BLOGS: The High-Tech Patent Agent: A View from the Trenches in Silicon Valley

Thursday, June 20, 2013, 9:00 AM

Dissenting opinions in CLS Bank International v. Alice Corp.

Regarding patent eligibility of an invention implemented by computers, we commented in a previous blog posting on the ruling in CLS Bank International v. Alice Corp. (Fed. Cir. 2013) (en banc).  Let’s look at the dissenting-in-part opinion filed by Moore, Circuit Judge, in which Rader, Chief Judge, and Linn and O’Malley, Circuit Judges join.  The opinion expresses concern that the current interpretation of 35 USC §101, “in particular the abstract idea exception, is causing a free fall in the patent system.”  Also, “Holding that all of these claims [the asserted method, media, and system claims] are directed to no more than an abstract idea give staggering breadth to what is meant to be a narrow judicial exception.”  The opinion then sets forth an estimate that nearly 20% of all patents issued in 2011 could be rendered ineligible if this reasoning were continued.

Moore’s opinion comments on the difference between a machine, which is a concrete thing, and a principal or an idea.  A machine is visible to the eye, while a principal or an idea is a conception of the mind.  A claimed machine is restricted by requiring certain physical components, which meaningfully limit the claim and prevent it from tying up an abstract idea in and of itself.

Moore’s opinion comments on the nature of software, which “effectively rewires a computer, making it a special-purpose device capable of performing operations it was not able to perform”, i.e., prior to being specially programmed.  Hardware and software elements in the specification and claims are then analyzed in the opinion, which then expresses that “The computer in the system claims is the entire detailed ‘solution,’ without which it would be impossible to achieve the invention’s purpose.”  Here is the take away message of the opinion: “When you walk up to the §101 gate holding a computer in your arms (or software for that matter), you should not be rejected because your computer is an abstract idea.”

Newman’s opinion succinctly states, “Section 101 is not the appropriate vehicle for determining whether a particular technical advance is patentable”, and proposes that section 101 should be “an inclusive statement of patent-eligible subject matter”.  Newman further proposes that the form of the claim should not determine whether the subject matter is patent eligible, and that the court should allow experimental use of patented information.

Linn and O’Malley study the claims construction applied in the case, and the record before the court, and opine, “We do not believe a patent eligibility inquiry can be disembodied from the actual claims at issue, with their attendant limitations.”  Their opinion continues by quoting another section of the opinion, “to describe the system as an abstraction ignores what is claimed… and turns a narrow exception into one which may swallow the expansive rule (and with it much of the investment and innovation in software).”

Rader advises that the remedy to all of the confusion is to consult the statute.  “The statute offers a patent to both inventions and discoveries, including simply an improvement on a known process or product.  He reminds us that “the statute does not list Section 101 among invalidity defenses to infringement”, and opines that “to inject the patentability test of ‘inventiveness’ into the separate statutory concept of subject matter eligibility makes this doctrine again ‘the plaything of the judges’…”

These dissenting opinions stand in contrast to the ruling.  They are both thoughtful and thought-provoking.  The majority of the court found the method and computer-readable media claims at issue were not directed to eligible subject matter under 35 USC §101, but not everyone on the court agrees.

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Tuesday, June 11, 2013, 1:48 PM

Patent Eligibility of an Invention Implemented by Computers

On May 10, 2013, the United States Court of Appeals for the Federal Circuit decided, in CLS Bank International v. Alice Corp. (Fed. Cir. 2013) (en banc), to affirm the District Court’s holding that the asserted method and computer-readable media claims are not directed to eligible subject matter under 35 USC §101.  In making the decision, the court acknowledged “The difficulty lies in consistently and predictably differentiating between, on the one hand, claims that would tie up laws of nature, natural phenomena, or abstract ideas, and, on the other, claims that merely “embody, use, reflect, rest upon, or apply” those fundamental tools.  Mayo, 132 S. Ct. at 1293.  The court looked at a number of well-analyzed cases involving patent eligibility of subject matter involving mathematical formulae.  One insight in the court’s §101 inquiry is, “With the pertinent abstract idea identified, the balance of the claim can be evaluated to determine whether it contains additional substantive limitations that narrow, confine, or otherwise tie down the claim so that, in practical terms, it does not cover the full abstract idea itself.”  This insight appears to direct patentees (and patent practitioners) to draft claims narrower in scope than “the full abstract idea”.  The court reinforces this notion by stating, “Limitations that represent a human contribution but are merely tangential, routine, well-understood, or conventional, or in practice fail to narrow the claim relative to the fundamental principle therein, cannot confer patent eligibility.”  Relative to the claims at issue, the court considers whether claim limitations requiring shadow records, using a computer to adjust and maintain shadow records, and reconciling shadow records and exchange institution accounts adds anything of substance to the idea of third-party intermediation, and concludes these limitations do not.

Another insight in the court’s §101 inquiry is, “Unless the claims require a computer to perform operations that are not merely accelerated calculations, a computer does not itself confer patent eligibility.”  This hints the court would prefer to see (for patent subject matter eligibility) the computer doing more in the claims than just calculating faster than a human could, i.e., the computer’s contribution should be significantly more.  In a subsequent blog entry, we will look at dissenting opinions.

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