DRAFT OCTOBER 22, 2014
AIPLA Electronic and Computer Law Committee Software White Paper
- The Case for Software Patent Protection in US
SUMMARY
The American Intellectual Property Law Association (AIPLA) is a leading national bar
association including diverse members directly or indirectly involved in the practice of
intellectual property law. The membership of the AIPLA is concerned with the interests of both
owners and users of intellectual property. On behalf of its membership, the AIPLA files amicus
briefs in important cases relevant to its members, lobbies Congress for changes to the intellectual
property laws, and interacts with the U.S. Patent and Trademark Office (USPTO) to further the
interests of its members. In important matters of intellectual property law, the AIPLA is a
leading voice for its membership.
The Electronic and Computer Law Committee (ECLC) of the AIPLA has the mission of
considering electronic, computer, and software technology and the laws, administrative practices,
and judicial decisions, both foreign and domestic, with respect to securing, promoting, and
enforcing the various intellectual property rights in such technology and to cooperate with the
AIPLA Board of Directors with recommendations as requested in such matters. The members of
the ECLC are very concerned about the direction the Supreme Court has taken the law relating to
patentable subject matter in Bilski v. Kappos, 130 S.Ct. 3218 (2010) (“Bilski”) and more recently
and more profoundly in Alice Corporation Pty. Ltd. v. CLS Bank International, et al., 573 U.S.
__ (2014) (“Alice”).The members of the ECLC are further concerned with the USPTO’s
response to these decisions.
The ECLC has prepared this document to start a dialog imploring the leadership of the AIPLA to
take prompt action to address what we believe to be a serious threat to the U.S. patent system for
stakeholders in our purview, namely, innovators in the fields of electronic, computer, and
software technologies. This document is our initial “call to action” to the AIPLA to not sit idly
by while the Supreme Court and USPTO significantly weaken patent rights for a significant set
of stakeholders in the U.S. patent system. In our call to action, we ask the AIPLA to take a
leadership role to encourage changes in the law to provide the appropriate degree of patent
protection for this important group of stakeholders. The ECLC stands by, ready and willing, to
help in this endeavor.
In the following pages, several members of the ECLC have contributed their thoughts in support
of our call to action. We encourage the leadership of the AIPLA to read the following text so
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that you understand precisely why we, members of the ECLC, are concerned about the direction
of the law of patentable subject matter and some of our thoughts about addressing these issues.
I.
Software is a Key Component of the U.S. Economy
The software industry plays a critical role in the U.S. economy. Software-implemented
innovations have benefited society by increasing efficiency and accuracy in wide-ranging fields.
These innovations have enabled the software industry to contribute to a significant portion of the
U.S. economy both in terms of jobs created and money spent. Although much attention is paid
to large software companies, the majority of the software industry comprises small businesses.
A.
Software is Playing an Increasing Role in Modern Innovations
Software- implemented innovations power our modern world and deserve patent protection.1
Software is changing the way we live and software drives many of the technologies that we
enjoy and depend on every day. Software is the enabling technology technology for improving
the way we provide healthcare (e.g., surgical robots), drive automobiles (e.g., automatic parallel
parking systems), and communicate with people around the world (e.g., video conferencing).
Software even assists farmers in maximizing yields to help feed a growing population and to
provide clean, renewable fuels. For example, see http://www.sstsoftware.com/. Software is also
used to manage herds and assists in providing a safe food supply. There are very few areas left
untouched by software.
B.
Software Innovations Contribute to a Significant Portion of the U.S.
Economy
In combination, the software industry contributed $526 billion to the U.S. GDP in 2012, or 3.2%
of the GDP.3 Of this contribution, the software industry directly produced $425 billion, which is
more than a 50% increase from 1997.4 In addition, software increased the productivity of other
industries for a value-add of $101 billion.5
Private entities and consumers spent $257 billion on software in 2010, accounting for almost
25% of the total investment in private equipment and software, and up from $57 billion spent in
David J, Kappos, Under Sec’y of Commerce for Intellectual Property., Keynote Address at the Ctr. for Am.
Progress: An Examination of Software Patents.
3
Shapiro, The U.S. Software Industry: As an Engine for Economic Growth and Employment, Software &
Information Industry Association (SIAA), September 2014 (available at:
http://www.siia.net/index.php?option=com_docman&task=doc_download&gid=5446&Itemid=318).
4
Id.
5
Id.
1
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1992.6 In 2006, the software and information technology industries employed more than 2.7
million Americans, adding 400,000 jobs between 1997 and 2006. While the market growth of
other industries was declining, the software industry’s market growth has increased since 2006
and is projected to continue to grow through at least 2016, with the software labor market among
the fastest growing through at least 2016.7,8 The current business climate, including the U.S.
patent system, has clearly created a fertile environment for the software industry to expand its
significant contribution to the U.S. GDP, a trend that is predicted to continue.
C.
The Majority of the Software Industry is Comprised of Small Businesses
Just over 50% of new jobs in the software industry were created by small businesses during the
2010-2011 year.9 Despite main stream media’s attention to the battle among giant companies –
e.g., Apple, Google, and Samsung – small businesses make up most of the software industry.
Census Bureau statistics report that of the 7,000 firms that were in the software industry as of
2011, nearly 5,000 were small businesses with less than 500 employees.10 In 2014, 42% of all
venture capital investments were in software firms.11 This outpaces the biotechnology industry
by 400%.12
II.
Software Patents are Key to Continued Growth in the Software Industry and the
U.S. Economy
Failure to provide patent protection for software would weaken competition in the software
industry (for example, by inhibiting startups) and could cede control of one of the most valuable
industries in the U.S. to other countries. The few large software companies that can afford to
withstand a lack of patent protection by virtue of their market share have a distinct advantage
over smaller competitors that rely more heavily on patent protection. In addition, more software
companies could turn to trade secrets to protect their innovations, counter to the desired policy of
disclosure promoted by patents. Further, software companies could shift out of the U.S. to
countries that offer stronger protection for software.
6
Bureau of Econ. Analysis, Private Fixed Investment in Equipment & Software,
http://www.bea.gov/national/FA2004/E&S_type.pdf.
7
Software & Info. Indus. Ass’n, Software & Information Driving the Global Knowledge Economy (2008).
8
U.S. Dep’t of Labor, Bureau of Labor Statistics, Occupational Outlook Handbook (2008).
9
U.S. Census Bureau, Statistics of U.S. Businesses.
10
Id.
11
https://smallbusiness.yahoo.com/advisor/software-firms-now-42-venture-capital-invested-2014-213007296.html
12
See Forbes article “Software is Dominating Venture Capital Investments In 2014”, Louis Columbus, available at:
http://www.forbes.com/sites/louiscolumbus/2014/04/19/software-is-dominating-venture-capital-investments-in2014/.
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A.
