Appeals Court Arbitrarily Deciding What Is And What's Not Patentable

from the depends-on-which-way-the-wind-blows dept

Fri, Sep 23rd 2011 3:48am — Mike Masnick

After the Supreme Court totally punted on the question of business model and software patents in the Bilski ruling, the courts have been a mixed bag. Without a brightline rule, they're sort of fumbling around. We recently wrote about one case that suggested that the courts might be much more willing to dump software patents, but other rulings are going in a different direction. The EFF has noted that a series of recent decisions from the Federal Circuit (CAFC) have basically left lawyers scratching their heads over what is and what is not patentable:

Taken together, these post-Bilski cases confuse, rather than clarify, the standard for impermissible abstraction. In four cases (Bilski, Ultramercial, Classen, and CyberSource), two patents were too abstract (patents for hedging risks and detecting credit card fraud) and two were not (patents for showing ads before copyrighted content and devising immunization schedules). For laypeople and attorneys alike, it is hard to understand why the latter two patents were any more concrete than the former. One might argue that the upheld patents required added complexity (computer programming and administering an immunization), but the abstract patents would likewise require additional steps to execute. What distinguishes those steps that are too abstract from those that are not?

As James Bessen has said repeatedly, a working patent system would lead to clear boundaries. A broken patent system is one with ridiculously vague boundaries, because all that does is increase litigation. The Supreme Court really should have made a clear ruling in Bilski. Instead, in many ways, the confusion and uncertainty is making the system worse, and just encouraging greater litigation.

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Filed Under: business models, cafc, patentability, patents, software

41 Comments

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Anonymous Coward, 23 Sep 2011 @ 4:46am

Judge: "Oh goody, another patent lawsuit. Time to break out the magic 8-ball."
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Anonymous Coward, 23 Sep 2011 @ 4:49am

I have to say that if the decisions were a little more "anti-patent" that the EFF would have absolutely nothing to say on the issue.

The EFF (aka, Lessig and friends) has gone from being about human rights, and are not much more oriented to trying to push an agenda against copyrights, patents, etc. I have noticed that Mr Lessig seems less likely to post up his own opinion these days, and more likely to express his opinion via the EFF news system, likely because the media learned to pay attention to the EFF in the past.

The story is attributed to Julie Samuels, who "focuses on intellectual property issues". It seems that Lessig's EFF has certainly shifted it's focus.
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Anonymous Coward, 23 Sep 2011 @ 4:52am

Re:
Let me add that it is even funnier considering that Lessig is no longer active in EFF, but seems to always come up whenever EFF is up to something.

Odd, isn't it?
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6, 23 Sep 2011 @ 4:54am

I told you in your post on Cybersource to watch out because those were just three judges whose opinion was rather weirdly made in that case.

Rader on the other hand is a staunch patent expansionist/protectionist and that is reflected in his two decisions.

If you want to understand the patent system you really have to get to know the characters involved.
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Dementia (profile), 23 Sep 2011 @ 4:57am

Re: Re:
That's funny, since the only one I see bringing up Lessig is you.
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Richard (profile), 23 Sep 2011 @ 5:02am

If you want to understand the patent system you really have to get to know the characters involved.

If true that is the biggest possible indictment of the system.
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Anonymous Coward, 23 Sep 2011 @ 5:11am

Re: Re: Re:
You have to be blind not to see his hands on this one.
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Anonymous Coward, 23 Sep 2011 @ 5:43am

Re:
tl;dr version:

"blah blah blah smear blah blah ad hominem yadda yadda patents rule yak yak nothing is broken blah blah don't mess with the status quo"
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Anonymous Coward, 23 Sep 2011 @ 5:49am

Re:
Tin foil hat too tight?
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pjcamp (profile), 23 Sep 2011 @ 6:13am

No
This is actually Congress' job.

If the courts have to step in to set boundaries, that indicates that far more is broken than just patent law.
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Mark, 23 Sep 2011 @ 6:22am

Why not? When the Fish and Wildlife Service can shut down a private corporation ... http://msmignoresit.blogspot.com/2011/09/usfws-impedes-america-economy-while.html
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Anonymous Coward, 23 Sep 2011 @ 6:25am

Broken For Whom?
A broken patent system is one with ridiculously vague boundaries, because all that does is increase litigation.

The system is run by the courts and the lawyers. Increasing litigation is a good thing, to them.

