The Idea of Software Patent Protections

By Dr. Aunya Singsangob

Six years after Benson, the Supreme Court reinforced the decision's mathematical algorithm preemption approach by holding in Parker v. Flook,(39) that the novelty of an invention was only in the "mathematical algorithm or formula" used. The Court stated that a mathematical algorithm is patentable when there is an "inventive concept in its application" to a physical process. Unfortunately, the court rejected the attempt to patent and ruled that the concept using alarm limits to monitor chemical reactions was not in the field; consequently, it was not inventive and thus not patentable subject matter under 101 of the Patent Act. Many opponents argued that this holding was damaging to software inventions because the claim was for an improved method of calculation used for a specific purpose, and it was still held unpatentable.

The Court of Customs and Patent Appeals (CCPA) developed the two-step Freeman-Walter-Abele test, a special subject matter test for software advances involving applications of mathematical algorithms. (40) To evaluate patentability, the court first determines (i) whether a patent claim mentions an algorithm directly or indirectly. If so, then the court asks (ii) whether the claimed invention as a whole involves more than just the algorithm itself. If not, the invention is patentable subject matter and that a patent should issue if other tests for patentability are met. (41)

In 1981, the U.S. Supreme Court in Diamond v. Diehr (42) acknowledged that some software inventions were patentable subject matter under 35 U.S.C. 101. The Court noted that Congress intended that the categories of inventions or discoveries that can be granted utility patents in the United States "include anything under the sun that is made by man." (43) In Diamond, the Court held that software that is linked to a physical structure or process could be patentable subject matter under 35 U.S.C. 101, even if an algorithm were involved in the process.

In 1994, with In re Alappat, (44) a new era in software patent protection began. This decision established that all was needed for software to be patentable was to define the claim in terms of a computer program implemented in a machine.

In 1998, in State Street Bank & Trust Co. v. Signature Financial Group, Inc.,(45) the Federal Circuit rejected the Freeman-Walter-Abele test, holding that anything useful is patentable subject matter. The court reasoned that the transformation of data, representing discrete dollar amounts by a machine through a series of mathematical calculations into a final share price, constitutes a practical application of a mathematical algorithm, formula, or calculation, produces "a useful, concrete and tangible result." (46) Unpatentable mathematical algorithms are identifiable by showing they are merely abstract ideas constituting disembodied concepts or truths that are not "useful." (47) In AT&T v. Excel Communications,(48) the Federal Circuit affirmed the "useful concrete and tangible result" test and concluded that the generation of billing records was clearly useful. Now, after the State Street and AT&T cases, patents are being issued for software without any limitation as to tangible form, and for propagated signals. (49)

Some legal experts also explained that computer software could be treated as an invention under 101 in three general ways. (50) First, software is deemed as "a machine" when a computer is included in the claims of the invention. Second, software is "a process" when it is claimed as a series of operational steps to be performed on or with the aid of a computer. Third, a computer readable memory-such as floppy disks or CD-ROM-can be considered "an article of manufacture" if it can be used to direct a computer to function in a particular manner. (51)

(III) USPTO's Examination Guidelines for Computer-Related Inventions (52)

The Examination Guidelines for Computer-Related Inventions was issued by the USPTO effective March 29, 1996. The purpose of the Guidelines is to assist USPTO officers in the examination of applications drawn for computer-related invention.(53) However, the Guidelines are only USPTO's view concerning the minimum features of patentable subject matter generally; they are not the law. The Guidelines do not constitute substantive rulemaking, and the failure of the officers to follow the guidelines is unappealable.

The Guidelines explain (i) how to determine what an applicant has invented and is seeking to patent, (ii) how to conduct a thorough search of the prior art, (iii) how to determine whether the claimed invention complies with 101, (iv) how to evaluate the application for compliance with 112, and (v) how to determine whether the claimed invention complies with 102 and 103. (54)

Subject to the Guidelines, the officer must (i) review the complete specification, including the detailed description of the invention, (ii) identify and understand any practical application asserted for the invention, (iii) review the detailed disclosure and specific embodiments of the invention to determine what the applicant has invented, and (iv) review the claims. The officer must also (i) consider the details of 101 jurisprudence under the controlling-law method, and (ii) identify the proper statutory category for the claimed invention to determine whether it complies 101. To evaluate the application's compliance with 112, the patent officer must determine whether the claimed invention complies with the requirements.

Richard Gruner wrote that the guidelines were seriously deficient in their failure to provide more detailed standards for determining when patentable subject matter was presented in computer-related advances lacking manipulations or transformations of physical items. (55) He said that the Guidelines provided little useful instruction to examiners about how to assess patentable subject matter in the types of information-processing advances. Furthermore, they failed to indicate clear principles or criteria for distinguishing patentable and unpatentable advances in information processing. (56)

(IV) Is Patent the Optimal Form of Computer Software Protection ?

