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USPTO Issues New Subject Matter Eligibility Guidance: Software Patents Are Dead! Long Live Software Patents!

Added by Philip McKay in Articles & Publications, Intellectual Property and Patent Law on February 19, 2019

Patent subject matter eligibility, and particularly the patent eligibility of various software related inventions, has been the subject of significant debate, confusion, and attention over the past decade. Recently, much of that attention has focused on how to apply the U.S. Supreme Court’s framework for evaluating patent eligibility, set forth in the Alice Corp. v. CLS Bank Int’l decision, to determine the patent eligibility of various ideas, including, most notably, software related inventions. In short, properly applying the Alice Corp. v. CLS Bank Int’l decision in a consistent manner to determine software patent eligibility has proven to be very difficult, and has caused uncertainty in this extremely import area of human endeavor. The confusion created by the Alice Corp. v. CLS Bank Int’l decision can be readily observed by a quick survey of the literally thousands of Internet articles on the subject ranging from pronouncements of “the death of software patents” to determinations that the Alice Corp. v. CLS Bank Int’l decision represents no real change to the heart of the law.

As noted by the United States Patent and Trademark Office (USPTO) itself, the confusion regarding software patentability has made it difficult for inventors, businesses, and other patent holders to reliably and predictably determine if various types of software related inventions are patent eligible. The need to address the patentability of software related inventions is made all the more critical by the fast-paced advances of Machine Learning (ML), Artificial Intelligence (AI), and data security systems and the rapidly increasing prevalence of this technology in the day-to-day lives of much of the world.

In addition, several nations have sought to fill the void created by the uncertainty in U.S. law by creating more software friendly policies and issuing more software related patents in their own jurisdictions. China in particular has benefited by the confusion in the U.S. patent law and has made the Chinese patent system more software friendly and predictable than the U.S. patent system. Of note, the number of patent application filings in China is now five times the number of filings in the United States and estimated to be ten times as many by 2020. This has allowed China to make significant and rapid progress towards their openly stated goal of becoming the dominant global leader in AI, and AI related patents, by 2030. Given the world’s increasing reliance on AI systems, this goal, if achieved, will have significant economic and military ramifications.

In an attempt to more clearly address the patentability issue, on January 7, 2019, the U.S. Patent and Trademark Office (USPTO) published 2019 Revised Patent Subject Matter Eligibility Guidance (hereafter referred to as “the 2019 Revised Guidance”) for determining the eligibility of patents, including those directed to the software and the computer arts.

We believe that with careful attention to the 2019 Revised Guidance, and the examples provided, practitioners with software related patent experience will find it easier obtain software related patent rights for their clients than it has been in over four years, i.e., since the Alice Corp. v. CLS Bank Int’l decision. In addition, under the 2019 Revised Guidance, practitioners with software related patent experience will also be able to more accurately assess the patentability of software related inventions for their clients before the clients incur any significant costs.

It should be noted that the 2019 Revised Guidance, like all USPTO guidance, does not have the force and effect of law and is therefore not binding on the courts. However, the 2019 Revised Guidance does provide the examiners, who decide patent eligibility at the patent issuance level, solid examples of how patent eligibility analysis should be performed. Consequently, we believe the 2019 Revised Guidance represents a significant step towards unifying the analysis of software related patents and goes a long way to curtailing some of the more onerously broad interpretations of the Alice Corp. v. CLS Bank Int’l decision, and overly creative rejections of software patents, that have been all too regularly seen since the Alice Corp. v. CLS Bank Int’l decision.

In summary, we believe the 2019 Revised Guidance represents a significant and positive step towards the stated goals of providing more clarity and predictability in software patentability and will make it easier to obtain software related patents going forward. We also believe this is of critical importance if the U. S. is to retain a leadership position in both the global patent arena and the commercialization of software related ideas. Consequently, we welcome this guidance and applaud the efforts of the USPTO to provide more clarity and vision in this increasingly important area of human endeavor.