STATE STREET BANK & TRUST CO., Plaintiff-Appellee, v. SIGNATURE FINANCIAL GROUP, INC. Defendant-Appellant. No. 96-1327. United States Court of Appeals, Federal Cireuit. July 23, 1998. RICH, Circuit Judge. Signature Financial Group, Inc. (Signa- ture) appeals from the decision of the United States District Court for the District of Mus- sachusetts granting a motion for summary judgment in favor of State Street Bank & Trust Co. (State Street), finding U.S. Patent No. 5,193,056 (the '056 patent) invalid on the ground that the claimed subjeet matter is not encompassed by 35 U.S.C. $ 101 (1994). See State Street Bank & Trust Co. u Signature Financial Group, Iic, 927 F.Supp. 502, 38 USPQ2d 1530 (D.Mass. 1996). We reverso and remand because we conclude that the patent claims are directed to statutory sub- ject matter. BACKGROUND Signature is the assignce of the '056 patent which is entitled "Data Processing System for Hub and Spoke Financial Services Con- figuration." The '056 patent issued to Signa- ture on 9 March 1993, naming R. Todd Boes as the inventor. The '056 patent is generally directed to a data processing system (the system) for implementing an investment structure which was developed for use in Signature's business as an administrator and accounting agent for mutual funds. In es- sence, the system, identified by the proprie- tary name Hub and Spoke®, facilitates a structure whereby mutual funds (Spokes) pool their assets in an investment portfolio (Hub) organized as a partnership. This in- vestment configuration provides the adminis- trator of a mutual fund with the advanta- geous combination of economies of scale in administering investments coupled with the tax advantages of a partnership. State Street and Signature are both in the business of acting as custodians and account- ing agents for multi-tiered partnership fund financial services. State Street negotiated with Signature for a license to use its patent: ed data processing system described and claimed in the '056 patent. When negotia- tions broke down, State Street brought a declaratory judgment action asserting inval- idity, unenforceability, and noninfringement in Massachusetts district court, and then filed a motion for partial summary judgment of patent invalidity for failure to claim statu- tory subject matter under $ 101. The mo- tion was granted and this appeal followed. DISCUSSION On appeal, we are not bound te give deference to the district court's grunt of summary judgment, but must make an inde- petient determination that the standards for summary judgment have been mel Vas- Cath, Inc. v. Malarkar, 935 P.2d 1555, 1660, 19 USP©2d 1111, 1114 (Fed.Cir.1991), Sum- mary judgment is properly granted where there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(e). The substantive issue at hand, whether the '056 patent is invalid for failure to claim statutory subject matter under $ 101, is a matter of both claim construction and statutory con- struction. "[Wle review claim construction de novo including any allegedly fact-based questions relating to claim construction." Cubor Corp. v. FAS Techs, 138 F.3d 1448, 1451, 46 USPQ2d 1169, 1174 (Fed.Cir.1998) (in banc). We also review statutory con- struction de novo. See Romero o. United States, 38 F.3d 1204, 1207 (Ped.Cir.1994). We hold that declaratory judgment plaintiff State Street was not entitled to the grant of summary judgment of invalidity of the '056 patent under § 101 as a matter of law, be- cause the patent claims are directed to statu- tory subject matter. The following facts pertinent to the statu- tory subject matter issue are either undisput- ed or represent the version alleged by the nonmovant. See Anderson 2. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). The patented invention relates generally to a system that allows an administrator to monitor and record the fi- nancial information flow and make all calcula- tions necessary for maintaining a partner fund financial services configuration. As previously mentioned, a partner fund finan- cial services configuration essentially allows several mutual funds, or "Spokes," to pool their investment funds into a single portfolio, or "Hub," allowing for consolidation of, inter alia, the costs of administering the fund com- bined with the tax advantages of a partner- ship. In particular, this system provides means for a daily allocation of assets for two or more Spokes that are invested in the same Hub. The system determines the percentage share that each Spoke maintains in the Hub, while taking into consideration daily changes both in the value of the Hub's investment securities and in the concomitant amount of each Spoke's assets. In determining daily changes, the system also allows for the