Alice Corp. v CLS Bank or the case of a patent for an abstract idea
“We risk that in business, instead of competition of prices, products and technologies, there will soon be competition for who has a patent lawyer,” said US Supreme Court Judge Stephen Brier on March 31, 2014 (hearing challenging patents owned by Alice Corp.).
Alice Corp. Ltd. v. CLS Bank Int. continues to split opinions about the possibility of patenting software and business methods, which began after the sensational “Bilski case” in 2010 (Bilski v. Kappos). It was then that the court decided for the first time not to use the “device or transformation” test (“machine-or-transformation”) as a test for patentability, which, according to the Software Freedom Law Center, will subsequently cause many problems with software patents and patenting ideas in general. “The problem is that no one understands what exactly makes an idea abstract and therefore not entitled to patent protection,” noted Mark Lemli, a well-known law professor, in his article “Life after Bilski.”
And now, the second similar case is under consideration by the US Supreme Court. The written conclusions (amicus briefs) have already been sent by Google, Microsoft, IBM, Dell, Hewlett-Packard, Trading Technologies, Red Hat and many other organizations and experts in the field of IT-technologies interested in the outcome of the litigation.
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The contested "invention" of Alice Corp. set out in four patents ( 5970479 ; 6912510 ; 7149720 ; 7725375 ) and generally represents the idea of regulating trade operations through software in real time, namely: monitoring the solvency of the parties and making payment of obligations for transactions using the escrow principle (escrow) .
In the appeals instance, the judges declared this business method not to be subject to patent protection. “The idea of using resellers in concluding transactions in order to minimize entrepreneurial risks is not new and has been used in business for a long time. In essence, this idea is abstract, ”the court indicated in its decision . However, seven out of ten judges expressed completely different opinions about the reasons for which they came to this conclusion. And five out of ten judges did not agree on what standard should be applied at all to determine the patentability of such "inventions."
The main difference of the judges in opinion arose in whether the condition of the implementation of the business method using a computer can serve as a sufficient criterion of patentability.
In accordance with Article 101 of the United States Code, any new and useful process, device, method of producing or converting a substance, or also any new and useful improvement of the above, is subject to patent protection. Articles 102 and 103 require a clear description of the novelty and essence of the invention, and article 112 prescribes indicating the method of obtaining (manufacturing) and also include a description of the process of using and implementing the specified object.
“Mention of computer use does not constitute an inventive concept and does not add anything new to the idea of reducing calculated risks through the use of mediation. The common reference in the description of the invention of terms such as "computer", "data storage device", "machine", "communication controller" does not give an abstract idea of materiality and is not sufficient to ensure the passage of articles 101, 102, 103 and 112 "Noted in the court decision.
At the same time, some judges believe that the wrong approach in resolving this case "will be the death of many patents registered and protected by law in the financial sphere (business methods) and software technology patents." Any invention, including software, is entitled to patent protection. In addition, according to them, an abstract invention can be described from the point of view of materiality: to state the whole process according to the scheme of interaction of transistors, capacitors and other electronic components and unambiguously correspond to the conditions of Art.101. And the fact that instead of a detailed technical description follows the reference to the use of a particular device, does not make this invention non-patentable.
In a jointly submitted opinion, Google, Facebook, Amazon, Dell oppose the patenting of such "inventions", because such patents monopolize abstract ideas and impede the normal development of innovation. They are not a support, but a serious threat to the development of information technology and business. Thus, in 1980, approximately 2000 patents for software were registered, by 1996 their number had reached 10,000, and by 2013 it had exceeded 400,000 patents and their number continued to increase. “This problem is not a minor nuisance, it is turning into a real expanding plague,” Google said categorically.
They further indicate that software and business method patents are inherently very similar. Currently, almost all devices used in everyday life are made up of computer hardware and software. If you allow to receive patents for abstract ideas just because they will be implemented with the help of computer equipment, then this will lead to the blocking of innovations in the modern economy. The creation of inventions in the IT sphere has recently become increasingly difficult due to the excessive array of patents, which entail large administrative costs for the acquisition of rights to use them and make the process of product development and research more costly and, in the worst case, impossible. In this regard, Google considers it necessary to limit the patentability of business methods and other abstract processes.
