Munich I Regional Court's third patent litigation division (44th Civil Chamber) held its first-ever patent infringement hearing: multitouch patent case against Samsung

For only the second time in more than a year, I went to the Landgericht München I (Munich I Regional Court) today. The case itself--Solas OLED v. Samsung Electronics (case no. 44 O 9702/21)--lacks everything that a patent infringement action needs in order to be taken seriously. If it raises any interesting question at all, it's whether Google is supporting Samsung against a case that targets the Android operating system. I'll get to that later. I'd have attended that hearing even if the case had been outside of my industry focus. All I wanted to see the court's third patent litigation division's premiere session. Icing on the cake: I got to see a new courtroom, too.

Here's a picture of the Munich I Regional Court's 44th Civil Chamber that I took with my limited talent and a Google Pixel phone (click on the image to enlarge):

In the middle, you see Presiding Judge Dr. Georg Werner. To his right (from the beholder's angle), his deputy, Judge Dr. Anne-Kristin Fricke (who brings not only patent but also significant competition law expertise to the table and is the rapporteur on today's case). To his left, Judge Dr. Franziska Greiner-Wittner.

Don't infer from the medieval-looking banner behind the judges that this courtroom (Lenbachplatz building, room 101) is old-fashioned. It used to be a library, but has recently been transfomed into a courtroom--and with a view to videoconferencing capabilities, it presumably has better technical equipment than any other courtroom in Munich.

In recent years, the Munich court's patent infringement panels have clearly demonstrated thought leadership, arguably to a greater extent than any other trial court in the world:

• The Munich application of the Huawei v. ZTE case law of the European Court of Justice was subsequently adopted by one Mannheim division, then adopted by the Federal Court of Justice, and meanwhile all German courts including the Dusseldorf Regional Court faithfully apply Sisvel v. Haier I and II. An ECJ review of the German application of Huawei v. ZTE is very unlikely by now.

• Earlier this year, the Munich court referred to the ECJ a question concerning the availability of preliminary injunctions over non-battle-tested patents. That case has the potential to result in more patent PIs throughout Europe.

• Since the 2019 Nokia v. Continental anti-antisuit case, other courts have also been more willing to apply a very similar standard to motions for anti-antisuit injunctions. In January, Judge Gilstrap (Eastern District of Texas) granted Ericsson an anti-antisuit injunction against Samsung, and in October, Ericsson was denied an anti-antisuit injunction against Apple at this stage, but a Dutch court, in principle, performed an analysis similar to the one first seen in Munich. The Dusseldorf Regional Court followed suit as well (in a Xiaomi case).

It is no secret in the local patent law community that Judge Dr. Werner, who is also very well-liked in academia, made important contributions to the development of patent jurisprudence in Munich. Consistency is assured: the court's three patent litigation divisions (the 7th, 21st, and now also 44th civil chambers) will be perfectly synced. There was a time when Munich plaintiffs viewed the 7th Civil Chamber the "grand prize" in the lottery that is the assignment of new cases to a division. The only way to engage in "judge-shopping" was to amend existing complaints by throwing in new patents, which claims were immediately severed but remained with the same division. That's a thing of the past. If you're looking to assert patents in Munich, your case will be put on a very similar timeline and your chances of success will be at the same level no matter which of the three divisions your complaint gets assigned to.

Before he became the 44th Civil Chamber's Presiding Judge, Judge Dr. Werner left the 7th Civil Chamber (where he was Judge Dr. Matthias Zigann's deputy) earlier this year and took over a non-patent division that nevertheless heard cases with an IP element. He's since presided over a number of hearings and trials, so it came as no surprise that his moderation of today's session looked like he'd been doing this for many years.

Next year we'll probably start to hear about landmark decisions by the 44th Civil Chamber, but the case they heard today is just too weak to lend itself to anything spectacular.

Non-practicing entity Solas OLED asserts patent against Samsung that doesn't even make a technical contribution to the state of the art

Ireland-based patent licensing firm Solas OLED is suing Samsung over a number of patents in different venues, and a Texas jury has already awarded it more than $60 million in patent infringement damages.

There are cases in which NPEs (or the ones who sold them patents) came up with a brilliant idea before anyone else patented it. But there are also cases in which someone just tries to obtain a patent on a technique that is not innovative in any respect, and the plan is just to capitalize on legal uncertainty by suing those who make actual products (like Samsung), hoping that a court will be gaslighted into an overbroad claim construction resulting in a lucky punch for some troll. And Samsung has a hard-earned reputation for declining to feed the trolls.

The German Patent and Trademark Office can be anyhing but proud of having issued German patent DE102009019910 on gesture recognition. The court phrased it diplomatically today, but Judge Dr. Werner noted their real struggle to identify some claimed inventive substance. Let's keep in mind that when that patent was filed in 2009, capacitive multitouch touchscreens were already in widespread use: the first iPhone was launched in 2007, and the first Android devices not much later. This doesn't mean that there wouldn't be any more room for multitouch patents, or even gesture recognition patents, but a claimed invention has to make a technical contribution to the state of the art as it solves a technical problem with technical means. This particular Solas patent makes no technical contribution, and here's why:

The closest thing to a technical contribution that the court--only hesitantly, for good reason--identified is found in paragraph 15 of the specification of the patent. The argument for patentability comes down to saying that a particular way to structure computer program code is more efficient to develop and easier to test than another. However, this is not a software patent of the kind that is considered a computer-implemented invention, which solves a technical problem with technical means involving a computer program. What this is all about is a software architecture, if not a coding style.

The patent fails to provide any efficiency gains at the machine level. If it has any effect, it has to do with how to organize the work that computer programmers perform. It's astonishing that some German patent examiner granted that patent application in clear contravention of § 1 PatG (§1 Patent Act), which is the German implementation of Art. 52 of the European Patent Convention (EPC). There is no technical effect here: all that the patent specification itself claims is that it#s "hard to reliably and efficiently add code to identify a new gesture in an existing code segment, and that testing such code presented difficulties.

Reliability and efficiency can justify the patent-eligibility of a software-related invention under European case law. But that applies only if the invention is technically superior and, therefore, more reliable and more efficient. In this case, there's nothing that would stop programmers from developing equally (if not more) reliable and efficient program code for the purpose of the identification of new gestures whether or not they choose the code structure claimed by the patent. Sure, some programming styles are more error-prone than others, but that's not capable of establishing technicity. Technicity means that you develop a program, execute it, and the execution of the code then reliably delivers a tangible benefit. Otherwise the authors of books like Clean Code could also have filed for patents before publishing their works...

