US Patent Office: Supreme Court Made Us Reject More Patents, But We've Now Fixed That And Are Back To Approving Bad Patents

from the say-what-now? dept

One of the most important Supreme Court rulings in the patent space is the so-called Alice ruling in 2014 which should have effectively spelled the end of software patents (even though the ruling doesn't exactly say that). The ruling just says that you shouldn't get patents on software that "does no more than require a generic computer to perform generic computer functions." As we noted at the time... that's basically all software that is found on computers and personal devices. Sure, there may be some specialized machines, and, fine, let them get patents. But based on this ruling, nearly all software patents should be rejected.

And, for a little while it seemed like that was happening. There were stories of the Patent Office rejecting a bunch of patents based on this ruling and things seemed to be heading in a good direction. Bad patents for generic software were not being allowed. But something changed. Indeed, after a general plateau in patents granted after Alice, patents started to go back up again.

While some patent system supporters have been claiming that various Supreme Court decisions, such as Alice, have destroyed their ability to patent their non-patentable concepts, reality shows that the PTO has continued approving plenty of awful patents.

And, now we know why. The US Patent Office has just released quite an eye-opening report regarding how it responded to the Alice decision entitled Adjusting to Alice. The TL;DR summary: "After Alice we started rejecting a lot more patents, but then Patent Office bosses issued "new guidance" that effectively overruled Alice, and we're back to approving bad patents again!"

They didn't quite put it that way, but that seems to be the clearest interpretation of the report. First, they say what happened after the Alice decision:

The likelihood of receiving a first office action with a rejection for patent-ineligible subject matter increased by 31% in the 18 months following the U.S. Supreme Court decision in Alice Corp. v. CLS Bank International in 33 “Alice-affected” technology areas.

For these technologies, uncertainty in patent examination — measured as variability in patent subject matter eligibility determinations across examiners in the first action stage of examination — increased by 26% in the 18 months following the Alice decision.

But have no fear patent trolls, the USPTO stepped in with "guidance" and magically the number of patent rejects quickly dropped.

One year after the United States Patent and Trademark Office issued its January 2019 Revised Patent Subject Matter Eligibility Guidance (2019 PEG), the likelihood of Aliceaffected technologies receiving a first office action with a rejection for patent-ineligible subject matter had decreased by 25%.

Uncertainty in patent examination for Alice-affected technologies decreased by 44% in the 12 months following the issuance of the 2019 PEG.

Apparently, the Patent Office thinks it gets to overrule the Supreme Court with "guidance." How about that? The charts are pretty clear. After the Alice decision, patent examiners (understanding the Supreme Court's clear statement regarding these kinds of patents) started issuing rejections more frequently, stopping unpatentable subject matter from getting patents (which is a good thing):

Then, in early 2019, the Patent Office issues "guidance" that more or less tells examiners to start approving these kinds of patents again and, voila, the number of initial rejects declines massively

And then look back up at the chart showing total patents granted in 2019 and you can see why the number of patents shot up so much. This is a massive problem and seems to be the Patent Office deciding that it can write its way around the Supreme Court in order to go back to approving bad patents. That's bad on any number of levels, but will almost certainly lead to more patent trolling in the next few years that will stifle all kinds of innovation.

Filed Under: guidance, patent trolls, patentable subject matter, patents, software patents, upsto
Companies: alice, cls bank

Patent Loving East Texas Judge Clips Wings Of Largest Patent Troll

from the go-away-now dept

Earlier this year, we noted that patent trolls had struck back, filing a ton of new cases this year. The leading patent troll was a firm called eDekka: Like many patent trolls, not much is known about eDekka, but it's represented by Austin Hansley, who just happens to represent all three of the top patent troll lawsuit filers in that graphic above: eDekka, Data Carriers and Wetro Lan (you may recall Wetro Lan, for using an expired bogus patent on a basic firewall to troll lots of companies -- and also for its name (say it out loud)). eDekka, though, topped the list with a ton of lawsuits over US Patent 6,266,674, for "random access information retrieval utilizing user-defined labels."

