How The Application Of Alice Endangers Innovation

by Maxim Waldbaum

*In a recent post, I discussed the problems with the Supreme Court’s ruling in the 2014 case of Alice Corp vs. CLS Bank International, the chilling effect it was likely to have on innovation and the logical somersaults it requires one to perform in order to have an understanding of patent law. To demonstrate the problem, here are recent cases and examples of patents already being invalidated.

*The case of Video Share LLC v. Google LLC saw video-streaming technology patents invalidated. The grounds cited included that the technology involved used “conventional computer functions, such as the Internet.” If simply using the Internet qualifies as conventional, is any innovation safe?

*A website-labeling patent that allowed data to be converted into symbols and made searches easier for members of an online dating site was invalidated. The rationale here was that the invention solved a “very specific, very real problem.” Thus, on the one hand patent protection is denied on the grounds that it is abstract theory, and also denied that the problems it solves are too specific.

*Technology that filters e-mail for spam and viruses was invalidated on the grounds that it is a “long-prevalent practice for people receiving paper mail to look at an envelope and discard certain letters, without opening them, from sources from which they did not wish to receive mail based on characteristics of the mail.” The Circuit Court added that the patent simply applies an idea using computers.

*In BASCOM Global Internet Services, Inc. v. AT&T Mobility LLC a content-filtering system that prevented users from accessing different websites was invalidated.

*The cases of Jericho and Essociate invalidated patents for authenticating user requests and for tracking the source of network transactions, respectively.

What all of these patents have in common is that they make the online world more functional for users and for e-commerce. The patents are being denied on the grounds that the component ideas were already in existence. It makes one wonder if today’s judicial system would grant Thomas Edison a patent for his light bulb idea, given that glass, wire and firmament were already in existence.

The reality is that in a world that has gone online, the inventions needed to make it run well are going to be ideas—they are going to have an abstract quality to them. It’s that abstractness that is being used against patent-holders in the courts.

But a careful reading of the U.S. Patent Code makes it clear that this is going too far:

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 (emphasis added) therefore, subject to the conditions and requirements of this title.” (35 USCA Section 101)

It was subsequent judicial decisions, handed down literally over the course of two centuries, that developed abstract principle as the grounds for denying a patent. What might have made sense in 1817 or 1917, is dangerous in 2017.

The danger lies not in the patents that are denied. It’s the ones that are never applied for because the spirit of innovation has been devalued and crushed.