Software Patentability After Prometheus

• Publication year: 2014

Software Patentability after Prometheus

Joseph Holland King
Georgia State University College of Law, holland.king@gmail.com

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SOFTWARE PATENTABILITY AFTER PROMETHEUS

Holland King^*

Table of Contents

Introduction.......................................................................1112

I. Brief History of Software Patentability.................1114

A. The "Four Seminal Supreme Court Precedents"....1114

1. Gottschalk v. Benson..........................................1115
2. Parker v. Flook...................................................1117
3. Diamond v. Diehr...............................................1118
4. Bilski v. Kappos.................................................1120

B. Prometheus Sets the Standard..................................1121

1. CLS Bank International v. Alice Corporation....1124

a. Alice Panel Decision....................................1124
b. Alice En Banc Decision...............................1125

2. Bancorp Services, L.L.C. v. Sun Life Assurance Co. .......................................................................1128
3. What is an Abstract Idea?..................................1130

II. An Examination of the Tests and Factors Used by the Courts.............................................................................1132

A. Machine-or-Transformation ....................................1132
B. Inventive Concept.....................................................1134
C. Draftsman's Tricks..................................................1136
D. Claim Broadness.....................................................1137
E. Current Direction.....................................................1138

1. Practicality.........................................................1139
2. Sufficient Machine Limitation............................1140

III. A Path Forward...........................................................1141

A. ICoMSE....................................................................1142

1. Inventive Concept...............................................1142
2. Market Success...................................................1142
3. Number of Embodiments....................................1143

B. The Future of the Machine-or-Transformation Test 1144

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C. Application...............................................................1145

1. Bancorp Services, L.L.C. v. Sun Life Assurance Co. .......................................................................1145
2. Parker v. Flook...................................................1146
3. Diamond v. Diehr...............................................1147

Conclusion..........................................................................1148

Introduction

Since the advent of computers,¹ there has been an open question of whether software should receive similar patent protection to that of the hardware it runs on and competes with, or if it should be excluded from patentability as an abstract idea.² The courts have generally allowed for limited eligibility,³ but struggled to define the boundaries of that condition. Consequently, the line for patentability moves with the courts using a number of tests, frequently rejecting or devaluing a given test in favor of another.⁴ In a recent decision on patentable

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subject matter, the Supreme Court attempted to strengthen the barrier to patent eligibility by requiring more from the invention.⁵ The Federal Circuit applied this decision in recent cases,⁶ albeit while receiving blame for inconsistency.⁷ Even the Federal Circuit itself seems troubled by its own decisions, as evident in its decision to vacate one of these opinions for an en banc rehearing.⁸ The problem is not a direct result of the Supreme Court's most recent decision, but rather that "no one understands what makes an idea 'abstract.'"⁹ Currently, the only well-defined test available—the machine-or-transformation test¹⁰ —is losing favor with the Supreme Court,¹¹ and has been criticized by the patent community.¹² This Note proposes that courts adopt an additional test, one whose factors incorporate the teachings of the Supreme Court as well as the patent community.

This Note examines the history of patentability of abstract ideas and the tests that courts have used to make the determination of whether an invention incorporating an abstract idea is patentable. Part I provides a history of the four seminal cases related to patentable subject matter, as well as some more recent on point decisions.¹³ Part

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II changes focus to the various tests and factors that have been used by the courts, exploring the history of each, discussing the treatment by the Supreme Court, and determining the strengths and weaknesses of each.¹⁴ Based on the discussion in Part II, Part III proposes a new test to supplement the existing machine-or-transformation test.¹⁵

I. Brief History of Software Patentability

A. The "Four Seminal Supreme Court Precedents"¹⁶

Generally, the well-known maxim regarding subject matter patent eligibility is that "anything under the sun that is made by man" is patentable subject matter under 35 U.S.C § 101.¹⁷ This section, which remains relatively unchanged since its origin in 1790,¹⁸ sets forth four categories of patentable subject matter: process,¹⁹ machine,²⁰ manufacture,²¹ and compositions of matter.²² However, the Supreme

