Source: https://www.scotusblog.com/2014/06/symposium-the-supreme-court-as-promoter-of-progress/
Timestamp: 2019-04-18 23:03:16+00:00

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Sandra S. Park is a senior attorney at the American Civil Liberties Union. She represented petitioners challenging gene patents in the ACLU’s first patent lawsuit, Association for Molecular Pathology v. Myriad Genetics, and filed an amicus brief on behalf of the ACLU in support of CLS Bank.
Yesterday’s Supreme Court decision in Alice Corp. v. CLS Bank International revisits a fundamental question about our patent system: which patents promote the progress of science?
The case involved patents aimed at addressing the risk that one party might not complete a deal after the other one has already fulfilled its end of the bargain. The steps of Alice’s patented method essentially called for using a third party, or clearinghouse, to keep track of financial transactions between two parties and then to instruct another institution to adjust the two parties’ accounts accordingly at the end of the day. Alice patented any computer implementation of this process, as well as any computer systems and computer-readable media containing program code that could carry out the method.
Justice Thomas, writing for a unanimous Court (as he did last Term in Association for Molecular Pathology v. Myriad Genetics), invalidated the patents because they claimed abstract ideas in violation of Section 101 of the Patent Act. The decision can be read as a straightforward application of the Court’s recent Section 101 decisions in Bilski v. Kappos, Mayo v. Prometheus, and Myriad. The Court first concluded that using a third-party intermediary to address settlement risk is an abstract idea, because it is a fundamental economic practice and building block of the modern economy. Accordingly, there was no meaningful distinction between the invalid method of hedging risk in Bilski and the claims here. Drawing on Mayo, the Court then held that there was no inventive concept in generic computer implementation of the method, because use of a computer is routine and did not sufficiently transform the abstract idea.
The decision should also be understood as a strong affirmation of the Court’s role in ensuring that our patent system “promotes the progress of science,” rather than impedes it, consistent with the constitutional mandate underlying our intellectual property system set out in Article I, § 8, cl.8.
Second, the Court specifically identified pre-emption as the animating principle of its Section 101 analysis. The Court described “pre-emption” of use of abstract ideas, laws of nature, and products of nature as the “concern that undergirds our § 101 jurisprudence.” Because Alice’s patents foreclosed use of the abstract idea, without improving the functioning of the computer or effecting an improvement in any other technology or technical field, the Court concluded that they were ineligible under Section 101. The pre-emption concern applies to all types of patents, including methods which pre-empt use of basic economic practices like intermediating settlement or hedging risk, and compositions of matter like isolated DNA, which pre-empt use of patients’ genetic information. By focusing on pre-emption, the Court stresses that patents must be evaluated to determine whether they spur innovation. Even where the pre-emptive effect is limited to a specific technological context, there is still a risk of tying up the use of the underlying abstract ideas or natural phenomena, disproportionate to the contribution of the patentee.
These are important points for the Patent Office, which will need to revise its guidance on abstract ideas. Following Myriad, the Patent Office re-assessed its approach to products and laws of nature and acknowledged that a “course correction” was needed. In guidance issued in March, it instructed examiners on how all patent applications must be analyzed to determine whether they claim laws or products of nature, but did not address its separate guidance on abstract ideas. Alice provides general support for the Patent Office’s decision to synthesize all of the Court’s case law in its guidance, and to not limit the reasoning of Myriad to patents on nucleic acids.
In light of Alice, the Patent Office should take further steps to ensure that its guidance is in line with the Court’s doctrine. For example, the guidance on abstract ideas currently instructs patent examiners to determine whether a claim “wholly embraces a judicially recognized exception,” rather than the Court’s more nuanced examination of whether the abstract idea is sufficiently changed so that it no longer forecloses use of the underlying concept. The Patent Office should also refrain from placing too much emphasis on the inclusion of a machine in patent claims. The machine-or-transformation test, previously adopted by the Federal Circuit, was rejected as a sole test for patent eligibility by the Supreme Court in Bilski. As Alice makes clear, incorporation of a machine – or claiming the machine itself in the form of a computer system – will not cross the Section 101 threshold.
Moreover, the decision communicates to the Federal Circuit that it must play a more active role in disallowing patents that claim abstract ideas and laws and products of nature. The Federal Circuit can take some comfort that, of the Court’s recent Section 101 decisions, this is the first that does not reverse the court of appeals or rebuff a major holding. Yet, the Court chose to grant the petition, most likely because of the intense disagreements below. The first panel of the Federal Circuit held that Alice’s patents survived Section 101, and Chief Judge Prost, in her dissent, declared that the “majority has failed to follow the Supreme Court’s instructions.” The en banc court splintered, issuing a per curiam affirmance and five separate opinions. Will Alice move the Federal Circuit to apply the Court’s more skeptical approach to patents? Its recent decision rejecting patents on Dolly the sheep and other cloned animals suggests that a shift is underway. Other Section 101 cases now pending before the Federal Circuit will provide further clues, including Myriad’s latest effort to maintain its monopoly on testing patients’ BRCA1 and BRCA2 genes by asserting claims on basic DNA primers and methods of genetic sequencing (the ACLU filed an amicus brief).
The question whether “software patents,” broadly speaking, pass Section 101 muster was left for another day. The case here was an easy one to resolve based on the Court’s Section 101 precedent, given the generic nature of the claims.
But while Alice may not provide the bright-line rules that many patentees seek, it reinforces the vitality of Section 101 and protects against patents that serve as barriers to scientific inquiry and progress. As we argued to the Court in our amicus brief, Section 101’s prohibition on patenting abstract ideas is compelled by the constitutional values embedded in Article I and the First Amendment, which protects freedom of thought. The Supreme Court’s decision preserves patents as incentives for true inventions, rather than monopolies on what should be in the commons for all to use.

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