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#AliceStorm:
How Alice Has Crippled The Patent Law
Robert Sachs
Fenwick & West LLP

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At the same time, we tread carefully in
construing this exclusionary principle lest
it swallow all of patent law. At some level,
"all inventions . . . embody, use, reflect,
rest upon, or apply laws of nature, natural
phenomena, or abstract ideas.“
Alice Corp. v. CLS Bank
Words of Caution…

Don’t Worry, Software is Not Impacted…
 “This is not the death of software patents. . . . This will not
affect software patents.”
•Counsel for CLS Bank at Alice Oral Argument
 Sotamayor: “Do you think we have to reach the patentability
of software to answer this case?”
 Solicitor General: “Well, I think you can – I think the answer to
that question is no, not necessarily.”
•Exchange during Alice Oral Argument

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Unintended Consequences
JANUARY 2015PATENT LAW YEAR IN REVIEW

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#AliceStorm @Federal Courts
5
 October 15, 2015

Fenwick & West LLP JANUARY 2015

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8

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9

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10
District Courts with >= 2 §101
decisions
= 90% of all invalidity decisions

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11
 = 2 Decisions >= 3 Decisions

Fenwick & West LLP JANUARY 2015
State Street
Bank (1998)

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#AliceStorm @PTAB/CBM
15
 §101 fair game for CBM (but not IPR)
 PTAB has broad view of what qualifies as “financial
product or service”
•“The Specification discloses that protection attributes are used to protect against
unauthorized access of a data portion in a database and that banking is a field where
protection against unauthorized access to databases that are used for administering and
storing sensitive information is desired” CBM2015-00021
 CBM decisions since Alice addressing §101
•97/114 institution decision on §101 grounds
•61 final written decisions –61 find patents invalid
Abandon all hope, ye who enter here

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Rejections and Allowance Before and After Alice

Section 101 Rejection Rates
in Biotech, Ecommerce
& Other Work Groups
Biotech= Art Units 1630, 1630, 1640,
1650, 1670
Ecommerce = Art Units 3620, 3680, 3690

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Section 101 Rejection Rates Q1/2014 to Q1/2016.

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Final §101 Rejection Rates

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Status Analysis

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Status Analysis by E-Commerce Technology

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Ecommerce Abandonments, Mar. – Oct. 2015

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Examiner % 101 Rejections in Ecommerce Art Units

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E-Commerce Examiners’ Behave Differently

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The Effect of #AliceStorm on USPTO Filings

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Those who cannot remember the
past are condemned to repeat it.
George Santayana

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“Inventiveness” Pre-1952 Act
 “Results of inventive effort”
•Smith v. Goodyear Dental Vulcanite Co., 93 U.S. 486, 497 (1876)
 “A substantial invention or discovery.”
•Atlantic Works v. Brady, 107 U.S. 192, 200 (1882)
 “Exercise of inventive skill”
•Ansonia Brass & Copper Co. v. Elec. Supply Co., 144 U.S. 11, 18
(1892)
 “The creative work in the inventive faculty.”
•Hollister v. Benedict & Burnham Mfg. Co., 113 U.S. 59, 73 (1885)
 “Exercise of the inventive faculty,”
•Potts v. Craeger, 155 U.S. 597, 608 (1895)

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 “the exercise of the creative faculty amounting to a
meritorious invention”
•Expanded Metal Co. v. Bradford, 214 U.S. 366 (1909)
 “An invention is the result of an inventive act.”
•Walker on Patents, First Deller Ed., Vol. 1, p. 110
(1937)
 “Something new, unexpected, and exciting.”
•Thurber Corp. v. Fairchild Motor Corp., 269 F.2d 841, 849 (5th Cir.
1959)
 “The flash of creative genius.”
•Cuno Eng’g Corp. v. Automatic Devices Corp., 314 U.S. 84, 91 32
“Inventiveness” Pre-1952 Act

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McClain v. Ortmayer, 141 U.S. 419, 427 (1891)
“The truth is the word cannot be defined in such manner as to
afford any substantial aid in determining whether a particular
device involves an exercise of the inventive faculty or not. In a
given case we may be able to say that there is present invention
of a very high order. In another we can see that there is lacking
that impalpable something which distinguishes invention from
simple mechanical skill.”

