On May 4, the USPTO issued a new memorandum for patent examiners, “Formulating a Subject Matter Eligibility Rejection and Evaluating the Applicant's Response to a Subject Matter Eligibility Rejection” (“Examiner Instructions”)  along with a new set of five example claims, this time in the life sciences and chemistry arts.   The Examiner Instructions are a positive step forward in refining the examination process, but leave open many questions.  

The Examiner Instructions are primarily procedural in nature—how the examiners are to draft § 101 rejections and respond to arguments—rather than addressing substantive issues such as the scope of abstract ideas, laws of nature or natural products  This comes, I believe, in response to many of the public comments to the Interim Guidance and the July Update that focused on having examiners provide more complete and thorough rejections.  There is a widespread perception, backed up by real evidence, that a large percentage of examiners issue boilerplate § 101 rejections that simply identify some alleged abstract idea, and then formulaically assert that there is no inventive concept because all of the claims limitations recite well-known, routine and conventional steps or the functions of a generic computer.  

Continue Reading USPTO Updates Alice Guidance with Examiner Instructions, More Work Needed

On September 4, a Massachusetts district court issued an interesting ruling that calls into question many of the recent preliminary stage Alice-based invalidations we’ve seen over the past year.  The decision, the latest round in ongoing litigation between DataTern and numerous defendants, is notable for the following reasons:

  • It expressly recognizes that the presumption of validity applies to subject matter eligibility, saying that notwithstanding some suggestions in the Federal Circuit to the contrary (see Judge Mayer in Ultramercial III, 772 F.3d at 720-721), the Supreme Court’s unanimous statement in Microsoft Corp. v. i4i Ltd. Partnership, 131 S. Ct. 2238 (2011) was, without qualification, that 35 U.S.C. § 282 requires an invalidity defense to be proved by clear and convincing evidence.  The DataTern court refused to read the Supreme Court’s silence on the issue in its more recent § 101 decisions as creating any sort of exception to that rule.
  • The patent at issue (6,101,502) is remarkable in how little hardware it describes in the specification, and the claims are directed, for example, to, “A method of interfacing an object oriented software application with a relational database, comprising the steps of selecting an object model; generating a map …; employing the map …; and utilizing a runtime engine … to access data from the relational database.”  Thus, these are pretty software-centric claims, which have had a dismal track record in recent § 101 challenges.
  • After summarizing the post-Alice case law, the court found that “the ‘502 patent is directed at solving a problem that specifically arises in the realm of computing” so computer limitations in the claims are neither just post-solution limitations nor mere specific applications of an abstract idea.

Based on such reasoning, the court denied the motion for summary judgment of invalidity.  If this decision is appealed, it will be interesting to see the Federal Circuit’s reactions to the presumption of validity issue, the minimal recitation of hardware, and the “realm of computing” analysis.  Given the paucity of other cases upholding such software-related claims, we should expect to see this decision cited in numerous other pending cases in the coming months.

Part II:  See Part I #AliceStorm: July is Hot, Hot, Hot…and Versata is Not, Not, Not

What Is a “technological invention”?

The other part of the CBM definition at issue in Versata is the exclusion of a technological invention from the scope of CBM review. Correctly, the Court noted that the USPTO’s circular definition of technological invention as “essentially one having a “technological” feature that solves a “technical” problem using a “technical” solution,” “does not offer much help.”  But instead of defining what was technological, the Court looked to what PTAB said was not technological, that is “certain characteristics which, if present, did not help support a finding” that an invention was technological.  Here are PTAB’s exclusionary factors:

1) mere “recitation of known technologies”; 2) “reciting the use of known prior art technology”; and 3) “combining prior art structures to achieve the normal, expected, or predictable result of that combination.”

