Overcoming 35 U.S.C. § 101 Rejections Based on Electric Power Group

By Michael Borella --

Opening scene . . . our intrepid patent attorney arrives early at her office for a productive day at work.  With morning coffee sitting next to her monitor, she opens her email.  She finds a few messages from clients and colleagues, as well as a new office action from the USPTO.  Curious, she opens the Office action and scans through it, only to find that it contains yet another 35 U.S.C. § 101 rejection applying the dreaded Electric Power Group LLC v. Alstom S.A. decision.

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When it first came down from the Federal Circuit, many patent attorneys just shrugged about the case.  It was just another § 101 opinion that found claims patent-ineligible.  It didn't seem to break much in the way of new ground.  But in Electric Power Group, Judge Taranto wrote that the claimed invention was directed to an unpatentable abstract idea because it merely involved "a process of gathering and analyzing information of a specified content, then displaying the results."  A few short weeks later, USPTO examiners were using this language to contend that virtually any invention that involves input, processing, and output was similarly abstract.  And more than two years later, Electric Power Group remains the proverbial big hammer that makes software claims look like nails.

Why has Electric Power Group had such a large and lasting impact?  And how should our patent attorney craft her response in order to be well-positioned to overcome the rejection?

Starting with the former question, let's look at the representative claim that was under dispute in that case:

A method of detecting events on an interconnected electric power grid in real time over a wide area and automatically analyzing the events on the interconnected electric power grid, the method comprising:
    receiving a plurality of data streams, each of the data streams comprising sub-second, time stamped synchronized phasor measurements wherein the measurements in each stream are collected in real time at geographically distinct points over the wide area of the interconnected electric power grid, the wide area comprising at least two elements from among control areas, transmission companies, utilities, regional reliability coordinators, and reliability jurisdictions;
    receiving data from other power system data sources, the other power system data sources comprising at least one of transmission maps, power plant locations, EMS/SCADA systems;
    receiving data from a plurality of non-grid data sources;
    detecting and analyzing events in real-time from the plurality of data streams from the wide area based on at least one of limits, sensitivities and rates of change for one or more measurements from the data streams and dynamic stability metrics derived from analysis of the measurements from the data streams including at least one of frequency instability, voltages, power flows, phase angles, damping, and oscillation modes, derived from the phasor measurements and the other power system data sources in which the metrics are indicative of events, grid stress, and/or grid instability, over the wide area;
    displaying the event analysis results and diagnoses of events and associated ones of the metrics from different categories of data and the derived metrics in visuals, tables, charts, or combinations thereof, the data comprising at least one of monitoring data, tracking data, historical data, prediction data,  and summary data;
    displaying concurrent visualization of measurements from the data streams and the dynamic stability metrics directed to the wide area of the interconnected electric power grid;
    accumulating and updating the measurements from the data streams and the dynamic stability metrics, grid data, and non-grid data in real time as to wide area and local area portions of the interconnected electric power grid; and
    deriving a composite indicator of reliability that is an indicator of power grid vulnerability and is derived from a combination of one or more real time measurements or computations of measurements from the data streams and the dynamic stability metrics covering the wide area as well as non-power grid data received from the non-grid data source.

Though lengthy, this claim is broader than it initially appears due to its use of the disjunctive at several points.  Nonetheless, it looks narrow at first blush.

As alluded to above, Judge Taranto characterized the claims as focused on "collecting information, analyzing it, and displaying certain results of the collection and analysis."  For each of these three steps, he cited to precedent that found similar claim elements to be abstract.  He further determined that there was nothing non-abstract in the combination thereof.

This particular choice of language is problematic for software-based inventions.  All a computer can do is receive input, process data, and provide output.  Thus, if the thrust of an invention is on a particularly innovative way of doing such receiving, processing, and outputting, it is all too easy for the USPTO to make an analogy to Electric Power Group in order to contend that the associated claims are nothing more than an abstract idea.  And examiners have taken an expansive view of the case.

Nonetheless, hope is not lost for our patent attorney or for the rest of us.  A careful reading of Electric Power Group itself suggests how one should rebut such a rejection.

The claims in Electric Power Group were found to be ineligible under § 101 for two main reasons:  (i) the claims were focused entirely on the gathering, processing, and displaying information with no technical improvement thereof, and (ii) the claims were not limited to a specific solution to a problem but instead claimed the result.

In particular, Judge Taranto wrote:

Here, the claims are clearly focused on the combination of those abstract-idea processes.  The advance they purport to make is a process of gathering and analyzing information of a specified content, then displaying the results, and not any particular assertedly inventive technology for performing those functions.  They are therefore directed to an abstract idea.

