CITE:  172 F.3d 1352
CMON:  April 1999
PLAIN: ATT Corporation
DEFND: Excel Communications Inc.
COURT: U.S. Court of Appeals Federal Circuit
DATE:  April 14, 1999 

Holder of patent relating to method of indicating telephone call recipient's
primary interexchange carrier (PIC) as data field in standard message
record brought infringement action against competitor.  The United States
District Court for the District of Delaware, Sue L. Robinson, Judge, 1998
WL 175878, granted summary judgment for competitor, and patent holder
appealed.  The Court of Appeals, Plager, Circuit Judge, held that patent's
method claims were within scope of patentable subject matter.

  Algorithm does not have to physically transform matter to be patentable,
  but only has to produce useful, concrete and tangible result.

JUDGE: PLAGER, Circuit Judge.
Before PLAGER, CLEVENGER, and RADER, circuit judges. 

This case asks us once again to examine the scope of section 1 of the Patent
Act, 35 U.S.C. Section 101 (1994). The United States District Court for the
District of Delaware granted summary judgment to Excel Communications, Inc.,
Excel Communications Marketing, Inc., and Excel Telecommunications, Inc.
(collectively "Excel"), holding U.S. Patent No. 5,333,184 (the '184 patent)
invalid under Section 101 for failure to claim statutory subject matter. See
AT & T Corp. v. Excel Communications, Inc., No. CIV.A.96-434-SLR, 1998 WL
175878, at *7 (D. Del. Mar. 27, 1998). AT & T Corp. ("AT&T"), owner of the
'184 patent, appeals. Because we find that the claimed subject matter is
properly within the statutory scope of Section 101, we reverse the district
court's judgment of invalidity on this ground and remand the case for
further proceedings.



The '184 patent, entitled "Call Message Recording for Telephone Systems",
issued on July 26, 1994. It describes a message record for long-distance
telephone calls that is enhanced by adding a primary interexchange carrier
("PIC") indicator. The addition of the indicator aids long-distance carriers
in providing differential billing treatment for subscribers, depending
upon whether a subscriber calls someone with the same or a different
long-distance carrier. 

The invention claimed in the '184 patent is designed to operate in a
telecommunications system with multiple long-distance service providers. The
system contains local exchange carriers ("LECs") and long-distance service
(interexchange) carriers ("IXCs"). The LECs provide local telephone service
and access to IXCs. Each customer has an LEC for local service and selects
an IXC, such as AT&T or Excel, to be its primary long-distance service
(interexchange) carrier or PIC. IXCs may own their own facilities, as does
AT&T. Others, like Excel, called "resellers" or "resale carriers," contract
with facility-owners to route their subscribers' calls through the
facility-owners' switches and transmission lines. Some IXCs, including
MCI and U.S. Sprint, have a mix of their own lines and leased lines.

The system thus involves a three-step process when a caller makes a
direct-dialed (1+) long-distance telephone call: (1) after the call is
transmitted over the LEC's network to a switch, and the LEC identifies the
caller's PIC, the LEC automatically routes the call to the facilities used
by the caller's PIC; (2) the PIC's facilities carry the call to the LEC
serving the call recipient; and (3) the call recipient's LEC delivers the
call over its local network to the recipient's telephone.

When a caller makes a direct-dialed long-distance telephone call, a switch
(which may be a switch in the interexchange network) monitors and records data
related to the call, generating an "automatic message account" ("AMA") message
record. This contemporaneous message record contains fields of information
such as the originating and terminating telephone numbers, and the length
of time of the call. These message records are then transmitted from the
switch to a message accumulation system for processing and billing.

Because the message records are stored in electronic format, they can be
transmitted from one computer system to another and reformatted to ease
processing of the information. Thus the carrier's AMA message subsequently is
translated into the industry-standard "exchange message interface", forwarded
to a rating system, and ultimately forwarded to a billing system in which
the data resides until processed to generate, typically, "hard copy" bills
which are mailed to subscribers.