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Sound and Fury Signifying Nothing
 “It has been stated to be the law that, in addition to being new
and useful, and invention, to be patentable, must involve
‘invention.’ Merely to state that proposition, in the absence of
an initiation into the mysteries, sounds ridiculous.”
•Giles S. Rich
 “[T]he so-called ‘standard of invention’…is an ummeasurable
quantity having different meanings for different persons.”
•P.J. Federico

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Rich, The Vague Concept of “Invention” as Replaced
by Section 103 of the 1952 Patent Act
46 J. Pat. Off. Soc’y 855, 866 (1964)

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Rich: 1952 Act did three things:
36
Giles S. Rich, The Principles of Patentability, The George Washington
University Law Review, January 1960, pp. 393-407.

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History Repeats Itself: Eligibility as Inventiveness
 “The use of generic hardware and software running an intrusion detection
application is not viewed as new and inventive” Intellectual Ventures I LLC
v. Capital One Fin. Corp
 “because Plaintiff’s insight…is not a sufficiently inventive concept, the
Court concludes that the patents are drawn to an ineligible subject matter”
HealthTrio, LLC v. Aetna, Inc.
 “Here, the Court finds that the patent claims merely automate the
practice of booking and tracking shipping containers; this automation is
insufficient to transform the nature of the patents.” GT Nexus, Inc. v. Inttra,
Inc.

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Confusing Eligibility with Novelty
 “The concept of a database is not novel or unique.
Information exchanged between a database (as part of or
remote from a computer) and the computer is not novel and
adds nothing to the 101 analysis.”.OpenTV, Inc. v. Apple, Inc.

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Confusing Eligibility with Definiteness and
Enablement
 “in the absence of any details about how the “expert system” works, the claims at
issue are drawn to a patent ineligible abstract idea, satisfying Mayo/Alice step
one.” Vehicle Intelligence v. Mercedes-Benz USA
 The additional recitation of specific computer components such as a “database,”
“memory,” “transceiver” and “wire-based network,” and computer functions such
as “storing,” “transmitting” and “receiving,” are incapable of conferring the
requisite specificity.” Clear With Computers LLC v. Altec Indus., Inc.
 Claim “does not purport to limit itself to a specific way of converting a message
from one layout to another-it simply covers the act of 'converting' messages”,
TriPlay, Inc. v. WhatsApp Inc.

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The USPTO is Waging War on §100(b)
100(b)The term “process” means process, art
or method, and includes a new use of a
known process, machine, manufacture,
composition of matter, or material.

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In re Smith (CAFC)
 “At oral argument, the court asked, “[i]t has been my impression that the
PTO has sort of adopted the position that games are in general not going
to be patent eligible post Bilski, is that a correct position? Games as a
whole, any kind of card games … none of those would be allowed now?”
PTO counsel answered, “[t]hat’s correct your honor. In fact, the
Government argued in Bilski that things like card games should not be
eligible.” Oral Argument at 13:33 In Re Smith, No. 2015-1664 (Dec. 10,
2015), “
 “That is not to say that all inventions in the gaming arts would be
foreclosed from patent protection under§ 101. We could envisage, for
example, claims directed to conducting a game using a new or original
deck of cards potentially surviving step two of Alice. The GovernmentJANUARY 2015PATENT LAW YEAR IN REVIEW

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 A method for alleviating congestion in a
communication network, the
communication network enabling the flow
of data to and from a plurality of end user
devices that are connected to the
network through a plurality of
communication devices, the method
comprising the steps of:
 monitoring data flows to and from the
plurality of end user devices for
indications of congestion; and
 controlling the data rate of at least one
end user device in response to the
congestion indications.
 A method for reducing startup latency
associated with a data transmission system
having a first device configured to
communicate with a second device over a
communication channel, the method
comprising the steps of:
 establishing a call between the first device and
the second device;
 determining whether a characteristic of the
communication channel is similar to a
corresponding characteristic associated with a
previously established communication channel;
and
 if the characteristic is similar to the
corresponding characteristic, initializing at least
one of the first and second devices using a
number of stored parameters associated with
the previously established communication
Quiz: Which is Eligible?

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