Patent Docs

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

By Michael Borella --

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

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

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

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

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

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

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

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

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

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

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

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

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

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

In re Zunshine (Fed. Cir. 2020)

By Donald Zuhn –-

Earlier today, the Federal Circuit affirmed the rejection by the Patent Trial and Appeal Board of claims 1-3 of U.S. Patent Application No. 15/726,162 as being patent ineligible under 35 U.S.C. § 101.  The '162 application, which is entitled "An Iterative Process of Squeezing Excess Food out of Daily Food Intake to Achieve and Maintain Weight Loss Using Hunger as a Feedback Mechanism," is directed to a method for weight loss.  The '162 application contains three independent claims, of which claim 1 is representative:

1.  A process wherein, on day one, you--which stands for a user of the process-- cut your food intake during all three regular meals, break-fast, lunch, and dinner, by 1/3 and keep it that way for 3 months, and follow the how-to-eat rules: (1) no food unless you are hungry, or it is your regular mealtime, breakfast, lunch, or dinner, (2) if you are hungry and it is not your regular mealtime, you drink a glass of water, first, and wait 10-15 minutes; if you are still hungry, then you eat a snack, and (3) the amount of the snack is determined by your BMI (body mass index) and the time left before the next regular meal or bedtime, whichever comes first.

During prosecution of the application, the Examiner rejected claims 1-3 of the '162 application as being patent ineligible under § 101.  The Applicant, Mr. Zach Zunshine, appealed the rejection to the Board, which affirmed the Examiner's rejection.  In particular, the Board agreed with the Examiner that the claims recite an abstract idea, concluding that the claims describe methods of managing personal behavior, and that the claims do not recite any limitations that integrate the abstract idea into a practical application.

In affirming the Board, the Federal Circuit similarly concluded that claims 1–3 are directed to an abstract idea.  The Court explained that "[e]ach of claims 1–3 amount to nothing more than reducing food intake to achieve weight loss and snacking to curb hunger," adding that "[h]umans have long managed their personal diets in such a manner, and thus claims 1–3 are directed to an abstract idea."  Citing Trading Techs. Int’l, Inc. v. IBG LLC, 921 F.3d 1084, 1092 (Fed. Cir. 2019), the Court also noted that "[t]he fact that the claims might add a 'degree of particularity' as to the amount that food intake is reduced 'does not impact our analysis at step one.'"

In response to the Applicant's argument that claims 1–3 are not directed to abstract ideas because these claims "represent specific improvements in the field of calorie-restrictive diets," analogizing the '162 application to McRO, Inc. v. Bandai Namco Games America, 837 F.3d 1299 (Fed. Cir. 2016), and Rapid Litigation Management, Ltd. v. CellzDirect, Inc., 827 F.3d 1042 (Fed. Cir. 2016), the Court responded that:

[U]nlike the specific improvements recited by the claims in those cases, the purported improvement in claims 1–3—i.e., solving the "hunger problem" in calorie-restricted weight-loss diets—is neither a technical improvement tied to a specific apparatus nor an improvement of an existing technological process.  Instead, in this case, the solution to the hunger problem in claims 1–3 is itself an ineligible abstract idea.

In response to the Applicant's argument that claims 1-3 teach the treatment of a disease (i.e., obesity and diseases afflicting the overweight and obese) and are patent eligible like the claims in Vanda Pharmaceuticals Inc. v. West Ward Pharmaceuticals International, Ltd., 887 F.3d 1117 (Fed. Cir. 2018), the Court disagreed, noting that:

In Vanda, we did not hold that all methods of treating a disease are categorically patent eligible, but explained that the claims at issue were patent eligible because they were directed to "a specific method of treatment for specific patients using a specific compound at specific dose to achieve a specific outcome."  887 F.3d at 1136 (emphases added).  Claims 1–3 are quite different.  The claims merely direct a user to manage his or her food intake according to a series of rules that humans have long followed in managing their diets.  Such personal management of food intake is an abstract idea that is not patent eligible.

The Court determined that the claims of the '162 application were different from those found to be patent eligible in Vanda, pointing out that the claims at issue here "merely direct a user to manage his or her food intake according to a series of rules that humans have long followed in managing their diets," and concluding that "[s]uch personal management of food intake is an abstract idea that is not patent eligible."

Turning to the second step of the Alice/Mayo inquiry, the Court determined that nothing in the claims, either individually or as an ordered combination, transformed the claims into a patent-eligible application of the abstract idea recited therein.  In response to the Applicant's argument that the elements of claims 1–3 are not found in the prior art and together the elements produce "spectacular" weight loss, the Court responded that "[t]he purported inventive concepts . . . are nothing more than the abstract ideas themselves," and that the suggested novelty of the claims fails to transform the abstract idea of limiting food intake into a patent-eligible process.  The Court therefore affirmed the Board's determination that claims 1-3 of the '162 application are patent ineligible under § 101.

In re Zunshine (Fed. Cir. 2020)
Nonprecedential disposition
Panel: Chief Judge Prost and Circuit Judges Newman and O'Malley
Per curiam opinion

Barbaro Technologies, LLC v. Niantic, Inc. (N.D. Cal. 2020)

Claims for an Interactive 3D Virtual Environment Found Patent Ineligible

By James Korenchan --

In the field of computer gaming, the U.S. District Court for the Northern District of California recently granted Defendants' Rule 12 motion alleging that claims 1, 3, and 6 of U.S. Patent No. 8,228,325 (the '325 Patent) are invalid as claiming patent-ineligible subject matter under 35 U.S.C. § 101.  Plaintiff Barbaro Technologies, LLC (hereinafter "Barbaro") had contended that the video games Ingress and Pokémon Go, developed and published by Defendant Niantic, Inc. (hereinafter "Niantic"), infringed these claims.  The suit also involves U.S. Patent No. 7,373,377, of which the '325 Patent is a divisional.  However, Niantic's motion only addressed the claims of the '325 Patent.

The '325 Patent claims a computer system for providing a "three-dimensional virtual thematic environment" (abbreviated in the opinion and hereinafter as "3D VTE").  The background of the '325 Patent notes that "virtual environments, especially those present on the internet, for example, have not provided the user with a real world experience."  The '325 Patent thus aims to integrate audio, video, 2D/3D technology, and other applications or services (e.g., "mini-applications," as the '325 Patent calls them, such as word processing programs or email programs) in order to provide a virtual and real world experience to users.  More particularly, the '325 Patent describes that the 3D VTE can be a gaming environment, geographic environment, or other theme of environment in which and with which a software application can simulate real-world interaction.  For example, a user can select a city to visit and the software will integrate real-world data (e.g., satellite and street view images, 2D/3D graphics) into a 3D VTE resembling the city that the user can navigate and interact with, such as in a third or first person view.  For instance, a user might travel down a street in the simulated city and "enter" a bookstore by clicking a mouse on the virtual representation of the bookstore.  The '325 Patent lists numerous examples of real-time and real-world data that can be integrated into 3D VTEs, such as sports scores, film, news, and a "real-world geographic location of a user."

The claims at issue in this case are reproduced below:

1.  A computer system for providing a virtual thematic environment, comprising:
    at least one memory having at least one program comprising the steps of:

retrieving information for utilization with a three-dimensional virtual thematic environment, from external sources over the internet, said information including a real-world geographic location of a user within said three-dimensional virtual thematic environment; and

integrating said information into the three-dimensional virtual thematic environment, such that the three-dimensional virtual thematic environment includes said real-world geographic location displayed to the user as said three-dimensional virtual thematic environment;

    wherein the user interacts with the three-dimensional virtual thematic environment as a simulated real-world interaction, depending on the user's geographical three-dimensional movement through the three-dimensional virtual thematic environment; and
    at least one processor for running the program.

3.  The system according to claim 1, wherein said information includes real-time information.

6.  The system according to claim 1, further comprising: displaying said information to a user in a mini-application within the virtual thematic environment.

In Alice Corp. v. CLS Bank Int'l, the Supreme Court set forth a two-part test for determining whether a claim is directed to patent-eligible subject matter under § 101.  First, it must be determined whether the claim involves a judicially-excluded law of nature, a natural phenomenon, or an abstract idea.  If so, it must be determined whether the claim recites an inventive concept -- that is, an element or combination of elements that is sufficient to ensure that the claim is significantly more than the judicial exclusion.  But generic computer implementation of an otherwise abstract process does not qualify as significantly more, nor does an element or combination of elements that is well-understood, routine, and conventional.

In applying the first part of the Alice test, the District Court deemed claim 1 to be directed to an abstract idea of removing the disconnect between the user in the real-world and a VTE.  As noted above, and as argued by Barbaro, the prior art virtual environments allegedly did not provide users with real-world experiences, and thus the '325 Patent improves over these environments by providing a way to integrate AV, 2D/3D technology, etc. to maximize a real-world experience for users, thereby effectively removing the disconnect between the real-world user and the 3D VTE.  Barbaro also argued that its claims are analogous to those in Federal Circuit cases such as Enfish, LLC v. Microsoft Corp.

The Court was not convinced, instead asserting that the claimed computer system, memory, and processor are "standard" components, and that "[t]he claims demonstrate the improvement offered by the '325 Patent is directed at a result—integrating the real and virtual worlds—rather than at any particular method of achieving it."  The Court noted that the claimed computer system, memory, and processor are "standard" components, and that the claimed steps can be performed using any combination of existing technologies.  Neither the claims nor the patent specification, in the Court's view, elaborated on how to integrate real-world information into the 3D VTE.  In particular, the Court said:

[T]he claims of the '325 Patent are not directed to the means or method of the claimed invention. They are focused on the result: allowing the user to "interact[] with the [3D VTE] as a simulated real-world interaction, depending on the user's geographical three dimensional movement through the [3D VTE]."  '325 Patent at 42: 53–56.  The specification of the '325 Patent recites dozens of embodiments of the claimed result, accomplished by a variety of existing technologies, as discussed above, but does not purport to make any improvements to them.

The Court also distinguished the asserted claims over those in Enfish and other cases.  The Court pointed out that, in Enfish for instance, the court found that the claims about a database management system were not directed to any form of storing tabular data, but rather to a specific self-referential table.  The Court here further noted that, unlike the specific sensor configuration/method and the specific improvements to computer memory claimed in Thales Visionix Inc. v. United States and Visual Memory LLV v. NVIDIA Corp., respectively, the claimed invention here provided no such improvement to computer technology or specific configuration/method for achieving its desired result.

Instead, the Court analogized the asserted claims to Federal Circuit cases pointed to by Niantic, such as Electric Power Group, LLC v. Alstom S.A., In re Morsa (finding claims for customizing information based on user information and other specific data to be abstract), and Move, Inc. v. Real Estate All. Ltd. (finding claims about displaying real estate properties based on a user-selected area of a map were directed to an abstract idea of collecting, organizing, manipulating, and displaying data and were "devoid of any implementation details").

The Court concluded its part one analysis stating that the claims are directed to an abstract idea because "computers are simply invoked as a tool for solving a problem that has predated them: integrating real-world information about a user into a virtual model."

Regarding part two of the Alice test, Barbaro had argued that integrating real-world information into a virtual world such as a video game solves a uniquely technical problem.  But the Court was quick to note that the concept of building models of real-world locations, and integrating the user's location or a user avatar into such models "long predates computers," and that the framing of Barbaro's argument "ignores the fact that computer games were not the original virtual worlds" (emphasis in original).  And as we've seen before in § 101 cases, this Court found the lack of technological details in the claims and specification -- that is, any details beyond mere instructions to apply a "pre-Internet abstract idea" using generic computer components -- to be fatal to the claims' validity.

Thus, the Court found the asserted claims to be patent ineligible under § 101.

