Guest Column

Federal court is ‘foggy’ on patent software issues

August 23, 2013
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In 1998, the Court of Appeals for the Federal Circuit, which hears all appeals in patent matters, reversed a long-standing precedent that inventions for “methods of doing business” are not patentable.

In State Street Bank and Trust Company v. Signature Financial Group Inc., the Federal Circuit Court held that a business method invention is patentable if it involves some practical application and “produces a useful, concrete and tangible result." Thus, a business method could be patentable if: it is tied to a particular machine or apparatus, or if it transforms a particular article into a different state or thing.

This “machine or transformation” test served as the Patent Office’s basis for accepting or rejecting business method and software patents for 12 years.

In 2010, however, the Supreme Court held in Bilski v. Kappos that the machine-or-transformation test is not the sole test for determining the patent eligibility of a process, but rather "a useful and important clue, an investigative tool, for determining whether some claimed inventions are patentable processes."

Unfortunately, the Supreme Court was foggy on what other criteria might be useful in protecting business method/software patents.

If Bilski left inventors, patent attorneys and the Patent Office in a fog, the recent case decided by the Federal Circuit, CLS Bank International v. Alice Corp., has sent them wandering about in “Wonderland.” The court in “Alice” held that any process is patentable, unless it comprises a law of nature, natural phenomena, or an abstract idea. A process is abstract if it is a “fundamental concept,” a “fundamental tool of discovery.” 

With these rather vague exceptions to patentability in mind, I can recommend one or more of the following in drafting business method and software patent applications:

  • Make sure each claim “contains additional substantive limitations that narrow, confine or otherwise tie down the claim” so that, in practical terms, it does not cover the full abstract idea itself. 
  • Make sure the claim comprises not only a fundamental concept but also “a product of human ingenuity,” which is “more than a trivial appendix to the underlying abstract idea.”
  • Make sure the human elements are more than those which are “necessary to every practical use of … a natural law,” or an abstract idea.
  • Include in the claim some “specific or limiting recitation of essential … or improved computer technology,” and not merely “insignificant post-solution activity relative to the abstract idea.” (“Simply appending generic computer functionality to lend speed or efficiency to the performance of an otherwise abstract concept does not meaningfully limit claim scope for purposes of patent eligibility.”)

One can believe these steps will provide the edge in overcoming a rejection of your patent as covering only a law of nature, a natural phenomena, or an abstract idea.

Attorney James Mitchell is the chairman of Mitchell Intellectual Property Law.

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