In the seven months since Alice Corp. Pty. v. CLS Bank Int’l was decided, over one hundred patents have been invalidated for claiming ineligible subject matter, more than the total number of patents invalidated under Section 101 in the past five years. Based on pending district court motions and Federal Circuit appeals, in the next six months we are likely to see another hundred patents invalidated. While the Supreme Court has advised the lower courts to “tread carefully in construing this exclusionary principle lest it swallow all of patent law,” the behavior of the lower courts, including the Federal Circuit, has instead been to ply the legal pen as broadsword to cut down whatever software or business method patent stands before them. As delightful as this trend may be to patent defendants, it has created enormous consequences for companies that rely on patent protection to protect crucial technology assets, including the loss of business contracts, disrupted partnerships, and increased difficulty in obtaining venture funding. It is time for Congress to act.[1]
In this essay, I propose twenty-two ways Congress can amend the patent law to restore the balance it created in the 1952 Patent Act. As a starting point, here are the existing relevant statutory provisions:
35 U.S. Code § 100 – Definitions
100(a) The term “invention” means invention or discovery.
100(b) The term “process” means process, art or method, and includes a new use of a known process, machine, manufacture, composition of matter, or material.
100(j) The term “claimed invention” means the subject matter defined by a claim in a patent or an application for a patent.
35 U.S. Code § 101 - Inventions patentable
101 Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title.
Definitional Approaches
There are two basic ways to alter the statutory definitions under § 100. One can narrowly define the judicial exclusions of laws of nature, natural phenomenon, and abstract ideas. Alternatively, one can expansively define “machines” and “processes” to include software (or other desired subject matter).
Expansive Definitions[2]
100(b)(1) The term “process” means process, art, [[or]] method, or algorithm, and includes any [[new]] use of a known process, machine, system, computer, manufacture, composition of matter, or material, regardless of physical embodiment or means of implementation.
100(b)(2) The term “machine” means a system or apparatus, made by human agency, regardless of physical embodiment or means of implementation.
This approach has the virtue of being very simple and direct. It makes clear that an eligible process includes any use of an existing or conventional computer, thereby eliminating the pseudo-presumption that software implemented on a “generic computer” is ineligible. Of course, some will argue that the “generic computer” exclusion is the right rule. But if implementing a process on a generic computer does not make it eligible, then it makes no sense to allow processes to be eligible when implemented using other types of “generic” structures, like springs and screws, levers and pulleys, gears or joints, or even complex objects such as amplifiers, antennas, motors, timers, or the other innumerable circuits and systems used by inventors every day. These are precisely the kinds of inventions that are intended to be eligible under Section 100(b). This tells you that something is wrong with the “generic computer” rule.
Narrowing Definitions
100(k) A “law of nature” means an express statement of a physical, causal relationship governing the natural properties or behaviors of physical objects, and that is recognized by the relevant scientific community.
100(l) A “natural product” means a material, substance, composition as entirely as it appears in nature without any processing by human agency, and excludes any purified, simulated, copied, isolated, replicated product.
100(m) An “abstract idea” means a purely mental concept that is incapable of any physical embodiment and excludes any process performed by a computer program.
This approach cabins in the judicial exceptions directly, to prevent the courts from expanding them in haphazard and often scientifically incorrect ways. As to “laws of nature,” the proposed definition is consistent with how many scientists regard “scientific” or “physical laws.” Grounding the definition in being “recognized by the relevant scientific community,” requires a court to receive scientific evidence under the Daubert standard before finding a claim directed to a law of nature, and not to rely on its own lay belief of what constitutes a law of nature.
The narrowing definition of “abstract ideas” also returns the phrase to its more restrictive and accepted definition, one that is distinct from “abstractions.” An abstraction is a generalization of a given concept or category that omits certain properties or features. For example, the concept of a container is an abstraction of the concepts of cup, glass, pot, mug, etc. Obviously, all of these are “concrete” objects, not abstract ideas. The courts have consistently failed to understand this distinction—and similarly failed to understand that all patent claims make use of abstractions in this sense. Moreover, the courts do not understand that the use of abstractions is a necessary aspect of designing software. Additionally, the definition specifically excludes computer-implemented processes—and should thus render moot the debate as to whether software is an abstract idea.
