Source: https://www.ipwatchdog.com/2018/08/01/no-light-at-the-end-of-the-tunnel/id=99473/
Timestamp: 2019-04-20 17:13:23+00:00

Document:
Last February, in light of the recent Berkheimer and Aatrix cases, Attorney Meredith Addy wrote an excellent article for IP Watchdog entitled: “Is there a Light at the End of the Alice Tunnel?” In her article, Meredith Addy aspired “[h]opefully . . . this is the beginning of a recognition of the underlying facts and the procedure required for proper Rule 12 dismissal, and not just a blip in the Alice carnage.” Five months later, it is clear that Ms. Addy was too optimistic.
It’s been over eight years since the Supreme Court issued its Bilski v Kappos decision, over six years since the Supreme Court issued its Mayo v. Prometheus decision and over four years since the Supreme Court issued its Alice Corp. v. CLS Bank decision. In case anyone missed it, each of these three landmark cases was decided based on evidence on the record. See, e.g., Mayo, slip op. at p. 10 (using admissions made in the patent specification as evidence); Alice Corp., slip op. at p. 9 (citing various textbooks as evidence for the underlying business methods of both Bilski and Alice Corp.). Thus, the Supreme Court not only contemplated the need for evidence when determining patent eligibility for abstract ideas of man-made origin, but wholly embraced the practice.
Yet despite the Supreme Court’s trio of evidence-based holdings, it was February of this year before a single three-judge Federal Circuit panel definitively ruled on the evidence issue in Berkheimer v. HP, and it was the end of May before a majority of the Federal Circuit signed on to the idea that determining whether a man-made something is well-understood (or well-known), routine and conventional is an issue of fact that should be based on objective evidence. That’s the better part of a decade of the Federal Circuit wandering the desert despite having a sextant, a sky full of bright stars and a truckload of the most modern GPS systems known to man. This isn’t comforting.
Further, the honorable Judge Reyna’s dissent in Berkheimer en banc (as with Aatrix) is puzzling given Judge Reyna’s holding in McRo v. Bandai. That is, despite Judge Reyna’s recent anti-evidence stance, a reading of McRO (penned by Judge Reyna) reveals he decided that the McRO claims were patent-eligible based on a lack of evidence. “Defendants provided no evidence that the process previously used by animators is the same as the process required by the claims” (emphasis added). McRO, slip op. at p. 24. “Defendants’ attorney’s argument that any rules-based lip-synchronization process must use the claimed type of rules has appeal, but no record evidence supports this conclusion” (emphasis added). McRO, slip op. at p. 26. Clarification is needed.
In contrast to Judge Reyna, the honorable Judge Taranto signed on to all three of the pro-evidence McRO, Aatrix and Berkheimer en banc decisions. However, despite Judge Taranto’s recent epiphany on the need for evidence, his Electric Power Group v. Alstom and SAP America v. Investpic decisions are devoid of any discussion of evidence on the record. Alstom and Investpic are arguably the two worst anti-evidence patent-eligibility decisions to date. These cases cannot be reasonably reconciled with McRO, Aatrix and Berkheimer, and few information-age claims survive the holdings of these cases.
Note that I am not declaring that the claims of either of Alstom or Investpic must be patent eligible. I merely assert that Judge Taranto’s holdings in these cases cannot be reconciled with the holdings of McRO, Aatrix and Berkheimer, all of which Judge Taranto signed on to. I also posit that the Alstom and Investpic decisions cannot be reconciled with the holdings of at least DDR Holdings, Trading Technologies, Enfish and Finjan.
For example, in Alstom, the Federal Circuit declared that merely “presenting the results of abstract processes of collecting and analyzing information, without more (such as identifying a particular tool for presentation)” cannot be patent eligible. Alstom, slip op. at p. 7. Note that Alstom doesn’t identify what might qualify as a “particular tool for presentation,” or why a “particular tool for presentation” is necessary under Alice/Mayo. The court’s supporting citations of Content Extraction and Ultramercial provide no apparent clue. Further, Bilski clearly states that “courts ‘should not read into the patent laws limitations and conditions which the legislature has not expressed.’” Bilski, slip op. at p. 2 (citing Diamond v. Diehr), and it is worth noting that DDR Holdings, Trading Technologies, McRO, Enfish, Finjan, Berkheimer and Aatrix involve claims that do nothing more that collect, process and (maybe) display data.
