CLS Bank v. Alice Corp: Court Finds Many Software Patents Ineligible

by Dennis Crouch

CLS Bank v. Alice Corp. (Fed. Cir. 2013) (en banc)

In a much awaited en banc decision, the Federal Circuit has affirmed the patent ineligibility of Alice Corp’s claims to a computerized method, a computer-readable medium containing computer instructions, and a computer system that implements those instructions.  The ten-member en banc panel released seven different decisions. While none of the opinions garnered majority support, seven of the ten judges agreed that the method and computer-readable medium claims lack subject matter eligibility.  And, eight of the ten concluded that the claims should rise and fall together regardless of their claim type.

All of the judges recognized that the test for patent eligibility under section 101 should be “a consistent, cohesive, and accessible approach” that provides “guidance and predictability for patent applicants and examiners, litigants, and the courts.”  However, the judges hotly disagree as to the pathway that will lead to that result.

The leading five-member opinion written by Judge Lourie provides three guideposts for its analysis:

  • First and foremost is an abiding concern that patents should not be allowed to preempt the fundamental tools of discovery—those must remain “free to all . . . and reserved exclusively to none.” . . . [T]he animating concern is that claims should not be coextensive with a natural law, natural phenomenon, or abstract idea; a patent-eligible claim must include one or more substantive limitations that, in the words of the Supreme Court, add “significantly more” to the basic principle, with the result that the claim covers significantly less. Thus, broad claims do not necessarily raise § 101 preemption concerns, and seemingly narrower claims are not necessarily exempt. 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.
  • Next, the cases repeatedly caution against overly formalistic approaches to subject-matter eligibility that invite manipulation by patent applicants. . . . Thus, claim drafting strategies that attempt to circumvent the basic exceptions to § 101 using, for example, highly stylized language, hollow field-of-use limitations, or the recitation of token post-solution activity should not be credited.
  • Finally, the cases urge a flexible, claim-by-claim approach to subject-matter eligibility that avoids rigid line drawing.

Abstract Ideas are Disembodied Concepts: Alice Corp’s claims are drawn to methods of reducing settlement risk by effecting trades through a third party intermediary (a supervisory institution) empowered to verify that both parties can fulfill their obligations before allowing the exchange to be completed.  This essence, the method is a form of third-party escrow that helps overcome the risk of fraud and non-payment. In thinking about that method, the court determined that it is an abstract idea because it is a “disembodied” concept that is a basic building block of human ingenuity and untethered from any real-world application.  Lourie writes:

CLS describes that concept as “fundamental and ancient,” but the latter is not determinative of the question of abstractness. Even venerable concepts, such as risk hedging in commodity transactions, see Bilski, 130 S. Ct. at 3231, were once unfamiliar, just like the concepts inventors are unlocking at the leading edges of technology today. But whether long in use or just recognized, abstract ideas remain abstract. The concept of reducing settlement risk by facilitating a trade through third-party intermediation is an abstract idea because it is a “disembodied” concept, In re Alappat, 33 F.3d 1526, 1544 (Fed. Cir. 1994) (en banc), a basic building block of human ingenuity, untethered from any real-world application. Standing alone, that abstract idea is not patent-eligible subject matter.

After identifying the portion of the claim directed to an abstract idea, Judge Lourie then looked to see whether “the balance of the claim adds ‘significantly more.’” Answering that question in the negative, the court found the claims lack eligibility.

Writing in Dissent, Chief Judge Rader disagreed with the court’s decision. He writes:

I enjoy good writing and a good mystery, but I doubt that innovation is promoted when subjective and empty words like “contribution” or “inventiveness” are offered up by the courts to determine investment, resource allocation, and business decisions. Again, it is almost . . . well, “obvious” . . . to note that when all else fails, it makes sense to consult the simplicity, clarity, and directness of the statute.

As I start my next quarter century of judicial experience, I am sure that one day I will reflect on this moment as well. I can only hope it is a brighter reflection than I encounter today.

 


 

 

376 thoughts on “CLS Bank v. Alice Corp: Court Finds Many Software Patents Ineligible

  1. 376

    Night, most of this is beyond my field of expertise. What I really want to know is how do we use this information to help Alice win the case on appeal?

  2. 375

    There is this argument that to understand sorting algorithms one must consider the entrophy gains and losses as the system becomes more ordered and the consequent radiated heat somewhere else in the universe. The related argument from nuclear cell division DNA replication – in science fiction called sometimes the life force – is that when one duplicates information there is a consequent ‘life force’ heat side effect from the physical law of the conservation of information in quantum mechanics equations. The heuristic explanation then is that if we can minimise the heat from the sorting, we’ll have found the best sorting algorithm. Now quicksort wastes more fractions of distinguishment than multi-pass-N-way merge sorting in theory … so there is more tiny fractions of wasted bits caused by the comparisions. If the exchanges are free and there is unlimited memory then less wasted bit fractions of distinguishment would mean less heat therefore quicksort should on average be slower … but practical tests proves quicksort faster!

  3. 374

    Judge Lourie writes: “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. See id. at 1302 (“The laws of nature at issue here are narrow laws that may have limited appli- cations, but the patent claims that embody them nonethe- less implicate this concern.”).

    Again, the honorable and esteemed Judge Lourie has committed fundamental errors in logic and law. First, a law of nature is not a fundamental concept. A law of nature is representative of a physical thing. A concept is an idea and not yet a physical thing. See Le Roy v. Tatham, 14 How. 156, 175.

    Second, an application of a concept is allowed to subsume the entire concept. This will not prevent other inventors from inventing different applications of the same concept because it is the application for which one is granted a patent and not the concept itself. An inventor may think of an original concept and is allowed to patent as many embodiments of that concept as she can fully enable and describe. It that sense, scope is not a 101 issue but an issue of 112.

