Purely Business Method Patent Found Ineligible under Section 101
By Joseph Herndon --
In an appeal from a rejection in initial examination of appellant Mark Eberra's patent application, the Federal Circuit affirmed the Patent Trial and Appeal Board's ("Board") determination that the claims are patent-ineligible under § 101.
The patent application is entitled "Business Method for Opening and Operating a National Television Network" with serial number 12/230,058 ("the '058 application"). The Examiner rejected all claims of the '058 application as patent-ineligible under 35 U.S.C. § 101 and as anticipated under 35 U.S.C. § 102.
The Board initially affirmed the Examiner's anticipation rejection without reaching the § 101 issue. Then, on rehearing, the Board affirmed the Examiner's rejection under both § 101 and § 102. Mr. Eberra appealed and represented himself pro se.
The '058 application describes a business method for providing a television network "that requires the masses of the general public to purchase products in exchange for being allowed to perform in television programs shown on the network." Claim 1, which the Board treated as exemplary, reads:
1. A process for providing a television network comprising:
(a) opening at least one physical location for a production of a television program;
(b) requiring at least one customer to make a purchase of a product;
(c) allowing said customer to give a performance in said production of said television program, in exchange for making said purchase of said product;
whereby said purchase made by said customer results in said production of said television program for said performance of said customer on said television network.
To determine whether a claim is patentable under § 101, the Supreme Court has instructed use of a two-step framework. First, a court must determine whether the claim is directed to a patent-ineligible concept, i.e., a law of nature, a natural phenomenon, or an abstract idea. If so, the court must proceed to step two and ask whether the elements of the claim, considered both individually and as an ordered combination, add enough to transform the nature of the claim into a patent-eligible application.
Starting at step one of the test, the Federal Circuit agreed with the Board's conclusion that the claims at issue are directed to an abstract idea, namely "promoting the purchase of a product with the incentive being a spot in a television program, i.e. product promotion."
Like the concept of risk hedging, which the Supreme Court found to be an abstract idea in Bilski v. Kappos, the Federal Circuit found that the concept of product promotion is a fundamental economic practice long prevalent in our system of commerce.
The Appellant argued that the claims are not directed to the abstract idea of product promotion and are instead directed to what the specification describes as a "new Customercast model of television" in which "the basic principle is to attract large numbers of people to perform on television, and require a purchase for the experience." But the Federal Circuit found that the abstract nature of the claims is not altered at step one by the existence of claim limitations (much less characterizations in the specification) that add a degree of particularity to the implementation of the abstract idea.
Here, claim 1, considered as an ordered combination, simply describes a form of product promotion in which the incentive for purchasing a product is the opportunity to perform in a television program. The Federal Circuit noted that this is more specific than the concept of product promotion, but it is no less abstract.
Turning to step two, each specific step in the claims—opening a location (which requires nothing more than finding a location), requiring a purchase, and allowing a performance in a television program—was found to be a routine television-production or advertising activity performed in a conventional way, as described in the specification. Thus, there was no inventive concept found, and the claims in the '058 application were found to not be directed toward patentable subject matter under § 101.
Because the Court affirmed the Board's determination that the claims are patent-ineligible under § 101, they did not address the Board's decision with respect to anticipation.
In re Eberra (Fed. Cir. 2018)
Panel: Chief Judge Prost and Circuiot Judges Dyk and O'Malley
Per curiam opinion