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25 “What is preventing us from having a truly autonomous car? Software. How else can all of that data be processed so the car knows whether an obstruction is a pothole or a three-year old?… [O]nce someone solves that problem, it’s an abstract idea.”- Raymond Millien
From left: Bob Stoll, Russ Slifer, Raymond Millien and Benjamin Cappel
On Day 2 of IPWatchdog LIVE, a lively morning panel was convened on the subject of “Is the Federal Circuit Killing Software Patents?” Though that question was answered in the first few seconds of the panel session, the following hour of discussion yielded various ideas on how disastrous jurisprudence on Section 101 subject matter eligibility could be addressed at the Federal Circuit. Speaking on this panel was Robert Stoll, Co-Chair of the IP Group at Faegre Drinker and Former Commissioner of Patents, USPTO; Russ Slifer, Principal at Schwegman Lundberg & Woessner and Former Deputy Director, USPTO; Raymond Millien, CEO at Harness Dickey; and Benjamin Cappel, Partner at AddyHart P.C.
Millien: We Cannot Solve Autonomous Driving Without Software
“We could easily answer this question ‘yes’ and be done with the session,” said Stoll. The statement elicited no small amount of laughter, and the rest of the panel clearly agreed with the sentiment. Though the Federal Circuit was established in the early 1980s with a mission of having patent law decided uniformly by judges with scientific backgrounds, Slifer noted a 1984 article by Judge Richard Posner that pointed out how, with any court specialized in its subject matter jurisdiction, it becomes easier for one of two opposing viewpoints on legal doctrine to win out than in the regional circuit courts. Though Slifer believed that the Federal Circuit was staffed with circuit judges fulfilling the scientific mission of the court through its first 20 years of existence, several Federal Circuit appointees over the last 15 years have had different backgrounds than earlier judges and often wind up on panel decisions which have tended to limit patent rights in software and other sectors.
Millien did not mince words in discussing the problematic nature of Section 101 jurisprudence on software, specifically in the context of autonomous driving:
I’m going to say something controversial: All of the hardware needed for autonomous driving has already been invented. What is preventing us from having a truly autonomous car? Software. How else can all of that data be processed so the car knows whether an obstruction is a pothole or a three-year old? We’ve all been doing that since we first started driving at the age of 16 and it takes a millisecond in the brain. We cannot solve that problem without software, but once someone solves that problem, it’s an abstract idea.
Later in the discussion, Millien noted a recent article he wrote for IPWatchdog in which he provided data showing that 63% of U.S. utility patents issued in the first half of 2021 were software-related. By comparison, less than 50% of EPO patents and just over 40% of Chinese patents granted during that period of time were software-related.
Although the Supreme Court in Alice v. CLS Bank, the 2014 decision that has so beleaguered the patent eligibility of software, cautioned that the holding should be interpreted narrowly “lest it swallow all of patent law,” Slifer felt that such consumption had been reached by 2018, with the Federal Circuit’s Section 101 decision in ChargePoint v. SemaConnect. While the makeup of the Federal Circuit is an issue given the panel-dependent nature of Section 101 analysis in many cases, Slifer believed there was more hope for a legislative rollback of judicially-created subject matter exceptions through Congress than by replacing Federal Circuit judges.
Cappel: No Chance for Change by Explaining Section 101 to CAFC Judges
Cappel indicated that he couldn’t understand why the Federal Circuit was analyzing issues under Section 101 that are obviously more appropriate under a Section 103 analysis. “But these judges are smart people and they’re obviously doing it for a reason,” Cappel said. “We can’t expect to explain Section 101 to them and have them go, ‘Oh, now I get it.’” He believed that while members of the patent bar could advocate for meaningful change through Congress, Supreme Court decisions or by swaying public opinion, Cappel didn’t think that such change could be addressed directly at the Federal Circuit.
The panelists discussed that one of the biggest issues in swaying public opinion is getting people to understand the actual real-life implications of detrimental software patent policy without getting bogged down in technical and legal details that cannot engage with much of the public. “The public cares about independent inventors,” said Cappel. “This is why people love Shark Tank. You see the little guy who works 9 to 5, has a great idea, and he goes on to be successful enough to take care of his family. We need to point out that’s the guy who got screwed.”
