The Jurisprudence of Justice John Paul Stevens: Selected Opinions on Intellectual Property Law

Congressional research reportMay 14, 2010

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The Jurisprudence of Justice John Paul

Stevens: Selected Opinions on Intellectual

Property Law

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May 14, 2010

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The Jurisprudence of Justice John Paul Stevens: Selected Opinions on IP Law

Summary

This report briefly surveys decisions of retiring Justice John Paul Stevens in intellectual property

cases. An examination of Justice Stevens’ written opinions relating to intellectual property law

reveals a strong desire to ensure that the rights of intellectual property creators are balanced with

the rights of the public to access creative and innovative works. No decision embodies this

interest more than Justice Stevens’ majority opinion in Sony Corporation of America v. Universal

City Studios, Inc., a landmark copyright case issued in 1984 that paved the way for the

development and sale of popular consumer electronics, such as the video recorder (VCR, DVR,

TiVo), portable music and video players (iPod), personal computers, and other devices that permit

the recording and playback of copyrighted content.

In addition, Justice Stevens issued a lengthy dissent in the 2003 case Eldred v. Ashcroft, in which

he asserted that Congress lacked the power to pass a law that extended the term of existing

copyrights by 20 years. Such a retroactive extension delays the entrance of copyrighted works

into the public domain and, in Justice Stevens’ opinion, is a violation of the Constitution’s

authors and artists for “limited Times.”

In the area of patent law, Justice Stevens authored the majority opinion in the 1978 case Parker v.

Flook that sought to severely restrict the availability of patent protection on inventions relating to

computer software programs. Yet just three years later, the Supreme Court’s decision in Diamond

v. Diehr effectively opened the door to the allowance of patents on some computer programs.

Justice Stevens wrote a strongly worded dissent in Diehr in which he suggested that Congress

would be better suited than the Court to address the policy considerations of allowing patent

protection for computer programs. His written opinions in both of these cases reveal an interest in

judicial restraint, not wanting to extend patent rights into areas that Congress had not

contemplated.

Justice Stevens dissented from the 1999 opinion, Florida Prepaid v. College Savings Bank, in

which a majority of the Court invalidated Congress’s attempt to abrogate state sovereign

immunity and authorize patent holders to file suits for monetary damages against states and state

instrumentalities that infringe their patent rights. Justice Stevens believed that the 1992 Patent and

Plant Variety Protection Remedy Clarification Act was a proper exercise of Congress’s authority

under §5 of the Fourteenth Amendment to prevent state deprivations of property without due

process of law, and he expressed his disagreement with the majority opinion’s expansive

protection of states’ rights.

Congressional Research Service

The Jurisprudence of Justice John Paul Stevens: Selected Opinions on IP Law

Contents

Introduction ................................................................................................................................1

Copyright Law Opinions .............................................................................................................1

Fair Use and Consumer Electronics.......................................................................................2

Extension of Copyright Terms ...............................................................................................5

Patent Law Opinions ...................................................................................................................7

Computer Software Patents ...................................................................................................8

State Sovereign Immunity and Patent Infringement ................................................................... 11

Patent Remedy Act.............................................................................................................. 12

Contacts

Author Contact Information ...................................................................................................... 13

Congressional Research Service

The Jurisprudence of Justice John Paul Stevens: Selected Opinions on IP Law

Introduction

Retiring Justice John Paul Stevens has not authored many opinions relating to intellectual

property law, but those he has written reflect his interest in striking an appropriate balance

between the protection of intellectual property rights and public access to the products of creative

and inventive minds. His intellectual property opinions seek to serve the central purposes of the

authors and inventors by offering them exclusive legal rights to their respective writings and

discoveries, and (2) promote the progress of science and useful arts by requiring that the

monopoly privileges last only for a limited period, after which the public gains free access to such

work. This report examines Justice Stevens’ opinions involving copyright law, patent law, and

state sovereign immunity and patent infringement lawsuits. A brief summary of the basic

principles and provisions of copyright and patent law precedes each section describing these

opinions.

including books, movies, photography, art, and music. 1 The Copyright Act refers to the creator of

such works as an “author;” ownership of a copyright initially vests in the author,2 but the author

may transfer ownership of the copyright to another person or company.3 A copyright holder

possesses several exclusive legal entitlements under the Copyright Act, which together provide

the holder with the right to determine whether and under what circumstances the protected work

may be used by third parties. The grant of copyright permits the copyright holder to exercise, or

authorize others to exercise, the following exclusive rights:

•

the reproduction of the copyrighted work;

•

the preparation of derivative works based on the copyrighted work;

•

the distribution of copies of the copyrighted work;

•

the public performance of the copyrighted work; and

•

the public display of the copyrighted work, including the individual images of a

motion picture.4

Therefore, a party desiring to reproduce, adapt, distribute, publicly display, or publicly perform a

copyrighted work must ordinarily obtain the permission of the copyright holder, which is usually

granted in the form of a voluntarily negotiated license agreement that establishes conditions of

use and an amount of monetary compensation known as a royalty fee. There are, however, other

ways a third party may legally use a copyrighted work in the absence of affirmative permission

from the copyright holder, including the use of statutory licenses or reliance upon the “fair use”

doctrine.

