State of Innovation

Patents and Innovation Economics

CLS v. Alice Oral Argument

Reading the transcript of the oral argument at the Supreme Court in this case is like listening to bunch of stoned college freshman debating Jonathan Livingston Seagull.  Not one person involved in the discussion would pass a first semester law school class in patent law.  None of the people involved are patent attorneys, none of them have a solid technical background, none of them understand how a computer works, none of them of legally or factually competent to be patent attorneys.  Everyone of the people involved in this oral argument should have recused themselves as incompetent

Alice’s attorney failed for three reasons: 1) he is not a patent attorney, 2) he tried to make sense of the Supreme Court’s earlier decisions, which a full of logical contradictions, 3) he failed to define what an invention is and what an abstract idea is.  CLS’s attorney was unscrupulous and played fast and loose with the law and the facts as I will explain below.

Because the oral argument was so incoherent, I will just highlight the parts that I found outrageous, interesting, or nonsensical.

Abstract Idea:  Justice Breyer is using the technique of all charlatans and refusing to define what an abstract idea is.  He should be thrown off the court for this stunt.  The abstract idea exception to 35 USC 101 is illogical.  Any truly abstract idea would not meet the requirements of 35 USC 112 and that is where this issue should be dealt with.  But Justice Breyer is not interested in logic, he likes using an undefined phrase that he can manipulate to attack any patent.

Justice Breyer’s use of analogies is against the law.  An invention is defined by its claims and the claims must be taken as a whole (35 USC 101 and Conservation of matter and energy).  The reason Breyer uses analogies is because he is too stupid to be able to understand the actual invention and is incapable of reading a claim.

Here is an example of this

I mean, imagine King Tut sitting in front of the pyramid

10 where all his gold is stored, and he has the habit of

11 giving chits away.  Good for the gold, which is given at

12 the end of the day.  And he hires a man with an abacus,

13 and when the abacus keeping track sees that he’s given

14 away more gold than he is in storage, he says, stop.

15 You see?

16  Or my mother, who used to look at my

17 checkbook, when she saw that, in fact, I had written

18 more checks than I had in the account, she would grab

19 it.  Stop.  You see?

20  So what is it here that’s less abstract that

21 the computer says, stop?

 

Using analogies to inventions is completely useless.  The law requires the invention be evaluated on the patent, not on some absurd analogy.  I warned Alice about this.  Alice’s council should have refused to deal in hypotheticals and pointed to the law.  They also should have defined what an invention is and what an abstract idea is.  An invention is a human creation that has an objective result.  Here Alice’s invention is a specially programmed computer.  Those do not exist separate from man.  Therefore Alice’s invention is a human creation.  Alice’s invention has an objective result of affecting a transaction if all the conditions are satisfied and not affecting a transaction if any of the conditions are not satisfied.

 

Here is an excellent analogy to the absurdity of Justice Breyer’s statements that using a computer to implement the invention is irrelevant, by my good friend and patent attorney Peter Meza, “A new idea for a current mirror does not become patent eligible merely by tacking on a transistor to carry it out.”

 

Another idiotic statement by Breyer when Alice’s counsel suggests Breyer’s analogy is caricature.

 

JUSTICE BREYER:  Of course it’s a

20 caricature.  It’s a caricature designed to suggest that

21 there is an abstract idea here.  It’s called solvency.

There is an abstract idea in every invention.  That is like saying the LASER is abstract because it uses the ‘abstract idea’ of stimulated emission.  Breyer is an idiot.  He uses analogies because he is totally incompetent in the technology, so he has to bring up something he does understand.

 

Justice Sotomeyer seems to be creating a new exceptions to 35 USC 101

 

JUSTICE SOTOMAYOR:  I’m sorry.  But ­­ but

20 what it appears to be, it sounds like you’re trying to

21 revive the patenting of a function.  You used the word

22 “function” earlier, and that’s all I’m seeing in this

23 patent is the function of reconciling accounts, the

24 function of making sure they’re paid on time.  But in

25 what particular way, other than saying do it through a

1 computer, is this something new and not function?