Modernizing § 101
Before considering the next set of amendments, I offer a modernized version of § 101:
35 U.S. Code § 101 - Inventions patentable Eligible Subject Matter
101(a) Whoever invents or discovers A claimed invention directed to any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title shall be eligible for patenting by its inventor.
Since Section 101 is about “eligible” subject matter, the proper focus is on “claimed inventions,” not on persons. Thus, the revision retitles the section and replaces the archaic “whoever invents or discovers” with a more conventional phrasing at the end. These changes make the section consistent §§ 102 and 103 which are written in terms of the “claimed invention.” In addition, the term “new” is removed to avoid the suggestion of imposing an additional requirement beyond § 102. The Court in Diamond v. Diehr pointed out that the Senate Report on the 1952 act which introduced § 101 stated that the “new” in this section was simply a prelude to the novelty requirement of § 102, not a separate lesser requirement: "Section 102, in general, may be said to describe the statutory novelty required for patentability, and includes, in effect, an amplification and definition of 'new' in section 101."[3] This change should remove from the patent eligibility framework any consideration of whether a claim includes conventional, well-known or routine activity or other “inventive” elements, thereby restoring the rule of Diehr.
Safe Harbors of § 101
The safe harbors define subject matter that is presumed eligible; the presumption can be overcome by clear and convincing evidence. First, an “industrial” safe harbor:
101(b) A claimed invention shall be presumed eligible under Section 101(a) if it has any industrial, commercial, physical, material, digital, or concrete embodiment.
This safe harbor reflects something of an “industrial utility” approach, as used in the European Patent Convention, and similar frameworks. The addition of “digital” here captures the notion that software is presumed eligible, as well as computer systems and computer readable products.
In honor of Judge Rich, there is the “State Street” safe harbor:
101(b) A claimed invention shall be presumed eligible under Section 101(a) if it produces a concrete, tangible, and useful result.
The software safe harbor:
101(c) A claimed computer-implemented process, method, computer-program product, or computer system shall be presumed eligible under Section 101(a).
Substantive Amendments
Structural amendments address various underlying substantive and procedural aspects of the patent eligibility question.
Eligibility Determined by The Person of Ordinary Skill in the Art
One of the key objections to the eligibility jurisprudence is that it has been (and remains) an inherently subjective exercise. As Judge Lourie noted in the CLS Bank plurality opinion, “deciding whether or not a particular claim is abstract can feel subjective and unsystematic, and the debate often trends toward the metaphysical, littered with unhelpful analogies and generalizations.”[4] Even after Alice, the problem of subjectivity remains acute. Judge Woo recently compared the Mayo test to a one-step test to Justice Potter Stewart’s famous test for obscenity: “I know it when I see it.”[5]
The goal is to provide an objective framework for patent eligibility. The patent law already has an objective framework, and that is POSITA. The perspective of POSITA is commonly used as an objective basis for evaluating other requirements of the patent law, including questions of law. The POSITA’s view is fundamental to the determination of claim construction[6]; indefiniteness[7]; enablement and written description[8]; obviousness[9] and infringement under the Doctrine of Equivalents[10]. It is incongruous for these other patent law requirements to be evaluated objectively while patent eligibility is evaluated based on lay understanding of the court.
There are a number of different ways POSITA can be brought into § 101. Here is the simplest:
101 Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, as recognized by a person having ordinary skill in the art to which the claimed invention pertains, may obtain a patent therefor, subject to the conditions and requirements of this title.
This version preserves the existing text of the statute. A better approach is to adopt the modernized form of § 101, shown above and then further amended:
101(a) A claimed invention directed to any useful process, machine, manufacture, or composition of matter, or any useful improvement thereof, as recognized by a person having ordinary skill in the art to which the claimed invention pertains, shall be eligible for a patenting by its inventor.
A different approach is to restyle existing § 101 as § 101(a)), and introduce § 101(b):
101(b) The eligibility of a claimed invention under Section 101(a) shall be determined according to a person having ordinary skill in the art to which the claimed invention pertains.
