Eligibility: Example case law

In Travel Sentry, Inc. v. David A. Tropp the Fed. Cir. upheld an Eastern District of New York opinion that a pair of patents owned by David Tropp are ineligible for patenting under Alice. The court rejected Tropp's argument that claim 1 is directed to “novel physical locks with uniform master key (that works with a variety of locks that have different locking mechanisms).” Stated the court:

• News article (paywall) (private cache)
• Blog summary, opinion

In a pair of appeals, Mentone Solutions LLC v. Elo Touch Solutions Inc. and Mentone Solutions LLC v. Digi International Inc. a Federal Circuit panel reversed a holding by J. Stark of Delaware (who was recently named by President Biden to fill a seat on the Federal Circuit) that claim language in a data transmission patent was defective in that the claim language is functional and results oriented and doesn't include an inventive concept.

The district court and appellees argued that claim 5 is “directed to the abstract idea of of receiving a[n] [uplink status flag (USF)] and transmitting data during the appropriate time slots.” The USF defines for each of a set of mobile stations in which of 8 time slots they can upload and download data. Due to a required change-over time between uploading and downloading, the invention provides a shifted USF feature which allows stations to more fully utilize available time slots to improve throughput. The district court held that the shifted uplink status flag combined with the “abstract idea, functional limitations, and anything else” is not significantly more than a claim to the abstract idea. The Federal Circuit disagreed, saying that “claim 5 is directed to a patent-eligible improvement to computer functionality, namely permitting additional multislot configurations for certain classes of mobile stations using extended bandwidth allocation.”

The Federal Circuit further held that

Citations and internal quotes omitted.

• News article (paywall)

In CardioNet v. Infobionic, the Federal Circuit held that performing a mathematical filtering operation on a heartwave to improve the accuracy of a heartweve monitor is abstract undr Alice and is therefore not eligible for patent protection.

The court agreed with InfoBionic that claim 20 is directed to the abstract idea of filtering data. The court further dismissed CardioNet's contention that claim 20 is tied to a “specific improvement” in cardiac monitors but instead is “simply [the] use the computer 'as a tool' to implement an abstract idea.” The court was similarly unimpressed with CardioNet's argument that human cannot mentally perform the T wave filter calculations and that claim 20 is similar to the claims held nonabstract in CardioNet v. InfoBionic ¹⁾. However, the Court distinguished that prior case because in that case, there was no evidence that cardiac arrythmia detection by the claimed method was previously used whereas here, “InfoBionic pointed to evidence that the use of a filter to perform mathematical functions was not a new activity.”

The court parted ways with the district court's determination “that claim 20 recites an inventive concept because it satisfies the machine-or-transformation test.” Quoting the Surpeme Court's Bilski decision that, “the machine-or-transformation test is a 'useful and important clue' for determining patent eligibility, but not dispositive,” the court concluded that “although claim 20 is technically tied to a machine (a cardiac apparatus) its ultimate focus is to 'preprocess[] a cardiac signal' using a 'T wave filter,' which . . . is an abstract idea.”

Opinion: Had the claims further included a step of detecting a heart rate based on the filtered signal, the court may have found a different conclusion. In that case, the claim would have resembled the ones in Diamond v. Diehr which was discussed in TDE Petroleum Data Solutuions and Thales Visionix.

• News article (paywall)

Decided April 30, 2020: In Uniloc USA Inc. et al. v. LG Electronics USA Inc. et al., the Federal Circuit reversed a district court ruling that claims for a Bluetooth connection technology were directed to the abstract idea of “additional polling in a wireless communications system” and that the claims failed to recite an inventive concept “sufficient to save the claims.” The Federal Circuit reversed, stating that, ”[t]he claimed invention . . . eliminates or reduces the delay present in conventional systems where the primary station alternates between polling and sending inquiry messages. Therefore, like the claims in DDR, the claimed invention changes the normal operation of the communication system itself to 'overcome a problem specifically arising in the realm of computer networks'“ (citations omitted).

The court further rejected LG's assertion that, while reducing latency . . . is a patent-eligible improvement” the claims “are not sufficiently directed to this purported improvement.” The court's responded that, “[t]o the extent LG argues that the claims themselves must expressly mention the reduced latency achieved by the claimed system, LG is in error. Claims need not articulate the advantages of the claimed combinations to be eligible.”

