Unless Congress acts first, which is unlikely, it seems inevitable that the Supreme Court will soon revisit the abstract idea doctrine. The Court is likely to revisit the abstract idea doctrine simply because its recent decisions on the doctrine are incomplete and unsatisfying. In many ways, the Court “punted” in both the famous Bilski and Alice cases by issuing decisions that left many questions unanswered. Bilski v. Kappos, 130 S. Ct. 3218 (2010) (“Bilski II”); Alice Corp. Pty. Ltd. v. CLS Bank Intern., 134 S. Ct. 2347 (2014) (“Alice II”). Since these two recent cases, the Patent Office and the lower courts have ran with the thrust of these decisions by routinely rejecting patent applications and invalidating or revoking issued patents. In view of these recent developments, I would argue that the lower courts, by interpreting these precedents so broadly, have begun to realize the Supreme Court’s fear of the abstract idea doctrine “swallow[ing] all of patent law.” Alice II, 134 S. Ct. at 2354. What is needed, then, is concrete guidance from the Supreme Court that establishes an appropriate limiting principle to prevent these precedents from doing more unintended harm. We need a new pro-patent case to end the modern trilogy of abstract idea cases, just as the Diehr case ended the earlier trilogy of abstract idea cases on a happy note (and left the doctrine dormant for about three decades). Gottschalk v. Benson, 409 U.S. 63 450 (1972); Parker v. Flook, 437 U.S. 584 (1978); Diamond v. Diehr, 450 U.S. 175 (1981). Note that the Supreme Court’s notorious Mayo decision is technically classified as a natural law case rather than an abstract idea case. Mayo Collaborative v. Prometheus Labs., 132 S. Ct. 1289 (2012). In this article I sketch what a solution to the crisis in patentable subject matter law may look like—a tourniquet to stop the bleeding.
When considering what a winning strategy on patentable subject matter would look like, it is important to consider what previous losing strategies have looked like. Since 2010, the patent bar and innovation community have had two opportunities to persuade the Supreme Court to issue a ruling that respects patent rights and establishes appropriate limiting principles. Yet, in both cases (Bilski and Alice), we all failed. With that in mind, it is helpful to perform an autopsy to consider what strategies went wrong, so we can further learn what other strategies might go right in a future case. Based on my review, I count at least the following previous strategies that the Supreme Court, rightly or wrongly, simply refuses to accept:
- arguing the plain language of the statute;
- arguing to abolish the abstract idea doctrine (e.g., in the context of computer-implemented inventions);
- arguing the tangibility of the invention;
- arguing to shift the analysis to other sections of the Patent Act.
To be sure, I genuinely believe that all of these strategies have great merit and the Supreme Court should find them persuasive in general. Nevertheless, as I outline below, the modern Supreme Court simply refuses to accept these arguments.
First, attorneys have argued for the Supreme Court to simply follow the statute. Former Chief Judge Rader famously implored everyone, “[w]hen all else fails, consult the statute!” CLS Bank Intern. v. Alice Corp. Pty. Ltd., 717 F.3d 1269, 1335 (Fed. Cir. 2013) (en banc) (“Alice I”) (J., Rader, additional views). The parties framed the debate throughout the Bilski appeal on “what the term ‘process’ in § 101 means.” In re Bilski, 545 F.3d 943, 951 (Fed. Cir. 2008) (en banc) (“Bilski I”). And, in fact, the Supreme Court agreed with Bilski that the term “process” is so broad that it cannot exclude all business methods or all inventions failing the machine or transformation test. Bilski II, 130 S. Ct. at 3228. But this victory proved to be pyrrhic, because the Court went on to affirm the rejection of Bilski’s patent application under the Court’s precedents on the abstract idea doctrine, which is decidedly non-statutory. So, in the end, the Supreme Court simply does not strive for strict fidelity to the statutory language, because the abstract idea doctrine has almost no connection to the statutory text. Accordingly, although this argument has merit, and may even reflect the most accurate construction of the statute, we cannot expect the argument to yield desired results at the Supreme Court.
