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What to know after the latest patent ruling by the U.S. Supreme Court

Kari Barnes and Sandra P. Thompson | July 29, 2014
The Alice ruling clarifies patent-eligible software processes.

We have already seen this effect in action. The USPTO issued a memorandum to Examiners providing preliminary instructions in view of Alice. In practice, we are already receiving rejections of software applications with a new form paragraph based on the Alice decision. A supplemental rejection under Sect. 101 may even be issued in cases with an outstanding office action that previously did not include a subject matter rejection. Therefore, it does look like more of these cases will have to be argued under this new framework.

If you have a pending patent application that may be considered covered by the Alice decision, you should consider contacting your patent attorney to discuss these options and whether this decision affects your patent application.

Result on litigation

The major implication of the decision on the litigation front is who gets to decide patent validity and when. Subject matter eligibility is a question of law for a judge to decide, and can be brought earlier in a proceeding. Deciding novelty is a question of fact that should be tried by a jury, and only decided by a court if there are no disputed facts to make the decision. The decision on novelty will occur generally after claim construction, discovery and expert testimony, either at the summary judgment stage or after, whereas subject matter eligibility can be decided whenever the judge determines there is sufficient information to decide the question of law. This may help reduce litigation costs and liability for patents that truly encompass known business practices that are merely implemented on a computer. Because these cases may be decided earlier in the litigation process, defendants may be provided a real option to defend themselves against a patent suit instead of simply acquiescing to a license to avoid litigation costs.

 

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