Agreeing with the opinion of the District Court that had initially invalidated the claims, he added:

[T]he court reasoned, "there is a critical difference between patenting a particular concrete solution to a problem and attempting to patent the abstract idea of a solution to the problem in general."  Electric Power Group's asserted claims, the court observed, do the latter:  rather than claiming "some specific way of enabling a computer to monitor data from multiple sources across an electric power grid," some "particular implementation," they "purport to monopolize every potential solution to the problem"—any way of effectively monitoring multiple sources on a power grid.  Whereas patenting a particular solution "would incentivize further innovation in the form of alternative methods for achieving the same result," the court concluded, allowing claims like Electric Power Group's claims here would "inhibit innovation by prohibiting other inventors from developing their own solutions to the problem without first licensing the abstract idea.

These observations provide the roadmap for a response.  To the extent possible, which will vary based on the claims at hand, one should argue that one's claims suffer from neither of the enumerated deficiencies.  It is particularly beneficial to be able to assert that the claims under consideration involve a highly-specific set of operations that provide a clear technical benefit (e.g., faster processing, less memory utilization, the ability to carry out tasks that were previously unworkable, etc.).  Thus, one can state that the claims go well beyond merely gathering, processing, and displaying information and instead involve a particularly inventive technical improvement to a specific device or field.

It is also helpful to be able to state that the claims do not recite just an aspirational goal or a desired outcome.  Instead, the claims should be focused on solving a particular technical problem and recite discrete steps that can be taken to obtain this solution.

But beyond these two points, both of which can be used to rebut an Electric Power Group rejection, it is important to know that claims that are directed to receiving input, processing, and providing output are not per se ineligible under § 101.  Notably, just a few weeks after Electric Power Group the Federal Circuit also decided McRO, Inc. v. Bandai Namco Games America Inc.

In McRO, the disputed invention was directed to generating animations of facial expressions that match a given sequence of phonemes.  This was accomplished through the application of morph weights to points on an animated face based on the timing of phoneme sub-sequences.  The invention of McRO was carried out entirely in software operating on a general-purpose computer -- and essentially consisted of receiving, processing and displaying data.

The Federal Circuit found that the claims were not abstract because they represented a technical improvement and there was "no evidence that the process previously used by animators is the same as the process required by the claims."  Thus, the McRO claims were distinguished from the patent-ineligible claims of Alice Corp. v. CLS Bank Int'l, Parker v. Flook, and Bilski v. Kappos, cases in which the invention being claimed was performed by computer in the same way it had previously been carried out.  Notably, the rule-based claims of McRO could be carried out manually.  And yet, the Court found the claims eligible because they recited an unconventional procedure that had not previously been carried out manually.

Clearly, the McRO panel was aware of Electric Power Group -- Judge Taranto joined the unanimous opinion of McRO.  Thus, McRO stands for the principle that inventions involving nothing more than software operating on a general purpose computer can be patent-eligible.  This goes a long way toward de-clawing and reducing the scope of Electric Power Group.

Thus, one should argue that the claimed invention is analogous to the eligible claims of McRO -- a software-based improvement that is limited to the practical application of a specific set of operations that require computer implementation.  Any presence of data gathering processing, and output in the claims is not dispositive.  Instead, the USPTO must consider the advance provided by the invention as a whole.  And it is particularly compelling if there is nothing in the record that even suggests that the invention was previously performed manually.

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Our patent attorney rolls her eyes and smiles, knowing what arguments and claim amendments can effectively rebut the dreaded Electric Power Group rejection.  She dockets the response for handling and goes on to enjoy her coffee, secure in the knowledge that she's got this one.

Comments

[Paul F. Morgan]

Thanks for publishing substantive practical advice on overcoming Alice [101] abstraction rejections. [Much more constructive than the many ineffective personal rants against Sup. Ct. decisions.]

[Skeptical]

Impact of Core Wireless Licensing SARL v. LG Electronics Inc., 880F.3d 1356 (2018)….?

[Michael Borella]

@skeptical

Core Wireless is about improved user interfaces, where the improvement is to overcome some physical limitation (e.g., small screens). Applicable to the "displaying data" aspects of this case, but only if your invention is analogous.

[Michael Borella]

@paul

When the Supreme Court decision is objectively obtuse, a rant or two is perhaps warranted.

[Paul F. Morgan]

Michael, rants are fine in their place. My objections to mere personal rants against Sup. decisions on a legal educational blog is that they confuse lay readers when presented as if they were legally relevant, and they discourage readers from wading through them in hopes of finding actually useful information.

[EG]

Paul,

I agree with Michael-perhaps even more than "a rant or two is" is warranted with respect to SCOTUS. Their nonsensical and broken Mayo/Alice framework is unworkable, leading to multitudes of Federal Circuit panel decisions for which the "rhyme or reason" is unfathomable and purely subjective. I could do better with a Ouija board than trying to apply this unworkable framework.

