IP Reports

The Supreme Court’s 2014 decision in Alice was a sea change for patent owners in the field of computer-implemented inventions, such as software.1 Since the Federal Circuit’s decision in State Street Bank,2 patentees have been applying for, and have been granted, patents on software. Although other cases have changed the standards over time,3 the Court’s ruling inAlice left a serious question as to which of those software patents would remain unscathed. 

One issue that has emerged from the shadow of Alice is the re-emergence of the so-called “technological arts” test for patent eligibility. Although long-rejected by the Board of Patent Appeals and Interferences (“BPAI”)4 and the Federal Circuit,5 in the wake of Alice, the Federal Circuit has now reintroduced the “technological arts” test in determining patent eligibility and practitioners must once again wrestle with this standard. Until more cases emerge, we predict that the technological arts test will inject more uncertainty into an already unpredictable body of law.

  1. The Basics of Patent Eligible Subject Matter.

Often referred to as “Section 101,” the text of the patent statute that declares what is and is not patent eligible appears at first to be short, plain, and straightforward; a patent may be obtained on a “process, machine, manufacture, [] composition of matter, or any new and useful improvement thereof.”6 But, applying Section 101 has never been straightforward. For over 150 years, the Court has applied a judicially-created exception to Section 101 that laws of nature, natural phenomena, and abstract ideas are unpatentable.7 With respect to computer-implemented and software inventions, it is the last category—abstract ideas—where many inventions get tied up. In those cases, Alice held that there is a two-step framework for determining whether claims recite patent-eligible subject matter: 

  1. "First, we determine whether the claims at issue are directed to one of those patent ineligible concepts.”8
  2. “If so, we then ask ‘what else is there in the claims before us’ . . . consider[ing] the elements of each claim both individually and ‘as an ordered combination’ to determine whether the additional elements ‘transform the nature of the claim’ into a patent-eligible application.”9

The second inquiry has been dubbed the “search for an inventive concept,” and is the situs of the technological arts test.

  1. The Technological Arts Test.

Under the basic two-step framework provided by the Court, it is the lower courts’ task to develop narrower, more specific guidelines for inventors and practitioners in determining what is and is not patent-eligible subject matter. Pursuant to that duty, the Federal Circuit recently took the first step and recognized a “technological arts” test in determining subject matter eligibility.

  1. Summary of the Current Technological Arts Test.

Generally speaking, the technological arts test asks whether the claims address a challenge that is technical in nature, or relate to some other field, such as economics or the social sciences. If the inventive concept is non-technical, under the technological arts test it could mean the patent is invalid and ineligible for protection. More specifically, for software the technological arts test determines whether the claims “improve the functioning of the computer itself” or “effect an improvement in any other technology or technical field.”10 To do so, the “claims must harness natural laws and scientific principles—those ‘truth[s] about the natural world that ha[ve] always existed,’ Alice 134 S. Ct. at 2356 . . . and use them to solve seemingly intractable problems. They must, moreover, not only describe a technological objective, but set out a precise set of instructions for achieving it.”11 Although not expressly limited to the field of computing, the technological arts test has yet to be applied by the courts in any other field.

In applying the Federal Circuit’s new “technological arts” test, so far courts have only provided the ends of the measuring stick for determining whether an invention falls within the “technological arts” or is sufficiently “technical.” On one end, the Federal Circuit flagged claims that “merely recite the performance of some business practice known from the pre-Internet world along with the requirement to perform it on the Internet” as insufficiently technical.12 On the other end, “an improved, particularized method of digital data compression” is “technologically complex.”13 As explained below, there is disagreement as to inventions falling somewhere in the middle and where to draw the line.

  1.  Short Case Law History of the Technological Arts Test.

The Federal Circuit’s decisions applying the technological arts tests draw support from the Supreme Court’s statement in Alice that “[t]he method claims do not, for example, purport to . . . improve the functioning of the computer itself . . . . Nor do they effect an improvement in any other technology or technical field.”14 In a concurring opinion in Ultramercial, Judge Mayer of the Federal Circuit first relied on those particular words in Alice to support and explain his application of the technological arts test.15 Judge Mayer explained that “[b]ecause the [patent] system’s objective is to encourage ‘the onward march of science,’ . . . its rewards do not flow to ideas—even good ones—outside of the technological arena.”16 In connecting the technological arts test to the holding in Alice, Judge Mayer stated that “[t]he problem was not that the asserted claims disclosed no innovation, but that it was an entrepreneurial rather than a technological one.”17 Reading into the above-quoted language in Alice, Judge Mayer propounded that “[i]n assessing patent eligibility, advances in non-technological disciplines—such as business, law, or the social sciences—simply do not count.”18 However, being that this was a concurring opinion by a single judge, it was not then clear whether the technological arts test would take hold.

Less than one month after Ultramercial, the Federal Circuit in DDR referenced the technological arts test in its rationale.19 In DDR, the majority and the dissent disagreed as to the proper application of the technological arts test—not its existence or place in the eligible subject matter inquiry. The court explained that the claims are directed toward the technological arts notwithstanding that the “claims address a business challenge (retaining website visitors),” which one would naturally characterize as entrepreneurial or business related rather than technical.20 In the court’s view, that was because “it is a challenge that is particular to the internet” and the claimed solution is one that is “necessarily rooted in computer technology in order to overcome a problem specifically arising in the realm of computer networks.”21 However, Judge Mayer’s dissent in DDR argued that the majority incorrectly applied the technological arts test, and cited to the patent’s own characterization of its invention to conclude that “because this purported inventive concept is an entrepreneurial rather than a technological one, DDR’s claims are not patentable.”22Therefore, the most important question for patent holders, alleged infringers, and applicants is where the line is drawn between technical and non-technical. DDR illustrates that currently there is no consensus on that issue.

Currently, application of the technological arts test is uncertain and potentially predictable only in the clearest cases; however, it is rapidly developing. In 2015 alone, at least five district court cases in three different venues cite to Judge Mayer’s concurrence in Ultramercial for the proposition that Alice articulated a technological arts test.23 Thus, patent holders, alleged infringers, and applicants are likely to face the (new) technological arts test and the issues discussed above in the near future.