The Supreme Court’s June ruling on the patentability of software — its first in 33 years — raised as many questions as it answered. One specific software patent went down in flames in the case of Alice v. CLS Bank, but the abstract reasoning of the decision didn’t provide much clarity on which other patents might be in danger.
Now a series of decisions from lower courts is starting to bring the ruling’s practical consequences into focus. And the results have been ugly for fans of software patents. By my count there have been 11 court rulings on the patentability of software since the Supreme Court’s decision — including six that were decided this month. Every single one of them has led to the patent being invalidated.
This doesn’t necessarily mean that all software patents are in danger — these are mostly patents that are particularly vulnerable to challenge under the new Alice precedent. But it does mean that the pendulum of patent law is now clearly swinging in an anti-patent direction. Every time a patent gets invalidated, it strengthens the bargaining position of every defendant facing a lawsuit from a patent troll.
The end of “do it on a computer” patents
In the late 1990s and early 2000s, the Patent Office handed out a growing number of what might be called “do it on a computer” patents. These patents take some activity that people have been doing for centuries — say, holding funds in escrow until a transaction is complete — and claim the concept of performing that task with a computer or over the internet. The patents are typically vague about how to perform the task in question.
The Supreme Court invalidated a patent like that in its decision this year. The patent claimed the concept of using a computer to hold funds in escrow to reduce the risk that one party would fail to deliver on an agreement. The Supreme Court ruled that the use of a computer did not turn this centuries-old concept in recent weeks, the courts have been following the Supreme Court’s lead and ruling that these patents are illegal:
- On July 6, a Delaware trial court rejected a Comcast patent that claimed the concept of a computerized telecommunications system checking with a user before deciding whether to establish a new connection. The court noted that the steps described in the patent could easily be performed by human beings making telephone calls.
- On July 8, a New York court invalidated a patent on the concept of using a computer to help users plan meals while achieving dieting goals. The court was unimpressed with the patent holder’s argument that some of the details in the patent — such as the use of “picture menus” to choose meals — was sufficient to render it a patentable idea.
- On July 17, the Federal Circuit Appeals Court (which is in charge of all patent cases) rejected a patent on the concept of keeping colors synchronized across devices by building a profile that describes the characteristics of each device. The court held that the creation and use of these profiles were merely mental steps that could be done by a human being and were therefore not eligible for patent protection.
- On August 26, the Federal Circuit rejected a patent that claimed the concept of running a bingo game on a computer. “Managing the game of bingo consists solely of mental steps which can be carried out by a human using pen and paper,” the court ruled. Converting that process into a computer program doesn’t lead to a patentable invention.
- On August 29, a California court struck down a patent on a method of linking a mortgage line of credit to a checking account. The court said that the generic computer functions mentioned in the patent were not enough to merit protection.
- On September 3, a Texas trial court invalidated a patent on the concept of using a computer to convert reward points from one store to another. The court held that the “invention” claimed by the patent “not fundamentally different from the kinds of commonplace financial transactions that were the subjects of the Supreme Court’s recent decisions.”
- In a second September 3 decision, a Delaware trial court rejected a patent on the concept of an intermediary selectively revealing information about two parties to each other — using a computer. The court noted that it has long been common for corporate headhunters to withhold certain information about an employer from potential employees (and vice versa) until both parties are ready to proceed.
- On the same day, the same Delaware court invalidated a patent on the concept of using a computerized system to “upsell” customers who buy one product on other products that might interest them. The court pointed out that upselling is as old as commerce itself.
- In a final decision the same day, the Federal Circuit appeals court struck down a patent that claimed the concept of using surety bonds to guarantee a transaction — using a computer. The court pointed out that surety bonds have been around since ancient times, and performing this well-known transaction with the help of a computer doesn’t turn it into a patentable invention.
- On September 4, a California trial court rejected a patent on the concept of using a computer network to ask people to do tasks and then wait for them to do them. The court pointed out that people have done this with telephones for decades, and that doing the same thing over the internet doesn’t count as an invention.
- On September 11, a Florida court invalidated a patent on the concept of subtracting a small amount of money from each of many payments in order to accumulate a larger sum of money — using a computer. The court noted that this kind of schemes has been widely known for centuries. For example, the plot of Superman III involved a villain using this kind of scheme to steal from co-workers’ paychecks.