The Law of Software Subject-Matter Eligibility Remains Unsettled
Friday, November 1, 2013

Revisiting the issue of patent subject-matter eligibility in software patents, the U.S. Court of Appeals for the Federal Circuit affirmed a lower court’s summary judgment of invalidity for lack of subject-matter eligibility, finding that Accenture’s insurance task patent to be directed to patent-ineligible subject matter.  Accenture Global Services, GmBH v. Guidewire Software, Inc., Case No. 11-1486 (Fed. Cir., Sept. 5, 2013) (Lourie, J.) (Rader, C.J., dissenting). 

The patent asserted by Accenture in the appeal is directed to a system and a method for generating tasks to be performed in an insurance organization. The district court, applying Bilski, held both the system claims and the method claims of the patent invalid under § 101.  Accenture appealed only the invalidity of system claims and not the method claims.

The Federal Circuit agreed with the district court that the claims were not directed to patent eligible subject matter.  Applying the plurality opinion in CLS Bank, the system claims were held to not have “meaningful imitations” beyond the method claims that were held patent-ineligible by the district court and not appealed.  The Federal Circuit reasoned that this lack of difference between the invalid method claims and the system claims at issue was sufficient for the Court to avoid considering the patent eligibility of the system claims separately.

After noting that analysis of the issue was not required, the Court nonetheless proceeded to analyze and reject the patent eligibility of the system claims.  After first identifying the abstract idea of the claims—generating tasks based on rules—the Federal Circuit rejected Accenture’s argument that the idea was limited by applying it “in a computer environment and within the insurance industry.”  Returning to the meaningful limitations analysis, the Court rejected the sufficiency of certain claim elements to limit the claims beyond their abstract concept: a database of tasks, a means to access the database and a set of rules to be applied to the tasks.  The Court noted, but held to be insufficient, the “very detailed software implementation guidelines” in the patent specification.

In a potentially significant comment, the Federal Circuit noted the difference in procedural posture between the patent eligible claims in Ultramercial and the ineligible claims in this case.  Without elaborating, the Court stated that this case, having claim construction complete, presented a “different scenario” from the Ultramercial case.

In dissent, Judge Rader quoted Ultramercial, in which he wrote the majority opinion finding a software invention patent eligible, and where Judge Lourie concurred in the result.  Calling the majority opinion “a testament to the perversity of a standard without rules,” Chief Judge Rader highlighted different ways that the abstract concept of the system claim could be performed without infringing the claims.  He also questioned the reasoning by the majority that, based on CLS Bank, the patent eligibility of the system claims did not need to be individually considered based on the invalidity of the associated method claims.  Chief Judge Rader noted that while eight of the ten en banc panel members in the CLS Bank found that the method and system claims in that case rose or fell together, they did not find that associated system and method claims be considered together.

Practice Note: Coming just three months after a similar issue was decided to the contrary in the Ultramercial case, this case would appear to add to the uncertainty surrounding patent eligibility for software-related inventions. 

 

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