However, in a surprise move, Judge Rodney Gilstrap, in the Eastern District of Texas, has just tossed out 168 lawsuits filed by eDekka, after noting that the '674 patent is not valid under Section 101 of the Patent Act. As recent Supreme Court rulings have made clear, you can't just take a standard thing that people have done for ages, and "do it on a computer" to get a patent. And that's the key problem that Judge Gilstrap notes in his ruling:

As summarized above, the claimed idea represents routine tasks that could be performed by a human. While the generic requirement of a “data structure” is included, Claim 1 essentially describes the common process of receiving, labeling, and storing information, while Claim 3 encompasses retrieving such information.

And thus, the patent covers nothing more than an "abstract idea," which are not patentable under Section 101.

But... that's not all. In this one single order, Judge Gilstrap says that everyone else who has been sued under this patent shall be considered prevailing parties in their lawsuits and then issued a separate order allowing all of the defendants sued by eDekka to jointly file a brief asking for attorneys' fees:

The Court ORDERS Defendants to file a consolidated brief of not to exceed fifteen (15) pages in support of any and all claims for reasonable attorney fees...

As Joe Mullin notes in his story on this (linked above), this is especially surprising from Judge Gilstrap:

Just the invite is a sign of changing times: in his four years on the bench, Gilstrap has never granted attorneys' fees to a defendant.

Indeed, as we've pointed out just recently, Judge Gilstrap had become something of a patent troll favorite down in East Texas. Perhaps that's changing...

Filed Under: abstract ideas, austin hansley, east texas, labels, patentable subject matter, patents, rodney gilstrap
Companies: data carriers, edekka, wetro lan

USPTO Demands EFF Censor Its Comments On Patentable Subject Matter

from the check-the-footnotes dept

As you know, last year the Supreme Court made a very important ruling in the Alice v. CLS Bank case, in which it basically said that merely doing something on a general purpose computer didn't automatically make it patentable. This has resulted in many courts rejecting patents and the USPTO being less willing to issue patents, based on that guidance. The USPTO sought to push out new "guidance" to its examiners taking the ruling into account. Soon after the Alice ruling, it issued some "Preliminary Examination Instructions." However, it then issued the so-called 2014 Interim Guidance on Subject Matter Eligibility and sought public comment through March 16 of this year.

Plenty of folks did comment, including the EFF. However, the USPTO apparently was offended at parts of the EFF's comment submission, claiming that it was an "improper protest." In response, the EFF refiled the comment, but redacted the part that the USPTO didn't like. Here's what page 5 of the document on the USPTO site looks like: However, EFF also added the following footnote (footnote 8) on page 6:

On April 2, 2015, the PTO contacted EFF to request that we remove a portion of these comments on the basis that they constituted an improper “protest.” We respectfully disagree that our comments were a protest under 35 U.S.C. § 122(c). Rather, our comments discussed a specific application to illustrate our broader points about the importance of applying Alice. Nevertheless, to ensure these comments are considered by the Office, we have redacted the relevant discussion in this revised version of our comments. Our original comments remain available to the public at: https://www.eff.org/files/2015/03/18/eff_comments_regarding_ interim_eligibility_guidance.pdf.

And, of course, if you go to that link, you get the full, unredacted version of the EFF's filing.

As you can see by the full filing, the EFF filing isn't some sort of improper protest. Rather it is a clear demonstration of how the USPTO does not appear to be living up to what the courts are saying in the wake of the Alice ruling. It is difficult to see what the USPTO was thinking in trying to silence the EFF's comment. It is beyond ludicrous on multiple levels. First, it suggests a skin so thin at the USPTO that you can see right through it. Second, it suggests that the USPTO doesn't want people to recognize that its guidance is problematic in light of what actual federal courts are saying. And, finally, it suggests (still) a complete lack of understanding of how the internet and freedom of expression works, thereby guaranteeing that the EFF's complete dismantling of the USPTO's guidelines will now get that much more attention...

Has anyone patented a method and system for self-inflicted shaming for being overly sensitive to someone pointing out your flaws?

