Wednesday, March 7, 2012

Myspace v. Graphon - Federal Circuit Sidesteps Patent Eligibility under 35 USC 101

In the 2010 Bilski decision, the Supreme Court attempted to state a test for what is patent-eligible under 35 USC 101. The Supreme Court rejected that certain categories of subject matter such as business methods or software would be automatically ineligible and that the Federal Circuit's machine-or-transformation test should be the exclusive test. Instead the Supreme Court looking to its own precedent stated laws of nature, natural phenomena, and abstract ideas would be unpatentable.

Since that time the Federal Circuit has struggled to develop a working test for what is an unpatentable abstract idea. Part of the problem is a patent claim is an abstraction of an embodiment of the invention. And the Supreme Court abstract idea test is the ultimate penalty if the abstraction is too great (i.e., the claim is too broad).

In Myspace, Inc. v. Graphon Corp., the Federal Circuit assessed the validity of a software patent relating to creating, modifying, and storing database records over a computer network. The Federal Circuit made several candid and surprising statements: (1) it conceded section 101 is a murky morass that should be avoided when possible; (2) the USPTO may become the source of a workable test (note the Supreme Court implied that the Federal Circuit would further develop the law); (3) patent eligibility was not a threshold question (Bilski states otherwise); and (4) courts should initially evaluate a patent under section 102 (novelty), section 103 (obviousness) and section 112 (written description and enablement) to avoid "the swamp of verbiage that is section 101." Note sidestepping the section 101 defense didn't help as the Federal Circuit then held the patent invalid under sections 102 and 103.

Also see Donald Chisum's Weeds and Seeds in the Supreme Court's Business Method Patents: New Directions for Regulating Patent Scope on this topic.

Copyright © 2012 Robert Moll. All rights reserved.