Request for Amici: Tell the Supreme Court to Clarify Section 101

By Bill Abrams & Rich Black
April 2, 2019

“Unlike many of the patents struck down on Section 101 grounds, the patent at issue has already withstood extensive challenges at the U.S. Patent and Trademark Office’s Central Reexamination Unit, Patent Trial and Appeal Board, and in the Federal Circuit.”

On March 8, Foster Pepper filed a petition for certiorari with the Supreme Court, case number 18-1199, challenging the Federal Circuit’s emerging “physical realm” test as part of its Alice/Section 101 analysis. Amicus briefs in support of our cert petition are most welcome to assist the Court’s understanding of why it is important to grant cert and clarify the correct patent eligibility test for computer-implemented inventions. We are also seeking amicus brief writers for the many amici we have already secured. These efforts will help clear up the uncertainty innovators and patent holders face in cutting-edge fields of our modern economy and, as a result, help drive innovation forward.

The case addresses recent Supreme Court, Federal Circuit, and trial court decisions interpreting Section 101 of the Patent Act in a manner that invalidates any computer-implemented patents based on the conclusion that computer-implemented inventions involve patent-ineligible “abstract ideas.” The Federal Circuit held that the patent of our client, InvestPic, was an “abstract idea” because it did not involve “physical realm” innovation. The patent otherwise met all the statutory criteria of novelty, utility, non-obviousness, and written description.

The past several years’ worth of rulings on Section 101 have created uncertainty about whether innovation in computer-reliant fields is eligible for patenting. The current trend in the courts appears to be against allowing patents for computer-implemented technology, which could jeopardize the patent portfolios of individuals, companies, and institutions that innovate in the computer-implemented technology sector. This case presents an opportunity for the Court to clarify how its patent-eligibility test applies to computer-implemented inventions. Clarification, whether in favor of our client or not, will provide much-needed certainty for innovators and patent owners.

A Solid Test Case

This case also warrants review because the Federal Circuit used the case to impose its own “physical realm” test, which is not based on any precedent under our patent system. The “physical realm” test, which would require inventions to be in the “physical realm” as opposed to the “digital realm,” in order to be patentable, would categorically exclude computer-implemented technology from patentability. Such a test or exclusion has never been endorsed by the Supreme Court. Regardless of whether the Supreme Court ultimately approves or rejects this test, input from the Court would be invaluable to inventors and patent owners working in computer-implemented technology fields. Congress may need to provide additional solutions related to Section 101 of the Patent Act, but the Court can offer needed clarity on this new “physical realm” test now.

Finally, this case is an appropriate test case for the Supreme Court because of the significant prior scrutiny of the invention and patent at issue. This case concerns an invention that meets all the statutory qualifications for patentability. Unlike many of the patents struck down on Section 101 grounds, the patent at issue has already withstood extensive challenges at the U.S. Patent and Trademark Office’s Central Reexamination Unit, Patent Trial and Appeal Board, and in the Federal Circuit. Additionally, the Federal Circuit and many notable experts agree that the invention is highly innovative. Our client InvestPic and one of its principals, Dr. Samir Varma, created a breakthrough data science system for investment analysis. The 2001 Nobel Laureate economist Michael Spence described the InvestPic system as a brilliant and very significant advance in data science technology.

On its second trip to the Federal Circuit (after having been upheld the first time around), the patent was declared ineligible. The Federal Circuit concluded that the inventive components of the invention took place on a computer and determined that the invention was therefore an “abstract idea” because it was not in the “physical realm.” See SAP Am., Inc. v. InvestPic, LLC, 898 F.3d 1161, 1168 (Fed. Cir. 2018) (holding the patent invalid because “the focus of the claims is not a physical-realm improvement but an improvement in wholly abstract ideas—the selection and mathematical analysis of information, followed by reporting or display of the results”). In doing so, the Federal Circuit departed from controlling Supreme Court case law to impose its own eligibility requirements.

Help Us to Fix 101

The Federal Circuit’s “physical realm” requirement will have severely negative consequences for those who represent innovators in fields such as software, quantum computing, artificial intelligence, data science, robotics, finance, cybersecurity, medical diagnostics, computer engineering, or biotechnology. Under this emerging test, all patents that require computer implementation are in danger of invalidation.

We believe that this case is well-positioned to capture the Supreme Court’s interest. The InvestPic patent has narrow and detailed claims directed to a specific and difficult technical solution to a serious problem, unlike some of the notoriously broad patent claims that Section 101 has been used to invalidate.  (See, e.g., claims 32-40). Most importantly, the decision below is particularly vulnerable to challenge given its unprecedented expansion of the “abstract idea” doctrine into a “physicality” inquiry.

The deadline for amicus briefs is April 15, and the deadline for requesting permission from opposing counsel is April 5. We have secured the support of several innovators, venture-backed startups, companies, academics, associations, and organizations, and would greatly appreciate additional amicus assistance, including with writing briefs for amici we have already secured.

