Of Technical Tools and Problems: Going Beyond the Two-Prong Alice Test

By Michael Borella --

Introduction

It is abundantly clear that the Supreme Court's 2014 Alice Corp. v. CLS Bank decision has significantly changed the patent-eligibility landscape for business methods and some types of software inventions.  For instance, in 2015, approximately 70% of all patents challenged under Alice in district courts were invalidated, while the monthly 35 U.S.C. § 101 rejection rates for USPTO Technical Centers 3620, 3680, and 3690 were over 85% for most of the year.[1]

These sobering statistics are due to the new subject matter eligibility test set forth in Alice.  Particularly, one must first 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 significantly more than the judicial exception.  But, generic computer implementation of an otherwise abstract process does not qualify as "significantly more."  Notably, the abstract idea exclusion has been heavily employed against the aforementioned business method and software inventions.

Since Alice was handed down, organizations, their attorneys, the USPTO, and lower courts have struggled to apply this test.  After all, the Supreme Court refrained from explicitly defining the scope of abstract ideas, and provided only limited examples of what might be "significantly more" than a judicial exclusion.  This has led to much hand-wringing, because ultimately one must be able to determine whether a claim falls into the bucket of patent-eligible inventions.  This calculus takes place during claim drafting, when evaluating the eligibility of a pending claim, and when evaluating the validity of an issued claim.

But what if we are approaching post-Alice eligibility the wrong way?

Herein, I propose that our emphasis on deciphering the two-prong test might not be the best way of evaluating claims.  Instead, we should be focusing on two alternate tests that have emerged from lines of cases in the Federal Circuit.  There is evidence that these tests are being used, in at least some circumstances, by the district courts and USPTO.  Further, I submit that thinking about patent-eligibility in terms of these two tests may be more helpful than just focusing on the language of Alice.

The first is the "technological tool test."  The question to ask is whether the claimed invention is directed to a new technological tool, or is it merely making use of one or more existing technological tools.  The second is the "technical problem test."  Here, the question is whether the claimed invention is a technical solution to a technical problem (yes this is very similar to the approach used by other jurisdictions, Europe, and the European Patent Office in particular).

The Technological Tool Test

Use of the technological tool test first appeared explicitly in Enfish, LLC v. Microsoft Corp.  Therein, the Federal Circuit characterized the first prong of Alice as an inquiry into "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 court further noted that "in Bilski and Alice and virtually all of the computer-related § 101 cases we have issued in light of those Supreme Court decisions, it was clear that the claims were of the latter type."

Thus, the Federal Circuit is taking the position that the technological tool test can be used to distinguish between eligible and non-eligible inventions.  Notably, the court stated that the claims in Enfish were "directed to a specific improvement to the way computers operate" and therefore "not directed to an abstract idea within the meaning of Alice."  In some cases, if claims clearly pass this test, then there is no need to fully evaluate the claims under the two-prong test of Alice -- essentially, short-circuiting that determination.  But the technological tool test can also be applied at prong two, as we will see below.

This test was picked up by the USPTO in its May 19th memo entitled Recent Subject Matter Eligibility Decisions (Enfish, LLC v. Microsoft Corp. and TLI Communications LLC v. AV Automotive, LLC).  In it, the USPTO asserted that "the Enfish claims were not ones in which general-purpose computer components are added after the fact to a fundamental economic practice or mathematical equation, but were directed to a specific implementation of a solution to a problem in the software arts."

In contrast to Enfish, the Federal Circuit rendered a decision in TLI Communications LLC v. AV Automotive, L.L.C. shortly thereafter.  In TLI, the court wrote that while the claims involve "concrete, tangible components such as 'a telephone unit' and a 'server,' the specification makes clear that the recited physical components merely provide a generic environment in which to carry out the abstract idea of classifying and storing digital images in an organized manner."  The court also found that the process recited by the method claims was abstract (though arguably the ordered combination of method steps was new).  Since the claims involved merely using the recited components for their intended purpose, no new technological tool was invented.  Thus, the claims were found invalid under § 101.

