{"id":3746,"date":"2016-07-14T14:24:27","date_gmt":"2016-07-14T18:24:27","guid":{"rendered":"http:\/\/cpip.gmu.edu\/?p=3746"},"modified":"2026-02-03T21:09:04","modified_gmt":"2026-02-03T21:09:04","slug":"federal-circuit-brings-some-clarity-and-sanity-back-to-patent-eligibility-doctrine","status":"publish","type":"post","link":"https:\/\/blogs.uakron.edu\/ualawip\/2016\/07\/14\/federal-circuit-brings-some-clarity-and-sanity-back-to-patent-eligibility-doctrine\/","title":{"rendered":"[Archived Post] Federal Circuit Brings Some Clarity and Sanity Back to Patent Eligibility Doctrine"},"content":{"rendered":"

By Adam Mossoff<\/a> and Kevin Madigan<\/a><\/em><\/p>\n

\"closeupFollowing the Supreme Court\u2019s four decisions on patent eligibility for inventions under \u00a7 101<\/a> of the Patent Act, there has been much disruption and uncertainty in the patent system. The patent bar and most stakeholders in the innovation industries have found the Supreme Court\u2019s decisions in Alice Corp. v. CLS Bank<\/em><\/a> (2014), AMP v. Myriad<\/em><\/a> (2013), <\/em>Mayo Labs v. Prometheus<\/em><\/a> (2012), <\/em>and Bilski v. Kappos<\/em><\/a> (2010) to be vague and doctrinally indeterminate<\/a>. Given the moral panic about the patent system that has been created as a result of ten years of excessive lobbying in D.C. for legislation that weakens patent rights, judges have responded to the excessive discretion they have under these cases by invalidating<\/a> whole swaths of patented innovation in the high-tech, biotech, and pharmaceutical industries. The Patent Office is also rejecting<\/a> patent applications at record levels, even for traditional inventions<\/a> outside of high-tech and life sciences directly affected by the recent \u00a7 101 case law.<\/p>\n

In Sequenom v. Ariosa<\/em>, the Supreme Court had the opportunity to bring some clarity to the law of patent eligibility and to reign in some of the judicial and Patent Office excesses, but unfortunately it rejected this opportunity when it denied<\/a> Sequenom\u2019s cert petition this past June. Fortunately, the Court of Appeals for the Federal Circuit is now\u00a0taking the lead in providing some much-needed legal guidance on patent eligibility to the inventors and companies working in the innovation industries. In two recent decisions, Enfish v. Microsoft<\/em><\/a> and Rapid Litigation Management v. CellzDirect<\/em><\/a>, the Federal Circuit has set forth some important doctrinal guideposts for defining what counts as a patent-eligible invention.\u00a0Not only do these two decisions bring some reason and clarity back to the law of patent eligibility under \u00a7 101, they provide important doctrinal insights on how stakeholders may wish to address this problem if they ultimately choose to seek relief in Congress.<\/p>\n

Enfish<\/strong><\/em> and the Patentability of Computer-Implemented Inventions (a\/k\/a \u201cSoftware Patents\u201d)<\/strong><\/p>\n

At the time it was decided, some commentators<\/a> believed that the Alice<\/em> decision was a directive from on high that most, if not all, computer software programs were not patentable inventions. This was a surprising claim if only because the Alice<\/em> Court did not once use the phrase \u201csoftware\u201d in its entire opinion.\u00a0Of course, \u201csoftware patent\u201d is not a legal term in patent law<\/a>; the proper term is \u201ccomputer-implemented invention,\u201d as used by the Alice<\/em> Court, and so the Court may have been only avoiding vague rhetoric from the patent policy debates. More important, though, this claim about Alice<\/em> contradicts the Court\u2019s opinion in Bilski<\/em> just four years earlier, when the Court warned the Federal Circuit not to adopt a bright-line rule that limited \u00a7 101 to only physical inventions of the \u201cIndustrial Age,\u201d because this created unnecessary and innovation-killing \u201cuncertainty as to the patentability of software.\u201d<\/p>\n