The invention of the '184 patent calls for the addition of a data field into a
standard message record to indicate whether a call involves a particular PIC
(the "PIC indicator"). This PIC indicator can exist in several forms, such as
a code which identifies the call recipient's PIC, a flag which shows that the
recipient's PIC is or is not a particular IXC, or a flag that identifies the
recipient's and the caller's PICs as the same IXC. The PIC indicator
therefore enables IXCs to provide differential billing for calls on the
basis of the identified PIC.

The application that issued as the '184 patent was filed in 1992. The U.S.
Patent and Trademark Office ("PTO") initially rejected, for reasons unrelated
to Section 101, all forty-one of the originally filed claims. Following
amendment, the claims were issued in 1994 in their present form. The '184
patent contains six independent claims, five method claims and one apparatus
claim, and additional dependent claims. The PTO granted the '184 patent
without questioning whether the claims were directed to statutory subject
matter under Section 101. 

AT&T in 1996 asserted ten of the method claims against Excel in this
infringement suit. The independent claims at issue (claims 1, 12, 18, and 40)
include the step of "generating a message record for an interexchange call
between an originating subscriber and a terminating subscriber," and the
step of adding a PIC indicator to the message record. Independent claim 1,
for example, adds a PIC indicator whose value depends upon the call
recipient's PIC:

  A method for use in a telecommunications system in which interexchange
  calls initiated by each subscriber are automatically routed over the
  facilities of a particular one of a plurality of interexchange carriers
  associated with that subscriber, said method comprising the steps of:

  generating a message record for an interexchange call  between
  an originating subscriber and a terminating subscriber, and

  including, in said message record, a primary interexchange carrier
  (PIC) indicator  having a value which is  a function of whether
  or not the interexchange carrier associated with said terminating
  subscriber is a predetermined one  of said interexchange carriers. 

(Emphasis added.) Independent claims 12 and 40 add a PIC indicator that
shows if a recipient's PIC is the same as the IXC over which that
particular call is being made. Independent claim 18 adds a PIC indicator
designed to show if the caller and the recipient subscribe to the same IXC.
The dependent claims at issue add the steps of accessing an IXC's subscriber
database (claims 4, 13, and 19) and billing individual calls as a function
of the value of the PIC indicator (claims 6, 15, and 21).

The district court concluded that the method claims of the '184 patent
implicitly recite a mathematical algorithm. See AT&T, 1998 WL 175878, at *6.
The court was of the view that the only physical step in the claims involves
data-gathering for the algorithm. See id. Though the court recognized that the
claims require the use of switches and computers, it nevertheless concluded
that use of such facilities to perform a non-substantive change in the
data's format could not serve to convert non-patentable subject matter into
patentable subject matter. See id. at *6-7. Thus the trial court, on summary
judgment, held all of the method claims at issue invalid for failure to
qualify as statutory subject matter. See id. at *7.



Summary judgment is appropriate if there are no genuine issues of material
fact and the moving party is entitled to judgment as a matter of law. See Fed.
R.Civ.P. 56(c). We review without deference a trial court's grant of summary
judgment, with all justifiable factual inferences drawn in favor of the party
opposing the motion. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255

The issue on appeal, whether the asserted claims of the '184 patent are
invalid for failure to claim statutory subject matter under 35 U.S.C. Section
101, is a question of law which we review without deference. See Arrhythmia
Research Tech. v. Corazonix Corp., 958 F.2d 1053, 1055-56, (Fed. Cir. 1992).
In matters of statutory interpretation, it is this court's responsibility
independently to determine what the law is. See Hodges v. Secretary of the
Dep't of Health & Human Servs., 9 F.3d 958,960 (Fed. Cir. 1993). 


