By Michael Borella --
Some things are rare. A visit from Halley's comet . . . the Chicago Cubs winning the World Series . . . a season of Game of Thrones without a major character's death . . . and a Federal Circuit panel finding that claims pass muster under 35 U.S.C. § 101. With respect to the latter category, there is now a second post-Alice decision concluding that a patent's claims meet the statutory and judicial requirements of patent-eligibility.
In 2012, Enfish sued Microsoft and several other parties in the Central District of California for infringement of U.S. Patent Nos. 6,151,604 and 6,163,775. The District Court, with the late Judge Mariana R. Pfaelzer presiding, found all claims invalid under § 101 because they were directed to the abstract idea of "storing, organizing, and retrieving memory in a logical table" or "the concept of organizing information using tabular formats."
Both patents claim ways of manipulating a new type of database table. As a representative example, claim 17 of the '604 patent recites:
A data storage and retrieval system for a computer memory, comprising:
means for configuring said memory according to a logical table, said logical table including:
a plurality of logical rows, each said logical row including an object identification number (OID) to identify each said logical row, each said logical row corresponding to a record of information;
a plurality of logical columns intersecting said plurality of logical rows to define a plurality of logical cells, each said logical column including an OID to identify each said logical column; and
means for indexing data stored in said table.
In order to appreciate the claimed invention, let's take a step back. Traditional databases are relational, in that "each entity (i.e., each type of thing) that is modeled is provided in a separate table" of rows and columns. Classic examples include an employee database that contains a table with entries for each employee, as well as respective tables for employee job titles and departments.
In contrast, the patents describe a "self-referential" table structure that allows the information that would normally appear in multiple relational tables to be stored in a single table. Some of the information that might otherwise appear in columns is formatted as rows instead. In the specification of the '604 patent, Enfish asserted that this self-referential arrangement had several advantages. These include faster lookups, more efficient storage of data other than structured text, and no requirement that one model each thing to be represented in the database as a separate table. For instance, "the self-referential database can be launched without [modeling and configuration of tables] and instead configured on-the-fly."
With that in mind, the District Court construed the "means for configuring" step of claim 17 under 35 U.S.C. § 112, paragraph 6, as requiring a four-step algorithm:
1. Create, in a computer memory, a logical table that need not be stored contiguously in the computer memory, the logical table being comprised of rows and columns, the rows corresponding to records, the columns corresponding to fields or attributes, the logical table being capable of storing different kinds of records.
2. Assign each row and column an object identification number (OID) that, when stored as data, can act as a pointer to the associated row or column and that can be of variable length between databases.
3. For each column, store information about that column in one or more rows, rendering the table self-referential, the appending, to the logical table, of new columns that are available for immediate use being possible through the creation of new column definition records.
4. In one or more cells defined by the intersection of the rows and columns, store and access data, which can include structured data, unstructured data, or a pointer to another row.
In its substantive analysis, the Court proceeded to review the two-prong test for patent-eligibility set forth in Alice Corp. v. CLS Bank Int'l. First, one must determine whether the claim at hand is directed to a judicially-excluded law of nature, a natural phenomenon, or an abstract idea. If so, then one must further determine whether any element, or combination of elements, in the claim is sufficient to ensure that the claim amounts to something more than the judicial exception. Notably, generic computer implementation of an otherwise abstract process does not qualify as "something more."
With respect to the "directed to" language of the first prong, the Court wrote that this inquiry "applies a stage-one filter to claims, considered in light of the specification, based on whether their character as a whole is directed to excluded subject matter." The Supreme Court "suggested that claims purporting to improve the functioning of the computer itself, or improving an existing technological process might not succumb to the abstract idea exception." Since Alice, this analysis has almost exclusively been the domain of the second prong. However, the Federal Circuit reasoned that performing such an analysis as an entry point to the Alice test was appropriate.
Here, it is helpful to quote the Court at length:
We do not read Alice to broadly hold that all improvements in computer-related technology are inherently abstract and, therefore, must be considered at step two. Indeed, some improvements in computer-related technology when appropriately claimed are undoubtedly not abstract, such as a chip architecture, an LED display, and the like. Nor do we think that claims directed to software, as opposed to hardware, are inherently abstract and therefore only properly analyzed at the second step of the Alice analysis. Software can make non-abstract improvements to computer technology just as hardware improvements can, and sometimes the improvements can be accomplished through either route. We thus 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. Therefore, we find it relevant to ask whether the claims are directed to an improvement to computer functionality versus being directed to an abstract idea, even at the first step of the Alice analysis.
