Patent Docs: Patentable Subject Matter

Patentable Subject Matter

January 27, 2020

iLife Technologies, Inc. v. Nintendo of America, Inc. (N.D. Tex. 2020)

With the eligibility rubric of Alice v. CLS Bank, an applicant/patentee must navigate a minefield of pre-issuance and post-issuance validity challenges under 35 U.S.C. § 101 in order to obtain and enforce a patent.

First, through clever drafting, the applicant must convince a U.S. Patent and Trademark Office (USPTO) examiner to not raise a § 101 rejection during prosecution. If one is raised, the applicant has to persuade the examiner, through amendment or argument, to withdraw it. If the examiner remains unpersuaded, an appeal to the USPTO's Patent Trial and Appeal Board (PTAB) must serve that function. Failing that, appeals to the Federal Circuit (which applies a highly-unpredictable eligibility analysis) and even the Supreme Court (which has not found a patent eligible since 1981) are possible. To be fair, it is unlikely that the high Court will grant certiorari on a § 101 issue these days, as we have recently seen.

Once issued, the patent might be able to be pulled back into the PTAB for a Post-Grant Review (PGR) or a Covered Business Method (CBM) Review. In addition to that, enforcement proceedings in a district court can subject the patent to further invalidity challenges under § 101 on the pleadings and at summary judgment. If the district court's § 101 decision is appealed, the patent then has to survive said eligibility analysis of the Federal Circuit, the decision of which could potentially be further appealed to the Supreme Court with said unlikely chance of being heard.

Only once these avenues have been exhausted can the patentee relax and use the surviving patent to enjoin a party from practicing the claimed invention or to seek damages therefrom without the specter of § 101 hanging over the proceedings (this specter is one of stock horror-movie fare -- pale complexion, chunks of missing flesh, sharp claws -- quite non-abstract, if you will). And yes, the patent also has to be found novel, non-obvious, properly specified, and infringed.

Clearly, an entity seeking an enforceable patent to protect its innovations from copyists and free-riders has a few hurdles to overcome. Perhaps this would not be a terrible conundrum if the law surrounding patent eligibility was clear. But it is not. Don't take my word for it -- read what others more knowledgeable and eloquent have written.

In any event, iLife sued Nintendo in the Northern District of Texas for allegedly infringing U.S. Patent No. 6,864,796. At issue were the latter's Wii and Wii U motion control wands known as "Wiimotes".

As described by the Court:

The '796 patent generally discloses a system for evaluating body movement relative to an environment. The system includes a sensor that detects dynamic and static accelerative phenomena of the body. The sensor senses one or more absolute values, changes in value, or some combination of the same and generates an output signal to [a] processor. The processor then evaluates the signal to determine whether the body is in an acceptable or unacceptable state. The patent describes acceptable or unacceptable as within or beyond tolerance.

Regarding the patent, claim 1 was front and center in the accusation of infringment. It recites:

A system within a communications device capable of evaluating movement of a body relative to an environment, said system comprising:
    a sensor, associable with said body, that senses dynamic and static accelerative phenomena of said body, and
    a processor, associated with said sensor, that processes said sensed dynamic and static accelerative phenomena as a function of at least one accelerative event characteristic to thereby determine whether said evaluated body movement is within environmental tolerance
    wherein said processor generates tolerance indicia in response to said determination; and
    wherein said communication device transmits said tolerance indicia.

The case went to trial and the jury found that Nintendo infringed claim 1, awarding iLife slightly over $10 million in damages. The jury also found the patent to be not invalid on grounds of purportedly lacking adequate written description and enablement.

Nintendo moved for a judgment as a matter of law, arguing that claim 1 is invalid under § 101, indefinite, and lacks adequate written description and enablement. We will focus on the eligibility dispute.

In Alice, 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 involves 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 elements or combinations of elements that are well-understood, routine, and conventional will not lift the claim over the § 101 hurdle. While this inquiry is generally carried out as a matter of law, factual issues can come into play when determining whether something is well-understood, routine, and conventional.

Applying part one of Alice, the Court found that, not unlike the Federal Circuit decision of Electric Power Group v. Alstom S.A., claim 1 was "directed to the abstract idea of gathering, processing, and transmitting . . . information." Further, the type of information at play -- dynamic and static accelerative phenomena -- did not render the claim any less abstract. The Court also noted that "[n]othing in claim 1, understood in light of the specification, requires anything other than conventional sensors and processors performing conventional activities previously known to the industry." Indeed, the Court cited to such an admission in the specification.

The Court also considered whether the claim involved an improvement to its recited hardware. Ultimately, the Court concluded that it did not, finding that "the claim does not disclose any improvement in the sensor's ability to collect information, such as collecting previously unknown information or collecting information more accurately [and] it does not disclose some improvement in the processor itself, such as faster or more powerful processing." Further, the claim "is not limited to any particular configuration of the components that results in a technological improvement . . . [i]nstead, the sensor and processor are merely tools to execute an abstract idea."

Finding claim 1 abstract, the Court moved on to part two of Alice. Unsurprisingly, the claim fared poorly, with the Court rapidly concluding that "[t]here is no inventive concept in the claim elements, whether considered individually or as an ordered combination . . . [and it] does not add any meaningful limitations to the routine steps of data collection, analysis, and transmission using conventional computer components."

Particularly, "[c]laim 1 requires neither a new source or type of information nor a new method of measuring information [and] provides for an unspecified set of rules for analyzing sensor data, but discloses no further details on those rules, like how data might be evaluated for a child versus an adult." The Court even used iLife's own claim construction argument that claim 1 "does not contain words requiring any special type of processing" against it.

iLife argued that, in its specification, "the claimed processor distinguishes between normal and abnormal accelerative events, and, when an abnormal event is identified, to indicate whether the abnormal event is tolerable, or within tolerance" as well as distinguishing "other physical characteristics, including temperature, pressure, force, sound, light, relative position, and the like." But the Court observed that the claim itself does not contain these details or limitations, and therefore does not satisfy part two of the test.

Consequently, the Court ruled the '796 patent invalid under § 101 as a matter of law, effectively rendering the jury verdict moot.

For anyone following § 101 jurisprudence, a quick glance at claim 1 was probably enough to provide an educated guess for which way the Court was going to rule. Recent § 101 opinions from the Federal Circuit have repeated found that claims lacking in technical detail -- ones that recite what an invention does rather than how the invention accomplishes its goals -- are generally abstract. This is not the dictionary definition of the word "abstract," but instead a legal fiction that a concrete and tangible invention can be invalid if it is defined in terms of its outcome rather than the process used to achieve that outcome.

Despite there being no inkling of this notion in § 101 of the patent statute and questionable support in the Supreme Court's cases, the post-Alice Federal Circuit has morphed patent-eligibility into a game in which one must guess the level of detail required for an invention to cross over from "abstract" to "non-abstract." If anything, such considerations are best addressed under §§ 102, 103, and 112 -- the parts of the statute where over-broad claim language can be considered in a more cogent fashion. But with the Alice hammer all claims look like nails, so here we are. And the § 101 minefield becomes even more hazardous.

iLife Technologies, Inc. v. Nintendo of America, Inc. (N.D. Tex. 2020)
Order by Chief Judge Lynn

Posted at 10:43 PM in District Court, Patentable Subject Matter | Permalink | Comments (3)

January 13, 2020

U.S. Supreme Court on Eligibility: Nothing to See Here, Move Along

By Kevin E. Noonan --

The Supreme Court today entered orders denying certiorari in all five cases having petitions on subject matter eligibility, including Athena Diagnostics, Inc. v. Mayo Collaborative Services, LLC; Hikma Pharmaceuticals USA Inc. v. Vanda Pharmaceuticals Inc., and Berkheimer v. HP Inc.

It can only be concluded that the Court is comfortable with the state of diagnostic method patenting (i.e., it does not exist in the U.S.). There are members of the Court who have expressed skepticism or outright hostility to such claims, fearing that they will inhibit the practice of medicine, as well as statements (some of dubious provenance) that diagnostic methods are unlike pharmaceuticals and don't need patents (mostly from legal academics and economists). Although Bilski was a business method patent case, some of the Justices there seemed unimpressed with method claims more generally, and this prejudice may be affecting their certiorari behavior. And there is the animus many of the Justices have voiced about the Federal Circuit over the past 15-20 years, which may have made the Court less inclined to come to their rescue.

Or maybe the Court believes that this decision (not to decide) will motivate Congress to change the law; after all, in Mayo, Justice Breyer said something along the lines of "if you disagree with us, go to Congress." And genuinely, the Court may be facing up to the reality that, even if its concerns are real, the Justices don't have a solution to the problem, in which case Congress is the only answer.

What needs to be done (although it won't be) is for the PTO and courts to distinguish in individual cases the application of the Mayo/Alice cases to come to a determination of patent eligibility. The Court can speak in generalities all it wants, but if pressed by advocates who point out the economic consequences of the recent jurisprudence there is a chance the Court will moderate its views. After all, the Court certainly does not want the business section of the Wall Street Journal to run the headline "Supreme Court Destroys U.S. Industry, Public at Risk, Healthcare Costs Sure to Rise."

On the bright side, by denying cert. in Vanda, the Court kept alive the glimmer of hope that there is a way to draft enforceable claims related to diagnostics leading to real world therapeutic interventions, as well as in Berkheimer, which increases the burden on patent challengers and may inhibit plenary dismissal on eligibility grounds.

And in view of the Court's denial of certiorari in Regents of the University of Minnesota v. LSI Corp., maybe the Court believes that the other petitioners have more compelling interests in the Court's disposition of their cases than patentees have. This sentiment would not be inconsistent with the Court's views on patent law enunciated in many cases over the past decade.

Posted at 11:11 PM in Patentable Subject Matter, Supreme Court | Permalink | Comments (4)

January 05, 2020

January 02, 2020

January 01, 2020

December 31, 2019

USPTO Makes Ex Parte Hannun An Informative PTAB Decision

By Michael Borella --

Over five and a half years on from the Supreme Court's Alice vs. CLS Bank ruling, patentees, patent professionals, judges, and USPTO personnel are still wrestling with what it means for an invention to be eligible for patenting. This is especially true for software-related innovations. Despite the software-driven digital economy accounting for approximately 7% of the U.S. gross domestic product, software inventions can have a rough path to allowance and are likely to have their eligibility challenged post-issuance. The disconnect between software being one of the main sources of innovation in the last decade and its least-favored-nation status in patent law is largely due to Alice and its progeny.

In Alice, the 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 involves 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 elements or combinations of elements that are well-understood, routine, and conventional will not lift the claim over the § 101 hurdle. While this inquiry is generally carried out as a matter of law, factual issues can come into play when determining whether something is well-understood, routine, and conventional.

How to apply this test in practice has been anything but clear. In response to complaints from applicants, patentees, and numerous other parties, the USPTO published its 2019 Revised Patent Subject Matter Eligibility Guidance in January and an update thereto in October.

Notably, the Guidance breaks the first part of the Alice test into two sub-steps. In the former, one determines whether the claim recites a judicial exception, such as an abstract idea. In the latter, one determines further "whether the recited judicial exception is integrated into a practical application of that exception." To focus the analysis, the Guidance indicates that all abstract ideas should fall into one of three categories: mathematical concepts, certain methods of organizing human activity, and mental processes. Think of these as the "Three M's" -- math, money, and mental steps.

In order to put its version of the Alice test into practice, the USPTO has been publishing a series of informative PTAB § 101 decisions. We discussed four of these as well as a fifth earlier in the year. Recently, a sixth, Ex Parte Hannun, has been added to the list.

The Claimed Invention

The applicant's claimed invention is described as being directed to:

[S]tate-of-the-art speech recognition systems developed using end-to-end deep learning. In embodiments, the model architecture is significantly simpler than traditional speech systems, which rely on laboriously engineered processing pipelines; these traditional systems also tend to perform poorly when used in noisy environments. In contrast, embodiments of the system do not need hand-designed components to model background noise, reverberation, or speaker variation, but instead directly learn a function that is robust to such effects. A phoneme dictionary, nor even the concept of a "phoneme," is needed. Embodiments include a well-optimized recurrent neural network (RNN) training system that can use multiple GPUs, as well as a set of novel data synthesis techniques that allows for a large amount of varied data for training to be efficiently obtained. Embodiments of the system can also handle challenging noisy environments better than widely used, state-of-the-art commercial speech systems.