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Court has carved out three exceptions to these statutory categories: "'laws of nature, physical phenomena, and abstract ideas.'"²³ These policy-based exclusions are generally premised on the idea that a fundamental concept or truth is free of any reservation and therefore is not patentable.²⁴ Due to the nature of the exceptions, the boundaries of each exception—the point at which the fundamental concept ends and patentable subject matter begins—is blurred and is often indeterminate. Every invention, at some level, builds on an exception: a rule of nature such as Newtonian mechanics to build a machine; a physical phenomenon such as using a naturally occurring mineral in the invention; or an abstract idea such as a mathematical formula to calculate when the invention should perform an action.²⁵ The question thus becomes whether the patent is claiming an invention made by man, or is only claiming the exception through a trick of patent drafting, commonly known as a draftsman's trick.²⁶ The Supreme Court has provided clues in the "[f]our seminal" cases.²⁷

1. Gottschalk v. Benson

In Gottschalk v. Benson, one of the earliest cases dealing with a software patent, an inventor attempted to patent a computer algorithm that would convert decimals into binary.²⁸ In its analysis, the Court

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drew a direct comparison between the invention at bar and the claimed invention in O'Reilly v. Morse, the telegraph case.²⁹ In Morse, the Court found that the claim was not for the use of "'electricity distinct from the particular process with which it [was] connected in his patent.'"³⁰ Instead, the Morse patent attempted to claim all uses of electricity to convey a message without a limitation to a specific machine or apparatus.³¹ Without such limitation, the Court found, Morse not only attempted to monopolize more than he had described, or enabled, but also attempted to claim the concept of electromagnetic transmissions.³² In comparison, the Court in Benson determined that the formula had no other application than for a digital computer.³³ This contradicting logic of not claiming the algorithm specifically, but attempting to patent all uses of the algorithm, led the Court to reject the claim as it would effectively patent the algorithm itself.³⁴ where Morse wanted to patent all uses of electricity to deliver a message,

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Benson wanted to patent all uses of the formula to convert decimals into binary. In Flook, below, the Court would come to understand Benson as standing for the idea that "the discovery of a novel and useful mathematical formula may not be patented."³⁵

2. Parker v. Flook

Shortly after Benson, the Supreme Court again addressed software patentability in Parker v. Flook.³⁶ In Flook, the Court described the invention—a method to continuously update the desired alarm limit³⁷ —as a method involving three steps:

[A]n initial step which merely measures the present value of the process variable (e. g., the temperature); an intermediate step which uses an algorithm to calculate an updated alarm-limit value; and a final step in which the actual alarm limit is adjusted to the updated value.³⁸

As in Benson, the Court took issue with the invention being little more than the mathematical formula it encompassed.³⁹ The inventor argued, and the Court conceded, that in Benson a patent would have wholly preempted use of the formula.⁴⁰ Preemption of the formula would grant the inventor a monopoly over not only the invention but also the unpatentable mathematical formula, which was not true in Flook.⁴¹ Other versions of the formula were already in the public domain and would not be affected by the outcome of the case.⁴² Despite the

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inventor's arguments, the Court rejected the idea of any post-solution activity as a transformation for patentability.⁴³ It pointed to a common mathematical formula, the Pythagorean theorem, as an idea that an inventor could not wholly or partially patent regardless of the final steps attached to it.⁴⁴ Building on Benson, which restricted the ability to patent a formula, Flook now looked to inventions that attempted to patent a formula and some other activity. Any additional activity would not be enough to salvage the patentability of the invention; instead, the Court must evaluate the patent as if the formula were well known.⁴⁵

3. Diamond v. Diehr

In Diamond v. Diehr, the Court examined whether a process for curing rubber was patentable.⁴⁶ The Court recognized that, while the patent was for a process and therefore presumably patentable under § 101, because the process incorporated a...