17 U.S.C. § 102(a).

17 U.S.C. § 201(a).

17 U.S.C. § 201(d).

17 U.S.C. § 106.

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The Jurisprudence of Justice John Paul Stevens: Selected Opinions on IP Law

The doctrine of “fair use” recognizes the right of the public to make reasonable use of

copyrighted material, under particular circumstances, without the copyright holder’s consent. For

example, a teacher may be able to use reasonable excerpts of copyrighted works in preparing a

scholarly lecture or commentary, without obtaining permission to do so. The Copyright Act

mentions fair use “for purposes such as criticism, comment, news reporting, teaching,

scholarship, or research.”5 However, a determination of fair use by a court considers four factors:

•

the purpose and character of the use including whether such use is of a

commercial nature or is for nonprofit educational purposes,

•

the nature of the copyrighted work,

•

the amount and substantiality of the portion used in relation to the copyrighted

work as a whole, and

•

the effect of the use upon the potential market for or value of the copyrighted

work. 6

Because the language of the fair use statute is illustrative, determining what constitutes a fair use

of a copyrighted work is often difficult to make in advance—according to the U.S. Supreme

Court, such a determination requires a federal court to engage in “case-by-case” analysis.7

Violation of one of the exclusive rights of the copyright holder constitutes infringement, and the

damages and/or to obtain an injunction to prevent further infringement.8 The direct infringer is

not the only party potentially liable for infringement; the federal courts have recognized two

forms of secondary copyright infringement liability: contributory and vicarious. The concept of

contributory infringement has its roots in tort law and the notion that one should be held

accountable for directly contributing to another’s infringement.9 For contributory infringement

liability to exist, a court must find that the secondary infringer “with knowledge of the infringing

activity, induces, causes or materially contributes to the infringing conduct of another.”10

Vicarious infringement liability is possible where a defendant “has the right and ability to

supervise the infringing activity and also has a direct financial interest in such activities.”11

Fair Use and Consumer Electronics

For manufacturers of consumer electronics and personal computers, the Supreme Court’s 1984

decision in Sony Corporation of America v. Universal City Studios12 is considered the “Magna

Carta” of product innovation and the technology age. 13 The Sony decision held that the sale of the

17 U.S.C. § 107.

Id.

Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569, 577 (1994).

17 U.S.C. § 501.

Fonovisa, Inc. v. Cherry Auction, Inc., 76 F.3d 259, 264 (9th Cir. 1996).

A & M Records, Inc. v. Napster, Inc., 239 F.3d 1004, 1019 (9th Cir. 2001).

Gershwin Publ’g Corp. v. Columbia Artists Mgmt, Inc., 443 F2d. 1159, 1162 (2d. Cir. 1971).

464 U.S. 417 (1984).

Randal C. Picker, Rewinding Sony: The Evolving Product, Phoning Home, and the Duty of Ongoing Design, 55 CASE

W. RES. L. REV. 749, 753 (2005); Jessica Litman, The Sony Paradox, 55 CASE W. RES. L. REV. 917, 951-60 (2005).

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The Jurisprudence of Justice John Paul Stevens: Selected Opinions on IP Law

home video cassette recorder (VCR) did not constitute contributory infringement of the

copyrights on television programs, because such a “staple article of commerce” is capable of

“substantial noninfringing uses”14 that include “time-shifting”—recording a television program to

view it once at a later time, and thereafter erasing it.15 Sony’s embrace of time-shifting as a “fair

use” of copyrighted works has created a safe harbor from copyright infringement liability for

developers and sellers of electronic devices that facilitate the recording, storage, and playback of

copyrighted media, such as the digital video recorder (DVR and TiVo), portable music and video

players (iPod), and personal computers.16 Some commentators consider the Sony decision to be

the “legal foundation of the Digital Age.”17 The outcome of Sony “meant that companies could

invest in the development of new digital technologies without incurring the risk of enormous

liability for the potential misuses of those technologies by some of their consumers.”18

