Software patents after Alice Corp.

This year, the U.S. Supreme Court invalidated software patents in the matter of  Alice Corporation Pty. Ltd. v. CLS Bank International (June 19, 2014) (or simply Alice). This case has resulted in a fair deal of commotion among patent lawyers, so it may be important for an inventor to at least have a basic understanding of the case. I’ll also discuss the recent guidelines issued by the USPTO based on Alice. These guidelines are currently being used to reject software patent claims.

Alice Corporation was formed by an Australian citizen, Ian Shepherd, after he successfully obtained a patent, issued in 1999 (filed in 1992), on performing escrow services using a general computer.  Alice Corporation then spawned many child applications from the original patent application. As such Alice Corporation obtained patents on an abstract idea implemented on a computer system. However, as most of us are aware (and as recognized by the U.S. Supreme Court),  escrow services have been around even before computers existed.

When Alice‘s patents were challenged, the Supreme Court had to deal with the question: Is implementing an (abstract) idea on a computer enough to claim novelty? As expected, the Court ruled against Alice. The  Court determined that Alice‘s claims were patent ineligible because “the claims … amount[ed] to ‘nothing significantly more’ than an instruction to apply the abstract idea of intermediated settlement using some unspecified, generic computer.” (Alice at p. 15).

Based on Alice, the USPTO has issued guidelines using which software claims are now being rejected.  However, as discussed below, a well drafted application should be able to overcome any Alice type rejection.

Earlier the USPTO would allow a software idea be patented using any computing device. However, Alice prompted the USPTO to update it’s guidelines on patent eligible subject matter. To avoid an “Alice rejection,”  all software patent applications now would be held to the following standard:
I. The USPTO will now first examine if the claim in a software application is directed to an abstract idea, like:
  • Fundamental economic practices;
  • Methods organizing human activities;
  • An idea itself; or
  • Mathematical ideas or formulas.

II. And if the claim is directed towards an abstract idea, does the claim provide details that “limits the claims in a significant manner?” For such a showing, the USPTO will be looking for a:

  1.  claim limitation that limits the implementation of an abstract idea with a particular technology;
  2.  claim limitation that improves another technology or technical field ; or
  3. claim limitation  that improves the function of the computer itself.

To summarize, this means that software patent applications need to be more detailed than before. Here are some tips to keep in mind:

Tip 1: All that technicality matters. The application should at least disclose a particular way of doing something on a computer; you cannot claim  every way of doing something on the computer. This means, the specification needs to be technical and detailed explaining at least one implementation of the invention. 

Tip 2: Greed may result in trouble. In view of Alice, the practice of attempting to monopolize an abstract idea needs to change.  Applicants need to be realistic in what they want to be claimed. Applicants should be mindful of the USPTO guidelines and brainstorm the invention with their attorneys considering what the USPTO is looking for in software claims.

Tip 3: It’s all in the details.  Because software inventions often involve breakthrough ways of using a computer to perform a long wanted task on a computer more efficiently, it is important that at least some claims provide details on how the novelty was implemented. Based on Alice, it is clear the Supreme Court takes a negative view of computer related claims written with a high level of generality. Narrowing the scope of the claims would most likely overcome the issue.

Tip 4: I, Robot! Inventors involving robotics must be aware that at least some mechanical aspect of their invention is also described within the specification and claims.  Thus, robotics based products with software-related inventions should have a combination of software and hardware elements in the claims.

Tip 5: Man v. Machine. Machine wins!  Applicants should emphasize on ways in which a computer is an integral unit to the claimed invention, emphasizing why a computer was needed to perform the task. If something can easily be performed by a human being without the use of a machine, claiming patent eligibility based on implementation of the thing on a machine may not be enough to pass muster.

In a nut shell
It should be noted that Alice is a ‘first in its kind’ case addressed by the Supreme Court. As more case law emerges,  it will clarify how software patents  should be treated. A patent attorney should be mindful about not only the current state of the law, but also attempt to strategize based on the direction in which various courts have been interested in taking software patents.

The author believes that the Supreme Court is attempting to prevent litigation by “patent trolls” claiming broad subject matter (Alice was a non-practicing entity).  Certainly, providing more details in the claim equates to narrowing the claim.  However, an applicant who has developed a novel idea implemented using a particular technology would certainly not be afraid of having claims that discussed the novel implementation.

Based on the current state of the law, to avoid potential invalidation of a software patent, taking a conservative approach might be pragmatic.

Disclaimer: This article is for informational purposes, it is not intended to constitute legal advice, and may be considered advertising under applicable laws of some states. This article is an  opinion of the author only.

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