Posted on 05/14/2019 12:58:00 PM PDT by Jagermonster
“I asked to participate in the 101 Roundtable and was denied access based of the fact that I am ‘media.’ Yet, the tech giants that are rejecting reform are allowed to participate and still engage in a carefully coordinated public relations campaign.”
On June 19, it will be five years since the United States Supreme Court issued a decision in Alice Corp. v. CLS Bank, 134 S.Ct. 2347 (2014), which significantly changed the way courts and patent examiners evaluated patent eligibility of computer implemented innovation in the United States. While the Supreme Court ostensibly extended the patent eligibility analysis applied in the life sciences context that had previously been adopted in Mayo Collaborative v. Prometheus Labs., 132 S.Ct. 1289 (2012), even a cursory review of allowance rates from the USPTO and invalidity rates in federal courts shows that Alice changed the prevailing analysis in profound ways. We will be commemorating this anniversary on June 24-25 in Washington, DC with a dedicated event examining the damage, discussing real solutions, and offering strategies for innovators who need protection in these uncertain times (see below for more detail).
Almost immediately after Alice, patent examiners started to issue new subject-matter eligibility rejections for computer implemented innovations using the abstract idea exception to the statutory categories of patent eligibility. “The ubiquity of subject-matter eligibility rejections in office actions exploded, leading many to wonder whether software implemented inventions remained patentable at all,” explained Kate Gaudry and Samuel Hayim, who have done a series of articles on IPWatchdog detailing their statistical analysis. “This effect was largely centered in business method art units of [USPTO technology center] (TC) 3600. For example, the number of allowances issued from business-method art units dropped from 24% in the months before Alice was decided to about 3% in months after.”
For months there has been growing hope that a legislative fix spearheaded by a few dedicated Members of Congress would provide a solution. But in recent weeks, that hope is waning as the uncomfortable reality that big tech is dominating the discussions has started to set in.
While many will not cry a river over innovations that have been routed to the business method art units suffering the indignation of insurmountable Alice rejections, in the aftermath of Electric Power Group, LLC v. Alstom, S.A., 830 F.3d 1350 (Fed. Cir. 2016), the USPTO started issuing patent eligibility rejections in the Artificial Intelligence (AI) art units. And not just issuing rejections, but rejections on a frequency and difficulty level commensurate with the level of Section 101 rejections found in the business method art units. All because the Federal Circuit explained in Electric Power Group that concepts of collecting and analyzing information fall within the “realm of abstract ideas” because information is intangible. Id. At 1353-54.
Someone really needs to explain to the Federal Circuit that the very benefit of innovation we classify as AI is in the fact that it is abstract. So, finding an AI related innovation patent ineligible because it is abstract is utterly asinine. Of course it’s abstract! That is the entire point of the invention! Artificial Intelligence is by definition creating or exhibiting the appearance of human cognition. AI innovations are not A + B = C. The benefit of the innovation lies in the abstraction.
The trials and tribulations of innovators in the AI space is particularly significant because the Federal Circuit relied on Alice in Electric Power Group to invalidate the claims at issue. This means the Supreme Court is responsible for the exportation of AI research and development and angel and venture funding to China and Europe.
As unfortunate, and self-inflicted, as this episode has been for innovators in the artificial intelligence space, one of the more remarkably strange scenarios present in the financial sector since Alice, payment gateways—no matter the uniqueness or functionality—are no longer patent eligible in America. They are, however, patent eligible overseas. As unfortunate as that may seem, the real oddity is that, while the functioning of a payment gateway cannot achieve a utility patent in the United States, it can obtain design patent protection for the look and feel. Refusing to protect the intricate technical implementations of payment gateways, but at the same time protecting their aesthetic because they look cool or interesting, seems exactly backwards. The United States is willing to protect the way something looks rather than the significant engineering achievements behind a useful, new and non-obvious financial interface? Backwards and bizarre it does seem, but then again, on the life sciences side of the aisle, one of the most revolutionary medical discoveries of recent vintage—an invention that reduced the risk of mother and unborn child to absolute zero by obviating the need for amniocentesis—was found patent ineligible, while a method for freezing liver cells was declared patent eligible.
In many regards, with respect to patent eligibility, since Alice, the U.S. has been like a crab that can’t travel any way but sideways or backwards.
As the fifth anniversary of the Alice decision approaches, great uncertainty remains with respect to what is patent eligible in America. While the USPTO, under the leadership of Director Andrei Iancu, has released new guidance in 2018 (relating to Berkheimer and Step 2B of the Alice/Mayo framework) and revised guidance in 2019 (relating to Step 2A of the Alice/Mayo framework), significant questions exist with respect to whether the Federal Circuit will agree with Director Iancu’s interpretation of Section101 in light of Supreme Court precedent. And while patent eligibility rejections have lowered, for example with respect to technologies such as AI-related innovation, if the Federal Circuit does not support this new approach that strictly interprets Supreme Court precedent, more chaos will ensue.
