process and business method claims to take embodied form, as either tied to a machine or effecting a physical transformation.152 This “machine-or-transformation” test, in turn, was rejected as a strict requirement by the Supreme Court, where a majority held that it was “not the sole test” for eligibility, even if it remained an “important clue” in many cases.153 The Court did still invalidate the claim at issue, consisting of “a series of steps instructing how to hedge risk” in financial transactions.154 Characterizing this as a claim over “the basic concept of hedging,” the Court held it ineligible as an “abstract idea.”155

147. For Chakrabarty, see infra text accompanying note 246; for Diehr, see infra text accompanying note 288. 148. State Street Bank & Tr. Co. v. Signature Fin. Grp., Inc., 149 F.3d 1368, 1371–77 (Fed. Cir. 1998). 149. One prominent critic was Justice Breyer, who in his dissent in Laboratory Corp. of America Holdings v. Metabolite Laboratories, Inc., 548 U.S. 124 (2006), characterized State Street’s “useful, concrete and tangible” test as “contrary” to long-standing Supreme Court precedent, including Morse, Benson, and Flook. Id. at 136 (Breyer, J., dissenting from dismissal of certiorari as improvidently granted). 150. In re Bilski, 545 F.3d 943, 949 (Fed. Cir. 2008) (en banc), aff’d, 561 U.S. 593 (2010). 151. Id. at 959–60. 152. Id. at 954. 153. Bilski v. Kappos, 561 U.S. 593, 604 (2010) (emphasis added). 154. Id. at 599. The specifics of the claims are discussed infra text accompanying note 268. 155. Id. at 611.


Three aspects of the decision are noteworthy: (1) First, this was the Court’s first inclusion of something other than a mathematical formula or algorithm under the “abstract idea” heading—an expansion of the category that was then consolidated by Alice’s similar inclusion of “the concept of intermediated settlement” to reduce risk.156 (2) Second, regarding “business method” claims, the Court declined to rule these out as categorically barred.157 (3) Finally, the Court said very little as to why abstract ideas were ineligible, or how claims involving such ideas or business methods may become eligible (besides rejecting the physicalist “machine-or-transformation” test as exclusively determinative).158

The latter vacuum was remedied soon enough by the trilogy of Mayo, Myriad, and Alice, which filled in the gap left by Bilski for analysis of ineligibility, for each of the three categories of “laws of nature” (Mayo), “natural phenomena” (Myriad), and “abstract ideas” (Alice). We will take up the details of these cases in Section III.C, where their facts and holdings will be used to illustrate the distinctive contours of the reconstructed doctrinal framework for eligibility being proposed there. At present, the key point is that the cases resurrected, in steps, the eligibility framework put in place by Funk Brothers, Benson, and Flook. Starting with Mayo’s elaboration of Benson’s “basic tools” rationale into a “building-block concern,”159 this continued with Mayo’s embrace of the Funk/Flook requirement of an “inventive concept” in application160—bolstered, as in Flook, by a misreading of Neilson161—and finally was crystallized by Alice into the following two-step doctrinal framework for all three categories, which the Court read back into Mayo:

Step 1: First, we ask “whether the claims at issue are directed to” a law of nature, natural phenomenon, or abstract idea. Step 2: If so, “we then ask, ‘what else is there in the claims before us,” considering “the elements of each claim both individually and ‘as an ordered combination’ to determine whether the additional

156. Alice Corp. v. CLS Bank Int’l, 573 U.S. 208, 219 (2014). 157. Bilski, 561 U.S. at 606–09. 158. Id. at 604. 159. Mayo Collaborative Servs. v. Prometheus Lab’ys, Inc., 566 U.S. 66, 71, 89 (2012). 160. Id. at 72, 81–82. 161. Id. at 83; MENELL ET AL., supra note 80, at 296 (“[B]oth Flook and Mayo based the inventive application requirement on a profound misunderstanding of the Neilson case.”).


elements ‘transform the nature of the claim’ into a patent-eligible application. We have described step two of this analysis as a search for an ‘inventive concept.’”162

Three observations on this—the present doctrinal framework for eligibility law—may serve to draw our review of its historical development to a close. First, what the Mayo trilogy has done is to integrate the Diamond pair’s formulation of the three distinct ineligibility categories—of “laws of nature, natural phenomena, and abstract ideas”—with the (pre-Diamond) Funk, Benson, and Flook framework of ineligibility analysis, both in its rationale for why they are ineligible (because they serve as “basic building blocks” of scientific and technological work) and in its test for how claims involving them may become eligible (by containing an “inventive concept in application”). But, second, there is a fundamental problem with this framework—its basic disconnect between “the why” (its underlying rationale of ineligibility) and “the how” (its test for becoming eligible). If the reason certain spaces of knowledge are ineligible is because they are “basic,” then why doesn’t delimiting the claims to a zone of “application” suffice for eligibility? Because, third, alongside this underlying functionality concern have been a series of overlying physicalist misnomers, which have obscured both why certain subject matter is ineligible and how it may become eligible. The key to reconstructing eligibility law, then, lies in shedding all lingering physicalism, fully developing its distinct functionality rationale, and, finally, properly working out and following through on that rationale’s doctrinal implications. It is to these tasks that the following two sections turn.

These sections will also take up one final issue. In its winding procession from nineteenth-century origins in “principles,” onto “phenomena,” and then “formulas,” the three central categories into which eligibility law has differentiated—laws of nature, natural phenomena, and abstract ideas—have been accompanied by three more on the margins: mental steps, software, and business methods.163 A full reconstruction of the doctrine, then, needs to attend to both sets of categories, and specifically to the two problems posed by each: First, what is the distinct content of each of the categories of ineligible

162. Alice, 573 U.S. at 217–18 (internal citations to Mayo, 566 U.S. at 78, 79, 78, and 72–73). 163. See supra notes 115, 117, and 148 and accompanying text.


subject matter and, second, why is each ineligible for patent protection?

B. Critique of the Three Categories: The Spell of Physicalism

1. The categories: Laws of nature, products of nature, abstract formulas The present-day categories of ineligible subject matter are, per the

Mayo trilogy, “laws of nature, natural phenomena, and abstract ideas.” Our first task in reconstructing this area of doctrine is simply to clarify what each category means, ideally in a manner that retains its distinctiveness from the others. Having done so, we then need to follow suit from Section I.B’s dephysicalization of the statutory categories of eligible subject matter, and now dephysicalize these common-law categories of ineligible subject matter. In other words, for each category we need to read in the phrase “knowledge of” and unpack the implications of that. Doing so enables us to clarify both what is wrong with existing ineligibility doctrine (it being marred by a series of physicalist misconceptions), and what is right (its embryonic expression of functionality concerns).

What does each category stand for, and how does it differ from the others? A few hurdles stand in the way of clarity on this front. First is the ambiguity attending “natural phenomena”: the term may be taken to encompass both naturally occurring “products” and naturally occurring “processes.” But doing so would seem to collapse “laws of nature” as a distinct category: all such “laws,” presumably being “naturally occurring processes,” could be subsumed as a sub-domain of “natural phenomena.” A second distinct problem attends “laws of nature” from the other side: since all such “laws” are ostensibly “abstract,” they would also seem to be subsumable as a sub-domain of “abstract ideas.” Leaving us with the result that a given invention—such as the knowledge in Mayo of the correlation between ingesting a substance and blood chemical levels—may simultaneously fit all three categories, being at once a “law of nature,” a “natural phenomena,” and an “abstract idea”! Finally, a distinct third problem is one facing “abstract ideas” on its own: irrespective of whether or not the term is taken to include “laws of nature” within its ambit, what the term by itself should be taken to mean is maddeningly difficult to specify with any precision.

Adopting the sensible presumption that each category should retain its distinct integrity from the others, the following solutions suggest themselves. First, we should read “natural phenomena” narrowly,


restricting it to “naturally occurring products”—or, simply, “products of nature.”164 “Naturally occurring processes,” meanwhile, may plausibly already fall within what is now a distinct category, “laws of nature.” Finally, such “laws of nature” may retain their distinctiveness from “abstract ideas” by restricting the latter term to those “abstract”—meaning “unapplied” (in a sense to be specified shortly)—ideas that concern regularities not of nature but of artifacts, meaning artificially generated phenomena the variables and relations of which are nevertheless reducible to mathematical equations or formulaic mathematical methods.165

2. Critique of the categories: “Knowledge of” laws, products, and formulas This yields, then, the following list of three distinct categories: “laws

of nature, products of nature, and abstract formulas.” And now to state them more accurately: “knowledge of” said laws, products, and formulas. In what does such knowledge consist? For the first category, it is knowledge of a natural process; for the second, knowledge of a natural structure; and for the third, knowledge of an artifactual regularity. Why is such knowledge ineligible for patent protection?

Two very distinct sets of reasons have, again, been advanced by the courts, in an almost inextricable tangle. But the first of these turn out, upon examination, not to be “reasons” at all, but rather a series of misplaced objections foundering on ill-conceived physicalist notions. It cannot be that these claims are ineligible because they go to “abstract”—as in dephysicalized—“ideas”: all patent claims go to that. Nor because they go to pre-existing physical “products” of nature: no patent claims go to that. Nor because they go to pre-existing Platonic “laws” of nature: patent claims only go to “knowledge of” said laws, and such knowledge is always a human creation, even if one takes the “laws” themselves simply to exist “out there,” independent of humans.

In other words, strewn throughout ineligibility case law are a series of discrete physicalist misnomers, differentially applicable to the three categories of ineligible subject matter of laws of nature, products of

164. In lieu of “natural phenomena” from Diehr and the Mayo trilogy, and “physical phenomena” from Chakrabarty. 165. This conception follows Diehr in restricting this category to the first two of five distinct senses growing out of Benson and progeny: “mathematical equations” and “formulaic mathematical methods.” The other three senses—formulaic or “algorithmic” methods in general; “mental processes”; and “abstract ideas” simpliciter—go to the secondary categories of software, “mental step,” and business method claims, which are taken up in Section III.C.4.


nature, and abstract formulas or ideas. These errors all stem from a common failure to see that patents always and only obtain in a space of “knowledge of” something, rather than some tangible “thing.” Starting out from this mistaken reification—of thinking that patents obtain in some “thing” itself, rather than “knowledge of” it—the errors fan out into three main types: (1) Supposing that patents may obtain in a tangible object, “product” claims are thought to be over the tangible “product” of nature itself and, hence, something “naturally occurring”; whereas, the actual object of such claims is “knowledge of” the structure of such a product, which is surely not naturally occurring.166 (2) Supposing perhaps that patents must obtain in some tangible object or physical process, “principles” or “ideas” claims are thought to be unduly “abstract,” as in dephysicalized; whereas, all patent claims are, in fact, dephysicalized.167 (3) Supposing that patents obtain in something “itself,” “laws of nature” or “mathematical formulas” claims are thought to be claims over something “pre-existing” (on a Platonist view of the status of such laws and formulas); whereas, actually patent claims are actually only over “knowledge of” something, and such knowledge surely does not pre-exist human efforts. Thus, whether one adopts a Platonist or constructivist ontology of the object of knowledge is irrelevant, or at least secondary to the main error, which is to reify the object of the claims as the law or formula “itself,” rather than “knowledge of” it.168

The upshot of such physicalist errors may be any one of three pernicious effects (as detailed in Section III.C.(1) below): (1) under-inclusivity: certain subject matter may be deemed ineligible for no reason other than a physicalist misconception of the object of patent rights;169 (2) over-inclusivity: certain subject matter may be deemed eligible for no reason other than a physicalist misconception of the object of patent rights;170 (3) indeterminacy: finally, since no good reason is given either way, the “tests” that issue from this approach suffer not only from a lack of principled substantive grounding, but are often hobbled by a formal lack of clarity and internal consistency

166. See supra notes 22–24, 146 and accompanying text. 167. See supra notes 74, 82, 85, 121, 144, 146 and accompanying text. 168. See supra note 132 and accompanying text. 169. See infra text accompanying notes 244, 249, 254. 170. See infra text accompanying notes 238–39.


as well.171 And in some leading cases, such as Myriad, all three effects may be simultaneously seen at work.172

Does this then mean that there is no plausible justification for the subject-matter bars? No. Only that to see through to it we must first jettison implausible physicalist notions. What remains in their wake? A second set of more plausible concerns, having to do with functionality. These, however, have until now been ensnared within the physicalist web, and thus given only inchoate voice by the courts. Consequently, they need to be reconstructed along more plausible lines, both as a conceptual matter and in terms of their underlying policy rationale. Finally, they then need to be systematically followed through as a doctrinal matter. It is to these three tasks that we now turn.

III. THE INELIGIBILITY CATEGORIES: RECONSTRUCTION

A. Functional Knowledge: Knowing That vs. Knowing How

Consider the following candidate formulation of the claim relating to the discovery or invention in Neilson, one that surely would have been held ineligible:

“Knowledge of the principle that heated air promotes ignition better than cold.”

What is wrong with such a claim? Again, it cannot be that it pertains to something “abstract,” in the sense of disembodied or intangible: all patent claims pertain to intangible spaces of knowledge. And it cannot be that it goes to a “principle” of nature, one that might be thought on Platonist grounds to be already “out there,” pre-existing human intervention. Whatever one’s views on such Platonism, it is beside the point here since the claim expressly goes to “knowledge of” said principle, and such knowledge surely does not pre-exist human intervention but is precisely the result of human ingenuity, whether it is thought to take the form of “discovery” or “creation.”

On the contrary, what is wrong with such a claim is that it goes to merely knowing that a process or operation exists in the world, without knowing how to do something with it, or knowledge of any practical application. And similarly for the claim in Myriad that was held ineligible (when that claim is set forth in its proper “knowledge of” form):

171. See infra text following note 242. 172. See infra text accompanying note 243.


“Knowledge of the DNA sequence and precise location of the BRCA1 gene.”

Again, what is wrong with such a claim? It cannot be that it pertains to something “naturally occurring,” a “product” of nature: the claim is not over any tangible “product” but over knowledge of its structure and location. And what is wrong with such a claim is that it goes simply to knowledge of a structure in the world, merely knowing that it exists, without any knowledge of a practical application for said structure, knowing how to do something with it.

It is this distinction—between knowing that versus knowing how—that forms the conceptual backbone of ineligibility doctrine, giving it shape and sense after all physicalist errors have been dissipated.173 The distinction, to elaborate, is between: (1) merely knowing that some structure or operation exists in the world versus (2) actually knowing how to do something with it. Knowledge of the first sort is about understanding something about the world; knowledge of the second sort is about intervening in the world. Understanding is a form of basic knowledge; intervening a form of applied knowledge. The former is science; the latter technology. And it is this contrast, between basic scientific understandings versus applied technological interventions, that forms the hinge around which ineligibility doctrine, properly reconstructed, pivots.

This claim, in turn, raises two distinct but related questions: (1) First, in what precisely does this distinction consist? That is, how are we to

173. The distinction between knowing-that versus knowing-how has a long pedigree in philosophical accounts of knowledge. Associated most prominently with the work of Gilbert Ryle, who elaborated it in terms of the distinction between “propositional” versus “practical” knowledge, on some views it traces back to Aristotle, if not Plato, and the distinction drawn there between “episteme” versus “techne.” See GILBERT RYLE, THE

CONCEPT OF MIND 25–61 (Routledge 2009) (1949); Jeremy Fantl, Knowledge How, in STANFORD ENCYCLOPEDIA OF PHILOSOPHY 1 (Stanford Univ. 2017) (2012), https://plato.stanford.edu/archives/fall2017/entries/knowledge-how [https://perma.cc/RD7U-JNYM]. However, the present argument does not seek to rely on (or, for that matter, to abjure any relation to) any specific version of the distinction as it is developed within various philosophical theories. Rather, the present account of the distinction is meant to stand on its own, grounded in its own conceptual elaboration and underlying rationale, as developed next. For earlier uses of the distinction in IP, see Kevin Emerson Collins, The Knowledge/Embodiment Dichotomy, 47 U.C. DAVIS L. REV. 1279, 1288–90 (2014); Sean M. O’Connor, The Overlooked French Influence on the Intellectual Property Clause, 82 U. CHI. L. REV. 733, 773–85 (2015); Sean M. O’Connor, The Lost “Art” of the Patent System, 4 U. ILL. L. REV. 1397, 1400–04 (2015). These authors put the distinction to quite different uses, both from each other and from the present argument.


determine whether some space of knowledge lies on the knowing-that, or basic scientific understanding, side of the divide versus the knowing-how, or applied technological intervention, side? (2) Second, why should this distinction matter? That is, why should knowledge lying on one side be barred from patent protection, while that on the other be eligible? An initial answer to the first question is that to determine whether some space of knowledge is basic versus applied, we resort to the related contrasts, of understanding versus intervention and science versus technology. Although perhaps helpful as an orienting heuristic, this answer is unlikely to be fully availing. This is because like the basic/applied distinction, those between understanding/intervening and science/technology are themselves not self-evident but require explication. And to do that we need to know why we are setting up these contrasts in the first place, or why the distinctions matter. We need to know, that is, what the underlying rationale is for keeping basic scientific knowledge out of the patent system. It is to this that we now turn.

B. The Platform Rationale: Basic (Science) vs. Applied (Technology)

Why should basic scientific knowledge be ineligible for patents, with protection restricted to applied technological knowledge? Because such knowledge serves as a foundational platform for all subsequent researchers, one that should be kept fully free and clear of all patent barriers, with its generation being better suited to the alternative innovation policy of publicly funded open science. The present Section develops this platform rationale, beginning by distinguishing it from two other arguments with which it may be identified but from which it is importantly distinct.

1. What the Platform Argument is not A first point of distinction is between the platform argument and the

Supreme Court’s own “basic building block” rationale.174 Although the present argument builds on the Court’s rationale, it does so by advancing one particular way of filling in its key missing dimension. To say that basic knowledge is a “building block” of scientific and technological research, one that many future researchers will draw upon in their own work, is, as a ground for denying patent protection, radically incomplete. Indeed, by itself the argument seems to be one in favor of allowing patents: the more fundamental the knowledge, the

174. See supra note 105.


more socially significant or valuable, and hence the greater the need for its generation, and hence the greater the case for providing patent incentives for it. The entire point of the patent system being to incentivize the generation of socially valuable knowledge, to point to the very great value of some knowledge is not an argument against, but rather for, allowing patent protection over it.

Of course, the forthcoming reply is likely to be that patents come with the drawback of restricting access to the knowledge generated, and these access costs are greater the more valuable the knowledge. But by itself this reply still remains, like all other stand-alone access arguments, a non-starter: one cannot one-sidedly point to access concerns as a reason against patenting, without also addressing the incentive side of the equation. If, without the patent incentive, the invention would not be generated, then surely that is a worse outcome than it being generated but coming with patent barriers to access. Better a world with the invention and restrictive access to it than one with no invention at all (and hence access to nothing).

