Software patents recently took another hit as courts continue down the rabbit hole following the Supreme Court decision in Alice Corp. v. CLS Bank Int’l, 134 S. Ct. 2347 (2014). In Alice, the Court held that claims to generic computer implementation of abstract ideas are not eligible for patent protection under 35 U.S.C. § 101. Specifically, the patents at issue concerned a computerized platform for eliminating risk in conducting financial transactions between two parties.
In the short months following Alice, the chain reaction has been swift:
A week after the Court issued its Alice decision, the U.S. Patent and Trademark Office published a set of Preliminary Examination Instructions. The change in examination procedures requires that examiners must determine whether the claimed invention is directed to an abstract idea, and if so, then the examiners must determine whether the claimed invention is sufficient to ensure that it amounts to significantly more than the abstract idea itself.
In a blog post on August 4, 2014, the USPTO stated that it has withdrawn the notice of allowances for several patent applications that were deemed ineligible in view of Alice.
A number of lower decisions have relied on Alice to invalidate computer implemented patents. Recently, in Open Text v. Alfresco Software, No. 13-CV-04843-JD (N.D. Cal, Sept. 19, 2014) the Northern District Court in California granted a 12(b)(6) motion, dismissing two of nine patent infringement claims under 35 U.S.C. § 101. The patents concerned a computer readable storage medium for facilitating a network based on dialogue with costumers, and were invalidated because they were held to be directed to an abstract idea.
Open Text followed on the heels of another case in which a 12(b)(6) motion was similarly granted, dismissing patents relating to computer-implemented systems for asking people to perform tasks and monitoring the performance of those tasks. The patents in this case were also held to be invalid because the systems were directed to abstract ideas. See Eclipse IP, LLC v. McKinley Equipment Corporation, No. CV-14-154-GW (AJWx) (C.D. Cal., Sept. 4, 2014).
Both Open Text and Eclipse show that defendants may have gained a powerful procedural tool to attack the validity of certain kinds of patents on inventions directed to software, computer implementations, and business methods, via dissection into a concept that can be dismissed as abstract, and a method for implementation that can be dismissed as conventional and/or generic.1
In contrast, it is doubtful that all software, computer-implemented and business method inventions will be affected by Alice. For example, software inventions that improve the functioning of a computer, or improve other technical fields, may still be eligible for patent protection. Still, while the full effect of Alice is yet to be determined, entities seeking to patent inventions directed to software, computer implementations, and business methods, need to ensure that inventions are sufficiently innovative and directed to concrete ideas.
1 In addition to Open Text and Eclipse, there have been a myriad of other cases in which the courts have repeatedly rejected patents that attempted to appropriate an abstract concept by claiming generic computer implementation of that concept. See, for example, Dietgoal Innovations, LLC v. Bravo Media LLC, No. 13 Civ-08391-PAE (S.D.N.Y. July 8, 2014) (invalidating a patent relating to the use of a computer to plan meals and achieve diet goals), and Tuxis Tech v. Amazon, C.A. No. 13-1771-RGA (D. Del. Sept. 3, 2014) (invalidating a patent relating to a computerized process for individualizing up-selling based on the identities of the purchaser and the product to be purchased).