1. CLS Bank v. Alice – This case was heralded as the federal appeal court’s best recent opportunity to give meaningful guidance regarding the patentability of software and business methods. Instead, the judges deeply disagreed, leaving stakeholders in the dark as to what aspects of software and business methods –if any–may be patented. The only meaningful takeaway is that the failure of the appeals court apparently persuaded the Supreme Court to hear the case. The upcoming Supreme Court decision could have a significant and wide-reaching impact on the software industry, financial services and processes, how to protect software and computer-related technologies, etc. A decision is expected by mid-year. For now, patent protection is still the preferred option for protecting software technologies, but strategies must be carefully considered in light of the fact that patent availability may drastically change -- more in the coming year on this case. Further reading: SCOTUSblog.
2. America Invents Act: First-to-File Provisions – The Leahy-Smith America Invents Act of 2011 (“AIA”) made sweeping changes to U.S. patent law, including changing the U.S. patent system from a “first-to-invent” to a “first-to-file” system, effective March 2013 (technically, the change was to a “first-inventor-to-file” (“FITF”) system, but net result is effectively the same). Varying interpretations of the AIA (arguably the biggest patent law change in over 50 years) have caused significant uncertainty. With the first substantive court decision on the FITF system likely 3-5 years away, the uncertainty will no doubt continue. One guiding principle has emerged: filing patent applications early (and often) in the invention process can put an inventor/company strategically well ahead of its competitors.
3. Non-Practicing Entity Legislation – The AIA did not seem to adequately address several pressing patent system issues. In the fall of 2013, Congress introduced further patent litigation reform legislation, “The Innovation Act” (H.R. 3309), which purportedly intends to curb litigation by non-practicing entities (“NPEs”)(sometimes referred to as “patent trolls”). The bill, among other things, introduces heightened pleading requirements (requiring more specific details about what a plaintiff claims is at issue to get into court) and increases transparency of ownership of patents asserted in litigation (requiring identification of the parties owning the asserted patents). As of this writing, the Innovation Act passed in the U.S. House of Representatives and has been referred to the Senate, which is reportedly preparing its own version of the bill. Stakeholder reaction has, unsurprisingly, been mixed. Only time will tell how these further reforms (if passed) will affect patent stakeholders. Further reading: Digest for H.R. 3309, Sample of Reactions via Patent Docs.
4. Apple v. Samsung – Juries awarded Apple nearly $900 million in the highly-publicized Apple v. Samsung consolidated patent case(s) relating to smartphones (the parties are involved in several separate litigations, U.S. and abroad). There is another U.S. trial set for March 2014, indicating the smartphone war is far from over. Additionally, Samsung has won more court contests abroad, begging the question: Who is really winning the smartphone patent wars? These cases will likely have far-reaching effects on patent law, policy, and litigation – and certainly the smartphone features in your pocket. Further reading: CNET, Ars Technica.
5. Association for Molecular Pathology v. Myriad Genetics – The biggest biotech patent case of year established that “[a] naturally occurring DNA segment is a product of nature and not patent eligible merely because it has been isolated, but cDNA is patent eligible because it is not naturally occurring.” Many biotechnology patents still appear to be quite valuable, but this case is an example of the Supreme Court instantaneously devaluing entire species of patents. Is this a pre-cursor to the forthcoming CLS Bank v. Alice case? Further reading: Supreme Court Opinion, SCOTUSblog.
The above items, and others not discussed, illustrate that issues with U.S. patent law are hotter than ever. The law certainly will continue to evolve well beyond 2014. Well-considered patent strategies need to be implemented to hedge against this volatility. Consult an IP attorney at MMM with questions or concerns.
