Versata v. SAP: Federal Circuit Claims Broad Review of CBM Decisions

by Dennis Crouch

Versata v. SAP and the USPTO (Fed. Cir. 2015)

This an important decision stemming from the first Covered Business Method (CBM) Review Proceeding, the Federal Circuit has affirmed the PTAB properly cancelled the challenged claims for lacking patent eligible subject matter.  However, in petit Marbury v. Madison style, the court also exerted its power of review over the PTABs decisions, including whether the challenged patent is a “covered business method patent.”  Judge Plager drafted the majority opinion that was joined by Judge Newman.  In a concurring opinion, Judge Hughes wrote that “[t]he majority’s interpretation of § 324(e) to permit review of whether Versata’s patent is a ‘covered business method patent’ directly conflicts with our precedential decision in In re Cuozzo Speed Technologies, LLC, (Fed. Cir. July 8, 2015).”   The cited statute indicates that “the determination by the Director whether to institute a post-grant review [or CBM review] under this section shall be final and nonappealable.” Judge Hughes argued that the question of whether a patent fits within the CBM definition is answered at the petition stage and thus not reviewable on appeal.

In its decision, the court also directly ruled that CBM review proceeding (and thus future post-grant review proceedings) can include Section 101 challenges.  The statute provides that CBM/PGR proceedings can be used to challenge patent claims “on any ground that could be raised under paragraph (2) or (3) of section 282(b) (relating to invalidity of the patent or any claim).” 35 U.S.C. 321(b).  Section 282(b), in turn, reads as follows:

(b)(2) Invalidity of the patent or any claim … on any ground specified in part II as a condition for patentability.

(b)(3) Invalidity of the patent or any claim … for failure to comply with— (A) any requirement of section 112 [except best mode] or (B) any requirement of section 251.

In our 2012 essays, Professor Hricik and I explained an argument why subject matter eligibility does not fit within these invalidity grounds of Section 282.

Our argument was that the only way patent eligibility fits into Section 282 is under pat (b)(2) since “part II” of the Patent Act does include Section 101. However, not all sections of Part II (Sections 100 to 212) are conditions for patentability, and, in fact, only sections 102 and 103 are so-labelled.  The court agreed with our agument, but found it to be overwhelmed by history:

Versata is correct that a strict adherence to the section titles can support an argument that § 101 is not listed as a “condition of patentability,” but rather has the heading of “inventions patentable.” However, as noted by the USPTO, both our opinions and the Supreme Court’s opinions over the years have established that § 101 challenges constitute validity and patentability challenges. . . .

It would require a hyper-technical adherence to form rather than an understanding of substance to arrive at a conclusion that § 101 is not a ground available to test patents under either the PGR or § 18 processes. Section 101 validity challenges today are a major industry, and they appear in case after case in our court and in Supreme Court cases, not to mention now in final written decisions in reviews under the AIA. The numerous cases in our court and in the Supreme Court need no citation. . .

 

===

As Judge Hughes writes, a major portion of the ruling here is in tension with Couzzo because it allows the Federal Circuit to review whether the grant of the review was proper. However, because the PTO won its case, it seemingly has no right to appeal that particular issue.  As such, the majority opinion regarding reviewability could also be seen as simply dicta since, if they had decided that the CBM issue was not reviewable then the case would have also been affirmed.

 

Dennis Crouch

About Dennis Crouch

Law Professor at the University of Missouri School of Law. Co-director of the Center for Intellectual Property and Entrepreneurship.

54 thoughts on “Versata v. SAP: Federal Circuit Claims Broad Review of CBM Decisions

  1. Jeremy, software, in the context of a larger machine or system, or in the context of an otherwise patentable process as in Diehr, can define an improved machine, system or process.

    But a programmed computer by itself, alone, with no inputs and outputs that are connected to do anything physical, is on very shaky ground for 101 purposes. I give you Benson — methods of calculating numbers according to a formula. The novelty of the algorithm was beside the point. The algorithm itself was ineligible, not being drawn to a statutory process. The courts labeled this phenomena as being abstract. But really they mean to me that math is not a statutory process.

    I think the court in Versata all but held this to be the case — that abstract was the equivalent of saying the subject matter was ineligible.

    1. Actually, anon, the thought that calculating numbers on a conventional computer without more can be patentable subject matter is today the unquestioned not patentable subject matter. However, tie a piece of software to a machine so it becomes a permanent fixture, part of the machine, and we might have a different topic of conversation here.