The Sony case concerned a lawsuit in which owners of copyrights on broadcast television

programs sought to hold Sony Corporation liable for contributory copyright infringement due to

its manufacture and sale of the Betamax VCR that Betamax customers used to record some of the

broadcasts.19 The district court ruled in favor of Sony because the court concluded that

noncommercial home recording of material broadcast over public airwaves was a fair use of

copyrighted works.20 The U.S. Court of Appeals for the Ninth Circuit disagreed, believing that the

home use of a video tape recorder was not a fair use because it allowed for mass copying of

copyrighted television programming. 21 The appellate court held that the copyright owners were

entitled to appropriate relief, including an injunction against the manufacture and marketing of

the Betamax video recorder or royalties on the sale of the equipment. 22

The Supreme Court reversed the Ninth Circuit. Justice Stevens authored the majority opinion that

garnered the support of four other justices. He was concerned that the Ninth Circuit’s ruling, “if

affirmed, would enlarge the scope of respondents’ statutory monopolies to encompass control

over an article of commerce that is not the subject of copyright protection. Such an expansion of

the copyright privilege is beyond the limits of the grants authorized by Congress.”23 He explained

that defining the scope of the copyright monopoly grant “involves a difficult balance between the

interests of authors ... in the control and exploitation of their writings ... on the one hand, and

society’s competing interest in the free flow of ideas, information, and commerce on the other

hand.” Justice Stevens also noted that historically, Congress has been primarily responsible for

amending copyright law in response to changes in technology.24 He elaborated:

The judiciary’s reluctance to expand the protections afforded by the copyright without

explicit legislative guidance is a recurring theme. Sound policy, as well as history, supports

Sony, 464 U.S. at 442, 456.

Id. at 423.

Peter Menell & David Nimmer, Unwinding Sony, 95 CAL. L. REV. 941, 943 (2007).

Matt Schruers and Jonathan Band, Justice Stevens Invented the Internet, CCIA Innovation Policy Post, April 20,

2010, at http://www.ccianet.org/index.asp?bid=89&BlogEntryID=67&FormID=300&catid=0.

Id.

Sony, 464 U.S. at 419.

Id. at 425.

Id. at 427-28.

Id. at 421.

Id.

Id. at 430-31.

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The Jurisprudence of Justice John Paul Stevens: Selected Opinions on IP Law

our consistent deference to Congress when major technological innovations alter the market

for copyrighted materials. Congress has the constitutional authority and the institutional

ability to accommodate fully the varied permutations of competing interests that are

inevitably implicated by such new technology.25

While Justice Stevens observed that the “Copyright Act does not expressly render anyone liable

for infringement committed by another,”26 he nevertheless acknowledged that the lack of such

statutory authorization does not preclude the imposition of vicarious liability on parties who have

not themselves engaged in infringing activity.27 He observed that the only contact between Sony

and its customers occurs at the moment of sale of the Betamax video recorder. The video

equipment may be used for both infringing and noninfringing purposes, as it is “generally capable

of copying the entire range of programs that may be televised: those that are uncopyrighted, those

that are copyrighted but may be copied without objection from the copyright holder, and those

that the copyright holder would prefer not to have copied.”28

As there was no precedent in copyright law for imposing vicarious liability on Sony because it

sold the video recording equipment with constructive knowledge that its customers might use it to

make unauthorized copies of copyrighted programming, Justice Stevens sought guidance from

patent law, defending the appropriateness of such reference “because of the historic kinship

between patent law and copyright law.”29 He first found that the Patent Act contained an express

provision that prohibits contributory infringement liability in the case of the sale of a “staple

article or commodity of commerce suitable for substantial noninfringing use.”30 He then quoted

from an earlier Supreme Court case involving contributory patent infringement that had said “a

sale of an article which though adapted to an infringing use is also adapted to other and lawful

uses, is not enough to make the seller a contributory infringer. Such a rule would block the wheels

of commerce.”31 While recognizing that there are differences between copyright and patent laws,

Justice Stevens believed that the contributory infringement doctrine as it is used in patent law

should also be applied to copyright law. 32 Therefore, he “imported” the “staple article of

commerce doctrine” from patent law into copyright law,33 in the passage below:

The staple article of commerce doctrine must strike a balance between a copyright holder’s

legitimate demand for effective – not merely symbolic – protection of the statutory

monopoly, and the rights of others freely to engage in substantially unrelated areas of

commerce. Accordingly, the sale of copying equipment, like the sale of other articles of

commerce, does not constitute contributory infringement if the product is widely used for

legitimate, unobjectionable purposes. Indeed, it need merely be capable of substantial

noninfringing uses.34

Id. at 431 (citations omitted).

Id. at 434.

Id. at 435.

Id. at 436-37.

Id. at 439.

