Patent Docs

Ancora Technologies, Inc. v. HTC America, Inc. (Fed. Cir. 2018)

By Michael Borella --

Ancora sued HTC in the Western District of Washington alleging infringement of U.S. Patent No. 6,411,941.  HTC moved to dismiss the case, contending that the claims of the patent were ineligible under 35 U.S.C. § 101.  The District Court granted HTC's motion.  Ancora appealed to the Federal Circuit.

The '941 patent is directed to mechanisms for preventing a computer from running unlicensed software.  While using license keys to control software was well-known at the time of the patent's earliest priority date (1998), the patent purports to do so in a rather unusual fashion (for that time).

Particularly, a key that uniquely identifies the computer that the software is installed upon is stored in read-only memory (ROM) of the computer's basic input / output system (BIOS).  Thus, the key cannot be modified, removed, or hacked by users or applications without significant effort.  Further, a record that is associated with the licensed software contains the names of the software, its vendor, and a number of licenses thereof.  The record is stored in volatile BIOS memory, encrypted by the key.  The software contains an unencrypted copy of the license record.

When the software is run, it is loaded into main memory, obtains a copy of the key, and performs encryption of its copy of the license record.  If this matches the encrypted license record stored in the BIOS, the program is permitted to continue executing.  Otherwise, the program is considered "unlicensed" and is either halted or run with reduced functionality.

This technique is different from how software licensing was previously enforced.  Software-based licensing required storing licensing information on the computer's main non-volatile storage device (e.g., a hard drive).  But this device was easily accessed and susceptible to hacking.  Hardware-based licensing required use of a pluggable dongle, which was poorly suited to software that was downloaded rather than sold in stores.

Further, BIOS memory was typically used to store low-level bootstrapping code that assisted startup of the hardware and initiation of the operating system, not license verification data.  Thus, the use of BIOS is unusual.

Claim 1 of the '941 patent was considered representative.  It recites:

1.  A method of restricting software operation within a license for use with a computer including an erasable, non-volatile memory area of a BIOS of the computer, and a volatile memory area; the method comprising the steps of:
    selecting a program residing in the volatile memory,
    using an agent to set up a verification structure in the erasable, non-volatile memory of the BIOS, the verification structure accommodating data that includes at least one license record,
    verifying the program using at least the verification structure from the erasable non-volatile memory of the BIOS, and
    acting on the program according to the verification.

In Alice Corp. v. CLS Bank Int'l, the Supreme Court set forth a two-part test to determine whether claims are directed to patent-eligible subject matter under § 101.  One must first decide 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 decide whether any element or combination of elements in the claim is sufficient to ensure that the claim amounts to significantly more than the judicial exclusion.  But generic computer implementation of an otherwise abstract process does not qualify as "significantly more," nor will elements that are well-understood, routine, and conventional lift the claim over the § 101 hurdle.

The District Court viewed the claim as focused on "the abstract concept of selecting a program, verifying whether the program is licensed, and acting on the program according to the verification."  The District Court was led to this conclusion because of the claim's breadth and that it did not recite "how usage of the BIOS to store the verification structure leads to an improvement in computer security."  With part one of Alice complete, the District Court found the claim lacking under part two as well, writing: "specifying that the BIOS be used to house the verification structure [calls for nothing more than] storing data in the memory of a computer component that generally stores data."  Since the District Court found the claim abstract and without an inventive concept, it entered judgment in favor of HTC.

On appeal, the Federal Circuit rapidly answered the patent-eligibility question in the positive.  Relying on recent precedent, such as Finjan, Inc. v. Blue Coat System, Inc., the Court stated that "[i]mproving 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 went on to disagree with the District Court, noting that the claim does recite storing the verification structure in a section of BIOS with certain beneficial characteristics, which was asserted to be an unexpected technique at the time of invention.  Thus, in the view of the Federal Circuit, the claim does not recite a mere desired outcome, but how to achieve this outcome.  Further, the claim addressed a technological problem associated with computers -- software license verification -- rather than a business, mathematical, or financial problem.

Oddly, while still considering the claim under the first part of Alice, the Court made an analogy to BASCOM Global Internet Services v. AT&T Mobility.  The latter case stands for the principle that an unconventional combination of well-known additional elements can make a claim patent-eligible under part two of the test.  The Court seemed to do so in order to support its conclusion that the claim was directed to a technical improvement in computer functionality.

With claim 1 found to be non-abstract, the Court did not need to explicitly move on to part two.  Thus, the Federal Circuit reversed the District Court, and found that the '941 patent met the requirements of § 101.

Ancora Technologies, Inc. v. HTC America, Inc. (Fed. Cir. 2018)
Panel:  Circuit Judges Dyk, Wallach, and Taranto
Opinion by Ciurcuit Judge Taranto

CyWee Group Ltd. v. Samsung Electronics Co. (E.D. Tex. 2018)

Claims for Determining an Orientation of a 3D Pointing Device Using Sensor Data Found to be Patent-Eligible

By James Korenchan --

Plaintiff CyWee Group Ltd. ("CyWee") sued Defendants Samsung Electronics Co., Ltd. and Samsung Electronics America, Inc. (collectively, "Samsung"), asserting various claims of U.S. Patent No. 8,441,438 (the '438 patent) and U.S. Patent No. 8,552,978 (the '978 patent) (a child of the '438 patent).  Samsung responded with a motion for summary judgment of invalidity of all asserted claims under 35 U.S.C. § 101.  Last week, Circuit Judge William C. Bryson (sitting by designation in the Eastern District of Texas) denied the motion.

The claims of the asserted patents generally involve using a particular combination of sensors of a "3D pointing device" to gather raw data points representative of a position of the device, and then inputting those data points into a mathematical formula to determine an orientation of the device in a spatial reference frame.  As an example, a 3D pointing device can be a mouse or other controller used to play video games such that, when a user moves the device, a pointer on the screen moves along with the orientation of the device.

Claim 1 of the '438 patent is representative of the four asserted apparatus claims of the '438 patent:

1.  A three-dimensional (3D) pointing device subject to movements and rotations in dynamic environments, comprising:
    a housing associated with said movements and rotations of the 3D pointing device in a spatial pointer reference frame;
    a printed circuit board (PCB) enclosed by the housing;
    a six-axis motion sensor module attached to the PCB, comprising a rotation sensor for detecting and generating a first signal set comprising angular velocities ω_x, ω_y, ω_z associated with said movements and rotations of the 3D pointing device in the spatial pointer reference frame, an accelerometer for detecting and generating a second signal set comprising axial accelerations Ax, Ay, Az associated with said movements and rotations of the 3D pointing device in the spatial pointer reference frame; and
    a processing and transmitting module, comprising a data transmitting unit electrically connected to the six-axis motion sensor module for transmitting said first and second signal sets thereof and a computing processor for receiving and calculating said first and second signal sets from the data transmitting unit, communicating with the six-axis motion sensor module to calculate a resulting deviation comprising resultant angles in said spatial pointer reference frame by utilizing a comparison to compare the first signal set with the second signal set whereby said resultant angles in the spatial pointer reference frame of the resulting deviation of the six-axis motion sensor module of the 3D pointing device are obtained under said dynamic environments, wherein the comparison utilized by the processing and transmitting module further comprises an update program to obtain an updated state based on a previous state associated with said first signal set and a measured state associated with said second signal set; wherein the measured state includes a measurement of said second signal set and a predicted measurement obtained based on the first signal set without using any derivatives of the first signal set.

Claim 14 of the '438 patent is representative of the five asserted method claims of the '438 patent:

14.  A method for obtaining a resulting deviation including resultant angles in a spatial pointer reference frame of a three-dimensional (3D) pointing device utilizing a six-axis motion sensor module therein and subject to movements and rotations in dynamic environments in said spatial pointer reference frame, comprising the steps of:
    obtaining a previous state of the six-axis motion sensor module; wherein the previous state includes an initial-value set associated with previous angular velocities gained from the motion sensor signals of the six-axis motion sensor module at a previous time T−1;
    obtaining a current state of the six-axis motion sensor module by obtaining measured angular velocities ω_x, ω_y, ω_z gained from the motion sensor signals of the six-axis motion sensor module at a current time T;
    obtaining a measured state of the six-axis motion sensor module by obtaining measured axial accelerations Ax, Ay, Az gained from the motion sensor signals of the six-axis motion sensor module at the current time T and calculating predicted axial accelerations Ax′, Ay′, Az′ based on the measured angular velocities ω_x, ω_y, ω_z of the current state of the six-axis motion sensor module without using any derivatives of the measured angular velocities ωx, ωy, ωz; said current state of the six-axis motion sensor module is a second quaternion with respect to said current time T; comparing the second quaternion in relation to the measured angular velocities ω_x, ω_y, ω_z of the current state at current time T with the measured axial accelerations Ax, Ay, Az and the predicted axial accelerations Ax′, Ay′, Az′ also at current time T;
    obtaining an updated state of the six-axis motion sensor module by comparing the current state with the measured state of the six-axis motion sensor module; and
    calculating and converting the updated state of the six axis motion sensor module to said resulting deviation comprising said resultant angles in said spatial pointer reference frame of the 3D pointing device.

And claim 10 of the '978 patent is representative of the two asserted method claims of the '978 patent:

10.  A method for compensating rotations of a 3D pointing device, comprising:
    generating an orientation output associated with an orientation of the 3D pointing device associated with three coordinate axes of a global reference frame associated with Earth;
    generating a first signal set comprising axial accelerations associated with movements and rotations of the 3D pointing device in the spatial reference frame;
    generating a second signal set associated with Earth's magnetism; generating the orientation output based on the first signal set, the second signal set and the rotation output or based on the first signal set and the second signal set;
    generating a rotation output associated with a rotation of the 3D pointing device associated with three coordinate axes of a spatial reference frame associated with the 3D pointing device; and
    using the orientation output and the rotation output to generate a transformed output associated with a fixed reference frame associated with a display device, wherein the orientation output and the rotation output is generated by a nine-axis motion sensor module; obtaining one or more resultant deviation including a plurality of deviation angles using a plurality of measured magnetisms Mx, My, Mz and a plurality of predicted magnetism Mx′, My′ and Mz′ for the second signal set.

Samsung contended that these claims are directed to a mathematical formula and thus patent-ineligible.  In doing so, Samsung attempted to analogize these claims to those in Parker v. Flook and Digitech, and to distinguish these claims to those in Thales Visionix.  In Flook, the Supreme Court found that claims for merely providing an equation into which selected temperature values were inserted were patent-ineligible.  In Digitech, the Federal Circuit found that claims "recit[ing] a process of taking two data sets and combining them into a single data set" were directed to an abstract idea and thus patent-ineligible.  And in Thales, the Federal Circuit found that the claims at issue, despite involving a mathematical equation, were "directed to systems and methods that use inertial sensors in a non-conventional manner to reduce errors in measuring the relative position and orientation of a moving object on a moving reference frame" and were thus patent-eligible.

Addressing step one of the Alice test, the Court began its analysis by opining on the importance and patentability of mathematical formulas:

Mathematical formulas, operations, or algorithms are at the heart of countless inventions; the application of mathematical principles has been the key to advancements in any number of fields.  Just considering fields akin to the orientation - sensing devices and methods at issue in this case, mathematical algorithms are at the heart of such inventions as driverless vehicles, drone navigation, and the remote orientation of satellites and scientific instrumentation in space.  The mathematical processes used in the operation of such devices have consequences in the physical world that make those devices precisely the kinds of inventions that the patent system was designed to protect and encourage.  Moreover, improvements in such devices are patentable even when the improvements in the devices are the product of improvements in the sophistication of the algorithms that drive the product's performance.  For example, autonomous emergency braking systems in automobiles have evolved through the use of more and more sophisticated algorithms, even when the brakes themselves and the sensors used to detect collisions may not have evolved significantly.  An improved system for autonomous emergency braking could hardly be deemed unpatentable if it used an algorithm that was more sophisticated than its predecessors, even though the mechanical components were themselves known in the art.

The Court also stressed that mathematical equations involved in claims should be viewed in conjunction with all other claim elements.

With this in mind, the Court found that the '438 patent and '978 patent claims "entail more than simply performing a calculation or organizing information through mathematical correlations, as in Flook and Digitech."  In particular, the Court highlighted the 3D pointing device and the computations performed by the processing/transmitting module based on the signal sets from the six-axis motion sensor module from the apparatus claims of the '438 patent, concluding that those claims are "directed to a particular device that performs a specific, useful function in the physical world" and "recite tangible, physical results from the receipt and assessment of information."  As for the method claims recited in both patents, the Court concluded that the claims "do not simply describe a mathematical calculation" and are rather "directed to a means of using the inputs from six-axis and nine-axis sensors to track the orientation status of the 3D pointing device and correct errors associated with conventional motion detectors."

Lastly, the Court specifically addressed Samsung's argument that, unlike the inertial sensors in Thales, the present claims involve sensors being used in a conventional manner and are thus patent-ineligible.  The Court refuted this argument, stating that the Thales Court did not view the unconventional use of the inertial sensors to be critical to the patentability of the subject matter.  Rather, the Court asserted that the Thales court viewed this unconventional use merely as "additional evidence that the claims were not directed to an abstraction in the form of a pure mathematical formula, but instead to a new and useful technique that simply relied heavily on an algorithm for its effectiveness."

