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An Alternative Subject Matter Eligibility Test

Updated: Nov 8

September 19, 2022

By Robert Cantrell - Registered Patent Agent


I have worked on many inventions that skirt the edge of patent eligibility stemming from the outcome of Alice Corp. v. CLS Bank International, 573 U.S. 208 (2014). Some of these projects came from the vantage of being outside counsel, inside counsel, and a member of inventor teams. I am a named inventor on 45 US granted patents from Walmart, many of which center on software and demanded we take Alice into account.


A problem with Alice is that it can force inventors to create inventions that are less evolved than they could be by, for example, incorporating physical elements of a greater system to avoid their invention being interpreted by USPTO examiners as abstract. An alternative to incorporating physical elements exists, however, that could both align the spirit of patent eligibility testing to the way technologies evolve and create an easier patent eligibility test having fewer gray areas.


To explain, first recognize that there are dozens of predictable paths by which technologies evolve. One of these paths, for example, appears within the computer industry and is simply a trend toward a given benefit being delivered in ever smaller systems. A related path with which Alice, in its present form, runs at odds is the path by which solutions evolve from mechanical to electronic to virtual. Calculating machines, for example, once involved mechanical apparatuses such as an abacus or slide rule. 1961 saw the first electronic calculator, a handheld model emerging in 1967. Today, calculators appear on smartphones, a virtual solution and one of many applications that followed a similar trajectory: clocks, calendars, organizers, global positioning systems, and more.


When a solution evolves into the virtual domain, it risks becoming patent ineligible. The proposed test here, however, is to evaluate the patent eligibility of a virtual invention based on whether it has or could have patent-eligible electronic or mechanical counterparts. For example, a novel, useful, and non-obvious clock that is a software program—and, therefore, virtual—could be eligible for patent protection by merits of being a clock, regardless of whether it somehow makes its host, physical computer run better and without requiring it to somehow transform time.


A test based on how technologies evolve into virtual environments would work equally well at assessing whether a proposed invention organizes human activities and nothing more. For example, I am frequently asked to evaluate inventions whereby the inventor uses a software program to improve upon a business method such as choosing an investment. No one would consider a mechanical approach to such ideas—paper, pencil, erasers, and algorithms—nor supplementing the mechanical approach with a calculator, as patentable. The software program would, therefore, also fail to be patent eligible.


Even potentially grayer areas would map well onto the proposed way to evaluate patentability. For example, the first use of blockchain for confirming the authenticity of a virtual document would pass patent eligibility tests because it is easy to conceive of a patent-eligible first use of a unique ink imprint on a physical sheet of paper to verify the authenticity of the physical document, whereinafter blockchain, as a part of an invention, would be subject to standards of novelty, usefulness, and non-obviousness just as would an improved ink imprint system or method. As a second example, a software that allows for the management of a distribution center would not be patent eligible by virtue of doing what had been performed by the human brain. It could, however, obtain patent eligibility by doing something novel such as, as was pioneered by Amazon, storing products physically by space availability instead of by product category—i.e. bottles of a shampoo brand may be distributed all throughout a distribution center instead of lumped all in one place—because distribution centers otherwise have, and would be motivated to, store like products together where people can find them.


A patent eligibility test based on technology evolution pathways of virtual inventions from mechanical and electronic counterparts would not only be a more straightforward evaluation than present Alice guidelines, it would also free companies to invent into virtual domains such that any physical components exist only because that physical component was necessary for the invention, not to satisfy patent eligibility requirements. Inventors would be free to replace physical components with virtual components as technology evolutionary pathways predict they should without sacrificing their opportunity to gain patent protection.


Align the law with the way technology evolves.

 

By Jose W. Jimenez, Esq – Former Chief Patent Counsel & Registered Patent Attorney

Many very familiar commercial innovations, in the form of software or software apps, have been launched by enterprises in the past few years that capitalize on or tackle the problem of unpredictability or inability to reasonably quantify available inventory of a product or asset at any given time. Although these innovations have revolutionized their respective industries, as Robert posits, they present a nightmare for patent practitioners who wish to patent theirinnovations in light of the Alice case.

By way of example, AirBNB®, Outdoorsy® and Turo® provide consumers today with options for using someone else’s condo or home, RV trailer or automobile to not only combat higher prices for the rental of some of these items provided by traditional vendors but to also capitalize on idle inventory of products or assets owned by consumers. The revenue models for each of these innovations is well established but the actual revenue generated is not easily protectible by patents in the USA let alone globally. So, what is a good entrepreneur and innovator to do? They cannot wait for the US Patent system to catch up or for Congress to act.

The key is early engagement with a patent professional ----well before software innovation is completed as some of the methods of protecting software applications lies in how the various subroutines or modules work together with physical assets, geographic locations and sources of these assets or product to generate a commercially viable product or software applet. Most importantly, it means helping the inventor find an edge in their solution that goes beyond streamlining what a person could do with a spreadsheet or a paper and pencil.

As in life, you do not get a second chance to make a first impression. Therefore, try putting your best foot forward in your product and patent application before it lands on the patent examiner’s desk. Your investors will be pleased, and you will have less sleepless nights.

 

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