The Aftermath of Alice Corp.

On June 25, 2014, the USPTO issued preliminary examination instructions to address the Supreme Court’s recent decision in Alice Corp. Pty. Ltd. V. CLS Bank Int’l et al. (“Alice Corp.”), which held that the patent claims at issue were not subject matter eligible under 35 U.S.C. § 101. When the notice first came out, we wondered how the instructions might affect the actual examination of patent applications.

This situation reminded me of the time when the Bilski v. Kappos decision was handed down in 2010. There, as here, the USPTO issued interim guidance for determining subject matter eligibility for process claims. Many of us were concerned about how the machine-or-transformation test would affect claim allowance and what amendments would be needed to place the claims in a condition for allowance. After months of working with examiners, we found that standard language regarding inclusion of a “suitably-programmed computer” or “a processor to execute method steps” could place process claims in compliance with the USPTO’s interpretation of Bilski.

Less than two weeks after having been decided, the Alice Corp. decision is already influencing the examination of software claims by throwing a metaphorical wrench into the familiar interpretation of statutory subject matter under the Bilski guidance. Now, under the new Alice Corp. instructions, statutory subject matter interpretation seems to suggest that: 1) a general computer is not enough to make a software claim statutory and the standard language used to comply with the requirements of Bilski under the former guidance will likely not make the software claim statutory; and 2) the steps of a method claim should be steps that cannot be performed by a human or alternatively, are known to be performed only by a computer and not a person, such as encryption.

My concern that the United States is moving closer to a view of software patents similar to that held by the European Patent Office appears to be validated. Currently, examiners and practitioners are struggling to interpret the Alice Corp. instructions; the examining corps has not yet been trained under the new instructions. Perhaps, once training has been provided and examiners have had an opportunity to work through a few cases, the actual implementation of the guidelines will be less stringently interpreted than appears to be the case today.