Experian Marketing Solutions, Inc. v. RPost Communications Ltd. – PTAB finds electronic messaging a “technological invention” outside ambit of Covered Business Method review

July 17th, 2014

In Experian Marketing Solutions, Inc. v. RPost Communications Ltd., Case CBM2014-00010 (June 19, 2014), the Patent Trial and Appeal Board denied a request for covered business method patent review even though it found that the patent included claims for “performing data processing or other operations used in the practice, administration, or management of a financial product or service.”  Experian petition ExperianMktgSolutions_v_RPostCommLtd_CBM2014-0010

When determining whether to grant CBM review, the Board considers three elements.  First, if the patent includes the aforementioned financial claims.  Second, at least one of the financial claims must not be directed to a “technological invention.”  Third, the petitioner must provide information that demonstrates that it is more likely than not that at least 1 challenged claimed is unpatentable.

In Experian, the Board applied its broad interpretation “operations used in … a financial product or service” to encompass the challenged claims even though the language of the claims does not mention finance at all, as can be seen by example claim 1 below:

1. A method of transmitting a message from a sender to a recipient through a server acting as a Mail Transport Agent, including the steps at the server of:

transmitting the message to the recipient’s Mail Transport Agent in a protocol dialog selected from a group consisting of the selected one of the SMTP and ESMTP protocols; and

recording at the server some portion of the selected one of the SMTP and ESMTP protocol dialog between the server and the recipient through the server including those portions of the selected one of the SMTP and ESMTP protocol dialog between the server and the recipient in which the receiving Mail Transport Agent accepts or declines delivery of the transmitted message.

The Board justified this finding based on the disclosure in the specification of the patent of an “e-commerce embodiment.”  Since many data processing claims are applicable in a financial setting, this bar is quite low.

However, if the claims include a “novel and unobvious technological feature” or “solve a technical problem,” they are directed to a technological invention and not subject to CBM review.  Accordingly, the patentee identified the technical problem solved by the challenged claims as “providing reliable proof of content and delivery of electronic messages … without requiring use of special e-mail software by the sender or the recipient” by using “an intermediary server.”  Since the petitioner did not “provide persuasive evidence” that the technological feature was known in the art, and instead relied on “conclusory language … that none of the steps … requires any novel and unobvious technological implementation, or solves a technical problem,” the Board found that the petitioner’s burden was not met.  Accordingly, the Board found that the claims were not directed to covered business methods, and denied the petition.

In this case, the Board did not reach the third stage of determining whether the petitioner had a probability of success.  Accordingly, it appears that the Board did not consider the petitioner’s three separate §102 arguments that claim 1 was anticipated by the prior art.  In order to make the claim that the invention was not technological because it was well-known in the art, the petitioner might have been well-served to explicitly invoke the three references instead of relying on broad conclusory statements.

My thanks to Domenico Ippolito of Schwegman, Lundberg & Woessner, P.A., for this post.

 

Digitech Image Technologies, LLC v. Electronics For Imaging, Inc. — Data structures per se not patentable

July 17th, 2014

In Digitech Image Technologies, LLC v. Electronics For Imaging, Inc., Case No. 13-1600 (Fed. Cir. July 14, 2014), the Federal Circuit affirmed a district court decision invalidating all claims of Digitech’s patent (U.S. Patent No. 6,128,415).  In making its decision, the court considered three independent claims of the ‘415 patent.

Independent claim 1 recites “A device profile … comprising … first data … and second data ….”  Similarly, independent claim 26 recites “A device profile … comprising data ….”  The claims do not recite any storage media holding the device profiles, but are entirely directed to the profiles themselves.  These claims appear on their face to be directed to data structures per se, and the Federal Circuit so held, finding that claims 1 and 26 are “directed to information in its non-tangible form.”[1] Notably, the application that led to the ‘415 patent was filed on September 6, 1996, but In re Warmerdam, 33 F.3d 1354 (Fed. Cir. 1994) had already established that a “data structure” “is not one of the categories of subject matter recited in Sec. 101.”  Thus, the rejection of this claim is based on case law from 1994, and does not reflect a post-Alice change.

