Mirror, Mirror: The Alternative Legal Universes of Guidewire and Ultramercial II

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Alternative universes make for compelling drama on the big screen, especially when the plot involves the reversal of identities or roles. What is surprising is how exciting this theme can be when set in the scholarly suites of the Federal Circuit courthouse. The following commentary is highly tongue-in-cheek. Reader discretion is advised.

SECTION 101

These are the voyages of the Starship Federal Circuit…

…whose never ending mission is to seek out new forms of patent eligible subject matter…

… to boldly claim what no man has claimed before!

Mirror, Mirror:[1] A transporter malfunction in the U.S.S. Guidewire[2] sends Capt. Rader and First Officer Lourie into an alternate legal universe, where Rader advocates for Lourie’s legal theory of preemption from The En Banc Maneuver,[3] while Lourie devises a new theory of method claim estoppel to escape the consequence of his own inviolable logic.[4]

Previously, in The En Banc Maneuver, Lourie offered an “integrated approach” to patent eligibility in CLS Bank v. Alice, rationalizing to a large extent the disparate Supreme Court decisions of Benson, Flook, Diehr, Bilski and Prometheus, and providing a two-step analytical framework for evaluating whether a claim falls within the “abstract idea” exception. “[T]he first step in that analysis requires identifying the abstract idea represented in the claim.” The second involves determining whether the claim contains “meaningful limitations that prevent the claim as a whole” from covering all “practical applications” of that abstract idea. Further, Lourie, supported by a plurality of other senior officers, clearly states that the presumption of validity applies to Section 101 and can only be overcome by clear and convincing evidence of the “real world” effects of the claim. The logic of Lourie’s analysis was stark and compelling, and led inexorably to two principled conclusions: (1) that a patentee can overcome a sneak attack on patent eligibility by demonstrating that there are alternative ways of practicing the abstract idea that do not infringe the claim and (2) that a motion to dismiss based on patent ineligibility should rarely, if ever, be granted. Capt. Rader agreed in part, but also diverged, suggesting a different approach based on whether the limitations of the claim were “inherent” in the abstract idea. (At a meeting at Legal Fleet HQ in San Francisco in August 2013, Capt. Rader admitted that The En Banc Maneuver was the most difficult and least successful episode of his legal career, and that he put more time and energy into getting all of the crew on board than ever before, but was unable to succeed in their assigned mission.)

In the following episode, The Olive Branch, Capt. Rader, piloting the panel ship Ultramercial II,[5] adopts Lourie’s framework and synthesizes it with his own analysis, demonstrating that, in essence, the two approaches were consistent. Rader’s approach was not an alternative theory that rejected Lourie’s framework, but rather was a different formulation of the “precise test” used to implement it. In particular, Rader confirmed what Lourie’s logic entailed—that on a motion to dismiss, “the only plausible reading of the patent must be that there is clear and convincing evidence of ineligibility. For those reasons, Rule 12(b)(6) dismissal for lack of eligible subject matter will be the exception, not the rule.” Lourie for his part rejects this advance, and his objections to the captain’s course of action are noted in the ship's log.

Last week’s episode, Mirror, Mirror, is a stunning turnabout. Now, First Officer Lourie is at the helm, assisted by Commander Reyna, and attempting to pilot the panel ship, the U.S.S. Guidewire, through the Accenture Nebula back to U.S.S. Federal Circuit, currently in space dock at the Dolley Madison space station. The Guidewire is attacked by the Accenturians, a race of high-technology consultants (descended from Roman businessman of Centurion rank) who have patented[6] the Ultimate Insurance Computer,[7] a system for “generating tasks to be performed in an insurance” species. The UIC includes an “insurance transaction database,” a “task library database,” a “client component,” and a “server component” having “an event processor, a task engine and a task assistant.” These elements are specifically configured to perform warp drive insurance functions under predetermined changes in the space-time continuum.  

