In Re Bilski Blog

Patent Eligibility: The Historical Cases

By: Robert R. Sachs

There are three 19th century cases that form part of the canon of Supreme Court caselaw on patent eligibility: Le Roy v. Tatham, 55 U.S. 156 (1852), O'Reilly v. Morse, 15 How. 62 (1853) and Tilghman v. Proctor, 102 U.S. 707 (1880). 

Le Roy v. Tatham

I'll begin our historical tour with Le Roy v. Tatham, which is cited and quoted in just about every recent Supreme Court and Federal Circuit decision for nothing more than this singular statement: "A principle, in the abstract, is a fundamental truth; an original cause; a motive; and these cannot be patented, as no one can claim in either of them an exclusive right." Given the ubiquity with which Le Roy is cited, one can be forgiven for believing that this case was indeed about whether a 'principle,' etc. was patent-eligible. It is not.

The Normative Stance of Patent Eligibility

By: Robert R. Sachs

Judge Mayer, along with Judges Dyk, Prost, Lourie, are "Normativists," who see § 101 as defining what inventions and claims "ought" to be. The Normative approach imposes an extrinsic value judgment—from a source unspecified—as to what kinds of innovations count as "inventive" and what kinds do not. This approach is of a piece with the Supreme Court, which holds in Prometheus that a process "that focuses upon the use of a natural law also contain other elements or a combination of elements, sometimes referred to as an "inventive concept," sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the natural law itself."

In particular, the Normativists believe that the use of computers to deliver useful "human" functionality has no inherent inventive value per se, that there is no "human ingenuity" in designing computerized solutions. This view is based in part on the view that computers are so common, so woven in the modern life, using them to do something useful is not inventive.

The Normativist View of Section 101 and the Hidden Lessons in the Supreme Court's Cases

By: Robert R. Sachs

Judge Mayer's dissents in MySpace v. GraphOn and Alexsam v. IDT are passionate epistles to his fellow jurists of the Federal Circuit. Mayer argues for making patent eligibility a gateway issue in patent litigation and for adopting without scrutiny the Supreme Court's "inventive concept" framework as the received wisdom. Mayer's reading of the Supreme Court cases is essentially representative of what I call the Normativist view of the patent law, which has been expounded by the High Court itself and come to be regarded as the conventional wisdom.

In the next two posts and those that follow, I will explain why this analysis of Supreme Court precedent is incorrect and in much need of scrutiny and overhaul. The first post will summarize the Normativist stance, and the second will review the historical Supreme Court cases on patent eligibility—cases that are invariably quoted, but otherwise left unexplored. I will show not only that these cases do not stand for the propositions for which they are cited, but they actually stand against much of the conventional view of § 101 now being asserted. Moreover, I will show that the approved and thus patent-eligible claims at issue in these cases would absolutely fail as patent-eligible subject matter under the current law—a clear sign that the current framework is flawed. In future posts, I will turn to the modern Supreme Court cases—Benson, Flook, Diehr—and demonstrate both the errors in these decisions and how they have been badly misread and misapplied. I will also address some of the deeper philosophical issues that pervade § 101 and have been completely overlooked by the courts, resulting in the current swamp that is patent eligibility jurisprudence. 

Read: The Normative Stance of Patent Eligibility

Read: Patent Eligibility: The Historical Cases

CLS v. Alice: The Federal Circuit at a Jurisprudential Deadlock

By: Robert R. Sachs

dead·lock  [ded-lok]

    noun

    1.  a state in which progress is impossible, as in a dispute, 
    produced by the counteraction of opposing forces; standstill; 
    stalemate: The Federal Circuit has reached complete deadlock 
    in its Section 101 jurisprudence.

The Federal Circuit’s decision to take CLS Bank v. Alice Corp., (No. 2011-1301, May 10, 2013), en banc was expected by many to result in a significant decision on eligibility of software for patent protection, setting forth some objective standard for evaluating whether claims for software-implemented inventions are abstract ideas. Instead, we have a court that is radically and perhaps hopelessly split in “judicial deadlock.” As Judge Newman laments “In deciding to rehear the patent dispute between CLS Bank and Alice Corporation, the en banc court undertook to remedy distortions flowing from inconsistent precedent on section 101. This remedial effort has failed.” “With today’s judicial deadlock, the only assurance is that any successful innovation is likely to be challenged in opportunistic litigation, whose result will depend on the random selection of the panel.” Newman, dissent at 2.

