WildTangent to SCOTUS: End the patent eligibility madness!

August 26, 2013

On Friday, the online game company WildTangent filed a petition asking the U.S. Supreme Court to decide, once and for all, whether computer-implemented abstract ideas are eligible for patents. According to the company’s lawyers at Latham & Watkins, a three-judge panel of the Federal Circuit Court of Appeals ran amok in June when it held that patent eligibility extends to the concept of permitting online access to copyrighted material in exchange for viewing an advertisement. Instead of seriously considering the Supreme Court’s previous admonition about patent eligibility in Mayo v. Prometheus Laboratories, the WildTangent brief said, the Federal Circuit opinion, written by Chief Judge Randall Rader, sets up an eligibility test so easy that just about every computer-implemented abstract idea can pass. WildTangent contends that the Federal Circuit has contradicted itself, defied the Supreme Court and rewritten the Patent Act to promulgate its own expansive doctrine of patent eligibility.

Considering that the Supreme Court has already signaled its concern with the patent eligibility of computer-implemented ideas – after its Mayo v. Prometheus ruling in 2012, it sent the WildTangent case back to the Federal Circuit for reconsideration – it’s a good bet that the justices will take up the issue. It’s become almost an annual rite, after all, for the Supreme Court to school the Federal Circuit on some aspect of patent eligibility: business method patents in Bilski v. Kappos in 2010, patents based on laws of nature in Mayo in 2012, and gene patents Association for Molecular Pathology v. Myriad last spring. But will the court grant certiorari to WildTangent or will it decide to review CLS Bank v. Alice Corporation, the Federal Circuit’s spectacular en banc failure to agree on when computer-implemented abstractions are eligible for patent protection? You remember the now-infamous May 2013 ruling in CLS: The appeals court spewed 135 pages of concurrences and dissents but set precedent only in one paragraph finding Alice’s computer-assisted escrow process to be ineligible for a patent.

The splintered CLS decision, which comes in for quite a bit of disdain in WildTangent’s cert petition, was issued about a month before the three-judge panel came down with a decision in the WildTangent case, so you might expect Alice Corp to have struck first with a request for Supreme Court review. According to WildTangent’s petition, Alice told the justices in July that it intends to seek certiorari but requested and was granted an extension until Sept. 6 to file its petition. (I called and emailed Alice’s lead Federal Circuit lawyer, Adam Perlman of Williams & Connolly, but didn’t hear back.)

If Alice does indeed seek cert, the Supreme Court will have a very interesting choice to make (assuming, of course, that the justices agree with WildTangent that the technology and software industries desperately need clarity on what makes an invention eligible for a patent). CLS v. Alice was an en banc ruling addressing a grant of summary judgment to CLS, which had sued for a declaratory ruling that Alice’s patent is invalid. As I mentioned, the only actual holding by the en banc court was that the process was not eligible for a patent; the rest of the decision is very interesting musings about the gateway function of Section 101 of the Patent Act. In contrast, the three-judge panel’s decision in Ultramercial v. WildTangent, which addressed a lower-court dismissal rather than summary judgment, “seeks to fill the void,” as the cert petition puts it, left by the Federal Circuit’s failure to muster a majority in CLS. “The decision in this case completely revamps the law in this area and transforms (Section) 101 into little more than a statutory preordination of patent eligibility,” the petition said. “The Federal Circuit is hopelessly divided, and the court should not permit this extreme decision to set the ground rules for (Section) 101 going forward.”

WildTangent’s petition reminded the Supreme Court that the Ultramercial patent has already been before the justices once, when they remanded the Federal Circuit’s previous ruling for reconsideration in light of Mayo. (The Federal Circuit denied WildTangent’s motion for the reconsideration to take place before the entire appeals court.) Both the Mayo and Myriad cases followed the same procedural path, WildTangent pointed out: The Supreme Court agreed to hear those cases after the Federal Circuit stuck with its original reasoning on patent eligibility in remand rulings. WildTangent’s lawyers are hoping that even though CLS v. Alice was decided by an en banc court, the justices will agree that their case is the better, cleaner vehicle for deciding the eligibility of computer-implemented patents.

“The concept of trading advertisement viewing for content is indisputably abstract,” the brief said. “The court below recognized that formal claim construction was not necessary before resolving the (Section) 101 issue presented here. The claims at issue are based on technology that is easily understood – indeed, virtually any Internet user is familiar with websites that require viewing advertisements before viewing content. This case not only presents a computer-related method but one that applies to the Internet, a growing body of method patents. And the Federal Circuit’s decision in this case holding that the claims at issue are patent eligible under (Section) 101 is written in sweeping terms and will all but eliminate the important role of (Section) 101 in screening computer- and Internet-related patents.”

We’ll see in September how (or if) Alice will argue that its case, rather than WildTangent’s, presents the Supreme Court with the best set of facts to decide the patent eligibility question. Meanwhile, Ultramercial counsel Lawrence Hadley of McKool Smith told me that his client hasn’t yet decided whether to file a response in opposition to WildTangent’s petition.

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