The Freeman-Walter-Abele test has been defunct for many years, dating back to when the United States Court of Appeals for the Federal Circuit finally did away with the test in In re Alappat, 33 F.3d 1526 (1994). Still, the Freeman-Walter-Abele test, named for the three cases contributed to the tortured test, remains an important part of software patent history in the United States for several reasons.
Under the Freeman-Walter-Abele test some physical, tangible link to process steps of a claim needed to be present, which sounds eerily similar to the machine component of the Bilski machine or transformation test. Furthermore, under the Freeman-Walter-Abele test it was not enough that the patent claim be drafted as a method, but rather the process had to be linked to one or more elements of a statutory apparatus claim that itself would meet the requirements of section 101. Again, similarity with the machine-or-transformation test is again striking.
The Freeman-Walter-Abeletest was widely criticized (rightfully so) as being so flexible that any district court judge or three-judge panel of the Federal Circuit could apply it to justify any preconceived notions and ideological preferences. Indeed, while the Freeman-Walter-Abele test was an attempt to interject objectivity into the patent eligibility inquiry, the test proved to be anything but objective. The FWA test was unworkable.
The FWA introduced uncertainty and unpredictability into matters of business and property law. It is axiomatic that business law must be certain to allow individuals and corporations to have confidence in decision making as they adjust and define their commercial affairs. It is essential that matters of property law be well-settled to the point of boredom so everyone can know what is owned and by who. The FWA test was an abysmal failure, which is why the Federal Circuit finally dismissed it, being no longer willing to perpetuate the charade.
While the presence of physical, tangible elements in a claim is no longer the touchstone of patent eligibility under the Alice/Mayo test, we have come full circle in many important respects. The two-part Alice/Mayo test is unintelligible and every bit as unworkable as the Freeman-Walter-Abeletest had become. Although it presents a framework that gives the appearance of objectivity, the truth is the framework allows any and every decision maker to reach whatever final determination they philosophically and ideologically are predisposed to reach.
The Alice/Mayo framework does not mandate a conclusion, it tolerates – even enables – whatever conclusion the decision maker prefers. This is allowed because of a universe of irreconcilable opinions from the Supreme Court. So bad is the situation that you can’t hope to know the likely result unless you know which precedential opinions the decision maker will apply. Unfortunately, there are precedential opinions that support every proposition, all of which remain good law and have not been overruled, at least according to the Supreme Court.
It is hardly shocking that the Federal Circuit is having an impossible time applying the test. The Supreme Court said in Diamond v. Diehr that it is improper to allow considerations of novelty to seep into patent eligibility determinations, but then that is precisely what the Court did in Mayo, but somehow we are all to pretend that Diehr hasn’t been overruled because the Supreme Court says they didn’t overrule Diehr. Perhaps they don’t understand the issues well enough to realize that the ruling in Mayo impossibly irreconcilable with Diehr. This is but one example. The Supreme Court overruled Diamond v. Chakrabarty in Myriad and we are similarly to operate under the charade that both are good law.
To make matter worse, the Supreme Court detests bright line rules, but the front lines of U.S. patent laws implemented by nearly 8,500 patent examiners most of whom are not attorneys. It is hardly shocking that the Patent Office is likewise having an impossible time applying the Alice/Mayo test.
The private sector is confused and uncertain, which creates an untenable climate for innovation in such critically important areas as artificial intelligence, blockchain technologies and autonomous driving, medical diagnostics – all critically important technologies for the economic future of America.
The constellation of the problems that lead to the demise of the Freeman-Walter-Abele test are again present, this time it is a Supreme Court test that has led us into the morass. Unfortunately, the Supreme Court cannot be depended upon to come to their collective senses. The Justices actually believe their patent jurisprudence is consistent (which it isn’t) and they seem simply incapable of appreciating the havoc they have wrought. That is why so many in the industry believe the solution requires a legislative fix.
Meanwhile, startup companies in China are receiving more funding in the area of artificial intelligence development than startup companies in the United States, which should be a warning sign – a giant red flag waving. This is not to suggest that Chinese startups are unworthy of investment, they absolutely are worthy of investment and smart money is leaving the United States and heading to China and Europe where the climate for startups that require heavy R&D budgets is far friendlier. It should, however, be a wake-up call to American leaders. The future of the high-tech global economy is finding it easier in Europe, and even in a tightly regulated single-party economy such as China.
A decade ago it would have been unthinkable, even laughable, that high-tech startups in a field as critical as artificial intelligence would face greater headwinds in America than startups in places like Europe and China. But a decade ago software was largely only meaningfully protectable in the United States. As the rest of the world has increasingly followed the historical American tradition of a broad view of what is patent eligible, our Supreme Court has taken us in the opposite direction.
Today the law of patent eligibility is a mirror image of what it was just a decade ago. Less and less is patent eligible in the United States, while the rest of the world continues to expand their view of what can be and should be patent eligible. That is why Europe and China are poised to win the future, while America can expect to see its economic fortunes decline relative to other countries that actually value innovation.
Image Source: Deposit Photos.