One possible way to complete the building block argument is to fill in its missing incentive piece by arguing that patents on basic knowledge should not be unavailable so much as narrowly restricted, either in their breadth or timing, so as to avoid unduly “preempting” the work of others. And such a “preemption” view is the second argument that needs to be distinguished from the platform rationale.175 On the main version of this argument, the aim of eligibility doctrine is to restrict the scope of patent claims, so as to keep them commensurate with the patentee’s actual contribution. Favored by some as the best reading of key nineteenth-century eligibility cases

175. The Court itself has often characterized its “building block” rationale in terms of a concern with “preemption,” even at times using the terms interchangeably. Bilski v. Kappos, 561 U.S. 593, 611–12 (2010) (“Allowing petitioners to patent risk hedging would pre-empt use of this approach in all fields, and would effectively grant a monopoly over an abstract idea.”); Alice Corp. v. CLS Bank Int’l, 573 U.S. 208, 216 (2014) (“We have described the concern that drives this exclusionary principle as one of pre-emption.”). But whatever label we use for the Court’s central concern, the present point is that substantively it needs completion by either of two distinct arguments: the one presently discussed in the text and put aside as not fitting the Court’s doctrine, and the one developed in the following section and embraced as more fitting. And the “preemption” label, despite being used on occasion by the Court itself, is more apt for this first argument that in substance the Court itself rejects, as discussed in the text accompanying note 180. Cf. Strandburg, supra note 30, at 563. For the second argument, which better fits the Court’s substantive concerns, the more apt label is the “platform” rationale.


such as Morse and the Telephone Cases, this argument has been most prominently advanced in recent years by Professor Mark Lemley and co-authors as a way of re-interpreting eligibility doctrine in the face of its resurrection post-Bilski.176 A second possible variant is to focus not on the breadth so much as the timing of patent protection: drawing on the parallels between the Court’s “preemption” language in Alice and its 1966 Brenner v. Manson177 decision, this argument would assert that patents over basic scientific research are not to be ruled out as ineligible so much as “too early,” with disclosure of a “specific and substantial” downstream “use” required before eligibility kicks in.178

Whichever version of the argument is advanced, it faces a key difficulty: it essentially collapses eligibility doctrine into other areas of patent law, principally § 112 doctrines of claim breadth and practical utility tracing back to Morse and Brenner. And this is not merely a formal point, but one having significant substantive bite. To say that claims on basic knowledge may preempt others and, hence, that patents over them should not be “too broad” or “too early,” is radically different from saying that they are simply ineligible, and, hence, get “no patent at all.” On the former view, once you pass muster under the breadth or timing doctrines, you are eligible to receive a patent that reaches more broadly or back upstream.179 By contrast, ineligibility doctrine rules out protection simpliciter, steering some zones of research free and clear of all patents.

Which view is to be preferred? As a simple matter of fidelity to existing law, the Court has made it clear that eligibility is to be treated as a distinct stand-alone matter: this was stated in no uncertain terms in Mayo,180 but it bears noting that even key nineteenth-century cases such as Morse do articulate eligibility as a distinct (if inchoate) doctrine from that of claim breadth.181 Moreover, this also makes good policy sense: distinct eligibility bars find a powerful substantive justification in the platform rationale for keeping basic knowledge fully free and clear of patents, as discussed next. Finally, that rationale not only

176. Lemley et al., supra note 5. 177. 383 U.S. 519 (1966). 178. See id. at 522, 528–29. 179. See, e.g., The Telephone Cases, 126 U.S. 1, 353 (1888); In re Brana, 51 F.3d 1560, 1565, 1567 (Fed. Cir. 1995). 180. Mayo Collaborative Servs. v. Prometheus Lab’ys, Inc., 566 U.S. 66, 88–89 (2012) (explicitly distancing the Court’s eligibility doctrine from views concerning claim breadth). 181. See supra note 88 and accompanying text.


provides the best way of making sense of the doctrine but also for improving upon its existing three-part framework, as argued in Section III.C below.

2. What the Platform Argument is And so, we finally turn to the platform argument itself: the reason

why basic scientific knowledge should be ineligible for patent protection, with such protection restricted to cover only applied technological knowledge, is because the former serves as a foundational platform for subsequent researchers, one that should be kept fully free and clear of all patent barriers, with its generation better suited to the alternative innovation policy of publicly funded open science. The argument, that is, takes the form of a comparative-institutional case for public funding over patents as the innovation policy of choice for enabling the generation of basic scientific knowledge.

That case hinges on the tight link between basic knowledge and the comparative virtues of the internally driven exploratory trajectory of peer production, as compared to applied knowledge and the comparative virtues of externally oriented search processes of market production. More comprehensively, it has to do with the comparative costs and benefits of market-driven, property-enabled innovative activity versus peer-driven, publicly enabled innovative activity.

In summary form, that case rests on three prongs: (1) Comparative costs: the key drawback of IP rights as an incentive mechanism—barriers to access—comes with especially high costs in the strongly cumulative context of basic research. (2) Comparative benefits, 1: meanwhile, the key advantage of IP rights as an incentive mechanism—channeling innovation in accord with market price signals—is considerably attenuated by two features of basic research that radically degrade market prices as signals of its social value: its far-off time horizons and high positive spillovers. (3) Comparative benefits, 2: finally, the key ostensible drawback of public funding—its channeling of research in a highly centralized way—is in fact alleviated in the context of basic science, owing to the internally driven exploratory trajectory of foundational knowledge, one that is particularly well-suited for decentralized discovery guided by a peer-structured process.

The first two components of this case are hopefully familiar, being based on long-standing insights developed in the overlapping economic, sociological, and legal literatures on public-sector funding and open-science research. For these, the present discussion aims


primarily to provide an integrated synthesis, fitting them within an overall frame of comparative-institutional analysis of the case for public funding versus patents as the innovation policy of choice in this area. The third component, however, may be less well-recognized and merits special emphasis, going as it does to the core of the present argument. And this is the difference between the internally driven versus externally oriented character of the search processes of basic versus applied research. The policy implications of that difference underpin, and help elaborate and apply, the conceptual distinctions drawn above between knowing-that basic understanding and knowing-how applied intervention.

The first prong of the comparative case for public funding over patents for basic research is likely the most familiar: the highly cumulative character of such research poses in especially sharp form the main drawback of IP rights as an innovation policy mechanism, namely proprietary barriers to access.182 Basic or foundational research feeds into highly cumulative innovation processes in two key distinct ways: (a) most obviously, it directly feeds into more applied research downstream; and (b) less obvious but no less significant, it catalyzes further discoveries upstream as well, either in the same or adjacent fields, thereby feeding into future foundational work.183

This foundational character of basic research is of course precisely what the Supreme Court’s ineligibility jurisprudence has in mind with its “building block” concern. But as stated above, that concern is incomplete if it points only to the access costs of IP rights. Completing it requires accompanying access concerns with an argument that either the incentive benefits of IP rights or some alternative innovation policies are not needed, or that said benefits are better secured by an

182. See Robert P. Merges & Richard R. Nelson, On the Complex Economics of Patent Scope, 90 COLUM. L. REV. 839, 843–44 (1990); Mark A. Lemley, The Economics of Improvement in Intellectual Property Law, 75 TEX. L. REV. 989, 992 (1997); WILLIAM W. FISHER III, INTELLECTUAL PROPERTY AND INNOVATION: THEORETICAL, EMPIRICAL, AND

HISTORICAL PERSPECTIVES (2001), https://cyber.harvard.edu/people/tfisher/Innovation.pdf [https://perma.cc/PAJ5-UED8]; Dan L. Burk & Mark A. Lemley, Policy Levers in Patent Law, 89 VA. L. REV. 1575, 1581–86 (2003). 183. See Michael A. Heller & Rebecca S. Eisenberg, Can Patents Deter Innovation? The Anticommons in Biomedical Research, 280 SCI. 698 (1998) and the legal scholarship on “open science,” infra, note 197.


alternative to IP rights. The former is unlikely to hold here.184 And so it is to the latter that we must turn, namely that although some innovation policy likely is needed to ensure an adequately robust level of basic research, the preferable innovation policy in the present context is not IP rights, but an alternative—specifically, public funding.

To make out that case, we need to show that this alternative will outperform patents on a mix of comparative costs and benefits. The analysis of comparative costs is straightforward: the alternative of public funding comes without the exclusionary restrictions of patents, which pose especially high costs in the present context of cumulative innovation. The analysis of comparative benefits, meanwhile, hinges on the respective merits of market-driven innovative activity carried out under the aegis of patents versus that of peer-driven innovative activity carried out in the public sector of largely government-funded, university-based open science.

Comparative benefits, part 1: the advantages of market-driven innovation. The central virtues of market-driven innovative activity are two-fold: (1) the signal provided by market prices is often a reliable metric of the social value of an innovation;185 and (2) the spur provided by market competition enables a decentralized way of exploring the innovation frontier.186 As to the first, however, in the case of basic research, scholarship has disclosed two severe deficits, high spillovers and short time horizons, with market metrics of its social value. (a)

184. Given the high capital costs of such research, even those with predominantly non-pecuniary motives would need some way to materially sustain their activity. And while there are significant non-proprietary ways for private firms to internalize benefits of engaging in basic or upstream research—both in the form of developing in-house capacity to take advantage of breakthroughs generated elsewhere and of capitalizing on in-house breakthroughs via downstream outputs that can be propertized—see Ashish Arora & Alfonso Gambardella, Evaluating Technological Information and Utilizing It: Scientific Knowledge, Technological Capability, and external linkages in biotechnology, 24 J. ECON. BEHAV. & ORG. 91 (1994); Iain Cockburn & Rebecca Henderson, Public-Private Interaction and the Productivity of Pharmaceutical Research (Nat’l Bureau Econ. Rsch., Working Paper No. 6018, 1997)—these are unlikely to be significant enough to ensure a robust level of such activity, in line with its social value, owing to the fact that such firms will only ever internalize a small fraction of that high social value, as discussed momentarily. 185. See Harold Demsetz, Information and Efficiency: Another Viewpoint, 12 J.L. & ECON. 1, 13 (1969). 186. See F.A. Hayek, The Use of Knowledge in Society, 35 AM. ECON. REV. 519, 521 (1945).


High spillovers: basic research has such high positive spillovers, both up and downstream, as to make it implausible that a private firm can internalize more than a fraction of its social value, even with low-cost licensing in place.187 In other words, even putting aside the transactional costs involved in any licensing that is secured, and any access costs from failed licensing, it remains the case that from the vantage of sending accurate incentive signals via price, licensing will enable private capture of only a very small fraction of the social value of basic research. (b) Time horizons: reinforcing the previous consideration is the fact that many of the benefits of such research will only come to fruition far down the line, long past the short-to-medium term time horizons of market actors, whose private discount rate is higher than any plausible social one.188

Market prices, then, will systematically under-value basic research, giving rise to a strong case for publicly funded research to step in to pick up the slack. Up to this point, public funding is needed simply to fill in a gap left by market activity, which would hold even if the former were clearly inferior to the latter in terms of steering innovative searches. But even that turns out not to be the case here. Indeed, in the context of basic science, we have good reason to believe that public-sector research will not only hold its own against market-driven innovation but may even outperform it. Why? For two reasons: (1) In conditions of high uncertainty, such as those that attend basic research, a decentralized, “many-minded” search process is imperative, and the internal exploratory trajectory of foundational research facilitates a peer-driven version of such a process that is an effective alternative to the market’s own price-driven variant. (2) And it does so in a form that also allows for greater coordination, and thus reduced wastes from duplication, than does market-driven activity. We now briefly elaborate on each of these.

187. See Kenneth J. Arrow, Economic Welfare and the Allocation of Resources for Invention, in THE RATE AND DIRECTION OF INVENTIVE ACTIVITY: ECONOMIC AND SOCIAL FACTORS 609 (R.R. Nelson, ed. 1962); Edwin Mansfield, et. al Social and Private Rates of Return from Industrial Innovations, 91 Q.J. ECON. 221, 233–37 (1977); Brett M. Frischmann, Commercializing University Research Systems in Economic Perspective: A View from the Demand Side, in UNIVERSITY ENTREPRENEURSHIP AND TECHNOLOGY TRANSFER: PROCESS, DESIGN, AND INTELLECTUAL PROPERTY 155 (Gary D. Libecap ed., 2005); Brett Frischmann & Mark Lemley, Spillovers, 107 COLUM. L. REV. 257, 257 (2007); BRETT M. FRISCHMANN, INFRASTRUCTURE: THE SOCIAL VALUE OF SHARED RESOURCES (2012). 188. See Richard R. Nelson, The Simple Economics of Basic Scientific Research, 67 J. POL. ECON. 297 (1959).


Comparative benefits, part 2: the advantages of peer-driven innovation. The second key benefit of market-driven innovative activity is, to repeat, that it enables a form of decentralized, many-minded search of the innovation possibility frontier. But against this we must consider that public sector research—i.e., government funded, university-based research—comes with its own distinct form of decentralized, many-minded exploration. To evaluate their comparative virtues, we need to review briefly the basics of innovation theory and policy on this front.

From an economic point of view, exploration of the innovation possibility frontier ideally involves not one sweeping investment decision but rather a series of sequential ones. This is best modeled as a kind of step function: subsequent decisions involve a higher rate of investment, but alongside greater expenditures the amount of information available for making the decisions also increases, so that the uncertainties become, in lockstep, less fundamental.189 Earlier stages, being highly uncertain, should incur lower outlays per step, so that the drawback from the “many minds” needed to explore uncertainty—duplicative wastes from overlapping failures and successes—is not as worrisome due to lower unit costs. But with each step uncertainty is reduced: as dry holes are winnowed out, we funnel toward prospects with greater chances of success. Ultimately, we may reach a stage where we can confidently devote a large measure of resources to a single line of inquiry, at which point the benefits of a more coordinated, rather than decentralized search come to the fore, to cut down on duplication wastes. To sum up: the greater the uncertainty, the greater the advantages of many minds; the greater the costs, the greater the advantages of coordination.190

Markets provide a setting for decentralized and, at least initially, uncoordinated exploration. For earlier, more upstream “research” stages of R&D, this may serve us well, but at later, more downstream “developmental” ones it may become too costly. And it is precisely at this point that coordination via property may kick in, in the form of centralized development in the hands of a single patent-holder of broad rights over a pioneer innovation, as counseled by Kitchian

189. See generally WILLIAM NORDHAUS, INVENTION, GROWTH, AND WELFARE: A

THEORETICAL TREATMENT OF TECHNOLOGICAL CHANGE (1969); F. M. SCHERER, INNOVATION AND GROWTH 152 (1984); OFFICE OF TECHNOLOGY ASSESSMENT, PHARMACEUTICAL R&D: RISKS AND REWARDS 279 (1993). 190. See Edmund W. Kitch, The Nature and Function of the Patent System, 20 J. L. &

ECON. 265, 265–66 (1977); Merges & Nelson, supra note 182, at 843–44.


“prospect” theory.191 Something very much like this often takes place in biopharmaceutical innovation, where many-minded exploration at the more uncertain midstream stage of applied research is carried out by small biotech firms—often clustered in research parks around universities—before the baton is passed off to big pharma to coordinate the more expensive development stage of clinical testing.192

But what about for the further upstream zone of basic research? Here another institutional setting kicks in, of public-sector activity consisting of two components: (a) government funding of (b) university-based science.193 Public research, it is commonly thought, is a setting for coordinated activity via centralized decision-making. With the boon of public funding, it is assumed, comes the bane of bureaucratic decision-making or “central planning.” And while to some extent this may be unavoidable for the overall magnitude of the enterprise, at a granular level regarding its direction it need not be, and in fact typically is not, the case, owing to the peer-driven character of scientific research. Such research resembles but is distinct from commons-based peer production, a space of decentralized yet coordinated activity driven largely by non-pecuniary motivations.194 This latter being most feasible when the material inputs to an activity are relatively modest so that non-pecuniary internal and social rewards largely suffice, it faces

191. See Kitch, supra note 190 (suggesting that patents function as “prospecting” rights, to channel exploration of risky technological frontiers by coordinating it in the hands of a single, broad rights holder); F. Scott Kieff, Property Rights and Property Rules for Commercializing Inventions, 85 MINN. L. REV. 697, 707 n.47 (2001); John Duffy, Rethinking the Prospect Theory of Patents, 71 U. CHI. L. REV. 439, 441–46 (2004). 192. See Jürgen Drews, Drug Discovery: A Historical Perspective, 287 SCI. 1960 (2000); Gary Pisano, Pharmaceutical Biotechnology, in TECHNOLOGICAL INNOVATION AND

ECONOMIC PERFORMANCE 358 (Steil et. al, eds., 2002); RICK NG, DRUGS: FROM DISCOVERY

TO APPROVAL 5–6 (2004); NIH, Changing Patterns of Pharmaceutical Innovation (2006). 193. Thus in 2017 the share of basic research carried out by public-sector institutions of government labs, universities, and non-profits was 71%. Science & Engineering Indicators, NAT’L SCI. FOUND. (Jan. 15, 2020), https://ncses.nsf.gov/pubs/nsb20201/u-s-r-d-performance-and-funding. Meanwhile, the share of university-based research funded by the federal government came to 53% in 2018, with most of the rest coming from state and local governments, nonprofits, and in-house, and private-sector funding comprising 6%. Science & Engineering Indicators, NAT’L SCI. FOUND. (Jan. 15, 2020), https://ncses.nsf.gov/pubs/nsb20202/academic-r-d-in-the-united-states. 194. See Yochai Benkler, Coase’s Penguin, or, Linux and The Nature of the Firm, 112 YALE L.J. 369, 375–76 (2002); YOCHAI BENKLER, THE WEALTH OF NETWORKS: HOW SOCIAL

PRODUCTION TRANSFORMS MARKETS AND FREEDOM 91–127 (2006).


difficulty when capital costs are high,195 and when those undertaking the activity depend on it for their livelihood—two conditions clearly met in the case of advanced scientific research. And so, in steps the modern enterprise of “open science,” a form of publicly funded peer production: decentralized yet coordinated and also able to address high material costs. A paradigmatic example here is the combination of National Institutes of Health (NIH) funding and peer review of grant proposals.196

The central aspect of this enterprise for present purposes is its internally driven exploratory trajectory. Basic scientific research is guided more by the searchlight of the lamppost than by the location of the keys. Its explorations of the knowledge frontier move out from existing understandings, rather than in toward existing problems. Its orienting aim is to expand fundamental understanding, not to solve practical problems. Hence its criteria of success are determined by epistemic norms internal to a scientific discipline, rather than external metrics of practical success in application, whether these are understood in market or other social value terms. In other words, its search processes are particularly well-suited to the peer-driven character of university-based research, rather than the market-driven character of firm-based development. Serving as the lynchpin of the platform rationale, further, to flesh out this argument’s premises and implications, we need to situate it within a broader account of the modern scientific enterprise.

