The Software IP Report

Addressing the Subjectivity of Patent-Eligibility Post-Alice

By Charles Bieneman

Categories: Patent Eligibility, Software Patents, The Software IP Report

Perhaps the single most useful resource summarizing the law of patent-eligibility under the Alice abstract idea test is this chart of Federal Circuit cases under 35 U.S.C. § 101, found on the  USPTO’s very helpful web page providing guidance on analyzing claims for patent-eligible subject matter. This blog has previously covered the USPTO’s guidance on patent-eligibility; I am discussing it again to note that the afore-mentioned chart of patent-eligibility case was updated on January 4.  If you are responding to – and especially if you are appealing – a rejection under the Alice abstract idea test, this chart is the place to start.

But the USPTO’s summary of Federal Circuit cases is also a nice vehicle for highlighting the overriding problem of the present law of patent-eligibility.  A large universe of subject matter remains unambiguously patent-eligible. And perhaps it is a smaller universe, but there seems to be subject matter that is unambiguously patent-ineligible. A few recent cases (admittedly the minority of all the Alice / fee award cases we have covered)  have even awarded attorney fees against parties maintaining lawsuits predicated on clearly patent-ineligible claims.

But then there are cases like the Federal Circuit’s January 2017 decision in Trading Technologies Int’l., Inc. v. CQG, Inc., in which the patent claims were directed to a system for reducing trading time via a claimed manner of presenting pricing data. And then there is the oft-cited DDR Holdings, LLC v., L.P., holding e-commerce patent claims patent-eligible in December 2014, three weeks after a different Federal Circuit panel, in Ultramercial, Inc. v. Hulu, LLC, held other e-commerce patent claims patent-ineligible. As I wrote at the time of DDR Holdings and Ultramercial, it is hard to see how all of these disparate cases can be reconciled to one another.

A recent post on the PatentlyO blog, quoting a PTAB decision to the effect that the USPTO is not required to provide facts supporting patent-eligibility rejections, further drives home the reality. As the Federal Circuit has explained in many cases (see, e.g. OIP Techs., Inc. v., a 2015 case holding claims directed to price optimization patent-ineligible), patent-eligibility is a question of law. In practice, this means that it is like interpreting or construing claims – every adjudicator, from patent examiners up to the US Supreme Court, gets to look at it anew.  Every adjudicator can apply his or her own gloss, a nightmare for patent applicants, patent owners, and potential infringers alike.

Which brings me back to the summary of cases discussed above. As a patent practitioner, all you can do is know when you are in a gray area and when you are not. And when, like the immortal Fletch, the answer to the question “how gray?” is “charcoal,” your best recourse is to peruse the cases and find the ones (hopefully precedential) that best support your situation.