Software patents in the Federal Circuit‚¬¦ One step forward, two steps back.October 12, 2016

Following the United States Supreme Court’s ruling in the Alice Corp. v. CLS Bank Int’l, (S. Ct. 2014) case (which held that abstract ideas are not patentable), the software and computer industry has been fighting and clawing to peel back the layers of the decision in hopes of finding some clarity as to what is and is not patentable subject matter. In Alice, the Supreme Court held that mere computer automation of abstract processes was insufficient to render the claims patent eligible.

Recently, the Federal Circuit has issued a number of decisions, including:  Enfish LLC v. Microsoft Corp., (Fed. Cir. May 12, 2016); Rapid Litigation Management Ltd. v. Cellzdirect, Inc., (Fed. Cir. 2016);BASCOM v. AT&T, (Fed. Cir. 2016); and McRO, Inc. v. Bandai Namco Games America Inc. et. al. (Fed. Cir. 2016), wherein the Federal circuit held that the computer and software related inventions did include patentable subject matter. For example, in the McRo, Inc. it reversed the lower court’s ruling that patents on lip-sync technology were invalid for claiming an abstract idea. Specifically, the Court noted that it was “the incorporation of the claimed rule, not the use of the computer, that improved the existing technological process by allowing the automation of further tasks.”These decisions have largely been viewed as wins for the computer and software industry. While these decisions have not opened the door for all software and computer related inventions, they are at least a step in the right direction toward clarifying the blurred lines of patent eligible subject matter under 35 U.S.C. § 101, in wake of the Alice decision.

Just when it appears that progress is being made to clarify and define what is patent eligible subject matter, here comes the Intellectual Ventures I LLC v. Symantec Corp., (Fed. Cir. 2016) decision. In this most recent decision by Federal Circuit, the Court affirmed the lower court’s decision that U.S. Patent Nos. 6,460,050 and 6,073,142, held by Intellectual Ventures, were patent ineligible under § 101. The Federal Circuit also reversed the lower court decision and held that U.S. Patent No. 5,987,610 was also ineligible under § 101. While the decision itself appears to further cloud the issue of patent eligible subject matter for software, the perhaps more concerning issue arises in the concurring opinion. In a concurring opinion, Judge Mayer states that “(1) patents constricting the essential channels of online communication run afoul of the First Amendment; and (2) claims directed to software implemented on a generic computer are categorically not eligible for patent.”

Judge Mayer’s concurring opinion, while not precedent setting, does provide insight into the thought process and opinion of software patent held by at least one judge on the Federal Circuit. As described by Mayer, “U.S. Patent  ‘050  purports  to  cover  methods of  ‘identifying characteristics of data files,’ whereas U.S. Patent  ‘142 broadly claims systems and methods which allow an organization to  control  internal  email  distribution.  U.S.  Patent ‘610 describes, in sweeping terms, screening a communication for viruses or other harmful content at an intermediary location before delivering it to an addressee.”   As such, Mayer suggests that software patents “[e]ssential First Amendment freedoms are abridged when the Patent and Trademark Office (“PTO‚¬) is permitted to balkanize the Internet, granting patent owners the right to exact heavy taxes on widely-used conduits for online expression … [and that] most of the First Amendment concerns associated with patent protection could be avoided if this court were willing to acknowledge that Alice sounded the death knell for software patents.”

With regard to the patentability of software, Mayer appears to be strongly opposed to any software related inventions being patent eligible. In the concurring opinion, Mayer takes the position that “[f]rom an eligibility perspective, software claims suffer from at least four insurmountable problems. First, their scope is generally vastly disproportionate to their technological disclosure. … A second, and related, problem with software patents is that they provide incentives at the wrong time. Because they are typically obtained at the “idea”stage, before any real inventive work has been done, such patents are incapable of effectively incentivizing meaningful advances in science and technology. … Yet another intractable problem with software patents is their sheer number … Given the vast number of software patents—most of which are replete with broad, functional claims—it is virtually impossible to innovate in any technological field without being ensnared by the patent thicket. … Fourth, and most fundamentally, generically-implemented software invariably lacks the concrete borders the patent law demands.” While these are opinions that those of us practicing in the computer and software industry disagree with, Mayer’s concurring opinion may be the first step toward what could represent a grim reality for software patents challenged before the Federal Circuit in the future, unless or until Congress decides to step-in and further define patentable subject matter under 35 U.S.C. § 101.

The full Intellectual Ventures opinion may be found here.