Table of Contents

Statutory Subject Matter

Fed. Cir.: Amdocs network monitoring patents eligible under Alice (posted 11/02/16)

In Amdocs v. Openet Telecom, the Federal Circuit held that patents related to a distributed system for collecting network data for billing was patent eligible under § 101 because the distributed nature of the data enhancement step represented an improvement over prior art and therefore represented an unconventional technical solution.

~UPDATED~ Openet petitioned for En Banc Rehearing and this was followed by an Amicus Brief by the Internet Association and the Computer & Communications Industry Association.

The petition raised the following two questions for consideration:

  1. Can features disclosed in the specification but not claimed by a patent provide the inventive concept for the second step of the Alice/Mayo framework?
  2. Under the two-step Alice/Mayo framework, can a court properly determine whether a claim contains an “inventive concept” without first fully evaluating whether and to what extent the claim is directed to an abstract idea?

Procedural background

In 2014, the Federal Circuit issued a previous opinion in Amdocs (Israel) Limited v. Openet Telecom, Inc. which resulted in remand to the the district court. Since that decision, the Supreme Court issued its infamous Alice decision after Openet, with the case on remand from the initial Federal Circuit decision that the claims, moved for judgement of invalidity under Alice, which the district court granted. The panel majority, Judges Newman and Plager, reversed and remanded on all four patents at issue; Judge Reyna dissented.


The Court held that “a search for a single test or definition [of 'abstract idea'] int he decided cases concerning § 101 from this court, and indeed from the Supreme Court, reveals that at present there is no such single, succinct, usable definition or test. [. . .] Instead of a definition, then, the decisional mechanism courts now apply is to examine earlier cases in which a similar or parallel descriptive nature can be seen—what prior cases were about, and which way they were decided.” The court then proceeded to undertake a review of other cases and found the following:

  • With respect to '065 patent, “computer code for using the accounting information with which the first network accounting record is correlated to enhance the first network accounting record” is not abstract because the word, “enhance” was construed as dependent upon the invention's distributed architecture, where “distributed” means that the network usage records are processed close to their sources before being transmitted to a centralized manager.“ The court reasoned that this is not abstract because the distributed enhancement was a critical advancement over the prior art and therefore constituted an unconventional technological solution. The remaining broad claims of the other three patents were held to be patent eligible for similar reasons.


Judge Rayna dissented, arguing, that the majority did not properly follow the procedure outlined in Alice, that the use of a “distribution architecture” is insufficient to satisfy Alice step two, and was improperly imported to the claims from the specification when it was not explicitly present in the claims.

Oral Hearing

In oral arguments a three-judge panel including judges Newman, Rayna, and Plager heard arguments that a software invention relating to collecting and organizing information from a computer network is an abstract idea or not. One of the judges (either Plager or Rayna) appeared to focus on what an abstract idea is–whether everything is “abstract” under Alice, while Judge Newman appeared to focus on preemption. The patent holder argued that the invention is tied to physical, concrete objects, and therefore is not abstract, stating, “we have left our minds. We have left the realm of just general concepts or ideas and now we are talking about something that really exists in the real world in a geographically distributed architecture.”

Fed. Cir. suggests eligible under § 101 if patentable under §§ 102/103 (posted 07/31/16)

On June 27, the Federal Circuit, BASCOM Global Internet Services, Inc. v. AT&T Mobility, LLC, issued another opinion interpreting Alice, Mayo, and now Enfish, in the field of computer software, vacating the district court's dismissal, and remanding to the lower court for further proceedings. In this case, the invention relates to a method to provide filtering internet requests at an ISP, where the filtering is customized for the particular user, as determined by a sign-in process.

The court addressed step 2 of the 2-step analysis outlined in Mayo without resolving step 1. Stated the court (internal citations and quotes omitted):

This case, unlike Enfish, presents a close call about how to characterize what the claims are directed to. The Enfish claims, understood in light of their specific limitations, were unambiguously directed to an improvement in computer capabilities. Here, in contrast, the claims and their specific limitations do not readily lend themselves to a step-one finding that they are directed to a nonabstract idea. We therefore defer our consideration of the specific claim limitations’ narrowing effect for step two.

Fed. Cir. criticized the District court's step 2 analysis of the claim limitations, stating (internal cites and quotes omitted):

In light of Mayo and Alice, it is of course now standard for a § 101 inquiry to consider whether various claim elements simply recite well-understood, routine, conventional activities. The district court's analysis in this case, however, looks similar to an obviousness analysis under 35 U.S.C. § 103, except lacking an explanation of a reason to combine the limitations as claimed. The inventive concept inquiry requires more than recognizing that each claim element, by itself, was known in the art. As is the case here, an inventive concept can be found in the non-conventional and non-generic arrangement of known, conventional pieces.”

Jude Newman's Concurrence

Finally, Judge Newman’s concurs in result, but makes a forceful argument that, in order to resolve the issue presented in this case as to patent eligibility, you need to resolve patentability, and in such cases, the lower courts should litigate both eligibility and patentability together:

When evidence of patentability is needed or presented to resolve a challenge to eligibility of claims to a new method . . . the district court and the parties should have the flexibility to resolve patentability at this threshold. If the claims are unpatentable, any issue of abstractness, however defined, is mooted. And if the subject matter is patentable, it is not an abstract idea. We should clarify that such expediency is an available response to challenges on the ground of abstract idea.

Fed. Cir. reverses 101 invalidity on "self referential database" (posted 05/17/16)

On May 12, 2016, in Enfish v. Microsoft Corp., the Fed. Cir. reversed a district court ruling of invalidity under § 101 of a claim directed to a self referential database.

