Rader’s Ruminations – Patent Eligibility III: Seven Times the Federal Circuit Has Struck Out
“At a minimum, the Supreme Court tells the Federal Circuit to wield a scalpel, not a sledgehammer, when implementing an exceptions-based eligibility test. The Federal Circuit has done neither. Strike three!”
The U.S. Supreme Court’s flimsy eligibility jurisprudence offers the U.S. Court of Appeals for the Federal Circuit (CAFC) several “softball pitches” to avoid a patent bloodbath. To date, the Federal Circuit has struck out at preserving the patent system — at least twice without really even taking a swing!
Strike One: A Declined Invitation to Bring Balance
The first softball pitch appears in the High Court’s initial decision to exalt judge-made “exceptions” over the 200-year-old statutory rule, namely, Mayo v. Prometheus, 566 U.S. 66 (2012):
“The Court has recognized, however, that too broad an interpretation of this exclusionary principle could eviscerate patent law. For all inventions at some level embody, use, reflect, rest upon, or apply laws of nature, natural phenomena, or abstract ideas. Thus, in Diehr the Court pointed out that ‘a process is not unpatentable simply because it contains a law of nature or a mathematical algorithm.’ 450 U. S., at 187. It added that ‘an application of a law of nature or mathematical formula to a known structure or process may well be deserving of patent protection.’” Diamond v. Diehr, supra, at 187.
Id. [emphasis supplied].
This passage from Mayo is the Court’s outright admission of the weakness of its choice to substitute its exceptions for the language of the Patent Act. After all, the Supreme Court does not often set forth a new rule (e.g., abortion may be regulated by the states) and then say, but the opposite previous rule (e.g., abortion is per se legal as a matter of privacy) is fine too. Obviously, the Supreme Court rarely overrides and preserves a rule in the same decision. In Mayo, however, the Court explains that the previous rule remains in place (an application of a natural law is eligible) because a “broad interpretation” of its new rule “could eviscerate patent law.”
Thus, even while abandoning the statute on eligibility, the Supreme Court invites the Federal Circuit to bring balance to eligibility determinations. Tragically, instead of employing a scalpel to delicately and carefully remove a few unsightly blemishes, the Federal Circuit wields a sledgehammer to smash even the smallest wart, leaving entire limbs of innovation (software, diagnostics, medical treatments, etc.) broken and bleeding.
Moreover, the Supreme Court’s softball invitation was not a passing thought. The Court again invoked Diehr and repeated the same caution in Alice two years later to ensure its non-statutory rule does not “swallow all of patent law.” Alice Corp. v. CLS Bank, 573 U.S. at 304 (2014). Sadly, the Federal Circuit has not even referred to this invitation, let alone implemented it. Strike one!
By identifying a “strike,” this article means that the Federal Circuit has missed an opportunity to recover from an ongoing train wreck after eligibility left the statutory tracks.
Strike Two: Top U.S. Patent Court Allows Patent Law to Be Swallowed
The Supreme Court offers a second softball pitch again in both Mayo and Alice:
“Thus, in Diehr the Court pointed out that ‘a process is not unpatentable simply because it contains a law of nature or a mathematical algorithm.’ 450 U. S., at 187 (quoting Parker v. Flook, 437 U.S. 584, 590 (1978)). It added that ‘an application of a law of nature or mathematical formula to a known structure or process may well be deserving of patent protection.‘ Diehr, supra, at 187. And it emphasized Justice Stone’s similar observation in Mackay Radio & Telegraph Co. v. Radio Corp. of America, 306 U.S. 86 (1939):
‘While a scientific truth, or the mathematical expression of it, is not a patentable invention, a novel and useful structure created with the aid of knowledge of scientific truth may be.’ 450 U. S., at 188 (quoting Mackay Radio, supra, at 94).”
Mayo, 566 U.S. 66. [emphasis supplied].
With these words, the Supreme Court openly directs the Federal Circuit to use its earlier Diehr case.
In this passage, the Court even restated the traditional statutory eligibility rule with origins in Jefferson’s 1793 language. Yet, Diehr contains an even more important principle. In Diehr, the Court considered a process for curing synthetic rubber. The process used a computer to run the prior art Arrhenius mathematical equation with a prior art curing press. The computer’s computational speed, reliability, and automaticity ensured that the press “automatically open[ed] . . . at the proper time.” Diehr, at 187. Although the inventive improvement over prior art was computer software, the Court observed:
“In determining the eligibility of respondents’ claimed process for patent protection under § 101, their claims must be considered as a whole. It is inappropriate to dissect the claims into old and new elements and then to ignore the presence of the old elements in the analysis. This is particularly true in a process claim. . . .”
Id. at 188-89.
