Posts Tagged: "Alice Corp. v. CLS Bank"

Drawing Software Patent Drafting Guidance in 2021 from an Unlikely Source: the Federal Circuit

Since the Supreme Court’s Alice decision in 2014, inventors have faced extra hurdles trying to protect their software-related inventions with patents. A chief obstacle has been satisfying the two-part test for eligibility under Section 101 set forth in Alice and Mayo. To meet this test, claimed subject matter must not be directed to a judicial exception, such as an abstract idea, (Step One), and if it is, must add “significantly more” to provide an inventive concept (Step Two)…. Theodore Rand reported in IPWatchdog last week, a disturbing but not surprising trend. Rand found that, in 2020, 81% of software-related patents on appeal for subject matter eligibility in decided precedential cases (22 of 27) were found invalid. But in three cases, software-related patents were found drawn to eligible subject matter for patent purposes. Id. In each of the three cases, the appeals court pointed to aspects of the patent specifications themselves. Looking more closely at the representative claims and court’s comments with respect to the corresponding patent specification is illuminating. In particular, the court looked to the specifications for evidence of performance improvements over conventional systems, description of a technical problem/solution, and technological advantages.

Cybergenetics Appeals Ohio Federal Judge Ruling that Alice Kills DNA Analysis Patents

On October 13, 2020, Cybergenetics filed a notice of appeal to the Federal Circuit from a decision of the Northern District of Ohio, Eastern Division, that held the patent claims asserted by Cybergenetics invalid under 35 U.S.C. 101, and granting the defendant’s Rule 12(b)(6) motion to dismiss.  Cybergenetics’ brief on appeal is due December 28, 2020.

Study Suggests Individuals and Startups More Likely to Face Invalidity Under Alice

To the surprise of Lemley and Zyontz, their study uncovered a striking disparate treatment in the way federal courts handle patent eligibility matters based on entity size, with startup companies doing poorly when it comes to Alice-related patent eligibility matters, and individual inventors doing even worse. Their abstract summarizes their findings thusly: “Most surprisingly we find that the entities most likely to lose their patents at this stage are not patent trolls but individual inventors and inventor-started companies,” Lemley and Zyontz write. “As biotech worries about deterrence of new innovation and software worries about patent trolls dominate the debates, we may be ignoring some of the most important effects of Alice.”

How to Prepare and Prosecute Patents in Light of the USPTO’s Post-Alice Focus on Eligibility

Since the issuance by the United States Supreme Court of its opinion in Alice Corporation Pty Ltd. v. CLS Bank International, 573 U.S. 208, 134 S. Ct. 2347 (2014), the United States Patent and Trademark Office (USPTO) has increased its focus on patent eligibility. As a consequence, patent applicants now receive more claim rejections under 35 U.S.C. § 101, leading to protracted prosecution. While rejections under 35 U.S.C. § 101 are likely unavoidable, patent attorneys and agents can take steps during application preparation and prosecution to minimize the likelihood of such rejections and to successfully rebut such rejections when they do arise.

If You Want to Protect Your Business Method, Reframe It as a Technical Invention

The most effective way to protect an inventive business method is with a patent on a technical invention. Ever since the U.S. Supreme Court’s 2014 Alice decision, the U.S. courts and the U.S. Patent and Trademark Office (USPTO) have consistently held that you can’t patent a business method by itself. The Alice decision overturned several related business method patents as being nothing more than an attempt to patent a fundamental economic process. Lower court decisions have since affirmed that “no matter how groundbreaking, innovative or even brilliant” a business method might be, you still can’t patent it. The only way to use patents, therefore, to protect business method inventions, is to patent the technological inventions required to make the business methods work. These inventions will be patentable since they will “improve the functioning of the computer itself.” See Buysafe, Inc., v. Google, Inc. 765 F.3d 1350 (2014) citing Association for Molecular Pathology v. Myriad Genetics, Inc., ___ U.S. ___, 133 S.Ct. 2107, 2116, 186 L.Ed.2d 124 (2013).