Filed Under: alice vs. cls bank, censorship, patentable subject matter, patents, protest, redactions, uspto
Companies: alice, cls bank, eff

Patent Troll Kills Open Source Project On Speeding Up The Computation Of Erasure Codes

from the promoting-the-progress dept

Via James Bessen, we learn of how a patent trolling operation by StreamScale has resulted in an open source project completely shutting down, despite the fact that the patent in question (US Patent 8,683,296 for an "Accelerated erasure coding system and method") is almost certainly ineligible for patent protection as an abstract idea, following the Supreme Court's Alice ruling and plenty of prior art. Erasure codes are used regularly today in cloud computing data storage and are considered to be rather important. Not surprisingly, companies and lawyers are starting to pop out of the woodwork to claim patents on key pieces. I won't pretend to understand the fundamental details of erasure codes, but the link above provides all the details. It goes through the specific claims in the patents, breaking down what they actually say (basically an erasure code on a computer using SIMD instructions), and how that's clearly an abstract idea and thus not patent-eligible. Furthermore, it details the relevant prior art:

The most prominent prior art invalidating this patent is the RAID6 (one of the most commonly used Erasure Code) implementation of the linux kernel. In an article dated 2004 (i.e. ten years before the patent was granted to StreamScale) it is described to be optimized as follows : For additional speed improvements, it is desirable to use any integer vector instruction set that happens to be available on the machine, such as MMX or SSE-2 on x86, AltiVec on PowerPC, etc. Where SSE2 is the acronym of Streaming SIMD Extensions 2. The patent cites Anvin aticle’s but only to state the problem and does not acknowledge it also contains the solution.

Even so, StreamScale apparently bullied the open source project's creator, Professor James Plank, into removing his repositories and saying he is no longer working on the software project. No lawsuit was filed, but Plank posted a statement that makes it clear he was threatened by StreamScale and agreed to do this to avoid a lawsuit. Apparently, StreamScale also threatened USENIX for merely publishing a paper by Plank detailing the concepts in his software.

After a failed attempt to bully USENIX, StreamScale  intimidated (i.e. there was no lawsuit and therefore no ruling) James Plank, a known researcher in the field, also author of widely used Free Software libraries using the same techniques as those described in the linux kernel. James Plank agreed to publish the following on his web site as part of a settlement, presumably in exchange for a promise from StreamScale to not threaten to sue him in the future.

On this page I (James Plank) am providing notice that:

• GF-Complete and Jerasure versions 2.0 and later are no longer supported.
• StreamScale, Inc. offers a similar solution for commercial purposes.
• I offer no representations or warranties in general about StreamScale’s products.
• I have verified that StreamScale’s solution is faster than GF-Complete or Jerasure in at least some respects.
• StreamScale, Inc. asserts that the use of GF-Complete (particularly as part of Jerasure 2.0 or later) or any similar software, method or code for erasure coding infringes StreamScale’s issued United States Patent No. 8,683,296.
• I express no opinion on StreamScale’s claims, but I believe that parties should be aware that StreamScale asserts such claims.

The repositories on which James Plank published the software implementing the ideas from his research papers ( gf-complete and jerasure ) have been removed the same day, meaning James Plank had to agree to never work on implementing erasure coded software in the future.

There is the only marginally complicating factor that Plank, apparently, was a consultant for StreamScale a few years ago -- leading the company to argue that his research, publications and code pulled from information he had learned while working with the company. But, again, these ideas both have clear and known prior art and do not appear to be patentable subject matter. And the end result: less ability to innovate (or even research!) these sorts of things, and some important open source code no longer being supported.

Filed Under: abstract ideas, erasure codes, james plank, patent troll, patentable subject matter, patents, prior art
Companies: streamscale

Third Time's A Charm: CAFC Finally Says You Can't Just Add 'On The Internet' And Get A Patent

from the took-'em-long-enough dept

It looks like the Ultramercial saga may finally be ending. As we've been covering for many years, Ultramercial held a patent (7,346,545) on watching an ad to get access to content, and it sued lots of companies. While a lower court rejected the patent, CAFC (the appeals court for the Federal Circuit, which handles all patent cases) overturned that ruling. The key issue: is something patentable if you take a common idea and just add "on the internet." CAFC said yes. The Supreme Court asked CAFC to try again following its own ruling in the Mayo case (which said you couldn't patent medical diagnostics). But CAFC still found the patent to be valid. Finally, earlier this year, following the Alice ruling, the Supreme Court gave CAFC a third try to get it right.

