On June 19th, 2014, the U.S. Supreme Court handed down a decision in Alice Corp. v. CLS Bank International that significantly changed the landscape for what had been, up to that point, a very active area of intellectual property. The court found that the Alice patent-in-suit in that infringement case, which protected a computer-implemented system of exchanging financial obligations using a computer system as a third-party intermediary, was not patent-eligible under Section 101 of U.S. patent code, the broadest possible statute for determining whether or not a technology is patent-eligible.
The major consequence of this decision is that any patent protecting a computer-implemented method, also known as software, has essentially been deemed ineligible for patent protection. Judges working on the case prior to it reaching the Supreme Court noted that a blanket decision of ineligibility for software patents would invalidate hundreds of thousands of patents that had already been issued. Soon after the case was decided, guidance handed out by the U.S. Patent and Trademark Office directed patent examiners to give more scrutiny to patent applications for software and business methods, resulting in fewer such technologies being protected by a patent.
Naturally, any software developer is going to feel a great deal of concern for the fate of his or her intellectual property. This is one reason why Reed Tech is launching a new service designed to help those applying for software patents—PatentAdvisor Customized Reports for Alice.
This service capitalizes on the data analysis tools that are already available through the PatentAdvisor system. The service also leverages the knowledge of subject matter experts who analyze a patent portfolio to find any claims that could be adversely affected by the Supreme Court’s decision in Alice vs. CLS. Patent portfolio owners using this service will also be informed of applicable case law from Patent Trial and Appeal Board (PTAB) cases, which can better prepare patent owners for defending their intellectual property rights in the face of a challenge to a patent’s validity.
Companies prosecuting a large number of patent applications in the hopes of receiving a patent grant do not need to be reminded of the incredible costs required of the process. Large companies, especially those in the financial or software industries, may have thousands of patent applications affected by the court’s decision. Each of those patent applications represents a significant investment, which could reach $15,000 to $20,000 of financial commitment on behalf of the patenting organization. With the Alice vs. CLS decision throwing such a wide swath of the U.S. patent landscape under intense scrutiny, some companies have found large portions of their portfolio stymied. Companies who find their portfolios stumped in this way do not have the resources to address every individual patent application facing a non-final or final rejection because of software’s new patent-ineligibility under Section 101.
Large companies also find themselves unable to adequately respond to the threats that the Alice decision poses to a portfolio because of the use of outside counsel. Large tech developers are often required to retain dozens of outside counsel to handle the prosecution of a large number of patent applications. This means that it is often difficult to pool relevant information from case law, so if one group of lawyers finds a successful strategy for prosecuting patent applications, it is not simple to disseminate that information among all legal teams.
Companies facing final or non-final rejections under Section 101 post-Alice can use the LexisNexis Custom Reports for Alice to find case law that supports claims facing rejection. That information is then presented to customers in a format that identifies the claims impacted by an examiner’s rejection under Section 101. The report also identifies how those affected claims can be supported by prior case law. Even with the new guidelines on software inventions, patent examiners will likely be swayed by instances of prior case law that support the claims they had previously rejected.
The repercussions of the Supreme Court’s decision on Alice have cast a great deal of doubt over an entire sector of patents, which protects billions of dollars of consumer services. These Custom Reports for Alice provide a valuable service in synthesizing all of the relevant Section 101 rejection information, enabling patent prosecution teams to confidently chart a course forward.