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April, 29th, 2020

By: Stephen Ball

Software inventions are patentable. The statutory language is clear:

Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title.

35 U.S.C. § 101. Congress gave patent eligibility to all machines and provided other provisions for challenging validity. Software is used to program new and useful computing machines and so is just as patentable as any other type of invention.

Despite this, the Supreme Court has attack software patents by establishing an amorphous “know it when you see it” test for abstract ideas, a judicial exception to § 101. This has caused many to reduce patent filings on these types of inventions. The Supreme Court’s activism has generated responses from judges, practitioners, industry groups, inventors, and others, all calling for a solution. The law is moving in favor of patents and now is the time to obtain this essential protection.

Faced with an uncertain framework, the Court of Appeals for the Federal Circuit has repeatedly asked for clarification from the Supreme Court. In July 2019, the Federal Circuit denied a petition for en banc rehearing on the question of patent eligibility in a 7-5 decision. The denial includes eight separate opinions that all call for Supreme Court or Congressional intervention. Athena Diagnostics, Inc. v. Mayo Collaborative Servs., LLC, 927 F.3d 1333 (Fed. Cir. 2019). Judge Hughes recognized “[t]he multiple concurring and dissenting opinions regarding the denial of en banc rehearing in this case are illustrative of how fraught the issue of § 101 eligibility…is” Id. at 1337.

The USPTO has done its part by issuing new guidelines. 2019 Revised Patent Subject Matter Eligibility Guidance, 84 Fed. Reg. 4, 50-57 (January 7, 2019). The guidelines note that “[p]roperly applying the [Supreme Court’s] test in a consistent manner has proven difficult, and has caused uncertainty in the area of the law,” id. at 50, and the approach by courts of comparing claims at issue to those already found to be directed to abstract ideas has “become impractical,” id. at 52 (emphasis added). The guidelines limit eligibility exceptions and direct that an invention is not abstract if it is “integrated into a practical application.” Just recently, the USPTO reported that the likelihood of receiving a § 101 rejection decreased 25% since the new guidelines were issued. https://www.uspto.gov/sites/default/files/documents/OCE-DH_AdjustingtoAlice.pdf. It is getting easier to protect software inventions and the ability to enforce them will have to follow.

The American Intellectual Property Law Association (AIPLA) and the Intellectual Property Owners Association (IPO) have submitted their own legislative proposal to amend 35 U.S.C. § 101. The proposal recites: “A claimed invention is ineligible under [Section 101] if and only if the claimed invention as a whole (i) exists in nature independently of and prior to any human activity or (ii) is performed solely in the human mind.” Joint AIPLA-IPO Proposal on Patent Eligibility, May 2018, https://www.aipla.org/advocacy/legislative/joint-aipla-ipo-proposal-on-patent-eligibility.

Perhaps the most encouraging development is that Congress has released a bipartisan, bicameral draft bill to reform §101. The draft bill has a number of pro-patent provisions: the “provisions of section 101 shall be constructed in favor of patentability;” all cases establishing or interpreting the judicial exceptions to patent eligibility are “hereby abrogated;” the eligibility of a claimed invention under §101 shall be determined “without regard to: the manner in which the claimed invention was made; whether individual limitations of a claim are well known, conventional or routine; the state of the art at the time of the invention; or any other considerations relating to sections 102, 103, or 112 of this article.” Draft Bill, May 2019, https://www.tillis.senate.gov/services/files/E8ED2188-DC15-4876-8F51-A03CF4A63E26.

A solution has been demanded by the Federal Circuit, IP trade groups, the USPTO, and others, and it is coming. It may take some time to move through the legislative process, but a patent is a long-lasting property right that should not be wasted based on a short-term disarray in the law. Filing patent applications is like planting seeds—it must be done now so there will be something to harvest in the years to come.

 

WHIPgroup is leading counsel for U.S. and international technology companies. We specialize in patent and trademark law.

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