That enterprise, as disclosed by scholars of “open science” working in sociology, philosophy, law, and economics, is organized around three principal mechanisms: (1) First, at the level of individual motivation, scientists tend to be animated as much or more by the internal and social rewards of scientific activity—its intellectual gratifications and peer recognition—as by material incentives. (2) Second, as a result they strive to publish early and scrutinize competitively each other’s work, leading to: (a) rapid generation of

195. Yochai Benkler, Commons-Based Strategies and the Problem of Patents, 305 SCI. 1110, 1111 (2004) (“[T]he problem of high-cost bottlenecks may limit the extent to which some processes can be made amenable to peer production.”). 196. See Bhaven N. Sampat, Mission-Oriented Biomedical Research at the NIH, 41 RSCH. POL’Y 1729, 1730, 1732–33 (2012); Katherine Strandburg, Curiosity-Driven Research and University Technology Transfer, in UNIVERSITY ENTREPRENEURSHIP AND TECHNOLOGY

TRANSFER: PROCESS, DESIGN, AND INTELLECTUAL PROPERTY 97 (Gary D. Libecap ed., 2005). NIH-based funding comprises the majority of federal funding of academic research coming to 55% in 2018. NSF, supra note 193.


knowledge; (b) wide dissemination feeding into cumulative advance; and (c) peer review as a means of quality control. (3) Finally, the institutional culture of the scientific community as a whole foments important “norms of science” in addition to those of openness and sharing via early publication—namely, disinterestedness (in conducting research), impartiality (in reviewing others’ work), and organized skepticism—which, in combination, help to account for science’s epistemological success.197

To be sure, each aspect of this composite picture of the “Republic of Science” has come in for criticism, but none in ways essential to the present argument. Thus, regarding the first, some economists have queried the role of non-material motivations, either on a priori commitments to homo economicus198 or, more plausibly, on empirical indications of shifts in such motivations over the career cycle of an individual scientist or, for the community as a whole, over time as a result of larger policy changes (such as the Bayh-Dole system instituted

197. The foundational sociological and philosophical works in this vein are: ROBERT

K. MERTON, THE SOCIOLOGY OF SCIENCE: THEORETICAL AND EMPIRICAL INVESTIGATIONS

(Norman W. Storer ed., 1973); MICHAEL POLANYI, PERSONAL KNOWLEDGE TOWARDS A

POST-CRITICAL PHILOSOPHY (1962); Michael Polanyi, The Republic of Science: Its Political and Economic Theory, 1 MINERVA 54–73 (1962); WARREN O. HAGSTROM, THE SCIENTIFIC

COMMUNITY (1965). Key economic analyses giving more formal treatment to the insights include Partha Dasgupta & Paul A. David, Toward a New Economics of Science, 23 RSCH. POL’Y 487, 510 (1994); Paula E. Stephan, The Economics of Science, 34 J. ECON. LIT. 1199, 1200–02 (1996). Key works of legal scholarship drawing on and further developing the insights include: Rebecca S. Eisenberg, Proprietary Rights and the Norms of Science in Biotechnology Research, 97 YALE L.J. 177, 214–26 (1987); Robert P. Merges, Property Rights Theory and the Commons: The Case of Scientific Research, 13 SOC. PHIL. &

POL’Y 145, 162–66 (1996); Arti K. Rai, Regulating Scientific Research: Intellectual Property Rights and the Norms of Science, 94 NW. U. L. REV. 77, 94–116 (1999); John M. Golden, Biotechnology, Technology Policy, and Patentability: Natural Products and Invention in the American System, 50 EMORY L.J. 101, 122–31 (2001); Lee, supra note 30; Katherine Strandburg, Norms and the Sharing of Research Materials and Tacit Knowledge, in WORKING

WITHIN THE BOUNDARIES OF INTELLECTUAL PROPERTY 85 (Rochelle C. Dreyfuss et. al, eds. 2010); Amy Kapczynski, Order without Intellectual Property Law: Open Science in Influenza, 102 CORNELL L. REV. 1539, 1590–606 (2016). An influential policy manifesto based on this picture was VANNEVAR BUSH, SCIENCE—THE ENDLESS FRONTIER: A REPORT TO THE

PRESIDENT ON A PROGRAM FOR POSTWAR SCIENTIFIC RESEARCH 17–22 (Nat’l Sci. Found. ed. 1990) (1945). 198. F. Scott Kieff, Facilitating Scientific Research: Intellectual Property Rights and the Norms of Science—A Response to Rai & Eisenberg, 95 NW. U. L. REV. 691 (2001); Pierre Azoulay et. al, The Determinants of Faculty Patenting Behavior: Demographics or Opportunities? (Nat’l Bureau Econ. Rsch., Working Paper No. 11348, 2005).


in the 1980s, discussed below).199 Yet once we register that the peer production here—owing to its high capital costs and needs for livelihoods—is not commons-based but publicly enabled, it becomes clear that the role of non-pecuniary motivations is less to sustain the activity than orient its direction.200 And in that respect, arguments concerning the shifting role of material incentives take on a different light: the relevant role of non-pecuniary motives either remains intact (in the case of variability over careers) or, where eroding due to policy changes, calls for a policy response (as argued below). Regarding the second, against norms of openness and sharing it has been noted that competition for priority credit leads to its own form of secrecy.201 But the relevant yardstick here is not absolute but comparative, and the scientific secrecy resulting from competition for credit remains less restrictive than the commercial secrecy resulting from competition for profit—if only because credit is ultimately premised on disclosure while profit on its opposite.202 And the same applies to the third, perhaps most stringent and plausible set of criticisms, coming from a critical camp of sociologists querying the otherworldly purity of the norms imputed by the “open science” literature: again, the relevant yardstick is comparative, not absolute, and when set against the conflicts of interest besetting commercially sponsored research, academically driven ones seem rather less worrisome.203

What emerges, then, from the foregoing is that the key distinctive feature of the enterprise, one receiving less emphasis than it might but

199. Azoulay et. al, supra note 198, at 21–22. 200. A point most fully developed in the economic literature by Dasgupta & David, supra note 197, at 513 (highlighting the role non-pecuniary motivations play in determining the scope and role of a researcher’s decision to research); and in the legal literature by Strandburg, supra note 196, at 95, 100 and Kapczynski, supra note 197, at 1591. 201. John P. Walsh et al., Effects of Research Tool Patents and Licensing on Biomedical Innovation, in PATENTS IN THE KNOWLEDGE-BASED ECONOMY (Cohen & Merrill, eds., 2003). 202. David Blumenthal et al., Withholding Research Results in Academic Life Science Evidence From a National Survey of Faculty, 277 J. AMER. MED. ASS’N 1224 (1997); Eric G. Campbell et. al, Data Withholding in Academic Genetics: Evidence from a National Survey, 287 J. AMER. MED. ASS’N 473, 475, 479 (2002). 203. For debate on this score, see Steven Shapin, Mertonian Concessions, 259 SCI. 839 (1993) (reviewing STEPHEN COLE, MAKING SCIENCE (1992)); Stephen Cole, Book Review, 66 LIBR. Q. 112 (1995) (reviewing STEVEN SHAPIN, A SOCIAL HISTORY OF TRUTH: CIVILITY AND SCIENCE IN SEVENTEENTH-CENTURY ENGLAND (1995)); D. Wade Hands, The Sociology of Scientific Knowledge: Some Thoughts on the Possibilities, in SCIENCE BOUGHT AND

SOLD: ESSAYS ON THE ECONOMICS OF SCIENCE 515 (Mirowski & Sent, eds. 2002).


of central importance here, is that: (4) The research agenda of a scientific discipline is largely set by the community’s internal epistemic criteria, whereby practitioners must convince their peers of the merit—in terms of the significance and either ex ante feasibility or ex post success—of their projected or claimed extension of existing knowledge, within a system of evaluation dominated by successful and influential peers.204 It is this aspect of basic research, its internally driven exploratory trajectory, that is the key here.

This feature is what enables peer-driven scientific research to be a form of decentralized yet coordinated activity. It is decentralized because many minds deploy their local judgments as to the feasibility and fruitfulness of some line of inquiry as an extension of existing knowledge, with such judgments disciplined by failure/success as evaluated by peers as fellow experts (as opposed to disciplined by market failure/success). In other words, the social valuation of the activity and, hence, the guiding of its future lines, turns on neither market price signals nor central planning, but decentralized peer review. It is coordinated because accompanying peer production is wide dissemination, owing to (a) publishing for priority credit and (b) norms of access to data for peer review and learning, enhancing quality control, and accelerating progress. In other words, the coordination takes place not via centralized decision-making, be it of a government or broad property-rights holder, but by way of open access and dissemination curbing duplication wastes.

Where does this leave us? If we bracket the valuation deficits of market prices and simply compare how market-based activity fares versus peer production in directing innovative activity, we get: (1) market-driven innovation is marked by (a) commercially driven secrecy on the front end, and (b) proprietary restrictions on the back end, to result in decentralized but uncoordinated and restrictive innovation; (2) peer-driven innovation is marked by (a) priority-fueled secrecy on the front end, and (b) wide dissemination at the back to result in

204. The key works in this respect are those taking a sociohistorical turn in the philosophy of science. See generally THOMAS S. KUHN, THE STRUCTURE OF SCIENTIFIC

REVOLUTIONS (2nd ed. 1970); Thomas S. Kuhn, Logic of Discovery or Psychology of Research?, in CRITICISM AND THE GROWTH OF KNOWLEDGE 1 (Lakatos & Musgrave eds., 1970); Imre Lakatos, Falsification and the Methodology of Scientific Research Programmes, in CRITICISM AND THE GROWTH OF KNOWLEDGE 91 (Lakatos & Musgrave eds., 1970); Thomas S. Kuhn, The Road Since Structure, 2 PHIL. SCI. ASS’N PROC. 3 (1990) (“For the historian . . . no Archimedean platform is available for the pursuit of science other than the historically situated one already in place.”).


decentralized yet coordinated and open-access innovation. In a nutshell, while both bear the informational virtues of many minds, peer production outperforms market production along the dimensions of reducing duplication wastes via coordination and accelerating the pace of innovation via open access. If we then factor in social valuation, this only strengthens the comparative case for peer production on a publicly funded basis in the context of basic research, with its high spillovers and far-off time horizons.

Against this account of the comparative virtues of public- and private-sector search, one or both of two objections may be lodged. First, does not much public-sector activity—i.e., research done in government labs and universities, sustained by public and nonprofit funding—also go to “applied” and not only to “basic” ends?205 Second, in any case, is not this basic/applied distinction overdrawn, with much activity in both public and private sectors—and even more so in their overlap in university-industry partnership labs clustered around campuses—taking place in “Pasteur’s Quadrant,” of being dual-purpose or “use-inspired basic research”?206 Each of these points is well-taken, but neither detracts from the present case. Indeed, the opposite: each helps to refine the distinctive contours and illuminate a distinctive strength of that case.

As to the first objection: does the fact that much public-sector research is applied rather than basic belie the present case for the comparative virtues of public funding in the case of basic research—or, put conversely, does the present analysis imply that this activity is misguided? Not at all. Although the present case hinges on the internally driven character of basic research as opposed to the externally oriented character of applied work, it may be that even in the latter case publicly funded peer production outshines market activity. How so? When the metrics of practical success for such applied work are best evaluated not in terms of market measures of social value but professional judgments as to technical merit. That this may well hold for much applied research is currently being driven home in the biomedical field by the sizeable amount of public-sector research being

205. In 2018, although the majority (sixty-two percent) of academic R&D was basic, a sizeable share of thirty-eight percent went to applied research and development. NSF, supra note 193. 206. DONALD E. STOKES, PASTEUR’S QUADRANT 79 (1997).


done on diagnostics, therapeutics, and vaccines in the era of COVID-19.207

In other words, what the present analysis shows is that for basic research publicly funded peer activity has three virtues in comparison to privately funded market activity: (1) Its (a) far-off time horizons and (b) high spillovers render market prices inapt signals of its social value. (2) Its internally driven exploratory trajectory renders peer judgments apt vehicles for decentralized search. (3) Its cumulative character renders comparatively superior the dissemination and access features of open science, both (a) for coordinating search by reducing duplicative failures and (b) for accelerating follow-on progress by enabling building-upon. How this translates for applied research is as follows: since the third prong of the case for peer production remains strong, if on the first two prongs the case remains reasonably secure—as it will for applied work that has high spillovers (though no longer far-off time horizons) and/or for which the metrics of practical success are as or more apt for professional than market judgments—then the comparative case for public funding remains sound, even if not as airtight as for basic research. Put another way, for applied research the comparative case for public funding works more as a supplement to patents, while for basic research it works as a substitute. Precisely as doctrine would have it on the present account: for basic research, eligibility works to keep this zone free and clear of all patents, while for applied research, substantive doctrines under § 112 work to restrict the breadth and timing of claims to ensure that they do not unduly tread on more cumulative zones of applied activity.208

What about, finally, for research in Pasteur’s Quadrant, meaning “dual-purpose” activity that aims at both expanding fundamental understanding and solving pressing problems? Does this undermine the present analysis, showing that it draws too sharp a line between basic and applied, with much of the action happening in some blurred area in between? On the contrary: a key virtue of the present account is that it realigns the boundaries between public funding and patenting

207. See, e.g., Tung Than Le et al., The COVID-19 Vaccine Development Landscape, 19 NATURE REVS. 305, 306 (2020) (describing the speed and scale of the R&D efforts by vaccine makers as “unprecedented”); NIH to Launch Public-Private Partnership to Speed COVID-19 Vaccine and Treatment Options, NIH: NEWS RELEASES (Apr. 17, 2020) (announcing the Accelerating COVID-19 Therapeutic Interventions and Vaccines partnership); Kapczynski, supra note 197, at 1624–26 (documenting the centrality of the public sector in the applied zone of influenza research). 208. See supra text accompanying notes 175–81, 206.


from what transpired during the “Bayh-Dole era”—when research in molecular biology and its cognate fields moved into the zone of Pasteur’s Quadrant, while its innovation policy treatment resulted in precisely those developments against which the Mayo trilogy may be seen as a corrective response.

The term “Pasteur’s Quadrant” refers, once again, to a zone of activity that straddles basic and applied research. Introduced in an influential analysis by Donald Stokes to denote the distinct character of the activity of a Louis Pasteur from the purely foundational research of a Nils Bohr or purely applied work of a Thomas Edison, it is typically depicted as follows:

FIGURE 3: PASTEUR’S QUADRANT209

QUEST FOR

FUNDAMENTAL

UNDERSTANDING

CONSIDERATIONS OF PRACTICAL APPLICATION Low High

High Basic

research (e.g., Bohr)

Use-inspired basic research (e.g.,

Pasteur)

Low Applied research (e.g., Edison)

As was quickly seized upon by other scholars, Stokes’s analysis was

particularly apt for the direction taken by research in the biological sciences since the 1970s “revolutions” in molecular biology, genomics, biotechnology, and their cognate fields increased their practical salience. As a result, such research often came to be neither solely driven to expand fundamental understanding nor solely oriented toward practical applications, but rather “dual-purpose,” whereby basic understanding was sought but it pertained to “physical, biological, or chemical processes that underpin specific problems, solutions, or applications.”210 Moreover, just as the increased practical relevance of foundational insights pushed university-based research into Pasteur’s Quadrant, so it pushed private-sector activity upstream, closer to basic work. And even if private-sector biotech research was not, strictly speaking, dual-in-purpose—meaning driven by dual aims—it was often dual-in-effect, meaning leading to dual results, or “ideas . . .

209. Adapted from STOKES, supra note 203, at 73. 210. DAVID C. MOWERY ET AL., IVORY TOWER AND INDUSTRIAL INNOVATION: UNIVERSITY-INDUSTRY TECHNOLOGY TRANSFER BEFORE AND AFTER THE BAYH-DOLE ACT 20 (2004).


simultaneously of value as a scientific discovery and as a useful, inventive construct.”211 Examples of such “dual-use” inventions include: the onco-mouse (insights into sources of cancer and a means for investigating cancer therapies); techniques of recombinant DNA (insights into cellular machinery and means for producing recombinant therapies); and discovery of RNA interference (advancing the explanation of DNA replication and foundation for a new line of potential therapies).212

As molecular biology and its cognates shifted into Pasteur’s Quadrant, an older view of “public funding for basic research” and “private funding for development” was called into question. This in turn led many to push for the patenting of upstream public-sector research, its licensing out to private-sector developers, and the formation of university-industry linkages in the intermediate zone of applied activity. To push, that is, for the “Bayh-Dole system,” initiated by the 1980 Bayh-Dole Act213 allowing patenting of the fruits of federally funded research and, as extended by subsequent legislation, not only permitting but encouraging such patenting, along with the assignment of the rights to individual faculty inventors and their licensing out to private-sector collaborators.214 And emerging hand-in-hand with the legislation were university technology-transfer offices, taking as their mission not only the propertization of university research and facilitation of technology transfer, but also wider promotion of university-industry collaborations, as symbolized by

211. See Fiona Murray & Scott Stern, Do Formal Intellectual Property Rights Hinder the Free Flow of Scientific Knowledge? An Empirical Test of the Anti-Commons Hypothesis 3 (Nat’l Bureau Econ. Rsch., Working Paper No. 11465, 2005); see also Marie Thursby et al., Are There Real Effects of Licensing on Academic Research? A Life Cycle View, 63 J. ECON. BEHAV. & ORG. 577 (2007). 212. Murray & Stern, supra note 211, at 8. 213. Pub. L. No. 96-517, 94 Stat. 3019 (1980). 214. The key pieces of legislation were the 1980 Bayh-Dole Act, 1980 Stevenson-Wydler Technology Innovation Act, 1984 Trademark Clarification Act, and the 1986 Federal Technology Transfer Act, as codified at 35 U.S.C. §§ 200–12 and 15 U.S.C. §§ 3710–14. See generally Rebecca S. Eisenberg, Public Research and Private Development: Patents and Technology Transfer in Government-Sponsored Research, 82 VA. L. REV. 1663 (1996); Adam B. Jaffe, The U.S. Patent System in Transition: Policy Innovation and the Innovation Process, 29 RSCH. POL’Y 531 (2000); MOWERY ET AL., supra note 210.


faculty-inventor-based biotech start-ups clustered in research parks arounds universities.215

These developments have had many enthusiasts but also many detractors, or at least those sounding cautionary notes. The enthusiasts have championed: (1) the redirection of public research into ostensibly more socially valuable zones of practical application;216 and (2) making its fruits available for downstream private-sector development, via patents,217 technology transfer,218 and faculty-firm collaborations more generally.219 The critics’ concerns have also been two-fold: (1) The first regards upstream “proprietary creep,” with critics querying the need for patents to: (a) incentivize upstream research, already supported by public funding;220 (b) enable downstream developments, which should ostensibly merit patents of their own;221 or (c) facilitate technology transfers, which ostensibly may be contractually effected without proprietary rights.222 (2) The second pertains to upstream “mission creep,” or concerns over shifts in the orientation and culture of university-based scientific research,

215. See Richard Jenson & Marie Thursby, Proofs and Prototypes for Sale: The Licensing of University Inventions, 91 AM. ECON. REV. 240 (2001); Jerry G. Thursby & Marie C. Thursby, University Licensing and the Bayh-Dole Act, 301 SCI. 1052 (2003); Mary L. Good, Increasing Commercialization of the Academy Following the Bayh-Dole Act of 1980, in BUYING

IN OR SELLING OUT? THE COMMERCIALIZATION OF THE AMERICAN RESEARCH UNIVERSITY 48 (Donald G. Stein ed., 2004); Celestine Chukumba & Richard Jensen, University Invention, Entrepreneurship, and Start-ups 2 (Nat’l Bureau Econ. Rsch., Working Paper No. 11475, 2005). 216. Philippe Aghion et al., Academic Freedom, Private-Sector Focus, and the Process of Innovation 3 (Nat’l Bureau Econ. Rsch., Working Paper No. 11542, 2005). 217. Jenson & Thursby, supra note 215, at 241; Thomas Hellmann, The Role of Patents for Bridging the Science to Market Gap, 63 J. ECON. BEHAV. & ORG. 624 (2007). 218. Lynne G. Zucker et al., Commercializing Knowledge: University Science, Knowledge Capture, and Firm Performance in Biotechnology 2 (Nat’l Bureau Econ. Rsch., Working Paper No. 8499, 2001); Good, supra note 215; Chukumba & Jensen, supra note 215; Jaffe, supra note 214. 219. Fiona Murray, The Role of Academic Inventors in Entrepreneurial Firms: Sharing the Laboratory Life, 33 RSCH. POL’Y 643 (2004); Lynne G. Zucker et al., Intellectual Human Capital and the Birth of U.S. Biotechnology Enterprises, 88 AM. ECON. REV. 290 (1998). 220. Eisenberg, supra note 214; Jaffe, supra note 214; Arti K. Rai, The Increasingly Proprietary Nature of Publicly Funded Biomedical Research, in BUYING IN OR SELLING OUT?

