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.
Critics of the patent system, and specifically the critics of software patents, would have the United States forfeit the future in favor of something that has never worked. Curtailing patent rights has never worked to produce more innovation anywhere it has been tried. So why would we try such an experiment in the United States when it hasn’t ever worked anywhere ever? Unfortunately, it seems that many of our leaders in Washington, DC, are listening to those who have fanned the flames and worked exceptionally hard to create an unhealthy anti-patent climate.
Newsflash — innovators are not evil. The fact that this even needs to be said shows just how far we have come and how pervasive the anti-patent climate has become. Rather than celebrate innovation day after day like the drone of a metronome we hear how patents are evil and how they stifle innovation. But if you actually look through the rhetoric you notice that those claims are made with zero supporting evidence, but that is because all of the available objective evidence directly contradicts the growing orthodoxy.
Once upon a time the United States celebrated innovators, and gave them a meaningful opportunity to reap the deserved reward from their hard work and ingenuity. Today, we vilify innovators as evil all because there are a handful of bad actors that engage in abusive patent litigation tactics. Of course, these tactics have nothing to do with patents substantively and everything to do with the fact that these bad actors are allowed to manipulate the judicial process and exploit inefficiencies in the litigation system that are wholly unrelated to the substance of a patent.
This article tries to bring a little more clarity to what is a computer-implemented invention —and what is an obvious use of a computer —by reviewing some of the Alice v CLS Bank oral arguments.
Certain things are obvious. It was obvious in the oral arguments that it was a challenge for both the Supreme Court judges and the lawyers to distinguish between abstract ideas, ideas, computer programs, technological innovations, patentable subject matter, and inventions. (This confusion also showed up in the seven different written opinions of the judges in the Appeals Court review of this same case.)
In the oral arguments (P34-L17), Justice Sotomayor in response to a discussion on abstract ideas, inventive contributions and the Mayo test for technological innovation asked Mr. Perry, counsel for CLS Bank, the following…
Justice Sotomayor: “How about email and just word processing programs?”
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.
The necessary legislative effort to curb bad actors in the patent industry has been “hijacked” by a small handful of very powerful global technology companies intent on forcing broader changes in the patent system to make it better serve their business interests.
Under the banner of “patent reform,” these giant firms have spent tens of millions of dollars on lobbyists and media relations to promulgate a series of dramatic but false claims about America’s supposedly-“broken” patent system — claims that are now almost universally accepted as true by the media, Congress, and the public at large.
In Parts 1 and 2 of this series, we examined the false claim that there is an “explosion of patent litigation greater than any in history” as well as the myth that non-practicing entities are a new breed of parasitic patent holder who contributes nothing to society. In Part 3, we debunked the myth that NPEs are stampeding the International Trade Commission with spurious infringement claims, as well as the myth that excessive damages are being won in litigation.
Justice Antonin Scalia, who seemed most favorable to Alice.
Once Chief Justice John Roberts said “[t]he case is submitted,” which occurred this morning at 11:05 a.m., the reading of the tea leaves began.
The Supreme Court was very hot Court, with a lot of questions on the mind of the Justices. After reviewing the transcript I am left believing the Court is likely wondering whether it is possible to find the Alice patent claims to be patent ineligible while also ruling that software patent claims are not all patent ineligible. Surprisingly, it seemed as if Justice Scalia was most persuaded by the patent eligibility of the claims, directly saying at one point that the issues circling the case seem to really be about 102, not 101.
While I support the patent eligibility of the patent claims, particularly the patent claims drawn to a system, it seems undeniable that Alice missed many opportunities to score easy points. Indirect arguments were made by Alice that didn’t seem very persuasive. Indeed, if one is to predict the outcome of the case based on oral arguments alone it did not go well for Alice today. Only three things give Alice supporters hope after this oral argument as far as I can tell. First, the government seems to be asking the Supreme Court to overrule precedent in Bilski that is not even four years old, which simply isn’t going to happen. Second, the egregious overreach and outright misleading nature of the CLS Bank argument should raise a legitimate question or two in the mind of the Justices. Third, the reality simply is that at least the systems claims recite numerous specific, tangible elements such that it should be impossible to in any intellectually honest way find those claims to cover an abstract idea.