Software Patents are Essential for Startups
Early stage software companies, or startups, are extremely important for the U.S. economy, not
only because they drive great amounts of innovation but also because they create jobs in a way
that large companies do not. The software developed by such companies enables new forms of
communication, increased worker productivity, increased efficiency in business and government,
and other numerous advantages.
The USPTO reported13 that while firms of all sizes create jobs, small businesses are the primary
drivers of job creation in the U.S. The USPTO report stated: “Small businesses create an average
of 3 million jobs per year, far more than their larger counterparts. This pattern has held generally
in the U.S. for more than three decades.”14
Software-related patents remain a critical tool for startups, as they rely on the patent system to
obtain investments and recoup research expenses. Patents are vital in attracting investors.15
Businesses also rely on patents to gain a competitive advantage and prevent piracy and copycats.16
In an industry such as software where copying is both easy and rampant, a strong patent system
is essential.17 This is especially true for new and small businesses that may depend on patent
protection for their success.18 According to some,19 weak patent protection for software will
weaken the U.S. economy. Those that copy the work of others do not, by definition, create new
things. “When innovators cannot get protection they cannot get funding, they do not form
companies, jobs are not created and pretty soon there won’t be anything left for the copy-cats to
copy.”20
13
International Patent Protections for Small Businesses, Report to Congress, 2012 (available at:
http://www.uspto.gov/aia_implementation/20120113-ippr_report.pdf.
14
Id. (citing . Kane, The Importance of Startups in Job Creation and Job Destruction (July 2010).
15
Id. (citing Graham et al, High Technology Entrepreneurs and the Patent System: Results of the 2008 Berkeley
Patent Survey, 24 BERKELEY TECH. L.J. 255 (2009).
16
The Small Business Report cites Ronald J. Mann & Thomas W. Sager, Patents, Venture Capital, and Software
Start-ups, 36 RES. POL’Y 193 (2007); David H. Hsu & Rosemarie H. Ziedonis, Strategic Factor Markets and the
Financing of Technology Startups: When Do Patents Matter More As Signaling Devices? (June 2011), available
here. And it states “[i]t is noteworthy that an inherent limitation of this kind of evidence, whether statistical or
anecdotal, is that it is difficult to distinguish which way the causation runs. For instance, the growth, superior
performance, and success of a small company may have been primarily the result of good managers, who also tend
to select patenting because it is in their best interest to preserve the company’s competitive options.”
17
http://globalstudy.bsa.org/2011/
18
PAI
19
http://www.ipwatchdog.com/2014/09/12/the-destruction-of-a-high-tech-economy/id=48490/
20
http://www.ipwatchdog.com/2014/09/12/the-destruction-of-a-high-tech-economy/id=48490/
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Early patent protection is extremely important in the development process of a new invention.
Unlike large companies, who have the economic resources to finance the process itself, startups
rely heavily on venture capital. For startups, the need for patent protection is absolutely essential
in the process of obtaining venture capital investment. The lack of patent protection
disincentivizes venture capital companies from investing in startups.21 Without this investment,
the startup companies will be more likely to fail, and the public may never realize the benefits of
the innovations from these failed startups.
Larger companies that have the means and resources to access the necessary capital in the
development of their inventions could have a big advantage over startups. Without patent
protection for software, startups are not able to access venture capital that can help move their
inventions towards further and final phases or capture the intellectual property in a form that
would make the startups attractive for an acquisition.
Lack of patent protection for software acts may trigger a vicious circle. Without patent
protection, the ability of startups to access capital is reduced. Without access to capital, they
cannot compete with larger companies. The effect is to significantly reduce or simply erase
competitiveness otherwise supported by patent protection, for if the patent system is limited,
competition may never develop.
B.
The Public is Harmed by Undue Reliance on Secrecy
When companies cannot obtain patent protection for their innovations, particularly software
companies whose innovations may easily be copied, those companies may seek to protect their
innovations through secrecy where possible. For example, companies may resort to trade secrets
or make other design choices that are motivated by preventing reverse engineering or copying
rather than by improving products based on technical considerations. In turn, such design
choices may result in less desirable or suboptimal products for consumers in an effort to preserve
the trade secrets.
The innovations of a company that relies upon trade secrets rather than patents can be used by
the public, but are not publically available for improvement. In some situations, such as when
the use of an invention by a competitor is not discoverable, it may make sense to choose trade
secret protection over patent protection. However, if it is difficult to obtain patent protection,
21
See the statement of Vern Norviel, Partner with Wilson Sonsini Goodrich and Rosati, available here, particularly
referring to life sciences startups but which conclusions should be applicable to any other industry startup.
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innovations that would otherwise have been published may instead be held as trade secrets to
give the innovator some means to prevent copying and recoup investment. In these situations,
the policy incentives motivating disclosure of innovations that patent law is founded on are
undermined by the lack of patent protection. If the company is long-lived, its innovations remain
unavailable to the public for improvement indefinitely, resulting in stagnation of innovation. In
addition, if the company goes out of business, the benefits of its innovations are removed from
the public and lost until re-discovered. Moreover, innovators who rely on collaboration between
entities – an increasingly common phenomenon in all industries – will be hampered and possibly
prevented from pursuing many otherwise promising areas of research and development because
they will be restricted in sharing information with others to preserve trade secrecy and
confidentiality. This is inefficient and harmful to consumers and innovators alike.
C.
The U.S. is Harmed by Weakened Protection for Its Companies
If there is no patent protection for software, or simply weak protection, investment in the
software industry could be very low. Software patents can improve company valuation, attract
investment from venture capitalists, and increase the chances of collaboration with partners
through licensing.
Research and development spending from 2012 to 2013 has grown by approximately 22.1% for
the software and Internet sector, compared to 5.8% growth for the whole economy. Business
Software Alliance (BSA) member companies spend in excess of $32 billion each year on
research and development to expand their innovation portfolios.22 Without patent protection, a
critical means for protecting this investment is lost, and thus software companies will be less
likely to make the investment in the first place. Also, the premium companies can charge for
innovative products incorporating that research and development would be lost if competitors
can copy those innovations without penalty.
The patentability of software inventions is one reason why software is dominating venture
capital investment. In 2014, just over $4 billion was invested in software deals by venture
capitalists during the first quarter, four times as much as biotechnology.23 In the first quarter of
2014, 42% of all venture capital investments were in software firms.24
22
Jaruzelski et al., The Global Innovation 1000: Navigating the Digital Future, 73 Strategy & Business 33, 36-37
(Winter 2013), (available at: http://www.strategy-business.com/article/00221?pg=all.
23
See Columbus “Software is Dominating Venture Capital Investments In 2014”, Forbes (April 2014) (available at:
http://www.forbes.com/sites/louiscolumbus/2014/04/19/software-is-dominating-venture-capital-investments-in2014/).
24
Id.
