Patentable Software: Will We Know It When We See It?

Applicants should continue to claim processes that are implemented by a computer or that recite a particular method step that utilizes a processor to accomplish a specific task. While the inclusion of specific implementation of a process on a computer may result in a determination of patent eligibility by the U.S. Patent and Trademark Office (“USPTO”), the inclusion of a computer or other structure by itself does not appear to tip the scales in favor of patent eligibility in the courts. See Interim Guidance for Determining Subject Matter Eligibility for Process Claims in View of Bilski v. Kappos, 75 Fed. Reg. 43922 (July 27, 2010). Instead, this perceived difference in treatment in software claims between the USPTO and the courts could be a trap for the unwary. CLS Bank Int'l v. Alice Corp. Pty., 685 F.3d 1341, 1359 (Fed. Cir. 2012) vacated by CLS Bank Intern v. Alice Corp. Pty. Ltd., 484 Fed. Appx. 559, 2012 U.S. App. LEXIS 20906 (Fed. Cir. 2012); see also Mayo Collaborative Servs. v. Prometheus Labs., Inc., 132 S. Ct. 1289, 1300 (U.S. 2012); CyberSource Corp. v. Retail Decisions, Inc., 654 F.3d 1366, 1374 (Fed. Cir. 2011) (“Regardless of what statutory category ('process, machine, manufacture, or composition of matter,' 35 U.S.C. ' 101) a claim's language is crafted to literally invoke, we look to the underlying invention for patent-eligibility purposes.”).

Patent applicants would be wise to look beyond claiming the implementation of a process on a computer for each claim element, and ultimately the claim as a whole, and should determine whether each claim is patent eligible based on: 1) whether the claim as a whole can be performed by a human, 2) whether at least one claim element goes further than just using the computing device for its known purpose (e.g., storing, calculating, displaying) and 3) whether the claim as a whole is directed to a particular series of steps that cover a particular result.

Processes That Can Be Accomplished in Someone's Head

Claims that are directed to processes that can be accomplished by someone carrying out the steps in his/her head or with a pen and paper are more likely to be patent ineligible under ' 101, such as a claim that is directed to a computer process used to accelerate an otherwise known mental process. Bancorp Servs., L.L.C. v. Sun Life Assur. Co. of Canada, 687 F.3d 1266, 1279 (Fed. Cir. 2012). The computer process of Bancorp involved a policy generator for generating a life insurance policy including a stable value protected investment with an initial value based on a value of underlying securities of the stable value protected investment and a number of calculators. Upon review of the claims and specification, the Federal Circuit held that Bancorp's claims attempted to “patent the use of the abstract idea of [managing a stable value protected life insurance policy] and then instruct[ed] the use of well-known [calculations] to help establish some of the inputs into the equation.” Id. As in Bilski, the claims in Bancorp did not effect a transformation, and the fact that the required calculations could be performed more efficiently via a computer did not materially alter the patent eligibility of the claimed subject matter. Id. at 1278.

Simply reciting the use of a computer to execute an algorithm that can be performed entirely in the “human mind” is not sufficient to render a claim patent eligible. See CyberSource, 654 F.3d at 1375. For example, and referring to a claim at issue in CyberSource, the court determined that each element in the claim could be performed by a human. For example “obtaining information about other transactions that have utilized an Internet address that is identified with the [ ] credit card transaction” ' can be performed by a human who simply reads records of Internet credit card transactions from a pre-existing database; a person may “construct [ ] a map of credit card numbers” as required by the claims by writing down a list of credit card transactions made from a particular IP address; and “utilizing the map of credit card numbers to determine if the credit card transaction is valid” ' is so broadly worded that it encompasses literally any method for detecting fraud based on the gathered transaction and Internet address data. Id. at 1372-1373. Patent applicants should conduct a claim element by claim element analysis to determine whether any claim element and, ultimately the claim as a whole, can be performed in someone's head or with a pen and paper, or alternatively, whether the claim can ever be infringed by someone carrying out the claimed process in his/her head or with a pen and paper.

Use of a Computer for More Than Its Basic Function

Patent applicants should also determine whether a claim, when read as a whole, uses a computer for more than its most basic function, such as making calculations or computations. Bancorp, 687 F.3d at 1278; See also SiRF Tech., Inc. v. Int'l Trade Comm'n, 601 F.3d 1319, 1333 (Fed. Cir. 2010) (“In order for the addition of a machine to impose a meaningful limit on the scope of a claim, it must play a significant part in permitting the claimed method to be performed, rather than function solely as an obvious mechanism for permitting a solution to be achieved more quickly, i.e., through the utilization of a computer for performing calculations.”). For example, in Bancorp, the computer required by Bancorp's claims is employed only for its most basic function, the performance of repetitive calculations, and does not impose meaningful limits on the scope of those claims. Bancorp, 687 F.3d at 1278.