    And let’s take this opportunity to put this idea of using/applying a process on “any” computer being a reason for patent ineligibility to rest. If I invent a wrench that can be used on any machine, thing, or apparatus does that make my wrench an abstract idea? Of course not! A wrench is a physical thing!! Well, a process is also a physical thing. That a process can be used on any computer makes it no more abstract than a wrench.

  4. 373

    “Further, the district court held the asserted system claims similarly ineligible, as those claims “would preempt the use of the abstract concept of employing a neutral intermediary to facilitate simultaneous exchange of obligations in order to minimize risk on any computer, which is, as a practical matter, how these processes are likely to be applied.”

    How does the DC, or Judge Lourie for that matter know the use/application has been pre-empted?

    The fallacy here is that there is a limitation to the imagination and creativity of the human mind. That the good and learned Judge may not be able to think of any other way to use or apply the concept does not mean no one ever will. Indeed, Inventors love a challenge and will find ways to invent around and improve up on anything. And since Alice did not claim “ANY” use of the concept there is no logical or practical way all future uses of the concept could be pre-empted. However by removing the incentive of a patent, not only for this invention but for all future improvements on it, the good Judge Lourie is the one that has reached too far and obstructed rather than catalyzed innovation.

  5. 372

    Your post and claim is too abstract for me to answer. Perhaps if you have a link to the actual patent specification and claim I can evaluate it and answer your question. Also if the patent is to some type of nuclear weapons process you might want to check the law regarding such inventions be patentable.

  6. 371

    “How does Albert come into this?”

    Because of Einstein’s work in physics and the testing that followed we know that energy ( that of which we cannot see) is equal to mass, that which we can see, and therefore a process is a physical thing as much as a hammer or a nail.
    And just like a hammer or nail is not not abstract, neither is a process, abstract. All Physicists will tell you that In the physical realm we have macroscopic, microscopic, atomic, nuclear, and sub nuclear processes; all of which can be objectively replicated and evaluated. None of which are abstract. That’s why “process” is an independent section in the enumerated categories of USC Title 35.

    What we have in the CLS Bank v Alice case is over 100 years of scientific progress completely and willfully ignored by almost half the judiciary on the Federal Circuit. Alice’s method, CRM, and Machine/System claims are no more pure abstract existence than the very machine I am using at this moment to type this message.

  7. 370

    One just a couple of others point 6, if I may. My views are not arcane. My views are the exact views of the Supreme Court of the United States of America as proven with the citations from their case law.

    What is rather mysterious is the way you in effect simply “foreordain” Alice’s claimed invention as a patent ineligible idea. And you should know that judicially excepted subject matter is “relevant” to ALL claims, because “all inventions at some level embody, use, reflect, rest upon, or apply the [ judicially excepted subject matter] of laws of nature, natural phenomena, or abstract ideas.” Mayo Collaborative Servs. v. Prometheus Labs., Inc., 132 S. Ct. 1289, 1293 (2012). Emphasis Added

    So the proper legal question to ask is not if Alice has judicially excepted subject matter “relevant” to the claims, but if Alice has claimed as a whole, judicially excepted subject matter of a law of nature, natural phenomena, or abstract idea.

    No one on the Alice panel was able to prove that. [ And no, just saying something is abstract does not prove its abstract ] You most certainly have failed to prove it. Thus, Alice claims are patent eligible subject matter.

  8. 369

    I have a post that will not post here for some reason. it is an equation. That is all the claims presents. The equation.

    The specification discloses a use for the equation: nuclear weapons yield calculations.

    Is the claim abstract?

  9. 368

    How does Albert come into this?

    I think we see a pattern with the anti’s like Lourie and Stevens having medieval conceptions of the human mind. They seem to believe in a mind and brain (and apparently spirits).

  10. 367

    Judge Lourie states: “Abstract methods do not become patent-eligible machines by being clothed in computer language.”

    The fallacy in this statement is that a method or process can be abstract, when we have known since 1905 ( Thanks to Albert Einstein) that a process is a physical thing. Therefore an “abstract method” is an oxymoron and can’t exist in the real world. However, ideas exist within the human mind and are abstract by their nature. So, if the good judge had said, ” abstract [ideas] do not become patent-eligible by being clothed in computer language”, he might have had a point to be argue. He could have also stated that while all methods are physical, and thus not abstract, not all methods are within the useful arts. For example, dancing, acting, or reciting poetry are within the liberal arts and not in the useful arts. But he fails to make this argument as well; and prudently so since Alice does not claim a liberal art. So, with the removal of this one fallacious construct called “abstract methods”, his entire case collapses like the house of cards it was built on.

  11. 364

    You automating a known process in a routine fashion, which should be used with a 103.

    If Lourie can’t even get that right, then he should resign immediately as too ignorant to even speak the work computer.

  12. 363

    1. Its not the equations that are excepted so much as it is what they represent, laws of nature, natural phenomenon and abstract ideas.

    2.you have failed to identify one exception alice has claimed and why its an exception

    3.I am banned or I would use my known screen name.

  13. 362

    Bro idk who you are, but suffice to say that I’ve considered all of your arcane views previously and I find them rather unconvincing since 1. math equations are not the only judicially excepted subject matter and 2. there is judicially excepted subject matter relevant to the claims in Alice.

    And also it doesn’t appear that you’re banned from posting, it looks like you simply had trouble posting because of your long post.

