Patent Docs

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

By Donald Zuhn --

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

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

Athena then sets forth the question presented as:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

With respect to the first reason, Athena argues that:

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

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

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

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

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

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

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

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

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

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

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

For additional information regarding this topic, please see:

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

Solicitor General Files Brief in Berkheimer v. HP

By Michael Borella --

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

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

As background, the Supreme Court's Alice decision set forth a two-part test to determine whether claims are directed to patent-eligible subject matter under § 101.  One must first decide whether the claim at hand is directed to a judicially-excluded law of nature, a natural phenomenon, or an abstract idea.  If so, then one must further decide whether any element or combination of elements in the claim is sufficient to ensure that the claim amounts to significantly more than the judicial exclusion.  But generic computer implementation of an otherwise abstract process does not qualify as "significantly more," nor will elements that are well-understood, routine, and conventional lift the claim over the § 101 hurdle.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

By Donald Zuhn --

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

And the brief continues:

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

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

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

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

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

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

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

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

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

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

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

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

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

By Michael Borella --

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

The Invention

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

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

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

The Claims

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

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

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

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

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

The Patent-Eligibility Test

The two-part test from Alice Corp. v. CLS Bank Int'l is used to determine whether claims are eligible for patenting under 35 U.S.C. § 101.  One must first decide whether the claim at hand involves a judicially-excluded law of nature, a natural phenomenon, or an abstract idea.  If so, then one must further decide whether any element or combination of elements in the claim is sufficient to ensure that the claim amounts to significantly more than the judicial exclusion.  But, elements or combinations of elements that are well-understood, routine, and conventional will not lift the claim over the § 101 hurdle.  While this inquiry is generally carried out as a matter of law, factual issues can come into play when determining whether something is well-understood, routine, and conventional.

The District Court Proceedings

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

The Federal Circuit Decision

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

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

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

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

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

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

USPTO Subject Matter Eligibility October Update: Example 46

By Michael Borella --

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

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

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

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

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

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

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

Claim 1

Claim 1 recites:

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

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

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

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

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

As a consequence, claim 1 is ineligible.

Claim 2

Claim 2 depends from claim 1, and recites:

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

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

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

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

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

Claim 3

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

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

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

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

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

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

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

Therefore, claim 3 is eligible.

Claim 4

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

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

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

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

Analysis

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

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

Federal Circuit Invalidates Edison's Light Bulb Patent

By Michael Anderson and Michael Borella --

August 27, 1890

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

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

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

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

The claims of the '898 patent recite:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

USPTO Publishes Update to Its Subject Matter Eligibility Guidance

By Michael Borella --

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

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

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

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

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

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

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

And now, on to the guts of the October Update

When Does a Claim Recite a Judicial Exception?

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

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

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

The Grouping of Abstract Ideas

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

Regarding mathematical concepts, the USPTO writes:

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

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

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

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

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

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

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

When is a Judicial Exception Integrated into a Practical Application?

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

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

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

Nonetheless, the USPTO does prescribe that:

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

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

The Prima Facie Case

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

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

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

Educating the Examining Corps

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

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

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

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

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

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

By Joseph Herndon --

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

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

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

The Patent

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

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

Representative claim 21 recites:

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

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

Claim 41 recites:

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

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

Claim 46 recites:

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

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

Motion to Dismiss

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

Abstract Idea

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

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

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

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

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

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

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

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

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

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

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

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

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

Opinion and Order by Chief District Judge Mark S. Davis

iNO Therapeutics LLC v. Praxair Distribution Inc. (Fed. Cir. 2019)

By Kevin E. Noonan --

Albert Einstein once famously (albeit perhaps apocryphally) said that "[c]ompound interest is the most powerful force in the universe."  Not to contradict the creator of 20th Century physics, but it is just as likely that the most powerful force in the universe is the power of unintended consequences.  The Federal Circuit illustrated this power in its recent decision in iNo Therapeutics LLC v. Praxair Distribution Inc. with regard to Justice Breyer's exhortation, in his Mayo Collaborative Serv. Inc. v. Prometheus Laboratories opinion, regarding the need to beware of "interpreting patent statutes in ways that make patent eligibility 'depend simply on the draftsman's art' without reference to the 'principles un­derlying the prohibition against patents for [natural laws],'" citing Flook v. Parker.

Plaintiffs iNO Therapeutics, LLC, Mallinckrodt Hospital Products Inc., and Mallinckrodt Hospital Products IP Inc. asserted U.S. Patent Nos. 8,282,966; 8,293,284; 8,795,741; 8,431,163; and 8,846,112, which the opinion "collectively [termed the] 'heart failure patents' or 'HF patents'" against Praxair Distribution Inc. and Praxair Inc.  Plaintiffs also asserted U.S. Patent Nos. 8,573,209; 8,776,794; 8,776,795; 9,265,911; and 9,295,802 which the opinion "collectively [termed the] 'delivery system infrared patents' or 'DSIR patents'" and which were directed to devices for administering nitric oxide gas.  As explained in the opinion, inhaled nitric oxide (iNO) gas had been "used to treat infants experiencing hypoxic respiratory failure" since at least the early 1990's.  However, in certain cases this treatment results in increased pulmonary edema for infants having a congenital defect, left ventricular hypertrophy.  The patents-in-suit were directed to methods and a gas delivery device to ameliorate this side-effect, as exemplified by the following claims:

The '741 patent:

1.  A method of treating patients who are candidates for inhaled nitric oxide treatment, which method reduces the risk that inhalation of nitric oxide gas will induce an increase in pulmonary capillary wedge pressure (PCWP) leading to pulmonary edema in neonatal patients with hypoxic respiratory failure, the method comprising:
    (a) identifying a plurality of term or near-term neonatal patients who have hypoxic respiratory failure and are candidates for 20 ppm inhaled nitric oxide treatment;
    (b) determining that a first patient of the plurality does not have left ventricular dysfunction;
    (c) determining that a second patient of the plurality has left ventricular dysfunction, so is at particular risk of increased PCWP leading to pulmonary edema upon treatment with inhaled nitric oxide;
    (d) administering 20 ppm inhaled nitric oxide treatment to the first patient; and
    (e) excluding the second patient from treatment with inhaled nitric oxide, based on the determination that the second patient has left ventricular dysfunction, so is at particular risk of increased PCWP leading to pulmonary edema upon treatment with inhaled nitric oxide.

The '794 patent:

1.  A gas delivery device comprising:
    a gas source to provide therapy gas comprising nitric oxide;
    a valve attachable to the gas source, the valve including an inlet and an outlet in fluid communication and a valve actuator to open or close the valve to allow the gas through the valve to a control module that delivers the therapy gas comprising nitric oxide in an amount effective to treat or prevent hypoxic respiratory failure; and
    a circuit including:
    a memory to store gas data comprising one or more of gas identification, gas expiration date and gas concentration; and
    a processor and a transceiver in communication with the memory to send and receive signals to communicate the gas data to the control module that controls gas delivery to a subject and to verify one or more of the gas identification, the gas concentration and that the gas is not expired.

(where the italicized limitations are relevant to the Court's decision).  The opinion also notes that the Court had earlier affirmed the PTAB's invalidation of the '112 patent in inter partes review (see "Praxair Distribution, Inc. v. Mallinckrodt Hospital Products IP Ltd. (Fed. Cir. 2018)").

The District Court held the claims of the HF patents to be directed to patent-ineligible subject matter under 35 U.S.C. § 101, and that Praxair did not infringe the claims of the DSIR patents.  Mallinckrodt appealed.

