On August 12, 2014, I had the opportunity to speak with Zeidman on the record. As the dust begins to settle from the Supreme Court’s Alice v. CLS Bank decision I thought it might be interesting to talk about the issues with a computer expert who regularly works with patent attorneys and technology clients, and who has been advising both attorneys and clients how to handle the Alice decision from a technical standpoint. In our three part interview we discuss the decision and various ways attorneys might be able to move forward to provide disclosure sufficient to satisfy even the Alice standard.
Chief Judge Michel (ret.), Dec. 10, 2013, at IPO Inventor of the Year ceremony in DC.
Recently I had the opportunity to sit down with private citizen Paul Michel, who we know in the patent community as the former Chief Judge of the United States Court of Appeals for the Federal Circuit. Judge Michel left the Federal Circuit several years ago now, choosing to retire rather than take senior status. Michel told me back then that he wanted to step down so he could say what needed to be said on behalf of the patent system, something he felt he couldn’t do while a member of the federal judiciary.
Judge Michel has been true to his promise. He keeps an active speaking schedule, he continues to appear on Capitol Hill to discuss matters of concern for the patent system, he continues to attend numerous industry events, and he has freely given of his time on the record for us at IPWatchdog.com.
In our latest conversation we talked about a great many things, including the seemingly inevitable nomination of Phil Johnson as Director of the USPTO, which now seems very unlikely. We also spent considerable time talking about the Supreme Court’s decision in Alice v. CLS Bank. As you will read in the interview below, Michel thinks the decision was terrible and will lead to nothing short of chaos because there is simply no workable, repeatable test that can evenly and predictably be applied by the numerous decision makers in the patent world.
Alice with Lion and Unicorn from “Through the Looking Glass,” published 1871.
Last month, the Supreme Court issued its opinion in Alice Corp. v. CLS Bank International, _ U.S. _ (2013). In its opinion, the Court holds that Alice Corp.’s patent claims are drawn to the abstract idea of intermediated settlement, and that merely requiring generic computer implementation fails to transform the abstract idea into a patent-eligible invention. Since the opinion issued, the PTO has starting pulling allowed applications and issuing § 101 rejections. And lower courts are already applyingAlice to hold claims ineligible. Taken together, all this signals that § 101 is going to remain at the forefront of patent law for the foreseeable future. In view of its importance, this article provides an overview of the opinion, attempts to glean lessons from Alice, and finally identifies some considerations for patent owners and challengers as they navigate the murky morass that is § 101 jurisprudence.
At the outset, the Supreme Court reiterates the principle that laws of nature, natural phenomena and abstract ideas are not patentable—noting that it has interpreted § 101 and its predecessor statutes this way for over 150 years. It observes that the concern driving these exceptions to patentability is pre-emption. That said, the Court recognizes that this exclusionary principle must be carefully construed because at some level all inventions embody laws of nature, natural phenomena or abstract ideas. It states “[t]hus, an invention is not rendered ineligible for patent simply because it involves an abstract concept” and “applications of such concepts to a new and useful end . . . remain eligible . . . .” Slip op. at 6 (internal quotations and citations omitted).
It has been over a month since the Supreme Court published its opinion in Alice v. CLS Bank. While the question on which certiorari was granted broadly considered the patent eligibility of computer implemented inventions, the Court ultimately issued an opinion that was tightly focused on the invention underlying Alice Corp’s patent. While many hoped that the Court would address this broader issue, the narrow opinion leaves many key questions unanswered. More importantly, the Court’s explanation of why the Alice patent was an ineligible abstract idea demonstrates the limitations inherent in applying that doctrine to computer implemented inventions. Those limitations will come to define the struggles confronting innovators, courts and the patent office as they attempt to operate in accordance with this opinion.
A review of the opinion and oral argument reveals that no participant was able to articulate a meaningful, repeatable, and predictable approach for determining which computer implemented inventions are too abstract and which are eligible for patent protection. The Court intentionally declined to broadly address this key issue: “[i]n any event we need not labor to delimit the precise contours of the “abstract ideas” exception in this case.” And that is because it cannot be done. As the Court itself acknowledged in Mayo v. Prometheus, “all inventions at some level embody” an abstract idea. And unlike laws of nature and natural phenomena, abstract ideas are not readily susceptible to line-drawing – where does the abstract idea stop and the eligible “application” of that abstraction begin?
