Robert Sachs

In Part I of this analysis, I discussed litigation trends before and after the Supreme Court’s decision in Alice Corp Pty Ltd v. CLS Bank Int’l., which turned five this year. In Part II, I will break down the data further by examining how the court decide Section 101 motions according to the underlying patented technology. Your interpretation of these facts depends on your point of view—a suitably post-modern outcome for some, less so for others. If you are a rights holder or licensor who depends on the objective certainty of patent rights, then the numbers are merely a grim confirmation that bad patents and bad science make for bad law. The consistency that Alice brings to litigation is, at best, the epistemic certainty that a patent on just about any kind of technology can be subject to a motion to dismiss for ineligible subject matter—and that nearly 60% of such attacks succeed in the district courts and are then affirmed over 85% of the time on appeal to the Federal Circuit.

It’s been five years since the Supreme Court remade the law of patent eligibility in Alice Corp Pty Ltd v. CLS Bank Int’l. As we all know, in Alice the Supreme Court dictated that patent-eligible subject matter is determined based on a two-step test. The application of this test under Queen Alice’s reign has drastically altered the patent landscape. Over 1,000 patents have been invalidated by the federal courts and the U.S. Patent and Trademark Office’s (USPTO’s) Patent Trial and Appeal Board (PTAB), while over 60,000 patent applications have been abandoned before the USPTO following rejections for patent ineligible subject matter. Patents and portfolios in many fields – particularly software and biotechnology – have declined in value or simply become unsaleable at any price. Defenders of Queen Alice and her critics go back and forth endlessly, driven by differing permutations of ideology, technology, judicial philosophy and business goals. I have contributed my share to those discussions, no doubt. But today, let’s get down to data and see what has really happened under Queen Alice’s rule.

EDITORIAL NOTE: This article is a continuation of Alice, the Illusory Death of Software Patents. We can return to the beginning of the analysis and revisit preemption. As stated, the Court sees § 101 as protecting the big ideas that are fundamental to commerce, science, and technology, patents that would preempt and “block” innovation. The Court realizes that every patent…

With apologies to the great humorist, the report of the death of software patents is an exaggeration. The Court set forth a two-step test grounded in Bilski v. Kappos and Mayo v. Prometheus. While the Court may not have defined a clear boundary for so called “abstract ideas” specifically, it did squarely place this case within the “outer shell” of the law set forth in Bilski and Mayo. In doing so it articulated an approach that focuses not on finding the boundary line, but rather on the core properties of an ineligible patent claim.

There is a further gulf between those who view In re Alappat as sound logic and engineering (ABL, AIPLA, Alice, Mr. Ronald Benrey, BSA, CCIA, Mr. Dale Cook, Prof. of Computer Science Lee A. Hollaar, IEEE-USA, Microsoft) and those who it as mistaken (Electronic Frontier Foundation, Prof. Robin Feldman, Red Hat) and primarily responsible for an increase in such patents (Electronic Frontier Foundation, Google, “Law, Business and Economics Scholars”). The IEEE-USA provides an excellent analysis of the relationship between software and hardware, pointing out the incontrovertible principle of equivalency, that “special-purpose programming of general-purpose hardware” is “equivalent to special-purpose hardware,” though IEEE-USA fails to mention that this is a fundamental principle of computer science, as established by Alan Turing in the 1930s. To assert, as does the EFF, that the Federal Circuit “concocted” the equivalency of hardware and software goes beyond denying the foundational work of Turing and others. The equivalency of software and hardware is what makes it possible for Java to run on any type of computer using the Java Virtual Machine, as well the electronic design automation industry, which enables complex electronic circuits to be entirely designed in software before being implemented in hardware.

The fractured views of the world begin with the question presented, and reflect how different parties frame the debate in very different terms. Alice’s merits brief presents the question before the Court as “whether claims to computer implemented inventions…are patent-eligible.” Putting the question this way allows Alice to place its inventions and claims in the larger context of all computer-implemented inventions, the subtext being that if the Supreme Court holds that computer-implemented inventions are patent eligible—which is a fair bet—then Alice’s patents should be valid. Further, phrasing it this way allows Alice to distance itself from pure business method claims from the invalid claims in Bilski v. Kappos.