Alice v. CLS Reality: PTO Pulling Back Notices of Allowance
|Written by Gene Quinn
Patent Attorney & Founder of IPWatchdog, Inc.
Principal Lecturer, PLI Patent Bar Review Course Posted: July 25, 2014 @ 4:44 pm
UPDATED: Saturday, July 26, 2014 at 11:20am
Over the last several days I have heard of an alarming trend from the United States Patent and Trademark Office — Patent Examiners are canceling Notices of Allowance and yanking previously granted claims back into prosecution while citing the United States Supreme Court’s ruling in Alice v. CLS Bank. In some instances granted claims are being pulled back into prosecution only to be rejected as lacking patent eligible subject matter even after the issue fee has been paid. I have also been told that an Examiner in one case has issued a new Examiner’s Answer to include a new Alice 101 rejection.
This is an alarming trend that seems to be building steam as virtually everyone who operates in this space is now seeing the aforementioned and/or they are seeing supplemental office actions issued where the pending office action never rejected claims based on patent eligibility grounds.
Rejecting claims after the issue fee has been paid represents an extraordinary disconnect from the initial USPTO guidance that essentially said that Alice changed nothing from a substantive point of view. I was shocked that the USPTO issued such guidance because if you actually read the Supreme Court’s decision in Alice you could hardly walk away with the belief that nothing had changed.
In the immediate aftermath of the Supreme Court’s decision in Alice the USPTO told examiners that the reason Alice’s claims were determined to be patent ineligible was because “the generically-recited computers in the claims add nothing of substance to the underlying abstract idea.” The USPTO, by and through the Deputy Commissioner for Patent Examination Policy, Andrew Hirshfeld, then went on to point out to patent examiners that there is no new category of innovation that is patent ineligible, nor is there any new or special requirements for the eligibility of either software or business methods. Hirshfeld explained: “Notably, Alice Corp. neither creates a per se excluded category of subject matter, such as software or business methods, nor imposes any special requirements for eligibility of software or business methods.”
Hirshfeld also explained that there is now a slight change in the way applications are to be examined when claims involve abstract ideas. Essentially, Alice stands for the proposition that the same analysis should be used for all types of judicial exceptions and the same analysis should be used for all categories of invention. Still, even recognizing this shift in analysis,Hirshfeld told examiners: “[T]he basic inquiries to determine subject matter eligibility remain the same as explained in MPEP 2106(I).” (emphasis added). Therefore, nothing has changed as far as the USPTO is concerned.
The initial USPTO guidance shocked me because it was exceptionally pro-patentee, which was surprising given how the Obama Administration has spent most of the last 18 months spewing anti-patent rhetoric that largely parroted the Google position on patents, which is that patents simply are not necessary, particularly for software and other computer related innovations.
There is an obvious disconnect, one that seems from the outside to be between the career USPTO officials who believe in the patent system and Administration officials who would rather see all software declared patent ineligible.
Regardless of why this is happening, we now have multiple patent examiners in many different cases issuing supplemental office actions using the same form paragraph, and now we hear that patents are being yanked back into prosecution with claims being rejected as lacking patent eligible subject matter after they were finally granted. This deviation from the initial guidance to patent examiners is alarming. Also extremely troubling is the fact that the USPTO is asking for comments on their initial interpretation of the meaning of Alice v. CLS Bank. Asking for feedback in the case of quick, initial guidance is unusual. In this case the USPTO is asking for such guidance under the guise of allowing further comment on the Mayo/Myriad guidelines, but the recently published notice quite clearly explains:
The United States Patent and Trademark Office (USPTO) has issued preliminary instructions on Alice Corp. to the patent examining corps and these preliminary instructions have been posted on the USPTO’s Internet Web site. The USPTO is inviting public comment on the Alice Corp. preliminary instructions.
I suspect that the Obama Administration, which has been taking its guidance on patent issues from Google, must have been uncomfortable with the “nothing has changed” approach the USPTO career officials wanted to take.
My initial reaction to the Supreme Court decision in Alice was that the decision was terrible and would cause tremendous problems for issued patents and patent applications in progress because the claims and disclosures were written to satisfy a different standard. Although many openly criticized my view, it seems as if what I wrote is all coming to pass. I wish I had been wrong! We seem to be entering a dark period for patent eligibility both for software and biotechnology. That won’t be good for the economy at a time when our economy is still stagnant.
I wonder at what point publicly traded companies like Google will need to inform shareholders that their patent portfolios and pending patent applications are largely worthless? If they don’t will they run afoul of Sarbanes Oxley? Stay tuned!
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Posted in: Gene Quinn, IP News, IPWatchdog.com Articles, Patent Prosecution, Patentability, Patents, Software, Technology & Innovation, USPTO
About the Author
Gene Quinn is a Patent Attorney and the founder of the popular blog IPWatchdog.com, which has for three of the last four years (i.e., 2010, 2012 and 2103) been recognized as the top intellectual property blog by the American Bar Association. He is also a principal lecturer in the PLI Patent Bar Review Course. As an electrical engineer with a computer engineering focus his specialty is electronic and computer devices, Internet applications, software and business methods.