RECENT DEVELOPMENTS IN THE PATENT-ELIGIBILITY OF SOFTWARE

423

RECENT DEVELOPMENTS IN THE

PATENT-ELIGIBILITY OF SOFTWARE AND

NAVIGATING THE UNCERTAINTY FROM

A PATENT DRAFTER’S PERSPECTIVE

Steven W. Gutke†

TABLE OF CONTENTS

I. Introduction .......................................................................................... 424 II. Background .......................................................................................... 424 III. Analysis................................................................................................ 425

A. Recent Cases Dealing with Patent Eligibility of Software

Innovations ................................................................................... 425 1. Bilski v. Kappos: Machine-or-Transformation Test Is Not

the Sole Test for Patent-Eligibility ........................................ 426 2. CyberSource Corp. v. Retail Decisions, Inc.: Computer-

Readable Medium Claims May Be Patent-Ineligible ............ 428 3. Ultramercial, LLC v. Hulu, LLC: Narrowing of the

Abstract Idea Exception ......................................................... 430 4. Mayo Collaborative Services v. Prometheus Laboratories:

Concerned About Preemption ................................................ 433 5. CLS Bank International v. Alice Corporation: A Fractured

Decision ................................................................................. 433 6. Ultramercial, LLC v. Hulu, LLC ........................................... 436

B. Application of the Law at the USPTO ......................................... 437 1. Interim Guidelines in Response to Bilski: A Factor-Based

Inquiry to Patent-Eligibility ................................................... 437 2. August 2012 Updated Examiner Training ............................. 440

IV. Recommendation ................................................................................. 441 V. Conclusion ........................................................................................... 443

† Steven W. Gutke is a graduate (summa cum laude, Order of the Coif) of the College of Law at the

University of Illinois at Urbana-Champaign. Mr. Gutke is also an honors graduate of Utah State University

with a B.S. in Electrical Engineering and a B.A. in German. Mr. Gutke is a Registered Patent Attorney and an

associate at TraskBritt, PC, in Salt Lake City, Utah. This Recent Development is intended to be a discussion

of current issues related to the patentability of software patents and should not be understood as representing

the opinion of TraskBritt or any of its clients.

424 JOURNAL OF LAW, TECHNOLOGY & POLICY [Vol. 2013

I. INTRODUCTION

The scope of 35 U.S.C. § 101—and its interpretation of patent-eligible

subject matter—is perhaps the most hot-button issue in patent law today.1

With respect to computer software, there is an ongoing debate as to whether

software should be patent-eligible—not just from a legal standpoint but also

from an innovation standpoint.2 This Recent Development discusses whether

computer software is patent-eligible under the Patent Act, what limitations

might exist, and what lessons can be learned from recent decisions that might

improve patent practitioners’ efforts in protecting software. This Recent

Development is also meant to assist those potential applicants desiring patent

protection on software in understanding the current state (and to a large extent,

the uncertainty) of patents involving software innovations.

Part II of this Recent Development briefly summarizes the current state of

confusion with regard to the patent-eligibility of software. Part III of this

Recent Development discusses selected recent Federal Circuit and Supreme

Court cases that may have an impact on the patentability of software

innovations. These selected cases are presented chronologically. From a legal

standpoint, these cases appear to at least agree that software—at least

computer-implemented innovations involving software—can possibly be

patentable.3 There remains, however, much uncertainty and disagreement

within the judiciary as to how to determine whether a patent claim recites

patent-eligible subject matter, where the lines are drawn, and even what

methods of analysis should be used. Part III further discusses the current

application of the law at the USPTO, including guidelines and training for the

Patent Examining Corps. Part IV gives recommendations for practitioners and

potential applicants going forward in this climate of uncertainty. Part V

presents conclusions.

II. BACKGROUND

So, what is the current state of the law with respect to patent-eligibility of

software? In a recent opinion (seven opinions to be exact) on the matter by the

Federal Circuit rendered in May 2013, Chief Judge Rader of the Federal

Circuit perhaps summed it up best:

1. The debate regarding patent-eligible subject matter is not just related to software patents. Most

recently, the Supreme Court has also addressed the patent-eligibility of genes (e.g., isolated DNA). See Ass’n

for Molecular Pathology v. Myriad Genetics, Inc., 133 S. Ct. 2107 (2013).

2. For example, there are numerous groups that believe that software patents stifle innovation and

harm economic growth, with such groups being dedicated to putting an end to software patents. See, e.g., END

SOFTWARE PATS., http://endsoftpatents.org/ (last visited Sept. 24, 2013). Others, including former United

States Patent and Trademark Office (USPTO) director David Kappos, argue that software innovations are

important and should be eligible for patenting. David Kappos, Dir., U.S. Patent & Trademark Office, Keynote

Address at the Center for American Progress: An Examination of Software Patents (Nov. 20, 2012), available

at http://www.uspto.gov/news/speeches/2012/kappos_CAP.jsp.

3. Mayo Collaborative Servs. v. Prometheus Labs, Inc., 132 S. Ct. 1289 (2012); Bilski v. Kappos, 130

S. Ct. 3218 (2010); CLS Bank Int’l v. Alice Corp., 717 F.3d 1269 (Fed. Cir. 2013); Ultramercial, LLC v. Hulu,

LLC, 657 F.3d 1323 (Fed. Cir. 2011); CyberSource Corp. v. Retail Decisions, Inc., 654 F.3d 1366 (Fed. Cir.

2011).

No. 2] PATENT-ELIGIBILITY OF SOFTWARE 425

No portion of any opinion issued today other than our Per Curiam Judgment garners a majority. The court is evenly split on the patent eligibility of the system claims. Although a majority of the judges on the court agree that the method claims do not recite patent eligible subject matter, no majority of those judges agrees as to the legal rationale for that conclusion. Accordingly, though much is published today discussing the proper approach to the patent eligibility inquiry, nothing said today beyond our judgment has the weight of precedent.

4

The answer to the question about the current state of patent-eligibility of

software is: confusion. How did it get there? There was a time when the

doctrine regarding what constitutes patent-eligible subject matter could very

broadly be summed up as “anything under the sun that is made by man.”5 But

now we have a situation where Chief Judge Rader laments that he and his

fellow judges have “little, if any, agreement . . . even though the statute has not

changed a syllable.”6 This statement comes even after the Supreme Court

decided multiple cases in this past decade that considered issues related to

patent-eligible subject matter. The clear split at the Federal Circuit, and the

accompanying uncertainty, provides another opportunity for the Supreme

Court to take up the issue of clarifying the law with respect to computer

software.7

III. ANALYSIS

The following analysis discusses the statutory standard of patent-

eligibility, as well as recent court decisions and USPTO practices that have

attempted to interpret that standard with regard to computer-implemented

innovations. In particular, Part II.A discusses selected recent court decisions

chronologically beginning with Bilski v. Kappos,8 decided by the Supreme

Court in 2010, up through CLS Bank International v. Alice Corp.9 and

Ultramercial v. Hulu,10

which were decided by the Federal Circuit in 2013.