allocation among the Spokes of the Hub's daily income, expenses, and net realized and unrealized gain or loss, calculating each day's total investments based on the concept of a book capital ac- count. This enables the determination of a true asset value of each Spoke and accurate calculation of allocation ratios between or among the Spokes. The system additionally tracks all the relevant data determined on a daily basis for the Hub and euch Spoke, so that aggregate year end income, expenses, and capital gain or loss can be determined for accounting and for tax purposes for the Hub and, as a result, for each publicly traded Spoke. It is essential that these calculations are quickly and accurately performed. In large part this is required because each Spoke sells shares to the public and the price, of those shares is substantially based on the Spoke's percentage interest in the portfolio. In some instances, a mutual fund administrator is re- quired to calculate the value of the shares to the nearest penny within as little as an hour and a half after the market closes. Given the complexity of the calculations, a computer or equivalent device is a virtual necessity to perform the task. The '056 patent application was filed 11 March 1991. It initially contained six "ma- chine" claims, which incorporated means- plus-function clauses, and six method claims. According to Signature, during prosecution the examiner contemplated a § 101 rejection for failure to claim statutory subject matter. However, upon cancellation of the six method claims, the examiner issued a notice of allow- ance for the remaining present six claims on appeal. Only claim 1 is an independent claim. The district court began its analysis by construing the claims to be directed to a process, with each "means" clause merely representing a step in that process. Howev- er, "machine" claims having "means" clauses may only be reasonably viewed as process claims if there is no supporting structure in the written description that corresponds to the claimed "means" elements. See In re Alappat, 33 F.3d 1526, 1540-41, 31 USPQ2d 1545, 1554 (Fed. Cir.1994) (in bane). This is not the case now before us. When independent claim 1 is properly construed in accordance with § 112, 1 6, it is directed to a machine, as demonstrated be- low, where representative claim 1 is set forth, the subject matter in brackets stating the structure the written description discloses as corresponding to the respective "means" re- cited in the claims. 1. A data processing system for manag- ing a financial services configuration of a portfolio established as a partnership, each partner being one of a plurality of funds, comprising: (a) computer processor means [a personal computer including a CPU) for process- ing data; • (b) atorage means (a data disk) for stor- ing data on a storage medium; (c) first means [an arithmetic logic circuit configured to prepare the data disk to magnetically store selected data] for ini- tializing the storage medium; (d) second means (an arithmetic logic cir- cuit configured to retrieve information from a specific file, calculate incremental increases or decreases based on specific input, allocate the results on a percent- age basis, and store the output in a separate file) for processing data regard- ing assets in the portfolio and each of the funds from a previous day and data regarding increases or decreases in each of the funds, [sic, funds') assets and for allocating the percentage share that each fund holds in the portfolio; • (e) third means [an arithmetic logic cir- cuit configured to retrieve information from a specific file, calculate incremental increases and decreases based on specif- ie input, allocate the results on a per- centage basis and store the output in a separate file] for processing data regard- ing daily incremental income, expenses, and net realized gain or loss for the portfolio and for allocating such data among each fund; fourth means [an arithmetic logic cir cuit configured to retrieve information from a specific file, calculate incremental increases and decrenses based on specif- ie input, allocate the results on a per- centage basis and store the output in a separate file) for processing data regard- ing daily net unrealized gain or loas for the portfolio and for allocating such data among each fund; and (g) fifth means [an arithmetic logic circuit configured to retrieve information from specific files, calculate that information on an aggregate basis and store the output in a separate file) for processing data regarding aggregate year-end in- come, expenses, and capital gain or loss for the portfolio and each of the funds. Each claim component, recited as a "means" plus its function, is to be read, of course, pursuant to $ 112, 16, as inclusive of the "equivalents" of the structures disclosed in Each claim component, recited as a "means" plus its function, is to be read, of course, pursuant to $ 112, 16, as inclusive of the "equivalents" of the structures disclosed in 1. Indeed, although we do not make this delermi- nation here, the judicially created exceptions, Le. abstract acas. laws of nature, elc. should bel amplicable to all categories of statutory subjeci maller. as Own procodient surrests See Alappat, 33 F.3d at 1542, 31 USPQ2d at 1556; ses also In re Johnston. 