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CLS Bank v. Alice - Some Amicus Briefs ~pj
Sunday, December 30 2012 @ 04:19 AM EST

When, if ever, should software be patentable? That is the question being argued before the Federal Circuit in an en banc review of CLS Bank v. Alice Corporation. I have some of the amicus briefs for you.

Back in July, the Federal Circuit issued a decision in CLS Bank v. Alice Corporation, overturning the district court, which had ruled that the asserted claims were not patent-eligible because they recited “the abstract idea of transformation or manipulation of legal obligations or business risks” and could be done without a computer, inside your head, making "on a computer" not limiting the idea. A divided Federal Circuit panel, however, reversed, and said that if “it is not manifestly evident that a claim is directed to a patent ineligible abstract idea, that claim must not be deemed for that reason to be inadequate under § 101", ignoring the US Supreme Court's direction in In Re Bilski and Mayo v. Prometheus, once again promoted its own, contradictory view that pretty much anything is patentable. In September, CLS Bank asked for an en banc review. That request was granted [PDF] in October and now amicus briefs are being filed.

There is quite a variety, with more expected. There are briefs by Google, IBM, Twitter, EFF, as you would expect. But what is surprising are the briefs urging the court to do something about software patents gone wild from entities like bar associations and internet retailers. When the Federal Circuit and the US Supreme Court do not agree, chaos is the result. And, as at least one brief points out, the results of earlier patents issuing under a looser standard of usefulness has brought on a nightmare of litigation over patents that should never have issued in the first place. And something needs to be done.

There has been a noticeable shift since the amicus briefs filed in In Re Bilski, in other words, I'd say, with brief after brief in CLS Bank asking to court to align with the US Supreme Court and put an end to the contradictory rulings, which is resulting in guesswork and unnecessary litigation.

The appeals court is asking the briefs to answer the following questions:

a. What test should the court adopt to determine whether a computer-implemented invention is a patent ineligible "abstract idea”; and when, if ever, does the presence of a computer in a claim lend patent eligibility to an otherwise patent-ineligible idea?

b. In assessing patent eligibility under 35 U.S.C. § 101 of a computer-implemented invention, should it matter whether the invention is claimed as a method, system, or storage medium; and should such claims at times be considered equivalent for § 101 purposes?

Unfortunately, the Federal Circuit isn't making the briefs available on its website to be downloaded. However, Patently O has all the amicus briefs filed so far, with a brief paragraph about each, but I thought you might like to see the summaries of the various arguments in more detail, so you can read them for yourself and decide which ideas you'd like to read in full.

As you'd expect, IBM doesn't want software patents completely cut off, and neither does Google argue for that, or the USPTO, not even EFF. Mark Lemley's suggestion is highlighted, that properly applying 35 U.S.C. § 112(f) to step-plus-function claims would at least restrict the broad functional claiming seen in software and business method patents. And everybody, with a few exceptions, sees that just adding "on a computer" to an abstract idea or obvious method should not result in a patent.

You don't need the court's permission to file an amicus brief in this case, so there is even a pro se amicus brief arguing that software is not patentable subject matter, not that this court is likely to pay any attention to that argument, being so, so far from such a concept. But it's been expressed. Here's CLS Banks's appeal brief [PDF], so you can follow along, because it tells the whole story of the case from the beginning. Alice will file its brief in January, and there will be more amicus briefs, one assumes.

So without further characterizing them, here are the summaries of arguments taken from the introductions to the briefs we have already, organized alphabetically.

British Airways (eHarmony, Intuit, LinkedIn, SAP, Travelocity, Twitter and Yelp) [PDF]:

SUMMARY OF ARGUMENT

Amici urge the en banc Court, in the course of addressing the substantive-law questions it has posed, to decide these important subsidiary procedural questions in the affirmative:

1. Should courts enforce the patent eligibility requirement evenhandedly without imposing a “manifestly evident” or “coarse filter” hurdle on the patent challenger?

2. Is patent eligibility a threshold requirement well-suited for decision on the pleadings and on early summary judgment?

All agree that the Constitution and the Patent Act limit what can be patented. These limits protect a core goal of our patent system: innovation. Patents on abstract ideas or natural phenomena are more apt to harm innovation than spur it. It is this realization which has motivated the U.S. Supreme Court to grant certiorari on this issue twice in recent years, each time unanimously striking down patent claims exceeding the limits on patentable subject matter.

Despite the Supreme Court reinvigorating the limits on patent eligibility, innovation-harming patents on abstract ideas, etc., remain a significant problem today. In part, this is because most extant U.S. patents were issued under the more lenient “useful, concrete and tangible result” test for patent eligibility—since rejected by this Court en banc and by the Supreme Court.

Consequently, technology companies continue to face expensive and burdensome patent suits on patent claims the Patent Office never would have issued had it applied today’s governing precedents on patent eligibility.

Fortunately, trial courts have alleviated this problem by evenhandedly applying the Supreme Court’s precedents, on early motion practice.

The vacated majority opinion here, however, threatened to change that. CLS Bank Int’l v. Alice Corp., 685 F.3d 1341 (Fed. Cir. 2012). Indeed, it encouraged trial courts to do the opposite. It urged trial courts to side with patent owners unless a patent claim’s ineligibility for patenting is “manifestly evident.” Id. at 1352. “The ‘disqualifying characteristic’ of abstractness must exhibit itself ‘manifestly.’” Id. at 1349 (citations omitted). And, it encouraged trial courts to delay deciding this threshold issue of law, allowing innovation-harming patents to stand for months or years without any judicial scrutiny under the Supreme Court’s precedents. Id. at 1348. The panel told trial courts that patent claims violating Section 101 “should arise infrequently” and that they may wish to delay considering Section 101 in favor of other “comprehensive” patentability requirements where those “might be discerned by the trial judge as having the promise to resolve a dispute more expeditiously or with more clarity and predictability.” Id. at 1347, 1348. In sum, as the dissent observed, “the majority resists the Supreme Court’s unanimous directive to apply the patentable subject matter test with more vigor. Worse yet, it creates an entirely new framework that in effect allows courts to avoid evaluating patent eligibility under § 101 whenever they so desire.” Id. at 1356 (Prost, J., dissenting).

Both suggestions by the panel majority are irreconcilable with Supreme Court precedent. Both would harm innovation. This Court en banc should expressly reject both suggestions.

