The last post on this blog ended optimistically, reading “[i]t’s likely that the Federal Circuit will continue to review cases requiring §101 analysis, and in each instance will hopefully continue to shed light on what is required to patent business methods and software”. It appears that the first half of that sentence is correct; the Federal Circuit, the court with exclusive jurisdiction over appeals from trial court judgments in patent cases, has gotten much more involved in conducting § 101 analyses. However, the hope that these cases would shed light on what is required to patent business methods and software appears to have been a longshot. For the past few months, the Federal Circuit’s opinion in Intellectual Ventures I LLC, v. Symantec Corp. has been making its way around the internet (even Reddit appears to have gotten a slice of this action), and at a glance it doesn’t look good for software patents.
Three decisions were mentioned in our last blog post, Enfish, Bascom, and McRO. Enfish was heard by Judges Moore, Taranto and Hughes; Bascom by Judges Newman, O’Malley and Chen; and McRO by Judges Reyna Taranto, and Stoll. Some of you may already see a problem forming here in that these three cases, which we’ve previously identified as being important recent cases for elaborating on the U.S. Supreme Court’s decision in Alice Corp. v. CLS Bank International, were all heard by different three-judge panels, the only overlap being Judge Taranto’s involvement in McRO and Enfish. A split among judges on a panel can create confusing, and often contradictory, rulings issued by the Federal Circuit in matters of nuance such as patentable subject matter.
So what’s got the internet so flustered? A concurring opinion written by Senior Federal Circuit Judge Mayer in Intellectual Ventures I took the position that Alice was the death of software patents and that it’s time to recognize it as such. Judge Mayer made “two points: (1) patents constricting the essential channels of online communication run afoul of the First Amendment; and (2) claims directed to software implemented on a generic computer are categorically not eligible for patent”. A number of blogs and legal news websites have posted excerpts from Judge Mayer’s concurring opinion to highlight its finer points. But what is often not mentioned explicitly in the commentaries is that Judge Mayer’s concurring opinion is not binding precedent. The binding precedent in Intellectual Ventures I is the majority opinion written by Judge Dyk, which concluded that all three patents-in-suit were invalid under § 101 as claiming patent-ineligible subject matter. The third judge on the case, Judge Stoll, who also heard and joined the majority opinion in Enfish, issued a partial dissent arguing that one of the three patents-in-suit claimed patent-eligible subject matter under § 101. In the majority opinion in Intellectual Ventures I, The opinions of Judge Dyk and Judge Stoll relied on precedent from Bascom, although they reached remarkably different conclusions when it came to one of the patents. Only Judge Mayer’s opinion, which again is not binding precedent, contained this broad assertion that software patents in generally are patent-ineligible.
Why has this opinion in Intellectual Ventures I gained so much attention then, if no court actually has to follow it? The plainest reason is that software patents are a hot topic in IP law, and no judge on the Federal Circuit has expressed such a strong opinion against their patent eligibility. Judge Mayer has a long history on the Federal Circuit, and was even the court’s chief judge from 1997-2004. Coincidentally, this period is when the Federal Circuit first began to tackle software patents, and those patents were given broad support by the Federal Circuit. Judge Mayer’s opinion was also noteworthy because of its assertion that the First Amendment precludes the right to patent anything “constricting the essential channels of online communication”. This First Amendment assertion presents an entirely new aspect of the § 101 analysis.
Although Judge Mayer’s concurring opinion in Intellectual Ventures I is interesting on an academic level, it perhaps unintentionally highlights the problem with the Federal Circuit’s interpretation of the Alice decision to date, namely, the judges do not, and maybe cannot, agree on how Alice should be applied or even how to apply their own precedent to questions involving patent eligibility. So depending on which three-judge panel hear a case, the outcome is based more upon the judge’s individual inclinations regarding patent-eligibility under § 101 rather than the reliable application of the court’s precedents. This leaves the lower courts with two options: (1) struggle to follow the Federal Circuit’s inconsistent precedent and apply a loosely defined framework of the two-step Alice analysis, or (2) encourage the Supreme Court to explicitly define what constitutes an “abstract idea” and what constitutes the “something more” to establish patent eligibility, so that in future cases the Federal Circuit can actually do its job. We can only hope that the Supreme Court will agree to hear a § 101 case again soon and clarify how software and business method patents should be analyzed for patent-eligibility. For now, Judge Mayer’s opinion in Intellectual Ventures I should be considered a catalyst for resolving the confusion and inconsistencies brought about by the Supreme Court’s ruling in Alice.