The Federal Circuit affirmed-in-part, vacated-in-part, and remanded, in an opinion by Chief Judge Prost joined by Judge Dyk; Judge Newman concurred in part and dissented in part (but the thrust of her opinion dissented from the majority's routine and now conventional, but not capable of being well-understood, affirmance that the claims were not eligible for patenting under § 101).  The Court applied its now well-worn (and unnecessarily expansive) interpretation of the Supreme Court's Mayo/Alice test in affirming the District Court.  Dissecting the claims in furtherance of its patent-invalidating efforts, the panel majority first states that:

It is undisputed that treatment of infants experiencing hypoxic respiratory failure with iNO gas has existed for decades.  The inventors observed an adverse event that iNO gas causes for certain patients.  The patent claim does no more than add an instruction to withhold iNO treatment from the identified patients; it does not recite giving any affirmative treatment for the iNO-excluded group, and so it covers a method in which, for the iNO-excluded patients, the body's natural processes are simply allowed to take place.  Consequently, the claim here is directed to the natural phenomenon.  The claim, apart from the natural phenomenon itself, involves only well-understood, routine, and conventional steps.  For the reasons below, claim 1 of the '741 patent fails to recite eligible subject matter.

What follows is the majority's justification for this conclusion.  The natural phenomenon is "undisputed" (because the majority defines it as such), the majority saying "[a] neonate patient's body will react to iNO gas in a certain way depending on whether or not the patient has a congenital heart condition called LVD," followed by a recitation of the consequences thereof.  The panel majority then parsed the claim language to find that the claims are "directed to" an observation of the natural phenomenon they have defined, because the exclusion (from treatment) step "merely restates the natural law" (nature it seems providing a caregiver who can give the gas as well as knowing without benefit of the invention when to refrain from giving it).  According to the majority:

Properly understood, this added step [characterized by Mallinckrodt as an "exclusion" step] is simply an instruction not to act.  In effect, the claim is directed to detecting the presence of LVD in a patient and then doing nothing but leaving the natural processes taking place in the body alone for the group of LVD patients.  Accordingly, the claim is directed to the natural phenomenon.

And to avoid any correspondence with Vanda Pharmaceuticals Inc. v. West-Ward Pharmaceuticals International Ltd., 887 F.3d 1117 (Fed. Cir. 2018), the majority asserted:

Indeed, Mallinckrodt cannot dispute that the patented method does not propose a new way of treating LVD patients that leverages this discovery (e.g., by titrating the iNO dose).  Instead, the claim simply requires that the patient not be treated with iNO.  This is significant because a claim not to treat—i.e., not to disturb these naturally-occurring physiological processes within the LVD patient's body—risks monopolizing the natural processes themselves.

And returning to the opinion's theme:

A closer look at the claim language as a whole confirms that the focus of the invention is not on a new way of actually treating the underlying condition of hypoxic respiratory failure.  Nor does it recite a way of reducing the risk of pulmonary edema while providing some level of treatment to those patients.  Rather, the focus of the invention is screening for a particular adverse condition that, once identified, requires iNO treatment be withheld.  A treatment step of administering a prior art dosage is also present.  But that step is plainly not the focus of the claimed invention.  Mallinckrodt concedes this step is not innovative.  Mallinckrodt does not point to "any innovation other than its [purported] discovery of the natural law," citing Athena Diagnostics, Inc. v. Mayo Collaborative Servs., LLC, 915 F.3d 743, 750 (Fed. Cir. 2019).

The opinion also cites Nat. Alternatives Int'l, Inc. v. Creative Compounds, LLC, 918 F.3d 1338 (Fed. Cir. 2019), and Endo Pharm. Inc. v. Teva Pharm. USA, Inc., 919 F.3d 1347 (Fed. Cir. 2019), in support of the majority's distinction between these claims and what it considers "method of treatment" claims.  The panel further distinguished these claims from the patent-eligible claims in Rapid Litigation Management Ltd. v. CellzDirect, Inc., 827 F.3d 1042 (Fed. Cir. 2016) (a decision also written by the Chief), again on the grounds of "a careful reading of the claim language" in those claims and these.

With regard to the second step of the Mayo/Alice test, the panel majority rejected Mallinckrodt's argument that the claims possess an "inventive concept."  Following their wont, the majority found nothing sufficiently novel to warrant satisfaction of the second step inquiry.  It is a tribute to the essential blurring of statutory lines engendered by Justice Breyer's Mayo decision (but much less understandable or forgivable when the nation's "patent court" does so) that the discussion revolves expressly on lack of novelty in performing the eligibility analysis ("This would be quite a different case if the inventors had invented a new way of titrating the dose" and, citing the District Court (which doesn't take a putatively specialized appellate court to do), "Plaintiffs cannot seriously contend that it is a new practice to exclude certain patients from treatment with a drug when those patients are at an increased risk of experiencing negative side effects from the drug").  Understandably, the majority took frank recourse to what they perceive to be the parallels between these claims and the claims in Mayo to support their decision.  And the majority characterized as a "red herring" Mallinckrodt's contentions that their claims do not entirely preempt the putative natural phenomenon, surprising in view of the role preemption plays in justifying the Supreme Court's eligibility requirements in the first place.

The majority's consideration of infringement of the DSIR patents is more legally conventional, involving Mallinckrodt's disagreement with the District Court's construction of the term "verify" in the phrase "verify one or more of the gas identification, the gas concentration and that the gas is not expired."  The majority correctly noted that the District Court didn't formally construe the word, giving it its plain and ordinary meaning.  The opinion characterizes this argument as Mallinckrodt "attempt[ing] to undo its loss on infringement by redrawing the metes and bounds of the claim" and finds this effort "unavailing."

Providing one basis for Judge Newman to agree with her colleagues, the opinion reversed a "technical error" by the District Court and remanded for correction of the Court's "clerical error" (specifically, issuing a "blanket" judgment on all the claims of the asserted patents rather than limiting it to the asserted claims).

Judge Newman's dissent is directed to the eligibility portion of the decision.  In her view, the inventors observed a natural phenomenon and then developed a treatment method that took advantage of that observation to avoid adverse events.  "The method that is described and claimed does not exist in nature; it was designed by and is administered by humans" in her view.  Procedurally, Judge Newman faults her colleagues because:

The majority improperly separates the claims into old and new steps, describes some claim steps as a "natural phenomenon" and some steps as "well-understood, routine, and conventional steps," and avoids the requirement that a claimed invention is considered as a whole.

And "[t]oday's change of law adds to the inconsistency and unpredictability of this area of patent-supported innovation."  In Judge Newman's view "the majority's ruling conflicts with extensive precedent" (which she extensively cites) as well as "the national interest":

The majority [states that] "we emphasize the narrowness of our holding today, which is limited to the particular claims at issue and is driven by the particular circumstances here."  This disclaimer appears at the end of a lengthy exposition, whose wide-ranging pronouncements of law and policy are not tied to narrow circumstances or claims.  The persistent theme of the majority's analysis is that if a claim contains limitations that concern human physiology, ineligibility arises under section 101, whether or not the claimed method of medical treatment meets the requirement of patentability.

The majority's broad pronouncement of ineligibility of medical treatment that relates to human physiology not only contravenes precedent, but contravenes the national interest in achieving new methods of medical treatment with the assistance of the patent incentive.

