Enfish for Alice: a software win

Enfish is good news for software patents
Enfish is good news for software patents

The Enfish court decision improved the outlook for US software patents.

Some good news for software patents.  The negative impact of the 2014 SCOTUS (Supreme Court of the US) “Alice” decision (invalidating some business method and financial software patents) was somewhat mitigated by the 2016 “Enfish” court decision.

What is “abstract?”  “You keep using that word, I do not think it means what you think it means.” Inigo Montoya, “The Princess Bride”.

In “Alice”, SCOTUS did not make business-method and financial software patents patent ineligible.  Instead, they determined that “abstract” subject matter is patent ineligible.  Unfortunately, SCOTUS refused to define the meaning of “abstract”, and then further confused things by using circular logic.  The present two-step, circular-logic, SCOTUS mandated test for patent eligibility is:

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”.    

No one really knows what “abstract” means.  Unfortunately, since late 2014, and even now despite the latest guidelines, USPTO patent examiners often assume that patents for software running on standard (generic) computers must be abstract under step 1. Many USPTO examiners (and judges) totally skip step 1 of the two-step Alice test.  They just assume that a given software patent is abstract, and start their Alice test at step 2 “something more”.  This makes it much easier to reject the patent.

What is “something more?”  It is also undefined, but financial and business software generally seems to be somehow lacking.  It is sort of like “obviousness” but is apparently not.  It takes a medieval theologian, the Pope, the oracle at Delphi, or at least 5 out of 9 SCOTUS judges to determine this.

We could substitute “evil spirits” for “abstract”, and “charisma” for “something more”.  We could almost as validly say that lately, many USPTO examiners and judges have been rejecting most business and financial method patents because 1) assumption of evil spirits and 2) a further lack of charisma.  It is easier to understand if you don’t expect logic.

In 1982, Congress established the Federal Circuit Court to bring more logic and consistency to patent law.  Their record with regards to what is “abstract” is very mixed. However, in the May 12, 2016 “Enfish v Microsoft” (Enfish) decision, at least some Federal Circuit judges tried to clarify things. The Enfish court ruled that examiners and judges can’t just arbitrarily skip step 1 of the two-step Alice test.  Specifically, the Enfish court ruled that it is improper to assume that software running on standard computers is “step 1” abstract.

The Enfish court pointed out that in Alice, SCOTUS didn’t rule that software is automatically abstract.  Further in Alice, SCOTUS also warned against running amok since every patent is somewhat abstract.  So don’t make software automatically fail the two-step Alice test at step 1.  The Federal Circuit further determined that software running on standard computers that improve an existing technology (such as a database) is not abstract at step 1.

This is another important point:  “abstract” is an undefined legal term, and you and I lack the authority to officially define it.  But the Federal Circuit does have some legal authority to define “abstract”.  The USPTO and other judges have to follow their various updated definitions. It would be nicer, however, if the Federal Circuit was internally consistent with itself. The various judges just can’t agree. The underlying problem is that the basic SCOTUS rulings don’t make sense. GIGO.

But Enfish, at least, did provide some good news for US software patent law.

CLS Bank v. Alice Corporation

CLS Bank v Alice
Confusing directions

CLS Bank v Alice Corporation: what is patentable? Perhaps I was too optimistic in my earlier “Prometheus bound (or at least distinguished)” post.

The May 10 Federal Circuit court decision, “CLS Bank v Alice Corporation” shows that the Federal Circuit is unfortunately still spinning its wheels with regards to determining basic questions about what is patent-eligible.

The good news is that the decision’s various logical problems, and the logical problems with the underlying Supreme Court decisions, are being widely publicized.  Indeed interest in this decision was so high that the Federal Circuit Court servers crashed under the load of everyone trying to download the decision at once!

If you are interested in seeing the present state of the art in regards to cutting-edge legal confusion, you can download the Federal Circuit decision at:

https://www.eff.org/files/cls_bank_v_alice_en_banc_ruling.pdf

Note added in 2020:  An alternate title for this article could have been “the insanity begins“, but arguably the insanity actually started a bit earlier with the earlier Mayo v Prometheus case.  However, CLS Bank v Alice dialed the insanity “up to eleven“.

In retrospect, the original 2012 dissenting opinion by Judge Moore (joined by Judges Rader, Linn, and O’Malley) clearly shows that nearly half the Federal Circuit judges realized that the Federal Circuit (and as it turns out, later the Supreme Court) were about to go seriously “off the rails” with regards to patent eligibility.

Here is what the Judges wrote in 2012 (see page 88 in the above file):

I am concerned that the current interpretation of § 101, and in particular the abstract idea exception, is causing a free fall in the patent system. The Supreme Court has taken a number of our recent decisions and, in each instance, concluded that the claims at issue were not patent-eligible. See Bilski, Prometheus, Myriad (under consideration)…

Holding that all of these claims are directed to no more than an abstract idea gives staggering breadth to what is meant to be a narrow judicial exception…

My colleagues erroneously apply Prometheus’s “inventive concept” language by stripping away all known elements from the asserted system claims and analyzing only whether what remains, as opposed to the claim as a whole, is an abstract idea…This approach is inconsistent with the 1952 Patent Act, and years of Supreme Court, CCPA, and Federal Circuit precedent that abolished the “heart of the invention” analysis for patentability…

Moreover, my colleagues’ analysis imbues the § 101 inquiry with a time-dependency that is more appropriately the province of §§ 102 and 103… Under my colleagues’ approach, however, a system claim that passes § 101 when the patent issues could later magically transform into an abstract idea simply because certain computer hardware elements no longer seem inventive.”

So these judges, writing in 2012, analyzed the problem with total clarity and foresaw exactly what would happen.  Too bad the Supreme Court apparently ignored this opinion!

With the passage of time, dissenting opinions often become majority opinions. In this context, the 2012 dissenting opinion by Moore, Rader, Lin, and O’Malley spells out exactly how, when, and why the patent eligibility legal framework went amock. It also gives a good clue as to how to fix these problems.