Mark Lemley, Stanford Law School professor
Mark Lemley, Stanford Law School professor (Jason Doiy / The Recorder)

SAN FRANCISCO — A U.S. Supreme Court opinion that never mentioned the word “software” is expected to have a big impact on the software industry. Silicon Valley lawyers and academics were debating just how big on Thursday after the high court ruled in Alice v. CLS Bank International that an abstract idea does not become patent eligible merely by implementing it through a generic computer.

“I expect that holding to invalidate the majority of all software patents in force today,” predicted Stanford law professor Mark Lemley, who is also a partner at Durie Tangri.

“It’s an extraordinarily important intellectual property decision,” said UC-Hastings College of the Law professor Robin Feldman, who filed an amicus brief in the case. “Broad patents like these have been the weapon of choice for patent trolls and for the smartphone wars.”

But Fenwick & West partner Robert Sachs, who filed an amicus brief on behalf of patent holder Alice Corp., and Haynes and Boone partner Kenneth Parker, who represents both patent holders and accused infringers, said the reach of the opinion is less clear-cut.

The court clearly did not rule all software patents ineligible, Sachs said, and it again “punted on defining an abstract idea,” other than clarifying that it includes “old” or “fundamental” practices. Software patents in long-established industries such as banking or commerce might be at some risk, Sachs said, but it’s not clear how CLS Bank will apply, for example, to a social networking interface. The patent holder might argue that social networking is new technology, while an infringer might claim that “all you’re doing is transferring messages back and forth between people,” he said.

Parker cited software encryption as another example. Defined down to the basics, encryption is creating a code and a key that unlocks it. Implementing the idea through a generic computer arguably may not satisfy the CLS Bank test, he said, though perhaps using a random number generator or an atomic clock to create the code would pass muster.

“There’s a Potter Stewart-esque element to this,” he said. “It’s a net win for defendants, and particularly businesses that are being sued by nonpracticing entities. The question is how big a win is it.”

One clear positive is that patent applicants will have to get more specific about what makes their claims innovative, Parker said. Other businesses “can look at specific computer designs and design around it,” he said. “So it’s going to move the ball.”

Hastings’ Feldman said she believes the court’s unanimous opinion sends a message to lower courts, particularly the U.S. Court of Appeals for the Federal Circuit, which had split 5-5 on whether Alice Corp.’s system claims were patent eligible.

“This is the latest in what is essentially a conversation between the Supreme Court and the Federal Circuit,” Feldman said.

Justice Clarence Thomas’ opinion repeatedly warned against patent holders using “drafting effort” or “draftsman’s art” to monopolize abstract ideas. Feldman interpreted that as signaling the court is “fed up” with the Federal Circuit condoning the practice. “The message could not have been more clear,” she said.

Not all Bay Area IP scholars hailed the decision. UC-Berkeley law professor Peter Menell and Hastings professor Jeffrey Lefstin had filed an amicus brief arguing that the Supreme Court could clear up a lot of confusion by turning away from its vague requirement of an “inventive concept” for patent eligibility, a test most recently enunciated in Mayo Collaborative Services v. Prometheus Laboratories. Instead, the court appeared to go all-in on that approach.

Menell said he didn’t disagree with the decision’s result, though his approach aligns more with the three justices who contributed a brief concurring opinion. “I do believe that the court not only missed an opportunity to correct Mayo,” he said, “but reinforced a flawed interpretation.”

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