 

Was there ever a rule against patenting a function.  Patent law allows, actually requires that well known complex functions not be described in detail.  Thus we do not claim the transistors, resistors, capacitors in a low pass circuit or a transceiver.  Claiming a low pass filter is claiming a function: claiming a transceiver is claiming a function.  These Justices are idiots.  The function of error correction code is to correct errors.  A patent on an error correction code is a patent on the function of correcting error in the transmission of data.  The claims do not recite I claim intermediated settlement (whatever that is – note this is not a standard term used in banking)

 

Justice Scalia seems to be slowly learning some patent law.  Here he recognizes that this case in not about novelty.

 

JUSTICE SCALIA:  Well, I’m not saying use a

5 computer is ­­ is much of a novelty.  I mean, that’s ­­

6 that goes to whether it’s novel or not.  If you just say

7 use a computer, you haven’t invented anything.  But if

8 you come up with a serious program that ­­ that does it,

9 then, you know, that may be novel.  But that’s a novelty

10 issue, isn’t it.

 

Note the claims never say “use a computer” but these people are too ignorant to read claims.

 

Justice Kennedy shows he knows nothing about patent law.  Alice’s attorney should have force him to analyze the claims.  He should have said to Kennedy and Breyer the invention is defined by the claims, if you wish to discuss this invention then you must look at the claims and tell me what it is you are referring to.

 

 JUSTICE KENNEDY:  Suppose I thought ­­ and,

9 again, it’s just a thought because I don’t have the

10 expertise ­­ that any computer group of people sitting

11 around a coffee shop in Silicon Valley could do this

12 over a weekend.  Suppose I thought that.

 

Here both Alice’s attorney and Justice Sotomeyer, who is suppose to be a copyright attorney, prove their ignorance of a concept any law student taking copyrights should know the answer to – my only caveat to this is perhaps this was a backhanded way of saying Alice never wrote any code.  While CLS makes this claim, I seriously doubt it is true.

 

 JUSTICE SOTOMAYOR:  Is your software

15 copyrighted?

16  MR. PHILLIPS:  No, I don’t believe so.

 

Of course the software is copyrighted.  This is the incompetent leading the incompetent.

 

Alice’s counsel attempts to force Justice Kagan to look at the claims, but she proves her ignorance of patent law by ignoring the claim limitations.

 

 MR. PHILLIPS:  I’m saying both actually.  I

15 mean, I’m making both of those arguments.  I ­­ I

16 believe that if you analyze the claims and you don’t

17 caricature them and you don’t strip them out of the

18 limitations that are embedded in there, this is not some

19 kind of an abstract concept.  This is not some kind ­­

20 it’s not an abstract idea.  It’s a vary ­­

21  JUSTICE KAGAN:  So putting the computer

22 stuff aside completely ­­

 

Here Alice’s attorney attempts to get back on track.

So my suggestion to you would be follow that

15 same advice, a liberal interpretation of 101 and not a

16 caricature of the claims, analyze the claims as written,

17 and therefore say that the solution is 102 and 103 and

18 use the administrative process.  If you ­­

 

This might be a hopeful sign.  Justice Scalia is pointing out that not all the Justices agree on this interpretation of an abstract idea.

 

JUSTICE SCALIA:  And four is not five

10 anyway, right?

11  MR. PHILLIPS:  That’s true.

12  JUSTICE SCALIA:  Four is not five.

 

Another hopeful sign by Justice Scalia.

 

JUSTICE SCALIA:  By the way, we ­­ we have

16 said that you can’t take an abstract idea and then say

17 use a computer to implement it.  But we haven’t said

18 that you can’t take an abstract idea and then say here

19 is how you use a computer to implement it ­­

 

Justice Kagan proves she can’t read a claim or a specification and has no intention of doing so.

 

JUSTICE KAGAN:  Well, how are you saying the

5 how?  Because I thought that your computers ­­ that your

6 patents really did just say do this on a computer, as

7 opposed to saying anything substantive about how to do

8 it on a computer.