THE COMMERCIALIZATION OF THE AMERICAN RESEARCH UNIVERSITY 117 (Donald G. Stein ed., 2004). 221. Arti K. Rai & Rebecca S. Eisenberg, Bayh-Dole Reform and the Progress of Biomedicine, 66 L. & CONTEMP. PROBS. 289 (2003). 222. Rebecca S. Eisenberg & Robert Cook-Deegan, Universities: The Fallen Angels of Bayh-Dole?, 147 DAEDALUS 76 (2018).


specifically: (a) the redirection of research toward more commercially lucrative short-term horizons, at the expense of more socially valuable longer-term ones;223 and (b) the erosion of norms of “open science,” both the internal and social rewards that drive peer-driven activity and the norms of open access and dissemination that help it thrive.224

The debate between these camps is ongoing and cannot be definitively settled here.225 We can, however, make three points pertinent to the platform rationale for patent ineligibility. First, it is precisely the upstream proprietary creep—as signaled by the flood of gene patents—to which the Mayo trilogy may be seen as a response, as a course correction by the Supreme Court to the Bayh-Dole era—an era partially launched by its own pair of Diamond decisions.226 That response, of resurrecting ineligibility bars for basic knowledge, finds full support in the platform rationale: even when research moves from purely foundational into the dual zone of Pasteur’s Quadrant, its basic knowledge outputs still do not merit patent protection, be they generated by dual-in-purpose research in the public sector or dual-in-effect in the private. Why? Because nothing in the transition into Pasteur’s Quadrant changes the comparative-institutional case for the superiority of basic knowledge being generated under the aegis of public funding, and so to allow patent rights over its fruits is unnecessary double-dipping—both unduly restrictive of access and unduly increasing the cost paid for its fruits.227 As for basic knowledge resulting from private-sector research, three considerations dovetail

223. David Blumenthal et al., University-Industry Research Relationships in Biotechnology: Implications for the University, 232 SCI. 1361 (1986); JENNIFER WASHBURN, UNIVERSITY, INC.: THE CORPORATE CORRUPTION OF AMERICAN HIGHER EDUCATION xiv (2005). 224. NAT’L RSCH. COUNCIL, TRENDS IN THE EARLY CAREERS OF LIFE SCIENTISTS 18 (1998); Cockburn & Henderson, supra note 184, at 4; Golden, supra note 197, at 174–75; Arti Kaur Rai, Evolving Scientific Norms and Intellectual Property Rights: A Reply to Kieff, 95 NW. U. L. REV. 707, 711–12 (2001); Campbell et al., supra note 202, at 473; Strandburg, supra note 200, at 95–96; Richard R. Nelson, The Market Economy, and the Scientific Commons, 33 RSCH. POL’Y 455, 456 (2004). 225. For two incisive reviews, see Rebecca S. Eisenberg, Anticommons, Transaction Costs, and Patent Aggregators, in RESEARCH HANDBOOK ON THE ECONOMICS OF

INTELLECTUAL PROPERTY LAW 27 (Ben Depoorter & Peter S. Menell eds., 2019); Rochelle Cooper Dreyfuss, Double or Nothing: Technology Transfer Under the Bayh-Dole Act, in BUSINESS INNOVATION AND THE LAW: PERSPECTIVES FROM INTELLECTUAL PROPERTY, LABOUR, COMPETITION AND CORPORATE LAW 52 (Marilyn Pittard et al. eds., 2013). 226. See Eisenberg, supra note 135, at 354–57. 227. See Eisenberg, supra note 214, at 1667–68 (discussing federal policy concerning the mishandling of intellectual property rights given competing interests at stake).


toward the same conclusion: (a) first, as a substantive policy matter, patent protection is likely not needed to incentivize such activity, which is largely driven by appropriation of its benefits through downstream applications that remain patentable;228 (b) second, as a matter of administrability, it is untenable in applying eligibility rules to distinguish between public- and private-sector patentees; (c) finally, as an institutional matter, the imperative of retaining strong eligibility rules outweighs any concern regarding their over-inclusivity at the margins—especially when, as will be urged in Section III.C below, the rules are properly framed to tightly hew to their underlying rationale, so as to keep out all and only basic knowledge from the patent system.

It is precisely this institutional imperative that leads us to our second point. The importance of strong eligibility rules lies not only, or perhaps even primarily, in the need to avoid undue patent creep upstream, with its restrictive effects on access. Rather it lies as much or more in the signal it sends of the need to maintain robust institutional support for public research, with its comparative superiorities in generating foundational knowledge, rooted less in its cumulative character than its far-off time horizons and peer-driven exploratory trajectory. Such is the precise implication of the Court’s eligibility doctrine: if basic knowledge is to remain outside the patent system, it must be sustained by another. Hence the significance of the Mayo trilogy’s resurrection of strong eligibility rules lies as much or more in addressing the second as the first set of concerns fueling critics of Bayh-Dole era developments regarding not upstream creep of patents, but upstream erosion of the overall (far-sighted) mission and (open-science) culture of the public-sector enterprise. When the Supreme Court emphatically declares, as it did in Mayo, the institutional need for clear eligibility rules, it sends a strong signal of affirmation, long overdue, of the importance of that enterprise.229

Yet, and this brings us to our third and final point, while the Mayo course correction was overdue, it was also overdrawn. As detailed below, in developing its doctrinal framework for eligibility, the Court extended its reach in two distinct ways to restrict patent coverage of applied as well as basic knowledge.230 But the platform rationale

228. When not driven by the need to build in-house capacity to capitalize on upstream results generated elsewhere. See discussion supra note 184. 229. Mayo Collaborative Servs. v. Prometheus Lab’ys, Inc., 566 U.S. 66, 88–89 (2012). 230. See infra Sections III.C.2, III.C.3.


provides no strong basis for rendering applied knowledge ineligible. This is most evident in the case of private-sector activity. That this sector’s applied outputs should be eligible for patents is precisely what the present rationale countenances, with its institutional division of labor between publicly funded basic research and patent-enabled applied. But what about when applied outputs are generated by public-sector research? Should they also be eligible for patents even if, as Bayh-Dole critics might maintain, such protection raises similar concerns of unnecessary double-dipping as do patents over publicly funded basic knowledge?231 Here, we must separate two questions. As a matter of administrative practice, it may well be unwise for those overseeing innovation and technology transfer policies at universities and federal labs to procure patents over such research, unless, as the Bayh-Dole enthusiasts contend, such patents play an important role in facilitating downstream development. Either way, however, as a matter of doctrinal principle in patent law, two reasons push in favor of retaining the availability of patents for such applied outputs as a matter of eligibility doctrine. First, as stated above, it is administratively untenable when applying eligibility rules to distinguish between public- and private-sector patentees and so just as disallowing eligibility over basic knowledge for public-sector researchers requires doing the same for private-sector ones, so here, allowing eligibility for private-sector patentees requires doing the same for those from the public-sector. Second, also in parallel to the above, just as the administrability concern in the case of basic research likely comes with little substantive cost, so here there may be a sound reason of substantive policy to allow eligibility for applied public-sector research, which is that it retains the rational kernel of the Bayh-Dole system: its push for public-private collaborations by facilitating linkages in applied zones between the two.

Thus, the fact that much public-sector research takes place in Pasteur’s Quadrant is not an objection to the platform rationale so much as perhaps its most significant implication. The rationale simultaneously clarifies the basis of the Mayo trilogy’s signaling of the need to retain a no-patent bulwark around public-sector basic research, while it also ensures that the trilogy’s course correction is not an over-correction by preserving the possibility of Bayh-Dole-type collaborations and linkages. One central way it does so, detailed below, is by preserving a firewall between ineligible-basic and eligible-applied

231. See supra note 227 and accompanying text.


research, while enabling overlap in activity between the two zones by allowing innovations on the former front to feed into patents properly delimited to the latter.232 In so doing, it simultaneously stops upstream patent creep and related distortions, contra Bayh-Dole run amok, while still facilitating, contra the Mayo trilogy, robust collaboration across the zones of basic and applied research, whether done in universities, private firms, or university-industry partnerships clustered in belts around campuses.

C. Doctrinal Implications of the Basic/Applied Distinction

What doctrinal framework for the analysis of eligible subject matter flows out of the above basic/applied distinction and its underlying platform rationale? Specifically, what modifications does it suggest to the existing Alice framework? In a nutshell, it suggests three.

First, under step one of the analysis, when determining if a claim is directed to an ineligible category, we do not ask the somewhat opaque—and in any case misdirected—question of whether it claims a “law of nature, product of nature, or abstract formula” itself. Rather, we ask if the claim seeks to cover “knowledge of” one of these, and we understand that to be answerable only with reference to our guiding aim, namely, to keep “basic knowledge” free and clear of patents. Specifically, in determining whether some knowledge qualifies as knowledge of a “law, product, or formula,” we do not seek recourse to any self-evident meanings or self-contained definitions but rather keep explicitly in touch with our underlying purpose here, by asking: is this the sort of basic knowledge or understanding that can be expected to be generated by the internally driven exploratory trajectory of a scientific field’s research program, aiming to extend existing knowledge starting from what we already know? Or is it instead the sort of applied knowledge or intervention that is externally oriented, aiming at the prospects of practical success in solving particular problems?

Next, under step two, if the claim does involve basic understanding, nevertheless it may be saved so long as it delimits the ambit of its coverage to a zone of practical application. Such a delimitation should, all by itself, suffice to render a claim eligible, without any further need to show either an “inventive concept” in moving from the basic knowledge to the application, or any sort of physical embodiment in a “machine or transformation,” or anything else by way of “post-solution

232. See infra Section III.C.3; infra text accompanying note 300.


activity.” Why? Because only this is in accord with the guiding rationale here, namely, to keep basic (or non-applied or non-functional) knowledge out of the patent system. Claims that do not seek coverage for any component of purely basic knowledge do not run afoul of that aim.

Finally, when moving beyond eligibility analysis into that of the substantive requirements of patentability, claims should be truly evaluated “as a whole” so that, for instance, a claim whose delimited application is obvious, but which also involves a nonobvious basic contribution, should pass muster under § 103 just as easily as one whose delimited application is itself nonobvious.

The following three sections elaborate on each of the above three steps of this doctrinal framework, using the facts and holdings of Myriad, Mayo, and Alice as illustrative contrasts for its analysis of each of the three central categories of products, laws, and formulas, respectively. This analysis does not address the three secondary categories of mental steps, business methods, and software, leaving these for a separate discussion in the final section of this Part.233 That section briefly considers how those categories may be handled by extending aspects of the present framework, by elaborating further functionality-based tenets to meet the distinct concerns those categories pose.234

1. Step 1: Basic understandings are ineligible Step one of the analysis, to repeat, no longer involves asking whether

the claim at issue is directed to (a) a “product of nature”—be it naturally occurring or modified—since all patent claims go to knowledge of such products, of their structure or property, and that knowledge is never “naturally occurring”; or (b) a “law of nature”—pre-existing or otherwise—since all patent claims go to knowledge of such laws, of their existence or operation, and that knowledge is never pre-existing; or (c) an “abstract formula”—whether machine-implemented, process-transforming, or otherwise—since all patent claims go to knowledge of such formulas, of their existence or operation, and that knowledge is always dephysicalized or intangible. In their stead, we now ask whether the claim is directed at basic knowledge (or merely knowing that some structure or operation exists in the world) or at applied knowledge (or actually knowing how to do something,

233. See infra Section III.C.4. 234. See infra Section III.C.4.


achieve some function or use or make some structure). Underpinning this know-that versus know-how distinction, and helping us to elaborate and apply it, is the platform rationale: is this space of knowledge the sort of basic understanding that can be expected to be generated by the internal exploratory trajectory of a scientific field’s research program? Or is it instead the sort of applied intervention that is externally oriented, driven by the prospects of practical success?

We now apply this step to the facts of Myriad, Mayo, and Alice, comparing its results with the holdings and reasoning in those cases to see how the analysis comes out for each of the three categories. Doing so, we arrive at dramatically different results for all three cases, finding that both Myriad and Mayo were likely wrongly decided while Alice, if rightly decided, was likely for the wrong reasons and needs a fresh analysis as well.

Turning first to Myriad, the key claims at issue pertained to (knowledge of) the structure and precise location of the BRCA1 and BRCA2 genes associated with breast cancer—their DNA and cDNA sequences and exact chromosomal locations.235 Applying the present framework, the analysis and outcome for each of the DNA and cDNA claims is relatively straightforward and the same: (a) knowledge of the structure of a gene in terms of the associated string of amino acids its DNA sequence encodes is precisely the sort of basic knowledge we can expect to be generated by the internally driven research trajectory of scientific fields such as molecular biology and its cognates, research typically conducted via peer-reviewed open science and carried out in publicly funded university and related research labs;236 and (b) the same goes for knowledge of the correspondence cDNA sequence, i.e., for the exon-only DNA sequence of coding nucleotides synthetically created via reverse transcription in a lab: the process involved is an

235. Ass’n for Molecular Pathology v. Myriad Genetics, Inc., 569 U.S. 576, 582–84 (2013). Although by specifying the precise nucleotide sequences of the genes, the claims thereby identified their exact location on the relevant chromosomes, that the genes were in fact located somewhere on those chromosomes was already known and disclosed prior to the patentee’s contribution. Ass’n for Molecular Pathology v. U.S. Pat. & Trademark Off., 702 F. Supp. 2d 181, 201 (S.D.N.Y. 2010), aff’d in part, 653 F.3d 1329 (Fed. Cir. 2011), vacated sub nom. Ass’n for Molecular Pathology v. Myriad Genetics, Inc., 569 U.S. 576. 236. As illustrated by the invention history of the claims, with their origins lying in publicly funded university-based research at the University of Utah, and controversies attending the respective contributions of public- and private-sector researchers. See Ass’n for Molecular Pathology, 702 F. Supp. 2d at 201–03.


entirely standard part of molecular research, using routine biotechnological tools involving neither any special ingenuity nor application over and above uncovering the DNA sequence itself.237 Thus, both the claims would similarly fail and for equivalent reasons: as ineligible basic knowledge.

By contrast, the Court’s analysis of the claims, in an opinion authored by Justice Thomas, provides a stark instance of physicalist errors and their associated convolutions in doctrine and outcomes. Holding the DNA claims to be ineligible but the cDNA ones eligible, the Court’s only basis for distinguishing between the two was that the DNA sequences were “naturally occurring,” while the cDNA ones were not.238 But, once we remove the physicalist error here by inserting the phrase “knowledge of” into both claims, the basic fallacy stands revealed: in both cases, the claims are not over the DNA or cDNA sequences themselves, as tangible materials, but over knowledge of them, specifically knowledge of their structure in terms of a string of nucleotide base pairs and associated amino acids. Given that such knowledge is not naturally occurring in either case, this puts paid to the sole ground offered by the Court for the distinction it draws between them: why should knowledge of a DNA sequence be ineligible but (the basically equivalent) knowledge of the cDNA be eligible? Other than its physicalist misnomer, the Court’s opinion offers no reason.

To fully appreciate the depth of the physicalism in Myriad, and its pernicious effects, it helps to situate the Court’s opinion in relation to those given by the courts below. At the Federal Circuit, Judge Lourie held that not only the cDNA but even the DNA claims were eligible: since separating native DNA involved breaking “covalent bonds,” the claims involved not something already existing in nature but an “isolated” variant of it, akin to the “isolated” variant of adrenalin held eligible by Judge Hand in Parke-Davis.239 The trouble with that, of course, is that neither the physical fact of “broken bonds” nor the physical act of “isolating” have any relevance to the pertinent patent inquiries, regarding either the subject matter of the claims (a “space of knowledge” of the structure and location of a gene, with covalent bonds irrelevant to that knowledge) or the innovative contribution of the patentee (research generating said knowledge, in which the

237. See id. at 198–99, 203–04. 238. Myriad, 569 U.S. at 590–91, 594–95. 239. Ass’n for Molecular Pathology, 689 F.3d at 1328.


breaking of covalent bonds plays no significant role). By contrast, Judge Bryson insisted that there was “no magic” to the breaking of bonds: be it in native or “isolated” chemical form, the DNA sequence of the two amounted to the same thing.240 This may seem to signal a departure from physicalism, but in fact Judge Bryson’s reasoning remained enmeshed within the physicalist web: his focus was not on convergence in the knowledge of the native and isolated DNA sequences, but rather on their physical convergence, as “structural[ly] similar[]”—with the differences in chemical structure owing to broken covalent bonds deemed to be less significant than the remaining similarities in biological structure.241 With this physicalist focus on tangible structures, Judge Bryson then went on to agree with the majority that the cDNA claims were eligible, because their structures were physically “distinct” enough.242

But this just raises the question: how do we determine whether two structures are “similar” or “distinct” enough for eligibility purposes? By what criteria of significance are we to assess departures or convergences? It is not just that a physicalist focus is indeterminate here—why shouldn’t we draw the line between native and “isolated” DNA (as Judge Lourie does) rather than between these and “synthesized” cDNA (as Judge Bryson and Justice Thomas do)? More importantly, such a focus is simply irrelevant: an inquiry into “how close” a physical structure is to one that is naturally occurring, even if tractable, is simply beside the point once we understand that the claim goes to “knowledge of” said structure. And, at that point, the relevant inquiry becomes clear: since knowledge of natural structures is ineligible because “basic,” is knowledge of the structure at issue still of a basic or now of an applied character? Meaning, does it go to foundational, or internally driven, understanding or is it more of a practical, or externally oriented, intervention?