Part II.B discusses application of the court decisions at the USPTO, including

interim guidelines published in 2012 in response to Bilski, as well as additional

examiner training in 2012.

A. Recent Cases Dealing with Patent Eligibility of Software Innovations

35 U.S.C. § 101 sets forth the statutory standard for patent-eligibility as:

4. CLS Bank Int’l, 717 F.3d at 1292 n.1 (Rader, C.J., concurring-in-part and dissenting-in-part).

5. Diamond v. Chakrabarty, 447 U.S. 303, 309 (1980) (quoting the committee reports accompanying

the 1952 Patent Act).

6. CLS Bank Int’l, 717 F.3d at 1335 (Rader, C.J., filing additional reflections).

7. Congress had an opportunity to clarify some of the issues regarding what should or should not be

patent-eligible in the recently enacted America Invents Act of 2011. Unfortunately, Congress chose to be

silent on these issues facing the courts.

8. Bilski, 130 S. Ct. at 3225.

9. CLS Bank Int’l, 717 F.3d at 1335.

10. Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 1335 (Fed. Cir. 2013).


“[w]hoever 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 therefor, subject to the conditions and

requirements of this title.”11

The Patent Act further defines the “process”

category as meaning a “process, art or method, and includes a new use of a

known process, machine, manufacture, composition of matter, or material.”12

Courts have further stated that “[i]n choosing such expansive terms . . .

modified by the comprehensive ‘any,’ Congress plainly contemplated that the

patent laws would be given wide scope.”13

These two statutes set the standard

starting point for analysis in nearly every case deciding the bounds of

patentable subject matter of software innovations.14

In addition to the statutes, most cases (including the cases discussed

below) expressly recognize that there are three exceptions to the broad

treatment of what constitutes patent-eligible subject matter—“laws of nature,

natural phenomena, and abstract ideas” are not patentable.15

The Supreme

Court has recognized that “too broad an interpretation of this exclusionary

principle could eviscerate patent law. For all inventions at some level embody,

use, reflect, rest upon, or apply laws of nature, natural phenomena, or abstract

ideas.”16

What happens from there is where the real action occurs.

1. Bilski v. Kappos: Machine-or-Transformation Test Is Not the Sole Test

for Patent-Eligibility17

Although the patent in question in Bilski would more likely be

characterized as a “business method” patent than a “software” patent, Bilski had a major effect on the manner in which all methods are evaluated, which

affects the analysis of software-type patents. Bilski briefly discussed software

patents and did not categorically exclude software from being patent-eligible

subject matter.

Prior to Bilski, method claims were generally evaluated under the

machine-or-transformation test, which determined that a process is patent

eligible if “(1) it is tied to a particular machine or apparatus, or (2) it

transforms a particular article into a different state or thing.”18

The Court, as in

11. 35 U.S.C. § 101 (2006).

12. Id. § 100(b).

13. Bilski, 130 S. Ct. at 3225 (quoting Diamond v. Chakrabarty, 447 U.S. 303, 308 (1980)).

14. See, e.g., id. at 3227–28 (discussing concerns found in amicus briefs based on emerging

technologies, such as software, which must be analyzed under 35 U.S.C. § 101); Diamond, 447 U.S. at 307–08

(stating that the court is required to construe 35 U.S.C. § 101 to determine whether a party’s micro-organism

“constitutes a ‘manufacture’ or ‘composition of matter’ within the meaning of the statute”); Ultramercial, LLC

v. Hulu, LLC, 657 F.3d 1323, 1328 (Fed. Cir. 2011) (discussing whether “a method for monetizing and

distributing copyright products over the internet” satisfied 35 U.S.C. §§ 100 and 101); CyberSource Corp. v.

Retail Decisions, Inc., 654 F.3d 1366, 1369–70 (Fed. Cir. 2011) (discussing whether the patentee’s claims on a

process for verifying Internet credit card transactions and the computer program instructing the execution of

this process are considered processes under 35 U.S.C. § 101).

15. Bilski, 130 S. Ct. at 3225 (quoting Diamond, 447 U.S. at 309).

16. Mayo Collaborative Servs. v. Prometheus Labs Inc., 132 S. Ct. 1289, 1293 (2012).

17. Bilski, 130 S. Ct. at 3227.

18. In re Bilski, 545 F.3d 943, 954 (Fed. Cir. 2008); see also Parker v. Flook, 437 U.S. 584, 588 n.9


other recent patent cases, was reluctant to introduce a bright line rule or

exclusive test for application of the law. The Court, rather, determined that

“the machine-or-transformation test is not the sole test for deciding whether an

invention is a patent-eligible ‘process.’”19

Instead, the Court called the

machine-or-transformation test “a useful and important clue, an investigative

tool, for determining whether some claimed inventions are processes under §

101.”20

To some extent, the machine-or-transformation test might have been good

for software patent applicants in that it offered some predictability and kept

patent examiners bound by a test without giving them freedom to venture into

uncharted territory.21

On the other hand, the machine-or-transformation test

did eliminate certain types of claims from being allowed for inventions in the

information age.22

In fact, certain pro-software patent groups had filed amicus

briefs that argued that the machine-or-transformation test creates “uncertainty

as to the patentability of software, . . . inventions based on linear programming,

data compression, and the manipulation of digital signals.”23

In that sense,

having some leeway for subject matter to potentially be patentable, even if it

does not meet the machine-or-transformation test, could be good for software

patents.24

In practice, however, giving patent examiners more freedom to stray

from the machine-or-transformation test may result in more rejections of

software claims based on concepts such as abstract ideas.25

Courts and patent

examiners appear to be freer to reject claims that are drafted in a way that

would technically meet the machine-or-transformation test if the core of the

claim is too much of an abstract idea.26

(1978) (“An argument can be made, however, that this Court has only recognized a process as within the

statutory definition when it either was tied to a particular apparatus or operated to change materials to a

‘different state or thing.’”).

19. Bilski, 130 S. Ct. at 3227.

20. Id.

21. See generally Mark A. Lemley et al., Life After Bilski, 63 STAN. L. REV. 1315, 1319 (2011)

(asserting the prevalence of the machine-or-transformation test).