502 F.2d 765, 183 USPO 172 (CCPA 1974) (Rich, J., dissenting). 2. As explained in In re Berzy. 596 F.2d 952, 960. 201 USPO 352, 360 (CCPA 1979) emphases anc ootnote omitted The first door which must be opened on the difficult path to patentability is $ 101 .... The person approaching that door is an inventor, whether his invention is palenladie or not Being an inventor or having an invention, how- the written descripton portion of the specifi- cation. Thus. claimi properly construed, claims & machine. namely, a data processins system for managing a unancial services con figuration of a portfolio established as a part- nership, which machine is made up of, at the very least, the specific structures disclosed in the written description and corresponding to the means-plus-function elements (a)-(g) re- cited in the claim. A "machine" is proper statutory subject matter under § 101. We note that, for the purposes of a § 101 analy- sis, it is of little relevance whether claim 1 is directed to a "machine" or a "process," as long as it falls within at least one of the four enumerated categories of patentable subject matter, "machine" and "process" being such categories. This does not end our analysis, however, because the court concluded that the claimed subject matter fell into one of two alternative judicially-created exceptions to statutory sub- ject matter.' The court refers to the first exception as the "mathematical algorithm" exception and the second exception as the "ousiness method" excention. Section 101| rends. Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title. The plain and unambiguous meaning of § 101 is that any invention falling within one of the tour stated categories of statutory subject mancer may be patented, provided it meets the other requirements for patentability set forth in Title 35, ie., those found in $$ 102, 103, and 112, 12.3 ever, Is no quarantee or opening cven the first door. What kind of an invention or discovery is it? In dealing with the question of kind, w distinguished from the qualitative conditions invention palchlabie. 9 101 broad and general: its lanquage is: "any ..: process, macmine. composition of matter. or any improvement thereot. section luoco further expanas. process to in dideror method new tre o known process, machine, manulacture, composi tion of matter, or material." I the invention. as the inventor delines it in his claims (pursuant to § 112, second paragraph), falls into any one of the named cale ories he is allowed to pass through to the second door, which is § 102; "novelty and loss of right to patent" is the sign The repetitive use of the expansive term "any" in § 101 shows Congress's intent not to piace any restrictions on the subject matter for which a patent may be obtained beyond those specifically recited in § 101. Indeed, the Supreme Court has acknowl- edged that Congress intended § 101 to ex- tend to "anything under the sun that is made by man." Diamond v. Chakrabarty, 447 U.S. 303, 309, 100 S.Ct. 2204; 65 L.Ed.2d 144 (1980): see also Diamond « Diehr, 450 U.S. 175, 182, 101 S.Ct. (1981).' 1048, 67 L.Ed.2d 155 Thus, it is improper to read limita- tions into $ 101 on the subject matter that may be patented where the legislative histo ry indicates that Congress clearly did not intend such limitations. See Chakrabarty, 447 U.S. at 308, 100 S.Ct. 2204 (*We have also cautioned that courts 'should not read into the patent laws limitations. and condi- tions which the legislature has not ex- pressed.'" (citations omitted)). The "Mathematical Algorithm" Exception The Supreme Court has identified three categories of subject matter that are unpat- entable, namely "laws of nature, natural phe- nomena, and abstract ideas." Diehr, 450 U.S. at 185, 101 S.Ct. 1048. Of particular relevance to this case, the Court has held that mathematical algorithms are not patent- able subject matter to the extent that they are merely abstract ideas. See Diehr, 450 U.S. 175, 101 S.Ct. 1048, passim; Parker v. Flook, 437 U.S. 584, 98 S.Ct. 2522, 57 L.Ed.2d 451 (1978); Gottschalk a Benson, 409 U.S. 63, 93 S.Ct. 253, 34 L.Ed.2d 273 (1972). In Diehr, the Court explained that certain types of mathematical subject matter, standing alone, represent nothing more than abstract ideas until reduced to some type of practical application, Le., "a useful, concrete and tangible result." Alappat, 33 F.3d at 1544, 31 USPQ2d at 1557.4 on it. Notwithstanding the words "new and useful" in § 101, the invention is not examined under. that statute for novelty because that is not the statutory scheme of things or the long-estab lished administrative practice. 