Millien was also succinct in conveying the public relations problem for fixing software patent policy in a pro-inventor and pro-consumer way. “I know we’re in an IP field and we talk about IP rights, but here’s a concept for all of us highly paid people to understand: property doesn’t have rights, people have rights,” he said. Instead of talking in raw numbers, like pointing out that more than $300 billion has been invested into autonomous vehicle startup, Millien urged the audience to educate others that large investment helps inventors to feed their families and support their children. “We may represent X company or Y company, but we have to remember the people behind these companies.”
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Join the Discussion
25 comments so far.
Greg DeLassus
September 20, 2021 12:06 pmYou are an imbecilic moron.
Quite possibly, but this is kindergarten level argument. You are better than this. Have a consideration for your own dignity before you embarrass yourself by stooping to such grade school folderol. You would do better to ignore me entirely than to beclown yourself like this.
Obviously, tech (as it was defined then) was being invented prior to that without a patent system at all. Using your (il)logic, there is no need for a patent system.
You put your finger right on the nub of the issue here. We both agree that there would be some tech progress even without a patent system (call that “baseline”). We both agree that the purpose of the patent system is to raise the level of that progress above baseline. So, the essence of our disagreement is that you believe that the rate of software tech progress has been trending back towards baseline since the AIA & Alice, while I am skeptical that the rate of progress has changed.
In favor of your contention, you cite the purely anecdotal (and unverifiable) “evidence” that your own clients are discouraged and are “going Galt” (so to speak). Naturally, I can understand why you might be displeased by this trend, but it is less clear why society as a whole should care. The tech progress about which society cares is progress as a whole, not the work of any single inventor.
To make an argument that recent patent law trends have had a deleterious effect on software tech progress, you really need to point to some more big-picture evidence. I know it is not a happy thought to consider, but if all your evidence of tech decline relates to anecdotal reports from your own social network, this could be telling us more about you than about the industry as a whole.
Pro Say
September 20, 2021 10:26 amBig +1 as usual Curious.
Anon
September 20, 2021 09:26 amI have to chuckle as Curious and I find a (strong) common ground: Greg DeLassus does not understand computing innovation.
That he is so insistent on maintaining his ignorance is rather breathtaking.
Curious
September 18, 2021 12:15 amHow do you know that “[m]any would-be inventors are sitting on the sidelines” (emphasis added)?
Because I’m in the business. I speak to these people. They are exceptionally frustrated with the system.
How do you square this assertion with your earlier assertion that “[s]tartups are continually being created… by people who… are optimists at heart… [and] unlikely to accept an opinion that their IP is likely doomed”?
You are a *&^% moron. You think that the whole industry is one monolithic entity with the same knowledge and experience? The fact that startups are being created by optimists does not in any way detract from my position that there are many inventors who no longer trust the system — and deservedly so.
that still sounds to me like a world in which the tech will indefinitely continue to progress, patent law notwithstanding
Forget my last statement — you aren’t just a *&^% moron. You are an imbecilic *&^% moron. Patents were first introduced in the 14th century. Obviously, tech (as it was defined then) was being invented prior to that without a patent system at all. Using your (il)logic, there is no need for a patent system.
They have been “just around the corner” for a decade know, but computers and software keep improving at the same rate or better than they were back in the late aughts
You think so? If there is so much innovation, why have Facebook, Google, Amazon, Apple been the dominant players for well over a decade now? The reason is that they continually acquire innovation created by others. Facebook has no real competitors. Google has no real competitors. Regardless, you are clueless about the industry because you don’t practice in it.
The point of the patent laws is to provide benefit to consumers, not industry insiders.
LOL. Again, you show your ignorance. The industry insiders are Facebook, Google, Amazon, Apple and they all benefit greatly from a patent system that kills the patents of the little guy while maintaining the patents of the big guy. And have you looked at the profit margins of those companies? They are HUGE. They are huge because they don’t pay for the technology they appropriate. And, do you know why that is bad for consumers? It is because when current patent system favors the copyists over the innovators, big copyists are rewarded for copying rather than innovating. This mean capital is flowing towards the copyists and not the innovators — leading to less innovation and more copying. Less innovation = less products for consumers.