Physicalist tests for eligibility suffer, then, from three distinct flaws, irrespective of whether their focus is on the claimed subject matter being “purified” or “isolated” (in the language of Parke-Davis adopted by the PTO for many decades) or “markedly different” (in the language of Chakrabarty adopted by Myriad) from naturally occurring

240. Id. at 1351 (Bryson, J., dissenting in part). 241. Id. at 1355. 242. Id. at 1356.


substances.243 First, a focus on physical differences may result in over-inclusive eligibility findings where the differences appear “marked” but where knowledge of them is equivalently “basic,” such as in the case of cDNA in Myriad. Second, such a focus may lead to under-inclusive findings where such differences appear “minor” but where knowledge of them is significantly distinct, such as in the case of the “purified” and “isolated” forms of adrenalin in Parke-Davis, were we now to decide that these were not “markedly different” enough from natural adrenalin to be eligible.244 And in both cases the underlying source of the problem is the same: a focus on surface appearances of physical similarity or difference is not just indeterminate but, more importantly, simply beside the point. The reason why it is unclear where to draw the physicalist line is because it is unclear why we are drawing such a line to begin with: lacking any cogent rationale, the physicalist hunt for similarities or differences proceeds entirely in the dark. What matters are not the physical properties on the surface, but the character of the underlying knowledge of such properties (and of any innovative acts involved in generating it). Thus, all three surface flaws of physicalist approaches—their over-inclusivity, their under-inclusivity, and their highly indeterminate character—stem from the same underlying defect: by adopting a misplaced conception of the object of patent rights, as over some thing rather than knowledge of it, such approaches lose sight of any sense of the purpose of eligibility inquiries.

This is not to deny that behind the physicalist tests in Parke-Davis and Chakrabarty may lurk more defensible notions. Thus, in Parke-Davis, “purified” and “isolated” may not really be about surface differences as to physical forms resulting from physical acts, but rather about functionally significant differences as to knowledge of forms resulting from innovative acts—specifically, identification of (“purified”) salt and (“isolated”) base forms of adrenalin with distinct “commercially and therapeutically” valuable properties from natural adrenalin.245 And similarly in Chakrabarty: the “markedly different characteristics”246 of a genetically modified bacterium from those naturally occurring

243. Parke-Davis & Co. v. H. K. Mulford Co., 189 F. 95, 100, 103 (C.C.S.D.N.Y. 1911), aff’d in part, 196 F. 496 (2d Cir. 1912); Diamond v. Chakrabarty, 447 U.S. 303, 310 (1980). 244. As suggested by the District Court in Ass’n for Molecular Pathology. 702 F. Supp. 2d 181, 226 (S.D.N.Y. 2010). 245. Parke-Davis, 189 F. at 100, 103. 246. Chakrabarty, 447 U.S. at 310 (emphasis added).


may have been less about its physical than its functional differences in structure and properties (relating to the breaking down of crude oil).247 In other words, on their facts both Parke-Davis and Chakrabarty were likely rightly decided in terms of eligibility: in both, the subject matter of the claims went not to foundational knowledge but practical interventions. Yet the physicalist packaging of these functional considerations remained far from innocuous. Thus, for decades Parke-Davis’s “purified” and “isolated” language licensed pro forma gene-patent eligibility findings, based on little more than surface physical differences such as in Judge Lourie’s Myriad decision.248 And similarly for Chakrabarty: its physicalist overtones lead straight to the sorts of arbitrary—both formally unclear and substantively irrelevant—lines between DNA and cDNA as drawn by Judge Bryson and Justice Thomas in Myriad. Properly to pursue apt functionality concerns requires, then, completely breaking free from all lingering physicalism.

Finally, perhaps the clearest illustration of the difference between physicalist approaches to “products” cases and the present framework comes from a case where the claim pertained to materials that did not depart, however slightly or markedly, from their naturally existing form: Funk Brothers. At issue, again, was a claim over mutually non-inhibitive strains of the Rhizobium bacteria, which the Court held ineligible on the ground that the strains’ property of mutual non-inhibition was naturally occurring.249 Once we dephysicalize the claim—as going to knowledge of the property of mutual non-inhibition of the strains—to see that its subject matter is not naturally occurring, we can then focus on the apt inquiry: is knowledge of this property a type of basic understanding or applied intervention? Clearly it is the latter: rather than involving an internally driven extension of foundational knowledge, moving from what is already known, it is the result of an externally oriented effort at practical success, aiming toward improved outcomes in the field of agriculture.250 Indeed, that it was an application was explicitly acknowledged by the Court itself, which nevertheless denied it eligibility on the spurious ground that

247. Id. 248. See MERGES & DUFFY, supra note 116, at 130. 249. See supra note 97 and accompanying text; Funk Brothers Seed Co. v. Kalo Inoculant Co., 333 U.S. 127, 132 (1948). 250. This is not to say that the claim should ultimately have been held valid: in the form advanced, it likely should have failed under § 112 as too broad in relation to what the patentee contributed or specified in the disclosure. See Funk Brothers, 333 U.S. at 134–35 (Frankfurter, J., concurring).


such applications must themselves involve “invention” over and above “discovery” of the knowledge lying at their basis, since the latter form of knowledge was taken(on mistaken physicalist grounds) to pre-exist the patentee.251 This further aspect of Funk Brothers—that claims involving ineligible basic knowledge may be rendered eligible only if they are limited to applications that are themselves “inventive”252—goes to step two of the Alice analysis, and will be criticized below when we turn to that step. The present point, however, is that Funk Brothers also involved a mistake at step one, according to the present framework: knowledge of even naturally occurring properties may be eligible for protection, so long as such knowledge is applied rather than basic.

Summing up step one analysis for “products of nature,” eligibility doctrine for this category has been marred—from Parke-Davis and Funk Brothers through to Chakrabarty and Myriad—by an untenable physicalism, one failing to internalize that it is always knowledge of the structure and properties of a product (naturally occurring or otherwise) that forms the subject matter of claims and not the product itself, as a physical entity. This has resulted in doctrine that is simultaneously: (1) over-inclusive, allowing claims over knowledge of non-naturally occurring structures or properties even when that knowledge is basic; (2) under-inclusive, barring claims over knowledge of naturally occurring structures or properties even when that knowledge is applied; and (3) in either case highly indeterminate, substituting an opaque and misguided search for surface degrees of similarity or difference in the physical character of the product for the more apt inquiry into the basic or applied character of the underlying knowledge of its structure or properties.

Turning now to “laws of nature” and Mayo, we come to the mirror opposite result: whereas in Myriad misplaced physicalism led to an over-inclusive finding of eligibility from the vantage of functionality concerns, here, it led to an under-inclusive one, holding as ineligible what is likely a form of applied rather than basic knowledge. At issue in the case was a claim for a method of calibrating thiopurine drug dosages for the treatment of autoimmune diseases, by identifying a therapeutic sweet-spot of safety and efficacy for blood metabolite levels in patients upon ingesting the drug, between levels so high as to be toxic or so low as to be ineffectual, and then directing those

251. See supra text accompanying note 110; Funk Brothers, 333 U.S. at 132. 252. Funk Brothers, 333 U.S. at 132.


administering the drug to monitor patient blood levels and adjust dosages as needed.253 Such a claim would not be barred on the present framework as ineligible, being a form not of basic understanding but of applied intervention, precisely of the sort that is externally oriented toward practical results, and ones that are neither far off in time nor with highly cumulative effects.

Yet, in a unanimous opinion authored by Justice Breyer, the Court held the claim invalid as going to an ineligible “natural law[].”254 Viewing the correlations between “certain metabolites in the blood” and the likely safety and efficacy of “a dosage of a thiopurine drug” as a “law of nature,” Justice Breyer held claims over these ineligible on the ground that “the relation itself exists in principle apart from any human action.”255 There are two distinct difficulties here, one going to the specification of the category of “law of nature,” the other to its basis of ineligibility. Regarding the first, in what way is the effect of a human-made drug on blood levels a “law of nature”? Surely not in the classical sense, of an invariant relation between purely extra-human natural factors, such as Einstein’s e=mc2 or the “principle[s]” involved in Neilson that hot air ignites better or in Morse concerning the operation of electromagnetic force at a distance.256 How does the relation between a human artifact (a manufactured drug) and the body constitute a “natural correlation[]”?257 Justice Breyer’s opinion is silent on the matter, not specifying any further basis for his declaration that the relation is a natural law other than that it “exists in principle apart from any human action.”258 But of course that is not true: the correlation results directly from the effects of a human artifact, a manufactured chemical compound, not found in nature.259 To be sure, there is a sense in which the mechanism at work involves purely “material” rather than “social” factors, namely those of the natural world interacting with the human body. But that sense is too broad for Justice Breyer’s purposes here, since it would encompass not only “scientific”

253. Mayo Collaborative Servs. v. Prometheus Lab’ys, 566 U.S. 66, 74–75 (2012). 254. Id. at 72. 255. Id. at 77. 256. Neilson v. Harford, 151 Eng. Rep. 1266, 1272 (1841); O’Reilly v. Morse, 56 U.S. 62, 120 (1854). 257. Mayo, 566 U.S. at 80. 258. Id. at 77. 259. To be clear, the human intervention being pointed to here is not the mere administering of the drug, which “human action” Justice Breyer does recognize, id., but rather the making of the drug itself.


principles but also “technological” interventions. And this brings us to the crux of the matter: the relevance of “laws of nature” for eligibility purposes is that it serves as a shorthand proxy or indicator for ineligible basic scientific knowledge, of the sort involved in foundational understanding, as opposed to applied technological knowledge, of the sort involved in practical interventions. It does so by pointing to (the “law-like”) regularities of nature of the sort that are likely to be uncovered by the internal exploratory trajectory of a scientific discipline, rather than to the more haphazard processes resulting from practically oriented human interventions. And so, our task is not to seek some self-contained, fixed definition for the category, but rather to use it as our clue for an inquiry into whether the knowledge at issue is basic or applied. Here, it is clearly the latter: if knowledge of the therapeutic properties of manufactured chemical compounds is applied (as it surely is), then even more so is knowledge of their calibrated effects upon administration in the human body.

Reinforcing the foregoing is consideration of the second error in the opinion, concerning its basis for ineligibility of claims involving such “laws.” As just quoted, that basis was that the correlation “itself exists . . . apart from any human action” and, thus, presumably any claim over it seeks impermissibly to cover something existing prior to, or in any case independently of, the patentee’s contribution.260 This view is a compound of two premises: (a) first, that the claim covers the correlation itself; and (b) second, that such a correlation exists “out there” independently of any human action. And the key difficulty lies with the first, not the second, of the two premises. That is, the key error here is with the quasi-physicalist reification of the subject matter of the claim, as going to the correlation “itself” rather than knowledge of it, and not with the Platonist view of said correlation as existing outside of human thought or action. Even if Platonism were true with respect to the ontology of the correlation—namely, that it is an objective truth that exists independently of human perspectives or activities, perhaps even in an atemporal, spaceless “form”—that would simply be irrelevant to the patent issue: the patent claim is not over the correlation “itself” (whatever that may mean), but rather over (human) knowledge of it, and said knowledge surely does not exist apart from human activities and perspectives. Thus, to contest, as is often done, the ineligibility of claims involving scientific or mathematical principles by rejecting Platonism concerning their ontology (in favor

260. Id.


of a more “constructivist” view), not only leaves untouched the prior error but in fact lodges it even more deeply, by adopting the same reification of the subject matter of patent claims as one’s opponents. What matters for patent law is to get right the object of patent claims—as always and only a space of human knowledge. Once we do that, debates concerning the ontology of any “external” objects of such knowledge can be safely put to one side. To be sure, this does not by itself resolve the eligibility question, since not all knowledge need be eligible for patent protection—indeed, as argued here, basic knowledge should not. But the present point is that the basis for ineligibility cannot be that such knowledge pre-exists human action.261

A key upshot of these revisions to Mayo—both to its unclear characterization of “laws of nature” and its implausible basis for their ineligibility—is to restore patent-eligibility to claims over diagnostic methods, as going to suitably applied rather than basic knowledge. Criticisms of the Court’s decision on this front have been legion and the present analysis provides ample confirmation of, and redress for, their concerns.262 Once we understand what is actually being claimed in diagnostic patents—namely, a form of knowledge, as with all patents, and thus a human contribution rather than something pre-existing; and, further, a form of applied rather than basic knowledge—then any distinct basis for their invalidity in eligibility bars has been removed.263

Finally, we turn to Alice and what the Court refers to as “abstract ideas” but which, for reasons that will soon be apparent, we have been referring to as “abstract formulas.” Indeed, here it makes sense to bifurcate the analysis, and first take up the sorts of “abstract formulas” at issue in Benson, Flook, and Diehr, before turning to the more expansive view of “abstract ideas” adopted in Bilski and Alice. At issue in the Benson trio were “mathematical formula[s]” in one of two senses: (1) a narrower sense of mathematical equations, such as the weighted-average equation for updated alarm limits at issue in Flook or the

261. The human action being pointed to here is again not the administering of the drug that Justice Breyer does recognize, id., but now the generation of the knowledge of (dis)advantageous correlations upon its administration. 262. See references cited supra notes 13 and 14. 263. Of course, to be ultimately valid, particular claims must still pass muster on substantive patentability grounds of novelty, nonobviousness, disclosure, etc. But these are matters for §§ 102, 103, and 112, not 101.


Arrhenius equation264 for reaction rates embedded in Diehr; or (2) a broader sense of formulaic mathematical methods, such as the one for factoring at issue in Benson.265 Why might claims over these be ineligible on the present framework? For the same reason, essentially, as claims over scientific principles, namely that such claims go to foundational understanding, of the sort that can be expected to be generated by the internal exploratory trajectory of a scientific or mathematical discipline. Indeed, in many cases mathematical equations simply are formalized expressions of scientific principles (such as f=ma), an identity explicitly recognized by the Court from its earliest “formula” case of Benson to its most recent “laws” case of Mayo.266 But in other cases they may be broader, formalizing regularities or relations not between natural, but artifactual, variables or, as in Benson, involving not simply equations, but formulaic methods. Either way, however, the central point remains: such equations and methods are typically generated as part of the research internal to a discipline, often with spin-offs that are very far-off and manifold.

Applying this analysis to the Benson trio, the answer delivered under step one is relatively straightforward and the same for each: since the claims are either directed to (as in Benson and Flook) or embed (as in Diehr) mathematical formulas in one of these senses, they involve ineligible basic knowledge. Whether they can be saved under steps two and three of the analysis is a matter we take up in Sections III.C.2 and II.C.3 below.

We now turn to the transformation of this category from its narrow “mathematical formula” roots in the Benson trio to its more expansive “abstract ideas” version. This was given its first formal articulation by the dissent in Flook, a formulation then picked up by the Diamond pair267 and, finally, given its full substantive validation by Bilski and Alice. At issue in Bilski and Alice were claims framed at two distinct levels: (1) In the patentees’ formulations, they were claims over specific methods for hedging or mitigating risk in financial transactions: (a) in Bilski, hedging one’s risk exposure in a commodity market via

264. The Arrhenius equation describes the effect of temperature on a chemical reaction’s velocity and serves as the basis of all predictive expressions used for calculating reaction-rate constants like the cure time in rubber-molding presses. Diamond v. Diehr, 450 U.S. 175, 177 & n.2 (1981). 265. Parker v. Flook, 437 U.S. 584, 598 (1978); Diehr, 450 U.S. 175, 177 (1981); Gottschalk v. Benson, 409 U.S. 63, 65 (1972). 266. Benson, 409 U.S. at 67; Mayo, 566 U.S. at 80. 267. See supra note 139 and accompanying text.


transactions with parties holding counter-risk positions;268 and, (b) in Alice, mitigating settlement risk via a third-party intermediary.269 (2) In the Court’s formulations, the claims amounted to generic ones over “abstract ideas”: (a) in Bilski, over “the basic concept of hedging, or protecting against risk”;270 and, (b) in Alice, over “the concept of intermediated settlement.”271

Taking up the Court’s preferred formulations first, why might these be ineligible? We can immediately set aside one possible ground of invalidation: a puzzling feature of these cases is that if the claims were for the basic concepts the Court suggests, they would simply be invalid as going to ideas long familiar, and hence not novel. But the Court did not strike them down on that basis, but rather on the distinct one of ineligibility. Thus, for present purposes we must suppose that the ideas were not known before the patentees, but in fact were their contributions. In which case, why should the claims be held invalid? Specifically, what makes them “abstract ideas,” and why in any case should such ideas be ineligible? Once we move past the physicalist misnomer that “ideas” cannot be the object of patent rights—since, indeed, ideas or knowledge are always and only the object of such rights—our attention must focus on the term “abstract.” What does it mean here? Four main options present themselves: the two nineteenth-century notions of “intangible” and “unapplied” and two others of “broad” or “vague.” Three of these may be quickly jettisoned: to modify ideas with “intangible” is both redundant and, once we move past physicalist misnomers, irrelevant, while ideas that are too “broad” or “vague” are best left to doctrines of claim breadth and definiteness under § 112, rather than ineligibility. And so, we arrive at the same meaning for the term as when it modified “principles” in the nineteenth century or “formulas” in the Benson trio: it refers to “unapplied” or basic ideas. With a key difference here being that the basic knowledge at issue pertains not to the given world of nature, but to the constructed world of society. However, just as the former knowledge is best generated by the exploratory trajectory internal to specific disciplines of natural science, so the latter is best left to the research processes internal to specific disciplines of social science.

