CLS Bank v. Alice Corp.
Another superstar IP case upcoming at the Court this Spring addresses the question of how to define the abstract idea exception to patent subject-matter eligibility (35 U.S.C. Sec. 101). The Court addressed this issue four years ago in Bilski v. Kappos, but mostly just to say that it did not agree with the Federal Circuit’s test. The Federal Circuit has tried again (though in a fractured en banc opinion), and this time the Justices may articulate something more definitive.
There are some things that the Federal Circuit said in CLS Bank that the Court should affirm. First, a court should not be required to address Section 101 if there is an independent ground for denying the patent. In many cases, a court could avoid the 101 issue and just invalidate the patent on a novelty or non-obviousness ground. Second, the Federal Circuit’s view that an abstract idea should not be patentable if it amounts to a “wholesale preemption of a fundamental principle” is the right approach. Third, I agree with the Federal Circuit that you cannot reduce this inquiry to a rule–that is too hard and would lead to evasions in claim drafting.
How do we know that an idea is too abstract and would preempt a fundamental principle? In my view, the Federal Circuit went wrong when it said that the answer depends in part on how detailed the patent is and whether it contains a sufficient “inventive concept.” These ideas, as the dissents point out, are just the poor-man’s version of Sections 102, 103, and 112, which make novelty, non-obviousness, and definiteness requirements for a patent to issue. It is not correct to say that these elements should be read into Section 101, which does not mention them. To be fair, the Supreme Court’s precedents in this area are a mess, so the Federal Circuit cannot be attacked too much for being unable to straighten them out.
I want to put forward an idea that I raised in article on this topic five years ago. The thought is that you cannot know whether something is abstract or too broad without looking at the business or field that it touches. In other words, there is no abstract idea of an abstract idea. In some contexts, almost every patent might be deemed too abstract (the article talks about sports). In other areas, this would not be true or only true to some extent. Thus, a 101 inquiry should look at whether someone skilled in the art would think that something was too broad. Does this tell you much about software? Not as much as you might hope, though it would suggest that some types of software should be treated more generously than others (Basically, what business or field does the software serve?)
Anyway, this is a very challenging case, and if Bilski is any indication the Court may be unable to reach a consensus. (That case, you may remember, took a long time to decide and showed signs that one majority was replaced by a different one.)