3. The Committee Reports accompanying the 1952 Act inform us that Congress intended statu- tory subject matter to "include anything under the sun that is made by man." S.Rep. No. 82- Unpatentable mathematical algor- Ithms are identifiable by showing they are merely abstract ideas constituting disembod- ied concepts or truths that are not "useful." From a practical standpoint, this means that to be patentable an algorithm must be ap- plied in a "useful" way. In Alappat, we held that data, transformed by a machine through a series of mathematical calcula- tions to produce a smooth waveform display on a rasterizer monitor, constituted a prac- tical application of an abstract idea (a math- ematical algorithm, formula, or calculation), because it produced "a useful, concrete and tangible result"-the smooth waveform. Similarly, in Arrhythmia Research Tech- nology Inc. u, Corazoniz Corp, 958 F.2d 1053, 22 USPQ2d 1033 (Fed.Cir.1992), we held that the transformation of electrocardio- graph signals from a patient's heartbeat by a machine through a series of mathematical calculations constituted a practical applica- tion of an abstract idea (a mathematical al- gorithm, formula, or calculation), because it corresponded to a useful, concrete or tangi- ble thing—-the condition of a patient's heart. Today, we hold that the transforma- tion of data, representing discrete dollar amounts, by a machine through a series of mathematical calculations into a final share price, constitutes a practical application of a mathematical algorithm, formula, or calcula- tion, because it produces "a useful, concrete and tangible result"—a final share price mo- mentarily fixed for recording and reporting purposes and even accepted and relied upon by regulatory authorities and in subsequent trades 1979 at 5 (1952): H.R.Rep. No. 82-1923 at 6 (1952). 4. This has come to be known as the mathemati- cal algorithm exception. This designation has led to some confusion, especially given the Free- man-Walter-Abele analysis. By keeping in mind that the mathematical algorithm is unpatentable only to the extent that it represents an abstract idea, this confusion may be ameliorated. of Customs and Patent Appeals, and subse- quently adopted by this court, to extract and identify unpatentable mathematical algor- ithms in the aftermath of Benson and Flook. See In re Freeman, 573 F.2d 1237, 197 USPQ 464 (CCPA 1978) as modified by In re Walter, 618 F.2d 758, 205 USPQ 397 (CCPA 1980). The test has been thus articulated: First, the claim.is analyzed to determine • whether a mathematical algorithm is di- rectly or indirectly recited. Next, if a mathematical algorithm is found, the claim as a whole is further analyzed to determine whether the algorithm is "applied in any manner to physical elements or process steps," and, if it is, it "passes muster under $ 101." In re Pardo, 684 F.2d 912, 915, 214 'USPQ 673, 675-76 (CCPA 1962) (citing In re Abele, 684 F.2d 902, 214 USPQ 682 (CCPA 1982).* After Dichr and Chakraburty, the Freeman-Walter-Abele test has little, if any, applicability to determining the presence of statutory subject matter. As we pointed out in Alappat, 33 P.3d at 1543, 31 USPQ2d at 1567, application of the test could be mislead- 5. The test has ben the source of much confu- sion. In In re Abele, 684 F.2d 902, 214 USPO 682 (CCPA 1982), the CCPA upheld claims apply. ing "a mathematical formula within the context of a process which encompasses significantly more than the algorithm alone." Id. Thus, the CCPA apparently inserted un additional consideration--the significance of additions 10 the algorithm. The CCPA appeared to abandon the application of the test in In re Taner, 681 F.2d 787, 214 USPO 678 (CCPA 1982), only to subsequently "clarily" that the Freeman-Walter- Abele test was simply not the exclusive test for detecting unpatentable subject matter. in re Meyer, 688 F.2d 789. 796, 215 USPQ 193, 199 (CCPA 1982). 