After a string of recent, conflicting decisions on software patents, Judge Plager of the Court of Appeals for the Federal Circuit (CAFC) wrote this in dissent in Dealertrack v Huber:
[A]s a matter of efficient judicial process I object to and dissent from that part of the opinion regarding the ‘427 patent and its validity under §101, the section of the Patent Act that describes what is patentable subject matter. I believe that this court should exercise its inherent power to control the processes of litigation,Chamberes v. NASCO, Inc., 501 U.S. 32, 43 (1991), and insist that litigants, and trial courts, initially address patent invalidity issues in infringement suits in terms of the defenses provided in the statute: “conditions of patentability,” specifically §§102 and 103, and in addition §§112 and 251, and not foray into the jurisprudential morass of §101 unless absolutely necessary. (emphasis added).
For some context, the recent conflicting decisions I referenced above are CyberSource and Ultramercial, opinions where the same court came to seemingly opposite conclusions on whether patents on computer-aided software functions were within the scope of Section 101 and thus patentable. In CyberSource, the CAFC described a software patent as covering purely mental steps, where the attachment to a computer was essentially superfluous. In Ultramercial, by contrast, the CAFC described a rather similar patent as good for describing a controlled interaction with a user over the internet. This all follows the infamous Bilski decision, where the Supreme Court declined to issue any concrete guidance on subject matter eligibility.
It’s pretty shocking that a judge for the CAFC, the court with jurisdiction over all patent appeals, would tell lower courts to ignore section 101 and litigate other issues instead. As the “101” might indicate, that section of the patent act is the most basic description of what is eligible for patent – a topic that has been vigorously debated in recent years, not coincidentally corresponding to a proliferation of patents in software and business methods. Now, obviously this isn’t binding – no party will be getting out of a Section 101 issue by citing this language to a District Court. But it shows the sad state of affairs of Section 101 – even a judge on the CAFC thinks Section 101 has turned into a total mess.
One other thing to consider – how do you value a patent as a company in this sort of climate? Policy advocates on every side of an issue (I’m thinking things like ACTA and SOPA recently) like to throw out numbers in terms of values and investments and jobs, but in a world where the the very concept of what is protected is still in play at the highest level, you have to question how accurate any sort of valuation on that sort of protection can possibly be.
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