Barbaro Technologies, LLC v. Niantic, Inc. (N.D. Cal. 2020)
Order Granting Motion for Judgment on the Pleadings by District Judge Seeborg

Uniloc USA, Inc. v. LG Electronics USA, Inc. (Fed. Cir. 2020)

By Michael Borella --

Uniloc, owner of U.S. Patent No. 6,993,049, brought an action for infringement of that patent against LG in the Northern District of California.  The District Court granted LG's motion to dismiss on the pleadings, agreeing with LG that the claims were directed to patent-ineligible subject matter under 35 U.S.C. § 101.  Uniloc appealed.

The patented technology relates to Bluetooth-enabled and similar networks.  These networks involve a primary station and at least one secondary station that form ad hoc networks (piconets) with one another.  Joining such a network involves an inquiry procedure, in which primary stations identify secondary stations and the secondary stations can request to join the piconet, and a page procedure, in which a primary station can invite the secondary stations to join the piconet.  According to the patent, "it can take several tens of seconds to complete the inquiry and page procedures so that a device joins a piconet and is able to transfer user input to the primary station."

Further, secondary stations can be battery operated, and may enter a low-power "park" mode by stopping active communication with the primary station.  A parked station must be polled in order to restore its ability to communicate with the primary station.  This polling process may also take several tens of seconds.

The patent explains that this delay can be reduced by adding a data field for polling as part of the inquiry message.  This allows inquiries and polls to occur simultaneously for a parked station, thereby reducing the polling delays.

At issue was claim 2 of the patent, which recites:

A primary station for use in a communications system comprising at least one secondary station, wherein means are provided
    for broadcasting a series of inquiry messages, each in the form of a plurality of predetermined data fields arranged according to a first communications protocol, and
    for adding to each inquiry message prior to transmission an additional data field for polling at least one secondary station.

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

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

In any event, the District Court found claim 2 ineligible because of its allegedly being "directed to the abstract idea of additional polling in a wireless communication system."  The District Court found the claim to be analogous to those that failed the § 101 test in Two-Way Media Ltd. v. Comcast Cable Communications and Digitech Image Technologies, LLC v. Electronics for Imaging, Inc.

The Federal Circuit began its analysis by observing that the § 101 inquiry "often turns on whether the claims focus on specific asserted improvements in computer capabilities or . . . an abstract idea for which computers are invoked merely as a tool."  The Court went on to reiterate a point that it has made in a number of previous cases, that software claims can be eligible when "they are directed to improvements to the functionality of a computer or network platform itself."

Here, the Court rapidly concluded that this was the case for claim 2, as the claimed invention involves "the reduction of latency experienced by parked secondary stations in communication systems."  Notably, the additional data field facilitates this improvement and changes the normal operation of the communication itself "to overcome a problem specifically arising in the realm of computer networks."

LG did not dispute that the invention provided this improvement.  Instead, it contended that the claims did not focus specifically enough on the improvement, and instead used "result-based functional language."  LG also relied on the aforementioned Two-Way Media and Digitech cases.

The Federal Circuit disagreed.  It explained that the claims in Two-Way Media and Digitech were found lacking because the claim language did not include the purported technical advances described in their respective specifications.  In contrast, the Court found that claim 2 changed "the manner of transmitting data [to result] in reduced response time by peripheral devices which are part of the claimed system."

The Court also stated that:

To the extent LG argues that the claims themselves must expressly mention the reduced latency achieved by the claimed system, LG is in error.  Claims need not articulate the advantages of the claimed combinations to be eligible.

Further, the Court also made some general statements about software patent eligibility:

The claimed invention's compatibility with conventional communication systems does not render it abstract.  Nor does the fact that the improvement is not defined by reference to "physical" components.  . . .  Our precedent is clear that software can make patent-eligible improvements to computer technology, and related claims are eligible as long as they are directed to non-abstract improvements to the functionality of a computer or network platform itself.

For these reasons, the Federal Circuit ruled that claim 2 met the requirements of § 101 and passed the first part of the Alice test.  Therefore, the second part of the test need not be carried out.

Uniloc USA, Inc. v. LG Electronics USA, Inc. (Fed. Cir. 2020)
Panel: Circuit Judges Moore, Reyna, and Taranto
Opinion by Circuit Judge Moore

In re Rudy (Fed. Cir. 2020)

Claims Directed to Selecting Fishing Hooks for Use Are Not Patentable

By Joseph Herndon --

Christopher John Rudy, represented pro se, appealed from a decision of the Patent Trial and Appeal Board ("Board") affirming the rejection of claims 34, 35, 37, 38, 40, and 45–49 of U.S. Patent Application No. 07/425,360 ("the '360 application") as ineligible for patenting under 35 U.S.C. § 101.  On April 24, 2020, the U.S. Court of Appeals for the Federal Circuit issued a decision affirming the Board's conclusion.

Mr. Rudy originally filed the '360 application on October 21, 1989, and so, somehow, it has been pending for almost 31 years!

The application, entitled "Eyeless, Knotless, Colorable and/or Translucent/Transparent Fishing Hooks with Associatable Apparatus and Methods," has undergone a lengthy prosecution, including numerous amendments and petitions, four Board appeals, and a previous trip to the Federal Circuit, in which the Court affirmed the obviousness of all claims then on appeal.  In re Rudy, 558 F. App'x. 1011 (Fed. Cir. 2014).

Now, claims 34, 35, 37, 38, 40, and 45–49 of the '360 application stand rejected as ineligible for patenting under 35 U.S.C. § 101.  Claims 26–33 and 54–60 stand allowed and all remaining claims of the '360 application have been cancelled by the applicant.

Of the rejected claims, claim 34 is illustrative and recites the following:

34.  A method for fishing comprising steps of
    (1) observing clarity of water to be fished to deter-mine whether the water is clear, stained, or muddy,
    (2) measuring light transmittance at a depth in the water where a fishing hook is to be placed, and then
    (3) selecting a colored or colorless quality of the fishing hook to be used by matching the observed water conditions ((1) and (2)) with a color or color-less quality which has been previously determined to be less attractive under said conditions than those pointed out by the following correlation for fish-attractive non-fluorescent colors:

The Federal Circuit followed the two-step framework for assessing patent eligibility under § 101, and noted that it is not bound by the Office Guidance, which cannot modify or supplant the Supreme Court's law regarding patent eligibility.

Thus, despite a portion of the Board's analysis being framed as a recitation of the Office Guidance, in this particular case, the Federal Circuit found that the Board's reasoning and conclusion are nevertheless fully in accord with the relevant caselaw.

Applying the Supreme Court's two-step framework, the Federal Circuit first determined whether the claims at issue are directed to a patent-ineligible concept, such as an abstract idea or a law of nature.  The Federal Circuit found that claim 34 is directed to the abstract idea of selecting a fishing hook based on observed water conditions, which is a mental process of hook color selection based on a provided chart.

The Federal Circuit has held in the computer context that "collecting information" and "analyzing" that information are within the realm of abstract ideas, and the Court stated that the same is true in other contexts, including the fishing context.

The Court stated that claim 34 requires nothing more than collecting information (water clarity and light transmittance) and analyzing that information (by applying the chart included in the claim), which collectively amount to the abstract idea of selecting a fishing hook based on the observed water conditions.

Mr. Rudy stated in his brief that "all that is required of the angler is observation, measuring, and comparison with a predetermined chart."  Mr. Rudy continued, "even a fish can distinguish and select colors . . . the fisherman can do this too."  The Federal Circuit explicitly declined "to adopt a bright-line test that mental processes capable of being performed by fish are not patent eligible," but noted that such an observation underscores the conclusion that claim 34 is directed to the abstract idea of selecting the color of a fishing hook.

Having concluded that claim 34 is directed to the abstract idea of selecting a fishing hook based on observed water conditions, the Federal Circuit turned to step two of the inquiry and asked whether the elements of the claim, either individually or as an ordered combination, transform the nature of the claim into a patent eligible application of that abstract idea.

In this case, the three elements of the claim (observing water clarity, measuring light transmittance, and selecting the color of the hook to be used) are each themselves abstract, being mental processes akin to data collection or analysis.  Considered as an ordered combination, these three steps merely repeat the abstract idea of selecting a fishing hook based on observed water conditions.

The Federal Circuit made quick work here to determine that claim 34 fails to recite an inventive concept at step two of the test.

Thus, the Board affirmed the decision by the Board that the claims on appeal are ineligible for patenting.

In re Rudy (Fed. Cir. 2020)
Panel: Chief Judge Prost and Circuit Judges O'Malley and Taranto
Opinion by Circuit Judge Prost

USPTO Assesses the Impact of Patent Eligibility's Changing Landscape

By Michael Borella --

In a post-truth world, it is more tempting than ever to evaluate data based on gut instinct, intuition, and anecdotal evidence.  It is thus refreshing when results of a robust statistical analysis are published, even if the response to the ultimate outcome is, "Yeah, we knew that."

Case in point, patent eligibility.  Most patent practitioners are likely to agree that the Supreme Court's Alice Corp. v. CLS Bank decision made it more likely to receive 35 U.S.C. § 101 rejections during prosecution before the U.S. Patent and Trademark Office (USPTO).  Many of these practitioners would also likely concede that Alice made it less predictable as to whether a given claimed invention would run into eligibility issues.  These same practitioners would probably concur that the Federal Circuit's Berkheimer v. HP case as well as the USPTO's 2019 patent eligibility guidance (PEG) made it less likely to receive such a rejection and resulted in the eligibility inquiry being more predictable.

But most of this is anecdotal.  It is easy to find data supporting the premise that § 101 rejection rates went up after Alice and down after each of Berkheimer and the PEG.  But does this data withstand a rigorous examination?  Thanks to the USPTO's economists, the answer is yes.

Last week the U.S. Patent and Trademark Office published a study of how the patent eligibility landscape has changed within its art units over the last six years, with emphasis on the inflection points of Alice, Berkheimer, and the PEG.

Methodology

The USPTO identified Alice-affected technologies by considering patents litigated in the Supreme Court and Federal Circuit for which eligibility was at issue.  The USPTO's U.S. Patent Classifications for the associated applications were used to identify the Alice-affected technologies, and all other U.S. Patent Classifications were used as the control group.

Two main metrics were considered -- percentage of first-action § 101 rejections and § 101 examination uncertainty.  The former is a simple quotient of first-action § 101 rejections over all first office actions in the Alice-affected technology areas within a defined time period.  The latter is a bit more complicated.  First, the rate of first-action § 101 rejections for each examiner is determined over the time period.  Then, the variance of these per-examiner rates was calculated.  The § 101 examination uncertainty metric was the average of these variances.[1]  Similar metrics were found for the control group.

The Alice Decision

In Alice, the Supreme Court set forth a two-part test to determine whether claims are directed to patent-eligible subject matter under § 101.  One must first decide whether the claim at hand involves a judicially-excluded law of nature, a natural phenomenon, or an abstract idea.  If so, then one must further decide whether any element or combination of elements in the claim is sufficient to ensure that the claim amounts to significantly more than the judicial exclusion.  But, elements or combinations of elements that are well-understood, routine, and conventional will not lift the claim over the § 101 hurdle.

From the data, it is clear that Alice had a statistically significant impact on § 101 rejections.  In the Alice-affected technology areas, the likelihood of receiving a first-action § 101 rejection increased by 31% in the 18 months following the opinion's publication.  Also, Alice increased the § 101 examination uncertainty metric by 26% in these technology areas during the same period.

The Berkheimer Decision

While the Alice two-part 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.  Berkheimer stands for the notion that when such factual issues are present, a patent application cannot be found ineligible without further review.

Berkheimer resulted in the first-action § 101 rejection rate in the Alice-affected technology areas dropping from about 35% during March of 2018 to about 28% in early January of 2019.  Further, the uncertainty metric also fell from about 0.12 (its highest point since Alice) to about 0.9 in this time frame.  As a point of reference, in the months before Alice, the uncertainty metric was slightly below 0.9.

