Unintended Patent Consequences

Section 101 of the U.S. patent law limits the types of things for which patent protection can be sought. It says:

“Whoever 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.”

In 2012, the Supreme Court made what they thought was a useful change by adding an ‘inventive application’ requirement for patenting practical applications of scientific discoveries. The slippery slope had been set.

Recently, it was felt that the number of business and software patents that were being issued had become a problem. Many patents took what had been a well-known process or technique and then wrote them as software and attempted to patent it. Things grew to a head with Alice v. CLS Bank, such that the Supreme Court issued a ruling in 2014 that stated:

“The question presented is whether these claims are patent eligible under 35 U.S.C. §101, or are instead drawn to a patent-ineligible abstract idea. We hold that the claims at issue are drawn to the abstract idea of intermediated settlement, and that merely requiring generic computer implementation fails to transform that abstract idea into a patent-eligible invention.”

Since that ruling, many software patents have been denied or even struck down while undergoing litigation. We have seen several cases of this even within the EDA industry. In one case a fundamental synthesis patent owned by Synopsys was decimated during litigation with Mentor Graphics over an emulation battle. It was claimed that logic synthesis was nothing more than the application of design transformations that had been in use before they were encapsulated into a computer program and thus were not eligible for protection.

In short, anything that previously relied on requiring a generic computer implementation was deemed to be non-patentable if the original idea was based on an abstract idea. Let’s face it, what piece of software or algorithm is not based on an abstract idea? But what the Supreme Court basically said was that the whole field of software engineering was incapable of creativity, invention and quite frankly, that all software is created equal.

In an attempt to try and combat a heavy hand by the courts, guidelines were created in an attempt to help explain the new rules. Anything that requires this much explanation is clearly problematic when it comes to a profession that argues over the exact meaning of ‘the’ in a particular sentence. (And yes, I have been involved with court proceedings where this was the case and millions of dollars rested on its interpretation.)

It has also been reported that the rules are being applied differently in court systems around the country, with the District of Delaware and the Northern District of California being generally favorable to accused infringers seeking to mount a Section 101 challenge, whereas the Eastern District of Texas is the opposite.

The United States is now feeling the backlash of this ruling, and even people intimately involved with the U.S. Patent and Trade Office (USPTO) are beginning to speak out. David Kappos, former director of the USPTO, recently called for the total abolition of section 101. “It’s time to abolish Section 101, and the reason I say that is that Europe doesn’t have 101 and Asia doesn’t have 101 and they seem to be doing just fine in constraining patent-eligible subject matter,” he said.

While his comment stretches reality a little (Europe does have an equivalent to section 101), it has become easier to get software protection in other locations around the world than the United States. He is now recommending “that patent protection for biotechnology and software inventions is more robust in other countries like China and Europe and they are better off seeking patents in those places, because of the way U.S. courts have interpreted Section 101.”

This works the other way around as well in that it means that foreign companies have a much easier job striking down any U.S. patents on software, while they can raise barriers in the own countries. Given the global nature of most software these days, it is creating additional challenges for the industry. While I am not certain that eliminating section 101 is the right move, the Supreme Court should perhaps clean up the little mess they have left for the rest of the industry to deal with.

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