Instead, in many ways, the confusion and uncertainty is making the system worse,...

Or making the system better if you're making money from it.

...and just encouraging greater litigation.

That's the point.
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Anonymous Coward, 23 Sep 2011 @ 6:32am

Re:
The EFF (aka, Lessig and friends) has gone from being about human rights, and are not much more oriented to trying to push an agenda against copyrights, patents, etc.

If freedom is a human right, then that still seems to be about human rights, to me.
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Anonymous Coward, 23 Sep 2011 @ 6:33am

Re:
Rader is NOT an "expansionist", and to suggest otherwise is painting his application of Section 101 with a broad brush indeed.

The issue here is strictly limited to Section 101, the first "door" an alleged invention must pass before it is subject to scrutiny under the substantive provisions of Title 35, including, inter alia, 102, 103 and 112.

Between Newman in Classen and Rader in Unimerical, the CAFC was left to work with Bilski and its less than clear test. Bilski was hardly the paragon of clarity, but the court's refusal to draw a brignt line test is perfectly understanable given that the law has always posited that 101 is not to be read in a limiting sense precisely because Congress long ago made it clear that it was to be interpreted liberally as new inventions hitherto unknown entered into the commercial marketplace.

Newman and Rader, however, almost certainly have a purpose behind their opinions, and that is to feedback to the Supreme Court some of the problems associated with Bilski.

For example, pre-Bilski the CAFC held that the Classen was barred by 101 under then existing precedent. When the case was accepted by the Supreme Court and then remanded for reconsideration in light of Bilski, the CAFC reversed course because of Bilski and felt compelled to reverse its prior decision.

Maybe, just maybe, the CAFC has a much better handle on what is 101 eligible than the Supreme Court.
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Anonymous Coward, 23 Sep 2011 @ 6:35am

Re: Re: Re: Re:
"You have to be blind not to see his hands on this one."

One would have to be blind not to see whose hands are pulling your strings.
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Anonymous Coward, 23 Sep 2011 @ 6:40am

Re:
Ms. Samuels has no substantive experience with Title 35, so regurgitating here article mere adds to the FUD that surrounds Title 35.

Perhaps I should write an article about federal income tax law. After all, at one time I worked on an appeal to the CAFC on a specific secion of the IRC pertaining to the R&D tax credit, so that obviously makes me an expert on the law in general.
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Lord Binky, 23 Sep 2011 @ 6:41am

Re: No
I guess your textbook was old. Here I'll catch you up.

The Judicial branch used to interpret/explain/apply laws, but now just changes the definition of words to create the law they want while suggesting congress needs to rewrite the laws if they need to be changed.

The legislative branch change too. Congress once created laws to properly execture their granted powers now they create laws at the behist of their corporate overlords through an intermediary faction called "lobbiests."

The executive branch is hard to tell if it's changed any in function, but definitely the purpose has changed. The President's job is no longer to ensure that laws are properly executed and defend the constitution, but has been placed into the role of public relations which includes numerous tours and televeision appearances while placing endorsements for the same corporate overlords used to gain the position.
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Lord Binky, 23 Sep 2011 @ 6:43am

Re: Re: No
One day I'll bother to spellcheck, until that day comes, contact your local OD for bleeding eyes.
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Anonymous Coward, 23 Sep 2011 @ 6:55am

Re: Re:
Rader is NOT an "expansionist"

Bull.
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Anonymous Coward, 23 Sep 2011 @ 7:13am

Re: Re: Re: Re: Re:
Too bad the only person "pulling my strings" is me.

Nice try to deflect. Tell Mike you failed.
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Hephaestus (profile), 23 Sep 2011 @ 7:14am

Re: Re:
No, his Tin foil hat is way to loose, its letting in all those MK Ultra rays ...
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Richard (profile), 23 Sep 2011 @ 7:23am

Re: Re: No
The President's job is no longer to ensure that laws are properly executed and defend the constitution, but has been placed into the role of public relations which includes numerous tours and televeision appearances

Barack Obama == Zaphod Beeblebrox
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Anonymous Coward, 23 Sep 2011 @ 7:36am

Obviously the bribes weren't big enough.....
So the two that 'failed' as patents are related to finance, we all know the bankers got billions for doing nothing, obviously the Judge is just providing them guidance on the appropriate amount of 'contributions' required to get the ruling they want.