Unfortunately, the ambiguities in Alice<\/em> and in the Court\u2019s prior patentable subject matter decisions, such as Mayo<\/em>, left enough discretionary wiggle room in applying the generalized patent-eligibility test to permit judges and patents examiners to wage war on computer-implemented inventions. They thus made real again in the twenty-first century Justice Robert Jackson\u2019s famous observation in 1949 that \u201cthe only patent that is valid is one which this Court has not been able to get its hands on.\u201d Jungersen v. Ostby & Barton Co.<\/em>, 335 U.S. 560, 572 (1949) (Jackson, J., dissenting). As one commentator remarked<\/a> several months after Alice<\/em> was decided, \u201cIt\u2019s open season on software patents.\u201d The data<\/a> over the next several years has borne out the truth of this statement.<\/p>\n

The key argument against patents on computer-implemented inventions, such as key components of word processors, programs that run internet searches (like the patented innovation that started Google<\/a>), and encryption software, is that such inventions are inherently \u201cabstract.\u201d The judicial interpretation<\/a> of \u00a7 101 has long maintained that abstract ideas, laws of natural, and natural phenomena are unpatentable discoveries. In Alice<\/em>, for instance, the Court held that a complex software program for extremely complex international financial transactions was an \u201cabstract idea\u201d and thus unpatentable under \u00a7 101. But beyond claims that something long known is \u201cabstract,\u201d the Court has failed to define with precision what it means for a discovery to be abstract. With little to no specific guidance from the Alice<\/em> Court, it is no wonder that judges and examiners have succumbed to the recent moral panic about patents and declared \u201copen season\u201d on patents covering computer-implemented inventions.<\/p>\n

In this context, the Federal Circuit\u2019s decision in Enfish v. Microsoft<\/a> <\/em>is extremely important because it ends the unreasoned, conclusory \u201cI know it when I see it\u201d rejections of patents as \u201cabstract\u201d by judges and examiners.<\/p>\n

In Enfish<\/em>, the Federal Circuit reversed a trial court\u2019s summary judgment that a patent on a computer-implemented invention was an unpatentable abstract idea. The patent covered a type of database management system on computers, a classic incremental innovation in today\u2019s digital world. In its decision, the trial court dissected the invention down into the most basic ideas in which all inventions can be reframed as representing; for example, methods of using internal combustion engines can easily be reframed in terms of the basic laws in thermodynamics. In this case, the trial court asserted that this patent on a computer-implemented invention covered merely the \u201cabstract purpose of storing, organizing, and retrieving\u201d information. The trial court thus easily concluded that the invention was merely \u201cabstract\u201d and thus unpatentable.<\/p>\n

The Federal Circuit rejected the trial court\u2019s conclusory assertion about the invention being \u201cabstract\u201d and further held that such assertions by courts are a legally improper application of \u00a7 101. With respect to the patent at issue in this case, Judge Todd Hughes\u2019 opinion for the unanimous panel found that<\/p>\n

the plain focus of the claims is on an improvement to computer functionality itself, not on economic or other tasks for which a computer is used in its ordinary capacity. Accordingly, we find that the claims at issue in this appeal are not directed to an abstract idea within the meaning of Alice.<\/em><\/p><\/blockquote>\n

More important, the Enfish<\/em> court cautioned courts against the methodological approach adopted by the trial court in this case, in which \u201cdescribing the claims at such a high level of abstraction and untethered from the language of the claims all but ensures that the exceptions to \u00a7 101<\/a> swallow the rule.\u201d The court recognized that adopting a \u201cbright-line\u201d rule that computer-implemented inventions\u2014the \u201csoftware patents\u201d decried by critics today\u2014are necessarily \u201cabstract\u201d runs counter to both \u00a7 101 and the recent Supreme Court cases interpreting and applying this provision: \u201cWe do not see in Bilski<\/em> or Alice<\/em>, or our cases, an exclusion to patenting this large field of technological progress.\u201d<\/p>\n