 

Justice Kagan proves she is incapable of reading claims or the patent statute

 

 JUSTICE KAGAN:  No, but exactly.  I mean,

22 the claim would have said something along the lines of,

23 you know, there’s this process by which people order

24 products and we want to do it over the Internet, we want

25 to do it electronically, and we will use a computer to

1 do that, to essentially take the process of mail order

2 catalogues and make it electronic.

 

 

Mr. Phillips lies to himself and the court about his ability to write claims.  Mr. Phillips is not a patent attorney and I am sure has never written a claim in his life.  He does not have the technical background to write claims and does not have the legal knowledge to do so.

 

 MR. PHILLIPS:  I could certainly ­­ I think

4 I could write a claim ­­ a set of claims that I believe

5 would satisfy 101.  And ­­ and to the extent that

6 you’d ­­ that you’d think those are no different than

7 the ones I have here, then my argument is simply I think

8 I satisfy 101 with the claims we have before us,

 

Here is blatant lie by Mr. Perry.

On the abstract idea, Justice Ginsburg, you

8 asked Mr. Phillips what’s the difference between hedging

9 and this claim. There is no difference.  This is

10 hedging.  It is hedging against credit default rather

11 than price fluctuation, but it is simply hedging.

 

The definition of hedge is “Making an investment to reduce the risk of adverse price movements in an asset.”  Nowhere in Alice’s claims is there any investment to reduce the risk of adverse price movements.  Mr. Perry should be disbarred.

 

 

Another blatant lie by Mr. Perry

This claim has simply two steps.  It’s very

18 simple.  “First, debiting and crediting on a realtime

19 basis the relevant shadow records; and second, by

20 periodically affecting corresponding payment

21 instructions.”

 

The patents involved are USPNs 5970479, 6912510, 7149720, and 7725375.  All of the claims require more than Mr. Perry’s lie.  He also shows he does not understand the difference between the claims and the specification. He should be disbarred.

 

 

Justice Roberts is on the right track but proves he is incompetent to rule on patent cases.

 

CHIEF JUSTICE ROBERTS:  Well, that’s a

25 little more complicated.  He referred us to Joint , which is not a change in how

2 computers work.  But it is ­­ constitutes the

3 instructions about how to use the computer and where it

4 needs to be affected.  And just looking at it, it looks

5 pretty complicated.  There are a lot of arrows and

6 they ­­ you know, different things that go ­­

 

 

Mr. Perry in the quote below has attempted to redact the whole specification.  Since Mr. Perry is not a patent attorney perhaps he doesn’t understand the claims have to be supported by the specification.

 

It’s 4 columns.

6 It’s less than five pages in the printed appendix that

7 actually pertains to this invention.  And it contains no

8 disclosure whatever.

 

 

Mr. Perry attempts to define what would be patentable.

 

MR. PERRY:  Your Honor, there are many

1 examples.  One would be a technological solution to a

2 business problem.

Mr. Perry isn’t this what Alice’s invention is?  Of course you are too ignorant to read the claims, so you wouldn’t know.

 

Justice Kennedy proves his ignorance of patents.  All inventions can be described as a method or an apparatus.

JUSTICE KENNEDY:  Well, I ­­ I ­­ in my

16 language, I’ve called that mechanical rather than

17 process.  Can you give me an example of process?

 

This admission by CLS should win the argument for Alice in a rational world – but this is not a rational world.

  MR. PERRY:  At a point in time in the past,

12 I think both of those (word processor/spreadsheet) would have been technological

13 advances that were patentable.

14  JUSTICE SOTOMAYOR:  How?

MR. PERRY:  Today ­­ because they would have

16 provided a technological solution to a then unmet

17 problem.

 

 

Mr. Perry is putting words in other people’s mouth that are clearly not true and demonstrating his lack of understanding of physics and inventions.  Every invention in the history of the world is a combination of known things/elements/steps because you can’t create something from nothing.  This is because of conservation of matter and energy.  In addition, section 112 requires that you explain your invention in language people understand, which means it has to describe the invention in terms of things that are known.

