“The whole patent court Alice With the Federal Circuit’s 2008 decision, to the bank decision in In re Bilski… left things as clear as mud. ”
Software computer digital data homepage concept
As an update to my previous posts from 2017, 2019, 2020, March 2021, August 2021, and 2022, it’s been almost nine years since the 2014 U.S. Supreme Court decision. Alice Corp. vs. CLS Bank decision.Nevertheless, whether software (or computer-implemented) claims are patentable or merely abstract ideas that are “free to all and reserved exclusively to everyone” (as then-Supreme Court Justice Douglas eloquently stated more than 74 years ago) about Funk Bros. Seed Co. vs. Kalo Inoculant Co..).
Plus, it’s been 12 years since renowned venture capitalist Marc Andreessen wrote an influential and often-cited op-ed. wall street journal Titled “Why Software is Eating the World”. There is no denying the digital transformation in which software is “eating the world” today. Artificial Intelligence (AI), Metaverse, Web3, Cloud, Gene Editing, Autonomous Driving, Quantum Computing, and “Green Technology” dominate tech news headlines and tech trend predictions. All of these rely heavily on software-related innovations. [Forbes] [Gartner] [World Economic Forum]but there are still no specific guidelines for software-related patents.
Let’s look at some facts and figures.
- According to the Federal Reserve Bank of New York, computer engineering and computer science are two of the five highest-paid majors in the United States. [CNBC].
- Software engineers will be the most in-demand jobs in 2023, with a median salary of US$120,730, and the U.S. Bureau of Labor Statistics expects this occupation to grow 26% over the next decade. [S. News & World Report].
- US SaaS VC investments will hit a record high of US$90 billion in 2021, with over 263 US SaaS VC deals exceeding US$100 million. This is three times the last year’s total and seven times the 2015 total. [SVB].
- In 2022, global M&A activity in the software and internet services sector will reach US$973 billion with over 10,544 deals. [IMAA] – This includes acquisitions of VMware, Citrix, Anaplan and Zendesk [CIO].
- In 2020-21, the United States awarded 34,164 associate degrees, 90,775 bachelor’s degrees, 54,174 master’s degrees, and 2,572 doctorate degrees in computer and information science. [National Center of Educational Statistics].
- Gartner forecasts that global IT spending in 2023 will reach US$4.5 trillion in 2023, an overall increase of 2.4% from 2022, while the software and IT services segments will grow by 9.3% and 9.3%, respectively, in 2023. It is projected to grow by 5.5%.is projected to decline by 5.1% [Gartner].
Therefore, in view of the above, what percentage of patents issued by the United States Patent and Trademark Office (USPTO), the European Patent Office (EPO), and the China National Intellectual Property Administration (CNIPA) are “software-related”? I tried to judge again. “?
To define which patents are “software-related,” we used the same methodology employed by the US Government Accountability Office in its 2013 report to Congress. The report relied on specific United States Patent Classification (USPC) classes and subclasses of applications most likely to contain software-related claims, selected by the USPTO’s expert advisors. Now, with the help of IP services company Clairvolex (and after conversion from the USPC system to the Cooperative Patent Classification (CPC) system), the data was pulled from the PatSeer global patent database. result?of 2022:
- 63.5% issuance of weUtility patents are “software related” (relatively unchanged from 63.1% in 2021)
- 49.6% Granted EPO Patents are “software related” (relatively unchanged from 49.4% in 2021)
- 43.5% Granted Chinese Patents are “software related” (up 8% from 40.2% in 2021)
- The assignees of the top 15 software-related granted US utility patents are:
Despite the importance of the numbers above, the entire patent bar is Alice With the Federal Circuit’s 2008 decision, to the bank decision in In re Bilski (concluding that the “machine or transform” test is the dominant test for determining patent eligibility of a process under 35 U.S.C. 101), leaving things as clear as mud . In direct response to this uncertainty, the USPTO issued the 2019 Subject Matter Eligibility Examination Guidance based on page 22 (footnote at 87 and reference to “computer” at 42). Alice Decisions and Other Supreme Court and Federal Circuit Opinions Regarding Patent Eligibility. That guidance document is now included in Section 2106 of the latest version of the Manual of Patent Examining Procedure (MPEP e9 r7.2022) and can be readily summarized as follows:
Clear, right?
And without going too deep into “Stats 101”, lies and bullshit, and statistics debates, I’ll leave these observations behind (more than half of all US patents issued in the last decade were software-related). please take note). :
- “High-tech” (ie, software, hardware, and networking) patents account for nearly 70% of US patent litigation. [Unified Patents];
- Nearly two-thirds of patents challenged by the USPTO’s Patent Trial and Appeal Board (PTAB) in IPR have a prior district court action. [RPX];
- No USPTO Technology Center has a survival rate greater than 44% on the PTAB for IPR, CBM, and PGR cases. [Finnegan Henderson]; and
- The Federal Circuit has historically favored (partially or fully) the PTAB in over 83% of IPR, CBM, and PGR appeals. [Finnegan Henderson].
In light of all this, perhaps some legislative support is on the way? Well, last summer, Senator Tom Tillis (R-North Carolina) said, Patent Eligibility Restoration Act of 2022 [S.4734] Addresses Section 101 issues. In an accompanying press release, he summed up exactly as follows:
“Unfortunately, the current Supreme Court patent eligibility jurisprudence undermines American innovation and allows foreign adversaries like China to overtake us in major innovation. …Unfortunately, U.S. patent eligibility law has become confusing, limited, and unclear in recent years due to a series of Supreme Court decisions.…As of 2021, the 12-member Court of Appeals for the Federal Circuit All officers lament the state of the law. … [R]Reforms are needed to return the United States to global strength and leadership positions in key areas of technology and innovation such as medical diagnostics, biotechnology, personalized medicine, artificial intelligence, 5G, and blockchain. ”
Needless to say, Senator Tillis’ proposed bill went nowhere at 117.th meeting. So what about this new 118?th Since Section 101 of the Patent Act seems dedicated to fighting the sleeping culture wars, should Congress amend it? Until then, the battle is still ongoing when it comes to patenting software.