  14. 361

    > 6, here is what 35 U.S.C. 131 says in it’s totality: 35 U.S.C. 131
    > Examination of application: “The Director shall cause an examination
    > to be made of the application and the alleged new invention; and if on
    > such examination it appears that the applicant is entitled to a patent
    > under the law, the Director shall issue a patent therefor.” (Amended
    > Nov. 29, 1999, Public Law 106-113, sec. 1000(a)(9), 113 Stat.
    > 1501A-582 (S. 1948 sec. 4732(a)(10)(A)).)
    >
    > The part you conspicuously left out is “ the applicant is entitled to
    > a patent under the law.” Not under “your” law, but under “the” law.
    > Your job is to follow “the” law as written and enacted by Congress and
    > as interpreted by the Supreme Court of the United States of America.
    > The controlling law and case “most on point” for what “is” patent
    > eligible subject matter is Diamond v Diehr. That case specifically
    > instructs you as follows:“Respondents’ claims must be considered as a
    > whole, it being inappropriate to dissect the claims into old and new
    > elements and then to ignore the presence of the old elements in the
    > analysis.” Pp. 450 U. S. 185-191.
    >
    > Furthermore, your reference to Prometheus does not help you, as that
    > case affirms Diehr as controlling case law and informs you that the
    > reason Diehrs claims were patent eligible was because the claims were
    > “integrated.” See Prometheus instructing you as follows: In Diehr, the
    > overall process was patent eligible because of the way the additional
    > steps of the process [integrated] the equation into the process [as a
    > whole. ]450 U. S., at 187. These additional steps transformed the
    > process into an inventive application of the formula. )   [MAYO
    > COLLABORATIVE SERVICES v. PROMETHEUS LABORATORIES, INC  566 U. S.
    > (2012) 3 Syllabus] (Emphasis Added)
    >
    > Therefore, the analysis the Director says you have the authority to
    > conduct under 35 U.S.C. 131 is “Integration Analysis” as so held by
    > the Supreme Court of the United States; not dissection in which you
    > ignore the presence of patent eligible elements in the concluding
    > analysis. In fact, the Office has issued guidance on “Integration
    > Analysis” for the entire examiners corp to follow. Yes, 6, this
    > includes you. See Andrew H Hirschfeld, Deputy Commissioner of Patent
    > Examination Policy stating the policy at
    > :[link to uspto.gov
    >
    > And you should know that the Supreme Court of the United States has
    > never in it’s 101 case history gone on an expedition for finding
    > judicially excluded subject matter, nor instructed you or any court to
    > do so. You are confusing extra solution activity analysis with
    > dissection. In those cases when the Court has identified, “extra”
    > solution activity, the “initial” solution was for an equation to a law
    > of nature or natural phenomenon, that was claimed as the invention.
    > The “extra” solution in all those case was to limit the equation to a
    > computer, or a particular field of use, which in effect allowed a
    > claim on the equation itself, which is the judicially excluded subject
    > matter. See, Benson, Flook, and Prometheus. Even Bilski’s claim 4 was
    > reduced to a math equation, which is considered abstract by the Court,
    > and therefore an attempt to claim judicially excluded subject matter.
    > Therefore adding a computer would have been “extra” solution activity
    > and would not have saved Bilski’s claims from being ineligible subject
    > matter.
    >
    > Which brings us to the instant case. Alice does not claim a math
    > equation. Therefore no “extra” solution exist, and “extra” solution
    > activity analysis need not take place. Hence, in accordance with the
    > law, and Supreme Court precedent, Alice overall process is patent
    > eligible because the concept and technology of the claimed invention
    > is  [integrated] into the process as a whole.

  15. 360

    You are one of my favorite posters, and I’ll continue to enjoy reading your posts. However, it’s too bad your personal analysis does not have the discipline and rigor of your legal analysis. I hadn’t previously read the cases, as I was just reading for MDs thoughts on this. I generally enjoy his perspective on many issues.

    However, having looked at the cases now, I’m not sure if you have properly reviewed this. The case 760 F2d 1270 (1985) indeed includes the statement by Newman “This result furthers the basic purpose of the patent system. The exclusive right, constitutionally derived, was for the national purpose of advancing the useful arts — the process today called technological innovation” which seems to support the general point being made. I’m not sure where you are saying this is vacated – I have not Shepardized it – but it’s not in 796 F2d 456. That case is vacating the decision made by the Board on remand from the 760 case (1986). It can’t be vacated by Lundgren 2005 as that is a BPAI decision.

    There are good examples of there being no technical arts test, some listed in Lundgren. I just think your treatment of MDs point here is overly hostile, and perhaps not as strongly supported by the record as you suggest.

    I’m happy to read your response here, but I probably won’t comment further in this thread unless there is something interesting that advances the discussion, as I think both our points have been stated.

  16. 359

    It’s mindless soapboxing Steve.

    “We” have a problem with that – even on the internet.

    Note as well, that you have ignored the two points of my correction. The case itself did not have what was stated in the first place. When you get all soft on the actualities, and think, meh, that’s just a European perspective philosophy, you end up with drek and total nonsense like this.

    Mind you, on the internetz, the royal ‘we’ is always fine with Anything being said in a philosophical discussion. MaxDrei often rambles about anything other than “what the law in the USA is.”

    That you are not ‘hard edged’ about this show what level of ‘thinking’ you are comfortable with and that you have no business in a discussion of US legal topics.

  17. 358

    He seemed to be using it as an argument that “technological innovation” is lurking in the background of the thinking of at least some of the Fed Circuit judges. This in an argument where he was advocating for the EPO way as one way to resolve our 101 issues in the USA. I didn’t see it as misused or an overreach, and the vacatur of that holding doesn’t change the way those judges were mentally framing these issues. MD has always been clear that he speaks from a European perspective, and is more of an advocate for positions that trying to describe what the law in the USA is (i.e. having a philosophical discussion).

    Not sure why you feel the need to be so hard edged on this point, but have at it. It’s the internets, we’ll get over it.

