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Ignorance Is Not Bliss: Alice Corp. v. CLS Bank International*


Written by Eric W. Guttag
Eric W. Guttag IP Law Office
Posted: July 25, 2014 @ 1:48 pm
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Justice Thomas

I feel like a very broken record. In an IPWatchdog article I wrote back in 2012, I commented on the currently fractured patent-eligibility landscape in the split Federal Circuit panel decision in CLS Bank International v. Alice Corp. Pty. Ltd. where a claimed trading platform for exchanging business obligations survived a validity challenge under 35 U.S.C. § 101. See The Fractured Landscape of Patent Eligibility for Business Methods and Systems in CLS Bank International. That fracture got even worse in the subsequent en banc ruling which can only be described as lengthy, tumultuous, and confusing, with a brief per curiam opinion, as well as six full opinions.

With the Supreme Court’s most recent foray into the patent-eligibility world in Alice Corp. v. CLS Bank International, we now have a complete and utter disaster as to what data processing claims can (or more unfortunately cannot) survive scrutiny by Our Judicial Mount Olympus under 35 U.S.C. § 101. I once had respect for Justice Thomas’ view on patent law jurisprudence, having considered his substandard opinion in Myriad on the patent-eligibility of certain “isolated” DNA claims to be an “isolated” aberration. But having now read his mind-boggling Opinion for the Court in Alice Corp., I’ve now thrown my previously “cheery” view of Thomas’ understanding of patent law jurisprudence completely into the toilet. I have even less kind words to say about the three Justices that signed onto Justice Sotomayor’s disingenuous concurring opinion that accepts retired Justice Steven’s equally disingenuous suggestion in Bilski that 35 U.S.C. § 273 (in which Congress acknowledged implicitly, if not explicitly the patent-eligibility of “business methods” under 35 U.S.C. § 101) is a mere “red herring.” See Section 273 is NOT a Red Herring: Steven’s Disingenuous Concurrence in Bilski.

The Supreme Court’s decision in Alice Corp. operates from the view that “ignorance is bliss” when it come to the patent statutes, as well science and technology. I don’t share that view and never will. So in the format that I began with in shredding Justice Alito’s “comedic” opinion in Limelight Networks, here are my “ignorance is not bliss” candidates for Alice Corp., in all their ugliness.

Ignorance Is Not Bliss Point No. 1
Comingling the Separate Patent Statutes on Patent-Eligibility and Patentability
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Justice Thomas’ Opinion for the Court relies upon (unfortunately) the “framework” of Mayo Collaborative Services v. Prometheus Laboratories, Inc. for separating patent-ineligible “claims to laws of nature, natural phenomena, and abstract ideas from those that claim patent-eligible applications of those concepts.” Thomas describes this “framework” as a two-part analysis: (1) “determine whether the claims at issue are directed to one of those patent-ineligible concepts”; and (2) “search for the ‘inventive concept’ —i.e., “an element or combination of elements that is “sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the [ineligible concept] itself.” But this second part of the analysis (i.e., search for the “inventive concept”) essentially commingles patent-eligibility under 35 U.S.C. § 101 with patentability that includes novelty under 35 U.S.C. § 102, as well as obviousness under 35 U.S.C. § 103. In other words, the feared comingling of patent-eligibility with patentability when Justice Breyer announced the term “inventive concept” in Mayo in judging claimed methods under 35 U.S.C. § 101 is now (regrettably) fully bloomed.

Ignorance Is Not Bliss Point No. 2
No Adherence to the Fundamental Principle of Diehr that the Claimed Invention Must Be “Considered as a Whole.”

In footnote 3 of the Opinion of the Court, Thomas makes the following statement: “Because the approach we made explicit in Mayo considers all claim elements, both individually and in combination, it is consistent with the general rule that patent claims “must be considered as a whole,” (citing to Diamond v. Diehr). That statement is astonishing because it is utterly nonsensical. By separating out the alleged “abstract idea” in the first step of the analytical “framework,” Thomas, in Alice Corp. continues the disingenuous failure of Mayo to adhere to this fundamental principle of Diehr that “[i]t is inappropriate to dissect the claims into old and new elements and then to ignore the presence of the old elements in the analysis.” So much for following binding SCOTUS precedent by Our Judicial Mount Olympus.

Ignorance Is Not Bliss Point No. 3
Still No Definition Yet of What Is/Is Not an “Abstract Idea.

Near the end of part A of the Opinion of the Court, Thomas makes the following statement: “we need not labor to delimit the precise contours of the ‘abstract ideas’ category in this case. Put differently, what Thomas essentially does in Alice Corp. (as Justice Kennedy did before in Bilski) is “punt” on providing any meaningful definition of what is (and more importantly is not) an “abstract idea.” So much for providing us “mere mortals” with any “framework” of how to distinguish “abstract” from “non-abstract” ideas other than “we know it when we see it, but we in the Ivory Tower are not going to tell you mere mortals’ what our ‘secret’ is for so determining.”

