By Kevin E. Noonan --
"The name of the game is the claim." -- Judge Giles Sutherland Rich
Much has and will continue to be written about the Federal Circuit's en banc decision in CLS Bank Int'l v. Alice Corp. last week, and most of the commentary has and will be critical of the path the court took in arriving at its per curiam decision affirming the District Court's determination that the system, method, and computer-readable media claims fall within a judicially created exception to the broad scope of patent-eligible subject matter under Section 101. The decision establishes without doubt that Section 101 jurisprudence has been broken by the Supreme Court's return to its subjective, non-statutory approach exemplified in Benson v. Gottschalk and Parker v. Flook, first in Bilski v. Kappos and then in full flower in Mayo v. Prometheus. These decisions swing the pendulum from Congressional determinations of patent-eligibility to the Court's "we know it when we see it" standard that is not only directly contrary to the Congressional mandate that created the Federal Circuit but also contrary to the Constitutional basis for the Court's review of actions by Congress regarding patents. Specifically, no one with any knowledge of patent law can seriously argue that the Court's recent forays in finding exceptions to patent eligibility in any way "promote[s] the Progress . . . of the useful Arts."
But the decision also illustrates another fracture among the Federal Circuit judges that cannot be laid at the Supreme Court's doorstep and that in its own way is just as contrary to the statutory scheme and to almost two centuries of U.S. patent law. That is the practice of not limiting the inquiry to the language of the claims, but to disregard or ignore express claim language in an effort to ascertain "what the inventor has invented." While this tendency has many antecedents -- including the Supreme Court's Section 101 meanderings but also in the Federal Circuit's application of the written description requirement and the rubric that the claims should be interpreted in view of the specification -- it has surfaced frankly in other Federal Circuit decisions, most notably in Retractable Techs., Inc. v. Becton, Dickinson & Co., and in the opinions expressed concurrent with the Court's decision not to rehear the case en banc.
In the Retractable Technologies case, Retractable Technologies sued Becton Dickinson for infringing claims of U.S. Patent Nos. 5,632,733; 6,090,077; and 7,351,224. These patent claims were directed to syringes configured to retract the needle into the body of the syringe after use, to reduce the likelihood of needle-stick injury. The claim term at issue was "body," specifically whether the term should be construed to be limited to single-piece versus multiple piece embodiments. The District Court construed "body" as "a hollow outer structure that houses the syringe's components," and concluded that the term "body" was not limited to a one-piece structure.
The Federal Circuit reversed, in a decision by Judge Lourie joined by Judge Plager and (in part) by Chief Judge Rader. The panel reversed the District Court with regard to meaning of "body," finding that the term should be limited to a one-piece structure. The panel found that the claim language was not determinative, and disclosure in the specification supported its one-piece body construction. Specifically, the majority based its decision on the specification, which described the claimed invention as comprising a one-piece body. In addition, all the figures illustrated syringes comprising a one-piece body, and the specification disparaged prior art syringes made of multiple piece bodies. Moreover, there was no disclosure of a multiple piece syringe body in specification. In reversing the District Court's construction, the majority said:
There is a fine line between construing the claims in light of the specification and improperly importing a limitation from the specification into the claims. In reviewing the intrinsic record to construe the claims, we strive to capture the scope of the actual invention, rather than strictly limit the scope of claims to disclosed embodiments or allow the claim language to become divorced from what the specification conveys is the invention.
(citations omitted, emphasis added)
Judge Plager filed a concurring opinion expanding on this theme, saying that "the claims cannot go beyond the actual invention that entitles the inventor to a patent" and that "the [patentee's] obligation [was] to make full disclosure of what is actually invented, and to claim that and nothing more" (emphasis added). Chief Judge Rader, dissenting-in-part, argued the primacy of the claim language, and that it is impermissible to read limitations from the specification into the claims.
These disagreements regarding both the proper claim construction here and the proper method for performing claim construction generally also arose in the Federal Circuit's decision not to grant en banc review. Two dissents were filed in the Court's decision not to hear the claim construction decision en banc: one by Judge Moore, joined by Chief Judge Rader, and another by Judge O'Malley. Judge Moore's dissent characterized claim construction as "the single most important event in the course of a patent litigation." However, the Federal Circuit's rules for making claim construction determinations remain "ill-defined and inconsistently applied," even by the Court in her view. While citing commentators to support this conclusion, this dissent focused on the question at issue in Retractable Technologies and, according to Judge Moore, a question that arose generally from a deficiency in the Court's application of the law: where to draw the "fine line" between "construing the claims in light of the specification and improperly importing a limitation from the specification into the claims." Her dissent contended that this was the case to consider the issues of "the role of the specification in construing the claims and whether deference should be given to the district court in the claim construction process."