Thus, the Court found the claims of both the '438 patent and the '978 patent to be patent-eligible.

CyWee Group Ltd. v. Samsung Electronics Co. (E.D. Tex. 2018)
Memorandum Opinion and Order by Circuit Judge Bryson

Blackbird Tech LLC v. Niantic, Inc. (D. Del. 2018)

Video Game Patent Found to be Patent Eligible

By Joseph Herndon --

In the U.S. District Court for the District of Delaware, Plaintiff (Blackbird) sued Defendant (Niantic) alleging infringement of U.S. Patent No. 9,802,127.  Niantic filed the present motion to dismiss the case for failure to state a claim under Rule 12(b)(6), on the basis that the asserted patent claims are invalid under 35 U.S.C. § 101.

The Court followed the two-step approach set forth by Alice to evaluate the section 101 challenge, and ultimately found the claims satisfied step 1 (leaving step 2 unnecessary), and thus, the motion was denied.

The '127 patent is directed to a video game in which user determined location information (e.g. GPS, Google Maps, an entered address or the like) is acquired, and the determined location information of a physical location is mapped to a video game environment so that the user of the video game experiences objects from the user's physical location while playing the video game.

The '127 patent describes an example in which if a user is playing a car racing game, he or she is able to race through the streets of his or her local neighborhood in the game.  This is achieved by first obtaining user determined location information relating to a user's location.  In a particular example, the user is able to load information relating to the user's current physical location.  This may be accomplished by taking a GPS reading of the user's current physical location and a certain radius around the user location or by the user entering an address.  Other sources of user determined location information relating to the users physical location, such as Google Maps, may also be used to acquire a set of user determined location information to be mapped into the video game.  Once acquired, the information is mapped into the game.  In this example, if the user is at a residence at 1 Sarah Lane in Maynard, MA, user determined location information relating to Sarah Lane and the town of Maynard, MA is acquired (via GPS, Google Map®, Google Earth® and the like).  The user determined location information is mapped into the video game such that the user can race around the streets of Maynard, MA.  In the game, the user can leave the residence at 1 Sarah Lane, turn onto Route 117 and race to downtown Maynard.  Upon entering the downtown area the user is able to race around the town, passing local points of interest such as Clock Tower Place, local fast food places (e.g., McDonalds®), past local stores (e.g., The Outdoor Store®) and onto Route 62.  By allowing the user to experience his or her desired location in the video game, an entirely new and entertaining form of game playing is achieved.

Claim 1 of the '127 patent recites:

1.  A computer-implemented method comprising:
    receiving a first position indicator representing a first current physical location for a user of a video game, wherein said first position indicator is determined at least in part by taking a global navigation satellite system reading of said first current physical location;
    obtaining image data relating to said first current physical location, said image data comprising two or more camera images of said first current physical location;
    mapping said image data into a virtual environment of said video game by displaying said image data as a video, wherein said user experiences within said virtual environment real life objects from said first current physical location, and said user simultaneously encounters within said virtual environment virtual objects that are not physically present in said first current physical location;
    receiving a second position indicator representing a second current physical location for said user as said user navigates a geographic area surrounding said first current physical location;
    saving at least said second position indicator to a memory; and
    storing at least said second position indicator in said memory when said video game is not executing.

In the motion to dismiss, the Defendant argued that the '127 patent claims are directed to the abstract idea of "receiving, processing, and displaying or storing location information."  The Defendant analogized the asserted claims to the method claim in Concaten, Inc. v. Ameritrack Fleet Solutions, LLC, which was found invalid under § 101.  The Concaten claim provided steps for relaying weather and road data to and from snowplows, comprising: (1) "receiving" information on a snowplow's physical location, and the weather and road conditions in that area; (2) "processing" the information to provide a map and determine an instruction for the snowplow operator; and (3) "providing" the map and instruction to the operator.  The claim further required that the map be "visually displayed, by a touch screen monitor," and that specific conditions be included in the instruction.

The Defendant argued that the '127 patent claims are directed to an abstract concept because they merely describe the idea of receiving, processing, and displaying location information in the context of a video game virtual environment using generic computer components, and are therefore, invalid for the same reasons as noted in Concaten.

The Court, however, found that the Defendant was oversimplifying the claims.  Under the Alice framework, courts must be wary of describing the claims at such a high level of abstraction and untethered from the language of the claims lest the exceptions to § 101 swallow the rule.

The Court found the Concaten claim distinguishable from the '127 patent claims.  The Court explained that the Defendant forced the analogy by essentially reading out the '127 patent's "mapping" limitation, which requires taking camera images of a real physical space where the user is located, and integrating those images as a video into a virtual video game environment.

The Court explained that such mapping ensures that the claimed method does not merely take steps routinely performed by humans and apply them on a computer because "mapping" as described in the claims could not be performed by humans.  Further, unlike the abstract optimization step done by unexplained "processing" step in Concaten, the mapping step here is tethered to specific instructions on which images are to be mapped (camera images from the user's physical location), where those images are to be mapped (the video game virtual environment), and how those images are to be displayed (as a video wherein the user experiences both real and virtual objects within the video game virtual environment).

The Court noted that Defendant argued that claim 1 includes an insufficient level of detail as the claims fail to explain how the image data is displayed as a video and how the images are allegedly combined, but such an enablement argument is beyond the scope of § 101.

The Court further rejected Defendant's arguments regarding the idea that the "wherein" clause in the mapping limitation merely described an outcome and thus was an aspirational and result-focused claim lacking specificity.  Again, the Court found that claim 1 provides specific instructions on how the mapping is done.  The Court cited McRO, and found the '127 patent claims, like the claims in McRO, to be directed to a specific means or method that improves the relevant technology.  Namely, the claimed technology allegedly solves the problem in the existing art of being confined to a predetermined and merely virtual location in a video game by incorporating a user's physical location as part of the game environment.  This is done by the specific means of first taking camera images of the user's physical location, and then mapping those images as a video into the virtual game environment.

Also, the Court found that the asserted claims, like in McRO, are directed to the creation of something physical, here, the display of camera images depicting the user's location overlaid with the virtual images from the video game for viewing by human eyes.

As a result, the Court found that the '127 patent claims are not directed to ineligible subject matter under Alice step one, and Alice step two was not needed.  Thus, the motion to dismiss was denied.

Here, the Court found that the claim included sufficient detail to avoid being considered a result-oriented claim.  Although the "mapping" limitation is awkwardly worded (and appears to have some antecedent basis issues), it does include descriptive or non-generic terms to avoid the abstract characterization.

Blackbird Tech LLC v. Niantic, Inc. (D. Del. 2018)
Memorandum Order by District Judge Andrews

Data Engine Technologies LLC v. Google LLC (Fed. Cir 2018)

By Michael Borella --

Data Engine Technologies (DET) filed an infringement suit against Google in the District of Delaware contending infringement of U.S. Patent Nos. 5,590,259, 5,784,545, 6,282,551, and 5,303,146.  Google responded with a Rule 12(c) motion arguing that the patents are directed to patent-ineligible subject matter under 35 U.S.C. § 101.  The District Court agreed and invalidated the patents.  DET appealed.

In Alice Corp. v. CLS Bank Int'l, the Supreme Court set forth a two-part test to determine whether claims are directed to patent-eligible subject matter under § 101.  One must first decide 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 decide whether any element or combination of elements in the claim is sufficient to ensure that the claim amounts to significantly more than the judicial exclusion.  But generic computer implementation of an otherwise abstract process does not qualify as "significantly more," nor will elements that are well-understood, routine, and conventional lift the claim over the § 101 hurdle.

For purposes of the Alice analysis, the Federal Circuit divided the patents into two groups:  the '259, '545, and '551 patents in one and the '146 patent in the other.

The Tab Patents

The patents of the first group are directed to tabbed interfaces in spreadsheets.  With priority dates going back to 1992, these patents allege improvements over spreadsheets (at the time) that did not use tabbed interfaces.  In the words of the Court:

In contrast to conventional electronic spreadsheets, the method claimed in the Tab Patents includes user-familiar objects, i.e., paradigms of real-world objects which the user already knows how to use such as notebook tabs.  In this manner, complexities of the system are hidden under ordinary, everyday object metaphors, providing a highly intuitive interface—one in which advanced features (e.g., three-dimensionality) are easily learned.

In essence, the invention involves tabs familiar to anyone who has used a modern spreadsheet such as Microsoft Excel.

According to the patents, this interface has several advantages.  Notably, "instead of finding information by scrolling different parts of a large spreadsheet, or by invoking multiple windows of a conventional three-dimensional spreadsheet, the present invention allows the user to simply and conveniently 'flip through' several pages of the notebook to rapidly locate information of interest."

In what may have been a determinative move, DET submitted several articles from popular magazines (e.g., PC World and InfoWorld) at the time of the invention lauding the advantages of new spreadsheet software packages that used tabs.  The articles noted that managing the complexity of large spreadsheets had long been a problem for users, and existing, non-tabbed spreadsheets would have data and results distributed in an unorganized fashion.  The introduction of tabbing elegantly solved this problem.

Claim 12 of the '259 patent, which was one of the representative claims, recites:

12.  In an electronic spreadsheet system for storing and manipulating information, a computer-implemented method of representing a three-dimensional spreadsheet on a screen display, the method comprising:
    displaying on said screen display a first spreadsheet page from a plurality of spreadsheet pages, each of said spreadsheet pages comprising an array of information cells arranged in row and column format, at least some of said information cells storing user-supplied information and formulas operative on said user-supplied information, each of said information cells being uniquely identified by a spreadsheet page identifier, a column identifier, and a row identifier;
    while displaying said first spreadsheet page, displaying a row of spreadsheet page identifiers along one side of said first spreadsheet page, each said spreadsheet page identifier being displayed as an image of a notebook tab on said screen display and indicating a single respective spreadsheet page, wherein at least one spreadsheet page identifier of said displayed row of spreadsheet page identifiers comprises at least one user-settable identifying character;
    receiving user input for requesting display of a second spreadsheet page in response to selection with an input device of a spreadsheet page identifier for said second spreadsheet page;
    in response to said receiving user input step, displaying said second spreadsheet page on said screen display in a manner so as to obscure said first spreadsheet page from display while continuing to display at least a portion of said row of spreadsheet page identifiers; and
    receiving user input for entering a formula in a cell on said second spreadsheet page, said formula including a cell reference to a particular cell on another of said spreadsheet pages having a particular spreadsheet page identifier comprising at least one user-supplied identifying character, said cell reference comprising said at least one user-supplied identifying character for said particular spreadsheet page identifier together with said column identifier and said row identifier for said particular cell.

Claim 1 of the '551 patent recites:

1.  In an electronic spreadsheet for processing alphanumeric information, said . . . electronic spreadsheet comprising a three-dimensional spreadsheet operative in a digital computer and including a plurality of cells for entering data and formulas, a method for organizing the three-dimensional spreadsheet comprising:
    partitioning said plurality of cells into a plurality of two-dimensional cell matrices so that each of the two-dimensional cell matrices can be presented to a user as a spreadsheet page;
    associating each of the cell matrices with a user-settable page identifier which serves as a unique identifier for said each cell matrix;
    creating in a first cell of a first page at least one formula referencing a second cell of a second page said formula including the user-settable page identifier for the second page; and
    storing said first and second pages of the plurality of cell matrices such that they appear to the user as being stored within a single file.

Starting with claim 12, the Court quickly concluded that the invention therein was "directed to a specific method for navigating through three-dimensional electronic spreadsheets" rather than an abstract idea.  Relying on the teachings of the specification that prior art spreadsheet technology was not user-friendly, the Court found that the claimed method "provides a specific solution to then-existing technological problems" that were unique to computers.  Particularly, the tabbed interface offers "a highly intuitive, user-friendly interface with familiar notebook tabs for navigating the three-dimensional worksheet environment."  The Court also seemed persuaded by the contemporaneous article lauding the benefits of the tabbed interface.

The Court made analogies to claims found patent-eligible in Core Wireless Licensing S.A.R.L. v. LG Elecs., Inc.  Notably, "claim 12 recites a 'specific' and 'particular' manner of navigating a three-dimensional spreadsheet that improves the efficient functioning of computers."  Another analogy was made to the patent-eligible claims of Trading Technologies International, Inc. v. CQG, Inc. where "a specific, structured graphical user interface paired with a prescribed functionality directly related to the graphical user interface's structure that is addressed to and resolves a specifically identified problem in the prior state of the art."

Google argued that claim 12 was directed to no more than organizing and presenting information.  But the cases that Google relied upon (Affinity Labs of Texas, LLC v. DirecTV, LLC, Intellectual Ventures I LLC v. Capital One Financial Corp., and Intellectual Ventures I LLC v. Erie Indemnity Co.) all involved claims that were functional in nature, described an outcome rather than specific steps that can be taken to achieve that outcome, and/or lacked a non-abstract improvement to computer technology.  The Court also distinguished claim 12 over those of Electric Power Group, LLC v. Alstom S.A., noting that this claim was directed to a specific improvement to how computers operate rather than just collecting, organizing, and displaying data.