Further confirming that Enfish<\/em> represents an important step forward in how courts properly secure technological innovation in the high-tech industry, the Federal Circuit relied on Enfish<\/em> in its recent decision in BASCOM Global Services Internet Inc v AT&T Mobility LLC<\/a><\/em>. Here, the Federal Circuit again rejected the trial court\u2019s dissection of a patent claim covering a software program used on the internet into an \u201cabstract\u201d idea of merely \u201cfiltering content.\u201d The BASCOM <\/em>court emphasized that courts must assess a claim as a whole\u2014following the Alice<\/em> Court\u2019s injunction that courts must assess a patent claim as \u201can ordered combination of elements\u201d\u2014in determining whether it is a patentable invention under \u00a7 101. As numerous patent scholars explained in an amicus brief<\/a> filed in support of Sequenom in its failed cert petition before the Supreme Court, requiring a court to construe a \u201cclaim as a whole\u201d or \u201cthe invention as a whole\u201d is a basic doctrinal requirement that runs throughout patent law, as it is essential to ensuring that patents are properly evaluated both as to their validity and in their assertion against infringers.<\/p>\n

CellzDirect<\/strong><\/em> and the Patentability of Discoveries in the Bio-Pharmaceutical Industry<\/strong><\/p>\n

The high-tech industry is not the only sector of the innovation industries that has been hit particularly hard by the recent \u00a7101 jurisprudence.\u00a0The biotech and pharmaceutical industries have also seen a collapse in the proper legal protection for their innovative discoveries of new therapeutic treatments. One recent study<\/a> found that the examination unit at the Patent Office responsible for reviewing personalized medicine inventions (art unit 1634) has rejected 86.4% of all patent applications since the Supreme Court\u2019s decision in Mayo<\/em>. Anecdotal evidence abounds<\/a> of numerous rejections of patent applications on innovative medical treatments arising from extensive R&D, and the most prominent one was the invalidation<\/a> of Sequenom’s patent on its groundbreaking innovation in prenatal diagnostic tests.<\/p>\n

In this light, the decision on July 5, 2016 in Rapid Litigation Management v. CellzDirect<\/a><\/em> is an extremely important legal development for an industry that relies on stable and effective patent rights to justify investing billions in R&D to produce the miracles that comprise basic medical care today. In CellzDirect<\/em>, the trial court found unpatentable under \u00a7 101 a patent claiming new methods for freezing liver cells for use in \u201ctesting, diagnostic, and treating purposes.\u201d The trial court asserted that such a patent was \u201cdirected to an ineligible law of nature,\u201d because scientists have long known that these types of liver cells (hepatocytes) could be subjected to multiple freeze-thaw cycles.<\/p>\n

In her opinion for a unanimous panel, Chief Judge Sharon Prost held that the method in this case is exactly the type of innovative process that should be secured in a patent. Reflecting the same methodological concern in Enfish<\/em> and BASCOM<\/em>, the CellzDirect<\/em> court rejected the trial court\u2019s dissection of the patent into its foundational \u201claws of nature\u201d and conventional ideas long-known in the scientific field:<\/p>\n

The claims are simply not directed to the ability of hepatocytes to survive multiple freeze-thaw cycles. Rather, the claims of the \u2019929 patent are directed to a new and useful laboratory technique for preserving hepatocytes. This type of constructive process, carried out by an artisan to achieve \u201ca new and useful end,\u201d is precisely the type of claim that is eligible for patenting.<\/p><\/blockquote>\n

In other words, merely because a patentable process operates on a subject matter that constitutes natural phenomena does not mean the patent improperly claims either those natural phenomena or the laws of nature that govern them. To hold otherwise fails to heed the Mayo<\/em> Court\u2019s warning that \u201call inventions at some level embody, use, reflect, rest upon, or apply laws of nature, natural phenomena, or abstract ideas,\u201d and thus to dissect all patents down into these unpatentable foundations would \u201ceviscerate patent law.\u201d The CellzDirect<\/em> court was explicit about this key methodological point in evaluating patents under \u00a7 101: \u201cJust as in [the industrial process held valid by the Supreme Court in] Diehr, it is the particular \u2018combination of steps\u2019 that is patentable here\u201d\u2014the invention as a whole.<\/p>\n

