“Why the Federal Circuit has abandoned its one duty [with respect to patent law] is uncertain. It is, however, taking an extraordinary toll on innovation in America, which is why many have simply stopped attempting to patent medical diagnostics and are seeking patents and funding overseas, where they are establishing companies, creating jobs and pursuing the innovation of tomorrow.”
Have the judges lost their ability to distinguish cases based on the underlying facts? This is a skill taught in the first semester of law school, and one that separates those who will ultimately become lawyers and those who will drop out and pursue other avenues. But for some reason, the Federal Circuit is applying Mayo and Alice, two cases where the patent claims did not cover any innovation whatsoever, to strike a dagger through the heart of the innovation of tomorrow.
Is this what the Supreme Court has mandated?
No Pass for Bad Precedent
While we are quick to say—for good reason—that Supreme Court precedent on 101, from Benson to Flook to Diehr to Chakrabarty to Bilski to Mayo to Myriad and ultimately to Alice, are incomprehensible, incoherent and most importantly irreconcilable with each other, we give the Federal Circuit a complete pass, despite the fact that CAFC precedent is at least equally incomprehensible, incoherent and irreconcilable.
How can one reconcile Ultramercial with DDR Holdings? We are told in DDR that the outcome is supported because the problem being solved is not an old-world problem merely computerized, but a problem created only in the computer age because of the Internet. That also describes the innovation at issue in Ultramercial relating to viewing copyrighted material online only after watching an advertisement. But in Ultramercial, the invention was held patent ineligible, while in DDR the invention was eligible.
How can one reconcile the patent eligibility of claims in McRo, which identify a “first set of rules” that are nowhere mentioned in the specification? We are told that what saves the day is that mention of the rules in the claims, and while there are numerous rules identified in the specification, including a “second set of rules,” there is no mention of a “first set of rules”. So, how in the Alice/Mayo universe can something not present in the specification provide the linchpin of an innovative concept?
How can one reconcile Thales being declared patent eligible with claims that are extraordinarily naked? A different panel at the Federal Circuit would absolutely have ruled the claims to be patent ineligible.
How can it make sense to anyone on any level that the unique and innovative functioning of a payment gateway is per se patent ineligible, while the look and feel of that payment gateway can be protected with a design patent?
How can one reconcile the extraordinary medical advance that protects mothers and unborn babies in Sequenom v. Ariosa being patent ineligible, while the discovery that hearty hepatocytes can live through multiple freeze thaw cycles is patent eligible? The magnitude of these two innovations is not even close in terms of importance, and yet the innovation of greatest importance is somehow patent ineligible, while freezing and thawing liver cells for testing is patent eligible. Absurd.
One Job, Abdicated; Innovation, Forsaken
These and other decisions of the Federal Circuit are completely and totally random when viewed as a whole. They are irreconcilable and wholly unpredictable. Unpredictable, that is, until the judges walk through the door on the morning of oral argument. Once you know your judges, you likely know the outcome. But that is not predictability, and it is exactly the type of subjective decision making that leads to an incoherent, incomprehensible and irreconcilable body of law. And that is where we are today, courtesy of a Federal Circuit that has abdicated its one job—to bring uniformity to patent law.
What is clear is that the Federal Circuit has forsaken the patent and innovation communities. The Federal Circuit is AWOL. The Federal Circuit has one and only one job—the Court was created to unify patent law, to make the law predictable, and to recognize that patent claims—at least some—must be valid.
Why the Federal Circuit has abandoned its duty is uncertain. It is, however, taking an extraordinary toll on innovation in America, which is why many have simply stopped attempting to patent medical diagnostics, for example, and are seeking patents and funding overseas, where they are establishing companies, creating jobs and pursuing the innovation of tomorrow. The same is happening in the artificial intelligence field, where China start-ups outpace U.S. start-ups in terms of VC funding.
Why? Because you can predictably protect these innovations outside the United States, but can no longer predictably protect medical diagnostics, artificial intelligence and myriad other high-tech and life science innovations within the United States.
This should hardly come as a shock. This is precisely why the U.S. has dominated the biotechnology industry since the early 1980s. Back then, the U.S. Supreme Court had an expansive view of what was patent eligible in America, allowing patents even on genetically engineered life forms. Thanks to the decision in Chakrabarty, the U.S. was an outlier. Most of the rest of the world viewed patenting a form of life as ridiculous, even barbaric. Today the shoe is on the other foot. What jumpstarted the biotechnology revolution that led to U.S. dominance of the industry for over three decades was the fact that stronger and more predictable patent protection could be obtained in America. That is simply not true anymore for the high-tech and life sciences industries that will define the paradigm shifting innovation of the 21st century.
A Return to First Principles
It is time for the Federal Circuit to return to first principles and recognize what we all know must be true. At least some discoveries, for example, must be patentable. After all, the Constitution says it, and so, too, does the statute. In fact, the fourth word in Section101 relates to discoveries. It reads:
“Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title.”
I invite the Federal Circuit to read that one-sentence statute, but this time in light of Alice and Mayo and the rest of the Supreme Court’s 101 cases. Clearly, the Supreme Court cannot say that discoveries are not patentable, because the statute says otherwise. Even the Constitution itself recognizes that Congress is authorized to grant protection for discoveries. So, any reading of Supreme Court precedent that concludes that discoveries are patent ineligible is simply wrong. Alice and Mayo must mean something else, and it is the one job of the Federal Circuit to explain that to create a unified patent law for America.
The Federal Circuit can begin with the Supreme Court caution that an overly expansive view of what is patent ineligible would “swallow all of patent law.” Then, proceed to distinguish those cases on the facts, recognizing that those bad facts—and bad claims written to cover what were no innovations at all—simply cannot have any relevance or meaning for real innovation.
In Alice Corp. v. CLS Bank, the Supreme Court was faced with patent claims that related to computerizing the function of what was essentially, in the view of the Supreme Court, a checkbook register. The Supreme Court during oral argument was even told—not once, but twice—that the invention could have been coded by a second-year engineering student over a weekend. How trivial must the code be for that to be correct?
Consider that in Mayo v. Prometheus, the Supreme Court was faced with patent claims that no one in the patent community thought were novel or nonobvious. Yet, the Supreme Court took the opportunity to invalidate the claims as being patent ineligible because the claims at issue added so little beyond observing the natural law that the defined claim couldn’t possibly be worthy of a patent as there was no invention present. But rather than recognize the facts of Mayo are peculiar and represent the most trivial of situations, the Federal Circuit has used Mayo to destroy medical diagnostics and reiterate again and again a conclusion that is contrary to the text of the statute and Constitution—that discoveries are not patent eligible. But discoveries ARE patent eligible, period. Clearly the Supreme Court must have meant something else, and at least some discoveries MUST be patent eligible.
It is long past time for the Federal Circuit to come together and perform the one job for which each judge was appointed. The law of 101 is irreconcilable, incoherent and incomprehensible. A great deal of that blame rests on the Federal Circuit.
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