In a one-page memorandum to the Patent Examining Corpsdated May 13, 2013, Deputy Commissioner for Patent Examination Policy Drew Hirshfeld had a simple message to respond to the Federal Circuit’s en banc non-decision in CLS Bank v. Alice Corp. The message was this: “there is no change in examination procedure for evaluating subject matter eligibility.” (emphasis in the original)
This is hardly a surprise given that there were 7 different opinions with only one opinion garnering more than 5 out of 10 Judges. The sole opinion that achieved a majority was a mere 58 words in length and did nothing more than explain that given the fracture of the Court all that could reasonably be said was that the decision of the district court had been affirmed by an equally divided Court, which unfortunately rendered the claims all patent ineligible.
In his opinion Chief Judge Rader explained in footnote 1: “though much is published today discussing the proper approach to the patent eligibility inquiry, nothing said today beyond our judgment has the weight of precedent.”
Judge Lourie, who was joined by Judges Dyk, Prost, Reyna and Wallach, in CLS Bank v. Alice Corp. wrote: “At its most basic, a computer is just a calculator capable of performing mental steps faster than a human could. Unless the claims require a computer to perform operations that are not merely accelerated calculations, a computer does not itself confer patent eligibility.”
One way that Judges probe generalized statements is to look for the boundaries to test the logic. If the statement cannot be stretched to apply to even similar scenarios then the logic of the statement is questioned and believed to be faulty and self-serving. So let’s see if the above statement can withstand even modest scrutiny.
The statement above, by any fair reading, says that if the core of the invention is something that a human could do but slower then the subject matter is patent ineligible. So what about robots? Robots are more efficient, stronger and faster than humans, but a human can do what a robot can do. So are robots patentable?
Chief Judge Rader’s band De Novo should play a dirge tonight.
On May 10, the Federal Circuit issued its en banc opinion in CLS Bank. Within 48 hours, I had twice read the 135 page decision. It may be a bullet to the head of the software industry. Don’t take my word for it: four different judges say so:
And let’s be clear: if all of these claims, including the system claims, are not patent-eligible, this case is the death of hundreds of thousands of patents, including all business method, financial system, and software patents as well as many computer implemented and telecommunications patents. If all of the claims of these four patents are ineligible, so too are the 320,799 patents which were granted from 1998-2011 in the technology area “Electrical Computers, Digital Processing Systems, Information Security, Error/Fault Handling.” Every patent in this technology category covers inventions directed to computer software or to hardware that implements software. In 2011 alone, 42,235 patents were granted in this area. This would render ineligible nearly 20% of all the patents that actually issued in 2011. If the reasoning of Judge Lourie’s opinion were adopted, it would decimate the electronics and software industries. There are, of course, software, financial system, business method and telecom patents in other technology classes which would also be at risk. So this is quite frankly a low estimate. There has never been a case which could do more damage to the patent system than this one.
That parade of horribles is not entirely fair to Judge Lourie’s concurrence. Judge Lourie based his opinion on the fact that the disputed patent is directed not just to electronics, but to an insignificant use of modern electronics to implement an arguably basic financial transaction. I doubt that Judge Lourie would expand the holding in CLS Bank far beyond that specific fact pattern. Nevertheless, as quoted above, the dissenting judges do not share even this much optimism.
While the Supreme Court has done away with the “useful, concrete and tangible result” test from State Street Bank v. Signature Financial, in Bilski v. Kappos, 8 out of 9 Justices (i.e., everyone except Justice Scalia) signed onto an opinion that recognized that the patent claims in State Street displayed patent eligible subject matter. Indeed, the dissenters in Bilski specifically acknowledged that the claims at issue in State Street did not deal with processes, but dealt with machines. See Footnote 40 of the Steven’s dissent.
The import of this is that machines are specifically patent eligible subject matter, so if the claims of State Street are to machines then claims that are similarly configured would also be directed to machines and therefore patent eligible. So if the systems claims at issue in CLS Bank v. Alice Corp. are configured similarly to those that now stand invalid that would mean that Judges Lourie, Dyk, Prost, Reyna and Wallach have ignored the Supreme Court. Any fair comparison of the claims, as shown below, demonstrates this rather conclusively.