Our analysis of whether a claim is directed to statutory subject matter begins
with the language of 35 U.S.C. Section 101, which reads: 

  Whoever invents or discovers any new and useful process, machine,
  manufacture, or composition of matter, or any new and useful improvement
  thereof, may obtain a patent therefor, subject to the conditions and
  requirements of this title. 

The Supreme Court has construed Section 101 broadly, noting that Congress
intended statutory subject matter to "include anything under the sun that is
made by man." See Diamond v. Chakrabarty, 447 U.S. 303, 309, 100 S.Ct. 2204
(1980) (quoting S. Rep. No. 82-1979, at 5 (1952); H.R. Rep. No. 82-1923,
at 6 (1952)); see also Diamond v. Diehr, 450 U.S. 175,182, 101 S.Ct. 1048
(1981). Despite this seemingly limitless expanse, the Court has specifically
identified three categories of unpatentable subject matter: "laws of nature,
natural phenomena, and abstract ideas." See Diehr, 450 U.S. at 185.

In this case, the method claims at issue fall within the "process" {1}
category of the four enumerated categories of patentable subject matter
in Section 101.  The district court held that the claims at issue, though
otherwise within the terms of Section 101, implicitly recite a mathematical
algorithm, see AT&T, 1998 WL 175878, at *6, and thus fall within the
judicially created "mathematical algorithm" exception to statutory
subject matter.

A mathematical formula alone, sometimes referred to as a mathematical
algorithm, viewed in the abstract, is considered unpatentable subject matter.
See Diamond v. Diehr, 450 U.S. 175, 101 S.Ct. 1048 (1981); Parker v. Flook,
437 U.S. 584, 98 S.Ct. 2522 (1978); Gottschalk v. Benson, 409 U.S. 63, (1972).
Courts have used the terms "mathematical algorithm", "mathematical formula",
and "mathematical equation", to describe types of nonstatutory mathematical
subject matter without explaining whether the terms are interchangeable or
different. Even assuming the words connote the same concept, there is
considerable question as to exactly what the concept encompasses. See,
e.g., Diehr, 450 U.S. at 186 n.9 ("The term 'algorithm' is subject to a
variety of definitions . . . [Petitioner's] definition is significantly
broader than the definition this Court employed in Benson and Flook.");
accord In re Schrader, 22 F.3d 290, 293 n.5 (Fed. Cir. 1994).

This court recently pointed out that any step-by-step process, be it
electronic, chemical, or mechanical, involves an "algorithm" in the broad
sense of the term. See State Street Bank & Trust Co. v. Signature Fin. Group,
Inc., 149 F.3d 1368, 1374-75, (Fed. Cir. 1998), cert. denied, 119 S. Ct. 851
(1999). Because Section 101 includes processes as a category of patentable
subject matter, the judicially-defined proscription against patenting of
a "mathematical algorithm," to the extent such a proscription still exists,
is narrowly limited to mathematical algorithms in the abstract. See id.;
see also Benson, 409 U.S. at 65 (describing a mathematical algorithm as a
"procedure for solving a given type of mathematical problem").

Since the process of manipulation of numbers is a fundamental part of computer
technology, we have had to reexamine the rules that govern the patentability
of such technology. The sea-changes in both law and technology stand as a
testament to the ability of law to adapt to new and innovative concepts, while
remaining true to basic principles. In an earlier era, the PTO published
guidelines essentially rejecting the notion that computer programs were
patentable.{2} As the technology progressed, our predecessor court disagreed,
and, overturning some of the earlier limiting principles regarding Section
101, announced more expansive principles formulated with computer technology
in mind.{3} In our recent decision in State Street, this court discarded the
so-called "business method" exception and reassessed the "mathematical
algorithm" exception, see 149 F.3d at 1373-77, both judicially-created
"exceptions" to the statutory categories of Section 101. As this brief
review suggests, this court (and its predecessor) has struggled to make
our understanding of the scope of Section 101 responsive to the needs of
the modern world.

