Broadband iTV files amicus brief supporting Versata petition for certiorari

scotus-supreme-court-350-3On April 14, 2016, amici Broadband iTV, Inc. (“BBiTV”) filed an brief in support of Versata’s petition for a writ of certiorari in Versata Dev. Grp., Inc. v. SAP Am., Inc., No. 15-1124.  BBiTV is a former practicing entity and patent holder in the field of delivering video-on-demand content via cable television communication services. BBiTV has continued to enhance its technology by investing in ventures within its field and that commercially implement its inventions, and thus maintains a substantial interest in the fruits of its research and development in the form of its patent portfolio.  Charles R. Macedo, Jessica Capasso, and Sandra A. Hudak of Amster, Rothstein & Ebenstein LLP were authors on the brief.

Versata appeals from an affirmance of a CBM decision, finding claims of Patent No. 6,553,350, entitled “Method and Apparatus for Pricing Products in Multi-Level Product and Organizational Groups” as directed to the abstract idea of “determining a price using organizational and product group hierarchies.”

Versata presented four questions to the Supreme Court, some very specific to CBM proceedings.  In its amicus brief, BBiTV more generally asks the Supreme Court to revisit its patent-eligibility precedents, and clarify how computer-implemented claims can be found patent-eligible under Alice to correct the ongoing misapplication of Alice in the lower courts and by the PTAB.

The following is an excerpt taken from BBiTV’s amicus brief.

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The decisions below reflect confusion among lower courts and the PTAB as to what constitutes patent-eligible subject matter under 35 U.S.C. § 101. This confusion has persisted throughout the development of the patent-eligibility jurisprudence since this Court’s decision in Bilski v. Kappos, 561 U.S. 593 (2010) and, more recently, since this Court’s decision in Alice Corp. v. CLS Bank,134 S. Ct. 2347 (2014).

The Federal Circuit’s decision below [Versata Dev. Grp. v. SAP Am., 793 F.3d 1306 (Fed. Cir. 2015)] exemplifies the alarming trend of the PTAB and lower courts misapplying Alice in determining what constitutes an “abstract idea” versus what is sufficient to demonstrate that a claim is directed to a practical application of an abstract idea rather than merely the abstract idea itself.

Versata is simply one decision among many in which the PTAB or lower courts erred in defining the alleged abstract ideas by:

  1. improperly including “novel” business practices or methods of organizing human activities; and
  2. including detail well beyond the level of detail envisioned by Alice or Bilski.

This Court’s precedent has never sanctioned such a broad scope for the judicially-created exception to patent-eligible subject matter under Section 101.

Versata also evidences the growing and erroneous trend among lower courts in the misapplication of step two of the A lice framework.  Versata erred by:

  1. ignoring “inventive” aspects of the claimed invention that are “non-routine” merely because a generic computer was involved; and
  2. ignoring technological improvements that are effected by the claims as a whole merely because a generic computer was involved.

While Alice made clear that “the mere recitation of a generic computer cannot transform a patent-ineligible abstract idea into a patent-eligible invention,” it is equally clear that the use of a generic computer does not automatically make a claim patent-ineligible.  See Alice, 134 S. Ct. at 2358.  Thus, these inventive and technological elements cannot be ignored merely because they are part of a computer-implemented invention.  However, lower courts are confused about the state of the law of patent-eligibility under Section 101, which has resulted in the pervasive invalidation of patents involving computer-implemented inventions.  See, e.g., Sri Int’l v. Cisco Sys., No. 13-1534-SLR, 2016 U.S. Dist. LEXIS 48092, at *13–14 (D. Del. Apr. 11, 2016) (“Given the evolving state of the law, the § 101 analysis should be, and is, a difficult exercise.  At their broadest, the various decisions of the Federal Circuit would likely ring the death-knell for patent protection of computer-implemented inventions, a result not clearly mandated (at least not yet).”);  . . .