Google also argued that humans have long-used tabs to organize information in notebooks, binders, and so on.  The Court responded:

We agree that tabs existed outside the context of electronic spreadsheets prior to the claimed invention.  It is not enough, however, to merely trace the invention to some real-world analogy.  The eligibility question is not whether anyone has ever used tabs to organize information.  That question is reserved for §§ 102 and 103.  The question of abstraction is whether the claim is "directed to" the abstract idea itself.  We must consider the claim as a whole to determine whether the claim is directed to an abstract idea or something more.  Google fails to appreciate the functional improvement achieved by the specifically recited notebook tabs in the claimed methods.  The notebook appearance of the tabs was specifically chosen by the inventors because it is easily identified by users.  The tabs are not merely labeled buttons or other generic icons.  DET has disclaimed as much.  Rather, the notebook tabs are specific structures within the three-dimensional spreadsheet environment that allow a user to avoid the burdensome task of navigating through spreadsheets in separate windows using arbitrary commands.

Consequently, the Court found claim 12 not directed to an abstract idea, and that the second step of the Alice test was not necessary.  Thus, all claims of the '259 and '545 patents were deemed patent-eligible.

In contrast, claim 1 of the '551 patent was struck down under § 101.  When compared to claim 12, this claim "generically recites associating each of the cell matrices with a user-settable page identifier and does not recite the specific implementation of a notebook tab interface."  Therefore, claim 1 is "not limited to the specific technical solution and improvement in electronic spreadsheet functionality that rendered representative claim 12 of the '259 patent eligible . . . [i]nstead, claim 1 . . . covers any means for identifying electronic spreadsheet pages."

Declaring claim 1 abstract due to this rationale, the Court moved on the second step of Alice -- the search for an inventive concept in the additional elements of the claim that renders the claim significantly more than abstract.  Ultimately, the Court found that the elements of "partitioning cells to be presented as a spreadsheet, referencing in one cell of a page a formula referencing a second page, and saving the pages such that they appear as being stored as one file . . . merely recite the method of implementing the abstract idea itself."

Accordingly, the Court held that claim 1 did not meet the requirements of § 101, and was therefore patent-ineligible.  But the remaining asserted claims of the '551 patent were upheld based on the reasoning applied to claim 12 of the '259 patent.

The '146 Patent

The '146 patent is "directed to methods that allow electronic spreadsheet users to track their changes."  In the prior art, spreadsheets "provided little or no tools for creating and managing such a multitude of [what-if] scenarios."  This resulted in users having to "resort to manually creating separate copies of the underlying model, with the user responsible for tracking any modifications made in the various copies."

The solution provided by the '146 patent is "an electronic spreadsheet system having a preferred interface and methods for creating and tracking various versions or 'scenarios' of a data model."  The invention "includes tools for specifying a 'capture area,' that is, a specific set of information cells to be tracked and an Identify Scenario tool for automatically determining changes between a captured parent or baseline model and a new scenario."

Claim 1 of the '146 patent recites:

1.  In an electronic spreadsheet system for modeling user-specified information in a data model comprising a plurality of information cells, a method for automatically tracking different versions of the data model, the method comprising:
    (a) specifying a base set of information cells for the system to track changes;
    (b) creating a new version of the data model by modifying at least one information cell from the specified base set; and
    (c) automatically determining cells of the data model which have changed by comparing cells in the new version against corresponding ones in the base set.

The Court rapidly concluded that the claim was "directed to the abstract idea of collecting spreadsheet data, recognizing changes to spreadsheet data, and storing information about the changes" because "[t]he concept of manually tracking modifications across multiple sheets is an abstract idea."  Further, the Court found that the claimed invention does not improve spreadsheet technology in a specific, non-abstract fashion.  Moving on to step two of Alice, the Court stated that there was nothing more in the claims aside from "simply stating the abstract idea while adding the words 'apply it.'"

Thus, all asserted claims of the '146 patent were invalid under § 101.

Analysis

If the goal is to obtain further insight into the where the line is drawn between inventions that are eligible and ineligible under § 101, this case is not the best place to start.  But let's give it a try.

The valid claims explicitly recited navigation of a tabbed spreadsheet interface, were relatively narrow and specific in doing so, and were supported by statements in their specification regarding the technological problems solved thereby.  This latter point was bolstered by extrinsic evidence from contemporaneous publications.  On the other hand, the invalid claims were broader and not specific to navigating a tabbed interface.  Despite evidence that all claims under review were directed to an improvement in spreadsheet technology, the claims ultimately found invalid were viewed by the Court as conceptual rather than concrete, most likely due to their relative lack of detail.

Also, this case further raises issues of how to differentiate between the analyses of §§ 101, 102, and 103 -- particularly, the role of prior art in the § 101 inquiry.  The Court wrote that "[t]he eligibility question is not whether anyone has ever used tabs to organize information . . . [t]hat question is reserved for §§ 102 and 103," and "[t]he question of abstraction is whether the claim is directed to the abstract idea itself."  But the Court's conclusion that some of the claims were valid seemed to be heavily based on how these claims recited an improvement over the prior art of the time.  The Federal Circuit remains schizophrenic regarding this matter.

Data Engine Technologies LLC v. Google LLC (Fed. Cir 2018)
Panel: Circuit Judges Reyna, Bryson, and Stoll
Opinion by Circuit Judge Stoll

Ex parte Bolivar (PTAB 2018)

PTAB Affirms Patent Eligibility of Claims for Using Dwell Time to Rank Search Results

By James Korenchan --

In a decision issued last month, the Patent Trial and Appeal Board of the U.S. Patent and Trademark Office reversed the final rejection of all pending claims in U.S. Application No. 12/814,020, for which the real party in interest is eBay.

The claims at issue are directed to methods and systems for managing how search results are ranked and presented to a user of a trading or e-commerce application.  The application aims to balance the desires of buyers, sellers, and intermediaries, to best present "items" (i.e., products and services) that are being offered for sale, to increase the chances that a "transaction" (e.g., a sale) involving such items will occur.  To accomplish this, the claimed invention involves ranking listings based at least in part on "dwell time" -- that is, the amount of time that the user spends interacting with or viewing a webpage containing information about a listing of an item for sale.  More particularly, dwell time refers to the time that elapses between when the user navigates to such a page from a display of search results and when the user navigates away from the page.

The claims had been rejected under 35 U.S.C. § 101 as being directed to an abstract idea.  Representative claim 18 is shown below.  The other independent claims (a system and CRM) recite similar limitations.

18.  A method comprising:
    identifying a plurality of listings stored in a listing database as search results;
    determining, using a processor, a respective dwell time associated with each of the plurality of listings, the dwell time based on an elapsed amount of time one or more users view a page describing the listing, and the dwell time associated with a likelihood o f a transaction occurring with respect to the listing; and
    ranking the listings composing the identified plurality of listings based at least in part on the respective dwell time associated with each of the plurality of listings.

The bulk of the Examiner's position analogized the claims to advertising, at one point calling the claims a "business model for advertising on the web."  More particularly, the Examiner cited the Federal Circuit's decisions in Cyberfone and Digitech, arguing that the claims are directed to the abstract idea of "organizing search listings, a type of advertising, ranked by the time that a user views the advertisement" or, put simply, "sales and marketing actions or behaviors."  The Examiner also argued that claims recite generic computer functionality and do not recite any limitations that would add significantly more than the alleged abstract idea.

In the briefing, the Appellants attempted to argue that the Examiner did not establish a prima facie case of patent-ineligibility, but the Board disagreed.  The Appellants also argued that the claims are directed not to advertising, but rather to a "specific way in which relevant search result can be identified and ranked" (i.e., using dwell time), and thus provide an improvement to computer technology similar to patent-eligible claims in cases such as DDR Holdings.  The Board agreed with this argument, particularly noting the recited use of dwell time and how the invention, similar to that in DDR Holdings, addresses an "Internet-centric challenge":

We determine claim 1 is directed not only to the "business idea" of organizing (ranking) search results, but claim 1 also is directed to the use of dwell time, which is an Internet-centric challenge.  . . .  Thus, just as in DDR Holdings, here Appellants' claim 1 is not directed to an abstract idea because it does "not merely recite the performance of some business practice known from the pre-Internet world along with the requirement to perform it on the Internet."  Claim 1 is not directed to an abstract idea because it "is necessarily rooted in computer technology in order to overcome a problem specifically arising in the realm of computer networks."

(citations omitted)

The Board thus reversed the Examiner's rejections.

While welcome, this decision is further evidence of the Board's inconsistent patent-eligibility determinations.  One could imagine a different panel reaching the opposite decision.  Still, the bar for patent-eligible improvements to computer technology is often set too high, and this decision is a refreshing entry that lowered the bar.

Another thing worth noting:  the Examiner's rejection here appeared to lack a great deal of substance, yet the Board did not agree as much.  For example, the Appellants repeatedly pointed out in their briefings and responses that the Examiner did not attempt to articulate why the claims are similar to Cyberfone and Digitech.  Less substantive § 101 rejections weren't all that uncommon years ago (and occur a bit too often even today), but it is still a bit surprising that the Board dismissed the Appellants' arguments to this point despite so matter-of-factly reaching a conclusion of patent-eligibility in this short decision.

Ex parte Bolivar (PTAB 2018)
Panel:  Administrative Patent Judges Strauss, Barry, and Bennett
Decision on Appeal by Administrative Patent Judge Barry

Roche Molecular Systems, Inc. v. Cepheid (Fed. Cir. 2018)

By Kevin E. Noonan --

One of the limitations of our judicial system is that it is inefficient in overcoming error.  This drawback is most pronounced at the Federal Circuit, where precedential decisions can only be overcome by en banc reconsiderations, which (perhaps rightly) occur infrequently (and are not a guarantee that error will be rectified).  Among the several Circuits there is at least the possibility of a Circuit split that will be resolved by the Supreme Court; while this may result in a remedy worse than the disease, at least the Court has the benefit of fully developed appellate decision making to provide context and legal argument in addition to the supplications of the parties (which necessarily and correctly are focused on their own interests).

At the Federal Circuit, in contrast, two judges can effectively produce a precedential decision binding on all future panels, unless and until the decision is reconsidered en banc.  That is the situation with the Court's decision in In re BRCA1- & BRCA2-Based Hereditary Cancer Test Patent Litig., 774 F.3d 755, 760 (Fed. Cir. 2014), an immediately post-Myriad decision unduly restrictive of the scope of patent eligibility (as illustrated in Judge O'Malley's concurrence).  That case involved the subject matter eligibility of oligonucleotide primers (for practicing the polymerase chain reaction or PCR) and methods for detecting BRCA gene mutations using these techniques.  And the Court's decision was an almost knee-jerk application of the Supreme Court's decisions in AMP v. Myriad Genetics and Mayo Collaborative Services v. Prometheus Laboratories, creating (as is the Federal Circuit's wont) a bright line rule that nucleic acids were ineligible as natural products and diagnostic methods ineligible as natural laws (despite lip service to a mythic "something more" that would distinguish a patent-eligible method).

This situation made the decision in Roche Molecular Systems, Inc. v. Cepheid a foregone conclusion.  The case arose in Roche's infringement case against Cepheid over U.S. Patent No. 5,643,723.  The invention was directed to methods for detecting Mycobacterium tuberculosis in a human, and in particular rifampin-resistant variants thereof.  The claimed methods were recognized in the art and by the Court as an improvement on prior art methods, which involved in vitro culture of sputum specimens, which took several (3-8) weeks to produce a result, and could not specifically detect either M. tuberculosis cells or rifampin-resistant variants.  The opinion notes, but does not expressly rely on, evidence that genotypic detection of a specific gene, rpoB, was a target for research by others at the time the invention was made.  Researchers working for Roche and Mayo identified eleven "position-specific 'signature nucleotides'" by comparison of the gene sequence over several bacterial species, including M. tuberculosis.

Method and composition of matter (primer) claims were at issue; claims 1 and 17 are representative of each:

1.  A method for detecting Mycobacterium tuberculosis in a biological sample suspected of containing M. tuberculosis comprising:
    (a) subjecting DNA from the biological sample to polymerase chain reaction [PCR] using a plurality of primers under reaction conditions sufficient to simplify a portion of a M. tuberculosis rpoB [gene] to produce an amplification product, wherein the plurality of primers comprises at least one primer that hybridizes under hybridizing conditions to the amplified portion of the [gene] at a site comprising at least one position-specific M. tuberculosis signature nucleotide selected, with reference to FIG. 3 (SEQ ID NO: 1), from the group consisting
        a G at nucleotide position 2312,
        a T at nucleotide position 2313,
        an A at nucleotide position 2373,
        a G at nucleotide position 2374,
        an A at nucleotide position 2378,
        a G at nucleotide position 2408,
        a T at nucleotide position 2409,
        an A at nucleotide position 2426,
        a G at nucleotide position 2441,
        an A at nucleotide position 2456, and a T at nucleotide position 2465; and
    (b) detecting the presence or absence of an amplification product, wherein the presence of an amplification product is indicative of the presence of M. tuberculosis in the biological sample and wherein the absence of the amplification product is indicative of the absence of M. tuberculosis in the biological sample.

17.  A primer having 14–50 nucleotides that hybridizes under hybridizing conditions to an M. tuberculosis rpoB [gene] at a site comprising at least one position-specific M. tuberculosis signature nucleotide selected, with reference to FIG. 3 (SEQ ID NO: 1), from the group consisting of [the same 11 nucleotides at the positions disclosed in claim 1].