The PEG

In a nutshell, the PEG 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 PEG 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.

Similar to Berkheimer, the PEG reduced both the first-action § 101 rejection rate and the uncertainty metric.  The first-action § 101 rejection rate fell steeply in the Alice-affected technology areas, from about 28% to about 18%.  The uncertainty metric dropped from about 0.9 to about 0.5, the latter its lowest point in the decade since Bilski v. Kappos.  Thus, the overall impact of the PEG was greater than that of Berkheimer.

Analysis

Given the lack of surprising results in this study, it is tempting to just yawn and say, "So what?"  To some extent, doing so would not be unwarranted -- the PEG caused a huge reduction in § 101 rejections and uncertainty -- but the Federal Circuit has explicitly stated that it is not bound by the USPTO's guidance.  The USPTO can pat itself on the back for its efforts in providing more consistent and predictable examination with the PEG, but that ultimately may not matter when the federal courts will apply a less patent-friendly test when determining whether to invalidate patents that the USPTO granted.

But perhaps the most telling aspect of the study is not the data, but instead in the casual way that the authors describe the uncertainty surrounding § 101 and its potential impact on the economy.  Particularly, they take it as given that Alice "created uncertainty in the business and legal communities" and that "[a]mbiguity in the language . . . and in the scope of technologies involving abstract ideas made it difficult to predict how and where the standard would be applied."

These statements reflect those of federal judges, former federal judges, certain members of Congress, the inventor community, patent professionals, and (of course) USPTO Director Iancu.  There is widespread consensus that Alice's unclear language is problematic and has made it riskier for small and medium-sized businesses to invest to protect their inventions.  Under Alice, patent applications can be rejected (and granted patents can be invalidated) based on subjective and conclusory reasoning.  But perhaps Alice is yet another cynical by-product of the post-truth narrative, where opinions and gut feelings trump objective facts.

[1] It is not clear from the study whether this average was weighted by the number of first actions per examiner.  Arguably, it should have been so that more active examiners had more influence over the metric than less active examiners.

Cardionet, LLC v. Infobionic, Inc. (Fed. Cir. 2020)

By Kevin E. Noonan --

There are (at least) two ways of looking at the course of the Federal Circuit's evolving interpretation of the Supreme Court's subject matter eligibility jurisprudence under Mayo Collaborative Services v. Prometheus Labs., Inc. and Alice Corp. v. CLS Bank Int'l.  One way is to consider the Court to be adrift, unable to come to a consensus on how the law should be interpreted and thus calling into question the wisdom of Congress's decision to establish a court with purportedly specialized expertise in patent law (see, e.g., "In Defense of the Federal Circuit").  Alternatively, the exercise can be analogized to sausage-making (more usually an analogy used for how legislation is crafted), in recognition that the Supreme Court's Mayo/Alice jurisprudence, while enunciated as a two-part test has been, in the practice, much less straightforward in application.  The understanding and interpretation of either analysis is influenced anew with every Federal Circuit decision, and the Court's recent decision in Cardionet, LLC v. Infobionic, Inc. illustrates anew the internal divisions, where one judge (Judge Dyk) agreed with the outcome but felt compelled to write in partial dissent on one aspect of the majority's reasoning.

The case arose in litigation between the parties over cardiac monitoring technology protected under U.S. Patent No. 7,941,207.  The Court considered claims 1, 2, 3, 7, 10-12, and 22 to be relevant:

1.  A device, comprising:
    a beat detector to identify a beat-to-beat timing of cardiac activity;
    a ventricular beat detector to identify ventricular beats in the cardiac activity;
    variability determination logic to determine a variability in the beat-to-beat timing of a collection of beats;
    relevance determination logic to identify a relevance of the variability in the beat-to-beat timing to at least one of atrial fibrillation and atrial flutter; and
    an event generator to generate an event when the variability in the beat-to-beat timing is identified as relevant to the at least one of atrial fibrillation
    and atrial flutter in light of the variability in the beat-to-beat timing caused by ventricular beats identified by the ventricular beat detector.

2.  The device of claim 1, wherein the relevance determination logic is to accommodate variability in the beat-to-beat timing caused by ventricular beats by weighting ventricular beats as being negatively indicative of the one of atrial fibrillation and atrial flutter.

3.  The device of claim 1, wherein the variability determination logic is to compare times between R-waves in three successive QRS complexes to determine the variability in the beat-to-beat timing.

7.  The device of claim 1, wherein the event generator is to generate an event by performing operations comprising: collecting data associated with the collection of beats; and transmitting the data associated with the collection of beats to a remote receiver.

10.  The device of claim 1, wherein the relevance determination logic comprises logic to identify the relevance of the variability using a non-linear function of a beat-to-beat interval.

11.  The device of claim 1, wherein the beat detector comprises a QRS detector.

12.  The device of claim 1, further comprising a sensor that includes two or more body surface electrodes subject to one or more potential differences related to cardiac activity.

22.  An article comprising one or more machine-readable media storing instructions operable to cause one or more machines to perform operations, the operations comprising: determining a beat-to-beat variability in cardiac electrical activity; determining a relevance of the variability over a collection of beats to one of atrial fibrillation and atrial flutter using a non-linear function of a beat-to-beat interval; and identifying one of an atrial fibrillation event and an atrial flutter event based on the determined relevance, the event being a period in time when the information content of the cardiac electrical activity is of increased relevance to the one of atrial fibrillation and atrial flutter [wherein] determining the relevance comprises: identifying a beat of the collection as a ventricular beat, and weighting the beat as being negatively indicative of the one of atrial fibrillation and atrial flutter.

(where the claim language in italics is recited in independent claim 20 from which claim 22 depends).  The opinion also illustrated the invention with a reproduction of Figure 10*:

As the opinion sets forth, the invention permits a clinician to distinguish atrial fibrillation and atrial flutter from other forms of cardiac arrhythmias with regard to "beat-to-beat variability in heart rate over a series of successive heartbeats."  Importantly, the invention achieves its objectives "by analyzing the beat-to-beat timing for atrial fibrillation or atrial flutter while also taking into account the variability in the beat-to-beat timing caused by premature ventricular beats."  As a consequence, "the device can more accurately distinguish atrial fibrillation and atrial flutter from other types of arrythmias and has 'improved positive predictability of atrial fibrillation and atrial flutter," resulting (as set forth in the specification) in "a sensitivity to [these two arrhythmias] in excess of 90% and a positive predictivity in excess of 96%."

CardioNet asserted claims 1, 2, 3, 7, 10-12, and 22 against Infobionic.  The District Court dismissed CardioNet's complaint under Fed. R. Civ. Proc. 12(b)(6), on the ground that the claims were ineligible for patenting under 35 U.S.C. § 101 as interpreted under the Supreme Court's Mayo/Alice test. The District Court determined that, under step 1 of the test the claims were directed to an abstract idea, that these arrhythmias "can be distinguished by focusing on the variability of the irregular heartbeat."  And under step 2 of the test, the District Court held that "CardioNet 'd[id] not identify improvements to any particular computerized technology'" related to detecting electrical signals relevant to cardiac function.  This appeal followed.

The Federal Circuit reversed and remanded, in an opinion by Judge Stoll joined in full by Judge Plager and in part by Judge Dyk, who dissented over the terminal portion of the opinion as set forth in further detail below.  The opinion does not start promisingly, citing Athena Diagnostics, Inc. v. Mayo Collaborative Servs., LLC, 915 F.3d 743, 749 (Fed. Cir. 2019), for the standard of review (de novo, with factual issues construed in favor of the non-moving party).  After setting forth the details of the Mayo/Alice test, as well as citing Federal Circuit precedent on how that jurisprudence has been applied, the opinion turned to its assessment of how this jurisprudence should be applied to the claims before it.

The panel renders its decision on step 1, holding that the claims are not merely directed to an abstract idea.  According to the opinion (which is unanimous on this point), the claims are directed to an improvement in cardiac monitoring technology.  The opinion states:

[T]he language of claim 1 indicates that it is directed to a device that detects beat-to-beat timing of cardiac activity, detects premature ventricular beats, and determines the relevance of the beat-to-beat timing to atrial fibrillation or atrial flutter, taking into account the variability in the beat-to-beat timing caused by premature ventricular beats identified by the device's ventricular beat detector.

In the Court's view, the claims "focus" on specific methods for improving this technology, and are not directed to an abstract idea itself or ones that "merely invoke generic processes and machinery."  These conclusions, the opinion maintains, are supported by the written description, the opinion citing portions of the specification directed to "multiple technological improvements" (citations to the specification omitted):

First and foremost, the device more accurately detects the occurrence of atrial fibrillation and atrial flutter—as distinct from [ventricular tachycardia] V-TACH and other arrhythmias—and allows for more reliable and immediate treatment of these two medical conditions.  . . .  Indeed, the written description reports that when analyzing real-world arrhythmia data, the device demonstrated both high "positive predictivity" of, and high "sensitivity" to, atrial fibrillation and atrial flutter, meaning that it effectively avoids false positives and false negatives, respectively, in detecting these two conditions.  In addition, the device is able to identify sustained episodes of atrial fibrillation and atrial flutter that have "increased clinical significance."

(The opinion recites additional aspects of the invention in support of its conclusion recited in dependent claims.)

The opinion cites Federal Circuit precedent consistent with its opinion here, including Visual Memory LLC v. NVIDIA Corp. for the proposition that improvements to computer processing (in Visual Memory, computer memory) could be patent-eligible.  The opinion notes that it was "important to our determination" in favor of patent eligibility in Visual Memory that the specification set forth "advantages offered by" the claimed invention (supplying a seemingly bright-line practice tip to patent prosecutors, at least for now).  The panel found the same type of "advantages" recited in the '207 specification, with the same result regarding patent-eligibility.  The Court found similar support, based on similar analogies, in McRO, Inc. v. Bandai Namco Games Am. Inc. and support for the principle that "patent's written description[ can] inform[] our understanding of the claims" in Chamberlain Grp., Inc. v. Techtronic Indus. Co.

The panel found the District Court's error in "the incorrect assumption that the claims are directed to automating known techniques" (as InfoBionic argued below and maintained in its arguments to the Federal Circuit).  But "nothing in the record" supports this view nor the fact-finding by the District Court, according to the opinion.  The lower court also erred, in the Federal Circuit's view, in its consideration of the disclosure in the '207 patent specification, where it disregarded CardioNet's attempts to point out the relevant differences between the invention and the prior art.  Part of this error was also procedural, because in considering a motion to dismiss, the District Court was obliged to "construe all facts and draw all reasonable inferences in favor of CardioNet, the non-moving party," which the District Court did not do here.  Finally, the Federal Circuit disagreed that the facts and issues before the court were comparable to the facts and legal determinations in Berkheimer v. HP Inc. and FairWarning IP, LLC v. Iatric Systems, Inc., relied upon by the District Court.