Independent claim 10 recites “A method of generating a device profile … comprising: generating first data …; generating second data; and combining said first and second data into the device profile.”  The Federal Circuit acknowledged that method claims are directed to one of the statutory categories, but determined that the claim was directed to an abstract idea.  For support, the court cited Parker v. Flook, 437 U.S. 584, 595 (1978): “If a claim is directed essentially to a method of calculating, using a mathematical formula, even if the solution is for a specific purpose, the claimed method is nonstatutory.”[2] The Federal Circuit acknowledged that Alice provides for a method of determining if claims that appear to be directed to abstract ideas actually “are directed to patent eligible subject matter.”[3] However, the Alice/Mayo rubric was not applied, because the method claim “is thus ‘so abstract and sweeping’ as to cover any and all uses of a device profile.”[4] Thus, the rejection of this claim was also based on old law – in this case, from the 1970s – and does not reflect a post-Alice change.

Accordingly, while some Internet commentators are asserting that Digitech represents a sweeping application of Alice to invalidate patents, that conclusion does not have strong support in the text of the opinion.


[1] Digitech at 9.

[2] Id. at 12.

[3] Id. at 13.

[4] Id. (citing Gottschalk v. Benson, 409 U.S. 63, 68 (1972)).

My thanks to Domenico Ippolito of Schwegman, Lundberg & Woessner, P.A., for this update.

 

Drafting Software Patent Applications to Meet Section 101 after the Alice Decision

June 25th, 2014

My thanks to Peter Leal of Schwegman, Lundberg & Woessner, P.A., for this guest post:

In Alice Corporation PTY. Ltd. v. CLS Bank International, et al, handed down on June 19, 2014,  the U.S. Supreme Court held the Alice claims invalid under 35 U.S.C. § 101, using the two-step test for determining patent statutory subject matter set forth in the Court’s 2012 decision, Mayo Collaborative Ser­vices v. Prometheus Laboratories, Inc., 566 U. S. ___, ___.  One first determines whether the claim recites non-statutory subject matter such as an abstract idea.  If it does, then one “determines whether it contains an ‘inventive concept’ sufficient to ‘transform’ the claimed abstract idea into a patent-eligible application.”

In applying the second step to the method claims in Alice, the Court stated:

Viewed as a whole, these method claims simply recite the concept of intermediated settlement as performed by a generic computer.  They do not, for example, purport to improve the function­ing of the computer itself or effect an improvement in any other tech­nology or technical field. An instruction to apply the abstract idea of intermediated settlement using some unspecified, generic computer is not “enough” to transform the abstract idea into a patent-eligible invention.

Many software patent applications include a flowchart of the inventive concept and a block diagram of a computer system.  Several pages of detail describing the computer system are often included in the written description.  Claims are then directed to the inventive concept outlined in the flowchart as an operation of the disclosed computer system.  Software applications so drafted and claimed appear to be considerably more than the “unspecified, generic computer” in the above quotation from Alice.  However, one cannot be certain of the validity of patents issuing on this type of patent application until one of the patents is ultimately litigated.  A large number of patents may depend on that ultimate litigation.

Additional disclosure to that outlined above may help insure that claims directed to software meet section 101 after Alice.  One view of computer software patents is that the above flowchart amounts to an improvement in the function of the disclosed general purpose computer.  Consequently the patent application drafter might consider also including in software patent applications an additional figure of hardware logic design that discloses a hardware implementation of the flowchart.

On June 25, 2014 the USPTO issued “Preliminary Examination Instructions in view of the Supreme Court Decision in Alice Corporation PTY. Ltd. v. CLS Bank International, et al (the “Instructions”).”  In addressing the above second step, the Instructions state:

If an abstract idea is present in the claim, determine whether any element, or combination of elements, in the claim is sufficient to ensure that the claim amounts to significantly more than the abstract idea itself.  In other words, are there other limitations in the claim that show a patent-eligible application of the abstract idea, e.g., more than a mere instruction to apply the abstract idea?  Consider the claim as a whole by considering all claim elements, both individually and in combination.

