The Supreme Court’s decision in Alice v. CLS Bank International has created uncertainty for computer-related invention patents unlike any other decision in recent memory. Proposals are emerging for amending the statute governing patent subject matter eligibility (35 U.S.C. § 101) to prevent Alice from causing further damage. Meanwhile, the Court of Appeals for the Federal Circuit (CAFC), the federal court which presides over all appeals of decisions from patent infringement trials, has found over 90% of the inventions before it is ineligible for a patent and has upheld inventions as subject matter eligible in a relatively small number of cases since Alice. Some have interpreted the cases where the patent was held to be eligible to mean that all is now well and that legislation to amend 35 U.S.C. § 101 are not needed. The chaos created` by Alice does not end merely because the CAFC has found a modest number of inventions to be subject matter eligible.
What in Alice?
To recap, in Alice, the Supreme Court confirmed its own recently-created version of subject matter eligibility requirements (in addition to those articulated in 35 U.S.C. § 101), consisting of a two-step test: 1) determining whether the claimed invention is directed to one of a few Court-created exceptions to subject matter eligible for patenting, and if so, 2) determining whether the claimed invention includes additional elements amounting to “significantly more” than the relevant exception. With respect to computer-related inventions, including inventions implemented in software, the relevant exception is whether the claimed invention is directed to an “abstract idea”.
Inventions to be subject matter eligibility
The few CAFC cases (since Alice) that have found inventions to be subject matter eligible is certainly a welcome development. These cases indicate that the CAFC does not believe all computer-related inventions are ineligible, and they provide helpful clues about what will weigh in favor of eligibility. Unfortunately, these cases do not demarcate the boundary between eligibility and ineligibility in any predictable, meaningful way. We still do not have an acceptable working definition of “abstract” and we likely never will.
[6] In these cases, the CAFC applied a variety of different, often inconsistent, rationale for finding the inventions at issue to be subject matter eligible.
Despite the recent CAFC cases, the U.S. Patent & Trademark Office (USPTO) and the courts must still apply the same vague, meaningless and unpredictable test handed down by the Supreme Court in Alice. The same gross inconsistencies that result from the Alice test remain in the patent system. Subject matter eligibility rejection rates at the USPTO are still generally higher than before the Alice decision and the largest increases have been for network and video inventions and particularly for business method inventions. The courts interpret Alice to more significantly impact software (and not merely business methods).
Conclusion
Patent applicants and patentees need more clarity. The time and expense of appellate court review to resolve what should be a simple threshold issue inhibits patent system efficiency and should not be required for finality. Our innovation economy must have certainty. The lack of clarity and uncertainty impacts enforcement of patents, evaluation of inventions for patenting and, ultimately, investments in research and development. Robust, reliable patent rights promote innovation. A more predictable and consistent test for subject matter eligibility is still needed.