The two that 'succeeded' are related to.... copyright and pharma... who would have guessed, that probably the 2 biggest 'contributors' to the political parties that got the judge where he/she is today get the 'green light' to go ahead with their bogus patents.

I believe the term in business is 'working as designed', those who pay for the laws get the laws they want, those who don't get the shaft (and guidance on what they need to do better in the future... more graft please is what the judge is really saying).

Sure I'm a cynical tin-foil hat wearing conspiracy theorist, doesn't mean I'm not right, and I'd like to see anyone prove otherwise.....
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Old Fool (profile), 23 Sep 2011 @ 7:44am

Working as Intended
The courts are doing what any high profit business does, drumming up more work for itself.
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Anonymous Coward, 23 Sep 2011 @ 7:47am

Re: Re:
Ms. Samuels has no substantive experience with Title 35, so regurgitating here article mere adds to the FUD that surrounds Title 35.

Regurgitating EFF anti-IP FUD is one of Pirate Mike's prime directives.
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Anonymous Coward, 23 Sep 2011 @ 8:40am

Bilski was a punt, because the Supreme Court Is made up of lawyers.
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Mike, 23 Sep 2011 @ 9:22am

Let me address a few things
I am a patent attorney. I'm also a computer scientist and former application developer.

First, this post (and the EFF) makes it seem like patent attorneys are confused by the courts rulings. while there may be dispute about the purpose of 101, it really isn't a surprise how these cases have come out. Let me break it down for you:

These cases have largely only addressed what is the "subject matter of the patent system. This is embodied in 35 USC Section 101. This is admittedly a very low bar because no one wanted (or wants) to exclude the substance of human innovation BEFORE that substance has even been invented. It's one thing to look at the world through the lens of a manufacturing world, but the law had to anticipate uses in biotechnology, medicines, electronics, software, etc.

101 has nothing to do with how obvious some patent application is, it has nothing to do with whether the patent application claims something that has been done before, and it says nothing about how well the patent has been written.

Challenges under 101 are basically saying: you're not even in the realm of patented innovation.

The rulings coming out against certain patents find, what I'll call, "no iron." They don't even bother to reference a computer, a network, something that you can touch, print, see, etc. The other ones do.

These decision almost all remand the invalidity issue back to the lower court for a review under the other applicable sections of patentability, 35 USC: 102 (has it been done before), 103 (is it obvious), and 112 (whether the patent describes what is claimed in any meaningful way).

Second, I will remind you that companies and individuals sue for patent infringement and the decision makers in this choice are not usually lawyers (save in the case of a handful of trolls) or judges. Their the clients of the lawyers. Their clients are the ones willing to pony up the money to institute infringement cases, etc.

Third, any change is well within the scope of the power of Congress to change. The AIA did nothing to modify the status quo on this point and it was the most sweeping reform bill in decades. That's in large part because changes to Section 101 has the ability to do great harm to a great number of people and, despite the rhetoric here, no real good philosophical grounds upon which to base that change, e.g., a categorical exclusion of software.
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Mike Masnick (profile), 23 Sep 2011 @ 9:59am

Re: Re: Re: Re:
You have to be blind not to see his hands on this one.

Really? As far as I know Lessig has had nothing to do with EFF for years, and I don't ever recall Lessig taking any interest whatsoever in patents.

What makes you say that he must be involved in this particular issue? As far as I can tell this is an issue that he's never expessed any interest in whatsoever.
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Anonymous Coward, 23 Sep 2011 @ 3:09pm

Re: Re: Re: Re: Re:
Actually, Lessig has been involved in debates about patents for many years. For example, he was one of the signatories to an amicus brief file with the Supreme Court in the matter of Mercexchange v. eBay.

It is fair to say, though, that most of his work has been on the copyright side of the house.
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6, 23 Sep 2011 @ 5:26pm

Re: Re:
"Between Newman in Classen and Rader in Unimerical, the CAFC was left to work with Bilski and its less than clear test."

It's actually pretty clear if you don't mind not trying to overthink it.
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6, 23 Sep 2011 @ 5:28pm

Re: Re:
"For example, pre-Bilski the CAFC held that the Classen was barred by 101 under then existing precedent. When the case was accepted by the Supreme Court and then remanded for reconsideration in light of Bilski, the CAFC reversed course because of Bilski and felt compelled to reverse its prior decision."