Id. at 440 (citing 35 U.S.C. § 271(c)).

Henry v. A. B. Dick Co., 224 U.S. 1, 48 (1912).

Sony, 464 U.S. at 442.

Menell & Nimmer, supra note 17, at 993.

Sony, 464 U.S. at 442.

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The Jurisprudence of Justice John Paul Stevens: Selected Opinions on IP Law

With this test articulated, Justice Stevens analyzed whether the Betamax was capable of

commercially significant noninfringing uses. He identified one potential use that met this

standard: “private, noncommercial time-shifting in the home.”35 Such time-shifting could be

“authorized” time-shifting (recording noncopyrighted programs or material whose owners did not

object to the copying) as well as unauthorized time-shifting (where the copyright holders did not

consent to the practice). However, in his view, even unauthorized time-shifting is not infringing

because such activity falls within the scope of the Copyright Act’s “fair use” doctrine. 36 Because

the Betamax is capable of substantial noninfringing uses, Sony’s manufacture and sale of such

equipment to the public did not constitute contributory copyright infringement.37 Justice Stevens

concluded the Court’s majority opinion as follows:

One may search the Copyright Act in vain for any sign that the elected representatives of the

millions of people who watch television every day have made it unlawful to copy a program

for later viewing at home, or have enacted a flat prohibition against the sale of machines that

make such copying possible.

It may well be that Congress will take a fresh look at this new technology, just as it so often

has examined other innovations in the past. But it is not our job to apply laws that have not

yet been written. Applying the copyright statute, as it now reads, to the facts as they have

been developed in this case, the judgment of the Court of Appeals must be reversed.38

Extension of Copyright Terms

The Copyright Clause of the Constitution39 authorizes Congress: “To promote the Progress of

Science40 ... by securing for limited Times to Authors ... the exclusive Right to their respective

Writings….” Therefore, this constitutional provision indicates that the rights conferred by a

for “limited Times.” At the expiration of that period of time, the copyrighted work becomes part

of the public domain, available for anyone to use without payment of royalties or permission.

In 1790, the First Congress created a copyright term of 14 years for existing and future works,

subject to renewal for a total of 28 years. By 1909, both the original and the renewal term had

been extended to 28 years, for a combined term of 56 years. Additional extensions were enacted

between 1962 and 1974. When the current Copyright Act was enacted in 1976, Congress revised

the format of copyright terms to conform with the Berne Convention and international practice.

Instead of a fixed-year term, the duration of copyright was established as the life of the author

plus 50 years.

In 1998, Congress passed the Copyright Term Extension Act (CTEA)41 that added 20 years to the

term of copyright for both subsisting and future copyrights to bring U.S. copyright terms more

Id.

Id. at 454-55.

Id. at 456.

Id.

U.S. CONST., art. I, § 8, cl. 8.

The Framers of the Constitution used the word “Science” to mean “learning or knowledge.” Eldred v. Ashcroft, 537

U.S. 186, 243 (2003) (Breyer, J., dissenting).

P.L. 105-298.

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The Jurisprudence of Justice John Paul Stevens: Selected Opinions on IP Law

closely into conformance with those governed by the European Union. Hence, the law currently

provides that an author of a creative work may enjoy copyright protection for the work for a term

lasting the entirety of his/her life plus 70 additional years.42

Plaintiffs representing individuals and businesses that rely upon and utilize materials in the public

domain filed a lawsuit against the U.S. Attorney General to obtain a declaration that the CTEA is

unconstitutional. Among other things, plaintiffs argued that in extending the term of subsisting

copyrights, the CTEA violated the “limited Times” requirement of the Copyright Clause. The

lower court held in favor of the Attorney General, finding no constitutional problems.43 The U.S.

Court of Appeals for the District of Columbia Circuit affirmed the district court.44

Justice Ginsburg wrote the majority opinion in Eldred v. Ashcroft,45 in which the Court upheld the

CTEA by a vote of 7-2.46 She stated that “[h]istory reveals an unbroken congressional practice of

granting to authors the benefit of term extensions so that all under copyright protection will be

governed evenhandedly under the same regime.”47 She rejected the plaintiffs’ argument that the

“limited Times” requirement requires a forever “fixed” or “inalterable” copyright term. 48

