Appeal 2006-1601
Application 09/828,579
Freeman-Walter-Abele (“FWA”) test. However, consistent with Arrhythmia,
Alappat, State Street, and AT&T, the court also inquired into whether Schrader’s
method claim performed any kind of transformation. Schrader, 22 F.3d at 294, 30
USPQ2d at 1458 (“we do not find in the claim any kind of data transformation.”).
The court then distinguished Schrader’s claim from the statutorily eligible claims
in Arrhythmia, In re Abele, 684 F.2d 902, 214 USPQ 682 (CCPA 1982), and In re
Taner, 681 F.2d 787, 214 USPQ 678 (CCPA 1982), pointing out that in these
cases, “[t]hese claims all involved the transformation or conversion of subject
matter representative of or constituting physical activity or objects. Id. (emphasis
in original). Schrader expressly concludes that “a process claim [in] compliance
with Section 101 requires some kind of transformation or reduction of subject
matter.”7 Id. at 295, 30 USPQ2d at 1459. In sum, the Federal Circuit has never
7 Although the FWA test is no longer considered particularly probative in the
context of computer-implemented process inventions in view of Diehr (see, e.g.,
State Street, 149 F.3d at 1374, 47 USPQ2d at 1601 ), the erosion of FWA provides
no support for the position that a non-machine implemented process, not involving
any transformation, might be patentable. The answer to that question is still
provided by Schrader, and that answer, so far, is negative. While AT&T indicated
that Schrader is “unhelpful” because it did not reach the question whether a
“useful, concrete, and tangible result” occurred, the reason that case did not need to
reach that question was because it found that Schrader’s method claims were
unpatentable for lack of any transformation. In addition, Schrader’s claims did not
require machine-implementation, unlike AT&T’s claims. See AT&T, 172 F.3d at
1358, 50 USPQ2d at 1452 (“AT&T’s claimed process” uses “switching and
recording mechanisms to create a signal useful for billing purposes.”). Moreover,
it is axiomatic that dicta in one Federal Circuit panel decision cannot overrule the
holding of an earlier panel decision. George E. Warren Corp. v. United States, 341
F.3d 1348, 1351 (Fed. Cir. 2003) (“We cannot simply overrule [a prior panel]
decision, even if we were persuaded . . . that it is appropriate; to overrule a
precedent, the court must rule en banc” (citing Newell Cos. v. Kenney Mfg. Co.,
864 F.2d 757, 765, 9 USPQ2d 1417, 1423 (Fed.Cir.1988)).
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