Earlier this month, Major League Baseball returned to the courtroom to defend itself against a patent that claims to cover dynamic ticketing technology – though MLB argues it only covers an unpatentable abstract ideaAbstract ideas are not patent-eligible subject matter. This judicially developed exclusion was most recently explained by the Supreme Court in Bilski v. Kappos, 2010.. This latest legal battle epitomizes the danger posed by the flood of vague, low-quality patents that are leveraged against businesses each year.
The case was brought by Alan Amron. In April of last year, Amron sued all thirty MLB teams and several major ticketing platforms over technology that prevents fans from using unauthorized screenshots as substitutes for real tickets at ballparks. Amron, who once falsely claimed to have invented the Post-It Note, has sought a whopping $720 million payout on the technology in addition to a $90 million annual royalty for the alleged infringement.
In the Southern District of New York this month, MLB Advanced Media argued that the patent in question fails to meet the two-step test set out in the Supreme Court’s unanimous 2014 ruling in Alice Corp. v. CLS Bank International. The Alice test determines whether a patent’s claims are drawn to an abstract ideaAbstract ideas are not patent-eligible subject matter. This judicially developed exclusion was most recently explained by the Supreme Court in Bilski v. Kappos, 2010. and if so, whether that renders the claim ineligible for patenting. In this case, MLB argues that the ticketing technology is unpatentable, because, as the plaintiff’s own attorneys seem to concede, the patent describes “the abstract ideaAbstract ideas are not patent-eligible subject matter. This judicially developed exclusion was most recently explained by the Supreme Court in Bilski v. Kappos, 2010. of controlling access using changing credentials”—a concept which has already been widely applied in many other practical and business contexts. MLB also argues that the patent relies on vague “functional language,” meaning “the claim is drawn to [an] idea itself rather than how to implement that idea.”
While we await to see the results of MLB’s latest motion to dismiss, it’s clear that Alice is their best defense against patent claims that could cost them millions of dollars in bad-faith legal extractions. However, legislation proposed in the last Congress, the Patent Eligibility Restoration Act (PERA), would reverse the Alice precedent and deny organizations like MLB one of the best recourses they have to defend against patent trolling.
As we’ve discussed on Patent Progress, PERA would broaden the scope of patent-eligible subject matter to include a range of vague and abstract ideas, like mathematical concepts and naturally-occurring phenomena. If enacted, patent trolls would be empowered to assert infringement claims for a wide range of non-specific ideas which use technology—even when that technology is obvious or already applied in other contexts, as is the case with the MLB’s ticketing technology. Lowering the bar for patentability in this manner would result in an explosion of frivolous lawsuits against productive American enterprises like the MLB, burdening innovation in key sectors like tech and entertainment.
Opponents of PERA have warned against exactly this for months. Last year, a coalition of American manufacturers, retailers, and main street businesses (including CCIA) cautioned that “PERA would upend centuries of established law and do serious harm to the American innovation economy.”
As MLB continues to fend off this latest patent trolling attempt, it is a stark reminder that our patent system should support legitimate innovation, not abstract claims asserted for a quick payout. Right now, MLB is experiencing what will happen if the patent system allows and even encourages the granting and abuse of low-quality patents. But our patent system doesn’t have to allow these abuses—and it shouldn’t. Lawmakers should heed the lesson learned here and refrain from advancing PERA in the 119th Congress.