Judge Moore relied principally on Phillips v. AWH Corp., 415 F.3d 1303, 1312 (Fed. Cir. 2005) (en banc), and the "bedrock principle" that "the claims of a patent define the invention to which the patentee is entitled the right to exclude." She discounted the concerns voiced by the Retractable Technologies majority, including that "the metes and bounds of what the inventor claims extend beyond what he has invented or disclosed in the specification." In that case, the question would be one of validity rather than claim construction, she stated, and it is not the role of the court to "tailor the claim language to the invention disclosed." Citing Phillips, her dissent relied on the mantra that the "plain meaning" of the clams controls (and the dissent voiced surprise that this question was not resolved in Phillips). Judge Moore stated her (stringent) standard for the relationship between the claims and the specification: "the specification cannot be used to narrow a claim term -- to deviate from the plain and ordinary meaning -- unless the inventor acted as his own lexicographer or intentionally disclaimed or disavowed claim scope," citing Phillips and Teleflex, Inc. v. Ficosa N. Am. Corp., 299 F.3d 1313, 1327 (Fed. Cir. 2002)(emphasis added). Any deviation from this procedure should be applied narrowly, in her opinion, and specifically, her dissent opined that the choice of an overbroad term may affect validity but should not be considered for claim construction. Following a detailed recitation of the facts and legal principles enunciated in Phillips, the dissent contrasted the majority decision in Phillips with the panel decision here: in the absence of "disclaimer or special lexicography," the plain meaning standard must be applied. And the evidence, according to this dissent, failed to support a claim limited to single-body embodiments.
Judge Moore identified the problem with the panel decision with particularity:
The error in Retractable is the majority's attempt to rewrite the claims to better conform to what it discerns is the "invention" of the patent instead of construing the language of the claim. Indeed, the majority candidly explained that its construction, limiting "body" to a one-piece body, "is required to tether the claims to what the specifications indicate the inventor actually invented."
(emphasis in original)
While agreeing that the specification and claims must comply with the requirements of 35 U.S.C. § 112, her dissent stated simply that the Court "does not rewrite claims"; Retractable Technologies was not a case, Judge Moore contended, where "the majority is choosing between two equally plausible plain meanings and adopting the one that comports with the disclosure in the specification." Rather, that case was illustrative that there is "a fundamental split within the court as to the meaning of Phillips and Markman as well as the proper approach to claim interpretation." That was enough to convince Judge Moore and Chief Judge Rader that claim construction required reconsideration by the court en banc. Judge Moore also wrote that the Retractable Technologies case had a procedural posture that would permit the court to set forth the extent to which the "mongrel practice" of claim construction would permit or require deference to a district court's factual determinations under Markman v.Westview Instruments, Inc., 517 U.S. 370, 378 (1996).
When considered in this light, some of the sentiments expressed by Judge Lourie's "concurring" opinion in CLS Bank Int'l can be appreciated as more than just acquiescence to a perceived Supreme Court mandate to reign in a "patent-happy" USPTO. Examples of the propensity to focus on what was "invented," rather than what is claimed, include the "description" of the invention as:
[A] computerized trading platform used for conducting financial transactions in which a third party settles obligations between a first and a second party so as to eliminate "counterparty" or "settlement" risk . . . . Settlement risk refers to the risk to each party in an exchange that only one of the two parties will actually pay its obligation, leaving the paying party without its principal or the benefit of the counterparty's performance. Alice's patents address that risk by relying on a trusted third party to ensure the exchange of either both parties' obligations or neither obligation.
As well as the opinion's discussion of the relevant Supreme Court rubrics:
Where bona fide § 101 concerns arise, however, it is important at the outset to identify and define whatever fundamental concept appears wrapped up in the claim so that the subsequent analytical steps can proceed on a consistent footing. . . . In short, one cannot meaningfully evaluate whether a claim preempts an abstract idea until the idea supposedly at risk of preemption has been unambiguously identified.
With the pertinent abstract idea identified, the balance of the claim can be evaluated to determine whether it contains additional substantive limitations that narrow, confine, or otherwise tie down the claim so that, in practical terms, it does not cover the full abstract idea itself.
Even computer-readable medium claims cannot stand under this analysis ("under § 101 we must look past drafting formalities and let the true substance of the claim guide our analysis").
This approach, which Judge Lourie terms the "inventive concept" approach, may be consistent with recent musings by the Supreme Court on the philosophical bases for patent eligibility, but it is in stark contrast with what Judge Moore in Retractable Technologies recognized was a "bedrock principle," i.e., first interpreting the claims consistent with the specification and prosecution history, because only then can the particular questions mandated by the Supreme Court -- whether the claims implicate a law of nature, natural phenomenon or abstract idea, whether the claims completely preempt any implicated law of nature, natural phenomenon or abstract idea, or whether the claims "merely embody, use, reflect, rest upon, or apply those fundamental tools" be answered.