      1. Forever and a day I have asked you to ground your “so it becomes a permanent fixture” to some legal requirement and you have never stepped up and done so.

        What are the chances that you will do so now?

        Or do we all get yet another ride on the Ned-IMHO fantasy patent law Merry-Go-Round?

    2. Gottschalk v Benson declares ineligible a software program whose inputs and outputs are confined within the computer system executing the software program, but perhaps the implicit restriction of the rule to UMA (Uniform Memory Architecture) uni-processor/multiprocessor standalone systems is misguided.

      When I was on the faculty at MIT, I was inter alia working on a RPC (Remote Procedure Call) system that was a predecessor to SOAP (Simple Object Access Protocol), and I used to tell my supervisees that the Internet could be viewed as a vast NORMA (No Remote Memory Architecture) multiprocessor computer system. (I worked at MIT before Berners-Lee invented the World Wide Web in 1989.)

      Nowadays REST (REpresentational State Transfer) seems to have proven more successful as a basis for building distributed applications, but my assertion remains valid although I formulate it today as follows.

      The World Wide Web can be viewed as a vast NORMA (No Remote Memory Architecture) multiprocessor computer system.

      From this standpoint DDR Holdings’ ’572 and ’399 patents simply claim a program (in fact a fairly simple node.js script that acts both as a server and also as client application on the NORMA multiprocessor computer system that is the World Wide Web).

      The inputs to the hybrid server/client program come from a browser UI (also an application within the NORMA multiprocessor computer system).

      The outputs from the hybrid server/client program go to the selfsame browser UI.

      Multiple separate browser UIs may be instantiated at any point in time. A browser UI connects to the hybrid server/client program by writing specific fields in a number of data structures with specific values.

      Thus the claims of the ‘572 and ‘399 patents seem 101-ineligible by the precedent of Gottschalk v Benson.

      Any thoughts?

      1. Why of course Joachim, I have many times stated my approval of DDR Holdings. Such is an example of the use of software in a larger system that “improves” the operation of that larger system rather than the situation in Benson where software calculated a number from a number and just stopped.

        1. Today practically all computer systems are multiprocessor systems because almost all the CPU chips contain multiple processor cores that run in parallel.

          Generally multiprocessor systems fit into three categories:

          UMA (Uniform Memory Access) — all processors see memory in exactly the same way,

          NUMA (Non-Uniform Memory Access) — each processor can access its local memory quickly and can access remote memory more slowly. Local memory to one processor is remote memory to a different processor,

          NORMA (No Remote Memory Access) — each processor accesses its local memory quickly and cannot access remote memory directly. Instead remote memory is accessed by message exchange (over some sort of network medium — like the Internet).

          Sometimes NORMA systems use a software layer to emulate NUMA systems.

          When such software emulation is built into hardware logic, one typically refers to (NUMA) fabric interconnected systems. Starfabric provides this capability.

          I was trying to suggest that the World Wide Web is really one giant NORMA computer system in which the browsers server as simple I/O terminals.

          If the judges understood the World Wide Web as computer scientists (like me) do, the claims of the DDR Holdings patents would have been invalidated by the precedent of Gottschalk v Benson.

          In DDR Holdings’ claims, a web page was just calculatde/generated from some (browser) terminal inputs (something quite trivial by use of common automatic web page generation systems) and displayed on a (browser) terminal. These claims seem to be barely less abstract than those of Benson.

          However, the abstract idea guidance provides ways to formulate claims that would be eligible under 101. I suggested a claim might be eligible under 101 if it were directed to analyzing a file and generating a new/modified file that is saved to file storage.

  2. P.S. Don’t forget that the entire CBM system is automatically repealed on September 16, 2020, only 5 years from now, with respect to any further petitions under this Congressional enacted transitional program directed against business method patents. Congressional efforts to extend it do not seem to have survived in any current pending bills. Another good reason for the Sup. Ct. not taking cert.
    [Also note that while IPRs do not so expire automatically, IPR petitions cannot be based on 101, 112 or many other issues that can be raised in a CBM petition.]

    1. Because you know, Justice delayed is justice denied…

      Oh wait, your plea here is to merely save your desired new “t001” and is not concerned with the underlying “means” being constitutional or not.

      Oh Jezebel, how you do scramble.

