Congratulations to former Fenwick partner and frequent Bilski Blog author Robert Sachs on publishing his detailed two-part series (see Part 1 and Part 2) analyzing patentability decisions in the five years since Alice v. CLS Bank. Fenwick’s patent team has been tracking eligibility decisions both in the courts and at the USPTO since
Back in March, I reported on the breadth of comments the USPTO received in response to its new Guidance on patent subject matter eligibility. Now, Congress has taken up the issue with a proposed draft of a new bipartisan, bicameral bill, and the Subcommittee on Intellectual Property (under the Senate’s Committee on the Judiciary) recently completed three days of hearings. Sen. Thom Tillis has already stated that based on the testimony, he realizes revisions will need to be crafted to address issues with the new definition of “utility,” to reconsider the proposed amendment to § 112(f), to consider an appropriate enhancement of exemptions for experimental use and research, and to clarify that the legislation is not intended to promote patenting of human genes.
The range of commentary from the hearing’s 45 witnesses largely matched that provided in response to the USPTO Guidance. In addition, however, the witnesses collectively provided a breadth and depth of thinking that should be extremely helpful as the subcommittee considers what to do next. Provided below is a summary of the written testimony that each witness brought to the hearings. Though the summary is somewhat lengthy, reviewing the various perspectives really helps one understand why the balancing of interests involved in this fundamental issue of patent law is so important. I also hope that the summary below may be a useful shortcut for stakeholders to find testimony relevant to issues they may want to focus on.
In January, the USPTO announced it would seek comments on the new Guidance it had published on patent subject matter eligibility. We have previously discussed this Guidance and won’t repeat ourselves here. Instead, this post will highlight the wide range of views expressed by the thousands of comments that the USPTO received. Although the comment period ended on March 8, the USPTO cautioned that its web page posting the comments might not be complete for a couple of weeks thereafter. By now, all the submitted comments likely have been posted so it’s time to take a look at them.
My last post focused on definitions for the terms “well-understood,” “routine,” and “conventional”—or W-URC—from the subject matter eligibility test set forth in Mayo and further described in Alice. Those terms relate to one part of the current test only. It seems fair to consider another important term in the test, one that’s considered before even reaching the W-URC issue: Whether the claim is “directed to” patent-ineligible subject matter, e.g., a law of nature.
I was particularly reminded of the need to address this when reading last week’s Federal Circuit opinions in Vanda Pharmaceuticals v. West-Ward Pharmaceuticals. Not only did Judge Prost pen a stark dissent from Judge Lourie’s opinion for the court, but both the majority and dissenting opinions focused on this phrase over and over. The opinion of the court referenced “directed to” 17 times and the dissent used it 10 times. Further, the phrase was used either in italics or quotes five times, emphasizing the importance of the term. So it’s worthwhile to give a look to what “directed to” means.
The Federal Circuit has now had enough opportunity to address Mayo’s “well-understood, routine, conventional” test that we should have a good understanding of it. We don’t (or at least I don’t).
To begin with, the Federal Circuit cases don’t seem to differentiate among these terms. The cases also universally connect the three terms with “and” rather than “or,” but curiously most of the cases don’t seem to actually require all three to be explicitly met for a determination of ineligibility. See, e.g., Content Extraction, where the Federal Circuit noted only that the patent owner had conceded one function as being “routine.” Finally, there seems to be real disagreement about the extent to which these terms address facts as opposed to legal standards. In this post, I’m not going to comprehensively analyze all these issues, but instead will focus primarily on what these common terms mean.
With counterpoint by Gregory Hopewell
In reading post-Mayo/Alice decisions, some seem more comfortable than others. I’ve been having a tough time getting my head and heart around a recent decision from Judge Leonard Stark of the District of Delaware. The case is American Axle & Manufacturing v. Neapco Holdings and Neapco Drivelines. From the party names alone, this does not appear to be a likely candidate for Section 101 invalidity.
The claims that the court found representative for Section 101 analysis confirm that we’re not talking about social media applications or financial methods here, but instead “a method for manufacturing a shaft assembly of a driveline system.” Classic auto industry innovation dispute between two Detroit area companies, with a bonus that the judge also hails from Detroit. Spoiler Alert: To my surprise, the first sentence of the opinion’s discussion section said, “As explained below, the Court has determined that the Asserted Claims are not directed to patentable subject matter.”
I was reminded of this question, often posed by my dad to remind me not to become a slave to statistics, by two dramatic things that happened last week. On the one hand, at the IAM 2017 Patent Law and Policy conference in Washington DC, investors spoke about waning interest in the U.S. market given the increasing frequency of patent invalidations. On the other hand, the Nasdaq composite index (consisting of 86% U.S. companies) hit record closing and intraday highs. Whom are we to believe: those who say weak patent coverage is threatening our economy or those who say that patents are not, in fact, necessary for economic strength?
Or is there a third possibility—that other factors overwhelm the economic importance of patents so we can’t really give too much weight to the statistics?
The speakers at the IAM conference cited PTAB invalidation rates and post-Alice hostility to 21st century technologies as reasons that they are looking more kindly on, for example, European, Chinese, and Canadian portfolio elements. Uncertainty regarding PTO examination norms and PTAB decisions, as well as apparently inconsistent panels of the Federal Circuit, have reportedly made it more difficult to value U.S. patent assets than those of other jurisdictions. The fact that the Supreme Court in the Oil States case is considering whether PTAB review of issued patents is even constitutional gives yet more pause.
The press is all abuzz with reactions to Judge Mayer’s concurring opinion bluntly stating that “claims directed to software implemented on a generic computer are categorically not eligible for patent.” Intellectual Ventures I LLC v. Symantec Corp. et al., 2015-1769, -1770, -1771 (Fed. Cir. Sept. 30, 2016).
Here, I’ll just explore one aspect of this remarkable opinion—the reasons that judicially created exceptions are dangerous. As we have previously detailed on this blog, the precipitous drop-off in PTO allowances and Article III court confirmations of validity are not driven by the literal text of Section 101 or other portions of the patent statute, but instead by judicial interpretations of exceptions that the courts deem must be read into the Patent Act. Many commentators have observed that such judicially created exceptions may be an extremely convenient way to sidestep “bad” patents but are not needed, given that the provisions of sections 102, 103 and 112 would be just as effective in addressing vague or overbroad patent claims. Single-paragraph district court explanations of why particular patents claim nothing more than an abstract idea now regularly invalidate patents at the pleadings stage. Judge Mayer’s concurrence adds fuel to this fire. A few examples from his concurrence are illustrative.
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
By: Stuart P. Meyer
The interplay between the legislative and judicial branches in the area of patent law has become a tectonic collision. Congress appears to be ever more active in telling courts how to handle patent matters, and the courts are increasingly writing their own exceptions into the statutory language governing patents.
For several …