§ 101 eligibility - Key Holdings

  • “We . . . see no reason to conclude that all claims directed to improvements in computer-related technology, including those directed to software, are abstract and necessarily analyzed at the second step of Alice, nor do we believe that Alice so directs.”
  • “[t]he first step in the Alice inquiry . . . asks whether the focus of the claims is on the specific asserted improvement in computer capabilities . . . or, instead, on a process that qualifies as an “abstract idea” for which computers are invoked merely as a tool.”

The Fed. Cir. held that, in finding that Enfish's claims were directed simply to “the concept of organizing information using tabular formats”, the district court oversimplified the self-referential component of the claims and downplayed the invention's benefits. Contrasting the facts of this case with Versata Development Group v. SAP America, the court rejected the argument that the claims are doomed under Alice because the invention can run on a general-purpose computer. For similar reasons, the court rejected the idea that because the improvement is not defined by reference to “physical” components, the claims are invalid under Alice, refusing to resurrect the bright-line machine-or-transformation test of Bilski.

Benefits of the Invention: The court, in several places and in particular in oral arguments expounded on the benefits the invention brings to the art. Stated the court: “Moreover, our conclusion that the claims are directed to an improvement of an existing technology is bolstered by the specification's teachings that the claimed invention achieves other benefits over conventional databases, such as increased flexibility, faster search times, and smaller memory requirements. [. . .] In finding that the claims were directed simply to 'the concept of organizing information using tabular formats,' . . . the district court oversimplified the self-referential component of the claims and downplayed the invention's benefits.”

The opinion refers to a large extent to points made in oral arguments:

~NOTEYELLOW~ This case also touched on 112 means+function definiteness. See means-plus-function

Delaware rejects Alice arguments (posted 04/15/16)

In a pair of cases, the U.S. District court for Delaware rejected defendant's arguments that patent claims pertaining to network technologies were invalid under Alice.

SRI's claim 1 of U.S. Patent 6,711,615:
1. A computer-automated method of hierarchical event monitoring and analysis within an enterprise network comprising:

deploying a plurality of network monitors in the enterprise network;

detecting, by the network monitors, suspicious network activity based on analysis of network traffic data selected from one or more of the following categories: {network packet data transfer commands, network packet data transfer errors, network packet data volume, network connection requests, network connection denials, error codes included in a network packet, network connection acknowledgements, and network packets indicative of well-known network-service protocols};

generating, by the monitors, reports of said suspicious activity; and

automatically receiving and integrating the reports of suspicious activity, by one or more hierarchical monitors.

Network Congestion claim 1 of U.S. Patent 6,826,620:
1. A method for alleviating congestion in a communication network, the communication network enabling the flow of data to and from a plurality of end user devices that are connected to the network through a plurality of communication devices, the method comprising the steps of:

monitoring data flows to and from the plurality of end user devices for indications of congestion; and

controlling the data rate of at least one end user device in response to said congestion indications.

In SRI International, Inc. v. Cisco Systems Inc., the Delaware district court held that a patent claiming automated monitoring of a network. Quoting DDR 1), Judge Robinson held, “the claims (informed by the specification) must describe a problem and solution rooted in computer technology, and the solution must be (1) specific enough to preclude the risk of pre-emption, and (2) innovative enough to 'override the routine and conventional' use of the computer.” Judge Robinson rejected Cisco's argument that the claims are directed to the abstract idea “of monitoring and analyzing data from multiple sources to detect broader patterns of suspicious activity,” holding instead that:

“That Cisco can simplify the invention enough to find a human counterpart (or argue that a human could somehow perform the steps of the method) does not suffice to make the concept abstract as '[a]t some level “all inventions . . . embody, use, reflect, rest upon, or apply laws of nature, natural phenomena, or abstract ideas” [quoting Alice quoting Mayo].' [. . .] The claims at bar are, therefore, more complex than 'merely recit[ing] the performance of some business practice known from the pre-Internet world along with the requirement to perform it on the Internet,' and are better understood as being 'necessarily rooted in computer technology in order to overcome a problem specifically arising in the realm of computer networks'” (quoting DDR).

In Network Congestion Solutions, LLC v. United States Cellular Corp (combined with Network Congestion Solutions, LLC v. WideOpenWest Finance, LLC) Judge Robinson again turned to DDR Holdings for guidance, but noted that, “[s]ince providing that explanation, the Federal Circuit has not preserved the validity of any other computer-implemented invention under § 101” and specifically called out Intellectual Ventures 2). Judge Robinson quoted paragraph from Intellectual Ventures in which the Fed. Cir. distinguished that case from DDR, which concluded: “The patent claims [in Intellectual Ventures] do not address problems unique to the Internet, so DDR has no applicability.”

Judge Robinson rejected Defendants' characterization of the claim as directed to the abstract idea of “resource control management, namely managing resource flow by monitoring the usage of a resource, and then controlling that usage based on that monitoring” which defendants analogized to resource management by a TSA worker at an airport checkpoint or factory line supervisor of widgets down a production assembly line. Stated the court:

“The claims address the problem of 'network congestion' in a defined environment, which includes end user devices and communication devices. Although defendants argue that the environment and devices are well known in the prior art and cannot provide an inventive concept, the claim as a whole (the equipment recited and steps claimed) provides the requisite degree of specificity. Moreover, the claims are directed to a solution for a problem that arises in the computer context. This specificity also suffices to alleviate concerns of pre-emption.”

Fed. Cir. toes line with Alice, invalidates groundbreaking non-invasive fetal diagnostics patent (posted 06/18/15)

Subject matter eligibility test under Mayo 3) :

  1. Determine whether the claims at issue are directed to a patent-ineligible concept.
  2. If yes, consider the elements of each claim both individually and “as an ordered combination” to determine whether additional elements “transform the nature of the claim” into a patent-eligible application.