The PTAB deemed claim 11 representative. It recites:

A computer-implemented method for transcribing speech comprising:
    receiving an input audio from a user;
    normalizing the input audio to make a total power of the input audio consistent with a set of training samples used to train a trained neural network model;
    generating a jitter set of audio files from the normalized input audio by translating the normalized input audio by one or more time values;
    for each audio file from the jitter set of audio files, which includes the normalized input audio:
        generating a set of spectrogram frames for each audio file;
        inputting the audio file along with a context of spectrogram frames into a trained neural network;
        obtaining predicted character probabilities outputs from the trained neural network; and
        decoding a transcription of the input audio using the predicted character probabilities outputs from the trained neural network constrained by a language model that interprets a string of characters from the predicted character probabilities outputs as a word or words.

The Examiner's Rejection

During prosecution, the Examiner rejected claim 11 and claims depending therefrom under § 101 as being directed to patent-ineligible subject matter. Particularly, the Examiner viewed claim 11 as "using the predicted character probabilities (mathematical formula) to decode a transcription of the input audio into words or text data." The Examiner found that this was "similar to the court case Gottschalk v. Benson because the predicted character probabilities (mathematical formula or relationship) is used to convert or transcribe audio data into text data (words)." Thus, the Examiner concluded that the claim was directed to an invention falling into the mathematical concepts category.

The Examiner also characterized the claim as merely "normalizing the input audio data (manipulating data)," and "generating spectrogram frames based on each audio file (generating information sets based on prior information sets)," "using a mathematical formula to convert audio data into text data (Decoding)." The Examiner asserted that this implied that the claim was also abstract under the "certain methods of organizing human activity" and "mental process" categories because a "human can listen to an audio file and transcribe the audio data into text data which can all be done mentally."

Moreover, the Examiner found that the claim also fails under the second step of Alice. To that point, the Examiner wrote that the claimed invention "[d]oes not amount to significantly more since it is just decoding a transcription using a mathematical formula or relationship."

The PTAB's Decision

Applying the Revised Guidance, the PTAB began with the inquiry of whether the claim recites a judicial exception. Notably, the PTAB disagreed with the Examiner's contention that the claims involve either a mental process or a method of organizing human activity. The PTAB stated:

While transcription generally can be performed by a human, the claims here are directed to a specific implementation including the steps of normalizing an input file, generating a jitter set of audio files, generating a set of spectrogram frames, obtaining predicted character probabilities from a trained neural network and decoding a transcription of the input audio using the predicted character probability outputs. These are not steps that can practically be performed mentally. Nor do we see how the claimed invention recites organizing human activity.

The PTAB also concluded that the claims do not recite a mathematical concept, pointing out that while the specification discloses an algorithm, the claims do not recite the algorithm. Thus, under the Revised Guidance, no mathematical concept is recited. In particular, the PTAB referenced the USPTO's eligibility example 38, which explains that even if some claim limitations are based on mathematical concepts, the claim is not abstract unless at least one of those concepts are recited therein.

The PTAB went on to note that even if the claims were considered to recite one of the aforementioned categories of abstract ideas, the claims still "are not directed to an abstract idea because the alleged judicial exception is integrated into a practical application." Relying on statements made by the applicant, the PTAB observed that "the claims of the current application include specific features that were specifically designed to achieve an improved technological result" and "provide improvements to that technical field." As evidence of this, the PTAB looked to the specification, which describes a trained neural network used with a language model that "achieves higher performance than traditional methods on hard speech recognition tasks while also being much simpler."

Based on this analysis, the PTAB concluded that "the Examiner erred in determining that the claims are directed to an abstract idea."

Turning to the second part of Alice, the PTAB took further issue with the Examiner's reasoning. Particularly, the PTAB noted that "the Examiner concludes the claims do not include any additional elements that amounts to significantly more than a judicial exception but fails to provide sufficient factual support." Under Berkheimer v. HP, such a conclusory rationale for contending that a claim does not amount to significantly more cannot stand.

Thus, the PTAB reversed the Examiner's rejections of claim 11 and all of its dependent claims.

Analysis

This case is of note because it is one of the first in which the PTAB has confirmed that a machine learning invention can be non-abstract. While the USPTO's example 39 has suggested that one can claim a machine learning procedure without reciting any of the underlying mathematics, a mental process, or a method of organizing human activity, this decision affirms that is the case. The PTAB also seemed persuaded, based on statements made in the specification, that the claimed invention entails an improvement over previous techniques used to address the problem domain.

Of course, a district court or the Federal Circuit might agree or disagree. But, at the very least, the reasoning herein provides a roadmap for claim drafting and prosecution that may situate an invention to pass § 101 muster in the USPTO.

Ex Parte Hannun (PTAB 2019)
Panel: Administrative Patent Judges Kumar, McKeown, and Shiang
Decision on Appeal by Administrative Patent Judge McKeown

Posted at 11:01 PM in Patent Trial and Appeal Board, Patentable Subject Matter | Permalink | Comments (2)

December 16, 2019

Athena Diagnostics Seeks Supreme Court Review of Athena Diagnostics v. Mayo Collaborative Services

By Donald Zuhn --

Earlier this fall, Athena Diagnostics, Inc.; Oxford University Innovation Ltd.; and Max-Planck-Gesellschaft Zur Forderung Der Wissenschaften E.V. ("Athena") filed a petition for a writ of certiorari in Athena Diagnostics, Inc. v. Mayo Collaborative Services, LLC, requesting that the Supreme Court "provide much-needed guidance on the important question of the patent eligibility of medical diagnostic tests." Athena begins its petition by stating that:

Across eight opinions concurring or dissenting in the denial of rehearing en banc, the Federal Circuit unanimously agreed that the claims to a medical diagnostic method in this case should be patent-eligible. But the court split 7-5 on whether this Court's precedent foreclosed such a result or whether it was the Federal Circuit's own misinterpretation of that precedent that has denied patent protection to diagnostic tests. Numerous judges asked this Court to provide guidance.

Athena then sets forth the question presented as:

Whether a new and specific method of diagnosing a medical condition is patent-eligible subject matter, where the method detects a molecule never previously linked to the condition using novel man-made molecules and a series of specific chemical steps never previously performed.

At issue in the case are claims 6-9 of U.S. Patent No. 7,267,820, which is directed to methods for diagnosing neurological disorders by detecting antibodies to a protein called muscle-specific tyrosine kinase (MuSK). The '820 patent discloses that about 80% of patients with Myasthenia gravis (MG) produce acetylcholine receptor autoantibodies, and that the remaining 20% do not. The named inventors of the '820 patent discovered that many of the 20% of MG patients without acetylcholine receptor autoantibodies instead generate autoantibodies to MuSK. The '820 patent contains only one independent claim, which, while not at issue in the case, recites:

1. A method for diagnosing neurotransmission or developmental disorders related to muscle specific tyrosine kinase (MuSK) in a mammal comprising the step of detecting in a bodily fluid of said mammal autoantibodies to an epitope of muscle specific tyrosine kinase (MuSK).

Claims 6-9, which are at issue in the case, recite:

6. A method according to claim 3 whereby the intensity of the signal from the anti-human IgG antibody is indicative of the relative amount of the anti-MuSK autoantibody in the bodily fluid when compared to a positive and negative control reading.

7. A method according to claim 1, comprising contacting MuSK or an epitope or antigenic determinant thereof having a suitable label thereon, with said bodily fluid, immunoprecipitating any antibody/MuSK complex or antibody/MuSK epitope or antigenic determinant complex from said bodily fluid and monitoring for said label on any of said antibody/MuSK complex or antibody/MuSK epitope or antigen determinant complex, wherein the presence of said label is indicative of said mammal is suffering from said neurotransmission or developmental disorder related to muscle specific tyrosine kinase (MuSK).

8. A method according to claim 7 wherein said label is a radioactive label.

9. A method according to claim 8 wherein said label is 125I.

Athena markets a test called FMUSK that functions by evaluating those antibodies. After Mayo developed two competing tests, Athena filed suit against Mayo for infringement of the '820 patent, and Mayo moved to dismiss under Rule 12(b)(6), arguing that the asserted claims of the '820 patent were invalid under § 101 for claiming patent ineligible subject matter. The District Court granted Mayo's motion, and Athena appealed for a determination of whether claims 6-9 are patent eligible under § 101.

In February, a divided Federal Circuit panel affirmed a decision by the District Court, holding claims 6-9 invalid under 35 U.S.C. § 101, and dismissing Athena's complaint for infringement under Fed. R. Civ. P. 12(b)(6). In the panel opinion, authored by Judge Lourie and joined by Judge Stoll (with Judge Newman dissenting), the panel majority "ultimately agree[d] with Mayo that, under Mayo [Collaborative Services v. Prometheus Laboratories, Inc., 566 U.S. 66, 70 (2012)], the claims are directed to a natural law," and that in the instant case, the natural law "is the correlation between the presence of naturally-occurring MuSK autoantibodies in bodily fluid and MuSK related neurological diseases like MG." However, the majority also explained in a footnote that:

[I]n our view, providing patent protection to novel and non-obvious diagnostic methods would promote the progress of science and useful arts. But, whether or not we as individual judges might agree or not that these claims only recite a natural law, . . . the Supreme Court has effectively told us in Mayo that correlations between the presence of a biological material and a disease are laws of nature, and "[p]urely 'conventional or obvious' '[pre]-solution activity' is normally not sufficient to transform an unpatentable law of nature into a patent-eligible application of such a law," . . . . Our precedent leaves no room for a different outcome here [citations omitted].

In July, the Federal Circuit issued a per curiam Order in the case, denying Athena's petition for rehearing en banc. The per curiam Order was accompanied by eight opinions, four concurring in the denial of the petition and four dissenting in the denial of the petition. The four concurring opinions were authored by Circuit Judges Lourie, Hughes, Dyk, and Chen, with Chief Judge Prost and Circuit Judges Reyna, Taranto, and Hughes joining in one of the concurrences and Circuit Judge Chen joining in one concurrence and several parts of another. The four dissenting opinions were authored by Circuit Judges Moore, Newman, Stoll, and O'Malley, with Circuit Judges O'Malley and Stoll joining in one of the dissents and Circuit Judge Wallach joining in three of the dissents.

In its petition for a writ of certiorari, Athena declares that "[a]cross eight separate opinions in which the court divided 7-5 on denying en banc review, the Federal Circuit issued an unprecedented cry for help from this Court to clarify the patent eligibility of medical diagnostic tests." Athena then requests that the Supreme Court "heed that cry and provide much-needed guidance on the proper application of the judicially-created exceptions to Section 101 of the Patent Act." Noting that since the Supreme Court's decision in Mayo, "the Federal Circuit has invalidated every diagnostic claim to come before it as ineligible subject matter for patent protection," Athena points out that the Federal Circuit, while denying Athena's petition for rehearing en banc, "agreed with Athena that sufficiently specific diagnostic methods with proven utility like the ones here should be patent-eligible," and that there was broad consensus among the Federal Circuit judges that Supreme Court review was "desperately needed."

Athena provides three reasons for the Supreme Court to grant its petition. First, Athena suggests that the Court should review the case to clarify the Court's § 101 precedent. Second, Athena contends that the Federal Circuit's holding threatens to disrupt important medical innovation. And finally, Athena asserts that the case provides an ideal vehicle to clarify the patent eligibility of diagnostic methods.

With respect to the first reason, Athena argues that:

The Federal Circuit is deeply divided on how to apply this Court's precedent. Every judge of the en banc court was troubled by the conclusion that Athena's claims are not patent-eligible, despite their use of specific chemical steps and man-made molecules in the first diagnostic test ever developed for a large number of patients with MG. The disagreement focused on whether this Court's decision in Mayo Collaborative Services v. Prometheus Laboratories, Inc., 566 U.S. 66 (2012) mandates such an unfortunate result, or whether, as five judges argued, the Federal Circuit itself created the problem by misinterpreting this Court's precedent. Either way, the fractured decisions of the Federal Circuit are a clarion call for this Court to grant certiorari and provide much-needed guidance on the important question of the patent eligibility of medical diagnostic tests.

