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

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URL: https://www.frixlaw.com/law-library/documents/crs%3AR41236

## Record

- **Collection:** Congressional research report
- **Document type:** CRS Report
- **Published:** May 14, 2010
- **Citation:** R41236

## Text

The Jurisprudence of Justice John Paul
Stevens: Selected Opinions on Intellectual
Property Law
name redacted
Legislative Attorney
May 14, 2010

Congressional Research Service
7-....
www.crs.gov
R41236

CRS Report for Congress
Prepared for Members and Committees of Congress

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
Copyright Clause that authorizes Congress to grant exclusive intellectual property rights to
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.

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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

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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
Copyright and Patent Clause of the Constitution—(1) encourage and reward the creativity of
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.

Copyright Law Opinions
Copyright is a federal grant of legal protection for certain original works of creative expression,
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.
1

17 U.S.C. § 102(a).
17 U.S.C. § 201(a).
3
17 U.S.C. § 201(d).
4
17 U.S.C. § 106.
2

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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
copyright holder may bring a civil lawsuit against the alleged infringer to collect monetary
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
5

17 U.S.C. § 107.
Id.
7
Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569, 577 (1994).
8
17 U.S.C. § 501.
9
Fonovisa, Inc. v. Cherry Auction, Inc., 76 F.3d 259, 264 (9th Cir. 1996).
10
A & M Records, Inc. v. Napster, Inc., 239 F.3d 1004, 1019 (9th Cir. 2001).
11
Gershwin Publ’g Corp. v. Columbia Artists Mgmt, Inc., 443 F2d. 1159, 1162 (2d. Cir. 1971).
12
464 U.S. 417 (1984).
13
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).
6

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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
14

Sony, 464 U.S. at 442, 456.
Id. at 423.
16
Peter Menell & David Nimmer, Unwinding Sony, 95 CAL. L. REV. 941, 943 (2007).
17
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.
18
Id.
19
Sony, 464 U.S. at 419.
20
Id. at 425.
21
Id. at 427-28.
22
Id. at 421.
23
Id.
24
Id. at 430-31.
15

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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

25

Id. at 431 (citations omitted).
Id. at 434.
27
Id. at 435.
28
Id. at 436-37.
29
Id. at 439.
30
Id. at 440 (citing 35 U.S.C. § 271(c)).
31
Henry v. A. B. Dick Co., 224 U.S. 1, 48 (1912).
32
Sony, 464 U.S. at 442.
33
Menell & Nimmer, supra note 17, at 993.
34
Sony, 464 U.S. at 442.
26

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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
copyright cannot last forever; rather, a copyright holder may exercise his/her exclusive rights only
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
35

Id.
Id. at 454-55.
37
Id. at 456.
38
Id.
39
U.S. CONST., art. I, § 8, cl. 8.
36

40
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).
41
P.L. 105-298.

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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
Copyright Clause was “both a grant of power and a limitation,” and that the “limited Times”
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
copyright extensions retroactively, arguing that “the fact that Congress has repeatedly acted on a
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

42

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.
43
Eldred v. Reno, 74 F. Supp.2d 1 (D.D.C. 1999).
44
Eldred v. Reno, 239 F.3d 372, 373 (D.C.Cir. 2001).
45
537 U.S. 186 (2003).
46
For a more thorough analysis of this case, see CRS Report RS21179, Copyright Term Extension: Eldred v. Ashcroft,
by (name redacted).
47
Eldred, 537 U.S. at 200.
48
Id. at 199.
49
Id. (citation omitted).
50
Id. at 222-23 (Stevens, J., dissenting).
51
Id. at 223.
52
Id. at 235.

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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

53

Id. at 227.
Id. at 242.
55
35 U.S.C. § 101.
56
Diamond v. Chakrabarty, 447 U.S. 303, 309 (1980).
57
Diamond v. Diehr, 450 U.S. 175, 185 (1981).
58
Chakrabarty, 447 U.S. at 309 (quoting Funk Brothers Seed Co. v. Kalo Inoculant Co., 333 U.S. 127, 130 (1948)).
54

59

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.”).
60
35 U.S.C. § 100(b).

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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
61

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).
63
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).
64
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).
65
Id. at 64.
66
Id. at 72.
67
Id. at 67.
68
Cohen & Lemley, supra note 52, at 9.
69
437 U.S. 584 (1978).
70
Id. at 585.
62

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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,

71

Id. at 586.
Id. at 590.
73
Id. at 594.
74
Id.
75
Id. at 595 n.18.
76
Id. at 595.
77
450 U.S. 175 (1981).
72

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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

78

Justices Powell and White, after siding with Justice Stevens’ in Flook, joined Justice Rehnquist’s majority opinion in
Diehr.
79
Id. at 184.
80
Id. at 187.
81
Id.
82
Id. at 201 (Stevens, J., dissenting) (citation omitted).
83
Id. at 209.
84
Id. at 217.

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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

85

Id. at 219.
Cohen & Lemley, supra note 52, at 9.
87
28 U.S.C. § 1295(a)(1).
88
33 F.3d 1526, 1545 (Fed. Cir. 1994) (en banc).
89
35 U.S.C. §§ 154(a)(1), 271(a).
90
35 U.S.C. §§ 271, 281.
86

91
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).
92
For detailed information regarding this topic, see CRS Report RL34593, Infringement of Intellectual Property Rights
and State Sovereign Immunity, by (name redacted).
93
Seminole Tribe of Florida v. Florida, 517 U.S. 44 (1996).

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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
94

P.L. 102-560, 106 Stat. 4230 (1992) (codified at 35 U.S.C. §§ 271(h), 296(a)).
527 U.S. 627 (1999).
96
Id. at 647.
97
Id. at 648 (Stevens, J., dissenting).
98
Id. at 650.
99
Id. at 652.
100
Id. at 649.
101
Id. at 656.
95

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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.

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/crs%3AR41236. Public record. Not legal advice.