As a result, the Court interpreted the first prong of Alice as making a determination of "whether the focus of the claims is on the specific asserted improvement in computer capabilities (i.e., the self-referential table for a computer database) or, instead, on a process that qualifies as an abstract idea for which computers are invoked merely as a tool." The Court noted that the Alice and Bilski v. Kappos cases, as well as essentially all but one other § 101 case that it has reviewed since Alice, fell due to being of the latter type. In contrast, claim 17 is focused on "an improvement to computer functionality itself, not on economic or other tasks for which a computer is used in its ordinary capacity."
The Court dismissed the conclusion of Judge Pfaelzer that the claims were abstract, and also rejected Microsoft's argument that the claims are directed to "the concepts of organizing data into a logical table with identified columns and rows where one or more rows are used to store an index or information defining columns." Instead, the Court found that "describing the claims at such a high level of abstraction and untethered from the language of the claims all but ensures that the exceptions to § 101 swallow the rule." The Court further observed that, based on the District Court's construction, claim 17 recited a specific implementation of a self-referential table rather than the storing of tabular data in general. Thus, "the district court oversimplified the self-referential component of the claims and downplayed the invention's benefits."
In an interesting twist, perhaps due to the means-plus-function structure of the claims, the Court relied heavily on the specification's purported advantages of the claimed implementation. Again quoting the Court at length:
The specification also teaches that the self-referential table functions differently than conventional database structures. According to the specification, traditional databases, such as those that follow the relational model and those that follow the object oriented model, are inferior to the claimed invention. While the structural requirements of current databases require a programmer to predefine a structure and subsequent data entry must conform to that structure, the database of the present invention does not require a programmer to preconfigure a structure to which a user must adapt data entry. 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.
Further, the ability of the invention to operate on a general-purpose computer was not dispositive. The Court observed that "[u]nlike the claims at issue in Alice or, more recently in Versata Development Group v. SAP America, Inc., . . . the claims here are directed to an improvement in the functioning of a computer [while] the claims at issue in Alice and Versata can readily be understood as simply adding conventional computer components to well-known business practices." Requiring an improvement to a computer to be in hardware would resurrect the bright-line machine-or-transformation test of Bilski or improperly "creat[e] a categorical ban on software patents."
The Court went on to recognize the importance of software and the potential for innovation therewith: "Much of the advancement made in computer technology consists of improvements to software that, by their very nature, may not be defined by particular physical features but rather by logical structures and processes . . . [w]e do not see in Bilski or Alice, or our cases, an exclusion to patenting this large field of technological progress."
Accordingly, the Court concluded that the claims were not abstract under prong one of Alice, and therefore prong two of that test need not be carried out.
The outcome of this case may seem surprising when viewing the claims on their face. Claim 17 seems broad, but due to the § 112 ¶ 6 analysis, the Court applied the Alice test to the claims as construed in view of the specification. This narrower interpretation of the claims (the four-step algorithm above) likely made the invention look less abstract. Further, perhaps because the specification was in play from this construction, the Court took into account the patentee's contentions therein regarding the improvements and advantages of the invention.
Clearly, a practice point to take away is that describing how an invention improves over the prior art, especially if it improves the operation of a computer, can be advantageous. Of course, for purposes of avoiding estoppel, one should be careful when pointing out the deficiencies of what came before. Additionally, it appears as if the claims do not need to explicitly recite such improvements.
Another interesting aspect of this decision is that the Federal Circuit subtly changed the nature of the Alice test. Now, one can short-circuit the full analysis if the claimed invention is clearly not abstract, and doing so may involve determining whether the invention improves the operation of a computer or technological process. In a sense, the two-prong test is being compressed into a one-prong test. The impact of this approach may be significant, especially if it is adopted by district courts and the USPTO.
Additionally, the Court made it clear that whether such an improvement resides in hardware or software is not material. Since Bilski, there has been a knee-jerk reaction to add a hardware component to at least one element of each independent claim. Perhaps that is no longer necessary when the innovation is in software.
Finally, this outcome is in line with the reasoning behind the USPTO's abstract ideas examples, published last year in January and July. Based on these examples, as well as the Diamond v. Diehr and DDR Holdings v. Hotels.com cases, there are two main ways to claim software inventions to avoid § 101 issues. First, one can claim the software controlling other machines or components. Not unlike Diehr, when claimed with an appropriate level of specificity, such inventions may be viewed as an improvement to an industrial process. Second, one can claim that the software improves the operation of a computer itself. Usually this will take the form of lower-layer functions that support applications developed thereon. For instance, well-drafted claims directed to operating system function, networking, message parsing, speech recognition, image processing, compression, encryption, and graphical user interfaces, have all been found patent-eligible either in the courts or by the USPTO. Now we can add databases to that list.
Enfish, LLC v. Microsoft Corp. (Fed. Cir. 2016)
Panel: Circuit Judges Moore, Taranto, and Hughes
Opinion by Circuit Judge Hughes