[Paul Cole]

I have repeatedly argued that the four statutory eligible categories and the three judicially identified ineligible categories comprise two non-intersecting sets. Any suggestion otherwise involves judicial re-writing of statute and raises issues of the separation of powers.

A simpler and more straightforward expression of this principle which may be more immediately and directly useful follows. Claimed subject matter cannot both fall as a matter of substance (as opposed to mere outward presentation) within an eligible category and also fall into an ineligible category.

The remedy to much difficulty is therefore straightforward. Claims should be drafted so that they fall as clearly and straightforwardly as possible into one of the four eligible categories. Judicial authority for each of the four categories is summarised in the relevant section of MPEP.

In the event of objection either before the USPTO or before a court, the fact of positive compliance with an eligible category can be identified, and the reasons can be explained. It is notable that few of the CAFC or district court decisions that I have read have yet dealt with the issue of positive compliance. However, any lawyer who when construing or applying a statute fails to consider the positive provisions and only considers the exceptions would deserve a failing grade in any law school of any university where the Common Law is taught.

This kind of positive action which is within the power of all of us in our profession is a much better solution than vain ranting.

[Skeptical]

Mr. Morgan,

Your desire to "poo-poo" ANY meaningful discussion on Constitutional issues has been noted, given that you constantly snipe from the sidelines and never actually engage on the merits of Constitutional issues presented.

It is more than a bit disingenuous for you to presume confusion, irrelevancy, or discouragement when you yourself do more to confuse, to be irrelevant and discourage discussion (which SHOULD occur on a legal educational blog).

Please stop trying so very hard to NOT have the legal discussions that should be had.

[Skeptical]

Mr. Cole,

Your expressed views simply do not accord with the words of the Court itself.

It is the Court that has point blank stated that items squarely within the statutory categories NONETHELESS "really are directed to" something else. Even in the Alice case, BOTH SIDES stipulated to certain claims fully being within proper statutory categories (which would have removed the "present case or controversy" predicate for the Court's legal authority under your supposition -- more than merely the Constitutional issue of separation of powers is in play here).

Your desired "positive action" is not sufficient to overcome the reality with which we must necessarily face: the scoreboard IS broken.

[Greg DeLassus]

"[T]he four statutory eligible categories and the three judicially identified ineligible categories comprise two non-intersecting sets. Any suggestion otherwise involves judicial re-writing of statute and raises issues of the separation of powers."

I agree that it makes more sense to understand the "exceptions" as being implicit in the statutory language. I also agree that any other understanding of the exceptions raises separation of powers issues.

That said, the Supreme Court is fairly clear that It does *not* regard the "exceptions" as being an outgrowth of the statutory language. Rather, It regards the exceptions as something that It has layered on top of the statutory language. See, e.g., Bilski v. Kappos, 130 S. Ct. 3218, 3225 (2010) ("The Court's precedents provide three specific exceptions to § 101's broad patent-eligibility principles... ***While these exceptions are not required by the statutory text***, they... have defined the reach of the statute as a matter of statutory stare decisis going back 150 years," emphasis added). It is regrettable but nonetheless undeniable that the Court simply shrugs off the obvious separation of powers problem inherent in this view of the exceptions. That is why, it seems to me, the only resolution of this problem is *not only* to amend the statute to revise the exceptions, but *also* to remove patent appeals from the Court's certiorari jurisdiction. So long as the Court retains jurisdiction over patent appeals, It will simply lard Its version of the exceptions back into the statute, no matter how clearly the Congress amends the statute to trim the exceptions back.

"It is notable that few of the CAFC or district court decisions that I have read have yet dealt with the issue of positive compliance."

Indeed, this is noteworthy. I can think of *only* two cases of recent vintage (In re Nuijten,500 F.3d 1346 (Fed. Cir. 2007) and In re Wang, No. 2017-1827 (Fed. Cir. 20 Jun 2018, non-precedential)) that actually engage with the statutory categories---rather than the "judicial exception" categories---when assessing §101 compliance.

[Skeptical]

"Indeed, this is noteworthy. I can think of *only* two cases of recent vintage (In re Nuijten,500 F.3d 1346 (Fed. Cir. 2007) [_] that actually engage with the statutory categories---"

And the In re Nuitjen case was hopelessly MIS-decided from a purely factual point of view.

The universe simply does not exist according to how that case was decided.

[BP]

Electric Power Group: “Information as such is an intangible. See Microsoft Corp. v. AT & T Corp., 550 U.S. 437, 451 n.12 (2007); Bayer AG v. Housey Pharm., Inc., 340 F.3d 1367, 1372 (Fed. Cir. 2003)."

From a read of those cases one may uncover hints at the real intent of the EPG decision, which overlooks technological fact and precedential case law as to "data" such as "sensor data". EPG is an EXPEDIENT that gives the Fed Cir's handlers what they want, a weak patent system.