EFF has submitted comments to the Patent Office urging it not to support efforts to undermine the Supreme Court’s recent decision in Alice v. CLS Bank. The Patent Office had called for public submissions regarding whether “legislative changes are desirable” in response to recent court decisions, including Alice. We explain that, far from harming the software industry, Alice has helped it thrive.
When the Supreme Court issued its ruling in Alice, it was a shock to a patent system that had been churning out software patents by the tens of thousands every year. Back in the 1990s, the Federal Circuit had opened the software patent floodgate with its ruling in State Street and In re Alappat. That decision held that any general purpose computer could be eligible for a patent so long as it is programmed to perform a particular function. In Alice, the Supreme Court substantially moderated that holding by ruling that a generic computer is not eligible for a patent simply because it is programed to implement an abstract idea.
Courts have applied Alice to throw out many of the worst software patents. Alice is particularly valuable because, in some cases, courts have applied it early in litigation thereby preventing patent trolls from using the high expense of litigation to pressure defendants into settlements. While we think that the Federal Circuit could do more to diligently apply Alice, it has at least been a step forward.
As the Alice case made its way to the Supreme Court, defenders of software patents predicted disaster would befall the software industry if the courts invalidated the patent. For example, Judge Moore of the Federal Circuit suggested that a ruling for the defendant “would decimate the electronics and software industries.” This prediction turned out be entirely inaccurate.
In our comments, we explain that the software industry has thrived in the wake of Alice. For example, while R&D spending on software and Internet development went up an impressive 16.5% in the 12 months prior to the Alice decision, it increased by an even more dramatic 27% in the year following Alice. Similarly, employment growth for software developers remains very strong, as anyone who has tried to rent an apartment in the Bay Area can attest.
We also express concern that the Patent Office’s guidance puts the thumb on the scale in favor of patent eligibility. For example, the Patent Office’s call for comments asked how it can make certain decisions better known to examiners. But it focused only on decisions finding patent claims eligible. During the same period, even more decisions were issued by the Federal Circuit finding software-related claims ineligible, but those decisions were left off the list.
Some commentators have suggested that the Patent Office takes an “intentionally narrow” view of Alice. But it is not the Patent Office’s job to narrow Supreme Court holdings, its job is to apply them. Ultimately, the patent system does not exist to create jobs for patent prosecutors, examiners, or litigators. It exists for the constitutional purpose of “promot[ing] the Progress of Science and useful Arts.” With no evidence that Alice is harming software development, the Patent Office should not focus on pushing more patenting on the industry.
Many other non-profits and companies submitted comments in favor of the changes brought by the Alice decision. These include comments from Public Knowledge, Engine, and Mozilla. We hope the Patent Office listens to this feedback from outside the patent world before making any legislative recommendations.
Public comment periods are an important check on concentrated interests pushing regulations that hurt the public interest. EFF regularly submits comments to the Patent Office where rules are proposed that would harm the public. For example, EFF and Public Knowledge recently submitted comments to the Patent Office regarding applicants' duties of disclosure. This is the duty to tell the Patent Office about material (such as existing inventions) relevant to whether the application is patentable. The Patent Office has proposed a new rule that would require patent applicants to submit material only if it the material would actually lead to a rejection of a pending claim. That is, the Patent Office proposed adopting the standard set out in a case called Therasense, which was a decision from the Court of Appeals for the Federal Circuit regarding the standards for finding a patent invalid for inequitable conduct. The Patent Office justified its proposed change as being simpler for applicants and would lessen the incentives to submit only marginally relevant material.
In our comments, we urged the Patent Office to maintain its current standards. We explain that the change would lead to no reduction in a charge of inequitable conduct. In addition, we suggested that a better incentive to reducing the amount of marginally relevant material would be if the Patent Office more frequently enforce procedures requiring patent applicants to explain the relevance of materials submitted to the office.