Where intellectual property is patent eligible – except when it’s not…
In part 1 of our discusson on Alice we covered the background of the potentially landmark patent lawsuit. Here we travel through the courts.
On the way up, the courts went around the bush a few times. At the district court (US Dist. Ct in DC), the decision (decided at summary judgment) was that the patents were invalid. The district court said it was following the rationale in the 2010 Supremes opinion that “abstract methods” are not patent eligible, the‘ business method’ case “Bilski v. Kappos”. (Sup. Ct. 2010) Alice, (unsurprisingly as a NPE has no other business to pursue), appealed.
At the first round, a 3 judge panel of the US Court of Appeals for the Federal Circuit (CAFC), which has jurisdiction over all patent appeals, and is thus every patent litigator’s home court, decided to reverse the lower court. The reasoning was that under 35 USC 101, computer-implemented inventions like those of Alice are “patent-eligible” unless it is “manifestly evident” the claims are to an “abstract idea”.
Defendant CLS Bank, which includes a consortium of banks, then requested an “en banc” (“all judges”) review of the 3 judge opinion. The CAFC granted the banks’ petition and said it would address questions like “whether a computer implemented invention is a patent ineligible abstract idea”, “whether the presence of a computer in a claim could ever make the patent ineligible subject matter patentable”. That sounds important, right?
In May 2013 Alice then turned some serious talking heads, because, the CAFC opinion has 10 federal judges who wrote 7 different opinions, with no opinion supported by a majority. So for the practitioners at The Courtney Firm, that naturally cleared everything right up- just like a fog. The result, though, was that the CAFC en banc reversed and upheld the lower court, the Alice patents were not patent eligible. The only trouble was the why. The opinion did not produce any useful standard to determine whether a computer implemented invention is a patent ineligible abstract idea. [i]
As I already mentioned, Alice having nothing else to live for, literally, of course filed a writ of certiorari to the Supremes. The writ asked the Court to decide whether “computer implemented inventions- including claims to systems, processes, machines, and items of manufacture- are patent eligible subject matter”.[1] And That Sounds Important. Right?
A number of groups took interest and filed “friends of the court” briefs (amicus curiae). Most agreed Alice was out of luck, that the patents in the suit should be invalidated. Google, Amazon and others argued the patent was an abstract idea, and to patent that would harm innovation. Microsoft, Adobe, HP and others backed the district court position that the thing in Alice was like Bilski, an unpatentable business method, and saying it was implemented on a computer did not change anything. Some argued (the Free Software Foundation, for example, but also Netflix) that no software should be patented. (Yikes! See, that’s really exciting, scary, stuff!) IBM argued the patent law already deals with Alice under another provision, (35 USC 103- obviousness), and we really don’t have to worry about whether it is software, or not software. (My camp- if only the judges understood patent law). Many simply wrote briefs that asked that the Court please make a clear rule (yeah, well, good luck with that!)
In the Alice opinion so many so eagerly awaited, Justice Thomas writes that “the claims at issue are drawn to the abstract idea of intermediate settlement and that merely requiring generic computer implementation fails to transform the abstract idea into a patent eligible invention.” (In short, the claims are not patent eligible under 35 USC 101).
[1] 35 USC 101 begins the federal patent statute and states: “Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title.” 35 U. S. C. §101. Various decisions have create a “judicial exception” for “laws of nature, natural phenomenon, and importantly, abstract ideas.
[i] The CAFC en banc decision issued May 10, 2013.
([1] 35 USC 101 begins the federal patent statute and states: “Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title.” 35 U. S. C. §101. Various decisions have create a “judicial exception” for “laws of nature, natural phenomenon, and importantly, abstract ideas.)