BSA:
SUMMARY OF ARGUMENT

Many computer-implemented inventions are patentable under Section 101. In interpreting that provision, the Supreme Court has expressly refused to “adopt[] categorical rules” because such an approach “might have wide-ranging and unforeseen impacts.” Bilski v. Kappos, 130 S. Ct. 3218, 3229 (2010); see also Mayo Collaborative Servs. v. Prometheus Labs., Inc., 132 S. Ct. 1289 (2012). Several factors are relevant in determining whether Section 101 excludes a computer-implemented invention from patentability on the ground that it would “effectively grant a monopoly over an abstract idea.” Bilski, 130 S. Ct. at 3231; see also Mayo, 132 S. Ct. at 1294 (test under Section 101 is whether the claimed inventions “claim processes that too broadly preempt the use of a natural law”).

First, whether a machine is essential to perform the steps of the claim—or the claimed process instead is a mere mental process that can be performed in the human mind or with pencil and paper—bears substantially on patent eligibility. Second, whether a software innovation implements an abstract idea or law of nature in a new, useful, and innovative way also helps determine if a patent is eligible for protection, or if it too substantially preempts an abstract idea or law of nature. Only when a claimed software innovation fails under both factors may it be found ineligible for protection under Section 101. The form of the patent claim, whether it is claimed as a method, a system, or a storage system, has no bearing on patent eligibility.

Because of the critical role that software plays in our country’s economy and in the daily lives of all Americans, it is especially important to ensure in the context of software that Section 101 does not become more than a “threshold test” for patentability (Bilski, 130 S. Ct. at 3225), such that “[t]he vast number of claims pass this coarse eligibility filter” (Dealertrack, Inc. v. Huber, 674 F.3d 1315, 1331 (Fed. Cir. 2012)).

Software firms invest tens of billions annually in research and development in order to create new software innovations. This enormous investment brings countless new products to consumers, has led to vast improvements in industrial productivity, and ensures that U.S. software companies remain global leaders. Indeed, software and related innovations constitute a growing and significant portion of both the U.S. economy and the U.S. export market. Patent protection is essential to maintaining this vibrant and essential industry. In the words of PTO Director Kappos, “[d]iscrimination against a form of innovation that is increasingly critical to technological advancement, indeed that in many areas dominates technological advancement, makes no sense.” David Kappos, Keynote Address at Center for American Progress, An Examination of Software Patents (Nov. 20, 2012),
http://tiny.cc/33zfow.

CCIA [PDF]:
SUMMARY OF ARGUMENT

This brief responds primarily to the first question presented: “What test should the court adopt to determine whether a computer-implemented invention is a patent ineligible ‘abstract idea’; and when, if ever, does the presence of a computer in a claim lend patent eligibility to an otherwise patent-ineligible idea?”

The decision in this case should be straightforward. The patents purport to govern an abstract idea: escrow. The dispute is whether the claims add an “inventive concept” sufficient to bring them within ambit of patentable subject matter. They do not. The panel majority seeks to avoid this conclusion by devising its own rule that patent claims are presumptively not abstract. It then finds sufficient concreteness to preserve its presumption in computer-implemented “shadow records,” thereby saving patents that are otherwise analogous to the abstract patent that the United States Supreme Court invalidated in Bilski v. Kappos, 130 S. Ct. 3218 (2010).

The panel majority goes further. It not only justifies its rule by a sweeping policy claim, but further advocates disfavoring patent eligibility inquiries relative to the questions of patentability in Sections 102, 103, and 112. The acceptance en banc expands the scope of the case by asking fundamental questions that deserve to be fully probed. These questions should be answered with the balanced, principled approach expressed by the Supreme Court in Mayo Collaborative v. Prometheus Labs., 132 S. Ct. 1289 2(2012) (hereinafter “Prometheus”), as distinct from the patentee-centric perspective of the panel decision.

Clearing House Assn. (and the Financial Services Roundtable) [PDF]:
INTRODUCTION

The widespread adoption and integration of computers, especially in the workplace, has permitted a level of automation, convenience, and efficiency that would have been unimaginable only a few decades ago. But the extensive use of computers to perform tasks that were previously performed by human beings has raised a difficult issue for patent law. Section 101 of the Patent Act provides: "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." 35 U.S.C. § 101. The Supreme Court has long held that, although this standard for eligibilty is quite broad, it still excludes abstract ideas and mental processes, as well as laws of nature and physical phenomena. Diamond v. Chakrabarty, 447 U.S. 303, 309 (1980); Gottschalk v. Benson, 409 U.S. 63, 67 (1972). With modem computers performing tasks that were previously performed by humans, it is not always clear when the addition of a computer makes an otherwise patent-ineligible process eligible under Section 101.

At the most basic level, computers are only automated machines that execute a predetermined series of mathematical or logical operations. See Bancorp Servs., L.L.C v. Sun Life Assurance Co. of Canada, 687 F.3d 1266, 1277-78 (Fed. Cir. 2012) (explaining the nature of a computer and noting that prior to the information age, a "computer" was not a machine at all but a person employed to perform such operations).

Thus, a human being with unlimited time could execute exactly the same operations in exactly the same manner as the computer and achieve exactly the same result. This is obvious for simple tasks; a person can sit down with paper and pencil and perform exactly the same arithmetic processes as can be performed on a calculator. But the logic applies to more complicated tasks as well. A person with unlimited time and capacity and perfect precision could perform even the most complicated processes using only their own mind.

As this Court has explicitly held, mental processes are not patent eligible under Section 101 because "computational methods which can be performed entirely in the human mind are the types of methods that embody the 'basic tools of scientific and technological work' that are free to all men and reserved exclusively to none." CyberSource Corp. v. Retail Decisions, Inc., 654 F.3d 1366, 1373 (Fed. Cir. 2011) (quoting Benson, 409 U.S. at 67) (emphasis in original). Thus, Section 101 performs a vital threshold function, especially in the context of computer-aided business method patents, by screening out claims that attempt to monopolize patent-ineligible mental processes.

In the initial panel decision, the majority disregarded two important Section 101 principles. First, by holding that a claim is patent eligible under Section 101 unless it is "manifestly evident" that the claim is directed to a patent-ineligible abstract idea, the majority failed to recognize Section 101's role as an essential threshold requirement for patent eligibility. See Mayo Collaborative Servs. v. Prometheus Labs., Inc., 132 S. Ct 1289, 1303-04 (2012).

