So Alice has given us a useful rule regarding patents – or has it?
OK, we got it -the patents are invalid: but- what is the rule? The Court wrote that to evaluate whether a claim is patent ineligible, the Mayo framework is applied. The Court then recited the analysis steps: 1) determine whether the claims are directed at the patent ineligible concepts of “laws of nature, natural phenomena, and abstract ideas”.(my emphasis) If the claims fall inside one of these “patent ineligible” concepts, the query is then 2) “what else is there in the claims”? The Court says they then look for an “inventive concept” to make the claimed invention patent eligible.
(It looks good so far. They are going to tell us what an ‘abstract idea; is, right? Then we will know what’s patentable…NOPE.) At this point in the opinion, the Supremes changed the tune. Justice Thomas tells us that because this case is so like the business method in Bilski, “we need not labor to delimit the precise contours of the “abstract ideas” category in this case”. (My emphasis. Later in a very funny article, a comic was drawn about the opinion, with an audience responding “yes you do, yes you do!) Because the intermediated settlement (in Alice) is like the hedging in Bilski, both are “abstract ideas” as “we have come to use the term”. (Huh?)
Oh, those Supremes. “I know it when I see it” is supposed to apply to obscenity cases, not to patents. But once they found this case was so close to the hedging methods of Bilski, the day was quickly done. Few would argue that Alice was an incorrect decision, but Supreme Court decisions hopefully do more than simply decide an issue between two parties. In granting certiorari, the Supremes seemed to want to have a discussion about whether, and how, software is patent eligible- but it turns out in the end that discussion is not now, maybe another day.
Later we will talk about what the PTO has been doing with Alice. Take heart, however, all you coders. The Court did say, on its way out the building, that “There is no question that a computer is a tangible system (in 101 terms, a “machine”), or that many computer-implemented claims are formally addressed to patent-eligible subject matter”. (AHA! Software is patentable!). More to follow.
(The Supreme Court opinion issued June 19, 2014 is here : http://www.supremecourt.gov/opinions/13pdf/13-298_7lh8.pdf
[1] 33. A method of exchanging obligations as between parties, each party holding a credit record and a debit record with an exchange institution, the credit records and debit records for exchange of predetermined obligations, the method comprising the steps of:
(a) creating a shadow credit record and a shadow debit record for each stakeholder party to be held independently by a supervisory institution from the exchange institutions;
(b) obtaining from each exchange institution a start-of-day balance for each shadow credit record and shadow debit record;
(c) for every transaction resulting in an exchange obligation, the supervisory institution adjusting each respective party’s shadow credit record or shadow debit record, allowing only these transactions that do not result in the value of the shadow debit record being less than the value of the shadow credit record at any time, each said adjustment taking place in chronological order; and
(d) at the end-of-day, the supervisory institution instructing ones of the exchange institutions to exchange credits or debits to the credit record and debit record of the respective parties in accordance with the adjustments of the said permitted transactions, the credits and debits being irrevocable, time invariant obligations placed on the exchange institutions.
U.S. Patent No. 5,970,479. “Method and Apparatus relating to the formulation and trading of risk management contracts”, Claim 33.
[1] The CAFC en banc decision issued May 10, 2013, is here.