IBM, Google Disagree on Alice, Need for Congress to Act

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By Tony Dutra

March 15—IBM's top patent attorney argued for adjusting the U.S. Supreme Court's 2014 Alice v. CLS Bank decision that narrowed the type of inventions eligible for patenting, saying the ruling “put us in a very difficult position.”

“Something has to change,” Manny Schecter, chief patent counsel for IBM, the New York-based technology and consulting multinational corporation, said March 15 at the IPO Education Foundation’s patent bar & office dialog summit in Washington. “We can debate the how, but something has to change.”

Schecter and Laura Sheridan, senior patent counsel on Google Inc.’s global patents team, shared the stage with the Patent and Trademark Office's commissioner for patents and two other panelists concerned with the “chilling effect” the high court's Mayo and Myriad rulings have had on patents claiming medical diagnostic inventions.

Google's view was that Alice was an “important correction” of overly broad, ambiguous patents.

Schecter welcomed congressional intervention — not necessarily through the passage of new laws but by putting pressure on the courts to clarify standards.

“We need to get courts there,” Google's Sheridan said. But, “I strongly believe we shouldn't involve Congress.”

Google: Follow Rest of World

PTO statistics show that IBM consistently patents more than Google does, but that difference doesn't completely explain their differing views.

Sheridan said that Alice provided “a wakeup call” to the firm, whose pre-Alice patent application filings in the Internet advertising space she deemed “borderline.”

“So I think it's been a positive for us,” she said, “It makes us really assess the value proposition for some [applications].”

Schecter said that Alice hasn't had “as much of an effect” on its patent applications claiming business methods as might be assumed, because IBM curtailed those applications 10 years before.

However, he said PTO examiners are inconsistent when it comes to computer-implemented innovations generally, with some rejecting far more than just the “patents that deserve to go down.”

“The chilling effect caused by the current status quo is a real problem,” he said.

Schecter argued that the Supreme Court gave no definition for eligibility-defeating “abstractness” in Alice Corp. Pty Ltd. v. CLS Bank Int'l, 134 S. Ct. 2347, 2014 BL 170103, 110 U.S.P.Q.2d 1976 (2014), and he was pessimistic that the court would define it clearly enough to provide the consistency that IBM desires.

That concern could be minimized, said Sheridan of Google, which favors modifying the two-step Alice test slightly. Courts—and PTO examiners—should start with step two— identifying the “inventive concept” first—and then see if it presents “a technical solution to a technical problem,” she said. The court signaled in Alice that a question's technical nature should be looked at, she added.

This “technical effects” test is common in international jurisdictions, enough reason to consider it here, said Michael Fuller of Knobbe, Martens, Olson & Bear LLP, San Diego.

“Courts have changed things in a way where we're not aligned with the rest of the world,” he said. “Bringing us more in line with the rest of the world is, I think, a good idea.”

The PTO's Drew Hirshfeld had doubts.

“I think that the courts have hinted that, ‘The more technological you are, the better chances you have',” he said. “But courts have not given us a technological test. If we [use that test], we will be creating more uncertainty.”

Life Sciences: Hoping for Sequenom Savior

Panel moderator Courtenay Brinckerhoff of Foley & Lardner LLP, Washington, relayed an audience-submitted comment that, in 10 years, the U.S. will lose its advantage in life sciences technology development without a change to the Supreme Court's limits on patenting diagnostic tests.

“We are now more restrictive in our scope of patentable subject matter than any of the other major countries,” Schecter said in agreement.

“I think we may have to have legislation to fix the problem,” Fuller said.

Sheridan sympathized with life sciences stakeholders but remained opposed to legislation. “There should be a way to adjust the law without undermining the incredible positive impact Alice has had [in our area],” she said.

Hirshfeld noted a 20-percent decrease in business method application filings, but said that was not the case in the pharmaceutical and biotech areas. The difference, he said, is that the applicants are not getting the broader claims that they were used to getting before Mayo Collaborative Servs. v. Prometheus Labs. Inc., 132 S. Ct. 1289, 2012 BL 66018, 101 U.S.P.Q.2d 1961 (2012).

Nevertheless, he joined Brinckeroff and Fuller in hoping the Supreme Court would grant Sequenom's petition for review, expected April 1, of the U.S. Court of Appeals for the Federal Circuit's application of Mayo in Ariosa Diagnostics Inc. v. Sequenom Inc., 788 F.3d 1371, 115 U.S.P.Q.2d 1152 (Fed. Cir. 2015).

“Did the Supreme Court really mean that diagnostic tests are not patentable?” Fuller asked. “I think we'll be able to tell if they take up Sequenom. If they decline, then I guess that's what they meant.”

To contact the reporter on this story: Tony Dutra in Washington at adutra@bna.com

To contact the editor responsible for this story: Mike Wilczek in Washington at mwilczek@bna.com