Alice Corp. v. CLS Bank: Setting the abstract idea goalposts

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This week, the Court heard oral arguments in Alice Corp. v. CLS Bank. There are lots of writeups, and I, of course, prefer the one that quotes me. For that reason, I’m going to skip a lot of the detail. The gist of the case is that the Supreme Court must again decide whether patent claims are eligible subject matter – that is, whether the claims should be tested on their merits, or thrown out because we just don’t patent that sort of thing.

The last time around, in Bilski v. Kappos, the Court said that abstract ideas were not patentable, and that a claim to hedging was an abstract idea. That’s all well and good, until the next claim comes around, and the next claim, and the next claim. In Mayo v. Prometheus, the court added a little meat to the bones, saying that once you have your “natural law,” the inventor has to add some non-conventional steps in addition to the natural law.

That’s all well and good, except: 1) for reasons I can’t understand, lower courts aren’t tying the Prometheus conventional steps idea to abstract ideas systematically; 2) the conventional steps view imports 102 and 103, but without any of the rigor those sections require; and 3) lower courts and litigants can’t agree on what the base “idea” or “law” is, to which we might add steps. More on that later. Justice Breyer, at oral arguments in Alice, made clear that the Court was providing a “shell” in prior cases and that he was hopeful that the lower courts and litigants would figure it out.

How wrong he was. As I’ve written several times over the past seven years, since before subject matter challenges were en vogue, this is a morass that cannot be solved in a principled way. I think the best shot we had was our argument in Life after Bilski that we should be looking for claim overbreadth, and for ideas untethered from any application. The Court did not adopt this approach, though there is hope it will reconsider in this case.

But, despite my misgivings, my viewpoint that we should just abandon all attempts to limit patentable subject matter beyond the statute has been expressly rejected by the Court. In short, the Court really, really wants 101 to do something, and it is now struggling with what and how.

This leads to my view of how the Court should rule. Despite everyone who knows anything about patents (including me) thinking the Court is going to invalidate some of the claims of this patent, my view is that the Court must affirm patentability of the Alice Corp. claims. This doesn’t mean I think it’s a good patent.

Why do I argue this? Because we need goalposts. As long as the Court continues to hold patents invalid, we will see uncertainty. This is directly parallel to the Diehr case of 1981. Prior to that time, there was great uncertainty about what could be patented, and it did not end until Diehr. That uncertainty led to under-applications for patents, which led to less prior art, which made it harder to invalidate weak patents of the 1990s, the very same patents that give us so much trouble now.

My view is that Alice Corp. can be a new floor, that patent applications can be rejected on their merits but also become part of the public domain to wipe out other patent applications on weak inventions of the future. We need goalposts.

As for the actual subject matter of the patent, saying it is not an abstract idea is not a stretch. The broadest claim at issue is a system configured for settling multiparty transactions on a computer, getting information from a “device” and “generating instructions.” It’s written fancily, but it’s a pretty simple claim. Public Knowledge claims it can be implemented in 7 lines of Basic code. This is a bit of an exaggeration that takes some liberties with claim construction.

But that’s the point. First, we should probably construe what a claim covers before deciding that it’s an abstract idea. Oral argument at Alice, and general discussion in this area pays too little attention to the actual limitations of the patent claims. Second, the claims here include a device, a computer, a storage unit, etc. This is an application of how to do escrow, and not even the general idea of escrow, but a specific type of intermediated escrow. Yes, I understand that “Do idea x on a computer” is a claim we worry about, but we have cases like Dann v. Johnston that deal with that on obviousness, and if it wasn’t obvious to “Do idea x on a computer” then that might be the type of claim we want. Bonus trivia: cert. was granted in Dann on a subject matter challenge as well, and the court declined to rule on it, instead ruling only on the obviousness point.

Third, the patent has been attacked as simple and not doing anything earth shattering, but CLS Bank itself claims that this idea was a long time coming, some 20 years. If it could really be implemented with 7 lines of code, why didn’t CLS Bank just do it? Why did it take a couple years even after Alice sought patent protection to implement such an “abstract idea” that everyone claims to have known was necessary? Then again, maybe it’s just a simple invention and Alice was merely the first to write it down when computers and networks got faster. But these are all questions about obviousness – questions that we should be asking and that may well render the patent invalid. But just because we have a gut feel that something might be obvious, that doesn’t mean we should use hindsight many, many years after the patent filing to call it an abstract idea.

Admittedly, this is a broad claim. It might even satisfy our definition of “overly broad” from Life After Bilski and the factors of abstract idea that we identify there. But the Court did not adopt our framework. I worry that more harm than good will come of further nebulous definitions of abstract ideas, which will come until the Court affirms a borderline claim as good enough. Everyone watching this case, whether they favor broad patenting or limited patenting, thinks the lack of rule clarity is a problem. The Court should use this case to set the lowest bar for non-abstractness – it is the only way left to get some clarity.

