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

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.”


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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.  


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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.


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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)  


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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?


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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

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

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.


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