01/23/2017

Curiouser and Curiouser! Why the Federal Circuit Can’t Make Sense of Alice


Curiouser and Curiouser! Why the Federal Circuit Can’t Make Sense of Alice
Austin Steelman

In 2010, the Supreme Court broke nearly its nearly three-decade silence on patentable subject matter under 35 U.S.C. §101 in Bilski v. Kappos. The Court rejected the Federal Circuit’s machine-or-transformation test but declined to “define further what constitutes a patentable ‘process”’. Without a new test, the Federal Circuit’s post-Bilski decisions presented inconsistent interpretations of §101, especially for software patents. So in June 2014, the Supreme Court once again sought to bring clarity to the questions surrounding the abstract idea exception in Alice Corp. v. CLS Bank.

In Alice, the Court extended to abstract ideas the test it had created for natural laws under §101 two years earlier in Mayo Collaborative Services v. Prometheus Laboratories, Inc.. The Alice test consists of two inquiries. First, a court determines whether the claims in question are directed at a patent-ineligible concept. Second, if they are, the court must determine if the claimed invention includes an “inventive concept” that “transform[s] the nature of the claim into a patent-eligible application”.

The Alice framework appears simple, but its subsequent use by the Federal Circuit suggests the test did not resolve the disparate rationales and inconsistent outcomes. I argue that the opinions of the Federal Circuit include four fundamental tests that can be read into the Alice test: the tangibility test, the preemption test, the “need in the art” test, and the technological arts test. The tangibility test looks for materiality in the invention. This can mean that the invention is a physical construction itself or, in the case of process patents, that it creates a “useful, concrete, and tangible result.”

The tangibility test can be traced back to nineteenth-century exceptions to subject matter eligibility. Rooted in an industrial-era concept of invention, the tangibility test evolved into the machine-or-transformation test that the Federal Circuit used up until Bilski.

The preemption test withholds patent eligibility for inventions that claim broad principles so as to enable future improvements and innovation. This ex post policy approach to subject matter eligibility determinations dates back to the earliest Supreme Court decisions on the doctrine.11 Courts often cite preemption as the underlying rationale to the exceptions under §101.

The “need in the art” test looks to the importance of the invention in terms of the problem it solves. This test did not emerge until the Supreme Court’s opinion in Diamond v. Diehr. This ex ante policy approach, which suggests issuing patents for software that solves specific and important problems, was most recently used by the Federal Circuit in DDR Holdings, LLC v. Hotels.com, L.P.

The technological arts test distinguishes between patentable scientific or technological inventions and patent-ineligible economic, commercial, or social developments. Implied in Diehr, the technological arts test has shown up most explicitly and frequently in the Federal Circuit decisions of Judge Mayer. All these tests have emerged in the Supreme Court and Federal Circuit’s pre-Alice §101 jurisprudence, and all of these tests have been read into Alice by subsequent Federal Circuit opinions. The Supreme Court has left the Federal Circuit as baffled Lewis Carroll’s famous protagonist in the confusing Wonderland of §101. The Supreme Court must consider the abstract idea exception of §101 once again and provide clearer criteria for applying the two-step Alice test.

In Part I, I explain the four tests and trace the historical origins of each before Alice. In Part II, I discuss the ways in which Alice incorporates each of these tests. In Part III, I show how the Federal Circuit continues to use all four tests within the Alice framework.

98 J. Pat. & Trademark Off. Soc’y 374(2016)

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