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AIPLA President’s blog: A lack of judicial guidance

Jeffrey I. D. Lewis

In a one-two punch, the Supreme Court and the Federal Circuit declined to guide the patent bar on the law of patent eligibility. These are two opportunities that should not have been missed, but they were to lesser and greater degrees.

AIPLA PresidentIn Bowman v Monsanto the Supreme Court held that Bowman infringed Monsanto’s patents when he replanted patented soy beans as seed to grow new generations of soy beans. While I applaud the Supreme Court’s pro-patent ruling – and note that it is consistent with the positions AIPLA took in its amicus curiae brief –the decision is explicitly narrow and does not address other self-replicating technology. Judge Kagan, for the unanimous court, wrote:

Our holding today is limited – addressing the situation before us, rather than every one involving a self-replicating product. We recognize that such inventions are becoming ever more prevalent, complex, and diverse. In another case, the article’s self-replication might occur outside the purchaser’s control. Or it might be a necessary but incidental step in using the item for another purpose. … We need not address here whether or how the doctrine of patent exhaustion would apply in such circumstances.

Arguably, with technology rapidly advancing, the Supreme Court was well advised to have narrowing language to prevent future technologies from being swept up by the Bowman decision. This decision by the Supreme Court, while heartening, is nowhere near as lost an opportunity as the Federal Circuit’s CLS debacle.

The CLS Bank International v Alice Corp decision is one paragraph long, per curium. It simply states that a majority of the court affirms the finding that the method and computer readable media claims are not patent-eligible subject matter under Section 101, but that the court is equally divided on the system claims so that is affirmed for lack of a decision. Clearly a missed opportunity.

To try and remedy that error, however, six additional opinions were published – one concurrence, one dissent, three concurrences in part/dissents in part, and one “additional reflection”. In total, the judges spent 128 pages explaining the one paragraph per curiam decision.

The CLS decision was a highly anticipated chance to resolve an area of law that the Supreme Court had made murky. When the case was taken en banc, the Federal Circuit invited submissions and 22 amicus curiae briefs were submitted. Instead of the Federal Circuit giving direction and clarity, it added to the confusion as Judge Newman noted in dissent:

The ascendance of section 101 as an independent source of litigation, separate from the merits of patentability, is a new uncertainty for inventors. The court, now rehearing this case en banc, hoped to ameliorate this uncertainty by providing objective standards for section 101 patent-eligibility. Instead we have propounded at least three incompatible standards, devoid of consensus, serving simply to add to the unreliability and cost of the system of patents as an incentive for innovation. With today’s judicial deadlock, the only assurance is that any successful innovation is likely to be challenged in opportunistic litigation, whose result will depend on the random selection of the panel.

The simple fact is that the deadlock reflects the uncertain state of the law and an underlying morass. Even the decisions themselves reflect that confusion. Simply compare footnote 1 from Judge Lourie’s concurrence to footnote 1 of the concurrence in part, dissent in part by Judge Rader. Judge Lourie wrote in his footnote 1:

While Chief Judge Rader is correct to note that no single opinion issued today commands a majority, seven of the ten members, a majority, of this en banc court have agreed that the method and computer-readable medium claims before us fail to recite patent-eligible subject matter. In addition, eight judges, a majority, have concluded that the particular method, medium, and system claims at issue in this case should rise or fall together in the § 101 analysis.

In contrast, Chief Judge Rader’s footnote 1 accurately narrows the scope of the CLS analysis to show that there is little precedential guidance:

No portion of any opinion issued today other than our Per Curiam Judgment garners a majority. The court is evenly split on the patent eligibility of the system claims. Although a majority of the judges on the court agree that the method claims do not recite patent eligible subject matter, no majority of those judges agrees as to the legal rationale for that conclusion. Accordingly, though much is published today discussing the proper approach to the patent eligibility inquiry, nothing said today beyond our judgment has the weight of precedent.

Judge Newman said it correctly in her dissent. Patent law has legal principles that underlie economic incentive, and proper implementation of patents benefits the public as well as providing “benefits to the nation of industrial activity, employment and economic growth”. The muddiness of the CLS decision on the scope of section 101 for computer-based inventions – a major economic driver for the United States – is “a disincentive to both innovators and competitors”.

Better luck next time.

Thanks for reading.



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