The U.S. Supreme Court heard oral arguments this week on a case that could significantly impact the patent eligibility of software.

The closely watched appeal – Alice Corporation v. CLS Bank International – deals with ideas that are so “abstract” maybe they should not be patented – and was appealed from the Court of Appeals for the Federal Circuit.

On a more practical level, the Alice case focuses on whether and by how much software patents are excluded from patentability, according to lawyers.

In reviewing the questions raised in Monday’s oral arguments, Robert Unikel, a veteran intellectual property attorney with Kaye Scholer, noted in an interview how Justice Elena Kagan asked the lawyer representing Alice on Monday whether an invention could be separated into a computer portion and a method portion. That led to the issue if there is “something new or unique about either portion once separated,” Unikel said.

He noted too how some of the Justices’ questions related to the issue of being able to take an old basic method, and because a computer is used, does that make it eligible for patenting.

At one point in oral arguments, Justice Anthony Kennedy stated, “So the fact that the computer is involved, it ­­ it seems to me, is necessary to make it work.”

In his questions, Justice Antonin Scalia suggested using a computer alone would not make something patentable.

“If you just say use a computer, you haven’t invented anything. But if you come up with a serious program that ­­ that does it, then, you know, that may be novel,” Scalia said.

In other words, a substantial program could “alleviate his concern,” Unikel said.

In addition, four or more justices may favor eliminating business method patents based on comments made during oral arguments. “There is a limit on what business methods can be patentable,” Unikel later explained. In the related Kappos v. Bilski decision, the Supreme Court rejected the argument that any patent in business methods should automatically be excluded from patentability, he added.

Also, generally, Unikel said, the Supreme Court is unlikely to categorically exclude software patents from patent eligibility.

But another issue in the Alice case could pose a challenge: actually formulating a workable test about abstract ideas. Unikel says the Supreme Court may leave that up to lower courts, even though the Supreme Court took the appeal in Alice to give lower courts some guidance and clarity where there was chaos.

Unikel says that this area of patent law reminds him what the high court said about pornography many years ago. “You know it when you see it.”

He confirms it can be difficult to come up with a test on which abstract ideas cannot be patented. “You are often left with, ‘You know it when you see it,’” Unikel said.

At one point, Justice Ruth Bader Ginsberg admitted in oral arguments, “there has been some confusion on what qualifies as an abstract concept.”

To which Solicitor General Donald Verrilli Jr. responded, “We would define abstract ­­ an abstract concept as a claim that is not directed to a concrete innovation in technology, science, or the industrial arts.  So it’s the ­­ it’s abstract in the sense that it is not a concrete innovation in the traditional realm of patent law.” 

“An abstract idea does not become patent­eligible merely by tacking on an instruction to use a computer to carry it out,” Verrilli also told the justices. “It’s just not correct to say that our approach would make software patenting ineligible. Any software patent that improves the functioning of the computer technology is eligible. Any software patent that improves ­­ that is used to improve another technology is eligible.”

That definition may help some. But one source of confusion revolves around the application of the “101 filter,” according to Inside Counsel. That relates to Section 101 of the Patent Act of 1952, which is viewed as the first threshold on whether an invention can be patented.

But confusion still may continue. Unikel predicts, “If the responsibility is left to the Federal Circuit, it could mean that the software industry will remain in a continued state of uncertainty regarding what, if any, types of software inventions are patentable as, right now, the judges on the Federal Circuit have advanced very different views on how the abstract ideas exception applies to software inventions.”

“In application, that has meant that whether or not a specific software patent is valid and not an unpatentable abstract idea has become largely a matter of what panel (group of judges) the parties are assigned at the Federal Circuit,” he added.

Among those companies which have submitted briefs in the Alice case are: Adobe Systems, Hewlett-Packard, Google, and Microsoft, as well as Amazon, Dell, Facebook, Intuit, LinkedIn and Netflix. In total, there were 42 briefs submitted in the case.

The American Intellectual Property Law Association (AIPLA) was among those to file an amicus brief in the case, which asked the high court for clarity on Kappos v. Bilski, and reminded the justices about the economic implications of any decision.

In a statement released on Monday, AIPLA Executive Director Q. Todd Dickinson said, “it was clear that the Justices recognized the seriousness about the need to bring clarity to these issues without disrupting an extraordinarily important area of the US economy. We are hopeful that the Court will provide a framework that allows for continued innovation in this rapidly evolving industry.” 


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