BEAR: In Judge Michel’s brief, he writes about not confusing §101 with §102 and §103. I’m also looking at this and thinking that patentability questions regarding “abstract ideas” may, perhaps, be better handled under §112 on specificity grounds. What do you think about that?
QUINN: I totally agree. And I think that that was the way that Director Kappos meant it when he was at the Patent Office and the Bilski case came out. That was what he was urging the examiners to do. Do not to make this a §101 issue but instead get the §112 issue. I think that’s the exact right approach because the real question I think they’re struggling with is whether there is an invention there. You can’t know whether there is an invention there until you ask what does somebody of skill in the art understand by reading the disclosure. And what some want to do is make it a §101 question so that they don’t have to do any analysis or heavy lifting.
There are numerous briefs listed on the ABA’s brief publication webpage for Alice Corp. v. CLS Bank that are filed in support of the respondent, most of which make specious claims about software patents blocking innovation, or which make arguments that claims that specifically recite computers, data storage units, devices and more are somehow abstract and imaginary. These arguments should be easy enough to dispose of as ridiculous on their face, but who knows how the Supreme Court will respond. Still, one would hope that the Supreme Court would notice that neither patents generally or software patents specifically have done anything to block innovation in the smartphone industry.
Whereas the Alice supporters feel that the U.S. Patent and Trademark Office’s issuance of software patents are important for protecting and spurring innovation in many fields, the supporters of CLS Bank have largely responded that software patents hurt innovation. But that can’t be! One of the areas critics always say has been allegedly hamstrung by patents, the smartphones industry, is barely over 6 years old. Have patents stopped innovation of smartphones? Hardly. In fact, with every new version companies tout just how much more the phones do and how they are so far superior to the previous model. Thus, it is easy to see that those claiming that software patents block innovation simply ignore market reality and how the functionality of current devices (which is thanks to software) match up with previous generations of devices over the last 6 years. Corporate critics must also ignore their own marketing of new smartphones, which directly contradicts the ridiculous claim that software patents are preventing innovation. Still they make these and other specious arguments as if they are true.
When the U.S. Supreme Court finishes hearing arguments in the upcoming case Alice Corporation v. CLS Bank International, it will be asked to judge whether or not software and computer-implemented inventions are eligible to receive patent protections through the U.S. Patent and Trademark Office. Should the Supreme Court uphold the original decision and declares that the Alice’s patents on computer-implemented systems for managing risk in financial transactions are patent ineligible, thousands upon thousands of software patents could become invalidated.
We discussed some of the issues in play with this major case in our previous look at amicus briefs filed with the U.S. Supreme Court for this case. We have also profiled the IBM amicus briefthat argued that the abstract idea doctrine was unworkable. These parties, though largely neutral, had a number of disdain for how the judiciary has handled the issue of software’s patent eligibility under Section 101 of Title 35 of the United States Code. Today, we’re taking a look at briefs filed for either side of this historic case to get a broader sense of the viewpoints involved in this issue. A number of major corporations, non-profit organizations in technological fields and renowned scholars have lent their ideas to these briefs, and readers may find their views on the patent eligibility of software programs to be enlightening.
A quick perusal of the amicus briefs published online by the American Bar Association shows that only a few of the briefs filed are supporting the petitioner, Alice Corporation, in this case. In fact, only three briefs in support of the petitioner are shown on the ABA’s official site listing amicus briefs for this case; there are a total of 40 amicus curiae briefs shown on that site, as of this writing.
Much of this negativism is based on the poor job the US patent examiners have done in weeding out those many patent applications where the so-called invention is just one of the almost infinite, but obvious, ways one can automate a manual or semi-automatic process or procedure. But there are also true inventions that use a computer as part, or all, of the implementation of the invention. There is no reason to throw out the baby with the bathwater. So it is of utmost importance that we examine the many falsehoods related to software patents.
In this new article I intend to provide facts about software and the software industry to debunk these misnomers, myths, misconceptions, and just pure misunderstandings about “software patents”.
