CLS Bank v Alice (en banc Fed Cir. 2013). This case was supposed to provide greater certainty as to what is eligible and what is not eligible for software patents. Start ups which are the engine of the U.S. economy typically does not have money to spend on intellectual property rights that are speculative and may be difficult to enforce. As such, this group of companies, mid sized companies and solo inventors are very savy with their funds. They will only spend money when there is a greater chance of success than failure.
By the Federal Circuit’s opinion in CLS Bank v. Alice, they have just thrown a wrench into the patenting mechanism which has served to drive the U.S. economy by providing incentives for businesses, angel investors and investors to spend money on their ideas. Spending money pumps money into the economy and provides jobs for people. Additionally, the Federal Circuit has stated that the CLS bank opinion relates to more than just computer related technologies. As such, the CLS bank opinion could potentially have repercussions in all areas of technology such as mechanical arts, pharmaceuticals, etc.
I’ve provided a chart above as how the judges came down on software. Since software companies are supposedly against patents, it seems as if the opinion of CLS bank is welcomed news since it makes more uncertain the validity of current software patents and software patents in the pipeline. As you can see, the vast majority of the chart is red. However, there is a glimmer of hope in one area of software patents for the software industry that is actually pro-patents. That area is in the area of claiming the software implementation as a system.
What are the basic differences between method claims, media claims and system claims. Method claims recite the steps that the computer takes. Media claims recite the storage medium. System claims recite the actual hardware components that make the software work. This is a simplified explanation of the different types of software claiming categories.
With the above chart in mind, the pro-software patent companies can still conceivably obtain a patent on software provided that they recite the software invention in the form of a system claim. The majority opinion and the dissent and even Newman made clear that form does not override the substance of the invention. This means that merely reciting a computer (i.e., generic component) does not make an invention eligible for patent protection. There must be something more.
The majority opinion, although generally against software inventions, still provided some crucial verbiage that can help a patent attorney draft up a patent application that might overcome a patent eligible subject matter attack on a patent’s validity. In particular, the majority and some of the dissent were concerned with preemption and how far that preemption went. One of the points the opinion made was that narrow preemption still could push the invention into patent ineligible subject matter. The key is to look whether the claim preempts all practical implementations of the invention. If this is so, then the claiming strategy would entail splitting up the invention into different spheres.
What I mean is this? The basic filing fee allows for three independent claims. In foreign countries, they typically only allow one independent claim. The three independent claims in the United States allows the patent drafter to draft one independent claim directed to one of a plurality of implementations. This one claim might be easy to design around. However, the key is to ensure that the other two independent claims would cover those design arounds.
Another key area of potential patent eligibility is in system claims. As noted above, the court was split evenly on the system claims.
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