Second, in holding that the claimed computer-aided methods of avoiding settlement risk were patent eligible, the majority failed to follow Supreme Court and Federal Circuit precedent, which states that that the addition of a computer to an otherwise patent-ineligible mental process does not transform that process into a patent-eligible invention unless the integration ofthe computer adds an "inventive concept" to the process. See id. at 1294; Bancorp, 687 F.3d at 1278. The majority opinion, if affirmed by this en banc Court, will not only confuse courts and patent-holders about the meaning of Section 101, but it will also call into question many of this Court's existing precedents about the patent eligibility of computer-aided processes directed towards abstract ideas and mental processes.

Amici respectfully submit that the en banc Court should: (1) reject the notion that Section 101 is satisfied unless it is manifestly evident that it is not satisfied; and (2) explicitly hold that the addition of a computer to an otherwise patent-ineligible mental process does not transform that process into a patent- eligible invention unless the integration of the computer provides an inventive concept.3

Even if the Court declines to establish a clear test for applying Section 101 in the context of computer-aided business method patents, it should, at a minimum, restore the Court's Section 101 jurisprudence to the pre-CLS Bank status quo by affirming the district court's decision that Alice Corporation's patent fails to claim patent-eligible subject matter.

________
3 Although we do not address the issue in this brief, we recognize Supreme Court precedent establishing that the Section 101 inquiry is the same regardless of whether the invention is claimed as a method, system, or device. Such claims should be considered equivalent for Section 101 purposes. See Mayo, 132 S. Ct. at 1294 (stating that previous Supreme Court cases "warn us against interpreting patent statutes in ways that make patent eligibility 'depend simply on the draftman's art' without reference to the 'principles underlying the prohibition against patents for [abstract ideas]'" (quoting Parker v. Flook, 437 U.S. 584, 593 (1978))).

Conejo Valley Bar Assn. [PDF]:
INTRODUCTION AND SUMMARY OF ARGUMENT

The underlying purpose of patent law is to encourage the development of inventions that provide value and benefit for society. The Patent Act makes clear that any new and useful process, machine or article of manufacture is patent-eligible. Whether software is claimed as a method (process), a computer/system (machine) or manufacture (storage medium) is irrelevant. None of these broad categories is "abstract" and, therefore, all are inherently patent-eligible. As a result, any new test to determine which kinds of software are patentable under § 101 is unnecessary. Unless other sections of the Patent Act prevent a patent's issuance, all software, whether claimed as a process, machine or article of manufacture, is patentable.

Instead, through scrupulous application of other key provisions in the Patent Act, especially 35 U.S.C. §§ 102 (novelty), 103 (obviousness) and 112 (specification), by the Patent and Trademark Office and the courts protects the public from software patents that seek to take too much from society. These other provisions of the Patent Act, not § 101, serve as adequate gatekeepers to restrict patents to new and novel inventions that meet the requirements of all provisions in the Patent Act. In particular, these other provisions of the Patent Act already provide an adequate measure of whether a claimed invention is "abstract" because abstract ideas are inherently in the prior art.

Therefore, if a patent application passes muster under all provisions of the Patent Act, the inventor receives a patent - but only for the "limited times" of the grant mandated by the Constitution and embodied in 35 U.S.C. § 154. Limiting the form of patent-eligible software will reduce the incentive to patent and decrease the number of patentable inventions, causing vital and important inventions to be lost or otherwise secreted from society contrary to the purpose of patent law.

EFF and Public Knowledge [PDF]:
INTRODUCTION AND SUMMARY OF ARGUMENT

Section 101 of the Patent Act properly serves its function when it provides clear guidance to litigants. 35 U.S.C. § 101. Despite two recent Supreme Court cases on point, and at least eight recent cases before this Court, such guidance does not exist, particularly with regard to software or business method patents. This failure has helped foster a dangerous and dramatic increase in patent litigation over the last several years, especially involving those types of patents. Many of these software or business method patents are drafted in broad, purely functional language—often sounding abstract, with few if any non-functional claim terms (other than perhaps a “general purpose computer”). The recent increase in litigation over such patents has burdened the district courts, this Court, and litigants alike.

Below, amici offer an overview of the recent sharp increase in patent litigation and the resulting problems. Patent litigation has increased generally, to a record high of more than 4,000 actions filed in 2011. This increase is particularly noticeable in cases involving non-practicing entities (comprising almost 40 percent of the total in 2011), software and business method patents, or both. These lawsuits burden innovators large and small: large companies such as Apple and Google now spend more money on patents than they do on research and development, and small innovators are often driven out of business by litigation costs. Simply put, the patent system is too often serving as a tax on innovation, when it should be spurring innovation. To stem this tide, the technology industry needs more certainty in the interpretation and validity of dubious patents.

Amici also offer a practical solution to the questions presented by the En Banc Order, one that may avoid the difficulty of defining “abstract” for § 101 purposes. Professor Mark Lemley has suggested that properly applying 35 U.S.C. § 112(f) to step-plus-function claims will restrict the broad functional claiming so common to software and business method patents. A claimed step for performing a broad function should be limited to the specific structures disclosed in the specification and their equivalents. If there is no corresponding structure in the specification, the claim is invalid as indefinite under well-established law. If there is corresponding structure, that specific structure can more easily be examined as abstract or not. If not abstract, the claim would then be appropriately limited for any further analysis of validity or infringement.

Google [PDF]:
INTRODUCTION

Bare-bones patents like the one asserted in this case are invalid under 35 U.S.C. § 101 because they claim abstract ideas when used on a computer or over the Internet, without more. Because such patents merely divide an abstract idea into its component parts, the real work comes later, when others undertake the innovative task of developing concrete applications. That is the work that may be eligible for patent protection; merely claiming computer implementation of an abstract idea without reciting a particular means of computer implementation, is not.

