Software is Still Patentable Subject Matter: An Analysis of the En Banc Federal Circuit Opinion in CLS Bank v. Alice Corp

 by Dov Greenbaum

With the Supreme Court then poised to rule in Association for Molecular Pathology v. Myriad Genetics, Inc., 569 U.S. __(2013) regarding the subject matter eligibility of isolated genes, the en banc Federal Circuit in CLS Bank v. Alice Corp. (Fed. Cir. 2013) failed to provide a clear consensus as to the metes and bounds of 35 USC §101, principally as it relates to software.

Excerpt:

1. Short Summary

The scope of patent eligible subject matter continues to be a topic of judicial interest.With the Supreme Court then poised to rule in Association for Molecular Pathology v. Myriad Genetics, Inc., 569 U.S. __(2013) [an enhanced version of this opinion is available to lexis.com subscribers]  regarding the subject matter eligibility of isolated genes, the en banc Federal Circuit in CLS Bank v. Alice Corp. (Fed. Cir. 2013) failed to provide a clear consensus as to the metes and bounds of 35 USC §101 [an annotated version of this statute is available to lexis.com subscribers], principally as it relates to software.Without a clear majority united in their legal reasoning, the court provided only a short precedential opinion upholding the district court's ruling that the claims in this specific case were not directed to eligible subject matter. The remainder of the 135 page document is a fractured non-precedential discussion that will likely serve to only further muddy the issues.

2. Introduction

The case comes on the heals of many similar suits that seek to invalidate patents on patentable subject matter grounds, i.e., under 35 USC §101. Most recently the targets of these efforts have been business method patents (e.g., Bilski v. Kappos, 2010 U.S. LEXIS 5521 (2010) [enhanced version]) and a number of patents in biotechnology (e.g., Association for Molecular Pathology v. Myriad Genetics, Inc.., 569 U.S. ___ (2013) and Mayo Collaborative v. Prometheus Labs., 566 U.S. 182 (2012) [enhanced version].)

Their differences notwithstanding, all of these cases have a common thread that includes efforts, intentional or otherwise to narrow the scope of patentable subject matter by attacking the case on 35 USC §101 grounds --rather than §§ 102, 103 or 112. By framing the case within 35 USC §101, the plaintiffs inevitably lead the courts to create judicial rules that exclude not only the particular patents from patentable subject matter, but that also drag in thousands if not more in their dragnet.

It is unclear why this tact is accepted by the courts. Under established law, US courts abide by a doctrine of constitutional avoidance: "if there is one doctrine more deeply rooted than any other in the process of constitutional adjudication, it is that we ought not pass on questions of constitutionality .. unless such adjudication is avoidable." Ass'n for Molecular Pathology v. USPTO., 702 F. Supp. 2d 181 (S.D.N.Y. 2010) ("It is axiomatic that the federal courts should, where possible, avoid reaching constitutional questions.") [enhanced version] (citing Spector Motor Serv., Inc. v. McLaughlin, 323 U.S. 101 (1944) (Some citations removed) [enhanced version]).

"[I]f a case can be decided on either of two grounds, one involving a constitutional question, the other a question of statutory construction or general law, the Court will decide only the latter." Ashwander v. TVA, 297 U.S. 288, 347, 56 S.Ct. 466, 80 L.Ed. 688 (1936) (Brandeis, J., concurring) [enhanced version].

In many of the cases framed within 35 USC §101 the courts have often chosen to provide sweeping §101 based rulings that not only invalidate the patents at hand, but also narrow §101.

In the last several years, this court has confronted a rising number of challenges under 35 U.S.C. § 101. The language of § 101 is very broad. Nevertheless, litigants continue to urge this court to impose limitations not present in the statute. Subject matter eligibility under section 101 has become the "substantive due process" of patent law.

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Dov Greenbaum is an intellectual property attorney at Pearl Cohen Zedek Latzer Baratz. He has extensive experience in litigating and drafting patents in varied fields including hardware, software, biotech and medical devices. Dov is also an Associate Professor in the Department of Molecular Biophysics and Biochemistry at Yale University. Dov completed postdoctoral fellowships at Stanford University and Eidgenossische Technische Hochschule Zurich (ETH Zurich), where he focused on issues related to science and law. In addition to his many legal and scientific papers he has also written non-technical pieces relating to science in society. Dov has his law degree from the University of California, Berkeley, and a PhD in Genetics with a focus in Bioinformatics from Yale University