22. Bilski, 130 S. Ct. at 3227.

23. Id.

24. See id. (“Section 101 is a dynamic provision designed to encompass new and unforeseen

inventions.’’ (citing J.E.M. Ag Supply, Inc. v. Pioneer Hi–Bred Int’l, Inc., 534 U.S. 124, 135 (2001))). “A

categorical rule denying patent protection for ‘inventions in areas not contemplated by Congress . . . would

frustrate the purposes of the patent law.’” Id. (quoting Diamond v. Chakrabarty, 447 U.S. 303, 315 (1980)).

25. See id. at 3229 (“Indeed, if the Court of Appeals were to succeed in defining a narrower category or

class of patent applications that claim to instruct how business should be conducted, and then rule that the

category is unpatentable because, for instance, it represents an attempt to patent abstract ideas, this conclusion

might well be in accord with controlling precedent.”).

26. See id. at 3229–30 (“Rather than adopting categorical rules that might have wide-ranging and

unforeseen impacts, the Court resolves this case narrowly on the basis of this Court’s decisions in Benson,

Flook, and Diehr, which show that petitioners’ claims are not patentable processes because they are attempts

to patent abstract ideas.”).


2. CyberSource Corp. v. Retail Decisions, Inc.: Computer-Readable

Medium Claims May Be Patent-Ineligible27

In August of 2011, a three-judge panel of Judge Bryson, Judge Dyk, and

Judge Prost affirmed a district court decision granting summary judgment of

invalidity of Claims 2 and 3 of U.S. Patent 6,029,154 under 35 U.S.C. § 101

for failure to recite patent-eligible subject matter.28

Claim 2 recited the following (as amended during reexamination):

A computer readable medium containing program instructions for detecting fraud in a credit card transaction . . . to carry out the steps of:

a) obtaining credit card information relating to the transactions from the consumer; and

b) verifying the credit card information based upon values of plurality of parameters, in combination with information that identifies the consumer, and that may provide an indication whether the credit card transaction is fraudulent,

wherein each value among the plurality of parameters is weighted in the verifying step according to an importance, as determined by the merchant, of that value to the credit card transaction, so as to provide the merchant with a quantifiable indication of whether the credit card transaction is fraudulent,

wherein execution of the program instructions by one or more processors of a computer system causes that one or more processors to carry out the further steps of;

[a] obtaining information about other transactions that have utilized an Internet address that is identified with the credit card transaction;

[b] constructing a map of credit card numbers based upon the other transactions; and

[c] utilizing the map of credit card numbers to determine if the credit card transaction is valid.

29

Claim 3 recited the following:

A method for verifying the validity of a credit card transaction over the Internet comprising the steps of:

a) obtaining information about other transactions that have utilized an Internet address that is identified with the [ ] credit card transaction;

b) constructing a map of credit card numbers based upon the other transactions and;

c) utilizing the map of credit card numbers to determine if the credit

27. CyberSource Corp. v. Retail Decisions, Inc., 654 F.3d 1366 (Fed. Cir. 2011).

28. Id. at 1371.

29. U.S. Patent No. 6,029,154 (filed July 28, 1997); see also CyberSource, 654 F.3d at 1368.


card transaction is valid.30

The court evaluated Claim 3 first.31

As a method claim on its face, some

might think that the claim is patent-eligible by simply falling within the

statutory category of a process. As discussed above, however, not every

“process” is determined to be patent-eligible.32

To be a patent-eligible process,

the claim must also not fall within one of the judicially-created exceptions to

the statutory categories.33

The Federal Circuit first evaluated the claim under the machine-or-

transformation test, finding that the claim did not satisfy either prong.34

Because the Supreme Court in Bilski stated that the machine-or-transformation

test “is not the sole test for deciding whether an invention is a patent-eligible

process,”35

the Federal Circuit panel of judges performed a secondary test to

evaluate the method of Claim 3. The court determined that Claim 3 was “an

unpatentable mental process—a subcategory of unpatentable abstract ideas.”36

A mental process has been described as being a process that “can be done

mentally,”37

“can also be performed without a computer,”38

is “the equivalent

of human mental work,”39

and/or could “be made by [using a] pencil and

paper” even though such processes would be primarily useful for computerized

applications.40

The Federal Circuit concluded that “a method that can be

performed by human thought alone is merely an abstract idea and is not patent-

eligible under § 101.”41

The Federal Circuit’s decision with regard to Claim 2 was perhaps even

more significant. The Federal Circuit held that Claim 2—a claim directed to a

computer-readable medium—is patent ineligible.42

Traditionally, such

computer-readable medium claims (also referred to by practitioners as

“Beauregard” claims43

) had been considered patent-eligible simply by virtue

that on their face, the claims literally fall within a statutory category (i.e., an

article of manufacture) and do not fall within one of the long-standing

exceptions (i.e., a law of nature, physical phenomena, or an abstract idea).44

The abstract idea exception was generally only applied to method claims

because, after all, an apparatus is not an idea. As a result, many patent

practitioners previously were able to protect themselves from rejections under

30. ’154 Patent; see also CyberSource, 654 F.3d at 1368.

31. CyberSource, 654 F.3d at 1370.

32. Bilski v. Kappos, 130 S. Ct. 3218, 3225 (2010).

33. Id.


35. Bilski, 130 S. Ct. at 3225.


37. Gottschalk v. Benson, 409 U.S. 63, 67 (1972) (holding that claims involving the conversion of

binary-coded decimal numbers to binary numbers through a mathematical algorithm were not patent-eligible

under § 101).

38. Id.


40. Parker v. Flook, 437 U.S. 584, 586 (1978).


42. Id. at 1375.

43. In re Beauregard, 53 F.3d 1583 (Fed. Cir. 1995).

44. CyberSource, 654 F.3d at 1373–74.


§ 101 by reciting Beauregard claims or system claims so that at least those

claims would be allowed in the event the method claims were held to be

patent-ineligible.45

In CyberSource, the court decided to rely on substance over form by

“look[ing] to the underlying invention for patent-eligibility purposes.”46

Ultimately, the court held that the Beauregard claim could be held to be an

abstract idea.47

In this case, the Beauregard claim was not patent-eligible

because it was essentially the same method recited in Claim 3, which the court

determined to be an unpatentable mental process.48

The court distinguished

this situation from the Alappat Rule49

by stating that simply reciting the use of

a computer to execute an algorithm that can be performed entirely in the

human mind does not make the claim patent-eligible under 35 U.S.C. § 101.50

3. Ultramercial, LLC v. Hulu, LLC51

: Narrowing of the Abstract Idea

Exception

Less than one month after CyberSource was decided, Ultramercial I was

decided by a different three-judge panel of the Federal Circuit—Chief Judge

Rader, Judge Lourie, and Judge O’Malley. In Ultramercial I, the court

reversed a district court decision of invalidity of the claims of U.S. Patent

7,346,545 under 35 U.S.C. § 101.52

The judges on this panel, and particularly Chief Judge Rader who wrote

the opinion, were clearly more open to a broader, more expansive view of what

subject matter may be patent-eligible under 35 U.S.C. § 101. For example,

Chief Judge Rader called § 101 “merely a threshold check” and the listed

statutory categories “expansive” and no more than a “coarse eligibility filter”

for the substantive patentability requirements of § 102 (novelty), § 103 (non-

obviousness), and § 112 (adequate disclosure).53

Particularly, with the

statutory category of a process (i.e., a method claim), Chief Judge Rader noted

that a process has an additional statutory definition that does not have any

subject matter limitation to it.54

Although Chief Judge Rader recognized the

45. Id.

46. Id. at 1374.

47. Id.

48. Id. at 1371.

49. The Alappat Rule states, “programming a general purpose computer to perform an algorithm

‘creates a new machine, because a general purpose computer in effect becomes a special purpose computer

once it is programmed to perform particular functions pursuant to instructions from program software.’” Id. at