Second, some have asked for the Supreme Court to simply abolish the abstract idea doctrine. These critics observe that the Court’s prohibition against patenting ideas conflicts with its other precedents stating that patents protect inventions, which are essentially ideas conceived by inventors. Compare Benson, 409 U.S. at 71 (“It is conceded that one may not patent an idea.”) with Pfaff v. Wells Electronics, Inc., 525 U.S. 55, 60 (“The primary meaning of the word ‘invention’ in the Patent Act unquestionably refers to the inventor’s conception rather than to a physical embodiment of that idea.”). These critics also contrast patents with copyrights, from which Congress excluded ideas by statute. See Ultramercial, Inc. v. HULU, LLC., 722 F.3d 1335, 1349 (“After all, unlike the Copyright Act which divides ideas from expression, the Patent Act covers and protects any new and useful technical advance, including applied ideas.”) and 17 U.S.C. § 102(b). In this spirit, IBM argued in Alice II that the abstract idea doctrine “has proven unworkable” for computer-implemented inventions and that these inventions “will always fall outside the abstract idea exception.” If the Court had agreed with IBM and adopted its suggested conclusion, then the Court would have essentially eviscerated the abstract idea doctrine, because the doctrine has traditionally and predominately applied in the context of computers (see Benson, Flook, Diehr, Alice).
Ultimately, asking this Supreme Court to abolish or eviscerate the abstract idea doctrine is simply asking too much. The Court declined to adopt IBM’s suggestion in Alice II and, instead, followed CLS Bank and its supporting amici by applying the abstract idea more aggressively than ever before. Although the Supreme Court is fallible, and sometimes reverses its errors, the abstract idea doctrine is one area where the Court concedes nothing. Indeed, the abstract idea doctrine is another area in patent law where the Court decides cases primarily based on its own precedent rather the statutory text. See also Microsoft Corp. v. i4i Ltd. Partnership, 131 S. Ct. 2238 (2011); Kappos v. Hyatt, 132 S. Ct. 1690 (2012); Kimble v. Marvel Enterprises, Inc., 135 S. Ct. 1697 (2015). Perhaps the Court will be more receptive in the future, with a different membership that expresses greater concern for reliance on property rights and business investments.
Third, it is a mistake to focus on the tangibility of the invention when arguing before the Supreme Court. In fact, that is the essence of the mistake that the Supreme Court found in the Federal Circuit’s decision in Bilski I. Although the patent bar remembers Bilski II as an anti-patent decision (e.g., because the decision upheld the rejection of Bilski’s application), the decision also includes several pro-patent aspects, including especially its refusal to limit patent eligibility to inventions that satisfy the famous “machine-or-transformation test.” In other words, according to the Supreme Court, it is simply a mistake to focus on the tangibility of the claimed invention. At best, the machine-or-test transformation test is a “useful clue,” although the clue has not proven to be that useful. Bilski II, 130 S. Ct. at 3227. In Alice I, Judges Rader and Moore stated, in exasperation, “[i]f tying a method to a machine can be an important indication of patent-eligibility, it would seem that a claim embodying the machine itself, with all its structural and functional limitations, would rarely, if ever, be an abstract idea.” 717 F.3d at 1305. Yet, if there was any doubt that the tangibility argument had limited relevance to the Supreme Court, the Court’s later decision in Alice II settled the question by invalidating patent claims to a physical data processing system and corresponding computer program product. More recently, in dissenting from the denial of the petition for rehearing en banc in Ariosa, Judges Moore and Lourie argue that “[a]bstract steps are, axiomatically, the opposite of tangible steps.” In my view, that argument is admirable in terms of candor and common sense but the argument is, nevertheless, doomed to failure before a recalcitrant Supreme Court.
Fourth, it is similarly a mistake to argue that the Court should shift some of the work from the abstract idea doctrine and § 101 to other sections of the Patent Act, including especially §§ 102, 103, and 112. Various parties have employed this strategy in the Court’s recent patent eligibility cases, mostly notably by the Solicitor General in Mayo, by IBM in Alice II, and by former Chief Judge Rader in Alice I and various other Federal Circuit opinions. Yet, each time, the Court has resoundingly rejected this argument, even refusing to follow the Solicitor General in Mayo (which is rare for the Supreme Court in patent cases). The error underlying all of these failed arguments is thinking that the Supreme Court is simply using the abstract idea doctrine as a shortcut for invalidating patents directed to old or obvious inventions. Instead, as Professor Lefstin has persuasively argued in an excellent law review article, Inventive Application: A History, the Court’s judicial exceptions to § 101 carve out certain subject matter from patenting regardless of their novelty. As Justice Stevens wrote in Flook, patents can be invalid even if “we assume that respondent’s formula is novel and useful and that he discovered it.” 437 U.S. at 588. Of course, legal scholars have argued persuasively that these remarks in Flook constitute dicta that the Court later repudiated in Diehr. See Diehr, 450 U.S. at 189, n. 12 (rejecting the “claim dissection” interpretation of Flook). Nevertheless, the modern Supreme Court continues to selectively follow the spirit of Flook by focusing on “well-understood, routine, conventional activit[ies]” dissected from the overall claim language under review. See Alice, 134 S. Ct. at 2359 (internal citation omitted).
