Posts Tagged: "Alice v. CLS Bank"

The U.S. Supreme Court has muddied the waters about patent eligibility in a way that threatens American innovation.  Capitol Hill is beginning to discuss this as a possible legislative issue for 2019.  Some would say it is as important as the intellectual property disputes in the tariff war with China… Intellectual property legislation traditionally is nonpartisan, which may make it a little easier to find a solution.  All members of Congress will support preserving the patent system’s incentives for innovation if they understand what is at stake for the country.

The Boston Patent Law Association (BPLA) has announced its support for a proposal for a legislative fix to 35 U.S.C. § 101, the statute governing basic patentability in U.S. patent law, which was jointly offered earlier this year by the Intellectual Property Owners Association (IPO) and the American Intellectual Property Law Association (AIPLA). The BPLA now becomes the latest patent law organization to support the proposed legislative amendment to Section 101 that is designed to address major uncertainties in patentability stemming from various cases decided in recent years by the U.S. Supreme Court.

U.S. District Judge Indira Talwani of the District of Massachusetts signed an order dismissing a patent infringement suit brought by Malvern, PA-based wireless medical technology company CardioNet against Lowell, MA-based patient monitoring tech developer InfoBionic. Judge Talwani dismissed the suit after CardioNet’s asserted patent, which covers systems and techniques for monitoring cardiac activity, was found to be directed to patent-ineligible subject matter under 35 U.S.C. § 101… CardioNet filed a motion for leave to file a supplemental brief in support of the eligibility of the ‘207 patent arguing that the Federal Circuit’s decisions in Aatrix Software v. Green Shades Software and Berkheimer v. HP changed Section 101 precedent impacting several aspects of the district court’s patent eligibility analysis. However, Judge Talwani denied CardioNet’s motion a few days after it was filed.

Much of the havoc wrought in the software patent system by the landmark decision Alice v. CLS Bank International, 134 S. Ct. 2347 (2014) stems from the unworkable two-part patent eligibility test based on vaguely defined and nebulous Abstract idea and significantly more constructs… In a patent eligibility landscape riddled with Alice-based rejections and invalidation it behooves patent practitioner and applicants alike to appreciate that not every innovation that achieves “a new, useful, and tangible result” is patentable… It is now more imperative than ever for practitioners to probe inventors with the right set of questions directed at identifying any distinctive technical features in the implementation, structure, configuration or arrangement of the software invention.

If the claim is directed to an abstract idea, then abstractness is an essential property of the claimed subject matter as a whole. As such, a claim directed to an abstract idea cannot be transformed to possess non-abstractness by whether or not it embodies an inventive concept, since whether the inventive concept is inventive or not depends upon when the concept was conceived, which is an accidental property rather than an essential property of the claimed subject matter… Mayo may make sense for natural laws and physical phenomena but given the very different nature of abstract ideas the test logically falls apart when one thinks they can turn something that is by its fundamental nature abstract into something that is not abstract.

Four years later, the patent landscape demonstrates that Alice has become a train wreck for innovation… Unfortunately, the Federal Circuit failed to rein in this rout of Machiavellian creativity, which it could have done by relying on well-settled procedural process and patent doctrines… This year, the Federal Circuit appears finally to have awakened from its slumber. In two recent opinions, Aatrix v. Green Shades and Berkheimer v. HP, the Federal Circuit embraced long-established procedural rules and patent doctrines… Savvy and creative patent lawyering will prevail. To be successful, patent practitioners must show the PTO, the courts, and Congress the importance of our clients’ innovations and explain why the type of technology should not dictate whether there is enforceability.

This week in Capitol Hill hearings, it will be a relatively light week all around, and particularly so for those who focus on intellectual property, technology and innovation. Indeed, there are few hearings on tap for the week that might be of interest. Nevertheless, financial services innovation, health care cost reductions will be discussed in the Senate on Tuesday.

In early August, patent owner Smartflash filed a petition for a writ of certiorari with the U.S. Supreme Court to appeal a case stemming from covered business method (CBM) review proceedings carried out at the Patent Trial and Appeal Board (PTAB). Smartflash is asking the Supreme Court to decide whether PTAB administrative patent judges (APJs) are principal officers of the United States who are subject to the terms of the Appointment Clause, whether CBM review of patents disclosed prior to passage of the America Invents Act (AIA) violates the Fifth Amendment’s Due Process Clause, and whether undisputed evidence that an invention is not unduly preemptive is relevant to answer questions of patent eligibility under 35 U.S.C. § 101. At issue in this petition are a total of 30 CBM reviews petitioned by Apple, Samsung and Google against Smartflash, which were instituted by APJ panels at the PTAB.

contrary to popular notion, U.S. Patent No. 4,344,142 to James Diehr was not the first attempt to patent the idea of performing a real-time simulation of the Arrhenius equation using periodic temperature measurements of a rubber mold in order to cure rubber.  In fact, nearly two years prior to Diehr’s filing, Thomas Smith filed for a device that performed the very same algorithm using dedicated logic, which was granted as U.S. Patent No. 3,819,915. Smith was also granted U.S. Patent No. 4,022,555 for another rubber-curing device based on discrete logic. Similarly, William Claxton filed for patent protection in 1974 for an Arrhenius-based rubber-curing device using analog components, which issued as U.S. Patent No. 4,044,600.  