Similarly, the United States Supreme Court famously ruled in Diamond v. Diehr, that the United States Patent and Trademark Office inappropriately rejected claims to a computerized process for molding raw, uncured synthetic rubber into cured precision products. Ultimately, thanks to the decision of the Supreme Court the inventors, Diehr and Lutton, received U.S. Patent No. 4,344,142. If the claims in Diamond v. Diehrare similar to those that now stand invalid that would be further proof the Federal Circuit as a whole has ignored the Supreme Court.
By now most are likely already familiar with the unfortunate reality that the United States Court of Appeals for the Federal Circuit issued a non-decision in CLS Bank v. Alice Corporation on Friday, May 10, 2013. There were 10 judges who heard the case en banc, with 7 of the 10 finding that the method claims and computer-readable medium claims were not patent eligible. While there may be reasonable room for a difference of opinion relative to those claims, it was the system claims that specifically and clearly recited tangible structure that has thrown the patent law of software into such disarray. 5 Judges would have found that the systems claims were patent ineligible (Judges Lourie, Dyk, Prost, Reyna and Wallach), and 5 Judges would have found the systems claims were patentable subject matter (Chief Judge Rader, Judges Newman, Moore, Linn and O’Malley). For more see Federal Circuit Nightmare in CLS Bank and 5 CAFC Judges Say Computer Patentable, Not Software and Did the CAFC Ignore the Supreme Court in CLS Bank?
Today, however, I want to write about one of the more bizarre passages I have ever seen in any decision, and then pose an almost unthinkable question: Is IBM’s Watson still patent eligible in the view of Judges Lourie, Dyk, Prost, Reyna and Wallach?
First, let’s start with the passage. Judge Lourie, who was joined by Judges Dyk, Prost, Reyna and Wallach, actually wrote: “At its most basic, a computer is just a calculator capable of performing mental steps faster than a human could. Unless the claims require a computer to perform operations that are not merely accelerated calculations, a computer does not itself confer patent eligibility.”
In what can only fairly be characterized as utterly ridiculous, 5 of the 10 judges on the Federal Circuit to hear CLS Bank v. Alice Corporationen banc would find that claims that satisfy the machine-or-transformation test are not patentable. While I think it is inappropriate to find the systems claims patent ineligible that isn’t what makes the decision utterly ridiculous. The decision is an embarrassment because 5 other judges would have found the systems claims patent eligible. Thus, we have an even split of opinion at the Federal Circuit.
The Federal Circuit decision in CLS Bank v. Alice Corp. is now being horribly mischaracterized in the media, which will now only further complicate the matter in the court of public opinion. This decision offers no precedent whatsoever regarding systems claims because it was a tie. Alice Corporation loses the systems claims not because that is the law of the land announced by the Federal Circuit, but rather because a single district court judge determined that the systems claims were patent ineligible. Had that same district court judge found the systems claims patent eligible then Alice would have prevailed.
In other words, the Federal Circuit is essentially abdicating its authority relative to whether systems claims are patentable to the district courts and presumably also to the Patent Trial and Appeals Board at the United States Patent and Trademark Office. Whatever the district court or PTAB does is just fine. Well, not quite.
Well, the United States Court of Appeals for the Federal Circuit sort of decided CLS Bank v. Alice Corporation earlier today. Truthfully, all the important questions that we thought might be answered remain completely and totally unanswered because there were only 10 judges who sat on the en banc tribunal and no more than 5 judges signed on to any one opinion.
The only thing we know is this — the Federal Circuit issued an extraordinarily brief per curiam decision, which stated:
Upon consideration en banc, a majority of the court affirms the district court’s holding that the asserted method and computer-readable media claims are not directed to eligible subject matter under 35 U.S.C. § 101. An equally divided court affirms the district court’s holding that the asserted system claims are not directed to eligible subject matter under that statute.
Thus, all of the asserted claims are not patent eligible. At the moment I am completely flabbergasted and don’t know what to say.