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The link between weak patent protection and loss of investment can be seen clearly by
examining patent regimes that traditionally shun strong IP rights. For example, a recent Forbes
article suggests that weak Indian pharmaceutical patent protection has had the effect of weaker
investment. The article states that “it is unsurprising, if regrettable, those innovative drug-makers
are reluctant to sell their medicines there. Investors are also unlikely to put their capital at risk in
Indian drug companies that seek to discover new medicines.”25
Similarly, if software companies cannot receive appropriate protection in the U.S., foreign
countries could strengthen their protection of software, attract businesses making significant
research and development investment, and rise to become new leaders in software innovation.
The software industry is one of the most important and profitable industries in the U.S. and one
of the leading job creators.26 Patent policy has been vitally important to promoting the innovation
that has kept the U.S. at the forefront of software and hardware development. Bruce Lehman,
former President of the International Intellectual Property Institute, referring to the lack of
protection of pharmaceutical patents prior to the TRIPS Agreement of 1994, acknowledged that
“[t]he lack of any means of patenting these inventions and the related lack of experience in
licensing them to the private sector, suppresses the development of commercial enterprises
focused on alleviating the disease burdens common to developing countries.”27 The same
conclusion applies to any effort to weaken or eliminate patent protection for software
innovations. The inevitable effect will be less development in the software industry and the
migration of the software industry to other countries with stronger software patent protection.
In the same sense, the BSA stated in its amicus curiae brief that “as early as 1992, congressional
reports recognized that ‘patent protection is of importance to the U.S. software industry, both
domestically and in the global market.’”28 Without patent protection, software companies face
the risk that competitors will copy without penalty the essential elements of their inventions.
Graham, Indian Patients Suffer from India’s Weak Pharmaceutical Patents, Forbes (September 2014) (available
at: http://www.forbes.com/sites/theapothecary/2014/09/09/indian-patients-suffer-from-indias-weak-pharmaceuticalpatents/).
26
In 2009 the software industry added over $276 billion to the Nation’s economy. See OECD Stan Database for
structural Analysis (available here).
27
Lehman, The Pharmaceutical Industry and the Patent System, (2003) (available at:
http://users.wfu.edu/mcfallta/DIR0/pharma_patents.pdf
28
BSA/The Software Alliance, brief of amicus curiae filed before the Supreme Court in Alice Corporation Pty. Ltd.
v. CLS Bank International, et al, 573 U.S._ (2014), page 8, (citing U.S. Congress, Office of Technology Assessment
Finding a Balance: Computer Software, Intellectual Property and the Challenge of Technological Change 23
(1992)).
25
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As recognized by Congress and industry leaders, patent protection is vital to innovation in the
software industry. The availability of software patent protection in the U.S. has contributed to, if
not accounted for, the U.S. becoming the world leader in software innovation. Without patent
protection for software innovation in the U.S., the U.S. could see reduced investment in software
technologies whereby, over time, the U.S. would lose its position as a leader in software
innovation.
A strong patent system that does not discriminate based on technology should yield high quality
software patents, and in turn encourage investment in innovation. The software industry would
be enabled to continue its contributions to progress, the economy, and the job market.
Companies require some level of certainty regarding the investment made in their innovations.31
Insufficient protection of a company’s software-implemented innovations will have a chilling
effect on such innovations.32
III.
Software Patents Promote, Rather Than Stifle, Innovation
The U.S. is a leader in software innovation, with no close competitors.33 This leadership has
emerged under a robust patent system. Clearly, software patents have not undermined or stifled
software innovation. In the USPTO, software patents are at least as strong as any other
classification of patents. Software-related patent applications were rejected at a higher rate than
other classifications34 and the Patent Trial and Appeal Board (PTAB) upheld decisions
regarding software-related patent applications more often than non-software-related patent
applications.35 For those rejections that were appealed from the PTAB, the Court of Appeals for
the Federal Circuit (CAFC) upheld the rejections 95.4% of the time.36 Note that the USPTO
would not register computer scientists as patent agents or attorneys until the mid-1990s. The
USPTO has become more efficient in examining software-related patent applications, and now
simply needs stability in the law surrounding such applications.
The advantages of the U.S. patent system benefit all industries. Businesses with patents are able
to use them to attract investors to launch their products.37 This in turn can create jobs and bring
31
Bilski, 130 S. Ct. at 3231 (Stevens, J., concurring)
Kappos. supra
33
Kappos Key note
34
Software vs. Non-software chart Graham & Vishnubhakat
35
2003-2012 Graham & Vishnubhakat
36
Kappos, Stanford Tech Law Review @ 492.
37
See The Small Business Report cites Stuart J.H. Graham et al, High Technology Entrepreneurs and the Patent
System: Results of the 2008 Berkeley Patent Survey, 24 BERKELEY TECH. L.J. 255 (2009).
32
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new products to market. Without IP protection, businesses will have one less asset with which to
attract investors. Inconsistency in patent laws regarding software can cause threats of litigation
that will deter inventors from pursuing their inventions, thereby stifling innovation.
To maintain U.S. leadership in innovation and the contribution software makes to the U.S.
economy, patent protection should be available to protect innovations in software.
The Strategy for American Innovation38 states that innovation builds off of research and
development, and that IP protection provides an effective means for encouraging investment in
research and development. Without IP protection, businesses would be incentivized to shift their
resources toward the types of innovations that cannot be easily duplicated by competitors, which
limits collaboration and innovation. Further, without disclosure of innovations, such as those
provided by our patent system, the public is denied access to the knowledge and cannot improve
upon the inventions disclosed.
IV.
Software Patents Do Not Empower So-Called “Patent Trolls”
There is a misguided perception that the rise in software-related patents has given rise to patent
trolling.39,40 This is not the case. Even before there were software related patents, there were
companies that monetized patents for inventions that they themselves did not create, and
capitalized on their investment in them.41 These companies funded less affluent inventors to
continue inventing and these companies thrived during a time of great innovation in the U.S.42
38
http://www.whitehouse.gov/administration/eop/nec/StrategyforAmericanInnovation
"Software-related patents include a number of patent classes that are most likely to include patents with softwarerelated claims, and this includes business method patents." Although the PTO does not have a specific softwarerelated patent class, a number of entire patent classes that PTO economists have said are most likely to include
patents with software-related claims, and this includes business method patents, are included in this study. "For the
list of these classes, see S. Graham, , and S. Vishnubhakat, Of Smart Phone Wars and Software Patents, Journal of
Economic Perspectives, v. 27 no.1 (2013), pp. 67-86." "Software-related patents occur in a variety of technologies
containing at least some element of software, and cover things like sending messages or conducting business over
the Internet (e.g. ecommerce). Patents related to software can, but do not generally, detail computer software
programming code in the specification, but often provide a more general description of the invention, which can be
programmed in a variety of ways." Rusco, F., Intellectual Property: Assessing Factors that Affect Patent
Infringement Litigation Could Help Improve Patent Quality, United States Government Accountability Office,
GAO-13-465, August, 2013, p. 12.
