Law of the United States
The law of the United States comprises many levels of codified and uncodified forms of law, of which the most important is the United States Constitution, the foundation of the federal government of the United States. The Constitution sets out the boundaries of federal law, which consists of Acts of Congress, treaties ratified by the Senate, regulations promulgated by the executive branch, case law originating from the federal judiciary; the United States Code is the official compilation and codification of general and permanent federal statutory law. Federal law and treaties, so long as they are in accordance with the Constitution, preempt conflicting state and territorial laws in the 50 U. S. in the territories. However, the scope of federal preemption is limited because the scope of federal power is not universal. In the dual-sovereign system of American federalism, states are the plenary sovereigns, each with their own constitution, while the federal sovereign possesses only the limited supreme authority enumerated in the Constitution.
Indeed, states may grant their citizens broader rights than the federal Constitution as long as they do not infringe on any federal constitutional rights. Thus, most U. S. law consists of state law, which can and does vary from one state to the next. At both the federal and state levels, with the exception of the state of Louisiana, the law of the United States is derived from the common law system of English law, in force at the time of the American Revolutionary War. However, American law has diverged from its English ancestor both in terms of substance and procedure, has incorporated a number of civil law innovations. In the United States, the law is derived from five sources: constitutional law, statutory law, administrative regulations, the common law. Where Congress enacts a statute that conflicts with the Constitution, state or federal courts may rule that law to be unconstitutional and declare it invalid. Notably, a statute does not automatically disappear because it has been found unconstitutional.
Many federal and state statutes have remained on the books for decades after they were ruled to be unconstitutional. However, under the principle of stare decisis, no sensible lower court will enforce an unconstitutional statute, any court that does so will be reversed by the Supreme Court. Conversely, any court that refuses to enforce a constitutional statute will risk reversal by the Supreme Court. Commonwealth countries are heirs to the common law legal tradition of English law. Certain practices traditionally allowed under English common law were expressly outlawed by the Constitution, such as bills of attainder.</ref> and general search rrts. As common law courts, U. S. courts have inherited the principle of stare decisis. American judges, like common law judges elsewhere, not only apply the law, they make the law, to the extent that their decisions in the cases before them become precedent for decisions in future cases; the actual substance of English law was formally "received" into the United States in several ways.
First, all U. S. states except Louisiana have enacted "reception statutes" which state that the common law of England is the law of the state to the extent that it is not repugnant to domestic law or indigenous conditions. Some reception statutes impose a specific cutoff date for reception, such as the date of a colony's founding, while others are deliberately vague. Thus, contemporary U. S. courts cite pre-Revolution cases when discussing the evolution of an ancient judge-made common law principle into its modern form, such as the heightened duty of care traditionally imposed upon common carriers. Second, a small number of important British statutes in effect at the time of the Revolution have been independently reenacted by U. S. states. Two examples are the Statute of 13 Elizabeth; such English statutes are still cited in contemporary American cases interpreting their modern American descendants. Despite the presence of reception statutes, much of contemporary American common law has diverged from English common law.
Although the courts of the various Commonwealth nations are influenced by each other's rulings, American courts follow post-Revolution Commonwealth rulings unless there is no American ruling on point, the facts and law at issue are nearly identical, the reasoning is persuasive. Early on, American courts after the Revolution did cite contemporary English cases, because appellate decisions from many American courts were not reported until the mid-19th century. Lawyers and judges used English legal materials to fill the gap. Citations to English decisions disappeared during the 19th century as American courts developed their own principles to resolve the legal problems of the American people; the number of published volumes of American reports soared from eighteen in 1810 to over 8,000 by 1910. By 1879 one of the delegates to the California constitutional convention was complaining: "Now, when we require them to state the reasons for a decision, we do not mean they shall write a hundred pages of detail.