Not long after Enfish and TLI were decided, the Federal Circuit found another set of claims to meet the requirements of § 101.  In Bascom Global Internet Servs. v. AT&T Mobility LLC, the challenged claims involve an Internet content filtering system in which "individuals are able to customize how requests for Internet content from their own computers are filtered instead of having a universal set of filtering rules applied to everyone's requests."  Throughout the opinion, the court referred to the claimed filtering mechanisms as a "tool."  But the observation that swung the analysis in favor of the patentee was that the claim involved "the installation of a filtering tool at a specific location, remote from the end-users, with customizable filtering features specific to each end user."  Thus, "the inventive concept harnesses this technical feature of network technology in a filtering system by associating individual accounts with their own filtering scheme and elements while locating the filtering system on an ISP server."  As a consequence, the court found that the claims were "a technology-based solution (not an abstract-idea-based solution implemented with generic technical components in a conventional way) to filter content on the Internet that overcomes existing problems with other Internet filtering systems."  In other words, a new technological tool.

Recently, language related to Enfish's take on technological tools has found its way into district court decisions (see, e.g., Open Parking, LLC v. Parkme, Inc., as well as about a dozen others) and the USPTO's Patent Trial and Appeal Board as well (see, e.g., Netsirv v. Boxbee, and several other Board decisions).  Even though it is less than six months old, Enfish's tool paradigm already has a long reach.

The Technical Problem Test

Use of the technical problem test can differentiate between technical solutions to technical problems and technical solutions to non-technical (e.g., business) problems.  The former usually are patent-eligible, while the latter usually are not.  In order to apply this test one must consider whether the problem being solved is technical in nature.  Of course, one must also consider whether the solution is technical, but in almost all claims that is the case.

While use of a similar test has been employed in Europe for years, it has only recently reached U.S. shores.  Language supporting this test was introduced by the USPTO in its rules regarding the Covered Business Method (CBM) review program.  Particularly, 37 C.F.R. § 42.301 states "[i]n determining whether a patent is for a technological invention solely for purposes of the Transitional Program for Covered Business . . . the following will be considered on a case-by-case basis: whether the claimed subject matter as a whole recites a technological feature that is novel and unobvious over the prior art; and solves a technical problem using a technical solution."

While this position is not binding on courts, and even the USPTO couches it by limiting the definition to the CBM program, the Federal Circuit has adopted its use in at least some cases.  Notably, in that court's final take on Ultramercial Inc. v. Hulu LLC, Judge Mayer wrote in concurrence that Alice "for all intents and purposes, set out a technological arts test for patent eligibility."  In support of this premise, Judge Mayer suggested that the Supreme Court's dim view of claims that do not "improve the functioning of the computer itself or effect an improvement in any other technology or technical field" effectively leads to a technological requirement.  Judge Mayer contrasted claims that encompassed such an improvement with those directed to business or entrepreneurial goals.  It is worth noting, however, that nothing in the patent statute or the Alice decision dictates such an approach.

While this test has not been widely applied outside of CBM proceedings (though it is gaining popularity in the Federal Circuit and district courts), it is a helpful instrument for evaluating the patent-eligibility of claims.  For instance, the ineligible, financially-focused claims of Alice and Bilski v. Kappos were technical solutions to business problems.  Similarly, in Ultramercial, claims directed to carrying out an abstract business transaction over the Internet were deemed ineligible.  On the other hand, the claims directed to new features of a web server in DDR Holdings, LLC v. Hotels.com L.P. were found to be eligible.  Those claims were a technical solution to a technical problem despite their being motivated by commercial goals.

Indeed, the recent spate of Federal Circuit § 101 decisions can be viewed through this lens.  Enfish was directed to a new form of database that has certain advantages over other types -- thus it was a technical solution to a technical problem.  Similarly, Bascom's per-user Internet filtering technically solved a technical problem that was present in the state-of-the-art filtering mechanisms.

In contrast, TLI's claims to the transmission and storage of digital images were directed to "use of conventional or generic technology in a nascent but well-known environment, without any claim that the invention reflects an inventive solution to any problem presented by combining the two."  Particularly, the specification of TLI's patent indicated that the problem being solved was one of administration of digital images, rather than an improvement to a specific technology.  As a consequence, the court concluded that "the claims are not directed to a solution to a technological problem."

