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Here we'll explore the nexus of legal rulings, Capitol Hill policy-making, technical standards development, and technological innovation that creates -- and will recreate -- the networked world as we know it. Among the topics we'll touch on: intellectual property conflicts, technical architecture and innovation, the evolution of copyright, private vs. public interests in Net policy-making, lobbying and the law, and more.

Disclaimer: the opinions expressed in this weblog are those of the authors and not of their respective institutions.

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July 11, 2012

CAFC Wants to Bring (Its) Order to Patent Eligibility Rules

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Posted by Alan Wexelblat

You may remember that in my Q&A I said that one of the most desperately needed things for improving patents was some clarity on what is and is not patentable. Examiners and patent applicants who can't find/follow simple clear rules aren't likely to produce the best results. There have been several confusing decisions from various courts over the years, most recently the hair-pulling mess that is the Supreme Court's Mayo decision. Now the Court of Appeals of the Federal Circuit (CAFC) has attempted to bring some form of order to this chaos. Their decision speaks directly to the confusion issue and invites clarification.

The case is called CLS Bank v. Alice Corporation and the PDF of the decision is here: http://www.cafc.uscourts.gov/images/stories/opinions-orders/11-1301.pdf. The case specifically focuses on the question of what in the realm of computer hardware, software, process, etc is patent-eligible. The Court ruled that the system - a computerized trading platform - was patent-eligible, specifically under 35 U.S.C. 101 (this is sometimes called "101 eligible"). In this decision, the CAFC reversed the lower court, which had found that the system was ineligible.

In the majority opinion the Court took some pains to point out areas where decisions such as Mayo seem to have muddled different eligibility criteria, and tried to set the record straight. It also took some not-so-subtle swipes at the SCOTUS opinion and previous dicta from the high court. For example:

The abstractness of the "abstract ideas" test to patent eligibility has become a serious problem, leading to great uncertainty and to the devaluing of inventions of practical utility and economic potential.

For those who are coming late to this game, what this is saying is "Hey, SCOTUS, you gave us this test called 'abstract idea' but no guidance on what it means or how to apply it and which patent eligibility criteria it's supposed to affect". The CAFC complains at length that attempts to clarify this matter have not actually added any clarity:
It can, thus, be appreciated that a claim that is drawn to a specific way of doing something with a computer is likely to be patent eligible whereas a claim to nothing more than the idea of doing that thing on a computer may not. But even with that appreciation, great uncertainty remains, and the core of that uncertainty is the meaning of the 'abstract ideas' exception.

CAFC isn't always the final word on patent decisions, though it often is. If this case is taken up a level then the high court might finally use it as an opportunity to clarify what their 'abstract idea' test means. Or, by refusing cert and letting the decision stand, the Court could be implicitly saying that CAFC are right and that computer system implementations like Alice Corp's are indeed 101 eligible. That's not as definitive as a real ruling but at least it's something.

(Thanks to Greg Aharonian of Internet Patent News Service and PATNEWS for pointing me to this decision and the key parargraphs.)

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