The opinion then turns to a discussion of the question of whether the Court can decide patent eligibility or must remand to the District Court for factual assessments as to the state of the art and whether the claims are directed merely to automating practices long used by physicians (it is here that Judge Dyk parts company with his brethren).  The panel majority held that step 1 of the Mayo/Alice test is directed to the question of "whether the claims as a whole are 'directed to' an abstract idea, regardless of whether the prior art demonstrates that the idea or other aspects of the claim are known, unknown, conventional, unconventional, routine, or not routine," citing Diamond v. Diehr, 450 U.S. 175, 188–89 (1981) (a holding that puts Diehr and Mayo in direct opposition should the Supreme Court deign to decide the distinctions between the panel majority and Judge Dyk).  The majority opinion then distinguishes the purpose of Section 101 with the other provisions of the patent statute, sub silentio restoring the analysis to the state of the law pre-Mayo.  While acknowledging Judge Dyk's appreciation of statements in both Mayo and Bilski v. Kappos suggesting that the state of the prior art may be relevant, the majority notes that "in neither Bilski nor Alice did the Court rely on an examination of the prior art as part of its step one inquiry."  Instead, the majority cites the intrinsic evidence as the proper source of information for a court to arrive at the answer to step 1 of the Mayo/Alice test for determining patent eligibility.  For the majority, "[t]his court's decision in Enfish, LLC v. Microsoft Corp. . . . confirms this point":  "the Alice step one inquiry in Enfish and our other decisions began, and ended, with the patent itself," according to the majority.  To the extent that there is evidence that the claims recite "longstanding practice where there is no evidence of such practice in the intrinsic record," the majority believes a district court can take judicial notice thereof in appropriate circumstances.  For the majority the question, and its answer, is clear:

Thus, we simply clarify that step one of the Alice frame-work does not require an evaluation of the prior art or facts outside of the intrinsic record regarding the state of the art at the time of the invention.  Neither Bilski, Alice, nor this court's precedent endorses such an analysis.  [O]ur analysis at Alice step one involves examining the patent claims in view of the plain claim language, statements in the written description, and the prosecution history, if relevant.  . . .  The analysis does not require a review of the prior art or facts outside of the intrinsic record regarding the state of the art at the time of the invention.

Judge Dyk disagreed.  The Judge rejects the majority's contention that its decision is consistent with Supreme Court and Federal Circuit precedent, and disparages it as mere dicta, not being a basis for the Court's holding here (the dissent cites to the defendant's admission that there were no factual disputes to be resolved on remand).  For this Circuit Judge, the majority's error is "limiting the use of extrinsic evidence to establish that a practice is longstanding," a position that the dissent notes was not taken by either party.  Judge Dyk cites Bilski and Alice specifically for the principle that the Court considered extrinsic evidence concerning the conventionality of claimed methods in determining that claims in these cases were ineligible for being directed to an abstract idea.  The Judge also cites Federal Circuit precedent, including Intellectual Ventures I LLC v. Erie Indem. Co., Affinity Labs of Texas, LLC v. DIRECTV, LLC, 838 F.3d 1253 (Fed. Cir. 2016), Content Extraction & Transmission LLC v. Wells Fargo Bank, Berkheimer, and cases cited by the majority (BASCOM, FairWarning) in support of this position.  In Judge Dyk's view, the Federal Circuit "[has] persistently looked outside the intrinsic evidence" in deciding issues under step 1 of the Mayo/Alice test.  And the Judge finds no authority to support its conclusion that a district court is limited to intrinsic evidence in deciding the question of whether a claim is directed to an abstract ides under step 1 of the Supreme Court's Mayo/Alice test.

Cardionet, LLC v. Infobionic, Inc. (Fed. Cir. 2020)
Panel: Circuit Judges Dyk, Plager, and Stoll
Opinion by Circuit Judge Stoll; opinion dissenting in part and concurring in the result by Circuit Judge Dyk

* The opinion also contains an explication of some of the technical terms used in the claims; readers are directed to those explanations, which are outside the scope of this post.

Bozeman Financial LLC v. Federal Reserve Bank (Fed. Cir. 2020)

By Joshua Rich --

Less than two years ago, in Return Mail, Inc. v. U.S. Postal Service, 139 S. Ct. 1853 (2018), the Supreme Court held that a government entity -- in that case, the U.S. Postal Service -- is not a "person" under the America Invents Act, and therefore unable to avail itself of the AIA's post-issuance review proceedings.  But the Court did not resolve whether quasi-governmental entities would be barred from post-issuance proceedings as well.  Here, the twelve regional Federal Reserve Banks brought covered business method (CBM) review proceedings seeking to invalidate two Bozeman Financial patents.  And the Federal Circuit found, contrary to the Supreme Court, that they are "persons," entitled to do so under the AIA.

Bozeman Financial is the assignee of U.S. Patent Nos. 6,754,640 and 8,768,840; the '840 patent issued from a continuation of a divisional of a continuation-in-part of the application that issued as the '640 patent.  The patents relate to the detection of fraud in financial transactions during payment authorization and clearing.  Claim 1 of the '840 patent, which is representative of all of the claims, covers:

A computer implemented method for detecting fraud in financial transactions during a payment clearing process, said method comprising:
    receiving through one of a payer bank and a third party, a first record of an electronic financial transaction from at least one of the following group: a payer, a point-of-sale terminal, an online account and a portable electronic device;
    storing in a database accessible by each party to said payment clearing process of said electronic financial transaction, said first record of said electronic financial transaction, said first record comprising more than one parameter;
    receiving at said database at least a second record of said electronic financial transaction from one or more of a payee bank and any other party to said payment clearing process as said transaction moves along said payment clearing process, wherein said second record comprises at least one parameter which is the same as said more than one parameter of said first record;
    each of said first and second records received at said database comprise at least two of the same said more than one parameters;
    determining by a computer when there is a match between at least two of said parameters of said second record of said first financial transaction received at said database and the same parameters of said first record of said financial transaction stored in said database, and wherein any party to said payment clearing process is capable of verifying said parameters at each point along said financial transaction payment clearing process;
    sending a notification to said payee bank participant with authorization to process said electronic financial transaction when said parameters match; and
    sending a notification to said payee bank participant to not process said electronic financial transaction when said parameters do not match.

The Federal Reserve Banks filed petitions for CBM review, challenging all 26 claims of the '640 patent and all 20 claims of the '840 patent.  Bozeman Financial filed a fulsome response to the Federal Reserve Banks' arguments in relation to the '840 patent, but sought to incorporate those rejoinders by reference in relation to the '640 patent rather than making the arguments independently.  The Patent Trial and Appeal Board rejected that attempted incorporation and found all of the claims of each patent invalid as drawn to ineligible subject matter under 35 U.S.C. § 101.  The Board also found 22 of the 26 claims of the '640 patent invalid under § 112.

Bozeman Financial appealed the Board's decisions to the U.S. Court of Appeals for the Federal Circuit.  In doing so, it raised only the substantive grounds for the Board's subject matter eligibility decisions; it did not raise the Federal Reserve Banks' personalty.  Instead, after the Return Mail decision was issued, Bozeman Financial filed a supplemental brief raising the argument that the Federal Reserve Banks are not "persons" under the AIA, and therefore the CBM reviews were void ab initio.  In addition to disputing the merits of Bozeman Financial's argument, the Federal Reserve Banks argued that Bozeman Financial waived the issue by not raising it below or in its opening brief.

Judge Moore, writing for the Federal Circuit, started from the proposition that a federal appellate court generally does not consider any issue not decided below.  Nor does it generally consider arguments that are not raised in an appellant's (or cross-appellant's) opening brief.  There are, however, exceptional circumstances in which an appellate court will consider issues nonetheless, and the Federal Circuit found that this was one of those circumstances.

The Federal Reserve Banks have some characteristics that would suggest that they are part of the government (and therefore not empowered to bring post-issuance proceedings) and some that would suggest otherwise.  They were established by statute (in this case, 12 U.S.C. § 221 et seq.), implement the monetary and fiscal policies of the United States, and transfer profits to the United States Treasury.  However, the enabling statute establishes them each as a "body corporate," they have a board of directors, and the board enacts bylaws and governs the business of each bank.  They are therefore not directly supervised by government officials.  Most importantly, the Federal Reserve Banks can sue or be sued in "any court of law or equity."

It is that last characteristic, especially potential liability in any court, that was most influential in determining that the Federal Reserve Banks are "persons" under the AIA.  In Return Mail, one of the bases for the holding that the U.S. Postal Service was the government was that it could only be sued in the U.S. Court of Claims for a taking if it were accused of patent infringement.  But with one exception -- in which the Federal Circuit expressly declined to determine whether the Federal Reserve Banks were considered government agencies -- patent infringement proceedings against them did not need to be brought in the Court of Claims under 28 U.S.C. § 1498(a).[1]  Thus, the Federal Circuit found that the Federal Reserve Banks were not part of the government for purposes of the AIA, and could properly bring CBM proceedings.

From there, the Federal Circuit addressed the merits of the case.  Because Bozeman Financial had not challenged below the merits of the § 112 invalidation of 22 claims of the '640 patent, it could not do so now.  Furthermore, because it did not raise any separate arguments with regard to the '640 patent below, it could not do so now.  Thus, the four remaining claims of the '640 patent rose or fell with the claims of the '840 patent.  In the end, they fell.

The Court applied the Alice test and, in the first step, found that the Board had correctly found the claims were directed to the abstract idea of "collecting and analyzing information for financial transaction fraud or error detection."  Essentially, the claims of the '840 patent call for the review and verification of documents to reduce transactional fraud.  The Federal Circuit has repeatedly found such claims to be directed to abstract ideas.  That is true even though the claims involve physical steps; prior cases have held that physical steps relating to processing checks did not transform an abstract idea into patent-eligible subject matter.

Having found the claims directed to an abstract idea, the Court proceeded to the second step of the Alice test.  Even the specification of the '840 patent indicated that methods for preventing check fraud and verifying financial transactions were well known.  Bozeman Financial argued that the ordered combination of the elements in the claims was a specific implementation of the invention that was not itself routine or conventional, but failed to provide any evidence that was so.  Bozeman Financial also argued that the claims met the machine-or-transformation test of Alice's step two, but that alone would not be sufficient and the Federal Circuit rejected the argument in any event.  Thus, all of the claims were found to lack patent-eligible subject matter.

The Bozeman Financial case adds little to Alice jurisprudence, but does help clarify where the line between "governmental" and "non-governmental" entities lies with regard to personalty under the AIA.  The Federal Circuit has made it clear that even entities with some indicia of being the federal government can bring post-issuance proceedings, so long as they themselves can be sued for patent infringement in federal court.  There may be some exceptions -- entities that can be sued in court but are closely enough tied to the federal government that they cannot bring petitions or those that cannot be haled into court but lack such strong ties -- but for now, the line appears to be drawn between parties subject to suits for patent infringement under 35 U.S.C. § 271 and those subject only for takings under 28 U.S.C. § 1498(a).

[1] See Software Design Corp. v. Fed. Reserve Bank of St. Louis, 583 F.3d 1371, 1379 (Fed. Cir. 2009), distinguished at Slip Op., p. 6-7 n. 3.

Bozeman Financial LLC v. Federal Reserve Bank (Fed. Cir. 2020)
Panel: Circuit Judges Lourie, Dyk, and Moore
Opinion by Circuit Judge Moore

Boehringer Ingelheim Pharmaceuticals Inc. v. Mylan Pharmaceuticals Inc. (Fed. Cir. 2020)

By Donald Zuhn –-

Last month, in Boehringer Ingelheim Pharmaceuticals Inc. v. Mylan Pharmaceuticals Inc., the Federal Circuit reversed a decision by the U.S. District Court for the District of New Jersey finding certain claims of U.S. Patent No. 8,853,156 to be directed to ineligible subject matter under 35 U.S.C. § 101, and remanded for further proceedings.  The Federal Circuit also affirmed the District Court's finding that the asserted claims of U.S. Patent Nos. 9,173,859 and 8,673,927 were invalid for obviousness and obviousness-type double patenting.

Plaintiffs-Appellants Boehringer Ingelheim Pharmaceuticals, Inc.; Boehringer Ingelheim International GmbH; Boehringer Ingelheim Corp.; and Boehringer Ingelheim Pharma GmgH & Co. KG ("Boehringer") filed suit against Defendants-Appellees Mylan Pharmaceuticals Inc.; Mylan Inc.; Mylan Laboratories, Ltd.; Aurobindo Pharma Ltd.; and Aurobindo Pharma USA, Inc. ("Mylan") for infringement of the '156, '859, and '927 patents.  The asserted patents relate to the treatment of type 2 diabetes mellitus with DPP-IV inhibitors such as linagliptin.  Mylan moved for partial summary judgment on the pleadings, alleging that claims 10-17, 24, and 25 of the '156 patent are directed to ineligible subject matter under 35 U.S.C. § 101.  The District Court granted Mylan's motion, finding that claims 10-17, 24, and 25 of the '156 patent are directed to the "abstract idea" of "administering the DPP-IV inhibitor to the targeted patient population," and that these claims fail to recite an inventive concept.

