Alice, not Wonderland
Samuel F. B. Morse was being a greedy bastard:
Eighth. I do not propose to limit myself to the specific machinery or parts of machinery described in the foregoing specification and claims; the essence of my invention being the use of the motive power of the electric or galvanic current, which I call electro-magnetism, however developed for marking or printing intelligible characters, signs, or letters, at any distances, being a new application of that power of which I claim to be the first inventor or discoverer.
The inventor of the telegraph, Morse made an extremely broad claim in his patent, seeking to protect not only the machinery of the telegraph, but the basic principles by which it operated. The patent was ultimately litigated all the way to the Supreme Court, where Chief Justice Roger B. Taney (he of Dred Scott fame) wrote for the court that “he claims a patent for an effect produced by the use of electro-magnetism distinct, from the process or machinery necessary to produce it. The words of the acts of Congress…show that no patent can lawfully issue upon such a claim,” O’Reilly v. Morse, 56 U.S. (15 How.) 62, 120 (1853).
This was the first concrete statement of the legal principle that one cannot patent an abstract idea or a law of nature. Courts have wrestled with this principle ever since, and as computers have come to the fore in the last 30 years, so has the “abstract idea” exception to patentable subject matter.
In modern law, the Supreme Court has found that the “abstract idea” exception lives on in 35 U.S.C. § 101, which limits patents to “any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof,” thus implicitly excluding abstract ideas and laws of nature. This is the coarsest filter we use to determine whether an inventor should receive a patent — is the inventor trying to claim a law of nature or an abstract idea? Once we’ve decided that an invention is within the bounds of what can be patented, we ask two other important questions, dictated by 35 U.S.C. §§ 102 and 103: (1) is the invention novel? and (2) would the invention have been obvious to someone of ordinary skill in the field? If the invention lacks novelty or would have been obvious, no patent is granted. Novelty and nonobviousness are established by examining what has previously been invented (i.e., the prior art in the field).
Much ink has already been spilled over the Supreme Court’s decision in Alice v. CLS Bank 573 U.S. ___ (2014). In the case, the Court decided that a method for mitigating risk in financial transactions constituted an abstract idea and was thus not patentable. As Justice Thomas explained for the Court, “We hold that the claims at issue are drawn to the abstract idea of intermediated settlement, and that merely requiring generic computer implementation fails to transform that abstract idea into a patent-eligible invention.”
I agree that the claims at issue are not valid, but I disagree with the methodology the Court used to reach that conclusion. My biggest concern is that in several places in the opinion, the Court seems to conflate the requirements of 35 U.S.C. § 101 with the distinct novelty and nonobviousness requirements of §§ 102 and 103. For example, the Court states, “Like the risk hedging in Bilski, the concept of intermediated settlement is a fundamental economic practice long prevalent in our system of commerce,” Alice, slip op. at 9, internal quotations omitted. If that’s the case, why not allow the claim to proceed under §101 and reject the claim for lack of novelty or obviousness under §§ 102 and 103? If the coarsest filter for patentability gets too fine, then nothing at all will get through.
Despite the flaws in the decision, the sky has not fallen. The Court did not take the opportunity to decree that all software patents are invalid (although they appear to be leery about financial transaction patents). Still, it seems to me that applicants seeking patents on computer-implemented method inventions will need to define the steps of the method carefully and claim more than a generic computer.