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Abstraction in the Commonplace: Alice v. CLS Bank and its Use of Ubiquity to Determine Patent Eligibility


Written by Marc Ehrlich, Marian Underweiser, Mark Ringes & Manny Schecter
Posted: July 31, 2014 @ 11:55 am
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It has been over a month since the Supreme Court published its opinion in Alice v. CLS Bank. While the question on which certiorari was granted broadly considered the patent eligibility of computer implemented inventions, the Court ultimately issued an opinion that was tightly focused on the invention underlying Alice Corp’s patent. While many hoped that the Court would address this broader issue, the narrow opinion leaves many key questions unanswered. More importantly, the Court’s explanation of why the Alice patent was an ineligible abstract idea demonstrates the limitations inherent in applying that doctrine to computer implemented inventions. Those limitations will come to define the struggles confronting innovators, courts and the patent office as they attempt to operate in accordance with this opinion.

A review of the opinion and oral argument reveals that no participant was able to articulate a meaningful, repeatable, and predictable approach for determining which computer implemented inventions are too abstract and which are eligible for patent protection. The Court intentionally declined to broadly address this key issue: “[i]n any event we need not labor to delimit the precise contours of the “abstract ideas” exception in this case.”  And that is because it cannot be done. As the Court itself acknowledged in Mayo v. Prometheus, “all inventions at some level embody” an abstract idea.   And unlike laws of nature and natural phenomena, abstract ideas are not readily susceptible to line-drawing – where does the abstract idea stop and the eligible “application” of that abstraction begin?

Learned Hand lamented the intractable nature of this problem in the context of the idea expression dichotomy in copyright law. Struggling to separate the underlying unprotected idea from the copyright protected expression, he noted “…there is a point in this series of abstractions where they are no longer protected, since otherwise the playwright could prevent the use of his ‘ideas’, to which, apart from their expression, his property is never extended. Nobody has ever been able to fix that boundary, and nobody ever can.” See Nichols v. Universal Pictures Corporation.

Indeed, the same holds true for attempts to engage in a process of dissecting specific detailed computer implemented inventions to basic abstract ideas in patent cases, no one will ever be able to fix a boundary to determine patent eligibility. But while the purpose underlying the separation of idea from expression is clear from the language in the copyright statute, the separation of abstraction from invention is a judicially created rule which must be narrowly construed. While the Alice opinion acknowledged that the misapplication of this exclusionary principle could “swallow all of patent law,” unfortunately it did not lay out any of its contours beyond specific application to the patent in suit.

A troubling aspect of the analysis in the Alice opinion is the suggestion that an invention, once patent eligible, can become patent ineligible simply based on the passage of time and public adoption. Dialogue in the oral argument as well as statements in the Court’s opinion suggest this line of reasoning, which arguably originated in Bilski, has become an accepted principal. In one exchange during oral argument, CLS’s counsel contends that email and word processing software may have once been patent eligible but are now no longer patent eligible subject matter:

JUSTICE SOTOMAYOR: So you’re saying no to e-mail and word processing.

MR. PERRY: Your Honor, I think at a point —

JUSTICE SOTOMAYOR: They certainly have functionality and – and improvement of functionality for the user.

MR. PERRY: At a point in time in the past, I think both of those inventions would have been technological advances that were patentable.

JUSTICE SOTOMAYOR: How?

MR. PERRY: Today – because they would have provided a technological solution to a then unmet problem. Today, reciting, and do it on a word processor is no different than and do it on a typewriter or — and do it on a calculator.

The inventive contribution component, which uses specifically the language of conventional and routine and well understood, will evolve with technology. That’s why it’s different from the abstract idea component.

