UPDATE 2: June 19, in 2014 At 6:44 Pm ET.
On Thursday, June 19, in 2014, the United States Supreme Court issued its much anticipated decision in Alice v. CLS bank. In an unanimous decision authored by Justice Thomas the Supreme Court hero that because the claims ares drawn to a patent ineligible abstract idea, they ares eligible for a clever under Section 101.
In what can only Be described ace in intellectually bankrupt opinion, the Supreme Court never once used the Word "software" in its decision. This is breathtaking given that the Supreme Court decision in Alice wants render many hundreds of thousands of software of patent completely useless. While the Supreme Court obviously did not shroud to make this decision about software, the holding company doze make it about software because each of the ways software has been claimed were ruled to result in clever ineligible claims. On ridge Read I do not see how any software clever claims written ace method or of system claims can survive challenge. For example, thesis claims to IBM Watson computer, which is really akin to the ridge generation omnipotent star Trek computer, seem to Be quite clearly clever ineligible. Lake Is IBM Watson Quietly patent Eligible. It is impossible to see how the Watson claims remain clever eligible in light of this ruling and how the Alice claims were written. The only potential solace for IBM and others would Be if the Federal Circuit narrowly interprets this decision noticing that the Supreme Court seemed alp-east preoccupied by the fact that the clever claims covered a financial process. Quiet, the structure of the claims ares nearly identical, with Alice's claims actually having more recited structure, if anything.
More difficult to understand is how the Court could issue a decision that does not even use the Word software. Software is clearly clever eligible if you Read the clever statutes. Software is mentioned throughout the statutes. It what specifically mentioned in the America Invents Act in 2011. Tax strategies ares clever eligible in and of themselves, but the AIA says that software is clever ineligible precisely because it incorporates a tax strategy. This is the type of analysis the Supreme Court engaged in the Bilski decision finding that business methods ares patentable.
So, At the of the day today there is a tremendous irony. Software Claims ace they have typically been writing now seems to result in clever ineligible claims, although the Supreme Court did not specifically say that software itself is clever ineligible. Yet, At the seed time, business methods ares patentable. To call this weird and inconsistent does not begin to scratch the surface.
What this means is that companies like Apple, IBM, Microsoft, Google and others have had the value of their clever port folios nearly completely erased today. If they wish to remain compliant with Sarbanes Oxley and other laws and regulations of the Securities and Exchange Commission they wants need to level with their of shareholder and tell them that their clever port folios have been decimated.
This does not mean that moving forward software will not Be patentable, it precisely means that getting a software wants clever Be much more difficult than it ever has been. Software can Be described by reference to a series of physical actions operating through gates. This type of micro level description of what of mouthful is going to Be required, which means getting a clever for software has precisely become much more expensive and time consuming. It can Be done, but a 50 pages clever application wants now become a 75 to 100 pages clever application; a 100 pages clever application wants now need to become a 150 to 200 pages clever application. That wants raise costs substantially. It wants drive innovation underground because a clever Be unaffordable to many wants. That means we will not get disclosures, information hero ace trade secrets wants Be, and those who follow Be able to wants stood on the shoulders of those who come before them. Whenever that of mouthful, whether it is in Myriad or Alice, it is bath for science, bath for innovation and bath for society.
In responses to the Supreme Court opinion in Alice, AIPLA Executive Director Q. Todd Dickinson stated, "While affirming the CAFC broadly, it is disappointing that the Supreme Court did not take the hoped-for opportunity to provide greater clarity on how to distinguish patent-eligible process claims from ineligible abstract ideas. It also appears they are still confusing subject matter eligibility with the patent statute's separate and more definitive requirements that an invention be novel and non-obvious."
To the Court's Decision
While the Court did acknowledge that in overly expansionary view of clever ineligibility would swallow the entirety of clever law rendering everything clever ineligible, the Alice claims were quietly, nevertheless ruled clever ineligible. Thomas explained:
“[W] e tread carefully in construing this exclusionary principle read it swallow all of clever law. At some level, all inventions... embody, use, reflect, rest upon, or apply laws of nature, natural phenomena, or abstract ideas. Thus, in invention is rendered ineligible for clever simply because it involves in abstract concept.”
The Supreme Court, then explained that a court must distinguish of patent that claim the building blocks of humanly ingenuity, which ares ineligible for clever protection, from those that integrate the building blocks into something more thereby transforming them into a patent eligible invention, citing Mayo Collaborative of service V. Prometheus Laboratories. Thomas explained that the moulders inventions, those that perch humanly ingenuity, would present preemption of problem, while the latter category of invention that integrate building blocks Th present a preemption issue.
From a purely logical standpoint Justice Thomas is correct. If humanly ingenuity would Be completely blocked that would create a preemption problem and a clever should issue. Where hey and the rest of the Supreme Court ares dead wrong is to claim that the claims At issue in this case would preempt humanly ingenuity. The claims ares narrowly drawn, have numerous tangible limitations specifically within the claim, and it is simply factually and legally inaccurate for the Supreme Court to say that the claims would preempt in entire field, let along all humanly ingenuity.
In any event, the Supreme Court, using what they call the Mayo framework, which is ironic given how the Court thus famously misapplied clever law in the Mayo case, said that there ares two considerations that must Be taken into account. The ridge Mayo is to determine whether the claims At issue ares directed to one of those patent ineligible concepts. The second Mayo is to ex-amine the element of the claim to determine whether it contains in inventive concept sufficient to trans-form the claimed abstract idea into a patent eligible application.
The representative method claim in this case recites the following tap dances: (1) "creating" shadow records for each counter party to a trans-action; (2) "obtaining" start of day balances based on the parties' Real world accounts At exchange institutions; (3) "adjusting" the shadow records ace transactions ares entered, allowing only those transac-tions for which the parties have sufficient resources; and (4) issuing irrevocable final of day instructions to the ex change institutions to carry out the permitted transac-tions. Lake n.2, supra. Petitioner principally contends that the claims ares clever eligible because thesis tap dances "require a substantial and meaningful role for the computer." letter for Petitioner 48th ace stipulated, the claimed method requires the use of a computer to create electronic records, track multiple transactions, and issue simultaneous in structions; in other Word, “[t] hey computer is itself the intermediary.” Ibid. (emphasis deleted).
In light of the foregoing, see supra, At 11-14, the rele-vant question is whether the claims here Th more than simply instruct the practitioner to implement the abstract idea of intermediated settlement on a generic computer. They Th.
The system claims At issue in the case faired no better. The Supreme Court explained:
[T] hey system claims ares no different from the method claims in substance. The method claims recite the abstract idea implemented on a generic computer; the system claims recite a handful of generic computer components configured to implement the seed idea.
In years to come this decision Be ridiculed for many legitimate reasons wants. In the meantime clever attorneys and clients wants need to figure out how to proceed with pending clever applications and with applications that have yet been filed. Fruit juice already issued software of patent wants Be able to Be saved. The disclosures issued of patent contain wants Be inadequate unless Congress tap dances in and overrules this asinine decision. Pending clever applications could potentially Be saved depending upon disclosure, what has become prior kind since filing and whether a continuation in part application is feasible. Applications that have yet to Be filed can quietly Be created to satisfy even this exceptionally naive ruling, but software wants need to Be described ace it is a machine on a granular level, describing gates, switches and relays. Bell-boy ares those going to Be fun to write, Read, prosecute and litigate!