The 2010 post-Bilski guidelines seek to provide a comprehensive analysis of determining if an invention is statutory subject matter. However, part of the problem of using these guidelines is that some terms are supercharged with more-than-meets-the-eye meaning. “Practically applied” is one such term, which I found four times in the Guidelines. While the concept that you can only patent an application of an idea is basic to patent law, I wanted to see how this exact term came into existence and the subsequent history of the term for US law. I found that when used with regards to subject matter patent-eligibility, there has been some definite developments. Initially, the term was used in conjunction with all the judicial exceptions to subject matter (e.g., abstract ideas, laws of nature, natural phenomena, mental steps). However, before State Street Bank v. Signature Financial Group, the term was infrequently used. Now, the term is much more frequently used, but with a focus more on laws of nature and abstract ideas.

**Case Law**

While the first use of “practical application” was technically in *Le Roy v. Tatham*, 55 U.S. 156 (1853) (“The elements of the power exist; the invention is not in discovering them, but in applying them to useful objects. . . . In the case before us, the court instructed the jury that the invention did not consist “in the novelty of the machinery, but in bringing a newly discovered principle into practical application, by which a useful article of manufacture is produced, and wrought pipe made as distinguished from cast pipe.””), the concept started long before. A number of cases set the precedent that you can only patent an applied invention. *See **Lowell v. Lewis*, 15 F.Cas.1018 (Cir. Ct. Mass 1817) (“It has been often decided, that a patent cannot be legally obtained for a mere philosophical or abstract theory; it can only be for such a theory reduced to practice in a particular structure or combination of parts.”); *Evans v. Eaton*, 16 US 454 (U.S. 1818)* *(“[A] patent may be for a new and useful art; but it must be practical, it must be applicable and referrable to something by which it may be proved to be useful; a mere abstract principle cannot be appropriated by patent.”); * **Earle v. Sawyer*, 8 F. Cas. 254 (Cir. Ct. Mass 1825) (“The thing to be patented is not a mere elementary principle, or intellectual discovery, but a principle put in practice, and applied to some art, machine, manufacture, or composition of matter.”); *Whitney v. Emmett*, 29 F Cas 1074 (Circuit Ct. E.D. Penn. 1831) (“Nor is a discovery of some new principle, theory, elementary truth, or an improvement upon it, abstracted from its application, a new invention. But when such discovery is applied to any practical purpose . . . .”)*. *After *Le Roy v. Tatham*, other notable cases solidified the concept.* O’Reilly v. Morse*, 56 U.S. 62 (1954) (holding that the use of magnetism as a motive power, without regard to the particular process with which it was connected in the patent, could not be claimed, but that its use in that connection could); *In re Henry*, 11 F. Cas. 1150 (Cir. Ct. DC 1856) (“A well-known principle or truth of natural science, as well as a newly-discovered one, is patentable to the first applicant of it in the useful arts . . . .”); *Rubber-Tip Pencil Co. v. Howard*, 87 U.S. (20 Wall.) 498, 507 (1874) (“idea of itself is not patentable, but a new device by which it may be made practically useful is”); *Mackay Radio & Telegraph Co. v. Radio Corp. of America*, 306 U.S. 86, 94, 40 USPQ 199, 202 (1939) (“While a scientific truth, or the mathematical expression of it, is not patentable invention, a novel and useful structure created with the aid of knowledge of scientific truth may be.”).

More recently, *Funk Bros. Seed Co. v. Kalo Inoculant Co.*, 333 U.S. 127 (1948) dealt with a claim involving the natural phenomenon exception:

He who discovers a hitherto unknown phenomenon of nature has no claim to a monopoly of it which the law recognizes. If there is to be invention from such a discovery, it must come from the application of the law of nature to a new and useful end.”

The practical application language was reiterated in *Gottschalk v. Benson*. Benson’s limitation of his claims to a computer machine environment overcame the rejection bottomed on a “mental steps” theory. Because operation of a formula-solving computer constituted the only practical use of the involved algorithm, however, the Supreme Court deemed unpatentable what it considered claims to an algorithm performed in a computer, i.e., claims to the algorithm itself.