The fireside chat between Rader and Flanigan lasted nearly 60 minutes, and the Chief took questions from the audience. I found this entire presentation terribly interesting, but there were several things in particular that I have wanted to get to publishing, which did not neatly fit into the first article about patent litigation abuse. Namely, the Chief discussed the Supreme Court’s aversion to bright line rules and why they are really quite important in the commercial law context. He also discussed what the Federal Circuit has done to bring more certainty to damages, and he provided a razor sharp criticism of Judge Posner of the United States Court of Appeals for the Seventh Circuit.
I began by describing the facts of the Myriad case, which is currently before the Supreme Court, and the science behind the issues, as well as introducing the panelists. I then began the discussion by asking the panelists if genetic sequence and cDNA patents interfere with scientific research and with those who provide health care. Vern Norviel of Wilson Sonsini argued that it does not matter either way with regards to patents and new biotech product innovations. Mr. Norviel pointed out that the entire human genome was already mapped and the company who mapped it was not sued. More importantly, he argued, is that human genes are limited and it would be a very small bit of information that could be determined to not be patentable. He did, however, caution that the Court should try and restrain itself and not go too far such that it destroys what is currently a massive and successful life sciences industry. The bottom line is that regardless of whether a patent exists, professors and researchers will continue to do the research. Dr. James Mullen of Morrison & Foerster further argued that patents encourage research and innovation as venture capitalists want to know if (1) the research does what it is claimed to do and (2) if the party owns that research.
The Honorable Alex Kozinski immediately posed the question—by way of an analogy to scientists who stare at the stars—of why should someone be able to get a gene patent just because there was a significant amount of effort put in to discover that gene. Throughout the event, Judge Kozinski took on the role of the generalist judge, who would need to be convinced that the invention in the lab is anything other than a product of nature. Professor David Winickoff of UC Berkeley followed that question up by discussing James Watson’s amicus brief and the idea that genes are both symbolic in our culture and shared by all humans, thus making them a unique item in our world.
You may have heard about the “breast cancer gene patent wars.” Most likely, you have heard from various individuals and popular media asking “how can someone patent my genes?” One can’t and never could patent your genes as they are in you.
One side in the “gene patent war” has nevertheless convinced the Supreme Court to weigh in on the issue of whether DNA sequences derived from the human genome are patentable, in Association for Molecular Pathology (AMP) v. Myriad Genetics, while disingenuously labeling the patents at issue as “human gene patents.”
Myriad (the “other” side) owns several patents with claims directed to “isolated” nucleic acid molecules (e.g., DNA) and fragments thereof which are referred to as either “probes” or “primers,” based on their function. Probes anneal, i.e., bind, to a particular part of a DNA and are used to detect the presence of certain genes which indicate abnormalities or disease states. Primers anneal to particular parts of a DNA and are used to make additional pieces of DNA, e.g., make multiple copies of a single abnormal sequence such that it is readily detectable and/or become capable of being utilized in other useful applications, e.g. forensic science.
Given the remand of the Federal Circuit’s original panel decision for reconsideration in view of Mayo Collaborative Services v. Prometheus Laboratories, Inc., I’m not surprised that the Supreme Court granted the ACLU’s/Pubpat’s petition for certiorari in AMP v. Myriad. What is somewhat surprising is that the Supreme Court granted certiorari only as to the first question (“Are Human Genes Patentable”) posed by the ACLU/PubPat. The patent-eligibility under 35 U.S.C. § 101 of Myriad’s claimed method of screening potential cancer therapeutics that was (again) unanimously upheld by the Federal Circuit panel, but will not be before the Supreme Court. Nor will the issue of “lack of standing” with respect to but one of the plaintiffs be considered.
I’ve been following the various meanderings and wanderings of the Myriad case for almost three years now. One unfortunate aspect of this case is that, from the beginning, the ACLU/PubPat has manipulated and fabricated what this case is about in terms of the applicable “science,” as well as the applicable “patent law.” In fact, in distorting what this case is really about (i.e., the patent-eligibility of Myriad’s claimed “isolated” DNA sequences under 35 U.S.C. § 101), the ACLU/PubPat has also tried to hide the fact that the real plaintiffs in the Myriad case are none other than the ACLU/PubPat themselves; that has become readily apparent, given that all but one of the “alleged” plaintiffs have been knocked out of this case on “lack of standing” grounds.