As a general rule you do not define a word by what it is not: the definition of mammal is not creatures that do not have scales, cold blood, and lay eggs.  Similarly, the use of exclusions does not effectively differentiate between technological inventions and non-technological inventions. Continue Reading Versata: What’s “Technological” and the Federal Circuit’s New Rule Against Improvements

It's been one year since the Supreme Court's decision in Alice Corp. v. CLS Bank. On its face the opinion was relatively conservative, cautioning courts to "tread carefully" before invalidating patents, and emphasizing that the primary concern was to avoid preemption of "fundamental building blocks" of human ingenuity.  The Court specifically avoided any suggestion that software or business methods were presumptively invalid.  But those concerns seem to have gone unheeded.  The Court's attempt to sidestep the tricky problem of defining the boundary of an exception to patent eligibility—"we need not labor to delimit the precise contours of the "abstract ideas category in this case""—has turned into the very mechanism that is quickly "swallow[ing] all of patent law.” The federal courts, the Patent Trial and Appeal Board, and the USPTO are using the very lack of a definition to liberally expand the contours of abstract ideas to cover everything from computer animation to database architecture to digital photograph management and even to safety systems for automobiles.

Let's look at the numbers to present an accurate picture of the implications of the Supreme Court’s decision. My analysis is a data-driven attempt to assess the implications of Alice one year out. It is with an understanding of how the Supreme Court’s decision is actually playing out in the theater of innovation that we can better project and position ourselves for what the future holds.

Alice at Court

Table 0 Fed Courts

As of June 19, 2015 there have been 106 Federal Circuit and district court decisions on § 101 grounds, with 76 decisions invalidating the patents at issue in whole or in part.  In terms of patents and claims, 65% of challenged patents have been found invalid, along with 76.2% of the challenged claims. 

Continue Reading The One Year Anniversary: The Aftermath of #AliceStorm

It's been six weeks since my last AliceStorm update, and we've had plenty of action: twelve §101 decisions, and fourteen patents invalidated in just that period. That said, the success rate of motions on the pleadings is dropping, now down to a mere 69.6%. At PTAB, ten new institution decisions, all of which were granted on ineligibility grounds. And PTAB continues with its 100% kill rate, with seven (!) final decisions invalidating patents.

Here's the data.

Total

Total Invalid

% Invalid

+/-

Fed. Cir and 
Dist. Ct. Decisions

90

63

70.0%

-3.9%

Patents

215

131

60.9%

-10.4%

Claims

4,497

3,282

73.0%

-7.3%

Motions on Pleading

46

32

69.6%

-7.6%

PTAB CBM Institution Decisions on 101

51

44

88.5%

1.52%

PTAB CBM Final
Decisions on 101

27

27

100%

 0%

Continue Reading Tracking #AliceStorm: Spring Showers Continue to Rain Patent Destruction

Today Fenwick & West launched a new website on which users can easily browse the Post-Alice decisions of the PTAB, the Federal Circuit, and the district courts to see how the law on patent eligibility is evolving. The purpose of this site is to allow those who want to learn more about the subject to easily browse cases and locate decisions that may be of interest to them, as well as to compare decisions involving different types of inventions and coming from different tribunals. We welcome comments from users on how we can grow this site to be of greatest use to the community.  

This is the second such website Fenwick has produced, the first being devoted to decoding PTAB decisions. Patent law continues to change week-by-week, and we want to make it as easy as possible for people impacted by those changes to best understand them. 

Check back on these sites frequently, as our team updates the contents regularly.

By: Robert R. Sachs

The Supreme Court has consistently cautioned that the judicial exceptions to patent eligibility need to be carefully applied:

At the same time, we tread carefully in construing this exclusionary principle lest it swallow all of patent law. Mayo, 566 U. S., at ___. At some level, "all inventions . . . embody, use, reflect, rest upon, or apply laws of nature, natural phenomena, or abstract ideas.”

Alice Corp. v. CLS Bank International, 573 U.S. __, 134 S. Ct. 2347, 2352 (2014) (citations omitted).

On November 14, 2014, exception did in fact swallow the rule in the Federal Circuit’s decision Ultramercial, Inc. v. Hulu, LLC, 2010-1544, 2014 U.S. App. LEXIS 21633 (Fed. Cir. Nov. 14, 2014) (“Ultramercial III”). Judge Lourie, writing for the panel of Judges O’Malley and Mayer, found Ultramercial’s patent claims ineligible. Along the way to that ending the court observed:

[W]e do not purport to state that all claims in all software-based patents will necessarily be directed to an abstract idea. Future cases may turn out differently.