Any machine-learning algorithm would make it even less time-consuming to teach a system to recognize new gestures. The patent in question does not contain a specific solution to the problem of recognizing new gestures: the whole argument is that if you modularize (or one might also say "partition") the code and have one Turing machine (state machine) for the identification of single-touch gestures and a second that interprets a timestamped sequence of single-touch gestures as multi-touch gestures, you'll find it easier to write the additional program code needed to recognize new gestures. But someone still has to write that code. That someone is a human being. And if you let a very good programmer A write such code under a different software architecture, the result may be even more reliable and the development process even more efficient than if an average programmer B was assigned to the task but adopted this particular architecture.

The human factor here distinguishes the claimed invention in question from cases in which the EPO's boards of appeal and national courts have deemed software patents valid. This here is not a computer-implemented invention, but purely about how human beings organize their work (i.e., the code they write). The EPO itself has always made it clear, including in debates during the European legislative process on CIIs in the 2000s, that program code is not patent-eligible due to the exclusion of "computer programs as such" under the EPC. Firstly identifying single-touch gestures and then putting those intermediate results together and perform some further analysis is not just trivial: it simply fails to meet the European technicity requirement.

The way such patents are usually shot down in Europe is, however, not on the basis of Art. 52 (or its equivalent in Germany, § 1 Patent Act). Normally, all non-technical claim limitations are ignored in the novelty analysis, and what is not novel cannot contribute to an inventive step either. In this case, I don't think the piecemeal approach is appropriate, and prior art is not needed: the patent itself doesn't claim any technical efficiency or reliability gain; it merely claims that human beings who adopt the structural recommendations of the patent are more likely to arrive at a good result.

It speaks volumes that the closest thing to a technical contribution identified by the court is totally detached from the claims, which do not in any way address the question of how to support new multitouch gestures.

Other than a mention of four invalidity contentions brought by Samsung, validity was not discussed today, however. First hearings in Munich--unless infringement is conceded--do not address validity; it's too early for that. The focus was on the infringement analysis. Samsung disputes Solas OLED's allegations of infringement, arguing that Android's MotionEvent object does not have the two separate types of state machines described in the patent.

Samsung's lawyers--Allen & Overy patent litigators Dr. Jan Ebersohl and Denise Benz, and Zimmermann & Partner patent attorney Dr. Joel Naegerl ("Nägerl" in German)--have jointly achieved that the court is, for now, unconvinced of Solas OLED's case. In the U.S., the court would construe the patent, but would then let a jury decide the factual questions. In Germany, courts resolve these cases based on the pleadings, and Samsung's non-infringement argument may be sufficiently substantiated that Solas OLED will not overcome that hurdle.

It also became known today that Samsung has also, out of an abundance of caution, raised a proportionality-based affirmative defense to Solas OLED's prayer for injunctive relief. However, not only does it appear unlikely that the court will reach that question (as the patent may be neither infringed nor valid), but this year's patent "reform" bill falls into the "plus ça change" category anyway. Of course, defendants like Samsung cannot leave that stone unturned. It's just not going to help unless a plaintiff makes a huge mistake.

What Solas OLED is doing in this litigation gives NPE litigation a bad name. They're trying to monetize the mistake that the German Patent & Trademark Office made when it granted this patent. If they won, other Android device makers and, therefore, Google itself would have to be concerned. I didn't see any Google representative in the room, nor did Google appear to formally intervene. Maybe Google doesn't support device makers the way it should--or neither Google nor Samsung take this case seriously, which I couldn't blame them for.

I'm pretty sure that the 44th Civil Chamber's first patent injunction will come down next year (anything else would be a statistical anomaly), but in a rather different case. Despite today's case being a stupid one over a bad patent, the 44th is off to a good start.

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Ten patent and antitrust predictions for 2021

Happy New Year!

Let me start with what I believe will be some of the hottest items on the patent and antitrust agenda (with a focus on the information and communications technology industry, of course) this year. There's always a risk of making predictions that don't play out, but I can live with that. I've had a very high hit rate--but obviously sub-100%--with respect to judicial and regulatory decisions. Unlike practitioners, I don't incur the risk of clients losing faith in me. Instead, I believe many of my readers actually prefer me to just share my thoughts and speak my mind.

1. Mobile app platforms to be the clear #1 antitrust topic

   I'm convinced that this is bigger than the "smartphone patent wars" were in the first half of the last decade, and I'd definitely say so even if I had not released an app shortly before Christmas, which, by the way, has been lauded for its quality as well as for making a positive contribution to the fight against COVID-19. Some examples:

   • Viral Days is a brand new strategy game that supports the fight against COVID-19 (Pocket Gamer)

   • Viral Days is a must play in these days of COVID-19 (IZTech)

   • "[I]t’s a really great way to spend some time that’s going to keep you on your toes and teach you something as well." (AppAdvice)

   • Viral Days is a Mobile Game That Shows us the Best Way to Handle Pandemics: "an entertaining mix of strategy and management with a message that we all should be heeding right now" (Gamezebo)

   • Viral Days, el videojuego para móvil para crear conciencia de la infección de la Covid (El Español)

   • "Estamos ante el primer juego para móviles que demuestra el beneficio de usar mascarillas, el distanciamiento social y la cuarentena como medios para combatir las infecciones virales." (APPerlas)

   • "Improves people's awareness ... a very meaningful gameplay experience ... fits very well with real life"
     (逗游网 doyo.cn)

   • "Melhores jogos para Android e iOS da semana [24/12/2020]" (tudocelular.com)

   • Best iOS app released the week before (iPhoned.nl)

   No, it's not just that I'm seeing the world through an app developer's lens. Throughout this year, there's going to be news from numerous countries on multiple continents concerning app store antitrust matters. There'll be a spectacular Epic Games v. Apple trial in Oakland. From what I hear, and without stating my own position on the legal framework yet, I predict that the European Commission's Directorate-General for Competition (DG COMP) is going to hand down a Statement of Objections (SO) in the investigation of Spotify's October 2019 complaint (prior to which Spotify was already informally lobbying the EC heavily). The Coalition for App Fairness will certainly continue to grow. There will be cases in which apps are rejected, or will be removed from an app store despite originally having been approved, such as Vybe Together. But there's also a potential for further improvements in favor of developers--and room for improvement there clearly is, not only on iOS but also on Android.

   While some organizations primarily rely on regulatory intervention and judicial decisions, others will look for "workarounds" as we can see in the case of game streaming services, where Microsoft decided to bring its xCloud--and Google its Google Stadia service--to iOS devices on the basis of HTML5 web apps.