Reaching back more than two centuries, Judge Newman reminds her colleagues that patents do not function to "impede scientific and technologic advance," citing Whittemore v. Cutter, 29 F. Cas. 1120, 1121 (C.C.D. Mass. 1813), based on common law and statutory research exemptions, citing her dissent in Integra Lifesciences I, Ltd. v. Merck KGaA, 331 F.3d 860, 875 (Fed. Cir. 2003), and Giles Sutherland Rich in Principles of Patentability, 28 Geo. Wash. L. Rev. 393, 400 (1960) ("It should never be forgotten that patented inventions are published and become a part of the technical literature.  This publication itself promotes progress in the useful arts and it is the prospect of patent rights which induces disclosure and the issuance of the patent which makes it available.")

Returning to the majority's blessedly non-precedential opinion, it will bring cold comfort to patent-divested patentees, as well as being somewhat ironic that the upshot of the opinion leads patent prosecutors to the inevitable conclusion that the Federal Circuit is counseling exactly what Justice Breyer cautioned against in Mayo, that we should beware of the clever draftsman who attempts (or worse, succeeds) in obtaining claims that are enforceable and pass the patent eligibility test that the Federal Circuit has crafted, based predominantly on such claim-drafting cleverness.  This is not the first time that this has been the outcome of the Federal Circuit's patent eligibility jurisprudence.  For example, in In re Roslyn, Judge Dyk's opinion held patent-ineligible claims to Dolly the sheep which was, after all, just a sheep (notwithstanding being a sheep unlike any sheep that had ever lived).  But a careful review of that opinion leads ineluctably to the conclusion that, had the draftsman been clever enough (or prescient enough to realize before the fact the quantum and quality of cleverness required) to have claimed a flock of genetically identical sheep, the Court's objections to patent ineligibility would have perforce fallen, because it would be undeniable that flocks of genetically identical sheep do not occur in nature.  This state of affairs is frankly Byzantine and antithetical to Congress's purpose (uniformity and predictability in U.S. patent law) for creating the Federal Circuit, as well as being contrary to the principles of clarity and the creation of "bright line rules" that arguably prompted the Supreme Court to begin its heightened scrutiny of the Court and its opinions (if not philosophy).  The Federal Circuit's current path is contrary to the idea that patent claims should be readily understandable to well-intended business people and frank (or in current parlance, "efficient") infringers alike and also contrary to the Founders' attitudes regarding patenting as a way to encourage disclosure of new inventions for the public good.  Having such a path will give little relief to those who have lost patent rights under the current regime, but at least it provides a way for inventors to obtain patent-eligible claims no matter what other branches of government do in addressing this issue.  Innovation, especially in the diagnostic and life sciences arts, requires no more and is entitled to no less.

iNO Therapeutics LLC v. Praxair Distribution Inc. (Fed. Cir. 2019)
Nonprecedential disposition
Panel: Chief Judge Prost and Circuit Judges Newman and Dyk
Opinion by Chief Judge Prost; opinion concurring in part and dissenting in part by Circuit Judge Newman

Federal Circuit Invalidates A. G. Bell's Telegraphy Patent

By Michael Borella --

June 23, 1880

WASHINGTON D.C.  In a unanimous panel ruling, the Federal Circuit invalidated a patent owned by Salem, Massachusetts inventor A. G. Bell.  On February 14, 1876, Mr. Bell was granted Letters Patent No. 174,465 to an "Improvement in Telegraphy."  This patent was challenged in various proceedings by Mr. Elisha Gray of Highland Park, Illinois as allegedly entailing subject matter ineligible for patenting.  In a long-awaited ruling, the Federal Circuit held that Mr. Bell's claims were directed to an abstract idea without significantly more and therefore invalid.

The claims of the '465 patent recite:

1.  A system of telegraphy in which the receiver is set in vibration by the employment undulatory currents of electricity, substantially as set forth.

2.  The combination, substantially as set forth, of a permanent magnet or other body capable of inductive action, with a closed circuit, so that the vibration of the one shall occasion electrical undulations in the other, or in itself, and this I claim, whether the permanent magnet beset in vibration in the neighborhood of the conducting-wire form simultaneously be set in vibration in each others neighborhood.

3.  The method of producing undulations in a continuous voltaic current by the vibration or motion of bodies capable of inductive action, or by the vibration or motion of the conducting-wire itself, in the neighborhood of such bodies, as set forth.

4.  The method of producing undulations in a continuous voltaic circuit by gradually increasing and diminishing the resistance of the circuit, or by gradually increasing and diminishing the power of the battery, as set forth.

5.  The method of, and apparatus for, transmitting vocal or other sounds telegraphically, as herein described, by causing electrical undulations, similar in form to the vibrations of the air accompanying the said vocal or other sound, substantially as set forth.

The Court began its analysis by inferring the scope of the claimed invention.  To do so, it considered the specification of the '465 patent, writing "[o]ur cases have found the specification helpful in illuminating whether a claim is truly focused on an ineligible abstract idea or significantly more than just that."  To that point, the Court observed that:

The eligibility inquiry may involve looking to the specification to understand the problem facing the inventor and, ultimately, what the patent describes as the invention.  The problem identified by Mr. Bell, as stated in the specification, is that intermittent electrical currents sent along a telegraphic wire become effectively continuous when subjected to numerous transmissions of different rates of vibration, making this technique unsuitable for accurately transmitting sounds.  Mr. Bell's solution is to represent sounds by transmitting undulatory currents instead, which are physical phenomenon mathematically similar to sinusoidal motions of air caused by these sounds.

The Court then found that "looking at the problem identified, as well as the way the inventor describes the invention, the specification suggests that the invention is nothing more than the abstract idea of communicating sounds over a wire."  The Court noted that humans have communicated audibly since time immemorial -- that such vocalization was a fundamental aspect of and long prevalent in the human experience.  Further, the use of various types of audible and non-audible waveforms for communication over a distance -- such as those involved in or generated by drumming, shouting, signal fires, mirrors, semaphores, and so-called optical telegraphs -- have been used for centuries, if not millennia.

Notably, the Court made an analogy between Mr. Bell's claims and those found invalid by the Supreme Court in O'Reilly v. Morse.  Mr. Morse's invention was directed to using electromagnetism to telegraphically transmit intelligible signals, and was found to be an abstraction -- an "idea" rather than a practical application thereof.  In that case, the Justices expressed concern that Mr. Morse's broad claims would cover any possible application of communicating at a distance via electromagnetism.  Similar to those of Morse, Mr. Bell's claims are sufficiently broad enough to be directed to a principle ("all solutions for attaining a desired result") rather than a specific implementation of that principle ("a specific embodiment that produces the desired result in a particular fashion").

While the Court acknowledged that Mr. Bell described such communication in the context of telegraphy using undulatory currents, "[t]he prohibition against patenting abstract ideas cannot be circumvented by attempting to limit the use of the idea to a particular technological environment."  Again, the language of the claims supported the Court's determination, as they were "recited at such a high level of generality that the claimed scope encompasses representing sounds of all types with electrical undulations."  In support of this determination, the Court pointed to the specification where Mr. Bell wrote "I desire here to remark that there are many other uses to which these instruments may be put, such as the simultaneous transmission of musical notes, differing in loudness as well as in pitch, and the telegraphic transmission of noises or sounds of any kind."

Thus, the Court concluded that "the claims clearly involve an abstract idea -- namely, the abstract idea of transmitting representations of sounds over a telegraphic wire."