After pointing to other decisions in which "the Federal Circuit expressed confusion and division on patent eligibility or called for this Court's intervention," Athena states that:

The collective and consistent cry for help from the Federal Circuit, culminating in this case, is extraordinary and emphasizes just how critical this Court's guidance is. Patent-eligibility is a threshold question of enormous importance to innovation and the economy, and yet the Federal Circuit has badly misinterpreted the judicially-created exceptions to the statute to bar patent protection to inventions that meet all the statutory criteria for patenting, including the requirements that claims be novel and nonobvious. The judges tasked with hearing all patent appeals in the United States have now told this Court in no uncertain terms that they are confused and need clarification on how to apply those judicial exceptions. The Court should heed that call.

Athena provides five points of confusion that it contends have emerged "as courts and litigants have struggled to apply—or have misapplied—the judicially-created exceptions to Section 101." First, Athena contends that "courts have struggled with the tension between the Federal Circuit's striking down a diagnostic method claim that uses novel man-made molecules and this Court's holding that a 'molecule that is not naturally occurring' is 'not a 'product of nature' and is patent eligible under § 101.'" Second, Athena contends that "courts have struggled to apply the principles articulated in the context of the unusual facts of Mayo to more typical patent claims," arguing that in contrast with the claims at issue in the instant case, "[t]he claim in Mayo was an oddity" because the two actions required by the claim were steps that were already performed by doctors before the patent was issued. Third, Athena argues that "courts have struggled with the level of abstraction at which to determine whether the steps of a claim 'transform an unpatentable law of nature into a patent eligible application of such a law.'" Fourth, Athena asserts that "the Federal Circuit's approach gives little consideration to the 'preemptive' scope of a claim, contrary to this Court’s guidance," stating that the Federal Circuit "has transformed the preemption analysis into a one-way ratchet" in which claims that do not prevent others from using a natural law are nevertheless deemed to be patent ineligible. Finally, Athena argues that "courts have struggled with what it means to review a claim 'as a whole.'"

Athena suggests that "[g]iven the lower courts' widespread confusion about the judicially-created exceptions to patent eligibility, government officials, practitioners, and commentators have all echoed and amplified the need for guidance from this Court." Athena argues that "[t]he Federal Circuit's wavering hand has only made the PTO's struggle implementing this Court's Section 101 case law more difficult." Athena therefore contends that the Supreme Court "should grant review to provide the guidance that the Federal Circuit, the PTO, practitioners, and scholars all agree is urgently needed."

Moving on to the second reason for the Supreme Court to grant its petition, Athena contends (citing Judges Moore and Lourie) that the Federal Circuit's decision in this case has effectively shut the door for good for the vast majority of diagnostic claims, "establishing a 'per se rule' that bars 'diagnostic kits and techniques,' . . . insofar as they are deemed to 'consist of routine steps to observe the operation of a natural law,' . . . no matter how novel or useful they are." Athena declares that "[t]his rule will have devastating consequences," noting that in the month after Mayo was decided, the rejection rate for medical diagnostics applications rose from 7% to 32%, and that by the time that Alice Corp. v. CLS Bank Int'l was decided, the rejection rate increased to 50%, eventually rising to 64%. According to Athena, "[w]ith the decision below, that rate will climb significantly higher—if inventors even bother to apply for patents for diagnostic methods at all." Athena argues that such an outcome will be devastating for U.S. healthcare because diagnostics, which account for only 2.3% of national healthcare spending, reduce healthcare costs by allowing doctors to replace expensive late-stage therapies with cost-effective early-stage therapies.

Athena concludes its petition by arguing that this case provides an ideal vehicle to clarify the patent eligibility of diagnostic methods. In particular, Athena argues that its claims "recite a new and specific method of diagnosing MG through a series of concrete laboratory steps, so that patients can be accurately and expeditiously diagnosed," declaring that "[i]f these claims are patent-ineligible, that is truly the end for most medical diagnostic methods." Athena then points to several ways in which this case would provide an opportunity to clarify the patent eligibility of medical diagnostic tests.

First, Athena argues that its claims provide an opportunity to clarify the law with respect to the use of novel man-made molecules. According to Athena, the use of man-made compounds in its claimed methods "makes this an easy case," since "[t]here is no reason in law or logic that a claim that goes even further [than reciting man-made molecules] and limits itself to specific uses of novel man-made compounds should lose its eligibility for patent protection" (emphasis in opinion).

Athena next suggests that its claims provide an opportunity to clarify the law with respect to the recitation of specific chemical steps to achieve a new and useful result. Arguing that "[t]he patent claims here are a world apart from the claim invalided in Mayo," Athena notes that while the inventors made an undisputedly groundbreaking discovery that 20% of MG patients develop the disorder because they generate autoantibodies to MuSK, "that is not what they claimed." Instead, Athena argues that the inventors claimed an application of that discovery.

Athena closes its petition by arguing that "the rules the Federal Circuit has relied on to invalidate medical diagnostic claims find no support in the statute," adding that "[t]he language chosen by Congress easily encompasses Athena's claims," and that "[t]his case thus turns entirely on judicially-created exceptions, unsupported by the statutory text." Athena states that:

This Court, as the creator of those non-textual exceptions, bears a special responsibility to ensure that they are properly interpreted and applied. The Court has admonished courts to "tread carefully" lest the exceptions "swallow all of patent law." Alice, 573 U.S. at 217. But the Federal Circuit has not heeded that admonition, allowing those exceptions to expand ever outward and swallow the field of medical diagnostics. The legal issues are too fundamental, and the stakes too high, to allow that misapplication of the law to stand. The Court should grant the petition and reverse.

For additional information regarding this topic, please see:

• "The Proper Role of the Federal Circuit," July 25, 2019
• "Athena Diagnostics v. Mayo Collaborative Services -- The Dissents," July 17, 2019
• "Athena Diagnostics v. Mayo Collaborative Services -- The Concurrences," July 14, 2019
• "Athena Diagnostics, Inc. v. Mayo Collaborative Services, LLC (Fed. Cir. 2019)," July 9, 2019
• "Invitation to Join Amicus Brief in Athena Diagnostics v. Mayo," April 11, 2019
• "Athena Diagnostics, Inc. v. Mayo Collaborative Services, LLC (Fed. Cir. 2019)," February 12, 2019
• "Athena Diagnostics, Inc. v. Mayo Collaborative Services, LLC (D. Mass. 2017)," August 8, 2017

Posted at 11:59 PM in Patentable Subject Matter, Supreme Court | Permalink | Comments (2)

December 09, 2019

Solicitor General Files Brief in Berkheimer v. HP

By Michael Borella --

Berkheimer v. HP Inc. was decided by the Federal Circuit in February 2018 and stands for -- in the words of Judge Moore of that Court -- "the unremarkable proposition that whether a claim element or combination of elements would have been well-understood, routine, and conventional to a skilled artisan in the relevant field at a particular point in time is a question of fact." The Supreme Court's patent-eligibility opinions in Mayo Collaborative Srvs. v. Prometheus Labs, Inc. and Alice Corp. v. CLS Bank Int'l had not been perfectly clear on this issue, and the Federal Circuit appeared to have taken both sides at various times. Berkheimer settled the issue, for a while at least.

HP petitioned the Supreme Court for certiorari in September 2018. In January of this year, the Court requested that the Solicitor General file a brief expressing the views of the United States in this matter. That brief finally arrived last week. In short, the Solicitor General is of the opinion that the overall lack of clarity regarding the fundamental issues surrounding patent-eligibility under 35 U.S.C. § 101 makes addressing the points of Berkheimer premature.

As background, the Supreme Court's Alice decision 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.

While the Supreme Court did not specify whether the well-understood, routine, and conventional determination was to be carried out as a matter of law, fact, or a hybrid of both, its earlier Mayo Collaborative Srvs. v. Prometheus Labs, Inc. decision strongly suggested that the § 101 inquiry may overlap with fact-sensitive inquiries such as novelty under § 102 in at least some situations. However, the Federal circuit has stated, in OIP Techs., Inc. v. Amazon.com, Inc. that "[p]atent eligibility under 35 U.S.C. § 101 is an issue of law reviewed de novo." But in other cases, different panels have implied that facts may be considered.

This came to a head in Berkheimer, where Judge Moore wrote:

The question of whether a claim element or combination of elements is well-understood, routine and conventional to a skilled artisan in the relevant field is a question of fact. Any fact . . . that is pertinent to the invalidity conclusion must be proven by clear and convincing evidence. Like indefiniteness, enablement, or obviousness, whether a claim recites patent eligible subject matter is a question of law which may contain underlying facts. (Emphasis added.)

The outcome of the Court's factual analysis was that some of Berkheimer's dependent claims recite "limitations directed to the arguably unconventional inventive concept described in the specification" and therefore the case was remanded to the District Court for fact finding. Notably, Berkheimer did not win on the merits, but instead managed to get the District Court's invalidation of some of his claims reversed modulo further review.

In its petition, HP's question presented was "[w]hether patent-eligibility is a question of law for the court based on the scope of the claims or a question of fact for the jury based on the state of the art at the time of the patent." This question is somewhat deceptive, as the Federal Circuit explicitly stated that some patent-eligibility decisions can be made as a point of law, but others may require fact finding when the parties are in dispute over whether a claim element is well-understood, routine and conventional. HP's attempt to make this non-binary decision into a black-or-white issue does not reflect the nuances of the opinion.

Nonetheless, the Solicitor General begins his discussion with a blunt statement: "this Court's recent decisions have fostered uncertainty concerning those substantive Section 101 standards." This uncertainty lies mainly in the "the scope of the exceptions and the proper methodology for determining whether a particular patent implicates them."

Berkheimer being largely a procedural case would not be the appropriate vehicle for addressing the more fundamental substantive questions, in the Solicitor General's view. Indeed, "the allocation of decision-making authority between judge and jury . . . is deeply intertwined with the underlying legal standards that govern patent-eligibility." Thus, the Solicitor General opines that HP's question "would be difficult to answer in any cogent manner while uncertainty about the substance of the Section 101 inquiry persists." He further notes that Berkheimer's focus on step two of Alice is of limited use for purposes of clarifying § 101 since the uncertainty arises under both steps.

Indeed, any outcome of a Supreme Court ruling in Berkheimer could be rendered moot if the Court later rules on a more substantive § 101 case. The Solicitor General appears to be taking the position that there is little point to apply a Berkheimer band-aid when patent-eligibility actually needs major surgery.

The Solicitor General further observes that both parties are suggesting the Court use this case to address the larger § 101 issues. Yet, there is "significant disagreement about what the claimed invention actually comprises" in the disputed patent. The Solicitor General writes:

The district court appeared to view Berkheimer's patent as simply identifying features that it would be desirable for a software system to possess—one-to-many editing, increased efficiency, and reduced redundancy and storage costs—rather than as claiming a specific method for achieving those features and the corresponding benefits. In contrast, the court of appeals appeared to conclude that the claims at issue could be read as identifying a particular method that will achieve the desired results, and it declined to determine which view of the patent is correct in the case's current summary-judgment posture.

This implies that there is a potential problem with whether the patent conforms to the § 112(a) written description requirement. Particularly, the Solicitor General states that "[i]t would be difficult to provide meaningful clarity about Section 101's boundaries without first knowing whether and to what extent the invention represents a particular practical implementation of broader principles of software design to achieve the stated objective, or merely posits one possible way one might attempt to do so." In other words, if the scope of the invention is unclear, the Alice test is that much more difficult to apply.

The Solicitor General goes on to contend that this lack of clarity "may be exacerbated in the software-system context, in which this case arises." He even suggests that the Supreme Court is especially unequipped to address § 101 issues in software technologies, and that the software focus of Berkheimer would frustrate the Court's ability to clarify the larger principles underlying patent eligibility.

In accordance with these points, the Solicitor General concludes with the recommendation that "[r]ather than attempt to resolve broader questions of Section 101's substantive scope in the face of those difficulties, the Court should await an appropriate case that properly presents those broader questions without similar obstacles."

