Patent Docs

C R Bard Inc. v. AngioDynamics, Inc. (Fed. Cir. 2020)

By Michael Borella --

One of the more intellectually dishonest aspects of current patent eligibility law is that it allows one to ignore certain claim elements when evaluating claims under 35 U.S.C. § 101.  In Mayo v. Prometheus, it was stated that once one has identified a judicial exception to patentability (e.g., a law of nature, natural phenomena, or abstract idea) in a claim, further claim elements that are "well-understood, routine, conventional activity [that] when viewed as a whole, add nothing significant beyond the sum of their parts taken separately" essentially have no patentable weight in the eligibility inquiry.  This is despite the Court's acknowledgement that Diamond v. Diehr stood for the notion that claims "must be considered as a whole."[1]

Further, the Supreme Court never dug into the details of whether or how this holding should be squared with prior art analyses under §§ 102 and 103.  The Mayo opinion asserted that "in evaluating the significance of additional steps, the § 101 patent-eligibility inquiry and, say, the § 102 novelty inquiry might sometimes overlap."  But the nature of this overlap was not explored.  Instead, in both Mayo and the subsequent Alice v. CLS Bank decision, the "well-understood, routine, conventional" test appears to allow judicial notice that certain claim features are so generic that one need not provide any factual evidence that this is the case.  The Federal Circuit has attempted to rectify this matter in Berkheimer v. HP, holding that -- in at least some situations -- the § 101 analysis involves underlying factual matters of whether elements are "well-understood, routine, conventional."

And yet, the division of claims into "judicial exceptions" and "additional elements" can be tricky, as can knowing when one should ignore certain elements.  And the Federal Circuit has not provided clear guidance.  It is common to view a claim at a high level (and therefore ignore at least some of its elements) to declare the claim to be directed to a judicial exception.  In some cases, claims have been found to be directed to an exception because what they recite assumed to be known, and in other cases additional elements have been found to incorporate further exceptions that were subsequently ignored.

The problem with this element-oriented, reductionist approach is that it obscures the actual invention being considered.  There was wisdom in Diehr's instruction to study the whole claim because inventions consisting of nothing but judicial exceptions and well-understood, routine, conventional additional elements are some of the most important to our current and future economy (e.g., cryptography, machine learning, quantum computing, diagnostic methods, analysis of genetic sequences).  The value is in the combination of these features, not the features in isolation.  Ignoring any claim element under § 101, without a very good reason,[2] does violence to the invention.

As we will see, the printed matter doctrine is another avenue in which claim elements can be discounted.

Bard launched an infringement action against AngioDynamics in the District of Delaware.  At issue were Bard's U.S. Patent Nos. 8,475,417, 8,545,460, and 8,805,478.  As a representative example, claim 1, of the '417 patent recites:

An assembly for identifying a power injectable vascular access port, comprising:
    a vascular access port comprising a body defining a cavity, a septum, and an outlet in communication with the cavity;
    a first identifiable feature incorporated into the access port perceivable following subcutaneous implantation of the access port, the first feature identifying the access port as suitable for flowing fluid at a fluid flow rate of at least 1 milliliter per second through the access port;
    a second identifiable feature incorporated into the access port perceivable following subcutaneous implantation of the access port, the second feature identifying the access port as suitable for accommodating a pressure within the cavity of at least 35 psi, wherein one of the first and second features is a radiographic marker perceivable via x-ray; and
    a third identifiable feature separated from the subcutaneously implanted access port, the third feature confirming that the implanted access port is both suitable for flowing fluid at a rate of at least 1 milliliter per second through the access port and for accommodating a pressure within the cavity of at least 35 psi.

The invention is directed to "vascular access ports, which are devices implanted underneath a patient's skin that allow medical providers to inject fluid into the patient's veins on a regular basis without needing to start an intravenous line each time."  Notably, "the FDA cautioned medical providers in 2004 and 2005 that they should not use vascular access ports for power injection unless the ports were specifically and identifiably labeled for such use."  Accordingly, Bard developed such identifying labels for its ports, which the Court described as follows:

The primary identifying feature Bard developed was a radiographic marker in the form of the letters "CT" etched in titanium foil on the device.  This marker could be detected during an x-ray scan such as the "scout scan" typically performed at the start of a CT procedure.  Other identifiers incorporated into the device included a triangular shape and small bumps that were palpable through the skin.

In any event, the District Court judge asked a magistrate to help determine whether the identifiable features of the claims should be given patentable weight in view of the printed matter doctrine.  The magistrate "determined that these limitations were not entitled to patentable weight because they were directed to the content of information that was not functionally or structurally related to the claimed ports."  The judge went with this conclusion.

At the end of the trial, AngioDynamics filed a JMOL motion, and the judge asked the parties whether this printed matter issue was ripe for decision.  While the parties did not come to an agreement, the judge terminated the trial and granted the JMOL.  Among other rulings, the judge found the claims "invalid because they were directed to printed matter as ineligible subject matter and were not inventive."

Regarding this § 101 issue, the Federal Circuit began its analysis by acknowledging that printed matter has long been held to fall outside the scope of patentable subject matter.  In particular, "printed matter encompasses any information claimed for its communicative content, and the doctrine prohibits patenting such printed matter unless it is functionally related to its substrate, which encompasses the structural elements of the claimed invention.  Thus, the main concern is whether "the printed matter merely informs people of the claimed information, or whether it instead interacts with the other elements of the claim to create a new functionality in a claimed device or to cause a specific action in a claimed process."

As examples, the Court has previously decided that markings on dice have no functional relationship with the dice themselves.  On the other hand, digits printed on a circular band exploited the band's endless nature and made it useful for performing mathematical operations, and thus there was a functional relationship between the two.  Likewise, volumetric indicia on a measuring cup made the cup useful for measuring partial recipes.

In this case, the parties stipulated that the claimed identifiable features constitute printed matter, but disagreed over whether these features are functionally related to the port.  Bard contended that "the information conveyed by the markers provides new functionality to the port because it makes the port self-identifying."  The Court did not buy into this point, as "mere identification of a device's own functionality is sufficient to constitute new functionality for purposes of the printed matter doctrine" would eviscerate the doctrine.

Turning to the subject matter eligibility issue, the Court admitted that, since Alice, it had not "directly addressed whether a patent claim as a whole can be deemed patent ineligible on the grounds that it is directed to printed matter at step one and contains no additional inventive concept at step two."  But it found reason to do so here, as such a position is consistent with its prior holdings that "the mere conveyance of information that does not improve the functioning of the claimed technology is not patent-eligible subject matter under § 101.  Notably, the Court pointed to the claims found ineligible in Two-Way Media Ltd. v. Comcast Cable Commc'ns, LLC, Elec. Power Grp., LLC v. Alstom S.A., and Digitech Image Techs., LLC v. Elecs. for Imaging, Inc. as examples that stand for the principle that the processing of information does not improve the functioning on a computer.

Applying these notions to Bard's claims, the Court found that "the focus of the claimed advance is not solely on the content of the information conveyed, but also on the means by which that information is conveyed."  Particularly, the claims address "a specific need for easy vascular access during CT imaging, and it is the radiographic marker in the claimed invention that makes the claimed port particularly useful for that purpose because the marker allows the implanted device to be readily and reliably identified via x-ray, as used during CT imaging.  With respect to the Alice framework, the Court concluded that there was insufficient evidence that "the use of a radiographic marker, in the ordered combination of elements claimed, was not an inventive concept."  Notably, "[e]ven if the prior art asserted by AngioDynamics demonstrated that it would have been obvious to combine radiographic marking with the other claim elements, that evidence does not establish that radiographic marking was routine and conventional under Alice."  Thus, in accordance with Berkheimer, not all obvious elements would also be routine and conventional.

Therefore, the asserted claims are patent-eligible because they are not solely directed to printed matter.

One of the subtle points of this case is that the Federal Circuit seems to be equating printed matter with the notion of an abstract idea under step one of Alice.  Therefore, if a claim includes printed matter, it would have to also include additional elements that amount to significantly more to be eligible.  One way of establishing that this is the case is if the printed matter, in combination with the additional elements, provides functionality that the additional elements on their own do not provide.

But taking this a step further, printed matter doctrine provides more opportunities to ignore claim elements.  While that did not happen in this case, it would not be surprising for this holding to be expanded in a way that provides yet one more avenue for to do so.  It is conceivable that some courts could apply the doctrine to user interface claims in an attempt to establish that at least some of the displayed information therein is not related to the functionality of the computing system, thus rendering those claims ineligible.

C R Bard Inc. v. AngioDynamics, Inc. (Fed. Cir. 2020)
Panel: Circuit Judges Reyna, Schall, and Stoll
Opinion by Circuit Judge Reyna

[1] The Court attempted to synthesize this apparent contradiction between Mayo and Diehr by stating that "[b]ecause the approach we made explicit in Mayo considers all claim elements, both individually and in combination, it is consistent with the general rule that patent claims must be considered as a whole."  But in practice, the consideration of claim elements in combination was and is given short shrift. 

[2] Elements that are redundant with other elements and preambles reciting intended use are examples in which parts of claims can be disregarded.

On the Patent Eligibility of Graphical User Interfaces: Part II

By Michael Borella --

This article is Part II of a study on the patent eligibility of graphical user interfaces.  Part I was published yesterday.  We continue from where we left off, with overviews of a handful of Federal Circuit § 101 decisions addressing claims to graphical user interfaces and a discussion of how the three properties of specificity, technical character, and an advance over the prior art can be used to predict whether a claim meets the requirements of 35 U.S.C. § 101.

D.  Mobile User Interfaces

In Intellectual Ventures I LLC v. Erie Indemnity Company, claim 40 of U.S. Patent No. 6,546,002 was under dispute.  Particularly, this claim recites:

A system for storing and accessing user specific resources and information, the system comprising:    
    a network for accessing the user specific resources and information stored in a network server;
    and a local device communicating with the network and having a local memory and a mobile interface, wherein the local memory also includes user specific resources and information, and the mobile interface includes pointers corresponding to the user specific resources and information that are stored either on the local device or the network server, wherein the pointers provide links to access the corresponding user specific resources and information.

At issue was the mobile interface's use of pointers.  The plaintiff argued that the claim involved "a particular software-driven machine that performs specific operations to solve a problem unique to the field of computer networks."  But the Court did not concur, writing:

Yet the claimed invention does not recite any particular unique delivery of information through this mobile interface. Rather, it merely recites retrieving the information through the mobile interface. Nor do the claims describe how the mobile interface communicates with other devices or any attributes of the mobile interface, aside from its broadly recited function. Thus, the mobile interface here does little more than provide a generic technological environment to allow users to access information.

Finding the claims directed to an abstract idea, the Court moved on to part two of Alice.  Here, the plaintiff again focused its arguments on the mobile interface, contending that "the claims are limited to a specific use of multiple pointers to retrieve the user-specific data via a mobile interface in a network with a server and local device," thus providing users "with access to their files and data from any location irrespective of the device used."

Again, the Court disagreed, finding that "[t]he claimed mobile interface is so lacking in implementation details that it amounts to merely a generic component . . . that permits the performance of the abstract idea, i.e., to retrieve the user-specific resources," and "this interface provides no more than similar user interfaces recited in claims that we have previously held ineligible."  Moreover, the Court deemed the use of pointers to retrieve information over a network as conventional activity, claimed too functionally to provide an inventive concept.

A different story played out in Core Wireless Licensing S.A.R.L. v. LG Electronics, Inc.  At issue was claim 1 of U.S. Patent. No. 8,434,020, which recites:

A computing device comprising a display screen,
    the computing device being configured to display on the screen a menu listing one or more applications,
    and additionally being configured to display on the screen an application summary that can be reached directly from the menu,
    wherein the application summary displays a limited list of data offered within the one or more applications, each of the data in the list being selectable to launch the respective application and enable the selected data to be seen within the respective application, and
    wherein the application summary is displayed while the one or more applications are in an un-launched state.

The defendant contended that the invention as claimed was directed to the abstract idea of an index.  This point did not gain any traction with the Court, which found the claims "directed to a particular manner of summarizing and presenting information in electronic devices."  The Court continued:

The claim further requires the application summary window list a limited set of data, "each of the data in the list being selectable to launch the respective application and enable the selected data to be seen within the respective application."  This claim limitation restrains the type of data that can be displayed in the summary window.  Finally, the claim recites that the summary window "is displayed while the one or more applications are in an un-launched state," a requirement that the device applications exist in a particular state.  These limitations disclose a specific manner of displaying a limited set of information to the user, rather than using conventional user interface methods to display a generic index on a computer.

To back up its position, the Court looked to the patent's specification, observing that it discusses the problems associated with prior art interfaces, especially with respect to displaying information on devices with small screens.  Particularly, users had to "drill down through many layers to get to desired data or functionality [which] could seem slow, complex and difficult to learn, particularly to novice users."  In contrast, the claimed invention involves "[d]isplaying selected data or functions of interest in the summary window allows the user to see the most relevant data or functions without actually opening the application up."  Doing so "saves the user from navigating to the required application, opening it up, and then navigating within that application to enable the data of interest to be seen or a function of interest to be activated."

Based on this understanding, the Court concluded that the claim was not abstract, and that part two of the Alice test need not be carried out because the invention was eligible.

E.  Support for Tabs and Change Tracking in Spreadsheets

Examples of claims directed to spreadsheets that fell on both sides of § 101 can be found in Data Engine Technologies LLC v. Google LLC.  Under dispute were U.S. Patent Nos. 5,590,259, 5,784,545, 6,282,551, and 5,303,146.  For purposes of the Alice analysis, the Federal Circuit divided the patents into two groups:  the '259, '545, and '551 patents in one and the '146 patent in the other.

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

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

In essence, the invention involves tabs familiar to anyone who has used a modern spreadsheet such as Microsoft Excel.  According to the patents, this interface has several advantages.  Notably, "instead of finding information by scrolling different parts of a large spreadsheet, or by invoking multiple windows of a conventional three-dimensional spreadsheet, the present invention allows the user to simply and conveniently 'flip through' several pages of the notebook to rapidly locate information of interest."

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

Claim 12 of the '259 patent, which was representative of that patent and claims of the '545 patent, recites:

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

The Court quickly concluded that the invention as claimed was "directed to a specific method for navigating through three-dimensional electronic spreadsheets" rather than an abstract idea.  Relying on the teachings of the specification that prior art spreadsheet technology was not user-friendly, the Court found that the claimed method "provides a specific solution to then-existing technological problems" that were unique to computers.  Particularly, the tabbed interface offers "a highly intuitive, user-friendly interface with familiar notebook tabs for navigating the three-dimensional worksheet environment."  The Court also seemed persuaded by the contemporaneous articles lauding the benefits of the tabbed interface.  As a consequence, both the '259 and '545 patents were found to be eligible.

In contrast, claim 1 of the '551 patent was struck down under § 101.  This claim recites:

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

When compared to claim 12, this claim "generically recites associating each of the cell matrices with a user-settable page identifier and does not recite the specific implementation of a notebook tab interface."  Therefore, claim 1 is "not limited to the specific technical solution and improvement in electronic spreadsheet functionality that rendered representative claim 12 of the '259 patent eligible . . . [i]nstead, claim 1 . . . covers any means for identifying electronic spreadsheet pages."  Thus, the claim was deemed abstract.  Under part two of Alice, the Court found that the elements of "partitioning cells to be presented as a spreadsheet, referencing in one cell of a page a formula referencing a second page, and saving the pages such that they appear as being stored as one file . . . merely recite the method of implementing the abstract idea itself."

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

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

Claim 1 of the '146 patent recites:

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

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

Again this case demonstrates how fine a line exists between eligible and ineligible claims to a graphical user interface.  Here, the valid claims explicitly recited navigation of a tabbed spreadsheet interface, were specific in doing so, and were supported by statements in their specification regarding the technological problems solved thereby.  This latter point was bolstered by extrinsic evidence from contemporaneous publications.  On the other hand, the invalid claims were broader and not specific to navigating a tabbed interface.  Despite evidence that all claims under review were directed to an improvement in spreadsheet technology, the claims ultimately found invalid were viewed by the Court as conceptual rather than concrete, most likely due to their relative lack of specificity.

