Does Alice Target Patent Trolls?

Abstract

The Supreme Court upended the patent world in the past decade with a series of decisions restricting the scope of patent-eligible subject matter. The culmination of those cases – Alice v. CLS Bank -- has been at the center of a firestorm of controversy in the five years since it was decided. AAs we show in this paper, it has also been the basis of nearly a thousand court decisions. We evaluate how Alice and similar Supreme Court decisions on patentable subject matter have been used in the courts five years in. Using a comprehensive dataset we hand-coded of every district court decision and subsequent appeals to the Federal Circuit involving patentable subject matter, we explore not only how patent owners fare in patentable subject matter cases but how a variety of factors, including industry, the nature of the patent owner, and the judicial venue may influence those results. While we confirm some conventional wisdom, we upend other assumptions common in the legal and policy debates over patent eligible subject matter. In particular, we find that once in court, biotech/life science innovations are more likely to survive patentable subject matter challenges than software/IT innovations. Most surprisingly we find that the entities most likely to lose their patents at this stage are not patent trolls but individual inventors and inventor-started companies. Our findings have important implications for current legislative and judicial disputes over patent reform. As biotech worries about deterrence of new innovation and software worries about patent trolls dominate the debates, we may be ignoring some of the most important effects of Alice.