CLS Bank Int'l v. Alice Corp. Pty. Ltd.--Rader's Additional Reflections

Bitlaw Summary and Analysis

The Federal Circuit in this case was reversed by the U.S. Supreme Court in its Alice Corp. decision.

This Federal Circuit decision was issued in five different opinions, none of which received support of a majority of the members of the Federal Circuit. These decisions are as follows:

Additional reflections filed by RADER, Chief Judge.

RADER, Chief Judge.

In the twenty-fifth year of my judicial service, I am wont to reflect on my early judicial experience in search of the confidence in the correctness of my judicial views that I then enjoyed. In this instance, my reflection carries me back to [*1334] one of the first cases I helped decide as a new Circuit Judge on this court.

The case, Arrhythmia Research Tech. v. Corazonix Corp., 958 F.2d 1053 (Fed.Cir.1992), involved a patent on a software invention that allowed for swift computer analysis of electrocardiogram images to detect heart attack risks. Of course, I encountered the case flushed with confidence and a commitment to the law as written by our legislative branch, the branch to which I had dedicated my entire early career. In the face of this marvelous way to protect human life more efficiently and reliably, I found myself certain that this invention would "promote the Progress of the useful Arts." Moreover, the investment in research to develop that new method cried out for protection. Without protection, I reasoned, investors would quickly opt to put their resources into new cosmetics or weight control improvements safer propositions. In sum, I thought this case was easy.

Therefore, I could only describe my emotion as surprise that my senior colleagues on the panel, Judges Newman and Lourie, struggled mightily. The author for the court performed impressive feats of intellectual acrobatics trying to gain some handhold to show that the mathematic equations in the method had some physical connection and no preemptive effect, what-ever those concepts mean (and I still do not know if they have any meaning, let alone what that meaning might be). The court succeeded in converting "applying," "determining," and "comparing" into "physical process steps that transform [***66] one physical, electrical signal into another." Id. at 1059.

With some trepidation, I ventured to express my view that the statute settled the question without the need for laborious analysis. At the close of my opinion, I expressed a little frustration: "When all else fails . . . consult the statute." For me, Parker v. Flook, 437 U.S. 584, 98 S.Ct. 2522, 57 L.Ed.2d 451 (1978), Gottschalk v. Benson, 409 U.S. 63, 93 S.Ct. 253, 34 L.Ed.2d 273 (1972), In re Abele, 684 F.2d 902 (CCPA 1982), In re Walter, 618 F.2d 758 (CCPA 1980), and In re Freeman, 573 F.2d 1237 (CCPA 1978), vindicated the proposition that "all else had failed." And for me, the magisterial statute with its sweeping inclusion of "any" process and even "improvements thereon" without any of the written exceptions for "software per se" or other legislative exceptions featured in failed European and Asian statutes settled the question. Indeed, as the law expressed and the Supreme Court recognized, an invention could extend to "anything under the sun that is made by man." Diamond v. Diehr, 450 U.S. 175, 182, 101 S.Ct. 1048, 67 L.Ed.2d 155 (1981) (quoting 182 S.Rep. No. 1979, 82d Cong., 2d Sess., 5 (1952) and H.R.Rep. No. 1923, 82d Cong., 2d Sess., 6 (1952)).

As I noted at the outset, a quarter century has passed. After In re Alappat, 33 F.3d 1526 (Fed.Cir.1994) (en banc), and a few other opinions, the law of patent eligibility enjoyed a halcyon decade of reliance on the statute. Inventions rose and fell, but based on the merits of their contributions to the progress of the useful arts, not on the basis of undefined and unproven judicial abstractions like "abstractness" or "preemption." Prior art governed the patentability of claims. The separate concept of patent eligibility of subject matter (not a claim-driven concept at all) was not subject to judicial preference for a broad or narrow view of formless substance.

