The Bascom court decision helps software patents by suggesting that step 2 of the Alice test should follow established obviousness rules.
US software patents got another win from the Federal Circuit Court this week. This court, which has a Congressional mandate to clarify patent law (actual results may vary), made an important clarification to the Alice (software patent killer) “abstract subject matter” test in the Bascom v AT&T case (Bascom).
As you may recall from our last “Enfish” episode, the Supreme Court (SCOTUS) “Alice” decision created a judge-ordered
incoherent two-step test that any given patent must pass in order to be patent-eligible under 35 USC 101 rules. To simplify:
Step 1) Determine if the patent is directed to “abstract” subject material. If not then congratulations, the patent passes this test.
Step 2) But if the patent is found to be “abstract” in step 1, then determine if the patent contains “something extra” beyond just “abstract” subject material. If there is nothing extra, then reject the patent as being “abstract”.
The Federal Circuit is one step down from SCOTUS. The Federal Circuit doesn’t have enough clout to overrule SCOTUS, but does have enough clout to overrule the USPTO and the lower courts. More importantly, the Federal Circuit has both the clout and mandate to “clarify” SCOTUS decisions. Sometimes they do so, sometimes they make it worse. But I think they got it right in this case.
The USPTO and the lower courts were often ignoring Alice step 1 and just assuming that a patent had “abstract” subject matter. The previous Federal Circuit “Enfish” decision pointed out that this was improper. By contrast, the newer Federal Circut “Bascom” case is now clarifying that another common practice, just asserting that the patent fails Alice step 2 because it lacks an undefined “something extra”, isn’t right either.
More specifically, in Bascom, the Federal Circuit pointed out that based on earlier SCOTUS decisions (e.g. Mayo v. Prometheus, which SCOTUS used for “Alice”), Alice step 2 tests if the claim is “well-understood, routine or conventional”. According to the Federal Circuit’s interpretation, SCOTUS was probably thinking about something similar to an obviousness test. The Federal Circuit also pointed out that there are well-established rules for establishing obviousness, which the USPTO and the lower courts were (also) ignoring.
Specifically, the Bascom case was an appeal of a lower court decision that had earlier found the Bascom patent claims to be “abstract” and therefore invalid. The lower court’s arguments (in simplified form) were that the Bascom patent claim language words described conventional computer pieces, and therefore the Bascom claims failed Alice step 2 due to lack of “something more”.
In Bascom, the Federal Circuit Court, after “clarifying” Alice by pointing out that SCOTUS’s Alice step 2 resembled an obviousness test, then pointed out that the lower court had failed to follow established rules to determine obviousness (35 USC 103 rules). These 35 USC 103 rules require that the combination of the pieces and the motive for combining the pieces also be considered. Here conventional pieces, arranged in a non-conventional way, are often not obvious.
The Federal Circuit then looked at the Bascom claims, determined that they were not obvious, and (again somewhat simplifying) therefore had “something more” that satisfied step 2 of the Alice test. They then overruled the lower court and found the Bascom patent to be “not abstract” and therefore valid under 35 USC 101.
If there were more cases like the Bascom decision, it might almost introduce some sanity to the Alice test. Sadly, for every coherent Federal Circuit ruling, there is another incoherent ruling. Stay tuned…