Whether patent is the best remedy for protecting computer software is still a debatable issue. A prominent patent scholar, Professor Chisum, argued that the Benson case should be overruled and patent law should embrace the patentability of algorithms and other computer-related inventions. (57) He declared that Benson was poorly reasoned and the result of anti-patent judicial bias. The decision, he claimed, conflicts with the basic elements of the patent system established by Congress. (58)

On the other hand, some legal scholars have raised various arguments against affording patent protection to software-related inventions. Professor Samuelson disagreed with Professor Chisum, arguing that she saw no evidence of an anti-patent judicial bias in the Benson case. Indeed, the Court was keeping an open mind about the patentability of computer program-related inventions. (59) Other legal scholars have raised some objections to using patent law to protect software inventions, including (i) the subject-matter hurdle, which a software developer must clear before securing patent protection, (ii) some undoubtedly valuable software innovations might not qualify for patent protection because they failed to meet the requirements of the patent law (novelty, utility, nonobviousness), whereas others reserved too great a monopoly, stifling innovation, and (iii) the unique characteristics of software rendered the patent system administratively unmanageable as a vehicle for its protection (60) By contrast, Professor Hollaar asserted that the lack of adequate patent protection had created the current development environment in which software advances were incremental and evolutionary, as opposed to inventive and revolutionary. (61) He reasoned that if software developers could rely on patent protection, they would be more willing to disclose their inventions and help produce more rapid, inventive developments in the software area. (62)

Professors Lemley and Cohen noted that the current patent law contains no fair-use or reverse-engineering exception. Consequently, patentees could use the grant of monopolistic rights, including rights over a single component of a complex program, to prevent any making or using of the program as a whole, as well as those temporary uses needed in reverse engineering. (63) They suggested that Congress should, for research purposes, create a limited right to reverse engineer software containing patented components. Moreover, courts should construe software claims narrowly and should refuse a finding of infringement under the doctrine of equivalence (which establishes liability even when the accused product does not literally copy each element of the patent, if there is substantial equivalence as to each element) if the accused elements are interchangeable with prior art that should have narrowed the original patent or if the accused improvement is too many generations removed from the original invention.

Part 4

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(39) 437 U.S. 584 (1978).

(40) In re Freeman, 573 F.2d 1237 (C.C.P.A. 1978), In re Walter, 618 F.2d 758 (C.C.P.A. 1980), In re Abele & Marshall, 684 F.2d 902 (C.C.P.A. 1982).

(41) Arrhythmia Research Tech., Inc. v. Corazonix Corp., 958 F.2d 1058 (Fed. Cir. 1992).

(42) 450 U.S. 175 (1981).

(43) Id. at 182. See also Diamond v. Chakrabarty, 447 U.S. 303 (1980).

(44) 33 F.3d 1526 (Fed. Cir. 1994).

(45) 149 F.3d. 1368 (Fed. Cir. 1998).

(46) Id. at 1373.

(47) Id.

(48) 172 F.3d 1352 (Fed. Cir. 1999).

(49) Julie E. Cohen and Mark A. Lemley, Patent Scope and Innovation in the Software Industry, 89 CAL. L. REV. 1, 12 (2001).

(50) Nora M. Tocups and Robert J. O'Connell, Patent Protection for Computer Software, 14 No.11 COMPUTER L. 19 (1997).

(51) Id.

(52) 61 Fed. Reg. 7478 (1996).

(53) Id. at 7479

(54) Id. at 7479, 7480, 7481 & 7486.

(55) Richard S. Gruner, Intangible Inventions: Patentable Subject Matter for An Information Age, 35 LOY. L.A. L. REV. 355, 413 (2002).

(56) Id.

(57) Donald Chisum, The Patentability of Algorithoms, 47 U. PITT. L. REV. 959, 971 (1986).

(58) Id.

(59) Pamela Samuelson, Benson Revisited: The Case against Patent Protection for Algorithms and Other Computer Program-Related Inventions, 39 EMORY L.J. 1025, 1028, 1103 & 1104 (1990).

(60) Pamela Samuelson et al., A Manifesto Concerning the Legal Protection of Computer Programs, 94 COLUM. L. REV. 2308 (1994).

(61) Lee A. Hollaar, Justice Douglas Was Right: The Need for Congressional Action on Software Patents, 24 AIPLA Q. J. 283, 286-88 (1996).

(62) Id.

(63) Cohen and Lemley, supra note 49, at 3.