At trial, the District Court determined that claims 1, 14, 15, 20, and 21 of the '859 patent and claims 7, 9, 15, 17, 19, 25, and 26 of the '927 patent are invalid for obviousness-type double patenting in view of the claims of U.S. Patent No. 8,178,541, and invalid as obvious in view of U.S. Patent Application Publication No. 2004/0097510.  In particular, the District Court determined that because the claimed invention's doses of linagliptin in 2.5 mg and 5 mg fall within the '510 publication's disclosed range of 1–100 mg, there is a presumption of obviousness.  The District Court alternatively found that a person of ordinary skill in the art would have obtained the claimed dosages through routine experimentation.

In an opinion by Judge Moore, joined by Judges Dyk and Hughes, the Federal Circuit concluded that claims 10–17, 24 and 25 of the '156 patent are directed to patent eligible subject matter.  The opinion notes that the '156 patent relates to the treatment and/or prevention of metabolic diseases such as type 2 diabetes mellitus with DPP-IV inhibitors such as linagliptin in patients for whom normal metformin therapy is not appropriate, setting forth claims 1 and 10 of the '156 patent:

1.  A method of treating and/or preventing metabolic diseases in a patient for whom metformin therapy is inappropriate due to at least one contraindication against metformin comprising orally ad-ministering to the patient a DPP-IV inhibitor wherein the contraindication is selected from the group consisting of: renal disease, renal impairment or renal dysfunction, unstable or acute congestive heart failure, acute or chronic metabolic acidosis, and hereditary galactose intolerance.

10.  The method according to claim 1 wherein the metabolic disorder is type 2 diabetes mellitus and wherein the contraindication is renal disease, renal impairment or renal dysfunction, and wherein said DPP-4 inhibitor is used for said patient in the same dose as for a patient with normal renal function.

On appeal, Boehringer argued, echoing language from Vanda Pharmaceuticals Inc. v. West-Ward Pharmaceuticals International Ltd., 887 F.3d 1117 (Fed. Cir. 2018), that the claims are directed to a "method of treating a specific disease ([type 2 diabetes mellitus]) for specific patients (with renal impairment) using a specific compound (linagliptin) at specific doses (same dose in patients with renal impairment as in patients with normal renal function) to achieve a specific outcome."  Mylan argued that the claims are directed to the natural law that "certain DPP-IV inhibitors (including linagliptin) are metabolized by the liver rather than the kidney."

In finding claims 10–17, 24 and 25 of the '156 patent  to be patent eligible, the Federal Circuit determined that "consistent with this court's decision in Vanda Pharmaceuticals Inc. v. West-Ward Pharmaceuticals International Ltd., 887 F.3d 1117 (Fed. Cir. 2018), the claims are directed to a particular method of treatment under step one and are therefore patent eligible."  The Court explained that even though "certain DPP-IV inhibitors (including linagliptin) are metabolized by the liver rather than the kidney," this "does not make the claim 'directed to' that natural ability."  The panel also noted that because the claims are directed to a method of treatment at step one, the Court could "conclude [that] the claims are patent eligible and need not reach step two" under the two-step framework of Alice Corporation Pty. Ltd. v. CLS Bank International, 573 U.S. 208 (2014).  The Federal Circuit therefore reversed the District Court's grant of judgment on the pleadings of patent ineligibility and remanded to the District Court for further proceedings.

Turning to the District Court's finding that claims 1, 14, 15, 20, and 21 of the '859 patent and claims 7, 9, 15, 17, 19, 25, and 26 of the '927 patent were invalid for obviousness-type double patenting and invalid as obvious in view of the prior art, the opinion notes that the claims at issue relate to the treatment of type 2 diabetes mellitus with linagliptin in 2.5 or 5 mg doses, setting forth claim 14 of the '859 patent:

14.  An oral tablet formulation comprising 1-[(4-me-thyl-quinazolin-2-yl)methyl]-3-methyl-7-(2-butyn-1-yl)-8-(3-(R)-amino-piperidin-1-yl)-xanthine in an amount of 2.5 mg or 5 mg optionally in combination with metformin, and a pharmaceutically acceptable carrier or diluent.

and claim 7, which depends from claim 1, of the '927 patent as illustrative:

1.  A method of treating type II diabetes mellitus comprising administering to a patient in need thereof a pharmaceutically effective oral amount of 1-[(4-methyl-quinazolin-2-yl)-methyl]-3-methyl-7-(2-butyn-1-yl)-8-(3-(R)-amino-piperidin-1-yl)-xanthine, and a pharmaceutically effective amount of metformin, which is from 300 mg to 1000 mg once or twice a day, or delayed-release metformin in a dose of 500 mg to 1000 mg once or twice a day or 500 mg to 2000 mg once a day.

7.  The method according to claim 1, wherein the 1-[(4-methyl-quinazolin-2-yl)methyl]-3-methyl-7-(2-butyn-1-yl)-8-(3-(R)-amino-piperidin-1-yl)-xanthine is administered in an oral dosage of 2.5 mg or 5 mg.

On appeal, Boehringer argued that the District Court's conclusions of invalidity for obviousness-type double patenting and obviousness depended on its determination that the claimed dosages would have been obvious.  In affirming the District Court's findings of invalidity for obviousness-type double patenting and obviousness, the Federal Circuit concluded that the District Court's alternative finding (i.e., that a person of ordinary skill in the art would have obtained the claimed dosages through routine experimentation) is not clearly erroneous.  The Court therefore did not need to decide whether the District Court's presumption determination of obvious was correct.  The Federal Circuit thus affirmed the District Court's decision finding the asserted claims of the '859 and '927 patents to be invalid for obviousness and obviousness-type double patenting.

Boehringer Ingelheim Pharmaceuticals Inc. v. Mylan Pharmaceuticals Inc. (Fed. Cir. 2020)
Nonprecedential disposition
Panel: Circuit Judges Dyk, Moore, and Hughes
Opinion by Circuit Judge Moore

Naples Roundtable Requests PTAB to Make Decisions Precedential

The Naples Roundtable, a 501(c)(3) non-profit organization whose primary mission is to explore ways to improve and strengthen the U.S. patent system, will on Monday, March 23rd file a Request with the U.S. Patent and Trademark Office, to designate Ex parte Olson (Appeal 2017-006489), and Ex parte Fautz (Appeal 2019-000106) as precedential.  Both were designated "informative" on July 21, 2019.  In each case, the Patent Trial and Appeal Board reversed an Examiner's decision rejecting the claims in each application as being directed to patent-ineligible subject matter under 35 U.S.C. § 101 under the Supreme Court's Mayo/Alice jurisprudence.  The basis for the Board's decision reversing the Examiner in each case was the 2019 Revised Patent Subject Matter Eligibility Guidance, 84 Fed. Reg. 50 (Jan. 7, 2019) (hereinafter "Guidance").

The Olson claims were directed to a catheter navigation system involving mathematical equations used in the claimed system and methods that reduced registration errors in a 3D imaging system resulting in improved catheter placement in a patient.  The Board found error in the Examiner's application of Revised Step 2A, 2nd Prong, wherein the claims recited additional limitations that applied the results of the mathematical formulae to achieve the claimed result, i.e., reduce errors in catheter placement by accounting for patient-specific non-linearities and inhomogeneities in catheter navigation, again finding similarities to how the Arrhenius equation was used in Diamond v. Diehr.

The Fautz claims were directed to magnetic resonance tomography (MRT) and methods for performing MRT using the apparatus and recited three mathematical formulae and four calculations that use those formulae.  As in Olson, the Board held that the Examiner improperly applied Revised Step 2A, 2nd Prong.

And in each case, the rationale for the Board's decision avoided having to consider Revised Step 2B, regarding whether the claim recited that ineluctable "something more" recited in the Revised Guidance.

The letter is signed by Gary Griswold, Naples Roundtable President; Kevin E. Noonan, Patent Docs author and MBHB Partner: Andrew Baluch, Naples Roundtable Amicus Committee Chair; and Teresa Summers, Naples Roundtable Treasurer.

Mallinckrodt Files Certiorari Petition in iNO v. Praxair

By Kevin E. Noonan --

Mallinckrodt filed a certiorari petition with the Supreme Court last week, over the Federal Circuit panel decision (by Chief Judge Prost joined by Judge Dyk; Judge Newman dissented on the issue before the Court in this petition) affirming dismissal of a suit by Mallinckrodt's subsidiary, iNO Pharmaceuticals, in iNO Therapeutics LLC v. Praxair Distribution Inc.  From the first sentence, the petition frames the issue as one of lower court confusion with the Supreme Court's subject matter eligibility jurisprudence:

In the years since this Court's decision in Mayo Collaborative Services LLC v. Prometheus Laboratories, Inc., 566 U.S. 66 (2012), the lower courts have struggled to apply the judicially-created exceptions to the subject matter that Congress declared eligible for patent protection in 35 U.S.C. § 101.

In addition to painting the Federal Circuit with a brush both familiar to and consistent with the Court's view on its appellate junior, the petition makes the characterization that "[t]here is no more pressing issue in patent law than resolving the uncertainty that has surrounded the judicial exceptions to §101."  To be honest, however, following these exhortations with a reiteration of the situation at the Federal Circuit, including the almost cri de coeur nature of the concurrences and dissents by Federal Circuit judges in Athena Diagnostics Inc. v. Mayo Collaborative Services LLC is likely to fall on deaf ears, having already done so when the Court denied Athena's cert petition.  The petition is perhaps on firmer ground when adding a reminder of the Government's views, from the Solicitor General in Hikma Pharm. USA Inc. v. Vanda Pharma. Inc. (see "Solicitor General Recommends That Supreme Court Deny Certiorari in Hikma Pharmaceuticals v. Vanda Pharmaceuticals"), because there the SG urged the Court to revisit its subject matter eligibility jurisprudence just not in that case (specifically stating (and quoted in this petition) that "further guidance from this Court is amply warranted" and should be provided "in a case where the current confusion has a material effect on the outcome of the Section 101 analysis).  This gives this petition the opportunity to affirmatively state that "[t]his is just such a case."

As a reminder, the case involved methods (and devices) for treating infants with inhaled nitric oxide gas; perhaps more accurately, the claims recited methods to identifying infants in respiratory distress who should not be administered the conventional iNO treatment, due inter alia to their having a congenital defect, left ventricular hypertrophy, which predisposed such infants to pulmonary edema.  Illustrative claims of the patents-in-suit* include:

Claim 1 of U.S. Patent No. 8,795,741:

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.

Claim 1 of U.S. Patent No. 8,776,794:

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 Federal Circuit's decision).

The District Court held/found that the claims of the HF patents (vide infra) were directed to patent-ineligible subject matter, and a divided panel of the Federal Circuit affirmed; the Court refused to rehear the decision en banc.

