Today (31 March), the United States Supreme Court (USSC) is
scheduled to hear oral arguments in Alice
Corp v. CLS Bank. This case follows on the heals of Mayo v. Prometheus Laboratories from 2012 and Association for Molecular Genetics v. Myriad Genetics from 2013,
and indicates a strong desire by the USSC of clarifying that tricky issue of
patentable subject matter.
In Prometheus, the
Court held that patent claims directed to a method of optimizing therapeutic
efficacy of a drug comprising administering the drug to a patient and measuring
a level of metabolite of the drug are invalid as not patentable subject matter.
In Myriad, the Court held that patent
claims directed to a method for screening patients based on the presence of
mutated DNA, and patent claims directed to isolated genes, are invalid as not
patentable subject matter.
Now, in CLS Bank,
the Court is being asked to review a lower court’s holding that patent claims
directed to computer implemented methods (often called “software patents”) are
not patent-eligible. Remarkably, this is the first USSC case on the viability
of software patents in over 40 years. In that time, not many would disagree
that the lower US courts have made a fine mess of the issue. The Federal
Circuit decision that led to the USSC granting certiorari in CLS Bank involved a panel of 10 judges
and resulted in seven different opinions. It is safe to say that the
Federal Circuit cannot agree a single standard for analyzing patent-eligibility
with respect to software-based inventions.
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| Some people already know what to do with Software Patents |
This uncertainty is a serious problem due to the importance
of software patents. More than 40,000 software patents are now issued in the US
every year. The vast majority of cases brought by “patent assertion entities”
(i.e., “trolls” or “non-practicing entities”) involve software patents. Most
countries around the world allow software patents in one form or another (even
despite attempts to eliminate them – see here
on the debate generated by New Zealand).
The statistics about the CLS
Bank case specifically are also astounding. Alice Corp. holds the patent at
issue, and CLS Bank (allegedly) uses the patented methods to make settlements
of over $1 trillion every day! Perhaps more importantly, though, the
patent at issue has claims that are not remarkable. If they are held to be
ineligible for patent protection, the validity of thousands of issued patents
will become quite uncertain.
Clearly, then, the stakes couldn’t be higher. Roughly 40 amicus briefs were filed, from parties
in favor of maintaining software patents (e.g., IBM, which
not-so-coincidentally also happens to be the company perennially obtaining the
most US patents) to parties opposed to software patents (e.g., Google as well
as the US Government).
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| Hallowed halls - but can they save us from uncertainty? |
The USSC decision is due to be released in June/July. Much
has been said on this case (see, e.g., Patently-O here)
and much speculation will follow the oral arguments. This blogger merely hopes
that, whatever the decision, the holding is clear and definitive.
