Under U.S. patent laws, an invention must be directed to a statutory category that is eligible for patent protection. These categories include a process, a machine, a manufacture or a composition of matter. (35 USC § 101). If the invention does not fall within one of these four enumerated categories, that is, if an application claims an abstract idea, a natural phenomenon, or a law of nature, then it cannot be patented. Over the past few years, the Supreme Court has rendered a number of opinions relating to the eligibility of an invention for patent protection. However, these opinions are open to different interpretations which create tension in the patent system. Part of the tension lies in the struggle to define an abstract idea for the purposes of determining whether the invention is eligible for patent protection.
In Buysafe v. Google (Fed. Cir. 2014), the claimed invention was directed to a computer implemented method for facilitating a third party guarantee of a financial transaction. The Federal Circuit held, without much analysis, that the invention recited in the claims was directed to an abstract idea, and thus not eligible for patent protection. The Federal Circuit stated that:
The claims in this case do not push or even test the boundaries of the Supreme Court precedents under Section 101. The claims are squarely about creating a contractual relationship – a transaction performance guaranty” – that is beyond question of ancient lineage. … The claims thus are directed to an abstract idea. (emphasis added).
The Federal Circuit appears to suggest that all things ancient are abstract. However, old ideas and old innovations are typically identified as prior art, not as abstract ideas.
Although the two judges who decided this case thought that the invention was an abstract idea, other believed otherwise. The examiner also believed that the claimed invention was not an abstract idea, because otherwise, the examiner woulnd’t have allowed the case to issue as a patent. Judge Rader, who heard oral arguments for this case but retired from the bench before the opinion was written, hinted during oral arguments that the invention might not be an abstract idea. (See link here). As such, other reasonable minds such as the examiner and possibly Ret. Judge Rader thought differently. A well-reasoned explanation may be necessary, rather than merely stating that the abstractness of the invention was so clear on its face that no explanation was necessary.
In deciding this case, the Federal Circuit reviewed the Supreme Court decision in Alice v. CLS. As of this writing, the decision is the law of the land with respect to the subject-matter eligibility of a claimed invention. However, the Federal Circuit’s application of the legal holding in the Alice decision appears to add a physicality requirement, stating that:
A claim is ineligible for patent protection if (a) it is “directed to” matter in one of the three excluded categories and (b) “the additional elements” do not supply an “inventive concept” in the physical realm – that ensures that the patent is on something “significantly more than” the ineligible matter itself.
The Alice opinion did not refer to any requirement that the “something more” be within the physical realm. A physicality requirement may make the Section 101 analysis easier by excluding all non-physical inventions, but it would likely exclude inventions valuable to the forward progress of science.
For now, most of the Section 101 subject matter eligibility cases revolve around software and other narrow categories of cases. For example, in this case, the invention concerned contractual relationships. However, although Section 101 cases have been limited to certain limited situations, this does not mean that, over time, these Section 101 issues will not spill over to other more traditional arts (e.g., mechanical arts) where it has not been raised in the past.
Nonetheless, in the midst of this uncertainty, it may still be wise to file patent applications on software and other non-physical inventions. Those that keep on patenting software and other non- physical inventions could be in a good position once the dust settles in this area of patent law.
I invite you to contact me with your patent questions at (949) 433-0900. Please feel free to forward this article to your friends. As an Orange County Patent Attorney, I serve Orange County, Irvine, Los Angeles, San Diego and surrounding cities.