Further patent applicants should draft claims that specifically state how a computer aids the method, the extent to which a computer aids the method and/or the significance of the computer to the performance of the method. See Dealertrack Inc. v. Huber, 674 F.3d 1315, 1333 (Fed. Cir. 2012). For example, in Research Corp., claims directed to the process of halftoning in computer applications were deemed patent eligible because the claims were dependent upon computer components required to perform the claimed manipulation of computer data structures. Research Corp. Techs. v. Microsoft Corp., 627 F.3d 859, 868 (Fed. Cir. 2010). Thus, claims, when read as whole, that recite more than the use of a computer for its ordinary functions, such as storing data, performing calculations or the like are more likely to be patent eligible. See e.g., SiRF Tech., 601 F.3d at 1332 (noting that “the methods at issue could not be performed without the use of a GPS receiver; indeed without a GPS receiver it would be impossible to generate pseudoranges or to determine the position of the GPS receiver whose position is the precise goal of the claims.”); Ultramercial, LLC v. Hulu, LLC, 657 F.3d 1323, 1328 (Fed. Cir. 2011) vacated by WildTangent, Inc. v. Ultramercial, LLC, 132 S. Ct. 2431 (2012) (noting that “the mere idea that advertising can be used as a form of currency is abstract, just as the vague, unapplied concept of hedging proved patent-ineligible in Bilski, however a practical application of this idea requires intricate and complex computer programming, as well as, specific application to the Internet and a cyber-market environment.”).

Applicants should additionally include at least one claim set that is sufficiently directed to a particularized solution and avoids claiming the process at such a high level of generality that the claimed process would have to be employed by any person who wished to apply the abstract idea. See Mayo, 132 S. Ct. at 1297-98. That is not to say that applicants should not draft separate claims that cover each of the various invented particular solutions or that they should not include a broad claim set, but rather that applicants should draft at least one claim or claim set directed to a particularized solution taking the aforementioned rules under advisement. For example, if the software innovation is broadly directed to a computerized trading platform for exchanging obligations in which a third party is used to eliminate settlement risk, a particular solution, such as a solution that includes “shadow” records may leave broad room for other methods of using intermediaries to help consummate exchanges, whether with the aid of a computer or otherwise and, thus, would not appear to pre-empt much in the way of innovation. CLS Bank, 685 F.3d at 1355-1356. A patent application that contains a narrow claim directed to each particular method of solving a problem has a higher likelihood of patent eligibility when compared with a broad claim that generally states a series of inputs and a resultant output or otherwise generally forecloses all other solutions.

Conclusion

While an en banc rehearing in CLS Bank was held on Feb. 8, 2013, it is unlikely that software patent eligibility will be finally determined in the near future. In the meantime, and as discussed herein, patent applicants can analyze each claim to determine: 1) whether the claim as a whole can be performed by a human, 2) whether at least one claim element goes further than just using the computing device for its known purpose (e.g., storing, calculating, displaying) and 3) whether the claim as a whole is directed to a particular series of steps that cover a particular result. By optimizing pending claims using this strategy, patent applicants may pre-emptively and effectively draft and claim their software innovations.

Christopher TL Douglas is a senior associate in Alston & Bird LLP's intellectual property practice. His practice focuses on counseling and securing foreign and domestic patent rights for his clients.

A fierce debate rages about whether software is patent eligible, and if so, in what form. Software companies line up on both sides of the battlefield, some arguing that all software patents stifle innovation while others argue for limited patent eligibility of software patents so long as the patent claims recite software that causes hardware to accomplish a particular narrowly defined function. Still others believe that the emphasis on 35 U.S.C. ' 101 is misplaced and, thus, would prefer to leave questions of patent eligibility for software to ” 102, 103 and 112. As the pressure mounts and public concern rises, we await further clarification, by Supreme Court or congressional action, as to whether software is patent eligible. In the meantime, patent applicants should hedge against any potential outcome by drafting applications having claim sets that attempt to comply with future adoptable patent eligibility tests.