The District Court granted summary judgment of invalidity for both types of claims for patent-ineligibility, and the Federal Circuit affirmed, in an opinion by Judge Reyna, joined by Judges Hughes and O'Malley (who wrote a perceptive concurring opinion).  Judge Reyna, who also wrote the opinion in Ariosa v. Sequenom, substantially mimicked Judge Dyk's reasoning found in In re BRCA1, rejecting any distinction drawn by patentee Roche between the oligonucleotide primers and DNA as it occurs in nature; in this reasoning he cited Justice Thomas's conclusion that "mere isolation" did not change isolated DNA from naturally occurring DNA in the absence of a change in sequence.  The opinion is careful to mention, in a footnote, that "[w]e do not address the subject matter eligibility of primers that have been altered—e.g., investigator-induced mutation(s) such that their nucleotide sequences are not found in nature, or primers which are chemically modified or labeled by investigators such that they cannot be isolated directly from naturally occurring DNA," citing Myriad.  Nor did the synthetic nature of the oligos matter, a view consistent not only with the Court's decision in Myriad but also in cases that harken back to Cochrane v. Badische Anilin & Soda Fabrik (1877).  And the eleven "position-specific 'signature nucleotides'" were also non-availing for eligibility, the opinion holding:

The eleven position-specific signature nucleotides on the MTB rpoB gene that Roche's primers are designed to hybridize to are naturally occurring; the Roche inventors identified these eleven positions after sequencing MTB DNA.  . . .  In other words, Roche identified these pre-existing position-specific signature nucleotides; it did not create them.  There is no doubt that Roche's discovery of these signature nucleotides on the MTB rpoB gene and the designing of corresponding primers are valuable contributions to science and medicine, allowing for faster detection of MTB in a biological sample and testing for rifampin resistance.  However, "[g]roundbreaking, innovative, or even brilliant discovery does not by itself satisfy the § 101 inquiry," [citing Myriad].

Regarding the method claims, the Court used the "plain meaning" of the claim language to conclude that the claims were "directed to" the natural law that M. tuberculosis could be detected by PCR amplification of the sequence, stating that "[t]his relationship between the signature nucleotides and MTB is a phenomenon that exists in nature apart from any human action, meaning the method claims are directed to a natural phenomenon, which itself is ineligible for patenting."  Having crossed the threshold of step 1 of the Mayo/Alice test for ineligibility, the opinion effortlessly satisfies the step 2 by finding PCR amplification to be "conventional, routine, and well-understood" and thus that the claims do not contain an "inventive concept."  Mayo/Alice calculus complete, the Court holds the method claims to be patent-ineligible.  And at least because this patent was written long before the current judicial regime antithetical to certain types of patents almost per se, it is easy for the panel to identify language in the specification supporting its conclusion:

This invention involves a comparative analysis of the rpoB sequences in MTB, other mycobacteria and related . . . bacteria . . . demonstrating the heretofore undiscovered presence of a set of MTB- specific position-specific "signature nucleotides" that permits unequivocal identification of MTB . . . [emphasis added].

(It should be noted if only for the record that this application of the law ignores the requirement from Diamond v. Diehr that the claims be considered as a whole.  It was not "conventional, routine, and well-understood" to perform PCR amplification to detect the "position-specific 'signature nucleotides'" identified by these inventors, and thus at least one avenue for a court open to applying the law consistent with Diehr is once again avoided in this decision.  Roche gamely made this argument, which the panel reduces to a mere "discovery" of a law of nature that is, per se, ineligible.)

In a pattern established by Judge Linn in Ariosa, Judge O'Malley penned a concurrence that reads more like a dissent, and contains one procedural and one substantive rebuttal of the Court's opinion.  First, Judge O'Malley notes that the precedent upon which the Court relies, In re BRCA1, does not stand for the firmly established proposition that oligonucleotide primers and PCR amplification for diagnostic purposes are per se patent ineligible.  She reminds her brethren that the question in In re BRCA1 was whether the District Court had abused its discretion in denying Myriad's motion for a preliminary injunction, not whether oligonucleotides are per se patent ineligible:

This procedural context in BRCA1 is important.  We have routinely recognized that the question of whether an accused infringer has raised a substantial question of invalidity in the context of a motion for a preliminary injunction—such as the question before the district court in BRCA1—presents a different type of inquiry than the question of whether an asserted claim is invalid—such as the question that was before the district court on summary judgment in this case.  Indeed, "[w]hile the evidentiary burdens at the preliminary injunction stage track the burdens at trial, importantly the ultimate question before the trial court is different" because "[i]nstead of the alleged infringer having to persuade the trial court that the patent is invalid, at [the preliminary injunction] stage[,] it is the patentee, the movant, who must persuade the court that, despite the challenge presented to validity, the patentee nevertheless is likely to succeed at trial on the validity issue."  Titan Tire Corp. v. Case New Holland, Inc., 566 F.3d 1372, 1377 (Fed. Cir. 2009).  Significantly, "the trial court 'does not resolve the validity question, but rather must . . . make an assessment of the persuasiveness of the challenger's evidence, recognizing that it is doing so without all of the evidence that may come out at trial."  Id. (emphasis added) (citations omitted).

This recognition significantly reduces the precedential effect of the BRCA1 decision and provides, perhaps, a way for a future panel to distinguish claims to primers from this precedent.  Judge O'Malley reminds her colleagues and us that the BRCA1 decision did not rule on the patent eligibility of PCR primer claims and does not compel the result the Court announced here.

Judge O'Malley's concurrence also notes that this case, unlike the BRCA1 case, contains unresolved questions of material fact that, while disregarded by the Court may provide another basis for distinguishing the BRCA1 decision.  Citing the distinctions drawn by the Supreme Court in Myriad between genomic DNA and cDNA, Judge O'Malley opines that while the BRCA1 opinion sets forth the basis for finding the PCR primer claims to be patent ineligible, "it is not clear from the BRCA1 opinion or record why we reached this conclusion.  The lack of record evidence underlying BRCA1's conclusion on this point is important in light of the record in this case."  She then goes on to recite the factual distinctions argued by Roche regarding the differences between the claimed primers and the sequences as they occur in nature (including the differences in strandedness, complementarity ("a primer comprising a nucleotide sequence of ATCG is complementary to, but unquestionably different from, a natural DNA strand comprising a sequence of TAGC"), the presence of a 3' hydroxyl group, the linearity of the primers versus the circular nature of bacterial DNA, and that natural "primers" comprise RNA and not DNA).  All these facts were adduced from expert testimony and thus for Judge O'Malley raise "genuine issue of material fact" that are not appropriate for summary judgment.  Judge O'Malley also notes that the claimed primers here have a markedly different function, unlike the genomic DNA in Myriad, due to the presence of the 3' hydroxyl group which permits PCR amplification to occur.  Judge O'Malley apprehends that the patentee in this case raised factual issues not addressed in the Court's BRCA1 decision, and thus, "unlike the appellants in Myriad and in BRCA1, here, Roche submitted evidence of record that, at the very least, raises genuine issues of material fact as to whether there exists anything in nature that both has the structure and performs the function of the claimed primers."  Accordingly, she believes not only that the BRCA1 decision does not compel the Court's conclusion here, but that the question should be taken up en banc to clarify the law regarding the patent eligibility of oligonucleotide primers and perhaps methods of using such primers to amplify targeted portions of DNA.

While this concurring opinion is a welcome ray of sunshine on a cloudy day, the practical effects of this, like so many Federal Circuit decisions on eligibility, is to incentive non-disclosure of inventions such as these, with the concomitant injury to progress that trade secret protection of diagnostic methods is almost certain to create.  It should be self-evident that this outcome is contrary to the Constitutional mandate underlying the patent system, but it appears the current constitution of the Court is unconcerned with this outcome.  Perhaps Chief Judge Woods of the Seventh Circuit was right after all.

Roche Molecular Systems, Inc. v. Cepheid (Fed. Cir. 2018)
Panel: Circuit Judges O'Malley, Reyna, and Hughes
Opinion by Circuit Judge Reyna; concurring opinion by Circuit Judge O'Malley

Gust, Inc. v. AlphaCap Ventures, LLC (Fed. Cir. 2018)

By Michael Borella --

Almost two years ago, we covered a dispute in the Southern District of New York (which began in the Eastern District of Texas) involving plaintiff AlphaCap, a non-practicing entity that aggressively asserted its patents against a number of targets, including Gust.  In short, when Gust didn't quickly settle, AlphaCap offered to dismiss its claims.  But Gust wanted AlphaCap to pay its attorneys' fees or assign AlphaCap the patents.  After some back-and-forth between the parties, the District Court dismissed the case but awarded Gust attorneys' fees under 35 U.S.C. § 285.  Gutride Safier LLP, attorneys for AlphaCap, were held jointly and severally liable for these fees and costs under 28 U.S.C. § 1927.

Notably, the District Court stated that the case was "exceptional" under § 285 because the Supreme Court's Alice Corp. v. CLS Bank Int'l opinion "gave AlphaCap clear notice that the AlphaCap Patents could not survive scrutiny under 35 U.S.C. § 101."  The basis of this conclusion was that "the claims were directed to crowdfunding, a fundamental economic concept and way of organizing human activity, and that this was an abstract idea."  The District Court further held that "the claims did not include an inventive concept sufficient to render the abstract ideas patent eligible under Alice."

Regarding § 1927, the District Court found Gutride to have acted unreasonably and in bad faith during the dispute, because it was unwilling to recommend settlement "despite knowing that Alice doomed the claims and stating that the case was 'not worth litigating'."

Gutride brought this appeal to the Federal Circuit solely on the issue of its liability for the attorneys' fees.  Judge Linn wrote the opinion of the Court and was joined by Judge Hughes.  Judge Wallach dissented.

The Majority Opinion

28 U.S.C. § 1927 states:

Any attorney or other person admitted to conduct cases in any court of the United States or any Territory thereof who so multiplies the proceedings in any case unreasonably and vexatiously may be required by the court to satisfy personally the excess costs, expenses, and attorneys' fees reasonably incurred because of such conduct.

Applying the law of the Second Circuit, a successful motion under § 1927 requires that: (i) the case was "entirely without color", and (ii) was "brought in bad faith—that is, motivated by improper purposes such as harassment or delay."  These determinations require a court to "provide a high degree of specificity in the factual findings."

Addressing the first prong, the Gutride referenced the "unsettled state of the law following the decision in Alice" as evidence that its case had color.  Gust responded by contending that "the § 101 law post-Alice was settled, because all cases dealing with abstract ideas in patents cited the two-step Alice framework," and that "the claims here were not even questionably patent eligible."

The Federal Circuit agreed with Gutride, noting that there was a "relative paucity of § 101 cases that were decided by this court between Alice and AlphaCap's complaint in Texas."  Indeed, several of the Federal Circuit's own cases from this time period "recognized the uncertainty in the application of Alice."  The Court further observed that "[w]hen the applicable law is unsettled, attorneys may not be sanctioned merely for making reasonable arguments for interpreting the law."  Instead, "it is particularly important to allow attorneys the latitude necessary to challenge and thus solidify the legal rules without the chill of direct economic sanctions."  Also, according to the Court, Gutride made a colorable argument that the claims met the requirements of § 101 due to being analogous to DDR Holdings, LLC v. Hotels.com L.P., while Gust's analogy between the claims and those found ineligible in another Southern District of New York case was unpersuasive.  Finally, the Court strongly disagreed with Gust that the mere existence of the two-step Alice framework implied that § 101 law was settled, and found the District Court's patent-eligibility analysis to be conclusory.

When applying the second prong, the District Court concluded that Gutride's actions constituted bad faith based on three grounds: (i) "Gutride knew that AlphaCap's patents were not patent eligible after Alice, and initiated the litigation anyway to extract a nuisance settlement"; (ii) Gutride's opposition to transferring the case to the Southern District of New York; and (iii) "Gutride's failure to end the case through settlement, dismissal, or a covenant not to sue."

Regarding Gutride's alleged knowledge that the patents were not eligible, the District Court put a fair amount of weight on Gutride's statement that "the case is 'not worth litigating'."  But the Federal Circuit viewed this statement as a negotiating position, noting that "[i]n the context of advocating for settlement with the opposing party to settle, this is an inoffensive assertion that the calculus favors settlement, not an admission that the patents were invalid."

With respect to the nuisance settlement, the Federal Circuit was more sympathetic.  It acknowledged that "AlphaCap bears relatively little risk and cost in filing its infringement actions, as compared with the relatively high costs incurred by defendants to defend the lawsuit."  Thus, by "encouraging quick settlements at values far below the cost of defending an infringement action on the merits, AlphaCap was able to obtain not insignificant revenues without having to test the merits of its position."  Nonetheless, the Court found that "Rule 11, with its procedural safeguards, already addresses attorneys' complicity in the filing of frivolous and improper litigation" and that "§ 1927 only applies to actions that result in unreasonable and vexatious multiplication of proceedings."  Consequently, the Court ruled with Gutride on this issue.

The Court also sided with Gutride regarding its resistance to the transfer.  Driving this conclusion was the fact that the Eastern District of Texas was a proper venue, that Gust had agreed to venue discovery, and because "at least some third-party users were found to reside in the Eastern District of Texas."  Supporting these points, the Court observed that "an attorney need not bring a case in the most convenient forum, but only a proper forum."

Finally, the Court also agreed with Gutride that failure to settle is not evidence of bad faith.  Notably, "[t]he decision to settle or grant a covenant not to sue is wholly committed to clients, not their attorneys."  Thus, Gutride could not be held liable for its client's decision.