Learned Hand lamented the intractable nature of this problem in the context of the idea expression dichotomy in copyright law. Struggling to separate the underlying unprotected idea from the copyright protected expression, he noted “…there is a point in this series of abstractions where they are no longer protected, since otherwise the playwright could prevent the use of his ‘ideas’, to which, apart from their expression, his property is never extended. Nobody has ever been able to fix that boundary, and nobody ever can.” See Nichols v. Universal Pictures Corporation.
I feel like a very broken record. In an IPWatchdog article I wrote back in 2012, I commented on the currently fractured patent-eligibility landscape in the split Federal Circuit panel decision in CLS Bank International v. Alice Corp. Pty. Ltd. where a claimed trading platform for exchanging business obligations survived a validity challenge under 35 U.S.C. § 101. See The Fractured Landscape of Patent Eligibility for Business Methods and Systems in CLS Bank International. That fracture got even worse in the subsequent en banc ruling which can only be described as lengthy, tumultuous, and confusing, with a brief per curiam opinion, as well as six full opinions.
With the Supreme Court’s most recent foray into the patent-eligibility world in Alice Corp. v. CLS Bank International, we now have a complete and utter disaster as to what data processing claims can (or more unfortunately cannot) survive scrutiny by Our Judicial Mount Olympus under 35 U.S.C. § 101. I once had respect for Justice Thomas’ view on patent law jurisprudence, having considered his substandard opinion in Myriad on the patent-eligibility of certain “isolated” DNA claims to be an “isolated” aberration. But having now read his mind-boggling Opinion for the Court in Alice Corp., I’ve now thrown my previously “cheery” view of Thomas’ understanding of patent law jurisprudence completely into the toilet. I have even less kind words to say about the three Justices that signed onto Justice Sotomayor’s disingenuous concurring opinion that accepts retired Justice Steven’s equally disingenuous suggestion in Bilski that 35 U.S.C. § 273 (in which Congress acknowledged implicitly, if not explicitly the patent-eligibility of “business methods” under 35 U.S.C. § 101) is a mere “red herring.” See Section 273 is NOT a Red Herring: Steven’s Disingenuous Concurrence in Bilski.
The Supreme Court’s decision in Alice Corp. operates from the view that “ignorance is bliss” when it come to the patent statutes, as well science and technology. I don’t share that view and never will. So in the format that I began with in shredding Justice Alito’s “comedic” opinion in Limelight Networks, here are my “ignorance is not bliss” candidates for Alice Corp., in all their ugliness.
In this final segment of my conversation with Ray Niro we discuss the politics of patents, starting with the reality that the Obama Administration has for some time adopted the view of Google and other similarly situated tech companies that seem comfortable with an ever weakening patent system. We also discuss the Supreme Court’s recent decision in Alice v. CLS Bank, as well as the continuing and alarming trend toward expanding the definition of patent ineligible subject matter.
QUINN: Given that the Obama Administration is already out in front anti-NPE, anti-patent troll, and seems to be taking the Google philosophy which is who their advisors are, it seems to me foolish to think the Patent Office is going to moderate that decision and limit it narrowly.
NIRO: Right. The Administration has become a shill for Google — you even have a Google person running the Patent Office. So you have a situation where any number of patents, tens of thousands of patents, are going to be affected by Alice and also by the Limelight decision on split infringement.
A friend who handles large numbers of software patent applications for some of the most elite technology companies sent me an e-mail late last week about what he has already started seeing coming from patent examiners. He says he has seen the below form paragraph twice within a week. Most alarming, in one case the form paragraph came in the form of a supplemental office action, but the outstanding original office action didn’t have any patent eligibility rejections under 35 U.S.C. 101.
Claims… are rejected under 35 U.S.C. 101 because the claimed invention is directed to non statutory subject matter. In the instant invention, the claims are directed towards the concept of… [This] is considered a method of organizing human activities, therefore the claims are drawn to an abstract idea. The claims do not recite limitations that are “significantly more” than the abstract idea because the claims do not recite an improvement to another technology or technical field, an improvement to the functioning of the computer itself, or meaningful limitations beyond generally linking the use of an abstract idea to a particular technological environment. It should be noted the limitations of the current claims are performed by the generically recited processor. The limitations are merely instructions to implement the abstract idea on a computer and require no more than a generic computer to perform generic computer functions that are well-understood, routine and conventional activities previously known to the industry. Therefore, claims… are directed to non-statutory subject matter.