Although Diehr and Diamond v. Chakrabarty, 447 U.S. 303, 100 S.Ct. 2204, 65 L.Ed.2d 144 (1980), betokened decades of enforcing the [**1743] patent law as written, these giants too have bowed to new judicial influences. Twenty years ago, Judges New-man, [*1335] Lourie, and I still unanimously agreed on the outcome of Arrythmia. The intervening commotion leaves us with little, if any, agreement amongst us even though the statute has not changed a syllable.

Thus, I find myself writing again as I did in 1992. And I find myself resorting to exactly the same phrase:

When all else fails, consult the statute! And for evidence that all else has failed, I need only recite Bilski v. Kappos, ___ U.S. ___, 130 S.Ct. 3218, 177 L.Ed.2d 792 (2010), Mayo Collaborative Servs. Inc. v. Prometheus Labs., Inc., ___ U.S. ___, 132 S.Ct. 1289, 182 L.Ed.2d 321 (2012), Ass'n for Molecular Pathology v. U.S. Patent & Trademark Off., 689 F.3d 1303 (Fed.Cir.2012), cert granted in part, ___ U.S. ___, 133 S.Ct. 694, 184 L.Ed.2d 496 (2012), MySpace, Inc. v. GraphOn Corp., 672 F.3d 1250 (Fed.Cir.2012), Dealertrack, Inc. v. Huber, 674 F.3d 1315 (Fed.Cir.2012), and Classen Immunotherapies, Inc. v. Biogen IDEC, 659 F.3d 1057 (Fed.Cir.2011), and this list can and will go on and grow.

And the remedy is the same: consult the statute! The statute offers a patent to both inventions and discoveries, including simply an improvement on a known process or product. The statute further directs that even the mere new use of an old machine is eligible for patenting, with, of course, a high obstacle of meeting the conditions of patentability set forth in Sections 102 and 103 of the Patent Act ahead. See S.Rep. No. 82-1979 at 17 (explaining that the new use of a known machine or composition of [***67] matter is eligible for patenting "provided the conditions of patentability are satisfied.") In that regard, the Supreme Court long ago held that Section 101 is not a "condition of patentability." Diehr, 450 U.S. at 189-90, 101 S.Ct. 1048 (citing In re Bergy, 596 F.2d 952, 963 (CCPA 1979) (Section 101 "was never intended to be a 'standard of patentability,' the standards, or conditions as the statute calls them, are in 102 and 103")). Finally, the statute does not list Section 101 among invalidity defenses to infringement. See35 U.S.C. § 282 (while invalidity for failing to meet a "condition of patentability" is among the authorized defenses, Section 101 is not a "condition of patentability").

And what about "exceptions" like natural laws and natural phenomena? Of course, these are universal constants created, if at all, only by God, Vishnu, or Allah. But, for perspective, even gravity is not a natural law in Einsteinian theory, but a symptom of a curved universe. Einstein posited the speed of light as the only true natural constant. Thus, in context, equating the personalized medicinal effect of a human-created pharmaceutical in patients of different metabolic rates and genetic makeups with the speed of light (or even gravity) is only possible in a netherworld of undefined judicial insights. Moreover, to inject the patentability test of "inventiveness" into the separate statutory concept of subject matter eligibility makes this doctrine again "the plaything of the judges who, as they became initiated into its mysteries, delighted to devise and expound their own ideas of what it meant; some very lovely prose resulting." Giles S. Rich, Principles of Patentability, 28 Geo. Wash. L.Rev. 393, 404 (1960).

I enjoy good writing and a good mystery, but I doubt that innovation is promoted when subjective and empty words like "contribution" or "inventiveness" are offered up by the courts to determine investment, resource allocation, and business decisions. Again, it is almost . . . well, "obvious" . . . to note that when all else fails, it makes sense to consult the simplicity, clarity, and directness of the statute.

As I start my next quarter century of judicial experience, I am sure that one day I will reflect on this moment as well. I [*1336] can only hope it is a brighter reflection than I encounter today.