By: Robert R. Sachs

On June 25, 2014, just six days after the Supreme Court decided Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 134 S. Ct. 2347 (2014), the USPTO  issued its Preliminary Examination Instructions (“Guidance”) in view of the case.   Subsequently, the Office asked for public comments on the Guidance.   Over forty companies, associations, law firms and individuals submitted comments, including myself.  This series of posts is based on the comments I submitted to the Office.

In my view, the Guidance does not correctly interpret the Supreme Court’s decision, and does not provide specific guidance to the 7,000 examiners who will have to implement them on a daily basis.  The Court’s decision was not written as a manual for how examiners are to evaluate patent applications, and so simply quoting and paraphrasing the decision (along with scrupulous footnoting) is not sufficient to provide a cohesive, workable framework for the examination of patent applications, particularly for computer implemented inventions.  The core problem remains that examiners will be left to their own subjective evaluation and opinion of the patent eligibility of the claims before them.  Already, the patent community is observing very different approaches from different examiners.  This lack of uniformity leads to increased costs and delays in the examination of patents, as well as increased uncertainty by innovators as to the eligibility of their inventions in technologies that have been traditionally considered patent eligible.

Continue Reading Analysis of Preliminary Examination Instructions in View of the Supreme Court Decision in Alice Corp. v. CLS Bank.

By: Stuart P. Meyer

A recent episode of NPR’s “Planet Money” was entitled “The Case Against Patents.”  Several notable commentators in that episode questioned whether patents help or hinder innovation, whether history supports the benefits of a patent system, and whether patent terms should be tinkered with to determine the amount of protection that is optimal from various socio-economic perspectives.  I am delighted every time this issue is brought up, since the appropriate balance of rights between innovators and society is anything but static.  As reasonable royalty rates fluctuate under case law, as infringement and validity standards shift, and as patents become commodities traded outside of traditional M&A situations, the fulcrum is certain to shift in one direction or the other. 

The Supreme Court gave more than a little consideration to such issues in Alice v. CLS Bank.  In fact, the very focus of this unanimous opinion was on this balance:

We have described the concern that drives [the judicially-created exclusion for laws of nature, natural phenomena and abstract ideas] as one of pre-emption.  … Laws of nature, natural phenomena, and abstract ideas are “‘”the basic tools of scientific and technological work.”’” (slip op. at 5-6)  

Continue Reading Where are You, Congress? Alice v. CLS Bank and “The Case Against Patents”

By: Robert R. Sachs

~ ‘The report of my death was an exaggeration’ –Mark Twain

Mark Twain, American humorist.

With apologies to the great humorist, the report of the death of software patents is an exaggeration. Some commentators quite quickly suggested that the Supreme Court’s decision in Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 573 U.S. ___, No. 13-298 (June 19, 2014), will “invalidate the majority of all software patents in force today” and is “bad news for software patents”. That interpretation may make good copy, but it is simplistic and overblown. While the Court invalidated Alice’s patents, the decision certainly does not invalidate the majority, or even a large percentage, of software patents, nor does it radically restrict the kinds of inventions that can be patented going forward. The decision is a modest and incremental clarification in the patent law, and a not wholesale revision.

The Court set forth a two-step test grounded in Bilski v. Kappos and Mayo v. Prometheus.While the Court may not have defined a clear boundary for so called “abstract ideas” specifically, it did squarely place this case within the “outer shell” of the law set forth in Bilskiand Mayo. In doing so it articulated an approach that focuses not on finding the boundary line, but rather on the core properties of an ineligible patent claim. In Part I of this two-part post, I will focus on just the first step of the test, whether a claim recites a patent-ineligible “abstract idea.” In Part II, I’ll address issues regarding preemption, mental steps, and the application of Alice to software patents.

Read the rest on IPWatchdog….

By: Robert R. Sachs

Alice Corp. v. CLS Bank is out and the result is not unexpected:

1) Alice's patents for computer-implemented methods and systems for financial risk intermediation are invalid.

2) The patents claim abstract idea, but the Court will not "labor to delimit the precise contours of the "abstract ideas" category." That leaves unanswered the primary problem that has plagued the lower courts, identifying in a particular case whether the claims recite an abstract idea. As Judge Lourie said in his plurality opinion below, "deciding whether or not a particular claim is abstract can feel subjective and unsystematic, and the debate often trends toward the metaphysical, littered with unhelpful analogies and generalizations." CLS Bank v. Alice Corp, 717 F.3rd 1269, 1277. Today's decision only continues the trend towards glosses and legal mysticism, with the Court expressing concern over patents on the "building blocks" of "human ingenuity" or the "modern economy," or covering "fundamental practices" "long prevalent" in the field.  What is a "building block"? What is "fundamental"? How is a court or a patent examiner supposed to figure that out?

