Alice on Software Patents: Preemption and Abstract Ideas

By Robert Sachs
June 29, 2014

EDITORIAL NOTE: This article is a continuation of Alice, the Illusory Death of Software Patents.

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:

  1. 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.
  2. 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.

 

Alice and the Absence of Mental Steps

One of the most notable aspects of the Court’s handling of abstract ideas is that complete avoidance of any discussion of mental steps. Historically, the mental steps doctrine in § 101 jurisprudence excluded claims that directly set forth steps necessarily performed in the human mind, given the disclosure of the patent. The doctrine arose before the use of computers in business and industrial applications, and addressed patents that involved mathematical procedures that could only be performed mentally by “head and hand,” or human judgments guided by mathematical or other considerations. That is, in those patents, there was no disclosure of any way to perform the mathematical operations except by mental operations. See In re Bologaro, 62 F.2d 1059 (C.C.P.A. 1931) (method for setting lines of type using a mathematical procedure to determine average number of spaces per line not patent eligible; no disclosure of any machine for performing claimed method); Don Lee v. Walker, 61 F.2d 58 (9th Cir. 1932); Haliburton Oil Well Cementing Co. v. Walker, 146 F.2d 817 (9th Cir. 1944); In re Heritage, 150 F.2d 554 (C.C.P.A. 1945).

In Gottschalk v. Benson,the Court for the first time extended the mental steps doctrine to digital computers. To get to that decision it relied upon the following statement:

A digital computer, as distinguished from an analog computer, is that which operates on data expressed in digits, solving a problem by doing arithmetic as a person would do it by head and hand.

Benson, 409 U.S. 63, 65 n.3 (citing Ronald Benrey, Understanding Digital Computers 4 (1964)).

As our amicus brief for Ronald Benrey detailed at length, this statement was both factually and legally incorrect. This statement by the Benson Court has been frequently cited and relied upon by the Federal Circuit[1] and many federal District Courts[2] and has led to much confusion.

The Federal Circuit has frequently relied upon the Benson statement and its mental steps analysis as the mechanism for finding a claim to be nothing more than an abstract idea. For example, in CyberSource Corp. v. Retail Decisions, Inc., 654 F.3d 1366 (Fed. Cir. 2011), the court invalidated CyberSource’s patent on a method of verifying credit card transactions on the grounds that all the “method steps can be performed in the human mind, or by a human using a pen and paper.” Id. at 1372. Similarly, in Bancorp Servs., L.L.C. v. Sun Life Assur. Co. of Canada, 687 F.3d 1266 (Fed. Cir. 2012), the court invalidated a patent on an insurance policy management method saying “claim 3’s steps can all be performed in the human mind. Such a method that can be performed by human thought alone is merely an abstract idea and is not patent-eligible under § 101.” Id. at 1373. The Bancorp court went so far as to entirely equate computers with human brains based on Benson’s statement:

As the Supreme Court has explained, “[a] digital computer . . . operates on data expressed in digits, solving a problem by doing arithmetic as a person would do it by head and hand.” Benson, 409 U.S. at 65. Indeed, prior to the information age, a “computer” was not a machine at all; rather, it was a job title: “a person employed to make calculations.” Oxford English Dictionary, supra. Those meanings conveniently illustrate the interchangeability of certain mental processes and basic digital computation, and help explain why the use of a computer in an otherwise patent-ineligible process for no more than its most basic function—making calculations or computations—fails to circumvent the prohibition against patenting abstract ideas and mental processes.

Id. at1277 (Fed. Cir. 2012). The plurality opinion in CLS likewise reiterated the view that “[a]t its most basic, a computer is just a calculator capable of performing mental steps faster than a human could.” CLS, 717 F.3d at1286 (Lourie, J. concurring). See also SmartGene, Inc. v. Advanced Biological Labs., SA, 555 Fed. Appx. 950 (Fed. Cir. 2014) (claims computerized artificial intelligence system invalid where “every step is a familiar part of the conscious process that doctors can and do perform in their heads”).

Despite the Federal Circuit’s fondness for equating software inventions with mental steps—including as an underlying theme in the plurality opinion below—the Supreme Court made no mention whatsoever of either the doctrine or the concept in Alice. The absence is notable, since the Court has typically quoted from Benson:

Flook : “Phenomena of nature, though just discovered, mental processes, and abstract intellectual concepts are not patentable, as they are the basic tools of scientific and technological work.” Benson, 409 U.S. at 67.

Bilski: Thus, this Court stated in Benson that “[p]henomena of nature . . . , mental processes, and abstract intellectual concepts are not patentable, as they are the basic tools of scientific and technological work,” Benson, 409 U.S. at 67 (Stevens, J. concurring).

Alice: “We have long held that this provision contains an important implicit exception: Laws of nature, natural phenomena, and abstract ideas are not patentable.” Association for Molecular Pathology v. Myriad Genetics, Inc., 569 U. S. ___, (2013) (slip op., at 11) (internal quotation marks and brackets omitted).