We not mean that they shall include the small cases, impose on the country all this fine judici
Business method patent
Business method patents are a class of patents which disclose and claim new methods of doing business. This includes new types of e-commerce, insurance and tax compliance etc. Business method patents are a new species of patent and there have been several reviews investigating the appropriateness of patenting business methods. Nonetheless, they have become important assets for both independent inventors and major corporations. In general, inventions are eligible for patent protection if they pass the tests of patentability: patentable subject matter, inventive step or non-obviousness, industrial applicability. A business method may be defined as "a method of operating any aspect of an economic enterprise". On January 7, 1791, France passed a patent law that stated that "Any new discovery or invention, in all types of industry, is owned by its author...". Inventors paid a fee depending upon the desired term of the patent, filed a description of the invention and were granted a patent. There was no preexamination.
Validity was determined in courts. 14 out of 48 of the initial patents were for financial inventions. In June 1792, for example, a patent was issued to inventor F. P. Dousset for a type of tontine in combination with a lottery; these patents raised concerns and were banned and declared invalid in an amendment to the law passed in 1792. In Britain, a patent was issued in 1778 to John Knox for a “lan for assurances on lives of persons from 10 to 80 years of age.” At this time in British law, patents could only be issued for manufactured objects, not manufacturing processes. Patents have been granted in the United States on methods for doing business since the US patent system was established in 1790; the first financial patent was granted on March 19, 1799, to Jacob Perkins of Massachusetts for an invention for "Detecting Counterfeit Notes." All details of Mr. Perkins' invention, a device or process in the printing art, were lost in the great Patent Office fire of 1836, its existence is only known from other sources.
The first financial patent for which any detailed written description survives was to a printing method entitled "A Mode of Preventing Counterfeiting" granted to John Kneass on April 28, 1815. The first fifty years of the U. S. Patent Office saw the granting of forty-one financial patents in the arts of bank notes, bills of credit, bills of exchange, check blanks. On the other hand, cases such as Hotel Security Checking Co. v. Lorraine Co. 160 F. 467, which held that a bookkeeping system to prevent embezzlement by waiters was unpatentable, were read to imply a "business method exception", in which business methods are unpatentable. Another such case was Joseph E. Seagram & Sons v. Marzell, 180 F.2d 26, in which the court held that a patent on “blind testing” whiskey blends for consumer preferences would be “a serious restraint upon the advance of science and industry” and therefore should be refused. For many years, the USPTO took the position. With the emergence in the 1980s and 1990s of patent applications on internet or computer enabled methods of doing commerce, however, USPTO found that it was no longer practical to determine if a particular computer implemented invention was a technological invention or a business invention.
They took the position that examiners would not have to determine if a claimed invention was a method of doing business or not. They would determine patentability based on the same statutory requirements as any other invention; the subsequent allowance of patents on computer implemented methods for doing business was challenged in the 1998 State Street Bank v. Signature Financial Group; the court affirmed the position of the USPTO and rejected the theory that a "method of doing business" was excluded subject matter. The court further confirmed this principle with AT&T Corp. v. Excel Communications, Inc.. The USPTO continued to require, that business method inventions must apply, use or advance the "technological arts" in order to be patentable; this was based on an unpublished decision of the U. S. Board of Patent Appeals and Interferences, Ex Parte Bowman, 61 USPQ2d 1665, 1671; this requirement could be met by requiring that the invention be carried out on a computer. In October 2005 the USPTO's own administrative judges overturned this position in a majority decision of the board in Ex Parte Lundgren, Appeal No.
2003-2088. The board ruled that the "technological arts" requirement could not be sustained, as no such requirement existed in law. In light of Ex Parte Lundgren, the USPTO has issued interim guidelines for patent examiners to determine if a given claimed invention meets the statutory requirements of being a process, composition of matter or machine; these guidelines assert that a process, including a process for doing business, must produce a concrete and tangible result in order to be patentable. It does not matter. A price for a financial product, for example, is considered to be a concrete useful and tangible result; the USPTO has reasserted its position that literary works, compositions of music, compilations of data, legal documents, forms of energy, are not considered "manufactures" and hence, by themselves, are not
In United States patent law, the machine-or-transformation test is a test of patent eligibility under which a claim to a process qualifies for consideration if it is implemented by a particular machine in a non-conventional and non-trivial manner or transforms an article from one state to another. The test was first articulated under its present form in the government's brief in Gottschalk v. Benson. In its reply brief on the merits in that case, the government said, "we submit that the cases follow such a rule—implicitly or explicitly—and that they cannot be rationalized otherwise." The court declined to adopt the proposed rule as an exclusive test. It opined that future cases might present fact patterns calling for a different rule from that applicable to past cases, therefore the machine-or-transformation test was just a "clue" to eligibility for a patent; the test has been articulated in Bilski, but dates back to the nineteenth century. The test is articulated in the patent-eligibility trilogy—Gottschalk v. Benson, Parker v. Flook, Diamond v. Diehr.
