Does the USPTO have authority to address patent eligibility in Covered Business Method review?

By Robert P. Greenspoon
November 10, 2015

SCOTUS-supreme-court-w-flag-335Supreme Court review of the Obama Administration’s abuse of Congressional limits over handling of patent rights may come sooner than anyone previously thought. On November 5, 2015, patent owner Retirement Capital Access Management Company LLC filed the most important cert petition this term. This bold effort squarely presents a question circling around academic circles for years: whether the USPTO has the authority to address section 101 (subject matter eligibility) within Covered Business Method (CBM) reviews.

To the untrained eye, this issue might sound wonky, jargony, technical and narrow. It is instead profound. If granted, the petition might help restore much needed certainty to the innovation ecosystem.

The petition asserts that CBMs might properly reach issues such as anticipation (section 102), obviousness (section 103) or disclosure-sufficiency (section 112). But hands-off when it comes to subject matter eligibility (i.e., Bilski/Mayo/Alice analyses under section 101). The USPTO has no agency authority over that issue.

The rationale is elegant and simple. Congress used rare precision to set out the boundaries of the USPTO’s CBM authority. It limited the grounds of review solely to conditions for patentability specified in section 282(2) and (3) of the Patent Act. As I and others have previously observed (see my “Murky Morass” post from 3 years ago), nowhere does section 282 specify subject matter eligibility.

The petition arises from a CBM review in which subject matter eligibility was the only ground used by the USPTO. The USPTO invalidated the patent. It also rejected explicitly the Congressional-authority argument. On appeal, the Federal Circuit affirmed without opinion, effectively adopting the reasoning of the administration. Thus, this case is a perfect vehicle for Supreme Court review.

If review is granted, the ramifications will extend far beyond administrative law. Namely, the scope of section 282 affects every patent litigation. The provisions that Congress piggybacked to define USPTO authority sit within the statute that Congress originally passed in 1952 to limit the range of defenses that an accused infringer may raise. Limiting the USPTO will have the near-certain effect of drawing to a close the use of Alice defenses in patent litigation. It would restore needed certainty to the patent system, particularly for the benefit of innovative software and financial companies. Siding with the petitioner in this case would restrict section 101 inquiries to their proper use: initial examination decisions at the USPTO.

There are those who will contend that such jurisdictional review is dead on arrival. After all, Mayo and Alice came to the Supreme Court in the posture of section 101 being used as a litigation defense, and the Supreme Court did not hesitate to declare the invalidity of the relevant patents. But that is not how the Supreme Court looks at things. When it implicitly assumes without deciding that it has jurisdiction over a question, that does not bar later inquiry into whether it had jurisdiction in the first place. NASA v. Nelson, 131 S. Ct. 746, 766 (2011) (Scalia, J., concurring) (“The Court’s sole justification for its decision to ‘assume, without deciding’ is that the Court made the same mistake before. . . . But stare decisis is simply irrelevant when the pertinent precedent assumed, without deciding, the existence of a constitutional right”); FEC v. NRA Political Victory Fund, 513 U.S. 88, 97 (1994) (“The jurisdiction of this Court was challenged in none of these actions, and therefore the question is an open one before us.”); Brecht v. Abrahamson, 507 U.S. 619, 631 (1993) (reaffirming longstanding rule that if a decision does not “squarely address [an] issue,” a court remains “free to address the issue on the merits” in a subsequent case); Will v. Mich. Dept. of State Police, 491 U.S. 58, 63 (1989), citing Hagans v. Lavine, 415 U.S. 528, 535, n. 5 (1974) (“[T]his Court has never considered itself bound by [prior sub silentio holdings] when a subsequent case finally brings the jurisdictional issue before us.”); United States v. L.A. Tucker Truck Lines, Inc., 344 U.S. 33, 38 (1952) (“[T]his Court has followed the lead of Chief Justice Marshall who held that this Court is not bound by a prior exercise of jurisdiction in a case where it was not questioned and it was passed sub silentio.”); United States ex rel. Turner v. Williams, 194 U.S. 279 (1904) (“The rule of stare decisis only arises in respect of decisions directly upon the points at issue.”); United States v. More, 7 U.S. 159 (1805) (Marshall, C.J.) (“No question was made, in that case, as to the jurisdiction. It passed sub silentio, and the court does not consider itself as bound by that case.”); Special Devices, Inc. v. DEA, Inc., 269 F.3d 1340, 1346 (Fed. Cir. 2001) (Although a prior decision of this court ruling on an issue may have implied that the lower court issued a final decision with respect to the issue, the question of “finality . . . was raised neither by the parties nor sua sponte by [this] court. Because [the prior decision] did not confront and decide the same issue, it is not precedent on the question before us.”).

Amicus briefs in support of the petition would be due around December 5. Though I am not involved in the case, I have been asked if my clients might support an amicus filing. I recommend that others who represent patent owners speak with their clients about the advisability of filing or joining an amicus brief. This matter is too important not to take a stand.

If you or your clients are interested in having the latest information on possible possible amicus filings, please feel contact me.

 

The Author

Robert P. Greenspoon

Robert P. Greenspoon is a founding member of Flachsbart & Greenspoon, LLC. He is a registered patent attorney who concentrates his practice in the trial and appeal of patent cases involving computer and electronic technologies. He is also a former federal district court law clerk. The opinions presented above are his own, and not necessarily those of his firm or his firm’s clients.