IV.  Conclusion

Based on the detailed case law analyses provided above, a few recommendations regarding the eligibility of graphical user interfaces can be made.  First, like all inventions, claims to graphical user interfaces are evaluated on a case-by-case basis.  There is no categorical inclusion or exclusion of these types of claims.  Second, to be eligible, at least some aspect of the claim must be specifically recited to address a technical improvement over the prior art.  Each of the claims discussed above that failed the Alice test lacked at least one of these three factors.  In order to establish that an invention is such an improvement, it can be helpful to disclose in the specification or perhaps in a later declaration, the problems with the prior art and how the claimed invention overcomes these problems using a technical solution.

Even with this framework, not all marketable inventions are going to be found eligible under § 101.  But focusing on the innovative displaying of data -- whether a particular layout, workflow, real-time updating, or involving adaptation to screen size -- with claims drawn to specific embodiments is almost certain to help improve your odds of a favorable outcome.

On the Patent Eligibility of Graphical User Interfaces: Part I

By Michael Borella --

I.  Introduction

The evolution of graphical user interfaces parallels the evolution of computing technology itself.  As computers grow more powerful and sophisticated, so does their ability to display cutting-edge representations of information to users.  Indeed, an entire field of academia, Human-Computer Interaction, has been established to address how to best allow humans to interface with computers, and graphical user interfaces are one of several modalities that are frequently studied.

The importance of providing a suitable experience for users of software applications cannot be overstated.  One of the most visible aspects of any application is its user interface, which is often graphical.  Good graphical user interfaces can help applications become successful, while poor graphical user interfaces have the opposite effect and are regularly the subject of frustration and criticism.

It would be sensible to assume that, as a field ripe with innovation, graphical user interfaces would be commensurately well-disposed for patenting.  But this is not the case.  Due to a series of Supreme Court decisions, as well as restrictive interpretations thereof by the Federal Circuit, patenting a graphical user interface can be fraught with peril.

This article applies current state of patent eligibility to inventions involving graphical user interfaces.  In doing so, we develop a framework for assessing the patentability of such inventions and provide examples of claims that have both succeeded and failed to meet the eligibility standard.

Today we post Part I of this study and tomorrow we will port Part II

II.  Subject Matter Eligibility Overview

A series of decisions by the Supreme Court from 2010 to 2014 significantly narrowed the scope of what is patentable under 35 U.S.C. § 101.  This culminated in Alice Corp. v. CLS Bank Int'l, which held that claims of all statutory categories must have their eligibility determined by a two part test.

In a nutshell, the first part was described as "determin[ing] whether the claims at issue are directed to one of [the] patent-ineligible concepts" of laws of nature, natural phenomena, and abstract ideas.  If this is the case, then for the second part one must "consider the elements of each claim both individually and 'as an ordered combination' to determine whether the additional elements transform the nature of the claim into a patent-eligible application."  The Court described the second part as "a search for an 'inventive concept'—i.e., an element or combination of elements that is 'sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the ineligible concept itself.'"

While finding the claims in Alice directed to an abstract idea, the Court declined to actually define the term "abstract idea" in any meaningful fashion, noting that "we need not labor to delimit the precise contours of the abstract ideas category in this case."  The Court's treatment of the "search for an inventive concept" was similarly elusive.  Consistent with the prior holding of Mayo Collaborative Servs. v. Prometheus Labs., Inc., so-called "well-understood, routine, conventional activities previously known to the industry" would not clear this hurdle.

Recently, the Federal Circuit provided a major clue as to how to think about patent eligibility in practice.  In Dropbox Inc. v. Synchronoss Techs. Inc. the Court wrote that "an inventive concept exists when a claim recites a specific, discrete implementation of the abstract idea where the particular arrangement of elements is a technical improvement over the prior art."  This suggests that in order for a claim to be successful under § 101, it should have three qualities: specificity, a technical solution that it provides, and some degree of novelty.  More particularly, there should be a nexus between these three factors -- specificity, technical character, and an advance over the prior art should appear in the same claim element or at least be explicitly linked in some fashion in the recitation of the claim.

Support for the three factors being a more suitable proxy for eligibility than the Alice test can be found in case law.  This point was argued at length with empirical support in a pair of previous articles: What is an Abstract Idea, Anyway? and The Three Properties of Patent-Eligibility: An Empirical Study.

Claim specificity is not the same thing as claim breadth, although in practice the two are correlated.  Specificity, though, refers to whether and how much the claim recites a series of steps or set of elements that can be used to achieve a goal, rather than the goal itself.  The latter style has been referred to as "result-oriented," "outcome-oriented," and "black box" claiming, where the claim recites what the inventor hopes to achieve without reciting how the inventor purports to have achieved that goal.  The Federal Circuit often lauds the specificity of claims that it eventually finds eligible, while disparaging claims that lack this property.

Technical character is a bit trickier to explain.  Notably, § 101 lacks any requirement that inventions be technical, and even Alice only hinted that such a requirement might be the case.  But the Federal Circuit has run with these sub-dicta suggestions, using terms similar to "technical solution to a technical problem" among others to describe what it is looking for in eligible claims.  To understand this property, it helps to imagine all inventions on a spectrum of technical character.  Those at one extreme are clearly technical because they improve the operation of machines (e.g., engine control, error correction coding, image sharpening, memory management in a computer).  Those at the other extreme are clearly more business-oriented than technical (e.g., derivative trading, annuity calculations, retail schemes).  Put another way, the former improves how a machine works, while the latter improves how a business works.  The fact that business-oriented inventions can be run on computers (and may even require computers to obtain meaningful results) is largely irrelevant to this analysis -- such claims are still "non-technical."  Finally, in the middle of the spectrum we have inventions that improve how a person works (e.g., video game animations, livestock management, and in particular relevance to this discussion, graphical user interfaces).  These could be viewed as either technical or non-technical depending on the actual claim language at play.

Novelty is a simple enough concept, and is well-understood in patent law, though the exact nature of the de facto prior art analysis under § 101 is unclear.  Nonetheless, comparisons between claimed inventions and prior art are found in a vast number of § 101 decisions including the aforementioned Enfish and McRO cases, as well as Koninklijke KPN N.V. v. Gemalto M2M GmbH, Chamberlain Group, Inc. v. Techtronic Indus. Co., and Cellspin Soft, Inc. v. Fitbit, Inc., just to name a few.  Claims reciting features that are not in the universe of prior art being considered by the Court tend to fare much better than those that fall squarely within the prior art's confines.

To sum up, the three properties appear not only to be a reasonably useful way of thinking about patent-eligibility in a world where the two-part test is bewildering and obtuse, it is also highly predictive of patent-eligibility outcomes.  Of course, when you are before the USPTO or a court, you need to argue the two parts of Alice.  But keeping the three properties in mind can help you hone those arguments.

III.  Graphical User Interfaces

With Alice and the three factors in mind, let's discuss how to successfully claim an invention based around a graphical user interface in such a way that the claims are unlikely to run afoul of § 101.  But first let's define what we are talking about.

Graphical user interfaces facilitate user interaction with computing devices by way of graphical elements (and in some cases display links to audio elements as well), instead of through use of a pure text-based interface.  These graphical elements may include windows, icons, widgets, sliders, text boxes, buttons, and menus that can be selected, highlighted, moved, and so on through use of a pointing device (e.g., a mouse).  Modern smartphones expand these features to support touch and multi-touch manipulation.  Often, two or more screens of a graphical user interface are linked together into a workflow.  Navigation between these screens may be possible in particular orderings.  Graphical user interfaces may be web-based, for example, with parts of each page being loaded from a server and/or a database, or natively-compiled to execute on a client device even when no network is available.

An ongoing challenge in graphical user interface design is to maximize the user experience by providing sought-after information in a consistent, logical, and low-effort fashion.  This has, in turn, been an area that is ripe for innovation and in which many patents have been filed over the years.  But not all of these patents have survived § 101 scrutiny.

In the following sub-sections, we explore a handful of Federal Circuit § 101 decisions addressing claims to graphical user interfaces.  An understanding of these examples, as well as application of the three factors discussed above, can better guide claiming efforts in directions that are more likely to avoid § 101 pitfalls.

A.  Simple Generation and Display of Information

As a first point of order, the generation and display of generic, mathematical, or financial information at a high level is almost certainly going to be viewed as ineligible.  For an example, one need not look further than SAP America, Inc. v. InvestPic, LLC.  Claim 1 of InvestPic's U.S. Patent No. 6,349,291 recites:

A method for calculating, analyzing and displaying investment data comprising the steps of:
    (a) selecting a sample space, wherein the sample space includes at least one investment data sample;
    (b) generating a distribution function using a re-sampled statistical method and a bias parameter, wherein the bias parameter determines a degree of randomness in a resampling process; and,
    (c) generating a plot of the distribution function.

It is relatively easy to glance at this claim, observe how non-specific it is (strike one) and how it appears to be focused on plotting a mathematical function (strike two) related to financial services (strike three), and then conclude that it is directed to an abstract idea.  Indeed, that is more or less what the Federal Circuit did, as it wrote that "[t]he focus of the claims . . . is on selecting certain information, analyzing it using mathematical techniques, and reporting or displaying the results of the analysis."  All of these aspects had been previously found to be abstract.

There was some evidence in the specification that the invention entailed an improvement over the prior art.  Notably, it states that "conventional financial information sites on the World Wide Web perform rudimentary statistical functions that are not useful to investors in forecasting the behavior of financial markets because they rely upon assumptions that the underlying probability distribution function ('PDF') for the financial data follows a normal or Gaussian distribution."  The Court observed that "[such an] assumption, the patent says, is generally false: the PDF for financial market data is heavy tailed . . . rather than symmetric like a normal distribution."  As a consequence, traditional "analyses understate the true risk and overstate the potential rewards for an investment or trading strategy."  In other words, real-world financial data does not fit a so-called bell curve, and any statistics based on the incorrect assumption that it does will be flawed.

But this was insufficient to establish eligibility.  The Court ultimately concluded that:

There is, in short, nothing inventive about any claim details, individually or in combination, that are not themselves in the realm of abstract ideas.  In the absence of the required "inventive concept" in application, the claims here are legally equivalent to claims simply to the asserted advance in the realm of abstract ideas—an advance in mathematical techniques in finance.  Under the principles developed in interpreting § 101, patent law does not protect such claims, without more, no matter how groundbreaking the advance.

Or, specific, technical advances are necessary to establish patent eligibly, and the claimed invention here was neither.

B.  Web Navigation

Internet Patents Corporation (IPC) filed infringement suits against Active Network, Inc. and several other parties alleging infringement of U.S. Patent No. 7,707,505.  Of dispute was claim 1 of the '505 patent, which recites:

A method of providing an intelligent user interface to an online application comprising the steps of:
    furnishing a plurality of icons on a web page displayed to a user of a web browser, wherein each of said icons is a hyperlink to a dynamically generated online application form set, and wherein said web browser comprises Back and Forward navigation functionalities;
    displaying said dynamically generated online application form set in response to the activation of said hyperlink, wherein said dynamically generated online application form set comprises a state determined by at least one user input; and
    maintaining said state upon the activation of another of said icons, wherein said maintaining allows use of said Back and Forward navigation functionalities without loss of said state.

In a nutshell, the claimed invention is directed to a web browser that stores state representing what a user has typed into a web-based form, even if that information has not yet been submitted.  Then, if the user navigates away from and back to the web-based form, the stored state is usable in the form.  In this way, the user does not have to retype the information.

The Court focused on what the specification of the '505 patent discloses regarding claim elements that were new and those encompassed by the prior art.  Particularly, the '505 patent asserts that "the end result of 'maintaining the state' is described as the innovation over the prior art, and the essential, 'most important aspect'" thereof.  On the other hand, the '505 patent describes the "browser Back and Forward button functionality" as "conventional," "well-known," and "common."

Ultimately, the Court was influenced by the claim's lack of specificity, writing that "claim 1 contains no restriction on how the result is accomplished," and "[t]he mechanism for maintaining the state is not described, although this is stated to be the essential innovation."  Thus, "IPC's proposed interpretation of 'maintaining state' describes the effect or result dissociated from any method by which maintaining the state is accomplished upon the activation of an icon."  As a result of this outcome-oriented claiming, the Court ruled that the claim was patent-ineligible.

C.  Securities Trading

In Trading Technologies Int'l v. CQG, Inc., U.S. Patent Nos. 6,772,132 and 6,766,304 were found eligible in district court, and defendant CQG appealed.  Claim 1 of the '304 patent was found to be representative for purposes of the § 101 analysis:

A method for displaying market information relating to and facilitating trading of a commodity being traded in an electronic exchange having an inside market with a highest bid price and a lowest ask price on a graphical user interface, the method comprising;
    dynamically displaying a first indicator in one of a plurality of locations in a bid display region, each location in the bid display region corresponding to a price level along a common static price axis, the first indicator representing quantity associated with at least one order to buy the commodity at the highest bid price currently available in the market;
    dynamically displaying a second indicator in one of a plurality of locations in an ask display region, each location in the ask display region corresponding to a price level along the common static price axis, the second indicator representing quantity associated with at least one order to sell the commodity at the lowest ask price currently available in the market;
    displaying the bid and ask display regions in relation to fixed price levels positioned along the common static price axis such that when the inside market changes, the price levels along the common static price axis do not move and at least one of the first and second indicators moves in the bid or ask display regions relative to the common static price axis;
    displaying an order entry region comprising a plurality of locations for receiving commands to send trade orders, each location corresponding to a price level along the common static price axis; and
    in response to a selection of a particular location of the order entry region by a single action of a user input device, setting a plurality of parameters for a trade order relating to the commodity and sending the trade order to the electronic exchange.

In the words of the Federal Circuit, the patents "describe and claim a method and system for the electronic trading of stocks, bonds, futures, options and similar products," and "explain problems that arise when a trader attempts to enter an order at a particular price, but misses the price because the market moved before the order was entered and executed."  The claimed graphical user interface involves "bid and asked prices [that] are displayed dynamically along the static display, and the system pairs orders with the static display of prices and prevents order entry at a changed price."

This dynamic display appears to be the nugget of eligibility in the claim, providing a specific technical advance over the prior art.  The Federal Circuit agreed with the district court that the claims "solve problems of prior graphical user interface devices . . . in the context of computerized trading relating to speed, accuracy and usability," and that these improvements have "no pre-electronic trading analog."  Furthermore, rather than merely claiming the displaying of information on a graphical user interface, the claims "require a specific, structured graphical user interface paired with a prescribed functionality directly related to the graphical user interface's structure that is addressed to and resolves a specifically identified problem in the prior state of the art."  Thus, the claims were not abstract under part one of Alice.  Further, the static price index was an "inventive concept" under step two of Alice, because it "allows traders to more efficiently and accurately place trades using this electronic trading system."

The same plaintiff did not fare so well in Trading Technologies Int'l v. IBG LLC.  At issue was claim 1 of U.S. Patent No. 7,783,556, which had been held ineligible in a Covered Business Method Review procedure at USPTO's Patent Trial and Appeal Board (PTAB).  The claim recites:

A method for displaying market information on a graphical user interface, the method comprising:
    receiving by a computing device a current highest bid price and a current lowest ask price for a tradeable object from an electronic exchange;
    identifying by the computing device a long or short position taken by a user with respect to the tradeable object, wherein the long position is associated with a quantity of the tradeable object that has been bought by the user at a price, and wherein the short position is associated with a quantity of the tradeable object that has been sold by the user at a price;
    computing by the computing device a plurality of values based on the long or short position, wherein each of the plurality of values represents a profit or loss if the long or short position is closed at a price level among a range of price levels for the tradeable object;
    displaying via the computing device the plurality of values along a value axis;
    displaying via the computing device a first indicator at a first location corresponding to a first value along the value axis, wherein the first indicator represents a particular price based on any of the following prices: current best bid, current best ask, and a last traded price, and wherein the first value represents a profit or loss incurred by the user if the long or short position is closed at the particular price; and
    moving the first indicator relative to the value axis to a second location corresponding to a second value along the value axis responsive to receipt of an update to the particular price, wherein the second value represents a profit or loss incurred by the user if the position is closed at the update to the particular price.

The Court rapidly found the claims abstract, noting that "[t]he only difference between the trading screen of [the prior art] and the one claimed is that the axis in [the prior art] displays price values, and the claimed axis displays P&L values."  Further, the Court concluded that the identifying and computing steps were "nothing more than mere automation of manual processes using generic computers, which does not constitute a patentable improvement in computer technology."