It is conceded that one may not patent an idea. But in practical effect that would be the result if the formula for converting BCD numerals to pure binary numerals were patented in this case. The mathematical formula involved here has no substantial practical application except in connection with a digital computer, which means that if the judgment below is affirmed, the patent would wholly pre-empt the mathematical formula and in practical effect would be a patent on the algorithm itself. (409 U.S. at 71-72, 93 S.Ct. at 257, 175 USPQ at 676.)

The practical application term was used in reference to the abstract idea exception. In sum, the Court held that you can patent an invention that has an abstract idea in it (or here mathematical algorithm) only when it is practically applied.

The practical application standard was later further expounded upon in the CCPA case of *In re De Castelet*, 562 F.2d 1236, 1240-41 (C.C.P.A. 1977):

That language is interpreted by the solicitor and the board as foreclosing patentability of the appealed claims because, as de Castelet admitted at oral argument, the only practical application of the involved algorithm (equations) is in the claimed method. But the notion that the “ nutshell” language makes a method nonstatutory whenever it involves mathematical equations having their only practical use in the method is neither impelled by the rationale of Benson nor supported by precedent.

This court, in *In re Benson*, 441 F.2d 682 (1971), recognized that the only practical use of Benson’s method was in conjunction with a computer, but stated why that fact would not support a “mental steps” rejection:

Realistically, the process of claim 13 has no practical use other than the more effective operation and utilization of a machine known as a digital computer. It seems beyond question that the machines the computers are in the technological field, are a part of one of our best-known technologies, and are in the “useful arts” rather than the “liberal arts” as are all other types of “business machines,” regardless of the uses to which their users may put them. How can it be said that a process having no practical value other than enhancing the internal operation of those machines is not likewise in the technological or useful arts? (Emphasis in original. 441 F.2d at 688)

*In re De Castelet*, 562 F.2d 1236, 1241 (C.C.P.A. 1977). Here practical application is used with regards to abstract ideas, mathematical algorithms, and mental steps.

Then in *Diamond v. Diehr*, the practical application doctrine was used to uphold the machine the invention that contained an abstract idea. Diehr, 450 U.S. at 187, 209 USPQ at 8 (“application of a law of nature or mathematical formula to a known structure or process may well be deserving of patent protection.”).

The term practical application continued to be sparsely used until *State Street Bank v. Signature Financial Group*, which significantly strengthened the doctrine.

*Diehr,*the Court explained that certain types of mathematical subject matter, standing alone, represent nothing more than abstract ideas until reduced to some type of practical application, i.e., “a useful, concrete and tangible result.”

*Alappat,*33 F.3d at 1544, 31 USPQ2d at 1557.

*Alappat,*we held that data, transformed by a machine through a series of mathematical calculations to produce a smooth waveform display on a rasterizer monitor, constituted a practical application of an abstract idea (a mathematical algorithm, formula, or calculation), because it produced “a useful, concrete and tangible result”-the smooth waveform.

*Arrhythmia Research Technology Inc. v. Corazonix Corp.,*958 F.2d 1053, 22 USPQ2d 1033 (Fed.Cir.1992), we held that the transformation of electrocardiograph signals from a patient’s heartbeat by a machine through a series of mathematical calculations constituted a practical application of an abstract idea (a mathematical algorithm, formula, or calculation), because it corresponded to a useful, concrete or tangible thing-the condition of a patient’s heart.

-a final share price momentarily fixed for recording and reporting purposes and even accepted and relied upon by regulatory authorities and in subsequent trades.

*State St. Bank & Trust Co. v. Signature Fin. Group, Inc*, 149 F.3d 1368, 1373 (Fed. Cir. 1998).

*State Street* set the practical application doctrine in motion at the BPAI. Prior to 1998, there were no references to practical application regarding subject matter. Since then, there has been 98 decisions. The PTO’s 2005 subject matter guidelines were laced with the term practical application. It is likely that these guidelines steered the Board into further defining the practical application standard. Some recent BPAI decisions are notable in developing the practical application standard.

In *In re Gutta*, 93 U.S.P.Q.2d 1025, 2009 WL 2563524 (B.P.A.I. 2009), the Board applied the “real world use” test and the “substantially all practical applications” test to the claims at issue. With regard to the real world use test, claim 14 failed to recite any tangible practical application in which the mathematical algorithm is applied that results in a real-world use.