Did you notice the circular logic? The claims are abstract because the claims do not recite limitations significantly more than an abstract idea. Truthfully, this rather ridiculous logical construct can’t be blamed on patent examiners when the Supreme Court refuses to provide a definition for what is an abstract idea.
We can return to the beginning of the analysis and revisit preemption. As stated, the Court sees § 101 as protecting the big ideas that are fundamental to commerce, science, and technology, patents that would preempt and “block” innovation. The Court realizes that every patent preempts and blocks in some degree, because that’s what patent claims do. Rather, the risk of preemption must be “disproportionate.” Alice,slip op. at 5. This is a definitely a much higher bar than the standard set forth in the CLS plurality opinion, “Does the claim pose any risk of preempting an abstract idea?” CLS, 717 F.3d at 1282 (Lourie, J., concurring),cited approvingly in Accenture Global Services, GmbH v. Guidewire Software, Inc., 728 F.3d 1336 (Fed. Cir. 2013).This requirement for a high level of preemption risk is necessary because we can never know a priori (e.g., when a patent application is filed, when it is reviewed by a patent examiner) exactly what will happen in the future, and how important and preemptive the patent will be in regards to other developments in the same field or in other fields. Most truly fundamental “building block” inventions are not recognized as such for many years after the fact. Thus, we must tolerate preemption in two ways:
The kind of preemption that is inherent or recognizable based on the claim language. To borrow a phrase from Donald Rumsefld, this is the “known known” risk of preemption.
The “known unknown” preemption that we cannot determine because we cannot know what will happen in the future: whether the technology will be successful in the marketplace, whether others will adopt it, or design around it, or any other myriad factors that influence how “fundamental” an invention will be.
If a patent claim is ineligible if there is “any risk” of preemption, then the “exclusionary principle . . . will swallow all of the patent law.” Alice,slip op. at 5. A court or a patent examiner certainly cannot evaluate the level of “known unknown” preemption, and hence should not use speculations (or hand-waving) about this kind of preemption risk to invalidate a patent. The disproportionate risk of preemption only comes from patents that claim Abstract Ideas in the sense of fundamental building blocks, not just run-of-the-mill abstract ideas. It’s only when the known known type of preemption covers an Abstract Idea that the claim is ineligible. The ordinary type of preemption that comes from patent claims is an accepted part of the patent system—that’s the whole point of claims, to define the metes and bounds of the invention so that others are preempted from making, using, and selling what’s inside the bounds.
On Thursday, June 19, 2014, the United States Supreme Court issued its much anticipated decision in Alice v. CLS Bank. In a unanimous decision authored by Justice Thomas the Supreme Court held that because the claims are drawn to a patent-ineligible abstract idea, they are not eligible for a patent under Section 101.
In what can only be described as an intellectually bankrupt opinion, the Supreme Court never once used the word “software” in its decision. This is breathtaking given that the Supreme Court decision in Alice will render many hundreds of thousands of software patents completely useless. While the Supreme Court obviously didn’t want to make this decision about software, the holding does make it about software because each of the ways software has been claimed were ruled to result in patent ineligible claims. On first read I don’t see how any software patent claims written as method or systems claims can survive challenge. For example, these claims to IBM’s Watson computer, which is really akin to the first generation omnipotent Star Trek computer, seem to be quite clearly patent ineligible. See Is IBM’s Watson Still Patent Eligible. It is impossible to see how the Watson claims remain patent eligible in light of this ruling and how the Alice claims were written. The only potential solace for IBM and others would be if the Federal Circuit narrowly interprets this decision noticing that the Supreme Court seemed almost preoccupied by the fact that the patent claims covered a financial process. Still, the structure of the claims are nearly identical, with Alice’s claims actually having more recited structure, if anything.