I can see that the sophistication of the software in my company’s manufacturing facilities keeps improving
So what? The fact that innovation happens doesn’t mean that the patent system is necessarily spurring that innovation. When the true innovators don’t get rewarded, then there will be less innovation … period … full stop.
To argue that software improvement is stalling out
Try to use better strawman arguments. *&^% moron.
Greg DeLassus
September 17, 2021 02:19 pm[F]or someone who is a biotech attorney and unlikely has any contacts in the industry, how can you tell whether the progress in software R&D has slowed down?
Look, Art. I, §8, cl. 8 says that “Congress shall have Power To… promote the Progress of Science and useful Arts…,” not “To ensure full employment for Patent Attorneys.” The point of the patent laws is to provide benefit to consumers, not industry insiders. The founders wanted a nation of plenty, where consumers would have lots of content to enjoy because creative types would be incentivized by copyright, and lots of useful technology to enjoy because inventive types would be incentivized by patents. The measure, then, of whether the patent system is working well is not that industry players feel content, but that consumers see technological progress.
I am not—as you correctly observe—a software industry insider, but I am a software consumer. I can see with my own eyes that the number and quality of apps on my phone keeps improving, on my laptop keeps improving, in my car and major appliances keeps improving. I can see that the sophistication of the software in my company’s manufacturing facilities keeps improving, in the management of airline and other transportation networks keeps improving, in the mechanisms of payment that I use keeps improving. Etc. and so forth.
And this is not just true of me. It is true of nearly every other American consumer. We can all see and experience the continuous improvement of software in our lives year after blessed year. To argue that software improvement is stalling out because of (e.g.) Ultramercial v. Hulu is just not going to convince any but those who want (for transparently self-interested reasons) to believe that pitch.
Greg DeLassus
September 17, 2021 01:38 pm[A]n inventor who gets screwed by the IP system becomes less likely to invent… Why put the effort into inventing and building a business off your invention when you’ve discovered that the US patent system won’t protect the IP to your software-related business? Many would-be-inventors are sitting on the sidelines because they’ve been burned themselves or they’ve seen others burned.
1) How do you know that “[m]any would-be inventors are sitting on the sidelines” (emphasis added)? Is this an assumption, or do you have some systematic (i.e., non-anecdotal) method for quantifying this alleged phenomenon?
2) How do you square this assertion with your earlier assertion that “[s]tartups are continually being created… by people who… are optimists at heart… [and] unlikely to accept an opinion that their IP is likely doomed”?
If, as you contend, this industry is full of inventive minds who make an initial contribution to the tech frontier, get burned, leave the field, and are immediately replaced by a next wave of enthusiastic and inventive naïfs who do not know about the problems with IP law, that still sounds to me like a world in which the tech will indefinitely continue to progress, patent law notwithstanding.
I think that Alice was a bad decision, and it’s various sequelae continue to compound its original flaws. We patent lawyers want to believe that bad law should have bad consequences, so we keep telling ourselves either that these bad consequences are already manifest (despite their obvious absence), or else that they are just around the corner.
They have been “just around the corner” for a decade know, but computers and software keep improving at the same rate or better than they were back in the late aughts, before the legal changes we all deplore. It is time that we become honest with ourselves and admit that the deleterious consequences we predicted (I am very much guilty of this myself) did not happen and are not happening. It is just motivated reasoning that makes us continue to embarrass ourselves by foretelling a doom that never arrives.
Night Writer
September 17, 2021 01:20 pm@17 >> Greg Great. This is just another way of saying that the industry has found a way around the patent law obstacles, such that progress in the software industry is not being hampered by Alice et sequelae.
No. It means that funding has shifted to areas that aren’t as amenable to large corporations stealing the software. Or where execution is key such as building a company for the large corporations.
What it means is that a lot of innovation is no longer being funded outside large corporations and so forth.
There are articles about this that have been referenced on ipwatchdog.
Curious
September 17, 2021 01:17 pmI also thought that it would slow down progress in software R&D, but that manifestly is not happening.