• Summary and analysis
• Reaction, commentary
• News article (paywall)

July 14, 2020: In Packet Intelligence v. NetScout Sys.,²⁾ the Fed. Cir. affirmed that a network monitor that is capable of identifying disjointed connection flows as belonging to the same conversational flow is not abstract. The court rejected NetScout's argument that the invention was directed towards the “abstract idea of collecting, comparing, and classifying packet information.”

• Summary

October 23, 2020: The Federal Circuit, in TecSec, Inc. v. Adobe Inc., with regard to four TecSec patents directed to a method of labeling encrypted multimedia objects, and decrypting based on an access authorization based on the label, the Federal Circuit (1) reversed the trial court's decision to preclude evidence of inducement after a stipulation by the patent owner of non-infringement, and (2) affirmed the district court's ruling that the claims were patent-eligible under §101.

In affirming that the claims were patent-eligible, the Federal Circuit disagreed with Adobe's characterization of the claims as being “directed to the impermissibly abstract idea of managing access to objects using multiple levels of encryption.” Stated the court:

• Summary & analysis
• News article (paywall)
• summary
• Summary (American U.)

In March, 2021, the Federal Circuit, in In re Bd. of Trs. of the Leland Stanford Junior Univ.³⁾, affirmed PTAB that claims “directed to the use of mathematical calculations and statistical modeling” “without more, are patent ineligible” and fail to satisfy step one of Alice. Stated the court (internal citations omitted; emphasis added):

This decision arrived 2 weeks after an earlier decision relating to a different but similar patent, which was also found ineligible for essentially the same reasons.

• Summary and analysis

In Yanbin Yu et al. v. Apple, Inc., the Federal Circuit held that a claim to digital camera having two sensors each with a corresponding lens and a digital image processor for producing a single image using image data from both sensors was ineligible for patent protection under 35 U.S.C. § 101 because the claim is “directed to the abstract idea of taking two pictures . . . and using one picture to enhance the other in some way.”

The subject '298 patent was also the subject of an IPR petition that resulted in a judgment finding claims 1, 3, 4, and 5 to be unpatentable.

The court's analysis begins with the observation that “Yu does not dispute that . . . the idea and practice of using multiple pictures to enhance each other has been known by photographers for over a century” and bolsters this by observing, ”[o]nly conventional camera components are recited to effectuate the resulting 'enhanced' image – two image sensors, two lenses, an analog-to-digital converting circuitry, an image memory, and a digital image processor. Indeed, it is undisputed that these components were well-known and conventional.“ The court concludes its step-one analysis with, ”[w]hat is claimed is simply a generic environment in which to carry out the abstract idea.“ And finds that “claim 1 does not include an inventive concept sufficient to transform the claimed abstract idea into a patent-eligible invention” under step 2 of Alice/Mayo.

Judge Newman offered a strong dissent stating, “claim 1 is for a digital camera having a designated structure and a mechanism that perfrom specified functions; claim 1 is not for the general idea of enhancing camera images. The camera of the '289 patent may or may not ultimately satisfy all the substantive requirements of patentability, fo this is an active field of technology. HOwever, that does not convert a mechanical/electronic device into an abstract idea.” She further states, “Section 101 ineligibility does not arise simply because a device embodies minor and predictable differences from the prior art, as the majority holds.” “The digital camera described and claimed . . . is a mechanical/electronic device that easily fits the standard subject matter eligibility criteria. Neither the panel majority nor the district court decided patentability under Section 102 or Section 103, having elimiated the claims under Section 101. The '298 claims warrant review under the substantive criteria of patentability–a review that they never received.”

• News article (paywall) (cached).
• Blog, discussion
• In-depth analysis

In Simio, LLC v. Fexsim Software Products, Inc., the Federal Circuit looked to what the written description of the invention, i.e., the application specification, focused on to identify the “what the patent asserts to be the focus of the claimed advance over the prior art” and if that focus is “abstract.” Stated the court:

In stark contrast to its heavy focus on the abstract idea of using graphics instead of programming to create object-oriented simulations, the specification dedicates relatively little attention to the functionality reflected in the executable-process limitation.

The court also rejected Simio's argument that claim 1 improves a computer’s functionality “by employing a new way of customized simulation modeling with improved processing speed.” The court held (citations and internal quotation marks omitted): “We reject Simio’s argument, because claiming the improved speed or efficiency inherent with applying the abstract idea on a computer is insufficient to render the claims patent eligible as an improvement to computer functionality.”