Former CAFC Chief Judge Paul Michel filed an amicus brief in Alice v. CLS Bank.
In a few weeks, the Supreme Court of the United States will begin to hear arguments in Alice Corp. v. CLS Bank International. This case involves the very basics of U.S. patent law, namely what is considered patent eligible, and will have wide-reaching effects in the American technological sector. The case before the Court will ask it to decide upon the patent eligibility of software based on the most foundational aspects of patent law: Section 101 of U.S. Code Title 35. If a category of innovation is not patent eligible under Section 101 it does not matter whether the invention is highly useful, new and non-obvious. In fact, an invention can even be pioneering and revolutionary and not deserve a patent if it is deemed patent ineligible under Section 101. Because a determination that an entire area of technological pursuit can be deemed patent ineligible under Section 101 historically that has been only infrequently used so as to not unnecessarily kill innovative developments in their infancy.
In recent years, however, the Supreme Court has shown far more willingness to find things patent ineligible, which is a disturbing trend. In fact, In Mayo v. Prometheus, the Supreme Court conflated Section 101 with 102 to say that something that a patent claim that does not related to a law of nature was still nevertheless patent ineligible as a law of nature because the additional steps added that made it different than a law of nature were merely conventional. Up until Mayo such an analysis had been mandated by the Supreme Court to occur under Section 102. Indeed, the statute the Supreme Court ostensibly must follow requires novelty and conventionality to be addressed under 102. Thus, as the result of Mayo, and the Supreme Court’s decision in Myriad, there is great concern about the future of patent eligibility because it seems the Supreme Court now seems to prefer to find inventions patent ineligible without the mandated statutory analysis under 102, 103 and 112.
Software innovations are ubiquitous in our country, in use by machines and systems from consumer devices on to basic utility grids. There are numerous individuals who are keenly interested in the outcome of this case, and many have volunteered to participate and provide their insight, opinions and arguments to the Supreme Court. With this in mind we wanted to share some of the most informative amicus curiae briefs that have been filed with the U.S. Supreme Court. We have already published articles about the IBM amicus brief, the brief filed by the Solicitor General and the Trading Technologies amici brief joined by another 45 companies. Now as a part of our ongoing coverage of this case, we’ll look at what several other interested parties have to say about the patentability of software, and how our country’s patent system should be treating this issue.
EDITORIAL NOTE: A diverse group of 46 amici, spearheaded by Trading Technologies International, filed an excellent amici brief worth reading in Alice v. CLS Bank at the United States Supreme Court. The Summary of the Argument is republished here with permission. Charles J. Cooper is the Counsel of Record, but is joined on the brief by Vincent J. Colatriano and William C. Marra (both of Cooper & Kirk), as well as Steven Borsand and Jay Knobloch (both of Trading Technologies)
In keeping with the Constitution’s expansive grant to Congress of power to secure for “Inventors” exclusive patent rights to “promote the Progress of Science and useful Arts,” U.S. CONST. art. I, § 8, cl. 8, Congress has since 1790 broadly defined the subject matter of inventions eligible for patent protection. For nearly as long, this Court has applied exceptions, of its own making, to Congress’s designation of these “broad patent-eligibility principles.” Bilski v. Kappos, 130 S. Ct. 3218, 3225 (2010). This case focuses on one of those judicial exceptions – the “abstract ideas” exception.
The Court granted certiorari to decide “[w]hether claims to computer-implemented inventions – including claims to systems and machines, processes, and items of manufacture – are directed to patent-eligible subject matter within the meaning of 35 U.S.C. § 101 as interpreted by this Court?” Importantly, the patent claims in this case do not recite “a scientific truth, or the mathematical expression of it,”  Mackay Radio & Tel. Co. v. Radio Co. of Am., 306 U.S. 86, 94 (1939), and no court below entertained any evidence relating to whether the claims are novel and non-obvious under Sections 102 and 103 of the Patent Act. Thus, the question here is whether computer-implemented inventions that are not directed to a scientific truth should be deemed ineligible even if such inventions are novel, non-obvious, and otherwise patentable.