268. Bilski v. Kappos, 561 U.S. 593, 599 (2010). 269. Alice Corp. v. CLS Bank Int’l, 573 U.S. 208, 213 (2014). 270. Bilski, 561 U.S. at 611. 271. Alice, 573 U.S. at 219.


How does this analysis compare to the Court’s own views on what “abstract ideas” are and why they are ineligible? Quite well. Admittedly, the Court did not say much on the first question, declining to specify the content of the “abstract ideas” category even while de facto extending its reach beyond the narrower sense of “formulas” at issue in the Benson trio.272 Thus in Alice, the Court stated that “we need not labor to delimit the precise contours of the ‘abstract ideas’ category in this case,” suggesting that it was “enough to recognize that there is no meaningful distinction between the concept of risk hedging in Bilski and the concept of intermediated settlement at issue here.”273 Yet Bilski itself did not offer much guidance, with Justice Kennedy’s opinion simply referencing the Benson trio.274 However, the cases did offer more illumination on why such ideas are ineligible, in remarks that both shed light on what the category consists of and dovetail with the present analysis. Writing for a unanimous Court, Justice Thomas in Alice emphasized that the key reason for the ineligibility of the claim was that, “[l]ike the risk hedging in Bilski[,]” it pertained to a “fundamental economic practice.”275 The claims, in other words, went to “foundational” or basic knowledge. In a similar vein was Bilski’s formulation of its claim, as going to the “basic concept of hedging.”276 And it is precisely this basic or foundational character of the claims that led the Court to extend the “abstract ideas” category from knowledge of the natural to the social world. In rejecting the contention that “the abstract-ideas category is confined to ‘preexisting, fundamental truth[s]’ that ‘exis[t] in principle apart from any human action,’” Justice Thomas replied that “Bilski belies [that] assertion. The concept of risk hedging we identified as an abstract idea in that case cannot be described as a ‘preexisting, fundamental truth.’ . . . . [H]edging is . . . a method of organizing human activity, not a ‘truth’ about the natural world.”277 This was the reason, the Alice Court emphasized, that the Bilski Court widened the net of ineligibility: “[T]he Court grounded its conclusion that all of the claims at issue were abstract ideas in the understanding that risk hedging was a ‘fundamental economic practice.’”278 In both cases, then, the central

272. Id. at 221. 273. Id. 274. Bilski, 561 U.S. at 612. 275. Alice, 573 U.S. at 219 (emphasis added) (citing Bilski, 561 U.S. at 611). 276. Bilski, 561 U.S. at 611 (emphasis added). 277. Alice, 573 U.S. at 220. 278. Id.


reason why the claims were ineligible, at least on the Court’s preferred formulations of them, was that they went to basic (social) knowledge.

What about the claims’ eligibility on the patentees’ own formulations? On these versions, the claims were decidedly not about basic, but applied knowledge, delimited to specific ways of using the concepts of hedging or mitigating risk in particular financial settings. To be sure, such claims may have been relatively obvious applications and so where the basic knowledge was itself known or obvious—or in any case not the patentees’ contribution—the claims as a whole would lack novelty or nonobviousness.279 Alternatively, the claims may have been so broad or vague as to fail under § 112 doctrines of claim breadth and definiteness. But, again, we must set aside these substantive patentability considerations to see if there are any distinct ones of eligibility at play. And here we arrive at a new distinct concern: although the claims go to applied knowledge, they go not to applied natural or material knowledge, but applied social or commercial knowledge. They go, in other words, to “business methods.” It was precisely on this ground that the claims would have been held ineligible by the concurrences in the cases, by Justice Stevens in Bilski (signed by four Justices) and by Justice Sotomayor in Alice (signed by three).280 We turn to the possible reasons for that view in Section III.C.4 below, under secondary categories.

2. Step 2: Applied interventions are eligible To repeat, under step one of the analysis, if a claim covers only

applied rather than basic knowledge, then the eligibility inquiry is over, and we proceed to examining the claim’s merits on substantive patentability grounds under §§ 102, 103, and 112. If, however, the claim does involve basic understanding, we proceed to step two and ask whether the claim’s ambit is strictly delimited to a zone of practical application. If so, this delimitation by itself suffices to render the claim eligible, without any further need to show an “inventive concept” in application, or a tangible embodiment in a “machine or transformation,” or anything else by way of “post-solution activity.” Why? Because any other requirement will be extraneous or worse, by importing into eligibility analysis considerations that are either irrelevant (e.g., embodiment) or confusingly duplicative (e.g.,

279. See infra Section III.C.3. 280. Bilski, 561 U.S. at 613–14, 656 (Stevens, J., concurring); Alice, 573 U.S. at 227 (Sotomayor, J., concurring).


“inventive concept”). Only the requirement of strict delimitation to applied knowledge stays in accord with the underlying rationale here, of keeping basic knowledge out of the patent system.

A paradigm case of how a claim involving basic knowledge may be rendered eligible in this way, by delimiting its ambit to a zone of practical application, is Neilson: by restricting his claim resting on the principle that heated air makes for a better ignitor to the practical application of that principle in constructing improved (hot-blast) furnaces, the patentee was properly able to secure validity for his patent.281 Nothing more was needed by way of either embodiment in the physical particulars of a given furnace,282 nor any “inventive concept” in moving from the principle to the application.283 Similarly, in Funk Brothers, supposing that the claim involved ineligible basic knowledge (of the structure of naturally occurring Rhizobium bacteria), the fact that the claim was restricted in scope to applied knowledge (of the property of mutual non-inhibition) should have sufficed to render the claim eligible, without meeting the Court’s further requirement of “invention” in moving from the basic knowledge to application.284 That requirement, as discussed above, was based on physicalist misnomers regarding what was being claimed.285 It may also have been fueled by a fear that a claim over applied knowledge of the properties would illicitly reach back to cover basic knowledge of the structure. But this would also be misguided, as illustrated by Myriad, where the Federal Circuit upheld the eligibility of claims for applied use of the properties of the BRCA1 DNA gene in screening for therapeutic compounds, without fear that this would reach back to cover the ineligible basic knowledge of their structure and location.286 That eligibility finding (one not disturbed by the Supreme Court) also did not require, it should be noted, any “inventive concept” in moving from the basic knowledge of the structure to this particular application.

Turning from principles and products to the third category of mathematical formulas, Flook and Diehr provide perhaps the clearest

281. See supra text accompanying notes 81–82. 282. See supra note 81 and accompanying text. 283. See supra note 131. 284. Funk Brothers Seed Co. v. Kalo Inoculant Co., 333 U.S. 127, 132 (1947). 285. See supra note 112 and accompanying text. 286. See Ass’n for Molecular Pathology v. U.S. Pat. & Trademark Off., 689 F.3d 1303, 1335–36 (Fed. Cir. 2012), aff’d in part, rev’d in part sub nom. Ass’n for Molecular Pathology v. Myriad Genetics, Inc., 569 U.S. 576 (2013).


illustrations of how this step does and does not proceed. In both cases, the claims would pass muster under this step: in Flook, a claim directed to (basic) knowledge of a weighting equation was restricted to its (applied) use for calculating alarm limits in catalytic conversion; in Diehr, a claim embedding (basic) knowledge of the Arrhenius equation was restricted to its (applied) use in a process for molding rubber.287 Three points about this conclusion bear emphasizing. First, the fact that these claims pass muster under step two does not, of course, mean that they should ultimately be held valid; that depends on step three’s analysis of their merits on substantive patentability grounds (below). Second, the reason these claims pass muster here is because they are delimited to a zone of application, not because they are tied to any physical embodiment. That the two requirements are distinct is illustrated by Neilson. That the latter requirement is neither a necessary nor sufficient condition is illustrated, doctrinally, by Bilski (rejecting its necessity) and Flook (rejecting its sufficiency) and, substantively, by it being simply an expression of misplaced physicalism serving no underlying purpose. Thus, to the extent that the declaration in Diehr, since affirmed in Bilski and Mayo, that ineligibility “cannot be circumvented by attempting to limit the use of the formula to a particular technological environment,”288 is meant simply to reject physicalist savings of claims—with “technological” a synonym for “physical”—then the present analysis is squarely in line with it. But, and this goes to the third point, if by “limit[ing] . . . to a particular technological environment” is meant “limiting to a particular zone of application” and thus that something more than such delimitation is taken to be required, be it “[]significant postsolution activity”289 or an “inventive concept” in application,290 then the present analysis suggests that this is mistaken.

To require anything more than strict delimitation to a zone of applied knowledge is to move beyond the point of eligibility doctrine—of keeping basic knowledge out of the patent system—into murky and unnecessary terrain. Where not simply driven by physicalist misnomers about what is (or can be) claimed in the patents at issue, such a move

287. Parker v. Flook, 437 U.S. 584, 585, 594 (1978); Diamond v. Diehr, 450 U.S. 175, 178, 181 (1981). 288. Diehr, 450 U.S. at 191; Bilski v. Kappos, 561 U.S. 593, 610–11 (2010); Mayo Collaborative Servs. v. Prometheus Lab’ys, Inc., 566 U.S. 66, 73 (2012). 289. Diehr, 450 U.S. at 191–92; Bilski, 561 U.S. at 611; Mayo, 566 U.S. at 73. 290. Flook, 437 U.S. at 594; Mayo, 566 U.S. at 72–73.


is likely motivated by an understandable but readily addressed concern over formalistic evasions of eligibility requirements. A recurring refrain of the Court has been the need to curb “draftsman’s art” workarounds of eligibility bars, in which claims with ineligible subject matter are sought to be rendered eligible through pro forma invocations of magic words such as “apply it” or magic “solutions” involving “technology.”291 To prevent these, the Court has reached for more stringent requirements, such as the duplicative one of an “inventive concept” in application. But while the concern over formalistic evasions is apt, the proposed solution is not: what is needed are properly substantive requirements, not arbitrarily “stringent” ones. The way to prevent formalist subversion is to keep in touch with the underlying substantive purposes of the analysis. As the Court in Mayo eloquently warned: to allow a claim “simply [to] state the law of nature while adding the words ‘apply it’” would be to “make patent eligibility ‘depend simply on the draftsman’s art’ without reference to the ‘principles underlying the prohibition against patents for [natural laws].’”292 And so, the apt remedy is to specify precisely what the “underlying principles” at work here are—i.e., keeping the building blocks of basic knowledge free and clear of patent protection—and then assiduously keep in touch with these when inquiring, in a substantive way, into the character of the knowledge being claimed. Just as the apt inquiry under step one is not into surface physical similarities/differences, but rather about the actual character of the underlying knowledge, so too the inquiry here turns not on superficial verbal packaging, but on a substantive analysis of the actual spaces of knowledge being marked out by the claims: Are they delimited to applied interventions or encroaching upon basic understandings?

3. Step 3: Evaluating claims “as a whole” The final step of the analysis pertains to the evaluation of claims

once we move beyond eligibility and into the substantive requirements of patentability. The Court has repeatedly stated that claims should be evaluated “as a whole,”293 and what that means on the present framework is: (1) once a claim has passed step two and been held eligible despite containing a component of ineligible basic knowledge (owing to the rest of its components strictly delimiting the claim’s

291. Flook, 437 U.S. at 590, 593; Diehr, 450 U.S. at 192; Mayo, 566 U.S. at 72. 292. Mayo, 566 U.S. at 72, 77 (emphasis added) (quoting Flook, 437 U.S. at 593). 293. Flook, 437 U.S. at 594; Diehr, 450 U.S. at 188; Mayo, 566 U.S. at 90.


ambit to eligible applied knowledge); (2) then in evaluating whether the claim meets the substantive requirements of patentability under §§ 102, 103, and 112, we consider together all the components of the claim that are the patentee’s contributions, including any basic knowledge that by itself would have been ineligible, in determining whether the claim is new, nonobvious, and so forth. In other words, just as delimiting a claim containing ineligible basic knowledge to applications can save it under step two, so contributing nonobvious basic knowledge to an obvious application can save it under step three. In general, a claim is valid: (a) not only when both its basic knowledge and delimited application components are nonobvious contributions of the patentee; (b) but also when only the delimited application component is a nonobvious contribution of the patentee; and (c) even when only the basic knowledge component is a nonobvious contribution of the patentee.294

Neilson, Diehr, Flook, and Funk Brothers provide illustrative contrasts of how claims may or may not succeed under this step. In Neilson, while the delimited application under step two was likely obvious, the basic knowledge ineligible under step one was also the patentee’s contribution and was nonobvious, thereby saving the claim taken as a whole.295 Meanwhile, in Diehr, although the ineligible basic knowledge under step one (the long-known Arrhenius equation) was not the patentee’s contribution, nor was delimitation of it to a practical application under step two nonobvious, that practical application also involved other contributions by the patentee that were nonobvious—pertaining to improvements in the molding process via constant or continuous monitoring of temperatures296—which thus rendered the claim valid as a whole. A contrasting pair to these two are Funk Brothers and Flook. In Funk Brothers, although the patentee’s contribution was a delimited and nonobvious form of applied knowledge, of the mutually inhibiting properties of certain strains of bacteria, the problem was that its claim was not limited to any specific such (species of) strains that it had identified but to (the genus of) all such strains. As such, it should fail under § 112 doctrines of enablement and claim breadth.297

294. Of course, in all three cases, the claim must also satisfy novelty under § 102 and the utility, disclosure, and claim definiteness requirements of § 112. 295. Neilson v. Harford, 151 Eng. Rep. 1266, 1273 (1841). 296. Diehr, 450 U.S. at 178, 186–87. 297. Precisely as held by Justice Frankfurter in concurrence. Funk Brothers Seed Co. v. Kalo Inoculant Co., 333 U.S. 127, 134–35 (1948) (Frankfurter, J., concurring).


Similarly, in Flook: while the patentee’s contribution, the basic knowledge of a weighting equation, may have been nonobvious, and while its use was delimited to a zone of practical application under step two, the equation was only disclosed in very generic form, without enough on the specifics of the variable weights to be used to satisfy enablement and claim breadth, and perhaps even claim definiteness, under § 112.298

One final illustration of the power and appeal of this approach may be provided by analysis of the method claims in Myriad, involving the use of the knowledge of the BRCA1 gene to screen for therapeutics.299 Supposing, as seems plausible, that such a use of the basic knowledge is a relatively straightforward application of it once the knowledge itself is uncovered, the analysis of the claim’s validity works as follows: (1) the basic knowledge component of the claim is ineligible under step one; (2) delimiting the claim to its application component saves it under step two; and (3) although the delimited application is obvious, the basic knowledge was also the patentee’s contribution, and being nonobvious it renders the claim valid as a whole under step three.

This result has an implication of fundamental significance for the comparative-institutional analysis of innovation policy, which we may underline in conclusion to this Part. When researchers are working in “Pasteur’s Quadrant”—generating both basic and applied knowledge—the present analysis counsels an approach significantly distinct from that associated with either the Bayh-Dole era of promiscuous patenting of basic research or the Mayo trilogy plausibly seen as a course correction to that. Under the Bayh-Dole frame, once a field of research such as molecular biology moves from purely foundational into “dual-use” findings, all its fruits should become suitable for patenting and licensing out to private-sector partners, to enable university-industry linkages.300 That this may result in upstream “patent creep” and “mission erosion,” into research supported by public funding and carried out by peer production, is disregarded. The Mayo trilogy over-corrects for that peril, moving to the other extreme of separating out basic and applied research processes so sharply as to hinder collaboration across them, by disallowing innovation on the basic front to serve as the basis for patent-eligible applications. The

298. Flook, 584 U.S. at 586. 299. See Ass’n for Molecular Pathology v. Myriad Genetics, Inc., 569 U.S. 576, 591–93 (2013). 300. See above discussion at text accompanying notes 214–24, supra.


present framework, by contrast, retains a firewall around basic research (at steps one and two) but without erecting an impassable barrier between such research and that of applied interventions (at step three), so as to still enable productive collaborations between the two, all in keeping with its underlying platform rationale.

4. Secondary categories: Mental steps, business methods, and software claims The previous three Sections have sought to show how the central

categories and cases in eligibility jurisprudence—relating to products of nature, laws of nature, and abstract formulas—are best analyzed by taking their driving concern to be functionality, as elaborated in terms of a platform rationale that delimits patent protection to zones of applied knowledge. But there remain three subsidiary themes in the case law that do not fit squarely within this core functionality frame: (1) wariness toward claims going to purely mental steps, (2) business methods, and (3) software. The present section briefly addresses how these secondary categories may be handled by extensions of the present framework, elaborating further functionality-based tenets to meet their distinct concerns.

The category of “mental steps” first emerged in a line of cases that culminated in Benson, but then dwindled thereafter, since that decision both included “mental processes” in its ineligible list but said little else about the category.301 However, it has since been partially revived by Justice Breyer, who featured its concerns prominently in his dissent in Laboratory Corp. of America Holdings v. Metabolite Laboratories, Inc.302 and more mutedly in his unanimous Mayo opinion. The latter was then cited alongside Benson by the Federal Circuit in its Myriad decision for the view that claims over diagnostic processes are ineligible as going to “abstract mental processes.”303 What might be the underlying concern here, at least once we jettison any physicalist misnomer that patent claims cannot be over “knowledge” (since they are over nothing else)? Simply put, an unease over having patent rights “invade,” if you will, purely internal mental realms of thought. Somewhat more precisely, a mix of freedom of thought and privacy concerns may push us to resist the invasive reach of patent protection and corresponding sorts of

301. See Gottschalk v. Benson, 409 U.S. 63, 67 (1972). 302. 548 U.S. 124 (2006) (per curiam) (dismissing writ of certiorari as improvidently granted). 303. Id. at 136–38 (Breyer, J., dissenting); Mayo Collaborative Servs. v. Prometheus Lab’ys, Inc., 566 U.S. 66, 86–87 (2012); Ass’n for Molecular Pathology, 689 F.3d at 1333–35 (citing Benson, 409 U.S. at 67; then Mayo, 566 U.S. at 73–74).


surveillance that may be involved in enforcing patent rights having such extended scope.304 To address this concern, however, does not require us to abandon a dephysicalized conception of the object of patent claims, nor to impose extraneous requirements of physical embodiment or other “significant” post-solution activity. Rather, the apt remedy is the one discussed in Section I.A. above: although the object of patent claims is always a space of knowledge, we may still wish to limit the reach of patent rights to cover as infringing only that conduct involving some external manifestation of the knowledge, over and above merely internally processing it. That is, although for purposes of eligibility analysis we retain a dephysicalized conception of the subject matter of claims, as going to a space of knowledge (whether embodied or not), when it comes to the formulation of claims and infringement analysis, we require the patentee to restrict their ambit to cases of parties engaging in some external activity implicating the use of the knowledge, over and above merely internal thoughts.

