“It would be so nice if something made sense for a change.” ― Lewis Carroll, Alice in Wonderland

The more you examine the Court of Appeals for the Federal Circuit's recent decision in Secured Mail Solutions v. Universal Wilde, which upheld the district court's ruling that Secured Mail's seven asserted patents were ineligible for patenting under 35 U.S.C. Section 101, the more you find its logic curiouser and curiouser, as Lewis Carrol's Alice might have put it. These Secured Mail patents all address tracking mail through an encoded marking, e.g., a barcode, QR code or URL, on the outside of a mailer which is intended to provide information to the recipient about the contents and the sender.

To nonjudicial eyes—including the expert eyes of highly-trained patent examiners at the U.S. Patent and Trademark Office (USPTO)—Secured Mail's patents appear to describe something practical and useful, an innovation the likes of which the patent system was designed to protect. But to the esteemed judges of the Federal Circuit hearing the Secured Mail case, there was not a single thing even eligible for patent protection in these patents, let alone patentable.

To reach this strange decision the Federal Circuit judges used the Alice test—not Lewis Carroll's Alice, but one based on similar illogic)—which is derived from the Alice Corp. v. CLS Bank International case and is the type of analytical guide intended to help in the application of case law to the actual facts of a given case. While the need for such analytical guides spotlights the often-convoluted nature of what jurists write, they can often be helpful to practitioners. But not always, for in this case, the two-step Alice test has only served to make bad law even worse.

Indeed, in the hands of the Federal Circuit, the Alice test has already condemned dozens of issued patents containing hundreds of claims, each representing a property right duly issued by the U.S. government and paid for by the applicant in the form of research and development costs as well as patent application fees. In the Secured Mail case, the Federal Circuit continued, a la Alice's trip to Wonderland, down that rabbit hole, the bottom of which in this case unfortunately contains nothing but the property rights they have stripped from patent owners.

In the application of step one of the Alice test to the Secured Mail case, the court must, to quote the Federal Circuit opinion, “ascertain whether the claims are directed to ineligible subject matter.” In tackling this first step, the district court had determined that the claims of all seven of the asserted patents “are directed to the abstract idea of communicating information about a mail object by use of a marking.”

Let's take a time out right there: What is “abstract” about communicating tangible information by physically marking a physical object—i.e., an old-fashioned piece of snail mail?

You don't know? Me, either—but let's move on.

Despite some lip service to Enfish v. Microsoft, another Federal Circuit case dealing with the limits of subject matter eligibility which cautioned that “describing the claims at such a high level of abstraction and untethered from the language of the claims all but ensures that the exceptions to Sections 101 swallow the rule,” our intrepid appellate panel blows right past that warning. It found that the claims were directed at, in their words, “the abstract idea of using a marking affixed to the outside of a mail object to communicate information about the mail object, i.e., the sender, recipient and contents of the mail object.”

Still don't know what's “abstract” about marking the outside (do abstract ideas even have outsides) of a physical object to communicate tangible information, such as sender, recipient and contents, about the physical object? I still don't either—but let's continue to move on.

The court's logical gymnastics continued when faced with some of the real-world, concrete results of Secured Mail's innovations, like increased efficiency. Said the court: “The fact that [a sender-generated unique identifier] can be used to make a process more efficient, however, does not necessarily render an abstract idea less abstract.”

Wait. What? Take a minute to let that sink in. A process deemed to describe nothing more than an abstract idea (e.g., something like “the quantity of four”) can be more or less efficient? How can that be, when (memo to judges) efficiency is itself an expression of one of the qualitative metrics that are applied to tangible processes that can be observed and measured?

But when faced with a fact-based hurdle to judicially revoking a lawfully granted property right —i.e., a hurdle like the claimed use of a physical two-dimensional barcode known as a QR code—the court's reasoning becomes even more bizarre:

“The QR Code patents fare no better,” say the judges. “The claims of these patents provide a method whereby a barcode is generated, affixed to a mail object, and sent through the mail system. Then, upon receipt, the barcode is scanned, and data corresponding to the sender is sent to the recipient over the network and displayed on the recipient's device.”

Really? Do none of the following steps, derived directly from the Federal Circuit's above description, lend tangibility to the underlying invention? Generating a barcode; affixing the barcode to a mail object; sending that object through the mail system; receiving the object; scanning the barcode; establishing correspondence of the data generated by the scan to a particular sender; sending that data to a particular recipient; over a network; and, finally, displaying that data on a device.

Wow. My hat is off to the genius who devised (because we can't say invented) an abstract concept with NINE such concrete steps. That has to be hard to do.

Surely these claims could be saved at step two of the Alice test, however. This is the step where the courts must diligently search for at least one inventive step. And among the nine steps listed above that pertain solely to one subset of the claims of these seven patents, one would expect to certainly see at least one inventive step, right?