In Ariosa Diagnostics, Inc. v. Sequenom, Inc., the Fed. Cir. held that the application of a discovery that maternal blood plasma contains free copies of fetal DNA is not patentable since the the claims are first held to be drawn to a naturally occurring phenomena, that free fetal DNA is present in maternal plasma or serum, and hence satisfies the first Mayo test that the claim is patent ineligible. Turning then to the second step of the Mayo test, the court determined, “the preparation and amplification of DNA sequences in plasma or serum were well-understood, routine, conventional activities performed by doctors” and hence steps for amplifying and analyzing the fetal DNA “does not result in an inventive concept that transforms the natural phenomenon of cffDNA into a patentable invention.”

N.D. Illinois upholds GUI claims under Alice (posted 05/07/15)

1. A method of placing a trade order for a commodity on an electronic exchange having an inside market with a highest bid price and a lowest ask price, using a graphical user interface and a user input device, said method comprising:

setting a preset parameter for the trade order displaying market depth of the commodity, through a dynamic display of a plurality of bids and a plurality of asks in the market for the commodity, including at least a portion of the bid and ask quantities of the commodity, the dynamic display being aligned with a static display of prices corresponding thereto, wherein the static display of prices does not move in response to a change in the inside market;

displaying an order entry region aligned with the static display prices comprising a plurality of areas for receiving commands from the user input devices to send trade orders, each area corresponding to a price of the static display of prices; and

selecting a particular area in the order entry region through single action of the user input device with a pointer of the user input device positioned over the particular area to set a plurality of additional parameters for the trade order and send the trade order to the electronic exchange.

In Trading Technologies International, Inc. v. CQG, Inc. and CQGT, LLC, the Northern District of Illinois found that claims drawn to a method of providing a graphical user interface (GUI) were patentable under 35 U.S.C. § 101.

The court rejected CQG's argument that the claims recite an abstract idea for placing orders for a commodity on an electronic exchange based on observed market information. Specifically, CQG argued that the elements recited in the claims, “merely perform basic functions relating to electronic commodity trading and updating market information using unidentified and generic computer components.”

Stated the court:

Neither the claims of the '304 patent nor the claims of the '132 patent are directed to solely “setting, displaying, and selecting” data or information that is visible on the GUI device. Rather, the claims are directed to solving a problem that existed with prior art GUIs, namely, that the best bid and best ask prices would change based on updates received from the market. There was a risk with the prior art GUIs that a trader would miss her intended price as a result of prices changing from under her pointer at the time she clicked on the price cell on the GUI. The patents-in-suit provide a system and method whereby traders mae playce orders at a particular, identified price level, not necessarily the highest bid or the lowest ask price because the invention keeps the prices static in position, and allows the quantities at each price to change.

Patent invalidations after Alice (01/13/15)

The Bilskiblog by Fendwick & West is reporting on invalidations citing Alice by the Federal Circuit and district courts:

Federal Circuit
Patents Claims
Not invalid 1 1 27
Invalid 6 12 344
District Circuit
Patents Claims
Not invalid 11 20 535
Invalid 29 56 1488

At the Patent Office's Technology Center 3600, which covers finance, banking, health care, insurance, incentive programs and couponing, pricing, and business administration, “the allowance and issuance rate . . . has dramatically plummeted from about 47% pre-Alice to about 3.6% post-Alice.”

Writing Bilskiblog, author Robert R. Sachs further found:

“While business method patents (23) constituted the majority of the patents that were invalidated, the types of technologies ranged widely, including 3D computer animation (2), digital image management (7), document management (10), and medical records (2), database architecture (2), and networking (4). This suggests that the courts are aggressively expanding the zone of “abstract ideas” from the fundamental “building blocks” of “human ingenuity” that the Supreme Court has focused on in Alice, to just about any technological field.”

Sachs criticized the courts, led by the Federal Circuit, for ignoring or merely giving lip service preemption analysis, and relying on doctrines, such as the “mental steps” doctrine, which the Supreme Court never specifically endorsed.

N. D. Cal. interprets Alice (posted 01/06/15)

In Bascom Research LLC v. LinkedIn Corp. and Bascom Research LLC v. Facebook, Inc. (Opinion), Judge Illston of the Northern District of California federal court determined that a method and system to enable access to a document object (e.g., web pages) by allowing users to create link relationships between it and other document objects was directed to an abstract idea and therefore non-statutory subject matter. Stated the court (internal citations and quotations omitted):

Bascom’s patents similarly describe “an abstraction” having no particular concrete or tangible form. Allowing users to generate relationships between document objects and storing those relationships separately from the document objects simply describes the abstract idea of creating, storing and using relationships between objects. As defendants illustrate at length, the concept of establishing and using relationships between documents is a common, age-old practice. Courts have found similar “commonplace and time-honored practices” to be abstract ideas.

[. . .]

Notably, the concept of establishing, storing and using associations between documents can also be performed mentally. The Supreme Court and the Federal Circuit have generally considered such “mental processes” to be unpatentable. Bascom counters that its claims cannot be performed mentally because they require a computer network. However, “merely requiring generic computer implementation fails to transform that abstract idea into a patent-eligible invention.”

The Court concludes that Bascom’s patents are comparable to other computer-based patents involving the creation and organization of data that have been invalidated after Alice. Establishing relationships between document objects and making those relationships accessible is not meaningfully different from classifying and organizing data. In Digitech Image Technologies, LLC v. Electronics for Imaging, Inc., the Federal Circuit invalidated a patent describing a “device profile” comprised of two sets of data (color information and spatial information) used to render a digital image. The court found that the method described in the patent claims was an abstract idea “because it describes a process of organizing information through mathematical correlations and is not tied to a specific structure or machine.” “Without additional limitations, a process that . . . manipulate[s] existing information to generate additional information is not patent eligible.” Even Helios, upon which Bascom relies, suggested that the claims at issue may have described an abstract idea by encompassing “the ubiquitous use of the Internet or computers generally.”

