Introduction
For over a decade since the Supreme Court's Alice decision, questions of patent eligibility have plagued the US patent system. The Federal Circuit has been burdened with development of subject matter eligibility law, due to the inability of Congress to pass legislature, and the refusal of the Supreme Court to address subject matter eligibility since Alice.
Subject matter eligibility is foundationally concerned with preemption: preemption animates the Supreme Court's subject matter eligibility decisions but recent Federal Circuit decisions either do not address preemption, or address preemption in an ad-hoc, piecemeal manner.
Early Federal Circuit decisions considered and analyzed preemption by comparing the claimed scope to all applications of the abstract idea. But recent Federal Circuit decisions have minimized the role of preemption.
This minimization suggests that the test for subject matter eligibility has become abstract, expanding far beyond the intended scope of the "abstract idea" judicial exception, and yielding erratic and unpredictable eligibility results.
Indeed, there is no longer any "north star" to guide patent eligibility analyses at the Federal Circuit, and the expansive appellate decisions trickle down to the district courts and to the USPTO. ' 101 must get back to basics, and that starts with the preemption inquiry.
Supreme Court ' 101 decisions addressed preemption
An individual is entitled to a patent for any new and useful process, machine, manufacture, composition of matter, or improvements thereof, subject to certain judicial exceptions. These judicial exceptions bar any invention "directed to" a law of nature, natural phenomena, or abstract idea. On the occasions that the Supreme Court has addressed '101 head-on, preemption has always been at the forefront of the analysis.
For example, in 1981 the Supreme Court considered claims based on the Arrhenius equation, a well-known mathematical equation, in Diamond v Diehr. The claims were held patent-eligible, because they did not preempt the use of the equation, and in view of additional non-abstract elements that transformed the process into an inventive application of the equation.1
Just eight years earlier, the Supreme Court analyzed the effects of preemption in Gottschalk v. Benson, finding that the claims in Benson did "wholly pre-empt the mathematical formula" underlying the claims.2
The advent and rise in computer software technologies, however, led to further complications for patent eligibility. In 2010, the Supreme Court tackled subject matter eligibility once again in Bilski v. Kappos, cautioning against permitting claims that would "pre-empt the use of [an] approach in all fields, [that] would effectively grant a monopoly over an abstract idea."3
Just four years later, in the Alice decision, the Supreme Court restated that pre-emption is the concern that underscored this issue, stating "the concern that drives this exclusionary principle is one of pre-emption."4
Claims for mitigating settlement risk were classified as an abstract idea due to involving a fundamental economic practice. Only after identifying the abstract idea in Alice did the Court proceed to specify that the underlying concern that monopolizing the basic tools of scientific and technological work "might tend to impede innovation more than it would tend to promote it."
The additional non-abstract elements in Alice could not amount to something more because the tangible steps simply instructed a practitioner to implement the abstract idea of intermediated settlement on a generic computer.
Analyzing preemption has supported ' 101's purpose as a coarse filter
In 2014, only shortly after Alice was handed down, an objective and formulaic approach was applied for ' 101 disputes. In DDR Holdings v. Hotels.com, the court uncharacteristically stated that "identifying the precise nature of the abstract idea" was not straightforward.5
Not settling on a single description for the abstract idea, the claimed invention is described as providing website visitors the ability to purchase products from a third-party advertisement on a host's website without actually entering the third-party's website.
Critically, the court held that the claims at issue did not attempt to preempt every application of the abstract idea of increasing sales by making two web pages look the same. Instead, the claims recited a specific way to automate the creation of a composite web page that incorporates elements from multiple sources in order to solve a problem faced by websites on the internet.
Later, in BASCOM, despite the claims being directed to the abstract idea of filtering content at a high level, the claims did not "preempt all ways of filtering content on the Internet."6 As such, the claims were deemed patent eligible.
In Versata, despite finding the claims ineligible, the court stayed true to considerations of preemption in its analysis. There, the claims were directed to the abstract idea of a method of determining a price using organizational and product group hierarchies.7 The abstract idea here is characteristically a "building block" similar to the abstract idea of intermediated settlement in Alice.
Viewing each of the additional limitations, it was clear that they were either inherent to the abstract idea itself or generally applied the abstract idea to a generic computer. As such, upholding the patent would effectively monopolize the abstract idea of determining a price using organizational and product group hierarchies.
In these cases, the court applied a similar comparative test, where ' 101 functions as a "coarse eligibility filter." First, the abstract idea was identified...
