Has the Machine-or-Transformation Test Returned to Prominence in Patent Cases?

The machine-or-transformation test was once the gatekeeper of patent eligibility, but that reign ended in 2010 when the Supreme Court stated in Bilski that it is not the sole test for determining patentability. By 2013 the test became largely ignored, for example in the Federal Circuit’s Ultramercial opinion. When that opinion was vacated and remanded by the Supreme Court, however, the new Federal Circuit Ultramercial opinion issued in November 2014 devoted a large discussion to the test. Given the renewed emphasis by the Federal Circuit on the machine-or-transformation test, practitioners would do well to study the intricacies of the two prongs of the test.

The two prongs of the machine-or-transformation test are whether the claimed process (1) is tied to a particular machine or apparatus, or (2) transforms a particular article into a different state or thing. Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709, 716-17 (Fed. Cir. 2014). The Federal Circuit’s 2014 Ultramercial opinion echoed the Supreme Court’s proclamation that the test remains a useful and important clue for determining whether claimed processes are patent eligible. The Federal Circuit also addressed the meaning of a “particular machine” and the meaning of a “particular article” in the two prongs of the test.

Regarding the “particular machine” requirement in the machine prong of the test, the Federal Circuit found that the general purpose computer recited in the claims of Ultramercial was not a particular machine or apparatus. The Federal Circuit further concluded that the recitation of the Internet in the claims was also not sufficient to save the patent under the machine prong of the test. The reasoning of the Federal Circuit in Ultramercial has been picked-up by the District Courts, and one recent decision from the District of Delaware concluded that receivers, transmitters, communications devices, data entry devices, input devices, network computers, central transaction processing computers, and the Internet were not particular machines for purposes of the machine prong of the test. Joao Bock Transaction Sys., LLC v. Jack Henry & Assocs., Inc., No. 12-1138, 2014 U.S. Dist. LEXIS 172567, at *21-22, *22 n.7 (D. Del. Dec. 15, 2014).

Regarding the “particular article” requirement in the transformation prong of the test, the Federal Circuit found the claims lacking in Ultramercial because they did not transform a physical object or substance or an article representative of physical object or substance into a different state or thing. The Federal Circuit stated that any transformation from the use of computers or the transfer of content between computers is merely what computers do and does not change the analysis. As a consequence, the recitations in the claims of Ultramercial of a transaction involving the grant of permission and viewing of an advertisement, the grant of access by a content provider, and the exchange of money between a sponsor and the content provider were not enough to save the claims under the transformation prong of the test.

The recent Ultramercial opinion provides a reminder that courts still use the machine-or-transformation test as an investigative tool for patentability determinations. Practitioners briefing issues related to patent eligibility may want to include arguments addressing the application of the machine-or-transformation test to the claims at issue in their cases. Knowing the intricacies of the two prongs of the test may help practitioners from being blind-sided by opposition arguments.