Federal Circuit Limits Alice (posted 01/04/15)

In a panel decision of the Federal Circuit in DDR Holdings v. National Leisure Group et al., Judge Chen, joined by Judge Wallach, distinguished from Ultramercial and Alice, DDR's claims to a hybrid web page having the look and feel of a host web site with content of a 3rd party merchant website, stating:

“. . . these claims stand apart because they do not merely recite the performance of some business practice known from the pre-Internet world along with the requirement to perform it on the Internet. Instead the claimed solution is necessarily rooted in computer technology in order to overcome a problem specifically arising in the realm of computer networks.”

Judge Mayer dissented, arguing that the claims, “simply describe an abstract concept–that an online merchant's sales can be increased if two web pages have the same 'look and feel'–and apply that concept using a generic computer.” Mayer further stated:

“DDR’s patents are long on obfuscation but short on substance. Indeed, much of what they disclose is so rudimentary that it borders on the comical. For example, the patents explain that two web pages are likely to look alike if they are the same color, have the same page layout, and display the same logos. The recited computer limitations, moreover, are merely generic. The claims describe use of a “data store,” a “web page having a link,” and a “computer processor,” all conventional elements long-used in e-commerce. Because DDR’s claims, like those at issue in Alice Corporation v. CLS Bank International, 'simply instruct the practitioner to implement [an] abstract idea . . . on a generic computer,' they do not meet section 101” (internal citations omitted).

Delaware district judge amps up Alice

Representative Claim:

1. A distributed system for accessing and distributing electronic documents using electronic document references, the distributed system comprising:

a) a database of electronic documents and electronic document references stored in a first memory having a first capacity, each electronic document having an associated document reference identifying a location of the electronic document in the first memory, each electronic document having a first memory requirement for storage greater than a second memory requirement for storage of the associated electronic document reference;

b) a distributed document handling subsystem coupled to the database, the document handling subsystem including a transceiver for transmitting an electronic document reference without its associated electronic document at a first location and receiving the electronic document reference without its associated electronic document at a second location, the distributed document handling subsystem responding to receipt of the electronic document reference by producing a copy of the associated electronic document at a third location;

c) a portable electronic document reference transport device for transporting the electronic document reference without its associated electronic document, the portable electronic document reference transport device being physically separate from the first memory and the distributed document handling subsystem, the portable electronic document reference transport device including a second memory for storing the electronic document reference without its associated electronic document, the second memory having a capacity significantly less than the capacity of the first memory, the portable electronic document reference transport device including a transceiver for receiving the electronic document reference without its associated electronic document at the first location and transmitting the electronic document reference without its associated electronic document at the second location.

Law360 is reporting that a Delaware district judge (Judge Robinson) invalidated on summary judgment two patents as “abstract” in accordance with Alice. The claims are directed to a method for accessing documents using a memory-constrained device. This is the first time that I’ve seen a claim to something other than some business method-like invention invalidated as abstract. The judge dismisses the claims as doing, “nothing more than describe the contours of the cataloging process.” This will possibly be an opportunity for the Federal Circuit to identify the limits of Alice.

Ultramercial III: Federal Circuit Toes the Line (11/14/14)

~UPDATED~ Ultramercial seeks en banc review.

In the CAFC’s second look at Ultramercial v. Hulu this time with the benefit of Allice v. CLS Bank, the Court held that an 11-step method of forcing users to view a commercial in order to access media content is a non-statutory abstract idea.

Stated the court:

“. . . we do not purport to state that all claims in all software-based patents will necessarily be directed to an abstract idea. Future cases may turn out differently. But here, the '545 claims are indeed directed to an abstract idea, which is, as the district court found, a method of using advertising as an exchange or currency. We do not agree with Ultramercial that the addition of merely novel or non-routine components to the claimed idea necessarily turns an abstraction into something concrete. In any event, any novelty in implementation of the idea is a factor to be considered only in the second step of the Alice analysis.”

The court further stated:

“None of the eleven individual steps, viewed ‘both individually and “as an ordered combination,”’ transform the nature of the claim into patent-eligible subject matter. [citation omitted.] The majority of those steps comprise the abstract concept of offering media content in exchange for viewing an advertisement. Adding routine additional steps such as updating an activity log, requiring a request from the consumer to view the ad, restrictions on public access, and use of the Internet does not transform an otherwise abstract idea into patent-eligible subject matter. Instead, the claimed sequence of steps comprise only ‘conventional steps, specified at a high level of generality,’ which is insufficient to supply an ‘inventive concept.’”

In Judge Mayer’s concurrence, he emphasized, “. . . Alice Corporation v. CLS Bank International. . . , for all intents and purposes, set out a technological arts test for patent eligibility. Because the purported inventive concept in Ultramercial’s asserted claims is an entrepreneurial rather than a technological one, they fall outside section 101” (emphasis added).

