Although the U.S. Supreme Court’s recent decision in Alice Corp. v. CLS Bank has caused some to conclude that software is no longer patent eligible in the U.S., or that the Alice decision renders all but a narrow range of computer-implemented inventions patent ineligible, a careful reading of the Alice opinion indicates that such conclusions are incorrect.
One reason for the public’s misunderstanding of Alice is that the decision has thrown the USPTO into what appears to be a state of confusion. Just days after the decision was released, the USPTO issued a memo to the Patent Examining Corps explaining the USPTO’s preliminary interpretation of Alice, which indicated that examiners should continue to examine patent applications for patent eligibility in much the same way as they had done before Alice. Then, just a few weeks later (and as reported in IPWatchdog), the USPTO did an about-face without any explanation and started withdrawing Notices of Allowance from patent applications—even in cases in which the issue fee had been paid—and issuing patent eligibility rejections based on Alice, using nothing more than a standard form paragraph. In my own practice I have seen wide disparities among examiners in their application of Alice to individual cases, ranging from Alice-based patent eligibility rejections for every claim containing the word “computer” to Office Actions whose reasoning seems unaffected by Alice, and everything in between.
The environment for patent applicants and examiners that has resulted from such inconsistent treatment of Alice by the USPTO is one in which neither examiners nor applicants have clear guidance about how the USPTO is interpreting and intends to apply the Alice decision. This makes it difficult for examiners to know whether and how to issue Alice-based rejections, and for applicants to know how to respond to such rejections. In this environment, software patents are not dead; instead, they are, like Schrödinger’s cat, in an indeterminate state, simultaneously dead and alive until examined by an observer. In this case, the uncertainty over the impact of Alice on patent prosecution will only be dispelled when the USPTO analyzes the Alice opinion thoroughly and announces the Office’s interpretation of that opinion with a clear and unified voice. At that point, inventors, business owners, patent prosecutors, and patent examiners will be able to return to playing their respective roles within a rational patent system in which all parties involved seek to promote innovation according to fair, clear, and consistently-applied rules.
A Call to Action: Let’s Stand Our Ground Against Alice-Based Rejections
It is time for all of us who care about innovation in the U.S.—including patent applicants, patent prosecutors, and patent examiners—to take action to ensure that the U.S. patent system continues to promote innovation in the face of the Alice decision. The primary goal of this article is to provide practical guidance to achieve this end.
The guidance that I provide primarily takes the form of an array of arguments that patent applicants can use when responding to Alice-based rejections of computer-related patent applications. My hope is that applicants will use these and other arguments to hold the USPTO appropriately accountable in each and every case in which the USPTO issues an Alice-based rejection, and thereby to cause the USPTO to sustain its burden of proof in connection with such rejections. I also hope that the arguments provided herein help patent examiners to understand the burden of proof that they are legally required to sustain, in order to help them decide to issue Alice-based rejections only in cases in which such rejections are justified, and to withdraw Alice-based rejections when the facts and the law require them to do so.
Requiring the USPTO to justify every Alice-based rejection that it issues will both raise the cost to the USPTO of issuing such rejections and provide patent applicants, individually and collectively, with far greater information about how the USPTO is applying Alice than can be gleaned currently from the boilerplate rejections emanating from the USPTO. It will be important to watch the USPTO’s reactions to the arguments provided here, in order to further refine and improve subsequent responses to Alice-based rejections.
Most other public reaction to the Alice case has focused on flaws in the logic of the decision and on possible appellate responses to the decision. Although such strategies are important, the bottom-up, case-by-case, prosecution-based approach that I propose represents a broad-based front line defense against Alice, to be fought by patent prosecutors in the trenches as we prosecute individual patent applications on a daily basis. Such a prosecution-based approach will supplement litigation strategies and provide ammunition to litigators who seek to attack Alice in the federal courts.
Use the Alice Opinion to Argue Against Alice-Based Rejections
A thorough and careful reading of the Alice opinion reveals that the opinion itself provides a wide variety of support for the conclusions that computer-related inventions are not inherently patent ineligible and that a stringent test must be satisfied to justify rejecting any particular patent claim as patent ineligible. My first recommendation is not a particular argument to be used against Alice-based rejections, but rather a general suggestion that arguments in response to Alice-based rejections should rely on and cite specifically to the language in the Alice opinion itself. Such an approach is particularly valuable not only to demonstrate the flawed logic of most Alice-based rejections being issued by the USPTO in general, but to cut through the generic assertion by such rejections that the claims at issue are patent ineligible abstract ideas by pointing to the much more detailed requirements actually established by the Alice opinion.
The specific arguments that I recommend below are all drawn directly from the Alice opinion for three reasons. First, they do not rely on any future change to the law—they accept Alice as binding precedent which, for better or worse, is the reality that patent applicants face today. Second, doing so restricts the ability of an examiner to claim that any of these arguments was overruled by, or is inconsistent with, the Alice decision. Third, the fact that I have been able to derive a large number of arguments solely from the Alice opinion, without turning to any previous Supreme Court or Federal Circuit opinion, implies that the arguments listed here are just the tip of the iceberg and could be expanded upon significantly if previous Supreme Court and Federal Circuit precedent are also relied upon.
Now, my proposed post-Alice playbook.