For these reasons, the Court sided with Gutride and reversed the award of fees under § 1927.

Judge Wallach's Dissent

Writing in dissent, Judge Wallach faulted the majority for reversing the District Court.  A significant part of Judge Wallach's beef was based on the § 101 issues.  He disagreed that the law regarding patent-eligibility was unsettled, stating it was that "the framework with which we have consistently assessed patent eligibility under § 101 since its rendering."

Attacking the claims, Judge Wallach found them "directed to data organization and use of customizable profiles to facilitate patronage," which in his view were clearly abstract ideas.  While the majority found that § 101 jurisprudence as a whole was evolving, Judge Wallach stated that no claims similar to AlphaCap's were determined eligible by the Federal Circuit during the litigation.  In his words:

The Asserted Claims merely recite a series of steps for storing and organizing investment data that could all be performed by humans without a computer, and Gutride's attempt to assert otherwise was frivolous given that the abstract idea here is not meaningfully different from the ideas found to be abstract in other cases before the Supreme Court and our court involving methods of organizing human activity.

He also found additional elements lacking an inventive concept under Alice, as they were all involving conventional and generic terms.  Thus, with respect to § 101 as a whole, Judge Wallach concluded that "[t]he Patents-in-Suit clearly do not fall in that interstitial area where doubt may reasonably exist."  Judge Wallach was silent regarding the fact that he and the majority coming to two different conclusions when applying Alice to the claims suggests that the law surrounding § 101 is still unsettled.

Determining that the District Court did not abuse its discretion in finding that AlphaCap's case lacked a colorable basis, Judge Wallach moved on to bad faith.

Particularly, he found no flaw in the District Court's assessment of Gutride being "motivated by improper purposes such as harassment or delay."  He did not address the majority's position that Rule 11 controlled, and instead found "we must holistically consider Gutride's entire course of conduct in order to determine if it acted in bad faith by delaying dismissal of its suit, when it had knowledge of the suit's frivolous nature."  Further, he found that the "not worth litigating" statement occurred early enough in the case that Gutride could have pushed to settle the dispute much earlier.  Judge Wallach saw this as a "bad faith attempt to multiply the proceedings."

Turning to venue, Judge Wallach pointed to evidence that Gutride claimed that Gust had ties to the Eastern District of Texas, could not establish that said ties existed, and only after discovery was able to show that Gust had some users in the district.  This, apparently, was enough for Gutride to fail the bad faith sniff test.

Consequently, Judge Wallach would have affirmed the District Court.

Analysis

Regarding overly-aggressive litigation and the venue issue, Gutride may have indeed pushed the envelope.  On whether its conduct rises to the level of bad faith, the majority was probably correct to err on the side of caution.  Judge Wallach, on the other hand, gave more deference to the District Court.

But the majority was clearly correct to conclude that § 101 jurisprudence was too murky during the time of the litigation (early 2015 – late 2016) to conclude that AlphaCap's case was without color.

In 2015, the Federal Circuit found no claims patent-eligible under § 101.  But this does not imply that all business method and software claims involving data manipulation were categorically ineligible -- it merely suggests that the Court did not hear a case with claims that passed the test.  Also, not long prior to this time frame, there were multiple federal judges commenting on the record that Alice was hard to apply in practice.  Judge Wu of the U.S. District Court for the Central District of California criticized Alice for setting forth an "I know it when I see it" test.  Judge Pfaelzer, a colleague of Judge Wu, wrote that the Supreme Court's patent-eligibility cases "often confuse more than they clarify [and] appear to contradict each other on important issues."

More recently, Judge Wallach's Federal Circuit colleague, Judge Plager, wrote that the post-Alice §101 inquiry "renders it near impossible to know with any certainty whether the invention is or is not patent eligible."  And these are just a few examples of judicial confusion.  There are more.  The law was not settled during the case, and is even less settled now.

Thus, it is hard to agree with Judge Wallach.  Moreover, with a § 101 challenge being routinely raised against any asserted software or business method patent, the impact of penalizing plaintiffs and their attorneys for exercising such a patent would be to shut off nearly all software or business method litigation.

That is not to say that bad actors should not be punished.  But contending that § 101 is settled law to do so is absurd.  The only thing settled about patent-eligibility in the last four years is that it is unsettled.

Gust, Inc. v. AlphaCap Ventures, LLC (Fed. Cir. 2018)
Panel: Circuit Judges Wallach, Linn, and Hughes
Opinion by Circuit Judge Linn; dissenting opinion by Circuit Judge Wallach

Guada Technologies LLC v. Vice Media, LLC (D. Del. 2018)

Claims for Keyword-Based Navigation of Hierarchically-Structured Data Found Abstract But Survive Motion to Dismiss

By James Korenchan --

Plaintiff Guada Technologies, LLC ("Guada") sued Defendant Vice Media, LLC ("Vice Media"), alleging infringement at least claim 1 of U.S. Patent No. 7,231,379 ("the '379 patent").  Vice Media then filed a motion to dismiss.  Last week, Judge Richard G. Andrews of the U.S. District Court for the District of Delaware ruled that the claims are directed to an abstract idea under 35 U.S.C. § 101, but that a factual issue remains as to whether the claims provide an inventive concept.

The '379 patent, entitled "Navigation in a hierarchical structured transaction processing system," relates at a high level to navigating through a hierarchical network of "choices" (e.g., transactions, or operations where information is accessed) to accomplish a goal.  In such a network, choices are arranged as nodes in a graph structure.  As an illustrative example, Figure 3 of the '379 patent is shown below, which is in the context of airline reservations.

In this example, the high-level choice to make a reservation is shown in the graph at the top of a hierarchy of nodes.  As shown, for instance, the choices to reserve a domestic flight or an international flight are distinct nodes in the graph that branch from the reservation node.  Other choices (i.e., flight classes) are then shown as nodes branching from the domestic flight and international flight nodes.

The background of the patent notes that it can be difficult to efficiently navigate through a graph of choices to reach a goal, particularly when there are many choices involved in doing so.  In addition, the patent notes the disadvantages in how existing graphs and associated systems often require direct path traversal through a hierarchy.  That is, such systems do not allow a user to jump from one node to another unless the two nodes are connected as part of the same path through the graph.  The patent thus aims to provide more efficient navigation through a series of choices in a network of nodes by using keywords to allow a user to jump from one node to a non-connected node.  In the context of this invention, a "keyword" for a choice is the most important word and serves as a shorthand way of referring to a node.  As a simple example, if the node for a choice to make a reservation is "Would you like to make a reservation?", the keyword could be "reservation" (or "Reservations," as shown in Figure 3).

The '379 patent includes two independent claims of similar scope.  As a representative example, claim 1 is provided as follows:

1.  A method performed in a system having multiple navigable nodes interconnected in a hierarchical arrangement comprising:
    at a first node, receiving an input from a user of the system, the input containing at least one word identifiable with at least one keyword from among multiple keywords,
    identifying at least one node, other than the first node, that is not directly connected to the first node but is associated with the at least one keyword, and
    jumping to the at least one node.

Abstract Idea

Guada argued that the invention solves existing problems in the art by not restricting user movement through a decisional network to adjacent nodes or starting over at a top node.  And in oral arguments, Guada analogized the claims to those in McRO, asserting that the claims amount to computer improvement.  However, Guada provided little substance to its McRO position:

Plaintiff argues that the claims here provide "implementation details," which are not "purely functional," but rather amount to computer improvement.  First, argues Plaintiff, the "receiving an input" claim limitation "requires a specific user . . . who provides the input, provides the location where the input is received . . . , and what the input is . . . ."  Second, argues Plaintiff, the "identifying at least one node . . . associated with the at least one keyword" limitation requires "nodes associated with keywords."  Plaintiff argues that "nodes" in "the ordinary setup of a hierarchically arranged decision network" are "not associated with keywords."  Third, argues Plaintiff, the "jumping" limitation "requires the system to directly traverse from one node/vertex to another node/vertex that is not directly connected."

(citations omitted).

In response, Vice Media cited CyberSource, noting that the claimed "nodes" and "interconnections" are not tangible objects and that the steps of each method claim can be performed mentally or with pen and paper.  Even the concept of a hierarchical arrangement of nodes, Vice Media argued, is an abstract idea from mathematical graph theory.

The Court agreed with Vice Media, stating that the '379 patent provides no information as to how the "implementation details" allegedly provided by the claims improve computer functionality or even a computerized data set.  Rather, the claims related to a "generic automation of a once-manual method."  The Court also noted that keywords do not necessarily invoke computer functionality.  For at least these reasons, the Court deemed all seven claims of the '379 patent to be directed to an abstract idea.

Guada also argued that claim construction issues precluded a grant of the motion to dismiss and proposed its own constructions to remedy those issues, but neither rendered the claims non-abstract.  First, Guada argued that limitations in the preamble of each independent claim refer to "a computerized system of multiple nodes interconnected in a hierarchically arranged decisional network in which a user provides inputs or responses at each node to navigate through adjacent nodes in the hierarchical arrangement."  But the Court stated that the construction at best places the claim into a more specific technological environment.  Guada also provided specific constructions for the "jumping" limitations -- most notably of which being that the jumping limitation is an action required by the system, not the user.  But the Court stated that this merely amounts to automating "the mental process of jumping from one node to another."

Inventive Concept

In its Alice prong two contentions, Guada argued that the claims recite two alleged inventive concepts.  First, Guada argued that that "jumping" limitation is inventive because navigation in prior art hierarchical networks was not done the way that the patent purports.  Second, Guada argued that using keywords to jump from node to node is inventive.  Vice Media argued in response that both of these concepts were well-known at the time the patent was filed (November 2002), but provided no citation in support and thus did not provide the clear and convincing evidence of ineligibility required by Berkheimer.

As a result, the Court denied Vice Media's motion to dismiss and solidified this decision as another example of the increased difficulty in invalidating patents post-Berkheimer.  Vice Media will have to improve its contentions and actually provide evidence at the summary judgment stage.

Guada Technologies LLC v. Vice Media, LLC (D. Del. 2018)
Memorandum Opinion by District Judge Andrews

Director Iancu Produces Glimmer of Patent Eligibility Hope

By Kevin E. Noonan --

U.S. Patent and Trademark Office Director Andrew Iancu gave the introductory keynote address at the 46th Annual Meeting of the Intellectual Property Owners (IPO) Association on Monday, and his talk provided the prospect of a Patent Office administration dedicated, as former Solicitor Nancy Linck advocated several years ago at a Biotechnology Innovation Organization annual meeting, to adopt policies aimed at helping the courts (including the Supreme Court) come to the correct decisions regarding questions such as patent subject matter eligibility.

While discussing other aspects of the Office's policymaking (including improvements in the Trademark Office and participation in the Music Modernization Act) and infrastructure efforts (noting the "legacy" nature of the Office's IT infrastructure and the week-long outage of the Electronic Filing System and Patent Application Information Retrieval portal a few weeks ago), the bulk of Director Iancu's remarks had to do with subject matter eligibility.  The Director noted (and quoted) Federal Circuit judges to the effect that subject matter eligibility was an uncertain area of the law that needed change.  The Director noted the efforts of IPO, and the American Intellectual Property Lawyers Association (AIPLA) in proposing draft legislation to remove the uncertainty in the law (stemming unmentioned from Supreme Court cases of dubious sagacity).  But Director Iancu noted that legislation can "take[] a long time" and the results cannot be certain.

"[T]he USPTO cannot wait," he said, noting that there are "thousands of examiners who struggle with these issues on a daily basis" and who "need additional guidance now" (as well as "patent applicants, patent owners, and the public").

He then harkened back to Judge Giles Sutherland Rich and his "prescient" thoughts of almost 40 years ago, when in In re Bergy the Judge noted that there was an "unfortunate . . . though clear commingling of distinct statutory provisions which are conceptually unrelated, namely, those pertaining to the categories of invention in §101 which may be patentable, and to the conditions for patentability demanded by the statute . . . ."  Restating the point, Director Iancu asked:

How can a claim be novel enough to pass 102 and nonobvious enough to pass 103, yet lack an "inventive concept" and therefore fail 101?  Or, how can a claim be concrete enough so that one of skill in the art can make it without undue experimentation, and pass 112, yet abstract enough to fail 101?  How can something concrete be abstract?

These are not simple problems, insofar as they "confound the most sophisticated practitioners in our patent system" because "[p]eople simply don't know how to draw these distinctions."  Echoing many, the Director advocated using the other statutory sections (specifically, §§ 102, 103, and 112) as more appropriate tools for preventing unpatentable (in contradistinction to patent-ineligible) claims from being allowed.

The appropriateness of these statutory sections is illustrated by "decades of case law from the courts and millions of examinations at the PTO" to "guide us in our 102, 103, and 112 analyses."  The Director characterized that "the genius of the 1952 Patent Act" was that it provided categories of patent-eligible subject matter.  The problem, according to Director Iancu (and in this sentiment he is not alone) is that recent case law "mushes them all up again."  This "may [indeed, demonstrably does] lead to distorted legal conclusions," according to the Director, stating dramatically:  "And it has.  And it must end."