Moving on to the next step of the patent eligibility inquiry, the Court sought to determine whether the additional elements of the claims included an "inventive concept" that would limit their coverage to be significantly more than the abstraction therein.  The Court explained this step as involving "consideration of the additional elements of the claim both individually and as an ordered combination to determine whether these elements transform the nature of the claim into a patent-eligible application."  Such additional elements cannot be "well-understood, routine, or conventional articles previously known in the relevant art."  Thus, "transformation into a patent-eligible application requires more than simply stating the abstract idea while adding the words 'apply it.'"

The Court determined that the additional claim elements above and beyond those reciting the abstract idea were "a receiver, a telegraphic line, and various mechanisms for generating electrical undulations in said line."  But each of these elements fell under the "well-understood, routine, or conventional" rubric.  The Court quickly observed that receivers and telegraphic lines have been used in communication systems for decades, and included those of Mr. Morse.

Moreover, the Court noted that not all of the claims explicitly recited mechanisms for generating electrical undulations, and that Mr. Bell had made admissions in the specification that any such mechanisms were already known.  For example, Mr. Bell disclosed that it was well-understood that a permanent magnet could be used for this purpose:

It has long been known that when a permanent magnet is caused to approach the pole of an electro-magnet a current of electricity is induced in the coils of the latter, and that when it is made to recede a current of opposite polarity to the first appears upon the wire.  When, therefore, a permanent magnet is caused to vibrate in front of the pole of an electromagnet an undulatory current of electricity is induced in the coils of the electro-magnet.

Mr. Bell went on to state that:

There are many ways of producing undulatory currents of electricity, dependent for effect upon the vibrations or motions of bodies capable of inductive action.  A few of the methods that may be employed I shall here specify.  When a wire, through which a continuous current of electricity is passing, is caused to vibrate in the neighborhood of another wire, an undulatory current of electricity is induced in the latter.  When a cylinder, upon which are arranged bar magnets, is made to rotate in front of the pole of an electromagnet, an undulatory current of electricity is induced in the coils of the electro-magnet.

In the Court's view, these additional elements were, by Mr. Bell's own admission, pre-existing articles.  Further, they were merely being used "for their intended purpose with no improvement made thereto."  Indeed, "Mr. Bell did not invent electro-magnets, wires, or cylinders of bar magnets, nor was he the first to observe that these items can induce undulatory currents."  Particularly, "electromagnetic induction had been discovered by the Englishman Michael Faraday nearly half a century ago, and was a well-understood phenomenon at the time of the patent's filing."

Therefore, the Court found that "[t]hese conventional components, all recited functionally at a high level and in a generic way, are no better equipped to save the claims from abstractness."  Furthermore, "when considered as an ordered combination, these elements add nothing that is not already present when looking at the elements taken individually . . . [t]here is no indication that the combination of elements improves the functioning of a receiver, the wires, or any magnets used in various claims."

Consequently, the Federal Circuit concluded that the '465 patent was invalid due to being directed to patent-ineligible subject matter, and Mr. Bell has lost exclusive rights to his invention.

Genetic Veterinary Sciences, Inc. v. LABOKLIN GmbH (Fed. Cir. 2019)

By Donald Zuhn --

Earlier this month, in Genetic Veterinary Sciences, Inc. v. LABOKLIN GmbH, the Federal Circuit affirmed a decision by the U.S. District Court for the Eastern District of Virginia granting a motion for judgment as a matter of law filed by Appellee Genetic Veterinary Sciences, Inc., d/b/a Paw Prints Genetics ("PPG"), and as a result, found that the asserted claims of U.S. Patent Nos. 9,157,114 were patent ineligible under 35 U.S.C. § 101.  The Federal Circuit also affirmed the District Court's denial of a motion to dismiss PPG's complaint for lack of subject-matter jurisdiction and lack of personal jurisdiction filed by Appellants LABOKLIN GmbH & Co. KG ("LABOKLIN") and the University of Bern ("the University").

The '114 patent, which is owned by the University, relates to in vitro methods for genotyping Labrador Retrievers, in order to discover whether a dog might be a genetic carrier of Hereditary Nasal Parakeratosis ("HNPK"), a disease that causes crusts and fissures to appear on a dog's nose.  A professor at the University discovered that the presence of HNPK in Labrador Retrievers resulted from a point mutation in the gene SUV39H2.  Claims 1-3 of the '114 patent recite:

1.  An in vitro method for genotyping a Labrador Retriever comprising:
a) obtaining a biological sample from the Labrador Retriever;
b) genotyping a SUV39H2 gene encoding the polypeptide of SEQ ID NO: 1 and
c) detecting the presence of a replacement of a nucleotide T with a nucleotide G at position 972 of SEQ ID NO: 2.

2.  The method according to claim 1, wherein the genotyping is achieved by PCR, real-time PCR, melting point analysis of double-stranded DNA, mass spectroscopy, direct DNA sequencing, restriction fragment length polymorphism (RFLP), single strand conformation polymorphism (SSCP), high performance liquid chromatography (HPLC), or single base primer extension.

3.  The method of claim 1, wherein the genotyping utilizes a primer pair comprising a first primer and a second primer, each comprising a contiguous span of at least 14 nucleotides of the sequence SEQ ID NO: 2 or a sequence complementary thereto, wherein:
a) said first primer hybridizes to a first DNA strand of the SUV39H2 gene;
b) said second primer hybridizes to the strand complementary to said first DNA strand of the SUV39H2 gene; and
c) the 3' ends of said first and second primers are located on regions flanking the position 972 of SEQ ID NO: 2, or of nucleotide positions complementary thereto.

The University, which is an instrumentality of the Swiss Confederation having a place of business in Bern, Switzerland, granted an exclusive license for the '114 patent to LABOKLIN, which is a German company with its principal place of business Bad Kissingen, Germany.  LABOKLIN entered into two sublicenses of the '114 patent in the United States.  PPG offers laboratory services for testing for genetic variations and mutations known to cause certain diseases in dogs, including a test for detecting the presence of a mutation in the SUV39H2 gene.

In January 2017, after obtaining the consent of the University, LABOKLIN sent a cease-and-desist letter to PPG asserting that PPG had infringed the '114 patent.  PPG responded by filing suit against LABOKLIN and the University and seeking a declaratory judgment that the asserted claims of the '114 patent are patent ineligible under § 101.  LABOKLIN and the University moved to dismiss PPG's complaint for lack of subject-matter jurisdiction and lack of personal jurisdiction.  The District Court, however, issued an Order finding jurisdiction established over both LABOKLIN and the University.  The dispute proceeded to trial on PPG's invalidity defense, and following the close of both parties' evidence, but before the case was submitted to the jury, the District Court granted PPG's motion for judgment as a matter of law and found the asserted claims patent-ineligible under § 101.

On appeal, LABOKLIN and the University argued that the District Court lacked personal jurisdiction over LABOKLIN because LABOKLIN lacked sufficient contacts with the forum, and lacked personal and subject-matter jurisdiction over the University because the University enjoyed sovereign immunity.  With respect to Appellants' argument that the District Court lacked personal jurisdiction over LABOKLIN, the Federal Circuit disagreed with Appellants' assertion that a cease-and-desist letter along with licensing activity in the forum was not enough to confer jurisdiction.  The Federal Circuit stated that "[a]s the District Court aptly pointed out, here, 'LABO[KLIN] is not merely a remote patentee assisting a U.S. company with enforcement, but instead, it is the U.S. enforcer.'"  The Federal Circuit therefore determined that the facts of the case established that LABOKLIN's activities satisfy the minimum contacts requirement without offense to due process, and thus, personal jurisdiction over LABOKLIN in the District Court was reasonable and fair.