  18. 356

    ” you have failed to address anon’s and the CLS bank panels point about dissecting the claim to arrive at the “gist”. ”

    I didn’t address their “point”? The reason I didn’t address their “point” is because 1. They don’t have a legal leg upon which to base this “point” and 2. even if they did it is wholly irrelevant. You are very much so allowed to “dissect” a claim to arrive at the “gist”. Although I personally do not call it the “gist”, and instead focus on finding judicially excluded subject matter as opposed to a “gist”. Even so, there is no prohibition upon doing so and such has been employed in literally every 101 case that has gone to the supremes. Including Diehr. In Diehr they simply noted that the “gist” aka the Arrhenius equation at issue, was not preempt by the claim because the applicant limited it to one very specific application amongst millions of others.

    Just because you guys have talked yourselves into thinking differently doesn’t mean that you will have any persuasive power in court any longer now that the supremes have put their foot down, AGAIN, AND AGAIN and will likely continue to do so until the Fed Circ. and office falls in line.

    “Where do you get that legal authority strip the claim down to it’s gist, or abstract idea? Citation please”

    I get mine from 35 U.S.C 131: “The Director shall cause an examination to be made of the application and the alleged new invention;” I’m not sure where courts get their authority in the statute as I’m not a lawlyer.

  19. 355

    Worth repeating (in case Malcolm – or even Francis, or Keeping It Real – missed this):

    “Specifically, no one with any knowledge of patent law can seriously argue that the Court’s recent forays in finding exceptions to patent eligibility in any way ‘promote[s] the Progress . . . of the useful Arts.’ ”

  20. 353

    MaxDrei,

    You of all people have no room to talk about 101’s comfort blanket of fantasy.

    The fantasy world you live in with your ideal soapbox posts that cannot be discussed or criticised is testament enough to that.

  21. 352

    6: In this case, the claim is drafted so as to essentially cover the abstract idea while having limited itself only to the field of general computing.

    6 you have failed to address anon’s and the CLS bank panels point about dissecting the claim to arrive at the “gist”.

    Where do you get that legal authority strip the claim down to it’s gist, or abstract idea? Citation please

  22. 351

    The kudos go to Dr. Noonan (of course, he is reflecting a view that I have long promulgated, but he is a smart man).

  23. 350

    Great quote anon. Wow! This is so true. And what is scary is that the more science illiterate Obama stacks the Fed. Cir. with the more we can count on this getting worse and worse.

    It is psychotic the way these judges try to use all uses and all possibilities and well-known in the art. I mean, patent law has a way to deal with these situations and to pretend patent does not is disingenuous. And really grounds for removal. It is an intentional lie in a opinion of the court–removal is the remedy. And, J. Lourie should be removed.

    IANAE: do you think that applied math is a natural law?

  24. 349

    101 writes above:

    “the UK/EPO believe that something is real, and therefore patent eligible only if you can touch it and or drop it on your foot.”

    He thinks that his statement is NOT an invention.

    He’s wrong. It is an invention.

    What the UK (or the EPO) “believes” about eligibility is in Europe is in any case of no use to anybody except Mr 101 himself. More useful to the rest of us is the caselaw of the EPO on the issue. But Mr 101 is silent on that, lest it disrupt his comfort blanket of fantasy.

  25. 348

    Another fresh tidbit from Dr. Kevin Noonan:

      “The decision establishes without doubt that Section 101 jurisprudence has been broken by the Supreme Court’s return to its subjective, non-statutory approach exemplified in Benson v. Gottschalk and Parker v. Flook, first in Bilski v. Kappos and then in full flower in Mayo v. Prometheus. These decisions swing the pendulum from Congressional determinations of patent-eligibility to the Court’s “we know it when we see it” standard that is not only directly contrary to the Congressional mandate that created the Federal Circuit but also contrary to the Constitutional basis for the Court’s review of actions by Congress regarding patents. Specifically, no one with any knowledge of patent law can seriously argue that the Court’s recent forays in finding exceptions to patent eligibility in any way ‘promote[s] the Progress . . . of the useful Arts.’ “

    link to patentdocs.org

    Bravo.

  26. 347

    “I think he’s probably right, MD. After all, Europe has never produced an Einstein. It’s no wonder you’re lagging behind.”

    LB, it’s not about where Einstein or anyone was born, educated or lived. The point is how the world changed after Einstein’s special theory of relativity and the obvious implications for the useful arts and sciences. You and MD, and apparently the UK/EPO believe that something is real, and therefore patent eligible only if you can touch it and or drop it on your foot. Thus, things made out of iron and wood pass 101. While processes, that you can’t touch and feel are abstract and not patent eligible. And while such thinking made sense in 1805, by 1905 things changed dramatically. You see, in 1905, Albert Einstein published his special theory of relativity, and later of course his general theory of relativity. Because of Einstein we now know that the physical exist beyond what you can see with the eye and touch with the hand. There are “invisible things” in this world that can be objectively replicated, integrated, evaluated, and measured. These things are called processes and are part of the useful arts. Mainly because our forefathers had the foresight not to freeze innovation to the iron age during which the constitution was written. Likewise, learned experts like Frederico and Rich made sure such processes were a separate and independent category in the 1952 patent act so that innovation could progress well into the super quantum age, just as the founding fathers intended.

  27. 346

    MaxDrei: 101, I like your “objective measurement” point.

    You are mistaken. I made no such point. Here is the actual statement I believe you are referring to that I made:

    “Useful Arts are objectively replicated and measured.”

    Now to elaborate a bit. When you objectively replicate something you are performing a process. The process itself is objective as well as it’s measurement or evaluation. This is why we have process as an independent class in our 101 statute, The UK/EPO has not yet grasped this concept and is far behind the USA in that regard.

    Now I never said just because you can measure something it’s patentable, either. Measurement is not the issue per se. And of course measurement in terms of qualitative evaluation and personal perception from observation of a process can be entirely subjective. That’s why I said “objective” is the key. From this understanding, processes for conducting business and programming computers are all within the the useful arts. Of that there can be no debate.

  28. 345

    Vacuous cheerleading is always appreciated by members of the little circle club.

