Farewell to Chief Judge Rader

The tension between the CAFC and the Supreme Court (SCOTUS) is a recurring theme in this blog.

 The June 19 SCOTUS decision in AliceCorp. v. CLS Bank Int’l  followed by Chief Judge Rader’s retirement from the CAFC on June 30^th  may prove to be the climax and dénouement of this tension.

Those of us that find drama in such matters have been following Alice Corp. v. CLS Bank Int’l  since it was heard by a first  CAFC panel (Linn, Prost and O’Malley) July 2012 which found that the claims at issue were directed to patent eligible subject matter under § 101.  In that decision the CAFC noted that SCOTUS had granted cert, vacated, and remanded in Ultramercial, LLC v. Hulu, LLC, 657 F.3d 1323 (Fed. Cir. 2011).”

Since that time, the CAFC  reheard Alice Corp. v. CLS Bank Int’l en banc in May 2013, concluded that the claims are not patent eligible according to § 101 and was subsequently confirmed by SCOTUS which granted cert a second time and heard the Alice Corp. case in full.

 In the meantime, the CAFC had a second panel hearing (Rader, Lourie and O’Malley) in Ultramercial v. Hulu as required by SCOTUS.

The second panel decision is a masterpiece of judicial reasoning. For example, the CAFC cites the SCOTUS decision in Bilski saying “This Court’s [SCOTUS] precedents establish that the machine-or-transformation test is a useful and important clue . . . for determining whether some claimed inventions are processes under § 101.”

It is also a bold attempt to stand up to the higher court while appearing to concur with that Court’s decisions:

“Prometheus used the language of “inventive concept” to describe the “other elements or a combination of elements . . . sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the natural law itself” and explain that purported limitations must be more than “routine” or “conventional” to confer patent eligibility. 132 S. Ct. at 1294, 1298-99. While these inquiries do require an understanding of what existed in the ken of those skilled in the art during the relevant time frame, principles of patent eligibility must not be conflated with those of validity, however. The Supreme Court repeatedly has cautioned against conflating the analysis of the conditions of patentability in the Patent Act with inquiries into patent eligibility.  See Diehr, 450 U.S. at 190 (“The question therefore of whether a particular invention is novel is wholly apart from whether the invention falls into a category of statutory subject matter.” (internal quotation marks omitted)); see also Prometheus, 132 S. Ct. at 1304 (recognizing that “to shift the patent-eligibility inquiry entirely to [§§ 102, 103, and 112] risks creating significantly greater legal uncertainty, while assuming that those sections can do work that they are not equipped to do”). Because a new combination of old steps is patentable, as is a new process using an old machine or composition, subject matter eligibility must exist even if it was obvious to use the old steps with the new machine or composition. Otherwise the eligibility analysis ignores the text of §§ 101 and 100(b), and reads § 103 out of the Patent Act.”

 The second CAFC panel decision goes on to explain that “This inquiry focuses on whether the claims tie the otherwise abstract idea to a specific way of doing something with a computer, or a specific computer for doing something; if so, they likely will be patent eligible. On the other hand, claims directed to nothing more than the idea of doing that thing on a computer are likely to face larger problems. While no particular type of limitation is necessary, meaningful limitations may include the computer being part of the solution, being integral to the performance of the method, or containing an improvement in computer technology.  See SiRF Tech., Inc. v. Int’l Trade Comm’n, 601 F.3d 1319, 1332-33 (Fed. Cir. 2010) (noting that “a machine,” a GPS receiver, was “integral to each of the claims at issue” and “place[d] a meaningful limit on the scope of the claims”). A special purpose computer, i.e., a new machine, specially designed to implement a process may be sufficient. See Alappat, 33 F.3d at 1544”

The second CAFC panel decision concludes “In sum, as a practical application of the general concept of advertising as currency and an improvement to prior art technology, the claimed invention is not “so manifestly abstract as to override the statutory language of section 101.” Research Corp., 627 F.3d at 869. [see also first CAFC panel decision in Alice Corp. v. CLS Bank Int’l].

In what can only be described as an ironic coincidence, the Supreme court granted certiorari, vacated and remanded to the CAFC in (what is now) Wildtangent v Ultramercial (see order list 537; June 30 2014) as Chief Judge Randall R. Rader was formally taking leave of colleagues and co-workers at the CAFC on June 30^th.  The remand specifies “for further consideration in light of Alice Corp. v. CLS Bank Int’l, 573 U. S. ___ (2014).”

The CAFC appears to have no choice but to reverse a decision that they have twice made, and twice supported with citations to Supreme Court decisions (as well as their own).

In light of the June 30^th GVR in Wildtangent v Ultramercial, it seems almost certain that a vast number of granted US patents on computer implemented inventions will turn out to be invalid. Indeed, the phrase “presumption of validity” seems greatly diminished in effect.

Perhaps it is Just as well that Judge Rader will not be a party to the third CAFC decision in Wildtangent v Ultramercial.