And here we know that these patents don’t claim anything that isn’t conventional, well understood and routine. We went through that in great detail and Alice has never disputed a word of it. They just say you’re not supposed to do that analysis, even though the Court, 9-0 in Mayo said we should…

Often oral arguments simply reflect the Justices’ process of deliberation, but unfortunately the Alice opinion suggests that this line of reasoning in fact is central to the Court’s view of the “contours” of the abstract idea exception. Finding the claims at issue were nothing more than the abstract idea of “intermediated settlement”, the Court explained that abstract ideas are not limited to pre-existing fundamental truths that exist in principle apart from any human activity, but instead include ideas invented by man such as “fundamental economic practices”:

Drawing on the presence of mathematical formulas in some of our abstract-ideas precedents, petitioner contends that the abstract-ideas category is confined to “pre-existing fundamental truth[s]” that “’exist in principle apart from any human action’” …Bilski belies petitioner’s assertion…Although hedging is a longstanding commercial practice … it is a method of organizing human activity, not a “truth” about the natural world “ ‘that has always existed’ “…

This language follows the line of argument presented by CLS counsel during oral argument. Under this test patent eligibility is time and adoption dependent. An invention may initially be susceptible to patenting but may later become ineligible for patenting (as opposed to becoming unpatentable due to lack of novelty or obviousness) as it becomes more adopted, ubiquitous, successful or commonplace. Ubiquity, it would seem, is now the touchstone not only for patentability but for patent eligibility too. While the current decision (and the Bilski decision) would appear to limit application of this doctrine to economic practices, the broadening language regarding organizing human activity suggests that it may find application beyond financial business methods.

Many commentators have expressed concern with the Court’s use of patentability considerations as part of its eligibility jurisprudence. But the Court’s above application of step 1 of its test from Mayo v. Prometheus (determine whether the claims are directed to one of the patent ineligible exceptions) to abstract ideas is deeply worrisome. Even assuming we know how to determine abstractness (which we do not), this approach raises numerous questions that must now be answered. A sampling of these questions includes those relating to the mechanics of implementing the test such as:

  • How does one know when a practice has been in place long enough so as to be ineligible? Is the degree of adoption relevant? Are the considerations akin to those we normally associate with obviousness and the person having ordinary skill?
  • What is to be the subject of such longstanding practice analysis? Is it the invention in question in a given patent case or is eligibility judged against one or more pioneering inventions?
  • When is the longstanding nature of the abstract idea judged? Is it only relevant at the time the application was filed or can it be reconsidered later in the life of the patent?
  • Does evidence of the longstanding practice need to be specifically identified or simply alleged?
  • Does this approach to 101 which includes aspects of 102, 103 and 112, alter the application of those statutory sections?
  • Must this abstract idea analysis “come first” before substantive patent examination under the other statutory sections (as the PTO guidance currently suggests), and if so how does this comport with compact prosecution and the statute?

From a policy perspective the opinion raises other challenging questions, for example:

  • Is it in keeping with the policy underlying the judicially created exceptions to patent eligibility to extend the abstract idea exception past the envelope of the other judicially created exceptions which by definition relate to preexisting truths about the natural world?   Are the man-made inventions behind these “abstract ideas” akin to the “the fundamental tools of scientific and technological work” discovered as laws of nature or physical phenomena?
  • The Court has indicated that the presence of a mathematical algorithm holds no special significance in its abstract idea analysis. What boundaries if any does this analysis have?   Is it limited to economic practices or are inventions like email and word processing susceptible?
  • The Court has acknowledged that the misapplication of this judicially created exception to eligibility could “swallow all of patent law”. Does this application of that exception which relies on patentability considerations from other statutory sections to determine eligibility qualify as narrow? Is it consistent with Congressional intent?
  • How do patent owners address the possibility that this ruling could result in the loss of patents long held eligible?

These and other questions left unanswered by this decision will generate uncertainty for innovators and their competitors as the lower courts and the patent office struggle to provide needed structure to this ruling.

Concurrent with this writing IBM is submitting a set of comments to the USPTO to assist in their implementation of examination guidelines consistent with the Alice opinion. The USPTO is charged in the first instance with applying the reasoning outlined by the Court in Alice, and is likely to review thousands of claims that raise eligibility issues before lower courts see even a handful. It is critical that the USPTO examine these applications with great care, avoiding an overbroad approach that as the Court noted, could “swallow all of patent law.” We are hopeful that our comments will help the USPTO provide focused structure to the abstract idea analysis. However, the narrow opinion of the Court and the questions presented by its eligibility analysis suggest that rather than moving toward greater clarity in the area of patent eligibility we will continue to struggle through yet another chapter of problematic patent eligibility tests.

