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Blurring of Abstraction and Application Puts Software in Peril

By Jonathan T. Kaplan, Esq.                                November 2013

Today’s software patentability crisis stems from a new “tone” of criticism from the Supreme Court towards its lower court, coupled with a lack of guidance, on the difference between an abstraction and its applications.

Part II (please also see Parts I and III)

Last time, I provided an introduction to the truly amazing recent opinion of CLS Bank Int’l v. Alice Corp. Pty, LTD., decided by the Court of Appeals for the Federal Circuit (CAFC) in May of this year.  Also, a bit of background was provided on the basic framework the Supreme Court uses, when wrestling with the most basic question in patent law: whether an invention is of a type permissible for patenting (i.e., whether it is patentable subject matter).  Now, let’s see how the framework applies, when the invention is one that relies on software for its implementation.

Of the three exceptions discussed last time, to the statutory definition of patentable subject matter, the “abstract idea” exception has generally been the most troublesome for software.  Prior to the existence of computers and software, the Supreme Court had already developed a doctrine that mathematical expressions, with nothing more to limit them, should be treated as unpatentable abstract ideas or laws of nature.

When computer software came along, in some key cases over the period of 1972 to 1981, the Supreme Court established the precedent of considering software patentability on the basis of whether it represents an abstract idea, in a similar way in which mathematical expressions were already regarded to do.  On the other hand, if a claim is limited to only to an application of an abstract idea, then the Supreme Court considered the subject matter patentable.

Starting with those early cases, and continuing to this day, the courts have continued to struggle with defining a principled way to draw the line, between an abstract idea and its applications.  The courts uniformly agree that the “hardware” of a computer is patentable subject matter, because it represents a kind of machine.  Regarding software, when combined with a general purpose computer, as creating a kind of special purpose machine that should also be eligible for patenting — this is a concept with which the courts have had varying degrees of comfort over the years.

Recent Supreme Court cases (most notably, Bilski v. Kappos, 130 S. Ct. 3218; 177 L. Ed. 2d 792 (2010) and Mayo v. Prometheus, 132 S.Ct. 1289; 182 L. Ed. 2d 321 (2012)) seem to indicate a Supreme Court that is less comfortable, with the idea of software creating a special purpose machine, than the CAFC had previously thought.  The new “tone” of criticism towards CAFC approaches to the patentability issue, coupled with insufficient Supreme Court guidance on how to draw the line between abstraction and application, has led to something of a crisis situation in the CAFC and lower courts.

In CLS Bank Int’l v. Alice Corp. Pty, LTD., the trial level court ruled all of Alice Corp.’s claims unpatentable, because that court decided the claims were attempting to own the abstract idea of settlement with a trusted third party, rather than just a particular way in which that abstract idea could be applied.

As with any appellate court, the CAFC strives to provide firm guidance to its lower level courts, by providing at least one main opinion, that has the agreement of a majority of the judges.  For its review of the CLS Bank v. Alice Corp. decision, however, the 10 CAFC judges, that participated in review of the trial court’s decision, splintered into many factions.  The “opinion” of the CAFC in this case is actually composed of six separate sub-opinions.  The net result of these opinions, organized by basic claim type, is as follows:

  • Method and Media claims: A majority of the judges agreed with the district court’s opinion, that these claims are too abstract, and therefore ineligible for patent protection.  However, there was no majority, among these judges, as to the legal reasoning by which to reach this conclusion.

  • System claims: The court is evenly split, on whether these claims are patentable.

A clear theme, running through the six sub-opinions, is a highly-unusual plea for guidance from the Supreme Court.  The Supreme Court cannot be required to review any case, it can only be petitioned for such review.  Such a petition has been submitted in the case, and most observers believe it likely the Supreme Court will grant review.  Stay tuned for more exciting developments to come!

[Update: Supreme Court review was granted, please see next blog post.]

Mr. Kaplan runs a small IP law firm, specializing in patents, located in the northern suburb of Portland, OR.  He has over 20 years of experience (the first 10 with large nationally-prominent law firms), is admitted to practice law in three states (CA, NY, and WA), and is USPTO registered.

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