ENFISH V MICROSOFT CORP: Federal Court Rules Software Protection Still Exists

CLIENT ALERT

On May 12, 2016, the Federal Circuit in Enfish v Microsoft Corp., Civ 15-1244, found that the possibility of protection for software still exists, even though about 75% plus  of all cases since Alice have declared software and financial systems and methods ineligible under 35 USC §101.

With respect to a self-reformatted database for “organizing information using tabular formats,” the Court said, unlike Alice: “which the High Court held covered only an age old financial concept applied using a computer,” Enfish claims are eligible because they are focused on improving the functioning of a computer . . . not on economics or other tasks for which a computer is used in its ordinary capacity.”

The Court further stated that the Enfish claims are “directed to a specific improvement in the way computers operate,” something the “Justices said in Alice can be patented. The Court went on: “We do not read Alice to broadly hold that all improvements in computer-related technology are inherently abstract.”

The comments above are not helpful to understanding the meaning of an “abstract idea.” Notwithstanding inventor outcries, the Court has helped destroy the value of the sorts of innovations that once upon a time set our country apart from the world. Efforts to use §101 to eliminate perceived monopolistic patents that take from the public whole segments of the computer industry is specious. The law protects such activity through consideration of what may be described as new, useful, novel and nonobvious, full and complete description and enablement.

The language above in Enfish suggests a concern for what is well-known but this is not just a second step in understanding abstract ideas with “something more,” which is just as nonsensical as using §101 to define “abstract ideas” for innovations that have been actually or constructively reduced to practice. Calling these inventions “concepts” is disingenuous and dishonest and so, too, is distinguishing “directly relating to” from “involving,” another baseless fiction.

The USPTO and the courts are dismantling some of our country’s most important advances and innovations by manipulating basic definitions of rights given inventors under 35 U.S.C. §101.  On May 6 the PTO announced for at least the third time its attempt to clarify that which cannot be clarified, i.e., the extension of §101 to invalidate inventions which are foundational of our leading industries which rely on innovation, software, telecommunications, and life sciences.

A review of these new suggestions shows the PTO and, ultimately, our courts, are likely to continue to chase shadows attempting to cleanse dockets of “unworthy” patents, thus making the patent system more “valuable” as a source of respect for the US.  Such a quest is utter nonsense and has resulted, over the past two years since the decision of  SCOTUS in CLS v  ALICE, invalidating more than 80% of patents issued and reviewed (all but one case brought before the Federal Circuit (DDH) and 100% of covered business methods under their CBM Program.

This is all the result of a belief that something had to be done in these industries to create stronger patents, a misperception resulting from the use of a statute never intended for such purpose, leading companies in those industries down a path to chaos.

In the PTO’s May 4, 2016 memorandum, the PTO described a means of analyzing a finding of §101 ineligibility and, as well, the Alice two-part analysis from the PTO interim eligibility guidelines.  Step one requires a determination as to whether the claim is directed to an abstract idea or a “law of nature” or “natural phenomena.”  The second part of the analysis is to identify the additional elements in the claim and explain why the elements taken, individually or in combination, do not amount to claim, as a whole, significantly more than the judicial exception of step one.

A glaring flaw in this analysis is the supposition that an examiner can recognize when a claim describes “digital imaging processing,” a “global positioning system,” “distribution of products over the internet,” “graphical user interface for meal planning,” “graphical user interface for relocating obscure textual information,” or “rubber manufacturing” as “judicial exceptions” – and, less, abstract ideas.  The analysis begs the question.

Based on the descriptions above, none of these are “abstract” ideas.  They are products and methods which may or may not be new, useful, novel, and non-obvious.  But under the instant analysis, they are tarred with a broad brush, i.e., referring to them “abstract ideas.”  One might describe an “abstract idea” as, for example, musing about whether the sun will exists for 90 million more years or whether a dog might turn into a cat, generationally – it is not a specific attempt to work at problems inventors have tried to solve.

The above descriptions are not simply “concepts” because they all set forth, theoretically, how to make and how to use.  The abstract idea of a “judicial exception,” in the guidelines, seems to suggest there is no reduction to practice of the invention, but that is nonsense.  That is not the intention of the guidelines, as presented.

The reasoning is equally true for a “law of nature” and “natural phenomenon.”  Producing genetically modified bacterium, screening for gene alterations, and diagnosis and treating julitis are specifically conceived, reduced to practice inventions.  Calling them a “judicial exception” does not make them “available” in nature.  It appears that the real reason is that there are modifications which the guidelines want to say do not meet the standards of §§ 102-103 – and that is where the round peg fits in the round hole.

