How to Fix the Software Patent Mess: Go Back to Basics

start-businessman-writing-draftingMost people appreciate the benefits provided by computer software. Want to know how to get somewhere? Just ask Siri program on your iPhone. Reassured that newer cars are more stable and safer than just a few years ago? Thank software-controlled steering. Looking forward to self-driving cars? Of course, look to the software engineers. Software is a ubiquitous part of our lives and our economy. Most would agree that fostering software innovation benefits everyone.

But not all patents that are granted foster innovation. Indeed, after experiencing the mischief arising from undeserved privileges bestowed by the British Crown, the U.S. founders deemed the concept of patents to be a public embarrassment. See Walterscheid, Patents and the Jeffersonian Mythology, 29 J. Marshall L. Rv. 269 (1995) Still, the authors of the U.S. Constitution thought it worthwhile to accept such embarrassment in return for a patent system that would “promote the useful arts.” The term, useful arts, as used at the time, referred to practical knowledge, in distinction to the performing or fine arts. In crafting the provision for patents found in Article I of the Constitution, they effectively directed that the government be “stingy” in granting patents, issuing such exclusive rights only when it would promote important practical knowledge.

In following this mandate, the U.S. patent system should be implemented in a way to promote software innovation. In recent years, U.S. courts have developed a series of guidelines defining boundaries for patent eligibility. To the extent that such rules block patents from being issued too freely, they should be applauded as consistent with the Constitutional mandate. However, over the past decade, the U.S. Supreme Court’s decisions have presented a “moving target” of when software and other computer-implemented inventions are eligible for patent protection. This lack of clarity is reducing business incentives to develop software.

Most recently, in Alice Corp. v. CLS Bank Int’l, 717 F. 3d 1269 (Fed. Cir. 2013), the Supreme Court endorsed a two-prong test for patent eligibility:

Determine whether the claims at issue are directed to one of the patent-ineligible concepts: Laws of nature, natural phenomena, and abstract ideas.

If so, determine whether any additional claim elements transform the nature of the claim into a patent-eligible application. An element or combination of elements that is “sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the [ineligible concept] itself.”

The two-prong test has been soundly ridiculed by patent lawyers striving to counsel their clients. In the context of a patent claims, rules based on judgments of what is, or is not, “abstract” or “significantly more” are simply unhelpful.

Judge Wu of the U.S. District Court for the Central District of California has openly criticized Alice for evoking an “I know it when I see it” test. Judge Pfaelzer, a colleague of Judge Wu, writes that the Supreme Court’s patent eligibility cases “often confuse more than they clarify [and] appear to contradict each other on important issues.” Former Chief Judge of the Federal Circuit Paul Michel advises that Alice “create[d] a standard that is too vague, too subjective, too unpredictable and impossible to administer in a coherent consistent way in the patent office or in the district courts or even in the Federal Circuit.”

The uncertainty engendered by the Alice decision has serious real world consequences. To many business managers, “uncertainty” is another word for “risk.” And business managers uniformly seek to reduce risk for their investments.

Controlling risk is a basic tenet of business. When considering potential investments that promise the same return, a rational business owner will invest his/her money in the project with the lower risk. If one bond presents more uncertainty or risk than another bond, the riskier bond must promise a higher return before the market will invest in it. Increase the risk of a project not yielding the expected benefit, and business owners are less prone to invest in it.

The Alice decision has increased the risk associated with software development. It has made less clear that any expensive, new software will be eligible for patent protection. It has also accordingly increased the risk that such software will be copied by its competitors upon introducing it to the marketplace.

In light of the greater risk now associated with software development, businesses are less likely to invest in it. And for those software investments already made, a rational business owner will now have a greater tendency to keep the software a trade secret (and rely on robust code obfuscation) rather than paying for the preparation, prosecution and maintenance of patent rights of uncertain usefulness.

Judge Newman, concurring in part and dissenting in part from the CAFC’s majority opinion in Alice, implicitly calls for an end to amorphous semantics promulgated by the majority:

[T]he statutory purpose of section 101 [is] to provide an inclusive listing of the useful arts.

Then, upon crossing this threshold into the patent system, examination of the particular subject matter on the substantive criteria of patentability will eliminate claims that are ‘abstract’ or ‘preemptive,’ on application of the laws of novelty, utility, prior art, obviousness, description, enablement, and specificity.

There is no need for an all-purpose definition of ‘abstractness’ or ‘preemption,’ as heroically attempted today.

I propose that the court return to the statute, and hold that when the subject matter is within the statutory classes in section 101, eligibility is established.