In my view, the Flook rule is unfortunate and unnecessary, because patents on nonobvious inventions can cause only minimal harm to the public. No matter how sweeping a nonobvious patent claim is, the claim simply prevents the public for a brief time from freely practicing an invention that the public never practiced before. Perhaps for this reason, the architects of the Patent Act focused on novelty and nonobviousness as the primary “conditions of patentability.” Yet this public policy insight falls on deaf ears at the Supreme Court.
All of the above arguments have great merits but they also share one fatal flaw: the Supreme Court, rightly or wrongly, rejects them. Accordingly, what is needed is a new argument. The new argument should satisfy all of the following criteria:
- the argument should avoid all of the above failed strategies;
- the argument should avoid criticizing the Supreme Court’s precedents and instead provide cover for the Supreme Court to justify its earlier decisions;
- the argument should be moderate enough for the Supreme Court to accept;
- the argument should nevertheless establish a limiting principle that effectively serves as a tourniquet to prevent the abstract idea doctrine from further eviscerating patents and patent valuations.
I believe that I have such an argument, which we can call the Cluster Argument. I will summarize the Cluster Argument’s premises in the following brief introduction:
- The Supreme Court’s abstract idea cases are divided into two clusters: looped mathematical algorithms (Benson, Flook, Diehr) and fundamental business practices (Bilski and Alice).
- In each of both clusters of cases, there are certain narrowing hallmarks that every case in that cluster shares. Every math case involves a looped mathematical algorithm involving numerical values. And every business method case involves a “fundamental economic practice long prevalent in our system of commerce and taught in any introductory finance class.”
- Although the Supreme Court has not explicitly limited the abstract idea doctrine to cases that involve these narrowing hallmarks, we should invite the Supreme Court to do so, because:
- In the context of patentable subject matter, the Supreme Court has repeatedly told us to interpret its precedents narrowly and to avoid reading new limitations into the patent statutes that Congress has not expressed.
Let me expand on the argument. I believe that the patent community generally fails to appreciate how similar the first cluster of cases are (Benson, Flook, and Diehr) and also how much they differ from the later cluster of business method cases (Bilski and Alice). Consider the claims in the first cluster of cases:
|A data processing method for converting binary coded decimal number representations into binary number representations comprising the steps of
(1) testing each binary digit position `1,’ beginning with the least significant binary digit position, of the most significant decimal digit representation for a binary `0′ or a binary `1′;
(2) if a binary `0′ is detected, repeating step (1) for the next least significant binary digit position of said most significant decimal digit representation;
(3) if a binary `1′ is detected, adding a binary `1′ at the (i+1)th and (i+3)th least significant binary digit positions of the next lesser significant decimal digit representation, and repeating step (1) for the next least significant binary digit position of said most significant decimal digit representation;
(4) upon exhausting the binary digit positions of said most significant decimal digit representation, repeating steps (1) through (3) for the next lesser significant decimal digit representation as modified by the previous execution of steps (1) through (3); and
(5) repeating steps (1) through (4) until the second least significant decimal digit representation has been so processed.
|A method for updating the value of at least one alarm limit on at least one process variable involved in a process comprising the catalytic chemical conversion of hydrocarbons wherein said alarm limit has a current value of
wherein Bo is the current alarm base and K is a predetermined alarm offset which comprises:
(1) Determining the present value of said process variable, said present value being defined as PVL;
(2) Determining a new alarm base B, using the following equation:
where F is a predetermined number greater than zero and less than 1.0;
(3) Determining an updated alarm limit which is defined as B+K; and thereafter
(4) Adjusting said alarm limit to said updated alarm limit value.
|A method of operating a rubber-molding press for precision molded compounds with the aid of a digital computer, comprising:
providing said computer with a data base for said press including at least,
natural logarithm conversion data (ln),
the activation energy constant (C) unique to each batch of said compound being molded, and
a constant (x) dependent upon the geometry of the particular mold of the press,
initiating an interval timer in said computer upon the closure of the press for monitoring the elapsed time of said closure,
constantly determining the temperature (Z) of the mold at a location closely adjacent to the mold cavity in the press during molding,
constantly providing the computer with the temperature (Z),
repetitively calculating in the computer, at frequent intervals during each cure, the Arrhenius equation for reaction time during the cure, which is
where v is the total required cure time,
repetitively comparing in the computer at said frequent intervals during the cure each said calculation of the total required cure time calculated with the Arrhenius equation and said elapsed time, and
opening the press automatically when a said comparison indicates equivalence.