Codifying Diehr: Removing Lack of Novelty and Obviousness From Eligibility
One of the most common criticisms of the Mayo test is that it includes consideration of the novelty of the claimed invention. This criticism is not new: it was raised by the dissenters in Parker v. Flook (the foundation of the Mayo/Alice test), who later repudiated Flook’s claim dissection approach in Diehr: “The Court today says it does not turn its back on these well-settled precedents, but it strikes what seems to me an equally damaging blow at basic principles of patent law by importing into its inquiry under 35 U. S. C. § 101 the criteria of novelty and inventiveness.”[11]
Here are two possible amendments, the first expressly overruling Mayo/Alice, the second fashioned in the language of Diehr.
101(b) The eligibility of a claimed invention under Section 101(a) shall be determined without regard to whether any individual limitation or set of limitations of the claim is conventional, routine, or well understood by persons of ordinary skill in the art to which the claimed invention pertains.
101(b) The eligibility of a claimed invention under Section 101(a) shall be determined without regard to novelty or obviousness.
Codifying Diehr: Eligibility Based on the Claim as a Whole
Another amendment would be to codify the other aspect of Diehr, that eligibility must be determined with respect to the claim as a whole, not on the basis of individual elements.
101(b) The eligibility of a claimed invention under Section 101(a) shall be determined according to the language of the claim as whole.
This solution can also be achieved by use of a definition (assuming the modern form of § 101(a) above):
100 (j) The term “claimed invention” means the subject matter defined by a claim as a whole.
To give full effect to Diehr, the requirements of evaluating the claim as a whole and excluding novelty considerations can be combined:
101(b) The eligibility of a claimed invention under Section 101(a) shall be determined according to the language of the claim as whole, and without regard to whether any limitations are conventional, routine, well understood, lacking in novelty, or obvious.
Eligibility Based on Non-Preemption
The Supreme Court has repeatedly stated that preemption is the core concern of the judicial exclusions: “We have described the concern that drives this exclusionary principle as one of preemption.”[12] It is not enough that some aspect of a judicial exclusion is preempted because, by design, claims preempt. Rather, a claim is ineligible where it “monopolizes” the “full scope” of a judicial exception. For this reason, the requirement is that a claim preempts “every practical application” of the underlying judicial exception.[13] This approach can be codified in a variety of ways. The first amendment expressly recites preemption:
101(b) A claimed invention shall not be ineligible subject matter under Section 101(a) unless it wholly preempts all practical applications of a law of nature, abstract idea, or natural phenomenon. Evidence of a non-infringing alternative practical application of the law of nature, abstract idea, or natural phenomenon shall be presumptive evidence that a claimed invention is eligible.
The last sentence provides a substantive test for preemption: if there are non-infringing alternative implementations of the alleged ineligible concept, then the claim does not preempt all practical applications. Thus, if the patentee can provide factual evidence of such alternatives, then it has shifted the burden to the defendant to overcome the presumption of eligibility. Factual evidence would include, for example, the prior art in file history addressing the same problem as the challenged claims with a different approach, or an expert opinion.
Other amendments do not mention preemption but generally have the same effect:
101(b) A claimed invention shall not be deemed ineligible subject matter under Section 101(a) on the grounds that it incorporates, uses or is otherwise based upon a law of nature abstract idea or natural phenomenon.
101(b) A claimed invention shall not be deemed ineligible subject matter under Section 101(a) unless it is solely directed to a law of nature, abstract idea, or natural phenomenon.
Order of Legal Determination of Patentability
There is something of a debate as to whether a court must decide patent eligibility as a threshold, gateway or even “jurisdictional” issue before addressing other aspects of patentability, such as novelty, non-obviousness, indefiniteness and so forth. While Judge Mayer argues that eligibility must be decided first, Judges Newman and Plager have argued that “courts could avoid the swamp of verbiage that is § 101 by exercising their inherent power to control the processes of litigation, and insist that litigants initially address patent invalidity issues in terms of the conditions of patentability defenses as the statute provides, specifically §§ 102, 103, and 112.”[14] The plurality opinion in CLS Bank appeared to side with this latter position.[15] Congress can address this as well in a new Section 282(d):
282(d) In any action involving the validity or infringement of a patent, the defenses of invalidity under Section 112, lack of novelty under Section 102, or obviousness under Section 103 shall be considered and resolved prior to consideration of a defense of ineligible subject matter under Section 101.
A less complex way of reaching this result has been suggested by Wayne Sobon, former President of the AIPLA, in what I shall call the Sobon Amendment: renumber Section 101 as Section 113.5.