The Supreme Court has supported and enhanced this effort. In Diehr, the Court
expressly limited its two earlier decisions in Flook and Benson by emphasizing
that these cases did no more than confirm the "long-established principle"
that laws of nature, natural phenomena, and abstract ideas are excluded from
patent protection. 450 U.S. at 185. The Diehr Court explicitly distinguished
Diehr's process by pointing out that "the respondents here do not seek to
patent a mathematical formula. Instead, they seek patent protection for a
process of curing synthetic rubber." Id. at 187.

The Court then explained that although the process used a well-known
mathematical equation, the applicants did not "pre-empt the use of that
equation." Id. Thus, even though a mathematical algorithm is not patentable
in isolation, a process that applies an equation to a new and useful end "is
at the very least not barred at the threshold by Section 101." Id. at 188.
In this regard, it is particularly worthy of note that the argument for the
opposite result, that "the term 'algorithm' . . . is synonymous with the
term 'computer program'", id. at 219 (Stevens, J., dissenting), and thus
computer-based programs as a general proposition should not be patentable,
was made forcefully in dissent by Justice Stevens; his view, however,
was rejected by the Diehr majority.

As previously noted, we most recently addressed the "mathematical algorithm"
exception in State Street. See 149 F.3d at 1373-75. In State Street, this
court, following the Supreme Court's guidance in Diehr, concluded that
"[u]npatentable mathematical algorithms are identifiable by showing they
are merely abstract ideas constituting disembodied concepts or truths that
are not 'useful.' . . . [T]o be patentable an algorithm must be applied in
a 'useful' way." Id. at 1373. In that case, the claimed data processing
system for implementing a financial management structure satisfied the
Section 101 inquiry because it constituted a "practical application of
a mathematical algorithm, . . . [by] produc[ing] 'a useful, concrete and
tangible result.'" Id. at 1373.

The State Street formulation, that a mathematical algorithm may be an integral
part of patentable subject matter such as a machine or process if the claimed
invention as a whole is applied in a "useful" manner, follows the approach
taken by this court en banc in In re Alappat, 33 F.3d 1526, (Fed. Cir. 1994).
In Alappat, we set out our understanding of the Supreme Court's limitations
on the patentability of mathematical subject matter and concluded that:

  [The Court] never intended to create an overly broad, fourth category
  of [mathematical] subject matter excluded from Section 101. Rather, at
  the core of the Court's analysis . . . lies an attempt by the Court to
  explain a rather straightforward concept, namely, that certain types of
  mathematical subject matter, standing alone , represent nothing
  more than  abstract ideas until reduced to some type of practical
  application , and thus that subject matter is not, in and of itself,
  entitled to patent protection. 

Id. at 1543 (emphasis added). Thus, the Alappat inquiry simply requires
an examination of the contested claims to see if the claimed subject matter
as a whole is a disembodied mathematical concept representing nothing more
than a "law of nature" or an "abstract idea," or if the mathematical concept
has been reduced to some practical application rendering it "useful." Id. at
1544. In Alappat, we held that more than an abstract idea was claimed because
the claimed invention as a whole was directed toward forming a specific
machine that produced the useful, concrete, and tangible result of a smooth
waveform display. See id. at 1544.

In both Alappat and State Street, the claim was for a machine that achieved
certain results. In the case before us, because Excel does not own or operate
the facilities over which its calls are placed, AT&T did not charge Excel with
infringement of its apparatus claims, but limited its infringement charge to
the specified method or process claims. Whether stated implicitly or
explicitly, we consider the scope of Section 101 to be the same regardless of
the form -- machine or process -- in which a particular claim is drafted.
See, e.g., In re Alappat, 33 F.3d at 1581 (Rader, J., concurring) ("Judge
Rich, with whom I fully concur, reads Alappat's application as claiming a
machine. In fact, whether the invention is a process or a machine is
irrelevant. The language of the Patent Act itself, as well as Supreme Court
rulings, clarifies that Alappat's invention fits comfortably within 35 U.S.C.
Section 101 whether viewed as a process or a machine."); State Street,
149 F.3d at 1372 ("[F]or the purposes of a Section 101 analysis, it is of
little relevance whether claim 1 is directed to a 'machine' or a 'process,'
. . . ."). Furthermore, the Supreme Court's decisions in Diehr, Benson, and
Flook, all of which involved method (i.e., process) claims, have provided
and supported the principles which we apply to both machine- and
process-type claims. Thus, we are comfortable in applying our reasoning
in Alappat and State Street to the method claims at issue in this case.