As quoted above, each of these claims recites a mathematical algorithm in the literal sense. For example, all of the claims literally recite mathematical variables (a “binary digit position” in Benson, which is either “1” or “0”; “Bo,” “K,” “F,” and “PVL,” in Flook; and “v,” “C,” “Z,” and “x” in Diehr). Similarly, all of the claims are directed to repetition, whether conditional or absolute, of all or part of the mathematical algorithm (“repeating steps (1) through (4)” in the Benson claim; “[t]he process is repeated at the selected time intervals” in the Flook opinion, 437 U.S. at 598; and “repetitively comparing in the computer at said frequent intervals” in the Diehr claim). In other words, all of these claims are directed to a programming loop. We can summarize the narrowing hallmarks of the first cluster of cases as follows:
- a mathematical algorithm;
- that involves numerical values;
- that manipulates and/or compares the numerical values;
- either explicitly recites or suggests (through context) a looped or iterative calculation.
In contrast, the second cluster of business method cases has a different set of narrowing hallmarks. In Bilski II, the Supreme Court quoted Judge Rader, from Bilski I, when describing these narrowing hallmarks. According to the Court, Bilski’s claim was unpatentable under the abstract idea doctrine because it was directed to a:
- “economic practice”
- “long prevalent in our system of commerce and”
- “taught in any introductory finance class.”
130 S. Ct. at 3231 (quoting Bilski I, 545 F.3d at 1013 (Rader, J., dissenting)). Importantly, when invalidating the Alice patent, the Supreme Court quoted the same language from Judge Rader in Bilski I. Accordingly, even though the Alice patent(s) recited a computer implementation, the Supreme Court invalidated the corresponding claims based on the recitation of a fundamental economic practice. Thus, Alice II belongs squarely within the second cluster of recent business method cases rather than the earlier trilogy of mathematical algorithm cases.
Presumably, like everyone else, the Supreme Court would like to find a solution to the crisis in patentable subject matter law. Justice Scalia famously stated that the most difficult case is “probably a patent case,” perhaps referring to the heavily delayed, fractured, and criticized decision in Bilski II. The Supreme Court went on to grant certiorari for the question presented in Alice II of “[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?” During oral arguments, the Supreme Court expressed concern about a need for clarity in the law. Nevertheless, the Court ultimately punted again by issuing a decision that did not reference the term “software” and explicitly declined to define the key term “abstract idea.”
A future abstract idea case will provide the opportunity for the Supreme Court to stop punting and to finally define the term “abstract idea” in a manner that respects the Court’s precedents while also establishing a limiting principle to prevent the abstract idea doctrine from further eviscerating patent law. The Court can do this simply by first observing that the term “abstract idea” is a legal term of art. That “abstract idea” is a legal term of art follows naturally from the fact that, if the term is interpreted according to its plain and literal meaning, the term is redundant. All ideas are abstract. Moreover, the Supreme Court’s own precedents establish that patents protect inventions and that “[t]he primary meaning of the word ‘invention’ in the Patent Act unquestionably refers to the inventor’s conception rather than to a physical embodiment of that idea.” Pfaff, 525 U.S. at 60 (italics added). Thus, interpreting “abstract idea” as referring to all ideas would violate the Court’s own instruction to interpret its precedents narrowly and consistent with the Patent Act. Instead, the Court may observe that the term “abstract idea,” as a legal term of art, simply refers to the kinds of unpatentable inventions that the Court’s precedents identify: (A) looped mathematical algorithms that manipulate numerical values and (B) “fundamental economic practice[s] long prevalent in our system of commerce and taught in any introductory finance class.”
At this point, having acknowledged that the term “abstract idea” constitutes a legal term of art that defines a set including these two clusters of unpatentable subject matter, we should invite the Supreme Court to simply close the set. There is nothing in common between these two clusters that justifies their unpatentability in a way that should include an additional cluster beyond these two. The first cluster is justifiably unpatentable, to the extent it is, because it raises concerns about the First Amendment and mental processes. As Justice Douglas observed in his original opinion, the algorithm in the Benson method claim could be performed in the human mind. 409 U.S. at 67. In contrast, the second cluster raises primarily concerns about nonobviousness (and perhaps a distrust of financial engineering). If an “invention” is “long prevalent in our system of commerce” and “taught in any introductory finance class” then the invention was surely obvious. Thus, in my view, the common thread between these two has nothing to do with intangibility or abstraction. Instead, the common thread is simply historical happenstance and a shared legal moniker, the “abstract idea” doctrine. Out of judicial convenience, the Supreme Court has used the same term to invalidate, perhaps justifiably, two markedly different clusters of subject matter.