Multiple Tests As 'Clues' for Patent Eligibility

Courts have attempted to generate a bright-line test that precisely defines the patent eligibility of software patents. Such bright-line tests have proven difficult to implement and have not, in the long run, been sustained. Due to the broad range of software that has been patented and will be patented, courts will likely be unable to settle on just one test and therefore will be forced to use multiple tests as “clues” for patent eligibility. For example, the machine-or-transformation test will still be used as an indication of whether a patent claim is so abstract that it is patent ineligible. See Bilski v. Kappos , 130 S. Ct. 3218, 3227 (2010). Consequently, each software patent will likely need to be evaluated on a case-by-case basis with a specific inquiry as to what the claims recite as a whole. See Diamond v. Diehr , 450 U.S. 175 (1981). Patent applicants should consider strategically claiming their software innovations with an eye toward several post-Bilski decisions, including those that are pending further judicial review, that inform applicants about the clues courts may use when determining whether a claim is patent eligible.

Applicants should continue to claim processes that are implemented by a computer or that recite a particular method step that utilizes a processor to accomplish a specific task. While the inclusion of specific implementation of a process on a computer may result in a determination of patent eligibility by the U.S. Patent and Trademark Office (“USPTO”), the inclusion of a computer or other structure by itself does not appear to tip the scales in favor of patent eligibility in the courts. See Interim Guidance for Determining Subject Matter Eligibility for Process Claims in View of Bilski v. Kappos , 75 Fed. Reg. 43922 (July 27, 2010). Instead, this perceived difference in treatment in software claims between the USPTO and the courts could be a trap for the unwary. CLS Bank Int'l v. Alice Corp. Pty. , 685 F.3d 1341, 1359 (Fed. Cir. 2012) vacated by CLS Bank Intern v. Alice Corp. Pty. Ltd. , 484 Fed. Appx. 559, 2012 U.S. App. LEXIS 20906 (Fed. Cir. 2012); see also Mayo Collaborative Servs. v. Prometheus Labs., Inc. , 132 S. Ct. 1289, 1300 (U.S. 2012); CyberSource Corp. v. Retail Decisions, Inc. , 654 F.3d 1366, 1374 (Fed. Cir. 2011) (“Regardless of what statutory category ('process, machine, manufacture, or composition of matter,' 35 U.S.C. ' 101) a claim's language is crafted to literally invoke, we look to the underlying invention for patent-eligibility purposes.”).

Patent applicants would be wise to look beyond claiming the implementation of a process on a computer for each claim element, and ultimately the claim as a whole, and should determine whether each claim is patent eligible based on: 1) whether the claim as a whole can be performed by a human, 2) whether at least one claim element goes further than just using the computing device for its known purpose (e.g., storing, calculating, displaying) and 3) whether the claim as a whole is directed to a particular series of steps that cover a particular result.

Processes That Can Be Accomplished in Someone's Head

Claims that are directed to processes that can be accomplished by someone carrying out the steps in his/her head or with a pen and paper are more likely to be patent ineligible under ' 101, such as a claim that is directed to a computer process used to accelerate an otherwise known mental process. Bancorp Servs., L.L.C. v. Sun Life Assur. Co. of Canada , 687 F.3d 1266, 1279 (Fed. Cir. 2012). The computer process of Bancorp involved a policy generator for generating a life insurance policy including a stable value protected investment with an initial value based on a value of underlying securities of the stable value protected investment and a number of calculators. Upon review of the claims and specification, the Federal Circuit held that Bancorp's claims attempted to “patent the use of the abstract idea of [managing a stable value protected life insurance policy] and then instruct[ed] the use of well-known [calculations] to help establish some of the inputs into the equation.” Id. As in Bilski, the claims in Bancorp did not effect a transformation, and the fact that the required calculations could be performed more efficiently via a computer did not materially alter the patent eligibility of the claimed subject matter. Id. at 1278.

Simply reciting the use of a computer to execute an algorithm that can be performed entirely in the “human mind” is not sufficient to render a claim patent eligible. See CyberSource, 654 F.3d at 1375. For example, and referring to a claim at issue in CyberSource, the court determined that each element in the claim could be performed by a human. For example “obtaining information about other transactions that have utilized an Internet address that is identified with the [ ] credit card transaction” ' can be performed by a human who simply reads records of Internet credit card transactions from a pre-existing database; a person may “construct [ ] a map of credit card numbers” as required by the claims by writing down a list of credit card transactions made from a particular IP address; and “utilizing the map of credit card numbers to determine if the credit card transaction is valid” ' is so broadly worded that it encompasses literally any method for detecting fraud based on the gathered transaction and Internet address data. Id. at 1372-1373. Patent applicants should conduct a claim element by claim element analysis to determine whether any claim element and, ultimately the claim as a whole, can be performed in someone's head or with a pen and paper, or alternatively, whether the claim can ever be infringed by someone carrying out the claimed process in his/her head or with a pen and paper.