How to achieve this goal so fervently to be hoped?  The Director proposes going back to Judge Rich, "and keep[ing] rejections in their own distinct [statutory] lanes."  The standard the Director proposes is that, "[i]f the claims can be fixed by slightly different claiming, by narrower claiming, or by more definite claiming, this is likely a 'conditions' problem—not a subject matter problem."  He recognizes that some things, like gravity or DNA, are not patent eligible -- he is not an extremist or absolutist.  But he proposes to provide categories of patent ineligible subject matter like the statute provides patent eligible subject matter categories.

His discussion of providing more certain and defined (cabined, dare we say?) categories of ineligible subject matter focused on abstract ideas, which he believes is "the issue needing most attention."  To that end, the Director announced that "at the USPTO we are contemplating revised guidance to help categorize the exceptions—and indeed to name them—and instruct examiners on how to apply them."  He then explained his vision:

[T]he contemplated guidance would do two primary things:  First, it would categorize the exceptions based on a synthesis of the case law to date.  And second, if a claim does recite a categorized exception, we would instruct examiners to decide if it is "directed to" that exception by determining whether such exception is integrated into a practical application.  These two clarifications would help drive more predictability back into the analysis while remaining true to the case law that gave rise to these judicial exceptions in the first place.

This calculus would provide categories of patent-ineligible subject matter that satisfy the criterion set forth by the Supreme Court:  the "basic tools of scientific and technological work."  These include examples such as "gravity, electromagnetism, DNA"; "fundamental mathematics like calculus, geometry, or arithmetic per se"; "basic 'methods of organizing human activity,' such as fundamental economic practices like market hedging and escrow transactions"; and "pure mental processes such as forming a judgment or observation . . . by itself, something performed solely in the human mind."

Despite the Supreme Court having been "interpreting this statute for the past 200 years or so," the Director recognizes that the Court has only provided a "limited number of examples" of subject matter that encompasses the "basic tools of scientific and technological work."  The Director finds that what constitutes "natural phenomena" or "laws of nature" present less difficulty in defining their metes and bounds than abstract ideas.  To address this question, the PTO is performing "a thorough review of the relevant case law helps us draw more clear lines," "stud[ying] every relevant case in detail."  As a consequence, the Director informed his audience that "the proposed PTO guidance would synthesize "abstract ideas" as falling into the following three categories:

• Mathematical concepts like mathematical relationships, formulas, and calculations
• Certain methods of organizing human interactions, such as fundamental economic practices commercial and legal interactions; managing relationships or interactions between people; and advertising, marketing, and sales activities
• Mental processes, which are concepts performed in the human mind, such as forming an observation, evaluation, judgment, or opinion.

Under the new guidance, Examiners would first look at whether the claims were directed to one of the four statutory categories.  If yes, the Examiner would then "check to see if the claims recite matter within one of the judicial exceptions," categorized as set forth in the Director's talk; he said this was the Office's "new approach."  What seems to be the actual new approach was his next statement:  "[i]f the claims at issue do not recite subject matter falling into one of these categories [of patent-ineligible subject matter], then the 101 analysis is essentially concluded and the claim is eligible."  The Director predicted that "[t]his alone would resolve a significant number of cases currently confounding our system" because "[i]f an examiner does not find matter within the disallowed categories, he or she can move on."

However, if the subject matter falls within a patent-ineligible subject matter category, then (but only then) must the Examiner move on to consider "whether the claims are 'directed to' those categories."  What the Director believes this means, and what the new guidance will specify, is "that Supreme Court jurisprudence taken together effectively allows claims that include otherwise excluded matter as long as that matter is integrated into a practical application."  "The line, in other words, delineates mere principles, on one hand, from practical applications of such principles, on the other," according to the Director's description of the new guidance.  This methodology is supported, according to the Director, by Supreme Court precedent including Le Roy v. Tathem (1853), and Diamond v. Diehr (1980), and even Mayo v. Prometheus (which the Director cited for the teaching that "applications of such concepts to a new and useful end . . . remain eligible for patent protection" ).  In practice, the Director says that this means that "if the claim integrates the exception into a practical application, then the claim is not 'directed to' the prohibited matter[, ]passes 101 and the eligibility analysis would conclude."

If this is not the case, then the Examiner must move on to step 2 of the Mayo/Alice test to determine whether the "something more" in the claim is conventional, routine or well-understood according to the Berkheimer memo already set forth by the Office.  The difference with current practice, according to the Director, is that "the first step of our analysis does not include questions about 'conventionality,'" meaning that "it does not matter if the 'integration' steps are arguably 'conventional'; as long as the integration is into a practical application, then the 101 analysis is concluded."  The benefits of this change:  it "helps to ensure that there is a meaningful dividing line between 101 and 102/103 analysis," wherein "[a] fully 'conventional' yet patent-eligible claim may still be unpatentable as obvious [under §103]."  The Director also noted that this analysis would also permit claims that are overbroad or "functionally-stated or result-oriented" could be examined under Section 112, and that "USPTO examiners know, and will receive further guidance and training on, how to apply well-defined Section 112 principles."  Under the Director's proposed guidance:

[T]he examination does not conclude merely because we overcome Section 101; we must still examine for patentability under sections 102, 103 and 112.  And so for claims that pass 101 because they do not articulate matter in a defined category, or that integrate the matter into a practical application, we can rest assured that other sections of the code should still prevent a patent if the claim is not inventive or is merely on a non-enabled or undescribed or indefinite idea.

In sum, the proposed guidance for Section 101, which addresses step 1 of Alice, would explain that eligibility rejections are to be applied only to claims that recite subject matter within the defined categories of judicial exceptions.  And even then, a rejection would only be applied if the claim does not integrate the recited exception into a practical application.  This provides significantly more clarity for the great bulk of cases.

Charitably, the Director asserts that "we have gotten ourselves into a rut when it comes to Section 101 analysis" and that the proposed new guidance "is trying to navigate our examiners out of that rut given the current statute and judicial precedent."  He concluded with his hope that "other authorities will join in helping us get out of the rut, at least by keeping rejections in their lane and by clearly categorizing the subject matter of any exception" and warning that it may take some time before the guidance is finalized.

Despite the hope Director Iancu's remarks may have engendered, within them lie a major disadvantage of the U.S. patent system.  During the twenty-year life of a patent there will be at least two and perhaps many more changes in administration.  The past 18 years have seen Directors as varied as Rogan, Dudas, Kappos, Lee, and Iancu, each not just imposing their own nuance to the Office but in almost every case changing the standards under which patents were granted (and more recently, re-examined).  This intrinsic uncertainty makes it a certainty that for every Director Kappos or (perhaps) Iancu we will have a Director Dudas or Lee.  Uncertainty makes investment more difficult and risky and at best undervalues and at worst inhibits development of new technologies.  During times when there is a consensus that patents encourage innovation, the effects of a new Director historically have been minimal.  But when, as is the case with so many policy debates, the fundamental soundness of strong patent policy is debated on the grounds that patents are an impediment to innovation or that "efficient infringement" is good business practice, there is a risk that the changing tides of patent policy will contravene the constitutional purpose to "promote progress of the useful arts."  Director Iancu promises to promote the yin of pro-patent policy; but what will be the consequence when the next director promotes the yang?

The Subject Matter Eligibility of Machine Learning: An Early Take

By Michael Borella --

Machine learning is more than just a buzzword.  It represents a fundamental shift in how problems are solved across industries and lines of business.  In the near future, a machine learning library may become a standard part of all operating systems, just like TCP/IP and database technologies have in the past.

For the majority of the existence of computers, programmers wrote functions that were designed to take some input and produce a desired output.  Or, if i represents the input and o represents the output, the goal of the programmer was to develop a function f such that o=f(i).

Machine learning inverts this paradigm to some extent.  A data set (which in practice usually needs to be quite extensive) of mappings between inputs and their respective outputs is obtained.  This data set is fed into a machine learning algorithm (e.g., a neural network, decision tree, support vector machine, etc.) which trains a model to "learn" a function that produces the mappings with a reasonably high accuracy.  In other words, if you give the computer a large enough set of inputs and outputs, it finds f for you.  And this function may even be able to produce the correct output for input that it has not seen during training.

The programmer (who has now earned the snazzy title of "data scientist") prepares the mappings, selects and tunes the machine learning algorithm, and evaluates the resulting model's performance.  Once the model is sufficiently accurate on test data, it can be deployed for production use.

The number of patent application filings related to artificial intelligence (of which machine learning is the hottest subset) has been growing dramatically in the past several years, especially in the U.S.  But so has the legal uncertainty of certain types of software and business method inventions due to the Supreme Court's rulings in Bilski v. Kappos, Mayo Collaborative Services v. Prometheus Labs., Inc., and Alice Corp. v. CLS Bank Int'l.  So a natural question to ask is what does the patent-eligibility landscape look like for machine learning inventions?  Not unlike all questions regarding patent-eligibility, there are no easy answers.

But first, let's dig in to the nuances of the case law.  In Alice, the Supreme Court set forth a two-part test to determine whether claims are directed to patent-eligible subject matter under 35 U.S.C. § 101.  One must first decide 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 decide whether any element or combination of elements in the claim is sufficient to ensure that the claim amounts to significantly more than the judicial exclusion.  But generic computer implementation of an otherwise abstract process does not qualify as "significantly more," nor will elements that are well-understood, routine, and conventional lift the claim over the § 101 hurdle.

The Federal Circuit has not been a paragon of consistency across its § 101 cases.  For instance, Electric Power Group v. Alstom S.A. has been interpreted as holding that claims directed to no more than gathering, processing, and outputting data are ineligible.  On the other hand, in Enfish LLC v. Microsoft Corp., the Court found that a database arrangement that provided improvements over traditional relational databases met the § 101 requirements.  Likewise, in McRO, Inc. v. Bandai Namco Games America Inc., claims to software displaying lip synchronization and facial expressions of animated characters were eligible because they used a rule-based approach that was different from manual animation techniques.

Clearly, it is advantageous for claims related to machine learning inventions to be more than Electric Power Group's gathering, processing, and outputting of data.  But, at its core, that is what machine learning is all about.  Training a model takes in data, crunches it, and produces a program as output.  Using a model also involves taking input data, running it through the model, and obtaining output data as a result.  Thus, a naïve approach to claiming machine learning procedures may lead to § 101 difficulties.

To date, the Federal Circuit has not considered the patent-eligibility of machine learning claims.  The closest opportunity the Court had was in 2014's I/P Engine, Inc. v. AOL, Inc.  But in that case the claims were directed to non-specific ways of conducting a search for one user based on relevant search results found for other users.  While the patentee pointed out that its specification described use of a neural network to carry out the invention, the Court (in a footnote) dismissed this disclosure since the claims were not limited to such techniques.

In the district courts, there is relatively little to report.  Most relevant decisions to date, such as Kaavo Inc. v. Amazon.com, Inc. (D. Del. 2018), eResearchTechnology, Inc. v. CRF, Inc. (W.D. Penn 2016), and Neochloris, Inc. v. Emerson Process Mgmt. LLLP (N.D. Ill. 2015) are similar to I/P Engine in that the claims and/or the specification do not explicitly detail specific aspects of machine learning.

In Blue Spike, LLC v. Google Inc. (N.D. Cal. 2015), the claims were similarly non-specific to machine learning.  The patentee argued against the abstractness of inventions mirroring human perception and analysis on a computer, cautioning that a restrictive approach could render future breakthroughs in artificial intelligence technology unpatentable.  The Court remained focused on the breadth of the claims, stating that "[t]he mere fact that the claims may cover a computer implementation that surpasses in scope or complexity what a human mind is capable of accomplishing is irrelevant where the claims are not limited to such complex activities, but also encompass more basic approaches."

One case that provides a more substantive discussion is PurePredictive, Inc. v. H2O.AI, Inc. (N.D. Cal. 2017), and therefore is worthy of our attention.  PurePredictive sued H2O.AI, alleging infringement of U.S. Patent No. 8,880,446.  H2O.AI filed a motion to dismiss on the grounds that the claims of the '446 patent were invalid under § 101.

The invention at was described in the '446 patent as "an apparatus, system, method, and computer program product to generate a predictive ensemble in an automated manner . . . regardless of the particular field or application, with little or no input from a user or expert."  In this context, an "ensemble" is a set of machine learning models that can be operated in series or in parallel, with the goal of doing so being to provide better results than the output of any one individual model.

Claim 14 of the patent recites:

A method for a predictive analysis factory, the method comprising:
    pseudo-randomly generating a plurality of learned functions based on training data without prior knowledge regarding suitability of the generated learned functions for the training data, the training data received for forming a predictive ensemble customized for the training data;
    evaluating the plurality of learned functions using test data to generate evaluation metadata indicating an effectiveness of different learned functions at making predictions based on different subsets of test data; and
    forming the predictive ensemble comprising a subset of multiple learned functions from the plurality of learned functions, the subset of multiple learned functions selected and combined based on the evaluation metadata the predictive ensemble comprising a rule set synthesized from the evaluation metadata to direct different subsets of the workload data through different learned functions of the multiple learned functions based on the evaluation metadata.

The Court summarized the claim as consisting of three steps:  "First, it receives data and generates 'learned functions,' or, for example, regressions from that data[, then] it evaluates the effectiveness of those learned functions at making accurate predictions based on the test data[, and then] it selects the most effective learned functions and creates a rule set for additional data input."