Contrary to Judge Taranto’s position, not only does the McRO claim not produce a physical improvement to a display (contrast In re Allapat), but as can be seen above a display is not even recited in the McRO claim.  Judge Taranto’s position is as best an assertion that a physical display somehow works better because of the content displayed is subjectively more appealing.  However, a colorized version of The Maltese Falcon does not improve the intrinsic qualities of a generic display.  Similarly, the intrinsic qualities of a Kindle reader are not improved based on the quality of an author’s style of writing.

This assertion is a mischaracterization of Alice Corp., which never held that the intermediated settlement claims at issue in Alice Corp. were abstract because of the risk hedging claims in Bilski were abstract.  Instead, the Supreme Court stated “that there is no meaningful distinc­tion between the concept of risk hedging in Bilski and the concept of intermediated settlement at issue here” because “[b]oth are squarely within the realm of ‘abstract ideas’ as we have used that term.”  That is: the claims in Bilski and Alice Corp. were comparable only because the underlying business methods were undoubtedly long-prevalent in the business community.  To hold otherwise is to ignore the vast bulk of both the Bilski and Alice Corp. decisions.

In Interval Licensing LLC v. AOL, Inc., the Federal Circuit affirmed a judgment finding patent claims asserted by Interval Licensing LLC failed to recite patent-eligible subject matter under 35 U.S.C. § 101. In dissent, Judge Plager criticized the “abstract idea” framework under Alice. He argued first that the concept of an “abstract idea” is extremely difficult to apply in patent cases because the term is by definition “abstract,” meaning “difficult to understand,” and an “idea,” which is “something that lives in the interstices of someone’s brain, a psychophysiological area not fully understood to this day.”

It’s been over eight years since the Supreme Court issued its Bilski v Kappos decision, over six years since the Supreme Court issued its Mayo v. Prometheus decision and over four years since the Supreme Court issued its Alice Corp. v. CLS Bank decision.  In case anyone missed it, each of these three landmark cases was decided based on evidence on the record.  Thus, the Supreme Court not only contemplated the need for evidence when determining patent eligibility for abstract ideas of man-made origin, but wholly embraced the practice. Yet despite the Supreme Court’s trio of evidence-based holdings, it was February of this year before a single three-judge Federal Circuit panel definitively ruled on the evidence issue in Berkheimer v. HP, and it was the end of May before a majority of the Federal Circuit signed on to the idea that determining whether a man-made something is well-understood (or well-known), routine and conventional is an issue of fact that should be based on objective evidence. That’s the better part of a decade of the Federal Circuit wandering the desert.

There are 13 sections to Massie’s bill, many of which are geared towards the abolition of various statutes of the AIA. Perhaps the most salient portion of the proposed bill are sections regarding the abolishment of the Patent Trial and Appeal Board (PTAB) as well as the elimination of both inter partes review (IPR) and post-grant review (PGR) proceedings currently conducted by the PTAB. As the bill states, both IPR and PGR proceedings “have harmed the progress of science and the useful arts by subjecting inventors to serial challenges to patents.” The bill also recognizes that those proceedings have been invalidating patents at an unreasonably high rate and that patent rights should adjudicated in a judicial proceeding and not in the unfair adjudication proceedings which occur within the U.S. Patent and Trademark Office. Ex parte reexamination proceedings would be preserved by this bill as well.

The idea that all software is obvious is a theoretical argument that doesn’t just border on the scattological, it wades right into the sewer. Consider artificial intelligence. If AI, which requires the use of software algorithms, is supposed to augment human intelligence and provide us with answers to questions we can’t figure out without the use of AI, how is that at all obvious? What about IBM’s Watson cognitive computing platform? … When the highest court in the land incorporates such backward-minded patterns of thought which allows them to say that “At its most basic, a computer is just a calculator capable of performing mental steps faster than a human could,” the U.S. patent system must be a relative paradise to Duda and other anti-patent Luddites who believe that software inventions cannot and should not be patentable at all.