CyberSource and Software Patents
In CyberSource Corporation v. Retail Decisions, Inc., a three judge panel of the Court of Appeals for the Federal Circuit recently upheld a ruling that a Beauregard claim was not patentable subject matter under 35 U.S.C. 101. The CyberSource decision calls into question whether many types of software inventions can be patented.
This decision may be an outlier because in its Bilski decision, the Supreme Court reiterated that software was patentable. In addition, an even more recent decision by a panel that included Chief Justice Radar confirmed that software was patentable. "The digital computer may be considered by some the greatest invention of the twentieth century, and both this court and the Patent Office have long acknowledged that "improvements thereof" through interchangeble software or hardware enhancements deserve patent protection. Far from abstract, advances in computer technology—both hardware and software—drive innovation in every area of scientific and technical endeavor.“ Ultramercial, LLC v. Hulu, LLC (Fed. Cir. 2011) Slip Op, at 12.
However, the Board of Patent Appeals and Interferences has been relying on CyberSource to reject some traditionally allowable claim constructs as non-patentable subject matter. Another recent decision, Dealertrack v. Huber, deepens the split in the court, and the confusion over how software inventions may be protected.
US laws states that "Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title." 35 USC 101. Many software inventions are patented as machines that store the software.
In CyberSource, the Federal Circuit upheld a lower court ruling that a Beauregard claim was not directed to patentable subject matter although claiming a machine in the form of a computer readable medium. Dealertrack continued this line by holding that a computer aided method was not patentable subject matter because its claims are "directed to an abstract idea preemptive of a fundamental concept or idea that would foreclose innovation in this area...."
If you are filing a patent application to protect a software innovation, you can't wait for the law to settle. You need to both protect your invention now, and anticipate likely changes in your application to increase your chances of complying with those changes.
Based on past decisions on software patents, I recommend using the following strategies to anticipate changes in the law. These strategies are further supported by the recent Mayo v. Prometheus decision that emphasized the importance of practically applying laws of nature and abstract ideas instead of merely describing them as being performed.
Emphasize Novelty
Strongly emphasize novel features, particularly those that must be performed by a computer.
Address Specific Applications
In an early ruling on software patent claims, the Supreme Court complained that a "'process' claim is so abstract and sweeping as to cover both known and unknown uses of the BCD to pure binary conversion.” Gottschalk v. Benson, 409 U.S. 63 at 68 (1972). One way software patent law could change is require that algorithmic claims be directed to very specific solutions. A software application should anticipate such a change by detailing how the invention solves a specific problem.
Include Hardware Limitations that Humans can't do
The CyberSource decision noted that the Supreme Court held that purely mental processes were unpatentable in Gottschalk v. Benson. If there is a change in the law, it is likely that embodiments of inventions can be practiced by a person won't be patentable. However, similar embodiments may be patentable if they include actions that a human can't do. A software application should include language that would support such claim limitations.
Describe Key Hardware Functions
Jurisdictions such as Europe and China that do not allow software patents per se still allow software inventions to be patented that have a strong hardware component for the key inventive elements. It is likely that software patent applications that include such hardware elements will survive even a significant change in patent law.