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The U.S. Court of Appeals for the Federal Circuit has ruled that a process or mathematical algorithm performed on a computer satisfies the statutory subject matter requirement for patentability of 35 U.S.C. sec. 101 when the process is useful and directed to a practical application. AT&T Corp v. Excel Communications Inc., 172 F.3d 1352, 50 U.S.P.Q. 2d 1447, 1999 U.S. App. Lexis 7221 (Fed. Cir. 1999). While the utility requirement for computer-method claims has long been recognized, the issue of whether such claims must also be limited to a practical application of the claimed method or mathematical algorithm, or must include either a physical transformation of subject matter or some physical noncomputer activity, has been evolving.

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