Parker v. Flook: What Is It?

Parker v. Flook was a 1978 Supreme Court case involving catalytic converters that established the basis for patenting software. It involved alarm limits on a catalytic converter in an oil refinery. 

Catalytic converters only work under certain pressures and temperatures. A catalytic converter's pressure ranges are known as alarm limits. These can change during conversion. 

Dale R. Flook came up with a method to adjust alarm limits as they changed during conversion. He filed for a patent for this method. The patent was denied because the method's only novel feature was a mathematical formula, which is not patent eligible. The appeal board of the United States Patent and Trademark Offices (USPTO) upheld this denial. 

The Court of Customs and Patent Appeals (CCPA) reversed the decision. They stated that even if the method had limited applications, this did not mean it was ineligible for patent. Eventually, the case made it to the Supreme Court. The question was whether the limited use of a formula would make a process based on the formula unavailable for patent. 

The Supreme Court upheld the initial rejection in a 6-3 decision. They determined that activity caused by a formula does not make the formula eligible for a patent unless the patent includes some other novel concept. Because formulas and algorithms exist only in the mind, they cannot be patented. 

One of the most interesting things about this case was Parker's prediction. Parker, the Acting Commissioner of Patents and Trademarks at the time, stated that should software patents be allowed, the USPTO would be flooded with "thousands of additional patent applications." As we know now, his prediction was surprisingly accurate.

Using Parker v. Flook

The Parker v. Flook decision has been very controversial. In recent years, it has been cited frequently in patent cases. This is because many people want to revisit what types of ideas and inventions are available for patent. However, the Flook decision has been maintained in the Bilski v. Kappos and Mayo v. Prometheus decisions. 

Most people find Flook to be controversial because of the idea of an inventive concept. The Flook decisions stated that an inventive application of a formula could be patented. However, the discovery of a previously unknown formula is not available for patent. This is one of the reasons filing for a software patent is very difficult. 

Between 1996 and 2012, Parker v. Flook was cited more than 140 times. 

The Flook Application

Understanding the Flook decision is easier if you look at the patent filed by Daniel R. Flook. The patent was titled Method for Updating Alarm Limits. Flook based his method of updating alarm limits during conversion on a three-step process:

  1. Measurement of the temperature process variable
  2. Using a mathematical formula to calculate a new limit
  3. Changing the alarm limit 

The difference between Flook's method and previous methods was the formula used in the second step. His patent application included the new formula. The disclosure showed that the formula's primary use was for computerized calculations. However, Flook also included several other possible uses of the formula. 

The patent examiner decided that patenting Flook's formula would also patent the underlying mathematics. As we know, math processes are not eligible for patent. 

The CCPA's Reasoning

Unlike the Patent Appeal Board and later the Supreme Court, the CCPA decided in Flook's favor. They did so using a narrow interpretation of In re Christensen, where it only applied to processes in which no additional steps were required to use an algorithm. Because Flook's formula was the second step in a three-step process, and the formula resulted in an activity after it was solved, it was ruled a method and was patentable. 

The Supreme Court's Logic

Ultimately, the Supreme Court decided Flook's method could not be patented under 35 U.S.C. §101 rules. The court stated that Flook's patent was a discovery involving the laws of nature. This makes it non-patentable. This idea was established in the Benson case. 

Flook tried to argue that his formula resulted in a post-solution activity: the changing of the alarm limit. He claimed that this made his patent different from the one in the Benson case. The Court disagreed and stated his patent counted as prior art. This was because the process of catalytic conversion was already established and well-known. 

A later Supreme Court case known as Diamond v. Diehr was long assumed to overturn the Flook decision based on desuetude, or disuse. However, the later Mayo case resolved conflicts between these two decisions. 

History of Software Patents

A problem with software patents is that their interpretation has largely been left to the courts. The government's legislative branch has resisted clarifying the subject. The Manual of Patent Examination and Procedure has been the executive branch's only guidance on software patents. 

Three Supreme Court rulings have been related to software patents:

  • Gottshalk v. Benson
  • Parker v. Flook
  • Diamond v. Diehr 

The Benson and Flook decisions definitively stated that software cannot be patented, even if it is useful and there is a last step that is physical in nature. The Diehr decision upheld a patent on a piece of complex machinery. This has generally been seen as the basis for the definition of a general-purpose computer. 

The Diehr case involved a process for creating vulcanized rubber. The court ruled that because the formula involved in the process was used to change the state of the rubber, it constituted an actual machine. This made it available for patent. 

The Alappat decision used Diehr as a basis. It argued that applying software to a stock computer would create an entirely new machine. This removed the distinction between a general-purpose computer and a specialized device, resulting in all pieces of software being eligible for patenting. 

Flook Criticism

There has been much criticism of the Flook decision. In 1979, the CCPA reached a decision in re Bergy. A CCPA judge, Judge Giles, condemned the Flook decision. One of the reasons was that the Supreme Court had recently overturned a previous Bergy decision and instructed the CCPA to re-examine the issue based on the Flook decision. 

Giles stated that the Flook decision did not give the guidance that the Supreme Court believed. He also said that Flook wrongly combined provisions in Section 101 and Section 103 of the Patent Code. He stated that the Court incorrectly used Section 101 to make its decision. He believed that Section 101 was never meant to define patentability. This was reserved for Sections 102 and 103. 