Not according to our esteemed panel. Nothing inventive to see here, folks, move along.

Apparently, to follow the Federal Circuit's Red Queen logic, people were at one point sending mail not using the claimed method, but now they are sending mail using at the very least a close approximation of the claimed method—all without any innovation by anyone. The new method must have simply appeared out of nowhere. Creatio ex nihilo.

When I pointed this out to a colleague, he opined that perhaps it wasn't creatio ex nihilo exactly, but rather an immaculate conception. I like that explanation better as, compared to this Federal Circuit ruling, at least it offers some way of explaining the new method's appearance—namely, that there was a prior inventor, who was God, and his invention anticipates these claims.

Which leads me to the next incomprehensible aspect of this ruling: the incredible, and inexcusable, conflation of all the patentability statutes into one. I refer to the misuse of Section 101 law on eligibility to rule on other legal standards directed to patentability and codified under separate statutes, such as 35 U.S.C. Sections 102 and 103.

According to the Federal Circuit in this case, “The district court decision has pages analyzing the individual claim elements concluding that the claims are 'replete' with routine steps.'” Even if this is true, what does it have to do with eligibility? If the steps of the claims are all as routine as they have been depicted—and they obviously weren't to the patent examiners who issued the patents—then Sections 102 and 103, which address whether or not patent claims are novel (or new) and nonobvious (to someone familiar with the technology) and were specifically drafted by Congress to deal with exactly that issue, should be the governing law here.

Why would the courts misuse Section 101 this way? Perhaps it is because Sections 102 and 103 require the collection, examination and weighing of actual evidence. And work like that is not going to clear a court's docket of complex patent cases—all brought by patent owners with the audacity to try to enforce their rights nearly—as quickly and easily as a declaration of ineligibility as a “matter of law” before the case even begins.

A cynical view, perhaps. But it certainly doesn't vitiate the analysis above. Nor does it diminish the devastating impact of the current patent eligibility jurisprudence on the American patent system.

Need evidence of that impact? A 2017 U.S. Chamber of Commerce report on the strength of national patent systems around the world ranked the previously-No. 1-ranked U.S. patent system in 10^th place now—tied, it seems, with Hungary.

Hungary.

Oh, well—I guess it's fitting that we are now tied with a country named whose name invokes an abstract idea.

Brad Sheafe is chief intellectual property officer at the patent transaction and advisory firm Dominion Harbor Enterprises.

“It would be so nice if something made sense for a change.” ― Lewis Carroll, Alice in Wonderland

The more you examine the Court of Appeals for the Federal Circuit's recent decision in Secured Mail Solutions v. Universal Wilde, which upheld the district court's ruling that Secured Mail's seven asserted patents were ineligible for patenting under 35 U.S.C. Section 101, the more you find its logic curiouser and curiouser, as Lewis Carrol's Alice might have put it. These Secured Mail patents all address tracking mail through an encoded marking, e.g., a barcode, QR code or URL, on the outside of a mailer which is intended to provide information to the recipient about the contents and the sender.

To nonjudicial eyes—including the expert eyes of highly-trained patent examiners at the U.S. Patent and Trademark Office (USPTO)—Secured Mail's patents appear to describe something practical and useful, an innovation the likes of which the patent system was designed to protect. But to the esteemed judges of the Federal Circuit hearing the Secured Mail case, there was not a single thing even eligible for patent protection in these patents, let alone patentable.

To reach this strange decision the Federal Circuit judges used the Alice test—not Lewis Carroll's Alice, but one based on similar illogic)—which is derived from the Alice Corp. v. CLS Bank International case and is the type of analytical guide intended to help in the application of case law to the actual facts of a given case. While the need for such analytical guides spotlights the often-convoluted nature of what jurists write, they can often be helpful to practitioners. But not always, for in this case, the two-step Alice test has only served to make bad law even worse.

Indeed, in the hands of the Federal Circuit, the Alice test has already condemned dozens of issued patents containing hundreds of claims, each representing a property right duly issued by the U.S. government and paid for by the applicant in the form of research and development costs as well as patent application fees. In the Secured Mail case, the Federal Circuit continued, a la Alice's trip to Wonderland, down that rabbit hole, the bottom of which in this case unfortunately contains nothing but the property rights they have stripped from patent owners.

In the application of step one of the Alice test to the Secured Mail case, the court must, to quote the Federal Circuit opinion, “ascertain whether the claims are directed to ineligible subject matter.” In tackling this first step, the district court had determined that the claims of all seven of the asserted patents “are directed to the abstract idea of communicating information about a mail object by use of a marking.”

Let's take a time out right there: What is “abstract” about communicating tangible information by physically marking a physical object—i.e., an old-fashioned piece of snail mail?

You don't know? Me, either—but let's move on.

