PublishedFebruary 7, 2013

Summarizing the Briefs and Arguments in CLS Bank v. Alice

Tomorrow, the Federal Circuit will hear oral arguments in CLS Bank v. Alice Corp.  In an earlier post we gave an introduction to the case and explained how potentially important it might be.  At stake is the validity of software patents generally and if they should differentiate between method, system and storage-based software patents.  We will post again after the case, summarizing the oral arguments.

This post looks at the filings of the various parties in the case, including some filings by amici.

The CLS Bank Approach

CLS Bank’s brief begins by framing the terrain: it is well established law that abstract ideas are not patentable.  To determine whether a method claim is an abstract idea, CLS Bank argues the functional concern is “how much future innovation is foreclosed relative to the contribution of the inventor.”  When a method claim is based on an abstract idea the method must include an “inventive concept” beyond the abstract idea on which it is based.  CLS Bank then refines this test — adding conventional, well-understood elements to an abstract idea does not transform the unpatentable abstract into the patentable notice and description required by law.  Also important is whether the computer elements are integral to the method and specialized for the method.  Summarized, CLS Bank’s test appears to be in two parts: 1) would the granting of a patent for an abstract idea foreclose too much innovation; 2) if so, is it sufficiently limited by an accompanying inventive concept that provides a specific and specialized method of implementation?

With respect to whether a computer-implemented patent should be subject to different analysis depending on whether it is method, system, or storage medium, CLS Bank cautions the Federal Circuit to look at the substance and not the form of the patent application.  CLS Bank then argues that system and media claims must demonstrate an inventive concept, regardless of whether they are drafted to appear as mechanical data storage inventions.  When there is a method or process incorporated in a patent, they argue that the inventiveness test must be applied.

The Alice Corp. Approach

In their brief, Alice Corp. states that there is no Supreme Court precedent that imposes a separate “inventiveness” requirement.  Alice Corp. argues that this “inventiveness” requirement is contrary to Supreme Court precedent that a claim must be considered as a whole and not dissected into old and new elements.  Instead, Alice Corp. believes that claims that involve abstract ideas are patent eligible if the computer plays a sufficiently meaningful role.  Alice Corp. frames its terrain:  “The ultimate objective of any such test—in relation to computer-implemented claims or any others—is to differentiate between claims to abstract ideas themselves, which are impermissible, and claims to applications of ideas, which are eligible. In doing such an analysis, the focus should not simply be on the computer-implementation aspects of the claim, but rather on all of a claim’s limitations, and the question is whether that claim, as a whole, is to nothing more than an abstract idea.”  Under the Alice Corp. approach, the Federal Circuit should step back and analyze the totality of the patent in question.  If the totality of the patent describes how to implement or apply an abstract idea, then it is patentable under § 101.

Alice Corp. states its test as “[w]hen a computer-implemented claim is otherwise directed to an abstract idea, the question is whether the role of the computer in the claim is sufficient to make the claimed invention an application of the abstract idea, not the abstract idea itself.”  Alice Corp.’s test is broad, as virtually all uses of a computer will be an application of an abstract idea.  Alice Corp. seems to be creating a test far broader than it needs to pass §101 analysis.

The parties also took very different positions on what the effect of certain claim language has on patentability.  Alice Corp. argued that claim terms such as “computer system” and “storage media” place important limitations that can make process claims patentable “even if the process that the computer is configured to perform would not be patent-eligible standing alone.”  Here again we see an extremely permissive test being put forward by Alice Corp.

Approach of Amici Curiae

Many concerns were also raised by amici curiae.  Briefs such as those from British Airways and the Computer & Communications Industry Association (CCIA) (which is the creator of Patent Progress) expressed concerns with language from the Federal Circuit’s original opinion: that patents are presumptively not abstract and that a § 101 inquiry should be secondary to §102 and §103 inquiry.  CCIA’s brief sided with CLS Bank, stating Mayo v. Prometheus requires an innovative step to satisfy the § 101 screening threshold for subject matter patentability.  A brief from the Electronic Frontier Foundation and Public Knowledge advocated the creation of a bright line test for software patentability focusing specifically on whether the patent in question serves a notice function by clearly articulating a detailed, step-by-step method for accomplishing the claimed invention.

A brief submitted by several high-tech operating entities, including Google, HP, and Twitter, argued that software patents should have to claim concrete applications.  These companies contend that the lack of concrete applications and adherence to the test established in Prometheus results in the granting of low-quality patents which in turn disrupt innovation and competition in the high-tech industry.  This brief contends that the Supreme Court’s test “is not hard to apply in cases like this one” because the patents asserted “contain no limitations related to how the software or hardware  accomplishes the claimed function.”  The “what and how” test articulated by those in the industry reflects the frustration and uncertainty resulting from promulgation of low-quality, abstract patents.

Finally, the United States submitted a brief on behalf of the Patent and Trademark Office (USPTO) that stated that the Supreme Court has directed the USPTO and courts to approach judicial exception to §101 both more rigorously and more flexibly.  The subtopic headings for the government’s brief are illuminating.  First the government asserts “Bilski and Mayo makes clear that the USPTO’s longstanding approach to the eligibility of computer-implemented inventions is no longer sufficient” and then counsels “the essential question under § 101 is whether the claim, properly construed, incorporates enough meaningful limitations to ensure that it amounts to more than a claim for the abstract idea itself.”  However, the USPTO is less strident when crafting a proposed solution, stating that the Federal Circuit should create a “non-exhaustive list of factors” and reminding the court that statutory presumption of validity applies in district court § 101 challenges.

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Brendan Coffman

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