6. See e.g. Parker w. Flook, 437 U.S. 584, 590, 98 S.CL 2522, 57 L. Ed.2d 451 (1978) (*[A) process is not unpatentabic simply beçause it contains a law of nature or a mathematical algorithm."): Funk Bros. Seed Co. v. Kalo Inoculant Co., 333 U.S. 127, 130, 68 S.CL. 440, 92 L.Ed. 588 (1948) ("He who discovers a hitherto unknown' phe- nomenon of nature has no claim to a monopoly of it which the law recognizes. If there is to be invention from such a discovery, it must come from the application of the law to a new and useful end."): Mackay Radio & Tel. Co. v. Radio Corp. of Am., 306 U.S. 86, 94, 59 S.CL. 427, 83 L.Ed. 506 (1939) ("While a scientific truth, or the mathematical expression of it, is not a patentable invention, a novel and useful structure created ing. because a process, machine mannfar. ture, or composition of matter employing a law of nature. natural phenomenon, or ab- stract idea is patentable subject matter even though a law of nature, natural phenomenon, or abstract idea would not, by itself, be enti- tled to such protection. The test determines the presence of, for example, an algorithm. Under Benson, this may have been a suffi- cient indicium of nonstatutory subject mat- ter. However, after Dieir and Alappat, the mere fact that a ciaimed invention involves inputting numbers, calculating numbers, out- putaing numbers, and stonng numbers, in and of itsell, would not vender it nonstatuto. ry subject matter, untess, of course, its oper- acion does not produce a useful, concrete and tangible result." Alappat, 33 F.3d at 1544, 31 USPQ2d at 1557? After all, as we have repeatedly stated, every step-by-step process, be it electronic or chemical or mechanical, involves an 1.- gorithm in the broad sense of the term. Since $ 101 expressly includes processes as a category of inventions which may be patented and $ 100() further defines the word "process" as meaning "process, art or with the ax of knowledge of scientilic truth may be."*). When a ciaim containing a mathematical lor. mula implements or applies that formula in a. structure or process which, when considered as a whole, is periorming a function which the patent lows were designed to protect (e.g., transtormine or reducine an anticle to a dilier. ent state or hint. then the claim satistes the reausterin's or 9 01 oreher. 450 U.S. at 192, 101 S.Ci. 1048: see also In re /waltashi, 888 F.2d 1370, 1375, 12 USPO2d 1908. 1911 (Fed.Cir.1989): Taner, 681 F.2d at 789, 214 USPO at 680. The dispositive inquiry is whether the claim as a whole is directed to statutory subject matter. It is irrelevant that a Claim may contain, as part of the whole, subject matter which would not be patentable by itself. "A claim drawn to subiect matter otherwise sint. utory does not become nonstatutory simply bel cause il uses a mathematical formula, computer program or digital computer. Diehr, 450 U.S al 187. 101 S.Ct. 1048 As the Supreme Court expressly stated in Dichr, its own holdings in Benson and Flook "stand lor no more than these long-established principles that abstract ideas and natural phe- nomena are not patentable Diehr. 450 U.S..at 185, 101 S.CL. 1048 (citing Chakrabarty, 447 U.S at 309, 100 S.Ct. 2204 and Funk Bros., 333 U.S at 130, 68 S.Ct. 440.). method, and includes a new use of a known process, machine, manufacture, composi- tion of matter, or material," it follows that it is no ground for holding a claim is directed to nonstatutory subject matter to say it includes or is directed. to an algor- ithm. This is why the proscription against patenting has been limited to mathemati- cal algorithms... In re Iwahashi, 888 F.2d 1370, 1374, 12 USPQ2d 1908, 1911 (Fed.Cir.1989) (emphasis in the original)." The question of whether a claim en- compasses statutory subject matter should not focus on which of the four categories of subject matter a claim is directed to °—-pro- cess, machine; manufacture, or composition of matter--but rather on the essential char- acteristics of the subject matter, in particu- lar, its practical utility. Section 101 specifies that statutory subject matter must also satis- fy the other "conditions and requirements" of Title 35, including novelty, nonobviousness, and adequacy of disclosure and notice. See In re Warmerdam, 33 F.3d 1354, 1359, 31 USPQ2d 1754, 1757-58 (Fed.Cir.1994). For purpose of our analysis, as noted above, claim 1 is directed to a machine programmed with the Hub and Spoke software and admit- tedly produces a "useful, concrete, and tangi- ble result." Alappat, 33 F.3d at 1544, 31 USPQ2d at 1557.. This renders it statutory subject matter, even if the useful result is expressed in numbers, such as price, profit, percentage, cost, or loss. 8. In In re Pardo, 684 F.2d 912 (CCPA 1982), the CCPA narrowly limited "mathematical algor. ithm" to the execution of formulas with given data. in the same year , in In re Meyer, 688 F.2d 789, 215 USPQ 193 (CCPA 1982), the CCPA interpreted the same term to include any mental process that can be represented by a mathemati- eal algorithm. This is also the position taken he PTO in its Examination Guidelines, 6l Fed. Reg. 7478, 7483 (1996). 