Ignorance Is Not Bliss Point No. 4
Claims Will Be Deemed Patent-Ineligible Even Though Implemented by a “Machine,” i.e., a Computer
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At page 11 of the Opinion of the Court, Thomas states that “[t]he introduction of a computer into claims does not alter the analysis of Mayo step two.” While such “introduction” may not “alter the analysis of Mayo step two,” that so called “analysis” is fundamentally flawed in that a computer is nonetheless a machine, and machines are definitely within the statutory classes of subject matter denoted in 35 U.S.C. § 101. While the process steps implemented on such computers may be known (i.e., may lack novelty under 35 U.S.C. § 102 or may be obvious under 35 U.S.C. § 103), that process implemented on the computer is nonetheless a machine implemented process when considered “as a whole” as mandated by Diehr. That Gottschalk v. Benson and Parker v. Flook (cited by Thomas to support this quoted statement) say otherwise simply ignores the fundamental fact that computers ARE patent-eligible machines. Accordingly, processes implemented on such computers do not change those computers (so altered) into patent-ineligible machines.

Ignorance Is Not Bliss Point No. 5
Concurring Opinion Says Congress’ Implicit/Express Intent on What Is Patent-Eligible May Be Ignored
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The most startling statement in Alice Corp. occurs in Justice Sotomayor’s concurring opinion (joined by Justice Ginsburg and Breyer): “I adhere to the view that any ‘claim that merely describes a method of doing business does not qualify as a ‘process’ under §101,’” citing retired Justice Steven’s concurring opinion in Bilski. In other words, these three Justices have bought “hook, line, and sinker” Steven’s disingenuous view that Congress’ at least implicit, if not explicit acknowledgement in 35 U.S.C. § 273 that “business methods” are patent-eligible subject matter under 35 U.S.C. § 101 “is a red herring.” So much for these three Justices giving anymore than “lip service” to the expressed will and intent of Congress.

Our Judicial Mount Olympus may subscribe in Alice Corp. to the popular belief that “ignorance” of science, computer technology (as well as the patent statutes) “is bliss.” But such “ignorance” is mucking up our patent law jurisprudence, as well as “not so blissfully” impeding the creative spirit of our innovative Davids, our real hope for job growth in America. And that’s no “red herring,” Justices Sotomayor, Ginsburg, and Breyer!

*© 2014 Eric W. Guttag. Posted July 23, 2014 on IPWatchdog.com


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17 comments
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  1. Eric,

    I feel (empathize with) your frustration.

    The bigger, step back kind of question is whether SCOTUS has power under the US Constitution to completely rewrite the patent laws in the face of the statutes that the US Congress has passed and in the face of the mandate within the US Constitution itself that the rights of the inventor are to be “secured”, not de-secured?

    see
    http://patentu.blogspot.com/2014/07/us-constitution-and-power-of-scotus-to.html

  2. Maybe (just maybe) someone in Congress will take note and realize that the measures taken in 1952 have not only been undone, but have been undone purposefully and with spite.

  3. Large money interests (more commonly code-named: special interests) are simply getting what they paid for.

  4. SB,

    My frustration with the Royal Nine (as some call them) is that: (1) they simply refuse to adhere to any reasoning on patent-eligibility under 35 USC 101 that is rational and logical, as well as consistent with where the current growth in technology (data processing) is heading; and (2) provide no understandable guidelines or definition for establishing when a claimed method is no longer “abstract” so that it can reach the patent-eligibility zone. In other words, Our Judicial Mount Olympus provides no meaningful or logical guidance on patent-eligibility under 35 USC 101,but also won’t let the Federal Circuit do that job either, even though it was commissioned to do so by Congress in 1982. Instead, SCOTUS simply exerts judicial fiat over patent law jurisprudence which doesn’t gain my respect, only my disgust and censure.

  5. It has been long pointed out that we are witnessing a power struggle between the branches of the government.

    I have noted that the CAFC is but a pawn in this chess match. Created by Congress under constiutional authority, but subjugated nonetheless by the top dogs. Witness the brow beating they receive. Witness the fact that the en banc Alice decision specifically asked for help – and that no such help was forthcoming.

    On another thread, I note that asking the executive branch for help (in the manner of writing to the USPTO regarding their implementation efforts) is a waste of time.

    I do not make this statement with any sense of joy.

    Seeking redress of government actions is one of our fundamental rights in our form of government. But we must be clear in our understanding of when – or how – that seeking is futile and when – or how – seeking redress has a chance of being effective.

    Congress seems unaware that there is even a chess match in progress. In this chess match, the white of the Congress does not seem able to see the black of the judiciary (or the black of the executive).

    What happened prior to 1952 to awaken the sleeper back then?
    What can be done today to awaken the sleeper?

    (references to Dune are intentional, as there are a plethora of parallels to be found – for additional “pleasure” see http://cheerfulcynicism.blogspot.com/2009/10/sleeper-has-awakened-whatever-that.html )

  6. Should I note the irony of the year of the release of the movie Dune….

  7. While I agree with points 2-5, I do not find the framework in 1 unreasonable. Breaking the analysis into descrete steps, with the first being a 101 analysis, is an efficient approach. If you pass the 101 test, then you move to 102/103. What are the alternatives, doing the 102/103 first?

