Software Patent Law | Patents4Software.com

The Court of Appeals for the Federal Circuit recently heard oral arguments for the en banc rehearing of CLS Bank v. Alice Corp.  The questions to be focused on pertained to a test for determining when computer implemented inventions are abstract ideas and whether the form of the claim (method, system, or storage medium) was relevant to eligibility under Section 101.  Based on the oral arguments, it appears that some Judges would be uncomfortable declaring claims that recite systems as ineligible subject matter under Section 101.  However, the Judges seemed more receptive to the idea that method claims of computer implemented inventions could be ineligible.  The following is a synopsis of the arguments and comments from the hearing:

Arguing for CLS, Mr. Perry asserted that the claimed methods in Alice’s patents are abstract ideas and the tangible elements (computer) were added solely for the purpose of passing the eligibility requirement at the time.  In other words, the computer is neutral to the claims and does not add enough for the claim to be to significantly more than an abstract idea.  He also asserted that the patent was issued under the wrong standard of review at the PTO.

Judge Moore stated that this reasoning is difficult to apply to the system claims at issue.  She believes that adding a limitation to a computer system should not render the claim ineligible under Section 101.  She also stated that the specification included how to configure a computer to perform the claimed methods.

CLS asserts that the claims of the Alice patents are not to software inventions at all.    This is evidenced by the fact that the methods claimed can be performed using pencil and paper, without a computer.  CLS emphasized that Alice has not written a program to perform the methods and does not sell a product that perform the methods.  CLS categorized Alice’s claims as business methods where a general computer is simply added to attain eligibility under Section 101.

Arguing for Alice, Mr. Perlman asserted that Alice has not claimed an abstract idea, but a specific way of using a computer to exchange obligations using a computer.  He also asserted that even without the computer implementation, the claimed methods would be eligible under Section 101.  Alice’s claims require the use of a specially configured computer and Alice asserts that the specification of its patents instruct how to configure a computer to perform the methods that are claimed.

Alice thinks the test should be: the claim, with all its limitations, taken as a whole, must be to significantly more than just the abstract idea.  As applied to the computer context: the computer must play a significant role in permitting the claimed invention to be performed and not simply there to increase speed or print a result.

Some Judges were interested as to whether end of the day netting can be performed without infringing Alice’s claim.  This line of questioning was pursued to determine whether Alice claimed the only way of performing end of the day netting, which would suggest the claims at issue were not as specific as Alice seemed to assert.

Arguing for the United States, Mr. Kelley asserted that simply adding a general purpose computer to an abstract idea should not result in the claim being eligible subject matter under Section 101.  He also asserted that the process of determining eligibility under Section 101 must include an analysis of the function of the computer in the claimed method.  He suggested investigation into whether the method is separable from the system as a possible avenue to pursue.

This post prepared with assistance from Kyle Helgemoe.

The USPTO’s recent initiative to hold hearings on software patents reminds us again that the software patent debate continues, as it has for over thirty years.  Most of us that have been around throughout this time continue to wonder why this issue never gets resolved.   Why does the opposition to software patents continue to be visceral among at least a vocal minority of software developers?  Why do software patents continue to aggravate many software companies, even if they are in favor of the system in general?  Twenty years ago, the cause of this frustration was laid at the feet of poor patent examination quality.  The USPTO responded to those criticisms by greatly increasing the quality of examination in the software patent arts, and arguably holding software innovation to a higher standard of patentability than other technologies.  Now, the attention is being focused on functional claiming as the boogie man.  See my previous post for what I think of that line of reasoning.

There are, however, reasons that this debate has continued on for so long, but I think they lie in a different dimension than patent quality.  Software is indeed different from many other technologies, and those differences do create a patent ecosystem that is different from most other technologies. This difference is not, however, in the nature of software innovation, i.e., that it is somehow fundamentally different than innovation in other technologies (e.g., electronics or robotic systems), but rather in the structure of the software industry.

First, software inventors and software enterprises are far more numerous and un-concentrated than in most if not all other high technology industries.  One estimate puts the number of software contracting entities or publishers in the US at five thousand or more, most with less than a dozen employees.   Moreover, there are approximately 1,000,000 programmers and software engineers in the US.  All of these entities are capable of software innovation and patenting.  Most if not all other high technology industries, by comparison, have an order of magnitude fewer ongoing operating entities or working engineers or technicians.   This means the ownership of software patents in the US is both relatively un-concentrated and that the owners are more likely to have little or nothing to lose enforcing their patents, since their enterprises are small with few customers.

Second, even a single developer can make, manufacture and widely distribute a software application without much other than a computer and an Internet connection.

Third, software is ubiquitous in the US – it is now used by virtually the entire population of the US, other than infants.