Turning to Appellants' argument that the District Court lacked personal and subject-matter jurisdiction over the University because the University enjoyed sovereign immunity, the Federal Circuit began by noting that under the Foreign Sovereign Immunities Act ("FSIA"), "a foreign state is presumptively immune from the jurisdiction of United States courts; unless a specified exception applies, a federal court lacks subject-matter jurisdiction over a claim against a foreign state," and that under 28 U.S.C. § 1605(a)(2), if a foreign state engages in "commercial activity . . . in the United States," an exception to sovereign immunity applies.  Citing Intel Corp. v. Commonwealth Sci. & Indus. Research Org., 455 F.3d 1364, 1370 (Fed. Cir. 2006), the Court further noted that a defendant's "acts of (1) obtaining a United States patent and then (2) enforcing its patent so it could reap the profits thereof—whether by threatening litigation or by proffering licenses to putative infringers—certainly" are commercial activity.

In response to Appellants' argument that the University was presumptively immune from the jurisdiction of U.S. courts under the FSIA because the District Court erred in finding that the commercial activity exception under the FSIA applied to the University's immunity, the Federal Circuit explained that "[t]he University cannot claim immunity in the District Court because it obtained a U.S. patent and then participated in licensing and enforcing the '114 patent, which constitutes 'commercial activity' under the FSIA."  The Court also explained that "it matters not to [the Court's] analysis that it was LABOKLIN that physically wrote and sent the cease-and-desist letter to PPG, because the University conceded that it still retained substantial rights in the patent, such that the University, as the sole 'patentee,' ultimately controlled enforcement of the '114 patent."  The Federal Circuit therefore determined that the commercial activity exception to sovereign immunity applied such that the District Court properly exercised subject-matter jurisdiction over the University pursuant to § 1605(a).

On the issue of patent eligibility, LABOKLIN and the University argued on appeal that the asserted claims are directed to a patent-eligible application of the discovery of the underlying natural phenomenon because the asserted claims claim a man-made laboratory procedure.  The Federal Circuit, however, disagreed with Appellants' argument.

The Federal Circuit began its patent eligibility analysis by briefly reviewing four of its previous decisions:  Ariosa Diagnostics, Inc. v. Sequenom, Inc.; In re BRCA1- & BRCA2-Based Hereditary Cancer Test Patent Litigation; Vanda Pharmaceuticals, Inc. v. West-Ward Pharmaceuticals International Ltd.; and Natural Alternatives International, Inc. v. Creative Compounds, LLC.  The Court then declared that "[h]ere, the Asserted Claims are not directed to a new and useful method for discovery because they begin and end with the point discovery of the HNPK mutation in the SUV39H2 gene," adding that:

[C]laim 1 simply states that the search for the mutation involves the laboratory examination of Labrador Retriever DNA, which resulted in the revelation of the mutation.  The mutation location itself and the fact that it is inherited through male and female dog carriers mating are both natural phenomena.

Noting that "the plain language of claim 1 demonstrates that it is directed to nothing more than 'observing or identifying' the natural phenomenon of a mutation in the SUV39H2 gene," the Court determined that "the Asserted Claims are directed to natural phenomenon at Alice step one."

The Federal Circuit also disagreed with Appellants' argument that the claimed methods apply a new discovery of the SUV39H2 gene and develop novel genotyping methods for Labrador Retrievers, finding instead that "[n]othing in claim 1's language suggests the invention of a new method for genotyping."  In affirming the District Court's finding of patent ineligibility, the Federal Circuit determined that "the Asserted Claims provide no tangible result save the observation and detection of a mutation in a dog's DNA."  So, while such discovery constituted "a positive and valuable contribution," the Federal Circuit found that "these claims fall short of statutory patentable subject matter."

Genetic Veterinary Sciences, Inc. v. LABOKLIN GmbH (Fed. Cir. 2019)
Panel: Circuit Judges Wallach, Hughes, and Stoll
Opinion by Circuit Judge Wallach

Ubisoft Entertainment, S.A. v. Yousician Oy (E.D.N.C.)

By James Korenchan --

In August 2018, Plaintiffs Ubisoft Entertainment, S.A. and Ubisoft, Inc. (collectively, "Ubisoft") sued Defendant Yousician Oy ("Yousician"), alleging that Yousician's software products infringed Ubisoft's U.S. Patent No. 9,839,852 (the '852 patent).  In November 2018, Yousician moved to dismiss on grounds that the claims of the patent are directed to patent-ineligible subject matter under 35 U.S.C. § 101.  On August 9, 2019, Judge Louise W. Flanagan of the U.S. District Court for the Eastern District of North Carolina granted the motion and dismissed Ubisoft's complaint.

The '852 patent is generally related to Ubisoft's music video game, Rocksmith®, which is an interactive game designed to help users learn how to play guitar, such as by allowing users to play guitar along with visual learning aids displayed on a screen and providing users with useful feedback and statistics based on their performance.  More particularly, the claims of the '852 patent relate to a computer program that receives signals from a guitar device while a user is playing a song, assesses the user's performance  of the song, and determines a portion of the song where the user can improve the performance.  Once the program determines where the user can improve, the program changes a difficulty level of the fingering notations for the determined portion of the song (e.g., changing a frequency or speed at which the notations are presented) and generates a "mini-game" targeted to improving the user's performance of the determined portion.  As an example, the mini-game might prompt the user to play the determined portion (or the entire song) without missing a note or without the aid of the displayed fingering notations.

Claim 1 is provided as follows as a representative example:

1.  A non-transitory computer readable storage medium with a computer program stored thereon, wherein the computer program is operable to present an interactive game for playing a song on a guitar, wherein the computer program instructs one or more processors to perform the steps of:
    presenting, on a display device, a plurality of fingering notations corresponding to the song to be played by a user;
    receiving, from a guitar input device, an analog or digital audio signal when the guitar is played by the user, wherein the received signal corresponds to the song played by the user;
    assessing a performance of the song as played by the user, based on the assessed performance, determining a portion of the performance that should be improved;
    based on the assessed performance and the determined portion of the performance that should be improved, selectively changing a difficulty level of at least a portion of the presented plurality of fingering notations corresponding to the song; and
    generating at least one mini-game different from the game for the song being played targeted to improving the user's skills associated with the performance of the determined portion.

The '852 patent criticizes conventional techniques (e.g., CDs, video tapes, music teachers/books) for learning how to play musical instruments as limited in their quality of instruction and the manners in which they present information.  As such, the '852 patent purports to improve on existing techniques with an "interactive method and system" that provides an integrated learning approach as well as audio and visual feedback.  Specifically, Ubisoft alleges that the claimed invention improves over the prior art by assessing a user's performance for improvement, selectively changing the difficulty level of the song based on the assessment, and generating a different game target to improve the user's skills based on the assessment.

Abstract Idea

Regarding step one of the Alice test, the Court asserted that the '852 patent is directed toward the abstract idea of teaching guitar by evaluating a user's performance and generating appropriate exercises to improve that performance.  According to the Court, a "typical music teacher" performs the steps of claim 1 when teaching a musical instrument.

In reaching its abstract idea conclusion, the Court found the Federal Circuit's 2016 decision in Apple Inc. v. Ameranth, Inc. to be instructive.  The patents in Ameranth were related to a computerized menu for ordering food.  The Federal Circuit struck down the claims of those patents as patent ineligible, asserting that the claims did not involve a way of programming or designing the software to create menus, but instead "merely claim[ed] the resulting systems" for a practice that has historically been done verbally.

