Posts Tagged: "Alice-Mayo Framework"

Director of the U.S. Patent and Trademark Office Andrei Iancu made some interesting remarks yesterday at the Intellectual Property Owners Association Annual Meeting in Chicago on September 24, 2018 regarding a proposal for new guidance on how the USPTO would approach determination of subject matter eligibility under §101. In the IPO meeting’s (written) remarks, Dir. Iancu speaks at length about the current confusion in the Mayo/Alice framework and how “significantly more work needs to be done, especially on the ‘abstract idea’ exception.” Director Iancu asserted that “Currently, we’re actively looking for ways to simplify the eligibility determination for our examiners through forward-looking guidance. Through our administration of the patent laws, which we are charged to execute, the USPTO can lead, not just react to, every new case the courts issue.”

Four years later, the patent landscape demonstrates that Alice has become a train wreck for innovation… Unfortunately, the Federal Circuit failed to rein in this rout of Machiavellian creativity, which it could have done by relying on well-settled procedural process and patent doctrines… This year, the Federal Circuit appears finally to have awakened from its slumber. In two recent opinions, Aatrix v. Green Shades and Berkheimer v. HP, the Federal Circuit embraced long-established procedural rules and patent doctrines… Savvy and creative patent lawyering will prevail. To be successful, patent practitioners must show the PTO, the courts, and Congress the importance of our clients’ innovations and explain why the type of technology should not dictate whether there is enforceability.

In early August, patent owner Smartflash filed a petition for a writ of certiorari with the U.S. Supreme Court to appeal a case stemming from covered business method (CBM) review proceedings carried out at the Patent Trial and Appeal Board (PTAB). Smartflash is asking the Supreme Court to decide whether PTAB administrative patent judges (APJs) are principal officers of the United States who are subject to the terms of the Appointment Clause, whether CBM review of patents disclosed prior to passage of the America Invents Act (AIA) violates the Fifth Amendment’s Due Process Clause, and whether undisputed evidence that an invention is not unduly preemptive is relevant to answer questions of patent eligibility under 35 U.S.C. § 101. At issue in this petition are a total of 30 CBM reviews petitioned by Apple, Samsung and Google against Smartflash, which were instituted by APJ panels at the PTAB.

A conflict exists between the incentive to invent and the breadth of patent-eligible subject matter. It has become difficult to recognize the line between patentable subject matter and non-patentable products of nature. The Supreme Court has made conflicting statements regarding that line in its rulings in Funk Bros. and Myriad Genetics. It is time for the Supreme Court to resolve the inconsistencies in their rulings on 35 U.S.C. § 101… This case is an ideal vehicle for providing the clarification the patent and investment community require.  At issue is how to determine whether something is a product of nature under 35 U.S.C. § 101.

Narrowly construing the § 101 eligibility exception for abstract ideas is not only suggested by Supreme Court guidance, but also could potentially allow for increased coherence and consistency while simultaneously serving to solicit further Supreme Court guidance on eligibility. Even if the bright-line eligibility prohibition is construed narrowly, § 101 can still serve to police claiming at a level of abstraction that results in overbroad claiming.

On Wednesday, August 15th, the Court of Appeals for the Federal Circuit issued a precedential decision in BSG Tech LLC v. BuySeasons, Inc. which upheld a decision by the district court to invalidate patent claims owned by BSG Tech as patent-ineligible under 35 U.S.C. § 101. The Federal Circuit panel of Circuit Judges Jimmie Reyna, Evan Wallach and Todd Hughes found that the district court correctly determined that patent claim asserted by BSG Tech were invalid as abstract ideas lacking any inventive step under the Alice/Mayo framework… The only allegedly unconventional feature of BSG Tech’s claims was the requirement that users are guided by summary comparison usage information, which was simply a restatement of the abstract idea identified under the first step of Alice/Mayo

This assertion is a mischaracterization of Alice Corp., which never held that the intermediated settlement claims at issue in Alice Corp. were abstract because of the risk hedging claims in Bilski were abstract.  Instead, the Supreme Court stated “that there is no meaningful distinc­tion between the concept of risk hedging in Bilski and the concept of intermediated settlement at issue here” because “[b]oth are squarely within the realm of ‘abstract ideas’ as we have used that term.”  That is: the claims in Bilski and Alice Corp. were comparable only because the underlying business methods were undoubtedly long-prevalent in the business community.  To hold otherwise is to ignore the vast bulk of both the Bilski and Alice Corp. decisions.