Mr. Greenspoon represents both NPEs and operating companies, and both rights holders and accused infringers. He holds a winning appellate record, having argued numerous cases before the Court of Appeals for the Federal Circuit, as well as cases before the Fourth and Eighth Circuits.

CLICK HERE to visit Mr. Greenspoon's firm page.

Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com. Read more.

Discuss this

There are currently 47 Comments comments.

  1. Curious November 10, 2015 9:06 am

    I have my fingers crossed. This represents a great opportunity for SCOTUS to extricate themselves from the 35 USC 101 mess that has been created.

    101 was never created as a condition for patentability. The subject matter eligibility requirement of 35 USC 101 was intended to be extremely broad door to walk through. While the Supreme Court cautioned in Alice that “we tread carefully in construing this exclusionary principle lest it swallow all of patent law,” this treading carelessly is exactly what the USPTO and the courts have done.

    The following link goes to a great analysis of 101 rejections at the USPTO.
    http://www.bilskiblog.com/blog/2015/10/update-on-uspto-e-commerce-patent-applications.html

    By way of example, E-commerce patent applications are being rejected at a 90+% clip at the USPTO under 35 USC 101.

  2. Night Writer November 10, 2015 9:28 am

    A few things: (1) The courts don’t care about the Constitution. They want to limit patents and they are going whole hog. (2) I think the only hope for one of these Constitutional challenges is through a district court. I think the Fed. Cir. and the SCOTUS are just going to dodge the issues. And, (3) Curious, 282 doesn’t matter for Alice in the dist. courts. When the PTO or the Dist. Ct. use Alice to invalidate a claim, the holding is that it was unconstitutional to grant the claims because they do not tend to promote. So, Alice can be used anytime by a federal court.

    So, it may not matter whether or not 101 is listed or not because of the holding by the SCOTUS that it was unconstitutional to grant the claim.

  3. Curious November 10, 2015 9:58 am

    When the PTO or the Dist. Ct. use Alice to invalidate a claim, the holding is that it was unconstitutional to grant the claims because they do not tend to promote. So, Alice can be used anytime by a federal court.
    No. The USPTO doesn’t work directly with the Constitution. That being said 282 is a defense to infringement — not applicable during examination.

    As for the Courts, they are still treating 35 USC 101 as a defense to infringement. You are reading far too much into these decisions. Mind you, there is a difference between the holding and the rationale upon which the holding is based (the USPTO confuses the two all the time).

    No one else (that I know of) is making the arguments you are making, and on that basis alone, I have to question your conclusion.

  4. Night Writer November 10, 2015 10:08 am

    >No one else (that I know of) is making the arguments you are making, and on that basis alone

    Apparently no one else has read Alice. The claims are not be invalidated under 101, but as being unconstitutionally granted. (So, one can then say, oh and by the way, if they were unconstitionally granted then they also don’t fit into 101. But, Alice is not statutory interpretation. That is what makes it so outrageous. The SCOTUS has held this vast swath of patent claims as unconstitutionally granted. Probably what $100 billion dollar taking?)

  5. Night Writer November 10, 2015 10:10 am

    And no one else may be making these arguments because they don’t get it. It hasn’t been pushed into the courts yet. The SCOTUS will get it, though. (Note too that no legislation can fix Alice. It would be as if the Congress passed a law that said you don’t have to read the rights to a defendant. Won’t work.)

  6. Night Writer November 10, 2015 10:15 am

    Sorry for the multiple posts: but that brings up that probably the case law for Alice (what people are calling 101) is whether an administrative agency can at any time bring up a Constitutional issue. I don’t know the case law, but my bet is that an admin agency can bring up a Constitutional issue anytime in any proceeding. That means Alice is probably valid to bring up in IPRs. I’d bet there is an excellent argument that for that position. I’d bet that Alice can be brought up in every post grant proceeding at the PTO because it is a constitutional question of whether or not the claims were unconstitutionally granted. Someone that knows more administrative agency law could probably give us the answer.

    (And Curious as near as I can figure out, what is going on here is people are saying Alice is an interpretation of 101, but read it. It is not statutory interpretation. That explains why I am such an outlier.)

  7. David November 10, 2015 4:40 pm

    does anyone have a link to the petition?

  8. Gene Quinn November 10, 2015 4:51 pm

    David-

    My mistake. I meant to link the petition in the article. Here is the link:

    http://www.ipwatchdog.com/wp-content/uploads/2015/11/Retirement-Capital-petition.pdf

    I will correct the post to include the hyperlink as well.

    -Gene

  9. Curious November 11, 2015 1:32 am

    And no one else may be making these arguments because they don’t get it. It hasn’t been pushed into the courts yet.
    You just said that “[w]hen the PTO or the Dist. Ct. use Alice to invalidate a claim, the holding is that it was unconstitutional to grant the claims because they do not tend to promote.” Is it being pushed into the court yet or not??

    You’ve made this argument before yet I’ve seen it made nowhere else. As best as I can tell (having taking Constitutional law far too long ago and forgetting most of it), the Supreme Court finds laws to be unconstitutional — not patents.