Ultimately, the Court found that the unbroken congressional practice for more than two centuries

of applying adjustments to copyright term to both existing and future works “is almost

conclusive.”49

Justice Stevens wrote a vigorous dissent in Eldred; Justice Breyer filed a separate dissenting

opinion. Justice Stevens concluded that any extension of the life of an existing copyright beyond

its expiration date exceeds Congress’s authority under the Copyright Clause.50 He noted that the

requirement serves the purpose of promoting the progress of science by ensuring that authors’

creative works will enter the public domain once the period of exclusivity expires.51 He criticized

the majority opinion’s reliance on the history of Congress’s “unbroken pattern” of applying

mistaken interpretation of the Constitution does not qualify our duty to invalidate an

unconstitutional practice when it is finally challenged in an appropriate case.”52 Justice Stevens

opined that “[e]x post facto extensions of copyrights result in a gratuitous transfer of wealth from

the public to authors, publishers, and their successors in interest. Such retroactive extensions do

17 U.S.C. § 302. Other terms have been established for different works and different periods of time. For a concise

chart explaining the different terms, see http://www.copyright.cornell.edu/resources/publicdomain.cfm.

Eldred v. Reno, 74 F. Supp.2d 1 (D.D.C. 1999).

Eldred v. Reno, 239 F.3d 372, 373 (D.C.Cir. 2001).

537 U.S. 186 (2003).

For a more thorough analysis of this case, see CRS Report RS21179, Copyright Term Extension: Eldred v. Ashcroft,

by (name redacted).

Eldred, 537 U.S. at 200.

Id. at 199.

Id. (citation omitted).

Id. at 222-23 (Stevens, J., dissenting).

Id. at 223.

Id. at 235.

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The Jurisprudence of Justice John Paul Stevens: Selected Opinions on IP Law

not even arguably serve ... the purpose[] of the Copyright ... Clause.”53 He concluded his dissent

by making this observation:

By failing to protect the public interest in free access to the products of inventive and artistic

genius – indeed, by virtually ignoring the central purpose of the Copyright... Clause – the

Court has quitclaimed to Congress its principal responsibility in this area of the law. Fairly

read, the Court has stated that Congress’ actions under the Copyright ... Clause are, for all

intents and purposes, judicially unreviewable. That result cannot be squared with the basic

tenets of our constitutional structure.54

Patent Law Opinions

According to section 101 of the Patent Act, one who “invents or discovers any new and useful

process, machine, manufacture, or any composition of matter, or any new and useful

improvement thereof, may obtain a patent therefore, subject to the conditions and requirements of

this title.”55 Thus, the subject matter that is eligible for patent protection may be divided into four

categories: processes, machines, manufactures, and compositions of matter. The statutory scope

of patentable subject matter under § 101 of the Patent Act is quite expansive—the U.S. Supreme

Court once observed that the legislative history describing the intent of § 101 was to make patent

protection available to “anything under the sun that is made by man.”56

Notwithstanding the breadth of patentable subject matter, the Supreme Court has articulated

certain limits to § 101, stating that “laws of nature, natural phenomena, and abstract ideas” may

not be patented.57 The Court has elaborated on this restriction in several cases, including the

following explanation:

[A] new mineral discovered in the earth or a new plant found in the wild is not patentable

subject matter. Likewise, Einstein could not patent his celebrated law that E=mc2; nor could

Newton have patented the law of gravity. Such discoveries are “manifestations of ... nature,

free to all men and reserved exclusively to none.”58

Process patents (also called method patents) involve an act, or series of steps, that may be

performed to achieve a given result.59 The Patent Act defines a “process” to mean a “process, art,

or method, and includes a new use of a known process, machine, manufacture, composition of

matter, or material.”60 However, this statutory definition is not particularly illuminating “given

Id. at 227.

Id. at 242.

35 U.S.C. § 101.

Diamond v. Chakrabarty, 447 U.S. 303, 309 (1980).

Diamond v. Diehr, 450 U.S. 175, 185 (1981).

Chakrabarty, 447 U.S. at 309 (quoting Funk Brothers Seed Co. v. Kalo Inoculant Co., 333 U.S. 127, 130 (1948)).

See Cochrane v. Deener, 94 U.S. 780, 788 (1877) (“A process is a mode of treatment of certain materials to produce

a given result. It is an act, or a series of acts, performed upon the subject-matter to be transformed and reduced to a

different state or thing.”).

35 U.S.C. § 100(b).

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The Jurisprudence of Justice John Paul Stevens: Selected Opinions on IP Law

that the definition itself uses the term ‘process.’”61 It has thus been up to the courts to interpret the

scope of patentable processes under § 101 of the Patent Act.

Computer Software Patents

Software-related inventions may be patented if they meet the statutory requirements of the Patent

Act. 62 Today more than 20,000 software patents are granted each year. While software patents

comprised approximately 2% of all patents awarded in the early 1980s, they now account for

approximately 15% of the total number of U.S. patent issued each year.63

At the dawn of the computer age in the 1970s, however, inventions relating to computer software

were ineligible for patent protection due to a 1972 Supreme Court case, Gottschalk v. Benson.