I. In Mayo Collaborative Services v. Prometheus Laboratories, Inc., 132 S. Ct. 1289 (2012), the Supreme Court articulated the test for determining patent-eligibility. Under that test-which applies to all technologies, including computer-related technologies-a claim crosses the line from covering an unpatentable idea to claiming a patentable application if, in addition to an idea, it "contain[s] other elements or a combination of elements, sometimes referred to as an 'inventive concept,' sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the" patent-ineligible idea. Id. at 1294 (quoting Parker v. Flook, 437 U.S. 584,594 (1978)). The Court identified four guideposts for making that determination: (1) adding steps or elements that are conventional or obvious is insufficient to confer patent-eligibility; (2) adding general and non-specific steps or elements that do not significantly limit the claim's scope is insufficient; (3) limiting an idea to a particular technological environment-such as a computerized environment-is insufficient; and (4) claims that fail the machine-or-transformation test are likewise dubious. The panel majority objected to the Supreme Court's test, in part because it found the concept of an "abstract idea" to be elusive. Although it is difficult to formulate a one-size-fits-all definition of "abstract idea," experience has shown that identifying the abstract idea behind a particular patent claim is generally straightforward.

In any event, the Supreme Court's binding jurisprudence does not require a detailed threshold determination of whether an idea is "abstract." Instead, Mayo and Bilski distinguish abstract ideas from patentable applications by focusing on the application side of the idea/application divide: a claim must include significant, inventive limitations to be considered a patent-eligible application. That is the controlling determination, not a separate characterization ofthe idea itself.

II. As the majority and dissent both recognized, the restrictions on patent-eligibility apply to all patent claims, not only method claims. Here, the asserted system claim recites only a conventional "data storage unit" coupled to a "computer ... configured to" perform the steps of the method claims. Op. 5. That generic description of computer equipment capable of performing a computer-implemented method is just another way of describing the· method. As such, the asserted method and system claims must rise or fall together.

III. They fall together. The asserted claims simply break down the idea of financial intermediation into its component parts, without adding (and limiting themselves to) a particular way of implementing that idea with a computer. As a result, they are on the wrong side of all the Mayo guideposts.

IV. This issue is critically important in the high-tech context. Many computer-related patent claims just describe an abstract idea at a high level of generality and say to perform it on a computer or over the Internet. Such bare- bones claims grant exclusive rights over the abstract idea itself, with no limit on how the idea is implemented. Granting patent protection for such claims would impair, not promote, innovation by conferring exclusive rights on those who have not meaningfully innovated, and thereby penalizing those that do later innovate by blocking or taxing their applications of the abstract idea.

The abstractness of computer-related patents bears much of the blame for the extraordinarily high litigation and settlement costs associated with such patents. It is, therefore, imperative that courts enforce Section 101's "screening" function (Mayo, 132 S. Ct. at 1303) early in most cases, to save defendants and the courts from the unnecessary expense of fully litigating or settling cases-like this one- that should be dismissed at the outset.

Hollaar's (Professor Lee Hollaar and Peter K. Trzyna):
Summary of the Argument

Over four decades since this Court's predecessor held that a computer-implemented invention was statutory subject matter3 and over three decades since the Supreme Court finally found an acceptable method claim for such an invention4, courts are still trying to find where to draw a line.

Most likely, this is because the line that has been attempted is not anchored to technological reality. Statutory subject matter tests should be technologically sound, with other patentability requirements (novelty, non-obviousness, commensurate disclosure) playing their roles, which solves many of the problems with patents on computer-implemented inventions. And though many consider the Supreme Court trilogy of decisions5 contradictory, there is a simple, bright-line test for statutory subject matter that reconciles them and is technologically-sound.

Although the focus of this Court in this case is statutory subject matter, we will also discuss tests based on other relevant provisions of the patent statute to show how they collectively augment a simple test for statutory subject matter that does not require artifical, confusing, and technically-unsound tests for statutory subjeect matter.

_________
3 In re Benson and Tabbot, 441 F.2d 682 (CCPA 1971).

4 Diamond v. Diehr, 450 U.S. 175 (1981).

IBM [PDF]:

PRELIMINARY STATEMENT

That the vast majority of computer-implemented inventions are patent eligible is beyond debate. Computer-implemented inventions are the lifeblood of the innovations that created the Information Age and are on par with the most ingenious inventive acts that mankind has ever known. As this Court has recognized, “[m]odern computer technology offers immense capabilities and a broad range of utilities, much of which embodies significant advances that reside firmly in the category of patent-eligible subject matter.” Bancorp Services, L.L.C. v. Sun Life Assur. Co. of Can. (U.S.), 687 F.3d 1266, 1277 (Fed. Cir. 2012). Indeed, “both this court and the Patent Office have long acknowledged that . . . advances in computer technology—both hardware and software—drive innovation in every area of scientific and technical endeavor” and “deserve patent protection.” Ultramercial, LLC v. Hulu, LLC, 657 F.3d 1323, 1329 (Fed. Cir. 2011) cert. granted, judgment vacated sub nom. WildTangent, Inc. v. Ultramercial, LLC, 132 S. Ct. 2431 (2012).

Since the Supreme Court’s decision in Bilski v. Kappos, 130 S. Ct. 3218 (2010), this Court has repeatedly grappled with challenges to computer- implemented invention patents on § 101 patent-eligibility grounds.2 Many of those challenges dealt with claims that bore some similarity to the claims held patent ineligible in Bilski. Despite the Court’s best efforts, its recent attempts to explain why some computer-implemented inventions involving Bilski-like claims are patent eligible and others are not has left the law unsettled. The confluence of post-Bilski cases such as Bancorp, Fort Properties, and Dealertrack has left patentees, courts, and the PTO unsure about how to approach close questions regarding the patent eligibility of computer-implemented inventions that appear to involve, at least at some level, an abstract idea.

IBM appreciates the Court’s desire to provide greater clarity on this score by granting en banc review in this case. Clarity and predictability in the patent law are imperative. See Bilski, 130 S. Ct. at 3231 (Stevens, J., concurring) (“In the area of patents, it is especially important that the law remain stable and clear.”). That is because ambiguity in the rules governing patents breeds “uncertainty” that discourages investment in the research and development necessary to create new and useful technologies, “stifles innovation,” and deprives society of the fruits of invention. David J. Kappos, Under Sec’y of Commerce for Intellectual Prop., Speech at the Ctr. for Am. Progress: An Examination of Software Patents, at 2 (Nov. 20, 2012), http://www.uspto.gov/news/speeches/2012/kappos_CAP.jsp (“Kappos Nov. 2012 Speech”).