    At best, SCOTUS could determine that Congress should have made 35 USC 101 a condition for patentability and failure to do so was “unconstitutional.” However, before they do that, we have to ask why type of scrutiny is going to be applied. I don’t think strict scrutiny can be applied, and if not, I think it would be fairly easy for the patent laws to pass intermediate or rational scrutiny.

    The great part of the argument presented to SCOTUS is that the statute is extremely clear as to what is a condition for patentability.

  10. Night Writer November 11, 2015 7:16 am

    We have described the concern that drives this exclusionary principle as one of pre-emption. See, e.g., Bilski, supra, at 611-612, 130 S.Ct. 3218 (upholding the patent “would pre-empt use of this approach in all fields, and would effectively grant a monopoly over an abstract idea”). Laws of nature, natural phenomena, and abstract ideas are “`”the basic tools of scientific and technological work.”‘” Myriad, supra, at ___, 133 S.Ct., at 2116. “[M]onopolization of those tools through the grant of a patent might tend to impede innovation more than it would tend to promote it,” thereby thwarting the primary object of the patent laws. Mayo, supra, at ___, 132 S.Ct., at 1923; see U.S. Const., Art. I, § 8, cl. 8 (Congress “shall have Power … To promote the Progress of Science and useful Arts”). We have “repeatedly emphasized this … concern that patent law not inhibit further discovery by improperly tying up the future use of these building blocks of human ingenuity. Mayo, supra, at ___, 132 S.Ct., at 1301 (citing Morse, supra, at 113).

    That is what Alice says. I understand Curious that I am the only making this argument right now. But, like it or not it is what Alice actually holds. It is not statutory interpretation, but rather it says that any claim that fits the procedure laid out in Alice was unconstitutionally granted.

    The holding in Alice is that the claims are invalid because it was unconstitutionally to grant the claims. The only role 101 takes in this analysis is that according to the SCOTUS it includes subject matter that tends not to promote.

  11. Anon November 11, 2015 7:47 am

    Night Writer,

    Please incorporate the comments that I have made as to your “constitutionality” position.

    You keep on presenting an incomplete picture (and I expect better from you as opposed to others who knowingly repeat half-truths)

  12. Night Writer November 11, 2015 8:35 am

    Anon, OK, well what are they? Glad to hear criticism.

  13. Anon November 11, 2015 9:50 am

    Night Writer,

    several – and written in detail on past blog threads (sorry, I do not have them cataloged).

    One that immediately comes to mind is the limitations of authority that the judicial branch (including the Supreme Court) have in matters of statutory patent law by purposeful construction of this country (evincing among other critical themes, the separation of powers, the express limits of powers that the judicial branch may have, and the notion that the Supreme Court is not in itself above the law):

    present case or controversy and no advisory opinions. This ties to the future and purely conjectural “might” and “may” language of some possible future impairment of “progress;” a thin and rather tenuous “logic” the Court uses to insert its philosophical re-writes into the actual words of Congress.

    – what the Article I Section 8 clause means – the allocation of authority (with the introduction of the clause as laudatory and not a definite, per patent, edict of law. That “per patent edict” is precisely what is left up to Congress, and Congress alone. The Court does not have ANY authority to re-write the words of Congress to something that it wants. IF (and that’s a mighty big IF, given the first point above) the Court does find a constitutional problem, their option is to strike down the law – not rewrite the law to suit their views.

  14. Night Writer November 11, 2015 10:24 am

    Oh right Anon. But, those are limits on Alice. I generally agree with you. You’ll note though that my post is about expanding Alice in some sense to illustrate the points you make above. Need to look into admin. law, but my guess is that Alice could be added to any argument in any proceeding before the PTO where the validity of the claim is at stake.

    Alice really does drive home many aspects of the out of control SCOTUS.

  15. Night Writer November 11, 2015 10:30 am

    My guess is that what one could do is put Alice arguments in an IPR (get it instituted on other grounds) and then appeal to the Fed. Cir. because the PTO refused to consider Alice. And then go to the SCOTUS.

    And this is because Alice is not statutory interpretation but a Constitutional argument. The key, though, is whether there is case law that says that a Constitutional argument can be brought before an admin agency in IPR type of proceedings. My guess is yes.

    And again this is because claims under Alice are not found to be ineligible under 101, but are found to have been granted unconstitutionally because they do not tend to promote.

  16. Curious November 11, 2015 2:27 pm

    And again this is because claims under Alice are not found to be ineligible under 101, but are found to have been granted unconstitutionally because they do not tend to promote.
    Again, you are confusing the holding with the rationale underlying the holding. Let’s put aside, for a moment, that the rationale (e.g., “might tend to impede innovation more than it would tend to promote it”) is (i) speculative (as anon has already discussed) and thus an advisory opinion and (ii) based upon findings of fact entirely fabricated by the court (those findings being something that Congress is designed to do — not SCOTUS), someone who is infringing has to contend with 282(a) (i.e., patent is presumed valid) still has to plead a defense under 282(b). This is black letter law.

    The Courts cannot monkey around with the statutory case law when the law is clear on its face. This is the whole point of this petition. This “constitutionality” argument has (IMHO) is far more persuasive than the “constitutionality” argument that you are advocating.

  17. Edward Heller November 12, 2015 7:31 am

    Robert, on the text of statute, you should not lose — it is clear. But then this summer came King v. Burwell, 2015 WL 349885 (2015)(Obamacare II) where the Supreme Court ignored the words of the statute to effect the overall purpose of the act.