 And here we know that these patents don’t

1 claim anything that was not conventional, well

2 understood, and routine.  We went through that in great

3 detail, and Alice has never disputed a word of it.

“It is

10 possible to do the business methods of maintaining

11 accounts, adjusting accounts, and providing an

12 instruction without a computer or other hardware.”

 

It is possible to separate the seeds in cotton without a cotton gin, SO WHAT.

 

More stupidity from Mr. Perry.

We know from Benson, the Court’s seminal

20 computer implementation case, that if you can do it by

21 head and hand, then the computer doesn’t add anything

22 inventive within the meaning of the 101 exception.  That

23 is the holding of Benson.  And the Court reiterated that

24 in Mayo.

 

You can type by hand, you can do spreadsheets by hand.  Mr. Perry has just contradicted himself, but appears to be too technically incompetent to understand this.  Most likely so are most of the Justices.

 

Mr. Perry proves he does understand how claims of a patent work.  This is the sort of thing a first year associate in patent law should know.  Once again we have the incompetent leading the incompetent.  Alice’s invention cannot be implemented without a computer because of the need nearly real time communications.

 CHIEF JUSTICE ROBERTS:  What if ­­ what if

9 you can do it without a computer, but it’s going to

10 take, you know, 20 people a hundred years?  In other

11 words, theoretically, you can replicate what the

12 computer does ­­

13  MR. PERRY:  Two answers.

14  CHIEF JUSTICE ROBERTS:  ­­ but it’s

15 impractical without looking to do it on the computer?

16  MR. PERRY:  Mr. Chief Justice, first, these

17 claims literally read, as Alice reads them, on a single

18 transaction between two parties, so it’s not 20 people

19 for a hundred years.  It’s one person sitting in a room,

20 so that’s not a problem.

21  Second, if what is being claimed is the

22 necessary speed or efficiency or data crunching

23 capabilities, if you will, of a computer, then it would

24 have to be claimed, and there’s nothing claimed here.

25 All that is claimed ­­ and my friend is going to stand

 

No Mr. Perry the claims would never say any such thing.  But you are too incompetent to know that.

 

Mr. Perry proves he does not understand the purpose of 35 USC 112.  He is not a patent attorney.  Factually and Legally is not competent to be one.

MR. PERRY:  If I can answer in two steps,

20 Justice Kagan.  First in the negative:  What the

21 applicant or patentee must do ­­ must not do is simply

22 describe the desired result.  That would take us back to

23 State Street.  That would simply say:  I claim a magic

24 box that buys high and sells low or vice versa, I

25 suppose, I claim a magic box for investing.  That’s what

these patents do.

 

Listening to Mr. Perry is like listening to a teenage bull session.  Note that he makes a completely contradictory statement without even blushing.

MR. PERRY:  No, Your Honor.  I think the ­­

20 actual description of the programming is a 112 problem.

21 I agree with that, A 112 issue.  That is the realm of

22 the written description requirement.  What is a 101

23 problem is it is on the applicant to do more than simply

24 describe the results, simply say:  A magic box that does

25 intermediate settlement.

 

Justice Ginsburg clearly thinks she is a queen who can manipulate reality.  She is clearly too incompetent to even understand the contradictions and absurdities of her (the courts) own writings on patents.

 Justice Ginsburg, this Court’s precedents

3 are clear.  They are unanimous.  They just need to be

4 applied.  To suggest that there is confusion that needs

5 to be addressed by retreating, beating a retreat from

6 recent unanimous decisions, would simply reward

7 intransigence, difficulty, refusal to adhere to what are

8 clear precedents

 

 

Mr Verrilli proves he does not have the slightest idea how a computer works.  Any software is part of computing technology.  Patents are not about improvements, they are about whether the invention is novel (non-obvious).  Many designs around inventions are not improvements.  Mr. Verrilli should be fired for this clear ignorance of the law, but as a political appointee competence is irrelevant.