Despite the plaintiff arguing that the displaying and moving steps "provide a particular graphical user interface that improves usability, visualization, and efficiency," the Court disagreed.  Instead, it found that the claims focus on "providing information to traders in a way that helps them process information more quickly, not on improving computers or technology" and they fail to be non-abstract "because arranging information along an axis does not improve the functioning of the computer, make it operate more efficiently, or solve any technological problem."  The Court also found no inventive concept in the combination of claim elements.

Thus, unlike the static price index of the '304 patent, there apparently was not enough daylight between the prior art and the displaying and moving of first indicator in the '556 patent.  This goes to show how some graphical user interface decisions could easily go one way or another not just based on the claim language under review, but also the context of the invention with respect to the prior art.

Stupid § 101 Tricks

By Michael Borella --

With apologies to David Letterman.

If we have learned anything from the last six-and-a-half years of patent eligibility jurisprudence, it is that nobody knows what's going on.

Subject matter eligibility is a fundamental requirement for an invention to be patentable.  According to 35 U.S.C. § 101, "[w]hoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title."  This definition is quite broad, covering virtually any physical thing (machines, articles of manufacture, and compositions of matter) and any series of steps used to achieve a goal (processes).  Indeed, 40 years ago, the Supreme Court ruled that Congress had intended the statute to "include anything under the sun that is made by man."

But a series of decisions by the Court from 2010 to 2014 significantly narrowed the scope of what is patentable.  This culminated in Alice Corp. v. CLS Bank Int'l, which held that claims of all statutory categories must have their eligibility determined by a two part test.

In a nutshell, the first part was described as "determin[ing] whether the claims at issue are directed to one of [the] patent-ineligible concepts" of laws of nature, natural phenomena, and abstract ideas.  If this is the case, then for the second part one must "consider the elements of each claim both individually and 'as an ordered combination' to determine whether the additional elements transform the nature of the claim into a patent-eligible application."  The Court described the second part as "a search for an 'inventive concept'—i.e., an element or combination of elements that is 'sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the ineligible concept itself.'"

While finding the claims in Alice directed to an abstract idea, the Court declined to actually define the term "abstract idea" in any meaningful fashion, noting that "we need not labor to delimit the precise contours of the abstract ideas category in this case."  The Court's treatment of the "search for an inventive concept" was similarly elusive.  Consistent with the prior holding of Mayo Collaborative Servs. v. Prometheus Labs., Inc., so-called "well-understood, routine, conventional activities previously known to the industry" would not clear this hurdle.  Regarding the computer-implemented claims of Alice, the Court wrote that:

[M]ere recitation of a generic computer cannot transform a patent-ineligible abstract idea into a patent-eligible invention.  Stating an abstract idea while adding the words 'apply it' is not enough for patent eligibility.  Nor is limiting the use of an abstract idea to a particular technological environment.  Stating an abstract idea while adding the words 'apply it with a computer' simply combines those two steps, with the same deficient result.  Thus, if a patent's recitation of a computer amounts to a mere instruction to implement an abstract idea on . . . a computer, that addition cannot impart patent eligibility.

In practice, the introduction of this test effectively made it more difficult to patent certain types of inventions -- particularly, diagnostic methods, software, and business methods.  As a result, there has been consternation over the Court's opinions not only in how they have reduced the ability to protect critical innovations that drive the U.S. economy, but also how vague the Justices left the line between inventions that are eligible for patent and those that are not.

Indeed, a number of federal judges have strongly criticized Alice and its progeny.  Judge Wu of the U.S. District Court for the Central District of California panned Alice for setting forth an "I know it when I see it" test.  Judge Pfaelzer, a colleague of Judge Wu, wrote that the Supreme Court's patent eligibility cases "often confuse more than they clarify [and] appear to contradict each other on important issues."  More recently, Judge Plager of the Federal Circuit wrote that the post-Alice § 101 inquiry "renders it near impossible to know with any certainty whether the invention is or is not patent eligible."  Former Chief Judge of the Federal Circuit Paul Michel stated that Alice "create[d] a standard that is too vague, too subjective, too unpredictable and impossible to administer in a coherent consistent way in the patent office or in the district courts or even in the federal circuit."  And these are just a few examples of judicial confusion.  There are more.

Having said that, there are a few lines of attack that have been used by judges and patent examiners over the few last years that are particularly egregious.  Using these patterns allows a quick kill -- rejection of pending claims or invalidation of granted claims on grounds of ineligibly without the legal or factual reasoning that one would expect from the USPTO and the federal courts.  We'll call these "Stupid § 101 Tricks" for lack of a better term.

Trick 1: Abstract Is As Abstract Does

What does it mean to be "directed to" an abstract idea?  There is no clear answer, but all too often it involves a process that resembles a self-fulfilling prophecy.  Particularly, one takes a claim, removes most or all of the technical detail, views what is left at a 10,000 foot level, and then declares that this drastically summarized version of the claim language is abstract.  The logical fallacy comes in the next step, where one then declares that because the summarized version is abstract, the whole claim is directed to an abstract idea.  Or, in other words, you remove everything that is concrete in a claim and then assert that the claim is abstract based on what little is left.

The Supreme Court specifically warned against doing this, noting in Alice that "at some level, all inventions embody, use, reflect, rest upon, or apply laws of nature, natural phenomena, or abstract ideas," and that one must "tread carefully in construing this exclusionary principle lest it swallow all of patent law."  And yet, the Federal Circuit is guilty of this summarizing-to-abstraction.  In Recognicorp, LLC v. Nintendo Co. Ltd., it took a 154-word claim directed to a particular type of data compression technology, and declared it to be directed to the abstract idea of "encoding and decoding image data."  For those of you doing not doing the math at home, the Court compressed 154 words into 5 words without the benefit of any algorithm like that of Recognicorp.

And Recognicorp was not the only victim of this trick.  The Federal Circuit effectively rubber-stamped a district court's oversimplifying of claims essentially down to their preambles in Two-Way Media Ltd. v. Comcast Cable Communications, LLC, and also summarized a 155-word claim in Intellectual Ventures I v. Symantec Corp. down to the abstract idea of "backing up data."

There are numerous further examples in the courts as well as in USPTO examination.

Trick 2: Prima Facie Case?  What Prima Facie Case?

Speaking of the USPTO examination, let's pick on that for a while.  According to the USPTO's guidance entitled October 2019 Update: Subject Matter Eligibility, "the initial burden is on the examiner to explain why a claim or claims are ineligible for patenting clearly and specifically, so that the applicant has sufficient notice and is able to effectively respond."  Further, "[o]nce the examiner has satisfied the initial burden, the burden of coming forward with evidence or argument shifts to the applicant."  Sounds good, right?  But what can happen in practice is quite different.

Examiners often avoid truly establishing a prima facie case of ineligibility by instead following a three step process: (i) quote claim language, (ii) quote boilerplate rejection language, and (iii) conclude that the claim is ineligible.  Here's a generic example modeled after actual USPTO rejections:

Claim is directed to [quote claim 1 in its entirety].  This claim recites a [mathematical concept / mental process / method of organizing human activity] and is not meaningfully different from concepts found to be abstract ideas by the courts.  The claim does not include additional elements that are sufficient to amount to significantly more than the judicial exception because the additional elements when considered both individually and as an ordered combination do not amount to significantly more than the abstract idea.  Therefore, the claim does not meet the requirements of § 101.

You'll note that rejections of this style can be quite long but they do not say much.  Particularly, there is no actual reasoning pertaining to why the claim is abstract.  There is no identification of particular claim elements that are abstract or that are analogous to other claims previously found abstract by the courts.

But when interviewed, examiners who issue these types of rejections often believe that they did meet their prima facie burden even though they did not.[1]  Such examiners frequently contend that if the claim is not abstract, it is the applicant's job to explain why.  When challenged, examiners that issue these conclusory rejections often write more words defending their non-analysis than explaining why the claim was rejected.  The result is improper burden shifting from the USPTO to the applicant, an increased cost to the applicant, and an uphill battle for the applicant to be able to be provided with "sufficient notice and [to] able to effectively respond."

Trick 3: Wither the Dependent Claim?

On a related note, pity the dependent claim rejected under § 101.  Often, all dependent claims are rejected summarily with vacuous reasoning such as "the dependent claims merely further define the abstract idea or recite mechanisms of a generic computer, and therefore also lack eligibility."  Doing so also goes against the grain of MPEP § 2106.07, which states that the § 101 evaluation "should be made on a claim-by-claim basis, because claims do not automatically rise or fall with similar claims in an application," "even if an independent claim is determined to be ineligible, the dependent claims may be eligible because they add limitations amounting to significantly more than the judicial exception recited in the independent claim," and "each claim in an application should be considered separately based on the particular elements recited therein."

And yet, pointing this out to examiners rarely makes a difference.  Examiners challenged on this point again apply improper burden-shifting, stating that if the applicant does not argue for the eligibility of the dependent claims separately (even though these were rejected en masse), the rejections will stand.  If you think that appealing this point to the PTAB would set the record straight, think again.

It is now well-established that, during litigation, the parties can agree upon a representative claim to analyze in lieu of a separate § 101 analysis for each.  But doing so during examination without the applicant's consent essentially provides the examiner with a short-cut to ignore the dependent claims.  The USPTO either needs to clarify its guidance or enforce it.

Trick 4: Ghosting the Technical Improvement

One way to overcome an Alice rejection in the USPTO or an Alice challenge in court is to establish that the claimed invention provides a technical improvement over the state of the art.  In many cases, this can be done by pointing to such an improvement (when it exists) in the claim language or the specification, as was done in Enfish, LLC v. Microsoft Corp. and McRO, Inc. v. Bandai Namco Games America Inc., for example.

Similar arguments can be successful in the USPTO.  Moreover, according to the October 2019 Update, "[t]he claim itself does not need to explicitly recite the improvement described in the specification," and "[t]he specification need not explicitly set forth the improvement, but it must describe the invention such that the improvement would be apparent to one of ordinary skill in the art."  Thus, when the claims and specification do not overtly describe the technical improvement provided, one can still argue that it is inherent.

Nonetheless, both courts and the USPTO have been known to summarily dismiss, downplay, or outright ignore purported technical improvements in claimed inventions.  In the courts, this can happen when the claims are analogous -- even at a high level -- to those of a case in which a § 101 ruling went against the patentee.  One need look no further than Recognicorp for an example, where the patentee argued that the invention provided a technical improvement.  The Federal Circuit concluded -- after a non-substantive dismissal of this argument -- that claims "directed to encoding and decoding image data [are not] a software method that improves the functioning of a computer."  Such a statement is hard to square with the image processing claims of McRO that were found eligible by the same court just a few months earlier.  An even more glaring example was in American Axle & Mfg. v. Neapco Holdings LLC, where Judge Moore of the Federal Circuit dissented from the majority view that a claim was invalid under § 101 and pointed out that there were numerous disclosures of the invention's technical improvements in the specification and that were made during oral argument.

In the USPTO, it is commonplace for an initial Office action to completely ignore any technical improvement disclosed in the claims or specification.  Boilerplate that we see in these rejections goes like this:  "The combination of these [claimed] elements offers nothing more than generally linking the use of the judicial exception to a particular technological environment or field of use because the claimed machine is not particular, and the claim as a whole monopolizes the abstract idea."  This standard rejection language shows up even when a specification has several paragraphs describing the improvements in detail.

If the examiner disagrees with the applicant as to whether these stated technical improvements are indeed enough to meet the § 101 requirements, that is fine.  But the examiner should make that case.  Without any substantive reasoning, the applicant is provided with a rejection and nothing to rebut.

Even worse, after an applicant files a response describing the technical improvements (and perhaps pointing to relevant sections of the specification when doing so), a subsequent Office action arrives with the exact same rejection and no discussion (or minimal, conclusory discussion) of the applicant's arguments.  Again, if the examiner disagrees, the grounds for that disagreement should be made of record.

Trick 5: Forgetting That If You Can Drop the Invention on Your Foot, It Probably Is Not Abstract

Much hay has been made about the Federal Circuit's recent expansion of the judicial exceptions to patent eligibility beyond pure math, software, and business methods, and into inarguably tangible inventions.  In addition to American Axle (involving the manufacture of driveline system shaft assemblies), judicial exceptions have metastasized in The Chamberlain Group, Inc. v. Techtronic Industries Co. (involving a garage door opener) and ChargePoint, Inc. v. SemaConnect, Inc. (involving a charging station for electric vehicles).  Admittedly, the judicial exception in American Axle was a law of nature, but the Court's reasoning was so similar to that used in its abstract idea analyses that any differentiation on these grounds is largely academic.

A legal definition of abstract idea remains difficult -- if not impossible -- to pin down.  The Google-provided dictionary definition of "abstract" is "existing in thought or as an idea but not having a physical or concrete existence."  But one cannot square such a definition with the case law.  Some of the claims in Alice were found abstract despite reciting physical, tangible computer hardware.  To be sure, pure software written in code is stored on a physical tangible medium, such as a disk drive, flash memory, CDROM, etc.  While thinking about software is abstract, the code and equipment that makes your computer display or print this article -- or do anything else for that matter -- is not.  The dictionary definition does not help us decode how the courts are applying § 101.

Instead, the abstract idea is an elaborate legal fiction that has little to do with the layperson's understanding of what might or might not be abstract.  Without being grounded in statute or plain meaning, it is not hard to see why patentees, patent attorneys, the USPTO, and federal judges remain unable to agree on whether certain types of inventions are eligible for patenting.  And this gray area covers many types of inventions that are not only at the bleeding edge of research, but also crucial to the U.S. economy and competitiveness.  Artificial intelligence, machine learning, data science, and quantum computing innovations are more difficult to patent due to the current interpretation of § 101.

Which brings us back to a point made earlier.  If a goal of the § 101 analysis is to avoid letting the exclusions swallow all of patent law, then we need to draw the line somewhere.  Reasonable minds can differs on the exact contours of this line, but we have to ensure that it does not rule out what the law is intended to protect -- innovative new technologies.

[1] To be fair, only a minority of examiners engage in this behavior and this minority has gotten smaller since the USPTO revised its § 101 examination procedures in 2019.  But it still happens and it is still wrong.

Realtime Data LLC v. Reduxio Systems, Inc. (Fed. Cir. 2020)

By Michael Borella --

One of the more frustrating aspects of current patent-eligibility law is that it lends itself all too easily to mischief.  In particular, given that the eligibility test under 35 U.S.C. § 101 as interpreted by the courts is poorly-defined, conclusory reasoning frequently rears its ugly head.  Such reasoning is sometimes found in § 101 rejections of claims by examiners of the U.S. Patent and Trademark Office.  The more egregious of these rejections involve little actual analysis, no actual analysis, the ignoring of claim elements, the ignoring of stated improvements of the claimed invention, and attempts to minimize case law favorable to patentees by limiting the scope of those decisions to their facts.  But district courts are not immune to jumping to conclusions either.

Realtime LLC brought an action in the District of Delaware alleging that multiple parties infringed claims of U.S. Patents 7,415,530, 8,717,203, 9,054,728, 9,116,908, and 9,667,751.  The defendants moved the District Court to dismiss, contending that the patents are ineligible (among other grounds).  Immediately after oral argument, the District Court declared all 159 claims of the five patents ineligible without a formal written opinion.  The only memorialization of the judge's reasoning is a five-page transcript.  Realtime asked the District Court for leave to amend its complaint, but the judge refused.  He admitted that "reasonable people can disagree" on the eligibility of the asserted claims, but nonetheless stated "I think you can take your issues up with the Federal Circuit, and if I'm wrong, I'm wrong."  Realtime appealed.

In Alice Corp. v. CLS Bank Int'l, the Supreme Court set forth a two-part test to determine whether claims are directed to patent-eligible subject matter under § 101.  One must first decide whether the claim at hand 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.