Certainty is especially critical in the information technology sector where computer-implemented inventions are commonplace. Firms operating in that sector spend billions of dollars on research and development aimed at bringing new products to market. And “in order to invest the necessary resources,” companies “need some assurance that they will benefit from and recover the costs of the creation of intellectual property.” Econ. & Statistics Admin. & U.S. Patent & Trademark Office, Intellectual Property and the U.S. Economy: Industries In Focus, at 55 (2012) (“2012 PTO Report”), http://www.uspto.gov/news/ publications/IP_Report_March_2012.pdf. Clear rules governing patent eligibility and patentability thus yield real and tangible benefits, not just to innovative firms, but to the consumers that ultimately benefit from the creation of innovative products.

In attempting to create certainty in dealing with the boundaries of patent- eligible computer-implemented inventions involving Bilski-like claims, this Court must be careful to avoid jeopardizing those computer-implemented inventions that fall squarely within the confines of § 101. Any substantial (or even modest) departure from existing precedent, though well-intentioned, could result in an unjustified narrowing of what constitutes patent-eligible subject matter in the information technology sector. Certain areas of the information technology sector seem particularly vulnerable to a well-meaning but insufficiently-limited rule attempting to address the issues presented by Bilski-like computer-implemented inventions. For example, though the vast majority of software patents fall comfortably within the core of § 101 patent eligibility, software patents as a class are under attack and have been ever since the software industry began to rely on patent protection as a rule rather than an exception.

In other words, the Court must be careful in this case not to throw the proverbial baby out with the bath water. The majority of computer-implemented inventions—including software inventions—will readily meet § 101’s requirements for patent eligibility, and no more than a brief consideration of § 101’s text and judicially created exceptions will be required to conclude as much.

In attempting to develop a more refined approach to § 101 issues in close cases involving abstract ideas of the sort at issue in Bilski, this Court must take care not to adopt a rule that will render patent ineligible those computer-implemented inventions that are the product of the innovative activity that the Patent Act aims to protect.

SUMMARY OF ARGUMENT

I. Software inventions play an important role in countless products and systems, and many of those inventions would likely not have been developed without the protections the patent system provides. Patent protection allows firms to invest the substantial resources needed to develop innovative software products without fear that competitors will be able to copy with impunity once the product is brought to market. A rule placing the patent-eligibility of software inventions in doubt would chill innovation in the software industry, stifle product development in the broader information technology sector, and threaten the host of economic benefits that flow from software-driven innovation.

II. This Court should not adopt a field-specific test for whether a computer- implemented invention is a patent-ineligible abstract idea. The text of § 101 and precedents addressing the narrow judicially-created exceptions to that text are all that is required, and in most circumstances—as in any other technical area—no more than a quick pass through the computer-implemented invention’s claims will be necessary to deem the invention patent eligible. In addition to being unnecessary, adopting a computer-implemented invention field-specific test for patent eligibility is ill advised. That course of action would be in direct contravention of Supreme Court precedent, threaten the certainty that is critical to progress in the technology sector, and be the first step towards the development of a patchwork of field-specific patent eligibility tests that would not only lack any mooring in the statutory text but could undermine innovation.

III. Software inventions will rarely require any serious scrutiny under § 101. Software that plays an indispensable part in the operation of computer systems— such as that related to a computer’s BIOS operations—is no different in character from the chips and other components that make up a computer’s hardware in terms of patent eligibility. The same is true of most software-driven computer applications involving computer-specific processes. In the rare case where it is not readily apparent that a computer-implemented invention is patent eligible, such as when it involves a Bilski-like claim, if that invention’s functionality requires computer implementation, this would counsel in favor of patent eligibility. While the mere incidental recitation of a computer is not enough, inventions that actually rely on a computer to enable claimed functionality represent a concrete application of the underlying idea and are deserving of patent protection.

IV. It is hornbook law that a patent claim must be considered as a whole. That principle is doubly relevant here. The use of different claim terms—such as whether the claim involves a method or system—must be taken into account when evaluating the claim as a whole. Furthermore, when analyzing computer- implemented inventions involving Bilski-like claims, it is inappropriate to rewrite the claims to separate out the computer-related portions of the claim from the remainder and evaluate the two parts separately. The claim must be evaluated in its entirety, or the true nature of the invention will be distorted.

Internet Retailers [PDF]:
ARGUMENT

I. THE COURT SHOULD ADOPT A RULE OF EASY AND EARLY APPLICATION: APPLICANTS CANNOT "ADD-COMPUTER-AND-PATENT."

Section 101 of Title 35 of the United States Code ("Section 101'') is the statutory sea-wall Congress erected to prevent the patent system from being overwhelmed by tidal forces threatening to erase the boundaries between the patent- eligible and ineligible. In interpreting Section 101, the Supreme Court has concluded that its role in the patent system is both logically prior to and substantively separate from other doctrines of validity, such as anticipation, obviousness, indefiniteness, or written description. See Prometheus, 132 S. Ct. at 1303-04. Patent eligibility is logically prior to other considerations of patent validity because Section 101 "imposes a threshold condition. '[N]o patent is available for a discovery, however useful, novel, and nonobvious, unless it falls within one of the express categories of patentable subject matter."' Bilski v. Kappos, 130 S. Ct. 3218, 3236 (2010) (Stevens,]., concurring in the judgment) (quoting Kewanee Oil Co. v. Bicron Corp., 416 U.S. 470, 483 (1974)) (brackets in opinion); see also Bilski, 130 S. Ct. at 3225 (agreeing that Section 101 is a "threshold test'').

The role of patent eligibility is substantively separate from the other doctrines of validity because it guards against a different and broader danger than they do: the danger of oyer-expansive patent rights, both within the claims of individual patents and within the context of broader fields of invention. See Prometheus, 132 S. Ct. at 1301 (Section 101 protects against the "danger that the grant of patents that tie up theU use [of laws of nature] will inhibit future invention premised upon them.'') (brackets added); see also MySpace, Inc. v. GraphOn Corp., 672 F.3d 1250, 1268 (Fed. Cir. 2012) (Mayer, J., dissenting) (use of other validity doctrines has "proved woefully inadequate in preventing a deluge of very poor quality patents.''). This concern is especially salient in the context of computer-implemented patents. See MySpace, 672 F.3d at 1268 (Mayer, J., dissenting) ("'[T]here is no evidence that relying on §§ 102, 103, or 112 will solve the problem [of poor quality business method and software patents.]"') (quoting Gerald N. Magliocca, ''Patenting the Curve Ball: Business Methods and Industry Norms," 2009 BYU L. Rev. 875, 900 (2009)) (brackets in opinion). "That is, there are cases where we can easily tell the invention is not about systems or computers; it is merely an abstract idea clothed as something more tangible." CLS Bank Int'l v. Alice Corp. Pty. Ltd., 685 F.3d 1341, 1360 (Fed Cir. 2012) (Prost, J., dissenting). In such cases, the courts can and should act to eliminate such inventions from the scope of patent protection quickly and decisively.

