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 April, Senators Coons and Tillis proposed a draft framework for legislation reformulating the standards for determining patent eligibility under § 101 of the Patent Act. The framework largely codified the Patent Office’s latest internal eligibility standards that went into place in January 2019, formulating a closed list of categories excluded from patent eligibility and creating a “practical exception” test to ensure that such categories are construed narrowly.
On May 22, Senators Coons and Tillis were joined by Representatives Collins, Johnson and Stivers in proposing a bicameral draft bill containing—among other things—new text for § 101, as well as new supporting definitions in § 100.
It should be noted that the draft bill is still very much open to discussion, with hearings of the Senate Judiciary Subcommittee on Intellectual Property to be held on June 4, 5 and 11. That said, I’ve summarized some of the draft language’s key points below:
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.
The Supreme Court’s recent decision on patent venue, TC Heartland LLC v. Kraft Foods Group Brands, may actually turn out to be a good thing for patentees when it comes to Section 101. But before we get to that, let’s do the AliceStorm numbers: The overall Alicestorm index of percentage of Section 101 ineligibility outcomes in the federal courts is up 0.6% from March, at 67.6%. The Federal Circuit contributed the most to the increase, issuing eight separate decisions finding patent eligible subject matter, with six of these decisions being Rule 36 affirmances. The number of motions on the pleadings index are up as well, by 1.2% from March, at 63.3%. Turning to the monthly numbers, after the record number (35) of Section 101 decisions in March 2017 things returned to “normal” with just 15 decisions: The bump in March contributed to a marked increase in the three-month average of ineligible decisions, jacking it up from 62% to 73%. But beneath that, we can also see that the raw number of ineligible decisions in April (13) is about the same as the high marks since August 2016, and that the raw number of eligible outcomes (2) is at its lowest level since October 2015. This puts the ratio of ineligible to eligible decisions in April 2017 at 6.5, the highest it’s been since June 2015. Whether this signals a real uptick in favor of patent defendants or just a temporary blip in the overall downward trend in ineligible outcomes remains to be seen. …
The most significant Federal Circuit decision in March was Thales Visionix, Inc. v. United States, another case finding eligible subject matter. What distinguishes this case—and demonstrates the inherently subjective I-know-it-when-I-see-it nature of the Alice test—is the extraordinary breadth of the claims. Consider claim 22, a single-step method claim:
A method comprising determining an orientation of an object relative to a moving reference frame based on signals from two inertial sensors mounted respectively on the object and on the moving reference frame.
The court held that this claim was patent eligible, because it was not directed to an abstract idea in Step 1 of the Alice test:
As many of you know, the Federal Circuit’s decision in Trading Technologies was the first time a graphical user interface had been found patent eligible by the Federal Circuit. The defendant CQG moved for both panel rehearing and enbanc rehearing.
My client SHzoom filed a request to make the Trading Technologies decision precedential. CQG attempted…
The Federal Circuit’s recent decision in McRO has been interpreted by many in the patent community as a further signal that the so-called “pendulum” is swinging back to a more favorable position for patentees. There is some superficial evidence of this possibility. Let’s look at the numbers. September 2016 was the first time since Alice that the number of federal court decisions finding eligible subject matter (16) exceeded those finding ineligible subject matter (13). Those sixteen decisions also mark the highest number of eligibility decisions in a single month. The most significant contribution to the switchover is that only two motions to dismiss under § 101 were granted in September, compared to nine that were denied, the largest gap since March 2016 (6 granted, 10 denied). …
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.
Given the volume of district court decisions regarding Section 101, I typically don’t find ones that stand out enough to warrant discussion. But last week’s decision by Judge Stark in MAZ Encryption Technologies LLC v. Blackberry Corporation is an exception. The opinion demonstrates a rigorous application of the requirements of a Rule 12(c) motion for judgment on the pleadings, as well as an integrated approach to the Mayo test. The opinion is noteworthy as well because Judge Stark is no pushover on Section 101: Before MAZ he granted six of nine Section 101 motions (including two 12(b) motions) invalidating over a dozen patents. Judge Stark also wrote the opinion invalidating the patents in the Federal Circuit’s Mortgage Grader case. …