In the wake of the Supreme Court's opinion in Bilski v. Kappos, rejecting machine-or-transformation as the sole test of patent eligibility, confirming that it is only a "useful clue," it is now clear that this test is only a way to measure whether the patent claim in issue preempts all applications of the underlying idea or principle on which a patent is based—such preemption being a far more basic and general test of patent eligibility or ineligibility; the Supreme Court has held that the machine-or-transformation test is not the sole test for the patent-eligibility of processes. The certiorari petition in Bilski challenged that proposition, and the Supreme Court's Bilski opinion expressly rejected the Federal Circuit's declaration that it was the exclusive test to apply. In Gottschalk v. Benson, the court expressly reserved the point and declined to adopt the test as exclusive, stating: It is argued that a process patent must either be tied to a particular machine or apparatus or must operate to change articles or materials to a "different state or thing."
We do not hold that no process patent could qualify if it did not meet the requirements of our prior precedents. The government had made an argument in its brief in Benson that the Court should so hold and that it was impossible to rationalize the case law any other way; the Court, in its ruling, failed to agree with that argument. The Benson and Bilski opinions left important details of the machine-or-transformation test unexplained; the details include what kind of transformation is sufficient to confer patent-eligibility and what are the characteristics of a "particular machine" that confers patent-eligibility. Transformation of an article from one thing or state to another is said to be a clue to patent eligibility. Thus, in Benson, the court stated that "Transformation and reduction of an article `to a different state or thing' is the clue to the patentability of a process claim...." A hundred years earlier, the Court had said, "A process is... an act, or a series of acts, performed upon the subject matter to be transformed and reduced to a different state or thing."
The Benson opinion indicated that the article had to be a physical object, such as a lump of rubber, a piece of leather, or a pile of flour. The Federal Circuit's In re Schrader opinion, indicated that the article could be an electronic signal representative of a physical parameter, such as an EKG or seismogram signal. Thus, the Schrader opinion chided the Supreme Court for speaking of physical "articles" rather than "subject matter," and thus only "imperfectly" reflecting the relevant legal principle; the Bilski court appears to adhere to the Schrader formulation, rather than that of Benson, so that it seems to consider a signal transformation patent-eligible when the signal is representative of certain types of physical actions. But a transformation of signals representative of monetary or legal relations does not qualify, given the affirmance of the PTO's rejection of Bilski's claim and the Bilski court's treatment of State Street Bank, as well. Judge Rader asked in his Bilski dissent, "What form or amount of'transformation' suffices?"
The court did not answer his question. It may be that a "substantial" physical or chemical change of properties, material to the objectives of the invention is required, but this is still to be resolved. Benson and Bilski speak about the process being tied to "a particular machine" while Flook says that the mechanical implementation of a natural principle must be "inventive": Even though a phenomenon of nature or mathematical formula may be well known, an inventive application of the principle may be patented. Conversely, the discovery of such a phenomenon cannot support a patent unless there is some other inventive concept in its application. In Flook the implementation was no departure from the prior art. Therefore, the principle with or plus a conventional implementation was patent-ineligible; the Flook Court cited and relied on the same principle as being illustrated in Funk Brothers Seed Co. v. Kalo Inoculant Co. in which the natural principle was implemented in a manner so trivial on its face that the patent on the implementing article of manufacture was tantamount to a patent on the natural principle.
This aspect of the machine-or-transfor