2014 U.S. App. LEXIS, at *11.

This phrasing is precisely how one would state an exception to a rule. Instead of saying that software is generally not directed to abstract ideas, and that in some cases may be, this phrasing implies the opposite: software is presumed to be an abstract idea (hence ineligible) though there may be some case in the future in which it is not. This approach turns the entire patent eligibility framework on its head. This essay explores how Ultramercial III reaches this inversion and its potential consequences.

Continue Reading The Day the Exception Swallowed the Rule: Is Any Software Patent Eligible After Ultramercial III?

The Palo Alto Area Bar Association (PAABA) and the International Technology Law Association (ITechLaw) are teaming up to provide a luncheon panel discussion on the practical implications of the Alice v. CLS Bank decision. In her dissent to the Federal Circuit Alice decision, Judge Moore predicted that the majority view would result in “the death of hundreds of thousands of patents.” Since the U.S. Supreme Court affirmed that decision in June, it is now becoming clear that both courts and the US Patent and Trademark Office are treating the Alice decision as having changed the law on what types of inventions are eligible for patent protection.

The panel will explain this perceived change and offer practical suggestions for steering clients through these shifting seas, including:

  • How Alice has impacted patent applications at the USPTO, Covered Business Method post-grant proceedings at the PTAB, and invalidity arguments in district court
  • What the USPTO, district courts, and the Federal Circuit have done with the vague tests articulated by Alice regarding “abstract ideas” and “inventive concept”
  • What kinds of applications and patents are most vulnerable
  • What patent owners and applicants who are at risk can do to shore up their IP protection

November 11, 2014
12 – 1:30 pm PST 
Fenwick & West LLP, Mountain View

To register, click here.

Hosted by PAABA, ITechLaw and Fenwick & West LLP. CLE credit available.

By: Stuart P. Meyer

There has been significant commentary, both before and after the Supreme Court’s decision in Alice, that the various judicially created exceptions to patentability under 35 USC § 101 are not only sound, but are also constitutionally mandated.  For instance, a major thesis of the ACLU’s amicus brief in Alice was that the First Amendment naturally limits § 101, as “patents giving control over intellectual concepts and abstract knowledge or ideas—and thus limiting free thought—would violate the First Amendment.”

The Court may have already given some guidance in this area, and lower courts appear to be listening.  In a September 4 decision, one judge in the Central District of California had no difficulty dismissing, via FRCP 12(b)(6), an infringement complaint because the court found that the three patents-in-suit did not satisfy § 101, based on the judicially created exceptions as taught by AliceEclipse IP LLC v. McKinley Equipment Corp., Case No. SACV 14-742-GW (C.D. Cal. September 4, 2014).  Judge George Wu observed that Justice Kennedy in Bilski, delivering the opinion of the Court explained the limitations on  § 101.  The pertinent portion of Bilski reads:  “While these exceptions are not required by the statutory text, they are consistent with the notion that a patentable process must be ‘new and useful.’  And, in any case, these exceptions have defined the reach of the statute as a matter of statutory stare decisis going back 150 years.”

Continue Reading Are the Supreme Court’s exceptions to patentability mandated by the Constitution, or are they just “statutory stare decisis”?

The Alice Guidance lists four example categories of abstract ideas:

  • fundamental economic practices
  • methods of organizing human activities
  • an idea of itself (sic), and
  • mathematical relationships/formulas. 

Each of these examples has supporting footnotes to the Alice decision and other Supreme Court cases.  But it should be understood that these categories are for potential Abstract Ideas.  That is, something in one of these categories may or may not be an Abstract Idea. Taken superficially and out of context, some of these examples sweep too broadly, and will be too easily misused by examiners.  

Continue Reading The Alice Guidance Categories of Potential Abstract Ideas