Microsoft, Adobe and Hewlett-Packard support the right to protect software patents, but advised to separate the wheat from the chaff and figure out which abstract ideas have the right to patent protection and which are not. If, in their conclusion, about 20 pages of detailed consideration of the history of IT-technologies, philosophical questions and empirical discourses on the meaning and meaning of software are omitted, then you can immediately proceed to the main conclusions. So, in their opinion, the patent should have the right to protection if it is aimed at a specific practical application of the invention idea, improve the operation of the computer or is a new way of using computer equipment to achieve the result of the invention, and at the same time does not try to monopolize the whole idea. That is, the invention should describe the practical application of an abstract idea as part of the process, have a technological effect or a useful result when used on a computer.
At the same time, business methods are connected with processes in such non-technological areas as commerce and finance, and relate to intangible concepts of organizing human activity in the business sphere. The invention of Alice Corp., in their opinion, is the same innovation as the description of the pharmaceutical method of treating cancer patients with the phrase "a molecule aimed at treating cancer." The contested patent only imitates a real invention, carried out with the help of a particular device, incl. computer general purpose, and, therefore, can not pass the filter of Article 101 of the United States Code.
LinkedIn, Netflix, Rackspace and Twitter remind that the patent system was conceived as the main engine of innovation, its constitutional goal is to promote the progress of science, and not to slow it down. “Our programmers overwhelmingly oppose software patents,” they conclude.
The US Government also expressed its position, pointing out that three exceptions to Article 110: laws of nature, physical phenomena and abstract ideas, clearly indicate the patent of the invention, if it is not an innovation in technology, science, or industrial production. True, this statement was made with a vague reservation about the need to carefully study the problem and study the issue in each case.
What do the parties themselves say. Alice Corp. representatives claim that their patent is a way to solve the problem, which came to light in the early 1970s, namely, an attempt to eliminate the risk of non-regulation of mutual obligations in the context of a continuous trade process and the implementation of multilateral business problems. That is, in their opinion, this is definitely a new and useful process, firstly, designed to improve the interaction between the participants in business relations and, secondly, to facilitate this interaction through the implementation of this business method through a specific device (computer).
These good intentions, apparently, do not inspire CLS Bank, who at the last court session asked for special attention to be paid to the fact that Alice Corp. has not yet developed software according to its patent and has never implemented it in practice.
Summarizing the above, we can conclude that the litigation between Alice Corp. v. CLS Bank Int. claims to be a weighty precedent in the fight against patent trolls and in the resolution of disputes over software patents. By June 30, the US Supreme Court will either finally put an end to and define the boundaries and methods for determining the patentability of abstract ideas, or it will also remain as uncertain as after the Bilski case.
Alice Corp. Ltd. v. CLS Bank Int. continues to split opinions about the possibility of patenting software and business methods, which began after the sensational “Bilski case” in 2010 (Bilski v. Kappos). It was then that the court decided for the first time not to use the “device or transformation” test (“machine-or-transformation”) as a test for patentability, which, according to the Software Freedom Law Center, will subsequently cause many problems with software patents and patenting ideas in general. “The problem is that no one understands what exactly makes an idea abstract and therefore not entitled to patent protection,” noted Mark Lemli, a well-known law professor, in his article “Life after Bilski.”
And now, the second similar case is under consideration by the US Supreme Court. The written conclusions (amicus briefs) have already been sent by Google, Microsoft, IBM, Dell, Hewlett-Packard, Trading Technologies, Red Hat and many other organizations and experts in the field of IT-technologies interested in the outcome of the litigation.
')
The contested "invention" of Alice Corp. set out in four patents ( 5970479 ; 6912510 ; 7149720 ; 7725375 ) and generally represents the idea of regulating trade operations through software in real time, namely: monitoring the solvency of the parties and making payment of obligations for transactions using the escrow principle (escrow) .
In the appeals instance, the judges declared this business method not to be subject to patent protection. “The idea of using resellers in concluding transactions in order to minimize entrepreneurial risks is not new and has been used in business for a long time. In essence, this idea is abstract, ”the court indicated in its decision . However, seven out of ten judges expressed completely different opinions about the reasons for which they came to this conclusion. And five out of ten judges did not agree on what standard should be applied at all to determine the patentability of such "inventions."
The main difference of the judges in opinion arose in whether the condition of the implementation of the business method using a computer can serve as a sufficient criterion of patentability.
In accordance with Article 101 of the United States Code, any new and useful process, device, method of producing or converting a substance, or also any new and useful improvement of the above, is subject to patent protection. Articles 102 and 103 require a clear description of the novelty and essence of the invention, and article 112 prescribes indicating the method of obtaining (manufacturing) and also include a description of the process of using and implementing the specified object.