It should not be surprising, given the brashness of the Trump administration, that the executive branch would take two clear swipes at the judiciary: "You screwed up the law" and "you are not qualified to fix it." Despite the merits to both of these points, being a fly on the wall during the Court's conference on this case would likely prove interesting. But the important outcome here is that the government is arguing to let one of the very few patent-friendly § 101 decisions from the Federal Circuit stand.

Posted at 11:59 PM in Patentable Subject Matter, Supreme Court | Permalink | Comments (0)

December 08, 2019

Solicitor General Recommends That Supreme Court Deny Certiorari in Hikma Pharmaceuticals v. Vanda Pharmaceuticals

By Donald Zuhn --

On Friday, the United States filed its brief in response to the March 18, 2019 order of the Supreme Court inviting the Solicitor General to express the views of the United States on the petition for certiorari filed by Petitioners Hikma Pharmaceuticals USA Inc. and Hikma Pharmaceuticals International Ltd. in Hikma Pharmaceuticals USA Inc. v. Vanda Pharmaceuticals Inc. The Solicitor General concluded that "[i]n the view of the United States, the petition for a writ of certiorari should be denied," stating that the case was "not an optimal vehicle for bringing greater clarity [to the Court's recent § 101 precedents] because the court of appeals majority arrived at the correct result."

The brief begins by explaining that the case concerns claims for methods of using human-made drugs to treat medical conditions. The dispute between the parties began when Vanda sued Hikma (at the time known as West-Ward Pharmaceuticals International Ltd.) for infringement of U.S. Patent No. 8,586,610, which relates to methods of treating patients suffering from schizophrenia with iloperidone. Representative claim 1 of the '610 patent recites:

1. A method for treating a patient with iloperidone, wherein the patient is suffering from schizophrenia, the method comprising the steps of:
    determining whether the patient is a CYP2D6 poor metabolizer by:
        obtaining or having obtained a biological sample from the patient; and
        performing or having performed a genotyping assay on the biological sample to determine if the patient has a CYP2D6 poor metabolizer genotype; and
    if the patient has a CYP2D6 poor metabolizer genotype, then internally administering iloperidone to the patient in an amount of 12 mg/day or less, and
    if the patient does not have a CYP2D6 poor metabolizer genotype, then internally administering iloperidone to the patient in an amount that is greater than 12 mg/day, up to 24 mg/day,
    wherein a risk of QTc prolongation for a patient having a CYP2D6 poor metabolizer genotype is lower following the internal administration of 12 mg/day or less than it would be if the iloperidone were administered in an amount of greater than 12 mg/day, up to 24 mg/day.

As the brief explains, the '610 patent describes that some patients have a variation (genotype) of a particular gene (CYP2D6) that results in poor metabolization of iloperidone, which in turn can lead to a dangerous heart condition called QTc prolongation.

The District Court determined that Hikma's proposed products would infringe Vanda's patent, rejecting Hikma's argument that the '610 patent claimed a patent-ineligible natural law. The Federal Circuit affirmed, with the majority (Judges Lourie and Hughes) concluding at step one of its Mayo/Alice analysis that the claims of the '610 patent are patent-eligible because they are not directed to a patent-ineligible natural law, but rather are "directed to a novel method of treating a disease." As explained in the Solicitor General's brief, "[t]he majority explained that, although '[t]he inventors recognized the relationships between iloperidone' and genetically linked side effects, they had not claimed the relationship itself, but instead had 'claimed an application of that relationship' that requires the administration of a specific dosage, 'depending on the result of a genotyping assay.'" The brief also explained that Chief Judge Prost, writing in dissent, "stated that, '[w]hatever weight can be ascribed to' Mayo's suggestion that 'a new way of using an existing drug' may be patent-eligible, lower courts 'remain beholden' to what she described as Mayo's contrary 'holding.'" Following the Federal Circuit's denial of rehearing en banc, the Hikma filed a Petition for a Writ of Certiorari, offering the following Question Presented:

Whether methods of using drugs to treat medical conditions are patent-eligible processes under Section 101.

In summarizing the position of the United States, the Solicitor states that:

The court of appeals correctly held that the relevant claims of Vanda's patent constitute patent-eligible subject matter under 35 U.S.C. 101. Those claims encompass methods of medical treatment. Historically, such methods were well understood to be patent-eligible.

The decision below, however, implicates important and recurring questions on which the Court's recent Section 101 decisions have fostered substantial uncertainty. In particular, Mayo Collaborative Services v. Prometheus Laboratories, Inc., 566 U.S. 66 (2012), has sent conflicting signals. Language in that opinion indicates that the Court did not intend to overturn the well-settled understanding that method-of-medical treatment claims typically are patent-eligible. But the decision's logic arguably implies the opposite. The disagreement between the majority and dissenting opinions below reflects that internal inconsistency.

Although Mayo is the most immediate source of confusion, the uncertainty ultimately stems from the broader framework articulated in the Court's recent Section 101 decisions. The Court's reconceptualization in Bilski v. Kappos, 561 U.S. 593 (2010), of inherent, long-recognized limitations on Section 101's affirmative scope as freestanding, atextual "exceptions," id. at 601, has given rise to an array of difficult questions. The confusion created by this Court's recent Section 101 precedents warrants review in an appropriate case.

This case, however, is not an optimal vehicle for bringing greater clarity because the court of appeals majority arrived at the correct result. In cases involving medical-diagnostic methods, by contrast, the Federal Circuit's recent decisions suggest that the court might well have reached different outcomes if it were not bound by the Mayo framework. The Court should await a case in which lower courts' confusion about the proper application of Section 101 and this Court's precedents makes a practical difference.

The latter half of the brief is spent fleshing out the summary above.

While acknowledging the historical understanding that a method of using a drug to treat a medical condition constitutes patent-eligible subject matter, the brief notes that "the Court's recent Section 101 decisions leave the proper analysis of such claims unclear." In support of that historical understanding of patent eligibility, the brief points to the "tens of thousands of patents that included at least one method-of-treatment claim" that the U.S. Patent and Trademark Office has issued since enactment of the 1952 Patent Act (although it should be noted that a similar argument failed to sway the Court in Association for Molecular Pathology v. Myriad Genetics, Inc.) and Congress' enactment of the Hatch-Waxman Act in 1984, which the brief suggests contains "provisions [that] assume that claims for methods of medical treatment, including methods that involve the administration of drugs to patients, are potentially patent-eligible."

As for the Court's decision in Mayo Collaborative Services v. Prometheus Laboratories, Inc., the brief states that:

The Mayo Court . . . appeared to take as its premise that methods of medical treatment are patent-eligible. Nevertheless, as evidenced by the dissenting opinion below, it is arguably unclear how the longstanding and entirely correct rule that method-of-treatment claims are patent-eligible can be reconciled with mechanical application of Mayo's two-step framework.

The brief argues that the Mayo Court's application of "a new and capacious understanding of patent-ineligible 'laws of nature'" was significant in two respects. First, the brief asserts that the Mayo Court departed from the prior distinction under § 101 between products of nature and human-made inventions by describing as "laws of nature" biological responses of the human body to conditions that arise solely from human intervention. Second, the brief contends that the Mayo Court defined the natural law it identified at an extremely high level of specificity, noting that "[w]hen highly specific relationships of that sort are treated as laws of nature, it becomes more difficult for a patent applicant to show that its invention goes substantially beyond an instruction to 'apply the law.'" With respect to the difficulty of applying Mayo's two-step framework, the brief points out that:

[I]f mechanical application of Mayo's approach leads to the conclusion that the metabolizing of a drug, as in Mayo, is an "entirely natural process[ ]"—merely illustrating a natural law that "exists in principle apart from any human action," 566 U.S. at 77—the same would arguably be true of the biological reactions involved in Vanda's process. And if the precise mathematical correlations in Mayo qualify for this purpose as "laws of nature," ibid., the same would arguably be true of the highly particularized relationships on which Vanda's treatment method is premised.

And the brief continues:

Indeed, it is arguably unclear whether even a method of treating disease with a newly created drug would be deemed patent-eligible under a mechanical application of Mayo's two-part test. The proposition that a specified dosage of a new drug has therapeutic benefits for a particular class of patients would seem to constitute a "law of nature" under Mayo's expansive conception of that term. And once that therapeutic benefit has been identified, an instruction to administer the drug in the specified dosage to the relevant patients might be viewed as nothing more than routine and conventional activity. The patent-eligibility of such method-of-treatment claims has long been settled, and the Mayo Court did not suggest that it intended such an avulsive effect on established practices. The potential for rote application of the Mayo two-step framework to call into question such bedrock understandings of the patent system, in a way that the Mayo Court clearly did not envision, suggests that the Mayo framework warrants reconsideration [emphasis in brief].

As for the Federal Circuit's handling of the case, the brief contends that the majority and dissenting opinions "illustrate the conflicting strands within the Mayo opinion." The brief also suggests that "[t]he current uncertainty as to the proper application of the Mayo framework has considerable practical consequences for various types of medical innovations," with some commentators "liken[ing] Mayo's analysis to an elusive 'I-know-it-when-I-see-it' standard." The brief also argues that the USPTO's ability to provide direction to its examining corps and administrative patent judges "is constrained by the lack of clarity in judicial precedent."

According to the Solicitor General's brief, "[t]he present difficulties in applying Section 101 ultimately derive in substantial part from the Bilski Court's reconceptualization of the limits on Section 101's coverage as freestanding 'exceptions,' 561 U.S. at 601, rather than as context-sensitive interpretations of the provision’s terms." The brief states that:

[T]he Bilski Court . . . recast decades of precedent recognizing internal limits on Section 101's reach as "exceptions" that the Court acknowledged "are not required by" Section 101's language. Id. at 601. That approach decoupled the Section 101 analysis from the statutory text and context, necessitating an alternative methodology for ascertaining the scope of the exceptions and identifying claims that implicate them.

Mayo and later decisions demonstrate the difficulty of that task. Mayo "set forth a framework" that Alice distilled to two "step[s]." Alice, 573 U.S. at 217. First, courts must ask "whether the claims at issue are directed to one of th[e] patent-ineligible concepts." Ibid. Second, "[i]f so," courts must "ask, 'what else is there in the claims,'" while effectively disregarding activities that are "'well-understood, routine, [and] conventional.'" Id. at 217, 225 (quoting Mayo, 566 U.S. at 73, 78) (brackets omitted). Both steps have proven problematic.

The brief argues that the Supreme Court's instruction that courts inquire at the first step of the Mayo/Alice analysis whether a patent is "directed at" a law of nature, natural phenomenon, or abstract idea "provides little guidance," and contends that "[t]he second step is similarly ambiguous." Citing the Court's decision in Alice Corp. Pty. Ltd. v. CLS Bank Int'l, the brief notes that:

Within a single post-Mayo opinion, the Court variously articulated that step as a query regarding "what else is there in the claims"; an examination of "whether the additional elements transform the nature of the claim into a patent-eligible application"; "a search for an inventive concept"; an inquiry into any "additional features to ensure that the claim is more than a drafting effort designed to monopolize" the abstract idea or natural law; a review of whether the claims do "more than simply stating the abstract idea while adding the words 'apply it'"; an evaluation of whether a patent does more than merely "limit the use of an abstract idea to a particular technological environment"; and a determination whether additional features are "well-understood, routine, conventional activit[ies]" previously known to the industry.

In addition to the ambiguity of the second step of the Mayo/Alice framework, the brief argues that the second step "causes the Section 101 inquiry to overlap with the application of other Patent Act provisions," adding that "to the extent Mayo's approach screens out routine activity and considers only those discrete steps that are independently new, it replaces the traditional statutory focus on the invention 'as a whole,' . . . with a more demanding test."

Despite the problems with the Mayo/Alice two-step framework, the brief ultimately concludes that:

This case . . . is not an optimal vehicle to address the confusion stemming from this Court's recent Section 101 decisions. Despite that uncertainty, the court of appeals majority reached the correct result in concluding that the method of medical treatment claimed in Vanda's patent is patent-eligible subject matter.