1375 (quoting In re Alappat, 33 F.3d 1526, 1545 (Fed. Cir. 1994)).

50. Id. at 1375. The court did, however, provide some examples of claims that performed methods

involving computers running software that could not be performed entirely in the mind. See id. at 1375–76;

see, e.g., Research Corp. Techs. v. Microsoft Corp., 627 F.3d 859 (Fed. Cir. 2010); SiRF Tech., Inc. v. Int’l

Trade Comm’n, 601 F.3d 1319, 1333 (Fed. Cir. 2010).

51. Ultramercial, LLC v. Hulu, LLC (Ultramercial I), 657 F.3d 1323 (Fed. Cir. 2011).

52. Id. at 1324, 1330.

53. Id. at 1326. Like Chief Judge Rader, others have shared the view that some courts’ struggles with §

101 are attributed to the court trying to decide a case on grounds of patent-eligibility rather than on novelty,

obviousness, or enablement. See generally Stephen Pulley, An “Exclusive” Application of an Abstract Idea:

Clarification of Patent-Eligible Subject Matter After Bilski v. Kappos, 2011 BYU L. REV. 1223.

54. Ultramercial I, 657 F.3d at 1326.


long-standing exceptions (e.g., a law of nature, physical phenomena, or an

abstract idea) as established precedent, he was very careful to repeatedly refer

to the exceptions numerous times as “judicially created,” “judge-created,”

“non-statutory,” and “exceptions [that] are not required by the statutory text.”55

This tone was not used by the panel of CyberSource, illustrating the stark

divide in the philosophies of the different judges on the Federal Circuit with

regard to patent-eligible subject matter.

Claim 1 of U.S. Patent No. 7,346,545 recited the following:

A method for distribution of products over the Internet via a facilitator, said method comprising the steps of:

a first step of receiving, from a content provider, media products that are covered by intellectual property rights protection and are available for purchase, wherein each said media product being comprised of at least one of text data, music data, and video data;

a second step of selecting a sponsor message to be associated with the media product, said sponsor message being selected from a plurality of sponsor messages, said second step including accessing an activity log to verify that the total number of times which the sponsor message has been previously presented is less than the number of transaction cycles contracted by the sponsor of the sponsor message;

a third step of providing the media product for sale at an Internet website;

a fourth step of restricting general public access to said media product;

a fifth step of offering to a consumer access to the media product without charge to the consumer on the precondition that the consumer views the sponsor message;

a sixth step of receiving from the consumer a request to view the sponsor message, wherein the consumer submits said request in response to being offered access to the media product;

a seventh step of, in response to receiving the request from the consumer, facilitating the display of a sponsor message to the consumer;

an eighth step of, if the sponsor message is not an interactive message, allowing said consumer access to said media product after said step of facilitating the display of said sponsor message;

a ninth step of, if the sponsor message is an interactive message, presenting at least one query to the consumer and

55. Id. This attitude becomes even clearer in CLS Bank, where he pleads with the court to “consult the

statute!” CLS Bank Int’l v. Alice Corp., 717 F.3d 1269, 1335 (Fed. Cir. 2013) (Rader, C.J., filing additional

reflections).


allowing said consumer access to said media product after receiving a response to said at least one query;

a tenth step of recording the transaction event to the activity log, said tenth step including updating the total number of times the sponsor message has been presented; and

an eleventh step of receiving payment from the sponsor of the sponsor message displayed.

56

Chief Judge Rader focused on the third and fourth steps that require

“specific application to the Internet” and “intricate and complex computer

programming.”57

Perhaps this reference to the complexity of the programming

was an indirect way (without citation or discussion) of distinguishing from the

result in CyberSource, in which the computer-implemented software and

patent-ineligible claim was not particularly complex in comparison. However,

Chief Judge Rader noted that “[t]his court does not define the level of

programming complexity required before a computer-implemented method can

be patent-eligible,” and using the Internet to practice a method is neither

necessary nor sufficient in every case for such a method claim to be patent-

eligible.58

In essence, Chief Judge Rader took more of a factor-based approach

that weighed against the method being an abstract idea, and the relative

complexity of the programming and the controlled interaction between a

consumer and the Internet rose to the level of being patent-eligible.

Finally, Chief Judge Rader specifically distinguished the present claim

from the claims in CyberSource in that the claims of the “545 patent [do] not

claim a mathematical algorithm, a series of purely mental steps, or any

similarly abstract concept.”59

Chief Judge Rader made clear that he considered

this sub-group of an abstract idea to be very narrowly limited to purely mental

steps, and that “the presence of [some] mental steps . . . does not detract from

the patentability of other steps” in the claim.60

Ultramercial I only addressed

method claims and not apparatus claims, such as Beauregard claims or system

claims.61

Therefore, Ultramercial I does not address the question of whether

apparatus (e.g., Beauregard, system, device, etc.) and/or method claims must

rise or fall together depending on the level of abstractness of the underlying

process.

56. Ultramercial I, 657 F.3d at 1324–25 (citing U.S. Patent No. 7,346,545 col. 8 ll. 5–48 (filed May 29,

2001)).

57. Id. at 1328.

58. Id.

59. Id. at 1329.

60. Id. at 1330 (quoting Prometheus Labs., Inc. v. Mayo Collaborative Servs., 628 F.3d 1347, 1358

(Fed. Cir. 2010)).

61. See id. at 1323 (explaining that petitioner’s “action alleg[ed] infringement of their patent for method

for monetizing and distributing copyrighted products over the internet”).