The Benson Court held that mathematical algorithms, though they may be novel and useful, may

not be patented.64 The Court rejected patent claims for an algorithm used to convert binary code

decimal numbers to equivalent pure binary numbers (in order to program a computer), because

such claims “were not limited to any particular art or technology, to any particular apparatus or

machinery, or to any particular end use.”65 A patent on such claims, according to the Court,

“would wholly pre-empt the mathematical formula and in practical effect would be a patent on

the algorithm itself.”66 The Benson Court then pronounced that “[p]henomena of nature, though

just discovered, mental processes, and abstract intellectual concepts are not patentable, as they are

the basic tools of scientific and technological work.”67

After Benson, patent applicants tried to obtain patents on mechanical devices and processes that

included the use of a computer program to run the machine or implement the process. 68 In a 1978

case, Parker v. Flook,69 Justice Stevens wrote the majority opinion, joined by five other justices,

in which the Court rejected this attempt to runaround Benson. In Flook, the patent application

described a method for computing an “alarm limit,” which is a number that may signal the

presence of an abnormal condition in temperature, pressure, and flow rates during catalytic

conversion processes. 70 Justice Stevens criticized the patent claims, as follows:

The patent application does not purport to explain how to select the appropriate margin of

safety, the weighting factor, or any of the other variables. Nor does it purport to contain any

In re Bilski, 545 F.3d 943, 951 n.3 (Fed. Cir. 2008).

Julie E. Cohen & Mark A. Lemley, Patent Scope and Innovation in the Software Industry, 89 CAL. L. REV. 1, 8

(2001).

James Bessen and Robert M. Hunt, An Empirical Look at Software Patents, Working Paper No. 03-17/R, available at

http://www.researchoninnovation.org/swpat.pdf; Robert Hunt and James Bessen, The Software Patent Experiment,

available at http://www.researchoninnovation.org/softpat.pdf. For more information on software patents, see CRS

Report RL33367, Patent Reform: Issues in the Biomedical and Software Industries, by (name redacted).

409 U.S. 63 (1972). For an extensive discussion of this case as well as software patents generally, see Pamela

Samuelson, Benson Revisited: The Case Against Patent Protection for Algorithms and Other Computer ProgramRelated Inventions, 39 EMORY L.J. 1025 (1990).

Id. at 64.

Id. at 72.

Id. at 67.

Cohen & Lemley, supra note 52, at 9.

437 U.S. 584 (1978).

Id. at 585.

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The Jurisprudence of Justice John Paul Stevens: Selected Opinions on IP Law

disclosure relating to the chemical processes at work, the monitoring of process variables, or

the means of setting off an alarm or adjusting an alarm system. All that it provides is a

formula for computing an updated alarm limit. Although the computations can be made by

pencil and paper calculations, ... the formula is primarily useful for computerized

calculations producing automatic adjustments in alarm settings.71

Although the patent applicant attempted to distinguish the case from Benson by pointing out that

his application called for “post-solution” activity—the adjustment of the alarm limit to the figure

computed according to the formula—Justice Stevens rejected this argument:

The notion that post-solution activity, no matter how conventional or obvious in itself, can

transform an unpatentable principle into a patentable process exalts form over substance. A

competent draftsman could attach some form of post-solution activity to almost any

mathematical formula; the Pythagorean theorem would not have been patentable, or partially

patentable, because a patent application contained a final step indicating that the formula,

when solved, could be usefully applied to existing surveying techniques.72

While he allowed that an “inventive application” of a mathematical formula may be patented, he

determined that the Flook’s application contained no claim of patentable invention.73 Rather, the

application “simply provides a new and presumably better method for calculating alarm limit

values.”74 He then concluded that “a claim for an improved method of calculation, even when tied

to a specific end use, is unpatentable subject matter under § 101.”75 However, Justice Stevens

commented at the end of his opinion:

To a large extent our conclusion is based on reasoning derived from opinions written before

the modern business of developing programs for computers was conceived. The youth of the

industry may explain the complete absence of precedent supporting patentability. Neither the

dearth of precedent, nor this decision, should therefore be interpreted as reflecting a

judgment that patent protection of certain novel and useful computer programs will not

promote the progress of science and the useful arts, or that such protection is undesirable as a

matter of policy. Difficult questions of policy concerning the kinds of programs that may be

appropriate for patent protection and the form and duration of such protection can be

answered by Congress on the basis of current empirical data not equally available to this

tribunal.

