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Alice – An Obvious Looking-Glass?

Alice Corp. v. CLS Bank, 573 U.S. _____ (2014)
This June the Supreme Court decided the patent case Alice Corp. v. CLS Bank, holding that an unpatentable method of accounting for financial risk can’t be converted to a patentable piece of intellectual property just by using a computer to carry it out. This shouldn’t be surprising or difficult to understand since nearly all Supreme Court precedent has held the same way, with the exception being the Diamond v. Diehr decision, where industrial rubber molding technology, not investment banking, was involved.

There are two concerns I see arising here that I would like to address. One has to do with inventions that require human activity, e.g., board games and parlor games like dominos and Parcheesi, which for as long as I have been practicing in IP law used to be patent-eligible. The other is about how the court seems to be conflating (i.e., unifying) Section 101 subject matter eligibility with Sections 102/103 novelty and non-obviousness requirements.

My office recently prosecuted a patent application for a game that combined dominos with betting chips or tokens and a special playing surface where there were areas delineated for the play tokens and the dominoes, and for betting tokens used in making side bets. Despite the fact that there was nothing like this in the prior art, and the examiner admitted that, the examiner refused to allow the claims (method claims, in this case) because the claims were directed to a patent-ineligible human-activity type of abstract idea. I could not get the examiner or anyone in his examining group to budge from that position. The reason was that just moving pieces around on a playing surface, and playing a game according to rules did not transform anything and involved only patent-ineligible human activity. The examiner did, however, volunteer that since we had disclosed a version of the game that had the board, dominos, betting tokens etc., all simulated on a computer, that we could get the patent through be re-writing the patent claims as being directed to a computer-implemented dominos game. This tactic was successful and the application was granted.

Now, based on the Alice Corp. opinion, I wonder if a computer-implemented game patent would hold up, if the method claims only recite that the game is computer-implemented. I think the patent is valid in my case, but Alice seems to toss patent eligibility down the rabbit-hole. The Patent and Trademark Office position just recently was that implementing the game on the computer made it patent-eligible and would avoid the Section 101 rejection, but Alice seems to infer that the Office position might have been erroneous. All we did to change the patent claims was to implement it on a computer rather than a physical playing surface, and rather than using physical dominos, chips or tokens. Under Alice Corp., either both the “hard” version and the computer-implemented version are patent-eligible, or else neither one is. My client’s patent cannot possibly be the only game or human-activity patent that the USPTO has granted based on its being computer-implemented, so I also wonder how many others are now adversely affected!

The second concern is that Justice Thomas’s majority opinion in Alice Corp. Seems to re-interpret the earlier Diamond v. Diehr decision, 450 U.S. 175 (1981), to make the patent-eligible subject matter requirement more or less the same as the novelty and non-obviousness requirements. In the Diehr patent, the claimed process was for timing the curing of an industrial rubber-molding process, computing and re-computing the cure time based on the temperature of the rubber inside the mold, and then opening the mold when the computed cure time was reached. The Diehr decision used to stand for the principle and an actual industrial process, directed to manufacturing a real, physical useful article, did not become a “patent-ineligible” abstract idea just because a computation or algorithm happened to be involved. But now, J. Thomas’s opinion (on the paragraph that bridges pages 12 and 13 of the slip opinion) asserts that Diehr’s process was patentable because Diehr’s use of a thermocouple to measure temperature inside the mold was something the industry had not been able to do previously, and this step of measuring temperature plus repeatedly calculating cure time were what made Diehr’s process patentable. Justice Thomas states that these additional steps somehow transform the process (of computing) into an “inventive application of the formula.” By stating that these “additional steps” were missing in the prior art, the opinion is actually saying that the combination was not known or used by others before (i.e., Section 102 novelty), and that is was not obvious to persons of ordinary skill in the industry (Section 103 non-obviousness). This logic is very similar to that found in the recent Mayo Collaborative v. Prometheus Labs., 566 U.S. ___, 101 USPQ2d 1961, 1969 (2012), where Justice Breyer wrote about how Diehr’s physical steps of monitoring temperature, feeding numbers into the computer, recalculating mold time, and signaling a device to open “were in context not obvious.”

This sort of language and logic in Supreme Court precedent tells me that the Court views the novelty and unobviousness requirements and the statutory subject matter requirement as being aspects of a sort of cohesive whole “invention” requirement. Under this conflated view of Diamond v. Diehr, patent eligibility seems to require both some sort of advance beyond abstract reasoning and also an unobvious process step or two. Alice seems to be saying that patent eligibility can best be seen through the looking-glass of novelty and unobviousness.