It cannot be emphasized too much that the Court in Mayo, and again in Alice, expressly endorsed Diehr and its “as a whole” rule as the path to ensure that the new non-statutory eligibility rule does not “eviscerate/swallow patent law.”
Now the Court’s invitation to use the Diehr rule begs the question of what cases rejected as ineligible by the Federal Circuit were “an application of natural law . . . deserving of patent protection.” Mayo, supra. Stated in another way, what cases and patents that the Federal Circuit rejected as ineligible would have survived if the Circuit followed the Supreme Court’s direction to use Diehr’s “as a whole” methodology. In truth, dozens and dozens of cases could have survived if the Federal Circuit wielded a scalpel instead of a sledgehammer, but this article will mention only a half dozen to illustrate the point:
- Ariosa v. Sequenom, 788 F.3d 1371 (Fed Cir. 2015) — a diagnostic replacement for long-needle amniocentesis by analyzing bodily discharges from the mother;
- Athena Diagnostics v. Mayo, 927 F.3d 1333 (Fed. Cir. 2019) — a way to detect dangerous neurological disorders using antibodies in a MuSK protein; nonetheless found ineligible on a tragically close 5-7 en banc vote (with 8 different opinions);
- ChargePoint v. SemaConnect, 920 F.3d 759 (Fed. Cir. 2019) — an apparatus, method, and system for charging electric vehicles; of particular note, this invention included a charging apparatus and system, not merely a method;
- Chamberlain v. Techtronic, 935 F.3d 1341 (Fed. Cir. 2019) — a garage door opening apparatus with a wireless communicator; again the invention was an apparatus (or “machine” under the statute’s designation);
- American Axle v. Neapco, 966 F.3d 1347 (Fed. Cir. 2019) — an industrial technique for manufacturing automobile drive shafts (and even the U.S. Solicitor General argued that it was eligible);
- Yu v. Apple, 1 F.4th 1040 (Fed. Cir. 2021) — a camera embedded in a phone using multiple exposures and lenses to improve digital images.
These inventions and dozens more would remain eligible for patent protection when viewed “as a whole,” as Diehr demands. Diehr at 188. Nonetheless, the Federal Circuit’s sledgehammer has fallen on all of these inventions. Strike two!
Strike Three: Failure to Heed the Court’s Suggestion to Apply Diehr
As discussed in Part II of this series on eligibility, the Supreme Court has abandoned the statute and substituted a claim-by-claim validity analysis devoid of neutral and predictable standards. This new (and unjustified) validity analysis might seem to find minimal support because section 101 contains the word “new,” suggesting that perhaps novelty ought to be part of an eligibility test. Yet, the Supreme Court itself has already ruled that out:
“It has been urged that novelty is an appropriate consideration under § 101. Presumably, this argument results from the language in § 101 referring to any “new and useful” process, machine, etc. Section 101, however, is a general statement of the type of subject matter that is eligible for patent protection “subject to the conditions and requirements of this title.” Specific conditions for patentability follow and § 102 covers in detail the conditions relating to novelty. The question therefore of whether a particular invention is novel is ‘wholly apart from whether the invention falls into a category of statutory subject matter.’”
Diehr at 188-89. [emphasis supplied].
The Supreme Court made absolutely clear that validity is “wholly apart” from eligibility.
If the Supreme Court in Mayo and Alice had overruled Diehr, then both the “as a whole” reading of claims and the direction that novelty and claim-by-claim validity analysis is “wholly apart” from eligibility would not have survived. Far from overruling Diehr, the Supreme Court expressly endorsed this earlier case and counseled its use to prevent the eligibility “exceptions” from eviscerating or swallowing patent law. In sum, the Supreme Court told the Federal Circuit to use Diehr. On one level, this counsel might recommend that the Federal Circuit should maintain the statutory test in most cases. At a minimum, the Supreme Court tells the Federal Circuit to wield a scalpel, not a sledgehammer, when implementing an exceptions-based eligibility test. The Federal Circuit has done neither. Strike three!
Strike Four: Missed Opportunity to Cite Empirical Evidence
The Supreme Court’s next softball pitch involves its only stated justification for substituting its own judge-made exceptions for the statutory rule. The Court in Mayo, Myriad, and Alice characterized the inventions as endangering “the basic tools of scientific and technological work.” See, e.g., AMP v. Myriad, 133 S.Ct. at 2116. One might question whether a personalized dosage for the man-made drug thiopurine endangers a “basic tool” of science. The answer seems to be that the Court labels an invention as merely “a rubber curing press” (Diehr) or a threat to a “basic tool” of all science (Mayo) according to its own agenda at the moment.
