Mr Schecter's webinar will focus on the aftermath of the Supreme Court decision in the Alice case and potential paths going forward. Mr. Schecter will begin with an examination of how the lower courts and the USPTO have reacted to the Alice decision, and then consider the possibility of additional Supreme Court jurisprudence or legislation.
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Quotes From Law360, June 17, 2015
“Where Do We Stand One Year After Alice”
“No U.S. Supreme Court patent case has ever had so large an effect in so short a time…”
Ken Adamo, Kirkland & Ellis
“[P]ublic companies…will have to consider writing down the value of their portfolios…”
Richard Baker, New England IP
“[R]adically changed patent litigation…” Maya Eckstein, Hunton & Williams
“[W]e remain in a confusing state where validity under §101 is unclear…”
Barry Goldsmith, Miles & Stockbridge
“[S]parked a fire that continues to rage…” John Jarosz, Analysis Group
“The destructive wake of Alice…” Dr. Scott Kamholz, Foley Hoag
“[A] game changer…” Patricia Martone, Law Office of Patricia Martone
“[A]nimated a defense to patent assertions…” Paul Roeder, HP
“[A] very blunt instrument…” Gary Rosen, Law Offices of Gary Rosen
“[T]remendous value was destroyed…” Jaime Siegel, Acacia Research
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Full Disclosure: IBM Amicus Brief
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In the
Supreme Court of the United States
________________
ALICE CORPORATION PTY.LTD., Petitioner,
v.
CLS BANK INTERNATIONAL AND CLS SERVICES LTD., Respondents.
________________
On Writ of Certiorari to the United States Court of Appeals
for the Federal Circuit
________________
BRIEF OF AMICUS CURIAE INTERNATIONAL BUSINESS
MACHINES CORPORATION IN SUPPORT OF NEITHER
PARTY
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IBM Amicus Brief
§ Uncertainty regarding patent-eligibility of computer-
implemented inventions endangers critical part of
our economy
§ Abstract idea doctrine unworkable in the computer-
implemented invention context
§ Concerns generally better addressed under other
sections of statute
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Supreme Court’s Decision in Alice (2014)
§ Unanimous decision: all claims ineligible abstract
ideas
§ “[W]e need not labor to delimit the precise contours
of the abstract ideas category…”
§ “[W]e tread carefully in construing this exclusionary
principle lest it swallow all of patent law.”
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The Crux of the Problem
If all inventions rely on an abstract idea,
how do we determine whether an invention
is significantly more than an abstract idea
we do not know how to delimit?
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General Acknowledgement of Legitimacy of
Computer Implemented Inventions
§ Did not find software and/or business methods to
be generally ineligible
§ “There is no dispute that a computer is a tangible
system…, or that many computer-implemented
claims are formally addressed to patent-eligible
subject matter.”
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Need to Recite More Than Mere Computer
§ “Stating an abstract idea while adding the words
‘apply it’ is not enough for patent eligibility. Nor
is limiting the use of an abstract idea to a
particular technological environment.”
§ “[T]he mere recitation of a generic computer
cannot transform a patent-ineligible abstract idea
into a patent-eligible invention.”
§ “The introduction of a computer into the claims
does not alter the analysis at Mayo step two.”
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Examples of Abstract Ideas from Alice
§ Fundamental economic practice long prevalent in
our system of commerce
§ Certain methods of organizing human activities
§ An idea of itself
§ Mathematical relationships/formulas
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Significantly More Than Abstract Idea Itself
§ Improvements to another technology or technical field
§ Improvements to function of computer itself
§ Application with or via particular machine
§ Transformation to different state or thing
§ Limitation not well-understood, routine, conventional
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0
10
20
30
40
50
60
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 *2015
District court 101 invalidity findings by termination date
(*through 8/13/15)
Source: Lex Machina, district court cases with at least one finding of invalidity under 101, filed on or after January
1, 2000.
Bilski
Mayo
Alice
Increasing §101 Invalidations
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Lower Court Results
§ Lower courts since Alice: ~65-75% invalidity rate
on §101 grounds
§ Federal Circuit since Alice: ~90-95% invalidity rate
on §101 grounds
§ DDR is the only computer implemented invention
case since Alice in which the Federal Circuit
upheld subject matter eligibility
§ More dispositions on motion
Source: Robert Sachs, Fenwick & West, Bilskiblog/Alicestorm
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Are the Lower Court Results Deceptive?
§ Computer implemented invention optimists argue
technical patents are upheld in 2/3 of district court
§101 decisions
§ Higher rate of invalidity for business methods
§ But what about the other 1/3 – why are those
patents invalid?