Empirical evidence, discussed in greater detail, below suggests that the patent system has been swamped with lower-quality, computer-implemented patents that are, their relative lack of quality notwithstanding, many times more likely to be asserted in litigation than other classes of patents. In such a context, the courts should shoulder the responsibility of deciding the patent eligibility question directly. They can do so through the straightforward (and early) application of the basic "prohibition against patenting abstract ideas," thereby ensuring that this principle is not '"circumvented by attempting to limit the use of the formula [or method or system] to a particular technological environment' or adding 'insignificant postsolution activity."' Bilski, 130 S. Ct. at 3230 (quoting Diehr, 450 U.S. at 191-92) (brackets added).

In agreeing to hear this case en bane, this Court posed two questions to the parties and amici:

(1) What test should the Court use to decide whether a computer-implemented invention is patent-ineligible, and when (if ever) the presence of a computer in a claim lends eligibility to an abstract idea? and

(2) Does it matter for those purposes whether the claim is a method, system, or storage medium claim?

CLS Bank Int'l v. Alice Corp. Pty. Ltd, 2012 WL 4784336, *1 (Fed. Cir. Oct. 9, 2012). The Internet Retailers urge the Court to conclude that reference to computer- implementation alone cannot lend patent-eligibility to an abstract idea. The mere presence in a claim-whether directed to a method, system, or storage medium-of a "computer" or "the Internet" does nothing to concretize an abstract idea. Theidea of displaying photographs of products for sale adjacent to text describing those products (a/k/a a catalog) is not made less abstract by reference to implementation "on a computer" any more than it would be rendered less abstract by reference to it being implemented "on paper." Computer implementation must add something more, and more specific, before it can be considered relevant to resolving the patent-eligibility question. In this regard, computer-implementation is neither a different nor special mode of implementation entided to greater judicial deference than others....

If, however, a patent claim discloses a specific manner of computer implementation of a broader idea (the code for applying a specific algorithm, say), and that manner of computer implementation lies at the heart of the inventive concept of the patent, a detailed description of that species of computer-implemented concept would be germane to the patent-eligibility of that claim.

In the panel opinion in this case, both the majority opinion and the dissent separately acknowledged the principle that "[t]he mere implementation on a computer of an otherwise ineligible abstract idea will not render the asserted 'invention' patent eligible." CLS Bank, 685 F.3d at 1351 (majority) (brackets added); see id. at 1357 (dissent). This statement appears to reflect the reasoning just described. But this case is not an instance in which different judges of the same court just happen to have disagreed about the result after having applied a legal principle on which they agree. Rather than applying the teachings of Prometheus-examining the inventive concept underlying the invention and inquiring whether and how a specific form of computer-implementation defined by the patent is or is not central to that concept- the majority opinion adopted what amounts to a de facto rule of avoidance of the Section 101 issue altogether:

[T]his court holds that when-after taking all of the claim recitations into consideration-it is not manifestly evident that a claim is directed to a patent ineligible abstract idea, that claim must not be deemed for that reason to be inadequate under § 101 ....Unless the single most reasonable understanding is that the claim is directed to nothing more than a fundamental truth or a disembodied concept, wtth no limitations in the claim attaching that idea to a specific application, it is inappropriate to hold that the claim is directed to a patent ineligible 'abstract idea' under 35 U.S.C. § 101.
Id. at 1352 (brackets and ellipsis added).

The inquiry the panel majority would have courts perform is not whether the inventive concept is directed at eligible subject matter. Rather, the panel majority would have courts ask whether they can rule out all readings of the claim in which it might be seen as directed at eligible subject matter. Instead of identifying what the patentee invented, then evaluating it under applicable legal standards, courts would be instructed to look at a range of inventions the patentee might have invented, given the language of the claims, and decide whether any one of those potential inventions might be deemed patent-eligible. Instead of providing needed clarity, this rule adds a needless layer of interpretive complexity, thereby discouraging the use of Section 101 to evaluate patent validity.

IP Law Association of Chicago [PDF]:
SUMMARY OF ARGUMENT

The framers of our Constitution understood the importance of rewarding inventors for their creative endeavors. Congress implemented a plan for providing and protecting rights of inventors, and promoting the advance of the useful arts, by broadly drafting the patent statute without technological exclusions, ready to embrace yet unknown innovations. Thus, the language of 35 U.S.C. § 101 ("section 101") places few limits on the types of inventions eligible for patent protection and reflects Congress' judgment on how best to fulfill its Constitutional grant of powers.

In sum, for more than a century, the Supreme Court has applied section 101 using a flexible and broad subject matter analysis to accommodate incredible, sweeping, and unforeseen advances in technology. Without such subject matter flexibility, many of the inventions that have made the United States the technology leader of the world would never have been discovered or would have been hidden from the public with no incentive for revelation or commercialization. Similarly, section 101's flexibility accommodates smaller yet still deserving inventions. It is this elasticity of section 101, with few exceptions and without technological limitation, that has helped to make the u.S. patent system the strongest in the world, supporting innovation like no other.

This Court now seeks a specific test under section 101 for a specific type of subject matter of invention, computer-implemented inventions.

The Supreme Court has stated repeatedly that Section 101 is a filter of subject matter for patenting that does not include more than laws of nature, natural phenomenon, and abstract ideas. E.g., Mayo Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. _ , 132 S.Ct. 1289, 182 L.Ed.2d 321 (2012). The bar has sounded an alarm that "no one understands what makes an idea 'abstract.'" CLS Bank International v. Alice Corp. Pty. Ltd., 685 4 F.3d 1341 at 1349 (Fed.Cir. 2012) (citing M. Lemley, Life After Bilski, 63 Stan. L.R. 1315,1316 (2011). Consistently, the panel adopted a general test that ineligibility under section 101 must be manifest for there to be exclusion from patenting - that "the single most reasonable understanding is that the claim is directed to nothing more than a fundamental truth or disembodied concept." 685 F.3d at 1352. However, the bar's broad hyperbole does not comport with the Supreme Court's statements of its reasoning. As well, Supreme Court decisions are devoid of a "manifest exclusion test." This test does not follow precedent and is likely to be overturned by the Supreme Court.

