Prepared by Cislo & Thomas LLP Attorney Mark D. Nielsen, Ph.D.
1. In a recent opinion that included a number of issues, including a Section 101/Alice issue, the Federal Circuit may be trying to open up the scope of patent eligibility a bit, but in doing so, it is, I fear, creating even more confusion about what is and what is not patent eligible in the software space. In SRI International v. Cisco, the Federal Circuit affirmed a summary judgment ruling against Cisco finding eligibility, despite the patent being attacked as one that essentially collects and processes data. While the majority asserted that the patent improved the functioning of the computer/network that used the patented system, this point was not conceded by Cisco or the dissent, the latter stating that, “[t]he claims here recite nothing more than deploying network monitors, detecting suspicious network activity, and generating and handling reports. The detecting of the suspicious activity is based on ‘analysis’ of traffic data, but the claims add nothing concerning the specific means for doing so. The claims only recite the moving of information.” It is this type of patent that was invalidated in the Electric Power Group case. The majority asserted that the patents were not directed to an abstract idea, but are “directed to a specific technique – using a plurality of network monitors that each analyze specific types of data on the network and integrating reports from the monitors – to solve a technological problem arising in computer networks: identifying hackers or potential intruders into the network.” This does not sound like a technological solution with the computer itself, but perhaps it is. On page 9 of the opinion, there is a fair amount of “hand waving” about the claims not being directed to an abstract idea, but many are not convinced. While, at some level, some may be glad to potentially see the Federal Circuit opening up software eligibility, given the apparent conflict, at least in the minds of some, between the SRI v. Cisco outcome and the Electric Power Group outcome, as well as the new USPTO eligibility guidelines, and Alice itself, it appears that a lack of clarity will continue to reign on Section 101 issues for the foreseeable future.
2. In an interesting civil procedure-type opinion out of the District of Hawaii, that Court dismissed, with leave to amend, a federal trade secrets claim brought under the Defend Trade Secrets Act (“DTSA”) for failure to sufficiently plead a nexus to interstate commerce, as required under the DTSA. Specifically, the DTSA states that, “An owner of a trade secret that is misappropriated may bring a civil action under this subsection if the trade secret is related to a product or service used in, or intended for use in, interstate or foreign commerce.” 18 U.S.C. Section 1836(b)(1). The plaintiff alleged that a former employee had misappropriated confidential client lists of a business, but the issue was that neither party did business outside of Hawaii. Thus, the Court held that the jurisdictional element in the DTSA was not satisfied.
3. As noted in the March 4 takeaways, the Supreme Court has now made an issued copyright registration a prerequisite for filing a copyright infringement lawsuit. Of concern in that regard is the growing backlog of copyright applications in the Copyright Office, and the longer application pendencies before registrations are issued, in many cases. As a result, the Chairman (Sen. Tillis) and Ranking Member (Sen. Coons) of the IP Subcommittee of the Senate Judiciary Committee recently sent a letter to the Copyright Office expressing this concern and asking what steps the Copyright Office can take to reduce application pendency. This is particularly important for copyright owners in light of the Supreme Court’s recent ruling. Anecdotally, pendency has dramatically increased in the past 3-5 years.