Where are You, Congress? Alice v. CLS Bank and “The Case Against Patents”

by Fenwick & West LLP
Contact

A recent episode of NPR’s “Planet Money” was entitled “The Case Against Patents.”  Several notable commentators in that episode questioned whether patents help or hinder innovation, whether history supports the benefits of a patent system, and whether patent terms should be tinkered with to determine the amount of protection that is optimal from various socio-economic perspectives.  I am delighted every time this issue is brought up, since the appropriate balance of rights between innovators and society is anything but static.  As reasonable royalty rates fluctuate under case law, as infringement and validity standards shift, and as patents become commodities traded outside of traditional M&A situations, the fulcrum is certain to shift in one direction or the other. 

The Supreme Court gave more than a little consideration to such issues in Alice v. CLS Bank.  In fact, the very focus of this unanimous opinion was on this balance:

We have described the concern that drives [the judicially-created exclusion for laws of nature, natural phenomena and abstract ideas] as one of pre-emption.  … Laws of nature, natural phenomena, and abstract ideas are “‘”the basic tools of scientific and technological work.”’” (slip op. at 5-6)  

As the three sets of quotation marks here suggest, the Court was reciting language from not only one of its opinions (Myriad), but  also a second (Mayo) and a third (Benson). 

All four of these opinions explicitly state the policy concerns driving the exclusion.  

  • Alice: [I]n applying the § 101 exception, we must distinguish between patents that claim the building blocks of human ingenuity and those that integrate the building blocks into something more. (slip op. at 6)
  • Myriad: [W]ithout this exception, there would be considerable danger that the grant of patents would tie up the use of such tools and thereby inhibit future innovation premised upon them.  This would be at odds with the very point of patents, which exist to promote creation. (slip op. at 11)
  • Mayo: [M]onopolization of those tools through the grant of a patent might tend to impede innovation more than it would to promote it. (slip op. at 2)
  • Benson: Phenomena of nature, though just discovered, mental processes, and abstract intellectual concepts are not patentable, as they are the basic tools of scientific and technological work. (409 U.S. 63, 65)

(in all cases, excluding internal quotation marks, brackets, and citations). 

And all four of these opinions also expressly worry about over-application of the exclusion: 

  • Alice: [W]e tread carefully in construing this exclusionary principle lest it swallow all of patent law. (slip op. at 6)
  • Myriad: The rule against patents on naturally occurring things is not without limits. (slip op. at 11)
  • Mayo: The Court has recognized, however, that too broad an interpretation of this exclusionary principle could eviscerate patent law. (slip op. at 2)
  • Benson: It is said we freeze process patents to old technologies, leaving no room for the revelations of the new, onrushing technology.  Such is not our purpose.  (409 U.S. at 71) 

Sounds like the Court is thinking about the right things, doesn’t it? The problem, though, is that the policy considerations should not be—indeed are not—the province of any Article III court to decide.  The Court is discussing these issues as justification for its own judicial “implicit exception” to the explicit language chosen by Congress.

It is healthy for commentators to propose methods for finding the right balance in patent law.  It is healthy precisely because it is not self-implementing, but instead serves as a preliminary vehicle for presenting and vetting ideas.  Those ideas are then available for refinement and debate in the forum our Constitution provides: Congress. Even where courts include their observations on possible policy matters, as long as it is in obiter dicta, that too can serve as helpful input to Congress.  

However, when the Court steps in and decides that the very language Congress chose to define as patentable subject matter needs some tweaking because taking it at face value “might tend to impede innovation more than it would tend to promote it,” a real question about separation of powers arises.  Astonishingly, all four of the opinions addressed above speak to this concern as well:  

  • AliceCongress “shall have Power … To promote the Progress of Science and Useful Arts.” (slip op. at 6, quoting constitutional mandate, emphasis added)
  • Myriad: Concerns about reliance interests … are better directed to Congress. (slip op. at 16, n.7)
  • Mayo: [W]e must recognize the role of Congress in crafting more finely tailored rules where necessary. (slip op. at 2)
  • Benson: The technological problems tendered in the many briefs before us indicate to us that considered action by the Congress is needed. (409 U.S. at 73)

How is it that all four of these cases recognize Congress’s role in making the policy choices involved here, yet perpetuate the judicial “implicit exception” to the words Congress used?  Benson goes so far as to recognize the issue, but in a cart-before-the-horse manner.  “It may be that the patent laws should be extended to cover these programs, a policy matter to which we are not competent to speak.”  409 U.S. at 72.  The “extension” of the patent law addressed in Benson would actually be more a repudiation of the judicially created exception to the statutory language.  Would it not be better to admit that perhaps it was out of place for the Court to impose this exception in the first place?

No matter how popular it might be to complain about the dysfunction of Congress, all of the indicators—from NPR podcasts to Supreme Court opinions—point to Congress as the only appropriate place where the balance should once again be struck.  Even if they hear a number of closely related cases over the span of a few years, the courts cannot possibly have the same range of perspective and cannot possibly consider the same range of views as can hundreds of representatives and senators, along with the numerous constituencies influencing them.  Like Gotham’s use of the Bat-Signal to beckon Batman, we call upon Congress in the hope that someday the judicially created exception can be properly adopted, rejected, or modified.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Fenwick & West LLP | Attorney Advertising

Written by:

Fenwick & West LLP
Contact
more
less

Fenwick & West LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.
Feedback? Tell us what you think of the new jdsupra.com!