Written by Zach Stevenson, Extern
On October 2, 2017, the Supreme Court declined to review Synopsys, Inc. v. Mentor Graphics Corp., No. 16-1288. In Synopsys, the Federal Circuit invalidated certain claims in three of Synopsys’ patents due to ineligible subject-matter. The Synopsys’ patents (5,530,841; 5,680,318; and 5,748,488) disclose methods and systems to convert descriptions of logic circuits into logic circuit hardware components – essentially, using computer coding languages to create computer hardware. Patent practitioners had hoped for review of Synopsys to provide a more concrete guidance on how to interpret the § 101 framework under Alice Corp. v. CLS Bank, commonly referred to as Alice, decided in 2014. If the Supreme Court chooses not to take any 35 U.S.C. § 101 (Patent Eligible Subject-Matter) claims for the remainder of the term, this will be the fourth term without such guidance.
Previously, the Supreme Court had taken an interest in patentable subject-matter just prior to Alice in Mayo Collaborative Services v. Prometheus Laboratories, Inc. (commonly referred to as Mayo), where the Court first established a two-part test to determine whether a claim is directed to patent-eligible subject-matter. After two years of inconsistent decisions by the lower courts under Mayo, the Supreme Court reviewed the Federal Court’s decision in Alice as a way to solidify and explain the new framework. The Mayo and Alice rule is a two-step process comprising three individual questions. (See flow chart below for Alice explanation). For software, the issue tends to be whether the claims are directed to an abstract idea.
As the Supreme Court has not set out a hardline rule, the Federal Circuit, district courts, and the United States Patent & Trademark Office (USPTO) have the authority to interpret the Alice framework. This specifically causes unease for patent owners or prospective patent applicants because it is difficult to predict whether they will have any exclusive rights to their intellectual property in the future. In an extreme hypothetical, if the Federal Circuit published an opinion stating that software was per se abstract, the USPTO would likely issue guidance to the examiners to deny applications on the basis of the Federal Circuit decision. Any person who submitted an application prior to that decision would likely now be ineligible for patent protection and trade secret protection.
The Federal Circuit has issued mixed decisions interpreting §101 for software. Cases such as Enfish v. Microsoft, McRO v. Bandai, and BASCOM Global v. AT&T seem to make an easier case to classify software as eligible subject matter. In Enfish, the patented invention was self-referential database tables. Although this is computer software, the Federal Circuit stated that “computer-related technology [is not] inherently abstract.” On step 2A, a Court must consider whether a software claim is directed to improvements in computer-related technology. If the software claim is directed to improvements to computer-related technology, the Federal Circuit reasons that the claims may not be abstract. This seems to help owners of software-related patents because the patent owner can argue that the patented technology is not abstract because it improves on computer-related technology, therefore patent-eligible subject-matter.
In McRo, the patented invention was a method of generating computer animated facial expressions by utilizing a computer spreadsheet for data input. The Court found that when a “claim uses the limited rules in a process specifically designed to achieve an improved technological result in conventional industry practice,” the claim is likely not an abstract idea. This permits patent holders a good way to argue that their patented invention improves on an industry practice in a unique way before the claim is deemed abstract.
Finally, in BASCOM, the Federal Circuit held that, even though the claim of filtering internet data from an internet service provider was directed to an abstract idea, the claim as a whole is still patent-eligible subject-matter because “an inventive concept can be found in the non-conventional and non-generic arrangement of known, conventional pieces.” Essentially, despite the Court finding the idea abstract, the Court found that because there was an inventive concept, the abstract idea does not make the claims patent ineligible.
Despite these cases, the Federal Circuit has held many other software claims ineligible. For the most part, the USPTO has followed the direction of the Federal Circuit by issuing an Interim Examination Guidance memo almost every year since Alice. These memos instruct examiners how to respond to patent applications with questionable subject-matter eligibility based on the holdings in Supreme Court and Federal Circuit decisions.
Despite guidance from the Federal Circuit and the USPTO, subject-matter eligibility for software remains a mystery. Until the Supreme Court decides to step-in again, we are stuck with Alice.