The Alstom decision is problematic. However, compared to Alstom, the recent Investpic holding is far more disturbing. Not only did the Federal Circuit eschew the need for an evidence-based analysis, but the court declared that no advantage under step two of the two-part Alice/Mayo test could cure abstractness. “The claims here are ineligible because their innovation is an innovation in ineligible subject matter.” Investpic, slip op. at p. 3. “In the absence of the required ‘inventive concept’ in application, the claims here are legally equivalent to claims simply to the asserted advance in the realm of abstract ideas – an advance in mathematical techniques in finance.” Investpic, slip op. at p. 13. “Under the principles developed in interpreting § 101, patent law does not protect such claims, without more, no matter how groundbreaking the advance.” Id.
The rule established by the Investpic decision represents a frightening and legally-impermissible departure from the Alice/Mayo test as it de jure and de facto writes out the second step for an entire genre of information age inventions. There is nothing in Bilski or Alice Corp. that justifies the Investpic holding. In fact, the holdings of both Bilski and Alice Corp. are narrow. Specifically, Bilski or Alice Corp. stand for the idea that one cannot patent a long-known business method by merely evoking a computer. In contrast, new and never before seen business methods fall outside the scope of the Bilski and Alice Corp. holdings, and the Investpic claims represent a new business method even if the results cannot be physically touched. “The concern underlying the exceptions to § 101 is not tangibility, but preemption.” McRO, slip op. at p. 25 (citing Mayo).
“[T]he claims here are critically different from those we determined to be patent eligible in McRO, Inc. v. Bandai Namco Games America Inc. The claims in McRO were directed to the creation of something physical – namely, the display of “lip synchronization and facial expressions” of animated characters on screens for viewing by human eyes. The claimed improvement was to how the physical display operated (to produce better quality images), unlike (what is present here) a claimed improvement in a mathematical technique with no improved display mechanism. The claims in McRO thus were not abstract in the sense that is dispositive here. And those claims also avoided being “abstract” in another sense reflected repeatedly in our cases (based on a contrast not with “physical” but with “concrete”): they had the specificity required to transform a claim from one claiming only a result to one claiming a way of achieving it” (internal citations omitted).
First, without question the Investpic claims have sufficient specificity “to transform a claim from one claiming only a result to one claiming a way of achieving it.” In fact, the holding of Investpic gives no indication as to what “specificity” is lacking from the Investpic claims that precludes a person of ordinary skill from achieving the claimed methods and systems.
As a second issue, the first definition that pops up for a Google-based search of “concrete” is: “existing in a material or physical form.” If there’s a distinction between the concepts of “physical” and “concrete,” it is not made clear in the body of the Investpic decision.
As a third issue, there is nothing more “physical” about McRO’s set of resultant vectors used to create an image on a screen than Investpic’s market/investment analyses. In fact, I posit that financial markets are real; Wall Street is real; 3D cartoons are not. However, despite Judge Taranto’s belief in McRO’s physical nature, “[t]he concern underlying the exceptions to § 101 is not tangibility, but preemption.” McRO, slip op. at p. 25.
It is not my intention to criticize the judges on the Alstom and Investpic panels. However, one simply cannot seriously discuss the Alstom and Investpic cases without discussing the erroneous judicial theories championed by the judges involved in those cases. I greatly respect the Federal Circuit’s decisions as a whole, and find the Federal Circuit’s decisions outside the realm of patent-eligibility always to be insightful and informative. That said, one can cite conflicting and irreconcilable holdings from most judges on the Federal Circuit on the patent eligibility issue. It is my position that much of the inconsistency – not just judge to judge, but by the same judges case to case – stems from seemingly contradicting holdings and nebulous dicta from various Supreme Court decisions that the Federal Circuit failed to correctly resolve.