In light of this review of the current understanding of the "mathematical
algorithm" exception, we turn now to the arguments of the parties in support
of and in opposition to the trial court's judgment. We note that, at the
time the trial court made its decision, that court did not have the benefit
of this court's explication in State Street of the mathematical algorithm

As previously explained, AT&T's claimed process employs subscribers' and call
recipients' PICs as data, applies Boolean algebra to those data to determine
the value of the PIC indicator, and applies that value through switching and
recording mechanisms to create a signal useful for billing purposes. In State
Street, we held that the processing system there was patentable subject matter
because the system takes data representing discrete dollar amounts through
a series of mathematical calculations to determine a final share price --
a useful, concrete, and tangible result. See 149 F.3d at 1373.

In this case, Excel argues, correctly, that the PIC indicator value is derived
using a simple mathematical principle (p and q). But that is not determinative
because AT&T does not claim the Boolean principle as such or attempt to
forestall its use in any other application. It is clear from the written
description of the '184 patent that AT&T is only claiming a process that
uses the Boolean principle in order to determine the value of the PIC
indicator. The PIC indicator represents information about the call recipient's
PIC, a useful, non-abstract result that facilitates differential billing of
long-distance calls made by an IXC's subscriber. Because the claimed process
applies the Boolean principle to produce a useful, concrete, tangible result
without pre-empting other uses of the mathematical principle, on its face the
claimed process comfortably falls within the scope of Section 101. See
Arrhythmia Research Tech. Inc. v. Corazonix Corp., 958 F.2d 1053, 1060,
(Fed. Cir. 1992) ("That the product is numerical is not a criterion of
whether the claim is directed to statutory subject matter.").

Excel argues that method claims containing mathematical algorithms are
patentable subject matter only if there is a "physical transformation" or
conversion of subject matter from one state into another. The physical
transformation language appears in Diehr, see 450 U.S. at 184 ("That
respondents' claims involve the transformation of an article, in this case
raw, uncured synthetic rubber, into a different state or thing cannot be
disputed."), and has been echoed by this court in Schrader, 22 F.3d at 294,
("Therefore, we do not find in the claim any kind of data transformation.").

The notion of "physical transformation" can be misunderstood. In the first
place, it is not an invariable requirement, but merely one example of how a
mathematical algorithm may bring about a useful application. As the Supreme
Court itself noted, "when [a claimed invention] is performing a function which
the patent laws were designed to protect (e.g., transforming or reducing
an article to a different state or thing), then the claim satisfies the
requirements of Section 101." Diehr, 450 U.S. at 192 (emphasis added).
The "e.g." signal denotes an example, not an exclusive requirement.

This understanding of transformation is consistent with our earlier decision
in Arrhythmia, 958 F.2d 1053 (Fed. Cir. 1992). Arrhythmia's process claims
included various mathematical formulae to analyze electrocardiograph signals
to determine a specified heart activity. See id. at 1059.  The Arrhythmia
court reasoned that the method claims qualified as statutory subject matter
by noting that the steps transformed physical, electrical signals from one
form into another form -- a number representing a signal related to the
patient's heart activity, a non-abstract output. See id. The finding that
the claimed process "transformed" data from one "form" to another simply
confirmed that Arrhythmia's method claims satisfied Section 101 because
the mathematical algorithm included within the process was applied to
produce a number which had specific meaning -- a useful, concrete, tangible
result -- not a mathematical abstraction. See id. at 1060.