Federal Circuit applies Benson, Alice, in holding bingo patent non-statutory (08/27/14)

1. A system for managing a game of Bingo which comprises:

(a) a computer with a central processing unit (CPU) and with a memory and with a printer connected to the CPU;

(b) an input and output terminal connected to the CPU and memory of the computer; and

(c) a program in the computer enabling:

(i) input of at least two sets of Bingo numbers which are preselected by a player to be played in at least one selected game of Bingo in a future period of time;

(ii) storage of the sets of Bingo numbers which are preselected by the player as a group in the memory of the computer;

(iii) assignment by the computer of a player identifier unique to the player for the group having the sets of Bingo numbers which are preselected by the player wherein the player identifier is assigned to the group for multiple sessions of Bingo;

(iv) retrieval of the group using the player identifier;

(v) selection from the group by the player of at least one of the sets of Bingo numbers preselected by the player and stored in the memory of the computer as the group for play in a selected game of Bingo in a specific session of Bingo wherein a number of sets of Bingo numbers selected for play in the selected game of Bingo is less than a total number of sets of Bingo numbers in the group;

(vi) addition by the computer of a control number for each set of Bingo numbers selected for play in the selected game of Bingo;

(vii) output of a receipt with the control number, the set of Bingo numbers which is preselected and selected by the player, a price for the set of Bingo numbers which is preselected, a date of the game of Bingo and optionally a computer identification number; and

(viii) output for verification of a winning set of Bingo numbers by means of the control number which is input into the computer by a manager of the game of Bingo.

In Planet Bingo v. VKGS, the Federal Circuit panel (Hughes, Taranto, Bryson) reviewed and unanimously upheld a lower court's determination on summary judgment that a bingo management system is “abstract.” Among the justifications for this ruling:

  • “The district court correctly concluded that managing the game of bingo 'consists solely of mental steps which can be carried out by a human using pen and paper.'”
  • Like the claims at issue in Benson, not only can these steps be 'carried out in existing computers long in use,' but they also can be 'done mentally.' 409 U.S. at 67.“
  • The claims are similar to the claims at issue in Bilski v. Kappos and Alice, which the Supreme Court held were directed to abstract ideas.
    • Managing a game of bingo “is similar to the kind of “organizing human activity” at issue in Alice.

In response to Planet Bingo's argument that in real world use thousands if not millions of preselected Bingo numbers are handled by the claimed computer program making it impossible for the invention to be carried out manually, the court stated:

“But the claimed inventions do not require as much. At most, the claims require 'two sets of Bingo numbers,' 'a player,' and 'a manager.' We need not, and do not, address whether a claimed invention requiring many transactions might tip the scales of patent eligibility, as the claims fall far short of capturing an invention that necessarily handles 'thousands, if not millions' of bingo numbers or players.” (Emphasis added and internal citations removed.)

Supreme Court holds its "nose of wax" and extends "Abstract Idea" to systems (06/19/14)

In Alice Corporation v. CLS Bank, the Supreme Court held that a method of mitigating settlement risk, including steps of creating shadow records for each counterparty in a transaction, obtaining start-of-day balances based on real-world accounts, adjusting the shadow records as transactions are entered, and issuing end-of-day instructions to exchange institutions, using a computer, or a computer system for implementing the method, is an “abstract idea” and therefore not patentable under 35 U.S.C. § 101. The Court further held that,” [t]his court has long 'warn[ed] . . . against' interpreting § 101 'in ways that make the patent eligibility “depend simply on the draftsman's art.”'“ Quoting Mayo quoting Flook, “The concept of patentable subject matter under §101 is not 'like a nose of wax, which may be turned and twisted in any direction. . . .' Holding that the system claims are patent-eligible would have exactly that result.”

Sotomayor, joined by Gisburg and Breyer, concurred but focused on the invention being related specifically to business-methods, which they characterize as “processes for organizing human activity” which “[n]ever had been patentable.”

Fed. Cir. muddles 101 analysis

In CLS Bank Internat'l v. Alice Corp., the Fed. Cir. issued seven different opinions with the majority opinion by Lourie, Dyk, Prost, Reyna, and Wallach holding that Section 101 subject matter determinations must be made on a case-by-case basis. Stated the court: “Bright line rules may be simple to apply, but they are often impractical and counterproductive when applied to § 101” (Op. p. 17). Instead, the court held that the following analysis should be followed:

  1. First, determine whether the claimed invention fits within one of the four statutory classes set out in § 101.
  2. If so, then do any of the judicial exceptions apply, one of which is “abstractness.” The court acknowledges that “deciding whether or not a particular claim is abstract can feel subjective and unsystematic, and the debate often trends toward the metaphysical, littered with unhelpful analogies and generalizations” but explains “abstractness” only by way of the examples presented by precedents.
  3. Next analyze for preemption: With the pertinent abstract idea identified, the balance of the claim can be evaluated to determine whether it contains additional substantive limitations that narrow, confine, or otherwise tie down the claim so that, in practical terms, it does not cover the full abstract idea itself.

In her dissent, J. Newman found:

In deciding to rehear the patent dispute between CLS Bank and Alice Corporation, the en banc court undertook to remedy distortions flowing from inconsistent precedent on section 101. This remedial effort has failed. This failure undoubtedly reflects the difficulty of the question; I suggest that it also demonstrates that an all-purpose bright-line rule for the threshold portal of section 101 is as unavailable as it is unnecessary. Experience over two centuries of United States patent law supports this conclusion.

BPAI judges "storage medium" per say statutory (old news)

In In Ex Parte Hu, rendered February of 2012, the BPAI held that a claim to a “storage medium” is per se statutory, even without “non-transient” verbiage. Stated the panel:

“We find that the computerreadable storage medium is directed to a tangible storage medium, which can be read by a computer. While a computer-readable medium is broad enough to encompass both tangible media that store data and intangible media that carry a transitory, and propagating signal containing information, a computer readable storage

medium is distinguished therefrom as it is confined to tangible media for storing data.

BPAI "Bilskis" Apparatus and Beauregard claims (01/27/10)

Claim 14. A system for identifying one or more mean items for a plurality of items, J, each of the items having at least one symbolic attribute having a symbolic value, the system comprising:

a memory for storing computer readable code; and

a processor operatively coupled to the memory, the

processor configured to: compute a variance of the symbolic values of the plurality of items relative to each of the items; and select the at least one mean item having a symbolic value that minimizes the variance.