The petition terms method-of-treatment claims as "the one island of stability" in subject matter eligibility jurisprudence, which the decision below has disrupted by "extend[ing] the judicially created exceptions to the plain text of 35 U.S.C. §101 far beyond anything envisioned by this Court," characterizing the case as an opportunity for the Supreme Court to "rein in the Federal Circuit's runaway jurisprudence" on § 101 that "threatens innovation at the forefront of medical science."  The petition asserts three reasons why the Court should grant certiorari.  First, the decision below "heightens confusion" because it is contradictory to the "traditional understanding" (not upset by the Court's decision in Mayo) that method-of-treatment claims are eligible for patenting.  The petition illustrates this confusion by returning to statements made by most of the Federal Circuit judges in concurrences and dissents in Athena, as well as additional similar statements in Interval Licensing LLC v. AOL, Inc., 896 F.3d 1335, 1348 (Fed. Cir. 2018) by Judge Plager; Berkheimer v. HP Inc., 890 F.3d 1369, 1374 (Fed. Cir. 2018) by Judges Lourie and Newman; Smart Sys. Innovations, LLC v. Chicago Transit Auth., 873 F.3d 1364, 1377 (Fed. Cir. 2017) by Judge Linn; and Ariosa Diagnostic, Inc. v. Sequenom Inc., 788 F.3d 1371, 1381 (Fed. Cir. 2015) by Judge Linn; (where the combination of such citations may be effective to further illustrate this confusion).  The petition terms this an "extraordinary" "collective and consistent cry for help from the Federal Circuit" with evident justification.  The petition also cites such luminaries as former Chief Judge Paul Michel, in testimony before the Senate Subcommittee on Intellectual Property last June (see "Senate Subcommittee on Intellectual Property Holds Hearings on Proposed Revisions to 35 U.S.C. § 101"), public statements by current PTO Director Andrei Iancu and former Director David Kappos, testimony by practitioners and patent law groups (Including the American Bar Association and American Intellectual Property Lawyers Association), and legal scholars (including Mark Lemley and Christopher Holman), all asserting that the uncertainty created by inconsistent decisions by the Federal Circuit and district courts are harmful to innovation and the patent system.

The petition then turns to the potential for harm this decision poses, in disrupting the "island of stability" of patent eligibility for method-of-treatment claims, citing Natural Alternatives Int'l. Inc. v. Creative Compounds, LLC, 918 F.3d 1338 (Fed. Cir. 2019), and Endo Pharma. Inc. v. Teva Pharm. USA Inc., 919 F.3d 1347 (Fed. Cir. 2019), as well as Vanda.  This case "breaches that firewall" by holding for the first time that a method-of-treatment claim is patent ineligible.  The petition characterizes as the Federal Circuit "finess[ing] the point" by considering the claims to instruct inaction, which Petitioner counters by interpreting Mallinckrodt's claims as being directed to "an integrated treatment protocol" involving "selective action" (anticipating at least some of the argument Respondent can be expected to make).  And the evils this decision could occasion are not limited to such selective treatment claims, the petition asserting that this principle "could reach . . . manufacturing processes in which testing and predefined criteria are used to determine whether a step previously performed on all batches can be skipped in some instances, increasing efficiency . . .," this argument taking the issue outside the realm of diagnostics and illustrating the potential scope of the problem.

The petition next makes the bald assertion that "the Federal Circuit's decision is wrong."  And the basis for the statement is, first, that Congress spoke expansively in drafting Section 101 and the implicit judicial exceptions recognized by the Court are not as expansive as the Federal Circuit's decision below makes them.  The petition characterizes (properly) the claims in Mayo as being "an oddity" and accordingly, readily distinguishable from Mallinckrodt's claims (most easily by noting that the Mayo claims did not require any action on the part of a physician who had practiced the claimed method to determine whether the amount of administered drug was in the therapeutic range).  The Federal Circuit's mistake here was in disregarding this distinction and in failing to heed the Court's prescription that claims must be considered as a whole, citing (of course) Diamond v. Diehr, 450 U.S. 175, 188 (1981).  The petition also criticizes the decision below for attempting to distinguish the Vanda decision (noting that the author of this opinion dissented in that one), the deficiency in the attempt being crafting an "arbitrary distinction" between "treating and not treating" steps neither found or required by the statute or the Court's eligibility decisions (and further noting that the scope of the Vanda claims were even broader, wherein was claimed all dosages of the drug at 12 mg/day or less, while the claims here recited a "single, specific course of action," the petition reciting unclaimed, potential alternatives that reduced the scope of preemption).

The final reason the petition asserts supporting the Court's grant is the threat to personalized medicine, which Petitioner calls "the next frontier of medical research."  While compelling writing, such paeans to the coming beneficent future and the threat subject matter eligibility restrictions pose to it have become commonplace (due, at least in part, to the truth of these assertions), but frankly the Court has shown no tendency to be persuaded by them.  Perhaps this is due to the expected salvo of amicus briefing and legal and popular literature to the contrary, that patenting is a tax and an impediment to innovation, and perhaps it reflects the individual Justice's views on the proper place for patents involving medicine.  No matter how well written or how cogent the arguments made (here, by Seth Waxman, a preeminent Supreme Court advocate), it is hard to place much hope in any change of heart in this regard by the Court in this case.

Mylan will have an opportunity to file a responsive brief in due course, and the Court should it grant certiorari can be expected to hear argument in the Fall term (COVID-19 willing).

* The full list of claims asserted by iNO and Mallinckrodt include U.S. Patent Nos. 8,282,966; 8,293,284; 8,795,741; 8,431,163; and 8,846,112, collectively termed the "heart failure patents" or "HF patents," and U.S. Patent Nos. 8,573,209; 8,776,794; 8,776,795; 9,265,911; and 9,295,802, collectively termed the "delivery system infrared patents" or "DSIR patents."

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

By Kevin E. Noonan --

The latest Federal Circuit decision on subject matter eligibility in the life sciences came down (by a divided court) in favor of eligibility, in Illumina, Inc. v. Ariosa Diagnostics, Inc.  The claims at issue fell into the third "bucket" of eligibility, being neither diagnostic method claims (always ineligible at the Federal Circuit) nor method of treatment claims (eligible, at least until the Supreme Court grants certiorari in the next iteration of Vanda Pharmaceuticals Inc. v. West-Ward Pharmaceuticals), but rather (as denoted in the majority opinion), method of preparation claims, a philosophical cousin to the claims in Rapid Litig. Mgmt. Ltd. v. CellzDirect, Inc.  And as an added bonus, Judge Reyna dissented in a manner that illustrates his thinking on patent eligibility of inventions involving natural phenomena (and natural products).

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

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

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

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

'751 patent:

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

'931 patent:

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

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

The Federal Circuit reversed, in an opinion by Judge Lourie joined by Judge Moore; Judge Reyna (the author of the Court's Ariosa Diagnostics Inc. v. Sequenom, Inc. decision) dissented.  Judge Lourie got right to the point, stating "[t]his is not a diagnostic case.  And it is not a method of treatment case.  It is a method of preparation case."  The opinion acknowledged the consistent precedent post-Mayo that diagnostic method claims are ineligible, and method of treatment claims are eligible, citing Judge Moore's dissent from denial of rehearing en banc in Athena Diagnostics, Inc. v. Mayo Collaborative Servs., LLC ("Since Mayo, we have held every single diagnostic claim in every case before us ineligible."); the panel decision in Athena Diagnostics, Inc. v. Mayo Collaborative Servs., LLC; Cleveland Clinic Found. v. True Health Diagnostics LLC, 859 F.3d 1352 (Fed. Cir. 2017); and Cleveland Clinic Found. v. True Health Diagnostics LLC.  The panel majority also recognized that the Court had consistently held method of treatment claims to be patent-eligible, citing Endo Pharm. Inc. v. Teva Pharm. USA, Inc.; Natural Alternatives Int'l, Inc. v. Creative Compounds, LLC; and, of course, Vanda Pharm. Inc.

The majority appreciated a distinction lost on the dissent:  "[h]ere, it is undisputed that the inventors of the '751 and '931 patents discovered a natural phenomenon.  But at step one of the Alice/Mayo test, 'it is not enough to merely identify a patent-ineligible concept underlying the claim; we must determine whether that patent-ineligible concept is what the claim is 'directed to," citing Rapid Litig. Mgmt. Ltd. v. CellzDirect, Inc.

The majority understood the natural phenomenon underlying the claimed invention to be "that cell-free fetal DNA tends to be shorter than cell-free maternal DNA in a mother's bloodstream" despite some apparent inconsistencies in how at least Roche enunciated its interpretation.  The critical question as understood by the majority was "whether the claims are 'directed to' that natural phenomenon."  The majority held that the claims were not directed to the natural phenomenon but rather were directed to "a patent-eligible method that utilizes it."  In support of this conclusion, Judge Lourie wrote regarding the specificities of the claims (albeit not the five specificities he identified in his Vanda opinion).  These include "specific process steps—size discriminating and selectively removing DNA fragments that are above a specified size threshold" that increased the relative amount of cffDNA in the processed sample compared to maternal DNA.  The claimed method "change[d] the composition of the mixture" and produced a DNA-containing fraction that was different from what naturally occurs in maternal blood.  This was what distinguished, for the majority, what was claimed from merely "observing that fetal DNA is shorter than maternal DNA or detecting the presence of that phenomenon."

The written description of the invention (upon which the dissent extensively relied to draw the opposite conclusion) supported this view, according to the opinion:

As described by the specification, the inventors used these concrete process steps, not merely to observe the presence of the phenomenon that fetal DNA is shorter than maternal DNA, but rather to exploit that discovery in a method for preparation of a mixture enriched in fetal DNA.

The panel majority distinguished the decision in Ariosa, where the claims were directed to a method "for detecting a paternally inherited nucleic acid" (claims 1 and 24) or a method "for performing a prenatal diagnosis" (claim 25).  The only steps recited in those claims were related to making more of the cffDNA by amplification, followed by a detecting or sequencing step.  As in Mayo, Athena, and Cleveland Clinic, the Sequenom claims were directed to detecting a natural phenomenon:  the Sequenom inventors "discovered that cell-free fetal DNA exists, and then obtained patent claims that covered only the knowledge that it exists and a method to see that it exists.  Those claims were thus ineligible."  In contrast, the claims at issue here were not directed to the correlation between cffDNA size and its "tendency" to be maternal or fetal in origin.  The claims at issue here is produced a fraction enriched in fetal DNA, which distinguished them from the invalid claims in Ariosa for the panel majority.

And regarding the effect the Supreme Court's AMP v. Myriad Genetics decision has on these claims, the majority states:

Thus, in Myriad, the claims were ineligible because they covered a gene rather than a process for isolating it.  Here, we encounter the opposite situation, i.e., the claims do not cover cell-free fetal DNA itself but rather a process for selective removal of non-fetal DNA to enrich a mixture in fetal DNA.  Thus, the Supreme Court's decision in Myriad is not on point.

With regard to the Cellzdirect precedent, the panel majority analogized by noting that those inventors did not "invent" hepatocytes, but rather invented a method for making preparations of them that relied on the hepatocytes natural ability to be subjected to multiple rounds of freezing and thawing unappreciated in the prior art.  For the majority, the '751 and '931 patents similarly do not claim (and the inventors do not assert they had invented) cffDNA or even the differential size distribution between maternal and fetal DNA in maternal blood.  The panel majority recognized that the inventors here relied on this natural phenomenon to invent a method of separating cffDNA into an enriched fraction by "physical process steps" that "selectively remove some maternal DNA in blood to produce a mixture enriched in fetal DNA."

The majority summarized its opinion as follows:

The inventors here patented methods of preparing a DNA fraction.  The claimed methods utilize the natural phenomenon that the inventors discovered by employing physical process steps to selectively remove larger fragments of cell-free DNA and thus enrich a mixture in cell-free fetal DNA.

Judge Reyna dissented, his dissent nicely setting forth the philosophical differences between the members of this Court (as well as the Supreme Court) for whom the eligibility/ineligibility dichotomy is categorical:  once a "natural phenomenon" is identified, the invention cannot be patented (despite Judge Reyna's protestations at the end of his dissent that "process claims that involve naturally occurring phenomena from beginning to end could be directed to patent eligible subject matter, but this is not such a case" -- there will never be such a case).

