'Alice' and the Search for Patent Eligible Software Patents

The U.S. Supreme Court's June 2014 landmark decision  Alice v. CLS Bank International, 134 S.Ct. 2347 (2014), altered the course and viability of software patents in the United States and continues to cause uncertainty over the eligibility of software for patent protection.  Alice announced a multi-step test for analyzing patent eligibility, under which the basic question for any software application is, "does the application satisfy the patent eligibility conductions of 35 U.S.C. Section 101 (Section 101)?" The United States Patent and Trademark Office (USPTO) has established examiner guidelines for software patent applications and patent practitioners have become increasingly skilled at responding to USPTO Section 101 rejections. Since the  Alice decision, a number of decisions by the U.S. Court of Appeals for the Federal Circuit decisions have had great influence on the examination practice in software, and at least two 2018 decisions by the Federal Circuit in patent infringement appeals  have found the asserted software claims to be patent eligible. In both of these patent infringement appeals, the decision hinged on the disclosure or written content of the application's specification.

In April 2018, USPTO Director Andrei Iancu told the Senate Judiciary Committee that the USPTO, to the extent possible within the guidelines from U.S. Supreme Court precedent, would strive to provide concrete guidance for patent practitioners in framing their patent prosecution arguments to overcome Section 101 rejections. Until that guidance is available, practitioners can find updated case postings, guides and directives at  USPTO's subject matter eligibility page. To help keep track of key cases the USPTO is routinely updating the eligibility quick reference sheet.

While waiting for the new guidance, IP practitioners dealing with software claims are likely to see examiners continue their reliance on the older cases for Section 101 patent eligibility, see  BASCOM Global Internet Services v. AT&T Mobility, 827 F.3d 1341, 1352 (Fed. Cir. 2016) (holding a patent for a system for filtering internet content was not an abstract idea and thus eligible);  Electric Power Group v. Alstom, 830 F.3d 1350, 1356 (Fed. Cir. 2016) (finding that patents claiming methods and systems for real-time performance monitoring of electrical grids were ineligible as they contained abstract ideas without an inventive step);  Amdocs v. Openet Telecom, 841 F.3d 1288, 1306 (Fed. Cir. 2016) (holding that patents claiming a system which solves accounting and billing issues is not an abstract idea and was patent-eligible).

There are 2018 Federal Circuit cases, like  Finjan v. Blue Coat Systems, 879 F.3d 1299, 1302 (Fed. Cir. 2018), and  Core Wireless Licensing S.A.R.L. v. LG Electronics, 880 F.3d 1356, 1369 (Fed. Cir. 2018), that have the potential to influence any future analysis of Section 101 software patent eligibility. Additionally, these decisions could give patent attorneys another tool in their proverbial arsenal when arguing to both the USPTO and the judicial system.

Finjan arose out of a patent infringement action that Finjan brought against Blue Coat Systems alleging infringement of four Finjan patents, including U.S. 6,154,844, that are directed to identifying and protecting against malware.  Finjan, at 1302. As a result of the trial in the district court, the jury awarded Finjan $39.5 million as reasonable royalty damages, which included $24 million for Blue Coat Systems' infringement of the '844 patent. In a related bench trial addressing the nonjury legal issues, the district court concluded that satisfied Section 101 the '844 patent contained patent-eligible subject matter.

Blue Coat appealed to the Federal Circuit. The Federal Circuit addressed claim 1, which reads:

"A method comprising:

  • Receiving by an inspector a downloadable;
  • Generating by the inspector a first downloadable security profile that identifies suspicious code in the received downloadable; and
  • Linking by the inspector the first downloadable security profile to the downloadable before a web server makes the downloadable available to web clients."