To summarize Judge Newman: A process (including the process inherent in any functional software) meets the statutory standard for patent eligibility. An applicant may obtain patent protection for a process (including software) if it meets the other requirements for patentability.

Some argue that this straightforward approach runs contrary to the Founders’ expectation that the Patent Office should be stingy with its patent grants. They assert that removing the “non-abstract” or “abstract plus significantly more” tests of Alice would lead to the issuance of patents with claims that are either too broad or mere computer implementations of obvious methods.

But this doesn’t have to be the case. To avoid it, the Patent Office (and courts) should only enforce the written description and non-obviousness requirements of the Patent Statute. Consistent with the written description requirement, the Patent Office should require an applicant to narrow its claims if they exceed the bounds of what the inventor was in possession of upon filing the application.

As to the notion that the two-prong Alice test is required to stop the Patent Office from granting patents for old or obvious methods implemented on a computer, we need only refer to the often-used Winslow Tableau (described in In re Winslow, 365 F.2d 1017 (C.C.P.A. 1966)):

[P]icture the inventor as working in his shop with the prior art references . . . hanging on the walls around him. . . . Winslow would have said to himself, “Now what can I do to hold them more securely?” Looking around the walls, he would see Hellman’s envelopes with holes in their flaps hung on a rod. He would then say to himself, “Ha! I can punch holes in my bags and put a little rod (pin) through the holes. That will hold them!

For computer-implemented inventions, we can assume that a description of computers — and a statement that computers are known for quick and efficient computations — are included among the prior art references pinned to the walls of the inventor’s cubical. This is akin to the conception of a “notorious computer” implemented by the European Patent Office. We just assume that inventors know about existing computers. See EPO Guidelines for Examination. This approach simply acknowledges that computers, and how to use them, are well known.

In response to an application for a patent on a software invention, the USPTO has said:

Inventors understand that computers are good at processing, and understand how to use them. So, if you develop a method that is obvious, implementing it on a computer adds nothing to the argument that the claimed method or device is non-obvious.

Develop a new computer or a way to make a computer run better: great, you may well have a patentable invention. Take a known or obvious method and put it on a computer: no patent, in light of the “notorious computer.

A Winslow-inventor wall (stocked with a description of the notorious computer), combined with already-established tools for determining non-obviousness, provide a more reliable and predictable way to block patents from being issued for insignificant developments. If the Courts or USPTO believe that a method should not be patented, they need not probe into the murky waters of what is or is not “abstract” or “significantly more.” Then only need to apply rigorously the obviousness test they have applied for the past half-century.

This approach would make business less uncertain as to whether not their proposed investments in software could receive patent protection. And reducing this risk would promote the future useful art of software development.

The Author

Bradley J. Hulbert

Bradley J. Hulbert is a partner with McDonnell Boehnen Hulbert & Berghoff LLP. Mr. Hulbert, a founding partner in MBHB, has diverse experience in obtaining, evaluating and enforcing intellectual property. As a counselor to both Fortune 500 and start-up, venture capital companies, he has a special interest in developing creative, cost-effective strategies to address specific business objectives. He has helped lead the firm’s efforts in establishing an office in Mountain View, California.

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 9 Comments comments.

  1. Anon May 5, 2015 11:00 am

    I find that I cannot agree with some of the basic premises assumed by the author, including the over-application of the Jefferson viewpoint to multiple Founders.

    Sorry, but when you start out with a faulty premise, I am just not inclined to go along for the ride.

  2. A. Nony. Mous May 6, 2015 6:04 am

    ” Indeed, after experiencing the mischief arising from undeserved privileges bestowed by the British Crown…”
    When are US commentators going to get over this myth? The UK Statute of Monopolies of 1624 limited the grant of letters patent to “any manner of new manufacture”. Some royal monopolies were granted after its enactment, but the Civil War (theirs, not yours, 1642-51) essentially finished that off.

    And don’t forget the Venetian Patent Statute of 1474, which preceded everyone else’s.

  3. Ron Hilton May 6, 2015 9:40 pm

    I had a boss who used to say, “I want you to do what I meant, not what I said.” I think that is good advice for applying some of the Supreme Court decisions on patent validity. Even if they said they were ruling on subject matter eligibility, if their reasoning invokes the concept of obviousness, then that is how we should interpret it. Alice simply computerized a known method. An algorithm by itself is abstract because it lacks a means of carrying it out – it is not useful in the legal sense. So at a minimum it needs to be tied to a notorious computer. But that is a necessary and not a sufficient condition. It overcomes the utility problem, but not obviousness problem. That is where the “something more” is needed, to make it non-obvious. That’s what the Supreme Court meant, even though it isn’t strictly what they said.