Claim 19. An article of manufacture for identifying one or more mean items for a plurality of items, J, each of the items having at least one symbolic attribute having a symbolic value, comprising: a computer readable medium having computer readable program] code embodied thereon, the computer readable program code comprising:

a step to compute a variance of the symbolic values of the plurality of items relative to the symbolic value of each of the items; and

a step to select at least one item that has the symbolic value that minimizes the variance.

In In re Gutta, the BPAI sua sponte rejected claims 14, directed to a system, and claim 19, directed to “an article of manufacture . . . comprising a computer readable medium” under 35 U.S.C. § 101. The BPAI cites Comiskey 4) and Benson 5) for the principle that the scope of §101 is not unlimited. The BPAI then cites Alappat to support the notion that mathematical algorithms are not patentable, and that this exception applies to true apparatus claims 6). In re Johnson 7) is cited for stating, ”Benson . . . applies equally whether an invention is claimed as an apparatus or a process, because the form of the claim is often an exercise in drafting.” The BPAI concludes:

If a claimed machine . . . involves a mathematical algorithm, . . . then we must determine whether the scope of the claimed invention encompasses one of the judicially-created exceptions. This determination of claim scoep requires that we make two inquiries:

(1) Is the claim limited to a tangible practical application, in which the mathematical algorithm is applied, that results in a real-world use (e.g., “not a mere field-of-use label having no significantce”)?

(2) Is the claim limited so as to not encompass substantially all practical applications of the mathematical algorithm either “in all fields” of use of the algorithm or even “only one field?”

In footnote 11, the BPAI notes:

Notwithstanding the court's statement in Nuijten, 500 F.3d at 1356 n.7 (“We have never held that a manufacture is ever required to produce any result.”), if an applicant chooses to claim the manufacture in terms of applying a mathematical algorithm (e.g., Appellants' claim 19), then this two-part inquiry applies to determine if the claim is directed to eligible subject matter under § 101.

The BPAI follows the same logic in rejecting Beauregard style claim 19.

Bilski files for certiorari (01/28/09)

on 01/27/09, Bilski filed for writ of certiorari with the following two questions being presented:

Whether the Federal Circuit erred by holding that a “process” must be tied to a particular machine or apparatus, or transform a particular article into a different state or thing (“machine-or-transformation” test), to be eligible for patenting under 35 U.S.C. § 101, despite this Court’s precedent declining to limit the broad statutory grant of patent eligibility for “any” new and useful process beyond excluding patents for “laws of nature, physical phenomena, and abstract ideas.”

Whether the Federal Circuit’s “machine-or-transformation” test for patent eligibility, which effectively forecloses meaningful patent protection to many business methods, contradicts the clear Congressional intent that patents protect “method[s] of doing or conducting business.” 35 U.S.C. § 273.

Fed. Cir. Revises Comiskey (01/27/09)

In 2007, the Fed. Cir. issued its ruling that mental processes are not patentable. Now, the Fed. Cir., acting en banc, ordered that the original opinion be vacated and a new opinion be issued. The Order affirms the correctness of the original ruling in that “appellate tribunal [is allowed] to affirm an agency on alternative legal grounds or to remand to the agency to consider an alternative ground.” In this case, the BPAI rejected claims on obviousness grounds only, and the BPAI, rather than addressing the obviousness rejection, held that the method claims were non-statutory. Judge Moore, writing for the dissent and joined by Newman and Rader, states,

“In this case, the court declined to address the only ground for rejecting the patent claims decided below and appealed by the parties (§ 103). Instead, the court reached out to decide a new ground of rejection (§ 101), raised sua sponte by the court. The court evaluated both the process and machine claims under its chosen ground, § 101, concluding that the process claims were not directed to patentable subject matter, but that the machine claims, in light of our well-established precedent were directed to patentable subject matter. This resulted in affirming the rejection of the process claims albeit on a different ground and remanding the rejection of the machine claims without ever addressing the obviousness rejection by the PTO. Today, the en banc court vacates the original Comiskey opinion and permits the panel to revise it. The only change the panel makes is to remand the uncontroversial determination that

the machine claims are in fact directed to patentable subject matter. Why remand the machine claims and not the process claims? More importantly, why remand when the PTO already rejected the system claims as obvious. Given that the court has pointed to no flaw in the agency’s obviousness rejection, the court’s decision in Comiskey amounts to a wasteful remand.”

“[The] panel has repudiated controlling precedent of the court and indeed 180 years of practice since the Patent Act of 1839 that had established a strict proscription against a judicial reviewing body of Patent Office decisions playing de novo “examiner”. Instead, the reviewing court has had a limited statutory role that focused upon the rejection that had been made by the Office.

One hundred eighty years ago the Patent Act of 1839 established the ground rules for judicial review of Patent Office denials of patentability. A strict standard was established that the reviewing court should only review the decision below and never on a de novo basis impose a new ground to deny patentability.

In re Bilski decided (11/04/08)

The Fed. Cir. finally handed down its decision in In re Bilski. See the Bilski Page for background information on the case. Stated the court: “The true issue before us then is whether Applicants are seeking to claim a fundamental principle (such as an abstract idea) or a mental process. And the underlying legal question thus presented is what test or set of criteria governs the determination by the Patent and Trademark Office (“PTO”) or courts as to whether a claim to a process is patentable under § 101 or, conversely, is drawn to unpatentable subject matter because it claims only a fundamental principle.”