Here, the Court asserted that the '852 patent merely claims the resulting systems for evaluating a user's performance and generating appropriate exercises.  More particularly, the Court asserted that the '852 patent merely adds a computer to well-established, real world activities that have been historically performed by music teachers and does not claim or describe details as to how the video game software assesses the user's performance, targets a particular portion of the performance, and generates a mini-game targeted towards improving the user's skill with regard to that portion.  Without such details, the Court found the claims to be more akin to those in Electric Power Group -- namely, those directed to "collecting information, analyzing it, and displaying certain results of the collection and analysis" without a claimed technological improvement.  And, to explain why no technological improvement was present, the Court cited to the '852 patent's specification:

[T]he '852 patent's specification does not describe an improvement regarding operating computers and states instead "[t]he invention may be applied as a standalone game engine system or as a component of an integrated software solution," and that "the processes presented herein are not inherently related to any particular computer, processing device, article or other apparatus."

The Court thus concluded that the claims are directed toward an abstract idea.

Inventive Concept

Turning to step two of the Alice test, the Court found no additional element or combination of elements in the claims that elevated the claim beyond, in its view, wholly generic computer implementation of established teaching methods.  The Court highlighted what it believed to be the "only arguable inventive concept" in the claims:  the limitation of changing the difficulty level of a song responsive to the assessment of the user's performance, such as in real time while the song is being played.  Indeed, Ubisoft had argued that a human music teacher cannot selectively change a difficulty level of the same song that the user was playing in the manner recited by the claims.  But after further examination, the Court ultimately found the concept to be "vague and lacking innovation" in the sense that the claims and specification did not explain how the difficulty level feature (and, likewise, the targeted mini-game generation feature) would be accomplished in a level of detail beyond what a music teacher would normally do (e.g., changing a frequency or speed of the presented fingering notations, breaking the song into sections having different difficulties).

Ubisoft also argued that the dependent claims of the '852 patent further emphasize the improvements that the claimed invention provides to existing approaches, but the Court dismissed the claims as substituting a generic computer for a human teacher, instead distinguishing them from the types of improvements to computer technology identified by the Federal Circuit over the past three years in Ancora Techs., Inc. v. HTC Am., Inc.; Enfish, LLC v. Microsoft Corp.; Data Engine Techs LLC v. Google LLC; and others.  Ubisoft also found no help in the prosecution history of the '852 patent, as the Court paid no heed to the Examiner's previous decision of patent eligibility and noted that the mini-game generation feature -- the one feature the Examiner hadn't found in the prior art -- was not a technological improvement or an advance in computer function.

Lastly, the Court dismissed Ubisoft's arguments that Yousician failed to prove that the recited steps in the claims are well-understood, routine, and conventional.

Thus, the Court concluded that the claims were patent-ineligible and granted Yousician's motion to dismiss.

Ubisoft Entertainment, S.A. v. Yousician Oy (E.D.N.C.)
Order by District Judge Louise W. Flanagan

ChargePoint, Inc. v. SemaConnect, Inc. (Fed. Cir. 2019)

By Michael Borella --

On July 23, 2019, the Federal Circuit denied ChargePoint's request for panel rehearing and en banc review of its March 28, 2019 decision rendering four ChargePoint patents invalid under 35 U.S.C. § 101.  Since we did not review this case when the panel decision came down, and because the case subsequently garnered attention as being one of the more problematic § 101 decisions of late, today we provide a review and some perspective of the substantive issues at hand.

ChargePoint sued SemaConnect in the District of Maryland, asserting infringement of U.S. Patent Nos. 8,138,715, 8,432,131, 8,450,967, and 7,956,570.  All four patents share the same specification.  SemaConnect moved for dismissal under Rule 12(b)(6) on the grounds that the patents failed to meet the eligibility requirements of § 101.  The District Court sided with SemaConnect.  ChargePoint appealed.

2014's Alice Corp. vs. CLS Bank Int'l Supreme Court case set forth a two-part test to determine whether claims are eligible for patenting 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 described by the Court, the focus of the claimed inventions is "charging stations for electric vehicles."  Traditionally, charging was a long, slow, one-way process that required parking overnight or for a long period of time.  ChargePoint's technology purported to solve two semi-related problems with this charging.  First, allowing restaurants, shopping centers, or apartment complexes to control access to vehicle chargers on their premises.  Second, allowing electric vehicles to transfer power to the electrical grid in times of high demand on the grid.  In the words of the Court:

ChargePoint contends that its inventors created improved charging stations that address the various needs inherent in electric vehicle charging.  This was accomplished by creating networked charging stations.  According to ChargePoint, this network connectivity allows the stations to be managed from a central location, allows drivers to locate charging stations in advance, and allows all users to interact intelligently with the electricity grid.

Claims 1 and 2 of the '715 patent recite:

1.  An apparatus, comprising:
    a control device to turn electric supply on and off to enable and disable charge transfer for electric vehicles;
    a transceiver to communicate requests for charge transfer with a remote server and receive communications from the remote server via a data control unit that is connected to the remote server through a wide area network; and
    a controller, coupled with the control device and the transceiver, to cause the control device to turn the electric supply on based on communication from the remote server.

2.  The apparatus of claim 1, further comprising an electrical coupler to make a connection with an electric vehicle, wherein the control device is to turn electric supply on and off by switching the electric coupler on and off.

In addressing procedural aspects of the § 101 inquiry, the Court noted that "we have found the specification helpful in illuminating what a claim is 'directed to.'"  On the other hand, "while the specification may help illuminate the true focus of a claim, when analyzing patent eligibility, reliance on the specification must always yield to the claim language in identifying that focus."

With that in mind, the Court rapidly concluded that "[i]t is clear from the language of claim 1 that the claim involves an abstract idea—namely, the abstract idea of communicating requests to a remote server and receiving communications from that server, i.e., communication over a network."  But this was insufficient to determine whether the focus of the claim was an abstract idea.  So the Court continued by looking to the specification to understand the problem being solved by the inventors.

Reviewing its own precedent, the Court observed that statements made by the inventors in the specification can be used to determine this focus.  But hardware components described only at a high level of detail or functionally are generally outside of this focus.

The problem facing the inventors, according to the Court, was "the lack of a communication network that would allow drivers, businesses, and utility companies to interact efficiently with the charging stations."  "From these statements," the Court concluded, "it is clear that the problem perceived by the patentee was a lack of a communication network for these charging stations, which limited the ability to efficiently operate them from a business perspective."  To further justify its interpretation, the Court observed that "the specification never suggests that the charging station itself is improved from a technical perspective, or that it would operate differently than it otherwise could . . . [n]or does the specification suggest that the invention involved overcoming some sort of technical difficulty in adding networking capability to the charging stations."  Thus, "the specification suggests that the invention of the patent is nothing more than the abstract idea of communication over a network for interacting with a device, applied to the context of electric vehicle charging stations."

After establishing the problem to be solved, the Court turned to the language of the claims and found that it would "preempt the use of any networked charging stations."  The Court indicated that the breadth of the claims dictated such an expansive preemption, as the claims would effectively cover all solutions for achieving a desired result.

To sum up the analysis of claim 1:

In short, the inventors here had the good idea to add networking capabilities to existing charging stations to facilitate various business interactions.  But that is where they stopped, and that is all they patented.  We therefore hold that claim 1 is "directed to" an abstract idea.

The Court shot down claim 2 on similar grounds, finding that the limitation of an "electrical coupler to make a connection with an electric vehicle" does not change the nature of the invention being claimed.  Thus, both claims are directed to an abstract idea.

