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Second, the improvement need not be in the functioning of the computer itself. On the Brink of a Major Overhaul Mswipe: Proctor , citing Morse: Incorporate a physical device into your claims. Comment from Tim A.

The Fenwick & West Bilski Blog

September was the first time since Alice that the number of federal court decisions finding eligible subject matter 16 exceeded those finding ineligible subject matter Those sixteen decisions also mark the highest number of eligibility decisions in a single month.

Similarly, the success rate on motions on the pleadings at At best, this data may be interpreted as indicative of a shift in eligibility within the federal district courts, but I would prefer to see these numbers hold for several months.

While the McRO decision has been widely viewed as a positive development, the Court continues to affirm more invalidity decisions than it reverses. Judge Hughes continues to lead in number of Section cases, and has only voted once Enfish to find eligible subject matter.

Symantec was the first one since Alice that argued that the claims invalidated by the majority were eligible. Further, the method or mechanism for obtaining the result must be "new" in the sense that it was not previously used by humans to achieve the same result. Federico wisely and intentionally eliminated this requirement when they wrote the Patent Act, replacing it with Section My current data set, developed with the assistance of Patent Advisor , now contains over 2.

This itself is not surprising. For example, the biotech art units show a drop from But the Business Method art units pressed on regardless after the May memos, with a 2. At best there is the beginnings of a shift in the district courts in their application of the Alice test, but little evidence of a change in the Federal Circuit or the USPTO. This makes sense in that the district courts are the real front lines where the boundaries of eligible subject matter are being fought over.

As we have previously detailed on this blog, the precipitous drop-off in PTO allowances and Article III court confirmations of validity are not driven by the literal text of Section or other portions of the patent statute, but instead by judicial interpretations of exceptions that the courts deem must be read into the Patent Act. Single-paragraph district court explanations of why particular patents claim nothing more than an abstract idea now regularly invalidate patents at the pleadings stage.

A few examples from his concurrence are illustrative. In one sense, excluding a community from building a patented telephone system could be seen as such obstruction. In another aspect, one could not undertake meaningful discussion of the stability of a phase-locked loop circuit under various temperature or supply voltage variations without actually making and using such a circuit.

So patents by their very nature can have varying impacts on discourse. Given that, Judge Mayer appears to be arguing that the patent statute on its face is unconstitutional.

He makes no mention of how such a position can be squared with Bilski , or how his view of what should be can be implemented judicially rather than by Congress. It is at the end of his opinion that we see the policy positions Judge Mayer is really advocating. Many industries have established players with thousands of patents in their portfolios, and there is no policy deliberation suggested by Judge Mayer that would support singling out software-implemented inventions alone—indeed these are exactly the considerations that Congress is empowered to undertake in crafting legislation.

One of the most common concerns about our government—voiced from all parts of the political spectrum—is that Congress gets too little done. However, problems caused by any real or perceived Congressional dysfunction may be dwarfed by allowing courts to re-write the Patent Act. If there is ever an area where the balancing of interests calls for the legislative process to be involved, it is in our intellectual property system.

First, the mathematical nature of the invention was not fatal; it was vital. This is about as insightful as stating that patent claims in U. Second, the improvement need not be in the functioning of the computer itself.

This is consistent with the overall nature of human inventions, which is to create desirable solutions to human wants and needs, including aesthetic and artistic ones. It would have no value to animators if what animators did was of no interest to anyone. Second, it improved the end user experience of those sites, making users stay on the sites longer and resulting in improved customer satisfaction.

By definition, every algorithm that is performed by a computer was first invented by a human who thought up the algorithm and worked it out. Fourth, eligibility does not require tangibility. The court nixed this argument: This basis of rejection is clearly incorrect. Fifth, the court did not engage in a reductionist claim analysis.

As noted by the court in Oplus Techs. Software does nothing more. That the court did not use this approach, but instead focused on the limitations as a whole and how they worked together is instructive.

Again, the court made this plain:. Whether at step one or step two of the Ali ce test, in determining the patentability of a method, a court must look to the claims as an ordered combination, without ignoring the requirements of the individual steps.

The requirements of the individual steps means not just the verbs the steps but the specific details that limit the scope of each step to particular data and how it is structured e. First, the court could have further clarified that the preemption analysis should be from the perspective of a person of ordinary skill in the art POSITA , and not a lay court. POSITA is the only objective framework in the patent law and is already employed for claim construction, enablement, written description, obviousness, and the doctrine of equivalents.