It is our duty to construe the patent statutes as they now read, in light of our prior precedents,

and we must proceed cautiously when we are asked to extend patent rights into areas wholly

unforeseen by Congress.76

Only three years after Flook, the Supreme Court issued a 5-4 decision that appears to conflict

with Flook. The opinion of the Court in Diamond v. Diehr77 was written by Justice Rehnquist,

Id. at 586.

Id. at 590.

Id. at 594.

Id.

Id. at 595 n.18.

Id. at 595.

450 U.S. 175 (1981).

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The Jurisprudence of Justice John Paul Stevens: Selected Opinions on IP Law

who had dissented in Flook. 78 The Diehr Court upheld the patentability of a computer programcontrolled process for producing cured synthetic rubber products, stating:

[A] physical and chemical process for molding precision synthetic rubber products falls

within the § 101 categories of possibly patentable subject matter. That respondents’ claims

involve the transformation of an article, in this case raw, uncured synthetic rubber, into a

different state or thing cannot be disputed. The respondents’ claims describe in detail a stepby-step method for accomplishing such, beginning with the loading of a mold with raw,

uncured rubber and ending with the eventual opening of the press at the conclusion of the

cure. Industrial processes such as this are the types which have historically been eligible to

receive the protection of our patent laws.79

The fact that several of the process’s steps involved the use of a mathematical formula and a

programmed digital computer did not pose a barrier to patent eligibility, according to the Diehr

Court:

[T]he respondents here do not seek to patent a mathematical formula. Instead, they seek

patent protection for a process of curing synthetic rubber. Their process admittedly employs

a well-known mathematical equation, but they do not seek to pre-empt the use of that

equation. Rather, they seek only to foreclose from others the use of that equation in

conjunction with all of the other steps in their claimed process.80

Finally, the Court concluded that “a claim drawn to subject matter otherwise statutory does not

become nonstatutory simply because it uses a mathematical formula, computer program, or

digital computer.”81

Justice Stevens wrote a lengthy dissent in Diehr, joined by three other justices who were in the

Flook majority. He noted that the Benson decision in 1972 had “clearly held that new

mathematical procedures that can be conducted in old computers, like mental processes and

abstract intellectual concepts ... are not patentable processes within the meaning of § 101.”82 In

Justice Stevens’ view, Diehr’s patent claim concerning a method of using a computer to determine

the amount of time a rubber molding press should remain closed during the synthetic rubbercuring process “is strikingly reminiscent” of the method of updating alarm limits that the Court

had held unpatentable in Flook.83 He argued that “[t]he broad question whether computer

programs should be given patent protection involves policy considerations that this Court is not

authorized to address.”84 Justice Stevens would have preferred that the Court’s opinion contained

the following:

(1) an unequivocal holding that no program-related invention is a patentable process under

§101 unless it makes a contribution to the art that is not dependent entirely on the utilization

Justices Powell and White, after siding with Justice Stevens’ in Flook, joined Justice Rehnquist’s majority opinion in

Diehr.

Id. at 184.

Id. at 187.

Id.

Id. at 201 (Stevens, J., dissenting) (citation omitted).

Id. at 209.

Id. at 217.

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The Jurisprudence of Justice John Paul Stevens: Selected Opinions on IP Law

of a computer, and (2) an unequivocal explanation that the term “algorithm” as used in this

case, as in Benson and Flook, is synonymous with the term “computer program.”85

The Diehr decision and its appellate progeny encouraged software patent applicants to follow

“the doctrine of the magic words,” whereby the applicant could obtain a patent on software

inventions “only if the applicant recited the magic words and pretended that she was patenting

something else entirely,” such as hardware devices, some sort of apparatus, or other machines. 86

However, in 1994 the U.S. Court of Appeals for the Federal Circuit, which has exclusive

appellate jurisdiction in patent cases, 87 did away with this charade. The Federal Circuit issued an

en banc decision, In re Alappat, in which it concluded that “a computer operating pursuant to

software may represent patentable subject matter.”88

State Sovereign Immunity and Patent Infringement

The Patent Act grants patent holders the right to exclude others from making, using, offering for

sale, or selling their patented invention throughout the United States, or importing the invention

into the United States.89 Whoever performs any one of these five acts during the term of the

invention’s patent, without the patent holder’s authorization, is liable for infringement. 90

Defendants who may be sued for patent infringement include private individuals, companies, and

also the federal government. 91

Yet when state governments and state institutions (such as state-owned universities) infringe

patents, the patent holder currently has very limited legal recourse because of the U.S. Supreme

Court’s jurisprudence concerning the Eleventh Amendment to the U.S. Constitution.92 The

Eleventh Amendment, with limited exceptions, bars an individual from suing a state under federal

law without the state’s consent. While states may consent to suit by waiving the privilege of

sovereign immunity, in limited circumstances Congress may also abrogate, or overrule, that

immunity by passing a statute pursuant to the enforcement power under § 5 of the Fourteenth

Amendment.93

Id. at 219.