Require the Examiner to Apply the Alice Two Step Test to the Express Language of the Claims
The Alice decision sets out a two-part test for determining whether a claim is directed to patent eligible subject matter: (1) determine whether the claim is directed to an abstract idea; and (2) if the claim is directed to an abstract idea, then determine whether the claim’s elements transform that abstract idea into a patent eligible application of the abstract idea. Therefore, a claim’s subject matter is patent ineligible under Alice only if the claim is directed to an abstract idea under step (1) and the claim’s elements do not transform the abstract idea into a patent eligible application of that abstract idea. Otherwise, Alice provides no justification for the conclusion that the claim’s subject matter is patent ineligible.
Although it might seem too elementary to be worth mentioning, responses to Alice-based rejections should require the examiner to articulate his or her reasoning under the two step patent eligibility test set forth in Alice, as applied to the particular claims that have been rejected, and assert that failure by the examiner to do so constitutes a failure of the examiner to satisfy his or her burden of establishing a prima facie case of patent ineligibility.
All of the Alice-based rejections that have crossed my desk so far have failed to satisfy this basic requirement, since they all rely on a boilerplate paragraph promulgated by the USPTO for use by examiners. This paragraph merely states that the rejected claims are directed to an abstract idea, which is then summarized in a few words (e.g., “intermediated settlement”), followed by boilerplate text stating that the additional elements of the claim fail to transform the claimed abstract idea into a patent eligible application of the abstract idea. The boilerplate paragraph is not accompanied by any explanation of how particular elements of the rejected claims fail to transform the purported abstract idea into a patent eligible application. Any such “cut and paste” generic rejection clearly constitutes failure by the examiner to satisfy his or her obligation to apply the law to the express elements of the rejected claims.
Applicants should require every examiner who issues an Alice-based rejection of a claim to apply the Alice two part test by demanding that the examiner:
- clearly and specifically articulate the abstract idea to which the claim allegedly is directed, and point to specific language in the claim in support of the examiner’s conclusion that the claim is directed to that abstract idea; and
- acknowledge all express limitations in the claim (rather than completely ignoring the existence of such limitations, as the USPTO’s boilerplate paragraph does), and explain how those express limitations fail to go beyond merely providing an instruction to apply the abstract idea.
If an examiner fails or refuses to make out at such a prima facie case of patent ineligibility in accordance with the Alice two part test, the applicant should argue that the finding of patent ineligibility is unjustified and should be withdrawn.
Ride the Alice Seesaw
Many seem to interpret the Alice decision as sanctioning rejection of claims based on a mere finding that a claim is directed to an “abstract idea,” and fear that the Alice decision authorizes examiners to issue quick rejections of claims based on the mere assertion that those claims are directed to abstract ideas. This seems to be the interpretation embedded in the USPTO’s current boilerplate rejections. Yet such an interpretation is inconsistent with the reasoning in the Alice decision itself, which expressly reaffirms that not all claims drawn to abstract ideas are patent ineligible. In particular, the Supreme Court in Alice acknowledged that “at some level, ‘all inventions … embody, use, reflect, rest upon, or apply laws of nature, natural phenomena, or abstract ideas.’ … Thus, an invention is not rendered ineligible for patent simply because it involves an abstract concept. … ‘[A]pplication[s]’ of such concepts ‘’to a new and useful end,’’ we have said, remain eligible for patent protection. …”
Alice, therefore, does not give examiners free rein to simply shout “abstract idea” in support of a claim rejection and then end their analyses. In fact, the Alice two part test—which requires examiners to articulate a particular abstract idea to which each rejected claim is directed—forces each examiner to select a point along the abstract-concrete continuum at which to define the alleged abstract idea to which a particular rejected claim is directed. The examiner may, in other words, define the alleged abstract idea very abstractly, very concretely, or somewhere in between. Whatever choice the examiner makes when defining an abstract idea as the basis for a claim rejection, a corresponding argument is available to the applicant to traverse that rejection. In no case does the examiner get a free lunch.
I refer to this as the “Alice seesaw” because:
- the less abstractly (i.e., more concretely) the examiner defines the alleged abstract idea, the stronger the applicant’s argument that the alleged abstract idea is not an “abstract idea” as defined by the Alice opinion, such as because the alleged abstract idea is not a fundamental practice that is long prevalent in its field; and
- the more abstractly the examiner defines the alleged abstract idea, the stronger the applicant’s argument that the claim is directed to “significantly more” “than an instruction to apply the abstract idea.”
One important consequence of the Alice seesaw is that rejections based on alleged abstract ideas that the examiner defines very abstractly are not an automatic death sentence for the rejected claims, as many seem to think. A clear and well-written claim is likely to contain “significantly more” than a very abstractly-defined abstract idea, and therefore should satisfy step two of the Alice test for patent eligibility. In the following sections I describe the arguments represented by the Alice seesaw in more detail.
CLICK TO CONTINUE READING… In the next (and final) article the author will describe specific strategies for responding to particular Alice rejections.
 In the rest of this article I will refer only to “abstract ideas” for ease of explanation, even though the Alice decision applies more generally to abstract ideas, laws of nature, and natural phenomena.
 I have omitted citations from, and added emphasis to, this and other quotations to the language in Alice for ease of explanation. To avoid cluttering the text, I have not expressly indicated each and every instance where citations have been omitted or emphasis has been added.