The main point for this softball pitch is the justification that follows: “[M]onopolization of those tools through the grant of a patent might tend to impede innovation more than it would tend to promote it.” Mayo, 132 S.Ct. at 1923. This theory (and the Court senses the weakness of its sole justification by using the words “might tend to”) is akin to a theory known in academic circles as the “tragedy of the anti-commons.” The “tragedy” in a few words is that “too many” patents give too many owners the right to inhibit all future research and progress. This hypothesis sprang from the 1998 writings of Professors Heller and Eisenberg. Heller; Eisenberg; Can Patents Deter Innovation? The Anti-commons in Biomedical Research; SCIENCE Mag. (May 1998). In truth, this so-called tragedy has been fully rejected by academic and empirical studies. See, e.g., Teece, David; The “Tragedy of the Anticommons” Fallacy: A Law and Economics Analysis of Patent Thickets and FRAND Licensing; Berkeley Tech.L.J. Vol 32:1489 (2017) (“The systematic problem identified here is undercompensation, and possibly overuse, not underuse.”). Upon reflection, the Supreme Court’s “tragedy” reasoning becomes a floating softball pitch that the Federal Circuit should hit to knock the entire eligibility doctrine back to statutory sanity.
Now, the Supreme Court often advises the use of “common sense” in patent law settings. See, e.g., KSR v. Teleflex, 550 U.S. 398 (2007). Let’s apply “common sense” to the Court’s “too many” patents justification. If the United States has “too many” patents endangering technological progress, where is the empirical evidence to prove that hypothesis? See, e.g., John P. Walsh, Ashish Arora & Wesley M. Cohen; “Effects of Research Tool Patents and Licensing on Biomedical Innovation”; PATENTS IN THE KNOWLEDGE-BASED ECONOMY 285, 285 (2003) (“[Despite] an increase in patents on . . . ‘research tools,’ . . . we find that drug discovery has not been substantially impeded.”). Where have fields of research been shut down by “too many” patents? Where have prices soared in technologies captured by overbearing exclusive rights? Where have groups of companies abandoned technology because it is too expensive or already locked up? Where is the evidence? The empirical evidence suggests that technology availability has soared and prices have declined as innovation creates intense cycles of research competition. Indeed, the semiconductor chips that run most high-tech phones cost less than a cup of designer coffee.
Actually, the reason patents do not deter, but spur scientific development, is embedded in the disclosure doctrines of the Patent Act. By statutory design, each patent on a new, non-obvious invention opens more doors to future research than it could ever close. Yet, where has the Federal Circuit undertaken to explain that the “too many patents” theory has no empirical or theoretical foundation?
The Supreme Court has served up a pitch that begs to be hit: After all, the Court’s justification for its new “exceptions” claim-by-claim validity doctrine does not pass the “common sense” test. No empirical data shows declining patent filing rates; no empirical data shows patents closing down technology markets; no empirical data shows patents causing research to dry up or grind to a halt. This softball pitch begs the Federal Circuit to show that the Court’s reasoning has no basis. Instead, the Circuit has yet to swing its bat at this softball pitch, instead swinging only its sledgehammer. Strike four!
Strike Five: The Many Missed Chances to ‘School’ SCOTUS
Still another softball pitch is available to the Circuit. Again, the target is the rickety underpinnings of the Court’s “too many patents” reasoning. In this case, the language of section 101 itself rebuts the Supreme Court’s “too many patents” misstep. Besides extending protection to “any” invention in the four broad statutory categories, section 101 also embraces “improvements thereof.” 35 U.S.C. 101. Clearly the statute does not place some eligibility limit on the number or strength of patents. Instead, the statute clarifies that even “improvements” qualify for protection. Unlike the Supreme Court’s “exceptions” reasoning, this statutory language passes the common-sense test because science progresses incrementally — each small improvement building on earlier improvements of any dimension (as long as they satisfy the “other conditions and requirements” of the Act). Not only the disclosure purpose or the research economics of the Patent Act, but also its very language rebuts the Court’s tragedy-like defense.
This article’s suggestion that the Federal Circuit might “school” the Supreme Court on patent law’s purpose and economics may seem to be a “bridge too far.” To the contrary, the Supreme Court has already crossed that “bridge” once in this very area of patent law. In the 1970s, the Supreme Court had issued opinions in Gottschalk v. Benson, 409 U.S. 63 (1972) and Parker v. Flook, 437 U.S. 584 (1978) that moved section 101 toward a claim-by-claim validity doctrine. The Court threatened to characterize all software patents as ineligible mathematical algorithms. When the Supreme Court granted certiorari in the Diamond v. Chakrabarty and Diehr cases, Judge Giles S. Rich wrote an extensive opinion for the Court of Customs and Patent Appeals explaining the operation of Section 101. In re Bergy, 596 F.2d 952, 961 (CCPA 1979). Indeed, the Supreme Court cited both Bergy and the language of the 1952 Act to declare that eligibility protects “everything under the sun made by man” and that claims in any validity analysis must be considered “as a whole.”