Thus, the Court appears to no longer expressly rely on a mental steps framework to evaluate patent claims for Abstract Ideas. This is also a signal that the courts and patent examiners should not too quickly assume that they can apply a mental steps to patent eligibility determinations.

 

Alice and Software Patents

The impact of Alice on software patents is now much clearer, and much more limited. All software technologies rely on the use of abstraction to describe the entities and objects being manipulated and the operations being performed by the computer. For example, in database design, programmers use basic abstractions such tables, fields, records, rows, columns, and objects, and define others such as data structures representing a bank account or a purchase order. The functions performed on these entities are themselves abstractions: programs read, write, and lock records, sort tables, and delete objects; bank accounts are credited or debited; purchase orders are verified and approved. When you copy a file on your desktop, or download an electronic book, or even close a tab in a browser you are dealing with abstractions of objects and operations. Similarly, advertising on social networks, organizing search results, managing network traffic, encrypting a file, or hosting an online gaming platform all make use of abstractions. All of these abstractions are the little-a, little-i type of abstract ideas, tools that are used to define products and services, and to solve various kinds of design or engineering problems. They are not “fundamental” or “building blocks” of commerce, science, or anything else; they are not the Abstract Ideas that the Court is seeking to protect. Even broad claims on these kinds of inventions are unlikely to be “fundamental” in the sense used by the Court.

Judges and patent examiners have to take seriously the instruction of the Court to “distinguish between patents that claim the building blocks of human ingenuity and those that integrate the building blocks into something more.” Recognizing that the use of abstraction is an inherent part of engineering and inventing generally, and in particular in the software field, is an essential step to correctly applying the Court’s analysis. One cannot simply assume that the appearance of software abstractions like the foregoing in a patent claim indicates that the claims recite a prohibited Abstract Idea. Rather, the vast majority of software patent claims simply use the same types of descriptors that engineers always use to articulate their designs. Further, the very nature of patent claims is that they rely on abstractions to describe the invention. You simply cannot claim a software invention without using abstractions, any more than you can claim a small molecule without using the names or symbols of chemicals and elements. Thus, evaluation of a software patent claim requires much more than simply identifying the abstractions used in the claims, and assuming these are Abstract Ideas. Similarly, it is incorrect to assume that patent claims for software are Abstract Ideas on the grounds that software is essentially mental steps performed by computer.

If the Court really wanted to hold all software patents invalid, we can presume that it would have said that clearly and unambiguously. It did not do that. The Justices were clearly concerned about such a ruling and its impact on the software industry and the economy. By avoiding discussing Alice’s patent as an exemplar of software patents, the Court signaled that this case was not really about software. Similarly, by articulating Abstract Ideas as a special legal concept, it set up a framework so that the exceptions to patent eligibility do not ultimately swallow up existing patents or make future innovations unprotectable.

____________________

 

[1] In re Sarkar, 588 F.2d 1330 (C.C.P.A. 1978); In re De Castelet, 562 F.2d 1236 (C.C.P.A. 1977); In re Comiskey, 554 F.3d 967 (Fed. Cir. 2009); In re Waldbaum, 559 F.2d 611 (C.C.P.A. 1977); In re Christensen, 478 F.2d 1392 (C.C.P.A. 1973); CyberSource Corp. v. Retail Decisions, Inc., 654 F.3d 1366 (Fed. Cir. 2011); Ultramercial, Inc. v. Hulu, LLC, 722 F.3d 1335 (Fed. Cir. 2013); DealerTrack, Inc. v. Huber, 674 F.3d 1315 (Fed. Cir. 2012);

[2] Bancorp Servs., L.L.C. v. Sun Life Assur. Co. of Can., 771 F. Supp. 2d 1054 (E.D. Mo. 2011), aff’d, Bancorp Servs., L.L.C. v. Sun Life Assur. Co. of Canada, 687 F.3d 1266, (Fed. Cir. 2012); Digitech Info. Sys. v. Bmw Fin. Servs. Na, LLC, 864 F. Supp. 2d 1289 (M.D. Fla. 2012); Perfect Web Techs., Inc. v. Infousa, Inc., 89 U.S.P.Q.2d (BNA) 2001 (S.D. Fla. Oct. 24, 2008); Prometheus Labs. v. Mayo Collaborative Servs., 86 U.S.P.Q.2d (BNA) 1705 (S.D. Cal. Mar. 28, 2008); Prometheus Labs., Inc. v. Mayo Collaborative Servs., 581 F.3d 1336, (Fed. Cir. 2009); SmartGene, Inc. v. Advanced Biological Labs., SA, 852 F. Supp. 2d 42 (D.D.C. 2012); CLS Bank Int’l v. Alice Corp. Pty, Ltd., 768 F. Supp. 2d 221 (D.D.C. 2011); Big Baboon, Inc. v. Dell, Inc., 2011 U.S. Dist. LEXIS 155536 (C.D. Cal. Feb. 8, 2011); Compression Tech. Solutions LLC v. EMC Corp., 2013 U.S. Dist. LEXIS 78338 (N.D. Cal. May 29, 2013); Digitech Image Techs., LLC v. Konica Minolta Holdings, Inc., 2013 U.S. Dist. LEXIS 108010 (C.D. Cal. July 31, 2013) Digitech Image Techs., LLC v. Electronics for Imaging, Inc., 2013 U.S. Dist. LEXIS 108008 (C.D. Cal. July 31, 2013); Digitech Image Techs., LLC v. Fujifilm Corp., 2013 U.S. Dist. LEXIS 108007 (C.D. Cal. July 31, 2013); Digitech Image Techs., LLC v. Pentax Ricoh Imaging Co., Ltd., 2013 U.S. Dist. LEXIS 107900 (C.D. Cal. July 31, 2013); Digitech Image Techs., LLC v. Sigma Corp., 2013 U.S. Dist. LEXIS 107893 (C.D. Cal. July 31, 2013); Fuzzysharp Techs. Inc. v. Intel Corp., 2013 U.S. Dist. LEXIS 160897 (N.D. Cal. Nov. 6, 2013); Lumen View Tech. LLC v. Findthebest.com, Inc., 2013 U.S. Dist. LEXIS 166852 (S.D.N.Y. Nov. 22, 2013)

