May 16, 2016
Intellectual Property Alert
Author(s): Anthony M. Duncan, Jr.
On May 12, 2016, the Federal Circuit Court of Appeals beat back current trends of overly summarizing claimed inventions in broad general terms, in re: Enfish LLC v. Microsoft Corp., Case No. 15-1244, finding that patents that are directed to a specific improvement in the way computers operate are not directed to an abstract idea. Furthermore, the court held claims are not unpatentable under Alice simply because a software invention can run on a general-purpose computer, or because a software patent is not defined by physical components.
As many are aware at this point, in light of Alice Corp. v. CLS Bank Int’l., a two-step framework is used to determine whether or not patent eligible subject matter is recited. Under that test, a court must “determine whether the claims at issue are directed to one of those patent-ineligible concepts.” If so, then the court must ask “[w]hat else is there in the claims,” which requires consideration of “the elements of each claim both individually and ‘as an ordered combination’ to determine whether the additional elements ‘transform the nature of the claim’ into a patent-eligible application.”In this second step, the court must “search for an ‘inventive concept’—i.e., an element or combination of elements that is ‘sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the [ineligible concept] itself.”This two-step analytical framework has been labeled the “Alice/Mayo test.”
The Enfish decision involved only the first step of the test. Following an overwhelming trend to invalidate claims under Alice, the district court ruled Enfish's patents on a database with all the data on a single table was directed to an abstract idea of “organizing information using tabular formats.” The Federal Circuit disagreed, ruling that the Enfish patents are in fact directed to a specific improvement in the way computers operate. As a result, they are not directed to an abstract idea and there is no need to move on to the second step, the Federal Circuit said.
To provide further clarity on the topic, the court further provided guidelines on how to apply the two-part test defined in Alice. "The Supreme Court has suggested that claims “purport[ing] to improve the functioning of the computer itself,” or “improv[ing] an existing technological process” might not succumb to the abstract idea exception. . . . We do not read Alice to broadly hold that all improvements in computer-related technology are inherently abstract and, therefore, must be considered at step two," the Federal Circuit opined. "Nor do we think that claims directed to software, as opposed to hardware, are inherently abstract and therefore only properly analyzed at the second step of the Alice analysis."
The Supreme Court cautioned in Alice that applying the decision too broadly could “swallow all of patent law.” The Federal Circuit appears to be providing assistance in abstaining from the ultimate doom by lowering the bar. The court opined “software can make non-abstract improvements to computer technology just as hardware improvements can, and sometimes the improvements can be accomplished through either route,” effectively refocusing the test from a broad assessment of whether the claims are abstract to whether the claims define specific asserted improvements. Specifically, the court holds “[w]e 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” and “the plain focus of the claims is on an improvement to computer functionality itself, not on economic or other tasks for which a computer is used in its ordinary capacity.”
In short, the Federal Circuit has changed the nature of the Alice test, lowering the bar on whether the claims are abstract and effectively reducing the two-prong test to a single assessment analysis. Upon a display that the claims define specific asserted improvements (and are not abstract), an applicant no longer needs to identify the inventive concept.
The impact of this decision may be significant, especially if it is adopted by district courts and the USPTO.
A copy of the Federal Circuit’s decision in its entirety is available here.
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