Before the Myriad case becomes further obscured by the “pseudoscientific” nonsense foisted by the “real plaintiffs,” as well as the PR smokescreen of “politics, policy and philosophy” that the ACLU/PubPat has used to manipulate the applicable “patent law,” the Supreme Court needs to understand, to use Judge Lourie’s words, what this case “is not about.”
Those who have been following comments on the split decision in CLS Bank v. Alice Corp. case will be unsurprised to learn that yesterday the Federal Circuit ordered a rehearing en banc in the matter, vacating the panel decision originally decided on July 9, 2012.
The questions to be addressed on appeal are:
1. What test should the court adopt to determine whether a computer-implemented invention is a patent ineligible “abstract idea”; and when, if ever, does the presence of a computer in a claim lend patent eligibility to an otherwise patent-ineligible idea?
2. In assessing patent eligibility under 35 U.S.C. § 101 of a computer-implemented invention, should it matter whether the invention is claimed as a method, system, or storage medium; and should such claims at times be considered equivalent for § 101 purposes?
The parties have been invited to file new briefs on these questions, and the case will be heard based on the original briefs and any new briefs filed.
The America Invents Act (AIA) has now gone through its second phase of implementation. Initially there were few things that went into effect over the initial 90 days after President Obama signed the legislation into law. The first major wave of the AIA took effect on September 16, 2012. See, for example, Citation of Prior Art, Supplemental Examination, Oath/Declaration and Post-Grant Review et al.The most significant of the changes to U.S. patent law, namely the shift from first to invent to first to file, will not take place until March 16, 2013. This is a monumental change to U.S. patent law so it is never too early to discuss the many issues that will present with this shift.
The first and most obvious place to begin any discussion of the shift to first to file is with a very basic question: What is prior art? This is anything but an easy, straight forward question even under first to invent laws that we know so well and have been familiar with virtually throughout the entire history of the United States. The complexity in what seems an otherwise simple question stems from the fact that prior art is defined by statute. There is no common sense way to conceptualize what is, or what is not, prior art.
It should be remembered that the USPTO and courts traditionally granted signal claims, and Nuijten was an innovative decision and arguably an outlier that deserved more challenge than it received. The pre-Nuitjen position and the desirability of allowing signal claims or claims to computer program products without specifying non-transitory media embodiment is recorded in a paper by Stephen G.Kunin et al., Patent Eligibility of Signal Claims, Journal of the Patent and Trademark Office Society, 87, No. 12, 907 – 1002 (December 2005). Many positive reasons for allowance of such claims are described in that paper, and they are traced back in history to O’Reilly v Morse.
The good news is that signal claims and broad claims to computer program products are obtainable in Europe. However, such claims are only grantable if the necessary language is present in the European application or the International application as filed, otherwise objection will arise under a.123(2) EPC. Further, the EPO rules on priority are strict, and if the necessary language is missing from the US provisional or utility application from which priority is claimed, then signal or unrestricted computer program product claims will not benefit from priority. It is at the time of US filing that the necessary language must be introduced, and in particular entry into the European regional phase is too late.
Five years ago, on Thursday, September 20, 2007, the United States Court of Appeals for the Federal Circuit issued two decisions that provoked much debate, and which deserve to be remembered. One the Court got right and, sadly, one the Court got excruciatingly wrong.
The first case, In re Comiskey, seemed rather straight forward and certainly not earth shattering, except perhaps for one issue – namely that the Federal Circuit issued its decision on patentable subject matter grounds without patentable subject matter ever being an issue during prosecution or on appeal.
In Comiskey, one set of claims were directed to the purely mental process of arbitrating a matter and deciding the outcome. The Federal Circuit did not waste time pointing out that arbitration is extremely well known and could hardly be considered patentably new or nonobvious, rather they cut to the chase and explained that the law does not allow patents to be issued on particular business systems that depend entirely on the use of mental processes, deciding that “the application of human intelligence to the solution of practical problems is not in and of itself patentable.”
How to Write a Patent Application is a must own for patent attorneys, patent agents and law students alike. A crucial hands-on resource that walks you through every aspect of preparing and filing a patent application, from working with an inventor to patent searches, preparing the patent application, drafting claims and more. The treatise is continuously updated to address relevant Federal Circuit and Supreme Court decision impacting patent drafting.
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