Surely, the line between what is a technical versus a non-technical problem can be thin.  After all, most inventions are ultimately aimed at addressing business issues (e.g., by making something work faster, better, cheaper, with new features, and so on).  But those that merely make use of generic technology to solve what is presented as a business goal are unlikely to survive a § 101 challenge.

Conclusion

While there may be counterexamples (although I am not aware of any), it appears that the outcomes of most Supreme Court and Federal Circuit § 101 cases can be determined by applying either the technological tool test or the technical problem test.  Thus, these tests may be helpful for patentees, alleged infringers, and their respective representatives to keep in mind.

For instance, when evaluating the eligibility of a new invention, a patentee or its attorney should consider whether the invention can be reasonably said to pass these two tests.  If not, then further consideration should be taken as to how the invention can be positioned and claimed to be more technical.

Of course, the claims themselves remain critically important -- claims that are too broad or vague are likely to fail under the current § 101 jurisprudence.  But when drafted to a technological tool or technical solution to a technical problem, these claims are in a better position to issue and survive challenges.  Further, the specification has become similarly important, as it provides the applicant with an opportunity to state the (technical) motivation of the invention.

I am not advocating that we ignore the two-prong test of Alice.  Clearly, we still need to be able to apply those prongs in court and during prosecution.  Attorneys, however, must have a deep bench of arguments and ways of thinking about § 101.  The two tests presented herein may be helpful in that regard -- at the very least they are more concrete than making decisions about poorly-defined notions of what is "abstract" and "significantly more."

[1] Statistics derived in part from http://www.bilskiblog.com/.

Comments

[skeptical]

When did Congress write either of these "tests" into the law...?

[Mike Borella]

They did not, and obviously they didn't write the Alice test either.

[The Memory Motel]

MB: "For instance, the ineligible, financially-focused claims of Alice and Bilski v. Kappos were technical solutions to business problems."

Really? What were the technical problems that were "solved" in each of those cases?

Also, be very, very careful about putting too much weight on Enfish, DDR and Bascom. The CAFC's analysis of the prior art in those cases, not to mention the "logic" the court employed to reach their conclusions, is severely wanting.

Lastly, I want to congratulate you on seeming to accept the reality of subject matter eligibility and its crucial role in any sane patent system. It's not going anywhere! It's good that you seem to acknowledging that, even if you're about ten years behind the curve. Don't worry -- you can still catch up.

Here's a little exercise for you, MB: tell everyone (1) what is the "technical" problem being solved by the patent at issue in the CAFC's pending Planet Blue case and (2) tell everyone what the "technical" solution is. Here's a little hint to help you along: looking up rules in a table isn't a "technical" solution to anything. Good luck!

[Mike Borella]

MM:

Please note that Alice and Bilski were represented as addressing non-technical problems.

The technical problem in Blue Planet is lip-syncing of animated faces. And the technical solution is the weighting system as claimed.

But, sure, the claims are broad and given that the CAFC has taken so long in rendering a decision, this one could go either way.

Mike

[The Memory Motel]

MB: "The technical problem in Blue Planet is lip-syncing of animated faces"

In the early 21st century, why is deciding when a cartoon character's mouth is going to stay open or closed a "technical problem"? I animated my own cartoons forty years ago and I was able to figure out when to add sound to accompany a character's mouth movements. It didn't seem like much of a "technical" problem back then.

the technical solution is the weighting system as claimed.

Wow, that's a convenient answer -- it works in every case! What's being "weighted" by this system and how is that "weighting" achieved? It's not something non-technical like looking up some unclaimed (and unclaimable) "rules", is it?

[The Memory Motel]

Displaying information about phone calls on a prior art piece of paper is neither "technical" nor eligible, the last time I checked. And yet this patent was just asserted by Blackberry. How much money do you suppose they want for this brilliant "solution" to the "technical problem" (?!?) of ... displaying stored information about phone calls.

https://www.google.com/patents/US8411845

1. A method of displaying a communications log on a mobile device, the method comprising:

detecting an outgoing phone call associated with a phone number;

detecting an incoming phone call associated with the phone number;

storing in a memory communications-related information for the incoming phone call;

storing in the memory communications-related information for the outgoing phone call;

displaying an entry in the communications log associated with one of the outgoing phone call and the incoming phone call; and

displaying at least part of a listing when the entry is selected, the listing comprising communications-related information stored in the memory associated with the phone number including the outgoing phone call and the incoming phone call associated with the phone number.