40
Id., pp. 13-14.
41
Khan, B. Zorina, Trolls and Other Patent Inventions: Economic History and the Patent Controversy in the
Twenty-First Century, Geo. Mason L. Rev., Vol. 21:4, pp. 825-863.
42
Khan, p. 835.
39
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Software patents are often criticized for high litigation rates, but this perception is driven by an
over competitive business climate and involvement of ubiquitous popular products such as cell
phones, not an inherent feature of software patents. Given that software is the medium for
modern innovation, and central to new developments in manufacturing, healthcare, and nearly
every commercial field, it is no surprise that battles over markets increasingly involve software
innovations and thus software patents.
Even if some asserted patents have serious quality problems, it is not necessary, nor is it the role
of the judiciary, to devise new legal theories to address them. The last thirty-five years of
volatility over 35 USC 101 (“Section 101”), of varying interpretations and competing legal
theories, starkly contrasts with the fact that not one word of Section 101 has been changed since
its original passage in 1952. Although the boundaries of eligible subject matter have been subject
to uncertainty since the Supreme Court began evaluating this issue in Benson, only recently has
the Court’s inability to provide clarity reached so far into substantive innovation. The
increasing reach of the “abstract idea” exception stands in stark contrast to the words of the
statute, which do not explicitly recite or support any exceptions, let alone the extraordinary scope
of excluded subject matter the judiciary is now reading into Section 101..
V.
Software is Fundamentally No Different than Other, Already Protected, Forms of
Invention
The technological functions implemented in software can be embodied in and protected in other
forms, such as integrated circuits and discrete electronic components, and should be protected in
software as well. The power of software is described functionally by the Church-Turing thesis,
which states that any function that is computable by one Turing machine is also computable by
another Turing machine regardless of how implemented. Failure to protect software
functionality would leave a fundamental hole in the patent protection regime.
The efforts to limit the patentability of “software” (based on characterizations such as “it’s just
math” or “it’s inherently abstract / intangible”) necessarily presume that software is a discrete,
well-defined class of technology. Moreover, these arguments starkly contrast with the accepted,
and indeed unremarkable, patentability of novel circuits or special purpose machines as a class of
“apparatus.”
Disallowing software patents will harm the industry because (1) there are infinite ways to
implement the same functionality using different means, as illustrated by the Church-Turing
thesis, and (2) software is protected in electronic-component form. It would be impossible to
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identify all computer implemented inventions as an infinite series of possible hardware
(electronic-component) implementations, and such an exercise contradicts the positive evolution
of software towards more powerful, platform-independent functionality. Software patents are
thus required to protect functionality, no matter the implementation. In other words, what
matters is the invention, not whether some or all of the invention may be implemented in
software.
A.
The Fundamentals of the Church-Turing Thesis
Distinguishing hardware and software for patent purposes conflicts with one of the foundational
theories of computing, which holds that the functional power of any Turing machine – the class
of logical problems that it is capable of solving – is identical to the functional power of any other
Turing machine. That is, any logical process that can be performed by software that functions as
a Turing machine can also be performed by hardware that functions as a Turing machine (and
vice versa). Attempts to identify a rational distinction between hardware and software, as a basis
for extending or withholding patent eligibility, are therefore inherently doomed.
A Turing machine is a simple concept, but one that has had profound impacts on the computing
world. Developed by Alan Turing in 1936, a Turing machine is a model of a general purpose
computer, though one with unlimited memory.50
As Turing stated in the now-famous paper, “It is possible to invent a single machine which can
be used to compute any computable sequence. If this machine U is supplied with a tape on the
beginning of which is written the [state description] of some computing machine M, then U will
compute the same sequence as M.”51 This concept gives us our first glimpse at what are now
called stored computer programs.
The Turing machine created a way to more-easily prove the calculability of a process, and in
defining the machine, Turing showed the machine’s equivalence to Church’s lambda-calculus
theory of calculability, which achieves the same end through arguably less-intuitive means.52
Together, the works of Church and Turing create a formal definition of “algorithm,” meaning
that if it is possible to perform a process, then it is computable on a Turing machine, and if a
50
See MICHAEL SIPSER, INTRODUCTION TO THE THEORY OF COMPUTATION 137 (2d ed. 2006), available at
https://docs.google.com/file/d/0ByvvwnYhw4uXa2plemdwamNVUUk/edit?pli=1.
51
Turing at 12-13.
52
See Turing at 31-33. Because lambda-calculus is less-intuitive, it is not included in this description.
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process is computable on a Turing machine, then it is possible to perform it.53 This
connection/definition is the essence of the Church-Turing thesis.54
Therefore, if a process is calculable by a Turing machine, then it is possible to perform the
process in any manner of convenience. All working software is calculable by definition because
it consists of processes/algorithms, and a Turing machine defines “algorithm.” If software were
not calculable, it would not be possible to think through and write working software, which is a
contradiction. Therefore, being calculable, the processes performed by software may be
performed equally by mechanical or electronic means specifically configured to do so.
Patents are currently allowable on such mechanical or electronic means, but software remains
isolated and scrutinized as “abstract,” and potentially unpatentable under Section 101. This is
inconsistent with trends in modern computing and technology.
B.
How the Technological Functions Implemented in Software Are Protected in
Other Forms
The technical impossibility of distinguishing between hardware and software for patentability is
problematic in view of modern computing, where any particular algorithm can be implemented
in a variety of ways, such as:
53
54

A specific combination of discrete components forming a circuit that performs the
algorithm;

An application-specific integrated circuit (ASIC) or system on a chip (SoC) that has been
fabricated to perform the algorithm;

The hardware description language (HDL) schematic for the above ASIC;

A field programmable gate array (FPGA) that has been physically configured to perform
the algorithm;

A device that can configure an FPGA to physically perform the algorithm;

A processor coupled with a nonvolatile memory device storing machine-level instructions
that, when executed, cause the processor to perform the algorithm;

The nonvolatile memory device itself, loaded with such machine-level instructions,
which is usable with such a processor (a “computer-readable medium”);
See SIPSER at 155.
See id.
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
A volatile memory device storing the same set of machine-level instructions;

The combination of machine instructions loaded into a nonvolatile and/or volatile
memory;

Low-level source code that can be compiled to express such instructions;

A high-level script that can be interpreted by an interpreter into machine language that
(etc.);

A pseudocode expression of the script; and

An electromagnetic “signal” expressing such instructions.