The Court applied a similar analysis to the claims of the other patents and came to the same outcome.  Indeed, the Court made the dangerously sweeping statement that "[c]ommunication over a network for [the purpose of device interaction] has been and continues to be a building block of the modern economy" -- an abstract idea.  Undoubtedly, these words will be quoted over and over in future district court and Federal Circuit litigation in attempts to establish that any invention involving networked communication is per se ineligible under § 101.  Patent professionals are sadly shaking their heads at this all-too-likely and probably unintended consequence.

In any event, the Court moved on to part two of the Alice test.  ChargePoint contended that it has presented factual allegations that, under Berkheimer v. HP, would preclude a Rule 12(b)(6) dismissal.  These included purported unconventional approaches involving "(a) the ability to turn electric supply on based on communications from a remote server; (b) a network-controlled charging system; and (c) a charging station that receives communication from a remote server, including communications made to implement a demand response policy."

The Court's response -- unfortunately predictable at this point -- was that these innovations were directed to network control, which is the abstract idea itself.  To that end, the Court noted that "a claimed invention's use of the ineligible concept to which it is directed cannot supply the inventive concept that renders the invention 'significantly more' than that ineligible concept."

The Court wrapped up:

ChargePoint, of course, disagrees with this characterization, arguing that its patents claim "charging stations enabled to use networks, not the network connectivity itself."  But the specification gives no indication that the patented invention involved how to add network connectivity to these charging stations in an unconventional way.  From the claims and the specification, it is clear that network communication is the only possible inventive concept.  Because this is the abstract idea itself, this cannot supply the inventive concept at step two.

Thus, the claims were ruled ineligible under § 101 and invalidated accordingly.

Yes, the claims were broad.  Yes, they were vague, and the specification probably didn't describe the invention as well as it should have.  But for the 5,000th time, we have more well-founded and objective tests for these issues in §§ 102, 103, and 112.  Lumping obviousness and written description into § 101 results in the skewed analysis that you see here and in other eligibility decisions.

And the outcome herein is indicative of the hazard associated with applying a variation of the "technical solution to a technical problem" test.  Sure, such a test has been used in Europe and other jurisdictions for quite some time.  But it is being used differently here (i.e., the problem and state of the art are based on statements in the specification rather than prior art, and the test is separate from the obviousness analysis).  As a result, the Federal Circuit is shooting more holes in the long-standing principle that the invention is defined by the claims.  Instead, the invention is now defined by a subjective evaluation of what a judge believes to be the problem being solved, and then this identified problem is used to color the interpretation of the claims under § 101.  If the problem is viewed as non-technical, then the claims can easily be found abstract, as was the case with ChargePoint.  The fact that the Federal Circuit has previously found claims that solve business problems to be eligible under § 101 (e.g., DDR Holdings v. Hotels.com) seems to be beside the point.

The ensuing cognitive dissonance -- ChargePoint's device-oriented claims being viewed as abstract -- illustrates the judicial-exception-creep that has been occurring since Alice.  Since the § 101 inquiry can be applied in an outcome oriented fashion, more and more non-abstract devices, systems, structures, and components are now being lumped into the abstract idea classification or ignored as "conventional" in part two of the Alice test.  The abstract idea exception is a legal fiction that has been expanded to the point of meaninglessness -- thinking about network communication is truly abstract, but actual network communication or the facilitation thereof is not.

Indeed, the language of the claims matter little when one can try to infer from the specification what the claims "really mean" and then analyze that ascribed meaning rather than what the claims actually recite.  The door is left open for bad actors to try to convince the judiciary that virtually everything involving a computer, software, or a network is abstract.  At what point do we realize that, as just one example, the little computers we carry around in our pockets use software in a tangible fashion to communicate and have a concrete impact on themselves and other devices?  At what point does the legal fiction of the abstract idea swallow all of patent law?  Hint: this case.

ChargePoint Inc. v. SemaConnect Inc. (Fed. Cir. 2019)
Per Curiam

The PTAB Goes to Europe: Four Recent Section 101 Decisions Designated as Informative

By Michael Borella --

On July 1, the Patent Trial and Appeal Board (PTAB) of the U.S. Patent and Trademark Office (USPTO) designated four of its recent 35 U.S.C. § 101 decisions as informative.  Each of these decisions came down after and applied the USPTO's 2019 Revised Patent Subject Matter Eligibility Guidance.  Two resulted in claims being found eligible, and two had the opposite outcome.  While not binding on other PTAB panels or examiners, these cases are helpful in understanding how the PTAB is applying the Guidance.  In particular, the PTAB appears to be utilizing the Guidance in a fashion that is similar to how the subject matter eligibility inquiry is employed in the European Patent Office and certain other jurisdictions -- as consideration of whether the claimed invention is a technical solution to a technical problem.

The background of these decisions -- not to mention the Guidance itself -- is 2014's Alice Corp. vs. CLS Bank Int'l Supreme Court holding.  Therein, the Court set forth a two-part test to determine whether claims are directed to patent-eligible subject matter under § 101.  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, the Guidance breaks the first part of the Alice test into two sub-steps.  In the former, one determines whether the claim recites a judicial exception, such as an abstract idea.  In the latter, one determines further "whether the recited judicial exception is integrated into a practical application of that exception."  To focus the analysis, the Guidance indicates that all abstract ideas should fall into one of three categories:  mathematical concepts, certain methods of organizing human activity, and mental processes.  Think of these as the "Three M's" – math, money, and mental steps.

And now, on to the cases.

Ex Parte Fautz (U.S. Patent App. No. 14/326,661)

The claimed invention "generally relates to magnetic resonance (MR) tomography."  An MR device "use[s] reception coils to receive signals generated while scanning a subject," and the "invention optimizes the signal-to-noise ratio (SNR) from the reception coils."  The PTAB focused its review on representative claim 8:

The Examiner rejected the claim under § 101, finding it "similar to abstract ideas relating to mathematical formulas and collecting information, analyzing it, and displaying certain results of the collection and analysis."  The Examiner further found that "the MR tomography apparatus is an additional element that is well-understood, routine, and conventional in the art," while the "data collection and display are insignificant extra-solution activity."

The PTAB disagreed.  Applying the Guidance, the PTAB quickly concluded that under the first part of Alice, the claim recites an abstract idea -- notably three distinct mathematical formulas.  Continuing the inquiry, the PTAB then determined that the claim nonetheless integrates this abstract idea into a practical application thereof. 

The PTAB found the claim to be similar in nature to that of Thales Visionix, Inc. v. United States, where mathematical concepts were used to solve a technical problem and that the recited device "is neither a token addition nor an abstract concept."  To come to this conclusion, the PTAB looked to the application's specification which pointed out drawbacks to existing surface coils in MR systems -- these coils can result in poor image quality.  But, as described in the specification, the claimed invention improves the sensitivity of the coils, and thereby also improves image quality.

Accordingly, the PTAB concluded that the claim is not directed to an abstract idea, is eligible, and that the second part of the Alice test need not be considered.

Ex Parte Olson (U.S. Patent App. No. 11/715,923)

This second case involves a "locally deformable registration of a catheter navigation system to an external model or external image data such that the invention operates to transform the coordinate system of a catheter navigation system to the coordinate system of an external model or external image data."  Representative claim 7 recites:

The Examiner found the claim abstract because it "relies upon collecting and comparing known information, comparing new and stored information and using rules to identify options, organizing information through mathematical correlations, which are considered an abstract idea."  The Examiner further found that the claimed algorithm, the computer on which it runs, and the catheter navigation system, to all be generic.  The Examiner also stated that "Appellants do not claim any new and novel structures for the catheter and catheter navigation system."  Turning to part two of the Alice test, the Examiner found all of the additional elements to be well-known and conventional.

