What's happened to software inventions? Five unexpected facts that will change how you see patent eligibility.

The third quarter of 2016 was a busy one for the Federal Circuit when it comes to subject matter eligibility – with Federal Circuit issuing more opinions addressing Alice in 3Q2016 than it had in the preceding three calendar quarters combined. After such a flurry of activity, it seems reasonable to wonder what remains of what we thought we knew about subject matter eligibility, especially since there seems to be some controversy even within the Federal Circuit itself. However, after looking at the cases the Federal Circuit has decided since Alice, I concluded that there are at least five things we now know about subject matter eligibility, starting with…

5. The name of the game is no longer the claim
Judge Giles Rich (about whom more later) famously stated that “the name of the game is the claim.” While the accuracy of that aphorism may have been arguable in the past, it has been effectively abjured in the Federal Circuit’s subject matter eligibility jurisprudence. Regardless of the ultimate conclusion, the Federal Circuit has turned time and again to the remainder of the specification when evaluating eligibility. Of course, that’s not to say that the claims are completely irrelevant to the subject matter eligibility determination. The Federal Circuit still at least ostensibly considers claim language when applying § 101, and their recent decisions have illustrated that…

4. It’s better for a claim to be vague than to describe something that sounds familiar or like a business method
What do you get for describing an invention as one which bases the management of records on rules rather than one which uses rules in patient record management? The answer is ten times more likely to get a patent, since “policy, rule-based management of records, files and documents” is included in class 707 (database and file management or data structures) while “patient record management” is included in class 705 (financial, business practice, management, or cost/price determination), and as of writing, the allowance rates for those classes are, respectively, 42.1% and 4.7%. There’s a similar difference between describing an invention as a way for organizing data, and as a way of organizing a particular type of data that a judge is likely to be familiar with – i.e., pictures. The former type of description is arguably covered by the holding that a model for organizing data in a database isn’t an abstract idea, while the latter type of description would result in an invention being deemed ineligible because organizing a specific type of data which is likely to be familiar to a judge – i.e., pictures – is an abstract idea. This is a big change from the days when vague claims would have hurt the chances for a patent to be upheld or issued, but that’s not the only change that’s stemmed from our current subject matter eligibility jurisprudence because…

3. Subject matter eligibility is exorcising the ghost of Judge Rich
Until the current line of subject matter eligibility cases, the impact of Judge Giles Rich on the patent law was undeniable. He was one of the architects of the 1952 patent act, and authored the decisions which established that patent eligibility hinged on the presence of a “useful, concrete and tangible result” and formally ended the practice of treating business methods as per se unpatentable. However, the current subject matter eligibility cases are directly undoing Judge Rich’s legal changes. This is somewhat ironic, since during the oral arguments for Bilski v. Kappos, Justice Stevens professed to admire Judge Rich, and asked if he had written anything on what methods should be patentable. Nevertheless, current subject matter eligibility jurisprudence rejects Judge Rich’s subject matter eligibility decisions in State Street and Alappat, and the necessity of identifying an “inventive concept” to establish a claim’s eligibility has reintroduced an amorphous “invention” requirement that Judge Rich had specifically criticized and that the 1952 act had sought to eliminate. You might imagine that the courts wouldn’t be undoing the life’s work of a hugely influential and well-respected figure in patent law unless there was a good reason, but you’d be wrong because …

2. There is no reason for what we’re doing
In Alice, the Supreme Court explained that the reason for treating certain subject matter as ineligible is to avoid pre-emption. However, current subject matter eligibility jurisprudence is clearly not limited to only invalidating claims where necessary to avoid preemption. Some opinions have also hinted at policy-based reasons for aggressively policing subject matter eligibility – e.g., that certain classes of patents, like those claiming the use of a computer to perform well-known business methods, don’t protect real innovation and therefore should be eliminated – which may be closer to the truth for why the law has developed as it has. However, other rules – such as the rule that simply performing a known business process in a particular commonplace technical environment is obvious – were already in place before we started focusing on eligibility, and could have been used to eliminate non-innovative patents without having to create an entirely new body subject matter eligibility law. Of course, it’s possible that some opinions’ inclusion of dismissive references to the “draftsman’s art,” or warning against the “in terrorem power of patent trolls” may reflect a distrust of patent attorneys and a desire to protect innovators from the cost and difficulty of dealing with them. However, if we’re trying to do is protect innovators, aggressively policing subject matter eligibility makes no sense because …

1. We’ve been down this road before, and the end result will be to transfer resources to attorneys while making patents more opaque
This isn’t the first time courts have tried to issue new rules to rein in what they see as an out of control patent system. Claim construction is treated as a matter of law because the Federal Circuit saw juries as being unpredictable and wanted to minimize their role in patent cases as a matter of policy. The result was to increase expense to patent litigants by making claim construction into a separate trial within a trial in virtually all cases, and to make patents more difficult/expensive to prepare and interpret by spawning rules such as that saying what the invention is or what features are important could result in narrow protection. Indeed, this isn’t even the first time aggressive policing of subject matter eligibility has been used to try and limit the patenting of software. In the 1960s, the patent office strongly opposed the patenting of software, and issued guidance that computer programming was unpatentable. The result was that the nascent software industry didn’t stop trying to get patents, but instead started describing their patents as being directed to something other than software. Is there any evidence that the current aggressive policing of subject matter eligibility will have similar effects? Well, we already know that, like treating claim construction as a matter of law, it’s generated a new kind of trial within a trial – the subject matter eligibility determination – which patent litigants have to go through and pay their attorneys to handle. We also know that aggressive policing of subject matter eligibility hasn’t stopped the number of patent application filings from increasing year over year for each of the past five years, but that it has resulted in recommendations to omit features – like a high-level summary or a discussion of economic benefits – that could otherwise make patents easier to read and understand. While we can’t be certain that history will repeat itself, if you think that policing subject matter eligibility will necessarily make the patent system easier, cheaper, or more efficient, or even that policing subject matter eligibility makes sense when evaluated on its own terms, may want to consider this history as a reason to change how they think of subject matter eligibility. For a version of this article with supporting citations, see here.