Use of a Computer for More Than Its Basic Function

Patent applicants should also determine whether a claim, when read as a whole, uses a computer for more than its most basic function, such as making calculations or computations. Bancorp, 687 F.3d at 1278; See also SiRF Tech., Inc. v. Int'l Trade Comm'n , 601 F.3d 1319, 1333 (Fed. Cir. 2010) (“In order for the addition of a machine to impose a meaningful limit on the scope of a claim, it must play a significant part in permitting the claimed method to be performed, rather than function solely as an obvious mechanism for permitting a solution to be achieved more quickly, i.e., through the utilization of a computer for performing calculations.”). For example, in Bancorp, the computer required by Bancorp's claims is employed only for its most basic function, the performance of repetitive calculations, and does not impose meaningful limits on the scope of those claims. Bancorp, 687 F.3d at 1278.

Further patent applicants should draft claims that specifically state how a computer aids the method, the extent to which a computer aids the method and/or the significance of the computer to the performance of the method. See Dealertrack Inc. v. Huber , 674 F.3d 1315, 1333 (Fed. Cir. 2012). For example, in Research Corp., claims directed to the process of halftoning in computer applications were deemed patent eligible because the claims were dependent upon computer components required to perform the claimed manipulation of computer data structures. Research Corp. Techs. v. Microsoft Corp. , 627 F.3d 859, 868 (Fed. Cir. 2010). Thus, claims, when read as whole, that recite more than the use of a computer for its ordinary functions, such as storing data, performing calculations or the like are more likely to be patent eligible. See e.g., SiRF Tech., 601 F.3d at 1332 (noting that “the methods at issue could not be performed without the use of a GPS receiver; indeed without a GPS receiver it would be impossible to generate pseudoranges or to determine the position of the GPS receiver whose position is the precise goal of the claims.”); Ultramercial, LLC v. Hulu, LLC , 657 F.3d 1323, 1328 (Fed. Cir. 2011) vacated by WildTangent, Inc. v. Ultramercial, LLC , 132 S. Ct. 2431 (2012) (noting that “the mere idea that advertising can be used as a form of currency is abstract, just as the vague, unapplied concept of hedging proved patent-ineligible in Bilski , however a practical application of this idea requires intricate and complex computer programming, as well as, specific application to the Internet and a cyber-market environment.”).

Applicants should additionally include at least one claim set that is sufficiently directed to a particularized solution and avoids claiming the process at such a high level of generality that the claimed process would have to be employed by any person who wished to apply the abstract idea. See Mayo, 132 S. Ct. at 1297-98. That is not to say that applicants should not draft separate claims that cover each of the various invented particular solutions or that they should not include a broad claim set, but rather that applicants should draft at least one claim or claim set directed to a particularized solution taking the aforementioned rules under advisement. For example, if the software innovation is broadly directed to a computerized trading platform for exchanging obligations in which a third party is used to eliminate settlement risk, a particular solution, such as a solution that includes “shadow” records may leave broad room for other methods of using intermediaries to help consummate exchanges, whether with the aid of a computer or otherwise and, thus, would not appear to pre-empt much in the way of innovation. CLS Bank, 685 F.3d at 1355-1356. A patent application that contains a narrow claim directed to each particular method of solving a problem has a higher likelihood of patent eligibility when compared with a broad claim that generally states a series of inputs and a resultant output or otherwise generally forecloses all other solutions.

Conclusion

While an en banc rehearing in CLS Bank was held on Feb. 8, 2013, it is unlikely that software patent eligibility will be finally determined in the near future. In the meantime, and as discussed herein, patent applicants can analyze each claim to determine: 1) whether the claim as a whole can be performed by a human, 2) whether at least one claim element goes further than just using the computing device for its known purpose (e.g., storing, calculating, displaying) and 3) whether the claim as a whole is directed to a particular series of steps that cover a particular result. By optimizing pending claims using this strategy, patent applicants may pre-emptively and effectively draft and claim their software innovations.

Christopher TL Douglas is a senior associate in Alston & Bird LLP's intellectual property practice. His practice focuses on counseling and securing foreign and domestic patent rights for his clients.