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Patentability of Software after Bilski and KSR: Looking Back and Looking Forward

-- By ThomasHou - 19 Oct 2011

Section I: Bilski's Indirect Effect on Computer Software as Eligible Subject Matter

For patent law and software aficionados who were expecting the Supreme Court to make a definite pronouncement on the patentability of process patents such as computer software, the Court's decision in Bilski v. Kappos was a letdown. The Court declined to "comment[] on the patentability of any particular invention" and left to the Federal Circuit ("FedCir") to develop doctrine on the patentability of process patents according to the Supreme Court's precedents (including unpatentable subject matter, such as abstract ideas). For computer software, neither the Supreme Court nor the FedCir? addressed whether recitation of a general computer could satisfy the "special purpose machine" of the FedCir? 's machine or transformation test, or a machine specifically adapted to the claimed process was necessary.

Nonetheless, decisions from the PTO, BPAI, and district courts are suggesting a more exacting review of software patent applications. Since Bilski, the PTO and BPAI have begun to deny a large number of software-only patent applications, albeit without establishing clear doctrine. A July 2011 study of post-Bilski BPAI and district court cases on patentability found that a majority of software patent applications were invalidated, mostly because they were deemed abstract ideas. On that level, the lower courts and administrative bodies are heeding the Supreme Court's earlier precedents, especially _ Gottschalk v. Benson_, which held that patentable inventions cannot substantially preempt the use of an abstract idea. The PTO and BPAI have not definitely commented on the contours of the "special purpose machine" definition from In re Bilski. Most notably, the FedCir? has not had an opportunity to rule on the limits of patentability for pure software, which explains why the doctrine remains unsettled in this area.

In the upcoming years, I anticipate that the PTO and BPAI will continue to examine and adjudicate on various software patent applications, whose filings have not dropped. Although Jonathan Masur points to institutional incentives for the PTO to expand eligible subject matter, I find recent developments from the Supreme Court, FedCir? , and in fact Congress, tempering the PTO's ability. Ultimately, the FedCir? must rule on the patentability of software and define what constitutes "special purpose machine", either from patent applications denied from the PTO or invalidity arguments raised during one of these patent wars cases. Without settled doctrine from the FedCir? , much of the law will be in flux.

Section II: KSR's Heightened Nonobviousness Test to Bar Trivial Software Patents

Even though Bilski and eligible subject matter are dominating headlines in the patent law world, they are not the sole area in flux. After all, patentability also requires utility, novelty, and nonobviousness, the latter of which has long been the gatekeeper for patentability and the hardest for patentees to satisfy. The Supreme Court's fairly recent decision in KSR Int'l Co. v. Teleflex Inc. is having a similar effect as Bilski on determining the nonobviousness of patents, including computer software.

Several aspects of KSR are similar to Bilski and point to similar trickle effects on lower courts and the PTO and BPAI. First, the Court emphasized that its precedents called for a flexible and functional approach and rejected the FedCir? 's rigid, narrow test for obviousness. Second, the Court advised courts to look broadly at various factors, such as "interrelated teachings of multiple patents; the effects of demands . . . in the marketplace; and the background knowledge possessed by a person having ordinary skill in the art." Third, the Court recognized that market demand will often drive design trends, especially in the informational economy: "When there is a design need or market pressure to solve a problem . . . a person of ordinary skill has good reason to pursue known options within his or her technical grasp." This insight may be particularly pertinent to computer software. Finally, the Court reemphasized looking at its precedents on nonobviousness and by applying them to the facts of the case, instructed lower courts to do the same.

An empirical study has found the FedCir? has invalidated more patents for obviousness because of KSR. Having a high threshold is important for assessing the patentability of software, for nonobviousness limits the granting of exclusive rights to software whose inventiveness is trivial and which would have been obvious to the ordinary-skilled software inventor (whose skill would be quite high today). The field of software is broad and its prior art reaches beyond computer programs to that of the electrical arts and other fields. To encourage free software, the Federal Circuit and PTO should not relax the high threshold for nonobviousness. Furthermore, the Federal Circuit has traditionally relied on secondary considerations such as commercial success, long-felt but unsolved need, and failure of others when nonobviousness is at a balance. With software creation increasingly having a marginal cost of zero, the importance of those secondary considerations should be reconsidered. After all, their use is optional and depends on the context. The Federal Circuit should be wary of using secondary considerations to uphold the nonobviousness of software when the main Graham analysis is close.

But I still don't know, after two full readings of the essay, what it is about. Case summaries don't teach me anything, and what little here isn't a glorified West headnote is passing editorialization, with no discipline or data specified. What we most need here is a thesis, after which it should be possible to figure out how to use the remainder of the essay to explicate it, respond to its critics, and indicate its implications.

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