*In re Gutta*, at *1.

Most recently in *Ex Parte Ruby*, in addition to practical application, the standard included “real-world-use”:

When we consider these claims as a whole, we find nothing in the language of claims 1 and 17 to support Appellants’ presumption that because “the result is tangible plus the fact that the result is useful (e.g., in the context of video compression) and concrete (e.g., repeatable),” that this suffices “to establish that the claims relate to a practical application of the formula and not to the formula itself.” (Reply Br. 13, ¶2).

To the contrary, we find that merely storing the result of a mathematical operation in a register is insufficient to establish a tangible practical application having real-world use. See Gutta, 93 USPQ2d at 1026-27. Because the information contained in Appellants’ “result register” is not positively recited as being used to perform any function, we find that tangibly transforming the state of Appellants’ “result register” (claims 1 and 17) by storing the result of the combined compare and tally mathematical operations does not perform any tangible practical application that results in a real-world use. Moreover, while Appellants strenuously argue that the result is useful, e.g., in the context of video compression, we find representative claims 1 and 17 are each silent regarding any video compression. (Reply Br. 13, ¶2).

*Ex Parte Lee*, APL 2009-003697, 2010 WL 363234 (B.P.A.I. Jan. 29, 2010).

In* Ex Parte Talbot*, APL 2008-004894, 2010 WL 2157832 (B.P.A.I. May 27, 2010), appellants argued that the claims need not be limited to a particular application, only that a practical application be tied to the claims by way of the specification. Appellants stated the specification noted the decision network is tied to security applications and retail sales tracking. (App. Br. 6) Appellants then asserted the claims recite memory or means for storing, a processing unit or means for processing, or a computer readable medium, stating these limitations clearly constitute patentable subject matter. The Board rejected these arguments and used the Gutta rule that a “claim must be limited to a tangible practical application, in which the mathematical algorithm is applied, that results in a real-world use and be limited so as to not encompass substantially all practical applications of the mathematical algorithm.” *Id.* at *3.

In *Ex Parte Yazaki Corp.*, APL 2009-007532, 2010 WL 3072975 (B.P.A.I. Aug. 4, 2010), the applicant argued that the path plan had a practical application in its use for producing a wire harness. The Board rejected that argument by stating that “even if the step of “outputting the path plan” were interpreted as requiring the production of the plan on a tangible medium, that production constitutes nothing more than mere insignificant post solution activity. Such activity does not transform an unpatentable principle into a patentable process.” *Id. *at *3.

*Ex Parte Sun*, 2009-008503, 2011 WL 1211177 (B.P.A.I. Mar. 30, 2011), the applicant argued that claim 1 was directed to practical applications such as assisting a doctor’s investigation to a patient’s situation or a federal agent evaluating a possible terrorist attack. App. Br. 31.

^{1}The Board rejected this by stating that the claims were not directed to anything more than an abstract idea.

*Id.*at *5.

**Guidelines**

The most recent guidelines from the USPTO require that the invention either subscribe to the machine-or-transformation test, which requires a particular machine or transformation of a particular state or thing. To clarify what this means, these guidelines refer to the 2009 guidelines, where reference to practical application is used. The practical application focus of the 2009 guidelines is directed to abstract ideas that do not satisfy the machine or transformation test. “This ensures that the machine or transformation imposes real world limits on the claimed method by limiting the claim scope to a particular practical application.” The 2010 guidelines use practical application in reference to both abstract ideas and laws of nature:

Abstract idea

Factors that weigh in favor of patent-eligibility satisfy the criteria of the machine-or-transformation test or provide evidence that the abstract idea has been practically applied. 75 F.R. 143, 43925 (July 27, 2010).

Law of nature

Factors weighing toward eligibility:

The claim is directed toward applying a law of nature.

Law of nature is practically applied.

**Conclusion**

Practical application is a term easy to say, harder to apply to an invention. This seems especially true as innovation these days is not always easily distinguishable from an abstract idea. While initially used as a standard fairly infrequently before *State Street* in the case law, the test has shown a recent surge in popularity because of the focus that the USPTO subject matter guidelines have placed on it. Most recently, this focus has been on the two subject matter exclusions abstract ideas and laws of nature.