There the court held that a rule-based expert system for selecting therapeutic treatments for patients with particular diseases was ineligible. Specifically, the panel could have simply clarified two points. Feel free to blame some of this mess on me. Over the past two months, the trends I've discussed in my previous blogs on AliceStorm have continued and become more entrenched.

I'll discuss those points below, but first let's do the numbers. June, July and August showed an uptick in the number Section decisions from April and May, the majority of these being motions to dismiss and judgments on the pleadings. The rates of invalidity holdings continue to be steady: Success on motions on the pleadings is up to We've recently started tracking ITC proceedings as well, as shown above in the last row.

As I've argued , the Supreme Court did not intend AliceStorm and specifically did not intend the impact on software patents. Yet the onslaught continues. Here is the current update on the types of patents being litigated under Section Together these two judges are on 15 of the 23 written opinions. Patents describe technological advances, often based on applying scientific developments to particular problems. I believe that a correct theory of patent eligibility requires not only a deep understanding of science, but also of how technology develops—issues involving the nature of human creativity and innovation.

And when it comes to questions of what constitutes abstract ideas or laws of nature , there is again a wide range of views. Yet as far as I can tell from reading Federal Circuit opinions, the court is entirely unaware of these various fields of knowledge. I explained that the debate about laws of nature has a long tradition in philosophy of science—the term itself goes back to Roger Bacon , who first used the phrase in , over years ago!

Judge Michel candidly admitted: Indeed, and that's the problem. The result can only distort the development of the patent law. The problem is not confined the life sciences. When it comes to software, the court does not appear to understand how software works or is developed. The invention then was a solution in website design, not internet engineering. The invention did not "improve the functioning" of the computer system in any technical sense; the improvement was only an improvement in usability.

What the invention changed was simply which graphical assets were combined with which product assets to create a "hybrid webpage. There is no more instantaneous transport when you click on links than when you change channels from watching a local broadcast station to watching the BBC.

There is no discussion in Alice that using a computer as a tool is insufficient to be eligible. Second, such a reductionist view marginalizes the power and utility of computers and software, and is inconsistent with general principles of eligibility.

The computer has been developed over the years precisely to be a general purpose tool that can be programmed for specific new uses, uses which themselves can be inventions. No other tool in the history of human development is as flexible and re-purposeful as a computer.

And yet this very capability is now used as evidence of ineligibility by the Federal Circuit. Section in its own terms focuses on utility as the hallmark of eligibility, and new use of a computer created by programming should be eligible by default.

Indeed, Section b —"the term 'process' means process, art or method, and includes a new use of a known No theoretical explanation of the Federal Circuit's expansion of Alice is given, nor can there be because it is entirely contrary to the nature of both the patent law at least Section b and human invention.

Humans invent by taking conventional, off-the-shelf, readily available components and combining them into new structures and functions. Any complex machine is made of components—whether nuts and bolts, motors and relays, integrated circuits, batteries, etc.

Similarly, we program conventional computers, using conventional languages and methods, to result in new functions—just like we create new machines by combining conventional parts using known engineering approaches. We would not say that the function was an abstract idea, and the application of that idea using conventional parts failed to provide an inventive contribution sufficient to be eligible.

Any such analysis would clearly be seen as an obviousness analysis masquerading as eligibility. It is beyond dispute that every element in Diehr was conventional: The only difference over the prior art was the repetitive calculation of the Arrhenius equation—obviously using a computer precisely in the manner for which it was designed. Opening the mold based on the results of the calculation was at best "post-solution" activity. The justification that Diehr had solved a problem in the real "technology" of rubber molding is wrong on two fronts.

Eligibility is not based on the problem: Second, without a definition of "technology" this answer is provides no guidance. I subscribe to the Holmsian Maxim: As a result, the "rules" of patent eligibility may appear to be logical to a judge but are simply word games that bear little if any grounding in technological practice or scientific theory. Of course, the courts are not going to sit down and learn technology, work with inventors, and start developing the life experience to inform their decision-making.

Here is a small sample of my favorites. Creativity Flow and the Psychology of Discovery and Invention , a classic in the field of creativity studies. Demonstrates how scientific innovation depends on metaphorical reasoning. Abstraction and modeling are part of creativity thinking, not evidence of ineligible concepts. Readings on Laws of Nature , a compilation of the most important essays on laws of nature, covering the range of different approaches in contemporary philosophy.

First, the Court did not see the case as presenting a difficult question of defining what is an abstract idea. In other words, to the Court, this case was not about a software invention, but a business method that just happen to be implemented in software. CLS told the Court:. This is not the death of software patents… This will not affect software patents. The Court apparently accepted this view, as indicated by Justice Sotomayor:. What's the necessity for us to announce a general rule with respect to software?