  8. It might make sense to do 112 before 101 – if one does not construe the claims appropriately….

  9. Ralph,

    The framework noted in 1 is unreasonable as it comingles patent-eligibility (35 USC 101) with patentability (35 USC 102/103); these are distinct statutes that need to be addressed separately. It also encourages what I noted in point number 2, namely the violation of the fundamental principle of Diehr that “[i]t is inappropriate to dissect the claims into old and new elements and then to ignore the presence of the old elements in the analysis.”

  10. Ralph at 6:

    Until the Supreme Court added judicial exceptions thereby making the 101 determination more complicated and more subjective, doing a 101 analysis first would be okay. There was no need for an Examiner to determine the state of the prior art, and it was easy to determine whether a claim was patent eligible.

    For example, if the claim claimed an apparatus, it used to be easy to determine that the claim covered patent eligible subject matter. No need to look at the prior art.

    But the decision in the Alice case holds that a claim to an apparatus, i.e., the claim to a computer, is not patent eligible. Furthermore, because the Supreme Court in Alice mixes together 102 and 103 with 101 an Examiner cannot determine whether the apparatus is patent eligible without doing a search under 102 and 103 to determine the state of the art.

    Based on the Supreme Court’s decisions in Alice and Prometheus, it is not possible for an Examiner to determine if a claim passes the 101 test before conducting the 102 and 103 analysis.

  11. A Rational Person at 10. I’m just saying the flaw is not in the framework, it’s in the analysis. As stated, the framework is (1) “determine whether the claims at issue are directed to one of those patent-ineligible concepts”; and (2) “search for the ‘inventive concept’. The first step, “determine whether the claims at issue are directed to one of those patent-ineligible concepts” if applied correctly is clearly a 101 test. The second sterp “search for the ‘inventive concept’, poorly worded I concede, is a 102/103 analysis if applied correctly. Alice decision is flawed for the analysis, not the framework.

  12. Ralph at 11.

    I think the framework is flawed is well. Step (1) requires determining if a claim is directed to a “patent-ineligible concept.”. For an Examiner to easily apply step (1), there would need to be a well-defined list of things that are “patent-ineligible.” Otherwise, you are requiring an Examiner to make a subjective decision based on no evidence as a first step in the Examiner’s analysis.

    101 only works as a good first step in a patentability analysis if step (1) only requires that the Examiner determine that the claim is directed to a patent eligible subject matter, i.e., if the claim claims “process, machine, manufacture, or composition of matter, or any new and useful improvement thereof.” But for the judicial exceptions, this would be a relatively easy determination for an Examiner with respect to most claims.

  13. A Rational Person at 12. So if you were Thomas’ law clerking, what framework would you have written in place of (1) “determine whether the claims at issue are directed to one of those patent-ineligible concepts”; and (2) “search for the ‘inventive concept’?

  14. Ralph at 13.

    I would do what has been probably historically been done by most Examiners:

    (1) Determine if the claim claims a “process, machine, manufacture, or composition of matter, or any new and useful improvement thereof”, subject to explicit exceptions from the court cases .If the subject matter is in one of the categories set forth in 101 and does not clearly fall into an explicit court-made exception, the claim should be determined to claim patent eligible subject matter.
    (2) Determine if the claim meets requirements of 112, 102 and 103 in that order. Some 112 deficiencies may make it impossible to determine if claim meets requirements of 102 and 103.

  15. Rational Person at 14. No, I meant write it like an opinion, as if you were a supreme court judge. Its not that easy.

  16. Ralph at 15:

    The decision of Alice, written as an opinion as if I were a Supreme Court judge:

    Each of the claims at issue claim a “process”, a “machine” or a “manufacture” and therefore claim patent eligible subject matter under 35 USC 101. The decision of the Court of Appeals for the Federal Circuit is reversed and this case is remanded to the Court of Appeals for further proceedings consistent with this opinion.

    In comparison with the Supreme Court’s decision in Alice, my decision:
    (1) Is more consistent with the language of 35 USC 101.
    (2) Is more consistent with the intent of 35 USC 101.
    (3) Provides a more objective test for determining patent eligibility.
    (4) Would cause less chaos in the USPTO.

    And if you think that the Decision in Alice is anything other than a subjective test of patentability, I would ask you to explain what arguments a patent applicant could use if an Examiner rejected a claim under 35 USC 101 based on the ground that (1) the claim is directed to an abstract concept or (2) the claim is merely being an application of a natural law.

    I can find no useful guidance anywhere in Alice as to how an Applicant could successfully but a rejection based on either ground (1) or ground (2) above.

  17. Ralph,

    I would suggest you accept what A Rational Person says @16. It’s right on point as to why Alice Corp. is a disaster and a disgrace.

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