 

The Author

Robert Sachs

Robert Sachs is president at Robert R. Sachs PC. He is frequent commentator and speaker on patent eligibility. He started his own firm in 2017, leaving Fenwick & West LLP in San Francisco after 27 years of doing software patent prosecution and strategy for Silicon Valley clients. He is Vice Chair of the Intellectual Property Owners Association Section 101 Task Force and was one of the principle authors of the IPO’s proposed Section 101 legislation.

Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com. Read more.

Discuss this

There are currently 7 Comments comments.

  1. Anon June 29, 2014 10:37 am

    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.

    I hear the words that you are using, but cannot see a workable distinction. To a certain degree, you have just exchanged labels and “in a sense of fundamental” is an unknowable. The argument reduces to involving conjecture about what the future holds in all cases that are not covered by what has not been done before. In essence, this view makes the judicial tool of exception to be the antithesis of 102/103.

    These concerns moreover, are not the proper concern of the Court. These concerns are dealt with in writing the law. These concerns reflect the legislative function.

  2. wow June 29, 2014 5:57 pm

    making software un-patentable would most definitely kill the entire software industry plus businesses that need software related IP to protect their jobs and revenue stream.

    Waging war against patent trolls would seem like a reasonable move in some circumstances but trying to destroy the entire software industry would be really stupid.

  3. Tourbillon June 29, 2014 7:30 pm

    Excellent analysis. The overarching blunder in the “abstract idea” jurisprudence is that it is not based on Anglo-American legal analysis. It is based on pure tautology. Something is abstract when SCOTUS says it is, and even the PTO gets it (see their new guidelines, giving examples of past “abstractions” as the only means of defining the concept).

    Fortunately, the corruption of “abstract idea” jurisprudence also is its weakness. Its reach increasingly is limited to the handful of specific examples in Supreme Court cases, as indeed the new PTO guidelines more or less indicate. Alice will be no more than a tempest in teapot, without any fundamental shift in the law or in the protection of inventions, because the opinion is so poorly reasoned, and the analysis behind it so superficial, as to be limited in its applicability.

    Incidentally, this site is far superior to others in the field not least because it lacks the poison, vitriol, and vulgarity of a certain paid anti-patent troll

  4. angry dude June 29, 2014 9:22 pm

    bad cases make bad law
    Alice is a terrible case to apply to “software” patents

  5. step back June 29, 2014 10:38 pm

    angry dude @ 4:

    Right now I see the SCOTUS Justices congratulating each other for having “split the baby” precisely down the middle as was their intent because half the the people are thrilled with what they did and the other half are aghast.

    But King Solomon is doing cartwheels in his grave over this.
    The point of his “wisdom” was not to split the baby at all, but rather to save the baby and still get to the truth.

    Somehow our “wise” SCOTUS nine didn’t get the message. Lost in the translation. Sigh.

  6. patent leather June 30, 2014 12:14 pm

    Ultramercial is back to the Fed Circuit. Too bad Rader is gone and now we have newbies like Taranto, Wallach, and Reyna to screw this one up.

  7. Gene July 2, 2014 8:21 am

    “For example, in database design, programmers use basic abstractions such tables, fields, records, rows, columns, and objects, and define others such as data structures representing a bank account or a purchase order.”

    the number 7 is an abstraction. every human concept is an abstraction. google “mind-body problem”. numbers do not exist “out there”. the electric circuit (computer) that stores a representation of 7 is not an abstraction. scotus says that if your invention is based on an abstraction, there must be something in the claim that removes it from that domain in order to be patent eligible, e.g. sufficient non-generic structure or method. a novel algorithm, represented by a computer program, builds a non-generic machine when compiled.