    As to whether excluding 101 from 282(b)(2) excludes it as a defense — well 282(b) reads “The following shall be defenses in any action involving the validity or infringement of a patent and shall be pleaded….” This does not say that these are the only defenses. It only requires that these defenses be pleaded. Implicit is that there might be other defenses. Therein lies your problem with regular infringement suits.

    However, regarding CBM’s, the statute is unambiguous in my view. But, King v. Burwell.

  18. Anon November 12, 2015 8:05 am

    Curious states: “The Courts cannot monkey around with the statutory case law when the law is clear on its face.

    Which reminds me of another plank for Night Writer to consider: the problem that the Court has created by violating the separation of powers and de facto writing statutory patent law with its Alice decision: the law as (now) written by the Supreme Court is void for vagueness.

    The Court has created a weapon that is just not knowable a priori.

    Since the Court refused to create a bright line, since the Court has refused to define “abstract,” since the Court has opened up a truly unlimited ability to “Gist” away claim elements and render decisions on some unknowable “heart of the invention,” the law that they have written (and if you insist on pretending that they have only and merely “interpreted,” then the end result of that “interpretation” STILL suffers the same fate), is void for vagueness.

    The Void for Vagueness doctrine is most used for criminal law matters. But critically, that doctrine is not limited to criminal law, but is indeed applicable to certain civil matters, including matters of property rights.

    EVEN IF you want to turn a blind eye to the violations of the separation of powers and allow the Supreme Court to so radically change the words of Congress with their version of 101, you cannot embrace the end result of another violation of the constitution in the resulting Void for Vagueness.

    What is truly galling in all of this is the underlying permeation that the Supreme Court itself is somehow “above the law” and is itself not bound by the Constitution and these several doctrines.

    I really have no clue as to why so many (vocal) people in the blogosphere who should know better just do not see that this particular set of nine emperors do not have a stitch of clothing on when it comes to patent law.

    Maybe it is because monkeys just do not wear clothes….

  19. Anon November 12, 2015 8:12 am

    …and another monkey aphorsim comes to mind for those who do not recognize the severity of the larger governmental problem that is occurring in patent law:

    Three monkeys sitting in a row, one each clasping their paws over certain portions of their anatomy.

    Eyes
    Ears
    Mouth

    Refusal to see the problems afoot
    Refusal to hear others talk about the problems afoot
    Refusal to engage in any form of discussion about the problems afoot

    See no evil, hear no evil, speak no evil

    We – the royal we – cannot fix a problem when that problem is refused to be even engaged.

  20. Night Writer November 12, 2015 8:27 am

    Anon and Curious:Both challenges could be right. It can be that IPRs are unconstitutional, but if they are Constitutional, then you have the right to contend the claims are invalid under Alice. My point is a separate issue.

    >> you are confusing the holding with the rationale underlying the holding
    I am not. The rationale is what makes the holding. Alice is like in evidence when the evidence was unconstitutionally obtained. The point is that the statute doesn’t make any difference. The basis for Alice is the Constitution. The holding in Alice is very clearly that the claims are invalid because it was unconstitutional to grant the claims because they tend not to promote. There is no way to write what they did in Alice and have a different holding. If you think there is a different holding then what is it?

    And, again, Curious, it may be that it is unconstitutional for the PTO to invalidate granted claims, but that doesn’t weaken my argument. My argument applies only if the PTO can invalidate granted claims.

    I have said previously that I think it is unconstitutional for the PTO to invalidate granted claims under the current scheme, but that I think that the Fed. Cir. and the SCOTUS will worm their way out of that because the don’t want all that work coming back into the federal courts. (I haven’t been wrong yet on predicating one of these cases.)

    So, I stick with what I said. There is a way to bring in Alice into all proceeding before the PTO where a claim can be invalidate.

    Frankly, Curious and maybe Anon, please tell me what you think the holding of Alice if not what I wrote. How does Alice have anything to do with statutory interpretation? Consider that no matter how 101 is written by Congress that Alice is still completely valid–no change. It stands that if your claim fits the procedure laid out in Alice then the claim is invalid because it was unconstitutionally granted because it tends not to promote.

    What I wrote it just reality. If this is taken up to the SCOTUS, I am not sure what they will do. It depends on the agency law and how close an analogy to Alice is and the current political climate at the SCOTUS.

  21. Night Writer November 12, 2015 8:29 am

    Anon, I don’t disagree that IPRs are unconstitutional, but as I said the Fed. Cir. and SCOTUS will worm their way out of it. (If I had a day to look at the case law, I could probably outline about what their opinions will look like.)

    Big picture: they want all that patent work out of their courts.

  22. Anon November 12, 2015 9:20 am

    I am not. The rationale is what makes the holding.

    Your confusion remains.

    [The basis for] Alice is the constitution

    No. It most definitely is not.

    The constitution is a delegation of authority. 101 is a substantive SUB part of that delegation. The Court is just not at liberty to claim a 101 violation (substantive law as written by Congress) is the same as a constitutional violation.

    As I pointed out: there is NO “per patent” explicitness in the delegation of authority.

    The Supreme Court is just not at liberty to rewrite the Constitution to insert that.