Whether imposing such a requirement is ultimately wise is beyond our present scope. Here, our more modest points are three-fold. First, it is precisely such a requirement, and not an extraneous one of embodiment or other post-solution activity, that addresses the rational kernel of the “mental steps” doctrine, reconciling this secondary category with the main body of eligibility law. Second, doing so poses no problems for either a dephysicalized understanding of the subject matter of patent claims nor a functionality view of their ineligibility. Finally, it also poses no problems for either the eligibility or substantive bite of diagnostic method claims, but instead simply requires them to be more precisely formulated so as to focus on conduct rather than thought.

We now turn to “business method” and “software” claims, each the subject of a lengthy opinion by Justice Stevens urging their categorical ineligibility, first in dissent in Diehr regarding software and then in concurrence in Bilski for business methods, and in each case falling one Justice short of a majority.305 A rich literature exists on both, and full treatment of either is outside the scope of the present Article. Here, our aim is simply to indicate how analysis of each may fit within

304. See Dan L. Burk, Patenting Speech, 79 TEX. L. REV. 99, 138–40 (2000); Kevin Emerson Collins, Propertizing Thought, 60 SMU L. REV. 317, 344–47 (2007); Kapczynski & Syed, supra note 41, at 1958–59. 305. Diamond v. Diehr, 450 U.S. 175, 217–18 (1981) (Stevens, J., dissenting); Bilski v. Kappos, 561 U.S. 593, 656–57 (2010) (Stevens, J., concurring).


the present functionality frame. Specifically, it is to show that while the concerns they raise lie outside its core concern of delimiting patents to applied knowledge, nevertheless they each raise a distinct functionality concern, one that adds a new reason alongside the other powerful ones already adduced by scholars and judges for taking a skeptical view toward such claims.

Claims over business methods, as discussed above in connection with Bilski and Alice, are claims over applied knowledge, but now of a sort pertaining not to the natural world of material techniques, but to the social world of commercial practices. Why might such claims be ineligible? The present literature discloses two central reasons: (1) The first is a historical argument, that the original meaning of the Constitution’s IP Clause restricts the availability of patents to “useful arts” understood as “technological” or material knowledge.306 Section IV.B below offers a textual, rather than originalist, argument in the same vein. (2) The second is a policy argument, that the gap between the average costs and risks of innovation and speed and costs of imitation in this field is not so high as to require patent protection to sustain a robust level of innovative activity.307 To these, we may now add a third, uniting the others: (3) The reason we should construe the ambit of patents in the IP Clause as limited to material rather than commercial knowledge is because we have an especially strong reason to believe that the purpose of patents—to secure protection for valuable innovations that will not otherwise be generated—does not apply to the latter. And that reason goes beyond the gap between innovation and imitation costs, risks, and speed, to focus on the character of the relevant innovations themselves: advances in commercial practices, as opposed to those in material techniques, tend on the whole to be more positional or zero-sum rather than positive sum, their value residing less in expanding collective mastery of material constraints than in increasing the competitive advantage of

306. See Robert I. Coulter, The Field of the Statutory Useful Arts, 7 J. PAT. OFF. SOC’Y 487, 491, 498–99 (1952); John R. Thomas, The Patenting of the Liberal Professions, 40 B.C. L. REV. 1139, 1164, 1166–67 (1999); Brief Amici Curiae of Professors Peter S. Menell and Michael J. Meurer in Support of Respondent, Bilski, 561 U.S. 593 (No 08-964), at 5–9; Bilski, 561 U.S. at 634 (Stevens, J., concurring). 307. See Rochelle C. Dreyfuss, Are Business Method Patents Bad for Business?, 16 SANTA

CLARA COMPUT. HIGH TECH. L.J. 264, 274–75 (2000) (arguing innovation will be compromised as a result of business method patents); Brief Amici Curiae of Professors Peter S. Menell and Michael J. Meurer in Support of Respondent, supra note 306, at 29–38; Bilski, 561 U.S. at 648–56 (Stevens, J., concurring).


some at the expense of others. In technical economic terms, they tend to involve “pecuniary” rather than “real” effects,308 of precisely the sort that, in other contexts, legal economists advise ignoring for purposes of public policy.309 On this view, business methods, while going to applied knowledge, are not “functional” in the narrower sense of going to material or technological knowledge, which is the sense most relevant to patent law.

If a full analysis of business methods claims is outside the present scope, a proper treatment of software claims, the subject of a voluminous literature, is out of the question. What can be done here is briefly to adduce three points about how their analysis fits within the present frame. First, where claims pertain to basic knowledge, be it of the natural or social sciences, they should be ineligible as “abstract” (read basic) formulas or ideas, irrespective of any connection to software or a machine. Second, where claims pertain to applied material knowledge, they should be eligible irrespective of any connection to software. Third, where claims pertain to applied commercial knowledge, they should be ineligible—on the same grounds as business methods just adduced—irrespective of any connection to software or a machine. This leaves us then with a distinct category of sui generis software claims, over knowledge that directly improves general-purpose computer capabilities, independent of their connection to specific basic or applied material or commercial ends. How should these be treated? A full answer lies beyond our present scope, but if the foregoing analysis suggests anything, it is to add support to the other powerful arguments adduced by scholars in favor of according such claims tailored IP protection, of a type distinct from patents, via a sui generis regime (such as we do, for instance, for designs of semiconductor chips or of boat hulls).310

308. See Jacob Viner, Cost Curves and Supply Curves, 3 J. ECON. 23, 43, 46 (1931); RONALD N. MCKEAN, EFFICIENCY IN GOVERNMENT THROUGH SYSTEMS ANALYSIS 143–44 (1958) (distinguishing between technological and pecuniary spillovers resulting from physical inputs). 309. See, e.g., RICHARD A. POSNER, ECONOMIC ANALYSIS OF LAW 7 (6th ed. 2003) (distinguishing between “pecuniary” effects, as involving solely “private” costs, and “technological” ones, as involving properly “social” costs). 310. See Pamela Samuelson, Creating a New Kind of Intellectual Property: Applying the Lessons of the Chip Law to Computer Programs, 70 MINN. L. REV. 471, 473, 476, 483, 485 (1985); Peter S. Menell, Tailoring Legal Protection for Computer Software, 39 STAN. L. REV. 1329, 1364–65 (1987); Rochelle Cooper Dreyfuss, Information Products: A Challenge to


Summing up, analysis of the secondary categories of mental steps, business methods, and software reveals that in terms of both what is covered by these categories and why they might be ineligible, these do indeed remain distinct in their content and rationale from the central categories of products, laws, and formulas. Nevertheless, for each there are additional reasons for skepticism toward their eligibility, reasons that the present framework both helps to elucidate and properly address by extending functionality tenets to handle their distinct concerns.

IV. RECONSTRUCTING ELIGIBILITY’S STATUTORY AND CONSTITUTIONAL FRAMEWORK

Our analysis until now has focused on the common law and policy bases for restricting patent-eligible subject matter to functional knowledge, as deriving from a basic/applied distinction that runs through the case law and is best grounded in a platform rationale for keeping the “building blocks” of basic research free and clear of patents, by delimiting the zone of protection to applied knowledge. This Part now considers how these aspects of judicial doctrine and policy may find reinforcement in two additional supports for restricting the domain of patents to functional knowledge: the statutory requirement that patents may obtain only in “useful” inventions and the constitutional anchor of patent law in the mandate to promote progress in the “useful arts.”

A. The Standard View: Utility as Substantive Requirement

Attached to the front of § 101’s list of eligible categories for patent protection is the condition that any such “process, machine, manufacture, or composition of matter” be “new and useful.”311 The “novelty” requirement goes on to find its full elaboration in § 102,312 while that of “utility” is reinforced in § 112’s requirement that to obtain a patent, the applicant must disclose how “to make and use” the claimed invention.313 On one reading of the Patent Act, both novelty and utility are simply substantive requirements of patentability, finding

Intellectual Property Theory, 20 N.Y.U. J. INT’L L. & POL. 897, 899–900, 909–11, 918 (1988); Pamela Samuelson et al., A Manifesto Concerning the Legal Protection of Computer Programs, 94 COLUM. L. REV. 2308, 2312–14 (1994). 311. 35 U.S.C. § 101. 312. Id. § 102. 313. Id. § 112 (emphasis added).


their main elaboration in, respectively, §§ 102 and 112, with their presence in § 101 being mere surplusage: archaic hold-overs from prior iterations of the statute bearing no significance in terms of serving any distinct role. The present Section argues that while this reading is likely sound for “novelty”—so that “new” in § 101 is redundant and might simply be dropped—for “utility” matters stand quite differently: “useful” in § 101 should be seen to play a structurally distinct, subject-matter delimiting or eligibility, role alongside the more substantive requirement of “utility” under § 112.

On the conventional view, utility is understood by and large (although not completely, as we shall see momentarily) to be a purely substantive requirement of patentability, one having three main possible aspects. First, for most inventions it operates as a very low-bar requirement, simply mandating that an invention “work” as claimed, by passing a threshold of “bare operability” so as to bar fanciful claims (such as for a perpetual motion machine).314 Indeed this requirement is taken to be not only minimal but close to unnecessary or self-enforcing: why would anyone seek to take out a patent on something that didn’t work?315 Second, a possibly more stringent requirement of “moral” or “beneficial” utility—while finding some support in past U.S. decisions or at least dicta (and still having legs in Europe)—was put to bed in 1999 by the Federal Circuit’s decision in Juicy Whip.316 Finally, for a subset of inventions, principally those in the chemical, pharmaceutical, and biotechnological fields, there is also a requirement of “specific and substantial” practical utility.317

314. See, e.g., In re Swartz, 232 F.3d 862, 864 (Fed. Cir. 2000) (rejecting a “cold fusion” claim); CRAIG NARD, THE LAW OF PATENTS 234 (4th ed. 2017) (“The utility requirement of Swartz looks to whether the claimed invention simply works.”). 315. MERGES & DUFFY, supra note 116, at 193 (stating that the view that utility “would seem to be self-enforcing” is “largely correct,” and that for the “vast majority” of cases, “the test for utility sets the bar at a very low level”); JANICE M. MUELLER, AN

INTRODUCTION TO PATENT LAW 198 (2d ed. 2006) (similar). 316. Juicy Whip, Inc. v. Orange Bang, Inc., 185 F.3d 1364, 1366–67 (Fed. Cir. 1999); see also MERGES & DUFFY, supra note 116, at 199–209; MUELLER, supra note 315, at 207–10; NARD, supra note 310, at 235. 317. The leading case here, imposing the requirement for chemicals, is Brenner v. Manson, 383 U.S. 519 (1966). Illustrative cases for how the doctrine works in the pharmaceutical context include In re Brana, 51 F.3d 1560 (Fed. Cir. 1995) and In re ‘318 Patent Infringement Litig., 583 F.3d 1317 (Fed. Cir. 2009). For biotechnology, see In re Fisher, 421 F.3d 1365 (2005) and Utility Examination Guidelines, 66. Fed. Reg. 1092 (Jan. 5, 2001). See also NARD, supra note 310, at 236–40; MERGES & DUFFY, supra note 116, at 209–45; Mueller, supra note 311, at 196–204.


So runs the conventional wisdom on utility in the United States.318 Yet alongside this standard view, there also exist, often in the same sources expounding the standard view, the shards of an alternative view of “useful,” as having a structurally distinct, subject-matter delimiting, role in patent law. Two embryonic sources of that alternative view are as follows. First, as many commentators have noted, the current statutory language of “new and useful process, machine . . .” etc. descends directly from “new and useful art, machine . . .” etc. language of the 1793 Patent Act.319 Second, and related, as others have pointed out, there is a link between the statutory requirement that an invention be “useful” and the language of “useful arts” in the Constitution.320 What might be the implications of these textual roots? The following section offers one possible account.

B. An Additional Role: “Useful” as Delimiting Subject Matter

Three linked propositions undergird the account that follows: First, if we trace the current version of § 101 back not only to its 1793 predecessor but to even earlier antecedents, what stands out as the key textual transformation is not the substitution of “process” for “art,” but rather the full displacement of “useful art” as a unified statutory term. Second, this term directly traces back, of course, to the Constitution’s Intellectual Property (IP) clause, and the contrast that clause draws between “science” and “useful arts” is best elaborated precisely in terms of the contrast drawn here between “basic” and “applied” knowledge. Finally, not only does this basic/applied distinction lie at the heart of the foundational subject-matter cases of the nineteenth century (as discussed above), it also features in that period’s judicial understanding of the utility doctrine, so as to further tighten the links between ineligibility as a common law doctrine and its moorings in the statute and Constitution.321

318. But cf. Michael Risch, A Surprisingly Useful Requirement, 19 GEO. MASON L. REV. 57, 59, 63 (2011). Professor Risch argues for a stronger substantive role for “utility,” which the present argument builds on to argue for a structurally distinct, eligibility-filter role for “useful,” over and above any increase in its substantive patentability requirements. 319. MERGES & DUFFY, supra note 116, at 193; Pamela Samuelson, Strategies for Discerning the Boundaries of Copyright and Patent Protections, 92 NOTRE DAME L. REV. 1493, 1494 n.4 (2017); Patent Act of 1793, ch. 11, 1 Stat. 319. 320. U.S. CONST. art. 1, § 8, cl. 8; Mueller, supra note 315, at 195. 321. See ROBERT P. MERGES & JOHN F. DUFFY, PATENT LAW AND POLICY 86 (4th ed. 2007); MERGES & DUFFY, supra note 116, at 194.


As just mentioned, § 101’s present language, codified in the 1952 Patent Act, bears strong traces of the language of the 1793 Act: from 1793’s “new and useful art, machine, manufacture or composition of matter,” there is a shift in 1952 to “new and useful process, machine, manufacture, or composition of matter.”322 The key change here, of course, is that the term “art” is swapped out for that of “process.” But that is only half the story. To see the other half, it helps to trace the statutory language back even farther, to the 1790 Act, one administered by the “Commissioners for the Promotion of Useful Arts” and providing for the protection of any “useful art, manufacture,” etc. “not before known or used.”323 A full tabulation of the statutory history proves illuminating:

TABLE 1: SECTION 101 AND ITS PREDECESSORS

1789 exclusive rights for “inventors” in their “discoveries” in the

“useful arts”324

1790 any “invented or discovered . . . useful art, manufacture,

engine, machine, or device . . . not before known or used”325

1793 any “invented . . . new and useful art, machine,

manufacture or composition of matter . . . not known or used before the application”326

1836 any “discovered or invented . . . new and useful art,

machine, manufacture, or composition of matter . . . not known or used by others”*327

1870 any “invented or discovered . . . new and useful art,

machine, manufacture, or composition of matter . . . not known or used by others”*328

1952

any “invent[ed] or discover[ed] . . . new and useful process, machine, manufacture, or composition of

matter . . . subject to the conditions and requirements of this title”329

322. Patent Act of 1793, § 1, ch. 11, 1 Stat. 319; Patent Act of 1952, § 101, Pub. L. No. 82-593, 66 Stat. 792, 797. 323. Patent Act of 1790, § 1, ch. 7, 1 Stat. 110 (emphasis added). 324. U.S. CONST. art. 1, § 8, cl. 8 (emphasis added). 325. Patent Act of 1790, § 1 (emphasis added). 326. Patent Act of 1793, § 1 (emphasis added). 327. Patent Act of 1836, § 6, ch. 357, 5 Stat. 117, 119. 328. Patent Act of 1870, § 24, ch. 230, 16 Stat. 198, 201. 329. 35 U.S.C. § 101 (emphasis added).


* the section then continues with a fuller elaboration of novelty and statutory-filing bars.

What does this palimpsest reveal? Three central points stand out.

First, and most fundamentally, the term “useful art” in the 1790 Act has an integral unity—denoting a single concept—that is immediately rent asunder by the 1793 Act’s (unnecessary) tacking of “new” onto its front. In the 1790 Act, “useful art[]” denotes a discrete notion—one harkening back to the proper subject matter or domain of patents as marked out by the Constitution330—which serves as the lead or covering term for a list filled out by various other discrete items (each standing for embodied artifices of one sort or another). But this gets fully transmogrified in the 1793 Act: now we have “new and useful” as a unified descriptor, appended to various discrete items of “art, machine,” etc.—a very different matter altogether.331 Second, that the insertion of “new” in the 1793 Act—rending apart “useful art” and displacing it with “new and useful”—was indeed unnecessary is made apparent by the fact that the 1790 Act already contained the concept of novelty, with its stipulation that only inventions “not before known or used” may be patented, a stipulation retained, in redundant fashion, by the 1793 Act as well as each of its successors (albeit in modified forms) until the 1952 codification, which finally relocated such novelty and statutory-bar requirements to separate sections. Yet, and third, the 1952 Act still retained 1793’s “new and useful” so that, like all of its other successors, it carried forward the two defects of that Act’s transfiguration of the 1790 Act: (a) a severing of the unity of “useful art” as a lead term for the subject matter of patent protection; and (b) an unnecessary duplication of “new.”

And what of the shift from “art” to “process” in 1952? This was a welcome consolidation of a century-long, halting, movement toward dephysicalization. Consider that in the original 1790 list, all the items following “useful art” are embodied forms of artifice of one sort or other. These fostered a lingering physicalism that then exercised a residual pull on the first item, well into the nineteenth century. Telling here is

330. Based on a more exacting historical reconstruction than the present more purely textual argument, Professor O’Connor has expressed a similar view: “‘useful’ probably does not just modify ‘arts’ in the IP Clause—as some commentators have argued—but rather ‘useful arts’ should be seen as a conceptual category.” Sean M. O’Connor, The Lost “Art” of the Patent System, 4 U. ILL. L. REV. 1397, 1476 (2015). 331. See H.R. REP. NO. 82-1923, at 6 (1952); S. REP. NO. 82-1979, at 5 (1952).


the treatment accorded to “methods” or “processes” in this period, in close parallel to that given to “principles.” Recall that in the leading U.K. case of Boulton & Watt v. Bull, a key source of suspicion toward “principles” was that they raised the specter of dephysicalization, one Justice Heath suppressed via the re-physicalizing demand that to be patentable any such principles must be embodied in the “organization of a machine.”332 Closely parallel to this was Justice Heath’s treatment of the same claims when considered as “methods” (rather than principles): here again, the specter of dephysicalization arose and was suppressed, now via the physicalized demand of requiring that methods, for patentability, be “vendable” in the form a “machine,” something taken to be required by the Statute of James’ language of “manufactures.”333 Precisely the same parallel treatment can be seen at work in the U.S. decision of Le Roy v. Tatham: here too a key source of suspicion toward not only principles but also processes was their dephysicalization, which seemed to the majority an ill-fit with the statutory focus on “arts and manufactures,” so as to require rephysicalization via embodiment in a “useful article of [commerce or] manufacture.”334 Wresting “methods” or “processes” free from the lingering pull of physicalism was a drawn-out affair, really only completed in 2010 when the Supreme Court in Bilski put to rest the view, adopted by the Federal Circuit, that processes, to be patentable, must be tied to a machine or physical transformation.335 In this long march, the 1952 Act was a watershed moment, delinking “process” or “method” claims from any physicalist undertones of “art” as article or artifact.336

To summarize, when reconstructing the development of the statutory subject-matter provisions, if we bear in mind both the inapt partial erasure of functionality concerns and the apt pursuit of dephysicalization ones, what emerges is that: (1) the common core of all the provisions has been to make patents available for “inventions” or “discoveries” in the “useful arts,” (2) with such “inventions” or

332. See discussion supra text accompanying note 74. 333. Boulton & Watt v. Bull, 126 Eng. Rep. 651, 651 (1795). As Oren Bracha shows, Justice Heath’s opinion became the accepted position in England for decades after, with the prevailing view being that methods were patent-ineligible owing to a “vendability” requirement understood in explicitly physicalist terms. Bracha, supra note 73, at 85–86. 334. Le Roy v. Tatham, 55 U.S. 156, 174–75 (1852) (emphasis added). 335. Bilski v. Kappos, 561 U.S. 593, 604, 606 (2010). 336. See H.R. REP. NO. 82-1923, at 6; S. REP. NO. 82-1979, at 5.