The panel dissent, in contract, adopted a test of "inventive concept" for section 101. 685 F.3d at 1356. Yet this alternate test is precisely the type of exclusion from patent eligibility that Congress through its implementation in statute sought to avoid. Moreover, the relevant Supreme Court decisions are not fairly read to have a focused test of inventiveness as to section 101. This test also does not follow precedent. Worse, it will only reintroduce into the patent law under section 101 the notorious and pernicious problem of dealing with the concept of "invention." The lack of definition of the word "invention" is well known, expressed by the Supreme Court itself to be avoided, Graham v. John Deere & Co., 383 U.S. 1 (1966), and specifically sought by the Congress to be avoided by the adoption of 35 U.S.C. 103, id. at 14-17.

Rather than the test of the panel or the panel dissent, IPLAC urges the Court to harmonize Supreme Court precedents and see that the Supreme Court has been simply attempting to distinguish the abstract from the specific. It has said that the abstract may not be patented, and that the non-abstract may be patented. That is, patent claims that define subject matters such that they do not wholly preempt their subject matters are patent-eligible. This is the test already adopted and to which this Court should be true. This Court should not disturb the Congress's and the Supreme Court's stated threshold of statutory subject matter, that has fostered innovation and public disclosure over a wide variety of useful arts-and importantly, in new and emerging fields of technology including computer implementations. The judgment of the Federal Circuit should be consistent with Supreme Court precedent - unsatisfying to the bar, it is noted - that patent claims directed to computer-implemented inventions must claim such that they cover specific implementations of their subjects and not wholly preempt their subjects. This means that patent claims are to be recognized as proper or improper under section 101 whether they evidence ineligibility manifestly or not, and whether they claim "inventive concepts" such as "flashes of genius" or not.

The Juhasz Law Firm's amicus doesn't have an intro, so here's the table of contents instead:
ARGUMENT..............................2
A. The test to determine whether a computer-implemented invention is a patent ineligible "abstract idea” should be whether steps that are central to the claim (i.e., not token extra-solution activity) have a “physical” or “virtual” link to a specific real or tangible object. ....................2

B. Recited steps in the method claims of the U.S. 5,970,479 (“the ’479 Patent”) and U.S. 6,912,510 (“the ’510 Patent”), and the system and product (media) claims of U.S. 7,149,720 (“the ’720 Patent”) and U.S. 7,725,375 (“the ’375 Patent”) have neither a “physical” link nor a “virtual” link and so the ‘479, ‘510, ‘720, and ‘375 Patents are not subject matter patentable under 35 U.S.C. §101. ....................................7

C. Bilski should have a spillover effect upon the patentability of the other categories of machine, manufacture, or composition of matter since to hold otherwise would allow a competent draftsman to evade the recognized limitations on the type of subject matter eligible for patent protection. ...............................14

Koninklijke Philips Electronics [PDF]:
SHORT SUMMARY OF THE ARGUMENT

Mayo Collaborative Servs. v. Prometheus Labs., Inc., 132 S. Ct. 1289 (2012) is controlling law. An idea that is otherwise abstract does not automatically become patent-eligible by simply limiting claims to a particular technological environment or by adding insignificant well-known, well-understood post-solution activities. The use of computer machinery, controllers and systems to perform computations and execute the steps of logical algorithms is now so pervasive that the courts can and should take judicial notice that they are prima facie well-known and well-understood. In cases where an applicant or patentee alleges that the invention makes use of computers or computation in an unknown or unforeseeable manner, the burden should shift to the inventor to demonstrate patentability under 35 U.S.C. § 101. We urge the Court to incorporate the appropriate standards from Graham v. John Deere, 383 U.S. 1 (1966) including, for example the use of secondary considerations, into the objective criteria which will be used to evaluate patentability under § 101.

NY IP Law Assoc. [PDF]:
Without offering any opinion on the validity of the claims at issue, NYIPLA submits this brief to provide its views on how this Court should answer the questions presented to clarify the application of Supreme Court precedent under 35 U.S.C. § 101 as mandated in Bilski v. Kappos, 130 S. Ct. 3218, 3229, 3231 (2010).

Recently, the jurisprudence on patent-eligibility has placed a cloud over many patents, particularly computer-implemented inventions. NYIPLA encourages this Court to reduce and/or eliminate this confusion in favor of fair, reasonable and predictably applied principles that allow appropriate computer- implemented inventions to be the subject of patent protection. NYIPLA believes that the guiding principles set forth herein are extracted from the patent-eligibility jurisprudence of the Supreme Court and that this Court can cut through this confusion. See infra Part I.

As to the first question presented, the focus of any Section 101 inquiry must be on the difference between claims that preempt an abstract idea, which are patent-ineligible, and claims that are directed to a particular application of an abstract idea, which are patent-eligible. Under governing Supreme Court precedent, the mere presence of a computer in a claim should not alter the fundamental analysis as to whether the claim as a whole preempts the abstract idea at issue or whether there remain available ways outside of the claim to apply the abstract idea. See infra Part II.A. Moreover, this inquiry must address the claim as a whole. Efforts in some decisions to dissect the claim into old and new parts or computer and non-computer elements, should be rejected as squarely inconsistent with the Supreme Court's holdings in Diamond v. Diehr, 450 U.S. 175, 188-89 (1981), and Bilski, 130 S. Ct. at 3230.

While the presence of a computer in a claim that preempts an abstract idea should not in and of itself be sufficient to establish patent-eligible matter, it is not insignificant to the analysis. For example, in the context of the "mental steps" doctrine, the use of a machine, i.e., a computer or hardware, to meaningfully participate in the claimed actions can overcome these categories of objections to patent-eligibility. See infra Part II.B.

As discussed in Part III, as to the second question, whether a computer- implemented invention is claimed as a method, system or storage medium should not affect the Section 101 analysis. See infra Part III. A proper analysis should not depend upon the form of the claims. See id. This would elevate form over substance. However, NYIPLA does not agree that method, system and storage medium claims should ipso facto rise and fall together. Rather, each claim (regardless of its type) should be considered independently as a whole to determine whether it is directed to patent-eligible subject matter.