4. Mayo Collaborative Services v. Prometheus Laboratories: Concerned

About Preemption62

Prometheus is not a software or abstract idea case. Rather, the question

before the Supreme Court was whether Prometheus’s patents fell within the

judicial exclusion of a law of nature even though there were some additional

claim elements recited attempting to apply the natural law.63

Nevertheless, the

reasoning in Prometheus may have application to software claims and abstract

ideas. The Court invalidated the claims as non-patentable subject matter

because steps recited by the claims in addition to the natural laws “add[ed]

nothing of significance to the natural laws themselves” and “the patents tie[d]

up too much future use of laws of nature.”64

Such reasoning could also apply

to abstract ideas with respect to software. For example, applying Prometheus

to software, the following questions could be asked: (1) Are there additional

elements to the claim other than just the abstract idea? (2) Do these additional

elements add significance to the natural law or are they merely insignificant

and conventional steps? (3) Does the claim tie up too much future use (i.e.,

preempt) of the abstract idea?

5. CLS Bank International v. Alice Corporation65

: A Fractured Decision

Despite the various decisions surrounding software and patent-eligible

subject matter, the high point of confusion came from the recent Federal

Circuit decision in CLS Bank. In CLS Bank, the vote at the Federal Circuit was

an even 5-5 split with no majority opinion.66

Instead, there were six opinions

written and even an “Additional Reflections” written by Chief Judge Rader. In

total, the opinions resulted in 135 pages without any of the opinions

constituting a majority or having the weight of precedent.67

Only Opinions 1

and 2 are discussed herein as they provide the most analysis to draw from in

terms of how practitioners might prepare patent applications and how

innovators of software might make decisions regarding patent protection

during this time of uncertainty.

a. Opinion 1

The first opinion presented in CLS Bank attempted to provide an

“integrated approach” to summarize “several common themes that run

throughout the Supreme Court’s decisions.”68

The first theme is preemption.

In particular, Opinion 1 noted that there “is an abiding concern that patents

62. Mayo Collaborative Servs. v. Prometheus Labs., Inc., 132 S. Ct. 1289 (2012).

63. See id. at 1297 (“The question before us is whether the claims do significantly more than simply

describe these natural relations.”).

64. Id. at 1302.

65. CLS Bank Int’l v. Alice Corp., 717 F.3d 1269 (Fed. Cir. 2013) (en banc).

66. Id.

67. Id.

68. Id. at 1280.


should not be allowed to preempt the fundamental tools of discovery”69

and

further that “[g]uarding against the wholesale preemption of fundamental

principles should be [the] primary aim in applying the common law exceptions

to § 101.”70

The second theme identified by Opinion 1 is that “the cases repeatedly

caution against overly formalistic approaches to subject-matter eligibility that

invite manipulation by patent applicants.”71

Examples of such “draftsman’s

art” that Opinion 1 seems concerned about are “claim drafting strategies that

attempt to circumvent the basic exceptions to § 101 using, for example, highly

stylized language, hollow field-of-use limitations, or the recitation of token

post-solution activity . . . .”72

When drafting claims, patent practitioners

should keep in mind that the additional non-abstract elements are more than

just hollow or token elements. By ignoring certain claim elements for

purposes of patent-eligibility, Opinion 1 essentially unilaterally restructures

claim language. It is somewhat ironic that the approach of Opinion 1 appears

to allow courts to restructure claim language when patent practitioners exercise

a high level of skill in claim drafting, while other cases are not forgiving and

do not allow courts to restructure claims when patent practitioners draft ill-

conceived claims.73

Another theme Opinion 1 addresses is that the “cases urge a flexible,

claim-by-claim approach to subject-matter eligibility that avoids rigid line

drawing.”74

For example, Opinion 1 refers to the Supreme Court rejecting

exclusive use of the machine-or-transformation test or categorical exclusions to

business method patents.

Finally, Opinion 1 asserts that there needs to be an inventive human

contribution present that is “more than a trivial appendix to the underlying

abstract idea.”75

In other words, limitations that represent a human

contribution that are “merely tangential, routine, well-understood, or

conventional, or in practice fail to narrow the claim relative to the fundamental

principle therein, cannot confer patent eligibility.”76

Using these themes to guide their analysis, the judges joining Opinion 1

concluded that the method, computer-readable media, and system claims were

invalid under § 101 for failing to recite patent-eligible subject matter.77

69. Id.

70. Id. at 1281 (emphasis added).

71. Id.

72. Id.

73. E.g., BMC Res., Inc. v. Paymentech, L.P., 498 F.3d 1373, 1381 (Fed. Cir. 2007) (“In this case . . .

BMC could have drafted its claims to focus on one entity . . . . However, BMC chose instead to have four

different parties perform different acts within one claim . . . . [T]his court will not unilaterally restructure the

claim or the standards for joint infringement to remedy these ill-conceived claims.”).

74. CLS Bank Int’l, 717 F.3d at 1281.

75. Id. at 1283.

76. Id.

77. Id. at 1292.


b. Opinion 2

Opinion 2 goes into great detail about the breadth of § 101 in its statutory

interpretation to achieve the constitutional goals of patent law.78

More

pertinent for this Recent Development is the focus on whether the claim, as a

whole, is patentable. Its criticism of Opinion 1 is that Opinion 1 looks at each

claim, element by element and determines which elements are abstract and

which elements are not.79

Opinion 2 states that “[a]ny claim can be stripped

down, simplified, generalized, or paraphrased to remove all of its concrete

limitations, until at its core, something that could be characterized as an

abstract idea is revealed.”80

Such an approach would “if carried to its extreme,

make all inventions unpatentable because all inventions can be reduced to

underlying principles of nature which, once known, make their implementation

obvious.”81

The second theme of Opinion 2 is that “[t]he relevant inquiry must be

whether a claim includes meaningful limitations restricting it to an application,

rather than merely an abstract idea.”82

Opinion 2 further recognizes

preemption as a requirement, but limits its reach to only be “a subject matter

eligibility problem when a claim preempts all practical uses of an abstract

idea,”83

recognizing that all patents preempt future innovation to some extent,

as that is the limited monopoly right to exclude granted by the patent.84

Meaningful limitations also “do more than recite pre- or post-solution activity,

they are central to the solution itself.”85

When analyzing a computer-implemented claim according to Opinion 2,

the key inquiry is “whether the claims tie the otherwise abstract idea to a

specific way of doing something with a computer, or a specific computer for

doing something.”86

Another major point of disagreement is that Opinion 2

does not agree that “inventiveness” is required by § 10187

and that Opinion 1 is

inappropriately conflating the requirements of novelty and non-obviousness

into the threshold question of patentable eligibility.88

Under this analysis, Opinion 2 determines that the system claims are

patent eligible. The system claims are eligible because the computers are

machines that are specifically programmed in a specific way to solve a

complex problem and, thus, become special purpose processors.89

Opinion 2

78. See id. at 1276 (“Congress intended that the statutory categories [of § 101] would be broad and

inclusive to best serve the patent system’s constitutional objective of encouraging innovation.” (citing

Diamond v. Chakrabarty, 447 U.S. 303, 308–09 (1980))).