The Guidewire is disabled, and the crew must beam back to their ship. While beaming aboard the Federal Circuit, a transporter malfunction sends them to an alternate legal reality, where their jurisprudential identities are reversed. Lourie is in charge now. He promptly sets forth his preemption framework from The En Banc Maneuver, but cannot apparently reconcile it with the Guidewire’s tactical plan to thrawt the Accenturians:[8] the case is before the panel following Guidewire’s motion to dismiss; there is no record before the court except the patent and the complaint, no evidence that the “real world” effect of the patent claim is to preclude all “practical applications” of the abstract idea of “generating tasks [based on] rules ... to be completed upon the occurrence of an event.” Lourie has an inherent disdain of the Accenturians, whom he sees as business-methodonians worse than the Ferengi, out to enslave startups and other primitive peoples in violation of the Patent Prime Directive,[9] which holds that patent claims must claim “something more” to establish that there is a true “inventive concept.” But how can Lourie avoid the unavoidable, that the presumption of validity and the requirement for clear and convincing evidence compels finding that Guidewire’s motion to dismiss cannot be sustained, and the Accenturian patent is not invalid under Section 101? The only evidence before the crew is the Accenturian patent, a lengthy specification replete with complex technical details describing the implementation of the UIC (including specific software code). How can the “only plausible reading” be that the patent is “abstract”?

Lourie is nothing if not a master of jurisprudential judo, so he invents a solution: method claim estoppel. The method claims of the Accenturian patent, claims 8-22, had been found ineligible by the district court, and in an attempt to narrow the issue on appeal the Accenturians only appealed the invalidity of system claims 1-8. This was likely in view of the dangers to business method claims presented in an earlier episode, The Bilski Trap.[10] Lourie used this concession against the Accenturians with impeccable Vulcan logic: Since the system claims included “virtually the same limitations and many of the same software components as the patent ineligible method claims,” the “system claims are simply the method claims implemented on a system for performing the method.” The differences between the system and method claims are nothing more than “minor differences in terminology,” and thus, the claims “rise and fall together.” Accordingly, “[w]hile it is not always true that related system claims are patent-ineligible because similar method claims are, when they exist in the same patent and are shown to contain insignificant meaningful limitations, the conclusion of ineligibility is inescapable.” 

And what of the complex and code-replete patent specification, which showed the system was not some generic business method discussed in the context of generic computers, but had a very specific implementation? What about the rule set forth in Who Mourns for Alappat?,[11] that a specially programmed computer is in effect a particular machine, no longer a generic computer, and logically patent-eligible? Or that, in The Olive Branch, Capt. Rader noted that the patent-eligible invention required a “complex interface” and “computer programming,” even though none was specifically disclosed in the patent specification? Lourie dashes this argument to the ground:  “[T]he complexity of the implementing software or the level of detail in the specification does not transform a claim reciting only an abstract concept into a patent-eligible system or method.”

Now comes Capt. Rader—this treachery will not stand, this reversal of the rules is too much! First, claim method estoppel is without legal support—“No precedent from the Supreme Court or this court supports this proposition”—and fundamentally unfair: “[T]he court creates a very unsound policy by requiring litigants to appeal the invalidity of every claim or else risk the potential or estoppel or waiver of other claims. In simple words, [the Accenturians’] willingness to narrow issues should not create an admission that defeats [their] appealed claims.” Further, it contradicts what Lourie and four members of the Federal Circuit crew in fact stated in The En Banc Maneuver: “To be clear, the fact that one or more related method claims has failed under § 101, as here, does not dictate that all associated system claims must suffer the same fate ... [A] system claim that builds on the same abstract idea as a patent-ineligible method may well incorporate sufficient additional imitations, computer-based or otherwise, to transform that idea into a patent-eligible application.” Rader calls out Lourie’s mutinous analysis: “In sum, the court actually follows a procedure rejected almost unanimously by this court.” 

But this is only Rader’s first blow; he proceeds to show that Lourie’s preemption analysis compels a conclusion that the Accenturian patent is valid by making use of the non-infringement analysis that is the mirror of the preemption inquiry. Is there at least one way to practice the abstract idea that does not infringe some limitation of the claim? If so, then that limitation is meaningful because it prevents the claim from covering all “practical applications”:

