Source: https://www.brownwinick.com/news-blogs/intellectual-property-blog/software-patents-abstract-ideas-and-alice-corp.aspx
Timestamp: 2019-04-24 09:03:35+00:00

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Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title. 35 U.S.C. §101.
35 U.S.C. §101 defines four categories of patentable subject matter: 1) processes; 2) machines; 3) manufactures; and 4) compositions of matter. Although these categories seem quite expansive, there is some subject matter which is not patentable. For example, laws of nature, physical phenomena, and abstract ideas are not patentable. These latter categories are what is referred to as judicial exceptions to 35 U.S.C. §101.
The above judicial exceptions create a significant problem for those seeking patent protection of software. This is because computer programs underlying the software are generally based on ideas executed by mathematical operations. As a consequence, the United States Patent and Trademark Office (USPTO), as well as the federal courts, struggle with the issue as to whether patent claims directed to software merely recite an abstract idea, or something more.
For patent practitioners, there is little guidance from the courts to help us determine exactly what constitutes an abstract idea. In fact, the Court of Appeals for the Federal Circuit, in Ultramercial, LLC v. Hulu, LLC, admitted “[b]oth members of the Supreme Court and this court have recognized the difficulty of providing a precise formula or definition for the judge-made ineligible category of abstractness.” In fact, Justice Stevens, in In re Bilski, commented that the Supreme Court has never provided “a satisfying account of what constitutes an unpatentable abstract idea.” Most recently, in Alice Corp. v. CLS Bank, the Supreme Court reviewed a case to determine whether claims drawn to a method of exchanging financial obligations were patentable under 35 U.S.C. §101. In this case, the Supreme Court held the claims were drawn to an abstract idea and were therefore patent ineligible despite the fact the method was implemented by a computer. Although the Supreme Court declared the above claims were drawn to an abstract idea, the Supreme Court failed to define exactly what an abstract idea is. As such, Alice Corp. v. CLS Bank, did very little to inform the public as to exactly what is and isn’t an abstract idea.
The decision in Alice Corp. v. CLS Bank prompted the United States Patent and Trademark Office (USPTO) to issue new preliminary examination instructions for software patents. In the instructions the USPTO explicitly states: “Notably, Alice Corp. neither creates a per se excluded category of subject matter, such as software or business methods, nor imposes any special requirements for eligibility of software or business methods.” The preliminary examination instructions went on to offer some insight as to what the USPTO believes may be patentable subject matter and, in fact, offers a two part analysis for claims that recite abstract ideas. Part I requires an Examiner determine whether or not the claims of a patent are directed to an abstract idea. If so, Part II requires an examiner determine whether or not claim itself amounts to more than an abstract idea itself. If so, the claim recites patentable subject matter.
In addition to providing the two part test, the instructions provided some examples of abstract ideas and some examples of claim limitations that may allow a claim to be patent eligible despite being directed to an abstract idea. For example, the guidelines state that fundamental economic practices, methods of organizing human activities, ideas, and mathematical relationships themselves are abstract ideas. Claims that may still be patentable, despite being drawn to an abstract idea, are claims that improve another technology or technical field. Claims that improve the functioning of a computer are also deemed as being patentable claims, even if the claims themselves recite an abstract idea.
At first blush, the new USPTO guidelines appear to offer some guidance regarding abstract ideas. However, implementation of the guidelines is far from clear. For example, what sorts of organized human activities are abstract? How much of an improvement to a functioning of a computer or a technical field is necessary in order to impart patentability to a claim? Is an alternative way of doing something an improvement in a technical field? Until these sorts of questions are answered consistently, the guidelines do not offer much clarity regarding exactly what kind of abstract idea, or implementation thereof, is patentable.
In view of the above, the only thing that is clear, with regard to software patents, is that it is unclear exactly how to structure a software patent so that its claims recite what the courts and/or the USPTO deem patentable. However, the good news from the USPTO and the Supreme Court, is that there is clearly no per se rule forbidding the patenting of software.

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