Limitations referenced in Alice Corp. that may be enough to qualify as “significantly more” when recited in a claim with an abstract idea include, as non-limiting or non-exclusive examples:

  • Improvements to another technology or technical fields;
  • Improvements to the functioning of the computer itself;
    • Meaningful limitations beyond generally linking the use of an abstract idea to a particular technological environment

The hardware logic design figure suggested above may be viewed as a limitation that qualifies as “significantly more” since it is an “improvement[s] to the functioning of the computer itself” as in the above quotation from the Instructions.

Moreover, the current law allows patent applicants to claim the operation of an apparatus as a method.  Method claims drawn to the suggested hardware figure should be given breadth to cover a general purpose computer programmed to operate as the hardware logic diagram.  The Beauregard and system claims should likewise be given similar breadth.

 

 

 

Alice v. CLS Bank: Supreme Court Continues to Grope in Dark for Contours of Abstract Idea Exception

June 19th, 2014

In Alice Corp. v. CLS Bank Int’l (2014), the Supreme Court unanimously affirmed the one-paragraph per curium opinion of the en banc Federal Circuit, which found all claims of U.S. Patent Nos. 5,970,479, 6,912,510, 7,149,720, and 7,725,375 invalid under 35 U.S.C. § 101 for being directed to an abstract idea.

The Court based its affirmance on an application of a two-step process outlined in Mayo Collaborative Services v. Prometheus Labs, 566 U.S. ___ (2012). The first step is the determination of whether the claims are directed to a patent-ineligible concept such as a law of nature, natural phenomenon, or abstract idea. This step implicitly includes the identification of the concept at issue. The second step is to determine if the claims recite “an element or combination of elements that is sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the ineligible concept itself.”

The Court avoided providing “the precise contours of the ‘abstract ideas’ category” by relying on the similarity between Alice’s claims for intermediated settlement and Bilski’s claims for hedging. The Court characterized the Bilski claims as “a method of organizing human activity.” Accordingly, while only three justices signed Justice Sotomayor’s concurrence, stating that “any claim that merely describes a method of doing business does not qualify as a ‘process’ under §101,” the unanimous decision does implicate business methods as likely directed to abstract ideas.
At the Federal Circuit, the splintered opinion included a four-judge dissent that argued that the system claims should be patent-eligible even though the method claims were not. The Supreme Court disagreed with this view, finding that if the system claims were treated differently under §101, “an applicant could claim any principle of the physical or social sciences by reciting a computer system configured to implement the relevant concept” which would “make the determination of patent eligibility depend simply on the draftsman’s art.” To convey patent-eligibility, the claims at issue must be “significantly more than an instruction to apply the abstract idea … using some unspecified, generic computer.”

In my previous post regarding the oral argument before the Supreme Court, I noted that the Court seemed to be looking for reasonable and clear rules regarding the limits of the abstract idea exception to patentable subject matter, but did not get such a rule from any party. Perhaps as a result, this case was decided purely on its similarity to Bilski, and without providing much guidance as to the scope of the exception.

My thanks to Domenico Ippolito for this posting.

Congratulations to the USPTO’s New Regional Director Russ Slifer

June 16th, 2014

My congratulations to Russ Slifer, the new Regional Director of the USPTO’s Denver office.  I have known Russ since he started his career in patent law in 1994 at the Schwegman firm, and followed his career through his private practice representing several of America’s top high technology companies, to his many years as Chief Patent Counsel for Micron.  The USPTO is fortunate to have gained Russ for their leadership team.  He has always demonstrated a mastery of his craft, is amazingly productive, shows sound judgement in all his affairs, is a progressive manager, and has been a leader in every aspect of his professional life.  No doubt he will provide Michelle Lee and the USPTO a strong leader for the Denver office, continue to help the Office evolve and adapt to the ever changing needs of industry and policy, and get things done.  Once again, my congratulations to Russ and the USPTO.

Cotropia Study of USPTO Allowance is Rate is Total Bunk – Methodology Can Easily Result in “Corrected Allowance Rates” far in Excess of 100%, the Lower the Actual Allowance Rate Goes

May 13th, 2014

(My thanks to Domenico Ippolito for his research on this post)

In his article Getting Patents is Preposterously Easy under Obama, Timothy Lee asserted that the Patent and Trademark Office “needs a way to permanently reject patent applications” and called giving the Office that power a “common-sense reform.”[1] In support of this assertion, Mr. Lee refers to Apple’s “slide to unlock” patent, implying that the patent was allowed only because of exhaustion on the part of the PTO “after six years of back and forth.”  He goes on to say that 92% of patent applications eventually result in allowance, and that this high percentage shows that the PTO is over-“permissive” and contributing to “a proliferation of low-quality patents.”  None of these points survive a closer look.