This is a fluid gradient between indisputably patentable machines and currently-patent-ineligible
inventions. The different implementations are all functionally equivalent: a particular logical
process can be equivalently expressed by every single variant. Any such categorization is
therefore totally arbitrary and has no basis in technical reality – especially when many
embodiments are a hybrid of these technologies (e.g., a software emulation of a specific
hardware device that is specifically configured to…).
To make matters worse, the diversity of computing technologies is expansive and growing.
Computing can be conducted by specifically engineered proteins, DNA sequences, and bacteria;
by quantum computers; by purely mechanical machines powered by a hand crank or hydraulics,
etc.
If borders are drawn around favored classes of computing technology, a particular logical
invention can be deemed to merit patent protection when described in one form of computing
technology, and yet to be deemed “abstract” when implemented in a different form of computing
technology – even though the distinction is technically irrelevant, and is largely a design choice.
For example, consider a claim that is submitted as a “software system” or a “signal” or a
“general-purpose processor programmed to perform certain steps. This invention could be
rejected as ineligible for patent. But if the preamble recites “a codec integrated circuit” for
performing certain steps, this claim is deemed patent-eligible. There is no legal basis for
ascribing to that phrase the “magic words” effect of conferring patent-eligibility.
The duality of Turing machines as capable of implementing the same functionality in either
hardware or software actually expanded initial resistance to software patenting, to encompass
hardware counterparts. For example, programmable computers were initially large systems
employed primarily to perform complex or repetitive computations efficiently.55 That function
55
See, e.g., U.S. Patent No. 3,120,606 (patent issued on ENIAC), invalidated by Honeywell, Inc. v. Sperry Rand
Corp., 180 U.S.P.Q. 673 (D. Minn 1973).
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of performing computations led the USPTO to hold not only software per se to be non-statutory,
as preempting the underlying mathematical calculations, but also even hardware
implementations of the same functionality.56 Supreme Court decisions on patentability of
computer programs generally affirmed that view.57
Despite the pronouncements of software ineligibility, tension between the availability of patent
protection for programmable hardware (such as processors and microcontrollers) and the nonavailability of patent protection for the “special purpose machines”58 created by programming
such devices remained unabated. The proliferation of personal or desktop computers beginning
in the 1980s and their subsequent ubiquitous use in e-commerce and other Internet-based
operations caused both the USPTO and Courts to rethink denial of patent protection for software,
culminating with patentability for computer program product claims being affirmed in the mid1990s59 and, a few years later, for software-implemented processes generally.60
Today, the smart phones and tablets that are in widespread daily use contain computing power
orders of magnitude greater than was available just 50 years ago, employed for a wide array of
combination software-hardware processes including radio frequency (RF)
modulation/demodulation, data encryption, graphics processing, and Internet searching, to name
just a few. However, current application of Alice by the Patent Office has reverted to the view
that “[m]athematical relationships/formulas” are per se unpatentable abstract subject matter,61
under which software is considered unpatentable while equivalent hardware implementations of
the same functionality are considered patentable.
The need to allow patent protection for software is driven by technological and commercial
necessity. The equivalence between special-purpose hardware and general-purpose,
programmable hardware, and the insufficiency of copyright as a form of protection for the
functional innovation that may be embodied in software, drives this necessity.
VI.
Patent Protection is Needed for Software Because Other Forms of Protection Are
Inadequate
The argument is often raised that patent protection is not needed for software-implemented
inventions because they can also be protected by other type of intellectual property. This is true
56
Examination of Patent Applications on Computer Programs, 33 FR 15609, 15610 (Oct. 21, 1968).
Gottschalk v. Benson, 409 U.S. 63, 71-72 (1972) (holding that a computer program, as “a mathematical formula”
or algorithm without substantial practical application except in connection with a programmable computer, was not
patentable subject matter); Parker v. Flook, 437 U.S. 584, 594-95 (1978) (where novelty consisted of mathematical
formula or algorithm, claim failed to define patentable subject matter).
58
See In re Alappat, 33 F.3d 1526, 1545 (Fed. Cir. 1994)
59
In re Beauregard, 53 F.3d 1583 (Fed. Cir. 1995).
60
State Street Bank & Trust Co. v. Signature Financial Group, 149 F.3d 1368, (Fed. Cir. 1998).
61
Preliminary Examination Instructions in view of the Supreme Court Decision in Alice Corporation Pty, Ltd, v.
CLS Bank International, et al., USPTO Memorandum (June 25, 2014).
57
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only to a very limited extent. Indeed, if copyright and trade secret protection were satisfactory in
protecting the R&D investment of software developers, there would not be so many software
patents!
A.
Copyright
It is well-established that copyright law protects both source code and executable code versions
of computer programs, but copyright provides minimal protection against anything other than
direct, or replicative, copying. A fundamental principle of copyright is that it protects only the
expression of an idea and not the idea itself, with the doctrine of “merger” preventing any use of
copyright in a manner that might limit free use of ideas where it is difficult to distinguish
between the two. Thus, at the very outset it is clear that copyright cannot possibly provide the
sort of “blocking” protection that may be available under patent law for fundamentally new and
disruptive innovations. Further, independent development is a defense to copyright
infringement, so the benefits intended under patent law to encourage early disclosure and
application for protection do not exist. Few technology companies have established programs
for even registering their copyrights, except to satisfy the prerequisite for bringing an
infringement action. The societal objective of making technical subject matter publicly available
through the incentive of intellectual property protection is not nearly as well satisfied under
copyright law as under patent law.
There have been both judicial and legislative extensions to copyright law that provide some
measure of protection that might overlap with that provided by patents, but closer examination
reveals how limited copyright is for software. As an example, the growth in “look and feel”
copyright protection in the 1980s (e.g., Whelan v. Jaslow) was followed by significant narrowing
in the 1990s (e.g., Computer Associates v. Altai). Some protection for software available under
the Digital Millennium Copyright Act (DMCA), particularly for anti-circumvention measures,
undoubtedly helps strengthen the protections that software vendors can enforce via license
agreements. At the same time, however, express limitations on copyright protection for
computer software, whether in the U.S. under 17 USC §117 or in other countries makes
copyright protection very much a “lowest common denominator” analysis. Other limitations,
such as fair use (17 U.S.C. § 107) likewise are often employed to prevent a software copyright
owner from enforcing rights in anything close to a manner equivalent to what is available under
patent law. Finally, while copyrights can protect certain software features such as graphicsintensive user interfaces fairly well, they are not nearly as well suited for protection of software
functions—in fact copyright can only protect such functions incidentally to other features. See,
e.g., Storage Technology Corp. v. Custom Hardware Eng’g & Consulting, Inc., 421 F.3d 1307,
1312 (Fed. Cir. 2005), reh’g denied, 431 F.3d 1374 (Fed, Cir. 2005) (even where only a portion
of code is required to be loaded into random access memory for equipment to operate, the
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entirety of the corresponding program was subject to Section 117’s provisions, protecting
defendants’ right to copy that program).
