One might think that just about everything that can be said about Alice has already been said, but whenever there is an Alice themed presentation or webinar the room, or phone line, is packed. Patent attorneys and innovators are struggling to understand what needs to be done. We will gladly comply with whatever the Courts want to see in a patent application, just tell us!
And therein lies the real problem. Many of the patents that are failing because the claims do not exhibit patent eligibility subject matter were written many years ago at a time when the claims obtained would clearly have satisfied the tests in place at the time. To me this is one of the most fundamentally unfair aspects of the patent law that applies to software patents. As the law has evolved things that were once clearly patent eligible are now patent ineligible, but that doesn’t mean that the underlying innovations aren’t commercially valuable or innovative. It means that applications were written to one standard and then evaluated by a different standard that came into being many years later.
The best advice for innovators is to understand that there is no such thing as a quick, cheap and easy software patent any more. Perhaps there never should have been, but you really cannot blame patent attorneys for writing software patent applications in ways that explained software as a method. Yes, it is now clear that Courts, particularly the Supreme Court, will not allow software method claims. But if we want to be intellectually honest software is best described as a method.
Software is not an abstract idea, and it is not some product of nature. Software instructs a machine to operate in a specific way to accomplish a specific task. The fact that judges cannot understand the nature of software doesn’t change the reality that software is best understood by a method. What this means is we have to now describe software with extremely detailed disclosures, dense technological disclosures akin to a design document. Show the algorithms, explain the interoperability, and include the nuanced details. The focus cannot be on someone of skill in the art. The focus must be to overwhelm the average lay judge into understanding that there really is a technological advance, even if that isn’t specifically a requirement set forth in the Patent Act, or one even particularly well announced by the Supreme Court of Federal Circuit.
In short I’m saying that patent attorneys and innovators must anticipate that the law will change. When the law changes it will be applied retroactively. Every time the law changes more disclosure and technical specifics are required. I just don’t think you can write software patent applications to satisfy any particular standard that may exist at the moment, even if you could understand what the test of the moment is. Patent attorneys must engage as if we are playing chess – the way to succeed is to see the board several moves ahead. That will require onerous disclosures, greater expense, but it should lead to a generation of exceptionally strong, valuable patents in the future.
Of course, before we can look several moves ahead it would be helpful to understand the current state of the law. Sadly, that isn’t easy given conflicting Federal Circuit cases and an Alice decision that raises multiple questions with few useful answers.
“The reasoning is impenetrable,” said retired Federal Circuit Chief Judge Paul Michel speaking about Alice at the ABA spring IP meeting. Judge Michel says he doesn’t necessarily have an issue with the claims in Alice being declared unpatentable, but the Supreme Court decision results in an unpredictable test. “There is a shifting sand approach… When I get to the end of Alice I have no test,” Michel explained. He would go on to say that Alice is “great for litigators, but bad for business people, bad for inventors and bad for investors… It is a killer for investment.”
The Alice decision is “not very logical, not very rational and cannot be consistently applied,” Judge Michel went on. “We have a morass of uncertainty.” Unfortunately, the Federal Circuit may not be able to dig out of this mess because “the Supreme Court may have painted themselves into a corner,” Michel explained, relating to the unfortunate reality that the Supreme Court has selectively applied precedent in ways that make it impossible to reconcile all the decisions that the they somehow believe are all still good law.
Judge Michel is not the only highly regarded jurist to point out that it is difficult to harmonize Supreme Court patent eligibility decisions. “I have great difficulty rationalizing the Supreme Court’s opinions in Flook and Diehr,” Judge Richard Linn told me in an interview in November 2014. “In many regards I think those decisions are irreconcilably in conflict.”
This is one of the points I raised on the panel I participated in at the ABA meeting. The problem with decisions from the Federal Circuit, Patent Trial and Appeal Board and District Courts isn’t that they don’t scrupulously follow the law. If anything many decision makers are too scrupulously following the broad, generalized guidelines embodied in one or more Supreme Court patent eligibility decisions without enough consideration of the unique facts and circumstances of those before them. While I don’t think judges do the system any favors by merely trying to divine the intent of the Supreme Court, the real problem facing the industry is that we have no idea, which precedent judges are going to follow.
There is simply no way to reconcile all of the Supreme Court’s patent eligibility cases. A decision maker has to pick and choose which precedent to ignore and which precedent to follow. Once you know which cases they will treat as authoritative you know the outcome. This lack of certainty and predictability is the enemy of business and investment. It is also the enemy of common sense and any rational sense of justice and fair play. It is further the enemy of a property rights regime.
With patents we are ostensibly talking about a property right, but every several years the law changes. These new legal pronouncements get applied retroactively to kill patents. The real tragedy is that in many instances, if not most instances, the innovations that are now rendered patent ineligible could have been articulated and claimed as patent eligible inventions if only we knew what test would be used to evaluate them later.
Eric Gould Bear, a prolific inventor and expert witness in software and hardware user interfaces, suggests considering the use of the term “statutory” in claims themselves. He explains, “I’ve often thought that there should be a way to build in flexibility. Just think of all the headaches we could have saved around non-transitory signals by claiming ‘statutory computer readable media.’” Whether such a practice would satisfy courts that sometimes seem all too willing to invalidate patent claims is unclear. However, Bear offers an imminently reasonable solution – give patent owners a period of time to conform the language of previously issued patents to new standards without losing past priority rights. “That would be a smart way of grandfathering within a system that has reasonable motivation to evolve,” Bear explains.
Without offering something like Bear’s proposed cure period, this is exactly why with property rights, such as real estate, laws are typically not applied retroactively but only applied prospectively. People handle their affairs according to the law, as it exists. Changing the rules of the game is fundamentally unfair, which would be obvious to everyone if we were talking about football, soccer or playing a board game. Somehow common sense is abandoned when dealing with patents. Changing patent laws in midstream seems particularly un-American, both because it disturbs vested property rights and because it is quintessentially anti-inventor.
For some reason changes to patent law that directly change the rules affecting the very existence of the property right have always been applied retroactively. This is not something that would ever happen to real estate, and if it did the market for real estate would collapse because there would be no way anyone could be certain that the real property they own today would be theirs in the future. That kind of uncertainty paralyzes owners. We know this to be the case based on what we have repeatedly observed in developing countries. When they recognize strong personal rights to own real estate the economic outlook changes dramatically.
The fact that changes in the law retroactively apply to patents to render a once valid patent claim invalid is proof that patents are not truly a full-fledged property right in the view of many judges. Sadly, patents are treated as a red headed stepchild of the property world, fated to hang in the wind at the whim of judges and Congress. This is particularly disturbing given that we are talking about a property right of constitutional importance. Where are the Constitutional conservative leaders and jurists?
If we want to maximize a property rights regime it must be certain, stable and predictable. Patents are no exception.