Alice in Wonderland

[from the http://mupatents.com/ webblog]

The Alice v Banks (Alice) decision has changed the landscape of software patenting in the US. The Supreme Court provided a powerful negation of business method patents but with little guidance on where the line can be drawn for valid subject matter in the area of software and intangible computer inventions. The Court reaffirmed the Mayo test and brought it into the forefront. One thing is certain – USPTO Examiners are issuing 35 U.S.C. § 101 objections at the faintest scent of a generic computer concept.

The Alice decision applies the two-part Mayo test: i) determine whether the claims at issue are directed to a patent-ineligible concept (abstract idea), and ii) if so, is there an inventive concept sufficient in transforming the patent ineligible abstract idea into a patent-eligible application (usually referred to as “significantly more”). Where computer inventions are involved, if the claims are not directed to an abstract idea, then the analysis stops and the claim is patent-eligible subject matter.

The definition of an “abstract idea” by The Court is as follows: “a fundamental economic practice long prevalent in our system of commerce”, and a “building block of the modern economy.” The Court in Alice provides examples of ineligible claims of abstract ideas. Consider the following examples below:

– An algorithm for converting binary-coded decimal numerals into pure binary form
– A mathematical formula for computing alarm limits in a catalytic conversion process
– A method for hedging against the financial risk of price fluctuations
– The concept of intermediated financial settlement.

What ties these ideas together? If it’s not long-standing, i.e. something only possible because of the advanced computerized world, and it’s not related to the economy or finance, then it may very well be patent-eligible.
It’s crucial when filing a patent to keep these examples in mind to ensure the functionality of the invention is a truly new innovation. Then tweak the language to be as specific as possible.

Now that it’s clear what an ‘abstract concept’ is and how it applies to an ineligible patent, let’s discuss how to transform this lacking concept to patentable matter.

Obviously, adding a generic computer to carry out the steps of the abstract idea does not make it patent-eligible. Similarly, stating the abstract idea while adding the words “apply it with a computer” won’t fly. “Significantly more” is required to enable the addition of a computer to transform the claimed subject matter into patent eligible.

Examples that may lead to patentability are improving the function of the computer itself, or effecting an improvement in any other technology or technical field. In a nutshell, the use of the computer must amount to “significantly more” to bring patent eligibility.

Also, computer and electronics systems that move away from the norm of computers, servers and smartphones may exhibit “significantly more”.

Even if peripheral to the core of the invention, unique features including detail of algorithms used and atypical or unique hardware may prove beneficial in overcoming the § 101 objections of Examiners.

Understanding the basic principles of Alice and how they are applied to the patent application process is the first step. See below for specific tips on drafting to ensure your patent application is accepted.

1. Recite unique and unusual hardware where possible, as core features of the invention or as a fallback. This is especially meaningful where required for interaction with the software, for example, “Fit-Bit.”

2. Recite algorithms that cannot be carried out by humans, that accordingly could not be characterized as “longstanding commercial practice.”

3. Characterize inventions as only possible due to recent developments in computer technology (such as networks, etc.) that avoid a connection to “longstanding commercial practice.”

4. Avoid fundamental or general economic practices that do not feature information that add “significantly more” in the claims, if possible.

5. Show the examiner what a computer would bring to longstanding prior practice, and highlight how a new system is followed to bring benefits that could not be brought by simply computerizing the prior longstanding practice.

6. Challenge the Examiner’s application of § 101 to the claims when there are grounds.

[My comment – even if you fool the US patent examiners by fancy claim structures my guess is that enforcement will be tough with the US courts emboldened to overturn software patents on the basis on non-inventiveness. I don’t expect NPEs to flourish nor patent assets in the software space to be worth much unless these rules are relaxed].