As characterized by the Federal Circuit, the claimed inventions relate to "improving data storage and retrieval bandwidth utilizing lossless data compression and decompression."  The patents describe "certain drawbacks found in prior art systems, including that they did not adequately account for hardware limitations."  The inventions "overcome these limitations by, for example, selecting encoding techniques based upon their ability to effectively encode different types of input data."  As an example, claim 25 of the '751 patent recites:

A system for compressing data comprising:
    a data server implemented on one or more processors and one or more memory systems and configured to:
        analyze content of a data block to identify a parameter, attribute, or value of the data block that excludes analysis based solely on reading a descriptor;
        select an encoder associated with the identified parameter, attribute, or value;
compress data in the data block with the selected encoder to produce a compressed data block,     wherein the compression utilizes a state machine; and
store the compressed data block;
    wherein the time of the compressing the data block and the storing the compressed data block is less than the time of storing the data block in uncompressed form.

Of note is that these patents and their family members had survived previous § 101 challenges.  Particularly, "Magistrate Judge John D. Love of the Eastern District of Texas considered the patent eligibility of the '728, '530, and '908 patents, as well as the eligibility of members of the '203 and '751 patents' families, in two separate cases."  In these cases, Judge Love found the claims patent-eligible under both parts of the Alice test, and his findings were adopted by other judges in the Eastern District of Texas and the District of Massachusetts.

Writing for a unanimous panel, Judge O'Malley began by discussing the de novo standard of review that is used by the Federal Circuit when reviewing § 101 decisions.  She noted that "we remain a court of appeal not a court of original jurisdiction," and that "[d]istrict courts have an obligation to provide us with a reviewable decision, commensurate with the issues before it."  This standard "does not justify resolving a complex legal issue without an opinion or reasoned analysis."

Based on this understanding, the Court held that the record on appeal was insufficient for review.  It pointed to four errors made by the District Court.

First, the oral transcript did not clearly set forth the District Court's rationale for its decision.  To that point, "the district court repeatedly inquired whether claim limitations were novel" and "later expressed a view that the claimed invention of the '751 patent was 'obvious'—but not in the patent sense, 'like it's common sense.'"  Judge O'Malley admitted that novelty and non-obviousness "are not wholly divorced from some aspects of the § 101 inquiry," but that "they are rarely issues appropriate for resolution on the pleadings."  She went on to state that these concepts are not relevant under part one of Alice, and that the District Court's subjective common sense is not relevant to the § 101 test.  Further, there was no evidence in the record that "the district court considered the claims as a whole or, for that matter, seriously considered any claims beyond claim 25 of the '751 patent."

Second, the District Court failed to tie its description of the inventions to any representative claim and then apply the "directed to" analysis of Alice to that understanding of the claimed invention.  Judge O'Malley also questioned the District Court's high-level summary of the inventions ("choosing a compression method based on the data type").  She stated that this characterization "seems to miss that the claims expressly achieve this result in certain ways, involving examining data blocks and not relying just on a descriptor."  Moreover, "the district court improperly equated the presence of an abstract idea with a conclusion that the claims are directed to such an idea."

Third, the District Court failed to address why it disagreed with the other judges that had previously found the claims eligible.  Judge O'Malley elucidated the type of analysis that she was expecting:

This is not to say that those judges were necessarily correct in their assessment of this issue nor that the court was bound by those conclusions.  We mean only to say that, when deciding the motions to dismiss in this case, the court should have, at a minimum, provided a considered explanation as to why those judges were wrong.  This could have been done expressly; the court could have cited the earlier cases and distinguished them.  Or the analysis could have been implied; the court could have analyzed the arguments for eligibility in such a way that the reasons for the differing conclusions are apparent.  Here, however, rather than take either approach, the court recited a series of legal conclusions and § 101 cases, without analysis.

Fourth, prior to and during oral argument, Realtime cited cases that purportedly would support its position that the claims were eligible (Visual Memory LLC v. Nvidia Corp., Enfish, LLC v. Microsoft Corp., and DDR Holdings, LLC v. Hotels.com).  But the District Court did not even mention these cases in its analysis.  As stated by Judge O'Malley, "there are often very fine lines between those cases and between what is patent eligible and what is not," and "[a] detailed analysis of those cases and the record before the district court is often needed if we are to appropriately assess the court's resolution of a § 101 challenge."

For all of these reasons, the Federal Circuit remanded the case back to the District Court for further proceedings.  In short, Judge O'Malley's position is best captured in a statement made at the beginning of the opinion:

[D]istrict courts might be tempted to opt for an effective coin toss rather than a reasoned analysis when faced with a challenge under § 101.  This is especially so where the abstract idea exception is invoked.  But the system is not supposed to work that way.  The parties are entitled to more and the Court of Appeals needs more.

Realtime Data LLC v. Reduxio Systems, Inc. (Fed. Cir. 2020)
Panel: Circuit Judges Newman, O'Malley, and Taranto
Opinion by Circuit Judge O'Malley; concurring opinion by Circuit Judge Taranto

Guest Post -- Reconsidered: The Federal Circuit's Enfish Interpretation of Mayo-Alice

By Circuit Judge Paul R. Michel (Ret.) and John T. Battaglia --

The esteemed authors of Patent Docs have written of the need to reconsider the Federal Circuit's approach to section 101 eligibility, given the court's latest expansion and en-banc vote on subject-matter eligibility in AAM v. Neapco (Fed. Cir. July 31, 2020).  Is It Time for Federal Circuit to Rethink Its Subject Matter Eligibility Jurisprudence? by Kevin E. Noonan, Ph.D., Patent Docs (Aug. 24, 2020).  Among other points, we agree that such a need exists and suggest that the first step should lie with correcting the Federal Circuit's decisions in Enfish and Affinity Labs—the precedents that set forth the Federal Circuit's interpretation of "directed to" in the Mayo-Alice "framework" for testing a patent claim's ineligibility.  See Enfish, LLC v. Microsoft Corp., 822 F.3d 1327, 1334-35 (Fed. Cir. May 12, 2016); Affinity Labs of Texas, LLC v. DirecTV, LLC, 838 F.3d 1253, 1257-58 (Fed. Cir. Sept. 23, 2016); 35 U.S.C. §101.

To be sure, Enfish was (and largely remains) one of the rare Federal Circuit precedents that upheld the claims' eligibility.  But we are not concerned with particular outcomes; only legal reasoning and an even-handed rule of law.  And Enfish's analysis and resulting rule of law on §101 does not track even the Supreme Court's Mayo-Alice §101 framework, itself fraught with controversy.  More specifically, Mayo-Alice established the two-step "framework" to assess patent-eligibility:  step one asks whether the claim-at-issue "is directed to" an ineligible topic, such as an abstract idea or natural law; and if so, step two asks whether the claim's elements nevertheless add "something more" and demonstrate an "inventive concept" over what was "routine, conventional, or well-understood" at the time.  Alice Corp. Pty Ltd. v. CLS Bank Int'l, 134 S.Ct. 2347, 2355 (2014); Mayo Collaborative Servs v. Prometheus Labs, Inc., 132 S.Ct. 1289, 1298 (2012) (all emphases added unless otherwise noted).

Enfish in particular interpreted Alice's "directed to" language, as used in step one.  With that backdrop, we analyze Enfish's transformation of what was once a one-step eligibility test into a framework that, at both steps of Mayo-Alice, delves into the claim's patentability or "patentable advances."

I.  The Enfish Focus: What Does "Directed to" in Alice Step One Mean?

In Enfish, the Federal Circuit applied the Mayo-Alice ineligibility framework to a patent claiming an improved "self-referential database" design for computers.  822 F.3d at 1333.  Microsoft had successfully challenged these claims as "abstract," persuading the district court to grant summary judgment of ineligibility.  Id. at 1330.  The Federal Circuit panel agreed these claims were sufficiently similar to claims deemed "abstract" in other precedents.  Id. at 1334-35.  But then it turned to the issue that resulted in the Federal Circuit's unique §101 rule:  Namely, the issue of interpreting Alice's step one "directed to" language.

    A.  Enfish Misinterprets "Directed to."

Enfish started well enough.  It rejected the notion that "directed to" meant "involved," since such a broad interpretation would sweep in and put at risk myriad patent claims.  822 F.3d at 1335 ("That formulation plainly contemplates that the first step of the inquiry is a meaningful one, i.e., that a substantial class of claims are not directed to a patent-ineligible concept.  The 'directed to' inquiry, therefore, cannot simply ask whether the claims involve a patent-ineligible concept, because essentially every routinely patent-eligible claim involving physical products and actions involves a law of nature and/or natural phenomenon") (citation omitted) (emphasis in original).

But then Enfish ceased any effort to deconstruct "directed to."  It didn't consider, for example, its own case law, the decisions for which have been using "directed to" for decades before Alice issued.  Nor did it consider how the Supreme Court's pre-Mayo-Alice precedents had applied the eligibility exceptions for §101.  If Enfish had, it would've fairly discerned that "directed to" and variations thereof meant the claim-at-issue was "in practical effect on" or "essentially" on an ineligible topic "itself"—such as the "formula itself" for computing an "updated alarm limit," Parker v. Flook, 437 U.S. 584, 587 (1978), or an "algorithm itself," Gottschalk v. Benson, 409 U.S. 63, 67-72 (1972); accord Diamond v. Diehr, 450 U.S. 175, 182 (1981).  The Supreme Court specifically re-affirmed these precedents in its 2012 Mayo opinion.  132 S.Ct. at 1298, 1302.

    B.  Enfish Relies on Dicta in Alice Step Two to Define the Different Test in Step One.

Enfish took a different approach when interpreting step-one's "directed to" formulation.  Primarily, it latched onto a sentence of dicta at the tail-end of Alice.  In Enfish's reading, this Alice dicta "suggested that claims 'purport[ing] to improve the functioning of the computer itself,' or 'improv[ing] an existing technological process' might not succumb" to the abstract idea exception in step one.  822 F.3d at 1335 (citing "see" Alice, 134 S.Ct. at 2358-59).  Enfish admitted, however, that it was taking this "improved computer" dicta from the Alice Court's discussion on step two (the "inventive-concept" step) in order to define step one (the "directed to" ineligibility step).  Id.  But Enfish had a reason: "While it is true that the Court discussed improvements to computer-related technology in the second step of its analysis in Alice, …, that was because the Court did not need to discuss the first step of its analysis at any considerable length, …."  Id.

    C.  The Bottom Line: How Enfish Changed Alice Step One into a Test That Examines the Claim's     "Patentable Advance" Over the Prior Art.

In sum, the Federal Circuit in Enfish took the following to answer what "directed to" means in Alice's step-one eligibility framework:  (1) a sentence of Alice dicta; (2) on a specific technology ("improvements in computer technology"); and (3) that Alice addressed only when discussing step two's "inventive-concept" test.  Based on those points, Enfish effectively extended Alice to conclude that this step-two dictum was now (1) binding; (2) on all technologies subject to a §101-ineligibility challenge; and (3) applicable to Alice's step-one "directed-to" test.  In doing all this, Enfish transformed Alice step one from a test that asked "whether the claims at issue are directed to" a patent-ineligible concept to the "inquiry [that] … look[s] at the 'focus of the claimed advance over the prior art' to determine if the claim's 'character as a whole' is directed to excluded subject matter."  Affinity Labs, 838 F.3d at 1257-58; accord Enfish, 822 F.3d at 1327, 1335; American Axle & Manufacturing LLC v. Neapco Holdings, --F.3d--, No. 18-1763, at *9 (Fed. Cir. July 31, 2020) (applying Enfish-Affinity Labs' "patentable advance" inquiry to claimed process for manufacturing auto-parts).

II.  Enfish Couldn't Justify Its Step-One "Directed-to" Interpretation By Relying on Alice "Computer" Dicta in Step-Two's "Inventive Concept" Test.

In our view, Enfish cannot reasonably rely on Alice step-two dicta—dicta focused on a specific technology, no less—to fashion what has become the Federal Circuit's across-the-board step-one test.  Dicta is of course non-binding.  And the terse Alice sentence on "computer" technology hardly seems like a sufficient foundation on which to substantially transform the Federal Circuit's step-one inquiry, applicable in all circumstances.

These factors alone should've counseled against Enfish's approach.  Arguably as well, so too should have the differences between Alice's two steps, with one step focused on "ineligibility," the other on an "inventive-concept" test "analogous" to patentability.  Contrast, e.g., SAP Am., Inc. v. InvestPic, LLC, 898 F.3d 1161, 1163, 1167 (Fed. Cir. 2018) (addressing ineligibility of claimed calculation under Alice and explaining that, no matter how "new" or even ingenious that claimed mathematical calculation might be, it was "still an [ineligible] abstract idea") (emphasis in original) with Internet Patents Corp. v. Active Network, Inc., 790 F.3d 1343, 1346-48 (Fed. Cir. 2015) (explaining how step two's "inventive-concept" search requires an analysis "analogous to those of § 102 [anticipation] and §103 [obviousness]" and comparing claims to "the prior art").

Moreover, the lone justification Enfish offered for such cross-step borrowing—its belief that Alice simply "didn't need to discuss the first step of its analysis at any considerable length"—seems to rest on speculation.  As we read it, the proper deduction is that Alice didn't discuss this "patentable advance" test (or anything similar) in its step-one eligibility analysis precisely because the Supreme Court doesn't consider such a "patentable advance" relevant to step one.  If anything, "claimed" or "patentable advances" are the stuff of Alice step two, and certainly for the Patent Act's substantive patentability requirements, 35 U.S.C. §§102-103.  But not for Alice step one.

III.  Affinity Labs Solidifies the "Patentable Advance" Inquiry as Part of Step One—Without Discussion or Debate.

Given Enfish's various pressure points, as described above, one would've thought subsequent cases would've tried to limit or distinguish Enfish, whether because it was technology-focused, predicated on dicta in a different step (step two), or otherwise so unique as to be limited to its facts.  See, e.g., Miller v. U.S. Steel Corp., 902 F.2d 573, 575 (7th Cir. 1990) (the "polite formula for overruling").  Not so.  Four months later, in Affinity Labs, the court effectively sealed Enfish's transformation of step one.  838 F.3d at 1257-58.

Conclusion

Whether in Enfish or another imminent case, the Federal Circuit was right to interpret "directed to," as used in Alice step one.  The problem is that Enfish and its subsequent cases (such as Affinity Labs) proceeded to make its "patentable advance" interpretation not just inconsistent with Alice's "directed to" step; but nearly unrecognizable in view of it.  And it is wholly unclear that Enfish did much to stem the ineligibility tide.  After all, a recent study documenting §101 outcomes at the Federal Circuit (in published post-Alice cases) concluded that, regardless of technology or other such distinctions, some 82.1% of claims before the Federal Circuit "succumb" (in Enfish's words) to Mayo-Alice step one.  See Lessons From a Quantitative Analysis of the Federal Circuit's Section 101 Decisions Since Alice, by C. Graham Gerst & Paul Choi, IP Watchdog (Sept. 2, 2020).  Accordingly, as to the Federal Circuit's "patentable-advance" interpretation and the reasoning and process that produced it, patent lawyers should ask the court to revisit and correct this misinterpretation.

Is It Time for Federal Circuit to Rethink Its Subject Matter Eligibility Jurisprudence?

By Kevin E. Noonan --

The Federal Circuit's inchoate attempts to fashion a consistent, rational application of the Supreme Court's recent subject matter eligibility jurisprudence, while understandably Herculean in view of the difficulties inherent in that precedent, raises questions regarding the value of having a "specialized" Circuit Court for the purpose of harmonizing U.S. patent law (see "The Proper Role of the Federal Circuit"; "In Defense of the Federal Circuit: A Response to Judge Wood").  Such sentiments are understandable, particularly in view of the dissension amongst the Federal Circuit judges themselves (see, e.g., "Ariosa Diagnostics, Inc. v. Sequenom, Inc." and "Athena Diagnostics v. Mayo Collab. Servs.").  The most recent example of the fractured nature of the Court on this issue is American Axle & Mfg. v. Neapco Holdings LLC.  The opinions of the Circuit Judges on the question of granting American Axle's request for rehearing en banc is illustrative that these issues will not disappear soon without Supreme Court intervention.  (Whether such intervention would clarify or render the standard even more opaque is itself an open question.)

The Court split 6:6 on whether to grant rehearing, thus denying the request.  Of the Judges denying the request, Judges Dyk, Wallach, and Taranto based their decision not to grant en banc reconsideration squarely on O'Reilly v. Morse (all other precedent cited in their opinion relies on what they consider the proper application of this decision).  In their view, the claims whose invalidation here the panel affirmed (while reversing this determination in the revised opinion as to other claims) suffered under Section 101 by not reciting the specific means by which the scientific principle was applied; this determination was challenged by Judge Moore's dissent in both the original panel decision and the amended decision issued with the Court's decision not to rehear the matter en banc as amounting to a "super-enablement" requirement.