[MaxDrei]

As to Blue Planet, borderline on "technical", what might be the reason for the delay at the Federal Circuit?

I have a possible explanation.

If the CAFC is keen now on exploring what is and is not "technical" there is no better place to look than the EPO'S "White Book" of the "Established Caselaw" of its Boards of Appeal (which have been wrestling with exactly this question since 1978).

The 8th Edition of the book just published. Perhaps the Fed Ct thinks it prudent, to check out the 8th Edition before putting its own pen to paper.

[skeptical]

It really is a one trick pony "here, wear my glasses, they work for me" nonstop DISregard for the differences between sovereigns with you, is it not MaxDrei?

Is it any wonder that you have earned the reputation of being a shill?

[Notary]

Mike, thanks for the article. My vague impression is that the PTO may have a longer-term agenda to move more explicitly toward the EPO-style technical problem/solution approach as part of harmonization--the current 101 situation in the US notwithstanding. I think one could argue that the AIA's first to file provisions were a first big step in moving in that direction but that more is planned, although not openly stated for some reason. As an aside, there was an opinion in this morning's (Aug. 23) Wall Street Journal that you might find interesting; I couldn't find a link to provide here but the gist was: patents incentivize invention; look at decisions like Sequenom in contrast to CellzDirect; what we really need to do is establish a court with judges who have the technical expertise to be able to properly assess patents and send patent cases there. Hmmm...I feel like this idea was floated before...maybe in the 80s? Whatever happened to that? (LOL)

[Martin Snyder]

The whole concept of eligibility turns on the existence of an objective standard to separate the eligible from the ineligible. If the standard is subjective, then why bother with an eligibility analysis at all?

Eligibility is for a kind of thing, and patentability is for a specific thing.

If the analysis is always subjective, it's always specific, so why not void Section 101 for vagueness /redundancy and simply move to patentability analysis? Surely, establishing utility is inherent in section 112, and establishing relations with prior art is handled by 102/103.

An ineligible invention cannot be new, useful, non-obvious and fully described, can it?

But in the real world, the idea of eligibility and Section 101 can't and won't be eliminated, for various good reasons, a big one being that there is only one of the four section 101 categories causing trouble: processes.

Every new and useful thing that is not a composition of matter can likely be characterized as a process, and we can't patent every novelty in the universe. Or at least reasonable people don't think so, FWIW in the last days of civilization.

If eligibility can't be eliminated, than an objective standard for the eligibility of certain inventions is going to be required to avoid essentially random or political outcomes.

To consider a "technical solution to a technical problem" or a "technical tool" test as objective, when information technology infuses every aspect of life, is silly. They both amount to another "knowing it when they see it" test.

Something will have to give, both here and in Europe.

[MaxDrei]

I don't understand Martin, your "Europe". Both the EPO and Germany do eligibility objectively/absolutely. A claim "1. a digital computer." passes the eligibility test.

But not in the UK. There, the European test is said to be "intellectually dishonest". But the UK isn't "Europe" is it?

[MaxDrei]

Martin, in Europe, the notion of "technical" is informed by Article 52 of the EPC which lists the things that (as such) are not eligible ie lack technical character. They include programs for computers, business methods and the presentation of information. Europe thus has a hard eligibility boundary that is not to be over-stepped. Skilful drafters though, are pushing hard at that statutory boundary, so the courts have to be steadfast.

I suppose there is not yet any such guidance from the Federal Circuit, what "technical" means.

[skeptical]

MaxDrei,

You appear to have forgotten to include those great caveat words "as such" and "per se," so your statement of "hard eligibility boundary" is not nearly as "hard" as your post may indicate.

In other words, software and business methods (in some cases) may in fact be easier to obtain in EPO-land, n'cest ce pas?

[Martin Snyder]

Max you could drive a lorry thru "presentation of information" or "software program' per se.

Yes it's more narrow than the US, yet cases are still difficult to predict in advance when information inventions are involved.