• News and analysis ("Simio . . . may affect Alice test") (Paywall) (Private cached)
• Analysis and discussion

In Cxloyalty, Inc. v. Maritz Holdings, the Federal Circuit reversed the PTAB's finding that claims amended by IPR were not directed to a business method. The Board held that the original claims were ineligible business method claims, but that the replacement claims were eligible because the replacement claims “contained an inventive concept.”

This case touches on the question of when novelty is important in determining eligibility, but is not able to articulate why, in this case, novelty is insufficient even if it “is necessarily not well-understood, routine, or conventional.”

Stated the court:

“Although [Martz's] expert testimony invokes the words, 'well-understood, routine, or conventional,' the type of unconventionality described by Maritz's expert does not spare the claims. To be sure, a patent claim may be eligible under § 101 if it, for example, 'reflects something more than the application of an abstract idea using well-understood, routine, and conventional activities.' But the expert testimony relied upon by Martiz does not establish that. At most, the testimony describes the claimed subject matter as not conventional only in the sense that the subject matter as a whole was novel. Indeed, novel subject matter is necessarily not well-understood, routine, or conventional. But as explained previously, our cases are clear that a patent claim is not eligible under § 101 merely because it receives novel subject matter.” (Citations removed.)

• News story (paywall)

May 14, 2020: The Federal Circuit held, in Electronic Communication Technologies, LLC v. ShoppersChoice.com⁴⁾ that claims to an automated notification system for securely notifying customer is in advance of pickup or delivery of a good was directed to an abstract idea and did not contain an inventive concept.

The District Court summarized representative claim 11 as computer code that

Alice, step one analysis: Novelty alone is insufficient; prosecution history “has no relationship.”

The court reasoned,

The court further dismissed ECT's arguments stating that (1) novelty, or “uniqueness” alone is “insufficient to confer patentability, and (2) “specific details relating to the procedure of prosecution before the USPTO bear no relationship to the subject matter . . . and do not negate the fact that claim 11 is directed to longstanding business practices.”

Alice, step two analysis: Length of claim and enablement is not dispositive.

The court concluded that the claims “do not include an inventive concept sufficient to transform the claimed abstract idea into a patent eligible application.” ECT's arguments that (1) the court has “held far shorter, far less enabled claims valid” was found unpersuasive. Stated the court, “patent eligibility turns on the content of the cliams, not merely on the number of words recited. . . . In addition, just because a patent claim is enabled does not mean that the claim is patent eligible.”

Attorneys' fees.

In a follow-up decision, the Federal Circuit held that the District Court's finding the case to be unexceptional was in error for failing to consider objective unreasonableness of ECT's infringement claim.

In Ancora Technologies, Inc. v. HTC America, Inc., the Federal Circuit held that a claim describing a method of using a segment of BIOS non-volatile memory to store license verification to verify a program is eligible under Alice and Enfish.

More specifically, the Federal Circuit held that the District Court for the Western District of Washington erred in granting a motion to dismiss for being invalid under 35 U.S.C. §101. After summarizing previous decisions, including Enfish ⁵⁾, Visual Memory ⁶⁾, Finjan ⁷⁾, Core Wireless ⁸⁾, and Data Engine Technologies ⁹⁾, related to the intersection of software and §101, the court concluded that the invention is not abstract because “improving security –here, against a computer's unauthorized use of a program–can be a non-abstract computer-functionality improvement if done by a specific technique that departs from earlier approaches to solve a specific computer problem.” The Court further held that “claim 1 . . . is directed to a solution to a computer-functionality problem: an improvement in computer functionality that has 'the specificity required to transform a claim from one claiming only a result to one claiming a way of achieving it'” (citing SAP America).

• Summary and analysis
• Summary (Paywall)

In Automation Middleware Solutions Inc., v. Invensys Systems Inc. et al., in a summary ruling, the Federal Circuit affirmed a March, 2017 ruling in the eastern district of Texas that claims to a middle translation layer between a control system and robotic drivers were invalid as directed to non-patentable subject matter under Alice. In the discussion below, internal citations are removed from quotes.

Update: In a November, 2018 order, the Federal Circuit denied a petition for a rehearing filed by Automation Middleware.

The district court held that the asserted patents “are directed to the abstract idea of 'a middle translating layer.'” The court agreed with Defendants that the focus of the claims is not on motion control devices; rather, the claims focus on generating a sequence of control commands 'based on the application program, the component code, and the driver code of the selected software driver.' ” This 'generating' requires translating inputs from the application program's language into one or more drivers' programming language.”