  3. Anon2, as claimed, the method read on hand calculations and procedures. The citation to a computer added nothing.

    Perhaps if the claims recited detailed computer-implemented procedures that could not be implement by hand but could only be implemented by a computer, then we might have something. Do you agree?

  4. As the majority opinion itself notes, there are two intertwined legal doctrines at work here in the interpretation of the statutory scope of jurisdiction of CBMs by the Fed Cir.:
    1. “It has long been the law that “[a]dministrative determinations must have a basis in law and must be within the granted authority. . . . An agency may not finally decide the limits of its statutory power. That is a judicial function.” Soc. Sec. Bd. v. Nierotko, 327 U.S. 358, 369 (1946).”
    2. However, as also noted later on in this decision, it has also long been the law that federal agencies should be entitled to considerable “deference” in their interpretations of their own statutes and rules. [Especially when the statute expressly provides for the subject rulemaking?] {A deference the Fed. Cir. has not always given to all PTO determinations, but is not that a moot issue here?}

    1. “An agency may not finally decide the limits of its statutory power. That is a judicial function.” Soc. Sec. Bd. v. Nierotko, 327 U.S. 358, 369 (1946).”

      There are a large number of cases that say the same. Heckler v. Chaney, 470 U.S. 821, 105 S. Ct. 1649, 84 L. Ed. 2d 714 (1985) and Crowell v. Benson, 285 U.S. 22, 52 S. Ct. 285, 76 L. Ed. 598 (1932) are two more.

      The point I wish to make here is that the matter is one of separation of powers. Congress has no power to strip the courts of its right to review agency jurisdiction. This is why Hughes is so far off the mark. If he were right, and if the government position were correct, the statute would be unconstitutional.

      This harkens back to our discussion of McCormick Harvesting. There the Supreme Court clearly held that the question of the validity of a patent for purposes of revoking it is a matter for the courts citing cases that trace their authority directly back to Marbury v. Madison. It’s a constitutional issue and was recognized as being such even by Patlex. Congress has no power to rewrite the Constitution in a matter it so chooses, allocating a judicial function to the PTO. Neither does it have a right or the power to cancel by legislation the constitutional rights of patent owners.

  5. Does anyone else think that the Court may have opened the door for allowing novel business methods under 101? I.e. If a claim is directed to a business method and the steps of the business method is not a “commonplace business method[]” nor employ “known business processes”?

    1. Doubtful. Ultramercial killed off that possibility. An argument that “my claimed ‘computer-implemented instructions’ that are listed in the claims are novel and therefore my idea is not abstract” is untenable.

      Then again, this panel did use a lot of language re: fundamental concepts, building blocks, etc. Who knows. The whole thing is laughable, particularly those enjoying the ends and hand-waving re: the means.

      1. The whole thing is laughable

        The claims at issue here were laughable.

        Versata isn’t laughing now.

        But I certainly am.

        On the other hand, I don’t see anything particularly “amusing” about subject matter eligibility or the rationale for excluding abstractions (e.g., information, methods of calculating a price, etc) from a patent system.

        hand-waving re: the means

        If the tanking of these claims looks like “hand-waving” to you then you shouldn’t be anywhere near a patent.

        1. Oh this is rich. Notice that nothing in my post indicates that I disagree with this decision. I agree with it!

          But if you can’t see that the Alice test is an absurd way of reaching the result, then I don’t know what to tell you.

          Again, the Federal Circuit, district courts, and the PTAB all disagree with your reading of Alice. Maybe we’ll eventually get a test that mirrors yours, but right now Alice is inconsistently applied, because the test has no boundaries.

          1. the Alice test is an absurd way of reaching the result

            Maybe you can try to explain why that is the case. Take your time.

            the test has no boundaries

            Show everyone how Alice can be used to invalidate a claim to a new non-obvious chemical composition described in objective structural terms that distinguish it from prior art chemical compositions.

            Then show everyone Alice can be used to invalidate a new non-obvious device for computing, where that device is described in objective structural terms distinguishing it from prior art computing devices.

            If you can succeed at this, then you’ll be well on your way to convincing everyone that the test “has no boundaries.” But you won’t succeed. That much is guaranteed.

            Here’s the deal: just because you don’t like where a test leads (i.e., your favorite patents get wiped out) doesn’t make the test “absurd.”

            What’s absurd is that our patent system has granted patents that protect information and information-processing logic. That absurdity is being corrected. And there is more to come. Much more.

            Just wait and see.

