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Claims Directed to “[a] Signal with Embedded Supplemental Data” Are Not Patentable Under 35 U.S.C. § 101

September 20, 2007
Emsley, Rachel L.

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Last Month at the Federal Circuit - October 2007

Judges: Gajarsa (author), Linn (concurring-inpart and dissenting-in-part), Moore

[Appealed from: Board]

In In re Nuijten, No. 06-1371 (Fed. Cir. Sept. 20, 2007), the Federal Circuit affirmed the decision of the Board in which the Board had rejected “signal” claims in Petrus A.C.M. Nuijten’s application as unpatentable subject matter outside the scope of 35 U.S.C. § 101. The Federal Circuit held that “[a] transitory, propagating signal like Nuijten’s is not a ‘process, machine, manufacture, or composition of matter’” and that since “[t]hose four categories define the explicit scope and reach of subject matter patentable under . . . § 101[,] . . . such a signal cannot be patentable subject matter.” Slip op. at 18.

Mr. Nuijten’s patent application discloses a technique for reducing distortion induced by the introduction of “watermarks” into signals. In the context of signal processing, watermarking is a technique by which an original signal (such as a digital audio file) is manipulated so as to embed within it additional data. This ability to encode additional data into a signal is useful to publishers of sound and video recordings, who can use watermarks to embed in the media information intended to protect that media against unauthorized copying. Mr. Nuijten’s technique improves existing watermark technology by further modifying the watermarked signal in a way that partially compensates for distortion introduced by the watermark.

Mr. Nuijten’s application included claims to “[a] method of embedding supplemental data in a signal,” “[a]n arrangement for embedding supplemental data in a signal,” “[a] storage medium having stored thereon a signal with embedded supplemental data,” and “[a] signal with embedded supplemental data.” Id. at 5-6. The PTO allowed the method and “arrangement” claims, but rejected the “storage medium” and “signal” claims as directed to nonstatutory subject matter under § 101. In addition, the PTO rejected some of the claims for obviousness type double patenting. On appeal, the Board reversed the double patenting rejections and found the “storage medium” claim to be statutory. However, the Board affirmed the examiner’s § 101 rejections of the “signal” claims. Mr. Nuijten appealed.

On appeal, the Federal Circuit first addressed the issue of whether Mr. Nuijten’s “signal” claims were limited to covering only physical instances of signals, or whether they also covered intangible, immaterial strings of abstract numbers. The Court reasoned that “[a] ‘signal’ implies signaling—that is, the conveyance of information” and that “[t]o convey information to a recipient[,] a physical carrier, such as an electromagnetic wave, is needed.” Id. at 9. Thus, the Court noted that in order to be a “signal,” as required by the claims, “some carrier upon which the information is embedded [was] required.” Id. at 9-10. At the same time, however, the Court noted that while the claims were limited so as to require some physical carrier of information, they did not in any way specify what carrier element was to be used. Accordingly, the Court concluded that “some physical form for the signal [was] required [by the claims], but any form will do, so long as a recipient can understand the message—the nature of the signal’s physical carrier [was] totally irrelevant to the claims at issue.” Id. at 10.

After construing the claims, the Federal Circuit addressed the issue of whether Mr. Nuijten’s “signal” claims were directed to statutory subject matter. It noted that Mr. Nuijten and the PTO agreed that the claims included “physical but transitory forms of signal transmission such as radio broadcasts, electrical signals through a wire, and light pulses through a fiber-optic cable, so long as those transmissions convey information encoded in the manner disclosed and claimed by Nuijten.” Id. at 11. The Court held that such transitory embodiments are not directed to statutory subject matter. In so holding, the Court noted that its “inquiry here, like that of the Board, will consider whether a transitory, propagating signal is within any of the four statutory categories: process, machine, manufacture, or composition of matter.” Id. The Court observed that in State Street Bank & Trust Co. v. Signature Financial Group, Inc., 149 F.3d 1368, 1375 n.9 (Fed. Cir. 1998), it recognized that for claimed subject matter to be statutory, it must fall into at least one of those four categories. In doing so, noted the Court, it was advising courts not to be concerned about debates over which of the four categories the subject matter falls into—that is, “not to be overly concerned with pigeonholing subject matter once the court assures itself that some category has been satisfied.” Slip op. at 11-12.

