The Software IP Report

Alice Changed Law, No Issue Preclusion on Patent-Eligibility

Where a patent had survived a challenge under 35 U.S.C. § 101 in prior litigation between the parties, issue preclusion did not prevent a court from revisiting the question, and invalidating the patent claims, because, the court said, Alice Corp. v. CLS Bank Int’l., 134 S. Ct. 2347 (2014), represented a change in the law.  Voter Verified, Inc. v. Election Systems and Software, LLC., Case No. 1:16cv267-MW/GRJ (N.D. Fla. March 21, 2017).  The patent at issue was U.S. RE40449, directed to a voting system including “auto-verification whereby the voter has the opportunity and the responsibility to inspect the computer-printed ballot with his or her votes.”

After reviewing Alice and the Supreme Court’s immediately prior patent-eligibility cases, Bilski v. Kappos, 561 U.S. 593 (2010), and Mayo Collaborative Servs. v. Prometheus Labs., Inc., 132 S. Ct. 1289 (2012), the present court explained that

Courts previously used the “machine or transformation test” established in Mayo, but now Alice has made clear that a claim based upon an abstract idea does not pass § 101 scrutiny by implementing the idea into a computer. This two-step analysis was a substantial change in the standard of review for patentable subject matter under § 101. As a result of Alice’s holding, the United States Patent and Trademark Office (USPTO) issued guidance documentation to direct agents to review patents under the new Alice guidelines. In other words, it is clear that Alice constitutes a change in the law as it changed the analysis used by the office that issues patents, the USPTO.

(Citations omitted.)  The cognoscenti will realize, of course, that the court was off-base to characterize Mayo as implementing a “machine or transformation test,” an approach that the Bilski court expressly disclaimed as, at least, the sole test.  Nonetheless, Alice certainly did change the landscape, and it is hard to say that the prior ruling should not have been revisited, concerns about issue preclusion notwithstanding.

Unsurprisingly, the court then found “that the ‘449 patent is invalid under the Alice decision because the voting system claimed is simply an abstract idea on a computer; it does not ‘transform’ the abstract idea into a patent-eligible concept.”