The Fed. Cir. ruled that, ”[b]ecause the applicable test to determine whether a claim is drawn to a patent-eligible process under § 101 is the machine-or-transformation test set forth by the Supreme Court and clarified herein, and Applicants' claim here plainly fails that test, the decision of the Board is AFFIRMED.“

Bilski's impact in various fields:

Key holdings include:

  1. ”[A] claim is not patent-eligible 'process' if it claims 'laws of nature, natural phenomena, [or] abstract ideas.'“ (Quoting the S.Ct. in Diehr 8).)
  2. ”[W]hile a claim drawn to a fundamental principle is unpatentable, 'an application of a law of nature or mathematical formula to a known structure or process may well be deserving of patent protection.'“ (Quoting Diehr 9) and also citing Mackay Radio 10) with approval.)
  3. “A claimed process is surely patent-eligible under § 101 if: (1) it is tied to a particular machine or apparatus, or (2) it transforms a particular article into a different state or thing.” (Citing Benson 11), Diehr 12), Flook 13), and Cochrane v. Deener 14).)
  • ”[T]he Court explicitly stated in Benson that '[t]ransformation and reduction of an article “to a different state or thing” is the clue to the patentability of a process claim that does not include particular machines'“ (emphasis in original). The Fed. Cir. noted in footnote 11, that “We do not consider the word 'clue' to indicate that the machine-or-implementation test is optional or merely advisory. Rather, the Court described it as the clue, not merely 'a' clue.”
  1. ”[M]ere field-of-use limitations are generally insufficient to render an otherwise ineligible process claim patent-eligible.“ (Citing Diehr 15).)
  2. ”[T]he Freeman-Walter-Abele test“ comprising (1) determining whether the claim recites an “algorithm” within the meaning of Benson, then (2) determining whether that algorithm is “applied in any manner to physical elements or process steps, “is inadequate.” (Citing In re Freeman 16), In re Walter 17), and In re Abele 18).)
  3. ”[T]he 'useful, concrete and tangible result' inquiry is inadequate and reaffirm that the machine-or-transformation test outlined by the Supreme Court is the proper test to apply. (Citing with disapproval State St. Bank & Trust Co. v. Signature Fin. Group 19), In re Alappat 20), and AT&T Corp. v. Excel Commc'ns, Inc. 21).)
  4. There is no technical arts test or mental process test. In re Comiskey does not implicitly apply a new test barring any claim reciting a mental process that lacks significant “mental steps.”
  5. Data gathering or insignificant extra-solution activity does not make an algorithm patentable. (Citing In re Grams 22), In re Meyer 23), In re Schrader 24), and Parker v. Flook 25).)

Precedents cited with approval:

  • Diamond v. Diehr, 450 U.S. 175 (1981) (Diamond_v._Diehr)
  • Parker v. Flook, 437 U.S. 584 (1978) (Parker_v._Flook)
  • Gottschalk v. Benson, 409 U.S. 63 (1972) (Gottschalk_v._Benson)
  • Mackay Radio & Tel. Co. v. Radio Corp. of Am., 306 U.S. 86 (1939)
  • Cochrane v. Deener 94 U.S. 780 (1876)

Precedents cited with disapproval:

  • In re Freeman, 573 F.2d 1237 (CCPA 1978)
  • In re Walter, 618 F.2d 758 (CCPA 1980)
  • In re Abele, 684 F.2d 902 (CCPA 1982)
  • State St. Bank & Trust Co. v. Signature Fin. Group, 149 F.3d 1368 (Fed. Cir. 1998)
  • In re Alappat, 33 F.3d 1526 (Fed. Cir. 1994)
  • AT&T Corp. v. Excel Commc'ns, Inc., 172 F.3d 1352 (Fed. Cir. 1998)

Precedents clarified

  • In re Comiskey, 499 F.3d 13651 (Fed. Cir. 2007)

Fed. Cir. orders en banc rehearing of Bilski (02/22/08)

The Fed. Cir. ordered sua sponte rehearing of In re Bilksi, decided on March 8, 2006 by the BPAI. Bilksi addressed statutory subject matter questions surrounding a patent claiming ”[A] method for managing the consumption risk costs of a commodity sold by a commodity provider at a fixed price“. On October 1, 2007, the case was argued before a panel of the Fed. Cir., but rather than issuing an opinion, the court decided to rehear the case en banc, addressing the following five questions:

  1. Whether claim 1 of the 08/833,892 patent application claims patent-eligible subject matter under 35 U.S.C. § 101?
  2. What standard should govern in determining whether a process is patent-eligible subject matter under section 101?
  3. Whether the claimed subject matter is not patent-eligible because it constitutes an abstract idea or mental process; when does a claim that 2007-1130 - 2 - contains both mental and physical steps create patent-eligible subject matter?
  4. Whether a method or process must result in a physical transformation of an article or be tied to a machine to be patent-eligible subject matter under section 101?
  5. Whether it is appropriate to reconsider State Street Bank & Trust Co. v. Signature Financial Group, Inc., 149 F.3d 1368 (Fed. Cir. 1998), and AT&T Corp. v. Excel Communications, Inc., 172 F.3d 1352 (Fed. Cir. 1999), in this case and, if so, whether those cases should be overruled in any respect?

Signal not patentable (09/30/07)

In In re Petrus Nuijten, the Fed. Cir. affirmed the USPTO rejection of claims directed to a signal, citing O'reilly, et al. v. Morse, et al. 26). More on the Nuijten page.

Mental processes not patentable (09/28/07)

Claim 1: A method for mandatory arbitration resolution regarding one or more unilateral documents comprising the steps of:

enabling a person to enroll or register himself or herself and his or her one or more unilateral documents in a mandatory arbitration system;

providing arbitration language for insertion in the unilateral document wherein the arbitration language provides that any challenge to the unilateral document is to be presented to the mandatory arbitration system for binding arbitration;

enabling a complaintant to submit a request for arbitration resolution;

conducting arbitration resolution;

providing support to the arbitration; and

determining an award or a decision that is final and binding.