However, the remainder of the § 101 problem is wholly owned by Federal Circuit. Far too many decisions have issued that are not based on record evidence and/or the idea of preemption. The precedent set by these cases will warp patent eligibility analyses for decades to come unless the Federal Circuit produces an en banc decision and walks back many of its erroneous decisions. While there is the possibility that the Supreme Court may wake up and seriously consider one of the constant stream of relevant certiorari petitions sent to them, I’m not holding my breath.
I assert that there are at least four problems caused by the Federal Circuit that led to the ongoing judicial “carnage,” which will be addressed in a following article. I also assert that nothing will get better until all four of these problems are corrected. Stay tuned.
Alice was done so that DJ could rule on SJ that the all the claims were invalid.
A minor nit: references to Alstom should be recaptioned Electric Power Group, as that is the name used by the USPTO (and examiners).
Anyway, thanks again for this piece, it really summarizes the clusterf*** that is our current 101 jurisprudence.
Other than perhaps “Manson,” I thought infamous names went by more than the singular name….
> There is no assertion of the Investpic claims amounting to something well-understood, routine and conventional, or somehow being part of the prior art.
The logical fallacy here is that the reasoning analyzes whether adding generic components is itself well-understood, routine, and conventions (which arguably is), but does not analyze whether the sequence of steps (which are performed by the generic components) is well-understood, routine, and conventional. In McRO, the steps were analyzed and the claims were eligible. In Investpic and Electric Power Group (Alstrom), the addition of generic components was analyzed and the claims found ineligible. It is left to the whim and fancy of the judge as to whether the eligible features will be analyzed or whether the ineligible features will be analyzed.
To echo Anon’s comments. Mention “Alstom,” and everybody goes “never heard of it.” However, mention “Electric Power Group” and EVERYBODY knows what you are talking about.
After literally dealing with Electric Power Group at least a hundred times, I have found there are ways to argue it. However, nothing stops an Examiner who is hellbent to reject your claims regardless.
The problem with the Federal Circuit is that there are so many decisions that can be cited on barely distinguishable fact patterns that whether one’s claim survives or not is simply based upon the panel you are dealing with at the Federal Circuit. There is no “consistent law” to be applied. Nowadays, you just hope for a good panel.
The slight of hand that you are seeing is the attempt to dispatch the ordered combination portion.
We must not forget that the conventionality requirement is NOT limited to mere computer components, but MUST also be able to show the FULL ordered combination as conventional – keeping in mind that showing that something is conventional requires MORE than a showing of either lacking novelty or even being obvious. Showing conventionality means showing widespread use. And that must be by proper evidentiary support (no Article III judge hand waving permitted) and must be for the ENTIRE ordered combination.
If this is properly (and rigorously) pursued, the Office is going to wholesale drop trying to make these rejections.
There has been a case released after Electric Power Group that seriously impacts the ability to use that case – I cannot recall the name of it off of the top of my head, but it definitely constrains the unbridled “glee” the EPG was being wielded with.
Couple that with a rigorous application of Berkheimer (forcing the Examiner to provide legitimate evidentiary support by challenging ALL statements of “conventionally” (or “generic”), and the Examiners must eventually apply the actual law.
I assert that there have been many such cases, but one EPG beats ten thousand Berkheimet en bancs.
This patent situation reminds me of the collapse of the mortgage-backed securities fraud of early 2000-2008. The mortgage situation was so perverted, nobody deep down really thought it could continue forever although at times it seemed like it might. And intelligent people would just smile at you and rationalize the perversion of phony income verifications and inflated appraisals until the cows come home as they gamed the system to profit at the public’s expense.
The perversion happening with patents also seems like it might continue forever, however, it also cannot sustain itself. It will end, not as soon as it should, but it will end as it puts the country at outsized risk for the sake of a few well connected.
