Brace yourselves for a months-long uptick in the ever-smoldering debate over software and business method patents. This time, the fuel to the fire is the Federal Circuit en banc decision issued on May 10, 2013 in CLS Bank v. Alice Corp. Much will be written in the coming days about the areas of disagreement between the various Federal Circuit Judges regarding the judicial exception to statutory subject matter under §101 for abstract ideas. One such disagreement involves two distinct approaches to identifying a “particular practical application” that supports the patent eligibility of a claim. Although nothing other than the court’s one paragraph Per Curiam Judgment is precedent, patent professionals may still glean some useful pratice tips from this decision.
Every practitioner should know this one, and even the Judges in CLS Bank agree: An abstract idea completely disembodied from any particular practical application is not patent eligible under §101. As the opinion of the court reminds us, a claim may be premised on an abstract idea—the question for patent eligibility is whether the claim contains limitations that meaningfully tie that idea to a concrete reality or actual application of that idea. Lourie Op. at 16. For example, the concept of reducing settlement risk by facilitating a trade through third-party intermediation is an abstract idea because it is a “disembodied” concept, In re Alappat, 33 F.3d 1526, 1544 (Fed. Cir. 1994) (en banc), a basic building block of human ingenuity, untethered from any real-world application. Standing alone, that abstract idea is not patent-eligible subject matter. Lourie Op. at 26. See, e.g., Mayo, 132 S. Ct. at 1294 (“[A] process that focuses upon the use of a natural law [must] also contain other elements . . . sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the natural law itself.”); Bilski, 130 S. Ct. at 3231 (rejecting claims that would “effectively grant a monopoly over an abstract idea”); Benson, 409 U.S. at 71–72 (“[T]he patent . . . in practical effect would be a patent on the algorithm itself.”). Lourie Op. at Page 20. PRACTICE TIP: Remember those patent application drafting habits you developed when you were writing to satisfy the “useful, concrete and tangible result” test (See State Street Bank & Trust Co. v. Signature Fin. Group, 149 F.3d 1368 (Fed. Cir. 1998)), and the “machine-or-transformation” test (See In re Bilski, 545 F.3d 955 (Fed. Cir. 2008))? Well, keep doing that. Can’t hurt. But you’re not done.
Where the court splinters dramatically is on a proposed §101 analysis framework that turns on claim preemption. Specifically, the court proposes that a claim that subsumes all possible practical applications of an abstract idea is not patent eligible under §101. For support, the court notes that the Supreme Court applied Benson, Flook, and Diehr when the Court held in Bilski v. Kappos, 130 S. Ct. at 3231 that the claims failed to recite a patent-eligible process because they covered the abstract idea of hedging against risk. “Allowing [the claims] would pre-empt use of this approach in all fields, and would effectively grant a monopoly over an abstract idea.” Using this jurisprudence as its guideposts, the court reasons a claim cannot subsume the full scope of a fundamental concept/abstract idea, and when that threat exists, the court must look for meaningful limitations that prevent the claim as a whole from covering the concept’s every practical application (Lourie Op. at 16), and thereby preserve the “basic tools” of scientific discovery for common use (Lourie Op. at 17). PRACTICE TIP: Remember the USPTO’s “Factors Weighing Against Eligibility” (initial version appeared in 2010’s Interim Guidance for Determining Subject Matter Eligibility for Process Claims)? Analyze your draft claims using those factors to help you identify at least one potential, unclaimed application of the fundamental concept that is at the base of your claims. If you can’t do it, you may be in trouble. If you can do it, keep that example handy, because you may need it as fodder for a future Office Action and/or appeal.