            1. I’m not sure why anyone bothers responding to you. Alice is being used to invalidate some software patents, but not others. Certain courts and panels buy preemption arguments, others don’t. Certain courts and panels buy old physical components saving claims, some don’t.

              1. Some judges are less intelligent than others. Some judges are easily confused. Some judges get it wrong.

                It’s part of a process called “learning.”

                Just a few years ago I had to endure commenters endlessly trying not to understand the most basic proposition imaginable: you can’t turn an ineligible abstraction (e.g., a non-obvious thought) into an eligible claim merely by reciting some old eligible subject matter (e.g., drinking coffee) in addition to the ineligible abstraction.

                But ever so slowly people start to understand the issues. The fact that some judges still don’t “get it” (or don’t want to) doesn’t mean that some test is “absurd.”

                Now go ahead and answer the questions I asked you. Prove to everyone that the Alice test “has no boundaries.” That was your assertion. All I’m asking is for you to back it up. If you can’t back it up, then maybe consider retracting it.

                1. Sure will, as soon as you show me where the patent statutes preclude functional claiming and instead require objective physical structure. I suggest you steer clear of 112(f) though.

                2. It’s the Malcolm canard of one optional form of claiming somehow being the only legal form.

                  And let’s not forget the Vast Middle Ground where Malcolm’s goalpost moving fears to tread.

                3. as soon as you show me where the patent statutes preclude functional claiming and instead require objective physical structure

                  It’s logic and reason that shows you that.

                  That’s the thing about statutes: they aren’t interpreted in a vacuum by computers. People interpret them, using their brains. Try reading this case carefully and you might begin to understand how it works.

                  Just kidding. You’ll never understand. Maybe you can comfort yourself with the thought that for as long as you really, really, really believe in software patents, it’s still pretty easy to take money from naive clients, stuff your pockets with their cash, and run before they know what hit them. You’d be great at that, I think.

                4. So, to be clear, logic and reason leads you to ignore the language of 112(f). Which was enacted about three years ago.

                  Please be sure to advise when you’re arguing in front of any human being that 112(f) doesn’t allow functional claiming. I, and I’m sure others on this board, will make a point to travel to see it. Seriously. Thanks in advance.

                5. Whether or not software and computer implemented methods should be patentable is a matter of policy. It isn’t a legal question, it’s a political question. To the extent that the courts have crafted a “judicial exception” to patent eligibility, they are no longer interpreting Congressional intent, they are instead deciding a political question. It never should have happened.

                  Patent eligibility jurisprudence was developed in good faith by judges who were honestly trying to navigate complicated and important issues. It wasn’t their place to do so, but they their hearts were in the right place.

                  The jurisprudence developed in good faith is now being used by some as a shortcut to avoid having to deal with 102, 103, and 112 issues. It is being used by others as an instrument to advance policy preferences. It is in other instances still being used in good faith to try to address difficult questions. It is certainly not, however, being applied consistently. You can peer sideways and squint your eyes and try to pretend that everything lines up with your own calibrated heuristic, but the reality is that even if you can get the decisions to be consistent with your framework, the deciders are not all utilizing the same framework.

                6. JCD, To the extent that the courts have crafted a “judicial exception” to patent eligibility, they are no longer interpreting Congressional intent, they are instead deciding a political question. It never should have happened.

                  The problem JCD is that we have no definition of “process.” The attempt to use the definition from Cochrane v. Deener, 94 U.S. 780, 24 L. Ed. 139 (1877)*. was not accepted in Bilski. So, we operate by exception — what a process is not.

                  Now, where do you think these words came from? They sound very much like Bilski/Alice, do they not?

                  In the sense of the patent law, an art is not a mere abstraction. A system of transacting business disconnected from the means for carrying out the system is not, within the most liberal interpretation of the term, an art. Advice is not patentable. As this court said in Fowler v. City of New York, 121 Fed. 747 …

                  “No mere abstraction, no idea, however brilliant can be the subject of a patent irrespective of the means designed to give it effect.”

                  It cannot be maintained that the physical means described by Hicks, – the sheet and the slips, – apart from the manner of their use, present any new and useful feature. A blank sheet of paper ruled vertically and numbered at the top cannot be the subject of a patent, and, if used in carrying out a method, it can impart no more novelty thereto, than the pen and ink which are also used. In other words, if the “art” described the specification be old, the claims cannot be held because of novelty in the appliances used in carrying it out, – and for the reason that there is no novelty.