79. See id. at 1285–92 (examining each claim and its elements).

80. Id. at 1298.

81. Id. (quoting Diamond v. Diehr, 450 U.S. 175, 189 n.12 (1981)).

82. Id. at 1299.

83. Id. at 1300.

84. Id.

85. Id. at 1301.

86. Id. at 1302.

87. Id.

88. Id. at 1302–03.

89. Id. at 1307.


was impressed by the numerous flow charts illustrating the method showing

the complex processing performed by the application program that is part of

the computer.90

Opinion 2 determined that the method and computer-readable

media claims were ineligible for patenting.91

6. Ultramercial, LLC v. Hulu, LLC92

In response to a petition for certiorari, the Supreme Court vacated the

decision of Ultramercial I and remanded back to the United States Court of

Appeals for the Federal Circuit for further consideration in light of

Prometheus.93

Upon remand, the Federal Circuit again found that the claims

did not contain patent-eligible subject matter, reversing the judgment of the

Central District of California for a second time.94

In Ultramercial II, Chief Judge Rader performed a similar analysis of

claim construction to the one that he had previously done and emphasized:

[B]ecause eligibility requires assessing judicially recognized exceptions against a broad and deliberately expanded statutory grant, one of the principles that must guide our inquiry is these exceptions should apply narrowly. Indeed, the Supreme Court has cautioned that, to avoid improper restraints on statutory language, acknowledged exceptions thereto must be rare.

95

Chief Judge Rader also attempted to define what an “abstract idea” is,

whereas most of the previous decisions seemed to take the definition of

“abstract” for granted or discussed the concept of an abstract idea in terms of

examples rather than an actual definition.96

In particular, Ultramercial II states, “[a]n abstract idea is one that has no reference to material objects or

specific examples—i.e., it is not concrete.”97

The analysis focuses on whether

the claim has meaningful limitations in addition to an abstract idea, such that

the claim is directed to an application of the abstract idea rather than the

abstract idea itself, and that the claim does not preempt all uses of an

underlying abstract idea.

Applying that analysis to computer-implemented inventions,

Ultramercial II states:

When assessing computer implemented claims, while the mere reference to a general purpose computer will not save a method claim from being deemed too abstract to be patent eligible, the fact that a claim is limited by a tie to a computer is an important indication of patent eligibility . . . . This tie to a machine moves it farther away from a claim to the abstract idea itself. Moreover, that

90. See id. (referring to flow charts in the opinion).

91. Id. at 1292.

92. Ultramercial, LLC v. Hulu, LLC (Ultramercial II), 722 F.3d 1335 (Fed. Cir. 2013).

93. Wild Tangent, Inc. v. Ultramercial, LLC, 132 S. Ct. 2431 (2013).

94. Ultramercial II, 722 F.3d at 1354.

95. Id. at 1342.

96. Id. at 1343.

97. Id.


same tie makes it less likely that the claims will pre-empt all practical applications of the idea.

98

A significant emphasis is also placed on the so-called Alappat Rule discussed

above.99

Finally, Ultramercial II notes that the patent in question “does not claim a

mathematical algorithm, a series of purely mental steps, or any similarly

abstract concept . . . . Unlike the claims in CyberSource, the claims here

require, among other things, controlled interaction with a consumer over an

Internet website, something far removed from purely mental steps.”100

B. Application of the Law at the USPTO

In response to the Supreme Court’s Bilski decision, the USPTO issued

“Interim Guidance for Determining Subject Matter Eligibility for Process

Claims in View of Bilksi v. Kappos.”101

The 2010 interim guidelines and the

most recent training at the USPTO with regard to patent-eligibility can help

guide practitioners, at least in the short term, as to how pending applications

are being examined. Of course, the current guidelines and training do not

reflect the decision (perhaps “indecision” is the more appropriate term) of CLS Bank. In response to CLS Bank, the USPTO recently issued a memorandum to

the Patent Examining Corps.102

The memorandum stated that there were

“multiple divergent opinions” in CLS Bank and that there would be “no change

in the examination procedure for evaluating patent eligibility.”103

Thus, the

interim guidelines and subsequent examiner training are the best indicators of

the current application of the law at the USPTO.

1. Interim Guidelines in Response to Bilski: A Factor-Based Inquiry to Patent-Eligibility

The Interim Guidelines introduced a factor-based approach that was later

inserted into the Manual for Patent Examining Procedures (MPEP). The

factor-based approach considers the following factors:

(a) Whether the method involves or is executed by a particular machine or apparatus.

(b) Whether performance of the claimed method results in or otherwise involves a transformation of a particular article.

(c) Whether performance of the claimed method involves an

98. Id. at 1348.

99. See supra note 49 and accompanying text.

100. Ultramercial II, 722 F.3d at 1354.

101. Memorandum from Robert W. Bahr, Acting Assoc. Comm’r for Patent Examination Policy, to

Patent Examining Corps Regarding Interim Guidance for Determining Subject Matter Eligibility for Process

Claims in View of Bilski v. Kappos (July 27, 2010) [hereinafter Bilski Memo], available at

http://www.uspto.gov/patents/law/exam/ bilski_guidance_27jul2010.pdf.

102. Memorandum from Andrew H. Hirshfeld, Deputy Comm’r For Patent Examination Policy, to

Patent Examining Corps Regarding Federal Circuit Decision in CLS Bank et al. v. Alice Corp. (May 13, 2013)

[hereinafter CLS Bank Memo], available at http://www.uspto.gov/patents/law/exam/clsbank_20130513.pdf.

103. Id.


application of a law of nature, even in the absence of a particular machine, apparatus, or transformation.

(d) Whether a general concept (which could also be recognized in such terms as a principle, theory, plan or scheme) is involved in executing the steps of the method.

104

The first two factors (i.e., factors a and b) are directed toward the

machine-or-transformation test. The next two factors (i.e., factors c and d) are

directed toward evaluating the practical application of the abstract idea.

Examiners are also provided factors that weigh in favor of patent-

eligibility (factors that satisfy the criteria of the machine-or-transformation test

or provide evidence that the abstract idea has been practically applied) versus

factors that do not weigh in favor of patent-eligibility (factors that do not

satisfy the criteria of the machine-or-transformation test or provide evidence

that the abstract idea has been practically applied).

Specifically:

Factors Weighing Toward Eligibility:

Recitation of a machine or transformation (either express or inherent).

o Machine or transformation is particular.

o Machine or transformation meaningfully limits the execution of the steps.

o Machine implements the claimed steps.

o The article being transformed is particular.

o The article undergoes a change in state or thing (e.g., objectively different function or use).

o The article being transformed is an object or substance.

