I will be discussing patent claims in CLS v. Alice below, but I plan
to paraphase most of their contents so as to avoid unnecessary
‘pollution’.
Also I would point out that I am not a
lawyer.
The Federal Circuit is currently reconsidering en banc
the appeal in CLS Bank Intern. v. Alice Corp.. The district court found
the claims asserted to be drawn to nonstutory subject matter: see District Judge Rosemary M. Collyer's
memorandum opinion granting summary judgement. That grant was reversed by
divided three-judge panel consisting of
Circuit Judges Linn, Prost and O'Malley. A majority consisting of Judges
Linn and O'Malley reversed the district court. Judge Prost wrote a strong
dissent.
Some of the asserted claims are method claims. Others are
system claims. The specific question I want to discuss is whether the system
claims should be considered statutory subject matter on the grounds that they
are drawn to a machine. Elsewhere I have made the point that a claim that
purports to be drawn to a machine should not include extra-physical claim
limitations that have no bearing on the physical operation of the machine. I
suggest that this point can be strengthened with an argument involving
‘inherency’, discussed in the parent comment.
Consider the
following four forms of patent claim, in a context where no patent application
contains more than one of these claims:
Claim A:I
claim a data-processing system [for processing financial transactions and
generating instructions to change credit and debit records].
Claim
B:I claim a data-processing system [for processing financial transactions
and generating instructions to change credit and debit records]
wherein said instruction being an irrevocable, time invariant obligation placed
on [the appropriate party].
Claim C:I claim a data-processing
system [for processing financial transactions and generating
instructions to change credit and debit records] wherein said instruction being
a revocable, time invariant obligation placed on [the appropriate
party].
Claim D:I claim a data-processing system [for processing
financial transactions and generating instructions to change credit
and debit records] wherein said instruction being an irrevocable obligation
placed on [the appropriate party] and wherein the amount of said obligation
being equal to the face value of the said instruction at the time of the
transaction, multiplied by 1.02 raised to the power n, where n
denotes the number of 30-day periods that have elapsed since the transaction was
made.
Claim B above paraphrases Claim 1 of US patent 7,149,720, (the
'720 patent) owned by Alice Corporation.
The only difference between
Claims B and C is that the word “irrevocable” has been changed to
“revocable”.
I suggest that an embodiment of Claim C would
correspond to that of Claim B, but allowing for the optional extra step of one
party writing a business letter to the other party along the following lines:
“I hereby revoke this obligation on the grounds
that…”.
I suggest that an embodiment of Claim D would
correspond to that of Claim B, but that, in settlement, the parties would
examine the face value of the obligation, determined at the time of the
transaction and recorded on the generated instruction, and then calculate the
appropriate compound interest.
In short, I would suggest that if the
claim to the ‘data-processing systems’ of these claims were
considered to be claims to a machine (thereby falling within one of the
statutory categories specified in Section 101 of the patent statute), then a
machine that embodies the claimed invention of Claim B would embody the claimed
inventions of Claims A, C and B. Specifically if there were separate
‘inventors’ for the four claims, then the machines embodying the
respective claims would or could be identical. A machine cannot endow a
generated “instruction’ with the properties of being irrevocable or
time-invariant. Such properties are surely determined by the legal obligations
on the parties and the contractual arrangements between the
parties.
Thus a claim limitation imposing the requirement that the
generated instruction represent an irrevocable obligation or a
time-invariant obligation is a limitation on the use of the
machine that in no way implicates either the construction or the mechanical
operation of the machine.
Thus if the machine of claim A were within the
prior art, then awarding a patent to the ‘inventor’ of the claimed
inventions claimed in B, C or D would exclude the ‘inventor’ of the
machine of claim A “under the patent laws from uses of the machine which
were inherent in the operation that he built into the machine” (see the
argument of Mr. Wallace, representing the Commissioner of Patents, in the Oral
Argument in Diamond v. Bradley quoted in the parent comment). And even
if claim A were not a claim expressed in prior art patents, if patents were
granted successively to ‘inventors’ B and C, then the patent granted
to C would exlude B from uses of his machine which were inherent in the
operation of the machine.
Generalizing, I would argue that a patent
claim to a machine can only legitimately be limited by claim limitations that
limit the mechanical (or physical) construction and operation of the machine.
Claim limitations could not legitimately limit extra-physical factors such as
the legal status of some quantity represented within the machine (e.g., through
interpretation of the contents of a storage location within
a computerized
system). Because such purported claim limitations do not limit the
machine, considered as a machine. They only limit the permissible
use of the machine. In short such a claim attempts to claim a machine
through a claim to a (purportedly) new use for the machine. But this should not
be permissible under the doctrine of inherent properties and operations of
machines, manufactures etc.
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