Indeed, someone can “generate tasks based on rules to be completed upon the occurrence of an event” in a number of ways without infringing the claims. See CLS Bank, 717 F.3d at 1277 (opinion of Lourie, J.) (“[T]he Supreme Court’s foundational  § 101 jurisprudence . . . turns primarily on the practical likelihood of a claim preempting a fundamental concept.”); id. at 1300 (opinion of Rader, C.J.) (“Pre-emption is only a subject matter eligibility problem when a claim preempts all practical uses of an abstract idea.”). For example, one could use a single database rather than the recited multiple databases; one could utilize an electronic claim folder decomposed into a different plurality of levels or into non-insurance related levels (i.e., levels other than a policy level, claim level, participant level, and line level); and one could use something other than a client-server architecture. Moreover, because the claims require specific computer components, a human performing the claimed steps through a combination of physical or mental steps likewise does not infringe. In sum, this system does not preempt anything beyond the specific claims, let alone a broad and undefined concept.

The episode ends with Rader’s classic and oft-repeated wisdom. In his role as captain throughout the years, Rader has been a loyal and steadfast adherent to the statutory framework. In episode after episode, when confronted with hostile aliens or unusual cultures, he has reminded us that when all else fails, “the remedy is the same, consult the statute!”

What are we to make of this episode? Does this simply confirm Commodore Newman’s assertion in The En Banc Manuever that “the only assurance is that any successful innovation is likely to be challenged in opportunistic litigation, whose result will depend on the random selection of the panel”? What is it about financially related inventions, such as those of Alice Corp. (escrow system for currency exchanges), Bancorp Services (system for administration of life insurance policies), and Accenture, that they consistently fail to reach the bar of an “inventive concept” as far as Lourie is concerned? Why is it acceptable for Lourie to delve into the details of the specification to support the argument that the system claims are essentially the same as the method claims, but then of no import when considering whether what is claimed is purely an abstract idea? Why isn’t Lourie’s most generalized statement of claim 1—“The limitations of claim 1 are essentially a database of tasks, a means to allow a client to access those tasks, and a set of rules that are applied to that task on a given event”—patent-eligible on its face? A “database of tasks” is not some purely “abstract intellectual concept” that exists in the mind, but a real thing that exists in real computers. It may be anticipated and obvious, but that is a separate question. 

We will have to wait for future episodes of SECTION 101, or its spinoff, SUPREME BEINGS, to learn more. Stay tuned.[12]


[1] For those readers not sufficiently learned in the cultural references to the most influential television series of all time, I shall provide the necessary dereferencing. See, Star Trek, The Original Series (“ST-TOS”) Mirror, Mirror . For a great resource on all things Star Trek, see Memory Alpha.

[4] There is clear evidence that respect for patent rights was considered important in Star Trek. See, ST-TOS, I Mudd (Space pirate, entrepreneur, and open-source-pioneer Harcourt Fenton Mudd faces off with Kirk after escaping punishment for running a fraudulent patent licensing scheme under the guise of a technical information service). See, https://www.youtube.com/watch?v=LZ6-q59bL9M.

[6] U.S. Patent No. 7,013,284 “Component based interface to handle tasks during claim processing.”

[7] ST-TOS, The Ultimate Computer.

[8] It should be noted that the tactical plan for Guidewire’s response to the Accenturian attack was developed by Senior Strategy Commander Mark Lemley, currently stationed in the Delta Quadrant at Outpost Durie Tangri.  Commander Lemley also teaches advanced strategic and tactical theory at the the Legal Fleet Academy in Palo Alto, CA.  

[9] See, Starfleet General Order No. 1. The exact reason for Lourie’s concern is unclear. It may be that Lourie believes that the Accenturians are “subverting or avoiding the application of a society’s laws,” or “interfering in the internal affairs of a society.” We will have to wait for future episodes to better understand Lourie’s motivating weltanschauung.

[10] ST-TOS, The Man Trap.

[11]  ST-TOS, Who Mourns for Adonais?, See, In re Alappat, 33 F. 3d 1526.

[12] I appreciate that “tuning” into a channel or a show is an anachronism for most people; indeed most of my younger readers will never know the joy of using one’s own body as an extension of a TV antenna, (yes, TVs used to have dipole antennas, affectionately called “rabbit ears”) following the intricate choreographic instructions of a parental unit (“a little to the left, now forward, wait, back ... back ... put your hand on top of the cabinet ... that’s it! ... Now hold still and be quiet”).