There may be situations where the concepts of “laws of nature” or “natural phenomenon” are useful, but the guidelines analysis goes further, particularly work that has been done to solve problems and claims are said to fall within “judicial exception” categories.  Reading the limitations and descriptions in the index of suggested examples, it is clear that they are merely referring to routines or things common, i.e. obvious, when one looks at the invention.

That is the problem for examiners and courts, not whether they should be analyzed under §101.  When examiners or courts reject claims as saying they can be done with a pencil and paper as opposed to a computer that does not make them “abstract ideas,” that makes them obvious, predictable solutions done with a machine that is ubiquitous and available to all.

Even in Alice Corp. where a computer created electronic records, tracked multiple transactions and issued simultaneous instructions, they were stated to be “purely conventional computer functions.”   That is not an “abstract concept” – but one that is obvious and predictable.  Nearly every computer has a “data processing system” with a “communications caller” and a “data storage unit” – none of this means it is “abstract” – it just means it is “obvious.”

For life sciences, the same is true with Mayo.  The data gathering in Mayo was held to be well understood, routine, and conventional, none of which is “abstract,”  but rather predictable and obvious.  Scientists routinely measure metabolites as part of their investigations and this is part of obviousness analysis – not part of the investigation of what makes an idea “abstract.”  Analysis of the cases makes clear that §101 should never be used in the context of innovations and inventions, but just sets forth what the drafters understood to be the subject to be discussed and examined.

These are not §101 limitations, but parameters setting forth a mechanism for the analysis of §§ 102 and 103.  Trying to break apart “eligibility” under §101 to fit a tablet for invalidity creates disorder and disorients the natural application of the invalidity principles set forth in §§102 and 103.  “Markedly different characteristics” or an “MDC” test is not the answer to questions regarding validity.  It is a wrong-headed attempt to explain a bad conclusion, i.e. that there was an “abstract idea” instead of a presented conception and reduction of practice for something that may not have reached the levels of innovation under §§102 and 103.

A standard of “amounts to significantly more” to overcome a “judicial exception” is no standard at all.  It is just as vague as a step one determination of “judicial exception.”

The guidelines state that the abstract idea exception is “like the other judicial exceptions, was created by the courts to protect the building blocks of ingenuity, scientific exploration, technological work and the modern economy.”  To the contrary, the exception appears to be created to eliminate what some perceive, perhaps in the Patent Office, that there are too many software patents.  No doubt death squads created under the AIA to eliminate patents has succeeded as to software, financial related inventions, and the life sciences industry.  These are the true building blocks of U.S. innovation but the USPTO and those who follows its dictates have it wrong.

Mathematical formula, as in Flook, should be understood as “basic tools of the scientific and technological work that lie beyond the domain of patent protection.”  This is not what is happening in many of the cases found under Alice.  Nothing in those cases will “inhibit future innovation premised upon them.”  The broad swath of invalidity determinations is not a construct supported by such damaging fiction.

One would think that the U.S. would not be the only country to have this problem if, in fact, real “abstract ideas” are eliminated.  Although sometimes there are difficulties defining what is “technological,” this is better than trying to fit the square peg of abstract idea into the round hole of “something more.”

Patent lawyers can talk at length about further information which can be used in identifying “abstract ideas”  but sometimes the fact that an idea is “abstract” may make the appellation difficult to prove.  Generally, no one files patent applications unless the product or method is actually or at least constructively reduced to practice.  If it truly takes away from something basic in the world, where no one else can use it, that should be obvious, to everyone – and that certainly is not the case with Alice-following litigations.

When the issue is whether we are dealing with fundamental economic practices or methods of organizing human activity, one is generally analyzing “obviousness.”  Bilski was an obviousness problem, not an abstract problem.  Hedging financial transactions is not abstract.  It may not be new but certainly was useful, perhaps novel, and may or may not have been obvious.  The poison of Bilski infected Alice and everything else followed.

When Alice states the court is using a third-party intermediary as a building block of the modern economy, that is a statement of obviousness, not abstraction.  It is one thing to attempt to monopolize a concept, another to try to say the reduction of practice is part of taking a building block away from modern economy without determining predictability and obviousness.  The “significantly more” inquiry falls into the same trap as the “judicial exception.”

The above analysis applies as well to the guidelines recently submitted on subject matter eligibility examples for “life sciences.”  Patent lawyers and examiners understand the law of nature or a natural phenomenon, but what innovative work is done to modify such subject matter to obtain results never before achieved, is no longer a law of nature or a natural phenomenon.

Just as “technology” is the touchstone of whether software or equivalent subject is considered patentable, the uniqueness of results on work done to natural phenomenon or a product found to be within the laws of nature, should be equally subject to a §§102, 103 analysis.  Again, too much abstraction/distraction creates fictional, bad results.