On June 19^th, the Supreme Court issued a ruling in Alice Corp. v. CLS Bank International.  As was widely reported, the opinion did not clearly create any special requirements for the eligibility of software or business method patents nor did it create a new category of excluded subject matter.  Rather, the key points of the opinion in Alice Corp. are:

1. A reaffirmation that method claims directed to abstract ideas are not eligible for patents under 35 U.S.C. § 101; and

2. An indication that the same analysis should be used to ascertain the eligibility of any type of patent claim. 

While the first point is uncontroversial and unsurprising, the second point has significant impact for Covered Business Method Reviews and for software patents, generally.   As discussed below, patent owners may have to meet a higher burden to protect computer system and computer media claims from a challenge under § 101.  The burden is that such claims must add “significantly more” to the limitations of an analogous method claim determined to be directed to an abstract idea.

In Alice, the Supreme Court assessed the eligibility of method claims directed to mitigating settlement risk and determined that such claims were similar to the claims in Bilski and therefore unpatentable because they were directed towards abstract ideas.  The Court proceeded to analyze the computer system and media claims of the patent owner, Alice Corporation, and noted that those claims did not add “significantly more” to the implementation of the “abstract idea” found in the method claims.  Upon such analysis, the Court determined that the computer system and media claims were also not eligible for patentability because they were directed to “abstract ideas”.  (Some debate exists as to whether the system and media claims were deemed ineligible because Alice Corporation previously stated that all of its claims should “rise and fall together.”  While the Court took note of this assertion, it did not appear to influence the analysis.)

So, what bearing does Alice Corp. have on Covered Business Method Reviews?  When challenging computer system and media claims, Petitioners should now argue that claims of these types must do “significantly more” to implementations of abstract ideas in analogous method claims in order to be subject matter eligible. 

In fact, the first new petition for a CBM Review post-Alice Corp. has applied this very analysis.  In Amneal Pharmaceuticals, LLC v. Jazz Pharmaceuticals (CBM2014-00149), Petitioner Amneal relied on Alice Corp. to note that “wholly generic computer implementation is not the sort of ‘additional featur[e]’ that provides any ‘practical assurance that the process is more than a drafting effort designed to monopolize the [abstract idea] itself.”  Amneal Paper 1 at 46.  Petitioner also relied on the “significantly more” test of Alice Corp. to assess the subject matter eligibility of the Patent Owner’s dependent claims.

Amneal Pharmaceuticals was recently filed and we will have to wait for the PTAB’s decision regarding institution to determine whether Petitioner’s analysis was persuasive.  However, recent guidance from the PTO suggests that Amneal’s argument is a strong one.  On June 25^th, Deputy Commissioner Andrew H. Hirshfeld issued new guidance for examining software patents in light of Alice Corp.  Notably, on page 2, the Deputy Commissioner noted that Alice Corp., “establishes that the same analysis should be used for all categories of claims (e.g., product and process claims), whereas prior guidance applied a different analysis to product claims involving abstract ideas… than to process claims.”  Further, the guidance states at page 3 that:

“If an abstract idea is present in the claim, determine whether any element, or combination of elements, in the claim is sufficient to ensure that the claim amounts to significantly more than the abstract idea itself.  In other words, are there other limitations in the claim that show a patent-eligible application of the abstract idea, e.g., more than a mere instruction to apply the abstract idea?  Consider the claim as a whole by considering all claim elements, both individually and in combination.”

The guidance specifies certain limitations referenced in Alice Corp. that do not qualify as “significantly more” when recited in a claim with an “abstract idea.”  Generally, non-qualifying limitations include implementation of a method directed an abstract idea on a general purpose computer system.

We note that the PTAB has not yet issued a ruling regarding computer system and media claims in light of Alice Corp.  However, the PTO guidance provides a useful indication of the PTAB’s likely analysis. While it is not required that the PTAB act in concert with the PTO’s Examination procedures, it is also not likely that the PTAB would take a position that is highly contrary to the PTO’s procedures. 

Given the language of Alice Corp. and the new PTO guidance, we recommend that Petitioners consider using the approach taken in the Amneal Petition until the PTAB issues a decision contrary to this approach.  Specifically, Petitioners should aggressively challenge computer system and media claims that do not include limitations that are “significantly more” than those in analogous method claims.  However, Petitioners are cautioned to not presume that all computer system and media claims are necessarily the same as method claims.  Good practice will include assessing such claims for colorable arguments that they have distinguishing limitations from method claims.