 

About the Authors

Marc Ehrlich is Associate General Counsel for IBM Corp. He manages the patent licensing and sales legal team responsible for generating IP income for IBM.

Marian Underweiser is IBM’s Counsel for IP Law Strategy & Policy. Dr. Underweiser develops IBM’s policy on a broad spectrum of IP matters, including legislative, PTO, and judicial reform.

Mark Ringes is Vice President and Assistant General Counsel for IBM.

Manny Schecter is Chief Patent Counsel for IBM.


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Posted in: Companies We Follow, Government, Guest Contributors, IBM, IP News, IPWatchdog.com Articles, Manny Schecter, Patentability, Patents, Software, Technology & Innovation, US Supreme Court

25 comments
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  1. Thank you for this article and the questions it raises. This article made me realize there is another issue with the Alice holding with respect to “abstract ideas”:

    Under the following standard from Alice:

    <>

    Wouldn’t a claim to any of the following items potentially be considered patent ineligible as devices or objects that implement patent ineligible methods for organizing human activity: a traffic light, a fire alarm, a guard rail for a walkway, an ATM machine, an accounting machine, a user terminal at an airport, a user terminal in a store, a user terminal in a restaurant, etc.

    I’m sure others could come up with “inventions” that could be described as objects or machines for organizing human activities.

    The Supreme Court’s Alice decision is a total mess at almost every level.

  2. Thanks ARP. Your observation is similar to ours – what are the boundaries of Mayo step 1 when the Court specifically says the abstract idea exception can apply to man-made inventions and when the decision considers things like longstanding adoption for finding something abstract?

    What is really odd is that Justice Scalia seemed to get this during oral argument. Consider this passage from the oral argument (keep in mind this was a unanimous decision):

    JUSTICE SCALIA: Why isn’t it why isn’t doing it through a computer not enough? I mean, was the
    cotton gin not an invention because it just means you’re doing through a machine what people used to do by hand? It’s not an invention. It’s the same old, same old.

    MR. PHILLIPS: Justice Scalia

    JUSTICE SCALIA: Why why is a computer any different in that respect?

  3. Can anyone think of a patentable invention that isn’t associated with some kind of human activity?

  4. wow:

    A method of keeping a sleeping (and thus inactive) human infant asleep comprising:
    Rosie the Robot driving the sleeping Elroy in George Jetson’s Flying Car over the virtual rumble road just a bit longer. (No human “activity” involved)

  5. The following standard in my post was the following quote from the article (Sorry for the confusion):

    Drawing on the presence of mathematical formulas in some of our abstract-ideas precedents, petitioner contends that the abstract-ideas category is confined to “pre-existing fundamental truth[s]” that “’exist in principle apart from any human action’” …Bilski belies petitioner’s assertion…Although hedging is a longstanding commercial practice … it is a method of organizing human activity, not a “truth” about the natural world “ ‘that has always existed’ “

  6. ARP @4

    You need to stop confusing SCOTUS with the “reality” thing.

    They’ve picked their story (Alice in Blunderland) and they’re sticking with it.

  7. In re 2. It would be hard to write a patent specification for a traffic light that would not in effect claim a traffic cop, but one could write a specification to claim a specific timing circuit that might sequentially power and unpower a plurality of lights. Of course, that would not be particularly novel today.

  8. SB,

    I about fell over laughing at your Jetson example. Remember the antimated show well.

  9. SB,

    I about fell over laughing at your Jetson example. Remember the show well.

  10. What happens when the inventor (e.g., a person or company seeking to commercialize the invention) is responsible for the ubiquity? Wouldn’t this possibility prevent companies from investing heavily to commercialize their inventions, at least causing delays or using other strategies that are detrimental to society?

  11. Marc-

    When I heard Scalia say that during oral argument I was almost dumbfounded. It seemed like he understood the issue in a way I didn’t expect he would given his judicial philosophy and view of the Constitution from a historical perspective. With the decision out now it seems either he was convinced otherwise or just playing devils advocate.

    Great article. Thanks for the contribution. This is exactly what I am hearing from patent attorneys all over the country, particularly now that the USPTO is issuing Alice rejections that seem to directly contradict with the initial guidance given to patent examiners.