Continue Reading <i>Alice v. CLS</i>: More Questions Than Answers

By: Robert R. Sachs

On January 31, 2014, Fenwick & West and the Center for the Protection of Intellectual Property (CPIP) at George Mason University School of Law held a roundtable on Patentable Subject Matter at Fenwick’s Silicon Valley office. 

Our approach to this roundtable was different from the typical conference or roundtable on patent eligibility. As I have made clear in other posts, the question of patent eligibility reaches outside of the strict confines of the courtroom, the Patent Office and the patent statute; it is intimately grounded in science and philosophy, in the nature of human creativity and in the types of things that can be said to be the subject of human creation. In particular, the fundamental questions of patent eligibility—what is a law of nature, an abstract idea, or a natural phenomena—are questions that are ancient in origin, and that have been addressed in considerable detail outside the boundaries of the law.  

Accordingly, in addition to the usual suspects, such as law professors and patent practitioners, we included in our roundtable experts in a number of extra-judicial disciplines. Mark Turner, professor of Cognitive Science at Case Western Reserve University, is one of the leading theorists and researchers in studying the nature of human cognition, and one of the originators of the theory of Conceptual Blending, which describes how we combine abstractions from different domains to understand and imagine. Gregory Salmieri, visiting fellow in Philosophy at Boston University, provided insights on the historical and analytical issues underlying abstract ideas and laws of nature. Ted Brown, Emeritus Professor of Chemistry at University of Illinois at Urbana-Champaign, discussed the role of metaphor in scientific thinking, and how chemists and physicists think about laws of nature. Steve Rosenberg, Ph.D., Chief Scientific Officer at CardioDx, and an inventor on over 20 patents, brought his expertise in biochemistry and genetics to bear on these topics as well.

Our academic contingent included Adam Mossoff, Mark Schultz, Matthew Barblan, co-directors of CPIP; Kristin Osenga, professor of law at University of Richmond School of Law, with expertise in the role of linguistics in patent law; Christopher Holman, professor of law at University of Missouri-Kansas City, who has extensive experience in biochemistry and molecular biology; Andrew Chin, professor of law at the University of North Carolina, a specialist in the mathematical considerations under debate; and Saurabh Vishnubhakat, post-doctoral associate at Duke Law School and an expert advisor to the USPTO on patent policy. 

Our practitioners included myself, Courtney Brinckerhoff, partner at Foley & Lardner LLP, an expert in biotechnology patent issues and James Calkins, Vice President and Global Head of Patent Support at Sanofi (and former clerk to J. Giles Rich of the Federal Circuit), who explained the impact that the uncertainty in patent eligibility has on investments by companies in biotech innovations.

We will publish a white paper on the roundtable shortly. 

By: Robert R. Sachs, Daniel R. Brownstone

Last week, we filed two amicus briefs with the Supreme Court in Alice Corp. v. CLS Bank, one on behalf of Advanced Biological Laboratories (ABL), and one for Ronald M. Benrey (Benrey). It goes without saying that this is the bellwether case for the patent eligibility of software. The question presented by the Court and the parties was whether 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 as interpreted by this Court.

Our two briefs focused on different aspects of the issue. The ABL brief set forth a new framework for patent eligibility called “objective preemption.” The core thesis is that patent eligibility is a question of law, but must be predicated on objective analysis based on POSITA, the person of ordinary skill in the art. This conforms the analysis to how obviousness is determined, a question of law based on the Graham factors, as well as claim construction, enablement, written description and doctrine of equivalents infringement. In all of these, POSITA is used to ground the analysis in objective factors, not the subjective beliefs of the Court based on what it had for breakfast. The brief explains how POSITA would be used to understand the scope of the claim, and whether the claim preempts all practical applications of some abstract idea. The brief concludes by showing that Alice’s claims, which were held invalid by the district court and the Federal Circuit, are valid under objective preemption.

The Benrey brief is more narrowly focused. Benrey is the author of Understanding Digital Computers (1964). This book was cited by the Solicitor General to the Supreme Court in Gottschalk v. Benson in support of the proposition that computers perform mental steps like humans. This became a core principle over the years and persists today; Judge Lourie of the Federal Circuit has repeatedly stated it as a fact and continues to use it to invalidate software patents. The problem is that Benrey never suggested that computers in fact operate like human minds.  Benrey’s brief explains that he was quoted out of context, that computers do not perform mental steps, and that mathematical formulas are not scientific truths per se as apparently believed by the Court. Benrey’s brief goes on to explain that the mental steps doctrine was extended to computers only on the basis of this misunderstanding of the nature of computers and mathematics. It further shows that the notion that general purpose computers cannot impart patent eligibility is scientifically unsound, based on the work of Alan Turing.