    But you still may want to pay attention to the points I raised, MaxDrei.

  29. 344

    They may be ‘worth discussing’ in philosophical contexts – but that is NOT such as these – and certainly not the spin that MaxDrei was trying to present.

    Pay attention – I was not indicating that the vacatur was magically flip[ping] every word in the case to the opposite meaning, or to a negation.

    Let’s not let ‘philosophical discussions’ cloud the point. Anything can be said in a philosophical discussion. Sure, If MaxDrei had owned up to his actual use, then the force of my correction would not sting him so.

    He did not.
    It does.

    Presenting a vacated court opinion as if it had ANY precedence is misleading and gamesmanship of the worst kind. It is drek and poison. And it does not touch on either of the two points of my correction.

  30. 343

    Thank you SteveW. Much appreciated. My point entirely. But more effective coming from somebody other than me.

  31. 342

    Vacated cases may well be worth discussing in philosophical contexts such as these. Holdings of law are precedential and capable of being vacated. Any other statements in a case are exactly whatever they were before the vacatur, neither more nor less. A vacatur does not magically flip every word in the case to the opposite meaning, or to a negation (although the legal results that are vacated are certainly negated).

  32. 341

    That is quite simple 101. In fact, I answered it in my head when I read it, and I do really ha te it when I read something like that and am unable to help the good judges out with such simple things.

    The answer is because of what the claim is directed to. In the first instance, the claim is not directed to an abstract idea (or other judicial exception) at all. In the later, it is directed squarely at the programming, having tacked on the general purpose computer to make a vain attempt at patent eligibility.

    That is why.

    Now perhaps you’re wondering, “what does 6 mean by this “directed to” language he uses?” And perhaps you find yourself declaring, “I have such a hard time understanding 6 because he doesn’t explain himself as he would if talking to a kindergartener!”

    Well, you sir are in luck! I will take thee by the hand on this eve!

    What I, and everyone else who uses the term, mean is that the claim is drafted in a certain manner so as to be used in a certain way. In this case, the claim is drafted so as to essentially cover the abstract idea while having limited itself only to the field of general computing.

    YW bro!

  33. 340

    Thanks LB. Good Point.

    101, I like your “objective measurement” point. The EPO has it that inventions that are patentable can be parsed into solutions of objective technical problems, that is, things that deliver a measurable technical effect.

    Of course one can measure lots of things that are not of the useful arts, like preferences for particular poems, websites, films, TV programs or political parties. So just because you can measure something does not make “it” patentable.

    Mind you, a clever new way to measure something might well be patentable, also in Europe.

  34. 339

    And it is also worth noting that Einstein changed science and the world forever and that is why process is a separate and independent section of 101, and not confined to machines and industrial age transformations.

    In this regard the UK and EPO is lagging behind the USA and perhaps why your thinking on this matter appears to be constipated.

    I think he’s probably right, MD. After all, Europe has never produced an Einstein. It’s no wonder you’re lagging behind.

  35. 338

    MD: “Definition written today because, by tomorrow, it will have been rendered obsolete by the Inventors that give us our daily work.”

    The point you have failed to grasp from prior discussion is that the Useful Arts are objectively replicated and measured. The Keyword here being objective. Objectivity is what separates the useful arts from the liberal arts in the United States Constitution. And it is why business methods and software are within the useful arts and poetry and painting are not.

    And it is also worth noting that Einstein changed science and the world forever and that is why process is a separate and independent section of 101, and not confined to machines and industrial age transformations.

    In this regard the UK and EPO is lagging behind the USA and perhaps why your thinking on this matter appears to be constipated.

  36. 337

    anon:It has something to do with dissecting the part of the claim that they don’t like (in the name of arriving at some inventive gist) and ignoring it for a 101 analysis

    101 Integration Expert: Such an analysis is surely in conflict with Supreme Court Precedent as the dissent skillfully points out:

    See Diehr, 450 U.S. at 188 (it is improper to dissect the claims; they must be considered as a whole); Aro Mfg. Co. v. Convertible Top Replacement Co., 365 U.S. 336, 345 (1961) (“[T]here is no legally recognizable or protected ‘essential’ element, ‘gist’ or ‘heart’ of the invention.”).

    And while I generally agree with Rader that the system claims are eligible because a machine is performing the steps and thus the concept is “integrated”, it is important to point out that the Court never said “integration” as an example of eligibility was limited to automated machine processes.

    Indeed Diehr’s claims might have failed such a narrow interpretation of “Integration” as those claims did require a human operator, and could be performed without “all” the machinery and devices in the claim.

    In fact, going by the Prometheus broad interpretation of Diehr, Alice Escrow concept is integrated into the process as a whole, and this transforms the process into an inventive application of the concept, making the method claims statutory subject matter as well.

  37. 336

    Be that all as it may, Mr Bakels, the basic fact remains, that DG3 ducks out of any tough eligibility filtering (Art 52 EPC, corresponding to 35 USC 101) by letting through everything that has “technical character”. It defers until it gets to Art 56 the hard task of rejecting subject matter not fit for patenting, and it does it by distinguishing between technical inventiveness and those types of non-obviousness that are outside any technical field (and so don’t Count towards patentability).

    What Approach do you know, that strikes a better balance between fairness to inventors and fairness to those liable to be sued for patent infringement.

    Until we have a better way, the EPO’s Approach is the best we have.

  38. 335

    § 101 should be read in conjunction with pertinent case law that excludes “abstract ideas, natural phomena and laws of nature”. An abstract idea may be related to a machine.

  39. 334

    In German patent law, “technicity” is almost defined as “patentable”, making the reasoning completely circular. Still the German BGH decision generally perceived as defining technology, the “Red Dove” decision (1969) actually notes that the focus should not be on the “technicity”.