It seemed rather obvious to us that it was the Supreme Court saying, "Hey, would you reject this patent already?" and finally, CAFC got the message. On the third try, CAFC dumped the patent as invalid. More specifically, it goes all the way back to the original district court ruling, allowing the patent to be declared invalid on a motion to dismiss (i.e., before going through the massive expense of a big trial). This is very helpful, since it gives people sued for patents a path to success that won't put them too deep in the hole financially. Traditionally, courts were reluctant to toss out patents that early in the process, and patent holders relied on that fact, knowing that the legal bills for anyone they sue will be astronomical, even on a bogus patent. Now, however, courts can toss out those patents much more quickly. CAFC says so. Check out the full ruling:

We conclude that the limitations of the ’545 claims do not transform the abstract idea that they recite into patent-eligible subject matter because the claims simply instruct the practitioner to implement the abstract idea with routine, conventional activity. None of these eleven individual steps, viewed “both individually and ‘as an ordered combination,’” transform the nature of the claim into patent-eligible subject matter. See Alice, 134 S. Ct. at 2355 (quoting Mayo, 132 S. Ct. at 1297, 1298). The majority of those steps comprise the abstract concept of offering media content in exchange for viewing an advertisement. Adding routine additional steps such as updating an activity log, requiring a request from the consumer to view the ad, restrictions on public access, and use of the Internet does not transform an otherwise abstract idea into patent-eligible subject matter. Instead, the claimed sequence of steps comprises only “conventional steps, specified at a high level of generality,” which is insufficient to supply an “inventive concept.”

There's an even more interesting concurring opinion from Judge Haldane Mayer, that I kind of wish was the full opinion. It points out that patents that don't "promote the progress" are unconstitutional.

The Constitution’s Intellectual Property Clause is at once a grant of power and a restriction on that power.... Unless we are to assume that the constraints explicit in the Intellectual Property Clause are mere surplusage, we are bound to ensure that the patent monopoly serves “[t]o promote the Progress of Science and useful Arts,”... “This is the standard expressed in the Constitution and it may not be ignored.”

Mayer's ruling is the one that also clearly lays out why letting courts invalidate patents so early on is so important.

From a practical perspective, addressing section 101 at the outset of litigation will have a number of salutary effects. First, it will conserve scarce judicial resources. Failure to recite statutory subject matter is the sort of “basic deficiency,” that can, and should, “be exposed at the point of minimum expenditure of time and money by the parties and the court,”....

Second, resolving subject matter eligibility at the outset provides a bulwark against vexatious infringement suits. The scourge of meritless infringement claims has continued unabated for decades due, in no small measure, to the ease of asserting such claims and the enormous sums required to defend against them....

Finally, and most importantly, turning to section 101 at the outset protects the public. See Cardinal Chem., 508 U.S. at 101 (emphasizing the public interest in preventing the “grant [of] monopoly privileges to the holders of invalid patents” (footnote omitted)). Subject matter eligibility challenges provide the most efficient and effective tool for clearing the patent thicket, weeding out those patents that stifle innovation and transgress the public domain. As a general matter, trial courts have broad discretion in controlling their dockets and in determining the order in which issues are to be adjudicated. But the public interest in eliminating defective patents is an “even more important countervailing concern[],” Cardinal Chem., 508 U.S. at 99, which counsels strongly in favor of resolving subject matter eligibility at the threshold of litigation.

Furthermore, the opinion notes that courts should get away from simply presuming patents are valid:

Indeed, applying a presumption of eligibility is particularly unwarranted given that the expansionist approach to section 101 is predicated upon a misapprehension of the legislative history of the 1952 Patent Act. Those who support a “coarse filter” approach to section 101 often argue that the Act’s legislative history demonstrates that Congress intended statutory subject matter to “include anything under the sun that is made by man.” See, e.g., AT&T Corp. v. Excel Commc’ns, Inc., 172 F.3d 1352, 1355 (Fed. Cir. 1999). Read in context, however, the legislative history says no such thing. See Mayo, 132 S. Ct. at 1303–04. The full statement from the committee report reads: “A person may have ‘invented’ a machine or a manufacture, which may include anything under the sun that is made by man, but it is not necessarily patentable under section 101 unless the conditions of the title are fulfilled.” H.R. Rep. No. 1923, 82d Cong., 2d Sess., at 6 (1952) (emphasis added). Thus, far from supporting an expansive approach to section 101, the relevant legislative history makes clear that while a person may have “invented” something under the sun, it does not qualify for patent protection unless the Patent Act’s statutory requirements have been satisfied.

Good stuff all around... and very different from the CAFC of the past.

