After Alice: Is New Legislation Needed? Before Alice: Was there a Precedent?

By Martin Goetz
April 21, 2016

businessman-question-marks-335For almost two centuries there have been inventions implemented by wind technology and solar technology. One wonders if, during that long time period, did the US Supreme Court (or lower Courts) ever question whether inventions using those technologies were patentable? Or if new legislation was required?

Back in December 2015, I was invited to write an article in WIPR (World Intellectual Property Review), a UK daily IP on-line subscription site, because I disagreed with the conclusions voiced in two of their articles.

Their first article said it all in its title LES 2015: Legislation needed to fix Alice uncertainty, says IBM attorney. The second article WIPR survey: Legislation needed to clear up Alice uncertainty, readers say  stated that 88% of their readers said new legislation was needed.

The question of whether new legislation is needed has been very controversial since the June 2014 Alice decision. In a March 2016 article IBM, Google Disagree on Alice, Need for Congress to Act  an IBM representative again indicated that new legislation was needed while the Google representative disagreed. And recently, David Kappos, the former director of the U.S. Patent and Trademark Office stated in his article OPINION: Time For Congress To Leave Patent System Alone that “Congress should forego further sweeping patent legislation”.

In my WIPR article I gave two reasons why there was no need for new legislation:

Reason 1: The Alice Supreme Court decision was clear. On December 6, 2013 the Supreme Court granted certiorari on the following question that was framed by Alice:

“Whether 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?”

In the oral arguments on March 3, 2014 and in the Court’s 9 to 0 decision on June 19, 2014  the Court clearly answered “yes” when they wrote that “inventive concepts” are the basis for a patent. The Court went on to state that “improvements to another technology or technical field” and “improvements to the functioning of the computer itself” were examples of patentable subject matter. And those statements are completely consistent with the Supreme Court’s 1981 Diehr decision. On page 13 in the Alice decision they wrote “…the claims of Diehr were patent eligible because they improved an existing technological process, not because they were implemented on a computer”.

On June 25, 2014 the Patent Office then expanded on “inventive concepts” when it issued its Preliminary Examination of the Alice Decision and stated: “Notably, Alice Corp. neither creates a per se excluded category of subject matter, such as software or business methods, nor imposes any special requirements for eligibility of software or business methods.” In December 2014 the Patent Office gave guidelines and examples of what is patentable and what is not patentable and in July 2015 it came out with an additional update on subject matter eligibility. Also see The USPTO Strikes Back: Interim Guidance Update Promotes Software Patent Eligibility.

The bottom line is that the Alice decision clearly stated that computer-implemented inventions are patentable subject matter. And the Patent Office has provided guidelines and examples for patent examiners, the PTAB and the Courts to follow as they wrestle with new patent applications and existing patents.

Reason 2: Software is only a means to an end. Clearly, one does not get a patent on software or a computer program. You get it solely on an invention. But software could be the best way to implement an invention. Software, just like electronic circuits, or steam power, or wind energy, or solar energy, — to name a few — only  describes a way to implement (disclose)  an invention. For example, steam-implemented inventions were first patented late in the 19th century. Wikipedia shows a list of steam technology Inventions from 1887 to 2011. But there is no record that the Supreme Court had to intervene to determine if such inventions were patentable. Likewise with electronic circuits, wind and solar implemented inventions.

Under the USPTO long time guidelines one receives a patent only if a) there is an invention b) if there is a proper Specification (an adequate disclosure to one skilled-in-the-art) and c) the so-called invention in the patent application is not abstract and not obvious. True inventions must stand on their own two feet and meet the test of an invention as specified in the US Patent law. The USPTO states that an invention is defined in its claims and not by its specification. (See Determine What is an Invention).

The Mayo Two-Part Test: While I believe the Alice decision was clear and unambiguous in stating that computer-implemented inventions are patentable subject matter, the decision created a great deal of uncertainty by suggesting the Mayo-two-part test be the established framework for the Courts  in examining the validity of patents. And the Patent Office in its June 25, 2014 memorandum indicated that patent examiners and the PTAB should also use Mayo in reviewing claims that could involve abstract ideas.