Google Files Cert. Petition in Street View Case

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Google Street View carI noted back in October that Google had hired “noted Supreme Court advocate Seth Waxman” as it was preparing its petition for rehearing in the Street View case, “indicating perhaps how far they intend to take this.” (For background, see my earlier posts Part I, Part II, after the panel decision, and on the petition for rehearing.) My suspicions were accurate — after losing again at the rehearing stage in late December, Google has now filed a petition for certiorari, asking the Supreme Court to reverse the Ninth Circuit.

Google’s petition primarily makes the same substantive arguments it made in its petition for rehearing. The Ninth Circuit in the decision below adopted what I’ve called the “radio means radio” approach — “radio communications” in the Wiretap Act means only communications that you can receive with, you know, an ordinary AM/FM radio. I’ve argued that that is mistaken, and Google unsurprisingly agrees with me. Google provides three reasons why the Ninth Circuit’s interpretation cannot be sustained. Continue reading →

Schneier on the NSA, Google, Facebook Connection But What About Phones?

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Bruce Schneier argues that we should not be fooled by Google, Facebook, and other companies that decry the recent NSA data grabs, because the nature of the Internet is surveillance; but what about phone companies? The press has jumped on the Obama administration’s forthcoming plan that

would end its systematic collection of data about Americans’ calling habits. The bulk records would stay in the hands of phone companies, which would not be required to retain the data for any longer than they normally would. And the N.S.A. could obtain specific records only with permission from a judge, using a new kind of court order.

The details are to come, but Schneier’s point about the structure of the system applies to phone companies too, “The biggest Internet companies don’t offer real security because the U.S. government won’t permit it.”

There are few things to parse here. OK there are many things to parse, but a blog post has limits. First, Schneier’s point about Internet companies is different than his one about the government. His point is that yes, many companies have stepped up security to prevent some government spying, but because Gooogle, Microsoft, Facebook, Yahoo, Apple and almost any online company needs access to user data to run their businesses and make money, they all have built “massive security vulnerability” “into [their] services by design.” When a company does that, “by extension, the U.S. government, still has access to your communications.” Second, as Schneier points out, even if a company tried to plug the holes, the government won’t let that happen. Microsoft’s Skype service has built in holes. The government has demanded encryption keys. And so it goes. And so we have a line on the phone problems.

The proposed changes may solve little, because so far the government has been able to use procedure and sheer spying outside procedure to grab data. The key will be what procedures are required and what penalties follow for failing to follow procedure. That said, as I argued regarding data security in January 2013, fixing data security (and by extension phone problems) will require several changes:

A key hurdle is identifying when any government may demand data. Transparent policies and possibly treaties could help better identify and govern under what circumstances a country may demand data from another. Countries might work with local industry to create data security and data breach laws with real teeth as a way to signal that poor data security has consequences. Countries should also provide more room for companies to challenge requests and reveal them so the global market has a better sense of what is being sought, which countries respect data protection laws, and which do not. Such changes would allow companies to compete based not only on their security systems but their willingness to defend customer interests. In return companies and computer scientists will likely have to design systems with an eye toward the ability to respond to government requests when those requests are proper. Such solutions may involve ways to tag data as coming from a citizen of a particular country. Here, issues of privacy and freedom arise, because the more one can tag and trace data, the more one can use it for surveillance. This possibility shows why increased transparency is needed, for at the very least it would allow citizens to object to pacts between governments and companies that tread on individual rights.

And here is the crux of Schneier’s ire: companies that are saying your data is safe, are trying to protect their business, but as he sees it:

A more accurate statement might be, “Your data is safe from governments, except for the ways we don’t know about and the ways we cannot tell you about. And, of course, we still have complete access to it all, and can sell it at will to whomever we want.” That’s a lousy marketing pitch, but as long as the NSA is allowed to operate using secret court orders based on secret interpretations of secret law, it’ll never be any different.

In that sense he thinks companies should lean on the government and openly state security is not available for now. Although he knows no company can say that, the idea that we should all acknowledge the problem and go after the government to change the game is correct.

The point is correct for Internet companies and for phone companies. We should not over-focus on phones and forget the other ways we can be watched.

Public Service Announcement for Google Glass Team

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The Google Glass team has a post about the so-called myths about Google Glass, but the post fails to see what is happening around Glass. That is sad. Instead of addressing the issues head on, the post preaches to the faithful (just read the comments). As Nate Swanner put it “We’re not sure posting something to the tech-centric Google+ crowd is really fixing the issues though.” Google and other tech companies trying to do something new will always face challenges, fear, and distrust. The sad part for me is when all sides line up and fail to engage with the real issues. Some have asked what I did when at Google. Part of the job was to present the technology, address concerns, and then see where all of us saw new, deep issues to come. I loved it, because I knew the technology was driven by high-standards. The problems flowed from not explaining the tech. This post highlights talking past each other. Furthermore the truly wonderful advances that might be possible with Glass are not discussed. That distresses me, as no one really wins in that approach. But I will show what is not great about the post as a possible public service announcement for the Glass Team and others in the tech space.