Instead, the brief suggests that the Court "should provide additional guidance in a case where the current confusion has a material effect on the outcome of the Section 101 analysis," offering as one example a case involving the patent eligibility of medical-diagnostic methods, and pointing in particular to Athena Diagnostics, Inc. v. Mayo Collaborative Servs., LLC. The brief notes that in contrast with Vanda, where rehearing was denied by the Federal Circuit without dissent, "the Federal Circuit's recent order denying rehearing en banc in Athena was accompanied by multiple separate opinions articulating different understandings of Mayo and seeking clarification from this Court." The brief argues that the eight opinions in the Athena order "provide substantial grounds for inferring that, if the Federal Circuit were not bound by the current Section 101 framework, that court might have reached different outcomes in Athena itself and in other diagnostic-method cases."

The Solicitor General concludes the brief by recommending that the petition for a writ of certiorari in Vanda be denied, and proposing as an alternative that the petition be held pending the Court's decision in Athena, in the event the Court grants the petition for certiorari in that case.

Posted at 11:59 PM in Patentable Subject Matter, Supreme Court | Permalink | Comments (3)

November 19, 2019

Koninklijke KPN N.V. v. Gemalto M2M GmbH (Fed. Cir. 2019)

By Michael Borella --

Koninklijke KPN N.V. (KPN) sued Gemalto M2M GmbH (Gemalto) and several other parties in the District of Delaware for infringement of its U.S. Patent No. 6,212,662. The defendants moved for dismissal under Rule 12(c), contending that the asserted claims lacked subject matter eligibility. The District Court judge granted the motion. KPN appealed.

The Invention

The '662 patent involves checksums, which are calculations performed over blocks of data that result in a short (e.g., 16, 32, or 64 bit) code. These calculations may be a simple exclusive or operation, a more complicated cyclic redundancy check, or a hash function. Virtually all data transmitted on a network, wired or wireless, is accompanied by a checksum. In most cases, the transmitter calculates the checksum, appends the code to the blocks of data to be sent, and then sends the block and code. The receiver calculates its own version of the checksum over the blocks of data. If this matches the transmitted code, then the receiver can be reasonably assured that the blocks of data were not corrupted (e.g., due to random noise) during the transmission. But checksums are not perfect, and occasionally a corrupt block can produce the same code as if it were error free.

The inventors of the '662 patent observed that checksums often fail in the presence of certain types of systematic errors -- non-random errors that repeat from block to block. For instance, "[i]f a fixed [checksum] generating function produced defective check data for a transmission that was corrupted with a given systematic error (e.g., first and fourth bit is erroneous in every data transmission), that fixed generating function would likely continue to produce the same defective check data every time that systematic error appeared." In these cases, the systematic error will not be detected by the checksum.

The '662 patent involves "var[ying] the way check data is generated from time to time so that the same defective check data does not continue to be produced for the same type of persistent systematic error." This variability dramatically decreases the probability that a receiver will not detect repetitive errors after validating the checksum. One of the ways that the generation of check data can be varied is "through permutation, which interchanges the bit position in a data block."

The Claims

Of the claims invalidated, only 2, 3, and 4 were under appeal. Claim 2 depends from claim 1, and claims 3 and 4 depend from 2, so all are shown below.

1. A device for producing error checking based on original data provided in blocks with each block having plural bits in a particular ordered sequence, comprising:
    a generating device configured to generate check data; and
    a varying device configured to vary original data prior to supplying said original data to the generating device as varied data;
    wherein said varying device includes a per-mutating device configured to perform a permutation of bit position relative to said particular ordered sequence for at least some of the bits in each of said blocks making up said original data without reordering any blocks of original data.

2. The device according to claim 1, wherein the varying device is further configured to modify the permutation in time.

3. The device according to claim 2, wherein the varying is further configured to modify the per-mutation based on the original data.

4. The device according to claim 3, wherein the permutating device includes a table in which subsequent permutations are stored.

The Patent-Eligibility Test

The two-part test from Alice Corp. v. CLS Bank Int'l is used to determine whether claims are eligible for patenting under 35 U.S.C. § 101. One must first decide whether the claim at hand involves 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, elements or combinations of elements that are well-understood, routine, and conventional will not lift the claim over the § 101 hurdle. While this inquiry is generally carried out as a matter of law, factual issues can come into play when determining whether something is well-understood, routine, and conventional.

The District Court Proceedings

The District Court found the claims to be directed to an abstract idea at step one of Alice because "they do not say how data is re-ordered, how to use reordered data, how to generate additional data, how to use additional data, or even that any data is transmitted," and for the dependent claims, "they do not say how the permutations are modified in time or modified based on the data." The claims failed at step two of Alice, according to the District Court, because the "purported inventive concept was not captured in the claims."

The Federal Circuit Decision

On review, the Federal Circuit reversed the District Court. Explaining the Alice framework, the Court wrote that "[i]n cases involving software innovations, [the step one] inquiry often turns on whether the claims focus on the specific asserted improvement in computer capabilities or, instead, on a process that qualifies as an abstract idea for which computers are invoked merely as a tool." The Court further noted that "[s]ince Alice, we have found software inventions to be patent-eligible where they have made non-abstract improvements to existing technological processes and computer technology." Moreover, these improvements must be specific -- "[a]n improved result, without more stated in the claim, is not enough to confer eligibility to an otherwise abstract idea . . . [t]o be patent-eligible, the claims must recite a specific means or method that solves a problem in an existing technological process."

With respect to claims 2-4, the Court found them patent-eligible "because they are directed to a non-abstract improvement in an existing technological process . . . [b]y requiring that the permutation applied to original data be modified in time, claim 2 . . . recites a specific implementation of varying the way check data is generated that improves the ability of prior art error detection systems to detect systematic errors." This results in "a new way of generating check data that enables the detection of persistent systematic errors in data transmissions that prior art systems were previously not equipped to detect."

The defendants argued that the claims were abstract because they "fail to recite a last application step that uses the generated check data to actually perform error detection," and thus lacked a concrete application. The Court took a different view, stating that "[a] claim that is directed to improving the functionality of one tool (e.g., error checking device) that is part of an existing system (e.g., data transmission error detection system) does not necessarily need to recite how that tool is applied in the overall system (e.g., perform error detection) in order to constitute a technological improvement that is patent-eligible." Further, "the more relevant inquiry is whether the claims in this patent focus on a specific means or method that improves the relevant technology or are instead directed to a result or effect that itself is the abstract idea and merely invoke processes and machinery." Notably, the claimed modification of the permutation in time was a "specific solution for accomplishing [the] goal—i.e., by varying the way check data is generated by modifying the permutation applied to different data blocks."

The Court went on to distinguish the present claims over those found ineligible in Digitech Image Technologies, LLC v. Electronics for Imaging, Inc., RecogniCorp, LLC v. Nintendo Co., Two-Way Media Ltd. v. Comcast Cable Communications, LLC, and Intellectual Ventures I LLC v. Capital One Financial Corp. The critical point for the Court was that "[w]hile the patents in these cases may have claimed an improved result in a technical field, the claims failed to recite a specific enough solution to make the asserted technological improvement concrete." In contrast, claims 2-4 "specifically recite how this permutation is used (i.e., modifying the permutation applied to different data blocks), and this specific implementation is a key insight to enabling prior art error detection systems to catch previously undetectable systematic errors."

As a consequence, the claims are not abstract under step one of Alice, step two was not considered, and the Federal Circuit reversed the District Court. The moral of this story is that a claim specifically reciting a particular technical improvement over the prior art, where the improvement is described as such in the specification, is better equipped to survive a § 101 challenge than a claim lacking either of these qualities. Of course, the amount detail in the claimed technical improvement required to reach this level of specificity remains an open question.

Koninklijke KPN N.V. v. Gemalto M2M GmbH (Fed. Cir. 2019)
Panel: Circuit Judges Dyk, Chen, and Stoll
Opinion by Circuit Judge Chen

Posted at 11:29 PM in Federal Circuit, Patentable Subject Matter | Permalink | Comments (0)

November 17, 2019

USPTO Subject Matter Eligibility October Update: Example 46

By Michael Borella --

Last month the U.S. Patent and Trademark Office published an update ("October Update") to its subject matter eligibility guidance. As we noted at that time, the October Update is more evolutionary than revolutionary, and primarily serves to provide clarifications to the more substantive January Guidance. Nonetheless, the USPTO did provide four additional examples applying its revised test for subject matter eligibility under 35 U.S.C. § 101 to hypothetical claims. Here, we discuss Example 46.

The background, of course, is 2014's Alice Corp. vs. CLS Bank Int'l Supreme Court holding. Therein, the Court set forth a two-part test to determine whether claims are directed to patent-eligible subject matter under § 101. These parts are denoted by the USPTO as steps 2A and 2B, respectively (step 1 is to determine whether the claimed invention is one of the four statutory categories of subject matter set forth in § 101, and is rarely at issue in practice).

Under step 2A, one must decide whether the claim at hand involves a judicially-excluded law of nature, a natural phenomenon, or an abstract idea. If so, then under step 2B one further decides 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. Elements or combinations thereof that are well-understood, routine, and conventional will not lift the claim over the § 101 hurdle. While this inquiry is generally carried out as a matter of law, factual issues can come into play when determining whether something is well-understood, routine, and conventional.

The January Guidance breaks the first part of the Alice test into two sub-steps (let's call them 2A(i) and 2A(ii) for purposes of clarity). In the former, one determines whether the claim recites a judicial exception, such as an abstract idea. In the latter, one determines further "whether the recited judicial exception is integrated into a practical application of that exception."

To focus the analysis, the January Guidance indicates that, under step 2A(i), all abstract ideas should fall into one of three categories: mathematical concepts, certain methods of organizing human activity, and mental processes. Think of these as the "Three M's" -- math, money, and mental steps.

If the analysis moves on to sub-step 2A(ii), then one determines "whether the claim as a whole integrates the recited judicial exception into a practical application of the exception." Such a claim "will apply, rely on, or use the judicial exception in a manner that imposes a meaningful limit on the judicial exception, such that the claim is more than a drafting effort designed to monopolize the judicial exception."

Example 46 applies this test to four claims directed to an invention for obtaining and analyzing identification and behavioral data of livestock animals, such as dairy cattle. In some of these claims, cattle with aberrant behavior are identified, while in others cattle so identified are separated from the herd by a gating system or treated with a modified diet intended to address the disease of which the aberrant behavior is a symptom.

Claim 1

Claim 1 recites:

A system for monitoring health and activity in dairy livestock animals comprising:
    a memory;
    a display; and
    a processor coupled to the memory programmed with executable instructions, the instructions including
        a livestock interface for obtaining animal-specific information, wherein the animal-specific information comprises animal identification data and at least one of body position data, body temperature data, feeding behavior data, and movement pattern data; and
        a monitoring component for
            (a) comparing the obtained animal-specific information with animal information from a herd database to verify an animal's identity, and
            (b) analyzing the obtained animal-specific information to identify whether the animal is exhibiting an aberrant behavioral pattern as compared to past behavior of the animal, and
            (c) displaying the analysis results for the animal on the display.

The USPTO begins its substantive analysis by applying step 2A(i). Under the October Update, a claim recites a judicial exception when such an exception is explicitly set forth or implicitly described in the claim. Based on this interpretation, the USPTO finds that limitations (a) and (b) are an observation and an evaluation, respectively. Thus, they are "acts that can be practically performed in the human mind," and fall within the mental processes category of abstract ideas. Further, "[t]he recitation of a processor in this claim does not negate the mental nature of these limitations because the claim here merely uses the processor as a tool to perform the otherwise mental processes."

Moving on to step 2A(ii), the USPTO identifies the additional elements as "the memory, the display, the processor, the livestock interface, and limitation (c)." The first three of these elements are rapidly dismissed as being non-substantive for purposes of the § 101 analysis, because "they represent no more than mere instructions to apply the judicial exception on a computer [and] nothing more than an attempt to generally link the use of the judicial exception to the technological environment of a computer." Additionally, the USPTO finds that the livestock interface is just "insignificant extra-solution activity" because it is used for data gathering and is recited at a high level of generality. Limitation (c), on the other hand, only "performs the necessary software tasks so that the result of the abstract mental process is displayed." Thus, the additional elements, when considered in isolation, do not integrate the abstract idea into a practical application.