  23. Curious November 12, 2015 9:29 am

    The basis for Alice is the Constitution.
    … and unsubstantiated findings of fact (e.g., “might tend to impede innovation”). As an aside, the language “might tend” is very noncommittal as to the point they are trying to make. The holding makes sense if the “might tend” was omitted. I suspect that the “might tend” was not in the original version of the opinion but some (brighter) justice determined that they had to tone down this “finding.” Regardless, and back on point, you still need to be able to plead invalidity under 35 USC 101 as a defense. Remember, under the AIA, Congress removed “best mode” as a basis for invalidating a claim. While still a requirement, once an application gets issued by the patent office, best mode cannot be used as a basis for invalidating a patent.

    Big picture: they want all that patent work out of their courts.
    Easy enough — grant the petition and decide that 101 is not a defense — consistent with the statute. Otherwise, SCOTUS will have to keep refining (or starting to define) what is meant by (i) an “abstract idea”; (ii) an invention “directed to” an abstract idea; and (iii) an invention that claims “substantially more” than an abstract idea.

    Frankly, Curious and maybe Anon, please tell me what you think the holding of Alice if not what I wrote.
    This is from the Syllabus: “Held: Because the claims are drawn to a patent-ineligible abstract idea, they are not patent eligible under §101.”

    How does Alice have anything to do with statutory interpretation?
    The holding is that the claims are not directed to statutory subject matter (see above). The statutory “interpretation” (or rewriting) is that a claim directed to a process, manufacture, composition of matter, machine can still be directed to patent ineligible matter (e.g., if the claim is directed to an abstract idea).

  24. Anon November 12, 2015 9:29 am

    Night Writer @ 21,

    What they “want,” they cannot have.

    No single branch is above the Constitution. Every branch – including especially the judicial branch – is constrained by the doctrines.

    Yes, making sure the judicial branch remains constrained may indeed be the most difficult of any of the three branches, but this was NOT unforeseen by those who constructed our government. Feel free to fold into your “construction” the Federalist papers on the dangers of an unchecked judicial branch.

  25. Anon November 12, 2015 9:39 am

    Curious @ 23,

    The elephant in the room with “Alice” (or perhaps, better phrased as the depth of the rabbit hole), is that an item that both parties agreed to and stipulated (which removed the item as a “present case or controversy”), was that certain claims MET the statutory requirement of the portion of 101 concerning categories of invention.

    Since the only other portion of 101 – utility – was ALSO not at issue, certain claims were stipulated to have passed 101.

    And yet, the Court intervened and “held” that items that admittedly met both a statutory category AND met a proper utility, somehow can be “Gisted” to (“magically”?) be “really” directed to something the Court feels should not be allowed – because of the mere potential for some future harm.

    How is it that not all constitutional scholars, all academia, all patent professionals are NOT up in arms about this?

    Oh wait, the end achieved happens to match certain groups’ end desired.

    Well, in that case, let’s just close our eyes to the means used to get to that end… (with extreme sadness)

  26. Night Writer November 12, 2015 10:25 am

    >>“Held: Because the claims are drawn to a patent-ineligible abstract idea, they are not patent eligible under §101.”

    This “holding” is disingenuous at best for at least the reason that there was no need to invoke 101– it is superfluous.

    >>The holding is that the claims are not directed to statutory subject matter (see above).

    Based on the Constitution. Not 101. The reference to 101 is not needed. Doesn’t matter. The claims were found to be unconstitutional. Ends there.

  27. Night Writer November 12, 2015 10:29 am

    Anon, I agree with you. But, you know this is the kind of game the SCOTUS plays. They try to create new concepts and then claim they are really in the Constitution. And, then try to let them float without any grounding in the Constitution. (Note I am a liberal politically, but I think that we should be amending the Constitution and not playing these games.)

    Now, the SCOUTS acts as if the Constitution says “to promote as long as it is not abstract”.

  28. Night Writer November 12, 2015 10:30 am

    Curious, like it or not, every proceeding where a claim can be invalided should be able to make contentions based on Alice. Every IPR should be able to include Alice–not 101, but Alice, which has nothing to do with 101.

  29. Night Writer November 12, 2015 10:43 am

    Curious, I find your arguments really, really strange. The holding in Alice is crystal clear. The SCOTUS makes a finding of fact that abstract “tends not to promote.” They define a procedure for determining what is “abstract,” and then they find the grant of the claims to have been unconstitutional. The fact that they tack on a sentence about 101 is meaningless. It is entirely redundant.

    And again, you can see that because it does not matter what 101 says (and wouldn’t even matter if there was no patent statute). Alice stands by itself.

    For that reason, any proceeding that can invalidate any claim of a patent can bring up Alice. I know this is radical, but I am afraid it is true. (I don’t like it either, but it is a consequence of what the SCOUTS did, which is outrageous as usual.)

  30. Curious November 12, 2015 7:36 pm

    The holding in Alice is crystal clear.
    Yes … the claims are not directed to statutory subject matter under 35 USC 101. Mind you, they have to reinterpret 101 to get to that holding (i.e., “[w]e have long held that [35 USC 101] contains an important implicit exception”) but they do NOT hold the claims to be unconstitutional.

    They define a procedure for determining what is “abstract,”
    No — they don’t. They refrain from defining what is abstract. Instead, they define a procedure after finding that a claim is directed to an abstract idea.