    The EPO boards of appeal have created a lot of very opaque case law on the technical character of subject-matter, which IMHO caused by the fact that they try to distinguish technical products (e.g. machines) and technical disciplines (engineering sciences), and faild to recognise that technical knowledge is distinguished colloquially from purely theoretical knowledge. While the EPO approach leads to the “core theory” paradox (related to the US perception of “insignificant post-solution activity”), in particular for allegedly partially technical product, or partially technical disciplines, a focus on the technical nature of the pertinent knowledge avoids this paradox. It acknowledges that knowledge related to a “technical product” may itself not be technical, typically if it is just a concept or abstract idea.

    The reference to Heisenberg is confusing. Physicists have fundamentally different objectives. They try to describe nature, not claiming any “truth” or “evidence”, just that their theories provide results that match the observations. In particular in quantum theory, Heisenbergs field, “understanding” is not the goal of scentists: they are satisfied if the are able to predict and to relate.

    I learned a lot from a book by Rolf wank called “Die juristische Begriffsbildung” – building legal concepts (German is a foreign language for me too). Typically, legal concepts do not try to grasp The True Nature of something (“ontological definitions”), but they are just a convention, a shorthand, thus can never be right or wrong, only practical or impractial, and perhaps compliant or contrary to common parlance. Thus the Germans are not wrong to define “techical” as “patentable”, though it is a “restatement of the problem in more imprecise terminology”, a a British judge noted not so long ago.

  40. 333

    While the roles may be combined, there is a clear distinction between the knowledge these people handle.

    Not necessarily. Depending on the art, the categories may be subsumed, one into another.

    but a PHOSITA is no PHOSITA if he fails.

    No. The premise here that a PHOSITA does not fail could not be more wrong. There is no art existing that does not include failure. A PHOSITA may be omniscient, but it not omnipotent.

    True business method patents protect businesses against competition – which runs against our western system of private enterprise.

    Ah – that anti-patent peeks through – this is actually true of any type of patent (singling out business methods is just a divide and conquer scheme).

    and perhaps not at all

    Yes, there it is – fly your true colors RB.

    Your history is off.

    And the genesis of patents was not with the French, but with the Italians, and the goal was to protect the inventor, not to enrich the state.

    And the Statute of Monopolies is critically against your viewpoint in that the “not at all” could have been chosen as a path and instead, we had the birth of “Let’s have patents” that opened up the modern era.

  41. 332

    The Federal Cicuit fails to ask the fundamental question: is patent law a tool that allows people to appropriate any type of valuable (and perhaps costly) knowledge? The answer is given – indirectly – through § 112: the pertinent knowledge must be described such that it can be carried out (executed) by a PHOSITA, so logically it must be knowledge that allows such a description in the first place. So § 112 does not replace § 101, but it provides a hint for the interpretation of § 101. Various case law indicates that no “undue experimentation” may be expected from the PHOSITA, and the Supreme Court once stated that patents are not a “hunting licence”(Brenner v. Manson).

    Mere theories, however valuable, are not the “input” to a PHOSITA but to an inventor. Thus three tiers can be distinguished: the scientist, the inventor and the PHOSITA. While the roles may be combined, there is a clear distinction between the knowledge these people handle. The inventor is no necessarily smarter than the PHOSITA, his fundamental characteristic is that he is essentially uncertain. A pharmacist who does not manage to develop a new medicine is nog to blame, but a PHOSITA is no PHOSITA if he fails.
    In this trichotomy, business men are like inventors, not like PHOSITA’s.

    To put all this into perspective, keep in mind that the amount of effort is immaterial to obtain patent (§ 103 “shall not be negatived”). Everything can be explained consistently if a patent is not considered a reward for an effort, but as a privilege that is an exception to the rule of freedom of competition. True business method patents protect businesses against competition – which runs against our western system of private enterprise.

    Remember that historically patents originate from privilege systems. In the French revolution, “privileges” were considered against the spirit of “liberté, égalité et fraternité”, while property was declared a “droit inviolable et sacré”. (French is a foreign language for me too!) So smart lawyers understood that for political reasons they should declare patents a kind of property, and they devised the concept of “intellectual propery”.

    Still todays patent systems show many remenants of the old privilege systems. In modern conception, privileges should be granted only as an exception, and perhaps not at all. Well, this is nothing really new. The Statute of Monopolies in 1623 was based on similar thoughts.

  42. 331

    I continue to be astonished at how anon can so reliably miss “the point”.

    Yes of course the Founding Fathers could not contemplate what, today, is encompassed by the “useful arts”. They have moved on. For that very reason, judges and patent Offices know better than to impose on “Invention” or “technical” some Definition written today because, by tomorrow, it will have been rendered obsolete by the Inventors that give us our daily work.

    Just as the Founding Fathers understood that not all “arts” are “useful arts” so do the judges today. The concepts behind those words haven’t changed.

    What we call today “science” they called then “natural philosophy”. There are sciences today that were beyond comprehension in the 18th century. But they are sciences today and would have been accepted as natural philosophy then. This is all trite, banal, hardly worth writing. But necessary nevertheless, it seems.

  43. 330

    And all I am saying is you have whiffed on two major points here:

      That it was said at all

      That it would have any meaning even if it had been said – given vacatur.

    Just because you may want to repeat something, doesn’t change that something from being wrong to being right.

    Which part of you being wrong here are you still not understanding? The content? The legal position? How to put down a shovel?

  44. 329

    El toro, as Leopold leaps forward in the best vacuous Maclolm tradition.

    Still working on those “stronger intellect” items?

    (not sure why the comment didn’t attach here on the first post)

  45. 328

    was the meaning of “useful arts” in the 18th century

    One major exception you are forgetting (on purpose?) the term is NOT locked into the 18th century meaning.

    Check the archives – this point has been made many many many times already.

  46. 327

    El toro, as Leopold leaps forward in the best vacuous Maclolm tradition.