On appeal, the PTAB quickly determined that, through its explicit use of equations, the claim recites an abstract idea -- particularly, a mathematical concept.  But like Ex Parte Fautz, this abstract idea is integrated into a practical application.

To that point, the PTAB observed that the claim focuses on "addressing problems arising in the context of registering a catheter navigation system to a three-dimensional image in connection with cardiac procedures."  Further, the limitations therein "apply the recited mathematical calculations to improve registration of a catheter navigation system to a three-dimensional image of a heart by accounting for non-linearities and inhomogeneities in the catheter navigation system and reduce errors in the localization field."  Looking again to the specification, the PTAB noted that the invention provides a technical improvement of "avoid[ing] errors introduced in the prior art, such as those introduced when an affine transformation is used."  The PTAB also found the claims to be analogous to those of Thales and Diamond v. Diehr, and that the mathematical concepts were applied to a particular machine -- the catheter navigation system.

Thus, the PTAB concluded that the claim is not directed to an abstract idea, is eligible, and again declined to apply the second part of the Alice test.

Ex Parte Kimizuka (U.S. Patent App. No. 13/871,055)

The claimed invention involves software for selecting a golf club with a suitable lift angle for a player based on data from hit balls.  According to this application's specification, "[a] club's loft angle relates to the orientation of its face and influences a hit ball's flight distance."  Claim 7, which was deemed representative, recites:

A fitting method of a golf club, comprising the following steps of:
    creating a hit ball result database based on ball initial velocity prediction data, launch angle prediction data, and back spin prediction data, the ball initial velocity prediction data being data capable of predicting a ball initial velocity based on the dynamic loft and the blow angle, the launch angle prediction data being data capable of predicting a launch angle based on the dynamic loft and the blow angle, and the backspin prediction data being data capable of predicting a backspin based on the dynamic loft and the blow angle, wherein the hit ball result database is obtained by actual measurement and/or a simulation;
    measuring a subject's head speed, dynamic loft, and blow angle using a reference club;
    determining, by a processor, a suitable dynamic loft based on only the measured head speed, the measured dynamic loft, and the measured blow angle, the suitable dynamic loft being defined as a dynamic loft achieving a predetermined hit ball result, wherein the hit ball result database is used for determining the suitable dynamic loft, the hit ball result database includes correlation data between the dynamic loft and the blow angle which are created for each head speed, and the hit ball results in the dynamic lofts in the measured blow angle are compared using the hit ball result database;
    determining a dynamic loft difference from the suitable dynamic loft and the measured dynamic loft; and
    determining a recommended loft angle based on a loft angle of the reference club and the dynamic loft difference, wherein the hit ball result includes a flight distance.

The Examiner rapidly disposed of this claim, finding it directed to an abstract mental process, with all additional elements being well-understood, routine, and conventional.  The PTAB generally agreed.

The PTAB began by stating that, under broadest reasonable interpretation, the claimed steps could be performed in the mind (the Guidance allows one to ignore general hardware -- such as the claimed processor -- when making this determination).  Thus, the PTAB concluded that the claim recites an abstract idea.

Turning to the next step in the Alice part one inquiry, the PTAB considered whether the claim involves an improvement to a technology or technical field.  The PTAB found that the golf club selection was a non-technical problem.  Notably, the claim did not "improve how the measurements are taken or improve how the golf club is manufactured."  The PTAB then reviewed the additional elements individually, finding that each is either a token element, is used for its intended purpose (and therefore is not improved), or embodies insignificant data collection.  Therefore, the claim was found to be directed to an abstract idea under part one of the Alice test.

Applying part two (which is effectively quite similar to the second half of part one), the PTAB sought to determine whether the additional elements were just well-understood, routine, and conventional in the field.  Indeed, the processor, database, and measurements (alone and in combination) were considered to fit this bill based on reasoning similar to why they failed to integrate the claimed abstract idea into a practical implementation.

Consequently the claim was deemed ineligible and the Examiner was affirmed.

Ex Parte Savescu (U.S. Patent App. No. 12/468,616)

Here, the claimed invention relates to software for creating "a life-cycle workflow for a project."  Representative claim 1 recites:

A method for creating a life cycle workflow for a project comprising:
    creating one or more identifiable workflow stages for the project on a server computer, each of the one or more workflow stages corresponding to a specific sequence of workflow activities, wherein the creating further comprises using a workflow stage identifier as a property of the specific sequence of workflow activities for each of the one or more workflow stages;
    creating one or more identifiable workflow phases for the project on the server computer, each workflow phase includes one or more corresponding workflow stages;
    creating one or more project detail pages on the server computer, each project detail page being a web page that is made visible during a corresponding workflow stage;
    when a workflow stage is created, associating a workflow phase with the workflow stage, the workflow phase being selected from the one or more workflow phases on the server computer; and
    when the workflow stage is created, associating one or more project detail pages for the workflow stage.

The Examiner rejected the claim as being directed to an abstract idea without any additional elements that amount to significantly more than that idea.  The PTAB affirmed the Examiner's rejections.

Applying the Guidance, the PTAB pointed to the business nature of the claim ("determining a project name, describing the project's purpose, defining a project's scope, among other things") as indicative of "a concept related to managing relationships or transactions between people."  As such, the PTAB concluded that the claim recited certain methods of organizing human activity, one of the three categories of abstract ideas set forth in the Guidance.

Moving on the next phase of the first part of the Alice test, the PTAB identified the claimed server and the step of "creating one or more project detail pages on the server computer, each project detail page being a web page that is made visible during a corresponding workflow stage" as the additional elements.  The PTAB found that the server was a generic computer, while the creation of project detail pages did not involve a technical improvement to how those pages were created.  The PTAB also found that, at best, the claim automated a process that could have been carried out manually.  All of this added up to a failure of the claim to integrate the abstract idea into a practical application.

Turning to part two of the Alice test, the PTAB looked to the additional elements again and found them to be well-understood, routine, and conventional features.  Therefore, the claim did not provide an inventive concept, and was determined to be ineligible.

Analysis

There are a few lines of reasoning running through these four cases that are worth pointing out.  For the two that were found meet the requirements of § 101, the claims therein are narrowly focused and provide a technical solution to a technical problem.  For each, the technical problem and technical solution were described in the specification, and explicitly reflected in the claim language.  On the other hand, for the two cases that failed the Alice test, the PTAB specifically stated that the claims were not addressing technical problems, and were broadly drafted.

This suggests that the PTAB may be following a variant of the European view that eligible subject matter must be directed to a technical solution to a technical problem.  If so, that is problematic because there is no requirement in U.S. patent law that § 101 be applied so rigidly.  In fact, the Federal Circuit found the claims in DDR Holdings v. Hotels.com to be eligible despite their being focused on a technical solution to a business (non-technical) problem.

Furthermore, a post-hoc evaluation of whether a claim is addressing a "technical" problem can be subjective.  For example, an invention that provides real-time updating of graphical user interfaces that display data about service-level agreement compliance can be viewed as addressing a technical problem (real-time updating of the interfaces) or a non-technical problem (evaluating contractual conformity).

In any event, these four cases may help applicants determine whether a § 101 appeal to the PTAB makes sense.  If your claims fall into the technical solution to a technical problem camp, then an appeal may be viable.  Otherwise, you might be best off working a bit longer with the examiner.