The step 2A(ii) analysis also requires considering the additional elements in combination with one another and the rest of the claim. The USPTO states that the claim as a whole does no more than "automate the mental processes that the farmer used to perform (e.g., the mental inspection and evaluation of the livestock animals' behavior), using the computer components as a tool." Notably, "[w]hile this type of automation improves the daily life of farmers (by minimizing or eliminating the need for mentally evaluating the behavior of livestock animals), there is no change to the computers and other technology that are recited in the claim as automating the abstract ideas, and thus this claim cannot improve computer functionality or other technology." Therefore, the claim fails to integrate the abstract idea.

Step 2B proceeds similarly as that of step 2A(ii). The memory, display, and processor are "at best the equivalent of merely adding the words "apply it" to the judicial exception." The livestock interface and limitation (c) are still extra-solution activity. The USPTO then states, in a rather conclusory fashion, "[e]ven when considered in combination, these additional elements represent mere instructions to apply an exception and insignificant extra-solution activity, which cannot provide an inventive concept."

As a consequence, claim 1 is ineligible.

Claim 2

Claim 2 depends from claim 1, and recites:

The system of claim 1, wherein the system further comprises
    a feed dispenser that is connected to a feed and supplement supply and is operable to dispense individualized amounts of feed and optional supplements, and
    wherein the monitoring component is further configured for
        (d) automatically sending a control signal to the feed dispenser to dispense a therapeutically effective amount of supplemental salt and minerals mixed with feed when the analysis results for the animal indicate that the animal is exhibiting an aberrant behavioral pattern indicative of grass tetany.

Since claim 2 incorporates all elements of claim 1 and two of those incorporated elements have already been found to recite an abstract idea, claim 2 also recites an abstract idea under step 2A(i).

Regarding step 2A(ii), the USPTO writes that "limitation (d) does not merely link the judicial exceptions to a technical field, but instead adds a meaningful limitation in that it can employ the information provided by the judicial exception . . . to operate the feed dispenser." Moreover, "[l]imitation (d) in combination with the feed dispenser enables the control of appropriate farm equipment based on the automatic detection of grass tetany, which goes beyond merely automating the abstract idea."

The main difference between ineligible claim 1 and eligible claim 2 is the addition of feed dispenser and how it is triggered to the latter. This adds a non-computer physical element to the claim which changes state in response to the "mental" calculations performed by the computer. This appears to be enough to transform the claimed invention into one that meets the requirements of § 101.

Another way of differentiating between claims 1 and 2 is to make an analogy to Supreme Court and Federal Circuit case law regarding the law of nature and natural phenomena exceptions. Particular, since Mayo v. Prometheus and its progeny, diagnostic method claims are almost certainly going to be found ineligible, whereas method of treatment claims can be eligible. Claim 1 reads like a diagnostic method claim (e.g., gathering patient data and determining whether there is presence or likelihood of a disease), while claim 2 reads like a method of treatment claim (e.g., administering a medicine or nutritional supplement to a patient who has been diagnosed with a disease). In that light, the USPTO is at least being consistent with the precedent, even if the correctness of that precedent has been called into question.

Claim 3

Claim 3 focuses on separating cattle identified as possibly suffering from an illness from those that do not. It recites (edited to fix apparent typographical errors in the enumeration of steps):

A method for monitoring health and activity in dairy livestock animals comprising:
    (a) causing a herd of livestock animals to enter a sorting gate that is automatically operable, wherein each animal in the herd is equipped with an animal sensor having a radio frequency transponder,
    (b) for a particular animal in the herd, obtaining, by a radio frequency reader mounted on or near the sorting gate, animal-specific information from the animal sensor when the animal sensor is within proximity to the radio frequency reader, the animal-specific information comprising animal identification data and at least one of body position data, body temperature data, feeding behavior data, and movement pattern data,
    (c) analyzing, by a processor, the obtained animal-specific information from step (b) with respect to animal information stored in a herd database to identify the animal and to determine whether the animal is exhibiting an aberrant behavioral pattern as compared to the past behavior of the animal,
    (d) automatically operating the sorting gate, by the processor sending a control signal to the sorting gate to route the animal into a holding pen when the analysis results from step (c) for the animal indicate that the animal is exhibiting an aberrant behavioral pattern, and by the processor sending a control signal to the sorting gate to permit the animal to freely pass through the sorting gate when the analysis results for the animal indicate that the animal is not exhibiting an aberrant behavioral pattern, and
    (e) repeating steps (b) through (d) for each animal in the herd.

Analyzing the claim, the USPTO observes that step (a) "does not impose any limits on how the livestock animals are caused to enter the sorting gate" while steps (b) and (c) "[do] not impose any limits on how the radio frequency reader obtains the animal-specific information, or on how the analysis of the information is accomplished." Similarly, step (d) "does not impose any limits on how the sorting gate is operated." The USPTO also notes that the conditional dependencies between the steps results in three embodiments being covered under broadest reasonable interpretation:

[A] first embodiment in which only the first condition and first action occur (all animals exhibit aberrant behavioral patterns and are thus routed to the holding pen); a second embodiment in which only the second condition and second action occur (all animals exhibit normal behavioral patterns and are thus permitted to freely pass through the sorting gate); and a third embodiment in which both conditions and both actions occur (some animals exhibit aberrant behavioral patterns and are thus routed to the holding pen, and other animals exhibit normal behavioral patterns and are thus permitted to freely pass through the sorting gate).

Applying step 2A(i), the USPTO finds that step (c) of the claim recites the abstract idea of performing an evaluation. This evaluation of "whether the animal is exhibiting an aberrant behavioral pattern as compared to the past behavior of the animal" could practically be performed in the human mind by observing the animal.

Turning to step 2A(ii), the USPTO quickly dismisses steps (a) and (e) of the claim as "nothing more than an attempt to generally link the use of the judicial exception to the particular field of livestock management," while step (b) "represents mere data gathering." The USPTO also takes issue that "steps (b) and (c) are also recited at a high level of generality and represent no more than mere instructions to apply the judicial exception using generic computer components."

On the other hand, the USPTO's view of step (d) of the claim is that, under all three embodiments, it "does not merely link the judicial exception to a technical field, but instead adds a meaningful limitation in that it employs the information provided by the judicial exception . . . to operate the gate control mechanism and route the animals." As a result, "step (d) goes beyond merely automating the abstract ideas and instead actually uses the information obtained via the judicial exception to take corrective action by operating the gate and routing the animals in a particular way." This is an integration of "the judicial exception into the overall livestock management scheme and accordingly practically applies the exception, such that the claim is not directed to the judicial exception."

Therefore, claim 3 is eligible.

Claim 4

Claim 4 uses similar language as that of claim 1, but takes the invention in a different direction. It recites:

A system for monitoring health and activity in a herd of dairy livestock animals comprising:
    a memory;
    a processor coupled to the memory programmed with executable instructions, the instructions including a livestock interface for obtaining animal-specific information for a plurality of animals in the herd, wherein the animal-specific information comprises animal identification data and at least one of body position data, body temperature data, feeding behavior data, and movement pattern data; and
    a herd monitor including (a) a radio frequency reader for collecting the animal-specific information from a plurality of animal sensors attached to the animals in the herd when the animal sensors are within proximity to the radio frequency reader, each animal sensor having a radio frequency transponder, and (b) a transmitter for transmitting the collected animal-specific information to the livestock interface.

Notably, the difference between claims 1 and 4 is that the former comprises the aforementioned comparing, analyzing and displaying steps that were found to be abstract, while the latter includes the herd monitor with its radio frequency reader and transmitter.

Under step 2A(i), the USPTO rapidly concludes that there is no judicial exception recited in the claim. Particularly, "[t]he claim does not recite any abstract ideas, such as a mathematical concept, mental process, or a method of organizing human activity such as a fundamental economic concept or managing interactions between people." Further, "[t]he system's operation, like all computers, is based on mathematical theory, but that underlying operation does not trigger an eligibility analysis because it is not set forth or described in the claim." Therefore, the claim is eligible.

Analysis

We have found the USPTO eligibility examples helpful from time to time. But some, like this one, raise new questions as it provides a few answers. First, as noted above in the discussions of claims 1 and 2, is the USPTO taking the position that improvements using generic physical components that save people time are less likely to be eligible than improvements to specific devices that have the same outcome? If so, that requires an evaluation of whether a claimed invention improves a person's performance or a machine's performance, which is difficult in practice with many software-based inventions. For example, a new algorithm that recommends a course of action for a human to take might result in both human and computer performance being enhanced.

Second, the differences in the eligibility outcome of claims 1 and 4 require some rather thin bacon slicing, and involve nuances that many examiners, PTAB judges, and attorneys might not appreciate as relevant. Further, what if we added the comparing, analyzing and displaying steps from claim 1 into claim 4? Under the October Update, claim 4 would now recite an abstract idea, but would the herd monitor result in an integration into a practical application? In a broader sense, can adding limitations to an eligible claim render it ineligible? As the slogan for an infamous tabloid publication goes, inquiring minds want to know.

Posted at 10:00 PM in Patent Office Rules & Procedures, Patentable Subject Matter | Permalink | Comments (0)

October 20, 2019

Federal Circuit Invalidates Edison's Light Bulb Patent

By Michael Anderson and Michael Borella --

August 27, 1890

WASHINGTON D.C. The ups and downs of Mr. Thomas A. Edison's inventions related to electrical lighting continue. After his U.S. Patent No. 223,898 for an "Electric Lamp" was found to be valid in the Circuit Court of the Western District of Pennsylvania, the case was appealed to the Federal Circuit. Oral arguments were held this Spring and the decision of the Court came down last week, invalidating Mr. Edison's claims.

The Court (a panel of three appellate judges) applied curious reasoning. They began by describing what they referred to as "laws of nature" and "natural phenomena" -- properties of nature that exist independently of the human experience -- one of which was the basis of the invention:

Incandescence is a form of thermal radiation that results from heating a body to the point that it produces visible light. Virtually all solids and liquids exhibit incandescence if a proper amount of heat is applied, as described in Lardner's 1833 Treatise on Heat. Indeed, light from the sun is generated from incandescence. Thus, incandescence is a natural law; that is, a phenomenon that is produced by nature and not the hand of humankind.

The Court went on to explain that, to be patentable, an invention based on a natural phenomenon must include an inventive concept that is not "well-understood, routine, and conventional" and that provides "significantly more" than the excluded phenomenon itself. Otherwise, one could patent "what should be in the public domain and free for all to use as they see fit." Ultimately, the Court found that Mr. Edison's patent did not meet this requirement and was therefore an improper attempt to obtain a patent on an effect of the world we live in rather than an inventive modification thereof.

The claims of the '898 patent recite:

1. An electric lamp for giving light by incandescence, consisting of a filament carbon of high resistance, made as described, and secured to metallic wires, as set forth.

2. The combination of carbon filaments with a receiver made entirely of glass and conductors passing through the glass, and horn which receiver the air is exhausted, for the purposes set forth.

3. A carbon filament or strip coiled and connected to electric conductors so that only a portion of the surface of such carbon conductors shall be exposed for radiating light, as set forth.

4. The method herein described of securing the platina contact-wires to the carbon filament and carbonixin of the whole in a closed chamber, substantially as set forth.

Based on their broad language, the Court rapidly concluded that "the claims clearly involve a laws of nature, namely that of generating incandescence by heating a resistive wire through conduction of electricity." Justifying this decision, the Court wrote, "[p]henomena of nature, though just discovered, are not patentable, as they are basic and fundamental to ongoing scientific and technological work, and monopolization of such central principles through the grant of a patent might tend to impede innovation rather than promote it."

The Court made analogies to other discoveries of natural laws, and noted that "Newton could not have patented his celebrated discovery of law of gravity nor could Pythagoras have patented his theorem regarding relationship between the side lengths of a right triangle . . . [l]ikewise, we cannot affirm the validity of a patent on a fundamental process of the physical universe that likely existed well before the Earth itself."