The patent system really needs (and misses) Giles S. Rich. His successors still serve on the Federal Circuit and might adopt his example to suggest common sense to the Supreme Court. Judge Rich charted the path that converted Benson into Diehr and Funk Bros. into Chakrabarty. The key to charting that path again is finding the right case that only peripherally involves a natural law or phenomenon. So far, the Federal Circuit has had the chance to call an e-vehicle charging system an e-vehicle charging system, a garage door opener a garage door opener, and a cell phone camera a cell phone camera. But instead: so far . . . strike five! Other cases are coming, and the Circuit will have other opportunities to lay aside its sledgehammer and pick up a scalpel.
Strike Six: Ignoring Inconsistency with International Standards
Strike six involves a rather esoteric point of Supreme Court jurisprudence, but nonetheless worthy of a mention. The Supreme Court has long abided by the principle that “an act of congress ought never to be construed to violate the law of nations if any other possible construction remains.” Alexander Murray v. The Schooner Charming Betsy, 6 U.S. 64, 118 (1804). Notably, the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement) has a section under the heading “Patentable Subject Matter” which requires that “patents shall be available for any inventions, whether products or processes, in all fields of technology, provided that they are new, involve an inventive step and are capable of industrial application.”
Although the TRIPS agreement has some exceptions, it still demands the availability of “patents . . in all fields of technology.” A careful judicial examination would likely show that some “fields of technology” have fallen under an eligibility sledgehammer to the degree that the United States is out of harmony with international standards and obligations. Thus, the longstanding statutory construction counsel of Charming Betsy to avoid inconsistency with international standards might also advise reconsideration of the Court’s sweeping claim-by-claim validity analyses under the guise of testing eligibility. Even in the face of concerns about slumping U.S. competitiveness in the world innovation marketplace (e.g., Bloomberg Innovation Index of nations for 2021does not list the United States in the top ten; South Korea is number 1), these questions of international harmony and implications of U.S. innovation policy still elude all attention.
Strike Seven: Dodging the Duty to Define
Finally, the Supreme Court’s Mayo-Myriad-Alice eligibility regime itself cries out for clarification. The Court’s murky and indeterminate eligibility doctrine gives the Federal Circuit ample latitude to make improvements and corrections. For example, the Supreme Court’s largest “exception” category that has replaced the statute — abstractness — has yet to receive a definition. Moreover “natural laws” or “natural phenomena” are susceptible to sweeping or narrow interpretations. To continue, the notion of “directed to” is vaguely directional, not specific. The concept of an “inventive concept” has no defined dimensions. The “significantly more” test to determine if a vague inventive concept transcends the “exceptions” has no stated parameters. “Well-known,” “routine,” “conventional” are general labels, not standards for decisions. Each and every facet of the exception-based eligibility regime beseeches, implores, and pleads for definition. Each and every facet of the exception-based eligibility regime is a blank canvas that could, under the hand of an inspired Federal Circuit, produce a picture with more consistency and predictability.
By their terms, each aspect of the Supreme Court’s non-statutory regime entreats the Federal Circuit to provide a workable and predictable test. Thus, the Federal Circuit could define “abstract” according to its plain meaning to move away from anything with concreteness or practicality. Natural laws and phenomena could fall into place when read as components of an invention “as a whole.” “Directed to” could properly move toward “entirely preempting” which, after all, is the Supreme Court’s worry. See, Mayo, Myriad, Alice. An “inventive concept” could also find meaning when a claim is read “as a whole.” “Significantly more” could find satisfaction in “any improvement” as the statute states. “Well-known,” “routine,” and “conventional” could also recognize that any improvement as a whole cannot fit those general explanations.
A Plaintive Plea
In sum, the hazy and undefined terminology of the Supreme Court’s non-statutory test offers plenty of opportunity for the Federal Circuit to set aside its sledgehammer and pick up its scalpel or, to switch metaphors, pick up an artful brush to paint a predictable legal picture on the blank canvas of Supreme Court eligibility jurisprudence.
Actually, the Supreme Court’s vague definition of its own exceptions-dominated eligibility rule could show that the Federal Circuit deserves six or seven more strikes. Instead, this final note prefers to move away from a tone of indictment and issue in its place a plaintive plea that the Federal Circuit will swing a constructive bat at these softball pitches, instead of a sledgehammer. The patent bar and patent law in general hopes that the Federal Circuit can rise to the challenge that inspired its creation.
Image Source: Deposit Photos
Author: pasoderholm
Image ID: 3063887