    Still working on those “stronger intellect” items?

  47. 326

    That’s all I’m saying.

    Phffft! YOU don’t get to decide what you’re saying. HUMPTY DUMPTY will tell you what you are saying!

    BOW DOWN!!!

  48. 325

    Basic? Sure. The CAFC said in 1985 what it took to be the ambit of the Constitution’s “useful arts”. Rader and Newman say the same thing only very recently. Not much has changed, since 1985. What intelligent and unbiassed people in 1985 thought that “useful arts” meant in the 18th century is not going to be very different from what intelligent and unbiassed people in 2013 understand was the meaning of “useful arts” in the 18th century. That’s all I’m saying.

  49. 324

    In other words, not only was it not there to begin with, vacatur would in fact ‘magic it away’ even if it had been there.

    This is basic stuff, MaxDrei.

  50. 323

    MaxDrei,

    Your eighty iterations of six months experience is showing again:

    Whether or not the Paulik case was later vacated can’t magic away what the court wrote back then.” is ‘magicked away’ by vacatur – are you not familiar with that legal concept?

    That’s on top of the fact that you didn’t bother checking the original source for content.

    Two strikes (no check of content, no check to verify status) – care to go for a third strike by challenging me on the first two?

    Here’s a helpful hint: stay away from sound byte law.

  51. 322

    Well thanks for that anon. My source is the J.Intellectual Property Law and Practice 2013, Vol 8, No. 5, page 375 in the paper by Bradstreet. The author purports to quote directly from the Paulik case. His footnote cite is:

    Paulik v Rizkalla 760 F 2d 1270 (Fed Cir 1985) (en banc) 1276

    Unless Bradstreet is misquoting, the CAFC en banc panel wrote in 1985 what he quoted. Whether or not the Paulik case was later vacated can’t magic away what the court wrote back then. I do not say that this utterance binds the court for ever after. I think Bradstreet is simply inviting us all to take it for what it is worth. Are you saying that in the Lundgren case the utterance was expressly disavowed? Or would you have it that later legislation in the Congress rendered it moot?

  52. 321

    And while upon review of both cases, it is plainly not evident were upon you draw this magical conclusion, I do note that the interplay between Rich and Frederico is enlightening.

  53. 320

    The case you were drawn to was vacated. See Paulik v. Rizkella, 796 F.2d 456 (1986).

    You do know what vacated mens, right?

  54. 318

    My attention has been drawn to the case of Paulik v. Rizkella. CAFC en banc 1985, in which it is explained that the concept formerly known as promoting the useful arts is today more properly called “technological innovation”.

    That would be technological progress then, I suppose, that the patents system is supposed to nurture, as opposed to progress in the financial arts, or the arts of business.

  55. 317

    It has something to do with dissecting the part of the claim that they don’t like (in the name of arriving at some inventive gist) and ignoring it for a 101 analysis.

  56. 316

    Can someone from the Anti Patent Establisment please answer this question from CLS Bank v. Alice?

    “The parties in this case agree that if someone sought to patent a general purpose computer, it would satisfy § 101 (although it may fail § 102 or § 103). Why, then, would claiming the same computer with specific pro- gramming (thus creating a special purpose computer), transform a patent-eligible machine into a patent- ineligible abstract idea?”

  57. 315

    Still waiting.

    (don’t you all go get the weirdest sense of déjà vu with this waiting for Malcolm to actually explain something?)

  58. 314

    CORRECTION: This is compounded by the fact that Chief Judge Rader did follow the Supreme Court on “Integration” in his dissent at least for the “machine” claims.

  59. 313

    6: “Still, “not following” this “decision” is simply refusing to follow DAT LAWL laid down by the USSC very much prior to this decision. Lourie’s position, aka my position tarted up really nice, has been the lawl of the land at least since Flook, and actually more or less since Benson.”

    Wrong. It’s Judge Lourie that is not following the Supreme Court on “Integration” and that is why the the USPTO can’t follow Judge Lourie and use this decision as Examination policy. Specifically, Lourie did not follow the explicit explanation of the Supreme Court for when claims “ARE” Statutory subject matter as explained in the Prometheus case as follows. See:

    ” In Diehr, the overall process was patent eligible because of the way the additional steps of the process “INTEGRATED” the equation into the process as a whole. 450 U. S., at 187. These additional steps transformed the process into an inventive application of the formula. ) [MAYO COLLABORATIVE SERVICES v. PROMETHEUS LABORATORIES, INC 566 U. S. (2012) 3 Syllabus] (Emphasis Added)

    This is compounded by the fact that Chief Judge Rader did follow the Supreme Court on “Integration” in his dissent at least for the method claims.

    See:

    “Here, the claim recites a machine and other steps to enable transactions. The claim begins with the machine acquiring data and ends with the machine exchanging financial instructions with other machines. The “abstract idea” present here is not disembodied at all, but is instead “INTEGRATED” into a system utilizing machines. In sum, the system claims are indistinguishable from those in Diehr. For these reasons, the system claims are not directed to patent ineligible subject matter.” 38 CLS BANK INTERNATIONAL v. ALICE CORPORATION (Emphasis added)

    Since the Office relied on the Supreme Courts use of “Integration” in the Prometheus case for authority in its most recent guidance, and the CAFC in Alice ignored the Supreme Courts use of “Integration” the Office must now wait unto the Court speaks and hopefully clears this up, before it can proceed.

    Such a course of action by Deputy Commisioner Hirschfeld, is simply being prudent and respectful of the law. You on the other hand 6, are wreck-less, scofflaw, and a detriment to the USPTO and patent system at large.