Meanwhile, the Supreme Court is considering petitions for certiorari in Berkheimer and other Section 101 cases where the Federal Circuit has issued patent-friendly rulings. Will the Supreme Court take this opportunity to pull back from the brink? They have asked the Solicitor General for the opinion of the Trump Administration on whether to take these cases. The Commerce Department—both Director Iancu and Commerce Secretary Wilbur Ross—is in favor of a strong patent system, as is Makan Delrahim, Assistant Attorney General in charge of the Antitrust Division. But what will the Solicitor General think? Will the White House get involved, as was common during the Obama years?
And all of this is occurring at a time when bipartisan leaders of the relevant Senate and House IP Committees are vigorously discussing a legislative fix to Section101 that would find medical diagnostics per se patent eligible and do away with judicial exceptions to patent eligibility. A bill proposing a legislative fix is expected to be introduced this summer, with draft language imminent. See Change Could be Coming. But what will that bill look like? There is growing concern.
In recent days, I’ve learned from multiple independent sources that the tech sector giants who do not want to see any change to patent eligibility are dominating the 101 Roundtable convened by Senator Chris Coons (D-DE), Senator Thom Tillis (R-NC), Congressman Doug Collins (R-GA), Congressman Hank Johnson (D-GA) and Congressman Steve Stivers (R-OH). These tech giants are willing to agree that life science innovations should be patent eligible, but not software.
Apparently, there is a lack of participation from those opposing the tech giants, which I find completely believable. I asked to participate in the 101 Roundtable and was denied access based of the fact that I am “media.” This, despite the fact that I am regularly invited to off-the-record events and have never reported on anything unless I have explicit consent to go on the record or use information on background. Yet, the tech giants that are rejecting reform are allowed to participate and still engage in a carefully coordinated public relations campaign, both privately and publicly. If there is any area in which I have substantive expertise, it is the area of patent eligibility, specifically relating to computer implemented innovations. So, it is not at all shocking to me that the 101 Roundtable is being dominated by the tech industry behind the scenes, or that there is growing fear among some 101 Roundtable participants that any legislative fix will be so watered down that it may actually be harmful.
Against this backdrop, and at a pivotal moment when legislation to address patent eligibility is being taken up by Congress, please join IPWatchdog on June 24-25 in Washington, DC for Alice Five Years Later. This live program will provide a forum for thought leaders and interested industry professionals to gather for wide-ranging discussions on Alice and how to protect computer related innovation in America.
Day 1 of this Symposium will focus on Alice, Supreme Court precedent on Section101 and whether it is truly irreconcilable, Federal Circuit attempts to interpret and apply Supreme Court precedent, how the USPTO is interpreting Alice, and what Alice has meant to patent valuation and licensing. Day 2 will focus on the future, with discussions on legislative efforts to fix Section 101, as well as how to protect computer implemented innovation generally, with specific discussion of technology fields such as AI and security.
The judicial exceptions seem reasonable at first glance - current case law prevents inventors from getting patents on "abstract ideas," "laws of nature," and "natural phenomena." But there are no definitions for these terms, and the courts have studiously avoided allowing definitions to come into being, preferring instead to pick winners and losers on a case-by-case basis. Unsurprisingly, the scope of these exceptions has grown rapidly, to the point that they nearly prevent patenting inventions in software and biotech.
This has been a big debate in the patent community for years, but now, Congress has caught wind of it, and have decided to fix the problem. At present, it seems that the congressional committees seem inclined to make the Supreme Court's bad ideas a permanent part of the law. This is encouraged by large corporate infringers, and is to the detriment of individual inventors. < / my two cents >
If it isn’t a physical object, it should be under copyright or trademark.
No one should be able to patent an algorithm, equation or mere collection of zeroes and ones
We also need to make sure ALL patents and copyrights expire after a reasonable amount of time, with no exemptions or extensions; the founders got this right in 1790 with “not exceeding fourteen years”.
Can’t agree with you there, FReeper friend.
Those zeroes and ones are physical - they are charge states of the transistors that make up memory in your computing devices.
Further, every piece of software could be replaced by a special-purpose electronic circuit that only performed the functions of the software. But, to do so would be ridiculous - it is far more convenient and economical to write code to reconfigure a generic computer than to require a special purpose device for every invention.
The innovation can come from new application of existing technology.
The source code is just one implementation -- it can be done with hardware too without changing the invention. If the hardware version of your invention can be patented there is no reason to exclude a software version from patentable subject matter.
Descriptions in well drafted computer-based patent applications always include something like:
One of ordinary skill in the art will appreciate that some or all innovations described herein can be implemented using one or more of: digital circuits, analog circuits, FPGAs, PALs, ASICs, [software], or the like, or combination thereof.
The Courts screwed up by trying to use 35 USC 101 to limit patent trolls. Other statutes (103 or 112) would have worked much better.
35 U.S.C. 101 Inventions patentable. Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof may obtain a patent therefor, subject to the conditions and requirements of this title.
This sort of patent trolling needed to be stopped.
If the courts went too far then the pendulum needs to start moving in the other direction.
There was a professor at Stanford who came up with an algorithm that cut the time to perform a Fourier Transform in half. Stanford couldn't patent the algorithm so they created a coprocessor chip that performed the algorithm.
This same method could be adopted by AI developers.