9. Of course, the subject matter must fall into at least one category of statutory subject matter. 10. As Judge Newman has previously stated. (The business method exception] is .. an un- warranted encumbrance to the definition of subject matter in section 101, that (should be discarded as error-prone, redun- dant, and obsolete. It merits retirement from the glossary of section 101 Ail of the "doing business" cases could have been decid. ed using the clearer concepts of Title 35. Pat- The Business Method Exception As an alternative ground for invali- dating the '056 patent under § 101, the court relied on the "business judicially-created, so-called method" exception to statutory subject matter. We take this opportunity to lay this ill-conceived exception to rest. Since inception, the "business method" excep- tion has merely represented the application of some general, but no longer applicable legal principle, perhaps arising out of the "requirement for. invention"-which was eliminated by $ 103. Since the 1952 Patent Act, business methods have been, and should have been, subject to the same legal require- ments for patentability as applied to any other process or method." The business method exception has never been invoked by this court, or the CCPA, to deem an invention unpatentable." Applica- tion of this particular exception has always been preceded by a ruling based on some clearer concept of Title 35 or, more common- ly, application of the abstract idea exception based on finding a mathematical algorithm. Illustrative is the CCPA's analysis in In re Howard, 55 C.C.P.A. 1121, 394 F.2d 869, 157 USPQ 615 (CCPA 1963), wherein the court affirmed the Board of Appeals' rejection of the claims for lack of novelty and found it unnecessary to reach the Board's section 101 ground that a method of doing business is "inherently unpatentable." 1d. at 872, 55 C.C.P.A. 1121, 394 F.2d 869, 157 USPQ at 617,13 entability does not tum on whether the claimed method does "business" instend ol something eise, but on whether the method. viewed as a whole, meets the requirements ol patentability as set forth in Sections 102, 103, and 112 of the Patent Act. In re Schrader, 22 F.3d 290, 298. 30 USPQ2d 1455, 1462 (Ped.Cir. 1994) (Newman, J., dissent- ing). 11. See Rinaldo Del Gallo, III, Are "Methods of Doing Business" Finally oul or business as a Statutory Rejection?, 38 IDEA 403, 435 (1998). See also Dawn v. Johnston, 425 U.S. 219, 96 S.CL. 1393, 47 L.Ed. 2d 692 (1976) (the Supreme court declined to discuss te secton 0. argue ment concerning the computerized tinancial rec- ord-keeping system, in view of the Court's hold- ing of patent invalidity under section 103); In re Charfield, 545 F.2d 152, 157. 191 USPO 730, 735 (CCPA 1976); Ex parte Murray, 9 USPQ2d 1819, Similarly, In re Schrader, 22 F.3d 290, 30 USPQ2d 1455 (Fed.Cir.1994), while making reference to the business method exception, turned on the fact that the claims implicitly recited an abstract idea in the form of a mathematical algorithm and there was. no "transformation or conversion of subject mat- ter representative of or constituting physical activity or objects." 22 F.3d at 294, 30 USPQ2d at 1459 (emphasis omitted)." State Street argues that we acknowledged the validity of the business method exception in Alappat when we discussed Maucorps and Meyer: Maucorps dealt with a business methodol- ogy for deciding how salesmen should best handle respective customers and Meyer involved a "system" for aiding a neurolo- gist in diagnosing patients. Clearly, nei- ther of the alleged "inventions" in those cases falls within any 5 101 category. Alappat, 33 F.3d at 1541, 31 USPQ2d at 1555. However, closer scrutiny of these cases reveals that the claimed inventions in both Maucorps and Meyer were rejected as abstract ideas under the mathematical algor- ithm exception, not the business method ex- ception. See In re Maucorps, 609 F.2d 481, 484, 203 USPQ 812, 816 (CCPA 1979); In re Meyer, 688 F.2d 789, 796, 215 USPQ 193, 199 (CCPA 1982)." 1820 (Bd.Pal_App InterE. 1988) ("(Tihe claimed accounting method (requires) no more than the entering, sorting, debiting and totaling of expenditures as necessary preliminary steps to Issuing an expense analysis statement states grounds of obviousness or lack of novelty, not of non-statutory subject matter. 13.1 Any historical distinctions between a method of "doing" business and the means of carrying " out blur in the complexity of modern business systems. See Paine, Webber, Jackson & Curtis v. Merrill Lynch, 364 F.Supp. 1358, 218 USPQ 212 (D.Del.1983), (holding a computerized system of cash management was held to be statutory sub- ject matter.) 