PTAB speaks on 35 USC § 101 — or is it § 103? CRS v Frontline

Well, we are starting to see the work product of the Patent Trial and Appeal Board, whose goal for many of the new AIA proceedings is to dispose of them within a year.  Here’s the decision in CRS Advanced Technologies, Inc. v. Frontline Technologies, Inc. (Case CBM2012-00005), instituted January 23, 2013 and decided just under a year later on January 21, 2014.

CRS wanted to invalidate some of the claims of US Patent 6,675,151.  Doing so in court would likely have cost half a million dollars or more.  CRS picked the Covered Business Method approach and (I’d guess) probably spent well under a quarter million dollars.  And prevailed.

What I would have hoped is that the decision might help to clarify what practitioners need to do to draft patent applications that will survive post-grant review (whether before the PTAB or before the courts).  I don’t think I got my wish.  Here’s why I feel this way.  The decision says:

According to CRS, the process claims encompass the preexisting process of substitute fulfillment simply made more efficient with the use of generic computer hardware and software, and, therefore, constitute unpatentable abstract ideas under § 101.  …

We conclude that claims 3, 16, 24, and 33 are directed to abstract, and, therefore, unpatentable, methods for substitute fulfillment. The claims are directed to concepts for taking the preexisting process of substitute fulfillment and implementing it in a networked computing environment.  …

 We hold Frontline’s claims 3, 6, 7, 16, 24, and 33 to be unpatentable under 35 U.S.C. § 101. Specifically, the claims recite unpatentable abstract ideas, and the claims do not provide enough significant meaningful limitations to transform these abstract ideas into patent-eligible applications of these abstractions.

To my eye this is not a § 101 result at all.  It is a § 103 result.  The way it looks to me the PTAB’s reason for invalidating the claims, when translated into clear and plain language, is something like this:

It was in the prior art to do “substitute fulfillment” by means of mental steps and people posting things on bulletin boards and talking to each other.  Merely moving some or all of this prior-art activity onto a computer-based platform, even if novel, does not confer unobviousness upon the activity.  It was obvious to take what people used to do without a computer and move it to a computer.

I count this case as making it less clear, rather than more clear, how to write a patent application in a software/internet/business-method area that will survive post-grant review.

5 Replies to “PTAB speaks on 35 USC § 101 — or is it § 103? CRS v Frontline”

  1. I really hope the Supremes put an end to this nonsense in Alice v CLS Bank, but unfortunately I am expecting the worst from them. Is it really fair to change the rules after tens of thousands of patents (or more) have been granted that are now invalid under 101? I have a client that wants to sue the gov’t because many of his patents may no longer be valid under 101. Not a case I want to take. Do you have a prediction as to the outcome of Alice?

  2. Good observation, Carl. There seems to be a repeated level of confusion at the USPTO on whether the question of patent eligibility under 101 may be conflated with the question of novelty (based on the “new and useful” language of the statute). The question should have been settled once and for all by Diamond v. Diehr. Following the reasoning in In re Bergy, 596 F.2d 952, 961, CCPA 1979), Justice Rehnquist concluded the following:

    “it may later be determined that the respondents’ process is not deserving of patent protection because it fails to satisfy the statutory conditions of novelty under §102 or nonobviousness under §103. A rejection on either of these grounds does not affect the determination that respondents’ claims recited subject matter which was eligible for patent protection under §101.”

    That is how the “point of novelty” 101 analysis died, and it should not be revived. Section 102 and 103 are patentability questions that are irrelevant to the question of eligibility.

  3. I have been complaining for years that far too much of the § 101 case-law seems really to be directed to overbroad claims that should be dealt with under §§ 102 / 103. The classic example is Bilski, 130 S.Ct. at 3231: “Hedging is a … practice long prevalent in our system of commerce and taught in any introductory finance class…. The concept of hedging, described in claim 1, is…” er, maybe, old? This whole body of law is an admission of the inability of the patent system to police §§ 102 / 103.

  4. Carl, says “I count this case as making it less clear, rather than more clear, how to write a patent application in a software/internet/business-method area that will survive post-grant review.”

    I disagree. What they are saying is don’t bother writing a patent application in the software/internet/business-method area, because we are going to kill it if we get the chance. And the politicians who owe their campaign chests to the Oracles, Ciscos and Googles of the world, can go back for seconds.

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