Yes, I also have a patent examiner, who is intelligent on the surface, giving me borderplate 101 rejections using court cases from fields outside my technology. He refuses to acknowledge or address evidence submitted into the record that is directly on-point within my field or technology. The examiner babbles the same illogical statements that have nothing to do with my application or evidence while appearing to be sincere just like those that were scamming the country with their mortgages.
There is one rule in life that I find has always been true: When intelligent people say stupid or illogical statement, there is always a hidden agenda. You cannot rationalize the situation, although we foolishly try, as rationalization does not address their real agenda.
I just hope I hold on long enough until the joke stops and the country has to put a stop to the foolishness just like the mortgage scam.
>>There is one rule in life that I find has always been true: When intelligent people say stupid or illogical statement, there is always a hidden agenda. You cannot rationalize the situation, although we foolishly try, as rationalization does not address their real agenda.
This is right. And explains Lemley and the other anti-patent people. Taranto is trying to hold that all information processing that is like a person is per se obvious. European scientist say it isn’t even worth trying to simulate human thought because we don’t know enough yet.
So a Harvard trained mathematician is telling us the Sun revolves around the Earth. And that a machine that performs his job should be patent ineligible.
Hard to explain other than Taranto is getting some side money.
It would be interesting to do a deep dive into Taranto’s life and finances to try to understand why he is trying to burn down the patent system. Is he taking money? Maybe. Does he imagine himself to be a warrior against the unjust patent system and as such has decided that he does not need to care about the law or ethics? Is he simply deluded and so ignorant of science and patent law that Lemley’s propaganda convinces him?
It would be interesting to see why we have people like Taranto burning down the patent system. What motives this thing to burn the patent system down?
>>Research firm Gartner predicts that AI will create 2.3 million jobs and eliminate 1.8 million — a net increase of 500,000 jobs — by 2020. That doesn’t throw out the fact that it would result in steep layoffs around the world.
Be clear on what reality is. These machines are information processing machines that are replacing humans and we have judges like Taranto on the one court that is supposed to understand science telling us that these machines are not eligible for patentability or are per se obvious. It goes beyond outrage and it is equivalent to being told that we must believe that the Sun revolves around the Earth.
Be clear. We need judges like Taranto to be impeached. That is the only way forward for the patent system. Dissolve the CAFC and reform it with a requirement that the judge have a science background.
I still think that the FBI should investigate the manner in which the appointments to the CAFC were made under Obama. There is a lot of circumstantial evidence that companies were selecting judges and then the question is who did they select and what did they say to the selected judge before having Obama appoint them.
@13 – Read today’s modified opinion in SAP v. Investpic and you will vomit twice as hard about Taranto – and how EPG is cited numerous times. He again closes with: “If any such protection is to be found, the innovator must look outside patent law in search of it, such as in the law of trade secrets, whose core requirement is that the idea be kept secret from the public”. Which shifts the power to those corporations that have resources to enforce illegal employee agreements to silence those individuals – keeping everything they know “secret from the public” (i.e., secret from any future employer). What a world.
Their subject is nothing but a series of mathematical calculations based on selected information and the presentation of the results of those calculations (in the plot of a probability distribution function). No matter how much of an advance in the finance field the claims recite, the advance lies entirely in the realm of abstract ideas, with no plausibly alleged innovation in the nonabstract application realm. An advance of that nature is ineligible for patenting.
Pretty clear that Taranto is willing to mischaracterize technology to attain his ends.
Taranto also wrote: >>The claimed improvement was to how the physical display operated (to produce better quality images), unlike (what is present here) a claimed improvement in a mathematical technique with no improved display mechanism.
This is clearly wrong. He is saying it was a change to hardware when it wasn’t. We should assume intentional mischaracterization.
Basically, he is trying to make all software ineligible. I wonder what Taranto thinks of the fact that that makes all hardware ineligible too as I can just take a small piece of a hardware claim and perform the function in software.
Wow. This man has to go. He really is an existential threat to the patent system. I have been saying this for years about Taranto.