The failure of copyright to be a proxy for patent protection is seen in practice by the large
numbers of software vendors, large and small, who have embraced patent protection even where
both patent and copyright protection is available. In fact, numerous software vendors have even
opted to embrace design patent protection rather than copyright protection in clearly overlapping
areas. Given that patents cost tens of thousands of dollars to procure and maintain, while
copyrights have at best a nominal cost, this alone shows that copyright is not thought to provide
protection anywhere close to that of patents.
One good example of copyright’s limitations to protect software-implemented innovations is
found in Lexmark Int’l v. Static Control Components, 387 F.3d 522 (6th Cir. 2004), reh’g denied,
2004 U.S. Appl. LEXIS 27422 (Dec. 29, 2004), reh’g en banc denied, 2005 U.S. App. LEXIS
33330 (6th Cir. Feb. 15, 2005). Lexmark marketed toner cartridges with embedded program code
that allowed, for example, an indication of how much toner was remaining. The printer
authenticated cartridges upon installation. Defendant SCC made microchips that mimicked the
authentication sequence and admittedly included, verbatim, a small program Lexmark had on its
microchips. Lexmark sued for both copyright infringement due to the copying and for violation
of the anti-circumvention provisions of the DMCA. The Sixth Circuit ruled that compatibility
considerations brought into play both the merger and scenes a faire doctrines of copyright law,
dooming the copyright infringement claim. The Sixth Circuit also ruled that anti-circumvention
protection is only available to restrict access to the literal code of the chip, which did not exist in
this case. Comments by judges in concurring opinions cast doubt on whether the DMCA could
or should be used to “create monopolies for replacement parts” and that fair use might be a
defense if any such attempt were made. Here, the focus of copyright law on original expressions
rather than products or innovations per se is shown to make it very difficult to obtain anything
close to patent-like protection.
B.
Trade Secrets
Trade secrecy is also available for some aspects of a software product. Indeed, in many
instances a significant strategy decision is whether to opt for a patent, which requires disclosure
of an innovation, or instead maintain the innovation as a secret. In some cases, trade secrecy is
comparatively cheaper and easier to obtain and maintain than patent protection. However, there
are three major weaknesses with trade secrecy, in addition to harms to the public already
discussed above in Section II.B.
First, trade secrecy is only available for a subset of software-related innovations: those that are
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not evident to a user immediately upon use. Thus, while it may be perfectly fine to protect a
sorting algorithm hidden deep inside proprietary source code as a trade secret, it may be
impossible to protect a highly innovative user interface as a trade secret because the user
interface is immediately evident to anyone using the product. Traditionally, trade secrecy has
been favored for the “internals” of software while patents have been the mainstay of protection
for the “externals,” with the possible exceptions of software “apps” that may have limited
novelty.
Second, trade secrets, like copyrights, can be innocently infringed and trade secrets can vanish
immediately even if their owners do nothing wrong. Because there is no public disclosure
benefit to society, the law does not protect a trade secret from later, independent inventors.
Thus, the legal protection for an important innovation can evaporate immediately if a third party
independently creates something similar. Many software developers would rather provide the
public disclosure in order to gain certainty that their legal protection will remain available
regardless of what later third parties create. Moreover, trade secrets are inherently quite fragile
because a willful or even inadvertent disclosure by an employee, business partner or customer
who is a party to a non-disclosure agreement can cause a secret to become public. In that
instance, the trade secret vanishes forever, leaving its owner with, at best, a contractual or
business tort manner of redress against the disclosing party (but not against others who can then
take full advantage of the secret).
Third, trade secrecy remains a poor cousin of other forms of intellectual property because there is
no federal law under which a party can bring a civil action for trade secret misappropriation, and
there is little treaty-based international protection. There is currently a strong move in Congress
to enact such federal legislation, but until that time, the differences among state laws and the
inability to readily reach foreign defendants or reach across state borders for enforcement create
weaknesses for trade secret protection compared to patent protection.
C.
Trademark
The remaining alternative form of IP to patent protection is the trademark law. There have been
some extremely clever uses of trademark law to provide market advantages somewhat similar to
patents. For example, Adobe famously published the specification for its PostScript® page
description language and made it available for others to use, but carefully policed its trademark
to ensure that third parties did not use it for languages that deviated from those specifications.
Trademark differs from the other three forms of IP in that it provides only indirect protection to
software via the goodwill of the software vendor. In some cases, piratical copying may support a
pure trademark claim, and in other cases trademark-related causes of action (e.g., Lanham Act
section 43(a) and other unfair competition causes) may be available against egregious market
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entrants. Most often, however, it will be difficult if not impossible to protect particular software
innovations using trademark law alone.
VII. Applicants Need Clarity and Stability in the Law of Subject Matter Eligibility to
Effectively Seek Patent Protection
A.
Alice and Bilski Have Caused Confusion Regarding Section 101
From the 1980s through the 1990s and early 2000s, software patents were seldom challenged on
subject matter eligibility grounds. After decisions such as the Supreme Court’s decision in
Diamond v. Diehr and subsequent Federal Circuit decisions, such as State Street Bank, patent
practitioners believed that the door to software patent eligibility was clearly open. This stability
has provided many of the benefits to the software-industry and the US economy discussed above.
However, the overruling of State Street Bank by the Bilski decision in 2008 resulted in a steady
stream of Section 101 challenges to software patents that ultimately led to the re-framing of the
patent-eligibility test set forth in the Alice decision.
Recently, each time the Federal Circuit or the Supreme Court issued a significant decision
invalidating a “software” patent on Section 101 grounds, the USPTO had to adjust its guidelines
for protecting computer-implemented inventions (e.g., MPEP 2106), and likewise, patent
practitioners had to adjust their approach to drafting software patents. Given that the courts’
interpretations of Section 101 have recently changed numerous times, it has been all but
impossible for practitioners to draft patent applications with a degree of comfort that the
resulting patent will survive a future challenge under Section 101. This is an untenable situation.
The Section 101 patent eligibility test for software inventions cannot remain a moving target for
patent practitioners.
Patent applications are drafted according to the interpretation of patent eligibility in effect at the
time of application preparation. Patent practitioners interpret the rules/guidelines from the
USPTO, court decisions, and prior prosecution experience (e.g., rejections provided by
examiners) in order to identify appropriate claim and specification language. Practitioners
prepare the specification and claims prospectively and only later discover whether such language
will be acceptable to the USPTO, in accordance with the USPTO’s interpretation of the thencurrent patent eligibility standard, or even later and only if an infringement action goes to trial or
summary judgment, to the courts.
Practitioners are also charged with attempting to obtain the broadest available coverage for their
clients, while simultaneously obtaining a valid patent. The lack of clear, stable rules creates a
difficult challenge for patent drafters.
