Evolving Patent Eligibility Standard for Computer-Implemented Inventions
Addressing the patent eligibility of computer-implemented inventions, the US Court of Appeals for the Federal Circuit concluded that under step one of the Alice eligibility test, claims directed to improvements in computer functionality may not be directed to abstract ideas if the invention is directed to an improvement in the operation of a computer itself. Enfish, LLC v. Microsoft Corp., Case No. 15-1244 (Fed. Cir., May 12, 2016) (Hughes, J). Less than one week later, the Federal Circuit found that a computer-implemented invention that requires a computer to facilitate what might otherwise be non-computerized functions was directed to an abstract idea and therefore not patent eligible under Alice step 1. In re TLI Comm’s LLC Pat. Lit., Case Nos. 15-1372; -1376; -1377; -1378; -1379; -1382; -1383; -1384; -1385; -1417; -1419; -1421 (Fed. Cir., May 17, 2016) (Hughes, J). Shortly thereafter, the Patent Trial and Appeal Board (PTAB or Board) applied Enfish to find that claims directed to an improvement to computer functionality were not likely patent ineligible at Alicestep 1. Ahold USA Inc. v. Advanced Marketing Systems, LLC, Case No. CBM2016-00013, Paper 6 (May 26, 2016) (Giannetti, APJ).
In Enfish, the Federal Circuit reversed the district court judgment of no patent eligibility, finding claims to a computerized database organized as a “self-referential” logical table that defines its columns by rows in the same table to be directed to patent eligible subject matter. The Federal Circuit explained that a self-referential database allows for faster searching, easier configuration and more effective data storage than prior art databases. The Court reasoned that the claims were directed to a non-abstract improvement in computer function as opposed to the abstract idea of “storing, organizing, and retrieving memory in a logical table.”
By contrast, in TLI, the Federal Circuit (again with Judge Hughes writing) affirmed the unpatentability of claims to a computer-implemented method of organizing and storing digital information such as photographs using classification information such as the photograph’s date or location. The Court found that, rather than improving the function of a computer, the claimed method merely used the computer to facilitate the performance of an age-old method of indexing documents. Thus, the Court found the claims to be directed to the abstract idea of organizing information, and patent-ineligible because the remaining limitations amounted to no more than a command to “apply it on a [computerized] telephone network.”
Less than two weeks later, the PTAB, applying Enfish in the Aholdcovered business method (CBM) proceeding, declined to institute a CBM review of claims that it held were directed to an improvement in computer functionality (but not based on grounds of patent eligibility). The claims at issue were directed to a computer-implemented coupon system that allows vendors to imbue one coupon with multiple discounts, then selectively deactivate each discount as a consumer purchases each discounted item. Analyzing the CBM-eligibility of the claims, the PTAB explained the claims were not directed to a “technological invention” because the focus of the specification was the claimed coupon as opposed to the claimed data processing components, which were “conventional” and “existing.” The PTAB was not convinced that the problem solved by the claimed invention specifically arose in the realm of computer networks, but nonetheless found that the petitioner had insufficiently demonstrated the likelihood that the claims were not patent eligible. The PTAB faulted the petitioner for analyzing only whether the coupon was abstract rather than the combination of the coupon and data-processing components. Analyzing the claim as a whole, the PTAB reasoned that the claims were directed to improvements in computer function, not the abstract idea of “offering, tracking and processing discounts.” However, the PTAB went on to institute CBM review on written description and anticipation grounds.
Practice Note: The US Patent and Trademark Office has already promulgated guidance to examiners applying Enfish to narrow the circumstances under which claims to computer-implemented inventions will be rejected for patent ineligibility.