The Court, and the parties before it (including amici), can easily justify the Court adopting this narrow “cluster” definition of the term “abstract idea,” because the Court itself has repeatedly instructed lower courts and tribunals to interpret its precedents in this area of law narrowly:
- “We should not read into the patent laws limitations and conditions which the legislature has not expressed.” United States v. Dubilier Condenser Corp., 289 U.S. 178, 199 (1933);
- “We have also cautioned that courts ‘should not read into the patent laws limitations and conditions which the legislature has not expressed.’” Diamond v. Chakrabarty, 447 U.S. 303, 308 (1980) (quoting Dubilier Condenser Corp.);
- “[I]n dealing with the patent laws, we have more than once cautioned that ‘courts ‘should not read into the patent laws limitations and conditions which the legislature has not expressed.’’” Diehr, 450 U.S. at 182 (quoting Chakrabarty and Dubilier);
- “As in Chakrabarty, we decline to narrow the reach of § 101 where Congress has given us no indication that it intends this result.” JEM Ag Supply, Inc. v. Pioneer Hi-Bred International, Inc., 534 U.S. 124, 145-46 (2001);
- Bilski I, 130 S. Ct. at 3226 (same);
- “The Court has recognized, however, that too broad an interpretation of this exclusionary principle could eviscerate patent law.” Mayo, 132 S. Ct. at 1293;
- “At the same time, we tread carefully in construing this exclusionary principle lest it swallow all of patent law.” Alice II, 134 S. Ct. at 2354 (citing Mayo).
In view of the above, the Court’s own precedents provide overwhelming authority for interpreting § 101 broadly and, conversely, interpreting its judicial exceptions to § 101 narrowly. These precedents provide ample support for the Cluster Argument: (1) observing that the term “abstract idea” constitutes a legal term of art that, according to stare decisis, properly refers to looped mathematical algorithms and old and fundamental business practices and (2) declining to expand the set of “abstract ideas” beyond these two clusters without a signal from Congress.
Some readers of earlier versions of this article questioned whether the Cluster Argument would actually result in a significant change in the law. Absolutely, I believe that it would. Most importantly, it would immediately delete two out of four of the Patent Office’s categories of abstract ideas: “ideas themselves” and “certain methods of organizing human activity.” See 2014 Interim Guidance on Subject Matter Eligibility. That would be a huge relief to the patent prosecutors trying to handle the thousands of seemingly arbitrary section 101 rejections coming from the PTO after Alice.
Consider also the Federal Circuit decision in Planet Bingo. Appeal no. 2013-1663 (August 26, 2014) (nonprecedential). The game of bingo has a tangential connection to money and business, but bingo does not constitute a “fundamental economic practice.” Nor is bingo “taught in any introductory finance class.” Bingo does not resemble the fundamental economics concepts of hedging (Bilski) and escrow (Alice). Similarly, the District Court for the Central District in California invalidated claims directed to automating animation of computer-generated characters’ lips moving. See McRo, Inc., d.b.a. Planet Blue v. Bandat Namco Games America, Inc., et al., Case No. 12-cv-10322-GW (FFMx) (October 31, 2014). Yet, the claimed method does not recite a mathematical algorithm or the iterative manipulation of mathematical variables, even if the method if implemented using underlying mathematical logic on a general purpose computer, like virtually all software. The claimed method simply does not resemble the mathematical equations explicitly recited in Benson, Flook, and Diehr, as shown above. Many other recent federal court decisions that invalidate patent claims as impermissibly directed to abstract ideas would be similarly undermined by the logic of the Cluster Argument.
Although the Supreme Court is not obligated to accept this Cluster Argument, the Argument may represent our best hope for solving the crisis in patentable subject matter law. The Cluster Argument avoids all of the pitfalls that I outlined above in previous failed strategies. It also respects the Court’s precedents while providing a strategy for the Court to untangle itself from the web that is has spun. The Cluster Argument is a tourniquet and, if we give the Court the opportunity, the tourniquet can stop the bleeding.