  60. 312

    “YOU should really read the decision. Then start looking for another job, because if this isn’t over turned, your job is going away”

    I’ve been telling you for the last few years lester jester, I practice in the useful arts, and this decision has 0 impact on those except to dum p a bunch of unqualified examiners into the examining pool once all the software patent apps drop off. They don’t worry me in the slightest since most of them couldn’t examine their way out of a paper bag in the useful arts as their minds are “touched” by the imaginary too much to be of use in actual examination. The office can cut back on hiring and it should all work out just fine.

    The only people that need worry are those examing this garba ge and those prosecuting the same. Perhaps those that were filing them a bit too but that is about it. The world will carry on barely even noticing.

    And who knows? Perhaps congress will step in with the software patent act of 2014 and revive everything to statutory GLORY!!!!!!!!!!!!111111!!!!

    Or not.

    “If “all it is” is escrow tarted up with shadow accounts, then why reject with the quagmire of 101. ”

    Because it preempts an abstract idea as noted? I mean, I’m just saying, it is the lawl and all that.

    “Why not just make a nice clean rejection under 102 or 103?”

    Because I don’t wan na? Because I don’t feel like it? Take your pick? And because that way we take out the rest of the garb age along with this one particular case?

  61. 311

    On April 19 the EPO published this very short Decision:

    link to k-slaw.blogspot.de

    in which Microsoft failed to convince the EPO that its claimed method for determining relative skills of players was anything other than obvious.

    The decision cites Gale, an English decision from 1977 on using a computer to calculate a square root.

    As I see it, the new decision is useful, not so much on the allocation of filtering work between 101 and 103, but rather for its discussion of what is “technical”.

    I know “technical” is not in the AIA, but Rader CJ has already, in an earlier case, suggested it has a role in deciding patentability and Newman J.
    just did in CLS. It lurks in the background, also in the USA. I suspect that team Rader/Newman is intent on borrowing from the EPO songbook, to invoke “technical” when asking whether any particular claimed subject matter is “obvious”, when confined by the ambit of what are the “useful arts”. Time will tell.

  62. 310

    MM: Just like any decision finding the Prometheus claims ineligible had to be “in conflict” with the holding in Dierhr. We heard this story already, 101E. You told it to us…”

    101 Integration Expert: No, I never said that. You are a l_iar.

  63. 309

    Dear Readers, I have now read through the judgement and have a comment or two. What follows is what i have just posted to the IPKat blog which has a Piece on the CLS Decision under the title “The Wrong Tool…..”. Please forgive, if what follows has already been said by others.

    Pauline Newman comes up with challenging stuff, as ever. She asks whether 35 USC 101 is the proper vehicle for testing whether a particular technical advance is patentable. Folks, note “technical”.

    At bottom, this case is about claim construction. Is the subject matter in issue that of the ordinary meaning of the independent apparatus, method and System claims or is it something much more specific, namely what is shown in drawing Figure 16? there is means plus function language in the claim. The claim is to be interpreted in the light of the specification. The name of the game is the claim. Does the claim construction process yield a broad claim, or a Claim to the Fig 16 Picture?

    For fans of “Yes Minister” this CAFC work is magisterial, impressive and very funny. It constantly defers to the wisdom of its omnipotent master, even while it presents to the master the accumulated wisdom of the master’s own earlier utterances. Just as Jim Hacker’s brows grow ever more furrowed, one can imagine the same happening to the brows of any SCOTUS Justice when reading through this brilliant work.

    I liked the quote to Werner Heisenberg, explaining that you can hand down as many definitions as you like but still, at bottom, you will inevitably have to rely on “some concepts that are taken as they are, unanalysed and undefined”. So it is, with “technical”.

  64. 308

    “why is it so difficult” … because some of the new appointees have no science background and no patent background. These concepts take time and effort to learn. Some of the newbies have time adding two numbers together.

    Welcome, my friend, to the third world.

  65. 307

    “I’m pretty sure that they take pains to not do both of the things you accuse them of doing.”

    They may have taken pains not to, but that is exactly what they did. YOU should really read the decision. Then start looking for another job, because if this isn’t over turned, your job is going away.

    “So then it is the abstract idea of an escrow tarted up with “shadow accounts””

    If “all it is” is escrow tarted up with shadow accounts, then why reject with the quagmire of 101. Why not just make a nice clean rejection under 102 or 103? “…it would have been obvious to tart up escrow with shadow accounts because in hindsight, I say so.”

  66. 306

    All I want to hear from them is “the plurality opinion by Lourie is adopted as our own”.

    Won’t happen. See Malcolm’s explanation of what precedence means (oh wait…)

    Cannot happen. – See Tafas.

  67. 305

    “try to say something that is intelligible and useful going forward.”

    All I want to hear from them is “the plurality opinion by Lourie is adopted as our own”.

    Only problem is, with the correct result having been reached, i.e. the lower court being affirmed, there is less of a chance that the USSC will weigh in.

  68. 304

    “I seem to remember dicta in Bilski about whether or not a recitation of computer would change the result and the SCOTUS saying they didn’t need to reach a conclusion. ”

    Benson is a problem for certain. However what needs to be highlighted is the claims in Bilski were an attempt to patent a mathematical formula, which according to Benson falls under the abstract idea exclusion. See Bilski claim 4. To the best of my knowledge there is no manifest math equation in the Alice claims. So that argument is easily and factually rebutted. The counsel for Alice must absolutely argue the Supreme Court’s “Integration” just as it was presented by Rader in the dissent. After all this is the Supreme Courts own gloss on Diehr and patent eligible subject matter. The CAFC had absolutely no authority from the Court to dis-integrate the claims and leave them that way.

  69. 303

    Still waiting.

    (don’t you all go get the weirdest sense of déjà vu with this waiting for Malcolm to actually explain something?)

  70. 302

    I don’t know 101. I seem to remember dicta in Bilski about whether or not a recitation of computer would change the result and the SCOTUS saying they didn’t need to reach a conclusion. Sounded ominous.

    Given Benson, I think the SCOTUS could uphold this result.

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