The application of these principles is not lost on the dissenting members of the Court, including Chief Judge Rader who writes directly to this point in his "additional observations" as well as in his concurring-in-part, dissenting-in-part opinion where he was joined by Judges Linn, Moore, and O'Malley. The Chief Judge, as a former Congressional staffer to Senator Orin Hatch, has written before about the importance of courts relying on the language of the statute in rendering their opinions (such as in Merck v. Integra and the Hatch-Waxman Act) and he does so again here, explicating the legislative history and interdependence of Sections 101, 102, and 103 of the 1952 Patent Act (in the process emphasizing that Congress had relegated the "inventiveness" question, fruit of prior Supreme Court decisions, to Section 103; indeed, even the Court itself has recognized that Congress was "merely" codifying this requirement, as noted, inter alia, in Graham v. John Deere). In doing so, he rebuts Judge Lourie's concurring opinion but also the "less than pellucidly clear" language in Bilski and the outright inapt language in Mayo, which most clearly introduces these concepts back into the Section 101 analysis contrary to Congressional intent. Indeed, Chief Judge Rader recognizes the danger in the application of judicial subjectivity in Judge Lourie's (and the Mayo) approach:
Any claim can be stripped down, simplified, generalized, or paraphrased to remove all of its concrete limitations, until at its core, something that could be characterized as an abstract idea is revealed . . . . A court cannot go hunting for abstractions by ignoring the concrete, palpable, tangible limitations of the invention the patentee actually claims.
The Chief Judge states his case succinctly in his "Additional Reflections" to the court's en banc decision:
When all else fails, consult the statute!
And for evidence that all else has failed, I need only recite Bilski v. Kappos, 130 S. Ct. 3218 (2010), Mayo Collaborative Servs. Inc. v. Prometheus Labs., Inc., 132 S. Ct. 1289 (2012), Ass'n for Molecular Pathology v. U.S. Patent & Trademark Off., 689 F.3d 1303 (Fed. Cir. 2012), cert granted in part, 133 S. Ct. 694 (2012), MySpace, Inc. v. GraphOn Corp., 672 F.3d 1250 (Fed. Cir. 2012), Dealertrack, Inc. v. Huber, 674 F.3d 1315 (Fed. Cir. 2012), and Classen Immunotherapies, Inc. v. Biogen IDEC, 659 F.3d 1057 (Fed. Cir. 2011), and this list can and will go on and grow.
And the remedy is the same: consult the statute!
And more specifically (and invoking Giles Sutherland Rich, the only patent jurist the Supreme Court deigns to consider worthy of its recognition), the Chief Judge writes:
And what about "exceptions" like natural laws and natural phenomena? Of course, these are universal constants created, if at all, only by God, Vishnu, or Allah. But, for perspective, even gravity is not a natural law in Einsteinian theory, but a symptom of a curved universe. Einstein posited the speed of light as the only true natural constant. Thus, in context, equating the personalized medicinal effect of a human-created pharmaceutical in patients of different metabolic rates and genetic makeups with the speed of light (or even gravity) is only possible in a netherworld of undefined judicial insights. Moreover, to inject the patentability test of "inventiveness" into the separate statutory concept of subject matter eligibility makes this doctrine again "the plaything of the judges who, as they became initiated into its mysteries, delighted to devise and expound their own ideas of what it meant; some very lovely prose resulting." Giles S. Rich, Principles of Patentability, 28 Geo. Wash. L. Rev. 393, 404 (1960).
Among other things, Judge Rich was remarkably prescient.
Paul Scofield, as Sir Thomas More, recites a speech in A Man for All Seasons that is apropos to Judge Rader's point. Speaking about God and the devil, the dialog reads as follows:
More: Why, what has he done?
Margaret More: He's bad!
More: There is no law against that.
William Roper (at right): There is! God's law!
More: Then God can arrest him.
Alice: While you talk, he's gone!
More: And go he should, if he was the Devil himself, until he broke the law!
Roper: So now you'd give the Devil benefit of law!
More: Yes. What would you do? Cut a great road through the law to get after the Devil?
Roper: I'd cut down every law in England to do that!
Moore: And when the last law was down, and the Devil turned round on you -- where would you hide, Roper, the laws all being flat? (He leaves him) This country's planted thick with laws from coast to coast -- man's laws, not God's -- and if you cut them down -- and you're just the man to do it -- d'you really think you could stand upright in the winds that would blow then?
The Supreme Court, in its recent focus on patent eligibility, is like Roper, believing that the importance of getting the amount of patent eligibility "just right" is important enough to ignore the law (at least that portion of the law that mandates that claims are what sets forth the metes and bounds of an invention), at all costs. Judge Rader and those members of the Federal Circuit who recognize the folly in this endeavor have, at least, this reliance on the law to guide them, when other members of the Federal Circuit seem to have lost their way in the fog of recent Supreme Court jurisprudence.