Source: D. Bartley Eppenauer, Shook, Hardy & Bacon in Law360,
June 17, 2015
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None!
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Rovi v Netflix
Media Synch
Across Devices
Synopsis v Mentor Graphics
Circuit Logic Synthesis
for EDA
Thales Visionix v USA
Helmet Mounted Inertial
Tracking
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Thales Visionix v. USA and Elbit Systems
(Ct. Fed. Clm. 2015)
“[Regarding Alice Step 2] the system claim fails to transform the
method claim into a patent-eligible invention. The plain language of
Claim 1 describes generic, fungible inertial sensors that admittedly
have already gained “widespread acceptance” in the field of motion
tracking. Like the computer elements in Alice, these inertial trackers,
when considered as an ordered combination in the claimed system,
add nothing transformative to the patent. Although the concept of
tracking the motion of a moving object relative to a moving reference
frame may have been novel and nonobvious, the claimed system does
nothing to ground this abstract idea in a specific way. The claims allow
for the application of the navigation equation in almost endless
environments, and are not limited to a fighter jet and a pilot’s helmet.”
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Lingering Case Law Issues
§ Conflation of 35 USC §101 v. §102/103/112
§ Preemption v. parsing v. as a whole
§ Hindsight
§ Consistency
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Patent Trial & Appeal Board (PTAB)
§ Glass half full or half empty?
§ Same aggressive results used by
both optimists and pessimists
§ Demonstration of prevalence of
bad patents v. hostile patent
environment
§ Not necessarily the product of
Alice
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Rate of §101 Rejections in
Patent Examination Over Time
Source: Robert Sachs, Fenwick & West, Bilskiblog/Alicestorm
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0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Jan-12 Oct-12 Aug-13 May-14 Jul-14 Feb-15 Mar-15 Apr-15 May-15
2100-Comp. Arch 3600-Trans, E-Comm
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USPTO Patent Subject Matter Eligibility Guidelines
§ Focus on each individual claim as a whole
§ Prima facie case must be clearly articulated
§ Ineligibility conclusion may be supported by
general knowledge (examiner notice) – rejection
must include reasons but not necessarily evidence
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Lingering Issues in Patent Examination
§ Examiners just as confused as everyone else
§ Examples focus on what is not eligible
§ Form paragraph rejections lack specificity
(and lack evidence and consistency)
§ Just how is ineligibility properly demonstrated?
§ After Alice
– IBM survey indicates modest examination improvement
– OPQA indicates no increase in examiner errors
§ Lack of clarity in Alice will likely impact efficiency
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Where Are We Now?
§ Warning: USPTO interpretation does not have force
of law!
§ Greater uncertainty
§ §101 defense to assertions nearly automatic in
impacted technologies
§ More difficult to obtain and enforce patents
– Reduced filing in most impacted technologies
– Higher quality and lower volume of assertions and litigation
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Computer ease of use working against patent eligibility?
Inflection point on relative strength of geo patent systems?
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Claiming Tips
§ Focus claim language on technology, not business
§ Avoid mere economic claim language
§ Include more technical content and hardware in apps
§ Emphasize improvement to computer
§ Technical preambles? Bare bones preambles?
§ Include dependent claims covering valuable specific
embodiments
§ M+F claims to incorporate disclosure into claims?
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Prosecution Tips
§ Interview early
§ Delay prosecution
§ Distinguish abstract idea from claims
§ Ask for proof in response to examiner notice
§ Leverage prior similar and desired results
§ Consider reissue/reexamine to improve claims
§ Keep pending continuations (hard to amend during PTAB
challenge)
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Litigation Tips
§ Defendants
– Alice adds significantly more to your defense!
– Early PTAB challenges stay litigation
§ Plaintiffs
– Vet patents before assertion
– Consider success of §101 defense in potential jurisdictions
§ What if you are a defendant with a significant patent
portfolio?
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Remediation?
§ Never-ending search for clarity goes on
§ Other forms of IP are inadequate
§ Alice cannot simply be ignored
§ Another (clarifying) Supreme Court case?
§ Legislation to clarify 35 USC §101?
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Legislation?
§ Better to do nothing?
§ Codification of worst fears?
§ Elimination of judicial exception never fully assured
§ Need for community consensus
§ Intersection with pending patent reform legislation and
current Congressional climate
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Principles For Potential Legislation
§ Technology neutral
§ Claim considered as a
whole
§ Independent of 35 USC
§102, 103, and 112
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