While seven judges agreed that the method claims in suit were not patent eligible, they did so for conflicting and incompatible reasons. And the court was evenly split (5-5) on whether the claims for a computer system implementing the method were patent eligible. Judge Lourie, joined by Judges Dyk, Wallach, Reyna and Prost, attempts to set forth an “integrated approach” to Section 101 that synthesizes all of the Supreme Court’s decisions into a nice complete package. As expected, the decision is seen by some as undermining the legitimacy of software patents, and a nightmare for patentees.

The Confusion between Abstractions and Abstract Intellectual Ideas

By: Robert R. Sachs

In July 2012, two panels of Federal Circuit issued decisions regarding patentable subject matter for computer implemented business methods, CLS Bank Int’l v. Alice Corp. No. 2011-1301 (Fed. Cir. July 9, 2012), and Bancorp Services v. Sun Life Assurance Co. of Canada, No. 2011-1467 (Fed. Cir. July 26, 2012). The decisions demonstrated conflicting approaches various members of the court apply to this question. On what appears to be similar business methods patents, the two panels came to opposite decisions—the CLS panel finding the claims patent-eligible, and the Bancorp panel holding not.

In October 2012, the Federal Circuit vacated the CLS panel decision, granted CLS’s motion for en banc review. The en banc order posed two questions for the parties to address:

a. Whether a computer-implemented invention is a patent ineligible “abstract idea”; and when, if ever, does the presence of a computer in a claim lend patent eligibility to an otherwise patent-ineligible idea?

b. In assessing patent eligibility under 35 U.S.C. § 101 of a computer-implemented invention, should it matter whether the invention is claimed as a method, system, or storage medium; and should such claims at times be considered equivalent for §101 purposes?

On February 8, 2013, the court heard oral arguments from CLS, Alice, and the Solicitor General. Most surprisingly, no one attempted to actually answer the underlying questions here: What is an abstract idea? How do you know when a claim recites one? Instead, what was offered up as a “test” by both parties was whether the claim recites “significantly more” than just having a computer apply a (still undefined) abstract idea. This is just another ‘I know it when I see it test,’—just like Potter Stewart’s test for obscenity in Jacobellis v. Ohio. “Significantly more” provides no objective, analytical method to identify what is patent eligible. In this series of posts, we will explore some of the issues and problems raised by these questions, and offer the outlines of an objective answer and methodology.

Bilski Blog is Back!

Recent Supreme Court and Federal Circuit cases have significantly unsettled the law regarding patentable subject matter through a series of conflicting opinions regarding everything from business methods to biotechnology, from computer graphics software to medical diagnostics. These decisions only further confound serious problems in existing legal theories of claim construction (understanding what patent claims means) and obviousness (deciding whether an invention is sufficiently new and inventive to merit a patent). The increased uncertainty in the law could have deleterious effects on innovation, as companies and entrepreneurs may forgo developing new technologies and businesses if they believe that patent protection may not be available to protect their investments.

Critics of these recent changes call into question the Supreme Court’s wisdom in its recent decisions and feel that there is a lack of understanding about how best to approach these questions. Check here frequently for commentary calling for a more principled approach to the questions of patentable subject matter and related patent issues.

Canadian Court's Decision References Bilski Case

The Canadian case, Amazon.com, Inc. v The Attorney General of Canada and The Commissioner of Patents (October 14, 2010) refers to the Bilski decision and determines that Amazon's one-click purchasing method is patentable subject matter in Canada.

 

Cursory analysis of “abstract” by Bilski Court followed in Ultramercial case

Not saying, "We told you so, but..."

A decision from the Central District of California in August in the Ultramercial v Hulu case showcases a concern that we expressed about how cursory reliance on a claim being unpatentable because it is "abstract" can lead to unfortunate results. An amicus brief we filed in the Bilski case warned of the problems that could result if the Court applied the term "abstract" without providing a clear indication of the sense in which that term was being used. See amicus brief of On Time Systems (also can be found in the Supreme Court Proceedings tab of this blog).

A claim that is just a vague expression of a concept may be considered "abstract" and therefore correctly be held unpatentable. On the other hand, there are many claims that clearly are eligible for patent protection even though they deal with abstractions. For instance, any use of a sensor deals with something that is abstract - the example we gave in the brief was that a signal produced by a wind sensor is an abstraction of the force of air molecules striking the sensor. Just because a claim is based on a signal from a wind sensor does not mean that it is abstract and therefore unpatentable.

Unfortunately, the apparent deadlock among the Justices that led to the Bilski decision turning on a cursory statement that Bilski's claims were abstract, rather than either a detailed discussion of what that meant or a different ground (e.g., one of the issues presented as the ones that were before the Court) has encouraged other courts to likewise look to a quick "abstract" route to invalidating patents.