Having decided a priori that the slide-to-unlock patent should not have issued, Mr. Lee then turns to the allowance rate of the PTO in general, accusing the Office of allowing 92% of all applications, which “may mean that the patent office approved applications that didn’t deserve a patent.”  As Mark Twain famously said, “there are three kinds of lies: lies, damned lies, and statistics.”  So let’s tread cautiously where statistics are involved, and consider carefully what they reflect.  The PTO conveniently provides a dashboard with statistics showing that 51% of applications are being allowed.[2] As an applicant, that statistic is important: it means there’s a 51% chance that you’ll get an allowance on a single round of examination, before substantial additional fees kick in.  However, since an RCE can be filed after a Final Rejection, the 51% figure does not accurately reflect the chance of an original application eventually issuing as a patent.  Fortunately, the PTO dashboard also provides that number: it’s currently 70%.

Why is the PTO’s adjusted allowance rate so much lower than the 92% reported by the article Mr. Lee refers to?  The answer is simple: because the 92% figure is not an allowance rate.  The University of Richmond (UR) report “corrects” the 51% allowance rate reported by the PTO by adjusting the number of application disposals.[3] Walking through a calculation, the “nominal” number of application disposals was 548,051.  That number was corrected by subtracting out the RCEs, leaving 390,143 disposals.  Taking 51% of 548,051 as the number of allowances, and 390,143 as the number of disposals, a partially corrected allowance rate of 74% was obtained.  While this number is substantially higher than the rate of about 68% shown by the PTO for 2012,[4] at least the UR report and the PTO agree that this is an allowance rate.

However, UR goes on to calculate an allowance rate “corrected … for all Refiled Continuing Applications (including CIPs).”  The number generated after this “correction” is of uncertain value, at best.  To generate the corrected value, the number of allowances is held constant, but the number of disposals is reduced by the number of “continuations,” “refiled continuing applications,” and other “continuing applications.”  In this manner, an “allowance rate” of 89% was calculated for 2012.  This rate shows that for every application that is finally disposed of, an average of 0.89 patents issues.  That sounds similar to an allowance rate, and the rate is close to 100%, so does that mean that virtually every application eventually issues as a patent?  No.  That statistic was already calculated as 68% or 74%, depending on the source.  In fact, this number doesn’t have an upper bound of 100%, so the fact that it is close to 100% doesn’t have any particular significance.  To demonstrate the point, assume a 50% nominal allowance rate out of 500,000 disposals.  Further assume that continuations are filed in 90% of the cases.  Then the “corrected” allowance rate would be 250,000 allowances divided by the 50,000 cases finally disposed of – yielding a “corrected” 500% grant rate.  The statistic generated in this manner – whether the result is 89%, 92% or 500% — has no particular significance either to the inventor considering filing a patent application or to the outside observer interested in determining if the PTO is overly-permissive, as Mr. Lee alleges.  Calling it an allowance rate is sloppy at best, and deliberately misleading at worst.

The truth of the matter is that the increase in RCEs, far from showing that applicants can bully the PTO into granting dubious patents, instead shows that patent prosecution is harder, is taking longer, is costing more, and is resulting in the issuance of patents with narrower claims.  Contrary to Mr. Lee’s assertions, the PTO’s successful efforts in reducing pendency have resulted primarily from an increase in Office personnel, not from reduced quality of examination.[5]


[3] See Patent Applications and the Performance of the U.S. Patent and Trademark Office, Cotropia et al., available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2225781 (numbers used in the article are taken from Appendix C).

[4] http://www.uspto.gov/dashboards/patents/kpis/kpiAllowed.kpixml.

[5] See http://www.uspto.gov/dashboards/patents/kpis/kpiExaminers.kpixml (showing 6,642 examiners in November 2012 and 8,041 in March 2014); see also http://www.uspto.gov/patents/stats/examstaffing.jsp (showing 6,063 examiners in Q1 2009).