    The fact that they tack on a sentence about 101 is meaningless. It is entirely redundant.
    I don’t think you intended to use the word “redundant.” As for 101, the Mayo decision begins with a word-for-word recitation of 35 USC 101 in its entirety. Bilski and Alice also include a word-for-word recitations of 35 USC 101 in its entirety. Alice starts with Thomas stating “The question presented is whether these claims are patent eligible under 35 U. S. C. §101, or are instead drawn to a patent-ineligible abstract idea.” Moreover, all of the cases include extensive discussion of the case law regarding 35 USC 101. On the other hand, Mayo, Bilski, and Alice make scant mention of the US Constitution. I suggest you re-read Bilski, Mayo, and Alice and rethink your “tack on a sentence about 101” statement.

    any proceeding that can invalidate any claim of a patent can bring up Alice.
    And if this petition results in what the petitioner requests, those proceedings will not include AIA IPRs or infringement suits.

  31. Curious November 12, 2015 7:53 pm

    Oh wait, the end achieved happens to match certain groups’ end desired
    I realized this a long time ago when reviewing the (seemingly inconsistent) claim construction decisions at the Federal Circuit. The Court arrives at the conclusion they want, and then they modify the law to fit their conclusion.

    Certainly, not all judges are like this. However, judges are human, and they have their own biases. It remains to us commentators to point out the inconsistencies in the law and hope that some subsequent judge sees the error of another judge’s ways. Unfortunately, we are fighting an uphill battle with stare decisis, which (oftentimes) insulates a judge from doing a very hard thing — telling a peer that he or she was wrong.

    Douglas created this mess in Benson when he confused an issue regarding enablement and claim breadth (i.e., “the ‘process’ claim is so abstract and sweeping as to cover both known and unknown uses of the BCD to pure binary conversion”) with the claim being directed to an abstract idea.

    Douglas also failed to appreciate, when discussing how a process patent must change something to a “different state or thing,” that a computer-implemented process changes a computer into a different state. Additionally, certain of the claims at issue in Benson where tied to a particular machine.

    However, I have to give Douglas credit when, at the end of the decision, he clearly indicated that SCOTUS is “not competent to speak” on the “policy matter” regarding with computer program were patentable.

  32. Night Writer November 12, 2015 8:40 pm

    >> but they do NOT hold the claims to be unconstitutional.

    Curious, I think we are going to disagree on Alice. But, of course, they held that the claims were unconstitutionally granted.

  33. Night Writer November 12, 2015 9:23 pm

    >The question presented is whether these claims are patent eligible under 35 U. S. C. §101, or are instead drawn to a patent-ineligible abstract idea.”

    Curious, why is an abstract idea patent-ineligible? Because they say that an abstract idea does not promote and therefore the claims were unconstitutionally granted. I grant you that the SCOTUS dances around this issue a bit and tries to make it sound like federal common law that according to the SCOTUS was codified by the 1952 Patent Act, but the fact that they picked words out of the Constitution and said that an abstract idea does not fit the Constitution tells you what they did.

    Not sure why you don’t get this. Under what authority do you think they invalidated the claims if not finding the granting of the claims to have been unconstitutional? Federal common law? Statutory interpretation?

    Also, of course Alice defines an abstract idea. Have you been reading all the dist. ct. cases? My law firm sends us the dist. ct. in email for each Alice decision. The judges use Alice as a procedure. OK. The judges added first can you match the claims to an abstract idea, but they have added this to Alice.

    Anyway, I get the feeling we are never going to have a meeting of the minds on this one. But, Curious, ask yourself what authority did the SCOTUS use to invalidate the claims? (The mention of 101 was redundant.)

  34. Curious November 12, 2015 10:01 pm

    But, of course, they held that the claims were unconstitutionally granted.
    Quote please.

    Under what authority do you think they invalidated the claims if not finding the granting of the claims to have been unconstitutional?
    Statutory interpretation — from post #30 (i.e., “[w]e have long held that [35 USC 101] contains an important implicit exception”).

    of course Alice defines an abstract idea
    ?? From Alice: “we need not labor to delimit the precise contours of the ‘abstract ideas’ category in this case. It is enough to recognize that there is no meaningful distinction between the concept of risk hedging in Bilski and the concept of intermediated settlement at issue here.” There is no definition.

    Actually, in re-reading Bilski, the Court states “[t]he concept of hedging, described in claim 1 and reduced to a mathematical formula in claim 4, is an unpatentable abstract idea, just like the algorithms at issue in Benson and Flo.” If anything, SCOTUS (in Bilski) merely states that a mathematical formula is an abstract idea, and SCOTUS (in Alice) states that there is no meaningful distinction between Alice and Bilski. I would argue that Bilski (and by extension Alice) merely holds that you cannot patent a mathematical formula — any other reading is just not supported.

    Have you been reading all the dist. ct. cases?
    Enough to know that the judges merely cut and paste and use the same analysis:
    (I) cite 101 case law
    (II) declare the invention directed to abstract idea
    (III) declare remaining claim language not substantially more than abstract idea
    (IV) take the rest of the day off and head to the club for golf and drinks.
    with sections (II) and (III) being rarely more than a page or two of analysis.

    I could probably draft many of these decisions in less than a couple of hours. With time, I’m sure I could knock it out in under an hour.