Filed Under: cafc, motion to dismiss, on the internet, patent eligibility, patentable subject matter, patents, supreme court
Companies: alice, cls, ultramercial, wild tangent

Bingo!... Is Not Patentable Just Because You Put It On The Internet

from the b-i-n-no-go dept

Another day, another story of stupid software patents getting stomped out of existence thanks to the Supreme Court's Alice v. CLS Bank ruling. As we've been noting, this ruling is looking like it's going to invalidate a ton of software patents (and that's a good thing). The latest one dumped was an attempt to patent bingo online. Yes, bingo. The lower court had already rejected the patent using previous Supreme Court rulings against patenting "abstract ideas." Now, with the Alice ruling in hand, the Appeals Court for the Federal Circuit (CAFC) completed the stomping out of the bingo patent. They didn't waste much time on it either, pushing out a compact 7-page ruling. It makes short work of Planet Bingo (yes, that's the patent holder's name) and its claim that the patent actually is inventive and new:

“[I]f a patent’s recitation of a computer amounts to a mere instruction to ‘implemen[t]’ an abstract idea ‘on . . . a computer,’ . . . that addition cannot impart patent eligibility.” Alice, 134 S. Ct. at 2358 (quoting Mayo, 132 S. Ct. at 1301). In this case, the claims recite a generic computer implementation of the covered abstract idea.

Planet Bingo argues that the patents recite "significantly more" than an abstract idea because the invention includes “complex computer code with three distinct subparts.” ... We disagree. The ’646 and ’045 patents do not claim the “accounting program,” “ticket program,” and “verification program” that Planet Bingo identifies in its briefs. Instead, the claims recite a program that is used for the generic functions of storing, retrieving, and verifying a chosen set of bingo numbers against a winning set of bingo numbers. And, as was the case in Alice, “the function performed by the computer at each step of the process is ‘[p]urely conventional.’”

Planet Bingo really pushed hard on the ridiculous idea that because lots of numbers were involved, this was patentable subject matter. CAFC didn't buy it.

Planet Bingo argues that “in real world use, literally thousands, if not millions of preselected Bingo numbers are handled by the claimed computer program,” making it impossible for the invention to be carried out manually.... But the claimed inventions not require as much. At most, the claims require “two sets of Bingo numbers,” “a player,” and “a manager.” ... We need not, and do not, address whether a claimed invention requiring many transactions might tip the scales of patent eligibility, as the claims fall far short of capturing an invention that necessarily handles "thousands, if not millions” of bingo numbers or players.

It's a new era for software patents, and it looks like many of them are invalid. It's also a new era for CAFC, which both has new leadership... and (finally) some pretty clear instructions from the Supreme Court to dump these broadly written software patents. It may take a few years for the system to clear out, but this is going to be tremendously helpful for companies that actually innovate, rather than those that just try to shove tollbooths in the innovative process.

Filed Under: bingo, cafc, patentable subject matter, patents
Companies: alice, cls bank, planet bingo

In 'On The Internet' Patent Case, SCOTUS Gives CAFC 3rd Chance To Get It Right

from the try,-try-again dept

You may recall the important WildTangent v. Ultramercial case that has been going on for some time. This is the case in which the courts basically need to decide if merely adding an "on the internet' turns a basic idea into a patentable idea. In 2010 a court rejected Ultramercial's patent (7,346,545) on a process requiring people to watch an ad before getting access to content. However, the CAFC (court of appeals for the Federal Circuit) overturned that ruling, finding that taking a basic concept and adding "on the internet" to it made it patentable.

In 2012, following the Supreme Court's ruling in the Prometheus Labs v. Mayo case, that found medical diagnostics unpatentable, the Supreme Court told CAFC to try again on the Ultramercial case. Given another chance to get it right, CAFC again whiffed and insisted that this was patentable subject matter. In light of the recent ruling in CLS Bank v. Alice (which relied heavily on that Mayo ruling), the Supreme Court has told CAFC to maybe try one more time to see if it might actually get it right this time around, given the new guidance in the CLS Bank ruling.

In short, the Supreme Court seems to be telling CAFC: do we really need to draw a map for you here? Adding "on the internet" doesn't make something patentable. Now, the remaining question is whether or not CAFC will finally get that message.