More difficult to understand is how the Court could issue a decision that doesn’t even use the word software. Software is clearly patent eligible if you read the patent statute. Software is mentioned throughout the statute. It was specifically mentioned in the America Invents Act in 2011. Tax strategies are not patent eligible in and of themselves, but the AIA says that software is not patent ineligible just because it incorporates a tax strategy. This is the type of analysis the Supreme Court engaged in the Bilski decision finding that business methods are patentable.
Earlier today the United States Court of Appeals for the Federal Circuit ruled that Dolly the cloned sheep, and any other genetic clones, are patent ineligible in the United States because the “claimed clones are exact genetic copies of patent ineligible subject matter.” The case decided was In re Roslin Institute(Fed. Cir. May 8, 2014).
The Roslin Institute of Edinburgh, Scotland (Roslin) is the assignee of U.S. Patent Application No. 09/225,233 (the ’233 application) and had appealed from a final decision of the Patent Trial and Appeal Board, which held that all of Roslin’s pending claims were unpatentable subject matter under 35 U.S.C. § 101. The Board also rejected Roslin’s claims as anticipated and obvious under 35 U.S.C. §§ 102 and 103. Having determined that genetic clones are not patent eligible the Federal Circuit, in a decision by Judge Dyk who was joined by Judges Moore and Wallach, did not reach the 102 or 103 issues, instead simply affirming the Board’s rejection of the claims under § 101.
To tell the story involved in this case we must travel back to July 5, 1996, when Keith Henry Stockman Campbell and Ian Wilmut successfully produced the first ever cloned mammal from an adult somatic cell: Dolly the Sheep. The cloning method Campbell and Wilmut used to create Dolly was a significant scientific breakthrough. Campbell and Wilmut obtained U.S. Patent No. 7,514,258 (the ’258 patent) on the somatic method of cloning mammals, which was been assigned to Roslin. The ’258 patent was not at issue in this case.
Washington– The U.S. Department of Commerce’s United States Patent and Trademark Office (USPTO) will host a public forum on May 9, 2014 at the USPTO headquarters in Alexandria, Virginia, to solicit feedback from organizations and individuals on its recent guidance memorandum for determining subject matter eligibility of claims reciting or involving laws of nature, natural phenomena, and natural products (Laws of Nature/Natural Products Guidance). The Laws of Nature/Natural Products Guidance implemented a new procedure to address changes in the law relating to subject matter eligibility in view of recent Supreme Court precedent.
“We are always interested in receiving feedback from the public and this forum will provide an opportunity for participants to present their interpretation of the impact of Supreme Court precedent on the complex legal and technical issues involved in subject matter eligibility analyses during patent examination.” said Deputy Under Secretary of Commerce for Intellectual Property and Deputy Director of the USPTO Michelle K. Lee.
This is my third article, in a series, written to provide some useful aid for the Supreme Court and clerks in the wrapping of their minds and writing around the issues surrounding computers and software. I have already written two installments: Help for the Supreme Court in CLS Bank; and, What is a Computer? As predicted when I started, almost every patent person with a “dog” in the fight re software has written articles (or Amici) to be helpful. I only hope that what emerges from beneath the avalanche of writing is something that can get the patent system, and its relationship to computers/software, back to where it needs to be for the system to be an incentive and reward based enterprise as it was intended.
The object of this installment is not scholarly, in the sense that case citations are going to show up, but rather is another effort to give the lay person a chance to “get” what it is we in the patent community continue to babble about, in patent attorney code, when it comes to software. Of course, because, I am doing the writing, car analogies will be present because that is the only technology that I can readily relate to when characterizing computers/software/machines.
The story that begins the tale is me attending a small car show in Williamsburg, Virginia last summer. The selection of cars ranged from brass era to modern sports cars. As a part of the show, and to keep folks around, they had a schedule of “car starts” where a specific car would be fired up and the crowd would be given a short demo on the particular car. The one I waited for, specifically, was the Ford Model-T. It was the car that made modern America. It put thousands on the road and thousands to work. That “device” changed the course of our collective history. But, it was, none-the-less, a cantankerous beast. Henry Ford was quoted as saying, “I will give you the car for free if I can sell you the parts to keep it running!” (Hey, the first “freeware” sales model!) It was solid and, for its day, very reliable and capable. But the owner /operator had to be mechanically quite adept.