In the Ultramercial case, the court undertook analysis to determine whether the method claims in suit satisfied the Machine or Transformation Test, and found that they did not. Recognizing that under Bilski this is not the sole test, the Ultramercial court nonetheless did not attempt to consider any other subject matter test. Instead, it followed the formula the Supreme Court used in Bilski and took another analytical path - considering whether the claims were "abstract."

Actually, the Ultramercial court's approach was not even that precise, as it spoke in several places about how the method "disclosed in the patent" was abstract, apparently not even really focusing on the specific language of the claims but on the disclosure (i.e., the "teaching" part of the patent) instead. Indeed, the Ultramercial court expressly stated that it could make its determinination without putting the claims under the rigor of a Markman analysis to determine what the claim terms meant.

More importantly, though, even if one reads the Ultramercial opinion as focusing on the claim language, the court's treatment of whether the subject matter is "abstract" was limited to generalizations rather than specifics. For example, the analysis in this area began, "At the core of the ‘545 patent is the basic idea that one can use advertisement as an exchange or currency." The court immediately characterized this "core principle" of the patent as an abstract idea, without providing any basis for its reasoning. Instead, the court in the next sentence provided what sounds like a prior art argument, stating, "public television channels have used the same basic idea for years." The one-paragraph analysis concluded by asserting, "At its heart, therefore, the patent does no more than disclose an abstract idea."

In the next paragraph, the court essentially ignored the "added features, examples and limitations" of the patent as not limiting it "in a meaningful way." Such broad and conclusory analysis is contrary to the careful parsing and detailed review of specific claim terms that courts typically undertake before countering a patent's presumption of validity and holding it to be invalid.

We can only hope that future courts do not take up the Bilski decision's invitation to summarily rubber-stamp as "abstract" claims that just seem to them, at a gut level, to be not the sort of thing they would like to have patents protect. One wonders whether future courts will even bother going through the motions of the Machine or Transformation Test if they can just jump directly to the "abstract" rejection as an alternate ground.

Bilski Aftermath

What is the future for business method patents? Will Europe's "Technical Effect" test become the law in the U.S.? Robert Hulse examines these issues and analyzes the implications that the Bilski could have on future patent law in a blog post published on PLI's Patent Law Practice Center website.

Webinar on Bilski: Strategies for Prosecuting or Challenging Patent Process Claims Going Forward

Strafford will be offering a webinar entitled "Bilski:  Implications of the Supreme Court's Long-Awaited Ruling:  Strategies for Prosecuting or Challenging Patent Process Claims Going Forward" on August 11, 2010, 2010 from 1:00 - 2:30 PM (EDT).  Erika H. Arner of Finnegan Henderson Farabow Garrett & Dunner; Leigh J. Martinson of McDermott Will & Emery LLP, Boston; and Daniel R. Brownstone of Fenwick & West LLP will provide guidance for counsel and companies concerning the implications of the Supreme Court's recent decision in Bilski v. Kappos, and outline best practices for defending patent applications -- or challenging them --given the continuing lack of clear guidelines for patentability.  The webinar will review the following questions:

• What are the implications of Bilski for patent eligibility?
• What is its anticipated impact for past patent eligibility decisions?
• What strategies should patent applicants employ to improve the likelihood of a successful patent application going forward?
• What are the best practices for challenging patents following the Bilski decision? 

 The registration fee for the webinar is $297 ($362 for registration and CLE processing).  Those registering by July 23, 2010 will receive a $50 discount.  Those interested in registering for the webinar, can do so here.

Strafford will be offering a webinar entitled "Bilski:  Implications of the Supreme Court's Long-Awaited Ruling:  Strategies for Prosecuting or Challenging Patent Process Claims Going Forward" on August 11, 2010, 2010 from 1:00 - 2:30 PM (EDT).  Erika H. Arner of Finnegan Henderson Farabow Garrett & Dunner; Leigh J. Martinson of McDermott Will & Emery LLP, Boston; and Daniel R. Brownstone of Fenwick & West LLP will provide guidance for counsel and companies concerning the implications of the Supreme Court's recent decision in Bilski v. Kappos, and outline best practices for defending patent applications -- or challenging them --given the continuing lack of clear guidelines for patentability.  The webinar will review the following questions:

• What are the implications of Bilski for patent eligibility?
• What is its anticipated impact for past patent eligibility decisions?
• What strategies should patent applicants employ to improve the likelihood of a successful patent application going forward?
• What are the best practices for challenging patents following the Bilski decision? 

 The registration fee for the webinar is $297 ($362 for registration and CLE processing).  Those registering by July 23, 2010 will receive a $50 discount.  Those interested in registering for the webinar, can do so here.