Separately, it's also perhaps notable that the Supreme Court declined to hear the appeal in a different ruling, the Accenture v. Guidewire patent case, in which CAFC found the patent invalid based, in large part, on the Mayo ruling and the earlier CLS Bank CAFC ruling. Basically, here was a case where CAFC (properly) rejected a patent for being ridiculously overbroad, and now the Supreme Court doesn't have any concerns with that ruling. But in the Ultramercial case, where CAFC has twice upheld an overly broad patent, the Supreme Court is telling CAFC to try, try again.

Filed Under: cafc, on the internet, patentable subject matter, patents, supreme court
Companies: alice, cls bank, ultramercial, wildtangent

Supreme Court Rejects Software Patents On Performing Generic Functions; Pretends That Lots Of Other Software Must Be Patentable

from the a-step-in-the-right-direction dept

For a few years now we've been covering a key software patent case, Alice v. CLS Bank, which was another chance to show that pure software patents shouldn't be granted. As you may recall, four years ago, the Supreme Court got to tackle the question of software patents in the Bilski case, but chose to punt instead, rejecting that particular patent, and arguing that the specific test that everyone relied on shouldn't be the only test -- but otherwise leaving a lot of confusion in its wake. It did help dump a few software patents, but left the wider question pretty open.

We had hoped that when the Supreme Court agreed to hear the Alice case it wouldn't miss another chance to actually add some clarity to what is and what is not patentable. It seemed like the perfect opportunity. As you may recall, the original appeals court (CAFC) ruling was a complete disaster, with 135 pages of different opinions -- with only one single paragraph having a majority view, rejecting the specific patent. But no one could agree on why or the larger questions.

It was as if CAFC were practically begging the Supreme Court to provide clarity and guidance.

Unfortunately, the Supreme Court didn't really do that. It technically "upheld" the CAFC ruling (that one paragraph) rejecting the patent (which basically covered a computerized escrow service) as unpatentable subject matter. It further makes clear that merely taking an abstract idea and doing it "on a computer" doesn't make it patentable. That's all good... But, while three Justices (Sotomayor, Ginsburg and Breyer) hoped the court would go further and basically say that business methods weren't patentable at all, the rest simply wouldn't go along with that, saying that "many computer-implemented claims are formally addressed to patent-eligible subject matter," but never giving any examples.

Instead, it notes that you can't get a patent if each step claimed in the patent "does no more than require a generic computer to perform generic computer functions." Except, uh, many people will point out that's all that software does. That's basically how software works, but the Justices don't seem to recognize that. So, it's a bit of a conundrum. The court says many software patents are perfectly good because they apply to patent-eligible subject matter, but that if the claims do no more than require a generic computer to perform generic computer functions, it's not patentable. You could read that to mean that basically most software patents are no longer allowed, but... that's going to involve an awful lot of wasted litigation to teach a bunch of courts, including the Supreme Court, that basically all software involves generic computer functions.

Part of the problem is that, like many non-technical people, many of the Justice seems to think that software is a lot more than it really is. They seem to think that there's some magic in software that goes beyond just a bunch of instructions for a computer to follow. So, now they're saying that just taking some ideas and telling a computer to follow instructions to implement that idea is not patentable... but they still argue that there's plenty of software that is patentable. So it's... still really punting on the issue, in part because the Justices don't seem to understand software.

The court relies a lot on two other big recent rulings which we've covered -- the Mayo ruling that rejected medical diagnostic patents and the Myriad Genetics ruling that struck down gene patents, but doesn't quite go as far with software and business method patents. Instead, it sorta half rejects software patents, kinda, without going as far as it needs to go. As some folks are pointing out, the language used in the ruling is "going to tie folks in knots" as they try to figure out what it means.

In the long run, this may be a very important ruling. It's easy to read this ruling to basically reject a very large number of software patents. But, because of the unfortunately all-too-common nature of the Supreme Court semi-punting on clear decisions on this particular issue, it's not entirely clear where this ends up, meaning that there's going to be a lot of patent litigation citing this ruling, with both sides seeking to tap dance around the language choices. And that just means a few years down the road, it's quite likely that we'll be back here again, with the Supreme Court asked to decide, once again, whether or not software and business methods are really patentable.