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“Good” (i.e., valid) patents are not as often the subject of litigation, review, or appeals, so
practitioners are typically left with the “borderline” or “bad” patents as the subject of much case
law. Bad cases typically make bad case law with an emphasis on what not to do, with no clear
guidance as to what is desirable or even acceptable. This lack of good examples in the case law
also makes it difficult for the practitioner to advise his or her client on matters of patent
eligibility and is the driving force behind preparing this Software White Paper.
The Alice court acknowledged that, at some level, all inventions embody an abstract idea. Patent
applications drafted pre-Alice are constrained by existing language or constructs that were
established or approved under earlier standards (e.g., by the courts or the USPTO) with little or
no consideration as to whether an abstract idea may be present. Alice places a cloud over all
such patents. While these standards may have been difficult to follow pre-Alice, Alice’s notion
that all inventions may somehow implicate a statutory exception, coupled with the Court’s
explicit refusal to further define what an “abstract idea” is, make it highly challenging to
describe an invention—any invention, software or otherwise—that does not in some way
represent an embodiment of an abstract idea. Of course, this statement is made in an
environment where an “abstract idea” is undefined. As noted by District Judge Wu in Eclipse IP
LLC v. McKinley Equipment Corporation, [cite] in the absence of a definition of an abstract idea,
the abstract idea exception evokes like Justice Stewart’s most famous phrase: “I shall not today
attempt further to define the kinds of material I understand to be embraced within that shorthand
description; and perhaps I could never succeed in intelligibly doing so. But I know it when I see
it….” See Jacobellis v. State of Ohio, 378 U.S. 184, 197 (1964); cf. Alice, 134 S. Ct. at 2357 (“In
any event, we need not labor to delimit the precise contours of the ‘abstract ideas’ category in
this case.”). The doctrine of abstractness has been around for a long time, but no one has ever
been able to define or describe it in a useful and workable way. The courts must do better than
this.
B.
Inconsistent Examination by the USPTO as to Section 101 Requirements
Patent examiners have not had clear guidance on what constitutes patent eligibility under Section
101. Particularly when an invention covers a technical area that is completely new, language is
changing, and technology is advancing rapidly. With no clear guidance, examiners have no
option but to cite the Section 101 form rejection without any real analysis and try to encourage
applicants to amend claims to recite “something more,” another undefined and poorly articulated
standard from the Court. As of the time of this writing, the USPTO has not issued its final Alice
guidelines, so the Section 101 rejections thus far have been issued in a rote fashion with no
understanding on the part of the bar as to how to respond and even less of an idea by the
examiner as to how to consider the response.
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In addition, different patent examiners apply the USPTO guidance and rules differently. An
examiner’s approach may be determined by his or her supervisor’s opinion. Worse yet, Section
101 rejections are often evaluated by a Section 101 “guru” within each technology center. The
examiner cannot speak for the “guru” and the applicant cannot speak to the “guru,” so
overcoming Section 101 rejections becomes needlessly convoluted. Consequently, practitioners
get different decisions from different examiners on similar innovations. This leads to further
confusion as to where the boundary line between eligible and ineligible inventions lies.
VIII. Call to Action: Let’s Work Together to Develop Clear Guidance as to What Makes
a Good Software Patent
Though the tide is clearly running against software patents in the courts, no court decision (or
legislation, for that matter) has categorically stated that software is patent ineligible. In fact,
many decisions (including Alice) have taken pains to indicate that the intent is not to outlaw all
inventions that embody software.
However, the current “wait and see” approach to software patent eligibility is unworkable.
Software innovators and their business partners will not invest in research and development at
the same levels, and will not seek patent protection if there is a high level of uncertainty as to
whether their inventions are patent-eligible. This will, in turn, hinder innovation, as discussed
above.
Moreover, current owners of legitimate software patents that were drafted and granted by the
USPTO under a different Section 101 standard now face an uphill battle when attempting to
engage in technology transfer, licensing, and enforcement of their hard-earned intellectual
property rights. Many of these patents drafted under a different legal standard are now likely to
be called into question as a result of the new Alice test, regardless of the substantive merits of the
innovations described by these patents. The “know it when we see it” approach to determining
patent eligibility ex post (after the patent application has been prepared, filed, and issued) fosters
an attitude of disrespect for patent rights that usurps the legitimately obtained patent rights of the
original innovators.
Attitudes toward software patents have ebbed and flowed over the years, but software inventions
have always remained—at some level—patent eligible. No valid reason has been advanced to
inject the intolerable uncertainty that the recent 101 cases (particularly Alice) have created in the
area of subject matter eligibility for software. Undermining patent protection for software
inventions are patent-ineligible will have profound effects--not only in the software industry,
which is full of innovation, but in and across all other industries in which software is used.
discontinue patent protection for software. Categorically ruling that all software inventions are
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patent-ineligible would have profound effects—not only in the software industry, but also in and
across all other industries in which software is used.
Clear guidance as to the requirements for software patent eligibility is needed. Patent owners,
licensees, and investors in software technology, as well as patent practitioners, patent examiners
and courts, all need to be able to consistently and reliably determine whether the criteria for a
valid software patent have been met.
For at least these reasons, we urge the AIPLA to become actively involved in filing amicus briefs
defending software patents in appropriate cases addressing Section 101, to lobby Congress for
legislation overturning the most onerous aspects of the Bilski and Alice decisions, and to work
with the USPTO to establish guidelines for drafting, claiming, and prosecuting patent
applications directed to innovations implemented in software. The following sections offer
modest proposals from members of the ECLC.
A.
The AIPLA Should File Amicus Briefs in All Federal Circuit and Supreme
Court Cases Addressing the Issue of Patentable Subject Matter
The AIPLA should adopt a clear and concise position on the patentability of softwareimplemented inventions. This position should then be advanced in amicus briefs to the Federal
Circuit and Supreme Court whenever patentable subject matter is at issue. Every appellate judge
addressing the issue of patentable subject matter should appreciate the importance of this issue
and the stakes involved.
B.
The AIPLA Should Lobby Congress to Modify Section 101 of the Patent
Statute to Secure Appropriate Protections for Software-Implemented Inventions
The AIPLA should lobby Congress to amend Section 101 to recite a clear test for subject matter
eligibility that both plainly encompasses software-implemented inventions and overrules any
judicially created exceptions. The law should supply the test for subject matter eligibility, not
the courts.
\
Section 101 of the Patent Statute has not been amended since its adoption in 1952. We recognize
that amending Section 101 will require mindful debate and thoughtful action by a reticent
Congress. We also recognize that other stakeholders will have much to say about the contents of
such an amendment. However, the AIPLA can lead the way.
The details of any legislation to amend Section 101 will take time to explore and to discuss.