  4. Anon May 6, 2015 11:16 pm

    Ron,

    The only (and very real) problem with your thinking is that the Supreme Court itself rejected that line of thought.

    You enter a surreal game then of lawlessness by injecting what you think they thought – and it goes directly against what they said.

  5. Martin Snyder May 13, 2015 5:26 pm

    The bright line should be a machine or transformation test. If software is making a mechanical, chemical, or nuclear change to matter, it should be eligible. If instead, the end result is providing processed information to human beings via their senses, it should not be eligible.

    Software is not like other manufactures; it is human expression of instructions, written in symbolic languages. Litigating “obviousness” in that context has been, and should be, the province of copyright law, in the dimension of precise copies. The fixed workings of patent law are impossible to fairly apply to myriad shadings of expression. It creates vast economic injustice via misplaced litigation and is an assault on freedom itself as more of life becomes represented by software.

    Also, PS the idea that the software business depends on patents for investment vectors is not supported by data that I know of. In fact, the real world has shown software patents are uncertain to enforce (see the useless draw of the smartphone wars) and that software R&D does not follow laboratory patterns so much, but rather more closely mirrors creative production of motion pictures or the artistic design elements of engineered products.

  6. Anon May 13, 2015 8:03 pm

    Mr. Snyder,

    Your views remain ill (or non) informed tripe (and I am being gentle).

    You might want to look into what copyright law expressly does not capture before you sing the praises of that system in an attempt to protect the aspect of intellectual property that the patent system was designed to protect. Further, the protection afforded under patent law is NOT to the aspect within copyright that you identify (expression) – thus you are clearly wrong on both accounts.

    You have been posting here and elsewhere long enough now to know better. If you refuse to even bother attempting to get the laws (copyright, patent or both) right, then your diatribes deserve only scorn and ridicule. That, or your ability to post will be curtailed, and any thoughts that might someday be made with some understanding of the law will not be heard.

  7. Martin Snyder May 14, 2015 2:19 pm

    Always the weak resort to discredit the speaker to avoid uncomfortable ideas.

    Do you want to argue that the essence of copyright jurisprudence boils down to ‘knowing it when you see it” to resolve copying allegations? Do you want to argue that Alice is basically not an attempt to apply that ethos to patents? Do you want to argue that patent law has been built up for centuries to try and avoid that ethos? Do you want to argue that software is not defined as a set of instructions or that software is created by authorship in a language?

    No, you want to argue that the rapidly decreasing obscurity of your patent priesthood means that outside thinking is harmless, and easily nullified. You want to wish away the fact that many reasonable people believe that per se software should not be patent eligible. You may want to wish away intense political pressure to mitigate an obvious racket. You may want to argue that the whole thing is based on misperception and special interests. You would be right, but not in the way you think…..

    Keep wishing my friend.

  8. Night Writer May 15, 2015 11:53 am

    Martin, “Software is not like other manufactures.” No not exactly that is why it is innovation. The challenge of the law is to adopt to the new technologies not try to push new technologies in iron molds.

    Information processing requires space, time, and energy. The conservation of information is the most important law in physics. The size of the manufacture is highly dependent on the algorithms used.

    And you notion of human expression is absurd. Someone can say the same thing about building any machine.

  9. Anon May 15, 2015 8:09 pm

    I am sorry Mr. Snyder, but if we are going to have a conversation, then you will have to comport yourself with what the laws (both patent and copyright) actually comport.

    This is not Patently-O, where your law-less and fact-less diatribes have unending latitude. There is no “effort to discredit the speaker” on my behalf – your posts lacking in legal knowledge do that all on their own. There is no fear on my part of anything that you would consider “uncomfortable ideas” – save perhaps for entertaining a legal discussion with you if you want to pretend that “whatever” you spout has a perfectly acceptable basis for a legal discussion. Let me kindly let you down on that point: having an opinion is no substitute. Refusing to allow yourself to be informed about the opinion you want to have in a legal discussion simply hold no interest to me, nor will this site allow such shenanigans for long. If you want to discuss patent law, copyright law, or both, then you need to be either prepared, or open to learning. But your long history and diatribes across the patent blogosphere show that you are not willing to do either.

    This is simply not a matter of “outside thinking,” as it is a matter that your thinking remains uniformed and driven purely by a hostile and unreasonable belief system that is dissociated from patent law, the reasons why why have patent law, and in truth, the factual basis of software (yes, my friend, software is a manufacture as that term is known and intended under the law).

    I will keep wishing, but my wish remains the same: that you become properly and fully informed by being willing to set aside your fanatical belief system.