Filed Under: business model patents, cafc, generic functions, patentable subject matter, patents, software patents, supreme court
Companies: alice, cls bank

Supreme Court Seems Skeptical As Myriad Claims Gene Patents Should Exist, Because It Put A Lot Of Work Into Finding Them

from the sweat-of-the-brow dept

As many people know, on Monday, the Supreme Court finally heard the Myriad Genetics case, to look at whether or not genes are patentable subject matter. For the past few decades, the USPTO has generally argued that you can patent genes, which just seems crazy to most folks who point out that it's nuts to patent something that exists in your body. Supporters argue that they're trying to patent the process of isolating the gene, but that's just semantics. As you may recall, the appeals court, CAFC, had decided that genes are patentable because they're separate from your DNA. After that, the Supreme Court disallowed patents on medical diagnostics, and asked CAFC to reconsider the Myriad case with that as a guide. In response, CAFC stuck by its guns, insisting that genes are patentable.

With the big caveat that oral hearings are often meaningless in terms of how the Supreme Court eventually rules, the transcript and the various reports from those who were there suggest that there is at least some good skepticism about patenting genes. First off, we should point out that Myriad's CEO, Peter Meldrum posted a ridiculous op-ed at USA Today over the weekend, in which he argued that Myriad should be allowed to get patents because it worked hard to get them.

To create tests for hereditary breast cancer and ovarian cancer, our company and its investors spent more than $500 million over 17 years before we were able to recoup this investment.

Except, of course, patents aren't about the sweat of your brow and how much work you put into something. Nor -- despite Meldrum's silly claims -- are they about letting companies "own" their findings:

We think it is right for a company to be able to own its findings, just as pharmaceutical and other companies do all the time.

Except, of course, that's wrong. Because Meldrum does not want any other companies, who came up with the same thing independently, to "own" their "findings." Instead, he wants them to pay up or go out of business. For all of those companies, who may have spent even more money, that, apparently, doesn't matter at all, which highlights the complete hypocrisy of Meldrum's position. His argument only applies to his company, and not any other.

Furthermore, Myriad's critics made clear to point out that other labs were working on the same thing and were happily foregoing patent protection. The clear suggestion: it wasn't the patent that created the incentive, and the end result was that all of those other businesses were harmed. So Myriad's argument that it's helping researchers is doubtful.

We know that there were other labs looking for the BRCA genes and they had announced that they would not patent them if they were the first to find it. We also know that prior to the patent actually being issued, there were other labs doing BRCA testing and Myriad shut all that testing down. So we know in this particular case that problem would not have arisen.

But the point of the whole -- the whole point of the product of nature doctrine is that when you lock up a product of nature, it prevents industry from innovating and -- and making new discoveries. That's the reason we have the product of nature doctrine, is because there may be a million things you can do with the BRCA gene, but nobody but Myriad is allowed to look at it and that is impeding science rather than advancing it.

Justice Scalia followed that up by asking why would anyone invent anything if they can't get a patent. Of course, he might want to ask all of those labs that invested in the same process, but can't do anything about it. It seems they lose out, too.

In the end, there was clear skepticism from the Justices, but also a suggestion that they might try to punt the issue (again!) by ruling narrowly on particular issues, rather than by taking on the big question. We'll see how it all comes out in a few months...

Filed Under: gene patents, patentable subject matter, patents, supreme court, sweat of the brow
Companies: myriad genetics

Appeals Court Gets Yet Another Shot At Fixing The Software Patent Problem

from the pay-attention dept

The next big case to pay attention to concerning software patents appears to be the CLS Bank v. Alice Corp. case, which is being reheard "en banc" (by the full slate of judges) at the federal circuit court of appeals (CAFC). The short version of the case is that it involves a patent over the idea of software that conducts a "shadow transaction" to make sure that there are enough funds to complete a real transaction, before allowing the real transaction to go through, thus minimizing "settlement risk" (the risk of the deal not actually being completed). Should that be patentable? Well, that's part of the argument. The district court tossed out the patent as being simply about an "abstract idea," which is not patentable, as abstract ideas are excluded from section 101 of the patent act, which lists out patentable subject matter. On appeal, a divided three judge panel overturned the lower court, and said that when you looked at the invention as a whole, it was patentable subject matter under section 101. The full CAFC has agreed to rehear the case, and the amicus briefs are flowing in, as people realize that this case is the next key battleground over software patents.