The claim is directed toward applying a law of nature.

o Law of nature is practically applied.

o The application of the law of nature meaningfully limits the execution of the steps.

The claim is more than a mere statement of a concept.

o The claim describes a particular solution to a problem to be solved.

o The claim implements a concept in some tangible way.

o The performance of the steps is observable and verifiable.

105

Factors Weighing Against Eligibility:

No recitation of a machine or transformation (either express or inherent).

o Insufficient recitation of a machine or transformation.

104. USPTO, MPEP ch. 2106 (8th ed. Rev. 9, Aug. 2012).

105. Bilski Memo, supra note 101.


o Involvement of machine, or transformation, with the steps is merely nominally, insignificantly, or tangentially related to the performance of the steps, e.g., data gathering, or merely recites a field in which the method is intended to be applied.

o Machine is generically recited such that it covers any machine capable of performing the claimed step(s).

o Machine is merely an object on which the method operates.

o Transformation involves only a change in position or location of article.

o “Article” is merely a general concept (see notes below).

The claim is not directed to an application of a law of nature.

o The claim would monopolize a natural force or patent a scientific fact; e.g., by claiming every mode of producing an effect of that law of nature.

o Law of nature is applied in a merely subjective determination.

o Law of nature is merely nominally, insignificantly, or tangentially related to the performance of the steps.

The claim is a mere statement of a general concept (see notes below for examples).

o Use of the concept, as expressed in the method, would effectively grant a monopoly over the concept.

o Both known and unknown uses of the concept are covered, and can be performed through any existing or future-devised machinery, or even without any apparatus.

o The claim only states a problem to be solved.

o The general concept is disembodied.

o The mechanism(s) by which the steps are implemented is subjective or imperceptible.

106

Examiners are instructed to view the claim as a whole to balance these

factors.107

It is important to note that it is not required for all factors that favor

eligibility to be present and that a conclusion should not be based on one

factor, ignoring the other factors.108

These interim guidelines are still in effect

at the patent office despite the many additional decisions that have come after

Bilski.109

In a memorandum dated May 13, 2013, to the Examining Corps, the

USPTO emphasized that “there is no change in examination procedure for

106. Id.

107. USPTO, MPEP ch. 2106.

108. Id.

109. CLS Bank Memo, supra note 102.


evaluating subject matter eligibility. Current procedure detailed in MPEP 2106

should continue to be followed.”110

2. August 2012 Updated Examiner Training

The USPTO is currently taking a similar analysis approach as the courts

by starting with the four statutory categories of invention and the three

judicially-created exceptions.111

With regard to the exceptions, the USPTO

states that the terms of this group “are typically used by the courts to cover the

basic tools of scientific and technological work, such as scientific principles,

naturally occurring phenomena, mental processes, and mathematical

algorithms.”112

The USPTO states that “claimed inventions that fall within the statutory

categories must still avoid the judicial exceptions to be eligible.”113

In

addition, a claim that can be reasonably broadly interpreted to cover both

eligible and ineligible subject matter should be rejected under § 101.114

The

USPTO is training the Examining Corps on preemption as a condition for

determining whether an exception is met by instructing them to “[d]etermine

whether the claim covers all substantial applications of the exception and

thereby forecloses future innovation based on the law of nature, natural

phenomenon, or abstract idea.”115

Specifically discussing the exceptions, the

USPTO is emphasizing that claims falling within the judicial exceptions “are

not patentable, even when claimed as a process, machine, manufacture or

composition of matter.”116

Thus, the USPTO appears to be expanding the

reach of the abstract idea exception into apparatus-type claims in its training,

even if the Interim Guidelines of 2010 is the most recent official statement on

the matter. Even within the USPTO, there may be different standards that

apply depending on the stage of prosecution of the application. The

Examining Corps are generally required to perform their examination

according to the Interim Guidelines and other training.117

Because of the

difficulty in training such a large number of examiners, the USPTO may be

reluctant to issue new guidelines based on each new and conflicting case.

Thus, the standard being used for regular examination may still resemble some

of the older case law rather than the newer cases. For example, obtaining

allowable system and Beauregard claims may still prove to be somewhat easier

than obtaining allowable method (process) claims for software innovations,

whereas certain judges may be willing to treat these two types of claims

identically if the core of the invention is essentially the same for each claim

110. Id.

111. PowerPoint: USPTO, Evaluating Subject Matter Eligibility Under 35 USC § 101 (Aug. 2012),

available at http://www.uspto.gov/patents/ law/exam/101_training_aug2012.pdf.

112. Id.

113. Id. at 9.

114. Id.

115. Id. at 21.

116. Id. at 20.

117. Id. at 2, 26, 28, 65.


type. The Patent Trial and Appeals Board (PTAB),118

however, may have a

little more leeway during an appeal in interpreting and applying recent case

law without official guidelines being issued by the USPTO.

IV. RECOMMENDATION

Even with the uncertainty regarding software innovations, the good news

is there still appears to be some opportunity for obtaining patents for certain

types of software claims.119

The bad news is that the courts as well as the

USPTO cannot agree where to draw the line on patentable subject matter of

software innovations, nor is there agreement as to a test to be used, or even the

approach to take, for the analysis.120

Although some of the above cases warn

against interpreting patent eligibility to “depend simply on the draftsman’s

art,”121

that does not mean that nothing can be done to increase the likelihood

that a claim is not rejected (or later held invalid) for not reciting patent-eligible

subject matter.

Because of the stark division among judges and the uncertainty that exists

in the courts and in the USPTO, many expect the Supreme Court to again

address the issue of patent-eligible subject matter—this time to specifically

address the application of § 101 on software. So far, petitions for certiorari

have been filed for both Ultramercial II (on August 23, 2013) and CLS Bank (on September 4, 2013).

122

In the meantime (or in the event that the Supreme Court does resolve this

issue soon), what should practitioners do? CLS Bank is a very useful roadmap

to consider because of the wide variety of opinions that are contained

therein.123

No single opinion from CLS Bank has the weight of precedent;124

however, applications should be drafted to attempt to satisfy each concern of

the judges to the extent possible. As a result, the application hopefully can be

in a state that is prepared for any resolution by the Supreme Court (even if no

resolution is provided). Of course, for some judges, there is the possibility that

the underlying concept of some software innovations will be an abstract idea

118. The America Invents Act passed by Congress in 2011 eliminated interference practice. 35 U.S.C. §

135 (2006). As a result, the Board of Patent Appeals and Interferences (BPAI) was replaced by the PTAB

effective September 16, 2012. Id. § 6(a). Thus, patent appeals at the USPTO prior to September 16, 2012,

were heard by the BPAI, after which appeals are being decided by the PTAB. Id.