There is no software being patented in this case. Third, and most important, the Court was obviously aware that the lack of definition in both steps of the Mayo test created the risk of an over-expansive application of the judicial exceptions.

The Alice Court made clear that the judicial exceptions must be cautiously applied: At some level, "all inventions. However limited the Court believed or intended the Alice decision to be, the case has been broadly interpreted by both the federal courts and the USPTO, and the impact has been dramatic. CLS told the Court that the issue was "a very small problem" that impacted only the "most marginal, most dubious, most skeptical patents," noting that in the four years "since Bilski , there have only been 57 district court decisions on Section issues" and "only 12 Federal Circuit decisions total.

Table 1 summarizes these decisions, along with some additional data: Even more remarkable is the consistency of the Federal Circuit. The PTAB has granted As explained above, the Court did not see Alice as a software patent case, but rather an example of a fundamental business method simply implemented on a computer. Even today the common perception is that the patents being invalidated after Alice are generally business method patents.

Figure 2 shows that this is not the case. Business method patents patents classified in U. Patent Class account for But software patents account for In the majority of these cases, the rulings are based on the grounds that the claims are directed to "laws of nature" or "natural products.

Here is how the judges of that court have voted on patent eligibility:. The forty Federal Circuit decisions are remarkable for two reasons. Less obvious is that in forty decisions there have been decision opportunities by the individual judges, and yet there have been no dissents in any of the cases invalidating the patents in suit.

In the district courts, the confusion over not just the boundaries of abstract ideas, but the entire approach, is apparent. We do not so hold…. It is said we freeze process patents to old technologies, leaving no room for the revelations of the new, onrushing technology. Such is not our purpose. Kappos , S. There have been several district court and PTAB decisions since this data was compiled on June 12, Newman issuing 35, more twice that of Reyna 14 , the next most prolific dissent.

Statistically speaking, one would have "expected" about 2 or 3 dissents thus far. See Alice , S. Sallie Mae Bank, U. Here are the latest AliceStorm numbers through the end of October There have been 34 district court decisions in the past two months, but the percentage of invalidity decision is holding constant at There have been no new Federal Circuit Section decisions, but we're going to see a flurry of activity in the next couple of months, as the court has recently heard oral argument in a number of patent eligibility cases, and more are on calendar for November.

Motions on the pleadings have soared, with 23 in the past two months alone, and the success rate is up a tick from PTAB is a bit mixed: Turning to the motion analysis, the motions on the pleadings are the second scariest thing to a patent holder after the specter of attorney fees under Octane Fitness:. The Delaware district court continues as the graveyard of business methods and software patents, with 31 eligibility decisions, up from 19 just two months ago, and their invalidity rate is up from Jumping into second place is the Eastern District of Texas, with 23 decisions total up from Contrary to the rest of the rest of the bench, their invalidity rate is And finally, here is the run down on the all district court judges with two or more Section decisions.

With today's blog, I'm introducing some entirely new types of data, looking at the characteristics of the patents that have been subject to Section motions. As expected, business method patents are the most heavily litigated and invalidated click to see full size:.

The distribution of patents in terms of earlier priority dates shows a very large fraction of the invalidated patents were first filed in Now compare that to the distribution of patent classes with respect to priority year as well: Here too we see a very large number of the business method patents filed in I've coded all of the software related technologies as blue to group them visually.

Why the cluster around ? As those of us who were practicing them remember, it took about two years before the impact of the decision was widespread.

This was also the time of the Dotcom bubble when it seemed that just about everyone was starting up a business on Internet. Those two factors resulted in a surge of patent filings.

Of all the patents that have been thus challenged under Alice , only two have post- Bilski priority dates:. Over time we'll see more post- Bilski patents being litigated, and then eventually a true test: By my count, there are about 80 such patents thus far, and about another 90 that have been allowed. It will not be too long then before one of these patents is challenged under Section In my next column, I'll review some very disturbing decisions by coming out of the Delaware district courts.

My analysis was based on approximately , office action and notices of allowance received from Patent Advisor. The numbers here are the percentage of all events in the cohort TC and time period that had a Section rejection.

An event is either an allowance or a rejection; other events such as restriction requirements, advisory actions, and so forth are not counted. Since June, I've received a significant amount of new data from Patent Advisor. The trends we saw before are continuing, with some interesting new developments. Tech Center , which covers chemical and materials engineering saw an unexpected three-fold increase!