LOL — for someone who is a biotech attorney and unlikely has any contacts in the industry, how can you tell whether the progress in software R&D has slowed down?
At some point, we patent lawyers need to face the reality that patent law is not as important to industry as we like to imagine.
If you define the “industry” as Amazon, Google, Facebook, etc. (and has any of these companies had any serious competitors the last decade?), then you are correct. However, the industry also includes small companies whose products are constantly being appropriated by the mega-corporations of the world.
Greg DeLassus
September 17, 2021 12:02 pm[R]egarding funding for software startups…[,] funding has shifted where cooked in to the pie is that all software that can be stolen by the larger corporations will be so where the money is invested has shifted.
Great. This is just another way of saying that the industry has found a way around the patent law obstacles, such that progress in the software industry is not being hampered by Alice et sequelae.
I thought back in 2014 that Alice was a bad decision, and I still think that. I also thought that it would slow down progress in software R&D, but that manifestly is not happening. At some point, we patent lawyers need to face the reality that patent law is not as important to industry as we like to imagine.
response to greg
September 17, 2021 11:33 amGreg – yes, the software industry is doing fine, with or without patents, for now. But patents are a future-looking expense/product.
Without patents, all the useful software will be bought up, aggregated, into the few tech behemoths we already have. They have little incentive to innovate as long as they can flex market power (which has largely also become political power).
With patents, smaller guys have a chance, long term, to become one of the big guys. And more big guys competing means they need innovation because they can’t rely on market power.
So, yeah, with or without patents, people will innovate in the software space, but the speed of innovation and concentration of power will be affected by whether there are patents.
Don’t know if that cleared things up or made sense, just trying to look at a bigger picture than just “does software keep getting developed even without patents.”
Curious
September 17, 2021 11:18 amSo your hypothesis is that the software industry continues to function fine at present because the relevant players are ignorant of the law?
No. The mega-companies are not ignorant of the law. They know the law will protect them but will not protect the smaller companies.
But you further hypothesize that someday (soon?) they will learn the truth about the present U.S. patent law, and then innovation will slow noticeably?
No again. Startups are continually being created — and a good percentage are being created by people who don’t have a lot of experience navigating the intellectual property realm. This supplies the larger, more experienced software companies with lots of IP that the can appropriate (for free). Once the early startups wash out, they’ll get replaced with newer startups.
Do these folks not have patent lawyers, and have the lawyers not explained the law to their clients?
Really … are you that ignorant about the ignorance of startups? Certainly, there are some that hire patent attorneys and attempt to protect their inventions. Still even if they do hire a patent attorney, the advice given just 6 or 7 years ago (said advice now maturing into issued patents) just isn’t applicable today. When CLS Bank came out, it looked like it wasn’t going to expand too much on Bilski, and Bilski didn’t really have any serious impact. As such, 6 or 7 years ago, I would still advise small clients to get patents. However, the Federal Circuit took CLS Bank and ran with it. Today, if an inventor of software came to me asking my opinion, I would explain how the patent system is supposed to work but I would also state that the odds are very great that whatever patent could be obtained would very likely be invalidated at the Federal Circuit. You also have to realize the mindset of someone running a startup — they are optimists at heart. Startups usually fail so someone running a startup has to have extraordinary belief in themselves. However, an optimist is unlikely to accept an opinion that their IP is likely doomed.
The startups have had a decade now to learn.
Do you realize that “startups” is not a singular entity? Each startup is their own individual entity and many don’t learn from the errors of those that preceded it. This is just one of the many reasons why startups mostly fail.
There is simply no evident reason to suppose that present trends in U.S. patent law will ever appreciably affect the pace of software innovation.
This is where you are wrong (yet again). What happens is that an inventor who gets screwed by the IP system becomes less likely to invent. There is an expression of ‘once burned, twice shy’ that applies here. Why put the effort into inventing and building a business off your invention when you’ve discovered that the US patent system won’t protect the IP to your software-related business? Many would-be-inventors are sitting on the sidelines because they’ve been burned themselves or they’ve seen others burned.
