End of the Road for Software Patents?

October 21, 2016

The Court of Appeals for the Federal Circuit (CAFC) has again shaken up the software patent world with its most recent decision in Intellectual Ventures v. Symantec Corp & Trend Micro Inc. The majority wrote that:
“Most of the First Amendment concerns associated with patent protection could be avoided if this court were willing to acknowledge that

Alice sounded the death knell for software patents.

The Court explained that the “mere recitation of a generic computer cannot transform a patent-ineligible abstract idea into a patent-eligible invention.”
The court seems to be moving aggressively towards curtailing software patents – a direction somewhat at odds with its previous decisions over the last few months. The battle over software patents really kicked off with the 2014 Supreme Court decision in Alice v. CLS Bank International. In Alice, the court found that “claims [drawn] to patent ineligible abstract idea are not eligible for a patent under section 101.” Many viewed Alice as a fatal blow against software patents – although a year later, many patent attorneys thought that software was still eligible subject matter as long as claims were carefully constructed. Either way, the future of software patents seemed murky at best.
This most recent decision in Intellectual ventures will be applauded by some as “finishing the job” that Alice started: the death of software patents, and by extension, some of the worst “patent trolls” in the business. Intellectual Ventures itself is notorious for its numerous lawsuits against startups – and while the invalidation of its patents by the CAFC probably won’t kill Intellectual Ventures, it sure could kill some of the smaller “patent trolls” in the same industry. The uncertainty over the validity of software patents, as confirmed by Intellectual Ventures, makes “patent trolls” very hesitant to actually sue – if their patents are invalidated, they essentially no longer have a company.
The other side of the coin, however, is whether or not the death of software patents would stifle legitimate innovation. If you ever talk to a programmer in Silicon Valley, chances are that they hate software patents with a passion. Are software patents necessary to protect innovation in the field? Software certainly costs a lot to develop (tens of billions of dollars annually). Would developers spend time and money developing things like artificial retina algorithms if their work could be copied by another company?
To completely eliminate software patentability seems like it would go a bit too far. However, that doesn’t mean the system is perfect. The concurrence in Intellectual Ventures is probably the most worrying part of this recent case. Judge Mayer wrote that patents that constrain “essential channels of online communication run afoul of the first amendment.” Essentially, Judge Mayer is trying to make software patents into a First Amendment issue. Does this mean that Mayer is advocating for any sort of software that interacts with the internet (essential channels of online communication) should not be patent eligible? This would represent an enormous blow to quite a few software patent holders – these days, most software interacts with the internet in some way or another.
The decision in Intellectual Ventures doesn’t mean that software patents are dead. But it leaves the door open to a stricter interpretation of patent eligibility than we’ve ever seen before. If the court does take it in the direction that Judge Mayer is hinting at, it’s possible that a large number of software patents will be invalidated over the coming years.