Rates dropped back down in July and August. As explained before, TC covers both E-commerce and non-Ecommerce work groups and it is the former that contribute to the high rejection rates. Similarly, the rejection rates in TC appear generally low, but this obscures higher than average rejection rates in biotechnology work groups.

If we filter for those work groups we find the following: Here is a complete breakdown of the status of these applications: Of interest are the 3, applications abandoned for failure to respond to an office action. Also interesting is the filing of the appeals during this period.

This is a harbinger of things to come. I also aggregated the status by work group technology: The average number of office actions before abandonment here was 3. Here is a view of the distribution of the number of office actions to abandonment, allowance. Cumulatively not shown here the behavior was the same: Some applicants or some examiners, depending on your perspective fought to the bitter end, with 18 cases having ten or more actions before abandonment.

The average abandonment rate at The allowance rate at 1. That the applicants in these cases did nothing more than implement some foundational economic practice on a computer, without doing anything more? That the thousands of patent counsel prosecuting these cases couldn't draft a single eligible claim? From a business perspective, abandonments are more harmful to small companies with a small number of patent filings than to larger companies.

But if you are a small company, you tend to file on the core, crown jewel technology. If you have to abandon even one or two applications, the impact can be dramatic: In this light consider the following: Now, not all news is bad news. As the charts show, there are allowed applications that will issue within the next several months. These applications are likely the best evidence of the kinds of amendments and arguments that are getting over rejections. I've included a partial list of of these applications at end of the posting.

The list is sorted by art unit and then by examiner, so you can easily find applications in an art unit of interest. By identifying an examiner on one of your cases, you can review the kinds of amendments and arguments that the examiner has accepted and plan your strategy accordingly.

Abandonments and rejections aside, there are E-commerce examiners who are allowing cases, and they deserve recognition and support. In future posts I'll explore the biotechnology groups in a similar manner. Partial Listing of Allowed Applications. Many of the titles have been shortened by removing the stock "Methods, Systems, etc. In my July post , I noted that Section court decisions were issuing fast and furious, with twelve decisions in just the first ten days.

I predicted that "At this pace, we could see some twenty to thirty decisions this month. Sadly, I was spot on: With those cases, and the cases through August 26, these are the current AliceStorm numbers:. Compared to the last numbers from July, the invalidity decision rate is up a tick, patent invalidity percentage is essentially unchanged, and claims are down a bit.

The Federal Circuit numbers jumped from 16 to 19 decisions because there were two per curiam affirmances of invalidity in July and August, and one we picked up from before.

The Northern District of California showed a slight increase, up 1. To determine this, I looked at the 14 month periods before and after Alice. Here are the results: Note that the percent change post- Alice for decisions and patents is calculated with respect to the raw counts of decisions and patents, not with respect to the invalidity percentages.

To put this in perspective: Is that what the Supreme Court intended when the cautioned the courts to "tread carefully in construing this exclusionary principle lest it swallow all of patent law.

Section Rejection Rates, Of Course. With the assistance of Patent Advisor , I now have about , records of office actions and notices of allowance from the last year or so. The most recent update I received just over 79, office actions and allowances:.

But as I've explained, looking at TC as whole hides the real rejection rates for patent eligibility. Here, I have the percentages of Section rejections in each of the identified months, broken out between the e-commerce art units , and and all other art units at the USPTO i.

What's more, the percentage of notices of allowance dropped dramatically in the ecommerce units, from Perhaps more disconcerting, is that even in other art units, the rejection rate more than doubled, from 6. Can it really be that so many thousands of patent applications merely claim abstract ideas? Let's look at the rejection rates for June, specifically, organized by technology area: This is a cross-functional summary, in that I've aggregated the rejection rates according to the kinds of technology, which extends across different Tech Centers, or I've extracted technologies from within Tech Centers.

Again we see the extraordinary percentage of Section rejection rates in Commerce and the correspondingly low notice of allowance rates , relative to other technology areas. TC had the sharpest drop in RCE filings in particular. Without having the actual data, it's hard to exactly confirm, but from the below it appears that most TC's are flat or have a tiny decline in filings. Along with the RCE drop in TC , that suggests that TC is contributing the most to the overall decline in applications filings.

Alice is having real measurable impact on application filings. If these trends on rejections continue, then examiners are working themselves out of a job, and the USPTO is working itself in the red.

Fewer applications does not mean reduced pendency. Instead it means fewer examiners because there will be less fee income coming into the USPTO to pay examiners--fees from new applications, fees from extensions of time, fees for everything. And in the long run, it means less maintenance fees, which are already back-end loaded, to pay future examiners. You are welcome to make appointments with or contact either one of them when you have health concerns or questions.

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