It’s been over eight years since the Supreme Court issued its Bilski v Kappos decision, over six years since the Supreme Court issued its Mayo v. Prometheus decision and over four years since the Supreme Court issued its Alice Corp. v. CLS Bank decision.  In case anyone missed it, each of these three landmark cases was decided based on evidence on the record.  Thus, the Supreme Court not only contemplated the need for evidence when determining patent eligibility for abstract ideas of man-made origin, but wholly embraced the practice. Yet despite the Supreme Court’s trio of evidence-based holdings, it was February of this year before a single three-judge Federal Circuit panel definitively ruled on the evidence issue in Berkheimer v. HP, and it was the end of May before a majority of the Federal Circuit signed on to the idea that determining whether a man-made something is well-understood (or well-known), routine and conventional is an issue of fact that should be based on objective evidence. That’s the better part of a decade of the Federal Circuit wandering the desert.

While the subject matter of the speech was similar, this speech by Director Iancu was different. It was much more direct and forceful than any of his previous speeches. Iancu asked how inventors are supposed to know where to focus energy and effort without knowing what is patent eligible. That is an excellent question. One that Congress and the Courts should take to heart and thoroughly consider. Very real damage has been done to the U.S. patent system as the result of unnecessary uncertainty and an overly restrictive view of what is patent eligible in the U.S.

Yesterday I wrote about the United States Patent and Trademark Office filing a Director’s Unopposed Motion to Vacate and Remand in In re Intelligent Medical Objects, Inc., which was filed on June 5, 2018. This was not the only such motion filed by the USPTO. On June 4, 2018, the Office filed an Unopposed Motion for Remand in In re: Allscripts Software, LLC, which similarly asks the United States Court of Appeals for the Federal Circuit to vacate the decision of the Patent Trial and Appeal Board and remand the appeal to the USPTO so the Board can reconsider eligibility rejections of the claims in question in light of Berkheimer.

In Vanda, Chief Judge Prost, one of the judges on the CellzDirect panel, dissented from the majority’s decision that found claims patent eligible for not being directed to a judicial exception in step one of the Mayo/Alice test. What differences between the claims in Vanda and those in CellzDirect led Judge Prost to dissent? Can these differences shed further light on the characteristics necessary for a claim to be found not directed to a patent-ineligible concept in step one?

This case and the passage above merely confirms what we have long known to be true. The magnitude of the innovation does not matter. Whether there is an innovation does not matter. Certain advances, certain innovations, are simply not patentable in America. No longer is “anything made by man under the sun” patent eligible.

found it disturbing that the Director Iancu would circumvent the prerogative of Congress with recently announced proposed PTAB claim construction changes, though she admitted the decision wasn’t unlawful. She expounded for several minutes on issues of res judicata, which could tie the hands of the PTAB in light of district court or U.S. International Trade Commission (ITC) decisions regarding patent validity. “[This] would completely blow up what we were trying to do as a Congress,” Lofgren said. “It looks to me that the people who disagreed with [the AIA] and lost in the Congress, they went to the Supreme Court, they lost in the Supreme Court, and now they’re going to you, and you are reversing what the Congress decided to do and what the Court said was permissible to do.”

Director Iancu: “But for our purposes what I know for a fact is that in order to incentivize American innovation whether it’s artificial intelligence, DNA processing, or anything else we need to have a robust predictable reliable intellectual property system here at home. And I do worry that the current state of Section 101 in patentable subject matter weakens the robustness of our IP system in the affected areas. And if industry cannot predict in a relatively reliable way whether their investments will be protected from an intellectual property point of view I think that will result in less investment, less growth, fewer jobs created in the affected industries. So I do think it is critically important for our economy. And again whatever industry we’re talking about and whatever industry we want to grow it’s critically important to have a strong reliable and predictable intellectual property system.”

How the Federal Circuit could rule that Alice did not change the law governing § 101 is a bit of a mystery. Applying the same two-step test seems a convenient way of dodging reality. At a time when there is real momentum gathering for a legislative solution to § 101 why did the Federal Circuit choose to perpetuate a myth that Alice did nothing to change the law? Outcomes are unquestionably different as the result of Alice, and if outcomes are different how exactly is it possible that the law did not change? If the law remained the same why was Alice a clear pivotal moment in software patent history? Saying Alice did not change the law shows just how out of touch and insulated from reality the Federal Circuit has become.