O'Reilly v. Morse was decided in 1853.  In the 167 years since that decision no court (not the Court of Customs and Patent Appeals, the Federal Circuit's predecessor court, no regional Circuit Court of Appeals including the Federal Circuit, not even the Supreme Court) has used the Morse precedent as the Federal Circuit has done in American Axle to support a finding of lack of subject matter eligibility for such claims. The ancient principle that "the exception probes the rule" here works in reverse:  the fact this the decision is an exception is an indication that the rule, fully probed, has been improperly applied in this decision. And Judges Dyk, Wallach, and Taranto provide cold comfort when their opinion against granting rehearing en banc asserts that their opinion is somehow narrow in scope.  As has been seen all too often in subject matter eligibility cases, when the Federal Circuit gives some litigants (and some district courts) a subject matter eligibility inch they take, if not a mile, then at least the next step in expanding the scope of claims that can be held ineligible.

Nor does Judge Chen's agreement with his naysaying brethren (joined by Judge Wallach) convince in stating the judicial equivalent of "nothing to see here, move along."  While the Judge is correct that the application of law to fact in the Section 101 context has always been a case by case judgment, it can also be a misjudgment, the characterization of which can be discerned, inter alia, by the reaction to the decision of other learned judges on the Court.  This decision is clearly terra nova for patent eligibility if only for the reason that six other Federal Circuit judges believe it to have been decided in error.  (While not discounting their views, it is not surprising that Judges Dyk and Taranto agree to not rehear en banc, being the two judges who joined in both the original panel decision and the amended decision; using this calculus four of the judges not on that panel agree with their decision and six at least think that the entire court should rehear the case.)  While the Judge is also correct that O'Reilly v. Morse "remains good law," that is not the issue; the question is whether (as six of his colleagues agree) the failure is in the application of the law by the panel majority.

One other aspect of Judge Chen's decision provides support for the position that the law has been improperly interpreted here.  Judge Chen writes:

If claim 22 had omitted any reference to mass and stiffness, such that the claim simply recited "tuning to match the relevant frequency or frequencies," there would be no basis to say that the claim invokes Hooke's law.

There is at least the following deficiency in this position.  It suggests that a way to obtain a claim to a practical application of a natural law is, no matter what you do, don't inform the public about the law upon which your method is based.  While Hooke's Law is of ancient provenance, that will not always be the case (indeed it may rarely be the case).  And to the extent that the law is interpreted in this way, that interpretation, and not permitting patenting of claims depending on a natural law, is the Constitutionally infirm position because it is directly contrary to "promoting progress."  This statement also is reminiscent of the U.S. Patent and Trademark Office's valiant but failed attempt to circumvent the Federal Circuit's Sequenom decision by setting a standard whereby a claim directed to merely detecting a natural law, without reciting the application of that natural law in providing a diagnosis, was patent eligible.  The Federal Circuit overruled that attempt ("properly" in view of the Sequenom decision) in Cleveland Clinic Foundation v. True Health Diagnostics LLC and at the same time rejected reliance on the Office's expertise for the sake of "the need for consistent application of our case law."

Judge Newman's dissent from denial of rehearing en banc, joined by Judges Moore, O'Malley, Reyna, and Stoll illustrates (albeit not as forcefully as Judge Moore's dissent from the panel decision) the state of the Court's doctrinally incoherent precedent.  (Respectfully, Judge Reyna's presence on this dissent speaks volumes about the serious questions raised by the panel majority's decision, if only to the extent that rehearing en banc is warranted.)  Judge Newman's views and concerns regarding the Court's subject matter eligibility decisions echo her dissent in Athena; she states "[t]he court's rulings on patent eligibility have become so diverse and unpredictable as to have a serious effect on the innovation incentive in all fields of technology" and her concern remains that "[t]he victim is not only this inventor of this now-copied improvement in driveshafts for automotive vehicles; the victims are the national interest in an innovative industrial economy, and the public interest in the fruits of technological advance."

The opinions of the Federal Circuit judges that denied rehearing en banc are not consistent with Supreme Court precedent to the extent that the Court recognized and cautioned that invalidation or denial of patent eligibility based on an overbroad application of Section 101 posed significant risks to innovation:

At the same time, we tread carefully in construing this exclusionary principle lest it swallow all of patent law.  . . .  At some level, "all inventions . . . embody, use, reflect, rest upon, or apply laws of nature, natural phenomena, or abstract ideas."  . . .  Thus, an invention is not rendered ineligible for patent simply because it involves an abstract concept.  . . .  "[A]pplication[s]" of such concepts " 'to a new and useful end,' " we have said, remain eligible for patent protection.  . . .  Alice Corp. v. CLS Bank Int'l, 573 U.S. 208, 217 (2014) [some citations omitted].

Judge Newman's dissent recognizes these principles, citing Le Roy v. Tatham, 55 U.S. 156 (1852), that "[a]ll technology is based on scientific principles—whether or not the principles are understood" and that "[t]he Court then and now understood the distinction between the basic principles of science and their practical application."  Her dissent also cites many of the cases following from O'Reilly v. Morse cited by her brethren denying rehearing en banc but distinguishing them in ways they do not, based on principles versus their application.

Judge Stoll writes (joined by Judges Newman, Moore, O'Malley, and Reyna again), specifically challenging her colleagues' argument that what Judge Moore in her dissent from the panel opinion and the amended opinion characterizes as the "nothing more test" is consistent with O'Reilly v. Morse.  Indeed, Judge Stoll questions Judge Chen's reliance on the Morse precedent, stating:

I note that Judge Chen does not identify any prior court opinions or articles that specifically refer to an "O'Reilly test," nor am I aware of any.  To the extent that the Supreme Court has cited O'Reilly, it has been for the general propositions that there is an implicit exception to § 101 and that preemption is an important concern in patent law.

And with regard to the "how to" aspect of the majority's opinion, Judge Stoll writes:

Even assuming that claim 22 applies Hooke's law (or any other unnamed law of nature), the claim seems sufficiently specific to qualify as an eligible application of that natural law.  The claim identifies specific variables to tune, including "a mass and a stiffness of at least one liner."  . . .  It requires that the tuned liner attenuate specific types of vibration, including "shell mode vibrations" and "bending mode vibrations," and further requires that the tuned liner is inserted in a "hollow shaft member."  . . .  With this level of specificity, claim 22 appears to be properly directed to "the application of the law of nature to a new and useful end," not to the law of nature itself.  Funk Bros. Seed Co. v. Kalo Inoculant Co., 333 U.S. 127, 130 (1948) (collecting cases).  Yet this level of detail is insufficient in the majority's view, and it remains unclear how much more "how to" would have been sufficient to render the claim eligible under the majority's approach [citations to the record omitted].

Judge Stoll is also properly concerned with how far the Court has strayed from traditional principles of patent eligibility:

The majority invokes § 101 to hold ineligible a method for manufacturing a drive shaft assembly for a car—a class of invention that has historically been patent eligible.  See, e.g., Diehr, 450 U.S. at 184 ("Industrial processes . . . have historically been eligible to receive the protection of our patent laws.").  In my view, the result in this case suggests that this court has strayed too far from the preemption concerns that motivate the judicial exception to patent eligibility.  The claims at issue here are far removed from the canonical ineligible claim that "simply state[s] the law of nature while adding the words 'apply it.'"  Mayo, 566 U.S. at 72 (citing Gottschalk v. Benson, 409 U.S. 63, 71–72 (1972)).  Indeed, the claims at issue do not recite any particular law of nature, much less preempt the use of Hooke's law in any particular context.  Instead, they are directed to a specific "method for manufacturing a shaft assembly" with a liner that attenuates certain types of vibrations.  '911 patent col. 11 ll. 24–36.  Even assuming that Hooke's law is required to tune the claimed liner (despite not being mentioned anywhere in the specification or claims), so are innumerable other laws of nature.  And there remain innumerable ways to apply Hooke's law to achieve the goal of mitigating problematic vibrations in a shaft assembly—perhaps, for instance, by using something other than a liner tuned to attenuate at least two different kinds of vibrations.

After all, Judge Stoll notes that as one amicus posited, "the majority's original approach would have placed the combustion engine at risk of ineligibility—a proposition that would have seemed absurd just a few years ago, but now seems eerily plausible. . . one can still reasonably ponder whether foundational inventions like the telegraph, telephone, light bulb, and airplane—all of which employ laws of nature—would have been ineligible for patenting under the majority's revised approach" (see, e.g., "Federal Circuit Finds Calculating Machine Ineligible"; "Federal Circuit Invalidates Edison's Light Bulb Patent"; "Federal Circuit Invalidates A. G. Bell's Telegraphy Patent").

All these are ample reasons, for Judge Stoll and in a more rational age anyone conversant in patent law to believe rehearing en banc is warranted.

Finally, Judge O'Malley writes in dissent (joined by Judges Newman, Moore, and Stoll) based on her view that the panel majority, in both their original and amended opinion, transgressed the procedural standards advocated by The Advisory Committee on Appellate Rules pursuant to a letter to all Circuit Courts of Appeal from the American Academy of Appellate Lawyers.  The majority's rulings in her view were subject to the following procedural defects:

(1) it announces a new test for patentable subject matter at the eleventh hour and without adequate briefing; (2) rather than remand to the district court to decide the issue in the first instance, it applies the new test itself; and (3) it sua sponte construes previously undisputed terms in a goal-oriented effort to distinguish claims and render them patent ineligible, or effectively so.

These are enough, in Judge O'Malley's view, to merit rehearing en banc.

The answer to the question posed in the title is clearly "yes" but it is good to consider why it should be done (and soon).  There is a principle in rhetoric of reductio ad absurdum, that you can probe whether a logical argument is flawed by taking it to its extreme and seeing whether the outcome is ridiculous.  The American Axle decision is a good illustration of the application of this principle by the Federal Circuit (no matter how unintentional or unrecognized by at least half of the judges).  While it is but a faint hope, the trend is somewhat positive:  in Sequenom the vote to deny rehearing en banc was 8 to 4; in Athena it was 7 to five, and in American Axle it was 6 to 6.  Like a lifeline, the opportunity to revisit if not reverse the Federal Circuit's trend to affirm invalidating granted patents under Section 101, no matter how absurd the outcome, is the only one that might compel the Supreme Court to clarify its position on subject matter eligibility.  Nothing in the Court's decisions has mandated the lengths to which the district courts have applied this section of the statute, nor compelled the Federal Circuit to affirm against the better judgment of an increasing percentage of its judges.  To the extent that several of those judges have stated in their opinions that they are compelled by the Supreme Court's recent decisions to apply the law as they have applied it, they have at the same time ignored the Court's admonition that it is up to the inferior courts to apply the law in light of the broad proscriptions in their decisions to (like Blackstone) probe the contours of what the law commands.  The failure to do so has provided no impetus for the Court to reconsider its own decisions or to correct any over-application of them to cases that they did not consider (American Axle being the latest and most egregious of these).  The Federal Circuit, a court created to apply its specialized expertise (an expertise recognized by the Supreme Court; see Warner Jenkinson Co. Hilton-Davis Chemical Co., 520 U.S. 17 (1997), and other cases), owes it to its institutional integrity (and to the rest of us) to give the Court the opportunity to do so.  After all, if the front page of The Wall Street Journal one day runs the headline "Court Destroys American Industry," shouldn't that court be the Supreme Court?

Federal Circuit Finds Calculating Machine Ineligible

August 23, 1891

WASHINGTON, DC

In a unanimous panel ruling, the Federal Circuit has found that the calculating machine of U.S. Patent No. 388,116 fails to meet the eligibility requirements of 35 U.S.C. § 101.  Inventor W.S. Burroughs of St. Louis described the machine as "mechanically assisting arithmetical calculations."  Particularly, it includes "one or more registers, of a series of independent keys and intervening connections constructed, arranged, and operating, as fully specified hereinafter, so as to indicate upon the register the sum of any series of numbers by the proper manipulation of the keys, and also so as to print or permanently record the final result."  But this device ran afoul of recent Federal Circuit case law regarding the so-called "abstract idea" exception to patentability.

In a challenge brought by a potential licensee, the Court was asked to review the validity of the '116 patent.  While the Court agreed with the U.S. Patent and Trademark Office's ultimate conclusion that the claimed invention was novel and non-obvious, it found that the Office did not apply the § 101 test strictly enough during prosecution.

At play was claim 1, which recites:

The combination of a series of numbered independent indicators, a series of independent keys to each indicator, connections between each of the series of keys and each indicator, said connections being arranged to insure the movement of each indicator upon the movement of any key of its series and including a series of stops to each series of keys adjustable by but independent of the keys, arranged to vary the extent of movement of the indicator according to the position of the key struck, substantially as described.

The Court began its analysis by stating that "under § 101 we first determine the focus and character of claim, including the problem that it purports to solve."  Here, the Court found that the '116 patent addresses the summing of numbers through the mathematical operation of addition.  The Court observed that such simple arithmetic functions have been performed by hand and with assistance by machines for thousands of years.  For instance, "the first abacus was introduced no later than 2700 B.C. to perform sums as well as to store partial results of more complex operations -- clearly addition had previously been performed by humans in their minds or in writing prior to that."  Thus, the Court viewed the invention as being directed to an abstract idea.  Or, in the Court's words, no more than "a longstanding principle or an idea of itself."

More specifically, the Court wrote that "the claim is directed to a fundamental concept of the sort that could be performed mentally; that is, a person, armed with paper and pencil, could perform the claimed operations."  The Court also found claim 1 to lack specificity, using result-oriented language that "recites what the inventor hopes to achieve without reciting how the inventor purports to have achieved that goal."  In particular, the arrangement of connections and the positions of the series of stops were "claimed so broadly as to encompass the mere idea of their functionality and not a specific implementation thereof."

Burroughs argued that the invention of the '116 patent was a technical improvement in that it "eliminated painstaking and error-prone manual calculations required to sum a list of numbers."  But the Court disagreed, stating that "we have held many times in the past that automating an activity previously performed manually is not in and of itself patentable, even if said automation produces a faster and more accurate result."

Moving on, the Court looked to the remaining elements of the claim to determine whether it included an inventive concept -- something significantly more than the abstract idea that constituted a practical application of that idea.  It found that the additional elements of claim 1, indicators, keys, connections, and stops, were all well-understood, routine and conventional components claimed at a high level.  The Court concluded that "considering the elements of the claim both individually and as an ordered combination, they recite no additional parts or steps that would suffice to transform the nature of the claim into a patent-eligible application."

Burroughs argued that claim 1 recited several inventive concepts that were neither previously known, nor conventional or routine.  But the Court found his position lacking, and instead reasoned that:

Mr. Burroughs argues that his invention is an improvement in tallying sums.  As we noted earlier, that is no more than an abstract notion.  Our case law makes clear that improvements that are abstract themselves do not render a claimed abstract idea eligible for patent protection.  Furthermore, since the claim at hand merely recites the achievement of a result -- a result that has previously been achieved in a similar manner for most of written history -- the Burroughs machine is not the type of invention that patent law is intended to protect.

Consequently, the Court held that '116 patent invalid under § 101, and Mr. Burroughs must return to the proverbial drawing board.

The above is a sarcastic parody; our earlier sarcastic parodies can be found here:

• "Federal Circuit Rules Public Key Cryptography Algorithm Invalid Under 35 U.S.C. § 101," July 22, 2020
• "Federal Circuit Invalidates Edison's Light Bulb Patent," October 20, 2019
• "Federal Circuit Invalidates A. G. Bell's Telegraphy Patent," September 2, 2019

Illumina, Inc. v. Ariosa Diagnostics, Inc. (Fed. Cir. 2020)

Federal Circuit Hands Down Modified Opinion in Illumina, Inc. v. Ariosa Diagnostics, Inc.