14. Moreover, these cases were subject to the Benson era Freeman-Walter-Abele test- in other words, analysis as it existed before Dichr and Alappat. 15. See also Loew's Driw-in Theatres v. Park-in Theatres, 174 F.2d 547, 552 (1st Cir.1949) Chold- ing that the means for carrying out the system of transacting business lacked "an exercise of the Even the case frequently cited as estab- lishing the business method exception to stat- utory subject matter, Hotel Security Check- ing Co. v. Lorraine Co., 160 F. 467 (2d Cir.1908), did not rely on the exception to strike the patent. 15 In that case, the patent was found invalid for lack of novelty and "invention," not because it was improper sub- ject matter for a patent. The court stated "the fundamental principle of the system is as old as the art of bookkeeping, i.e., charg- ing the goods of the employer to the agent who takes them." Id. at 469. "If at the time of [the patent) application, there had been no system of bookkeeping of any kind in restau- rants, we would be confronted with the ques- tion whether a new and useful system of cash registering and account checking is such an art as is patentable under the statute." Id. at 472. This case is no exception. The district court announced the precepts of the business method exception as set forth in several treatises, but noted as its primary reason for finding the patent invalid under the business method exception as follows: If Signature's invention were patentable, any financial institution desirous of imple- menting a multi-tiered funding complex modelled (sic) on a Hub and Spoke config- uration would be required to seek Signa- ture's permission before embarking on faculty of invention ), In re Patton, 29 C.C...A. 982. 127 F.2d 324, 321-28 (CCFA 1942) (lindig claims invalid as failing to deline patentable sub- ject matter over the relerences of record.): Berar 190 F. 329. 332 (C.C.S.D.N.Y. 1911): In re Wait, 22 C.C.P.A. 822, 73 F.2d 982, 983 COYA 934)Surely these are. and al ways have been, essential steps in all dealings o this nature, and even conceding, without hold- ing, that some methods of doing business might present patentable novelty, we think such novelty is lacking here. ), In re Howard, 55 C.C.P.A 1121, 394 F.2d 869, 157 USPQ 615, 617 (CCPA 1968) (* Wie therefore affirm the decision of the Board of Appeals on the ground that the claims do not detine a nove. proccas sc unnecessary to consider the issue or whether method of coins businees is inherently unpatent able."). Although a clearer statement was made in In re Parton, 29 C.C.P.A. 962, 127 F.2d 324, 34133 UsrO 376, 379 (CCPA 1942) that a system for transacting business, separate trom the means for carrying out the system, is not patentable subcct matter, the jurisprudence does not require the creation of a distinct business class or unnatentsble sub ect matter. such a project. This is so because the '056 Patent is claimed (sic) sufficiently broadly to foreclose virtually any computer imple- mented accounting method necessary to manage this type of financial structure. 927 F.Supp. 502, 516, 38 USPQ2d 1530, 1542 (emphasis added). Whether the patent's claims are too broad to be patentable is not to be judged under $ 101, but rather under $$ 102, 103 and 112. Assuming the above statement to be correct, it has nothing to do with whether what is claimed is statutory subject matter. In view of this background, it comes as no surprise that in the most recent edition of the Manual of Patent Examining Procedures (MPEP) (1996), a paragraph of $ 706.03(a) was deleted. In past editions it read: Though seemingly within the eategory of process or method, a method of doing busi- ness can be rejected as not being within the statutory classes. See Hotel Security Checking Co. v. Lorraine Co., 160 F. 467 (2nd Cir.1908) and In re Wait, 24 USPQ 88, 22 C.C.P.A. 822, 73 F.24 982 (1934). MPEP. $ 706.03(a) (1994). This acknowledg- ment is buttressed by the U.S. Patent and Trademark 1996 Examination Guidelines for Computer Related Inventions which now read: Office personnel have had difficulty in properly treating claims directed to meth- ods of doing business. Claims should not be categorized as methods of doing busi- Instead such claims should be treat- ed like any other process claims. Examination Guidelines. 61 Fed.Reg. 7478, 7479 (1996). We agree that this is precisely the manner in which this type of claim should be treated. Whether the claims are directed to subject matter within § 101 should not turn on whether the claimed subject matter does "business" instead of something else. CONCLUSION The appealed decision is reversed and the case is remanded to the district court for further proceedings consistent with this opin- REVERSED and REMANDED.