In In re Stephen W. Comiskey, 27) claims 1-59 of patent application 09/461,742 were rejected as obvious under § 103 by the Examiner. The BPAI, primarily basing its decision on representative claim 32, affirmed the Examiner's rejection. Rather than address the obviousness issue, the Fed. Cir., found that independent claims 1 and 32 and most of their dependent claims lacked statutory subject matter under § 101. The Fed. Cir. relied on SEC v. Chenery 28) to for the proposition that “a reviewing court can (and should) affirm an agency decision on a legal ground not relied on by the agency if there is no issue of fact, policy, or agency expertise” and so felt justified in initially raising the question statutory subject matter under § 101. With regard to claims 1 and 32, the Fed. Cir. concluded, “Thus, like the claims that the Supreme Court found unpatentable in Benson 29) and Flook 30) and the claims found unpatentable in our own cases, Comiskey’s independent claims 1 and 32 seek to patent the use of human intelligence in and of itself. Like the efforts to patent “a novel way of conducting auctions” which Schrader 31) found to be directed to an abstract idea itself rather than a statutory category, Comiskey’s independent claims 1 and 32 describe an allegedly novel way of requiring and conducting arbitration and are unpatentable.”

~NEW~ (01/27/09): Request for En Banc review denied. Hal Wegner's take: The January 13, 2009, denial of en banc reconsideration of this procedural departure from a 180 year old statutory scheme represents a bold and unprecedented expansion of appellate jurisdiction, i.e., the three-judge panel “rejection” claims as lacking patent-eligibility under 35 USC § 101 where the issue was never raised below.

Yo Ho Ho and a Bottle Of Rum! BPAI finds problems with "Interim Guidelines" (02/19/07)

The BPAI, in Ex Parte Bilski, found that the Interim Guidelines (now incorporated into MPEP 2100) have several problems:

  1. Interim Guidelines are not consistent with case law which states that a series of steps is not necessarily a process under §101.
  2. Interim Guidelines do not provide adequate direction for Examiners on determining whether an invention is an abstract idea, a law of nature, or natural phenomenon.
  3. Interim Guidelines perpetuate the misunderstanding that “transformation” requires transformation of a tangible object or article, contrary to cases that explain that the subject matter can be physical, yet intangible, phenomena such as electrical signals.
  4. Interim Guidelines fail to qualify the general State Street test for patentable subject matter (the “useful, concrete, and tangible result” test) as having exceptions.
  5. Interim Guidelines' definitions of “useful,” “concrete,” and “tangible,” fail to cite any support in cases dealing with patentable subject matter, and are circular and therefore unhelpful.
  6. Interim Guidelines fail to provide any guidance as to how examiners should determine whether the claimed invention preempts an abstract idea, law of nature, or natural phenomenon.

Fortunately, the Interim Guidelines are less binding than the Pirate's Code (see footnote 8 on page 35). Because the claimed method is not tied to a computer or other machine and the only thing transformed are non-physical financial risks, the Board affirmed the Examiner's rejection.

Oral Arguments heard in In re Nuijten (02/06/07)

The PTO rejected a patent application claiming a signal on statutory grounds (35 U.S.C. § 101). Oral Arguments (links below) were heard yesterday.

Watermark signal case to be litigated before Fed Cir (08/11/06)

After being rejected by the Board of Appeals for lack of statutory subject matter under 35 U.S.C. §101, In re Nuijten, No. 06-1301, will be litigated before the Federal Circuit, with arguments to be heard in early 2007. This is a test case for determining whether an embedded signal is patentable.

DDR, 773 F.3d at 1257
792 F.3d 1363
Mayo Collaborative Services v. Prometheus Laboratories, Inc., 566 U.S. _, 132 S. Ct. 1289 (2012) (as cited in Ariosa)
554 F.3d at 977
409 U.S. at 67
33 F.3d at 1542
589 F.2d 1070
8) , 9)
Diamond v. Diehr, 450 U.S. 175, 185 (1981)
Mackay Radio & Tel. Co. v. Radio Corp. of Am., 306 U.S. 86, 94 (1939)
Gottschalk v. Benson, 409 U.S. 63, 70 (1972)
Diamond v. Diehr, 450 U.S. 175, 192 (1981)
Parker v. Flook, 437 U.S. 584, 589 (1978)
94 U.S. 780, 788 (1876)
Diamond v. Diehr, 450 U.S. 175, 191-92 (1981)
573 F.2d 1237 (CCPA 1978)
618 F.2d 758 (CCPA 1980)
684 F.2d 902 (CCPA 1982)
149 F.3d 1368, 1373 (Fed. Cir. 1998)
33 F.3d 1526, 1544 (Fed. Cir. 1994)
172 F.3d 1352, 1357 (Fed. Cir. 1998)
888 F.2d 835, 840 (Fed. Cir. 1989)
688 F.2d 789, 794 (CCPA 1982)
22 F.3d 290, 291 (Fed. Cir. 1994)
437 U.S. 584 (1978)
56 U.S. 62 (1853)
499 F.3d 1365, 84 USPQ2d 1670, 2007 U.S. App. LEXIS 22414
318 U.S. 80 (1943)
Gottschalk v. Benson, 409 U.S. 63, 64 (1972)
Parker v. Flook, 437 U.S. 584 (1978)
In re Schrader, 22 F.3d 290, 295 (Fed. Cir. 1994) (holding when a claim does not invoke a machine, “§ 101 requires some kind of transformation or reduction of subject matter”)