Stephen R. Stites [PDF], Pro Se:
STATEMENT OF AMICUS CURIAE

The basics of computer technology as it relates to patent law: Computers were invented independently by Britain, the United States, and Germany during WW II. The defining feature of a computer is that it has an instruction set, typically 100 to 200 instructions, which can be used in an infinite variety of ways without having to make any changes to the computer hardware. One of the goals in creating programmable computers was to stop having to redesign and rebuild a new machine for any new application. A computer's instruction set is the sum total of every function that computer is capable of doing. Electrical engineers do not design computer hardware to run word processing or to run payroll or to run web browsers or to control chemical vats or to run a method of exchanging obligations. They design computer hardware to run an instruction set.

Computer programs are algorithms. A programmer creates a list of hardware instructions for the computer to follow.

The programmer structures the list so that the computer does some complex procedure that the programmer considers useful. A simple program might contain thousands of hardware instructions. A complex program might contain millions of hardware instructions. A programmer keeps his programs from descending into chaos by creating algorithms within algorithms within algorithms. No computer program creates, alters, or destroys any of the computer hardware instruction set. Computer programs issue a computer's hardware instructions over and over again in an infinite variety of orderings.

Programming a computer to do something useful is analogous to solving a mathematical problem using the rules of algebra, calculus, or trigonometry. The hardware instruction set is the set of rules of the mathematical system the computer programmer is working within.

The court order asks the question:

"a. What test should the court adopt to determine whether a computer-implemented invention is a "patent ineligible" idea; and when, if ever, does the presence of a computer in a claim lend patent eligibility to an otherwise patent-ineligible idea?"
My answer: The presence of a computer can lend patent eligibility to an otherwise patent-ineligible idea only if the software implementation of the idea changes, adds to, or deletes a computer function. The software has to change, add to, or delete instructions in the computer's instruction set. Since software is incapable of changing, adding to, or deleting hardware instructions then a computer can never lend patent eligibility to any software....

The court order asks the question:

"In accessing patent eligibility under 35 U.S.C. S 101 of a computer-implemented invention, should it matter whether the invention is claimed as a method, system, or storage medium; and should such claims at times be considered equivalent for S 101 purposes?"
My answer: In Gottschalk v. Benson 409 U.S. 63 the United States Supreme Court ruled that a process claim directed to an algorithm, as such, was not patentable because "the patent would wholly pre-empt the mathematical formula and in practical effect would be a patent on the algorithm itself." Since a computer program is made up of algorithms and nothing but algorithms then computer programs are not patentable. Therefore whether a computer- implemented invention is a method, system, or storage medium is irrelevant.

CONCLUSION:

A computer program listing is covered by copyright but is not patentable just as a paper describing the solution to a mathematical problem can be copyrighted but not patented. Therefore the United States Court Of Appeals For The Federal Circuit should uphold the district court's summary judgment of invalidity.

US for USPTO [PDF]:
II. Summary of the Argument

The Supreme Court has clearly indicated in Bilski v. Kappos, 130 S. Ct. 3218 (2010), and Mayo Collaborative Services v. Prometheus Laboratories, Inc., 132 S. Ct. 1289 (2012), that the USPTO and the courts must approach the judicial exceptions to §101 both more rigorously and more flexibly. The Supreme Court has also made clear that patent-eligibility is not amenable to bright-line, categorical rules. Accordingly, this Court should not attempt to devise a single "test" for the patent-eligibility of computer-implemented inventions. Rather, this Court should articulate a flexible legal inquiry to be applied in such cases under §101.

In the government's view, Mayo and Bilski require courts to address §101 challenges to computer-implemented inventions by answering the following question: whether the challenged claim, properly construed, incorporates enough meaningful limitations to ensure that it amounts to more than a claim for the abstract idea itself. This formulation avoids the sort of categorical test rejected in Bilski, closely tracks the Supreme Court's language in Mayo, and speaks directly to the underlying concerns that have animated the Supreme Court's §101 decisions.

After identifying the correct legal inquiry, this Court should further articulate a non-exhaustive list of factors drawn from this Court's and the Supreme Court's precedents and the relevant USPTO guidance -- for example, whether the claim recites a computer solely for its generic functions of automating tasks -- to aid district courts in resolving the §101 inquiry on a case-by-case basis. In conducting that analysis, a district court should consider the significance of all claimed features, including any computer-implemented limitations, to determine whether the inclusion of those features in the claim sets forth a meaningful, practical application of the underlying concept, as opposed to a mere "drafting effort designed to monopolize [an abstract idea] itself." Mayo, 132 S. Ct. at 1297. In many cases, this may require the court to first resolve issues of claim construction, including the resolution of any underlying factual disputes, because a district court cannot declare limitations recited in a claim to be insignificant under §101 without first determining what those limitations actually mean. And, because of the statutory presumption of validity, a court should not declare a claim invalid under §101 as directed to an abstract idea unless the challenger demonstrates by clear and convincing evidence that any additional limitations in the claim are properly characterized as insignificant.

This Court should additionally hold that the particular form in which a claim is drafted does not determine whether the claim recites eligible subject matter. Most of the pertinent case law addressing the judicial exceptions to §101 -- and the USPTO's guidance interpreting that case law -- specifically addresses process claims. But, because claims relating to computer-implemented inventions can easily be recast in different formats, it should not matter whether the claim is recited as a process, a machine, or an article of manufacture. To accord significance under §101 to such drafting differences would contravene the Supreme Court's consistent admonition against "interpreting patent statutes in ways that make patent eligibility 'depend simply on the draftsman's art' without reference to" the judicial exceptions to §101. Mayo, 132 S. Ct. at 1294 (quoting Parker v. Flook, 437 U.S. 584, 593 (1978)).

On the facts of this case, the government recommends that this Court remand the matter to the district court for it to construe the relevant claim limitations and assess whether the claims, understood from the perspective of a person skilled in the art, embody a specific, practical application of an abstract idea, or whether instead they amount to nothing more than a claim for an abstract idea (or an abstract idea artificially limited to a particular field of use). Because that inquiry may require the resolution of disputed questions of fact, a remand is appropriate. On remand, after construing the claims, the district court should resolve the patent-eligibility inquiry articulated by this Court in light of the statutory presumption of validity.


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