2. It's a safe assumption that things can't get worse with respect to the USPTO and patent-related antitrust enforcement under the incoming Biden Administration than they were under the outgoing Trump Administration.

   With Andrei Iancu, a litigator whose firm does most of its patent assertion business with trolls, and Makan "Macomm" Delrahim, a Qualcomm lobbyist, #45 put not only fox in charge of the hen house, but two. #46 can't possibly make worse choices in that regard, even if he tried.

3. But, to my dismay, I expect very negative developments in the 117th United States Congress. With Senators Thom Thillis (R-N.C.) and Chris Coons (D-Del.) having been reelected, their unholy alliance is set to continue for many more years. Presumably they're going to launch a massive legislative assault on Alice (§ 101) with lots of support on both sides of the aisle. Silicon Valley largely supports the Alice case law, but will the tech industry thwart that foreseeable attempt to overrule the Supreme Court by means of new legislation? What the United States needs in 2021 is what the EU had about 20 years ago: an anti-software-patent movement (or at least an anti-abstract-software-patent movement). I didn't found that one; I joined it in 2004 and launched one prominent campaign within that movement. There still would be a potential for mobilizing the developer community at large, and that would be a way to contribute to efforts to dissuade Capitol Hill lawmakers from overturning Alice. If it comes down to traditional, run-of-the-mill lobbying, the anti-Alice movement will win handily.

4. What I believe can be avoided (but even that is not sure) is that Congress, in one fell swoop, also does away with the patent injunction requirements under eBay v. MercExchange. Sen. Thillis appears to have become a little more balanced in that regard, though he has yet to figure out how essential Alice is to protect America's true high-tech innovators (as opposed to trolls).

5. COVID-19 is still going to have a major impact on patent litigation. Expect to see delays in reasonable districts--but also irresponsible decisions by out-of-control superspreader judges on both sides of the Atlantic.

   In one major hotspot region, Germany, there are presently more people dying from and with COVID-19 every day, relative to population size, than in the United States, and it appears highly unlikely--barring an unforeseeable improvement of the situation, such as by a sudden burst of vaccine production capacity somewhere--that herd immunity will be achieved in Germany or any other large EU member state in 2021.

   While outgoing Chancellor Angela Merkel took far more reasonable positions than various other politicians when it came to imposing undesirable but inevitable restrictions on citizens, she's always been a total disaster with respect to migration policy (even in 2020, Germany condoned that more than 100,000 illegal immigrants entered the country, with many COVID-19 outbreaks in asylum shelters and other diseases being imported) and she's always put Europe first, her own country not even second.

   Even though the first highly effective COVID-19 vaccine was invented in Germany (by legal immigrants of the most admirable and desirable kind), the German government decided to source any vaccine only through the EU. That could have worked if not for French president Muckron's protectionism. Pfizer/BioNTech offered the EU 500 million doses, and Moderna (which uses the same type of technique, mRNA) another 300 million. With 800 million doses, the EU could have vaccinated pretty much every citizen (without even needing AstraZeneca's hands-down inferior and problematic alternative)--at a minimum, it would have achieved herd immunity, and probably by the summer, if not sooner.

   But the French government, whose influence over EU politics has never been more damaging than under its current president, would rather let many people die than acknowledge French pharmaceutical giant Sanofi-Aventis' failure to innovate. Sanofi's vaccine isn't ready, and even if and when it will be, it won't be a match for what Pfizer/BioNTech and Moderna have to offer. The French government wanted to avoid two things:

   • They didn't want Sanofi-Aventis to lose market share, as a result of its failure to provide a competitive COVID-19 vaccine, to German and American companies.

   • They also wanted to avoid a situation in which a German company (founded and led by Turkish immigrants) would have "saved" Europe from COVID-19.

   So Muckron, probably through French EU fake news commissioner Thierry Breton, practically vetoed any commitment to other companies that would have exceeded the quantities the EU agreed to buy from Sanofi-Aventis. Unfortunately, the totally unethical French government didn't have to fear any objection from its equally irresponsible and ruthless German counterparts in Berlin and Brussels who don't care about and for the lives of ordinary citizens nearly as much as for their "EU über alles" ideology.

   As a result, the German government's current vaccination plan envisions that the majority of the population (45 million people categorized as those having a "low risk") would not get vaccinated before December 2021 at the earliest.

   No, this is not a conspiracy theory. It was reported by Germany's nost influential political newsweekly, Der Spiegel, which is a liberal magazine and couldn't possibly be more EU-friendly--and a columnist for its center-right competitor, Focus, picked it up and completely agreed. His conclusion: instead of "Stronger together," the EU's slogan should be "Dying together, Brussels kills people." That is a similar way to put it as what Romanian MEP Cristian Terhes told the press: "European Unity is not a strength when it is slow, cumbersome and bureaucratic; indeed it kills when it puts utopian ideologies over letting nation states protect their own citizens and best interests."

   Later today, the same Focus columnist published another piece in which he says this is Merkel's most devastating mistake in 15 years in office, and he's wondering why most of the mainstream media (with a few notable exceptions, though) remains silent about it. People are going to see the impact of this as Germany will have to impose lockdowns at a time when other countries, thanks to herd immunity, will be back to normal life more or less.

   The combination of Spiegel and Focus in Germany is comparable to MSNBC and FOX NEWS agreeing on something in U.S. politics. Also, Dr. Daniel Stelter, a German management consultant who had worldwide responsibility as a managing director at Boston Consulting Group, discussed this matter on Twitter.

   Professor Uğur Şahin, the CEO of BioNTech, told German newspaper Die Welt that the EU behaved very differently from countries that bought vaccines directly. It appeared the Commission couldn't really act without approval from some member states, and the EU gave the impression it thought there were alternatives. This is consistent with the French protectionism story: obviously the Commission didn't invite BioNTech to its internal discussions with France (if anybody was privy to them, that would have been Sanofi, of course--given that France's vision of "fairness" is that its own companies, even when they fail to innovate, must receive preferential treatment). All that BioNTech saw that how the EC was dealing with them, and it's clear now that the Commission failed the bloc's citizens. It failed so miserably that there's probably never been a stronger case for leaving the EU: the UK is already outvaccinating it. While this Daily Express article reflects strong EU skepticism, it also talks about some of what went wrong and why.

   Those delays in vaccination will have an impact on German patent trials, unless judges decide to go ahead anyway, as some of them are prepared to do.

6. German patent injunction reform is going nowhere. Some kind of bill will be passed, and the pro-reform movement will engage in some predictable spin-doctoring, but the mess is going to be just the same, except that legal fees will be higher than before. I'd love to be proven to have been wrong, and to see something good come out of that process, but the pro-reform movement consists of too many born losers.

