The past 20 years have seen a large rise in the amount of patents issued for software technologies. According to statistics published online by the U.S. Patent and Trademark Office, U.S. patents issued in the class of Data Processing: Software Development, Installation, and Management have risen from 141 patents in 1995 up to 2,384 patents in 2015. During those 20 years, the USPTO reports that 25,016 patents have been issued in that class, including cross-reference classifications.
However, even as we move into an Information Age where software is more important than ever, the Supreme Court has made it significantly harder to protect software inventions through the patent process. In Alice Corporation v. CLS Bank International, decided in March of 2014, the Court invalidated claims directed to mitigating financial risk by using a virtual third party intermediary. The Court held that the claims were no more than an abstract idea, and were therefore not eligible for patent protection under Section 101 of the U.S. patent code. Under the new test for patent ineligibility set forth in Alice, it has become difficult to prove to the patent office that software claims are ever more than just an abstract idea. As a patent attorney representing clients with valuable software IP, it can be vexing to deal with such a rejection. However, many patent prosecution teams have navigated the turbulent environment of software patents quite well even in the face of such rejections.
Information culled from USPTO’s Public PAIR system shows how some patent owners successfully defended their patent applications in the face of Alice rejections. One such success is reflected in U.S. Patent No. 9,185,538, titled Wireless Subscriber Application and Content Distribution and Differentiated Pricing. Issued to Qualcomm, the patent protects a technology that provides software application developers with more flexible billing options for packaging or up-selling services to consumers. A final rejection issued last December asserted that the claims, directed to generating a shopping catalog, were patent-ineligible abstract ideas under Alice, as generating a shopping catalog is merely a fundamental economic practice. The prosecution team was able to overcome the Alice rejection with arguments alone, without amending any claims. In relevant part, the applicants argued that the claims were “necessarily rooted in computer technology” to solve a problem “specifically arising in the realm of computer networks.”
Another good example of a successful defense against an Alice rejection comes from U.S. Patent No. 9,305,424, entitled System for Managing an Electronic Gaming Machine Group. The claims in that case are directed to a gaming system that can create groups of gaming machines on a network with a variety of gaming characteristics. The examiner applied the abstract idea test from Alice and determined that the claims were directed to patent-ineligible subject matter. Specifically, the examiner found that the claims, when “analyzed as whole,” were directed to nothing more than an abstract idea, implemented on a generic computer. Ultimately, the applicants overcame the rejection by amending the claims to recite “specialized technological hardware devices” such as display devices, input devices, processors, and memory devices.
The outlook for software applications is not hopeless; there are more than 1,100 U.S. patents which have issued after an Alice rejection. LexisNexis can help you learn from the wisdom of others with a custom report with suggested arguments, customized to your specific rejections and claims, to help overcome an Alice rejection. With the help of this report, you may find successful arguments against Alice rejections which can help you chart the best course for your application. The customized report will also outline times when your team is better off abandoning a patent to help you better manage prosecution costs.