Yes and there were creative and conservative ways (within the meaning of carefully tailoring existing law) of limiting the trolls.
Instead, the tech giants did not let the overblown troll crisis go to waste. They came to DC with their powerful lobby aimed at obtaining a “get out of jail free” card for all their misdeeds.
The Microsoft’s of the world used their leverage to step on and wipe out smaller competitors. But what happened to said competitors IP? In an act of cosmic justice, the trolls scooped up the IP and came back to bite the giants in the arse.
Add to that the utter years of confusion and uncertainty over 101 and the result was the issuance of bs patents.
The resulting patent reform was an overreaction and the tech giants at dream. And here we are today.
There are two issues in patent law that have been dealt with hamhandedly. Section 101 and the treatment of patent trolls.
Let us start with Section 101. The invention of the programmable computer threw a wrench into patent law. Suddenly technological concepts started forming an ever increasing component of American innovation. Inventions implemented on or around the computer did not fit neatly into any enumerated category. What is software? Is it a work of authorship subject to copyright law? Is it a patentable method? In truth, it is both.
Trying to follow how the Patent Office dealt with high-tech over the years has been like watching a pendulum. At first, all such inventions were treated as “business methods” or as pre-empting algorithms or laws of nature. In some cases, the Courts and Patent Office treated it with a middle ground that software implemented in a computer was the equivalent of a new machine, which if you think about it, is somewhat true. Finally, the Courts gave an expansive view that “usefulness” was the standard.
But for the most part, the Patent Office had refused to examine such applications and, thus, never compiled a library of written prior art. When the permissive standard was passed by the Courts the Patent Office was flooded with applications for which it had NO, NADDDA prior art with which to reject the applications. The result was ridiculous patents being granted. This was a horrid public relations nightmare for the patent system.
As a result, we had bad patents being enforced by both the owners and the patent trolls (more on those later).
Herein lies the rub. Problems abhor a vacuum and Congress failed to deal with the issues raised by software and technological patents. And so the Supreme Court stepped in. One thing that you hit on about the Supreme Court is that when they rule on patent law, they are supremely stupid. Most decisions are long on rhetoric and short on implementable detail. The Alice decision was by far and away one of the biggest jokes in the history of a long list of patent jokes put in the form of an opinion by the Supreme Court.
In Alice, the Court annunciates an unworkable test relying on high minded rhetoric of not pre-empting “laws of nature” or being directed to “abstract ideas.” How unworkable was the test? After annunciating (sort of) the test, they proceed to drop a footnote that says “we know this is a well known law of nature because we found it in an old publication.” Gee, you talk about 101 and then drop a 102/103 analysis in there to prove it is a law of nature.
Now Congress is back in the game. But as my classmate Gene puts it, they really aren’t interested in fixing the problem. They are more interested in listening to high tech companies find a way to make the “get out of jail” free card permanent.
If they really, truly wanted a solution, the answer is right in front of them in 35 U.S.C. aka the patent code. The patent act provides for different types of patents. There are plant patents, design patents and utility patents. Why not craft a new type of patent that covers software and technological/computer aided concepts. It could have aspects of copyright protection, a different examination track and even a shorter term. In short, it could provide a more limited protection but still provide an innovator some exclusivity.
It is sad that none of these creative solutions are being discussed. Instead it is a “ban it all” approach that will leave our innovation unprotected.
As for the second issue, the patent trolls, that boogeyman was so grossly over managed that I fear the AIA took our patent system and flushed it. I am reminded of that scene from a Man for All Seasons when Thomas Moore remarks that cutting down all the laws to get to the Devil is all well and good, right until the devil turns around and you have no law to hide behind.
Under our current system, a patent is too easily invalidated by a joke of a post grant procedure. I say to clients all the time, “why innovate when you can imitate.” Slowly but surely the cost of original innovation will be questioned. Instead, the skilled copyist will simply await for the right idea to misappropriate.
The solutions to the trolls (aka non-practicing entities of NPE’s), like section 101 dealing with software, was also in the case law and the statute itself. But the lobbyists got involved and the high tech companies saw an opportunity to turn the perceived patent troll crisis into a “get out of jail free” card. So we got a complete overhaul of a system that instead could have done with some tweaks.
And what were those tweaks? Under the eBay case, injunctive relief was already cut off to NPE’s. Why not amend the statute so that in every infringement case there was a hearing, similar to a Markman hearing (where claims are interpreted), to determine if the plaintiff was 1) the real party in interest; and 2) if said plaintiff was an NPE.
Once it was established that the party asserting the patent was an NPE, then the solutions were myriad. The damages provision of the statute could have precluded lost profits, capped the damages. eBay could have been codified to preclude an NPE from obtaining an injunction. Finally, fee shifting could have been introduced whereby if the NPE lost, it paid costs and attorney’s fees.
Any one of those would have dissuaded if not cut off troll lawsuits. They would have done so without introducing an entirely new quasi-judicial proceeding that only increased the bureaucracy and killed the patent system.
Your classmate Gene wouldn’t happen to be Gene Quinn, would he?
Yes, he is.
Cool. I’ve never met him, but I read his stuff pretty religiously.
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