Giles believed that the only thing to consider for patent eligibility is if the invention is useful, novel, and non-obvious. He did not agree that using a natural principle must be inventive to be eligible for a patent. However, Giles overlooked part of the Flook decision. Flook only claimed to use his formula in a conventional way. This meant it was neither new nor non-obvious, two of the main requirements for a patent. 

Flook's admission that he did not use his formula in an inventive way made the ruling easy. This will likely not be the case for other patents involving natural processes. This limits how the Flook decision can be used to determine eligibility, which was Giles' point in his criticism. 

Economic Concepts Implemented By Computers

In 2014, the Supreme Court ruled on a hotly contested case between CLS Bank/CLS Services and Alice Corporation. It centered on how Section 101 of the patent code applied to computer-implemented inventions. In the ruling, the Court decided that computer-implemented inventions must compare to Section 101 in two steps:

  1. If the patent is an abstract idea, such as an economic practice
  2. If the patent contains an inventive step that makes it eligible for a patent

Alice's patent failed both steps, which is why the Court ruled it ineligible. 

Section 101 allows patents for people who have discovered:

  • A new or useful process
  • A machine
  • A manufacture
  • Compositions of matter
  • An improvement over any of the other items

However, there has always been an exception for abstract ideas and natural laws. This exception has been used to deny patent eligibility in the Benson, Flook, and Bilski cases. Unfortunately, this abstract exception did not establish rules for challenging patents. The Mayo decision sought to establish a framework, but judges still disagreed on how it could be applied. 

In the Alice case, Alice stated that CLS had infringed on their patents. These patents involved intermediate settlement, an economic concept that a computer used to make transaction records to facilitate an exchange. Alice stated their right to the concept in three ways:

  1. As a process for transaction settlements
  2. As the computer used to for these settlements
  3. As a media storage that contained computer programming 

CLS claimed that Alice's patents were based on an abstract idea and brought a case to a U.S. District Court. They argued Alice's patents did not disclose any computer programming and only included general ideas that could be found in any computer. The District Court ruled in CLS's favor. While the Federal Circuit initially overturned this decision, a second hearing resulted a 7-3 method/media decision and a 5-5 system decision. 

Alice requested the Supreme Court hear the case to resolve the Federal Circuit's decisions. Their contention was that intermediated settlement was not abstract. This is because it did not constitute a natural law like a mathematical formula. Alice also said they did not claim the entire concept in their patent because it required a computer to function.  

CLS argued that intermediated settlement was a fundamental economic practice and that it could not fulfill an inventive concept required for patent. 

The Supreme Court ruled unanimously in CLS's favor. Justice Thomas wrote the decision. The main point of the decision was that the necessity of a computer did not mean that intermediated settlement wasn't an abstract concept. However, the ruling did not state that all pieces of software are ineligible for patent. For instance, software that altered a computer's functioning might still be patentable. 

The decision included a few key points:

  • Mayo's two-step test should be used for all patent challenges. The first step is whether the patent is focused on an abstract idea. The second is if the patent includes an inventive use of the abstract idea.
  • The Mayo test was applied to Alice patents, which failed both steps.
  • Generic use of a computer cannot make an abstract idea eligible for patent.
  • The Diehr decision was not applicable because that decision involved an abstract idea that transformed an existing process. Alice's patents did not alter the functioning of the computer in question.
  • The computer's physical nature was irrelevant, and treating it as relevant would allow anyone to patent a natural process so long as a computer system was involved. 

The Alice decision's straightforward nature supports the rules established by the Bilski case. Business method patents will often be found ineligible under Section 101 rules. The use of a computer does not make an abstract concept patentable unless an inventive concept is present. 

Frequently Asked Questions

  • What is Parker V. Flook?

A Supreme Court case that has largely been used to determine software patent eligibility. The case ruled that an algorithm cannot be patented unless it is used in an inventive way. Flook's algorithm was used in a conventional manner. This made it ineligible for patent.

  • Are there any cases related to Flook?

Yes. The Benson, Alice, and Mayo cases all had similar conclusions. The patents in these cases were deemed ineligible under Section 101 rules. The Diehr case upheld a patent because the formula used did include an inventive step.

  • How does this involve software patents?

Computer software is based largely on the use of complex algorithms and mathematical formulas. However, neither of these concepts can be patented unless they are used in an inventive or transformative matter. Software that changes how a computer functions is usually patentable. If a piece of software does not transform the computer's operation, you will struggle to get a software patent.

  • Why do I need a lawyer?

If you're trying to patent a piece of software, hiring a lawyer is always a good idea. Your attorney can help you review your patent and tell you if it includes the inventive step necessary for a software patent. They can also help you deal with potential eligibility challenges. 

Talk With an Attorney

Anyone considering filing a software patent should have a full understanding of Parker v. Flook. This case's decision still plays a large part in software patent eligibility. If your patent doesn't match the requirements laid out in the Flook decision, you might not be able to fully protect your software. 

List your job on UpCounsel's marketplace if you need help understanding how the Parker v. Flook decision affects your software patents. The UpCounsel marketplace features attorneys for every legal need, including software patents. When you work with an attorney you find through UpCounsel, you'll be getting an experienced, dedicated legal professional at a competitive rate.