According to Title 35, Section 101 of the United States Code, “whoever invents … any new and useful process, machine, manufacture, or composition of matter … may obtain a patent therefor.”[1] This language became federal law in 1952, when less than a handful of UNIVACs were in operation and the term “software” may not have even existed. So where in that sentence does software, as we know it today, fit? Apart from the question of whether a given program or application is patentable (in the sense of being novel and non-obvious) is software even patent-eligible subject matter, or should it be dismissed entirely from consideration?
The answer: it’s complicated. While the USPTO has granted patents on software over the past few decades, neither Congress nor the Supreme Court has clearly stated whether or not software—all of it, some of it, none of it—constitutes patent-eligible subject matter. However, Supreme Court precedent[2] has established a few specific exceptions to the patent-eligible categories listed above: laws of nature, natural phenomena, and abstract ideas are patent-ineligible subject matter. In Alice Corp. v. CLS Bank[3], the Court applied a test borrowed from its earlier ruling in Mayo v. Prometheus[4] to distinguish patents claiming these exceptions from “patent-eligible applications of those concepts”. The first step was to determine whether the patent at issue was directed to “one of those patent-ineligible concepts”. (Was this an attempt to patent an abstract idea?) If so, the second step was to consider whether additional elements—an “inventive concept”—“transformed the nature of the claim” from a patent upon the ineligible concept into a patent-eligible application.”
Note the emphasis above on application. For example, clearly you couldn’t patent π; to do so, in the Court’s eyes, would “impede innovation more than … promote it” by “tying up the future use” of π, even for a limited time.[5] However, if you were able to apply π in some transformative way (via a device that, say, asks you for a whole number x and then applies π to slice a round pizza into x equivalent slices[6]) you’d have patent-eligible subject matter.
The Court determined that the claims in Alice were “drawn to the abstract idea of intermediated settlement”, which was “a fundamental economic practice long prevalent in our system of commerce”[7]. With respect to the second step, the implementation of “the abstract idea of intermediated settlement” on a generic computer was not enough of an “inventive concept” to “transform a patent-ineligible abstract idea into a patent-eligible invention.” In other words, there’s nothing novel about escrow or mitigating risk, so applying the concepts on a generic computer doesn’t make for a patentable invention.[8]
Since the Alice decision, the Court of Appeals for the Federal Circuit (which has exclusive jurisdiction over appeals of patent cases from the district courts) has found computer-implemented inventions to be patent-eligible only twice—the second time[9] just last week[10], in Enfish, LLC v. Microsoft Corp., Appeal No. 2015-1244 (Fed. Cir. 2016)[11].
Enfish sued Microsoft in 2012 for infringement of its patents[12] relating to a “self-referential database”; Microsoft argued that Enfish’s patents were invalid as directed to ineligible subject matter. Enfish’s patents taught various advantages of the “self-referential” type of database structure over relational database models (think Microsoft Access). The U.S. District Court for the Central District of California entered summary judgment that Enfish’s patents were invalid under Section 101 as directed to an abstract idea: in particular, “the abstract idea of ‘storing, organizing, and retrieving memory in a logical table’ or, more simply, ‘the concept of organizing information using tabular formats.’” The Federal Circuit disagreed: “[D]escribing the claims at such a high level of abstraction and untethered from the language of the claims all but ensures that the exceptions to § 101 swallow the rule.”[13]
In other words, Enfish didn’t patent the idea of a database, but a very particular type of database structure that improved upon other database structures. Furthermore, Enfish explained in its specification why their self-referential database improved upon existing object-oriented or relational databases in specific ways. Accordingly, Enfish’s claims were directed to “a specific improvement to the way computers operate” rather than to an abstract idea, and the Mayo/Alice analysis ended at step one.
While the Federal Circuit did not proceed to the second step, the court did observe that because Enfish’s claims were directed to “a specific improvement to computer functionality”, the fact that Enfish’s invention could “run on a general-purpose computer” did not render the claims ineligible. Nor were the claims rendered ineligible because Enfish’s improvements were “not defined by reference to physical components”:
Much of the advancement made in computer technology consists of improvements to software that, by their very nature, may not be defined by particular physical features but rather by logical structures and processes. We do not see in Bilski or Alice, or our cases, an exclusion to patenting this large field of technological progress . . . . [W]e are not faced with a situation where general-purpose computer components are added post-hoc to a fundamental economic practice or mathematical equation. Rather, the claims are directed to a specific implementation of a solution to a problem in the software arts.
(Enfish, Appeal No. 2015-1244, p. 18)
The above language suggests that, in at least some cases, software may definitively constitute patent-eligible subject matter—provided that said software is more than just an attempt to apply a familiar concept via a generic computer.[14]
[1] 35 U.S.C. § 101 (1952).
[2] See, e.g., Gottschalk v. Benson, 409 U.S. 63 (1972); Parker v. Flook, 437 U.S. 584 (1978), and Diamond v. Diehr, 450 U.S. 175 (1981).
[3] Alice Corp. Pty. Ltd. v. CLS Bank Int’l., 134 S. Ct. 2347 (2014). Not really a software case in that while the subject matter at issue was a computer-implemented business method, the ruling does not address the patentability (or patent-eligibility) of software per se.
[4] Mayo Collaborative v. Prometheus Labs, 132 S. Ct. 1289 (2012). Not a software case at all; Mayo concerned the patentability of a method for treating autoimmune disorders (think Crohn’s disease) by monitoring medication levels.
[5] “To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries”, U.S. Const., art. I, §8, cl. 8.
[6] (whereby, for any d-inch pizza, each slice would have a radius d/2 and describe an arc length of πd/x)
[7] The Court declined to explain precisely what was or was not an “abstract idea”; it was enough that the claims in Alice resembled the “concept of risk hedging” previously at issue in Bilski v. Kappos, 561 U.S. 593 (2010) (or other general examples identified by the USPTO, such as “certain methods of organizing human activities”).
[8] For a detailed exploration of the consequences of Alice on both patent practice and the invalidation of existing patents, see Bilskiblog.
[9] The first being DDR Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245 (Fed. Cir. 2014), which deals generally with a system for webpage display and which the court in Enfish did not mention.
[10] (May 12, 2016)
[11] Read the full decision here.
[12] U.S. Patents 6,151,604 (specifically claims 17, 31, 32) and 6,163,775 (claims 31, 32).
[13] The case has been made, at Bilskiblog and elsewhere, that “the exception swallow[ing] the rule” is exactly what has happened as a result of Alice.
[14] Or, it would appear, via a generic cell phone; five days after Enfish, the Federal Circuit invalidated a patent for “recording of a digital image, communicating the digital image from the recording device to a storage device, and … administering the digital image in the storage device” as “directed to the abstract idea of classifying and storing digital images in an organized manner . . . the use of conventional or generic technology [here, “a telephone unit” and “a server”] in a nascent but well-known environment, without any claim that the invention reflects an inventive solution to any problem presented by combining the two.”