Fourth, there are ample non-practicing entities that are more than happy to help small software entities to enforce their patents, or buy them outright for enforcement purposes.

This industry structure and the ubiquity of software users could be said to be a volatile mix.  There are a relatively large number of software patent owners with little to lose enforcing their patents, and a large number of targets.  That may be more to blame for the large number of software patent suits than the quality or undue breadth of software patents.  Moreover, the solution to the software patent problem may lie more in the realm of reforms uniquely addressed to these factors, as opposed to patent quality.  No doubt reforms addressed to these factors may be difficult if not impossible to achieve, but at least someone should be thinking about it.

There is one more factor that makes software very unique — because a single person can successfully develop and distribute software applications, the experience with the system is highly personalized for a large number of developers.  Software patents, in a sense, and almost unlike all other technology areas, restrict what feels like our treasured personal freedom, and understandably thus generate a visceral reaction to those so affected.  In almost all other mainstream industries, inventors do not act as manufacturers, but are employed by them.  This decouples and depersonalizes infringement concerns from the inventor/developer.  In actual practice, it is extremely rare that a small developer would ever be sued for infringement by any entity other than a direct competitor.  In this instance, the developer would be able to quite easily see it coming, but there is a possibility that they could be sued and not see it coming.  So, I can understand why smaller developers would feel personally threatened by software patents.  And even software developers in large companies often still fancy themselves as independent souls who, in their dreams, find fame and fortune founding a start-up and striking it rich.  So, they too, often can take umbrage as much as an independent developer.

Last Tuesday, February 12th, at the USPTO hearing on software patent quality held at Stanford University, Professor Lemley, of Stanford Law School, presented his most recent thoughts on how to address the problem of overly broad software patent claims, by limiting functional claiming, which he believes is at the core of the problem.  Professor Lemley is definitely on to something, but I’m pretty confident that the notion of limiting functional claiming for software patents is an impossibly unworkable approach to the problem of overly broad software patents.  The reasons are simple.  First, at every level of implementation, whether it be microcode, object code, source code, or higher, the very purpose of all computer software is to control the electronic data processing and storage functionality of a computer system.  So, software patent claims by their nature define electronic functionality, and after one leaves the level of machine-level functionality, the only thing limiting the characterization or description of this functionality is a programmer’s imagination.  Since virtually no programmers or software inventors invent at the level of machine level operation (this is left to operating systems, programming languages, compilers and interpreters, etc..)  there are few if any inventions at this level.  Rather, most all software invention occurs at a higher level of functionality, and in fact a much higher level of functionality and functionality definition.  If the invention occurs at this level, it is pretty difficult to see how any logical rule can limit the scope of the claims to a more detailed level of functional implementation that the programmer would largely be unaware of, that being left to the nuances of the particular language/operating system/compiler/interpreter used by the programmer or publisher.  Furthermore, if we limit the scope of software claims only to machine-level implementations disclosed in the patent, software patents will be of no use to protect anything other than a tiny fraction of software inventions. On a related note, it seems inconsistent with the state of software technology to hold software inventors or claims to an exacting standard of enablement where there is clearly an extremely high degree of what could fairly be called “automated enablement.”

On Tuesday February 12th the USPTO  held a hearing on software patent quality at Stanford University in Palo Alto.  The hearing featured speakers presumably chosen to represent the various divergent views of software patents held by various industry participants and legal experts, including distinguished professors of law to small developers to tech giants.  The speakers included:

Mark A. Lemley, William H. Neukom Professor at Stanford Law School

Colleen V. Chien, Assistant Professor of Law at Santa Clara Law School

Horacio Gutierrez, Corporate Vice President and Deputy General Counsel for Microsoft Corp.

Peter Tennent, IP Counsel IBM

Edward Goodmann, Analyst, Hattery Labs

John Ellis, Independent Developer

Aaron Greenspan, Code X Fellow, Stanford Law School

Tim Molino, Director of Government Relations for the Business Software Alliance

Jeremy Russell, Programmer

Julie Samuels, Staff Attorney, Electronic Frontier Foundation

Jon Potter, President, Application Developers Alliance

Aseet Patel, Esq. Partner, Banner & Witcoff, Ltd.

In a nutshell, it seemed that the large industry incumbents (Microsoft, IBM, BSA) favored improving the existing system using existing legal constructs, as opposed to any sharp departure from well established principles of software patent claim treatment.  Those representing smaller developers/industry participants appeared to be seeking more dramatic reform, while at the same time more or less acknowledging that software patents are not going away.

Professor Lemley and Professor Chien explored the theme of a more aggressive use of the written description and enablement requirements of 35 USC to limit the breadth of software patent claims.

The USPTO is scheduled to hold another hearing on this topic in New York City on Wednesday, February 27th.