                  *A process is a mode of treatment of certain materials to produce a given result. It is an act, or a series of acts, performed upon the subject-matter to be transformed and reduced to a different state or thing. If new and useful, it is just as patentable as is a piece of machinery. In the language of the patent law, it is an art. The machinery pointed out as suitable to perform the process may or may not be new or patentable; whilst the process itself may be altogether new, and produce an entirely new result. The process requires that certain things should be done with certain substances, and in a certain order; but the tools to be used in doing this may be of secondary consequence.
                  Cochrane at 788.

                7. Ned,

                  You are showing your anti-process bias once again by attempting to make process a sub-category, necessarily tied to a hard goods category.

                  That is just not the law – no matter how many times you try your monologuing internet style shout-down by repeating your fallacy.

                8. Anon, you are right that the topic of abstractness no longer strictly applies to just method claims. That is why claims to programmed computers “without more” are effectively abstract because the computers themselves are old and generic and the programming is abstract regardless of what numbers it calculates and the meaning of those numbers.

      2. Isn’t the problem here with the difference between “conception” and a “reduction to practice”. The law has always been that one can’t patent an idea but only may be able to patent an application of an idea. Every invention known to man stems from an abstract idea. This is substantially different than merely claiming a “narrow abstract idea” which by definition still an abstract idea. If one seeks to patent a tangible concrete application that is based on an abstract idea, I don’t see why Alice should stop it from being patent eligible as clearly a tangible concrete application is substantially more than merely a non-tangible idea.

        Note that the court here did not couch the 101 issue as a “fundamental economic practice” but rather couched it as an “abstract idea” which the court asserts is a separate distinction.

    2. Mike, I don’t think it makes any difference how detailed the method is described or claimed, if the ultimate output is “price,” the claim likely is abstract and ineligible. I think that is the takeaway from this case.

          1. Ned,

            Let me point out that you have not answered my questions.

            You provided merely the immediate output (and incompletely at that as something other than paper would do).

            You did not answer what is the ultimate output.

            You also have not answered the weight questions.

            Again.

            Do you recognize the Merry Go Round of your evasions?

            1. “Fifth. I claim, as my invention, the system of signs, consisting of dots and spaces, and of dots, spaces, and horizontal lines…”

              I omitted the explanatory field of use clause for clarity.

              The claim literally claims a system of signs.

              It does not require the use of a machine or medium.

              Dot, dash, dot space.

        1. I can easily see an argument as to why Morse could fail under Alice. For example, Morse’s claims are directed to the abstract idea of transmitting a communication over long distances . The claims merely state apply a pen and pencil communication long prevalent using the postal service. The claims do not provide “substantially more” as the claims merely recite a technological environment or an albeit narrow abstract idea.

          Here another example which is even more frustrating. Morse’s claims are directed to the abstract idea of “transmitting a communication over long distances via an electronic signal.” The claims do not provide “substantially more” as the claims merely recite applying the abstract idea in a particular technological environment. A narrow abstract idea does not make the abstract idea any less abstract.

          I hate this test as it makes no logical sense. All inventions have a “conception” which is an abstract idea. But claims that “apply” the abstract idea should be patent eligible so long as the application itself is tangible and concrete (i.e. not abstract). The second you take an idea and apply it to the real word it becomes non-abstract.

          Art unit 3600 has been rejecting 80%+ of all patents under 101. I even saw a rejection recently where the claims were allegedly abstract because they were directed to “a method” and thus the claimed steps are necessarily part of the “method”. System claims were not rejected. These types of rejections seem ludicrous.

  6. “As Judge Hughes writes, a major portion of the ruling here is in tension with Couzzo because it allows the Federal Circuit to review whether the grant of the review was proper. ”

    Not really, the majority distinguished Cuozzo and properly so.

    WHEN, the issue is one of jurisdiction, authority, the matters are reviewable on final decision. When the issue is on the merits, that is “washed clean” in the final decision and remains non reviewable.

    Think denial of summary judgment on a merits issues. On appeal from a final judgment after trial, whether a summary judgment was properly denied is not reviewable.

    On the contrary, standing is always reviewable. Statutory jurisdiction goes to the power of the PTAB to act, like standing in court. This is always reviewable.