7. The Unified Patent Court (UPC) will be like the German patent judiciary on steroids. It's going to start its operation soon. There was no political resistance, so it's just going to happen, and possibly the first UPC hearings will already take place this year.

8. We'll hear a lot about antisuit, anti-antisuit, and anti-anti-antisuit injunctions this year. In fact, 2020 ended with the outbreak of a major anti-anti-antisuit venue fight between Ericsson and Samsung.

9. Finally, component-level licensing of standard-essential patents (SEPs): Nokia won't be able to prevent the referral of a set of key legal questions to the Court of Justice of the EU. The more interesting question is what the other major German patent infringement venues will do: will they stay certain cases pending the CJEU proceeding? Or will they just look for ways to duck the question, simply by finding against plaintiffs on other grounds? The lower courts won't be helpful, but the appeals courts will overrule them in some cases. After the German referral to the CJEU, courts in other EU member states may also stay SEP cases involving component-level licensing-based defenses.

10. The Avanci SEP pool firm is not going to change its "end-product-only" policy. As a result, it's not going to do much business in 2021.

I'll look at these predictions again in a year from now.

Finally, I'd also like to highlight a macroeonomic fact: relative to the size of its economy, no other major economic area in the world has taken on nearly as much debt during the COVID-19 crisis as the eurozone. And I believe they'll have to do even more in 2021, due to the abysmal failure to procure enough doses of available and effective vaccines that I explained further above. The eurozone's perpetual lie is that they need to borrow their way out of debt in order to stimulate "growth." They've been saying so since the start of the Greek sovereign debt crisis. It just won't happen because especially Southern Europe can't compete in the Digital Age--and even Germany faces challenges (with Tesla being the world's most valuable automotive company, far more important than the entire EU automotive sector), as do the Nordic countries (Ericsson and Nokia can't simply sell their cellular base stations on the merits--they depend on patent abuse and political protectionism).

Since 2008, the ECB's central bank money supply has increased from about 900 billion euros to roughly five times that amount, if not more, as renowned economist Hans-Werner Sinn explained on YouTube. One might wonder why this hasn't led to hyperinflation. It hasn't yet, but it inevitably will at some point. The eurozone has been the loser among major economies with respect to digitization, and it's now also the loser with respect to COVID-19. The consequences will be dramatic. But we won't see much of them in 2021 as the ECB will continue to simply buy up government debt. That so-called "Modern" Monetary Theory is actually a very old concept that already failed about a century ago.

The euro currency may still exist in 10 years or even in 20 years (though I strongly doubt the latter) from now, but Europe's economic future looks extremely bleak. COVID-19 has been an accelerator, a catalyst, and it has exposed some of the structural issues facing the EU and the economies and societies of many (especially its largest) Member States. The UK--which never joined the eurozone anyway, but at some point might have had to choose between leaving the EU or giving up the pound--is going to do far better outside the EU. It will take more than one or two years until people recognize that Brexit will have been the best decision for Britain's prosperity, though I absolutely understand all those British citizens, especially young professionals, whose personal opportunities would be greater, or at least more numerous and more diverse, had the UK remained in the EU.

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Patent enforcement against delivery of non-executable data: Federal Circuit more balanced than Germany's Federal Court of Justice

The Munich-based CIPLITEC (Center for Intellectual Property Law, Information and Technology) is a recently-created forum for an exchange of views between the leading Bavarian law schools and practitioners. Yesterday, Dr. Ralf Uhrich, in-house patent litigation counsel at Google and in charge of all European patent infringement cases to which Google is a party (always as a defendant unless I missed something), gave a talk at Ludwig Maximilian University, as per CIPLITEC's invitation, on the subject of "patent protection for data." I had previously seen Dr. Uhrich at various German patent trials while he was a Quinn Emanuel associate, and at a couple of conferences in the area.

As a result of CIPLITEC's inclusive approach, there were 200 or 300 people in the audience as per my estimate; most of them were students, but I also spotted a number of law professors, patent attorneys, and patent litigators. In response to strong demand, this event had to be moved to a larger room than the one they had originally reserved. I attribute this to the topic, to many people's interest in Google's views (though one of the organizers stressed that Dr. Uhrich was expressing his personal views as opposed to engaging in advocacy on his company's behalf), and to Dr. Uhrich's great personal reputation in the German legal community. By the way, if you didn't know who he is, you might be led to believe he's the younger and smarter brother of Liverpool FC manager (and this year's UEFA Champions League-winning coach) Juergen Klopp.

The starting point for the presentation was the European legal framework for patent-eligible subject matter: Article 52 of the European Patent Convention (EPC). As Dr. Uhrich explained, the exclusions set forth there appear broader than they are applied when it comes to entire patents: a token reference to a computer or even just a storage medium salvages a claim, but non-technical claim limitations (though a more efficient use of computing resources is considered technical) are irrelevant to a novelty or inventiveness analysis. Having campaigned against software patents in the EU, my personal view is that the European Patent Office as well as national courts act as if Art. 52 EPC didn't exist as far as entire patent claims are concerned, and while the situation is indeed substantially better with respect to what counts in a novelty or inventiveness context, the statutory exclusions have simply been gutted. A 1969 decision by the Federal Court of Justice of Germany, Rote Taube ("Red Dove"), defined technicity as the planned use of controllable forces of nature for the purpose of achieving a specific result, and on that basis it would be possible to distinguish a software-controlled braking mechanism or other advanced in an applied natural science from pure advances in software such as more efficient memory (or bandwidth) usage through data compression.

The good news in the early part of Dr. Uhrich's presentation was that even the EPO doesn't grant patents that claim a data structure per se. So the issue here is not one of patentable subject matter in the strictest sense, but of the scope given to patent claims at the enforcement stage. To share the bad news upfront, the effect of an overreaching infringement theory can be just as bad as straightforward patent claims on data formats. But, at least for now, the related case law in the United States is fundamentally better than in Germany, though this may be attributable in no small part to the historic happenstance of what cases were put before the courts in what sequence--and what questions for review the parties raised.

Just so there is no misunderstanding: Dr. Uhrich's academic talk was nonjudgmental, so when you find words like "good news" and "bad news" here, rest assured they're just my opinion. He may or may not agree depending on context.

The enforcement-related main part of Dr. Uhrich's talk started with a 19th-century holding by the German Reichsgericht (Imperial Court), Methylenblau, involving a patent covering a chemical manufacturing process that was employed outside of Germany, but the resulting product entered the German market. The key doctrine there was that the scope of protection of a manufacturing patent potentially extends to the output if the substance so produced is an integral part of the patented process. On that basis, the Reichsgericht remanded the matter to the trial court.