Excel also contends that because the process claims at issue lack physical
limitations set forth in the patent, the claims are not patentable subject
matter. This argument reflects a misunderstanding of our case law. The cases
cited by Excel for this proposition involved machine claims written in means-
plus-function language. See, e.g., State Street, 149 F.3d at 1371; Alappat,
33 F.3d at 1541. Apparatus claims written in this manner require supporting
structure in the written description that corresponds to the claimed "means"
elements. See 35 U.S.C. Section 112, para. 6 (1994). Since the claims at
issue in this case are directed to a process in the first instance, a
structural inquiry is unnecessary.

The argument that physical limitations are necessary may also stem from the
second part of the Freeman-Walter-Abele test,{4} an earlier test which has
been used to identify claims thought to involve unpatentable mathematical
algorithms. That second part was said to inquire "whether the claim is
directed to a mathematical algorithm that is not applied to or limited by
physical elements." Arrhythmia, 958 F.2d at 1058.  Although our en banc
Alappat decision called this test "not an improper analysis", we then
pointed out that "the ultimate issue always has been whether the claim
as a whole is drawn to statutory subject matter".  33 F.3d at 1543 n.21.
Furthermore, our recent State Street decision questioned the continuing
viability of the Freeman-Walter-Abele test, noting that, "[a]fter Diehr
and Chakrabarty, the Freeman-Walter-Abele test has little, if any,
applicability to determining the presence of statutory subject matter."
149 F.3d at 1374.  Whatever may be left of the earlier test, if anything,
this type of physical limitations analysis seems of little value because
"after Diehr and Alappat, the mere fact that a claimed invention involves
inputting numbers, calculating numbers, outputting numbers, and storing
numbers, in and of itself, would not render it nonstatutory subject matter,
unless, of course, its operation does not produce a 'useful, concrete and
tangible result.'" Id. at 1374 (quoting Alappat, 33 F.3d at 1544).

Because we focus on the inquiry deemed "the ultimate issue" by Alappat, rather
than on the physical limitations inquiry of the Freeman-Walter-Abele test, we
find the cases cited by Excel in support of its position to be inapposite.
For example, in In re Grams, the court applied the Freeman-Walter-Abele test
and concluded that the only physical step in the claimed process involved
data-gathering for the algorithm; thus, the claims were held to be directed
to unpatentable subject matter. See 888 F.2d 835, 839, (Fed. Cir. 1989).
In contrast, our inquiry here focuses on whether the mathematical
algorithm is applied in a practical manner to produce a useful result.
In re Grams is unhelpful because the panel in that case did not ascertain
if the end result of the claimed process was useful, concrete, and tangible.

Similarly, the court in In re Schrader relied upon the Freeman-Walter-Abele
test for its analysis of the method claim involved. The court found neither
a physical transformation nor any physical step in the claimed process aside
from the entering of data into a record. See 22 F.3d at 294. The Schrader
court likened the data-recording step to that of data-gathering and held
that the claim was properly rejected as failing to define patentable subject
matter. See id. at 294, 296.  The focus of the court in Schrader was not on
whether the mathematical algorithm was applied in a practical manner since
it ended its inquiry before looking to see if a useful, concrete, tangible
result ensued. Thus, in light of our recent understanding of the issue,
the Schrader court's analysis is as unhelpful as that of In re Grams.