This alarming trend of misapplying Alice’s guidance has allowed the judicial exception to patent-eligibility to “swallow all of patent law.”  Alice, 134 S. Ct. at 2354; see also Mayo Collaborative Servs. v. Prometheus Labs., 132 S. Ct. 1289, 1293 (2012) (too broad an interpretation “could eviscerate patent law”).  Since Alice, more than 100 patents and thousands of claims have been declared invalid under 35 U.S.C. § 101 by the lower courts or PTAB using an overly broad interpretation of Alice.  Thus, it is important for this Court to take up the issue of patent-eligibility once again and right the course.

The Author

Charles R. Macedo

Charles R. Macedo is a Partner at Amster, Rothstein & Ebenstein LLP, where he advises and litigates in all areas of intellectual property law, including patent, trademark and copyright law, with a special emphasis in complex litigation. He also assists clients in obtaining, maintaining and enforcing patent and trademark portfolios. He has successfully recovered domain names registered to others using clients’ trademarks.
Mr. Macedo is also the author of the book, The Corporate Insider’s Guide to U.S. Patent Practice, originally published by Oxford University Press.

For more information or to contact Mr. Macedo, please visit his Firm Profile Page.

Charles R. Macedo

Jessica Capasso is an attorney with Amster Rothstein & Ebenstein LLP. Ms. Capasso litigates patent, trademark, copyright, trade secret and unfair competition cases, and counsels clients on protection of and contractual issues regarding intellectual property. Trained as a biological and environmental engineer, she works with a range of IP including computer technology, apparel and textile design, business method patents and materials science. Ms. Capasso has been centrally involved in numerous ARE litigations with responsibility for case management, drafting motions, preparing expert reports, preparing witnesses for depositions and managing discovery. To for more information and to contact Ms. Capasso please visit her firm bio page.

Charles R. Macedo

Sandra Hudak is an Associate with Amster Rothstein & Ebenstein LLP. Ms. Hudak works in all areas of intellectual property law, including patents, trademarks, copyrights, and unfair competition. She has been involved in numerous ARE litigation matters with responsibilities including developing strategies and defenses, analyzing prior art, managing document review, and drafting motions and pleadings. Her areas of focus in patent law include subject matter eligibility under 35 U.S.C. § 101, invalidity based on prior knowledge or use, and divided infringement. She prepares and prosecutes patent applications in a wide range of technologies, including financial services, internet marketing, consumer products, and therapeutic agents. She also assists clients in post-grant proceedings before the U.S. Patent and Trademark Office, such as, inter partes reviews and covered business method reviews.

For more information or to contact Ms. Hudak, please visit her Firm Profile Page.

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There are currently 1 Comment comments.

  1. Ternary April 19, 2016 3:30 pm

    Very good and timely article and brief. It is interesting to compare claims in issued SAP patents with the Versata claim, as for instance claim 27 in Versata S/N 6,553,350 in this case. Many SAP patents in the USA originate from Europe and are co-pending with cases allowed or pending in the EPO. It is clear that SAP has a focus on the technological aspects of business/software methods, under the limitations as dictated by the EPO. SAP has some very good claim drafters.

    Versata’s claim has more of a business focus. The original Versata patent was assigned to Trilogy. Trilogy, SAP and others companies operate in the space of what is called enterprise software. Some aspects of enterprise software automate and integrate known business processes. The integration of these business processes (as many companies that have gone through ERP implementation know) is not an obvious process at all. The design of that software and implementation on a computer system is not an abstract idea.
    Many of these processes perform also some form of optimization, or prioritizing or bottle-neck removal which greatly improves or even enables the integration of business processes.

    The inventive concepts behind enterprise optimization, including pricing, depend almost entirely on the application of computers. A next wave of business process optimization, including a better use of big data, is being rolled out right now.

    One urgent question that arises out of the Versata case (and other cases) and touched upon by the brief is if the use of “abstract idea” in the context of software is still appropriate at all in this digital age and not only if it is appropriately applied. Many “objects” in enterprise systems are software or data objects. One may give them the name of “software object” or “message” but also “price” or “buy order” or “invoice.” These objects are being modified, stored and transmitted and instigate a change in a system. Because of the still growing real-life impact and consequences it seems very much outdated to talk about “business” software as an abstract idea.

    The courts have very little guidance from the law to figure out what “abstract” actually means in the context of patents. It is one of the tasks of Congress to bring patent law into the digital age rather than commiserating over patent trolls.