There are other secondary issues as well, but I’ll just touch upon one. A company’s IP is their collateral for raising capital. The more collateral you have, the easier it is to raise capital. However, the problem is that the uncertainty regarding the validity of this IP has depressed the value — making it harder (and/or more expensive) for investors to raise capital.
All of these things represent headwinds against increased innovation.
Night Writer
September 17, 2021 11:04 am@11 and 12
There have been articles on ipwatchdog about this issue regarding funding for software startups. The answer is that funding has shifted where cooked in to the pie is that all software that can be stolen by the larger corporations will be so where the money is invested has shifted.
Also, it is the case that this hasn’t completely worked its way through the system.
Night Writer
September 17, 2021 10:30 am@4 Jeff—The nonsense of SCOTUS/CAFC deciding what promotes the progress of the Arts and Sciences needs to stop.
This is exactly right that Alice is based on the word “promote” in the Constitution and the Scotus making a finding of fact that claims that fit the Alice test violate the “promote”.
Also, all the troubles of 101 can be understand just by reading Ultramercial (by Rader) and hten Ultramercial (by Lourie).
The Rader version is a rational patent system the Lourie version is irrational judge based law where information processing is mischaracterized as well as how a person skilled in the art works.
Greg DeLassus
September 16, 2021 08:23 pmBecause the… smaller startups don’t yet realize that software patents have little value.
So your hypothesis is that the software industry continues to function fine at present because the relevant players are ignorant of the law? But you further hypothesize that someday (soon?) they will learn the truth about the present U.S. patent law, and then innovation will slow noticeably?
How could this be true? Do these folks not have patent lawyers, and have the lawyers not explained the law to their clients? This board is full of people who make their livings writing applications for software startups, so surely these startups are getting legal advice. How can it be that these startups all remain ignorant of legal trends that have been in place for the last decade?
Moreover, if knowledge of the legal reality has not diffused out to the startups yet, why should we expect that it ever will? If the current healthy state of the industry reflects an ignorance of the law, it is surely a willful ignorance at this point. The startups have had a decade now to learn.
Curious hypothesizes that if the software startups yet realize the real state of the patent law, they will reduce their R&D efforts. I say that if they have not caught on by now, they likely never will. There is simply no evident reason to suppose that present trends in U.S. patent law will ever appreciably affect the pace of software innovation.
Curious
September 16, 2021 05:41 pmAm I the only one troubled by the incongruity between today’s headline that the “Federal Circuit is Killing Software Patents” and last month’s headline that “63% of U.S. Patents… [A]re Software-Related”? Surely these assertions cannot both be true at the same time.
These assertions can both be true because they reflect the differences between the story being sold to inventors and the real story. The story being told to inventors is that patents will protect you. Considering that the vast majority of today’s technology involves software, this has lead to a great number of patents being issued on software-related inventions. However, the reality is that the Federal Circuit has little intention to let many/most (??) of those patents actually be enforced.
This difference is more pronounced when the inventor is a small entity. Those patents are more likely to be invalidated because large companies don’t assert just one or a handful of patents. Rather, they assert dozens/hundreds of patents — far too many to be invalidated for any cost-efficient number. As such, what happens is that the small guys have their patents invalidated whereas the big guys can still assert their patents.
Software patents do not steer autonomous vehicles. Software does that. Therefore, the (rumored) demise of software patents would only be an obstacle to autonomous vehicles if this putative demise were to give rise to a fall in software.
What happens when the company that finally gets the software working and goes to assert the patents on that software? In today’s Federal Circuit, those patents will likely be invalidated. Everybody is essentially working with essentially the same hardware. With that in mind, it won’t take long for the big manufacturers to steal the technology of others. If so, that will be a huge warning to those trying to create the next great software that their inventions are unlikely to be protected? Who is going to want to invest R&D dollars into some project when you can let someone else do the heavy lifting and then swoop in to take the prize?
We sound like the boy crying “wolf” when we keep shouting that the CAFC is destroying the software industry while the software industry keeps plugging along without qualm or quibble.
Because the large, established players in the “software industry” know that software patents of their smaller competitors aren’t worth the piece of paper they are written on, whereas the smaller startups don’t yet realize that software patents have little value.