  7. A surprisingly poor write-up of a critically important case, guys. I know you guys are proud of coming up with the “conditions of patentability” argument that was rejected, but your focus on this pet theory blinded you to the much bigger issue, the interpretation of a “covered business method patent” under the AIA, and the approval of the PTO’s broad definition of a financial product or service. That’s a huge issue that was ignored by your post.

    I also do not understand why you guys are calling the court’s jurisdictional discussion “dicta.” The PTO specifically moved to dismiss the appeal arguing that that the Federal Circuit couldn’t review the CBM eligibility determination because it was made in an initial institution decision. They could not address the CBM eligibility issue at all, which they did (see above), without first addressing their appellate jurisdiction. In no way does the jurisdictional discussion constitute “dicta.”

    As for the “conditions of patentability” argument, it was trendy for a while among patent holders. I saw this argument in dozens of briefs in district courts in which patentees were arguing that invalidity under 101 was not cognizable as an invalidity defense under 282 (notwithstanding that cases like Alice, etc., all invalidated claims under 101 in district court actions). No one gave the argument serious consideration, and I don’t think any district court bought it. (And most just ignored the argument without even feeling it warranted a response.)

    Sometimes you guys make arguments that stick (like pointing out the lack of Article III standing for PTO reexam appeals from public interest organizations), and sometimes you make arguments that miss the mark. This one fell into the latter category.

    1. LoadRunner, obviously, Judge Rich would not agree with you as it was his view that the ’52 Act all but removed and was intended to remove 101 from patentability considerations – moving all that to 103.

      I think this case finally puts a nail into that coffin. Section 101 remains a condition of patentability.

        1. The point I make here is that Rich would have given the argument a lot more weight given that his views were consistent with the text of the statute.

          1. Consistent… Statute…

            Tell me again (or yet for the first time), the difference between statutory law and common law, and which type, and to which branch, was authority under the constitution provided for…

  8. “[t]he majority’s interpretation of § 324(e) to permit review of whether Versata’s patent is a ‘covered business method patent’ directly conflicts with our precedential decision in In re Cuozzo Speed Technologies, LLC, (Fed. Cir. July 8, 2015).”

    That’s what I was kinda thinking. But I can see how they could be said to be different enough.

    “It would require a hyper-technical adherence to form rather than an understanding of substance to arrive at a conclusion that § 101 is not a ground available to test patents under either the PGR or § 18 processes. Section 101 validity challenges today are a major industry, and they appear in case after case in our court and in Supreme Court cases, not to mention now in final written decisions in reviews under the AIA. The numerous cases in our court and in the Supreme Court need no citation. . .”

    Exactly as I’d predicted when you guys brought this argument up.

    A right proper decision right here.

  9. This is fascinating case which again demonstrates genuine forward progress at the Federal Circuit. It’s just a shame that it took so much time to take these baby steps. Law professors (and any other parties) who enjoy sociology and history have plenty of interesting work to do.

    As a quick aside, this case is yet another example where the PTO’s use of BRI was found to make no difference to the outcome.

    Some choice excerpts:

    Versata, in its effort to avoid CBM review of the ’350 patent, argued that claim 17, like all the claims in the patent, recited a novel and nonobvious technological feature. This was described as a “hierarchical data structure” used in combination with a software-implemented pricing procedure. Versata further contended that the claims all require the use of a computer and the use of “denormalized” numbers that are to be determined in “run time.” SAP responded that claim 17 lacked a novel and nonobvious technological feature as the claim was merely directed to a business process of determining product prices that lack even minimal computer- related recitations. The PTAB concluded that claim 17 did not recite a technological invention.

    We accept the PTAB’s use of claim 17 as representative. As the PTAB correctly noted, even if the invention required the use of a computer, the claim did not constitute a technological invention. As we are now instructed, the presence of a general purpose computer to facilitate operations through uninventive steps does not change the fundamental character of an invention. See Alice Corp.
    Pty. Ltd. v. CLS Bank Int’l, 134 S. Ct. 2347 (2014)….

    [C]ontrary to Versata’s argument that the invention “‘leveraged the hierarchal data structures used by large companies to organize pricing information,’” we
    agree with the PTAB that this is not a technical solution but more akin to creating organizational management charts. … Like the PTAB, and for many of the same reasons, we conclude that whatever may be the full sweep of the term “technological invention,” the invention that comprises the ’350 patent is essentially not a technological one as that term ordinarily would be understood….