The Court applied the Alice test starting with part one.  H2O.AI took the position that the patent was "an attempt to monopolize the use of basic mathematical manipulations without reference to any specific implementation, application, purpose, or use."  PurePredictive disagreed, stating that the invention solved "a specific problem in and [made] improvements to computer-related technology," and argued that the claims were analogous to those of Enfish and McRO.

The Court leaned heavily on FairWarning IP, LLC v. Iatric Systems, Inc. as the most relevant precedent.  Similar to Electric Power Group, FairWarning involved claims that (in the view of the Federal Circuit) amounted to no more than "collecting and analyzing information to detect misuse and notifying a user when misuse is detected" and did not improve a technological process.

In light of this holding, the Court stated that "[t]he method of the predictive analytics factory is directed towards collecting and analyzing information."  Particularly, "[t]he first step, generating learned functions or regressions from data—the basic mathematical process of, for example, regression modeling, or running data through an algorithm—is not a patentable concept."  Further, the next two steps were "mathematical processes that not only could be performed by humans but also go to the general abstract concept of predictive analytics rather than any specific application."

PurePredictive argued that it would be impossible for a human to carry out the claimed invention.  But the Court found that this point held little weight, noting that "just because a computer can make calculations more quickly than a human does not render a method patent eligible."  The Court also stated that "[t]he patent specification's description of this process as a 'brute force, trial-and-error approach,' reinforces that this process is merely the running of data through a machine."  Regarding Enfish and McRO, the Court concluded that the claimed invention did not improve the functionality of computers or computer-related technology, and instead just used computers as a tool.

Moving on to part two of Alice, PurePredictive attempted to make analogies between its claims and those found to provide "significantly more" in DDR Holdings, LLC v. Hotels.com, L.P. and BASCOM Glob. Internet Servs., Inc. v. AT&T Mobility LLC.  Particularly, it contended that the claimed ensemble technique "do[es] not need extensive tuning and customization" and is "applicable regardless of the particular field or application."  But the Court disagreed because, unlike DDR Holdings, the claims address a broad scope of problems rather than being focused on solving a specific technical problem.  Furthermore, unlike BASCOM, the claims did not describe a specific physical architecture and instead was focused on software modules.

As a consequence, the claims failed both parts of the Alice test, were ruled ineligible under § 101, and therefore held invalid.

While this case is a useful data point, it reinforces the old saying that "bad facts make bad law."  The claims are indeed quite broad and not directed to solving a specific problem or making a particular technical improvement.  Prior to Alice and its progeny, this was unlikely to trigger issues under § 101, but now it does more often than not.

Still, it should surprise no one that machine learning claims are treated like any other type of software claim in the § 101 analysis.  While one could posit that the whole point of machine learning is to train a computer to do something that a human can't do (or is impractical for a human to do) in a way that a reasonable person would not do it, that is not enough to avoid Alice pitfalls.  Machine learning claims can potentially be even more vulnerable to § 101 challenges when the claims recite only data manipulation and do not provide a well-defined technological need or advantage.

Therefore, like other types of software inventions, those involving machine learning should be focused.  Some example claiming strategies involve reciting specific types of data associations, detailing the training phase and/or the structure of the model, and placing the model within the context of a larger system.  Until we hear more from the district courts -- and hopefully from the Federal Circuit as well -- moving forward with these best practices is the recommended approach.

Patenting Repurposed Drugs

By John E. Conour --

Even with billions of dollars of funding and the cumulative knowledge and experience of over a hundred years of experimental pharmacology, de novo discovery of effective and safe therapeutics remains a costly and risky endeavor.  The number of unsuccessful attempts to obtain Food and Drug Administration (FDA) approval of drugs for specific indications is far greater than the number of successes.  As a result, there is an extensive and ever growing list of "failed" drugs, most of which are ultimately abandoned by pharmaceutical companies.

More recently, failed drugs previously considered to be lost causes are being reconsidered as possible therapies for different indications than those for which they had originally been considered.  Such drug "repurposing" provides researchers and clinicians with a cost-effective way to identify potential new therapies without needing to start from scratch.  Many failed drugs have already established their relative safety in Phase I clinical trials, which can simplify and reduce the cost of obtaining FDA approval should a new indication be found.  Drug repurposing is not limited to failed drugs but is also being considered for currently marketed drugs as well as "off patent" generic compounds to expand and extend their usefulness.

But because drug repurposing primarily concerns previously-known drugs, obtaining patent protection can be challenging.  In some cases, a drug to be repurposed is still protected by a patent that can be acquired and/or in-licensed, but often the drug itself is not protected by patent.  Without patent protection, commercialization of a repurposed drug (i.e., maximizing the potential beneficial impact of the drug) is not realistic.  This article discusses certain issues to be considered when trying to obtain new patent protection for repurposed drugs.  It should be expected that each attempt to patent a repurposed drug will have its own factspecific challenges.  Accordingly, the concepts discussed here are generalized and nonexhaustive.

The foundational inquiry for determining whether a repurposed drug can be patented in the United States is to consider whether, under 35 U.S.C. § 101, the drug constitutes patentable subject matter.  Section 101, in relevant part, provides: "[w]hoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor . . . ."[1]  Repurposed drugs are often non-nature-based compositions of matter (i.e., synthetic compounds that are not naturally occurring) that can be used in useful processes (e.g., methods of treating a disease by administering to a patient in need thereof a therapeutically effective dose of a drug).  Therefore, claims directed to repurposed drugs and methods of their use should not typically run afoul of § 101.  Even repurposed drugs that are nature-based compositions of matter may still be patentable, for example, if recited in a method of treatment claim.  Indeed, method of treatment claims reciting nature-based compositions of matter seem to be on more secure footing under § 101 in light of the recent decision in Vanda Pharmaceuticals Inc. v. West-Ward Pharmaceuticals,[2] at least because the United States Patent and Trademark Office has issued a recent memorandum to the Patent Examining Corps advising that the Patent Office intends to follow the legal reasoning in this case.[3]  Nevertheless, care must be taken when drafting claims to avoid § 101 issues.

Another significant hurdle to overcome with respect to patenting repurposed drugs is 35 U.S.C. § 102.  Section 102, as applied to a repurposed drug, requires that it was not previously patented, described in a printed publication, or in public use, on sale, or otherwise available to the public before a patent application is filed to cover the repurposed drug.  In other words, a claim to the repurposed drug itself must be novel, in that it must recite something not previously publicly known.  Practically speaking, most composition of matter claims reciting only the repurposed drug will be excluded from patentability under § 102, because (almost by definition for a "repurposed" drug) the drug was previously known and thus its earlier public disclosure would be prior art to any subsequent patent filing.  Accordingly, composition claims directed to the repurposed drug itself will likely be anticipated because they are not reciting anything new.  Yet there are ways to overcome § 102 to obtain composition claims on repurposed drugs.

One useful approach for overcoming a § 102 rejection is to incorporate the repurposed drug into a composition that includes one or more other compounds to form a novel combination not previously known.  Importantly, the claimed combination can be any practical combination that is novel for purposes of overcoming § 102.  However, as discussed below, claims to pharmaceutical compositions that recite combinations with more than one key constituent (e.g., a therapeutically effective amount of a repurposed drug and a therapeutically effective amount of a second drug) are more likely to be patentable.  Additional details regarding specific amounts of drugs included in combinations or ratios between the drugs in the combination can add further grounds for finding such claims patentable over what was previously known in the prior art.

A further approach to obtaining claims directed to previously known drugs that are patentable in a § 102 context is to draft claims to novel pharmaceutical dosage forms.  Pharmaceutical dosage forms can be, for example, solids, liquids, delayed or extended release forms, and/or for a specific type of administration (e.g., oral, parenteral, intramuscular, etc.).  Many types of variations are possible with pharmaceutical dosage forms, which lend themselves to drafting novel claims.  For example, desired release characteristics and/or routes of administration may differ for the new use of the repurposed drug compared to its previous use, which would provide the basis of a novel claim.

As a final and particularly important example, a method claim reciting a repurposed drug may more easily overcome § 102 rejections.  Repurposing a drug for a new indication is typically a novel use of the drug.  Therefore, a method-of-use claim that recites a repurposed drug for treating a subject with the new indication should also be novel.  Such method claims are particularly useful because they are difficult for competitors to design around, and they are also available in many foreign jurisdictions (though with potentially different formats).

What is often more challenging for patenting a repurposed drug is overcoming an obviousness rejection.  Obviousness (or lack of inventive step) falls under 35 U.S.C. § 103, which states, in relevant part, that:

A patent for a claimed invention may not be obtained . . . , if the differences between the claimed invention and the prior art are such that the claimed invention as a whole would have been obvious before the effective filing date of the claimed invention to a person having ordinary skill in the art to which the claimed invention pertains.[4]

Here, the basic calculus is that if a skilled artisan (e.g., a clinician or researcher in the same field of practice or study as the person seeking to repurpose a drug and with the average skill level of such clinicians or researchers) who understands the prior art would have reasonably expected the drug to be useful for the new indication, then a claim to a repurposed drug for the new indication may be obvious.  Obviousness rejections of claims to repurposed drugs can be very complex and can be based on a combination of several prior art references, each teaching one or more aspects of the rejected claims.

Unfortunately, the relatively straightforward strategies for overcoming a § 102 rejection are mostly ineffective for overcoming obviousness rejections.  Simple chemical combinations of repurposed drugs with other drugs that may make a novel composition are arguably obvious if they are nothing more than a routine exercise for a skilled pharmacologist.  Fortunately, there are ways to overcome obviousness rejections, but they can require planning well before filing a patent application, and indeed, experiments to investigate the usefulness of a repurposed drug should be designed with obviousness rejections in mind.  This is because one of the most powerful arguments against an obviousness rejection of claims directed to a repurposed drug is a showing of unexpected results.[5]  In this context, a showing of unexpected results can be a presentation of scientific data (often in the patent application, but data can also be presented after filing) that, for example, show a surprising effect of a drug that would not have been expected based on what was known at the time.  Examples of unexpected results can include that a drug surprisingly works as intended for a new indication, or that a drug works at the dose used (e.g., a surprisingly low dose), or that a combination of drugs demonstrates synergy when used together (their combined effect being greater than each drug acting alone), among others.[6]  Another powerful example of unexpected results is the discovery that the drug acts via a different target or has a different mechanism of action for the new use than for its previous use.  Such examples of unexpected results can overcome obviousness rejections for claims directed to method of use, or pharmaceutical dosage forms, or pharmaceutical compositions comprising a combination of drugs, respectively.  Therefore, care should be given to experimental design and the types of data that are collected in support of such evidence of non-obviousness.

Finally, a patent for a repurposed drug must satisfy 35 U.S.C. § 112, which requires that a patent application include:

[A] written description of the invention, and of the manner and process of making and using it, in such full, clear, concise, and exact terms as to enable any person skilled in the art to which it pertains, or with which it is most nearly connected, to make and use the same.[7]

Section 112 also requires an application to have one or more claims "particularly pointing out and distinctly claiming the subject matter which the inventor or a joint inventor regards as the invention."[8]  Basically, § 112 requires that, at the time of filing, the written description must enable a skilled artisan to replicate the invention (much like a scientific paper should enable a researcher to replicate the experiments and data presented in the paper) and that the claims must be fully supported by the written description.

Careful patent application planning and drafting can avoid or overcome § 112 rejections.  At a minimum, literal support for each claim should be provided, examples of various embodiments of the invention described (e.g., the repurposed drugs and indication, possible drug substitutions and/or derivatives, dosing amounts, dosage forms, excipients, dosing regimens, methods of treatment, etc.), and experimental data establishing drug effectiveness included.  The written description should also be drafted with sufficient detail and distinct variations of the invention to permit claim amendments that can dispose of a prior art rejection (under either § 102 or 103).  Indeed, all important details and variations of the invention envisioned must be included before filing because § 112 prohibits addition of "new matter" after filing.

In conclusion, patent protection is possible for previously known drugs being repurposed for new indications.  The best chances for patenting repurposed drugs occur when care is given to initial experimentation to establish the usefulness of the drugs and for identifying any unexpected properties of the drugs.  By combining robust invention disclosures with thoughtful and detailed application preparation, patent applications directed to repurposed drugs will be better prepared to successfully navigate the rigors of the Patent Office.

[1] 35 U.S.C. § 101.

[2] 887 F.3d 1117 (Fed. Cir. 2018).

[3] See Memorandum from Robert W. Bahr, Deputy Comm'r for Patent Examination Policy, to Patent Examining Corps (Jun. 7, 2018), available at https://www.uspto.gov/sites/default/files /documents/memo-vanda-20180607.PDF.

[4] 35 U.S.C. § 103.

[5] Other important objective evidence of non-obviousness, also known as "secondary considerations," includes evidence of commercial success, long-felt but unsolved needs, and failure of others.  See Graham v. John Deere Co. of Kansas City, 383 U.S. 1, 17 (1966).

[6] See Manual of Patent Examining Procedure §§ 716.02, 2145.

[7] 35 U.S.C. § 112(a).

[8] Id. § 112(b).

Intellectual Ventures I LLC v. T Mobile USA, Inc. (E.D. Tex. 2018)

Claim for Scheduling Packet Data Communication Survives Patent Eligibility Challenge in Motion to Dismiss

By James Korenchan --

Last week, in yet another patent case before Judge Rodney Gilstrap of the U.S. District Court for the Eastern District of Texas Marshall Division, the Court ruled that Defendants T Mobile USA, Inc. and T-Mobile US, Inc. (collectively, "T-Mobile") failed to show that a claim related to packet scheduling is patent ineligible under 35 U.S.C. § 101.