This is a great system for the large players in the software industry. Their patents generally aren’t impacted. However, the patents of the startups have little chance of being successfully asserted — meaning that these startups are essentially unpaid research labs for the larger companies.
Greg DeLassus
September 16, 2021 05:30 pm[T]here is clearly work to be done to rectify the fair playing field that patent law is supposed to create…
Agreed. I am a lawyer, so I want the law to be conceptually coherent and efficacious in practice. The welter of §101 jurisprudence is anything but coherent, so clearly not all is well.
My only point is that it is pointless to argue that the present §101 mess is hurting software innovation when software innovation is palpably and obviously fine. One merely erodes credibility by arguing X when everyone can see “not X” with their own eyes.
Pro Say
September 16, 2021 05:04 pm“often wind up on panel decisions which have tended to limit patent rights in software and other sectors.”
“tended to?” Really?
The wanton destruction of American innovation by the unconstitutional, consistent, and repeated disregard of the SCOTUS admonition to tread lightly is a far cry from, “tended to.”
A far cry indeed.
That communist China — thanks to Alice / Mayo, the CAFC, and the PTAB Death Squad — now has a better patent system than the U.S. is unfathomable . . . and sickening.
And Congress’ response?
Despite their promise to restore American innovation leadership by restoring patent eligibility to all areas of innovation, we now hear crickets emanating from The Hill.
Only crickets.
_tr_
September 16, 2021 04:05 pm@Greg DeLassus,
I agree with your sentiment. And I, too, believe that some within the industry have overblown the “net effect” of the Alice confusion. Human ingenuity and the way it is facilitated through our market economy is relentless.
However, is it not true that the standard creates an intolerable level of uncertainty for investors and stakeholders? Why pay firms to prosecute literally tens to hundreds of thousands of patents if they are going to be invalidated in court. While it is true that industry powerhouses continue “plugging along,” there is clearly work to be done to rectify the fair playing field that patent law is supposed to create…
Joe Williams
September 16, 2021 02:39 pm‘Who affords to laugh here?’, is the better question to kick forward. A day left?
Greg DeLassus
September 16, 2021 02:06 pm1) Am I the only one troubled by the incongruity between today’s headline that the “Federal Circuit is Killing Software Patents” and last month’s headline that “63% of U.S. Patents… [A]re Software-Related”? Surely these assertions cannot both be true at the same time.
2) Software patents do not steer autonomous vehicles. Software does that. Therefore, the (rumored) demise of software patents would only be an obstacle to autonomous vehicles if this putative demise were to give rise to a fall in software. Do we actually observe such a fall? If so, where?
Near as I can tell, the rate of progress in autonomous vehicles has not been affected one whit by Alice, or Electric Power Group, or Windy City, etc. I find these decisions egregious and appalling, but objectively speaking, the software industry appears indifferent to the outcomes of these cases. We sound like the boy crying “wolf” when we keep shouting that the CAFC is destroying the software industry while the software industry keeps plugging along without qualm or quibble.
Curious
September 16, 2021 01:26 pmPunting on the CAFC, but looking towards the Supreme Court….?
No. One of the comments was that you what you get from the Supreme Court could be some Frankenstein monster. Also, the problem with going to Congress with a fix was that it is next to impossible to get the two sides to agree on anything.
Jeff Hardin
September 16, 2021 09:39 amFor those who haven’t already read Sherry Knowles and Anthony Prosser’s excellent paper on SCOTUS’ unconstitutional application of 101, go here: https://repository.law.uic.edu/ripl/vol18/iss2/2/
The nonsense of SCOTUS/CAFC deciding what promotes the progress of the Arts and Sciences needs to stop. They are not the People’s Congress. This message needs to spread.
The IP Subcommittees in both chambers of Congress need to pick this back up and focus on 101.
Anon
September 16, 2021 09:21 amAlas, it did not.
Anon
September 16, 2021 09:21 amThat did not translate well…
¯\ _ ( ? ) _ /¯
(let’s see if that “question mark” appears as it is intended)
Anon
September 16, 2021 09:19 amPunting on the CAFC, but looking towards the Supreme Court….?
¯\_(?)_/¯