But the Courts have found it difficult to use the Mayo two-part test in the examination of a patent’s validity thus creating great uncertainty. The February 2015 article Exploring Judge Lourie’s flip-flop in Ultramercial  discussed many of the confusing lower Court decisions that occurred in the 8 months since the Alice decision. Now in 2016 there is still confusion, but as the US patent Office, the USPTO and its patent examiners gain more experience in rejecting obvious and abstract patent applications, the rate of rejection by lower Courts for new patent applications will go down. And according to a recent study (see Most Comprehensive Study of Patent Trial and Appeal Board Decisions Shows Rate of Unpatentability Findings Overstated) “the study reveals that 40% of patent claims challenged in Inter Partes Review (IPR) proceedings survived scrutiny. But the fact that there are still very high rejection rates of those so-called software patents is not really a bad omen because of the many, many obvious patents that in the past should never have been approved by the Patent office.

In conclusion… One should not confuse the uncertainty of the complex U.S. patent system with the clarity of the Alice decision. There is no reason to believe any new legislation will provide any improvement in deciding what should, and what should not, be patentable.

The Author

Martin Goetz

Martin Goetz is a pioneer in the development of the commercial software industry, and is known within the industry as “the Father of Third Party Software.” He is also widely regarded as the inventor on the first software patent ever granted by the United States Patent and Trademark Office, U.S. Patent No. 3,380,029.

PBS Digital Studios profiled Goetz and his pursuit of the first software patent in the YouTube video below.

In 2007, Goetz was the “Unsung Innovator” of the computer industry by ComputerWorld. Goetz is also a member of the Mainframe Hall of Fame.

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. Night Writer April 21, 2016 9:12 am

    Martin, the problem is that technically legislation would not overrule Alice. Alice is a finding of what is unconstitutional to grant a patent for because the SCOTUS made a finding of fact that it does not promote innovation. Yes, Alice is unconstitional and outrageous in law.

    But, the upshot of this is that you can’t pass legislation that would over rule Alice. Not possible by our Constitution.

  2. step back April 21, 2016 12:41 pm

    Martin,

    Let me second Night Writer’s point.

    IIRC, you are not a lawyer. You did not have your brain cells twisted, pulled and woven into a braid the way many of us did in law school.

    So perhaps you approach the issues of Mayo and Alice with humble and genuine genuflection before the mighty and all knowing “Supremes” of our find land of Oz.

    But for those of us who have pulled back the Wizard’s curtain and have removed our red colored glasses, all is not well. Our Supremes are easily manipulated by them that they consider as “friends” of the court. They think there are really things called “laws of nature” and DNA is like a banana tree from which one plucks and peels the easily seen fruit. They think that any 2nd year engineering student can work at home over a weekend on a “generic” computer and “make it so” ala Star Trek’s Captain Kirk once given an “abstract idea” and told to ‘apply it’.

    They think they can create out of thin air, their own laws even though 35 USC 101 is broadly written to allow for ANY new and useful machine, process, manufacture, composition of matter or improvement thereof. They have no concept of 35 USC112’s mandate that the inventor decides what he regards as his invention.

  3. step back April 21, 2016 12:54 pm

    Hi again Martin,

    I did not realize that U-Toob has a dog and pony dog recreation of the Myriad case (the one where our Supremes pluck leaves off of trees)

    Use this URL ending to watch it: watch?v=ukihf6A-5bo

    You should be in for a treat (a doggie treat)

  4. Night Writer April 21, 2016 1:13 pm

    @3 step back: pretty funny.

  5. step back April 21, 2016 6:07 pm

    Speaking of Mayo, Alice and other dogs, a recent SEQUENOM v. Ariosa Brief here:

    http://www.twentyfirstcenturymedicine.org/wp-content/uploads/2016/04/c21cm_amicus_brief_scotus_ariosa-v-sequenom.pdf

  6. Reinier Bakels April 25, 2016 3:00 am

    New statutory rules indeed would not help. The EPO has more explicit rules on patentable subject-matter (in art. 52), but they are not helpful either.

    What is needed is more clarity on the purpose of patents, perhaps to be codified in a preamble. The constotutional clause in I.8.8 gives guidance.
    As long as patents are considered a kind of “copyright for technology” – a reward for an effort – there is no reason to refuse patents for certain subject-matter, except empty words.

    It must be acknowledged that patents are an exception to the rule of freedom of competition. This was acknowledged as early as 1624 by the English “Statute of Monopolies”.