The dissent recites the conventional view that applying routine, well-understood, and conventional methods to a newly discovered natural phenomenon is enough, per se, to preclude patent eligibility.  What Judge Reyna continues to refuse to acknowledge (and he is not alone in this particular brand of short-sightedness) is that there is nothing routine, well understood, and conventional (and cannot be) in using old techniques in new ways.  Indeed, there would be very little patenting if the use of older technology could not be a part of innovation; after all, the goal of building a better mousetrap would be considerably more difficult if the existence of a mousetrap itself preluded patenting a better one.

Judge Reyna states that "the claims are directed to a natural phenomenon [because the] patents' only claimed advance is the discovery of that natural phenomenon," which for him categorically precludes patent eligibility.  Ignoring the fact that the claimed methods permit cffDNA to be detected, in his view "[t]he inventors discovered a natural phenomenon: that cffDNA tends to be shorter than cell-free maternal DNA in a mother's blood.  Other than the surprising discovery, nothing else in the specification or the record before us indicates there was anything new or useful about the claimed invention."  And he disregards the distinction drawn by the majority between "method of preparation" claims and method of treatment or diagnostic claims, stating that "[a] 'method of preparation case' is treated no differently than any other process claim under our law," not considering the differential treatment (even by Justice Breyer in Mayo) between cases like Parker v Flook and Diamond v Diehr.

Regarding the significance of the written description to the question of whether the claims are "directed to" a natural phenomenon, the dissent appears to assert that if the invention identifies or recites a natural phenomenon, it is per se directed to the natural phenomenon, wherein the written description supports ineligibility merely by identifying the natural phenomenon (and seemingly equating an invention "based on" a natural phenomenon with one that is directed to it):

If a written description highlights the discovery of a natural phenomenon—e.g., by describing the natural phenomenon as the only "surprising" or "unexpected" aspect of the invention or that the invention is "based on the discovery" of a natural law—the natural phenomenon likely constitutes the claimed advance" [citing Ariosa, Athena, and Cleveland Clinic].

(Somewhat annoyingly, the dissent consistently brackets the term "surprising" with quotation marks; a jurist doesn't need to agree that "surprisingness" is enough to confer patent eligibility, but there is nothing in the record to refute that the results were surprising to one of ordinary skill in the art, the only actor whose "surprise" at the discovery is legally relevant).

Touching sub silentio on how the Court has interpreted claims involving natural products after Myriad, the dissent further states that ineligibility is supported by "[t]he fact that the claimed method steps begin and end with a naturally occurring substance, as in Ariosa" and that "[t]he inventors did not create or alter any of the genetic information encoded in the cff-DNA in the claimed method steps," which seems on its face to be contrary to the Supreme Court's Diamond v Chakrabarty decision.  Nevertheless, Judge Reyna states:

Likewise, the claimed method here begins and ends with a naturally occurring substance.  The claimed method begins with extracting a sample of blood plasma or serum from a pregnant mother that consists wholly of various naturally occurring substances, including cff-DNA.  The claimed method separates those naturally occurring substances by size, leaving a "fraction" of the original sample that is predominantly cff-DNA.  The claimed method ends with analyzing the components of the "fraction," which contains cff-DNA.  The substances present throughout the process are naturally occurring substances, and the claimed method steps do not alter those substances [except, of course, by enriching them in the resulting fraction].  The claimed method is therefore directed to a natural phenomenon.

The dissent is also focused on whether the claims constitute an "advance" in the art (ignoring the "advance" that the invention permits cffDNA to be analyzed):

Where a written description identifies a technology as well-known or performed using commercially available tools or kits, that technology cannot logically constitute a claimed advance" [citing Ariosa, Athena  (identifying the claimed "immunological assay techniques [as] known per se in the art" and therefore not the claimed advance); and Cleveland Clinic (relying on the patent's disclosure of "commercially available testing kits" for detecting the natural law)].

There is an apparent difference between how the majority and the dissent consider the Court's CellzDirect precedent.  Judge Reyna appreciates as a distinction that, in Cellzdirect, "the inventors created a new and useful cryopreservation technique comprising multiple freeze-thaw cycles" that went beyond applying a known laboratory technique to a newly discovered natural phenomenon and, instead, created an entirely new laboratory technique."  The claim in the Cellzdirect case does not support this interpretation:

1.  A method of producing a desired preparation of multi-cryopreserved hepatocytes, said hepatocytes being capable of being frozen and thawed at least two times, and in which greater than 70% of the hepatocytes of said preparation are viable after the final thaw, said method comprising:
    (A) subjecting hepatocytes that have been frozen and thawed to density gradient fractionation to separate viable hepatocytes from non- viable hepatocytes,
    (B) recovering the separated viable hepatocytes, and
    (C) cryopreserving the recovered viable hepatocytes to thereby form said desired preparation of hepatocytes without requiring a density gradient step after thawing the hepatocytes for the second time, wherein the hepatocytes are not plated between the first and second cryopreservations, and wherein greater than 70% of the hepatocytes of said preparation are viable after the final thaw.

The only difference between conventional method of cryopreservation and the claimed invention was that the claims direct that conventional methods be performed twice.  It is ironic that this repetition is sufficient to distinguish the claims here under these circumstances.

The biggest risk of the philosophy enunciated in this dissent is this:

The Majority's reasoning is shortsighted.  A process that merely changes the composition of a sample of naturally occurring substances, without altering the naturally occurring substances themselves, is not patent eligible" [citing Genetic Techs. and Ariosa, both of which involved claims reciting PCR amplification of specific DNA sequences].

If this was ever to be the law it would preclude on patent eligibility grounds claims to any natural product that differed solely by its isolation and concentration, again seemingly contrary to Supreme Court precedent.

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

What is an Abstract Idea, Anyway?

By Michael Borella --

In 2014's Alice Corp. v. CLS Bank Int'l case, Justice Thomas famously wrote, "we need not labor to delimit the precise contours of the 'abstract ideas' category in this case."  Instead, he found the claims of patentee Alice to have "no meaningful distinction" under 35 U.S.C. § 101 from those the Court previously found ineligible in Bilski v. Kappos.

Since then, the abstract idea inquiry has been applied by the Federal Circuit over 100 times in various ways.  Initially, there was some hope that this category may be limited to financial transactions or certain types of computer-implemented business methods.  Not so.  Recently, network-controlled electric car charging stations and garage door openers were found to be abstract in ChargePoint, Inc. v. SemaConnect, Inc. and The Chamberlain Group, Inc. v. Techtronic Industries Co., respectively.  These inventions join a long list of those found too abstract for patenting, including claims for displaying advertisements in before content in a video distribution service, dynamic tabs on a user interface, administration of digital images, monitoring of an electrical power grid, and computer virus screening just to name a few.

Even with all of these appellate opinions, the legal definition of "abstract idea" remains remarkably elusive.  Notably, in Interval Licensing LLC v. AOL, Inc., Judge Plager of the Federal Circuit wrote, "a search for a definition of 'abstract ideas' in the cases on § 101 from the Supreme Court, as well as from this court, reveals that there is no single, succinct, usable definition anywhere available."  Last year, the U.S. Patent and Trademark Office (USPTO) published patent eligibility examination guidance that defined three classes of abstract idea (mental processes, mathematical concepts, and methods of organizing human activity).  This demonstrates that the USPTO is struggling to have its examining corps of thousands apply Alice consistently.  But the courts have not adopted the USPTO's view of the world, and the Federal Circuit has explicitly stated that it is not bound by the guidance.

Denying one a property right or taking one's granted property right away based on such ill-defined criteria seems suspicious if not straight from the mind of a genetically-engineering offspring of George Orwell, Franz Kafka, and Terry Gilliam.  And yet, here we are.

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

Instead, the abstract idea is an elaborate legal fiction that has little to do with the layperson's understanding of what might or might not be abstract.  Without being grounded in statute or plain meaning, it is not hard to see why patentees, patent attorneys, the USPTO, and federal judges remain unable to agree on whether certain types of inventions are eligible for patenting.  And this gray area covers many types of inventions that are not only at the bleeding edge of research, but also crucial to the U.S. economy and competitiveness.  Artificial intelligence, machine learning, data science, and quantum computing innovations are more difficult to patent due to Alice and its progeny.[1]

A Concise Definition

Can one synthesize the aforementioned 100-plus Federal Circuit decisions applying the abstract idea test and come to a more clear understanding of what this category entails?  A daunting task no doubt, but one that I will attempt to address (with a handful of caveats, of course).

Particularly, in view of post-Alice Federal Circuit case law:

a claim is not directed to an abstract idea if it includes at least one element that is a specific, technical improvement that is not found in the prior art.

Let's break this down by stating the converse -- a claim is directed to an abstract idea if all of its elements are non-specific, address a non-technical problem, or are known in the art.  Thus, in order for a claim to be successful under § 101, it should have three qualities:  specificity, a technical problem that it solves, and some degree of novelty.  I will address each of these notions in turn.

Specificity

In ruling the invention in McRO, Inc. v. Bandai Namco Games America Inc. eligible, the Federal Circuit used the word "specific" or "specifically" at least 15 times when referring to the claims.  Similar usage of "specific" as a root word can be found in Enfish LLC v. Microsoft Corp., Trading Techs Int'l v. CQG, Inc., and SRI Int'l Inc. v. Cisco Systems Inc. -- in each of these cases, claims were ruled eligible.  In contrast, the Court in Chamberlain lamented the lack of specificity of the claims under review, which -- as noted above -- were found ineligible.

An aspect of specificity is whether the claims recite an outcome or how to achieve that outcome.  Purely outcome-oriented claims often appear functional, indicating what the invention provides rather than how the invention provides it.  In Electric Power Group, LLC v. Alstom S.A., the Court found the claims therein ineligible due to their "defining a desirable information-based result and not [being] limited to inventive means of achieving the result."  Likewise, in Two-Way Media Ltd. v. Comcast Cable Communications, LLC, the Court criticized one of the claim's "result-based functional language."  Particularly, "[t]he claim requires the functional results of converting, routing, controlling, monitoring, and accumulating records, but does not sufficiently describe how to achieve these results in a non-abstract way."  It is not hard to find more examples of claims that have fallen due to lacking specificity regarding the steps needed to carry out the invention.

Indeed, there are five types of specificities that can appear in a claim.[2]  Ideally for § 101 purposes, a claim recites a specific function of a specific element that does something in a specific way to obtain a specific result and thus solve a specific problem.  Not all five specificities need be present in each claim, but the more of these specificities there are, the more likely the claim will survive an eligibility challenge.  Conversely, the fewer specificities in the claim, the more likely it will be found abstract.

If you are thinking that specificity of claim language should be handled by the definiteness, enablement, and written description requirements of § 112 you would not be wrong.  But one of the odd aspects of post-Alice case law is how the § 101 test has evolved to take on characteristics from the § 112 tests.  This evolution has not gone unnoticed at the Federal Circuit.  In American Axle & Mfg. v. Neapco Holdings LLC, Judge Moore wrote in dissent that the majority had applied an enablement test in the guise of eligibility.[3]

Addressing a Technical Problem

But claims require more than just specificity to be eligible.  There are numerous examples of narrow, specific claims that fell to a § 101 challenge, including those of Trading Techs. Int'l, Inc. v. IBG LLC ("[t]he claims are focused on providing information to traders in a way that helps them process information more quickly, not on improving computers or technology"),[4] Versata Development Group, Inc. v. SAP America, Inc. (a claim "akin to creating organizational management charts" fails to "solve a technical problem using a technical solution"), Shortridge v. Foundation Construction Payroll Service, LLC ("generating certified payroll records is an abstract business practice"), and SAP America, Inc. v. InvestPic, LLC ("Under the principles developed in interpreting § 101, patent law does not protect [an advance in mathematical techniques in finance], without more, no matter how groundbreaking the advance").  Thus, specificity will only get you so far and is not the complete answer to the § 101 riddle.