 

Dave Kappos’ open letter to President Lincoln: A must read for leaders of all stripes

May 2nd, 2014

For those of you that have not yet read David Kappos’ open letter to President Lincoln, please take a moment to read it at Managing IP’s blog:  http://www.managingip.com/Blog/3334558/Guest-post-An-open-letter-to-Abraham-Lincoln-from-David-Kappos.html.

A great many of us that have been in the patent field for a long time believe Mr. Kappos was one of the greatest, if not the greatest, Director of the US Patent Office of our times.  It is heartening to know that he will continue to be a steady hand on the wheel of patent policy, even if only as a private sector advocate for sensible policy.

No doubt Lincoln’s understanding of the importance of the patent system was at least in part owing to his own inventiveness.  Leaves one wondering if the reverse is true – is the patent system least appreciated by those that are least inventive?  Certainly those that depend on copying others to succeed stand to gain the most by diminishing the value of the creativity of others.

Dave – thanks again for showing us why you will long be remembered as a truly great Director of the US Patent Office, and a fine student of history as well.

 

 

Supreme Court Arguments in Alice Corp. v. CLS Bank – Going between Scylla and Charybdis?

March 31st, 2014

The Supreme Court heard oral arguments in Alice Corp. v. CLS Bank, No. 13-298, today (March 31, 2014) regarding the question presented of “[w]hether 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.”  Arguments were heard from the petitioners, the respondents, and the United States as amicus curiae.

From the questions and comments of the justices, one might get the impression that at least some members of the Court were not entirely certain that the Alice patent was directed to an abstract idea.  The Court also seemed to be wrangling with how to draw the line between “technological” software inventions and those based on abstract ideas only.  At one point, Justice Breyer noted there were a lot of suggestions in the 42 briefs filed in the case as to “how to go between Scylla and Charybdis,” suggesting that on one side there was the evil of patenting abstract ideas, and on the other, the harm caused to legitimate software inventions by an overly restrictive test for Sec. 101 eligibility.

Naturally, the petitioners argued that the claims were not directed to an abstract idea, but to “a very specific way of dealing with a problem.”  Just as naturally, the respondents argued that the claims were simply directed to “[d]ebit, credit, and pay,” and thus were at a high level of abstraction.  The government took perhaps the most anti-software-patent position, arguing that improving “the functioning of computer technology” (e.g., through improved encryption or compression algorithms) or using a computer to “improve another technology” would be patent-eligible, but that other software claims would fail under Section 101.  Rather than focusing on the arguments made by the attorneys, the summary below is organized to emphasize the questioning of the Justices.

Questioning the Petitioners

Justices Kennedy, Ginsburg, and Breyer questioned the petitioners as to whether “intermediate settlement” is “less abstract than hedging,” since hedging was found to be a non-eligible abstract idea in Bilski.  Justice Breyer described a hypothetical pen-and-paper (or even abacus) implementation of the abstract idea of “solvency.”  After the petitioners observed that the hypothetical was a mere caricature of the claims, Justice Breyer agreed, but described it as a “caricature designed to suggest that there is an abstract idea here.”  In responding to these questions regarding the abstractness of the invention, petitioners argued that the claims solved the problem of the risk of non-settlement using software “that the patent specifically describes by function.”

Justice Sotomayor raised the question of functional claiming, expressing concern that the claim limitations amounted to no more than “reconciling accounts … through a computer.”

Justice Scalia asked why “doing it through a computer” shouldn’t be enough to confer patent-eligibility.  Just as mechanical inventions perform labor-saving tasks that could be performed by hand, so do computer inventions.  Petitioners agreed that computer-implemented inventions shouldn’t be singled out.

Justice Kagan was interested in pulling apart the invention into an “idea” and a “computer.”  Petitioners were wary of such a division, and argued that the invention, to be useful, had to be performed on a computer and thus could not be separated.