Having establishing that Mr. Edison's claims are directed to a natural phenomenon, the Court addressed the follow-on question of whether those claims were drawn narrowly and to an unconventional application thereof. The Court observed that, "[t]o transform an unpatentable law of nature into a patent-eligible application of such a law, one must do more than simply state the law of nature while adding the words 'apply it.'" Such a claim, in the Court's view, would just be "a clever drafting exercise designed to monopolize the law of nature itself."

Thus, the Court considered the language of the claims, looking for the aforementioned inventive concept in the additional elements. In doing so, it determined that these elements encompassed "metallic wires, glass, and a closed chamber," but that each was in routine use by experimenters at the time of Edison's invention.

The Court observed that the claimed metallic wires are conventional means for conducting electricity, and that it is routine to perform laboratory tests inside a chamber to prevent reactions from being contaminated by the outside world. Moreover, performing such a well-understood process in a controlled environment is a fundamental basis of experimentation. The extension of the laboratory testing conditions to an end product by sealing a glass chamber containing the "filament of high resistance" is nothing more than a conventional application of such laboratory conditions. As examples of the well-understood nature of the additional elements, the Court pointed to the 1761 work of Ebenezer Kinnersley in heating metallic wires to incandescence, the Belgian Marcellin Jobard who produced an incandescent light bulb in 1838 using a vacuum chamber, as well as the Russian Alexander Lodygin who, in 1872, demonstrated an incandescent light bulb in a glass enclosure.

Moreover, Mr. Edison stated in his patent that others have already been able to produce light through incandescence:

Heretofore light by incandescence has been obtained from rods of carbon of one to four ohms resistance, placed in closed vessels, in which the atmospheric air has been replaced by gasses that do not combine chemically with the carbon.

Mr. Edison went on to state that "[t]he leading-wires have always been large, so that their resistance shall be many times less than the burner." Because incandescence through one to four ohm resistance filaments was known, the Court observed that the basic application of the scientific principles of Ohm's and Joule's laws dictates that a higher-resistance filament would simply cause a reduction of the current required to cause incandescence. Therefore, based on these scientific principles, smaller wires and less power would be needed for incandescence. Thus, in the Court's view, Mr. Edison has conceded both that incandescence from carbonized elements in closed vessels and that the claimed structure and ratios of resistances between wires and filaments were already known.

Particularly, Mr. Edison does not claim that he created a new apparatus. Indeed, "Mr. Edison did not invent the claimed electric light structure, nor was he the first to observe the physical phenomena of incandescence." Instead, "Mr. Edison simply uses well-known components for their intended use according to the principles dictated by established laws of electronics."

Thus, the Court found that "[t]hese conventional components, all generic, are unable to transform the claimed invention into significantly more than the natural phenomenon." Furthermore, "when considered in combination, these elements add nothing beyond the elements individually, and the combination of elements fails to improve the functioning of an electronic bulb beyond what is expected by laws of nature."

Mr. Edison argued that because "the particular laws of nature that the claims embody are narrow and specific, the patents should be upheld." But the Court disagreed, stating that "[a] patent upon a narrow law of nature may not inhibit future research as seriously as would a patent upon Newton's discoveries, but the creative value of Mr. Edison's discovery is also considerably smaller." Moreover, "even a narrow law of nature can serve to inhibit future research."

The Court concluded, "[f]or these reasons, we hold that the patent claims at issue here effectively encompass the underlying laws of nature themselves and are consequently invalid."

Posted at 09:10 PM in Patentable Subject Matter | Permalink | Comments (4)

October 17, 2019

USPTO Publishes Update to Its Subject Matter Eligibility Guidance

By Michael Borella --

Early today, the U.S. Patent and Trademark Office released an update to its January 2019 Subject Matter Eligibility Guidance. Unlike the January Guidance, which represented a significant change in how the USPTO applies § 101 in examination and PTAB proceedings, this October Update is primarily an effort to clarify issues brought up by public comments on the January Guidance. While not exactly much ado about nothing, the October Update provides few changes to USPTO's stance on § 101.

The October Update discusses five areas of § 101 analysis and procedure in detail, and is accompanied by four new hypothetical § 101 examples, an index of all such examples published since early 2015, and an updated spreadsheet of § 101 court cases. The October Update itself is discussed below, with emphasis on the abstract idea judicial exclusion, and the new examples will be covered in future articles.

The backdrop to the § 101 guidance is 2014's Alice Corp. vs. CLS Bank Int'l Supreme Court holding. Therein, the Court set forth a two-part test to determine whether claims are directed to patent-eligible subject matter under § 101. These parts are denoted by the USPTO as steps 2A and 2B, respectively (step 1 is to determine whether the claimed invention is one of the four statutory categories of subject matter set forth in § 101, and is rarely at issue in practice).

Under step 2A, one must decide whether the claim at hand involves a judicially-excluded law of nature, a natural phenomenon, or an abstract idea. If so, then under step 2B one further decides 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. Elements or combinations of elements that are well-understood, routine, and conventional will not lift the claim over the § 101 hurdle. While this inquiry is generally carried out as a matter of law, factual issues can come into play when determining whether something is well-understood, routine, and conventional.

If the analysis moves on to sub-step 2A(ii), the one determines "whether the claim as a whole integrates the recited judicial exception into a practical application of the exception." Such a claim "will apply, rely on, or use the judicial exception in a manner that imposes a meaningful limit on the judicial exception, such that the claim is more than a drafting effort designed to monopolize the judicial exception."

And now, on to the guts of the October Update

When Does a Claim Recite a Judicial Exception?

Given the use of the vague term "recite" in step 2A(i), it is not surprising that some have taken issue with how this sub-step is to be applied in practice. The USPTO attempts to clarify what it meant in the January Guidance:

[A] claim recites a judicial exception when the judicial exception is "set forth" or "described" in the claim. While the terms "set forth" and "describe" are thus both equated with "recite," their different language is intended to indicate that there are two ways in which an exception can be recited in a claim. For instance, the claims in Diamond v. Diehr clearly stated a mathematical equation in the repetitively calculating step, such that the claims "set forth" an identifiable judicial exception, but the claims in Alice Corp. v. CLS Bank, "described" the concept of intermediated settlement without ever explicitly using the words "intermediated" or "settlement."

The USPTO goes on to state that multiple judicial exceptions can be recited in a claim, and if they are of different types (e.g., an abstract idea and a law of nature), then MPEP 2106.05(II) controls ("If . . . the claim clearly recites a plurality of discrete exceptions, then for purposes of examination efficiency, examiners should select one of the exceptions and conduct the eligibility analysis for that selected exception."). For multiple abstract ideas recited by the same claim (e.g., a mental process and a mathematical concept), the USPTO strongly recommends that these exceptions also be analyzed together.

The Grouping of Abstract Ideas

As noted above, the January Guidance places all abstract ideas into one of three categories (with rare exceptions). The October Update further clarifies the scope of these categories.

Regarding mathematical concepts, the USPTO writes:

When determining whether a claim recites a mathematical concept (i.e., mathematical relationships, mathematical formulas or equations, and mathematical calculations), examiners should consider whether the claim recites a mathematical concept or merely includes limitations that are based on or involve a mathematical concept. A claim does not recite a mathematical concept (i.e., the claim limitations do not fall within the mathematical concept grouping), if it is only based on or involves a mathematical concept. For example, a limitation that is merely based on or involves a mathematical concept described in the specification may not be sufficient to fall into this grouping, provided the mathematical concept itself is not recited in the claim. (Emphasis added.)

Applying this determination involves some rather thin bacon slicing, and was illustrated in § 101 example 38. We have previously discussed how the USPTO's analysis of example 38 provided more questions than answers and needed clarification. Unfortunately, the October Update does not address the problems with example 38, and even suggests the opposite outcome.

The USPTO does clarify, however, that "[a] mathematical relationship may be expressed in words or using mathematical symbols." The same holds for mathematical formulas or equations and mathematical calculations. Particularly, "a claim does not have to recite the word 'calculating' in order to be considered a mathematical calculation . . . a step of 'determining' a variable or number using mathematical methods or 'performing' a mathematical operation may also be considered mathematical calculations."

Regarding certain methods of organizing human activity, the USPTO indicates that "not all methods of organizing human activity are abstract ideas (e.g., a defined set of steps for combining particular ingredients to create a drug formulation is not a certain method of organizing human activity)." Nonetheless, this category has proven to be used quite expansively by examiners. While the USPTO indicates that "this grouping is limited to activity that falls within the enumerated sub-groupings of fundamental economic principles or practices, commercial or legal interactions, managing personal behavior, and relationships or interactions between people, and is not to be expanded beyond these enumerated sub-groupings," this definition remains broad. The USPTO goes on to provide examples of these sub-groupings, but there are no surprises therein.

Regarding mental processes, the USPTO's definition thereof reflects a legal fiction set forth by the Federal Circuit. Notably, "claims do recite a mental process when they contain limitations that can practically be performed in the human mind, including for example, observations, evaluations, judgments, and opinions," but "[c]laims can recite a mental process even if they are claimed as being performed on a computer." The justification for this non-literal interpretation is that "[t]he courts have found claims requiring a generic computer or nominally reciting a generic computer may still recite a mental process even though the claim limitations are not performed entirely in the human mind."

Nonetheless, "[c]laims do not recite a mental process when they do not contain limitations that can practically be performed in the human mind, for instance when the human mind is not equipped to perform the claim limitations." Examples include "calculating an absolute position of a GPS receiver and an absolute time of reception of satellite signals," "detecting suspicious activity by using network monitors and analyzing network packets," "a specific data encryption method for computer communication involving a several-step manipulation of data," and "rendering a halftone image of a digital image by comparing, pixel by pixel, the digital image against a blue noise mask."

The distinction between mental and non-mental processes under this rubric is that "merely using a computer as a tool to perform the [otherwise mental] concept" fails to lift an invention out of the mental realm, and examiners are encouraged to look to the applicant's specification in order to make this determination. Furthermore, "[t]he use of a physical aid (i.e., the pen and paper) to help perform a mental step (e.g., a mathematical calculation) does not negate the mental nature of this limitation."

When is a Judicial Exception Integrated into a Practical Application?

In practice, we have found that most § 101 disputes with the USPTO examiners or PTAB turns on sub-step 2A(ii) -- is the claimed invention integrating a judicial exception into a practical application? While the USPTO writes many words about this issue in the October Update, little new is said. As before, the USPTO is looking for the integration to be an improvement to the functioning of a computer or another technology. It is important to understand that a device or system must be improved -- an invention that uses technology to improve how humans perform (e.g., a data analysis system that does little more than crunch numbers to recommend a course of action to be taken by a person) is likely going to fail at this sub-step.

The USPTO reiterates that the applicant's specification "must describe the invention such that the improvement would be apparent to one of ordinary skill in the art" and not in a conclusory manner. Further, "the claim itself [must] reflect[] the disclosed improvement," but need not explicitly recite the improvement.

The October Update, however, does clarify that "the 'improvements' analysis in Step 2A determines whether the claim pertains to an improvement to the functioning of a computer or to another technology without reference to what is well-understood, routine, conventional activity." But this is followed by the somewhat confusing statement that "the claimed invention may integrate the judicial exception into a practical application by demonstrating that it improves the relevant existing technology although it may not be an improvement over well-understood, routine, conventional activity." (Emphasis added.) The distinction here is not perfectly clear and the USPTO does not expound further upon it.

Nonetheless, the USPTO does prescribe that:

[T]he Prong Two analysis considers the claim as a whole. That is, the limitations containing the judicial exception as well as the additional elements in the claim besides the judicial exception need to be evaluated together to determine whether the claim integrates the judicial exception into a practical application. The additional limitations should not be evaluated in a vacuum, completely separate from the recited judicial exception. Instead, the analysis should take into consideration all the claim limitations and how those limitations interact and impact each other when evaluating whether the exception is integrated into a practical application.

This language is welcome and likely to be a point that applicants repeat to examiners during § 101 discussions.

The Prima Facie Case

The USPTO received comments on the January Guidance suggesting that it re-emphasize the examiner's burden of establishing the ineligibility of claims under § 101. The October Update does so, but with a pair of caveats.

