Intellectual property law forbids the patenting of abstract ideas. After all, imagine if someone had patented the immutable laws of physics – that person could have an infringement case against everyone under the sun. But, is a software-based invention inherently too abstract an idea to be patented? Software programmers who want to file patents hope not, but the Federal Circuit may have other ideas.
The Federal Circuit recently decided Accenture Global Servs., GmbH v. Guidewire Software, Inc., 691 F. Supp. 2d 577 (D. Del. 2010), a case concerning the patentability of software. Despite a poignant dissenting opinion from Judge Rader, the majority opinion from Judge Lourie deals another setback for proponents of software patenting, namely that potential inventors will now have to demonstrate more reliance on the intricacies of a computer or other machines in order for a software-based invention to gain patent eligibility.
In Accenture, GmbH and Accenture, LLP sued Guidewire Software, Inc. alleging infringement of U.S. Patent 7,013,284 (the “‘284 patent”). The ‘284 patent contained claims to a system and method concerning generating tasks to be performed for an insurance organization. Guidewire raised an affirmative defense of patent invalidity against Accenture, asserting that the ’284 patent claimed abstract ideas, which are ineligible subject matter for patenting. Guidewire moved for summary judgment, alleging that the claims of the ‘284 patent would fail the machine-or-transformation test articulated in In re Bilski, 88 U.S.P.Q.2d 1385 (Fed. Cir. 2008).
The machine-or-transformation test requires a process, in order to be eligible for patenting, to either be tied to a machine or transform a material. If a process cannot meet this test, it is considered too abstract for patenting. The United States District Court for the District of Delaware granted the motion and held that the ‘284 patent was “directed to concepts for organizing data rather than to specific devices or systems, and limiting the claims to the insurance industry does not specify the claims sufficiently to allow for their survival.” As such, the District Court held that all claims of the ’284 patent were invalid under 35 U.S.C. § 101, meaning the claims were directed to ineligible subject matter for patenting.
Accenture appealed the summary judgment holding as to certain of the claims (1 and 8). The Federal Circuit affirmed the District Court’s holding, finding the system claims of the ’284 patent recited patent-ineligible subject matter. First, the court stated that the description contained in Accenture’s patent did not sufficiently distinguish the system claims from the invalid method claims. Second, the court ruled that Accenture’s patent claimed an invention that could not satisfy the strict machine-or-transformation test. Though Accenture contended that the invention included sufficient references to databases, components, a computer, an engine and a task assistant, the court disagreed, finding that the machine disclosed in the patent that would attempt to satisfy the machine-or-transformation test was a computer. According to the court, simply implementing an abstract idea on a computer would not create patent eligibility for a claim. The court also stated that the complexity of the software does not sufficiently transform an abstract idea into a patentable method.
After this ruling, patent practitioners are saddled with the prospect of a significantly higher bar for software patent eligibility: for a process to be patent-eligible, it must be more than merely tied to various computer components and databases. It must, in accordance with the prior Ultramercial decision (Ultramercial, Inc. v. Hulu, LLC (Fed. Cir. 2013)), require intricate and complex computer programming and specific, not simply tangential, ties to hardware. Although the Federal Circuit leaves an opening for patentability of software-related inventions in its support for Ultramercial, the court’s invalidation of Accenture’s patent serves to narrow the shrinking ground of eligibility for business method patent claims. Programmers with intentions of patenting must achieve complicated ties from their inventions to hardware, more complex than the ties demonstrated in the Accenture invention.
So, software programmers, it’s going to take a bit more inspiration and perspiration to escape the abstractness puzzle.
Do you have a question about how to best protect your software or other invention? The McHattie Law Firm, LLC can help.
(Neeraj Joshi)