The court further held that “[t]he claimed middleware layer does not improve the functioning of a computer. [. . .] The Asserted Patents' alleged improvement over the prior art is allowing more devices to be 'supported by the high-level program' by interposing a middleware layer that translates between the language of the high-level program and the various languages of the claimed motion control devices. As a practical matter, users of the claimed systems may have experienced benefits such as reduced costs from the ability to control heterogeneous motion control devices, but these benefits are not sufficiently technological to remove the abstractness of the claims under Enfish.

With respect to step two of the Alice inquiry, the court evaluated [quoting Alice]] “whether the claims here do more than simply instruct the practitioner to implement the abstract idea . . . on a generic computer.” The court concluded that (quoting):

The court's analysis of other claims at issue found only that the claims further specified the context of the invention or “amount to no more than a detailed description of routine and conventional tools in the software arts.”

The court also addressed the language of some of the claims at issue. For example, it held that a claim is invalid under §101 as being directed to non-statutory subject matter if the claim fails to either recite processes or the claimed software is fixed in a tangible medium. The court held that claims in U.S. Patent 6,516,236 “are not process steps but rather sets of operations, functions or drivers; component code; an application program; and a motion control component. [. . .] The specific words of the claims . . . and the claims as a whole demonstrate that the claims are not directed to processes.” Furthermore, the court held that “the claims do not explicitly recite 'a computer readable medium' or similar language, so the tangible medium must be inferred from other claim language. [In Allvoice], [t]he Federal Circuit . . . 'decline[d] to import . . . a tangible medium into claims that fail[ed] to recite or reference any such medium.' Similarly, this Court declines to import a tangible medium based only on the claim reciting computer-related functions.”

However, with respect to U.S. Patent 6,513,058, the district court held, “operating on a computer” supports the inference that a physical medium is required because the claim language directly invokes the computer instead of merely computer-related functions.”

• Summary (paywall). (Cached - private)

In Core Wireless Licensing v. LG Electronics, the Federal Circuit denied LG's motion for summary judgment of invalidity on Alice grounds. The court reviewed prior Alice decisions including Enfish, Thales, Visual Memory, and Finjan. With respect to the claims at issue, the court held that “[a]lthough the generic idea of summarizing information certainly existed prior to the invention, these claims are directed to a particular manner by which the summary window must be accessed. The claim further requires the application summary window to list a limited set of data, 'each of the data in the list being selectable to launch the respective application and enable the selected data to be seen within the respective application.'” The concludes, “[l]ike the improved systems claimed in Enfish, Thales, Visual Memory, and Finjan, these claims recite a specific improved user interface for electronic devices.

• Analysis

In Finjan Inc. v. Blue Coat Systems, Inc., the Federal Circuit held that claims directed to a virus scanning tool that performs behavior analysis of a downloadable executable file and then attaches a security profile to the file that can then be compared to a user's security policy in determining whether to download the whole file or execute the file is not abstract under Alice.

First, the Federal Court looked to the district court's claim construction of “security profile” and independently found this feature to be non-abstract. Stated the court:

In addition, the Federal Circuit held that the linking (or appending) of the security profile to the downloadable file was also a non-abstract improvement over the prior art:

In Thales Visionix Inc. v. U.S., the Federal Circuit reversed a lower court ruling that the claims were patent-ineligible subject matter under 35 U.S.C. § 101 because they are directed to an abstract idea under the two-part Alice framework.

The court first addressed Diehr, noting that the Supreme Court, “explained that claims are patent eligible under § 101 'when a claim containing a mathematical formula implements or applies that formula in a structure or process which, when considered as a whole, is performing a function which the patent laws were designed to protect.' In terms of the modern day Alice test, the Diehr claims were directed to an improvement in the rubber curing process, not a mathematical formula” (internal citations removed).

In footnote 2, the Court continued, ”Diehr preceded the evolution of the Supreme Court’s two-step framework and therefore did not separate its analysis into the two Alice steps. We do not hold that Diehr is instructive precedent only for Alice step one.“

In overturning the ruling that Thales Visionix's patent was invalid, the court stated (emphasis added):

• News summary (paywall)

In TDE Petroleum Data Solutions v. AKM Enterprise, Inc. DBA Mobilize, Inc., the Federal Circuit in 2016 nixed TDE's patent on a method of determining the state of an oil well operation on an appeal of the district court's grant of motion to dismiss made by Mobilize. In a short 5-page opinion, Judge Houghes wrote for the unanimous panel that the claims fail the 2-part Alice test.