    Examination of the claims—as a whole and in terms of each claim’s limitations—reveals that the claims are not directed to improving computer performance and do not recite any such benefit. The claims are directed to price determination and merely use a computer to improve the performance of that determination—not the
    performance of a computer

    Versata made some long-past-the-expiration-date arguments in its desperate attempt to rescue its claims (e.g., “claim dissection!”). It being 2015, those arguments were barely worth addressing and the panel here bluntly, and correctly, swept them all aside.

    Bottome line: more junky information-processing claims tanked and many, many more to come.

    1. These “junky information-processing claims” revolutionized the approach to determining pricing in an efficient and novel way, as evidenced by third-party copying such as SAP’s. U.S. software development drives significant innovation not only in the U.S. but world-wide. A legislative solution needs to come to stop this ridiculous appellate court 101 jurisprudence and let 102 and 103 do their job.

      Surely, some of our brilliant, legal scholars can and will propose a fix to protect software as proper subject matter while weeding out patent applications that are neither new nor unobvious.

      1. These “junky information-processing claims” revolutionized the approach to determining pricing in an efficient and novel way, as evidenced by third-party copying such as SAP’s.

        There’s a pretty huge difference between “efficient and novel”, on one hand, and “revolutionary” on the other. If the use of hierarchies in the context of a calculation was ever “revolutionary”, it stopped being so a long, long time ago. As for “copying”, are you suggesting that SAP copied Versata’s software? I’ve seen no evidence suggesting that.

        U.S. software development drives significant innovation not only in the U.S. but world-wide.

        That’s nice. Unfortuantely that has nothing to do with the patentability of junky information processing claims like the one that deservedly got tanked here.

        If you want to promote progress in the calculation of prices, find another way to do it. Our patent system wasn’t designed to promote progress in math. Most people have no difficulty accepting the fact that capitalism itself is perfectly suited for promoting progress in that area.

        Businesses that provide financial information are perfectly capable of progressing without patents. And the patent system is way better off without junky price calculation methods clogging up the PTO and the courts. Expunge them all and let’s continue the process of moving on and returning the patent system to something remotely sane.

        1. perfectly capable of progressing without patents.

          Excuse me, but so what?

          Unless of course, your “point” here is the fallacy that parents are only for the “but for” rationale.

          Is that your point?

          What happened to those short declarative sentences that you were always on about?

          You really do seem to have major problem portraying the law accurately with your propensity to want the law to be solely those optional aspects that you like, instead of what the law actually is.

        2. The aversion to examining software-implemented inventions on their 102/103 merits flies against the entire purpose of patents. Patents are an established, effective means in America of encouraging early innovation versus stealing IP. Let 102/103 do their job. The anti-software patent group are the equivalent of industry segregationists. The anti-software patent group should ultimately lose because they are on the wrong side of the American success story.

      2. anon2,

        protect software?

        1. Copyright.
        2. Contracts preventing reverse compilation.
        3. Keep the crown jewels secret.

        Publishing how the software works in a patent makes little sense from a business point of view. The whole world then knows, but patents do not cover the whole world.

        The people who advised Versata perhaps were more interested in making a buck for themselves than protecting Versata.

        1. The whole world knows…?

          Exact same is true for any invention in any art field Ned.

          Your “logic” is not just anti-software patent – it is anti-patent.

        2. Innovative new computer-implemented methods are implemented every year. If the concern is that obvious or non-novel methods gets patented, no worries, we have statutes for that: 102 and 103. If the concern is that Applicants may try to claim protection that isn’t commensurate with what they invented, no worries, we have a statute for that: 112. 101 is being used as a shortcut to invalidate patents that should be invalidated under 102, 103, or 112, but in doing so, precedent is created which can be used to prevent patenting of legitimate innovation. Whether computer-implemented methods is a policy question, not a legal one. Congress, and even the Supreme Court, have made it clear that software is patent eligible in theory. Some parties are working to make sure this is not true in practice. It is fine to lobby Congress to change the law, but it is just annoying to pretend like this isn’t a major shift in policy, rather than refinement of legal interpretation.

          1. Examiner’s shouldn’t be asked to handle purse legal questions like 101. Legal questions are for courts to decide. Examiner’s are not required to provide any actual evidence in their 101 rejections. At least 102 and 103 require the examiner to show evidence of prior art. Under 101 the Examiner is free to assert that the claims are “conventional” and “routine” without having to provide any evidence whatsoever. These rejections are arbitrary and capricious.

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