Patent Law Practice Center

Not a lot closer to understanding when software is patent eligible

“There should be no serious question that computer-implemented inventions such as software constitute patent-eligible subject matter under § 101,” Paul Clement wrote in a brief filed on behalf of IBM to the Supreme Court in 2014. Ultimately, the IBM brief would argue that the abstract idea doctrine is unworkable, which it is. Sadly, nearly 30 months after the Supreme Court’s landmark decision in Alice v. CLS Bank we are not a lot closer to having a working understanding about when and under what circumstances software is patent eligible.

Yes, the Federal Circuit has started to issue rulings that give hope, but they also then issue non-precedential rulings that seem to just string together buzzwords too. They also continue to allow the invalidation of patent claims without a claim construction, which is antithetical to pretty much the whole of patent law. See No claim construction, CAFC rules claims ineligible.

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Federal Circuit says automating 3D-animation method is patent eligible

The Federal Circuit recently issued a decision in McRo, Inc. v. Bandai Namco Games America, which found that the software patent claims at issue were not directed to an abstract idea and were patent eligible.

The patents in question related to automating a part of a 3D-animation method. Essentially, the patents cover lip synchronization of animated characters so that the lips of the animated character move in a normal fashion to the point where the animated character’s lips can be read.

After going through a two-plus page recitation of the law, Judge Reyna summarized the district court holding, that the claims were drawn to an abstract idea of automating rules-based use of morph targets and delta sets for lip synchronization in 3D animation. Reyna explained that the Federal Circuit disagreed with that determination, reminding the district court that they have cautioned courts to carefully “avoid oversimplifying the claims.” Reyna would go on to say that these claims are specifically “limited to rules with specific characteristics.”

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The Demise of a High-Tech Economy

In a blog post from March 2014, Marian Underweiser, IBM’s Counsel for IP Law Strategy & Policy, wrote:

Computer implemented inventions, particularly in software, form the basis for innovation not only in the technology products we use every day, such as laptops and smartphones, but in everything from cars to surgical techniques to innovations that increase efficiency and production in factories. Strong and effective patent protection for these innovations in the U.S. has fostered a fertile environment for research and development and, as a result, the US is the undisputed leader in the software industry.

But will the U.S. be able to maintain its position as the leader in the software industry under a patent regime that seems openly hostile toward software innovators?

Unfortunately, many simply won’t believe what IBM says because, as one of the most innovative companies in the world, they are also the top patent filer ever year. IBM is a company that spends $6 billion annually, year after year, on research and development, so they have a bias. But the Government Accountability Office does not have a vested interest and, in a 2013 report, they concluded that between 50% and 60% of all patent applications filed seek protection for innovation related to software in one way or another. That means that at least half of all innovations could potentially be lost due to the Supreme Court’s failure to follow the enacted patent statutes and instead act as a super legislature that despises all things patent. The Alice decision will likely be viewed in years to come as a devastating decision for high-tech entrepreneurs and start-ups.

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What’s the Harm in Allowing Software Patents?

As many of you undoubtedly already know, the United States Supreme Court will soon decide whether software is patent eligible in the United States. The fact that such a question needs to be addressed in the year 2014 would be comically funny if it were not so tragically sad. Software has been patented in the United States since 1968, which means software has been patentable in the United States for the last two generations. Yet the Supreme Court is poised to decide whether software is or should be patent eligible in Alice v. CLS Bank, which will be argued to the Court on March 31, 2014.

What is the harm in allowing software patents?  Saying that software is not patentable subject matter is akin to saying that a car battery is not patentable subject matter. No one could seriously argue that a new and non-obvious car battery would not be patentable subject matter. In fact, that is exactly what many researchers are trying to find right now, albeit not the same type of car battery that we are used to inserting under the hood.

Any car is itself just a bunch of pieces of metal that sit there fastened together to create a tangible shell that has taken on an identifiable structure. The car has lots of potential, but without some kind of fuel it doesn’t even have potential energy. It merely has potential to move from place to place under appropriate conditions. A car without a battery isn’t something that is useful in any real world sense of the word.

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Concrete and Tangible is the Right Test for Patent Eligibility

In 1998, the United States Court of Appeals for the Federal Circuit, in State Street Bank & Trust Co. v. Signature Financial Group, Inc., did away with what had previously been come to be known as the business method exception to patentability. The Federal Circuit, per Judge Giles Sutherland Rich (shown left), pointed out that the business method exception had never been invoked by either the Federal Circuit or its predecessor court, the CCPA. Judge Rich explained that “[s]ince the 1952 Patent Act, business methods have been, and should have been, subject to the same legal requirements for patentability as applied to any other process or method.”

Although the United States Supreme Court did away with that test when it issued its decision in Bilski v. Kappos, it is still nevertheless illustrative and the best test that is out there. Simply stated, in order to have a patentable business method, it is necessary for the invention to accomplish some practical application. In other words, in order for a business method to be patent eligible, it must produce a “useful, concrete and tangible result.” Judge Rich was correct to point this out and the Supreme Court has made a horrible mess of the law as it applies to business methods and computer-implemented innovations because it fails to understand what Judge Rich really meant.

If you really understand what Judge Rich meant by “useful, concrete and tangible result,” you come to the inescapable conclusion that it is the appropriate test. Indeed, those drafting patent application would do well to really target the description of the invention to satisfy the test.

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