Justice Breyer expressed his concern about striking the right Section 101 test as a policy matter.  If the bar for patentability is too low, business success will depend more on patent lawyers than on anything else.  If the bar for patentability is too high, then no computer-implemented inventions will be protectable.  Regarding Mayo, Justice Breyer said he found it to be “an obvious case” of patent-ineligibility, but deliberately left the line vague so that attorneys could weigh in and help “figure out how to go further.”  Petitioners responded that the line shouldn’t be moved to invalidate more patents.  Congress, by passing the AIA, provided for administrative review of more patents, but did not change the substantive law.  Petitioners suggested that the Court should view this as an endorsement of the status quo and interpret claims as written rather than reducing them to a caricature before applying Section 101.

Questioning the Respondents

Justices Breyer, Sotomayor, Ginsburg, and Kennedy asked, in different ways, if any business process claims would be patent-eligible and what the proper line to draw for Section 101 eligibility would be.  Similarly, Justice Kagan asked about the level of detail required in the claims regarding the computer-implemented steps in order to be patent-eligible and about the potential harm to already-issued patents from tightening the standards of Section 101.  Respondents referred the court to the PTO’s rules that held “economic concepts, legal concepts, financial concepts, teaching concepts, dating and interpersonal relationships and generally how business should be conducted as examples of those things that are likely abstract.”  Respondents further noted that Congress, in the AIA, said that business methods “that pertain to data processing in the financial services industry and do not offer technological solutions” “are subject to special scrutiny.”  Regarding the impact on the patent system, Respondents claimed that “this is a very small problem” because out of 22,000 infringement litigations since Bilski only 57 decisions on Section 101 grounds have been issued by the district courts.

Chief Justice Roberts asked about the teachings of the patent, and if the detailed flowcharts it contained took the invention beyond an abstract idea.  Respondents argued that the complex flowcharts were not related to the claims at issue.  Chief Justice Roberts also asked about the patent-eligibility of a computer-implemented process that was theoretically human-implementable but would be impractical without a computer.  Respondents argued that the claims at issue were not impractical without a computer, but did not address the broader question.

Questioning the Government

Justice Ginsburg, Breyer, and Kennedy asked if the government’s proposed rule would invalidate all business-method and software patents.  The government responded that it would be difficult to identify a patent-eligible business method unless an improved technology, such as an improved encryption algorithm, was involved.

Justice Sotomayor asked if the case before the Court is even a software patent case, since the claims at issue are directed to systems.  The government argued that the claims could be found invalid as system claims because they are directed to abstract ideas without additional technical innovation.

Chief Justice Roberts asked if the government’s proposed non-exhaustive 6 factor test was going to provide greater clarity and certainty.  The government responded that it really boils down to whether the claimed innovation improves a computer’s functioning or improves the functioning of another technological process.  If neither of those is true, the innovation is not patent eligible.

Conclusion

Justices Breyer, Kennedy, Ginsburg, and Sotomayor in particular seemed concerned that the precedents they had set so far had not led to clarity for the Court of Appeals for the Federal Circuit regarding the application of Section 101 to software claims.  Many questions were directed to trying to find proposed language to use to provide better guidance.  However, the suggested guidance did not seem to be what they were looking for.  Petitioners argued for a very narrow reading of the abstract idea exception.  Respondents and the government argued for a very broad one.  Since the Court appears to be sensitive to the set expectations of patentees and yet unwilling to give up on the abstract idea exception, it will have to craft its own answer, with very little help from any of the parties who argued before it today.

Transcript of S.Ct. Hearing in CLS Bank

My thanks to Domenico Ippolito of Schwegman, Lundberg & Woessner, P.A., for this post.

Broad Alliance of High Tech Start-Ups and Going Concerns Urges Supreme Court to Preserve Critical Patent Protection for Innovative Software

March 15th, 2014

Forty-one companies, four individuals, and a pro-patent organization joined in an amicus brief filed in Alice Corp. v. CLS Bank Int’l (Case No. 13-298) arguing that the “abstract ideas” exception to patent eligibility must be construed narrowly.  As the first-named amicus is Trading Technologies International, Inc., the brief will be referred to herein as the “TT brief.”  TT_Alice_CLS_amici

Beginning from first principles, the TT brief notes that the Constitution provides for patent protection to “promote the Progress of Science and useful Arts” and that Congress has accordingly provided for a broad scope of patentable subject matter.  As a result, the limitations placed on patentable subject matter are largely Court-created rather than being drawn from a literal interpretation of either statute or the Constitution.  The TT brief makes this point in quite strong terms, arguing that “[t]he judicial exceptions to Congress’s expansive definition of patent-eligible subject matter thus lie at the farthest edge of the judicial power, perilously close to the border separating permissible interpretations of statutes from impermissible encroachments on Congress’s Article I authority.”

