Five years after Alice: five lessons learned from the treatment of software patents in litigation

• Author: Joseph Saltiel
• Position: Marshall Gerstein & Borun LLP, Chicago, USA

It has been five years since the Supreme Court’s landmark decision in Alice Corp. v CLS Bank International. Alice established a two-part test to determine if a software patent was unpatentable under US Patent Law (35 USC Section 101) for claiming ineligible subject matter. Under this two-part test, a court must first consider whether the patent claims are directed to a patent ineligible concept such as an abstract idea, and if so, the court should consider whether the claim’s other elements transform the claim into a patent eligible concept. Applying this two-part test, the Alice decision held that known ideas are abstract, and reciting the use of a conventional computer in the claims to implement the known idea does not make the claim patentable subject matter. Alice has greatly impacted the litigation of software patents. Alice also gave defendants a new and highly successful defense that could be asserted early in litigation. In turn, patentees have had to take this new defense into account in their litigation strategy, and companies have questioned the value of software patents. After five years and hundreds of court decisions applying Alice, litigation of software patents has changed dramatically. Below are five lessons learned from software patent litigation after Alice.

Alice should be considered in every software patent litigation.

Before Alice, software patents were rarely challenged as unpatentable. After Alice, there were hundreds of patentability challenges per year targeting software patents. Most of these challenges were at least partially successful. The use of Alice became ubiquitous in software patent cases. Software patents were being challenged routinely and early in the litigation. Over half of the Alice-based challenges were made in early dispositive motions whereby the court decides the claim in favor of one or another party without need for further trial proceedings. Every patentee considering asserting a software patent therefore needs to consider the possibility of a patentability challenge based on Alice. Likewise, every defendant accused of infringing a software patent should consider an Alice motion.

Legal analysis of software patents under Alice differs from other legal analysis.

In litigation, parties must abide by the Federal Rules of Evidence. These rules provide for when evidence can be considered, what kind of evidence is proper, how evidence is introduced and how it should be considered. Words in legal instruments, and especially in patents, are vital. Attorneys spend countless hours debating the meaning of the words used in claims, and cases often turn...