By Kevin E. Noonan --

Earlier this year, the Federal Circuit (somewhat surprisingly) found claims of two Sequenom patents directed to methods for detecting fetal DNA in maternal blood to satisfy the subject matter eligibility requirements of Section 101 (see "Illumina, Inc. v. Ariosa Diagnostics, Inc. (Fed. Cir. 2020)").  The surprise arose in part due to the Federal Circuit's track record of finding all diagnostic method claims to be ineligible as being directed to a natural law without "something more" to overcome the patentability preclusion created by the Supreme Court in Mayo Collaborative Services v. Prometheus Laboratories, Inc. (see, e.g., Judge Moore's dissent in Athena Diagnostics, Inc. v. Mayo Collaborative Servs., LLC, 927 F.3d 1333, 1352 (Fed. Cir. 2019) ( "Since Mayo, we have held every single diagnostic claim in every case before us ineligible.").  Another reason, of course, is that the Federal Circuit affirmed a finding of patent ineligibility in Ariosa Diagnostics, Inc. v. Sequenom, Inc.  Nevertheless, a divided panel found a patent eligibility-creating distinction in the claims asserted in this most recent case (over a dissent by the author of the Ariosa v. Sequenom decision, Judge Reyna) and today the Court issued a revised opinion in the face of Ariosa's petition for rehearing.

To recap, the case arose over U.S. Patent No. 9,580,751 (the '751 patent) and U.S. Patent No. 9,738,931 (the '931 patent), directed to the solution of an unexpected difficulty in detecting cell-free fetal DNA (cffDNA):

[T]he major proportion (generally >90%) of the extracellular DNA in the maternal circulation is derived from the mother.  This vast bulk of maternal circulatory extracellular DNA renders it difficult, if not impossible, to determine fetal genetic alternations [sic] . . . from the small amount of circulatory extracellular fetal DNA.

The inventors found that cffDNA was significantly smaller (300-500 bp) than the "interfering" maternal DNA, and thus using admittedly conventional techniques of size separation the cffDNA could be isolated and rendered detectable.

Illumina and Sequenom asserted claims 1, 2, 4, 5, 9, and 10 of the '751 patent and claims 1, 2, and 10–14 the '931 patent against Ariosa and Roche Diagnostics; the Court considered claim 1 from each patent to be representative:

'751 patent:

1. A method for preparing a deoxyribonucleic acid (DNA) fraction from a pregnant human female useful for analyzing a genetic locus involved in a fetal chromosomal aberration, comprising:
   (a) extracting DNA from a substantially cell-free sample of blood plasma or blood serum of a pregnant human female to obtain extracellular circulatory fetal and maternal DNA fragments;
       (b) producing a fraction of the DNA extracted in (a) by:
           (i) size discrimination of
           (ii) selectively removing the DNA fragments greater than approximately 500 base pairs,
           wherein the DNA fraction after (b) comprises a plurality of genetic loci of the extracellular circulatory fetal and maternal DNA; and
       (c) analyzing a genetic locus in the fraction of DNA produced in (b).

'931 patent:

1. A method, comprising:
   (a) extracting DNA comprising maternal and fetal DNA fragments from a substantially cell-free sample of blood plasma or blood serum of a pregnant human female;
       (b) producing a fraction of the DNA extracted in (a) by:
           (i) size discrimination of extracellular circulatory fetal and maternal DNA fragments, and
           (ii) selectively removing the DNA fragments greater than approximately 300 base pairs,
       wherein the DNA fraction after (b) comprises extracellular circulatory fetal and maternal DNA fragments of approximately 300 base pairs and less and a plurality of genetic loci of the extracellular circulatory fetal and maternal DNA fragments; and
       (c) analyzing DNA fragments in the fraction of DNA produced in (b).

The District Court on summary judgment held these claims and all asserted claims to be ineligible under 35 U.S.C. § 101 and the Supreme Court's Alice/Mayo test (see "Illumina, Inc. v. Ariosa Diagnostics, Inc. (N.D. Cal. 2018)"), and Illumina appealed.

In the original opinion, the Federal Circuit reversed, in an opinion by Judge Lourie joined by Judge Moore; Judge Reyna dissenting (as he does in this revised opinion).  Judge Lourie justified the different outcome here by stating "[t]his is not a diagnostic case.  And it is not a method of treatment case.  It is a method of preparation case."  But the majority based its decision on this distinction:  "[h]ere, it is undisputed that the inventors of the '751 and '931 patents discovered a natural phenomenon.  But at step one of the Alice/Mayo test, 'it is not enough to merely identify a patent-ineligible concept underlying the claim; we must determine whether that patent-ineligible concept is what the claim is 'directed to," citing Rapid Litig. Mgmt. Ltd. v. CellzDirect, Inc.  It is undisputed that cell-free fetal DNA (cffDNA) exists in maternal blood and its presence is a natural phenomenon, and moreover that the size differentials and distributions that form the predicate basis for the claims at issue here are also naturally occurring.  But the panel majority held that the claims were not merely "directed to" that natural phenomenon, but rather were directed to a method that exploits the natural phenomenon that renders the claims patent-eligible.  Sounding a theme he first enunciated in Vanda Pharmaceuticals Inc. v. West-Ward Pharmaceuticals, Judge Lourie recognizes the distinction that the claims at issue recited "specific process steps—size discriminating and selectively removing DNA fragments that are above a specified size threshold" that increased the relative amount of cffDNA in the processed sample compared to maternal DNA and thus "change[d] the composition of the mixture" and produced a DNA-containing fraction that was different from what naturally occurs in maternal blood.

Judge Lourie's latest opinion reiterates most of these themes.  The basis of the decision remains that "this is not a diagnostic case.  And it is not a method of treatment case.  It is a method of preparation case."  As in the original opinion, the panel majority are somewhat critical of appellants' inability (in the majority's view) to "clearly identify the natural phenomenon that forms the basis of its challenge" but finds that the parties' differences on this point to be relatively meaningless distinctions and adopts Illumina's definition that the natural phenomenon underlying the claimed invention is that "cell-free fetal DNA tends to be shorter than cell-free maternal DNA in a mother's bloodstream."  But the majority arrives at the same conclusion as before:  although the claims are based on this natural phenomenon they "are not directed to that natural phenomenon but rather to a patent-eligible method that utilizes it" (emphasis in opinion).

And the basis of this conclusion relies at least in part on the specific method steps recited by the claims, which might constitute the ineluctable "something more" mandated by the Supreme Court's jurisprudence that looks enough like novelty to disturb any patent practitioner (or more likely scholar) concerned with doctrinal consistency.  But this insistence also cabins the scope of the claims to the specifically recited steps, which goes a long way towards avoiding the overbroad scope that seems to have been at least part of the Supreme Court's concern regarding preemption motivating the Court's attempts to restrict patent eligibility of certain types of claims.  Also important for the panel majority is that the choice of the size distinctions recited in the claims are not themselves natural phenomenon but are "human-engineered parameters that optimize the amount of maternal DNA that is removed from the mixture and the amount of fetal DNA that remains in the mixture in order to create an improved end product that is more useful for genetic testing than the original natural extracted blood sample."  And the result of the claimed methods are a mixture of DNA fragments having a change in their composition, being enriched in fetal-derived DNA fragments shorter than 500 (the '751 patent) or 300 (the '931 patent) basepairs.

The opinion, like its earlier version, distinguishes the claims at issue here with the claims in Supreme Court and Federal Circuit precedent found to be patent-ineligible, most notably that these claims are not directed to isolated DNA itself (Association for Molecular Pathology v. Myriad Genetics, Inc., 569 U.S. 576 (2013)), or merely detecting its presence in maternal blood (Ariosa), or even determining "whether a cell-free DNA fragment in a previously-prepared sample is fetal or maternal based on the natural size distribution of cell-free DNA fragments" but rather methods for preparing a mixture enriched in cffDNA based on "conventional separation technologies can be used in unconventional ways," specifically the claimed thresholds of 500 bp and 300 bp for separating fetal from material DNA ("Roche[] has presented no evidence that thresholds of 500 base pairs and 300 base pairs were conventional for separating different types of cell-free DNA fragments.").

An admittedly cursory comparison between the majority opinion issued in March and the one issued today finds precious little difference in the reasoning advanced by the Court.  In contrast, Judge Reyna's dissent appears to refine some of the Judge's arguments but at bottom reiterates his opinion that these claims are directed to a patent-ineligible natural phenomenon.

The Court is properly not transparent regarding the internal discussions and arguments asserted by those Judges who share the majority's views and those who share Judge Reyna's views.  But in light of the great similarities of these opinions it seems apparent that the Court was most comfortable not deciding to hear the case as a result of the revisions occasioned in the opinion handed down today.  Whether there are additional motivations (including putting the panel's disparate views in better condition for Supreme Court review) may become apparent if the Court deigns to revisit what it has wrought in the years since deciding the proper metes and bounds of Section 101 became a priority for the Court.

Illumina, Inc. v. Ariosa Diagnostics, Inc. (Fed. Cir. 2020)
Panel: Circuit Judges Lourie, Moore, and Reyna
Opinion by Circuit Judge Lourie; dissenting opinion by Circuit Judge Reyna

XY, LLC v. Trans Ova Genetics, LC (Fed. Cir. 2020)

By Kevin E. Noonan --

Last week, the Federal Circuit took the opportunity presented in an appeal from judgment on the pleadings in XY, LLC v. Trans Ova Genetics, LC to distinguish claims directed toward a patent-eligible invention from invalidation under the Supreme Court's imperfectly applied Alice Corp. v. CLS Bank Int'l (2014) test.

The case arose over XY's assertion of Reissue Patent No. RE46,559 as well as U.S. Patent Nos. 6,732,422, 7,723,116, and 8,652,769 against Trans Ova.  The claims of the '559 reissue patent were directed to improving flow cytometric analysis.  As set forth in the opinion, the claimed invention related to "apparatus and methods for real-time discrimination of particles while being sorted by flow cytometry . . . resulting in enhanced discrimination between populations of particles" which could include cells, specifically sperm cells based on whether the sperm carried an X or a Y chromosome.  Useful applications included animal husbandry.  The opinion contains this illustration of the functional geometry of apparatuses encompassed by the asserted claims:

and the following explanation:

After passing through a laser beam (34), particles coupled to a light-emitting element may emit signals, such as fluorescence, which are then collected by at least one signal detector, such as a forward scatter detector (30).  . . .  The "signal detector may be connected to a system . . . in which signal data indicative of the signals may be processed and analyzed in order to determine a sort decision."  "While a sort decision []n is being determined, particles may pass through a drop delay (35)." . . .  Following a sort decision, "a pulse of charge (37) may be applied to a droplet (23) containing a particle.  Droplets may pass through charged deflection plates (38) in order to sort particles into a desired sort receptacle (40)" [citations to the specification omitted].

The data produced in this way provides the basis for the apparatus to produce a more discriminating assessment of particles in a mixture, including differences between X- and Y-bearing sperm.  These methods involve signal processors programed to detect differences including "rotational alteration, translation operation, scaling operation, any combination of these and the like."

Claim 1 is representative:

1.  A method of operating a flow cytometry apparatus with at least n detectors to analyze at least two populations of particles in the same sample, the method comprising:
    (a) establishing a fluid stream in the flow cytometry apparatus with at least n detectors, the at least n detectors including a first detector and a second detector;
    (b) entraining particles from the sample in the fluid stream in the flow cytometry apparatus;
    (c) executing instructions read from a computer readable memory with a processor, the processor being in communication with the first detector in the flow cytometer, to detect a first signal from the first detector based on individual particles in the fluid stream;
    (d) executing instructions read from the computer readable memory with the processor, the processor being in communication with the second detector in the flow cytometer, to detect a second signal from the second detector based on the individual particles in the fluid stream;
    (e) executing instructions read from the computer readable memory with the processor to convert at least the first signal and the second signal into n-dimensional parameter data for detected particles in the sample, wherein the n-dimensional parameter data for particles from the at least two populations overlap in at least one of the dimensions;
    (f) executing instructions read from the computer readable memory with the processor to rotationally alter the n-dimensional parameter data so that spatial separation of the data from the particles from the at least two populations in the at least one dimension that is overlapped is increased;
    (g) executing instructions read from the computer readable memory with the processor to real-time classify each of the individual detected particles into one of a first population and a second population of the at least two populations based on at least the rotationally altered n-dimensional parameter data; and
    (h) using the real-time classification, sorting the individual particles with the flow cytometer.

Trans Ova filed a motion for judgment on the pleadings based on the '559 reissue patent being invalid because the claims were not patent-eligible under § 101.  The District Court granted this motion, applying its understanding of the Supreme Court's two step analysis as set forth in Alice Corp. v. CLS Bank Int'l, 573 U.S. 208 (2014).  The Court held that the claims were directed to an abstract idea, specifically a "mathematical equation that permits rotating multi-dimensional data."  Under step two of the Alice test, the District Court held that there was no "inventive concept" to render the claims patent eligible, based on XY's admission that all claim elements were known in the prior art (albeit not in the arrangement or order recited in the asserted claims).  The District Court also granted Trans Ova's motion to dismiss because asserting the '422, '116, and '769 patents was barred by the doctrine of claim preclusion based on an earlier lawsuit.

The Federal Circuit reversed the District Court on its patent eligibility decision, vacated the District Court's judgment on claim preclusion, and remanded, in an opinion by Judge Stoll joined by Judges Plager and Wallach.  With regard to judgment and invalidation for patent ineligibility, the panel held that the District Court had erred in its application of the Alice test.  Specifically, the Federal Circuit held that the asserted claims were not directed to an abstract idea; thus, if properly applied, the Alice test would have mandated that the District Court deny Trans Ova's motion.  The panel considered the Supreme Court's jurisprudence on patent eligibility to include the principle that "[l]aws of nature, natural phenomena, and abstract ideas are not patentable" to be tempered by the further Supreme Court instruction that "[a]t some level, 'all inventions . . . embody, use, reflect, rest upon, or apply laws of nature, natural phenomena, or abstract ideas,'" citing Mayo Collaborative Servs. v. Prometheus Labs, Inc., 566 U.S. 66, 71 (2012), and that further "[t]hus, an invention is not rendered ineligible for patent simply because it involves an abstract concept," citing Diamond v. Diehr, 450 U.S. 175, 187 (1981).  The District Court's error, according to the Federal Circuit, arose in its application of step one of the Alice test, because the asserted claims did not recite an abstract concept in the Court's view.  Even Trans Ova's counsel in argument before the Federal Circuit (according to the opinion) admitted that the claims of the '559 reissue patent were "not merely directed" to the mathematical concept, but rather to "a purportedly improved method of operating a flow cytometry apparatus to classify and sort particles into at least two populations in real time, wherein first and second detectors detect signals from individual particles and a processor converts the signals to n-dimensional parameter data and rotationally alters that data to increase spatial separation among the data, thereby facilitating classification and sorting of each individual particle."  The opinion expressly relied on the Supreme Court's Diehr opinion (as it must), as well as its own opinion in Thales Visionix Inc. v. United States, 850 F.3d 1343 (Fed. Cir. 201), for this conclusion.  The Court found the asserted claims of the '559 reissue patent to be analogous to the claims in Diehr because "the asserted claims 'describe in detail a step-by-step method' for accomplishing a physical process," citing Diehr.  The panel perceived a similar analogy with the Thales claims, which recited methods "in which at least two sensors or detectors gather data about an object before mathematical operations are applied to the gathered data to generate more accurate information about the object than was previously possible in the art."  And both sets of claims "purport to improve results" of previously practiced methods.  The panel appreciated the distinction between a claim directed to a mathematical formula and claims that apply a formula or algorithm to achieve "a function which the patent laws were designed to protect," citing Diehr.

The opinion expressly rejected Trans Ova's contention (and a basis for the District Court's decision) that the asserted claims of the '559 reissue patent were analogous to the claims in Parker v. Flook that were held ineligible because those claims "'simply provide[d] a new and presumably better method for calculating alarm limit values,' requiring nothing more than updating an alarm limit—a number—through application of the recited formula" according to the Flook opinion.  And the panel further understood there to be a distinction between this case and Flook because "[t]he patent application [in Flook] contained no 'disclosure relating to the chemical processes at work, the monitoring of process variables, or the means of setting off an alarm or adjusting an alarm system.'"  Bringing to mind Judge Lourie's emphasis on "specificities" in Vanda Pharmaceuticals Inc. v. Hikma Pharmaceuticals USA Inc., the opinion recites in distinguishing Flook the specifically recited steps in the claimed method.  The opinion cites in support of these distinctions the Supreme Court's holding in Diehr that "a process is not unpatentable simply because it contains a law of nature or a mathematical algorithm."  Finally, the panel distinguished these claims from those in Cleveland Clinic Foundation v. True Health Diagnostics LLC, 859 F.3d 1352 (Fed. Cir. 2017), which were held ineligible on Section 101 grounds, because the Cleveland Clinic claims "used a known laboratory technique to observe a previously unknown natural phenomenon," whereas here the '559 reissue patent claims were directed toward improving a known laboratory technique using the application of the mathematical formula.