Copies of the briefs are available at the links below. We look forward to further discussion with those on all sides of the issue over the coming weeks, and ultimately, resolution regarding this question that remains critical to the future of innovation.

Oral argument is set for March 31, 2014.  We’ll be there.

Brief for Amicus Curiae Advanced Biological Laboratories, SA in Support of Petitioner

Brief for Amicus Curiae Ronald M. Benrey in Support of Neither Party

By: Robert R. Sachs

 

"To coin a phrase, the name of the game is the claim.”
Judge Giles S. Rich, Federal Circuit (1990)

“We look to the words of the claims themselves … to define the scope ofthe patented invention.”
Vitronics Corp. v. Conceptronic, Inc., 90 F.3d 1576 (Fed. Cir1996)

“It is a ‘bedrock principle’ of patent law that ‘the claims of a patent define the invention to which the patentee is entitled the right to exclude.’”
Phillips v. AWH Corp., 415 F.3d 1303, 1312 (Fed. Cir. 2005) (en banc)

The above quotations are often cited in discussions and analysis of claim construction, typically in prelude to infringement or validity analysis. But when it comes to determining patent eligibility, there is a clear split within the Federal Circuit as to the importance of claim language, driven by the divergent stances that various members of the court take toward the fundamental question of what counts as an invention.

Continue Reading The Importance of Claim Language in Determining Patent Eligibility

By: Robert R. Sachs

The Federal Circuit’s en banc decision in CLS Bank Int’l v. Alice Corp., __  F.3d __, No. 2011-1301, 2013 WL 1920941 (Fed. Cir. May 10, 2013) was roundly criticized as a “nightmare,” further cementing the impression that the court was confused and in conflict over the requirements of patent eligibility under 35 U.S.C § 101. The six non-precedential opinions were seen as leaving patent applicants and owners alike without guidance, let alone predictability, as to whether their patents were valid. Alice Corp.’s patents covered computer-implemented methods and systems for a third-party intermediary to ensure real-time settlement of currency exchange transactions between counterparties. Judges Lourie, Dyk, Wallach, Reyna and Prost appeared to take a hard stand against such software-based financial inventions, finding that neither the method nor system claims were patent-eligible. Under Lourie’s “integrated approach,” the patent claims lacked any “meaningful limitations” and thereby preempted all “practical applications” of the abstract idea of third-party settlement. Taking a middle position, Judges Rader, Moore, Linn and O’Malley agreed that the method claims were not patent-eligible, but argued that the system claims were patent-eligible because they contained limitations that were not necessary and inherent in the abstract idea. At the other end of the bench, Judges Linn and O’Malley argued that the method claims were indeed patent-eligible because they included limitations that prevented the claims from being “unduly preemptive.”

Continue Reading Rader’s Olive Branch: <i>Ultramercial II</i> Resolves the Judicial Deadlock of <i>CLS Bank</i>

By: Robert R. Sachs

In Prometheus, Justice Breyer reintroduced the phrase “inventive concept” as it first appeared in Flook. “The Court’s precedents,” Breyer wrote:

Insist 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 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. Flook, supra, at 594. Mayo, 132 S.Ct. 1289, 1294 (slip op. at 3). 

Continue Reading Breyer’s Reinvention of the ‘Inventive Concept’

By: Robert R. Sachs

By design and practice patent claims necessarily make use of abstractions. This has been long recognized:

The difficulty which American courts…have had…goes back to the primitive thought that an “invention” upon which the patent gives protection is something tangible. The physical embodiment or disclosure, which, in itself is something tangible is confused with the definition or claim to the inventive novelty, and this definition or claim or monopoly, also sometimes called “invention” in one of that word’s meanings is not something tangible, but is an abstraction. Definitions are always abstractions. This primitive confusion of “invention” in the sense of physical embodiment with “invention” in the sense of definition of the patentable amount of novelty, survives to the present day, not only in the courts, but among some of the examiners in the Patent Office. E. Stringham, Double Patenting, Washington D.C., Pacot Publications(1933) (emphasis added).  

The black letter law statement that claims are not limited to the disclosed embodiments, Phillips v. AWH Corp., 415 F.3d 1303 (Fed. Cir. 2005) (en banc), only makes sense because claims necessarily make use of abstractions to cover a wide range of embodiments. As the Phillips court states, “persons of ordinary skill in the art rarely would confine their definitions of terms to the exact representations depicted in the embodiments.” Id. at 1323 (emphasis added). The only way one does not confine their definition to an exact representation is by the use of abstractions. 

Continue Reading Patent Claims and the Use of Abstractions