But Trading Techs, Versata, Shortridge, and SAP America all exhibit an unfavorable characteristic -- they are more directed to solving business problems rather than technical problems.  While there is no statutory notion in the U.S. that patents only protect solutions to technical problems, the America Invents Act did introduce the Covered Business Method Review process.  This, along with Alice, may have resulted in the Federal Circuit feeling like it has license to look askance at business methods, with the district courts and USPTO following.

What exactly is a difference between solving a technical problem versus a business problem?  For guidance, we can look to Europe and other jurisdictions where such a concept has been in place for years.  Along these lines of thinking, inventions exist on a spectrum from those addressing technical problems by improving the operation of machines (e.g., engine control, error correction coding of signals, multiprocessing), to those addressing the operation of a business (e.g., derivative trading, hedging risk analysis, ecommerce, and retail schemes).  The former is much more likely to be patentable than the latter.  In the middle, we have a gray area of inventions that improve human performance or life in general (e.g., film animation, desktop communication applications, video game avatar controls).  These inventions could go either way.

Indeed, the Federal Circuit has even found inventions that are claimed rather broadly to be eligible due to their technical nature.  In SRI, claims addressing a hierarchical network monitoring system were found rooted in computer technology in order to solve a specific problem arising in the realm of network computing.  Likewise, claims in Koninklijke KPN N.V. v. Gemalto M2M GmbH were also found eligible "because they are directed to a non-abstract improvement in an existing technological process."

Thales Visionix Inc. v. U.S. is a notable case in this category, where remarkably broad claims were found to be eligible because the accompanying specification explained in detail the technical improvement they provided.  But one should not conclude that specificity can be replaced by a technical improvement.  Claims with both fare better, and Thales may be an outlier.  A lengthy explanation of an invention's technical character in the specification (when argued properly) probably cannot hurt claims, but it will not guarantee success if the claims are outcome-oriented.

The USPTO's Patent Trial and Appeal Board (PTAB) seems to be taking the European approach.  Recently, the PTAB published a number of informational decisions applying the USPTO's latest examination guidance.  The outcomes of these cases break along the technical problem to a technical solution line.  An invention directed to optimizing the signal to noise ratio from reception coils of an magnetic resonance tomograph was found to meet the § 101 requirements, as was an invention focused on transforming the coordinate system of catheter navigation to the coordinate system of an external model or external image data.  On the other hand, software for selecting a golf club with a suitable loft angle and software for creating a life-cycle workflow for a project were found ineligible due to their addressing non-technical problems.

Nonetheless, the contours of the business method are somewhat malleable and in the eyes of the beholder.  There are instances of the Federal Circuit finding claims to be eligible where those claims are ostensibly business-oriented.  In Trading Techs Int'l v. CQG, Inc., the Court concluded that claims directed to a securities trading user interface was sufficiently technical because it solved existing problems in such interfaces.  In DDR Holdings, LLC v. Hotels.com L.P., the Court found that the claimed solution of "generating a composite web page that combines certain visual elements of a host website with content of a third-party merchant" to be technical and "necessarily rooted in computer technology," despite arguably addressing the business-oriented problem of retaining or increasing web site traffic.

Not in the Prior Art

Patent eligibility under § 101 was not intended to be a prior art test, but it has become one.  Despite Judge Moore's criticism of the Court's combining § 112 considerations into § 101, her opinion in Berkheimer v. HP Inc. introduces factual considerations of prior art under §§ 102 and 103 into part two of the Alice test (the search for an inventive concept where one must consider whether claim elements are well-understood, routine, and conventional).  But the cross-contamination of eligibility and prior art began before Berkheimer.  Indeed, comparisons between claimed inventions and prior art are found in a vast number of § 101 decisions including the aforementioned KPN, Chamberlain, Enfish, and McRO cases, as well as Cellspin Soft, Inc. v. Fitbit, Inc., Data Engine Technologies LLC v. Google LLC, Core Wireless Licensing S.A.R.L. v. LG Electronics, Inc., and Internet Patents Corp. v. Active Network, Inc., just to name a few.

The exact nature of this de facto prior art analysis under § 101 is unclear.  Not only does it impact the second part of the test but also the first part.  For example, in Chamberlain, the Court found the claims abstract after noting that the "only described difference between the prior art movable barrier operator systems and the claimed movable barrier operator system is that the status information about the system is communicated wirelessly" and that wireless communication is an abstract concept.  Rather than analyzing claims as a whole under part one as was set forth in Enfish and McRO, recent Federal Circuit cases appear to be dividing claims into elements within the prior art and those that are not.  The Court then only considers whether the non-prior-art elements are specific and technical enough to be more than an abstract idea.

But what if all of your claim elements are in the prior art, but your claims recite a combination that is not?  As noted, even though claims are supposed to be analyzed as a whole under part one of Alice and as an ordered combination under part two, these analyses get short shrift in practice.  In cases like Chamberlain and InvestPic, the Federal Circuit provided conclusory reasoning by using variations of the phrase "when considered as an ordered combination, the components of each claim add nothing that is not already present when the steps are considered separately."  This language is derived from Mayo, and similar wording regarding ordered combinations can be found in numerous district court and PTAB decisions.  Bottom line -- relying on claims being viewed as a whole or as an ordered combination is risky.

Analysis

To be clear, the definition I propose is not perfect, and is merely an attempt to fit a line through a messy set of data points.  Still, following this approach can provide a sense of how likely it is for your invention to avoid § 101 issues, or whether drafted claims should be edited or amended to become more clearly eligible.  While some of these factors might be able to be downplayed in certain situations, the more specific, technically-oriented, and novel your claimed invention, the higher the probability of a desirable outcome.

Notably, this definition is not the two-part Alice test.  There is no "directed to" or "inventive concept" inquiries.  In practice, the Alice test often effectively has only one part -- whether the claim is directed to a judicial exception.  In conducting this inquiry for the abstract idea category, one considers the claim's specificity, technical character, and whether it recites elements in the prior art.  Therefore, I posit that the definition proposed is a more coherent representation of the process actually carried out than the disparate articulations of Alice in the last five-and-a-half years of Federal Circuit case law.

[1] Medical diagnostics and genetic engineering are other high-value fields that suffer from the Supreme Court's rulings, though inventions in these areas are generally subject to the natural phenomenon or law of nature exceptions to eligibility, and are thus controlled by Mayo Collaborative Services v. Prometheus Labs., Inc. and Association for Molecular Pathology v. Myriad Genetics rather than just Alice.

[2] These five specificities are different but in the same spirit as those introduced by Judge Lourie in Vanda Pharmaceuticals v. West-Ward Pharmaceuticals.  In that case, he wrote "[a]t bottom, the claims here are directed to a specific method of treatment for specific patients using a specific compound at specific doses to achieve a specific outcome."

[3] Admittedly, the judicial exception in American Axle was a law of nature, but Judge Moore's general reasoning holds.

[4] There are multiple Federal Circuit cases with this heading, and the one decided April 30, 2019 is referred to here.

A Step-by-Step Approach to Patent Subject Matter Eligibility Reform

By Kevin E. Noonan --

There is a belief in some quarters that the most significant barrier to patent subject matter eligibility reform is an implacable opposition by companies in the high tech sector because those companies are convinced that the recent Supreme Court precedent (Bilski/Mayo/Alice) as interpreted by the Federal Circuit has resulted in a diminution in lawsuits by so-called "patent trolls," non-practicing entities who accumulate patents to be asserted against these companies.  Sitting in yet another patent conference, surrounded by some of the most erudite members of the patent community (judges and former judges, PTO officials current and past, distinguished patent lawyers and company IP counsel), discussing the current (parlous) state of affairs regarding patent subject matter eligibility and the inability (Federal Circuit, Congress) or unwillingness (Supreme Court) to find a solution, it is impossible not to think that the way the issue has been addressed is, at best, insufficient.  If indeed the issue cannot be resolved politically between the high tech and biotech/pharma shareholders, then it seems evident that this issue -- the attachment to the status quo by the high tech community because it serves their interests -- must be resolved before any solution to the problem for all other technologies becomes possible.

Past experience may provide an avenue for such a resolution.  In the 1990's, patent law was faced with claims directed to methods for performing eye surgery.  The patent, U.S. Patent No. 5,080,111 to Dr. Pallin, was being asserted (Pallin v. Singer, 1996 WL 274407 (D. Vt., Mar. 28, 1996)) against medical doctors and eye clinics and prompted swift Congressional action.  The measure that ultimately passed, introduced by Senator Bill Frist of Tennessee (himself a physician) was codified as 35 U.S.C. § 287(c):

35 U.S.C. 287 Limitation on damages and other remedies; marking and notice.

* * *

(c)(1) With respect to a medical practitioner's performance of a medical activity that constitutes an infringement under section 271(a) or (b) of this title, the provisions of sections 281, 283, 284, and 285 of this title shall not apply against the medical practitioner or against a related health care entity with respect to such medical activity.

 * * *

    (3) This subsection does not apply to the activities of any person, or employee or agent of such person (regardless of whether such person is a tax exempt organization under section 501(c) of the Internal Revenue Code), who is engaged in the commercial development, manufacture, sale, importation, or distribution of a machine, manufacture, or composition of matter or the provision of pharmacy or clinical laboratory services (other than clinical laboratory services provided in a physician's office), where such activities are:
        (A) directly related to the commercial development, manufacture, sale, importation, or distribution of a machine, manufacture, or composition of matter or the provision of pharmacy or clinical laboratory services (other than clinical laboratory services provided in a physician's office), and
        (B) regulated under the Federal Food, Drug, and Cosmetic Act, the Public Health Service Act, or the Clinical Laboratories Improvement Act.

The policy justification for the bill was, as eloquently expressed by Senator Frist, because "innovations in surgical and medical procedures do not require the midwifery of patent law."  As enacted, the bill reflects a carefully crafted ("narrowly tailored") balance between the concerns of the medical community and the patent community at large, particularly the biotechnology community.  For example, "biotechnology patents" are expressly excluded from the exemption; such patents are defined (under 35 U.S.C. § 103(b)) as "a process of genetically altering of inducing a single or multi-celled organism" or "cell fusion procedures yielding a cell line that expresses a specific protein" or "methods of using a product produced" by the above processes.  Also not exempt are individuals involved in the commercialization of "a machine, manufacture, or composition of matter" related to a medical activity.

If indeed one of the major impediments to patent subject matter eligibility reform today is the concerns of the high tech community that the current state of the law is what has reduced the plague of patent troll litigation against them (regardless of the justification for these concerns), perhaps Congress should consider amending the patent statute to contain a similar exclusion for such alleged troll activity:

It shall not be an act of infringement under section 271(a) or (b) of this title, and the provisions of sections 281, 283, 284, and 285 of this title shall not apply, to practice of a method claim wherein any limitation of said claim is recited and defined solely by its function, unless the method is practiced using a structural component corresponding to that function that is expressly disclosed in the patent specification, or equivalents thereof.

While not providing a blanket license to infringe such a statutory provision would go far along the path of immunizing the targets of "troll"-asserted patent litigation.  It would limit the scope of infringement for claims reciting functional limitations to the express contribution disclosed in the specification, or equivalents thereof (analytics for which are available for assessing the scope of claims reciting limitations falling within the scope of 35 U.S.C. § 112(f)).  It would provide an avenue for such claims to be practiced without infringement liability merely by exercising the marginal creativity needed to employ a step in the method using structural components not recited in the specification and different enough in structure not to be an equivalent to what the specification expressly discloses.  It would also provide statutory protection from infringement that would bring a measure of certainty to companies who purportedly find themselves as deep-pocket targets of non-practicing patentees or patent assertion entities.

Of course, nothing involving patent subject matter eligibility law is certain or easy.  But eliminating the complaints of one set of shareholders in such a way might clear the path for Congress to address the concerns of other members of the patenting community, where additional creative stratagems might be productively employed.  Like Rome, patent subject matter eligibility will not be built in a day, but by taking a step-by-step approach perhaps it may be possible in our lifetimes.