The legal tradition that started with Methylenblau wouldn't have had to inevitably lead to a high-court decision, more than a century later, that data sequences generated by a patented data processing operation are afforded the same degree of protection (potentially, as it's always subject to the specific facts of a case). Not only is there a fundamental difference between physical goods and non-physical data but what makes this doubly unreasonable is the blatant inconsistency of such an outcome with the statutory exclusion of patents on "computer programs as such." Unfortunately, it nevertheless happened.

In 2012, the Bundesgerichtshof (Federal Court of Justice of Germany) handed down a decision on whether data storage media manufactured outside of, but imported into, Germany might infringe a video encoding patent, EP0630157 on "systems and methods for coding alternate fields of interlaced video sequences," a patent declared essential to the MPEG 2 video standard. While the patent holder lost the case due to a combination of other reasons, particularly patent exhaustion (the video data was generated with a licensed tool), the decision held that the case could not be dismissed on the grounds of the accused products containing data sequences as opposed to an encoder (be it a physical device or a piece of software).

I have read the MPEG-2-Videosignalcodierung (MPEG 2 video signal encoding) decision, and there is no reference in it to the statutory exclusion of patentable subject matter under the EPC, suggesting very strongly that counsel for defendant didn't raise this point with the top court. German patent litigators rarely recur to the Article 52 exclusions as they have been rendered as meaningless as I explained above when it comes to entire patent claims. Many of my allies in the movement opposing software patents suspect that patent litigators wouldn't even want Article 52 to be given meaning since it would discourage the filing of many patent applications and infringement cases in the first place. Whatever the reason may be, I had a conversation in 2014 with a Federal Court of Justice patent judge (who was on the panel of five judges who made the MPEG 2 decision, though one never knows where a member of a German panel actually stood since there is no such thing in Germany as a dissenting opinion), and I mentioned my opposition to software patents. He noted that their decisions are often misunderstood as being exceedingly permissive in this regard just because the questions put before them--which may just be about novelty or inventiveness, for instance--don't even enable them to address subject matter. I'm still grateful for a very interesting conversation on a train ride from Bayreuth to Nuremberg after a conference, so I don't want to criticize the Federal Court of Justice for a decision that I regard as inconsistent with the letter and the spirit of Article 52 EPC. However, I would strongly encourage other litigants (knowing how many litigators read this blog) to raise the Article 52 question when the opportunity arises in connection with patent enforcement against pure byte sequences.

One of the reasons for which I believe it would be worth trying is that, as Google's Dr. Uhrich explained yesterday, the Federal Court of Justice seized the opportunity afforded to it by a non-digital patent case, Rezeptortyrosinkinase II, to clarify (well, there's a floating border in case law between clarifications and corrections) that the MPEG 2 doctrine doesn't cover just any information resulting from a patented process. In that case decided in 2016, the Federal Court of Justice did not see a patent infringement in the mere communication of the result of a medical analysis from the country in which the analysis is performed to the country in which the process is protected by a patent. In that case, the result was basically just a binary yes-or-no piece of information on whether a certain medical condition was present.

The relevant line-drawing is centered around the question of whether the transmitted data bears actual and technical characteristics engraved by the patented process. In the case of MPEG 2 video data, that was deemed to be potentially the case as the encoding process results in a particular data structure. Apart from the general concerns I raised above, I do have an MPEG-2-specific concern, which is that the key characteristic of MPEG 2 is "lossy" compression, so at least to the extent that data is removed (so as to allow for more efficient compression), it's hard to see how it can simultaneously be "engraved." However, despite disagreeing with the MPEG 2 doctrine, I certainly see the difference between a specific data format on the one hand and some abstract information on the other hand.

However, it will take more decisions to get a better idea of where exactly the line is drawn (and ideally one of the cases would eliminate the problem on the basis of Article 52 EPC). In the Q&A part, I brought up a case I had watched in Mannheim earlier this decade. A cellular standard-essential patent covered an algorithm for calculating a number sequence used as a key (like a cryptographic key) for mathematical operations that transformed data (the data to be sent over the wireless network) in a way that minimized undesirable physical effects at the radio frequency level. The key was clearly standard-essential, just like a cryptographic key prescribed by a security standard would be; but the asserted patent claim, in the preliminary opinion of the panel of judges, probably wasn't because the accused baseband chipsets simply had the number sequence hardwired instead of performing the patented process to derive them. That case was somewhere in the middle between MPEG 2 and Rezeptortyrosinkinase II, but never reached the higher courts due to a settlement.

Thankfully, Dr. Uhrich also drew a comparison between German and U.S. case law on patent enforcement against data sequences. In Bayer v. Housey Pharmaceuticals (2003), the United States Court of Appeals for the Federal Circuit affirmed the dismissal of an infringement claim because "infringement under 35 U.S.C. § 271(g) is limited to physical goods that were manufactured and does not include information generated by a patented process, and because the physical goods here (drug products) were not 'manufactured' by a process claimed in the asserted patents." The opinion was authored by Circuit Judge Timothy Dyk, joined by then-Chief Judge Mayer and now-Chief Judge Prost.

The term "manufacture" plays a key role in U.S. patent law. As some of you may remember, it was key to the Samsung v. Apple Supreme Court appeal related to the "article of manufacture" based on which a design patent holder would be entitled to an unapportioned disgorgement of an infringer's profits. The term "manufacture" alone, coupled with an almost-originalist interpretative standard that takes into account what lawmakers really meant way back when, enabled the Federal Circuit to decide against what would have been a similarly expansive school of thought as the one of the Federal Court of Justice of Germany.

Here comes Judge Sharon Prost again, who in most contexts (with exceptions like design patent damages proving the rule) takes very balanced positions. Meanwhile she had become Chief Judge, and she authored the Federal Circuit opinion in ClearCorrect v. ITC, a decision that Google's Dr. Uhrich also explained yesterday. In that case, the ITC had ordered an import ban on data generated outside the U.S. but sent to the U.S. for the purpose of 3D printing. It's not unheard of for the ITC to have an expansive view of its jurisdiction, even including digital data transfers, but the appeals court made clear that it disagreed with what the ITC had already held prior to ClearCorrect, which was that the statutory term "articles" "should be construed to include electronic transmission of digital data [...]."

The way things work, there's no doubt that some patent-asserting plaintiffs are still going to try to push the envelope of data format patentability in the United States. But at least for now, they'll be facing an uphill battle whenever they try.