Presumption of Validity
While every court decision states that the presumption of validity applies to Section 101, the behavior of the district courts suggests that the presumption in practice has no weight. This is evidenced by the growing numbers of district court decisions that find a patent invalid on motion to dismiss, in which the court most find that there is no plausible interpretation of the claim as eligible subject matter, giving no weight to the inherent fact that the patent examiner found it plausible that the claims were eligible by allowing the patent.[15]
To make sure that Section 101 gets its presumptive due, the following amendment is offered to Section 282(a):
282 (a) In General.— A patent shall be presumed valid, including but not limited to the conditions of patentability set forth in Sections 101, 102, 103, and 112. Each claim of a patent (whether in independent, dependent, or multiple dependent form) shall be presumed valid independently of the validity of other claims; dependent or multiple dependent claims shall be presumed valid even though dependent upon an invalid claim. The burden of establishing invalidity of a patent or any claim thereof shall rest on the party asserting such invalidity to establish such invalidity by clear and convincing factual evidence.
Congress should act now because the Supreme Court’s theory of judicial exceptions has already begun to “swallow the patent law,” and in doing so has intruded into Congress’s domain of defining the scope of Section 101.
A version of this blog was previously published on Law360.com.
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[1] I and my partner Dan Brownstone, along with Adam Mossoff and Mark Schultz of The Center for Intellectual Property Protection at George Mason University School of Law have founded a working group to explore various ways to amend the patent act. Some of the proposals provided here are based on the discussions of the working group.
[2] I’ll use conventional markup to indicate additions or deletions to the existing statutory provisions. Newly proposed statutory provisions will be shown without markup.
[3] Diamond v. Diehr, 450 U.S. 175, 190 (1980, quoting S. Rep. No. 1979, 82d Cong., 2d Sess., 5, 6 (1952).
[4] CLS Bank Int’l v. Alice Corp. Pty., 717 F.3d 1269, 1278 (Fed. Cir. 2013) (en banc) (Lourie, J., concurring).
[5] McRO, Inc. v. Namco Bandai Games America, Inc., No. 2:12-cv-10322, p. 8, 2014 U.S. Dist. LEXIS 135561, (C.D. Cal. 9/22/2014).
[6] Phillips v. AWH Corp, 415 F.3d 1303, 1313 (Fed. Cir. 2005) (en banc).
[7] Invitrogen Corp. v. Biocrest Mfg., L.P 424 F.3d 1374, 1383 (Fed. Cir. 2005).
[8] Novozymes A/S v. DuPont Nutrition Biosciences APS, 723 F.3d 1336, 1344 (Fed. Cir. 2013).
[9] KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398, 417 (2007).
[10] Graver Tank & Mfg. Co. v. Linde Air Prods. Co., 339 U.S. 605, 609 (1950). See also Dan L. Burk & Mark A. Lemley, Is Patent Law Technology-Specific?, 17 Berkeley Tech. L.J. 1155, 1186-87 (2002) (noting POSITA’s use in definiteness, enablement, best mode, claim construction, and doctrine of equivalents).
[11] Parker v. Flook, 437 U.S. 584, 600 (1978) (Stewart, J. dissenting).
[12] Alice Corp. Pty. v. CLS Bank Int’l, 134 S. Ct. 2347, 2354 (2014).
[13] CLS Bank, 717 F.3d at 1281(“What matters is whether a claim threatens to subsume the full scope of a fundamental concept, and when those concerns arise, we must look for meaningful limitations that prevent the claim as a whole from covering the concept's every practical application.”) (Lourie, J., concurring).
[14] MySpace v. Graphon, 672 F.3d 1250, 1258-62 (Plager, J., internal citations omitted); Mayer, J. dissenting).
[15] CLS Bank, 717 F.3d at 1284 (“First, some have argued that because § 101 is a "threshold test," Bilski, 130 S. Ct. at 3225, district courts must always consider subject-matter eligibility first among all possible bases for finding invalidity. That is not correct.…In addition, district courts may exercise their discretion to begin elsewhere when they perceive that another section of the Patent Act might provide a clearer and more expeditious path to resolving a dispute.”) (Lourie, J., concurring).
[16] Since Alice, 18 of 21 (86%) of Rule 12 motions on patent ineligibility have been granted.