119. See Pulley, supra note 53, at 1246 (“At least four justices were uncomfortable with a result that

would likely prohibit patents in software . . . .”); Bilski v. Kappos, PATENTLY-O (June 28, 2010, 9:00 AM),

http://www.patentlyo.com/patent/2010/06/bilski-v-kappos-business-methods-out-software-still-patentable.html

(“[I]t appears that software will largely remain patentable. At minimum, the decision would bar any

categorical exclusion of software patents.” .

120. See supra Parts III.A.5, III.B (discussing the fractured CLS Bank opinion and interim guidelines

issued by the USPTO).

121. Mayo Collaborative Servs. v. Prometheus Labs., Inc., 132 S. Ct. 1289, 1294 (2012) (quoting Parker

v. Flook, 437 U.S. 584, 593 (1978)).

122. Petition for Writ of Certiorari, WildTangent, Inc. v. Ultramercial, LLC, No. 13-255 (Aug. 23,

2013); Petition for Writ of Certiorari, CLS Bank Int’l v. Alice Corp., No. 13-298 (Sept. 4, 2013).

123. See supra Part III.A.5 (discussing the different analyses applied in the multiple CLS Bank opinions).

124. See supra Part III.A.5.


regardless of the drafting approach taken by the applicants.125

The courts and USPTO appear to be more and more interested in the idea

of pure mental steps, the application of an abstract idea, and also the idea of

preemption.126

One question that practitioners should ask themselves when

drafting claims is whether all claimed method steps could reasonably be

interpreted to be performed in the human mind or by pen and paper. Another

(somewhat related) question to ask is whether the method is merely a

mathematical algorithm being performed. The more a claim looks like a

mental process or a mathematical formula, the more likely the claim will be

held patent-ineligible.127

Even with the judges that are more open to a broad

interpretation of § 101 (by narrowly interpreting the judicial exceptions), pure

mental steps and pure mathematical algorithms are likely not going to be

patent-eligible.128

Unfortunately, this analysis might eliminate certain types of

software applications from patent-eligibility where data is just being processed

and doing tasks that a human could theoretically do. Of course, the law and

courts could change to be more favorable to applicants over the next several

years as patents continue to be examined; however, patent applicants of such

computer software should seriously consider whether it is worth the cost of

filing for a patent application under that standard as it appears to be the clearest

case of ineligibility by the courts.

There are ways that a practitioner could claim such methods by including

hardware, and language regarding the application of an abstract idea or

mathematical formula (the application of which is patent-eligible). These

efforts appear to still be eligible. The courts, however, appear to be moving in

a direction where substance rules over form. Claim language that recites

abstract ideas or mathematical formulas should also include meaningful

limitations that are an integral part of the claim in such a way that tie the idea

or formula to a particular application. As a result, the claim may be more

likely to be interpreted as not preempting all practical uses of the idea or

formula. Drafting claims in a way that emphasizes controlled interaction with

specific hardware devices or other physical components is one way to try to

satisfy the machine-or-transformation test, as well as avoid the problems of

having a pure mental step and the concern of preemption. For example, the

more the claim can be drafted to have software processing interact with, and

125. See CLS Bank Int’l v. Alice Corp., 717 F.3d 1269, 1281 (Fed. Cir. 2013) (en banc) (plurality

opinion) (“[C]laim drafting strategies that attempt to circumvent the basic exceptions to § 101 using, for

example, highly stylized language, hollow field-of-use limitations, or the recitation of token post-solution

activity should not be credited.”).

126. See In re Bilski, 545 F.3d 943, 952–53 (Fed. Cir. 2008) (“The true issue before us then is whether

Applicants are seeking to claim a fundamental principle (such as an abstract idea) or a mental process. . . .

[W]hile a claim drawn to a fundamental principle is unpatentable, ‘an application of a law of nature or

mathematical formula to a known structure or process may well be deserving of patent protection.’” (quoting

Diamond v. Diehr, 450 U.S. 175, 187 (1981))); see also CLS Bank, 717 F.3d at 1280 (“[P]reemption features

prominently in the Supreme Court’s recent § 101 decisions . . . .”).

127. See Parker v. Flook, 437 U.S. 584, 595 (1978) (“[I]f a claim is directed essentially to a method of

calculating, using a mathematical formula, even if the solution is for a specific purpose, the claimed method is

nonstatutory.” (quoting In re Richman, 563 F.2d 1026, 1030 (1977))).

128. Id.


even control, physical components, the more likely the claim is to be patent-

eligible.129

While there is no requirement (so far) that the novel feature of the

software be the element that is tied to a machine in the claim, practitioners may

consider doing so as a way to appease judges that struggle with combining

novelty and obviousness analysis with patent-eligibility analysis.

Apparatus claims, such as system claims, are currently still more likely to

be allowed than pure method claims, and practitioners should still be including

those claims even though they may ultimately rise or fall with the method

claims. To decrease the likelihood of having all claims rise and fall together,

practitioners should not just mirror the apparatus claims after the method

claims. Rather, the different claims should take different claiming approaches.

As the inclusion of hardware components (and control over hardware)

using the software becomes more important to patent-eligibility, it is not only

the claims that should be more focused and detailed as to the structure and

interaction of physical components. The specification of the patent application

should be carefully drafted to make clear what processes could be performed in

hardware or software, having figures dedicated to a system with a computer, a

processor programmed in a specific way, and a computer-readable medium to

provide support that these hardware elements are meaningful to the overall

invention and not just ancillary items. Practitioners should also have detailed

flowcharts for the software to further illustrate the complexity of the method

implemented by the program, as well as provide opportunities to discuss

hardware elements that are affected and/or controlled by each step within the

operation of the method illustrated by the flowchart. Practitioners may also

consider defining processors and other computing devices as special purpose

devices when configured or programmed with software.

V. CONCLUSION

As there are no bright line rules, and no clear answers, unfortunately

uncertainty will likely remain for the foreseeable future with regard to

software—even if the Supreme Court decides again to weigh in on this topic.

Patent practitioners can, however, navigate this uncertainty by considering

their underlying invention and determining a drafting approach that addresses

the various concerns of the different judicial interpretations. As a result, the

patent application can be in the best position to be deemed patent eligible

regardless of the approach adopted by the Supreme Court or Federal Circuit in

future cases.

129. See CLS Bank, 717 F.3d at 1302 (plurality opinion) (“[W]here the claim is tied to a computer in

such a way that the computer plays a meaningful role in the performance of the claimed invention, and the

claim does not pre-empt virtually all uses of an underlying abstract idea, the claim is patent eligible.”).

Documents

RECENT DEVELOPMENTS IN THE PATENT-ELIGIBILITY OF SOFTWARE