In short, the USPTO states that an examiner should "identify the judicial exception . . . by referring to what is recited . . . in the claim and explaining why it is considered to be an exception." Notably, "[f]or abstract ideas, the rejection should explain why a specific limitation(s) recited in the claim falls within one of the enumerated groupings of abstract ideas." Then, the examiner "should identify any additional elements recited in the claim beyond the judicial exception and evaluate the integration of the judicial exception into a practical application." This involves "explain[ing] why the additional elements, taken individually and in combination, do not result in the claim, as a whole, amounting to significantly more than the exception."

The first of the aforementioned caveats is that neither the January Guidance nor the October Update address the problem of conclusory § 101 rejections. These are unfortunately common, and when challenged, examiners that issue conclusory rejections often write more words defending their non-analysis than explaining why the claims are rejected. The second is that the October Update should have reiterated that examiners need to evaluate the patent eligibility of all dependent claims separately. Far too often an examiner will provide detailed reasoning for rejecting an independent claim and then reject all dependent claims in a single sentence. Examiners need to be educated that doing so is an improper burden shifting that requires that wrongly places the onus on the applicant to first establish the eligibility of the claims.

Educating the Examining Corps

The USPTO concludes the October Update with a discussion of how it is helping examiners obtain cognizance of the § 101 guidance. This involves publishing the examples (including new interpretations of examples published before the January Guidance), examiner training, and a reiteration that examiners are expected to follow the January Guidance.

But this section -- and the October Update as a whole -- ends with a point of irony. The USPTO states that:

[E]very applicant whose claims have been twice rejected, may appeal from the decision of the examiner to the Patent Trial and Appeal Board, and an applicant may rely upon the 2019 PEG in support of his or her argument that a rejection under § 101 is in error. It is the rejection under § 101, and not any alleged failure to comply with the 2019 PEG, that is reviewed by the Patent Trial and Appeal Board.

The PTAB is much more likely than examiners to base its § 101 reasoning on a combination of the January Guidance and relevant case law. Thus, appealing an examiner's rejection may effectively require arguing the case law as well as the January Guidance that supposedly replaces it.

Posted at 11:27 PM in Patent Office Rules & Procedures, Patentable Subject Matter | Permalink | Comments (0)

September 25, 2019

Jaguar Land Rover Ltd. v. Bentley Motors Ltd. (E.D. Va. 2019)

Land Rover's Patented "Terrain Response Technology" Found Patent Eligible

By Joseph Herndon --

In 2016, Bentley Motors Ltd. and Bentley Motors, Inc. launched their first SUV, the Bentayga, which is a direct competitor to Jaguar Land Rover Ltd.'s (JLR) Range Rover model. JLR's patented Terrain Response technology is included on certain vehicles, and the Bentayga has a Drive Dynamics system, which can be equipped with an "All Terrain Specification" that provides four off-road settings: Snow, Ice & Wet Grass, Dirt & Gravel, Mud & Trail, and Sand.

JLR filed a complaint, in the U.S. District Court for the Eastern District of Virginia, alleging that Bentley knowingly copied the Terrain Response system installed on JLR's Range Rover, and which is covered by U.S. Patent No. 7,349,776 that was later reissued as U.S. Patent No. RE46,828. Specifically, JLR asserted that Bentley infringed at least claims 21, 41, and 46 of the '828 patent.

Defendants Bentley Motors Ltd. and Bentley Motors, Inc. filed a Motion to Dismiss. The Court denied Defendant's Motion to Dismiss, instead finding that the technology embodied in the '828 patent claims improves computer functionality and is directed to "a particular way of performing that function," rather than merely being directed to performing a function in a computerized manner.

The Patent

U.S. Patent No. RE46,828, titled "Vehicle Control" is a reissue of U.S. Patent No. 7,349,776. The '828 patent generally relates to coordinated control of a number of subsystems of a vehicle in different configuration modes so as to suit different conditions. The '828 patent operates as follows: "the control of a number of the vehicle subsystems is coordinated by a central vehicle controller, which can be switched between a number of modes thereby controlling all of the subsystems in a coordinated way which is simple for the driver to control." Other systems, however, do not provide the driver with the ability to provide direct input regarding the surface terrain in an attempt to better select the appropriate subsystem configuration modes. The invention of the '828 patent offers a Terrain Response technology that electronically controls various vehicle subsystems, including the engine, the transmission, the brakes, the traction control, the suspension and the steering, to operate in a manner that is suitable for driving on a particular off-road surface (see Figure 4 block diagram below). The driver of the vehicle uses an input panel to select from several off-road driving surfaces including Grass/Gravel/Snow, Mud and Ruts, Sand, and Rocks.

The technology also allows the driver to further adjust the operation of the subsystems. The claimed elements in combination are alleged to be implemented in an unconventional and non-trivial manner, and are not generic vehicle components, but a control system that is not standard and cannot be purchased off-the-shelf.

Representative claim 21 recites:

A vehicle control system having a driver input device for selecting a driving surface, the vehicle control system arranged to control a plurality of vehicle subsystems each of which is operable in a plurality of subsystem configuration modes, wherein the vehicle control system is operable in a plurality of driving modes in each of which it is arranged to select the subsystem configuration modes in a manner suitable for a respective driving surface, and further wherein the plurality of driving modes includes at least two off-road modes in which the subsystem configurations are controlled in a manner suitable for driving on respective off-road driving surfaces, and an on-road mode in which the subsystem configurations are controlled in a manner suitable for driving on-road and still further wherein one of the off-road modes is a sand mode in which the vehicle subsystems are controlled in a manner suitable for driving on sand.

That is, claim 21 and its dependents are directed to a vehicle control system that optimizes control of the vehicle on a sand surface. The '828 patent describes that when a vehicle is driven on sand, the build up of matter in front of the wheels under braking can improve braking performance. Low wheel spin at low speeds prevents the wheel from digging into the sand but high wheel spin at high speeds is less of a problem and can even improve traction.

Claim 41 recites:

A vehicle control system having a driver input device for selecting a driving surface, the vehicle control system arranged to control a plurality of vehicle subsystems each of which is operable in a plurality of subsystem configuration modes, wherein the vehicle control system is operable in a plurality of driving modes in each of which it is arranged to select the subsystem configuration modes in a manner suitable for a respective driving surface, and further wherein the plurality of driving modes includes at least two off-road modes in which the subsystem configurations are controlled in a manner suitable for driving on respective off-road driving surfaces, and an on-road mode in which the subsystem configurations are controlled in a manner suitable for driving on-road and still further wherein one of the subsystems is a suspension subsystem and, in a second off-road mode, the suspension system is arranged to provide a higher ride height than in a first off-road mode.

That is, claim 41 is directed to a vehicle control system that optimizes control through adjustment of the suspension system based on the particular driving surface. The '828 patent describes that when traveling at high speeds on flat surfaces with good levels of friction, a suspension ride height that is set at low for low wind resistance and good stability is optimal.

Claim 46 recites:

A vehicle control system having a driver input device for selecting a driving surface, the vehicle control system arranged to control a plurality of vehicle subsystems each of which is operable in a plurality of subsystem configuration modes, wherein the vehicle control system is operable in a plurality of driving modes in each of which it is arranged to select the subsystem configuration modes in a manner suitable for a respective driving surface, and further wherein the plurality of driving modes includes at least two off-road modes in which the subsystem configurations are controlled in a manner suitable for driving on respective off-road driving surfaces, and an on-road mode in which the subsystem configurations are controlled in a manner suitable for driving on-road, and still further wherein one of the subsystems is a speed control system arranged to control the speed of the vehicle when descending a hill, and wherein the peed control system is arranged to be switched on in at least one of the off-road modes and switched off in the on-road mode.

That is, claim 46 is directed to a vehicle control system that optimizes control through adjustment of the speed control system. The '828 patent describes that to provide maximum control on hills, a vehicle has the standard default target speed of 6 kph. Claim 46 recites limitations that would capture this benefit through a specific implementation that requires a speed control system "arranged to control the speed of the vehicle when descending a hill" and "arranged to be switched on in at least one of the off-road modes and switched off in the on-road mode."

Motion to Dismiss

Defendants argued that Plaintiff's patent infringement claim should be dismissed because Plaintiff's patents are invalid for failure to claim patent-eligible subject matter under 35 U.S.C. § 101.

Abstract Idea

First, the Court addressed Alice Step 1 — whether the claims are directed to an abstract idea.

The Federal Circuit has distinguished between claims directed towards merely performing a function and claims directed to "a particular way of performing that function." The former generally fall into the abstract-idea category, while the latter generally do not. Claims that improve the functioning of a computer provide a particular means to perform a function, and therefore, fall in the latter category and are not directed towards an abstract idea.

Plaintiff argued that the claims are directed to an improvement in computer functionality because the technology permits the manipulation of multiple vehicle subsystems at once. In particular, Plaintiff alleged that the Terrain Response technology is a technological improvement to vehicle control systems. Prior to the '828 patent, drivers had to know the appropriate configurations of various subsystems when driving off-road on particular driving surfaces, the subsystems had to be manually changed one at a time, and a limited number of subsystems could be manipulated at one time. The '828 patent allegedly improves vehicle control technology by permitting a driver to control multiple subsystems at once and provides preset configurations of various subsystems for particular surfaces.

On the other hand, Defendants characterized the claims as mere computerization of what drivers already do in their mind — for instance, by slowing down while going downhill. Courts have found that merely using computers to perform what people can otherwise do is patent-ineligible.

Here, the Court found that the claims of the '828 patent are "directed to" manipulating multiple vehicle subsystems to allow a vehicle to better adapt to driving on various types of on-road and off-road surfaces. The claims asserted (claims 21, 41, 46) recite different components of the overall technology. For instance, claim 41 controls the suspension subsystem and claim 46 controls the vehicle's speed.

Applying these principles and construing the pleadings in the light most favorable to Plaintiff, the Court found that the claims are not directed to an abstract concept. The Court found that the most analogous technology to that embodied by the '828 patent is cruise control technology, which commonly exists in vehicles. Courts have found that such systems, which allow a driver to set and maintain a steady speed, are patentable and not directed at an abstract idea.

Plaintiff alleged that the technology embodied in the '828 patent claims improves computer functionality by allowing a driver to select one configuration on an input panel and then control multiple subsystems, which is an improvement to existing vehicle control technology. However, more fundamentally than that, the technology physically changes the subsystems of the vehicle. For instance, claim 21 and its dependents "allow lower levels of wheel spin when the vehicle is travelling at lower speeds than when the vehicle is travelling at higher speeds," (claim 23), and "allow a relatively high degree of wheel slip under braking," (claim 24).

Claim 41 adjusts the suspension subsystem, and changes the actual height of the vehicle. Claim 46 controls the speed of the vehicle in certain conditions, for instance, when the vehicle is going downhill, which is nearly identical to the claims made by cruise control systems. These claims do more than just perform a function, which Defendants characterized as driving differently in different conditions, but rather provide "a particular way of performing that function."

Similarly, in this case, drivers may engage in various mental processes while driving, for instance, driving slower while going downhill, avoiding sharp accelerations or braking while driving on certain surfaces. The Court found that the technology embodied in the '828 patent, however, physically changes the vehicle's subsystems — wheel spin changes while driving on certain surfaces (claim 21), the suspension changes the height of the vehicle (claim 41), and speed controls are engaged while going downhill (claim 46). It does not computerize what humans would otherwise do by replacing the mental process entirely.

Drivers may continue to engage in the same mental processes, but the vehicle itself has adapted to optimize and make driving on different surfaces more efficient.

Finally, the Court noted that it is not clear that people could do what the '828 patent claims to do. Although Defendants provided the example of driving slower downhill or applying the brakes in a different manner, drivers are generally not able to change the wheel spin of their vehicles or change the suspension while the vehicle is moving. Therefore, unlike tabulating a vote or performing basic economic principles, the technology here is more than mere computerization of functions that people can already do.

Because the claims of the patent are directed at both improvements in computer functionality and providing concrete, physical means of implementing the functionality, the Court concluded that the '828 patent is not directed at an abstract idea.

Thus, for these reasons, the Court denied Defendants' Motion to Dismiss.

Opinion and Order by Chief District Judge Mark S. Davis

Posted at 11:59 PM in District Court, Patentable Subject Matter | Permalink | Comments (1)

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