What is clearly needed is a pushback against overreaching patent enforcement in Germany. Yesterday's academic presentation was neither a campaign speech nor particularly alarmist. Expressing a personal--not corporate--view, Dr. Uhrich responded to a question from the audience with a reference to other forms of intellectual property protection for data, such as database rights (a big thing in the EU, by the way) and copyright law.

I mentioned my Art. 52 EPC concern, but I also think that regardless of software patent-eligibility, the MPEG 2 decision is bad as a matter of policy because if an encoder is patentable, then so is, typically, the related decoder. And that's what the enforcement of codec patents should be limited to.

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Preliminary opinion of European Patent Office: Apple's rubber-banding patent invalid in Europe

Well over a year since the United States Patent and Trademark Office upheld a few claims of Apple's "rubberbanding" (or "overscroll bounceback") U.S. patent, the European version of that patent has come under massive pressure. The opposition division of the European Patent Office indicated in a document filed in July that independent claim 1 of EP2122678 does not meet the patentability requirement of novelty. Two pieces of prior art were considered "novelty destroying" (a term I've never seen in U.S. documents, where the common wording is that a prior art reference "anticipates" a claim inventioned, but it seems to be used over here):

• PCT Publication No. WO 03/081458 on "controlling content display", by AOL/Luigi Lira (usually just referred to as "Lira" in court documents)

• Amy Karlson et al., AppLens and LaunchTile: Two Designs for One-Handed Thumb Use on Small Devices, CHI 2005, April 2-7, 2005, Portland, Oregon, USA (typically just referred to as "LaunchTile")

Apple will now have to try to salvage the patent at least in an amended form. Overcoming two independent prior art references deemed to anticipate the claimed invention is not going to be easy. Even if Apple introduced amendments that are deemed novel, they may still fail to meet the non-obviousness requirement.

Fortunately for Apple, it now faces much less opposition from other parties. Originally, three companies were challenging the patent: Samsung, Motorola Mobility, and HTC. Samsung and HTC have meanwhile withdrawn their challenges as a result of an ex-U.S. ceasefire agreement (Samsung) and a worldwide settlement (HTC). Samsung was represented by Zimmermann & Partner's Dr. Joel Naegerl ("Nägerl" in German), whose track record in both shooting down and defending patents didn't previously get the publicity on this blog that it actually deserved (I mentioned it in my previous post today).

Motorola Mobility is the last opponent standing and intends to have lawyers from Quinn Emanuel appear at the mid-March opposition hearing in Munich (which I plan to attend and blog about). That fact was confirmed most recently in a letter by Apple's counsel, Withers & Rogers, transmitted on August 18, 2014. This surprised me. A few months ago, Apple and Motorola announced the withdrawal of all pending actions against each other. Usually this includes that patents are no longer challenged. But in this case, the proceedings at the EPO would have continued in any event (the EPO would have had to reevaluate the patent ex officio), and it's possible that Google disliked the idea of making it too easy for Apple to salvage the patent. Two years ago, Apple won a German injunction against Motorola Mobility over this patent. The judge who entered the injunction, Dr. Peter Guntz, later became a judge at the EPO.

During the Apple v. Samsung trial I explained why I have a lot of sympathy for the rubberbanding patent. The basic idea behind it was very unorthodox at the time. But I never found it impressive in technical terms (which I stated on this blog on multiple occasions). It's inventive in a psychological sense. But from a non-psychological, purely technical-innovation point of view I tend to agree with the EPO's preliminary opinion.

Interestingly, the EPO does believe that this patent meets the European technicity requirement for patent-eligible subject matter:

"The opposition division is of the opinion that the features of the independent claims relate to subject matter which is of a technical nature because they relate to the solution of a technical problem, that is how to inform a user of the device that the end of an electronic document has been reached, the solution being implemented with technical means like the [] user input (interaction with a touch screen display) and the subsequent translation of the electronic document on the touch screen display following the user input."

Having recently filed for a couple of patents on user interface technology myself (which are preferably implemented by means of a touchscreen and have technical depth as I'm sure people who see them, after publication, will agree), I consider this good news, and I'm sure so do countless practitioners in Europe who deal with user interface-related inventions. But subject-matter eligibility is only the first hurdle. The rubberbanding patent clearly has problems with respect to other patentability requirements.

For those interested in European case law on the patentability of computer-implemented inventions, aka "software patents", I'd like to recommend a German-language blog: Munich-based patent attorney Bastian Best's Softwarepatent-Blog. His two most recent posts describe a decision in which a technical board of appeal of the EPO deemed an invention involving the transfer of a personal activation code by means of a wire transfer patent-eligible and another decision in which a graphical programming tool was not deemed to solve a technical problem because it merely provided a visual representation of the structure of program code.

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Supreme Court ruling in CLS Bank v. Alice makes 'generic' the new magic word for software patents

The Supreme Court of the United States just handed down its opinion in Alice v. CLS Bank, a case that some people (including the appellant) misportrayed as a case that was fundamentally about whether or not computer-implemented inventions are patent-eligible. In February I explained why this case was more of a "Bilski Reloaded", and I later commented on the March 31 Supreme Court hearing, predicting that software would undoubtedly remain patent-eligible. And indeed, today's decision is narrowly focused on issues that relate to abstract ideas such as business methods and does not provide any guidance with respect to the patent-eligibility of technical inventions involving software.

I have filed a U.S. patent application (and a simultaneous PCT application) on a computer-implemented invention and will file a couple more soon, but those fighting this category of patents also appear to agree that software patents haven't been abolished, judging by the initial reactions I've seen on Twitter and certain websites.

I'll keep this brief because everything turned out just as expected and because this ruling hasn't really changed anything. There's only one observation -- the one I already stated in the headline -- I wish to share. It's clear that post-Alice those challenging software patents and those defending them will have a favorite word and it is "generic". It's all over the SCOTUS opinion, in most instances as a qualifier before the word "computer" and sometimes before "computer implementation". And in at least one instance, "generic" itself has a qualifier:

"Wholly generic computer implementation is not generally the sort of 'additional featur[e]' that provides any 'practical assurance that the process is more than a drafting effort designed to monopolize the [abstract idea] itself."

The word "generic" also appeared in the Federal Circuit opinion(s), but in different combinations. The Supreme Court linked it to "computer implementation" because the question on appeal was whether the Federal Circuit ruling rendered all computer-implemented inventions patent-ineligible.