With regard to the claim preclusion issue, the panel agreed with XY that the District Court erred by not comparing the claims of the '422, '116, and '769 patents asserted in this action with the asserted claims in the prior lawsuits.  While the District Court recited the proper test ("whether the scope of the patent claims asserted in the 2012 and 2016 lawsuits was 'materially' the same"), the Federal Circuit held that the court did not provide the required comparison.  "Instead," according to the panel opinion, "the district court concluded that claim preclusion applied to XY's '422 and '116 patent-infringement allegations simply because (1) these patents issued before XY filed the 2012 lawsuit; and (2) XY's allegations of infringement 'address the same, or substantially the same subject matter as previously filed claims and [are] directed at a previously accused product or process,'" citing to the District Court's ruling on the motion to dismiss.  The panel considered the District Court to have concluded, without explanation on the record, that this action was "'part of the same transaction that prompted the 2012 [l]awsuit,' because they were 'related in time, origin, and motivation' to, and would have been 'a convenient trial unit' with, the patents asserted in the 2012 lawsuit."  As for the '769 patent, which had not issued when the earlier lawsuits were commenced, the District Court believed litigation over this patent to be "a continuation of a patent already in suit" and thus that XY should have moved the District Court in that earlier litigation to amend its complaint to add the '769 patent.  The Federal Circuit consider its precedent, SimpleAir, Inc. v. Google LLC, 884 F.3d 1160, 1165 (Fed. Cir. 2018), to be "materially indistinguishable" from the circumstance here; in that case, the District Court had held separate lawsuits on two related patents involved the same cause of action solely because the two patents shared the same specification and were both terminally disclaimed over another prior patent.  The Federal Circuit held that later-asserted patent claims "could provide a larger claim scope to a patentee than earlier-asserted patent claims.  According to the Federal Circuit, here "[t]he district court did not even mention the asserted claims of the '422, '116, or '769 patents, let alone analyze their scope as compared to the scope of the patent claims asserted in XY's 2012 lawsuit," which comparison was required under its Simple Air decision.  On this basis, the Federal Circuit vacated and remanded the case to the District Court for a proper analysis of the similarities and differences of the claims asserted in this action and the prior lawsuits.

This case illustrates hopeful and less hopeful trends in the Federal Circuit's jurisprudence on Section 101 subject matter eligibility.  On the one hand the decision illustrates the ease with which a district court can be convinced by an emphasis on the underlying basis for a claimed invention that the claims are directed to the "abstract idea" underlying the invention.  On the other hand, this decision follows a trend of the Federal Circuit distinguishing claims directed to the abstract idea itself and those directed to an application thereof (see, e.g., Rapid Litigation Management Ltd. v. Cellzdirect, Inc.).  But before anyone become giddy at the prospect of the Court finding a reliable guide to subject matter eligibility, it must be considered that on the same day the Court handed down its decision in this case it also denied a petition for rehearing en banc in American Axle & Mfg. v. Neapco Holdings LLC, which will be the subject of a subsequent post.

XY, LLC v. Trans Ova Genetics, LC (Fed. Cir. 2020)
Panel: Circuit Judges Wallach, Plager, and Stoll
Opinion by Circuit Judge Stoll

The Three Properties of Patent-Eligibility: An Empirical Study

By Michael Borella and Ashley Hatzenbihler* --

Patent eligibility is a bit of a mess these days.  Ever since the Supreme Court handed down the Alice v. CLS Bank decision six years ago, the distinction between what might be subject matter that can be patented and what is not has been blurry at best.

Famously, the Court legislated its own 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 the Alice 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.

However, the Court declined to define what it meant by "abstract idea" or "significantly more," leaving that for the Federal Circuit and the rest of us to figure out.  By admission of several of its own members, the Federal Circuit has failed to do so in a cogent fashion.  As just one example (and this is a doozy of an example) Judge Plager wrote in 2018's Interval Licensing v. AOL case that "[t]he law . . . renders it near impossible to know with any certainty whether the invention is or is not patent eligible" and "a search for a definition of 'abstract ideas' in the cases on § 101 from the Supreme Court, as well as from this court, reveals that there is no single, succinct, usable definition anywhere available."

Meanwhile, the USPTO's interpretation of Alice has added more steps to the test, clarified some aspects, muddied others, and counts for little to nothing in the courts.

Simply put, the problem is that we are spending too much time trying to ascertain the unknowable contours of Alice.  The Federal Circuit has separated and combined and separated and combined the two parts to the point where some have questioned whether Alice is actually a one-part inquiry in practice.  Further, at the prompting of ill-reasoned language from Justice Breyer in Mayo v. Prometheus, the Federal Circuit has amplified that case's overlap between §§ 101, 102, 103, and 112.

Rather than approach the Alice test with the rigidity of an automaton, there is a more pragmatic approach.  As described in a previous article, what the Federal Circuit is actually looking for to rule that a claim is patent-eligible can be expressed as three properties:  specificity, technical character, and novelty.  And not only does a claim almost certainly have to exhibit each to clear the § 101 hurdle, but there needs to be a nexus between these properties.  In other words, if one element of a claim is specific, another has technical character, and yet another is novel, that probably will not cut it.  Instead, a single element should exhibit all three.

That is not to say that claims lacking one of these properties are automatically ineligible -- there is a certain degree of flexibility in how the Federal Circuit balances the three.  But, as a rule, the more specific, technical, and novel your claim, the more likely it is to be patent-eligible.  Conversely, the less specific, technical, and novel your claim, the less likely it is to be patent-eligible.  A synthesis of the Federal Circuit § 101 case law makes this clear, and we have the data to back it up.

But before we get into the empirical stuff, let's do something that the Supreme Court did not do and define our terminology.

Claim specificity is not the same thing as claim breadth, although in practice the two are correlated.  Specificity, though, refers to whether and how much the claim recites a series of steps or set of elements that can be used to achieve a goal, rather than the goal itself.  The latter style has been referred to as "result-oriented," "outcome-oriented," and "black box" claiming, where the claim recites what the inventor hopes to achieve without reciting how the inventor purports to have achieved that goal.  The Federal Circuit often lauds the specificity of claims that it eventually find eligible (see McRO, Inc. v. Bandai Namco Games America Inc., Enfish LLC v. Microsoft Corp., Trading Techs Int'l v. CQG, Inc., and SRI Int'l Inc. v. Cisco Systems Inc.) while disparaging claims that lack this property (see Electric Power Group, LLC v. Alstom S.A., Two-Way Media Ltd. v. Comcast Cable Communications, LLC, and American Axle & Mfg. v. Neapco Holdings LLC).

Technical character is a bit trickier to explain.  Notably, § 101 lacks any requirement that inventions be technical, and even Alice only hinted that such a requirement might be the case.  But the Federal Circuit has run with these sub-dicta suggestions, using the term "technical solution to a technical problem" among others to describe what it is looking for in eligible claims.  To understand this property, it helps to imagine all inventions on a spectrum of technical character.  Those at one extreme are clearly technical because they improve the operation of machines (engine control, error correction coding, image sharpening, memory management in a computer).  Those at the other extreme are clearly more business-oriented than technical (derivative trading, annuity calculations, human resource management, retail schemes).  Put another way, the former improves how a machine works, while the latter improves how a business works.  The fact that business-oriented inventions can be run on computers (and may even require computers to obtain meaningful results) is largely irrelevant to this analysis -- such claims are still "non-technical".  Finally, in the middle of the spectrum we have inventions that improve how a person works (graphical user interfaces, video game animations, livestock management).  These could be viewed as either technical or non-technical depending on the actual claim language at play.

Novelty is a simple enough concept, and is well-understood in patent law.  The exact nature of the de facto prior art analysis under § 101 is unclear.  Nonetheless, comparisons between claimed inventions and prior art are found in a vast number of § 101 decisions including the aforementioned KPN, Chamberlain, Enfish, and McRO cases, as well as Cellspin Soft, Inc. v. Fitbit, Inc., Data Engine Technologies LLC v. Google LLC, Core Wireless Licensing S.A.R.L. v. LG Electronics, Inc., and Internet Patents Corp. v. Active Network, Inc., just to name a few.

So are the three properties a better way of understanding patent-eligibility than the two-part test?  We think so.  Do we like it?  No.  Do we think it is what the law should be?  Of course not.  But don't just take it from us.  Anyone who balks at the three properties should take note of Dropbox Inc. v. Synchronoss Techs. Inc. where the Federal Circuit recently wrote "an inventive concept exists when a claim recites a specific, discrete implementation of the abstract idea where the particular arrangement of elements is a technical improvement over the prior art" (emphasis added).

To quantify the three properties, we selected 24 notable post-Alice Federal Circuit decisions and scored them on a scale of 0-2 for each property, where 0 is a low score and 2 is a high score.  This scoring was not done in a vacuum -- we adhered to the following process.  If the Court spoke positively of a particular property in a decision, the score for that property would be a 2.  If the Court spoke negatively of a particular property, the score for that property would be a 0.  If the Court spoke neither positively nor negatively about a property or did not discuss the property in sufficient detail, we would review the claim language and the Court's discussion of the invention to come up with a value.

Thus, a specificity of 2 indicates that the claim describes the elements or steps involved in achieving its goal.  A specificity of 0 indicates that the claim is outcome-oriented.  A specificity of 1 indicates that the claim is partially descriptive and partially outcome-oriented.

Likewise, a technical character of 2 indicates that the claim is focused on a technical solution to a technical problem (i.e., improving the operation of a machine or system).  A technical character of 0 indicates that the claim is focused on a non-technical problem (i.e., improving the operation of a business).  A technical character of 1 indicates that the claim exhibits both technical and non-technical aspects (i.e., improving human performance or facilitating human decision making).

Similarly, a novelty of 2 indicates that the Court has stated that the claim is focused on an advance over the prior art.  A novelty of 0 indicates that the Court has stated that the claim is focused on a long-standing procedure or uses well-understood, routine, or conventional elements or steps to achieve its goal.  A novelty of 1 indicates that the Court made little or no comparison between the claim and the prior art.

Once determined, the specificity, technical character, and novelty scores for each case were added, resulting in summed values from 0 to 6.  Intuitively, one would expect that the higher this sum, the more likely that a claim is to be held eligible.

So, on to the data.

Case	Specificity (0-2)	Technical Character (0-2)	Novelty (0-2)	Sum (0-6)	Eligible?
DDR Holdings, LLC v. Hotels.com, L.P. (Fed. Cir. 2014)	2	1	1	4	Yes
Internet Patents Corp. v. Active Network, Inc. (Fed. Cir. 2015)	0	1	1	2	No
Versata Dev. Group, Inc. v. SAP America, Inc. (Fed. Cir. 2015)	2	0	0	2	No
Electric Power Group, LLC. V. Alstom S.A. (Fed. Cir. 2016)	0	0	1	1	No
Enfish LLC v. Microsoft Corp. (Fed. Cir. 2016)	2	2	2	6	Yes
McRo, Inc. v. Bandai Mamco Games America, Inc. (Fed. Cir. 2016)	2	2	2	6	Yes
Shortridge v. Found. Construction Payroll Service, LLC (Fed. Cir. 2016)	2	0	0	2	No
Thales Visionix Inc. v. U.S. (Fed. Cir. 2017)	0	2	2	4	Yes
The Chamberlain Group, Inc. v. Techtronic Indus., Co. (Fed. Cir. 2017)	0	1	1	2	No
Trading Techs Int'l v. CQG, Inc. (Fed. Cir. 2017)	2	1	2	5	Yes
Two-Way Media Ltd. v. Comcast Cable Commc'n., LLC (Fed. Cir. 2017)	0	1	1	2	No
Berkheimer v. HP Inc. (Fed. Cir. 2018)	1	2	2	5	Yes
Core Wireless Licensing S.A.R.L. v. LC Elec., Inc. (Fed. Cir. 2018)	2	2	2	6	Yes
Data Engine Tech. LLC v. Google LLC (Fed. Cir. 2018)	2	2	2	6	Yes
SAP America, Inc. v. InvestPic LLC (Fed. Cir. 2018)	0	0	2	2	No
Cellspin Soft, Inc. v. Fitbit, Inc. (Fed. Cir. 2019)	2	1	1	4	Yes
ChargePoint, Inc. v. SemaConnect, Inc. (Fed. Cir. 2019)	0	1	1	2	No
Koninklijke KPN N.V. v. Gemalto M2M GmbH (Fed. Cir. 2019)	2	2	2	6	Yes
SRI Int'l Inc. v. Cisco Sys. Inc. (Fed. Cir. 2019)	1	2	2	5	Yes
Trading Techs Int'l v. IBG LLC (Fed. Cir. 2019)	2	0	1	3	No
Elec. Commc'n. Techs., LLC v. ShoppersChoice.com, LLC (Fed. Cir. 2020)	0	0	0	0	No
Ericsson Inc. v. TCL Commc'n. Tech. Holdings Ltd. (Fed. Cir. 2020)	0	1	1	2	No
Dropbox, Inc. v. Synchronoss Techs. Inc. (Fed. Cir. 2020)	0	1	0	1	No
Uniloc USA, Inc. v. LG Elecs. USA, Inc. (Fed. Cir. 2020)	1	2	2	5	Yes

The 24 scored cases include 12 that were ruled eligible and 12 that were ruled ineligible.  Of the eligible cases, the sums of all landed in the range of 4-6.  Of the ineligible cases, the sums of all landed in the range of 0-3.  Thus, our initial intuition appears to be correct -- eligible claims tend to be more specific, technical, and novel, while ineligible claims are less specific, technical, and novel.  Notably, there were five with the highest possible sum of 6, but only one with the lowest possible sum of 0.

Overall, there was a correlation of 0.91 between sum and whether the claim was patent-eligible (we converted the "yes" or "no" results of the rightmost column to 1's and 0's respectively to perform correlations).  While this is a very high correlation, we need to keep in mind that in most cases correlation does not mean causation.  However, we believe that our analysis reflects a causative link from the properties of specificity, technical character, and novelty to eligibility.  In particular, the Court often states explicitly that a claim is eligible because it exhibits each of the three properties to at least some degree, or that a claim is ineligible because it lacks at least one of these properties.

We also calculated correlations between each of the properties and the eligibility outcome.  For specificity, the correlation was 0.58, for technical nature, the correlation was 0.80, and for novelty, the correlation was 0.74.  These results have an interesting implication for patent practitioners drafting initial claim sets or making amendments.  The technical nature of an invention appears to have the biggest impact on whether it is found to be eligible, but the practitioner has the least control over this aspect.  An invention that solves a business problem may be difficult to recast as solving a technical problem even using the cleverest claim drafting techniques.  Specificity and novelty, however, are more under the control of the practitioner, as detailed elements directed toward features believed not to be in the prior art can always be added (modulo the applicant's needs of course).  Thus, for a claim that is on the fence with respect to its technical character, making sure that it has at least one element that is specific and novel may help.

To sum up, the three properties appear not only to be a reasonably useful way of thinking about patent-eligibility in a world where the two-part test is bewildering and obtuse, it is also highly predictive of patent-eligibility outcomes.[1]  Nonetheless, while we attempted to avoid any bias during the scoring process, we are aware that there is a degree of subjectivity in our evaluations.  Moreover, the set of case law should be expanded beyond these 24 samples.  Therefore, we welcome others to suggest adjustments to the scoring and/or to continue this study with further cases.

[1] Of course, when you are before the USPTO or a Court, you need to argue the two parts of Alice.  But keeping the three properties in mind can help you hone those arguments.

* Ashley Hatzenbihler is a student at Loyola University Chicago School of Law where she is focusing her studies on Intellectual Property.  Ashley is a staff member of the Loyola University Chicago Law Review and a Summer Associate at McDonnell Boehnen Hulbert & Berghoff.  Prior to law school, Ashley received her Bachelors in Mechanical Engineering with a minor in Mathematics from Marquette University.  Ashley also completed her Masters of Science in Mechanical Engineering for her research on the optimal conditions for auto-ignition testing of diesel fuels and surrogates from Marquette University.