There was a new panel. The CAFC in total did not suddenly have a change of heart on that case. The author of the first opinion, and I believe the only one on the second panel that was also on the first panel held her ground and said that the claim was easily invalidated under Bilski.
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6, 23 Sep 2011 @ 5:29pm

Re: Re:
"Maybe, just maybe, the CAFC has a much better handle on what is 101 eligible than the Supreme Court."

Nah Bro, and even if they did it doesn't matter, they're bound to follow the USSC.
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6, 23 Sep 2011 @ 5:35pm

"The rulings coming out against certain patents find, what I'll call, "no iron." They don't even bother to reference a computer, a network, something that you can touch, print, see, etc. The other ones do."

Except Benson. But of course you knew that.

"That's in large part because changes to Section 101 has the ability to do great harm to a great number of people "

Such as...?
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Anonymous Coward, 24 Sep 2011 @ 12:21am

Re: Re: Re: No
Humph. Grammar and punctuation could do with some work, as well. Try proofreading before you mash the "Submit" button.
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Anonymous Coward, 24 Sep 2011 @ 1:32am

Re: Great Harm
"ability to do great harm to a great number of people"

The patent system is already doing great harm to the whole population of the USA. The reason is that its cost is greatly in excess of its benefits. Its cost is well higher than $80 billion per year (which is just the cost in lost company valuation). Call it $300 billion per year, to make the math simple. That works out to $1000 per year for every man, woman and child in the USA.

What are the benefits? Benefits are supposed to flow from the disclosure in the patents. In the patent lawyer's fantasy world, inventors patent then manufacturers license. In practice that does not happen at any economically significant rate. Inventors living off their licensing revenue are an extinct species. Manufacturers overwhelmingly do not benefit in any way from the disclosures made by the patent system. Patents are useless to engineers. No sensibly-run company will allow its engineers to read patents. The benefits of the patent system are illusory.

To stop the harm, either (1) reduce the costs, (2) increase the benefits, or (3) abolish the patent system. If the present participants in the patent system refuse to do (1) or (2) -- which is what they are doing -- then the political level will ultimately do (3). Lawyers, enjoy the ride, while it lasts.
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Anonymous Coward, 24 Sep 2011 @ 9:28am

Re: Re: Re:
It is about as clear as the "test" in Graham v. John Deere. It was easy to read and pretty clear, until as time passed I came to realize as years passed the opinion was nothing more than words on paper providing no meaningful guidance in the real world.
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Anonymous Coward, 24 Sep 2011 @ 9:29am

Re: Re: Re:
Actually, Newman and Moore were on both panels.
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Anonymous Coward, 24 Sep 2011 @ 9:32am

Re: Re: Re:
It does matter quite a bit. If a SCOTUS opinion is muddled, you can be sure the relevant issue will eventually make its way back to DC.

Rader and Newman are simply, and quite appropriately, interpreting the muddle in anticipation of the issue's return trip to DC.
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staff, 26 Sep 2011 @ 7:29am

another biased article
Masnick has an unreported conflict of interest-
https://www.insightcommunity.com/cases.php?n=10&pg=1

He sells blog filler and "insights" to major corporations including MS, HP, IBM etc. who just happen to be some of the world�s most frequent patent suit defendants. Obviously, he has failed to report his conflicts as any reputable reporter would. But then Masnick is not a reporter. He is a patent system saboteur receiving funding from huge corporate infringers. He cannot be trusted and has no credibility. All he knows about patents is he doesn�t have any.
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Bruce, 26 Sep 2011 @ 6:31pm

Stick to substance
The staff attack is arguably correct yet off topic. Masnick was contending that the Bilski decision leaves uncertainty that, in turn, leads to more litigation, not less. I agree with that contention, and would point to the seminal opinion of Tom Clark in Graham v John Deere where the Supreme Court established some degree of certainty in obviousness by establishing guidelines that are still quoted today. The machine or transformation test was a clear test that would have helped add certainty. However, it is water over the dam, and we do have some certainty. If it is commercial
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patent litigation, 16 Oct 2011 @ 3:52pm

muddle
I agree insofar as not being entirely convinced that the patent at issue in Ultramercial passes the "abstract idea" test. It may be time for an en banc review, in order to try to clear up the muddle that the Supreme Court helped create with its buck-passing Bilski decision.
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