The TT brief further notes that the question at bar is not whether the claims are directed to novel, useful, and non-obvious subject matter, but only as to “whether computer-implemented inventions that are not directed to a scientific truth should be deemed ineligible even if such inventions are novel, non-obvious, and otherwise patentable.”[1] Amici argue that the answer must be a resounding “no.”  Thus, the TT brief suggests that no computer-implemented claim should be found patent-ineligible merely for being directed to an abstract idea.  Furthermore, as argued by the TT brief and the Rader-Linn-Moore-O’Malley dissent from the Federal Circuit’s decision below, any invention can be boiled down to an abstract idea.  If the elements used to implement the idea are not found to be themselves inventive, then many claims – not merely software claims – will be found to be patent-ineligible on the basis of this test.

Additionally, the TT brief takes direct issue with the finding in the Federal Circuit’s plurality opinion that “a computer is just a calculator capable of performing mental steps faster than a human could.”  Rather, amici make the argument that computers are no longer merely machines capable of performing rapid calculations (and thus of implementing arbitrarily complex mathematical relationships), but are now “highly configurable machines capable of being turned into new and different machines through how they are programmed.”  On this basis, applying the abstract ideas exception to invalidate a broad swath of software patents would preclude patent protection for an area in which much innovation is still occurring: the creation of new specialized machines through the development of improved software.

Like the Moore-Rader-Linn-O’Malley dissent from the Federal Circuit’s opinion, the TT brief focuses on the fact that many issued patents rely on the patent-eligibility of software and the settled expectations of patentees would be disrupted by an expansion of the application of the abstract idea test.  The TT brief takes the argument one step further, by noting that programmable processors are being used in more of the things we buy, and that software is being used to improve those things.  For example, the novelty of a self-parking car is in the software used to maneuver the vehicle, not in the sensors used to gather the information or the control systems used to direct power to the wheels.

The argument continues by suggesting that the “abstract idea” exception to patent-eligibility should be limited to inventions that can be implemented entirely in the human mind, and thus has no bearing on claims that recite hardware components.  Likewise, claims directed toward “scientific truths” that have always existed and thus cannot be invented, are not patent-eligible.  But these two exceptions have no bearing on the patent-eligibility of a software-configured computer that performs specific tasks, so long as those tasks are not mere scientific truths.

Since the TT brief argues that a process performed on a computer cannot be abstract, amici emphasize the fact that both Alice and CLS Bank stipulated that the claims at issue must be performed on a computer.  By contrast, the plurality below minimized this stipulation by making its own finding that “the requirement for computer implementation could scarcely be introduced with less specificity.”  Accordingly, the two positions seem to be based on whether software patents are seen as (legitimate) claims directed to specially-configured machines or as claims to mental processes that happen to be implemented in machines.

My thanks to Domenico Ippolito at Schwegman, Lundberg & Woessner, P.A.’s Silicon Valley office, for this posting.


[1] Amicus Brief at 4 (emphasis in original) (defining “scientific truth” as a shorthand for laws of nature, natural phenomena and pure mathematical laws or axioms).

[2] See MPEP 2106 (II.B) (explaining that neither necessary data-gathering steps nor extra-solution activity that is not central to the invented method can convey patent-eligibility to a method that otherwise lacks it).

 

Amici Curiae Brief of Microsoft, Adobe and Hewlett-Packard: Alice Corp’s patent does not claim a technological innovation

March 2nd, 2014

For those of us that have been wondering how the Supreme Court can get its Section 101 jurisprudence back on track, the answer may be found in the brief of Microsoft Corporation, Adobe Systems Inc., and Hewlett-Packard Company as Amici Curiae, in support of affirmance.  The brief offers a reasonable path forward for the Supreme Court to refine the “abstract idea” test it rolled out in Bilski v. Kappos, 130 S. Ct. 3218 (2010).  That test may have worked to exclude Bilski’s business method innovation from patent eligibility, but unfortunately taken to its logical limit applied equally as well to exclude pretty much every other software invention as well, technological or not.