T-Mobile had moved to dismiss claim 109 of U.S. Patent. No. RE46,206 (the '206 patent) (a reissue of U.S. Patent No. 7,251,218) as directed to ineligible subject matter.  In addition, T-Mobile, as well as Defendants Ericsson Inc. and Telefonaktiebolaget LM Ericsson, moved to dismiss all claims of U.S. Patent No. 7,359,971 and claim 1 of the '206 patent as barred by issue preclusion.  The Court carried the motion under issue preclusion grounds but denied the motion as to patent eligibility.

The '206 patent relates generally to packet data communication based on end-user quality of service (QoS) requirements.  As described in the Background of the patent, packet switching -- which breaks up network data traffic into "packets" for transmission from one device to another device for reassembly -- uses available wireless network bandwidth more efficiently than circuit switching in that it enables many devices to share the available bandwidth.  The invention of claim 109 takes end-user QoS requirements into account when scheduling packet data to be transmitted over a shared bandwidth.  In particular, packets are classified according to such QoS requirements and then scheduled for upstream and downstream communication "according to a scheduling algorithm."

For reference, claim 109 is provided below:

109.  A method for scheduling packets comprising:
    classifying a plurality of packets according to end-user quality of service (QoS) requirements of said plurality of packets; and
    scheduling said plurality of packets for communication in at least one of an upstream direction and a downstream direction over a shared wireless bandwidth according to a scheduling algorithm.

In their motion to dismiss, T-Mobile not only argued that claim 109 is directed to the abstract idea of "classifying information based on an end-user's service requirements and scheduling information," but that the claim is "so abstract" that it can be performed by the human mind or using pen and paper.  T-Mobile even provided a drawing to illustrate this point (complete with a hand holding a pencil, to drive the point home even further):

In addition, T-Mobile analogized claim 109 to classifying mail according to customer service requirements and scheduling mail (similar to an analogy made in Intellectual Ventures I LLC v. Symantec Corp., which T-Mobile cited for support).  T-Mobile also cited to Federal Circuit decisions in Cyberfone Sys., LLC v. CNN Interactive Grp., Inc. and In re TLI Commc'ns LLC Patent Litig., the former of which found an abstract idea in "collecting information in classified form, then separating and transmitting that information in classified form," and the latter of which found an abstract idea in "classifying and storing digital images in an organized manner."  Emphasizing In re TLI, T-Mobile asserted that the concept of storing digital images could be substituted for scheduling information.

In response, Intellectual Ventures argued that T-Mobile trivialized the invention and described the claims at too high a level.  Intellectual Ventures also argued that the invention makes little sense outside of the context of telecommunications, and overcomes a problem specifically arising in that realm -- namely, that "different types of data packets have different ideal quality of service ("QoS") settings, which results in suboptimal data flow when, for example, voice packets and data packets are transferred over the same connection."  According to Intellectual Ventures, claim 109 specifically addresses this problem by requiring wireless networks to classify packets according to QoS requirements before scheduling the packets for communication.

The Court agreed that "[the] '206 patent is directed to a technical solution to a technical problem" and was persuaded that the patent sufficiently describes the invention as such.  In particular, the Court cited to portions of the patent that discuss existing challenges that wireless networks face in delivering QoS to end-users, including network congestion.  The Court then elaborated:

The '206 Patent is explicit in its solution to these problems.  Indeed, the first sentence, covering the field of the invention, states "The present invention relates generally to telecommunications and, more particularly, to a system and method for implementing a QoS aware wireless point-to-multi-point transmission system."  (emphasis added).  The "Summary of the Invention" states that "[t]he present invention is directed to an IP flow classification system used in a wireless telecommunications system.  More specifically, the IP flow classification system groups IP flows in a packet-centric wireless point to multi-point telecommunications system."  Accordingly, the '206 Patent makes clear that the patented invention is directed towards a technological solution to these stated problems.  Such solution is achieved by classifying, on a packet level, what the ideal quality of services characteristics are for each type of data in order to optimize data flow.  Under Rule 12(b)(6), the Court is required to take these affirmative statements as true.

(citations omitted).

The Court thus found that the '206 patent is directed to patent eligible subject matter and that the Defendants failed to show otherwise.

Intellectual Ventures I LLC v. T Mobile USA, Inc. (E.D. Tex. 2018)
Order Carrying-in-part and Denying-in-part Defendant's Motion to Dismiss by District Judge Gilstrap

BlackBerry Ltd. v. Facebook, Inc. (C.D. Cal. 2018)

Claims for Displaying Message Timing Data Found Patent Ineligible

By James Korenchan --

Last week, the U.S. District Court for the Central District of California ruled that claims related to providing time data for messages communicated between electronic devices in a messaging conversation are patent ineligible under 35 U.S.C. § 101.

Back in March, BlackBerry Limited ("BlackBerry") filed suit against Facebook, Inc., WhatsApp, Inc., Instagram, Inc., and Instagram, LLC (collectively, "Facebook Defendants"), alleging infringement of nine patents.  BlackBerry then sued Snap, Inc. ("Snap") a month later alleging infringement of six of those nine patents.  The Defendants in each of these suits each moved to dismiss their respective cases.  Snap moved on the basis that each of the six asserted patents are patent-ineligible.  The Facebook Defendants moved on the basis that four of the nine asserted patents in that suit are patent-ineligible.  The Court's ruling addressed seven of the nine patents, three of which were common between the two suits.  In particular, the Court granted Snap's motion with prejudice as to the independent claims of asserted U.S. Patent No. 8,301,713 (the '713 patent) and otherwise denied all other motions, including Snap's movement with respect to the dependent claims of the '713 patent.  This post addresses only the ruling on the '713 patent.

The '713 patent is directed to handheld electronic devices and providing information related to timing of messages (e.g., instant messages) in a messaging conversation.  The patent describes how handheld electronic devices have limited space for displaying information, which can make it difficult to provide a user with various time data related to the user's conversations.  The patent particularly aims to provide time data in scenarios where there are gaps between messages in a conversation.  For example, User 1 may send a message to User 2, but User 2 may not respond to the message immediately.  In this scenario, the patent purports to have User 1's electronic device determine that a predetermined duration of time (e.g., ten minutes) has elapsed since User 1's message was sent and that no other messaging has occurred since User 1's message was sent.  If after this duration elapses User 1's device detects an input, such as a message that User 1 is preparing to send to resume the conversation, the device will display a time at which the input occurred.  The patent describes other timing aspects of the conversation that can be provided as well, some or all of which can be provided to the user upon specific request.

Representative claim 1 of the '713 patent is shown below.  The other independent claims recite similar language.

1.  A method of operating an electronic device, the method comprising:
    outputting an electronic conversation comprising a plurality of indications, each indication being representative of at least a portion of a corresponding messaging communication between the electronic device and a second electronic device;
    identifying a first messaging communication between the electronic device and the second electronic device occurring at a first time, the first messaging communication having a corresponding first indication representative of at least a portion of the first messaging communication and which is one of the plurality of indications;
    determining that a predetermined duration of time has elapsed since the first time without additional communication between the electronic device and the second electronic device during that duration of time;
    detecting an input to the electronic device following said identifying and determining steps, said input occurring at a second time; and
    responsive to said detecting an input, outputting in the electronic conversation, a time stamp representative of the second time.

With respect to Alice step one, Snap argued that the '713 patent is directed to the abstract idea of time stamping, which Snap noted is an "utterly unremarkable idea that has been practiced manually for centuries."  (Snap also pointed out that BlackBerry's complaint itself acknowledges that time stamping electronic messaging was already well-known.)  In addition, Snap argued that time stamping communications after a predetermined duration is well-known, and that the '713 patent provided no limitations of what the duration would be.  Finally, Snap noted that, although the '713 patent describes how the purported invention was useful for saving space on devices with small screens, the asserted claims were not limited to devices with small screens.

In response, BlackBerry asserted that its invention "mak[es] a specific improvement to the way that time stamp information is displayed in an electronic conversation on a computer, specifically by displaying a timestamp when the user is most likely to be interested in one, rather than never displaying a timestamp (which under-informs users) and displaying a timestamp with each message (which unduly takes up valuable real estate and annoys users)" (emphasis in original).  BlackBerry also argued that the provisional patent leading to the '713 patent demonstrated that the '713 patent claims were directed to optimizing instant messaging for devices with small screens.

Despite BlackBerry's opposition, the Court pointed out that the '713 patent doesn't provide any information that specifically defines how or where to display a timestamp.  The Court also agreed with Snap (and BlackBerry effectively conceded) that the '713 patent did not limit what the predetermined duration of time could be, and thus the duration could be anything.  Thus, the language of claim 1 was broad enough to encompass embodiments in which no improvements to timestamping messages were provided.  As the Court noted, the Federal Circuit has previously found that use of a rule alone does not necessarily make a set of claims non-abstract.  Here, the "predetermined duration of time" aspect of the claim, while a rule, hardly qualified as a rule to elevate the claim into the realm of patent-eligibility.  At best, BlackBerry characterized the claims as only inserting a time stamp when there is a "break" in the conversations, but the claims still do not address specific lengths of the break.  The Court concluded that the independent claims were directed to the abstract idea of "displaying a timestamp based on the rule of whether a predetermined duration of time has passed."

The Court then went on to briefly discuss Alice step two.  The Court stating that, in contrast to BlackBerry's assertion that selective timing -- namely, the "predetermined duration of time" aspect of the claim -- was an inventive concept, this aspect was part of the abstract idea itself, and thus is not considered in performing the step two analysis.  The Court also noted the presence of "generic computer elements" in the independent claims.

Although Snap asserted in its motion that the independent claims are representative of all claims of the '713 patent, the Court was not ready to doom the dependent claims, finding that Snap did not meet its burden of patent ineligibility with respect to those claims.  Still, it is hard to see the dependent claims surviving.  (Concepts covered by the dependent claims define the claimed "input" as a "resumption message" resuming the conversation, display the resumption message, and display the time stamp between the resumption message and the previous message in the conversation.)

BlackBerry Ltd. v. Facebook, Inc. (C.D. Cal. 2018)
In Chambers – Final Ruling on Facebook Defendant's Motion to Dismiss by District Judge Wu

Deadline to Submit Comments to USPTO on Berkheimer Memo Approaching

By Donald Zuhn --

In April, the U.S. Patent and Trademark Office issued a memorandum to its Patent Examining Corps discussing changes in examination procedure pertaining to subject matter eligibility in view of the Federal Circuit's decision in Berkheimer v. HP, Inc. (see "USPTO Updates Patent Eligibility Guidance in View of Berkheimer").  Following the issuance of the memorandum, the Office also published a notice of the Federal Register seeking public comment on the Office's subject matter eligibility guidance, and particularly on its guidance in the Berkheimer memorandum.

The notice, entitled "Request for Comments on Determining Whether a Claim Element Is Well- Understood, Routine, Conventional for Purposes of Subject Matter Eligibility" (83 Fed. Reg. 17536), discusses the Berkheimer decision as well as the Office's Berkheimer memorandum and sets an August 20, 2018 deadline for the submission of written comments.  Those wishing to submit comments can do so by sending them by e-mail to Eligibility2018@uspto.gov.  Submitted comments can be viewed here -- to date, comments have been submitted by one law firm and five individuals.

In its notice, the Office indicates that the Federal Circuit, in Berkheimer, found that whether a claim element, or combination of elements, represents well-understood, routine, conventional activities to a skilled artisan in the relevant field is a question of fact.  Prior to the Berkheimer decision, the Office notes that Examiners had been instructed to conclude that an element (or combination of elements) is well-understood, routine, conventional activity only when an Examiner can readily conclude that the element is widely prevalent or in common use in the relevant industry.  As a result of the Berkheimer decision, and as outlined in last April's memo, the Office now requires that such a conclusion must be based upon a properly supported factual determination.

The notice explains that the Berkheimer memo specifies that the analysis for determining whether an element (or combination of elements) is widely prevalent or in common use is the same as the analysis under 35 U.S.C. 112(a) as to whether an element is so well-known that it need not be described in detail in the patent specification.  The notice also suggests that:

The question of whether additional elements represent well-understood, routine, conventional activity is distinct from patentability over the prior art under 35 U.S.C. 102 and 103.  This is because a showing that additional elements are obvious under 35 U.S.C. 103, or even that they lack novelty under 35 U.S.C. 102, is not by itself sufficient to establish that the additional elements are well-understood, routine, conventional activities or elements to those in the relevant field.

The notice points to guidance from its Berkheimer memo that in order for an Examiner to establish that an additional element (or combination of elements) is well-understood, routine, or conventional, the Examiner must find, and expressly support in writing, one or more of the following:

1. A citation to an express statement in the specification or to a statement made by an applicant during prosecution that demonstrates the well- understood, routine, conventional nature of the additional element(s).

2. A citation to one or more of the court decisions discussed in MPEP § 2106.05(d)(II) as noting the well-understood, routine, conventional nature of the additional element(s).

3. A citation to a publication that demonstrates the well-understood, routine, conventional nature of the additional element(s).

4. A statement that the examiner is taking official notice of the well- understood, routine, conventional nature of the additional element(s).

Both the notice and Berkheimer memo provide additional discussion of the items above, and in particular, items 3 and 4.