Over the last several days I have heard of an alarming trend from the United States Patent and Trademark Office — Patent Examiners are canceling Notices of Allowance and yanking previously granted claims back into prosecution while citing the United States Supreme Court’s ruling in Alice v. CLS Bank. In some instances granted claims are being pulled back into prosecution only to be rejected as lacking patent eligible subject matter even after the issue fee has been paid. I have also been told that an Examiner in one case has issued a new Examiner’s Answer to include a new Alice 101 rejection.
Rejecting claims after the issue fee has been paid represents an extraordinary disconnect from the initial USPTO guidance that essentially said that Alice changed nothing from a substantive point of view. I was shocked that the USPTO issued such guidance because if you actually read the Supreme Court’s decision in Alice you could hardly walk away with the belief that nothing had changed.
In the immediate aftermath of the Supreme Court’s decision in Alice the USPTO told examiners that the reason Alice’s claims were determined to be patent ineligible was because “the generically-recited computers in the claims add nothing of substance to the underlying abstract idea.” The USPTO, by and through the Deputy Commissioner for Patent Examination Policy, Andrew Hirshfeld, then went on to point out to patent examiners that there is no new category of innovation that is patent ineligible, nor is there any new or special requirements for the eligibility of either software or business methods. Hirshfeld explained: “Notably, Alice Corp. neither creates a per se excluded category of subject matter, such as software or business methods, nor imposes any special requirements for eligibility of software or business methods.”
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.
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.
Last month, I co-authored an article on IPWatchdog.comabout the legal, technical and academic communities’ over-a-decade long debate about the boundaries, legality and wisdom of software patents. Now, on June 19, 2014, the U.S. Supreme Court has issued a decision in its review of the U.S. Court of Appeals for the Federal Circuit’s en banc May 10, 2013, decision in CLS Bank v. Alice. Unfortunately, the clarity that many had hope for has not come to fruition!
What we do know for sure — for at least a 150 years now — is that U.S. Patent Law recognizes four broad categories of inventions eligible for patent protection: processes; machines; article of manufacture; and compositions of matter. 35 U.S.C. Section 101. We also know for sure, despite the oft-quoted recognition that the patent laws were made to cover “anything under the sun that is made by man,” Diamond v. Chakrabarty, 447 U.S. 303, 309 (1980) (quoting S. Rep. No. 1979, 82d Cong. 2d. Sess., 5 (1952)), the U.S. Supreme Court has long recognized that there are three exceptions to these four broad patent-eligibility categories: laws of nature; physical phenomena; and abstract ideas. Id. This is where the certainty ends.
The Supreme Court’s Alice decision has again left the IP bar without a clear, repeatable test to determine when exactly a software (or computer-implemented) claim is patentable versus being simply an abstract idea “free to all men and reserved exclusively to none,” Funk Brothers Seed Co. v. Kalo Inoculant Co., 333 U.S. 127, 130 (1948). This is perhaps not surprising as Alice is a case more about so-called “business method” patents than software patents! (In fact, three justices in a succinct, 116-word concurring opinion indicated that they would impose a per se ban on patenting business methods!) With respect to software patents, however, we still find ourselves with a myriad of USPTO Section 101 guidelines, flowcharts and presentation slides – the latest of which is a March 4, 2014, 19-pager which may very well get fatter after Alice!
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.
~ ‘The report of my death was an exaggeration’ –Mark Twain
Mark Twain, American humorist.
With apologies to the great humorist, the report of the death of software patents is an exaggeration. Some commentators quite quickly suggested that the Supreme Court’s decision in Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 573 U.S. ___, No. 13-298 (June 19, 2014), will “invalidate the majority of all software patents in force today” and is “bad news for software patents”. That interpretation may make good copy, but it is simplistic and overblown. While the Court invalidated Alice’s patents, the decision certainly does not invalidate the majority, or even a large percentage, of software patents, nor does it radically restrict the kinds of inventions that can be patented going forward. The decision is a modest and incremental clarification in the patent law, and a not wholesale revision.
The Court set forth a two-step test grounded in Bilski v. Kappos and Mayo v. Prometheus. While the Court may not have defined a clear boundary for so called “abstract ideas” specifically, it did squarely place this case within the “outer shell” of the law set forth in Bilski and Mayo. In doing so it articulated an approach that focuses not on finding the boundary line, but rather on the core properties of an ineligible patent claim. In Part I of this two-part post, I will focus on just the first step of the test, whether a claim recites a patent-ineligible “abstract idea.” In Part II, I’ll address issues regarding preemption, mental steps, and the application of Alice to software patents.
WASHINGTON – The U.S. Department of Commerce’s United States Patent and Trademark Office (USPTO) will host its next Software Partnership Meeting on Tuesday, July 22, 2014, at the USPTO headquarters in Alexandria, Virginia, from 1:00 pm – 4:30 pm. Members of the public are invited to attend. Software Partnership meetings are an opportunity to bring stakeholders together to share ideas, experiences, and insights and to provide a forum for an informal discussion of many topics specific to the software community.
On June 4, 2013, the White House issued five executive actions designed to reduce abusive litigation and level the playing field for innovators. The second of the five executive actions focuses on clarity in patent claims and functional claiming in patents. The meeting on July 22 will feature a focused discussion on claim clarity and functional language. In particular, USPTO officials at the meeting will present details of four examiner training modules on functional language, discussed below, that were delivered this past year, and will provide an opportunity for an interactive discussion on the goals and effectiveness of the training. A stakeholder presentation on claim clarity will follow. The public will have an opportunity to provide input on the training and ask questions regarding claim clarity. Public attendees are invited to provide individual input on these topics and additional ideas during the interactive discussion portion of the meeting.
For more than a decade, the legal, technical and academic communities have debated the boundaries, legality and wisdom surrounding the issue of software patentability. The debate, to say the least, has been spirited with many organized movements, websites, articles, blogs and law review articles, as well as a lot of lobbying dollars, devoted to both sides of the debate. Yet, as the U.S. Supreme Court currently reviews the U.S. Court of Appeals for the Federal Circuit’s en banc May 10, 2013, decision in CLS Bank v. Alice, we take the opportunity here to dispel some myths, state some of facts and offer a test with respect to software patentability.
This is not your Parent’s Software Industry
There are those who argue against the patentability of software as a whole – never mind finding a test as to what software (or computer-implemented) claims should be patentable. We disagree. Why? Well, the notion that software should not be patentable necessarily indicates that the software industry itself is not capable of innovation worthy of patent protection! Yet, in a country where patent rights are guaranteed by the Constitution, should not all fields of innovation be treated equally under the law? Should we not avoid becoming a country where one field of endeavor (e.g., pharmaceuticals or electronics) is deemed more “patent worthy” than other fields (i.e., computer science and information technology)!? To answer these questions in the negative seems silly to us.