Conclusion<\/strong><\/p>\n

The U.S. has long prided itself as having a \u201cgold standard\u201d patent system\u2014securing to innovators stable and effective property rights in their inventions and discoveries. As scholars<\/a> and economic historians<\/a> have long recognized, the patent system has been a key driver of America\u2019s innovation economy for more than two hundred years. This is now threatened under the Supreme Court\u2019s \u00a7 101 decisions and the \u201ctoo broad\u201d application of the Court\u2019s highly generalized patent-eligibility tests to inventions in the high-tech and bio-pharmaceutical sectors. The shockingly high numbers of rejected applications at the Patent Office and of invalidation of patents by courts, as well as the general sense of legal uncertainty, are threatening<\/a> the \u201cgold standard\u201d designation for the U.S. patent system. This threatens the startups, new jobs, and economic growth<\/a> that the patent system has been proven to support. Hopefully, the recent Enfish<\/em> and CellzDirect<\/em> decisions are the first steps in bringing back to patent-eligibility doctrine both reason and clarity, two key requirements in the law that have been sorely lacking for inventors and companies working in the innovation economy.<\/p>\n","protected":false},"excerpt":{"rendered":"

By Adam Mossoff and Kevin Madigan Following the Supreme Court\u2019s four decisions on patent eligibility for inventions under \u00a7 101 of the Patent Act, there has been much disruption and uncertainty in the patent system. The patent bar and most stakeholders in the innovation industries have found the Supreme Court\u2019s decisions in Alice Corp. v. […]<\/p>\n","protected":false},"author":3627,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[5,21,22,26,27,30,34,35,37,38,39,48,51,1],"tags":[75,83,198,214,233,702,1065,1085,1104,1304,1417,1527],"class_list":["post-3746","post","type-post","status-publish","format-standard","hentry","category-biotech","category-high-tech-industry","category-history-of-intellectual-property","category-innovation-2","category-intellectual-property-theory","category-inventors","category-legislation","category-patent-law","category-patent-litigation","category-patent-theory","category-patentability-requirements","category-software-patent-high-tech-industry","category-supreme-court","category-uncategorized","tag-abstract-idea","tag-adam-mossoff","tag-bilski","tag-bob-sachs","tag-broken-patent-system","tag-innovation","tag-patent","tag-patent-litigation-2","tag-patentability","tag-section-101","tag-supreme-court","tag-uspto"],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/blogs.uakron.edu\/ualawip\/wp-json\/wp\/v2\/posts\/3746","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blogs.uakron.edu\/ualawip\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blogs.uakron.edu\/ualawip\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blogs.uakron.edu\/ualawip\/wp-json\/wp\/v2\/users\/3627"}],"replies":[{"embeddable":true,"href":"https:\/\/blogs.uakron.edu\/ualawip\/wp-json\/wp\/v2\/comments?post=3746"}],"version-history":[{"count":1,"href":"https:\/\/blogs.uakron.edu\/ualawip\/wp-json\/wp\/v2\/posts\/3746\/revisions"}],"predecessor-version":[{"id":15858,"href":"https:\/\/blogs.uakron.edu\/ualawip\/wp-json\/wp\/v2\/posts\/3746\/revisions\/15858"}],"wp:attachment":[{"href":"https:\/\/blogs.uakron.edu\/ualawip\/wp-json\/wp\/v2\/media?parent=3746"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blogs.uakron.edu\/ualawip\/wp-json\/wp\/v2\/categories?post=3746"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blogs.uakron.edu\/ualawip\/wp-json\/wp\/v2\/tags?post=3746"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}