Cohen & Lemley, supra note 52, at 9.

28 U.S.C. § 1295(a)(1).

33 F.3d 1526, 1545 (Fed. Cir. 1994) (en banc).

35 U.S.C. §§ 154(a)(1), 271(a).

35 U.S.C. §§ 271, 281.

The “federal government” referred to in this section includes not only agencies and instrumentalities of the federal

government, but also a corporation owned or controlled by the United States, or a contractor, subcontractor, or any

person, firm, or corporation acting for and with the authorization or consent of the federal government. See 28 U.S.C. §

1498(b); 15 U.S.C. § 1114(1).

For detailed information regarding this topic, see CRS Report RL34593, Infringement of Intellectual Property Rights

and State Sovereign Immunity, by (name redacted).

Seminole Tribe of Florida v. Florida, 517 U.S. 44 (1996).

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The Jurisprudence of Justice John Paul Stevens: Selected Opinions on IP Law

Patent Remedy Act

Congress passed the Patent and Plant Variety Protection Remedy Clarification Act (Patent

Remedy Act) in 1992.94 The language of the statute specifically and unequivocally abrogated state

sovereign immunity and subjected the states to suits for monetary damages brought by

individuals for violation of federal patent law. The validity of this statute was challenged in

Florida Prepaid v. College Savings Bank.95

College Savings Bank held a patent for its financing methodology, based on certificates of deposit

and annuity contracts, designed to guarantee investors funds for future college expenses. The

state of Florida soon adopted College Savings Bank’s methodology and created the Florida

Prepaid Postsecondary Education Expense Board (the Board) to issue similar financing options to

its own residents. Consequently, College Savings Bank filed a claim for patent infringement

against the Board under the Patent Remedy Act. The principal issue in Florida Prepaid was

whether the Patent Remedy Act had legitimately abrogated state sovereign immunity from suit for

patent infringement. College Savings Bank argued that Congress had lawfully done so pursuant to

the due process clause by ensuring an individual an adequate remedy in the case of a deprivation

of property perpetrated by the state in the form of patent infringement.

The district court agreed with College Savings Bank, and the Federal Circuit Court affirmed.

However, the Supreme Court, in a 5-4 decision, overturned the Federal Circuit decision, holding

that the PRCA was not a valid use of the § 5 enforcement power of the Fourteenth Amendment

and therefore not a legitimate abrogation of state sovereign immunity. 96

Justice Stevens filed a dissenting opinion, joined by three other justices. He first observed that the

Constitution vested Congress with plenary authority over patents, and that Congress had passed

laws providing federal courts with exclusive jurisdiction of patent infringement litigation. 97 He

noted that there is “a strong federal interest in an interpretation of the patent statutes that is ...

uniform,” and that such federal interest is “threatened ... by inadequate protection for

patentees.”98 In Justice Stevens’ view, it was “appropriate for Congress to abrogate state sovereign

immunity in patent infringement cases in order to close a potential loophole in the uniform

federal scheme, which, if undermined, would necessarily decrease the efficacy of the process

afforded to patent holders.”99 He believed that the Patent Remedy Act was a proper exercise of

Congress’s power under §5 of the Fourteenth Amendment to prevent state deprivations of

property without due process of law.100 Supporting the concern for potential due process

violations, he referred to the legislative history of the Patent Remedy Act that included

congressional findings that state remedies would be insufficient to compensate inventors whose

patents had been infringed, and also that state infringement of patents was likely to increase.101

Justice Stevens argued that the Patent Remedy Act “merely puts” states in the same position as

P.L. 102-560, 106 Stat. 4230 (1992) (codified at 35 U.S.C. §§ 271(h), 296(a)).

527 U.S. 627 (1999).

Id. at 647.

Id. at 648 (Stevens, J., dissenting).

Id. at 650.

Id. at 652.

100

Id. at 649.

101

Id. at 656.

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The Jurisprudence of Justice John Paul Stevens: Selected Opinions on IP Law

the federal government and private users of the patent system when it comes to the possibility of

being held accountable for patent infringement.102

At the conclusion of his dissent, Justice Stevens criticized the majority opinion’s “aggressive

sovereign immunity jurisprudence” that “demonstrates itself to be the champion of States’

rights.”103

Author Contact Information

(name redacted)

Legislative Attorney

[redacted]@crs.loc.gov, 7-....

102

103

Id. at 663.

Id. at 664.

Congressional Research Service

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