    The mention of 101 was redundant
    No … strip out the discussion of 101 and one is left with almost no analysis by the court.

  35. Night Writer November 12, 2015 10:25 pm

    Curious, “[w]e have long held that [35 USC 101] contains an important implicit exception”). That implicit exception is from “tends not to promote.” So that implicit exception is that claims that are abstract are unconstitutionally granted. Why else did they quote the Constitution and say that abstract ideas are in contradiction to the Constitution? They made a finding of fact! Sheesh! There is no other possible holding.

    The mention of 101 was redundant–no question!

  36. Anon November 13, 2015 7:57 am

    Night Writer,

    You say that you agree with me, yet you continue to repeat your “constitutional” conclusion.

    I cannot resolve the conflict. If in fact you agree with me, your conclusion cannot be reached – no matter what the Supreme Court has done.

    And that, my friend, is part and parcel of the elephant in the room: what the Supreme Court has done cannot fit into the basic (as in foundational) model of what it means to have statutory law, written by Congress – separate from – the constitutional grant of authority to write that law.

    You continue to ignore that separation between grant of authority and substantive statutory law. agreeing with me, and continuing to do as you are doing are not compatible.

  37. Night Writer November 13, 2015 8:39 am

    Anon, I am not doing that. I am being a lawyer. I am saying I agree with what you are saying, but since nothing is going to be done about that, what I am saying is applicable. It is a bit like, saying, I didn’t hit that man and if I did hit that man it was in self defense. Alice is unconstitutional, but if it is not going to be overturned, then it is applicable in every proceeding where a claim of a patent can be invalidated.

    You know, Anon, what I have found that when courts do strange things there are often unintended consequences that don’t fit well into the rest of our jurisprudence. I think the fact that the holding in Alice is really that all claims that fit the procedure outlined in Alice were unconstitutionally granted is one of those cases. It is based on a finding of fact by the SCOTUS.

    You see?

  38. Curious November 13, 2015 8:51 am

    That implicit exception is from “tends not to promote.”
    Except that the tending not to promote language didn’t appear until Mayo while the exceptions to statutory subject were long on the scene prior to Mayo.

    Why else did they quote the Constitution and say that abstract ideas are in contradiction to the Constitution?
    Again, confusing reasoning (i.e., not tend to promote) with holding (i.e., patents are unconstitutional). Also, they didn’t say abstract ideas are in contradiction to the Constitution. That is far too strong of a statement. They said that monopolization of the basic tools of scientific and technological work “might tend” to impede innovation more than it would tend to promote it.” As anon has already stated, this is an advisory opinion on a possible future harm. Moreover, this “finding” sweeps up instances in which the monopolization of the alleged tool does more to promote innovation than it does to impede innovation.

    Notwithstanding that this statement is a sweeping generality that should only be applied on a case-by-case basis, there is little evidence that the patents thrown under the bus, using this rationale, have, in fact, impeded innovation more than they promote it.

  39. Night Writer November 13, 2015 9:32 am

    >>Also, they didn’t say abstract ideas are in contradiction to the Constitution. That is far too strong of a statement.

    That is exactly what they held and that is exactly the reasoning they used to invalidate the Alice claims.

  40. Night Writer November 13, 2015 9:37 am

    And Curious, I think we are at an impasse, so this is my last post on this thread. You are allowing a little game of the SCOTUS to confuse you. You shouldn’t let them do that. Go through the opinion and ask what power are they using to invalidate the claims. The only answer is the Constitution. (Again, one can argue federal common law, but here again, they are going through in Alice the justification for the abstract idea exception and explaining why it is unconstitutional to grant claims to abstract ideas.)

  41. Night Writer November 13, 2015 9:42 am

    I’ll break my own rule and add one more comment: I think you are doing a great disservice to patent law by not understanding Alice. You are serving the games of the SCOTUS to expert greater influence on patent law then they should be.

    Just consider that all of Alice is built on a finding of fact that the SCOTUS did all by themselves. The reason they didn’t want to say expressly “unconstitional” is because they know how weak their reasoning in Alice is.

    Just bizarre that you buy into their “exception” argument. You have to ask yourself where do these words come from? What is their basis in the Constitution.

  42. Anon November 13, 2015 10:35 am

    Night Writer,

    I find your last comment bizarre (41).

    It is you (and your “I am not doing that” – but you are; and “I am being a lawyer” – no, you are not) that is buying into what the Court has done.

    Point blank: your argument about the constitutional aspect of Alice is wrong. For the reasons given. If you want to have a different argument – that the Court is misapplying its authority and conflating statutory law with the delegation of authority to a particular branch; and doing so incorrectly and in a manner that itself violates the separation of powers doctrine concerning the details of statutory law, then you need a different argument. What you are stating is not that argument. What you are stating (as a lawyer) is not a correct statement. If you, as a lawyer, are merely “framing” the position of the Court, then – as a lawyer – you need to NOT stop at your initial post, but you MUST be able to take the counter points to that initial post and either a) defeat them (the opposite of your agreeing with them) or b) integrate them into a modified position.

    Since you have done neither, and have merely repeated your initial position, the impasse that has been created has been entirely your doing.

    I will take the combination of your lack of progress and your agreeing with my points put to you that your initial position is in fact not valid.

