In the last 3 years following the Alice judgment, we find 77% of the patents that claim inventions implemented fully or partially via a computer being rejected by the courts and the PTO on grounds of being an abstract idea that belongs to one of the three judicially created exceptions. The doctrinal requirement that patents may issue only for technological innovation that is useful, and not for just abstract ideas, is justified by Lockean property theory’s basic premise that productive labour creates the useful real-world values that serve a flourishing life. The highest court, while invalidating the patent in dispute, refused to provide any concrete definition as to what abstract idea actually meant. Let us deep dive into the whole concept of abstract idea conundrum and understand what the fuss is all about and what exactly abstract idea means in legal jurisprudence.
John Locke in his famous treatise provided a justification of Intellectual Property Rights whereby he believed that individuals are entitled to control the fruits of their labour. Per Locke, the process of thinking, developing and persevering are made out of free will and requires strain and sweat. Hence anyone who out of his own will indulges in the such process, he and only he must be entitled to fruits of the said process, subject to certain restrictions. This proviso in form of restrictions is something that plays a crucial role in determining scope of legal rights an individual is entitled to in return for his labour. He emphasized that the output from the labour must produce something useful and productive.
In light of the above jurisprudence relating to abstract idea, we understand that abstract idea is something which does not create ant tangible utility and owing to this fact abstract ideas fail the first level of the utility analysis. With that context, let us find out how courts and PTO have been applying the principles of abstract idea for rejecting patents involving use of computers.
In Alice vs CLS bank, the court invalidated the subject patent related to virtual account settlement citing it as a fundamental economic practice. Amongst other things, this decision gave a presumption about what all could be termed as abstract idea, for e.g long standing business process and economic practices. On aligning the decision with the historical jurisprudence set above, we might find that the court was correct in its interpretation of an abstract idea with respect to claims at hand. Simply automating an existing process didn’t create any useful addition to existing social knowledge, though one might argue.
After the Alice judgment, the courts and PTO have misinterpreted the term abstract idea and provided their own connotation to the judicial exemption carved on grounds of public policy. Unfortunately, for the PTO and lower courts, all computer implemented inventions relate to some or the other form of abstraction of human knowledge. One study by the American Bar Association found that almost two-thirds of court decisions invalidating a patent as an “abstract idea” did so without reference to any evidence. Read our blog on (Funny decisions on abstract ideas by Courts).