Please contact Brooks Lindsay, Bill Abrams, or Rich Black at Foster Pepper if you would like to write a brief or join/sign one (brooks.lindsay@foster.com, bill.abrams@foster.com, rich.black@foster.com).

 

The Author

Bill Abrams

Bill Abrams is a trial and appellate lawyer and advisor to technology and other businesses at Foster Pepper PLLC. He has been lead counsel in nearly 100 federal and state patent, trade secret and other intellectual property cases since 2000, including trials, arbitrations and appeals involving trade secrets, interference, unfair competition, false advertising, licensing, patent infringement, defamation, privacy and trademarks. Bill is recognized by the highly regarded Chambers USA legal directory for Intellectual Property in Washington. He is also recognized by The Best Lawyers in America for Technology law, IP Litigation, and Patent Litigation, as well as by The Legal 500 US, IAM Patent 1000, and Daily Journal’s “Top Intellectual Property Attorneys in California.” He represents public and private companies, start-ups and emerging companies, and individuals in industries including software, internet and media, artificial intelligence, satellite and space and blockchain. Bill maintains an active pro bono practice and is a member of the Stanford faculty, where he has taught courses on Science, Innovation and the Law; Justice, Science and Policy Making; among other courses.

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

Bill Abrams

Rich Black is a registered patent attorney at Foster Pepper who has practiced for more than 25 years, and has experience with virtually all aspects of U.S. and international patent, trademark and copyright application preparation, prosecution, litigation, licensing, M&A due diligence, portfolio design, strategy and counseling. He has extensive and experience with USPTO proceedings, including post-grant proceedings and was lead counsel on the first several patents to survive inter partes review. He has represented companies of all sizes across a broad range of technologies.

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

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 13 Comments comments.

  1. concerned April 2, 2019 2:23 pm

    I feel for this situation. Cannot help with the petition for certiorari.

    My rejected 101 patent application also had expert testimony and I have been congratulated by my colleagues on the accomplishment. I had no 102,103 112 issues. In appeal to the PTAB.

    My process identified results that the Administrating Agency could not reach, either manually or with computers for decades and it is causing financial loss and hardship. And we proved it. Therefore, we argued an improvement to the computer network, like the lip sync in McRO (which lip sync could be done manually).

    I hope you win your case. The clarification will be great for all of us. Apparently the court does not understand that your displayed result have never been reached before by professionals or experts(?), thus an improvement to the investment community’s technology.

    Good luck!

  2. Pro Say April 2, 2019 5:21 pm

    This is just one more case among almost too may to count; demonstrating that the best — perhaps the only — way forward is by abolishing 101.

    As long as it exists, eligibility decision-makers will likely find one or more ways around whatever modifications Congress makes to 101.

    In effect, they will “scriven” their way around 101.

    Abolish this pox on innovation.

  3. Jonah Probell April 3, 2019 12:51 am

    I don’t see an emerging “physical realm” test. Aren’t the eligible claims of Enfish, Finjan v. Blue Coat, and SRI International solely in the digital realm?

    Where the InvestPic court wrote that claims in other cases are eligible because they are in the physical realm, they did not write that claims are ineligible if they are not in the physical realm.

    I worry that if the Supreme Court writes another opinion on 101, it might add further uncertainty to our profession.

  4. Anon April 3, 2019 10:22 am

    To the authors of the article: I do not submit amicus briefs, but please feel free to adopt any of the explications that I have long provided in the comment sections here.

  5. anonymous April 3, 2019 11:03 am

    Gene, this is your chance to file a brief. Please do it.

    While InvestPic’s petition for cert does a good job to argue why Alice needs clarification, it doesn’t go far enough to tell SCOTUS they had no constitutional authority for extra-statutory judicial exceptions in the first place. SCOTUS won’t want to hear that, but they must. If not, Congress is the only fix. At this point, action by congress is urgently needed.

    Defining “abstract idea” is not the job of SCOTUS, nor is it interpretation of any part of 101, but rather it is legislating from the bench. And while it would be nice to know with exactitude what “tread carefully” means, and how a court is supposed to comply with that mandate, Alice remains a proverbial turd that cannot be polished. It is high time congress does its job and either codifies exceptions to 101 or does away with so-called judicial exceptions altogether.

  6. B April 3, 2019 6:54 pm

    @ Josh “I don’t see an emerging “physical realm” test. Aren’t the eligible claims of Enfish, Finjan v. Blue Coat, and SRI International solely in the digital realm?”

    This idiotic “physical realm” test was manufactured by Judge Taranto – who happened to sign onto the McRO v. Bandai. Taranto also penned Electric Power Group. About 99 percent of all PTAB 101 affirmances cite one or both of these cases.

    Ergo, in one sense you’re correct but in another you’re very wrong

    “I worry that if the Supreme Court writes another opinion on 101, it might add further uncertainty to our profession.”