“discoveries” to be conceived in dephysicalized ways, as “knowledge of” a “process, machine, manufacture, or composition of matter,” and (3) with such “useful” inventions or discoveries still needing to satisfy, of course, the substantive requirements of patentability as laid out in other parts of the statute. What might the implications be of this reconstruction for interpreting (and perhaps revising) § 101 in its current form? We take this up shortly, in Section IV.C. First, however, one further aspect of “useful” needs to be brought out.

Suppose we accept that “useful” does indeed play a distinct role in statutory subject-matter provisions compared to “new”—not that of a redundant repetition of a substantive requirement of patentability, but of a structurally distinct, eligibility-type role tracing back to “useful arts” in the Constitution. It still remains to ask: what should “useful” so construed be taken to delimit, in light of what “useful arts” in the Constitution is taken to denote? The IP Clause of the Constitution, as is well-known, has a bifurcated structure:

(a) the progress of science is to be promoted by granting authors limited-time exclusive rights in their writings—this being the domain of copyright; and (b) the progress of useful arts to be promoted by granting inventors limited-time exclusive rights in their discoveries—this being the domain of patents.337

Given that “useful arts” is conceived in partial contrast to “science,” how should this science/useful arts distinction be construed? On the present argument, the answer is clear: the contrast between science and useful arts in the IP Clause closely tracks that between basic and applied knowledge, or scientific understanding and technological intervention. Indeed, we can unify them in a single contrast: (basic) science versus (applied) useful arts, with the latter understood as “technology.”338

The argument for this construction is built on three propositions. First, recognizing that “science” in the IP Clause is meant to be broader

337. The full text reads: “Congress shall have Power . . . To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.” U.S. CONST. art. 1, § 8, cl. 8. On the bifurcated copyright-patent structure of the clause, see H.R. REP. NO. 82-1923, at 4; S. REP. NO. 82-1979, at 2; and Edward C. Walterscheid, To Promote the Progress of Science and Useful Arts: The Background and Origin of the Intellectual Property Clause of the United States Constitution, 2 J. INTELL. PROP. L. 1, 44–52 (1994). 338. Cf. In re Musgrave, 431 F.2d 882, 893 (C.C.P.A. 1970) (equating “useful arts” in the Constitutional clause with “the technological arts,” so as to serve as a limitation on the statutory subject matter of “process” under § 101).


than “natural science” as we understand it today—so as to include “learning” more generally, including that in the humanities and what today we would call the social sciences339—it remains the case that all these are areas of basic understanding, not applied intervention. Indeed, and second, we may go further in this respect by underlining that patents not only pertain to spaces of applied knowledge, or knowing how to do something, but to the “practice of” such knowledge, or doing something, rather than merely knowing something (whether that be knowing how or knowing that). Finally, while the “science” side of science/useful arts encompasses more than “natural science,” the “useful arts” side is in fact restricted to the applied aspect of “natural science”—or knowledge of nature and the human body—as opposed to the applied aspect of the humanities and social sciences—or knowledge of society and culture.340 The following provides a tabular summary of the argument.

TABLE 2: CONTENT, FORM, AND FUNCTION IN INTELLECTUAL PROPERTY

“Science” (Natural) “Science” (Social)

CONTENT Knowledge of Natural World

& Body Knowledge of Society &

Culture FORM Writings expressing such knowledge

FUNCTION Doings applying such knowledge This table translates the view that patents should not be available for

basic knowledge or understandings but only applied knowledge or interventions, into the following terms: patents are to be available not for mere content—i.e., any sort of knowledge or understanding by itself—but only for the putting-into-use of content, or function—i.e., the application of knowledge to affect some intervention in the world. Such a distinction would serve within patents as an analogue to one made in copyright, where protection is not available for content simpliciter—i.e., any sort of knowledge or understanding by itself, be it “ideas” or “facts”—but only for the form in which such content is expressed.341 Together, these contrasts yield the following overall picture of the IP landscape. The content of basic knowledge—be it of

339. See O’Connor, supra note 173, at 773–87. 340. See supra notes 306–10 and accompanying text. 341. 17 U.S.C. § 102(b).


the natural world and human body under Column A’s natural sciences, or of society and culture under Column B’s social sciences and humanities—lies outside the scope of either patent or copyright protection. Meanwhile, the form in which such knowledge may be communicated, via writings or other media of expression, is suitable for copyright but not patent protection.342 The domain of patents, on the other hand, is the function of applied knowledge or going from understanding to intervention. More precisely, the ambit of patents is to provide protection for the practice of such applied knowledge, i.e., not just knowing how to do something, but actually doing something with that knowledge. Finally, for reasons given above in Section III.C.4, patents should be restricted to applied knowledge of a material or technological sort (Column A), and not include that of a social or commercial sort (Column B)—so as to exclude, inter alia, business methods.

In a nutshell, the domain of patents is to be delimited to the practice of applied knowledge of a material or technological sort. “Functionality,” then, may serve in a broad sense as the coverall term for all three aspects of this delimitation: (a) restricting patents to applied knowledge; (b) restricting patents to applied knowledge of a material or technological sort; and (c) restricting patents to the practice of knowledge, or actually “doing” it rather than merely knowing it.

An important point is worth registering at this stage. Some readers may object that little has been done to show that the original legislative intent behind the 1790 statutory provision was indeed directly to link it back to the IP Clause of the Constitution. Or that the meaning being attributed to that clause was, in fact, its original meaning (in any of that term’s key senses). And so it should be clarified that the present account is not being offered as an accurate historical recovery of past meanings, nor as a normative argument from original meaning.343 Rather, it is meant in a more textualist and frankly presentist vein, of what is the most plausible construction, or purposive interpretation, of these texts when taken as legally authoritative for us.344 What, in other

342. A fuller discussion of how the present analysis relates to copyrightable subject matter lies outside our present scope. 343. Although it should be noted that such historical and normative arguments are available and have been advanced by the sources cited in supra note 306. 344. And in that vein, alongside the constructivist textualist argument offered in the text, also pertinent as arguments from purpose are the economic policy arguments against eligibility for business method claims summarized in supra notes 307–09 and


words, is the best reading of these texts given the point and purpose of legal argument as a whole?345

For those unpersuaded by this account—either in its constructivist approach to legal interpretation or by the specific interpretation it offers up—it should be emphasized that the present argument is fully severable from the those advanced above, in Parts II and III, or below, in Section IV.C. Parts II and III advanced a critique and reconstruction of ineligibility doctrine understood as a judicially crafted body of law. The present argument seeks to reinforce that common law doctrine with anchors in the statutory and constitutional language. But these remain, for all that, reinforcements—the earlier argument can still stand (or fall) on its own. Similarly, the following section takes a more explicitly reformist turn: it uses the present reconstruction of the statutory and constitutional bases for ineligibility as the basis for a more frankly revisionary, rather than interpretive, set of moves.

C. Reconstructing Section 101

What issues from the previous section’s account is, again, a tripartite understanding of the statutory subject matter for patents as follows. Patents are to be available for “inventions” or “discoveries” in the “useful arts”: (1) Such “inventions” or “discoveries” must be conceived in a thoroughly dephysicalized way, as spaces of “knowledge of” a “process, machine, manufacture, or composition of matter.” (2) Such spaces of knowledge must be spaces of “useful”—i.e., applied or functional—knowledge. (3) Finally, such candidate spaces of functional knowledge still need, to qualify for protection, to satisfy the substantive requirements laid out in the rest of the statute.

How does this understanding accord with the present statutory language of § 101? And what, if any, revisions to that language does it call for? Perhaps surprisingly, it fits the present statute very well, calling for only one modest, even cosmetic, change, namely the dropping of “new” in the section as a redundant and distracting holdover from past drafts. Section 101 in its current form provides that the following subject matter is eligible for patent protection:

accompanying text. As discussed there, however, a full policy analysis of business method claims is outside the scope of the present Article. 345. See Ronald Dworkin, The Original Position, 40 U. CHI. L. REV. 500, 502–03

(1973); RONALD DWORKIN, LAW’S EMPIRE (1986); Richard H. Fallon, Jr., A Constructivist Coherence Theory of Constitutional Interpretation, 100 HARV. L. REV. 1189, 1190–92 (1987).


“any new and useful process, machine, manufacture, or composition of matter.”346

What the present analysis calls for is one modest cosmetic change to this language, along with two interpretive glosses on the language already in place. First, we simply drop “new”—as a redundant holdover that merely duplicates § 102—to read:

“any useful process, machine, manufacture, or composition of matter.”

Next, we dephysicalize our understanding of “process, machine, manufacture and composition of matter” by reading in “knowledge of” a “process, machine,” etc.

Finally, we understand “useful” to play a delimiting, or eligibility-type filter role, to signal that the knowledge of a “process, machine,” etc. must be applied rather than basic knowledge.

Making these changes yields the following categories of statutory subject matter:

(1) “Knowledge of” a way of doing something (so-called “functional” claims) (2) “Knowledge of” some thing, its structure and at least one property (“product” claims) (3) “Knowledge of” a way of making something (method-of-making process patent)347 (4) “Knowledge of” a way of using something (method-of-use process patent)

Two significant features of this way of conceiving the categories bear emphasis. First, in its essentials this list is the same as that adumbrated above in Section I.B, when ostensibly only the dephysicalizing move of reading in “knowledge of” was applied to the statute. This is because at that stage it was helpful simply to bring functionality in, under cover of dephysicalization. Now, however, it is illuminating to delink the two. If we only dephysicalized the statutory list, without attending to functionality concerns, this would yield the following more threadbare categories:

(1) “Knowledge of” a process, understood as “knowledge of some operation” in the world. (2) “Knowledge of” a product, understood as “knowledge of some structure” in the world.

346. 35 U.S.C. § 101. 347. With “product-by-process” claims being a combination of (2) and (3).


That is, if we only attended to the conceptual point that patents obtain in dephysicalized spaces of “knowledge of,” without attending to any functionality concerns, then patents would also be made available in spaces of basic knowledge, or simply knowing that some operation or structure exists in the world. However, as elaborated by the courts in ineligibility case law—and supported by sound policy considerations as well as the statutory and constitutional texts of patent law—patents should only be available for spaces of applied knowledge, of how to do something in the world. And applying such functionality concerns to the statutory categories, knowledge of a process transforms from knowledge that some operation exists, to knowledge of how to do (or make or use) something. And knowledge of a product transforms from knowledge that some structure exists, to knowledge of how to do something with that structure, meaning knowledge not only of its structure but of at least one function—i.e., (useful) property—of that structure.

Which brings us to a second point. When we read into the statutory language not only “knowledge of”—to reflect the basic conceptual point of dephysicalization—but also functionality concerns, so as to delimit patent-eligibility to functional knowledge, of how to do something “useful,” the basis of this second interpretive construction may be thought to lie either in the judicial development of ineligibility doctrine, rooted in a basic/applied distinction grounded in a conceptual and policy argument concerning knowing-that versus knowing-how, or in the statutory and constitutional language of “useful,” as delimiting the domain of patents to applied science or the technological arts. Put another way, already packed into this reconstruction of the statutory categories of subject matter is the full (reconstructed) common law doctrine of eligibility.

What should we make of this consilience of common law and statutory-cum-constitutional considerations? Three points bear emphasis. First, it is not being asserted of course that the actual judicial development of ineligibility doctrine was simply an exercise in elaborating the statutory and constitutional terms of “useful” and “useful arts.” In developing eligibility doctrine, the courts clearly seemed informed by considerations other than those simply of statutory and constitutional construction (indeed, these seem to have


played very little role, at least explicitly).348 Nevertheless, and second, it is the case that the two lines of thought—i.e., the importance of cabining patents to spaces of “applied” rather than “basic” knowledge and the delimitation of patents to technology rather than science—can be seen to converge. Third, and finally, it is also bears emphasizing that it is indeed both lines of thought that are of importance here: by itself, the statutory and constitutional language provides only threadbare guidance, needing to be fleshed out with the aid of judicial development of the basic/applied distinction, in both its conceptual content and underlying policy bases. In other words, while the burden of the analysis in Section IV.B was that common law ineligibility doctrine can, in reconstructed form, be reconciled with the statutory and constitutional framework, this reconciliation, it must be emphasized, works both ways: common law doctrine may indeed find a foothold in the statutory and constitutional language as elaborated here, but that elaboration is itself spurred by judicial developments. While common law functionality concerns may indeed find a home in statutory and constitutional language, that this language is best read as expressing functionality concerns is itself driven home by the common law development of these concerns.

Taking stock, Table 3 distills the present Article’s argument as a whole, its reconstruction of both the statutory and common-law eligibility categories, and the underlying rationales for each.

TABLE 3: RECONSTRUCTING (AND RECONCILING) SECTION 101 AND COMMON-LAW ELIGIBILITY

S. 101 “any . . . useful process, machine, manufacture, or

composition of matter” is eligible

Step 1: Dephysicalization: reading in “knowledge of”

– Knowledge of some operation (“process”) or structure (“product”) in the world

Step 2:

Functionalization: limiting to “functional” knowledge as applied knowing-how, not basic knowing-that

– Knowledge of a way of doing, making, or using something (“process” claims)

348. But not no role: as Professors Merges & Duffy have noted, Justice Grier’s dissent in Morse explicitly anchors the ineligibility of scientific principles in the utility requirement. O’Reilly v. Morse, 56 U.S. 62, 132–33 (1854) (Grier, J., dissenting); MERGES & DUFFY, supra note 321, at 85.


– Knowledge of structure and at least one property of something (“product” claims)

Basis for Step 1

Why “knowledge of”? Conceptual claim that the object of patents are intangible spaces of knowledge

Bases for Step 2

Why spaces of “functional” knowledge? Because applied knowledge is the zone of patents, as stipulated by common law bars on basic knowledge of “laws of nature, natural phenomena, and abstract ideas”

Why spaces of “functional” knowledge? Because applied technology is the domain of patents, as denoted by “useful” in the statute and “useful arts” in the Constitution, in contrast to basic science

In sum, by applying the same two steps of dephysicalization and

functionality to the statutory and constitutional provisions of patent law as we did to common law eligibility doctrine, we arrive at the following understanding of patent-eligible subject matter. Patents are to be made available for “inventions” or “discoveries” in the “useful arts.” Understanding such inventions or discoveries in their properly intangible or dephysicalized way, we understand them to be spaces of knowledge of a “process, machine, manufacture, or composition of matter.” And conceiving such useful spaces of knowledge in a properly functional way, we understand them to be delimited to zones of applied knowledge, or technological intervention, with no encroachment into zones of basic knowledge, or scientific understanding. Such a view makes the best sense of the relevant legal materials, in terms of both conceptual fit and underlying policy justification: it accounts for the central doctrinal features of ineligibility case law as well with its statutory and constitutional basis, and it grounds these doctrines and texts in their most compelling underlying rationale.

CONCLUSION

To repair patent law’s ineligibility doctrine involves two fundamental steps. First, we must fully internalize the point that the object of patents is a dephysicalized one, an intangible “space of knowledge” of some thing or process, rather than any “thing” or process itself. Only with this conception in hand can we discern what is wrong with ineligibility doctrine, so as to clear the way for what is right with it. Second, what is right with ineligibility doctrine is a set of substantive functionality concerns. However, these must be extricated


from physicalist error and reconstructed on a sounder basis—sounder conceptually, policy-wise, and as a matter of doctrine. In other words, properly to pursue functionality concerns requires breaking free from the spell of physicalism.

When put this way, the two themes of the present analysis—physicalism and functionality—are simply conjoined, with the errors generated by the former erecting an unfortunate barrier to the effective pursuit of the concerns raised by the latter. Yet the relation between the two is in fact rather more intimately connected, something that we are only now in a position to see clearly. And thus, by way of conclusion, it will be good to bring out that relation more explicitly.

What gives physicalism its lasting power in patents—what makes the spell linger—is, in fact, precisely functionality: it is precisely because patents properly obtain only in spaces of functional knowledge, or knowing how to do something, that it becomes easy to forget that they nevertheless still only obtain in spaces of functional knowledge, or knowing how to do something. The two points pull in opposing directions. On the one hand, to dephysicalize patents—i.e., to internalize that their claims only obtain in an intangible space of knowledge of some thing or process, not the thing or process itself—is a movement away from the external world, pulling their subject matter into a purely human realm, of knowledge of said world. On the other hand, to functionalize patents—i.e., to insist that patents may only obtain in spaces of applied knowledge—is a movement back in the other direction, toward the external world: although it does not take patent claims back to the realm of physical things or processes themselves, it does take them away from mere intrinsic knowledge that some structure exists or process works, to extrinsic knowledge of how to do something in the world, or achieve some function with said structure or process. This is then reinforced by two further points. First, to require that patents cover the “practice” rather than only the “theory” of such knowledge is a further shift, away from merely knowing how to do something in the world to actually doing it: away, that is, from mere knowledge and toward knowledge-informed activity. Second, to require that patents only cover technological activity—meaning doing something vis-à-vis the material world of nature and the human body, rather than more purely social domains of commerce or culture—is a final push in a “materializing” direction.

It is these three functional aspects of patents—namely that they go to (a) the practice of (b) applied knowledge, (c) specifically applied


material or technological knowledge—that push up against the fact that, for all that, patents do still always and only go to knowledge. And it is this dance between functionality and physicalism—how the former generates the latter, which then threatens to envelop it—that provides the Ariadne’s thread to unlocking ineligibility’s puzzle.

reconstructing patent eligibility - american university law

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