First, the post sets an absurd tone. It starts with “Mr. Rogers was a Navy SEAL. A tooth placed in soda will dissolve in 24 hours. Gators roam the sewers of big cities and Walt Disney is cryogenically frozen. These are just some of the most common and — let’s admit it — awesome urban myths out there.” Message: Glass critics are crazy people that by into extreme outlying beliefs, not truth. And if you think I am incorrect, just look at this next statement: “Myths can be fun, but they can also be confusing or unsettling. And if spoken enough, they can morph into something that resembles fact. (Side note: did you know that people used to think that traveling too quickly on a train would damage the human body?).” Hah! We must be idiots that fear the future.

That said maybe there are some myths that should be addressed. Having worked at Google, I can say that while I was there, technology was not done on a whim. I love that about the company and yes, the Glass Team fits here too. Furthermore, as those who study technology history know, even electricity faced myths (sometimes propagated by oil barons) as it took hold. Most of the Glass myths seem to turn on cultural fears about further disconnection from the world, always on or plugged in life, and so on. But the post contradicts itself or thinks no one can tell when its myth-busting is self-serving or non-responsive.

On the glass is elitist issue: Google is for everyone, but high priced, and not ready for prime time. Huh? Look if you want to say don’t panic, few people have it, that is OK and may be true. But when you also argue that it is not elitist because a range of people (not just tech-worshiping geeks) use Glass; yet nonetheless the $1500 price tag is not about privilege because “In some cases, their work has paid for it. Others have raised money on Kickstarter and Indiegogo. And for some, it’s been a gift” the argument is absurd. That a few, select people have found creative ways to obtain funds for Glass does not belie the elite pricing; it shows it.

The surveillance and privacy responses reveal a deeper issue. Yes, Glass is designed to signal when it is on. And yes that may limit surveillance, but barely. So too for the privacy issue. Check this one in full:

Myth 10 – Glass marks the end of privacy
When cameras first hit the consumer market in the late 19th century, people declared an end to privacy. Cameras were banned in parks, at national monuments and on beaches. People feared the same when the first cell phone cameras came out. Today, there are more cameras than ever before. In ten years there will be even more cameras, with or without Glass. 150+ years of cameras and eight years of YouTube are a good indicator of the kinds of photos and videos people capture–from our favorite cat videos to dramatic, perspective-changing looks at environmental destruction, government crackdowns, and everyday human miracles. 

ACH!!! Cameras proliferated and we have all sorts of great, new pictures so privacy is not harmed?!?!?! Swanner hits this one dead on:

Google suggests the same privacy fears brought up with Glass have been posed when both regular cameras and cell phone cameras were introduced in their day. What they don’t address is that it’s pretty easy to tell when someone is pointing a device they’re holding up at you; it’s much harder to tell when you’re being video taped while someone looks in your general direction. In a more intimate setting — say a bar — it’s pretty clear when someone is taping you. In an open space? Not so much.

So tech evangelists, I beg you, remember your fans are myriad and smart. Engage us fairly and you will often receive the love and support you seek. Insult people’s intelligence, and you are no-better than those you would call Luddite.

Garcia v. Google: Works Within Works

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Garcia v. Google is a strange case.  If you’re not familiar with the basic facts, here is NPR’s summary. The Ninth Circuit’s opinion can be found here (courtesy of the EFF).

Why is it a strange case?  Well, it is not everyday that a copyright infringement lawsuit is predicated on the putative copyright owner’s fear of death threats due to her fraudulently procured authorial contribution to a work viewed by a religious community as blasphemous.  But it is also a strange day when Google, rather than simply taking down a video in response to a DMCA request, decides to take the hard route and challenge the takedown request in federal court. And it is also a strange day when Google “Warns of Harm to Hollywood.” Throw in an absentee essential party (the putative copyright holder in the controversial film) and give all this to an exceptionally creative jurist like Chief Judge Kozinski.  It’s no surprise that we get a strange and controversial opinion.

Much of the internet commentary I have seen on the decision has been negative. Eric Goldman had some initial thoughts (“shockwaves through the internet community”) and Rebecca Tushnet has offered a long, sad blow-by-blow account of both the majority opinion and the dissent in the case.  There are numerous other accounts offered elsewhere–just Google for them.  Notably, though, the majority of the IP experts that I know think the case was decided correctly–on its very strange facts.  See, e.g., David Nimmer and Jay Dougherty quoted here.

Before offering my defense of a part of the opinion, I want to state that, as far as the relief granted goes—and especially with respect to the gag order imposed on Google—I am not a fan of this case.  I’m also not a fan of the majority’s one-line First Amendment analysis. And there are clearly some very loose procedural and factual things afoot here: there are a multitude of “no evidence” assertions by the majority. However, all that said, there is one part of this opinion that seems more or less okay to me: I think it is plausible for an actor like Garcia to own a copyright interest that is infringed by a film that includes her fixed performance.

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