Fed Circuit swings the pendulum towards eligibility and away from abstraction

In 2012 when Enfish sued Microsoft the District Court for the Central District of California found all claims invalid because they were directed to the abstract idea of “storing, organizing, and retrieving memory in a logical table” or “the concept of organizing information using tabular formats.” On appeal, Judge Todd Hughes of the United States Court of Appeals for the Federal Circuit found that the claims were NOT directed to an abstract idea and consequently avoided the second step of the Mayo & Alice analysis completely. Although, the court affirmed the summary judgment of non-infringement the opinion is a monumental step in the right direction as it serves as an excellent guide to patent owners and practitioners on how, when, and why the two step framework may be avoided altogether.

It is now virtually cliché to state the Mayo Collaborative Servs. v. Prometheus Labs., Inc., 132 S. Ct. 1289 (2012), and Alice Corp. Pty. Ltd. v. CLS Bank Intern., 134 S. Ct. 2347 (2014) standards because they betray ones ability to portray an original thought. In any event, the muddled case law requires (1) a determination whether the claims at issue are “directed to” a patent-ineligible concept; and (2) a determination if the elements of each claim, both individually and as an ordered combination, transform the nature of the claim into a patent-eligible application.

Academics and practitioners alike spend considerable time discussing whether the bulk of the §101 analysis is performed in step one, step two, or some other peripheral hunt for an “inventive concept” that doesn’t “preempt” other technologies. In our view, step one is focused predominately on the simple questions i.e. “what is the invention” and “what novel technical improvements are claimed”. Step two seems to be more focused on the Supreme Court’s belief that some necessarily abstract technical disciplines require narrowly tailored claim language with meaningful concrete language in which the limitations amount to something substantial without unnecessarily preempting other fields and uses.

In Alice The Supreme Court suggested that claims improving “the function of the computer itself, or improving an existing technological process might not succumb to the abstract idea exception.” USPTO Examiners and District Courts have predominately performed this analysis at step two of the Mayo & Alice framework. In Enfish LLC v. Microsoft Judge Todd Hughes skillfully noted that step one necessarily includes an unnamed category of patent eligible subject matter. This unnamed yet necessary category was the logical foundation upon which an excellent opinion was formulated. Judge Hughes, found that software is not inherently abstract and that by viewing software improvements by a high level of abstraction as the District Court did would allow the exceptions to swallow the rule. Judge Hughes also explained that because The Supreme Court did not explicitly define the term “abstract idea” a finding would necessarily require a direct comparison of claims at issue to subject matter and claims that have been previously identified as abstract by The Supreme Court and the Federal Circuit.

Focus of the Opinion:

In our view the focus of the analysis of the opinion was on the quality of the specification and the well disclosed improvements the technology made to the field of software – specifically databases.  The Enfish patents were both focused on improvements that were made to “relational databases” used to store large quantities of information and how to draw inferences quickly and efficiently from that data. The patent establishes that a “self-referential” table structure is a preferential arrangement to the typically used tables, columns, cells, etc. of traditional relational databases because the “self-referential” table structure allows information that would normally appear in a multitude of relational tables to be consolidated and stored in a single table. (Emphasis added) Furthermore, the patents themselves explained that by using a single table a user could benefit from quicker searching and indexing in addition to an enhanced data structure and storage capabilities.

The Court plainly establishes that the claims must be read in light of the specification when determining if a claimed invention is subject to the second part of the Mayo & Alice framework. In the Courts own language:

“We thus see no reason to conclude that all claims directed to improvements in computer-related technology, including those directed to software, are abstract and necessarily analyzed at the second step of Alice, nor do we believe that Alice so directs.  Therefore, we find it relevant to ask whether the claims are directed to an improvement to computer functionality versus being directed to an abstract idea, even at the first step of the Alice analysis”

Practical Takeaways:

Practitioners should be counseling clients that creative draftsmanship of software patent applications should focus on the specific improvements the claimed subject matter is “directed to.” By focusing on improvements, and providing a comprehensive specification outlining those improvements to avoid the step one analysis as was the case in Enfish LLC v. Microsoft.  It is also important to establish that the claims should be carefully drafted with an eye on avoiding routine conventional language.

The uncertainty of the law indicates that the claims should also be given additional meaningful limitations. In DDR Holdings, LLC v. Hotels.com, L.P. Judge Chen relied heavily on the fact that when the claims were taken together as an ordered combination the claims recited meaningful limitations that were not merely routine or conventional and that they were “necessarily rooted in computer technology in order to overcome a problem specifically arising in the realm of computer networks.”

In our opinion it is preferable to avoid a step two analysis by carefully drafting an improvement oriented specification per Enfish LLC v. Microsoft rather than clutching to the meaningful limitations of a claim per DDR Holdings, LLC v. Hotels.com, L.P.  However, a prudent practitioner would counsel clients that a hybrid approach utilizing the two is likely the smartest path towards the award of a blue-ribbon copy of an official patent.

In summary practitioners now have two cases to make an argument for patent eligibility. Importantly they each provide a roadmap to eligibility under different prongs of the existing two frame analysis. Enfish LLC v. Microsoft should stand for the proposition that a well drafted specification focusing on improvements may pass § 101 muster on its own while DDR Holdings, LLC v. Hotels.com, L.P should stand for the proposition that claims should be narrowly tailored with a background underpinning of a technical solution to a technical problem. Enfish also shows a clear example of how a “means for” functional style claim should always be present as at least one of the three independent claims in any software application. In our opinion an apparatus claim, method claim, and “means for” claim would allow a practitioner to run the gambit of claim style and draw upon concrete examples which have been recently upheld. Enfish LLC v. Microsoft serves as a practical reference why experienced practitioner’s that can draft excellent non-routine disclosures of improvements in a specification is a must. Additionally, well drafted specifications may satisfy the algorithm requirement that means for functional claim language requires.

By: Maier and Maier PLLC – P. Marshall Ticer and Timothy J. Maier