Despite some lip service to Enfish v. Microsoft, another Federal Circuit case dealing with the limits of subject matter eligibility which cautioned that “describing the claims at such a high level of abstraction and untethered from the language of the claims all but ensures that the exceptions to Sections 101 swallow the rule,” our intrepid appellate panel blows right past that warning. It found that the claims were directed at, in their words, “the abstract idea of using a marking affixed to the outside of a mail object to communicate information about the mail object, i.e., the sender, recipient and contents of the mail object.”

Still don't know what's “abstract” about marking the outside (do abstract ideas even have outsides) of a physical object to communicate tangible information, such as sender, recipient and contents, about the physical object? I still don't either—but let's continue to move on.

The court's logical gymnastics continued when faced with some of the real-world, concrete results of Secured Mail's innovations, like increased efficiency. Said the court: “The fact that [a sender-generated unique identifier] can be used to make a process more efficient, however, does not necessarily render an abstract idea less abstract.”

Wait. What? Take a minute to let that sink in. A process deemed to describe nothing more than an abstract idea (e.g., something like “the quantity of four”) can be more or less efficient? How can that be, when (memo to judges) efficiency is itself an expression of one of the qualitative metrics that are applied to tangible processes that can be observed and measured?

But when faced with a fact-based hurdle to judicially revoking a lawfully granted property right —i.e., a hurdle like the claimed use of a physical two-dimensional barcode known as a QR code—the court's reasoning becomes even more bizarre:

“The QR Code patents fare no better,” say the judges. “The claims of these patents provide a method whereby a barcode is generated, affixed to a mail object, and sent through the mail system. Then, upon receipt, the barcode is scanned, and data corresponding to the sender is sent to the recipient over the network and displayed on the recipient's device.”

Really? Do none of the following steps, derived directly from the Federal Circuit's above description, lend tangibility to the underlying invention? Generating a barcode; affixing the barcode to a mail object; sending that object through the mail system; receiving the object; scanning the barcode; establishing correspondence of the data generated by the scan to a particular sender; sending that data to a particular recipient; over a network; and, finally, displaying that data on a device.

Wow. My hat is off to the genius who devised (because we can't say invented) an abstract concept with NINE such concrete steps. That has to be hard to do.

Surely these claims could be saved at step two of the Alice test, however. This is the step where the courts must diligently search for at least one inventive step. And among the nine steps listed above that pertain solely to one subset of the claims of these seven patents, one would expect to certainly see at least one inventive step, right?

Not according to our esteemed panel. Nothing inventive to see here, folks, move along.

Apparently, to follow the Federal Circuit's Red Queen logic, people were at one point sending mail not using the claimed method, but now they are sending mail using at the very least a close approximation of the claimed method—all without any innovation by anyone. The new method must have simply appeared out of nowhere. Creatio ex nihilo.

When I pointed this out to a colleague, he opined that perhaps it wasn't creatio ex nihilo exactly, but rather an immaculate conception. I like that explanation better as, compared to this Federal Circuit ruling, at least it offers some way of explaining the new method's appearance—namely, that there was a prior inventor, who was God, and his invention anticipates these claims.

Which leads me to the next incomprehensible aspect of this ruling: the incredible, and inexcusable, conflation of all the patentability statutes into one. I refer to the misuse of Section 101 law on eligibility to rule on other legal standards directed to patentability and codified under separate statutes, such as 35 U.S.C. Sections 102 and 103.

According to the Federal Circuit in this case, “The district court decision has pages analyzing the individual claim elements concluding that the claims are 'replete' with routine steps.'” Even if this is true, what does it have to do with eligibility? If the steps of the claims are all as routine as they have been depicted—and they obviously weren't to the patent examiners who issued the patents—then Sections 102 and 103, which address whether or not patent claims are novel (or new) and nonobvious (to someone familiar with the technology) and were specifically drafted by Congress to deal with exactly that issue, should be the governing law here.

Why would the courts misuse Section 101 this way? Perhaps it is because Sections 102 and 103 require the collection, examination and weighing of actual evidence. And work like that is not going to clear a court's docket of complex patent cases—all brought by patent owners with the audacity to try to enforce their rights nearly—as quickly and easily as a declaration of ineligibility as a “matter of law” before the case even begins.

A cynical view, perhaps. But it certainly doesn't vitiate the analysis above. Nor does it diminish the devastating impact of the current patent eligibility jurisprudence on the American patent system.

Need evidence of that impact? A 2017 U.S. Chamber of Commerce report on the strength of national patent systems around the world ranked the previously-No. 1-ranked U.S. patent system in 10^th place now—tied, it seems, with Hungary.

Hungary.

Oh, well—I guess it's fitting that we are now tied with a country named whose name invokes an abstract idea.

Brad Sheafe is chief intellectual property officer at the patent transaction and advisory firm Dominion Harbor Enterprises.