  43. Curious November 13, 2015 10:59 am

    I think you are doing a great disservice to patent law by not understanding Alice.
    What is there to understand beyond the alleged “abstract idea” in Alice is very similar to the abstract idea in Bilski and adding a computer to this abstract idea doesn’t cure the problem? That, in a nutshell, is the holding of Alice. They didn’t purport to expand upon the scope of what constitutes an abstract idea. The only thing they added was that reciting conventional elements does not cure a claim “directed to” (whatever “directed to” really means) an abstract idea.

    The reason they didn’t want to say expressly “unconstitional” is because they know how weak their reasoning in Alice is
    I would argue that it is difficult to state that the holding is the patent is unconstitutional when they don’t expressly use the phrase “unconstitutional.”

    Just bizarre that you buy into their “exception” argument.
    Bizarre that I buy into the plain language of the decision? Personally, if I have to make an argument before a lower court, I would rather cite to the exact language of a Supreme Court decision than rely upon some inferred yet unstated holding. If you want to put words in the Supreme Court’s mouth, that is your prerogative, however, I’m more comfortable with word-for-word quotes.

    To each his own ….

  44. Night Writer November 13, 2015 11:44 am

    We have described the concern that drives this exclusionary principle as one of pre-emption. See, e.g., Bilski, supra, at 611-612, 130 S.Ct. 3218 (upholding the patent “would pre-empt use of this approach in all fields, and would effectively grant a monopoly over an abstract idea”). Laws of nature, natural phenomena, and abstract ideas are “`”the basic tools of scientific and technological work.”‘” Myriad, supra, at ___, 133 S.Ct., at 2116. “[M]onopolization of those tools through the grant of a patent might tend to impede innovation more than it would tend to promote it,” thereby thwarting the primary object of the patent laws. Mayo, supra, at ___, 132 S.Ct., at 1923; see U.S. Const., Art. I, § 8, cl. 8 (Congress “shall have Power … To promote the Progress of Science and useful Arts”). We have “repeatedly emphasized this … concern that patent law not inhibit further discovery by improperly tying up the future use of these building blocks of human ingenuity. Mayo, supra, at ___, 132 S.Ct., at 1301 (citing Morse, supra, at 113).

    “[T]hereby thwarting the primary object of the patent laws.” I really don’t know what else to say to the two of you. I’ve never seen a clearer case of the SCOTUS holding something to be unconstitutional other than the fact that they refused to use that word. I think by allowing the SCOTUS to dance around the word unconstitutional by inserting the word “exception” performs a disservice to patent law. It is vital that we understand what authority the SCOTUS used to invalidate the claims of Alice (and Anon first we need to agree on what their reasoning was–I don’t discount what you said. I am trying to get an agreement with what the SCOTUS reasoning was.)

    (And note the indirection that goes on at the Dist. Ct. They are holding the claims invalid under Alice, but, in fact, the Dist. Ct. should have to make a finding of fact that the specific claims do not tend to promote and therefore are unconstitutional. We should demand that every Dist. Ct. opinion include those words.)

    If any Constitutional scholars are reading this, I’d like to hear your opinion. (Anon I get your arguments, but they have nothing to do with characterizing the SCOTUS reasoning.)

  45. Night Writer November 13, 2015 11:53 am

    Sorry one more post: Curious it is really disturbing to me that there are people like you that accept this type of game from the SCOTUS. You should listen to the Bork confirmation hearing where Bork talks about the game of creating a word and claiming that it is inherent within another portion of the Constitution. It is a game the SCOTUS plays to try and extend their powers.

    Here, you refer to “exception” or “abstract idea”, but where are they moored in the Constitution? That is the question you must answer because the SCOTUS came up with it on its own. If it isn’t from the Constitution then where did it come from? They can’t just generate whatever they want. And these terms are not in the statute. So, the game of them creating a term and then justifying it with the Constitution and then releasing the term to float on its own, is not a valid game. The term needs to be moored to the Constitution.

    Alice is a great case where the SCOTUS packaged up a term and sent it off to the dist. cts. to use so each dist. ct. didn’t have to hold that the claims “tend not to promote” and were thus granted unconstitutionally. But, that is the holding under Alice.

  46. Night Writer November 13, 2015 12:01 pm

    And Curious, what about the decimate exception. This exception is being created because too many patents tend not to promote innovation, so every tenth patent asserted in a dist. ct. we will find all the claims invalid.

    The decimate exception. A new word. A new world.

  47. Curious November 15, 2015 9:05 pm

    it is really disturbing to me that there are people like you that accept this type of game from the SCOTUS
    What makes you think I “accept this type of game”? I am not as prolific a poster as you or anon on this blog, but I believe my positions are pretty well known to long-term readers and for you to assert that I “accept this type of game” is a gross mischaracterization of my positions.

    Here, you refer to “exception” or “abstract idea”, but where are they moored in the Constitution?
    Ask SCOTUS — it is THEIR opinion. I’m just telling you what they wrote.

    They can’t [properly] just generate whatever they want.
    There, fixed it for you.

    If it isn’t from the Constitution then where did it come from?
    They said it is inherent from the statute. They could have said they found in in Celtic runes carved into the third white-barked tree on the east side of the misty river in the forest of the elves — it doesn’t matter now. Once they found it, stare decisis means that it will stay found absent action by Congress.