Of course, as often happens in these kinds of cases, you get amicus briefs with wildly divergent claims. For example, here we'll show and discuss the briefs from both the EFF and the Business Software Alliance (BSA). Somewhat surprisingly, both of those briefs agree on one thing: that the actual patent in question should be ruled invalid, as in the district court ruling. But that's about the extent of the similarities between the two -- who paint extremely different versions of the world of software patents today. The EFF brief explains how damaging software patents are to innovation and the wider economy while the BSA brief talks about how software patents are the greatest thing ever for innovation. One of these three-letter-acronymed organizations is wrong, and it's not the EFF.

The EFF brief is quite detailed in how, where and how much software patents are doing harm to innovation and the economy. It explains how there's been an explosion in the number of patents applied for, granted... and being used in litigation. They also detail how the costs associated with patent trolling have gone out of control, and how large companies like Google and Apple both spent more last year on patents than they did on actual research and development. If you read Techdirt regularly, you've seen many of the arguments and data they present, but it's a great overview whether or not you're familiar with the situation.

Meanwhile, the BSA takes a rather... different view of the world. And, by "different" we mean the view that Microsoft (the BSA's largest supporter) would take, whereby software patents are just freaking awesome. It does this by first rewriting history. It claims that the patentability of software is a long-settled matter without any disruption at all. It does this by completely ignoring the reality -- often espoused by companies who are BSA members, including Microsoft -- that software was not realized to be patentable subject matter until after the State Street case in 1998. As we've noted many times, even Bill Gates used to claim that if everyone was patenting software in Microsoft's early days, the industry would have stagnated rather than grown. Of course, now that basically every tech company out there is more nimble and innovative than Microsoft, it seems to want to stagnate the world.

It then talks up the importance of software to the economy and innovation -- which is true -- but falsely argues that this massive growth in innovation exists because of patents, rather than in spite of them. It keeps insisting that software companies rely on patents to have the incentive to innovate. This is laughable. Seriously. Whoever wrote it should be ashamed. I deal with software companies all the time -- including many very, very successful ones. And the people there all tend to hate patents with a passion. The idea that these patents have been any form of incentive is simply ridiculous. But they claim that without patents, innovation might grind to a halt:

Simple economics makes clear that, if patent protection for software were curtailed, the adverse consequences would be swift and severe. With less profit to capture from the commercialization of the fruits of research and development, businesses would divert their resources into other ventures, and software development would suffer. That would have a ripple effect on productivity across the entire economy. Advanced software allows factory workers to be more precise, cars more fuel efficient, and healthcare more effective. Any new obstacles to software development would carry a penalizing multiplier effect that could threaten the continued technological advantage of the United States. For these reasons, “[d]iscrimination against a form of innovation that is increasingly critical to technological advancement, indeed that in many areas dominates technological advancement, makes no sense.”

Once again, there is no evidence to support this. None, zero, zilch. Because it's simply not true. The "simple economics" the BSA describes is wrong both in theory and in practice. The software industry was built up and became super successful in a time before most software companies -- including most BSA members -- got any software patents at all. Ignoring that is simply historical revisionism being used for the sake of blatant protectionism.

They then go on to argue that, basically, CAFC had better not change a damn thing, because any change to such "settled" law, would be a disaster. Somewhat amusingly, they quote a decade old paper from Mark Lemley to support the argument that software patents are here and never going away and everyone should stop complaining. Why is that amusing? Because much of the EFF brief also relies on Lemley -- but a much more modern Lemley. That is, the key to the EFF's brief is suggesting that the judges at CAFC use this case as a chance to put into practice exactly what Lemley suggested earlier this year as an "easy" solution to the issue of software patents. Rather than worry about Section 101 and what's patentable, focus on Section 112(f), which (effectively) says that you can't claim a broader function (such as the idea of easing settlement risk with shadow transactions), only the specific implementation of the proposed solution or invention.

As Lemley noted when he first published his paper on the subject, all this really needs is for judges to enforce the law as written -- and the EFF is suggesting that now would be a good time for CAFC to start actually doing that. While the BSA filing gives lip service to Section 112, arguing that it is a good reason why the courts shouldn't redefine Section 101 to not allow software patents, I do wonder if BSA folks would really be that happy if the courts suddenly started tossing out tons of software patents for violating section 112(f) by describing a general idea, rather than a specific implementation.

Either way, whether the court deals with these specific issues or somehow dances around them (again), it's clear that the CLS Bank v. Alice case is one worth following if you care about software patents.

Filed Under: cafc, functional claiming, mark lemley, patentable subject matter, patents, software patents
Companies: alice, bsa, cls bank, eff