C.D. Cal. Swims Against The Tide Of Software Patent Ineligibility In Caltech v Hughes

Patent applicants from the software and business method fields took notice after the United States Supreme Court issued its opinion in Alice Corporation Pty. Ltd. V. CLS Bank International, et al. ("Alice," 134 S. Ct. 2347 (2014)) on June 19, 2014, and the U.S. Patent and Trademark Office ("USPTO") followed with preliminary guidelines ("Guidelines") issued June 25, 2014 for examining subject matter eligibility under 35 U.S.C. § 101 of claims relating to a judicially created exception to patent eligibility. On December 15, 2014 the USPTO published a revised interim guidance on patent subject matter eligibility that supplements the Guidelines, providing a review of relevant case law and examples. One judicially created exception bars patent eligibility for "abstract ideas."

The Guidelines provided illustrative examples of abstract ideas, including "fundamental economic practices, certain methods of organizing human activity, 'an idea of itself', and mathematical relationships/formulas." The patent claims at issue in Alice were, in the Supreme Court's view, presumptively directed to an abstract concept. Alice, 134 S. Ct. at 2352. Accordingly, the opinion did not discuss criteria for identifying whether a claimed invention is or is not directed to subject matter that is too abstract to be eligible for patent protection. In fact, the Alice opinion explicitly states that the justices did "not labor to delimit the precise contours of the 'abstract ideas' category." Id. at 2357. Instead, the Alice decision and subsequent Guidelines articulated 'abstract ideas' in terms of examples taken from cases previously devided by the Supreme Court, including such as Bilski (Bilski v. Kappos, 561 U.S. 593 (2010)), Diehr (Diamond v. Diehr, 450 U.S. 175 (1981)), Benson (Gottschalk v. Benson, 409 U.S. 63 (1972)), Flook (Parker v. Flook, 437 U.S. (2010)), and Mayo (Mayo v. Prometheus, 132 S. Ct. 1289 (2012)).

In the wake of Alice, the Court of Appeals for the Federal Circuit and the District Courts have issued a tidal wave of decisions finding ineligible numerous patents relating to computer-implemented technologies. Swimming against this tide of software patent ineligibility is the U.S. District Court for the Central District of California. In an order signed November 3, 2014, in California Institute of Technology v. Hughes Communications Inc. ("Caltech"), Judge Mariana Pfaelzer ruled that "Caltech's patents improve a computer's functionality by applying concepts...