“Mention of computer use does not constitute an inventive concept and does not add anything new to the idea of reducing calculated risks through the use of mediation. The common reference in the description of the invention of terms such as "computer", "data storage device", "machine", "communication controller" does not give an abstract idea of materiality and is not sufficient to ensure the passage of articles 101, 102, 103 and 112 "Noted in the court decision.
At the same time, some judges believe that the wrong approach in resolving this case "will be the death of many patents registered and protected by law in the financial sphere (business methods) and software technology patents." Any invention, including software, is entitled to patent protection. In addition, according to them, an abstract invention can be described from the point of view of materiality: to state the whole process according to the scheme of interaction of transistors, capacitors and other electronic components and unambiguously correspond to the conditions of Art.101. And the fact that instead of a detailed technical description follows the reference to the use of a particular device, does not make this invention non-patentable.
In a jointly submitted opinion, Google, Facebook, Amazon, Dell oppose the patenting of such "inventions", because such patents monopolize abstract ideas and impede the normal development of innovation. They are not a support, but a serious threat to the development of information technology and business. Thus, in 1980, approximately 2000 patents for software were registered, by 1996 their number had reached 10,000, and by 2013 it had exceeded 400,000 patents and their number continued to increase. “This problem is not a minor nuisance, it is turning into a real expanding plague,” Google said categorically.
They further indicate that software and business method patents are inherently very similar. Currently, almost all devices used in everyday life are made up of computer hardware and software. If you allow to receive patents for abstract ideas just because they will be implemented with the help of computer equipment, then this will lead to the blocking of innovations in the modern economy. The creation of inventions in the IT sphere has recently become increasingly difficult due to the excessive array of patents, which entail large administrative costs for the acquisition of rights to use them and make the process of product development and research more costly and, in the worst case, impossible. In this regard, Google considers it necessary to limit the patentability of business methods and other abstract processes.
Microsoft, Adobe and Hewlett-Packard support the right to protect software patents, but advised to separate the wheat from the chaff and figure out which abstract ideas have the right to patent protection and which are not. If, in their conclusion, about 20 pages of detailed consideration of the history of IT-technologies, philosophical questions and empirical discourses on the meaning and meaning of software are omitted, then you can immediately proceed to the main conclusions. So, in their opinion, the patent should have the right to protection if it is aimed at a specific practical application of the invention idea, improve the operation of the computer or is a new way of using computer equipment to achieve the result of the invention, and at the same time does not try to monopolize the whole idea. That is, the invention should describe the practical application of an abstract idea as part of the process, have a technological effect or a useful result when used on a computer.
At the same time, business methods are connected with processes in such non-technological areas as commerce and finance, and relate to intangible concepts of organizing human activity in the business sphere. The invention of Alice Corp., in their opinion, is the same innovation as the description of the pharmaceutical method of treating cancer patients with the phrase "a molecule aimed at treating cancer." The contested patent only imitates a real invention, carried out with the help of a particular device, incl. computer general purpose, and, therefore, can not pass the filter of Article 101 of the United States Code.
LinkedIn, Netflix, Rackspace and Twitter remind that the patent system was conceived as the main engine of innovation, its constitutional goal is to promote the progress of science, and not to slow it down. “Our programmers overwhelmingly oppose software patents,” they conclude.
The US Government also expressed its position, pointing out that three exceptions to Article 110: laws of nature, physical phenomena and abstract ideas, clearly indicate the patent of the invention, if it is not an innovation in technology, science, or industrial production. True, this statement was made with a vague reservation about the need to carefully study the problem and study the issue in each case.
What do the parties themselves say. Alice Corp. representatives claim that their patent is a way to solve the problem, which came to light in the early 1970s, namely, an attempt to eliminate the risk of non-regulation of mutual obligations in the context of a continuous trade process and the implementation of multilateral business problems. That is, in their opinion, this is definitely a new and useful process, firstly, designed to improve the interaction between the participants in business relations and, secondly, to facilitate this interaction through the implementation of this business method through a specific device (computer).
These good intentions, apparently, do not inspire CLS Bank, who at the last court session asked for special attention to be paid to the fact that Alice Corp. has not yet developed software according to its patent and has never implemented it in practice.
Summarizing the above, we can conclude that the litigation between Alice Corp. v. CLS Bank Int. claims to be a weighty precedent in the fight against patent trolls and in the resolution of disputes over software patents. By June 30, the US Supreme Court will either finally put an end to and define the boundaries and methods for determining the patentability of abstract ideas, or it will also remain as uncertain as after the Bilski case.
Source: https://habr.com/ru/post/288418/
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