Brief of Amici Curiae Law, Business, and Economics Scholars in Alice Corp. v. CLS Bank, No. 13-298

The Federal Circuit’s expansion of patentable subject matter in the 1990s led to a threefold increase in software patents, many of which contain abstract ideas merely tethered to a general-purpose computer. There is little evidence, however, to suggest this expansion has produced an increase in software innovation. The software industry was highly innovative in the decade immediately prior to this expansion, when the viability of software patentability was unclear and software patents were few. When surveyed, most software developers oppose software patenting, and, in practice, software innovators tend to rely on other tools to capture market share such as first-mover advantage, trade secrecy, copyright, goodwill, and economic network effects. If anything, the increase in software patenting has led to an increase in software litigation, which in turn has encouraged firms to acquire patents for strategic purposes unrelated to innovation, serving as either defensive stockpiles to deter legal threats or offensive leverage for rent-seeking patent assertion entities (PAEs). Moreover, abstract software patents do not function well within a property rights framework because they fail to define cognizable metes and bounds and fail to provide effective notice to third parties of when a particular practice or product might infringe. Due to their abstractness, these claims can often be construed to cover any of the particularized processes that result in the same outcome, including those never envisioned by the inventor. Accordingly, these metes and bounds are not concrete enough to be useful to those who wish to tread carefully around them. The mere application of the idea using general-purpose technological components, such as a general-purpose computer, does nothing to abate this problem. Similarly, abstract patents defy the attempts of software innovators, or general counsel at technology companies, to stay on notice of what is already protected. This leaves firms vulnerable to investing in software development with little to no assurance that they will be able to avoid infringing upon an abstract patent, even if they conduct diligent searches within patent databases. Again, this will be true even if there are general-purpose technological components tethered to the claims, as those components do nothing to help distinguish one abstract claim from another. Proliferation of such patents also contributes to the problem of patent thickets. A well-defined 35 U.S.C. § 101 ensures that abstract software patent claims and their attendant notice and patent thicket problems do not undermine the patent system and stymie innovation. It serves as a decisive gatekeeper that the Patent Office and trial courts can use early in administrative proceedings and litigation. Further, it avoids many of the systemic challenges prevalent with the use of 35 U.S.C. §§ 102, 103, and 112 in such cases – the speed of software innovation, the difficulty locating software prior art, and lax, broad claiming standards. Accordingly, this Court should affirm the invalidity of the patent claims at issue here and hold that abstract ideas in the form of software are unpatentable and that mere computer implementation of those ideas does not create patentability. * This brief was prepared with the help of NYU Law clinical students Megan Briskman, Philip Cernera, Ilyssa Coghlan, Rafael Reyeni, Peter Van Valkenburgh, and Shawn Soen under the supervision of Professor Jason Schultz