Indeed, for purposes of this Software White Paper, the ECLC did not even attempt to reconcile
the numerous viewpoints on the matter. Two examples of proposed amendments are provided
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below to show the range of opinions on the issue of amendments to Section 101. The ECLC
leaves it to the leadership of the AIPLA, hopefully with the ECLC’s input and support, to arrive
at language that addresses the concerns outlined in this document.
1.
Return to State Street: Useful, Concrete, and Tangible Result
A first proposal would amend Section 101 of Title 35 of the United States Code by
adding the following sentence at the end thereof:
An invention that provides a useful, concrete, and tangible result shall not be denied eligibility
for a patent on the ground that it is directed to a law of nature, natural phenomenon, or abstract
idea, and shall be evaluated in accordance with the other provisions of this title.
This proposed legislation expressly overturns the two part test in Prometheus and Alice and
echoes the enactment of section 103 in the 1952 Patent Act to override the 1941 Supreme Court
ruling in Cuno Engineering Corp. v. Automatic Devices Corp.62 In Cuno Engineering, the Court
associated the concept of “flash of creative genius” with what constituted an “invention” under
the patent law.63 This story is recounted in Judge Rader’s opinion in CLS Bank v. Alice Corp.64
Section 103, added by the 1952 Patent Act, provided an objective standard for evaluating the
advancement of the invention over the prior art and replaced the subjective standard of
“invention” used by courts before the 1952 Patent Act. “After deliberate effort, the 1952 Act
replaced any need for an ‘invention’ or ‘inventiveness’ measure with an objective test for
‘obviousness’ in Section 103.” A similar result is sought for amending Section 101.
2.
Make it Clear that Section 101 is a Coarse Filter
A second proposal would amend Section 101 of Title 35 of the United States Code by
adding the following sentence at the end thereof:
Eligibility for a patent under this Section shall be determined by considering the claimed
invention as a whole independent of any other Sections of this Title.
This proposed legislation would negate the most pernicious aspects of the Alice decision:
parsing of claims to pull out an abstract concept and consideration of the claim breadth
62
Cuno Engineering Corp. v. Automatic Devices Corp., 314 U.S. 84 (1941).
Cuno Engineering, supra, 314 U.S. at 90, 91.
64
CLS Bank International v. Alice Corporation Pty. Ltd., 717 F.3d 1269, 1295 et seq. (Fed. Cir. 2013). See also
Graham v. John Deere Co., 383 U.S. 1, 15 (1966)(separate opinion of Rader, J.).
63
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under Section 112 and novelty and nonobviousness of the claimed invention under
Sections 102 and 103 as part of the patentable subject matter inquiry.
C.
The AIPLA Should Work with the USPTO to Ensure that the USPTO’s
Patentability Guidelines Are Workable to Ensure that Meritorious SoftwareImplemented Inventions Remain Patentable
Legislation to address the issues outlined above could take years. In the meantime, the USPTO
is struggling to adapt to the changing legal landscape. Since the Alice decision issued in June,
2014, the USPTO and the bar have debated whether the Alice decision was a substantive change
in the law and, accordingly, whether the USPTO’s examination guidelines need to be
substantively changed. The AIPLA has stated in its comments to the USPTO’s request for
comments on Post-Alice Examiner Guidance that Alice does not require substantive changes to
current examination guidance. As of the time of the preparation of this document, the USPTO
has not yet issued its new examination practices. However, judging by the actions of the USPTO
since the Alice decision and discussions with examiners, the Alice decision has caused some
confusion in the USPTO and a knee-jerk reaction to reject most cases that could be argued to
contain an abstract idea, many of which are embodied in software.
For example, after issuance of the Alice decision, the USPTO pulled back many applications that
had been allowed so that patentability under Section 101 could be reconsidered. Also, the
USPTO has started to routinely issue pro forma Alice rejections suggesting that the invention
embodies an abstract idea without adding “something more,” but without providing a substantive
analysis. Significantly, these rejections are not being issued in applications that were previously
rejected under §101. This hardly seems like the actions of an agency that believes Alice has not
changed the patent landscape. In the absence of new Section 101 guidelines, practitioners have
had a difficult time responding to such rejections and examiners have had an equally difficult
time evaluating the responses.
So, how can one advocate for issuance of important software patents in these uncertain times?
In short, the USPTO and the bar need to do what they have done successfully in a few limited
instances – work together to find a solution. Examiners struggle with software patent
applications because the inventions are described generally and claimed functionally (primarily
due to the issues noted in Section V above). Identifying the invention is often difficult, so
comparing the claimed invention to the prior art is even more difficult. The lack of a standard
“template” for drafting patent applications and claims for software related invention has led to
disparate treatment by the USPTO, particularly in the application of Section 101.
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AIPLA Whitepaper on Software Patents
October 22, 2014
Page 24 of 24
PRELIMINARY DRAFT OF OCTOBER 22, 2014
The AIPLA needs to engage the USPTO and work together to establish guidelines with “do’s”
and “don’ts” for drafting software specifications and for drafting claims to softwareimplemented inventions in a manner that is compliant with the current case law. As the ECLC
and the USPTO did a few years back when they worked together to create Interview Guidelines,
members of the AIPLA, with leadership from the ECLC, should meet regularly with the USPTO
to discuss what works and what does not work in the context of the case law and USPTO
examination procedures when examining patent applications embodying software. The ECLC
stands ready to engage in this process. Similarly, the USPTO and AIPLA members should
discuss claim strategies and techniques that embody current “best practices” for claiming
software-implemented inventions given the fluid state of Section 101 jurisprudence.
The benefits to the USPTO and the bar are apparent. The USPTO would receive applications for
examination that are in a recognized format and structure so that the invention is easier to
recognize and search. Members of the bar would, in turn, achieve a better understanding of the
claim types and styles that are best suited to examination. Then, rather than the USPTO issuing
examiner guidelines and the examiners and practitioners trying to contort specification and
claims to comply with such guidelines, the USPTO and bar could agree on the format and
structure of specifications and claims for software implemented inventions so that the dialog
between examiners and practitioners during prosecution can focus more on the merits of the
invention than a difficult exchange about whether any new Section 101 guidelines are satisfied
by the claims as presented. This Software White Paper is intended to be a first step in that
direction.
CONCLUSION
The Bilski and Alice decisions and the USPTO’s response to these decisions has created
unprecedented uncertainty in connection with the patentability of innovations implemented in
software. The software industry is too important for the AIPLA to allow the erosion of patent
rights for software-implemented inventions to continue. The AIPLA must redouble its efforts to
persuade the courts, Congress, and the USPTO to take steps to remove the uncertainty around
software patentability while preserving a degree of protection that will allow the software
industry to continue to thrive. Practitioners within the ECLC recognize that this will not be an
easy task and that we may have to move outside of our comfort zones and perhaps change the
way we draft and prosecute patent applications implementing software. But something must be
done. The ECLC is ready, willing and able to act. It is our hope that the leadership of the
AIPLA will lead the way.
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