In Europe, where software is excluded from the scope of patent-eligible subject matter by statutory law (Art. 52 of the European Patent Convention), the equivalent to "generic" is "as such": software as such is not patentable, but technical inventions involving software are (making "technical" the magic word in Europe). In Europe there's already a rich body of case law concerning what is or is not technical. In the U.S., courts are now going to have to figure out again and again the meaning of the term "generic". Those applying for or defending software patents will argue that their inventions are not "generic" computer implementations of abstract ideas. Those challenging such patents will try to define "generic computer implementation" as broadly as possible and argue that every software patent they attack involves previously known computing technology and an abstract idea.

The Supreme Court clearly says that it does not want the exclusion of abstract ideas from patent-eligible subject matter to "swallow all of patent law". No doubt about that intent, but this won't dissuade some from trying to interpret the Supreme Court ruling overbroadly. It's a bit unfortunate for those seeking or defending software patents that there hasn't been a recent Supreme Court ruling that would have upheld a (technical) software patent and created some kind of safe harbor for software patents. In Alice, the only safe harbor for software patents that the Supreme Court mentions is that "a computer-implemented process for curing rubber was patent eligible [...] [because it] "employed a 'well-known' mathematical equation [...] in a process designed tosolve a technological problem in 'conventional industry practice.'" That reference to Diamond v. Diehr, a 1981 decision, is not a safe harbor for software patents that are unrelated to manufacturing processes. There's a huge gap between Diamond v. Diehr and Alice v. CLS Bank, and as a result there is a need for a whole lot more line drawing, which I guess we will indeed see in the years ahead. For the sake of balance it would be helpful clarification if the Supreme Court could at some point affirm a technical software patent, such as an operating system patent. For now we just know what the Supreme Court considers a "generic computer implementation", but there's a need for more clarity as to what is not just generic.

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CLS Bank v. Alice is not about 'the death of software patents': it's more like Bilski Reloaded

Four years ago people advocating the abolition of software patents made a lot of noise, including a movie named Patent Absurdity, about a case pending then before the Supreme Court of the United States: Bilski v. Kappos. They hoped that the Supreme Court would not only affirm the Federal Circuit's holding that Bilski and his co-inventor Warsaw weren't entitled to a patent on a risk-hedging business method, but that it would interpret 35 U.S.C. § 101, the statutory definition of which inventions are eligible for patent protection in the U.S. (applications must still meet all other patentability criteria such as novelty and non-obviousness), in a way that would render many, if not most or even all, software patents invalid.

The Supreme Court's June 2010 opinion fell far short of those hopes and expectations. The Bilski stuff was held patent-ineligible on the grounds of being too abstract, but the court declined to provide further guidance of the restrictive kind some had argued for. On page 9 of the Bilski ruling, a more restrictive approach was rejected because it "would create uncertainty as to the patentability of software, advanced diagnostic medicine techniques, and inventions based on linear programming, data compression, and the manipulation of digital signals". While that passage was based on a reference to amicus briefs submitted by pro-software-patent organizations, the way the SCOTUS refers to those concerns leaves no doubt that the justices who supported the passage agreed that the Bilski decision shouldn't cause collateral damage in those areas. At the very least it showed that the court had been perfectly aware of some people's abolitionist hopes and dreams, but declined their invitations to legislate from the bench on an issue it simply didn't have to reach.

Four years later history appears to be repeating itself as a result of the Supreme Court's grant of certiorari (i.e., decision to hear the case) in CLS Bank v. Alice. And I venture to predict a similar outcome: the ruling will, once again, be very narrow because, just like in Bilski, the facts of the case don't lend themselves to a decision of broad scope.

These are the four Alice patents at issue:

• U.S. Patent No. 5,970,479 on "methods and apparatus relating to the formulation and trading of risk management contracts"

• U.S. Patent No. 6,912,510 on "methods of exchanging an obligation"

• U.S. Patent No. 7,149,720 on "systems for exchanging an obligation"

• U.S. Patent No. 7,725,375 on "systems and computer program products for exchanging an obligation"

Don't be misled by words like "apparatus", "systems", and "computer program products". These are business method patents, not software patents in the sense of patents relating to software, or "computer-implemented" (another term that appears in those patents), innovation. The Alice patents relate to the very basic idea of having a third party ensure, like an escrow, that a transaction between two parties only takes place if the mutual obligations are met. That's what Alice seeks to monopolize. Some of these claims are downright business method claims (though the parties stipulated before the district court that they should be interpreted as requiring computer implementation); the others are business method claims camouflaging as system or program claims.

What has created the widespread perception of this being a software patents case is primarily that two opposing camps, for disparate reasons, place the emphasis in their argument on what implications this case allegedly has for software patents:

1. The first group consists of those who don't want patents like the Alice patents to be invalidated on the grounds of patent-ineligibility under § 101. There are two subgroups of this group:

   • (1a) those who absolutely want business methods to be(come) patentable by declaring them as computer-implemented invention (CII) patents, and

   • (1b) those who would probably invalidate the Alice patents anyway on non-novelty or obviousness grounds, but who don't want § 101 to be the vehicle for invalidation.

2. The second group already wanted Bilski to result in a restrictive ruling that didn't happen then and won't happen now.

I have some examples:

• Alice Corporation is, obviously, in group 1a. In its petition for certiorari, Alice grossly overstated the key issue to be reviewed as follows:

  "Whether claims to computer-implemented inventions--including claims to systems and machines, processes, and items of manufacture--are directed to patent-eligible subject matter within the meaning of 35 U.S.C. § 101 as interpreted by this Court?"

  Alice knows that judges will be more receptive to the idea of patenting software than that of patenting abstract business methods. And it hopes to get support from some of those who fear that if business method patents fall, software patents might be next in line. Those facts still don't make this anything other than a case involving business method patent claims that make only token references to computer hardware. A more honest question on review would have looked like this:

  "Can an otherwise-unpatentable abstract business method be patented in circumvention of 35 U.S.C. § 101 by mentioning magic words such as 'computer-implemented', 'computer' or 'program' in the claims?"

  While honest, this would be a no-go, which is why Alice prefers to blow things out of proportion.

  Circuit Judge Newman, who dissented from the Federal Circuit's majority in Bilski and wanted even that ultra-abstract patent application to pass the test, may also be part of this group. She may be more comfortable than others with the notion of a patent system without any meaningful boundaries.

• Circuit Judge Moore wrote an alarmist dissent-in-part:

  "I am concerned that the current interpretation of § 101, and in particular the abstract idea exception, is causing a free fall in the patent system. [...] And let's be clear: if all of these claims, including the system claims, are not patent-eligible, this case is the death of hundreds of thousands of patents, including all business method, financial system, and software patents as well as many computer implemented and telecommunications patents." (emphasis added)

  At the end of an even more alarmist footnote, she writes: "There has never been a case which could do more damage to the patent system than this one."