Clearly, the specter that the abstract idea exclusion to software subject matter will preclude patenting of technologically oriented software innovations in general, and even more so innovations that deal with manipulating what might be regarded as abstract information, such as inventions in the realm of artificial intelligence (e.g. IBM’s Watson(r) artificial intelligence system, or data compression algorithms underpinned by mathematical concepts), is of great concern to many of today’s technological titans, such as Microsoft, IBM, HP, Adobe and many others.

The Microsoft, Adobe and Hewlett-Packard brief echos many of the points made by IBM in its brief (see my post http://www.patents4software.com/2014/02/ibm-weighs-in-on-cls-bank-the-abstract-idea-test-is-unworkable-and-should-be-abandoned/), and also offers a path forward for the Supreme Court to circumscribe the Bilski abstract idea test so its application so it does not pose a threat to “true” technological software invention.  This is the essence of the points made by the brief:

1.  The Court should look at each “claim as a whole” and consider all the limitations of the claim in order to decide eligibility under Section 101.  “Patent eligibility should turn on whether the claim as a whole recites a specific, practical application of the idea rather than merely reciting steps inherent in the idea itself.”

2. Alice Corp is not claiming a “true” technological innovation — notwithstanding the fact that some of its claim are limited to a machine-implementation.  “While some of petitioner’s claims do refer to a computer or computer implementation, none relates to an advance in computing, software, or any other technology. Nor do the claims represent an innovation in how a computer may be employed to produce the desired result. Instead, the claims recite an abstract idea for conducting a business transaction and then add what amounts to the directive, ‘do it on a computer.’”

3.  The subject claims recite no functional relationship between the putative invention, a method for hedging risk, and the computer on which it is implemented.   “The claims all focus on a method for reducing settlement risk in financial transactions. Some claims may mention computers, but there is no connection between the method described and technological innovation; the references to computers are incidental or pretextual. The putative invention is the method, and that cannot be changed by saying, “and do it on a computer.” Far from being directed to patentable computer-implemented inventions, the patents concern unpatentable “abstract ideas” for organizing human obligations.

4. Software is an essential component of today’s technology, and it is just as deserving as patent protection as any other technology.  “Ultimately, however, software underlies the varied functionality and practical utility that computers provide. Without software, computers can do nothing useful. As a result, software is an indispensable aspect of innovation in every technological field and sector of the economy. Different software programs enable a general-purpose computer to perform new and different tasks.  ‘Such programming creates a new machine, because a general purpose computer in effect becomes a special purpose computer once it is programmed to perform particular functions pursuant to instructions from program software.’  In re Alappat, 33 F.3d 1526, 1545 (Fed. Cir. 1994).”

So, where would the Supreme Court leave us if it adopted this analytical framework in its decision on Alice Corp’s claims?  How can us mere mortals apply these, do I dare say, “abstract” Section 101 concepts to the real world?  I think one analogy that is easier to understand is this.  Consider the hypothetical where the “invention” is claimed as the combination of a record player and a record playing on it, wherein the record constitutes an engraving of a novel musical score on the record.  As I have pointed out in previous posts, I think most patent attorneys would agree that a novel musical composition is outside the scope of patent eligible subject matter, and that merely claiming it as part of a machine (i.e., the record playing on a record player) should not carry the music into the realm of patent eligible subject matter.  I think is pretty much what Microsoft, Adobe and Hewlett-Packard are saying in this brief — that Alice Corp’s business method innovation is the equivalent of music that is not patent eligible, and that merely “playing” this subject matter on a computer doesn’t carry it across the threshold of patent eligible subject matter.

On the other hand, were there some technological aspect to the implementation of the subject matter, like perhaps in the case of the music hypothetical, that the music is capable of performing a technological function like vibrating a beaker of chemicals to mix its content, then there may very well be patent eligibility.

At the end of the day, I think we are headed to a “technical effect” test akin to what the EPO and other jurisdictions have been applying for many years already.