    It’s like asking an incompetent mechanic to work on your brakes

  7. Jonah Probell April 4, 2019 12:58 am

    @B Because I am involved in a lot of 101 cases, I am genuinely interested in understanding what the authors of this article mean by a physical realm test. If possible, could you kindly point to where a written opinion describes the physical realm test?

    Putting the quote from the article in context, it says that, “Here, in contrast [to the Thales Visionix case in which the improvement was in a physical tracking system], the focus of the claims is not a physical-realm improvement but an improvement in wholly abstract ideas”

    That seems to imply that the Thales claims being focused on a physical device contributed to their being eligible but not a statement that physicality is necessary for eligibility of all claims. Right?

  8. Anon April 4, 2019 10:08 am

    Jonah,

    Near as I can tell, the “physical realm” test is an offshoot of the “clue” of the old Machine or Transformation theory.

    The USPTO just held a Business Methods Partnership Meeting. In that meeting there was some discussion of “transformation” being required to be a physical transformation, and that any computing transformations “do not count.” Never mind the fact that computing transformation must also be “physical” in the sense that the transformations do not occur “by magic” or in some other ethereal realm, the case law that the Office harkened back to appears to be based on a physical chemical transformation.

    Of course, choosing to constrain transformation ONLY to what a particular case happened to be discussing at the point of that case is not a proper application of law to other fact situations, but DOES align with the overall (and very much incorrect) view that the very first computer encompasses ALL future improvements to computing, and — even worse — that improvements by way of software somehow cannot “count.” This view becomes reflected in a myriad number of misconceptions – several of which are actively and purposefully propagated by those who do not want innovation protection to extend to innovation that comes by way of software.

  9. B April 4, 2019 12:36 pm

    @ Jonah

    “Because I am involved in a lot of 101 cases, I am genuinely interested in understanding what the authors of this article mean by a physical realm test. If possible, could you kindly point to where a written opinion describes the physical realm test?”

    The CAFC’s investpic and Electric Power Group decisions. Basically, Taranto doesn’t think software patents are patent eligible if all they do is take data, display data, and display data

    Pull the Investpic cert petition from the SCOTUS website. Bill Abrams and company do an amazing job at discussing the issue both just with how retarded Judge Taranto’s “physical realm” test is and the bigger problem with the Alice/Mayo test

    Spot on the issues

  10. Charles Miller April 5, 2019 11:33 am

    Are the amicus briefs you are soliciting intended to be on a pro bono basis ?

  11. Jonah Probell April 6, 2019 1:58 pm

    @B The authors of the petition are very good writers overall. However, like this article, the petition does not support its assertion that there is a physical realm test.

    The petition proposes three reasons to grant cert.
    A. It is wrong to have a physical realm test.
    B. Congress never said there should be a physical realm test.
    C. There is inconsistency between lower and higher courts, among Fed. Circuit judges, and between courts and the USPTO.

    It seems to me that reasons A and B are predicated on the existence of an imaginary test, and that they distract from important reason C.

    Reason C seems prima facie tenuous since most Fed Circuit 101 opinions affirm district courts, no Fed. Circuit judge has opined exclusively for or against eligibility, and the USPTO is responsible for its consistency with courts not vice versa.

    That said, reason C gets at what many in the field of patent law would like, which is a clear test for eligibility that would make the outcome of a 101 court challenge or USPTO examination predictable for any given claim. Personally, I doubt that another Supreme Court decision on an invention from the finance world would give us that, but maybe they will surprise us.

  12. B April 6, 2019 3:25 pm

    @JP “The authors of the petition are very good writers overall. However, like this article, the petition does not support its assertion that there is a physical realm test.”

    You’re kidding, right?

    Did you read the atrocity that is the Investpic decision? It states that a claim must not only have an improvement, but an improvement in the physical realm.

    “Reason C seems prima facie tenuous since . . . .no Fed. Circuit judge has opined exclusively for or against eligibility”

    Now you’re just being silly.

    “reason C gets at what many in the field of patent law would like, which is a clear test for eligibility”

    The test for patent eligibility is already available and perfectly clear – in the words of s101 as enacted nearly 70 years ago. It’s the meaningless exceptions to patent eligibility that is at issue, and the test for such exceptions will remain meaningless so long as: (1) the test involves “invention;” and (2) the test ignores the statutory language of s100, s101, s102, s103, and s112.

    “Personally, I doubt that another Supreme Court decision . . . would give us that.”

    Their record has been abysmal. Would you let a mechanic work on your brakes if said mechanic refused to follow a maintenance manual. “Grease, schmeese, I’ll use some 3-in-1 oil.”

    But if the time comes for the Supreme Court to act responsibly and get rid of Alice/Mayo, they’re throw the Federal Circuit under the bus as they always do.

  13. Anon April 6, 2019 7:09 pm

    Pssst: Kavanaugh Scissors