The Court then considered each of the four categories to determine whether Mr. Nuijten’s “signal” claims fell into any of them. Mr. Nuijten argued that a signal of the type covered by his claims was a “process” under that term’s statutory meaning, arguing both that a process need not be defined by reference to an act or series of steps, and that his signal claims did refer to the performance of acts. In rejecting these arguments, the Federal Circuit noted that “[t]he Supreme Court and [it has] consistently interpreted the statutory term ‘process’ to require action.” Id. at 13. In addition, it noted that although Mr. Nuijten’s claims recited that the signal was “encoded in accordance with a given encoding process,” such claims were still directed to the ultimate product, not the underlying process. Id. at 14. The Court observed that “[t]he presence of acts recited in the claim does not transform a claim covering a thing—the signal itself—into one covering the process by which that thing was made.” Id. Accordingly, the Court concluded that because a process claim must cover an act or series of acts and Mr. Nuijten’s “signal” claims did not, his claims were not directed to a process.

With respect to the “machine” category, the Court observed that the Supreme Court has defined the term “machine” as “a concrete thing, consisting of parts, or of certain devices and combination of devices.” Id. at 14 (citation omitted). It reasoned that “[a] transitory signal made of electrical or electromagnetic variances is not made of ‘parts’ or ‘devices’ in any mechanical sense” and that “[w]hile such a signal is physical and real, it does not possess concrete structure . . . .” Id. at 14-15. Accordingly, it concluded that “[a] propagating electromagnetic signal” was not a “machine,” as that term is used in § 101. Id. at 15.

Regarding the “manufacture” category, the Court noted that the question of whether the claimed signals are “manufactures” was more difficult. It observed that the claimed signals were “man-made, in the sense of having been encoded, generated, and transmitted by artificial means,” but that “artificiality [was] insufficient by itself to render something a ‘manufacture.’” Id. Citing to Supreme Court decisions defining “manufacture” and using the same dictionary the Supreme Court relied on for its definition of “manufacture” for the definition of the term “article,” the Court determined that “articles” of “manufacture” are “tangible articles or commodities.” Id. at 15-16. It found that “[a] transient electric or electromagnetic transmission [did] not fit within that definition.” Id. at 16. It reasoned that “[w]hile such a transmission is man-made and physical[,] . . . it is a change in electric potential that, to be perceived, must be measured at a certain point in space and time by equipment capable of detecting and interpreting the signal.” Id. It added that “[i]n essence, energy embodying the claimed signal [was] fleeting and [was] devoid of any semblance of permanence during transmission.” Id. It noted that “[a]ll signals within the scope of the claim [did] not themselves comprise some tangible article or commodity” and that “[t]his is particularly true when the signal is encoded on an electromagnetic carrier and transmitted through a vacuum—a medium that, by definition, is devoid of matter.” Id. at 16-17. Accordingly, the Court held that Mr. Nuijten’s signals, standing alone, were not “manufactures” under the meaning of that term in § 101.

Finally, with respect to the “composition of matter” category, the Court noted that Mr. Nuijten had not challenged the Board’s conclusion that his signal was not composed of matter and was clearly not a “composition of matter.” The Court, nonetheless, explained that the Supreme Court has defined “composition of matter” to mean “all compositions of two or more substances and all composite articles, whether they be the results of chemical union, or of mechanical mixture, or whether they be gases, fluids, powders or solids.” Id. at 17-18 (citation omitted). It reasoned that “[a] signal comprising a fluctuation in electric potential or in electromagnetic fields [was] not a ‘chemical union,’ nor a gas, fluid, powder, or solid.” Id. at 18. It thus concluded that Mr. Nuijten’s signals were not “composition[s] of matter.” Id.

In sum, the Federal Circuit found that “[a] transitory, propagating signal like Nuijten’s is not a ‘process, machine, manufacture, or composition of matter.’” Id. It held that because those four categories define the explicit scope and reach of subject matter patentable under § 101, such a signal cannot be patentable subject matter. It thus affirmed the Board’s rejection of Mr. Nuijten’s “signal” claims.

Judge Linn agreed with the majority that a “signal,” as used in the claims at issue, referred to something with a “physical form,” but disagreed with the majority’s holding that the claims were not directed to statutory subject matter under § 101. In his opinion, the Supreme Court’s definition of “manufacture” did not limit the term “manufacture” to “non-transitory, tangible things.” Linn op. at 2. He noted that when the Supreme Court defined “manufacture,” it emphasized that “[i]n choosing such expansive terms as ‘manufacture’ . . . modified by the comprehensive ‘any,’ Congress plainly contemplated that the patent laws would be given wide scope.” Id. (citation omitted). According to Judge Linn, because the patent claim at issue contemplated some physical carrier of information, it required that some input “material”—whether a pulse of energy or a stone tablet—had been given a new form, quality, or property by direct human action or by a machine. In his view, the resulting signal was thus a “manufacture” in the expansive sense of § 101. He added that because he believed that the claimed signal was a “manufacture,” it was necessary for him to examine the alternative argument that the claimed signal was an unpatentable abstract idea. He noted that because the claim at issue was both “new” and “useful,” it was not an abstract idea. For these reasons, he would reverse the Board’s decision.