Wow again about the trade secret discussion. That is exactly what the large corporation want to control employees. I have been predicting the rise of the trade secret now for about 5 years. And, you know, anyone that understand technology can easily see how the corporations can change development to make proprietary systems and turn everything they do into a trade secret.
These criminal IP pirates and their lackeys operate much as a cartel.
Consequently, and likewise, if there is ever to be any restoration of power to inventors, it will only be as a result of organizing into a cartel. This is the manifest truth of the tactical and strategic situation for inventors in the United States, today.
Given the common sense realization that trade secrets are all that is left to U.S. inventors in any case, this is not much of a relative sacrifice to make, by any measure.
I have composed founding documents and practical strategy for this approach, and contacted several leading members of our community, early this past May, 2018. No-one seems to be interested; even though, this likely is the last avenue available to U.S. inventors for a chance of worthwhile representation, if we wish to keep inventing with at least some prospect of viable practice and implementation of our inventions.
Is this last assertion, not too obvious now, given the blatantly obvious quite deliberate rejection (‘stonewalling’) by the Congressional members of any inventors’ interest whatsoever? They’re too busy with make-work for kangaroo courts, holding ten years of sham hearings at the behest of their true masters in the IP pirate community.
I have tried contacting some of the much more well known proponents in this community, including Josh, Paul and Randy. Not one reply, even to politely decline. Meantime, lately, Josh has been writing some comments quite close to what I propose to advocate for.
If we cannot maintain mutual respectability and communications, then how will any effort in response, ever get organized?
You mean how patent troll IBM scalped innovator Groupon for $82million today?
In what twisted world did 4 pieces of paper restore power to the inventors? If IBM did invent it, why did they sit on those 4 patents and not develop them? And why should they be rewarded over the scientists and engineers that brought an actual implementation to market that people and merchants could make use of?
You see, if you look around the past 20 years, you’ll see more innovation than ever before – MUCH MUCH MORE in fact – yet large parasitic-make-nothing corporations like IBM leech off true innovators bringing useful products to market. “Criminal IP pirates” indeed – all the lawyers and patent law firms.
A court of law (Berkheimer court) has to remind everyone that facts matter in a legal setting and the decision is viewed as a landmark principle.
I am not as learned in patent law as many people who post to this blog. Even to such a newbie it is clear that when hard third-party independent evidence is not even addressed, and still not being addressed by my examiner; when judges add words to the law that are not written into that law (101), and those judges will not define said words or terms, then I must back in kindergarten.
Everything I learned life I learned in kindergarten. The current patent jurisprudence in this country is like the playground games in kindergarten, only the adult version. I had no chance to win during those recess games when the rules kept changing or the rules were made up as the game progressed. One slight consolation is nobody had to wear black robes in kindergarten and the only thing stolen was my lunch apple.
My discovery and patent application is a solution that has never been accomplished by the working professionals and experts in my line of work. Experts have written about trying to solve this problem (evidence submitted by me), leading consultants in the field congratulate me, and yet the USPTO tells me it is routine, conventional and well understood. To the USPTO I suggest that they are in the wrong field if my solution was that obvious and well understood to them as my cohorts would have welcomed their brilliance many decades ago.
In retrospect, perhaps the USPTO and I should have switched fields. I rubber stamp everything rejected and the USPTO solves all the world’s unanswered problems.
@20 In what twisted world did 4 pieces of paper restore power to the inventors? If IBM did invent it, why did they sit on those 4 patents and not develop them? And why should they be rewarded over the scientists and engineers that brought an actual implementation to market that people and merchants could make use of?
A FTO would have found those patents. And–again–we have this myth that unless you develop what you have invented then you are bad person. And the myth that people that build systems invent the systems and aren’t just copying what they learned from a journal article written from the patent.
Etc. I don’t think innovation is up. Actually, what we are seeing is a suppression of innovation by a few large companies.
Great job; thanks for all of the time and effort you put in working through these issues. You were one of the first to present a challenge on some of these issues, and you continue to be a tireless champion for applicants everywhere.

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