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Post-Alice, Will Fed. Cir. Stem Tide of Software Patents?

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By Mark Wilson, Esq. on August 12, 2014 5:02 PM

June's U.S. Supreme Court decision in Alice Corp. v. CLS Bank International struck a blow to software patents -- or at least the ones that didn't make any sense in the first place. To briefly recap: The Court invalidated a patent for a very generic, unpatentable abstraction whose only claim to patentability was that the abstract concept had been reduced to a computer program. The Court unanimously declared that merely attaching the words "on a computer" doesn't transform an unpatentable idea into a patentable one.

Where does that leave the venerable Federal Circuit, which has always been loath to invalidate a patent?

The First Post-Alice Test Case: Ultramercial v. WildTangent

At the Electronic Frontier Foundation, Daniel Nazer points to the back-and-forth in Ultramercial v. WildTangent as the first test case for applying Alice. Ultramerical claimed a patent to the idea of showing an advertisement before a video on the Internet. Currently, Ultramercial has been sent back to the Federal Circuit for reconsideration in light of Alice Corp., which is a strong suggestion that the High Court didn't like the Federal Circuit's ruling -- although Nazer points out that the Federal Circuit has twice "thumbed its nose at Supreme Court authority" in the past and upheld Ultramercial's patent.

The Well May Run Dry

Ultramercial is a pretty severe test case, but when will the other bogus patent cases arrive? They may peter out: Gene Quinn of IP Watchdog thinks ridiculous "on a computer" patents won't be granted to begin with. As soon as a month after Alice, Quinn observes, the U.S. Patent and Trademark Office -- which hardly ever met an idea that it didn't want to issue a patent to -- began to reject patents because they were doing little more than claiming to "invent" abstract concepts performed by a computer, just like the patent in Alice.

Damming up the influx of bogus patents further downstream is a much better idea than solving the problem at the judicial level. Pre-Alice, an inventor seeking to patent an abstract idea "on a computer" could at least get his or her foot in the door by getting the patent issued to begin with. By the time a case has reached the Federal Circuit, it's already been through a district court, where thousands and thousands of dollars have been expended litigating a patent that has already been issued. The USPTO can save a lot of time and energy by slightly increasing the height of the hurdle to get the patent in the first place; a little bit of disincentive can go a long way.

It's been only two months since Alice, but the USPTO has quickly taken the initiative to at least take Alice seriously. Prospectively, it may be USPTO -- and not the Federal Circuit -- that preemptively turns off the faucet on bogus "business method" patents.

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