Finally, the decision in In re Warmerdam, 33 F.3d 1354,(Fed.Cir. 1994)
is not to the contrary. There the court recognized the difficulty in
knowing exactly what a mathematical algorithm is, "which makes rather
dicey the determination of whether the claim as a whole is no more than
that." Id. at 1359. Warmerdam's claims 1-4 encompassed a method for
controlling the motion of objects and machines to avoid collision with
other moving or fixed objects by generating bubble hierarchies through
the use of a particular mathematical procedure. See id. at 1356. The court
found that the claimed process did nothing more than manipulate basic
mathematical constructs and concluded that "taking several abstract ideas
and manipulating them together adds nothing to the basic equation"; hence,
the court held that the claims were properly rejected under Section 101.
Id. at 1360.  Whether one agrees with the court's conclusion on the facts,
the holding of the case is a straightforward application of the basic
principle that mere laws of nature, natural phenomena, and abstract ideas
are not within the categories of inventions or discoveries that may be
patented under Section 101.


In his dissent in Diehr, Justice Stevens noted two concerns regarding the
Section 101 issue, and to which, in his view, federal judges have a duty to

  First, the cases considering the patentability of program-related
  inventions do not establish rules that enable a conscientious patent
  lawyer to determine with a fair degree of accuracy which, if any,
  program-related inventions will be patentable. Second, the inclusion
  of the ambiguous concept of an "algorithm" within the "law of nature"
  category of unpatentable subject matter has given rise to the concern
  that almost any process might be so described and therefore held
  Diehr, 450 U.S. at 219 (Stevens, J., dissenting).

Despite the almost twenty years since Justice Stevens wrote, these concerns
remain important. His solution was to declare all computer-based programming
unpatentable. That has not been the course the law has taken. Rather, it is
now clear that computer-based programming constitutes patentable subject
matter so long as the basic requirements of Section 101 are met. Justice
Stevens's concerns can be addressed within that framework.

His first concern, that the rules are not sufficiently clear to enable
reasonable prediction of outcomes, should be less of a concern today in light
of the refocusing of the Section 101 issue that Alappat and State Street have
provided. His second concern, that the ambiguous concept of "algorithm" could
be used to make any process unpatentable, can be laid to rest once the focus
is understood to be not on whether there is a mathematical algorithm at work,
but on whether the algorithm-containing invention, as a whole, produces a
tangible, useful, result.

In light of the above, and consistent with the clearer understanding that our
more recent cases have provided, we conclude that the district court did not
apply the proper analysis to the method claims at issue. Furthermore, had the
court applied the proper analysis to the stated claims, the court would have
concluded that all the claims asserted fall comfortably within the broad scope
of patentable subject matter under Section 101. Accordingly, we hold as a
matter of law that Excel was not entitled to the grant of summary judgment
of invalidity of the '184 patent under Section 101. 

Since the case must be returned to the trial court for further proceedings,
and to avoid any possible misunderstandings as to the scope of our decision,
we note that the ultimate validity of these claims depends upon their
satisfying the other requirements for patentability such as those set forth
in 35 U.S.C. Sections 102, 103, and 112. Thus, on remand, those questions, as
well as any others the parties may properly raise, remain for disposition.


The district court's summary judgment of invalidity is reversed, and the case
is remanded for further proceedings consistent with this opinion.



{1}  "Process" is defined in 35 U.S.C. Section 100(b) to encompass:
"[a] process, art or method, and includes a new use of a known process,
machine, manufacture, composition of matter, or material."

{2}  See, e.g., 33 Fed. Reg. 15581, 15609-10 (1968).

{3}  See In re Tarczy-Hornoch,397 F.2d 856 (CCPA 1968) (overruling the
"function of a machine" doctrine); see also In re Bernhart, 417 F.2d 1395
(CCPA 1969) (discussing patentability of a programmed computer); In re
Musgrave, 431 F.2d 882 (CCPA 1970) (analyzing process claims encompassing
computer programs). For a more detailed review of this history, with
extensive citation to the secondary literature, see Justice Stevens's
dissent in Diehr, 450 U.S. at 193.

{4}  See In re Freeman, 573 F.2d 1237 (CCPA 1978), as modified by In re
Walter, 618 F.2d 758 (CCPA 1980), and In re Abele, 648 F.2d 902 (CCPA 1982).