Federal Circuit Rules Public Key Cryptography Algorithm Invalid Under 35 U.S.C. § 101

Note:  The below is a sarcastic parody, in the spirit of our earlier sarcastic parodies.

By Michael Borella --

WASHINGTON D.C., June 23, 1984.  In a unanimous decision, the Federal Circuit has ruled U.S. Patent No. 4,405,829 invalid under 35 U.S.C. § 101, finding the claimed invention directed to an abstract idea.  The '829 patent, assigned to the Massachusetts Institute of Technology (MIT), was the brainchild of three of its professors, Ronald Rivest, Adi Shamir, and Leonard Adleman.  Lauded in academic circles as one of the first viable public-key cryptosystems and duly granted by the U.S. Patent and Trademark Office, the Court nonetheless found that the patent lacked an inventive concept necessary for patentability.

Soon after issuance, MIT sought to license the patent to various companies developing security software and hardware.  Speaking under condition of anonymity, in-house counsel at one of these companies said, "We knew that there was no way the courts would uphold this patent, so there was no reason to take it seriously."  A number of these potential licensees joined a declaratory judgment action, asking the U.S. District Court for the District of Massachusetts to find the claims of the patent ineligible.  The District Court did so, and MIT appealed to the Federal Circuit.

Claim 1, which was agreed to be representative, recites:

The Court began its analysis "by first determining whether the claims at issue are directed to a patent-ineligible concept, such as law of nature, natural phenomena, or abstract idea."  This did not take long, as it noted that, "[t]he focus of the claims, as is plain from their terms, is on encoding a message into ciphertext using mathematical techniques and decoding the message from the ciphertext using complementary mathematical techniques -- that is all abstract."

MIT countered, arguing that the claimed invention was "revolutionary in nature."  It asserted that, prior to the '829 patent, encryption was largely based on symmetric keys.  Such systems involved using a key to encrypt a message to ciphertext, and the same key again to decrypt the ciphertext back into the message.  The disadvantage of such a system is that the symmetric key had to first be shared or distributed across an insecure medium in order to be effective.  The claimed invention, according to MIT, overcame this technical barrier by generating two mathematically inverse keys -- a public key (e), and a private key (based on d, p, and q).  The security of the system relied on the intractability of factoring large prime numbers (p and q).  Further, MIT contended that the claimed cryptosystem would facilitate "many future innovations, such as electronic commerce, virtual private networks, security of stored data, and military communications."

The Court was not convinced, stating that "even if the techniques claimed are groundbreaking, innovative, or brilliant, that is not enough for eligibility -- a claim for a new abstract idea is still an abstract idea."  Notably, the Court found that "the subject matter is nothing but a series of mathematical calculations based on selected information."  Moreover, the Court was skeptical about the potential of the claimed cryptosystem, relying on statements made by the challengers' expert indicating that "it would be dozens of years before computers were powerful enough to carry out the claimed exponentiations a reasonable time frame."

Finding the claim directed to an abstract idea, the Court moved on to determining whether the remaining elements of the claim constitute an inventive concept.  Such a concept needs to be "sufficient to transform the claimed abstract idea into a patent eligible application."  Here, the Court found that all additional elements, such as the encoding means, decoding means, and communications channel, "merely invoke well-understood, routine, conventional components and activity to apply the abstract idea identified previously."  Indeed, the Court noted that the encoding means and decoding means were "functionality claimed at a high level of generality, thus failing to limit the claim to a particular embodiment of this abstract idea."  Particularly, "nothing in the claims, understood in light of the specification, requires anything other than an off-the-shelf, conventional computer, or components thereof."

MIT attempted to establish that its technique was unconventional, but the Court rapidly shot down that notion.  It held that "the mathematical principles that MIT refers to may indeed be innovative, but they are also abstract," and "one cannot argue that a concept held abstract under part one of the analysis is inventive under part two."  Additionally, the Court observed that "the allegedly unconventional technique did no more than apply longstanding, well-understood mathematical operations -- multiplication, exponentiation, and modulus, for example."

Thus, the claims lack an inventive concept and fail the § 101 test.  The Court summed up by stating, "[a]n inventor who makes an advance such as this one cannot obtain patent protection for the advance itself and must seek protection outside of patent law, such as in the law of trade secrets."

Packet Intelligence LLC v. NetScout Systems, Inc. (Fed. Cir. 2020)

By Michael Borella --

Introduction

Packet Intelligence sued NetScout in the Eastern District of Texas, alleging infringement of U.S. Patent Nos. 6,665,725, 6,839,751, and 6,954,789.  The District Court ruled that all three patents were valid under 35 U.S.C. §§ 101 and 102, and infringed.  The § 101 dispute was tried at the bench.  NetScout appealed.

The core technological aspects under dispute are described reasonably well in the '789 patent as follows:

Some prior art packet monitors classify packets into connection flows.  The term "connection flow" is commonly used to describe all the packets involved with a single connection.  A conversational flow, on the other hand, is the sequence of packets that are exchanged in any direction as a result of an activity—for instance, the running of an application on a server as requested by a client.  It is desirable to be able to identify and classify conversational flows rather than only connection flows.  The reason for this is that some conversational flows involve more than one connection, and some even involve more than one exchange of packets between a client and server.

A hypothetical example of this might be that a packet monitor examining packets only on the granularity of TCP connection flows (defined by a 5-tuple of source and destination IP address, source and destination port, and protocol) might not be able to identify two TCP connection flows involving in the same transaction as being related to one another as members of a conversational flow.  Notably, the '789 patent has a June 1999 priority date, a time frame in which this type of packet monitor typically was only able to identify flows based on static filters.  Today's packet monitors largely have the ability to dynamically identify multiple related flows.

Claim 19 of the '789 patent was agreed upon to be representative, and recites:

19.  A packet monitor for examining packets passing through a connection point on a computer network, each packet conforming to one or more protocols, the monitor comprising:
    (a) a packet acquisition device coupled to the connection point and configured to receive packets passing through the connection point;
    (b) an input buffer memory coupled to and configured to accept a packet from the packet acquisition device;
    (c) a parser subsystem coupled to the input buffer memory and including a slicer, the parsing subsystem configured to extract selected portions of the accepted packet and to output a parser record containing the selected portions;
    (d) a memory for storing a database comprising none or more flow-entries for previously encountered conversational flows, each flow-entry identified by identifying information stored in the flow-entry;
    (e) a lookup engine coupled to the output of the parser subsystem and to the flow-entry memory and configured to lookup whether the particular packet whose parser record is output by the parser subsystem has a matching flow-entry, the looking up using at least some of the selected packet portions and determining if the packet is of an existing flow; and
    (f) a flow insertion engine coupled to the flow-entry memory and to the lookup engine and configured to create a flow-entry in the flow-entry database, the flow-entry including identifying information for future packets to be identified with the new flow-entry, the lookup engine configured such that if the packet is of an existing flow, the monitor classifies the packet as belonging to the found existing flow; and if the packet is of a new flow, the flow insertion engine stores a new flow-entry for the new flow in the flow-entry database, including identifying information for future packets to be identified with the new flow-entry,
    wherein the operation of the parser subsystem de-pends on one or more of the protocols to which the packet conforms.

We will discuss the Court's § 101 analysis of this claim.

In Alice Corp. v. CLS Bank Int'l, the Supreme Court set forth a two-part test to determine whether claims are directed to patent-eligible subject matter under § 101.  One must first decide whether the claim at hand 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.

Notably, procedure for the proper application of this test with the abstract idea exception has been inconsistently defined and is confusing in practice.  A potentially more workable definition of patent eligibility is that a claim is directed to an abstract idea if all of its elements are either non-specific, address a non-technical problem, or known in the art.  Thus, a claim is more likely to survive a § 101 challenge if one or more elements thereof have three qualities:  specificity, a technical problem that they solve, and some degree of novelty.

The Majority Opinion

Judge Lourie wrote for the majority, which was he and Judge Hughes.  The majority provided an overview of the District Court's § 101 analysis, of note being that the District Court made a series of factual findings with respect to the claimed invention versus the prior art and based its holding of eligibility on those findings.

In any event, the majority framed its opinion by stating that "[i]n our eligibility analysis, we consider the claim as a whole and read it in light of the specification."  The majority cited to a number of previous Federal Circuit decisions relating to the patent-eligibility of computer-implemented and networking inventions.  In this, the majority emphasized that the inquiry often turns on "whether the focus of the claims is on a 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."

With the § 101 framework in place, the majority agreed with the District Court that claim 19 was not directed to an abstract idea.  Particularly, "claim 19 purports to meet a challenge unique to computer networks, identifying disjointed connection flows in a network environment" and provides "detail how this is achieved in several steps."

Moreover, "[t]he asserted patents' specifications make clear that the claimed invention presented a technological solution to a technological problem."  They "explain that known network monitors were unable to identify disjointed connection flows to each other, and the focus of the claims is a specific improvement in computer technology: a more granular, nuanced, and useful classification of network traffic."

NetScout argued that Two-Way Media Ltd. v. Comcast Cable Commc'ns, LLC mandates limiting the Alice part one analysis to the specification's concrete embodiments.  But the majority observed that Two-Way Media stands for the notion that the claims, "not the specification, must include an inventive concept" under Alice part two.  Since the majority concluded that claim 19 was not abstract under part one, it did not have to reach part two.

Accordingly, the claimed invention was found to be patent-eligible.

Judge Reyna's Dissent

Judge Reyna wrote in dissent because, in his view, "the claims are directed to the abstract idea of identifying data packets as belonging to conversational flows rather than discrete connection flows."  Judge Reyna stressed that "the asserted advance over the prior art is the classification of data packets according to the flow of data associated with given activities rather than potentially disjointed exchanges transmitted over individual connections."  And, he found this distinction to be "conceptual, not technological, in the absence of specific means by which that classification is achieved."

The crux of the disagreement between Judge Reyna and the majority is that Judge Reyna limited his § 101 inquiry to the language of the claim, while the majority looked to the specification.  Judge Reyna noted that claim 19 recites "only a general method of sorting data packets according to any flow, not a specific means of sorting packets by conversational flow," and that "the claim does not recite how the individual packets are actually identified as belonging to a conversational flow beyond the functional requirement that identifying information is used."

Judge Reyna admitted that the specification provides the necessary detail, but "[n]one of these processes or components are recited in claim 19, and the claim elements have not been construed as limited to the structures and processes disclosed in the embodiments."  Thus, "the components and operations actually recited in the claims do not provide the specificity required to transform a claim from one claiming only a result to one claiming a way of achieving it."  Without this detail, Judge Reyna believes that the invention is drawn to information processing "falling within the realm of abstract ideas."

Conclusion

The majority found claim 19 to be a reasonably specific technical invention that provided an advance over the prior art.  Judge Reyna disputed this finding because he views the claim as being non-specific in terms of its technical character, thereby making any such improvement to be too abstract for patenting.  The case turned on a disagreement in fundamental principle -- when and how should one read the technical aspects of a specification into the broader language of the claims, if at all?  Until this question is answered, the appropriate level of detail to place into claims will remain an open issue.

Packet Intelligence LLC v. NetScout Systems, Inc. (Fed. Cir. 2020)
Panel: Circuit Judges Lourie, Reyna, and Hughes
Opinion by Circuit Judge Lourie; opinion concurring in part and dissenting in part by Circuit Judge Reyna

Electronic Communication Technologies, LLC v. ShoppersChoice.com, LLC (Fed. Cir. 2020)

By Michael Borella --

Electronic Communication Technologies (ECT) sued ShoppersChoice in the Southern District of Florida for allegedly infringing claim 11 of U.S. Patent No. 9,373,261.  The claim recites:

11.  An automated notification system, comprising:
    one or more transceivers designed to communicate data;
    one or more memories;
    one or more processors; and
    computer program code stored in the one or more memories and executed by the one or more processors, the computer program code comprising:
        code that enables a first party associated with a personal communication device (PCD) to input or select authentication information for use in connection with a subsequent notification communication session involving advance notice of a delivery or pickup of a good or service at a stop location by a mobile thing (MT);
        code that causes storage of the authentication information;
        code that monitors location or travel information in connection with the MT;
        code that causes initiation of the notification communication session to the PCD with the one or more transceivers, in advance of arrival of the MT at the stop location, based at least in part upon the location or travel information associated with the MT;
        code that, during the notification communication session, provides the authentication information to the PCD that indicates to the first party that the notification communication session was initiated by an authorized source; and
        code that, during the notification communication session, enables the first party to select whether or not to engage in a communication session with a second party having access to particulars of the pickup or delivery.

ShoppersChoice moved that the claim was invalid under 35 U.S.C. § 101, and the District Court granted this judgment on the pleadings.  ECT appealed.

In Alice Corp. v. CLS Bank Int'l, the Supreme Court set forth a two-part test to determine whether claims are directed to patent-eligible subject matter under § 101.  One must first decide whether the claim at hand 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.

Notably, procedure for the proper application of this test with the abstract idea exception has been inconsistently defined and is confusing in practice.  A potentially more workable definition of patent eligibility is that a claim is directed to an abstract idea if all of its elements are either non-specific, address a non-technical problem, or known in the art.  Thus, a claim is more likely to survive a § 101 challenge if it has three qualities:  specificity, a technical problem that it solves, and some degree of novelty.

Applying part one of Alice, the Court rapidly determined that the claim is directed to the abstract idea of "providing advance notification of the pickup or delivery of a mobile thing."  Particularly, the Court agreed with the District Court judge that "business practices designed to advise customers of the status of delivery of their goods have existed at least for several decades, if not longer."  And as we know from Alice, claims to longstanding business practices are given a dim view under § 101.

ECT argued that the claimed invention incorporated security enhancements, such as authentication of the notification communication session.  But the Court found these features to be claimed, and described in the specification, at so high a level that they could be virtually anything.  Therefore, they did not render the claim any less abstract.  Furthermore, "the process of recording authentication information . . . and including that information in a subsequent communication with the customer is abstract not only because it is a longstanding commercial practice, but also because it amounts to nothing more than gathering, storing, and transmitting information."

ECT also argued that its procedural openness and success at the USPTO should be factored into the § 101 inquiry.  ECT noted that the application "sailed through" the USPTO with "complete and total transparency."  Moreover, ECT requested that the USPTO reconfirm its findings of patentability under § 101 after receiving a notice of allowance, which the USPTO did.  Nonetheless, it should be surprising to absolutely nobody that the Federal Circuit does not put much weight on what the USPTO thinks about § 101 in any given matter.  The Court wrote:

These specific details relating to the procedure of prosecution before the USPTO bear no relationship to the subject matter to which claim 11 is directed and do not negate the fact that claim 11 is directed to longstanding business practices.  Nor do ECT's purported diligence and good faith during patent prosecution before the USPTO in any way shield the patent's claims from Article III review for patent eligibility.

Accordingly, the Court found the claim abstract and moved on to step two of Alice.  Here, it found that claim 11 did not pass muster "[b]ecause [it] is specified at a high level of generality, is specified in functional terms, and merely invokes well-understood, routine, conventional components and activity to apply the abstract idea identified previously."

ECT made an interesting argument, stating that in another § 101 case, the Court "held a far shorter, far less enabled claim valid."  The Court shot down this comparison, stating that "patent eligibility turns on the content of the claims, not merely on the number of words recited in the claims."  The Court went on to observe that "just because a patent claim is enabled does not mean that the claim is patent eligible—subject matter eligibility and enablement are separate inquiries, irrespective of any overlap between the two."

So the Court seems to be affirming that there is -- or at least can be -- some commonality between the § 101 and § 112(a) inquiries.  But this commonality is not fleshed out any further.  For that matter, the Court's earlier statements also imply overlap between the analyses of § 101 and § 112(f), but again we are left to guess as to the extent and implications of any such overlap.

Finally, ECT argued that the District Court should have construed the claims before rendering a § 101 decision.  But ECT did not identify any terms needing construction, so the Court dismissed this notion and held that claim 11 does not meet the requirements of § 101.

Electronic Communication Technologies, LLC v. ShoppersChoice.com, LLC (Fed. Cir. 2020)
Panel: Chief Judge Prost and Circuit Judges Dyk and Wallach
Opinion by Circuit Judge Wallach