 GENERAL VERRILLI:  Mr. Chief Justice, and

17 may it please the Court:

18  An abstract idea does not become

19 patent­eligible merely by tacking on an instruction to

20 use a computer to carry it out.  A computer makes a

21 difference under Section 101 when it imposes a

22 meaningful limit on the patent claim.  That occurs when

23 the claim is directed at improvement in computing

24 technology or an innovation that uses computing

25 technology to improve other technological functions.

1 That’s the test that we believe is most faithful to this

2 Court’s precedents in Bilski and Mayo.

 

Mr. Verrilli is incompetent to read the claims of a patent, so he ignores them.

 

At least Justice Ginsburg is beginning to understand that ‘abstract idea’ has never been defined.  Clearly Alice’s invention is a concrete invention, it solves a real problem using technology.  Clearly, the Obama Administration is doing the bidding of Wall Street and trying to ensure that there are no patents having anything to do with finance.  But neither the Obama Administration nor Wall Street can provide a rational explanation for this, so they resort to argument of “tradition.”

 JUSTICE GINSBURG:  I have a question about

3 how do you identify an abstract concept.  The ­­ a

4 natural phenomenon, a mathematical formula, those are

5 easy to identify, but there has been some confusion on

6 what qualifies as an abstract concept.

7  GENERAL VERRILLI:  We would define

8 abstract ­­ an abstract concept as a claim that is not

9 directed to a concrete innovation in technology,

10 science, or the industrial arts.  So it’s the ­­ it’s

11 abstract in the sense that it is not a concrete

12 innovation in the traditional realm of patent law.

 

Justice Sotomayor proves that she cannot understand basic logic.  If there are no business patents, then there are no patents.  All patents are directed to a business, people are not getting patents so they can hang a plaque on their wall.

 JUSTICE SOTOMAYOR:  If we were to say that

19 there are no business patents ­­

 

Patent law has now devolved to the state of politics.  As this oral argument proves, there is no logic, the statute is ignored, the claims are not analyzed, the only real question is who has the most political pull.  Patent law has become a cesspool in the same vein as anti-trust law, environmental law, and the Obama Administrations belief that they can change statutory law by Executive Orders.

 

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April 13, 2014 - Posted by | -Law, News, Patents |

5 Comments »

  1. Dale,

    Your last paragraph sums it up nicely.

    The Alice orals remind one of a slight twist on a law school maxim: If you don’t know the facts, don’t argue with facts. If you don’t know the law, don’t argue on the basis of law. Instead confabulate them with a boat load of abstractionist BS. The Supremes have done well in that last category.

    Comment by step back | April 15, 2014 | Reply

    • Stepback,

      Did you see the discussion on copyrights with Kagan and Phillips? Was that just a backhanded way of arguing Alice is a T—-, or are they both that ignorant?

      Comment by dbhalling | April 15, 2014 | Reply

  2. It’s sad. But we need to quit pretending that any Patent law decisions by the Supreme Court in the last 50-70 years are anything but gobbledygook.

    Comment by dbhalling | April 15, 2014 | Reply

  3. Dale,

    I just inserted the link to the tape-recorded orals here at my website:
    http://patentu.blogspot.com/2014/04/close-patent-encounters-of-go-ask-alice.html

    Upon listening to the vocal intonations of the various parties, the transcripts appear to take on a whole different appearance. Phillips is not as incompetent as he comes across in the tone deaf text. All the parties however appear to technology-deaf (and blind and dumb) when they talk about “the computer” and about having a ha ha idea and saying “apply it” on “the computer” using a handful of computer users you find in a Silicon Valley coffee shop. Inherently, by the terms of Alice’s claims, there cannot be a single “the computer” and secured telecommunications must occur between the escrow agent and transaction parties’ computers. Saying words like “solvency” and “King Tut” does not create the discipline of having shadow files and testing agreement constraints against those non-binding shadow files.

    Comment by step back | April 16, 2014 | Reply

    • Not only could none of them pass 1st semester patent law class, they could not pass a 1st semester survey course on computers and telecommunication.

      Comment by dbhalling | April 16, 2014 | Reply


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