The Federal Circuit analyzed claim 1 using the  Alice multi-step test to determine whether the patent claims recited an improvement in computer technology and concluded that the claims are directed at "a new kind of file that enables a computer security system to do things that it could not do before." During the eligibility analysis, the Federal Circuit turned to the '844 patent's specification and found that the '844 patent claims "behavior-based" virus scanning unlike prior "code-matching" scanning. In its decision the Federal Circuit used the example of accumulating and using newly available, behavior-based information to identify potential threats before they get to a client's computer. Based on this new approach, the Federal Circuit determined that the '844 invention contained improved "nuanced" virus filtering in the "security profile" as compared to the prior art.

While analyzing the eligibility of the invention, the Federal Circuit also compared the '844 patent claims to earlier cases, such as  Enfish v. Microsoft, 822 F.3d 1327 (Fed. Cir. 2016), and stated "that a result, even if an innovative result, is not itself patentable." Using this theory, the court concluded that the "claims recite more than a mere result ... and they the claims recite specific steps ... that accomplish the desired result." Given this, the circuit court held that "the idea is nonabstract and there is no need to proceed to step two of  Alice." As a consequence, the Federal Circuit affirmed the lower court's finding that the '844 patent contained patent-eligible subject matter.

Shortly after  Finjan, the court decided another appeal of a patent infringement verdict where it held that a pair of related software patents (U.S. Patents 8,434,020 and 8,434,020) contained eligible subject matter, see  Core Wireless Licensing, 880 F.3d at 1369. Claims 1, 11, and 13 of the '020 patent, and claims 1, 8 and 9 of the '476 patent were at issue. Claim 1 of the '020 patent, which is directed at computing devices wherein users can utilize an application summary window directly from the main menu, reads:

  • A computing device comprising a display screen, the computing device being configured to display on the screen a main menu listing at least a first application, and additionally being configured to display on the screen an application summary window that can be reached directly from the main menu, wherein the application summary window displays a limited list of at least one function offered within the first application, each function in the list being selectable to launch the first application and initiate the selected function, and wherein the application summary window is displayed while the application is in an un-launched state.

Claim 1 of the '476 patent reads:

  • A computing device comprising a display screen, the computing device being configured to display on the screen a menu listing one or more applications, and additionally being configured to display on the screen an application summary that can be reached directly from the menu, wherein the application summary displays a limited list of data offered within the one or more applications, each of the data in the list being selectable to launch the respective application and enable the selected data to be seen within the respective application, and wherein the application summary is displayed while the one or more applications are in an un-launched state.

The Federal Circuit once again turned to the specification to determine if the claims recited an improvement upon the prior art. Applying the  Alice test, the circuit court held that the "asserted claims in this case are directed to an improved user interface for computing devices, not to the abstract idea of an index, as argued by LG on appeal." Quoting the '202 patent specification, the Federal Circuit noted it "teaches that the prior art interfaces had many deficits relating to the efficient functioning of the computer, requiring a user 'to scroll around and switch views many times to find the right data/functionality.' The Federal Circuit went on stating "that process could 'seem slow, complex and difficult to learn, particularly to novice users.' The Federal Circuit did not proceed to the second step of  Alice and, with reliance upon  Enfish and  Finjan, determined that the claims were non-abstract and satisfied Section 101.

Given the Federal Circuit's reliance on the patentee's specifications, see  Finjan and  Core Wireless Licensing, it is clear that patent practitioners need to detail the technical improvements within the specification in order to support or argue for Section 101 patent eligibility. However, patent practitioners must be mindful that unartful teaching of the technical advantage can lead, especially in litigations, to the argument that the technical improvements were obvious and the patent should be invalidated under 35 U.S.C. Section 103.

Patent practitioners should also continue to follow the USPTO's subject matter eligibility webpage to stay current on new cases, guides and directives. The  Alice story is not complete and the ultimate determination of what is Section 101 patent eligible will shape the future for software patents and possibly well beyond software patents.

Reprinted with permission from the May 1, 2018 issue of The Legal Intelligencer ©2018 ALM Media Properties, LLC. Further duplication without permission is prohibited. All rights reserved.

Posted in: Patents



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