    -Gene

  12. SFT at 8.

    That’s a really good point about an inventor being effectively punished for making something that everyone will want to buy and use.

    Plus, as the invention becomes ubiquitous, the invention could also be viewed as “organizing human activity”. For example, I think there is no question that such ubiquitous prior inventions such as the light bulb, the Model T, the telephone, the television, the personal computer, the cell phone, the smartphone, etc. have the effect of “organizing human activity.”

  13. “A troubling aspect of the analysis in the Alice opinion is the suggestion that an invention, once patent eligible, can become patent ineligible simply based on the passage of time and public adoption”

    successful inventors will get screwed.

  14. “A troubling aspect of the analysis in the Alice opinion is the suggestion that an invention, once patent eligible, can become patent ineligible simply based on the passage of time and public adoption”

    successful inventors will get screwed.

    So you are saying that if a technology is in common use, that it is patentable?

    Wayne

  15. Wayne,

    Your timing is off – the comment has to do with massive adoption after filing.

  16. (caught in filter – please release)

  17. Not receiving any confirmations now (please release from filter and delete filter release requests).

  18. Wayne Borean August 4th, 2014 9:20 pm

    “A troubling aspect of the analysis in the Alice opinion is the suggestion that an invention, once patent eligible, can become patent ineligible simply based on the passage of time and public adoption”

    successful inventors will get screwed.

    So you are saying that if a technology is in common use, that it is patentable?

    Wayne

    No not saying its patentable but it should be patent eligible but unpatentable as either obvious or anticipated. Eligilbity as opposed to obviousness or anticipation should not have anything to do with how popular an invention is …. as we note above…

    An invention may initially be susceptible to patenting but may later become ineligible for patenting (as opposed to becoming unpatentable due to lack of novelty or obviousness) as it becomes more adopted, ubiquitous, successful or commonplace. Ubiquity, it would seem, is now the touchstone not only for patentability but for patent eligibility too…

    The conflation of the concept of whether an invention is eligible for patenting vs whether it passes muster under the other statutory sections is central to the problem we are trying to get at in this article.

  19. Anon-

    I’m not seeing anything in the spam folder now. I did see one earlier today and released that.

    -Gene

  20. Marc,

    The problem with that is that the Patent Office commonly issues patents for items that are unpatentable as either obvious or anticipated, never mind items that have been in common use for long periods of time.

    I was approached by an inventor, who wanted to sell us his invention, for which a patent had just been issued. After reading the patent, I told that we were already using that technology. He got upset, and started to huff and puff. I told him to go ahead and get upset, but we’d been using that technology for fifteen years, and had plenty of documentation to prove it.

    The problem is that the USPTO is incapable of making these sorts of determinations.

    Wayne

  21. Posted at 15 – thanks Gene, please feel free to delete this as well as my posts at 16 and 17.

  22. Marc,

    For all the self-congratulatory greatness coming from our Northern neighbor, it appears that he does not grasp the legal distinction that our Congress set in place in 1952 with the explicit difference between patent eligibility and patentability.

    Unfortunately, he is not alone.

  23. Anon,

    Please describe what you mean – or rather, post the exact wording from the legislation, along with a link to the Federal Register.

    Wayne

  24. Wayne,

    The distinction has been discussed many times – see the writings of Frederico, Rich, and the legislative notes to the newly introduced section of 35 USC 103 (which carves out from what was previously 35 USC 101 the concepts that the pre-1952 law contained).

    You will have to do your own homework on this.

    Interesting side note though, in the August 4 – August 10 edition of the magazine Bloomberg Businessweek, Canada’s “advancement” (or economic status) is discussed. Apparently, if you take away Alberta’s energy-related impact, the rest of Canada is reeling. I bring this up in response to your general view that the Canadian patent system can be viewed as superior to the US system, and as an indicator that your view may need to be adjusted on that accord.

  25. If you aren’t willing to list the references, I don’t see why I should believe you.

    As to Canada’s economy, Bloomberg is right and wrong. A good portion of our current economic issues come from our major trading partner having even bigger issues. This has really hurt manufacturing because demand is down, and your dollar is also down.

    Fix that, and we’d pick up really quickly. As it is, we are diversifying, including selling more to China, including manufactured goods.

    Wayne