In March 2017, the Supreme Court denied a petition certiorari after the Federal Circuit denied a petition for an en banc rehearing. An amicus brief filed on behalf of 15 law professors argues that this case is effectively a reversal of Diamond v. Diehr, the famous case involving automatically controlling a curing process for rubber tires.

In addition, the brief argues that the court improperly analyzed the claimed invention in parts, rather than as a whole. The amicus brief states:

• News summary (paywalll)
• Analysis, summary of Amicus Brief

In Amdocs v. Openet Telecom ¹⁰⁾, 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.

• Order denying this petition was entered March 9, 2017
• Petition for Write of Certiorari filed on 7/28/17 was denied by the Supreme Court on 11/27/17.

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?

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.

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.”

• Summary (paywall)

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):

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

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:

• summary and interpretation that it's mostly about preemption.

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.

• “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.”

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

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.

In SRI International, Inc. v. Cisco Systems Inc., the Delaware district court held that a patent claiming automated monitoring of a network. Quoting DDR ¹¹⁾, 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:

Appeal: The Federal Circuit affirmed the district court's denial of summary judgment of ineligibility, adopted its construction of “network traffic data” and affirmed its summary judgment of no anticipation.

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 ¹²⁾. 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:

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.”

Updated: See Illumina, Inc. v. Ariosa Diagonstics (2020), which upheld patentability for a similar method. That decision distinguishes this one, but see dissent. In the 2020 decision, the Invention passed step one, finding the invention eligible at that step.

• Case background and summary
• Summary and analysis from Harvard's Petrie-Flom Center
• News article summarizing opinion

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.

Patents at issue:

• 6,772,132 (Claims 1-28, 30-38, 40-48, 50-56 were invalidated by PTAB, which ruled the claims patent-eligible but obvious.)
• 6,766,304 (PTAB also found the claims patentable under § 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:

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):

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:

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:

• Summary, opinion, discussion
• Summary and insightful criticism, discussion

Law360 is reporting that, in Cloud Satchel v. Amazon.com 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.

• Law 360 Article (paywall) (private cache)
• Memorandum Opinion of the Court

~UPDATED~ Ultramercial seeks en banc review.

• read more

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).

• review and discussion
• Summary and commentary ("The day the exception swallowed the rule")

<box right 50% blue> 1. A system for managing a game of Bingo which comprises:

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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.)

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.”

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.

• Summary, discussion
• Tongue-in-cheek letter to SCOTUS summarizing disagreements between Fed. Cir. judges

• ~UPDATED~ Supreme Court Transcript
• Supreme Court grants cert 12/06/13. Briefs on Certiorari:
  • Sep 4 2013 Petition for a writ of certiorari
  • Oct 4 2013 Brief amicus curiae of Dale R. Cook
  • Oct 4 2013 Brief amicus curiae of Electronic Frontier Foundation
  • Oct 7 2013 Brief amici curiae of Trading Technologies International, et al.
  • Oct 7 2013 Brief amicus curiae of Sigram Schindler Beteiligungsgesellschaft mbH
  • Oct 7 2013 Brief amici curiae of Professor Lee Hollaar, and Peter K. Trzyna in support of neither party
  • Oct 7 2013 Brief amicus curiae of Gibbons Institute of Law, Science and Technology in support of neither party
  • Oct 7 2013 Brief amici curiae of Accenture Global Services, GmbH, et al.
  • Oct 7 2013 Brief amicus curiae of Institute of Electrical and Electronics Engineers, Inc.- USA
  • Oct 7 2013 Brief amicus curiae of Intellectual Property Law Association of Chicago
  • Oct 7 2013 Brief amicus curiae of New York Intellectual Property Law Association
  • Oct 7 2013 Brief amici curiae of Students of Patent Law
  • Nov 6 2013 Brief of respondents CLS Bank International, et al. in opposition
  • Nov 19 2013 Reply of petitioner Alice Corporation Pty. Ltd.
• Briefs on Substance
  • Jan 21 2014 Brief of Petitioner Alice Corporation Pty. Ltd.

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.

• Summary, discussion
• Summary

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 ¹⁴⁾ and Benson ¹⁵⁾ 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 ¹⁶⁾. In re Johnson ¹⁷⁾ 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.

• Summary, discussion

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., 56 U.S. 62 (1853). More on the Nuijten page.

Oral arguments:

• Brief analysis, discussion

In In re Stephen W. Comiskey, ¹⁸⁾ 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 ¹⁹⁾ 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 ²⁰⁾ and Flook ²¹⁾ 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 ²²⁾ 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.”