  Statements like these do nothing to discourage abolitionists from filing briefs in this context. But the actual intention of this 1b group of people is to warn against excessive use of § 101 (as opposed to other means of killing bad patents). Just like Alice and its fellow proponents of business method patents, they feel that the specter of software patent abolition will scare U.S. judges, who are well aware of the significance of the IT industry to the American economy. That agenda still doesn't change the substance of Alice's patent claims.

• The Electronic Frontier Foundation (EFF) is part of the second group but makes an interesting point in the amicus brief it filed in support of a SCOTUS review of the Federal Circuit decision:

  "Indeed, that failure [by the Fed. Cir.] to provide guidance led to a wrong and dangerous ruling in WildTangent, Inc. v. Ultramercial LLC, et al., No. 13-255. A petition for certiorari in that case is also currently pending before this Court; amicus believes that the WildTangent case would provide a better vehicle than this one to resolve how Section 101 applies to computer-implemented inventions. Brief of Amicus Curiae Electronic Frontier Foundation in Support of Petitioner, WildTangent, Inc. v. Ultramercial, LLC, et al., No. 13-255. However, the question surrounding the scope of Section 101 needs to be addressed by this Court, and this case, too, provides an opportunity for that to happen."

  So the EFF admits that CLS Bank v. Alice is a suboptimal context for raising the issue of software patent-eligibility. By the way, the patent at issue in the WildTangent case relates to advertising-financed online video viewing. It's also a business method patent, though it involves a digital media business as opposed to a financial services business.

I wouldn't read too much into the fact that the Supreme Court accepted to take a look at CLS Bank v. Alice. The Federal Circuit was hopelessly divided. It affirmed the decision to invalidate all of Alice's asserted claims, which I agree with the EFF was the right outcome, but only on the basis of affirmance by an equally divided court, not a substantive decision that received majority support. Only a minority of the circuit judges would have upheld the method patent claims. But there was also a majority that argued the method and system claims should rise or fall together -- and a few judges actually wanted to uphold the method claims as well. Regardless of whether the Supreme Court necessarily finds any important issue in CLS Bank v. Alice that goes beyond Bilski, it may have seen a need to speak out on this difficult issue.

In Bilski, the message to software patent abolitionists was that the U.S. patent system was intended by Congress to be inclusive and expansive. Between the lines, the SCOTUS told abolitionists that they needed to talk to Congress. Circuit Judges O'Malley and Linn wrote a dissenting opinion that makes a clear distinction between what the law is today and what some people, right or wrong, might prefer it to be. Notably, these two circuit judges would have considered even Alice's method claims patent-eligible, but they tell abolitionists that this case does not provide an opportunity for them to bring about the change they desire:

"We finally note that certain Amici express concern regarding the proliferation and aggressive enforcement of low quality software patents. [...] They seem to believe that patents on early generation technology inhibit technological advances. [...]

We do not discount Amici's concerns, we just disagree with what they ask us to do to quell them. Congress can, and perhaps should, develop special rules for software patents. It could, for instance, limit their life by limiting the term of such patents. [...] Or, Congress could limit the scope of software patents by requiring functional claiming. Or, it could do both, or devise some other rule. But broadening what is a narrow exception to the statutory definition of patent eligibility should not be the vehicle to address these concerns. While Congress may, this court may not change the law to address one technological field or the concerns of a single industry."

For the final part of this post I'd like to get back to what those Alice patents are really about. Circuit Judge Moore's alarmist words relate to Circuit Judge Lourie's opinion that all of Alice's patent claims-in-suit are ineligible. I don't mean to take a position here on which of these opinions is right (I've already said that I'm against those Alice patents). There are some interesting points in all of the different opinions provided by this fractured Federal Circuit (except that Circuit Judge Newman in my view totally misunderstood the concern of some people about patents in certain fields: she thought that people were concerned about limits on experimentation, when the concern is actually about incremental innovation, which requires real products to be developed and distributed). But since the Lourie opinion is of concern to some who say it is tantamount to the death of software patents, let's look at certain passages in the Lourie text that show this impact assessment blows things out of proportion:

"The concept of reducing settlement risk by facilitating a trade through third-party intermediation is an abstract idea because it is a 'disembodied' concept, [...] a basic building block of human ingenuity, untethered from any real-world application."

"Apart from the idea of third-party intermediation, the claim's substantive limitations require creating shadow records, using a computer to adjust and maintain those shadow records, and reconciling shadow records and corresponding exchange institution accounts through end-of-day transactions. None of those limitations adds anything of substance to the claim."

"First, the requirement for computer implementation could scarcely be introduced with less specificity; the claim lacks any express language to define the computer's participation."

"Furthermore, simply appending generic computer functionality to lend speed or efficiency to the performance of an otherwise abstract concept does not meaningfully limit claim scope for purposes of patent eligibility. [...] That is particularly apparent in this case. Because of the efficiency and ubiquity of computers, essentially all practical, real-world applications of the abstract idea implicated here would rely, at some level, on basic computer functions--for example, to quickly and reliably calculate balances or exchange data among financial institutions. At its most basic, a computer is just a calculator capable of performing mental steps faster than a human could. Unless the claims require a computer to perform operations that are not merely accelerated calculations, a computer does not itself confer patent eligibility."

"Whether the instructions are issued in real time, every two hours, or at the end of every day, there is no indication in the record that the precise moment chosen to execute those payments makes any significant difference in the ultimate application of the abstract idea."

If the Lourie opinion had become precedent (which it has not) or if this line of reasoning became effectively precedent after the SCOTUS decision, the paragraphs I quoted above (and they are just a subset of what could have been selected) contain more than enough ammunition for those defending or upholding true software patents -- for one example, patents on software techniques that enhance performance.

Circuit Judge Lourie and those joining in his opinion did not mean to abolish genuine software patents. They just don't want fake software patents to pass the § 101 test. In the particular context of Alice's system claims, the following question is raised:

"[D]o the limitations of the claim, including any computer- based limitations, add 'enough' beyond the abstract idea itself to limit the claim to a narrower, patent-eligible application of that idea? Or, is it merely a Trojan horse designed to enable abstract claims to slide through the screen of patent eligibility?"

The SCOTUS can close the door to Trojan horses without abolishing software patents. I guess it will find a way to do the former without collateral damage. It carefully avoided unintended consequences in Bilski. There may be even more noise now than there was four years ago, but U.S. substantive patent law hasn't changed since.

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