Imagine That IP Law Blog

More than decade after the Supreme Court’s landmark decision in Alice Corp. v. CLS Bank International, 573 U.S. 208 (2014), the question of what makes a software invention patent-eligible under 35 U.S.C. § 101 remains one of the most unsettled areas of U.S. patent law. The Alice framework, which built on the earlier Supreme Court ruling in Mayo Collaborative Services v. Prometheus Laboratories, Inc., 566 U.S. 66 (2012), purported to prevent monopolization of “abstract ideas” through generic computer implementation. However, that decision has since spawned a complex and often unpredictable body of case law.

For patent applicants in fields such as software, artificial intelligence, machine learning, and data analytics, § 101 eligibility continues to be a significant stumbling block. A patent application for an invention may be novel under 35 U.S.C. § 102, non-obviousness under 35 U.S.C. § 103, and fully described satisfying 35 U.S.C. § 112, yet still be rejected as “abstract” under § 101.

The conceptual challenge is that the Alice/Mayo two-step test presently employed by both patent examiners and the courts is deceptively simple, yet difficult to apply consistently. Step one asks whether claims are “directed to” an abstract idea, law of nature, or natural phenomenon. In the case where the answer to step one is yes, step two asks whether the claims contain an “inventive concept” sufficient to transform that idea into patent-eligible subject matter. Neither step has a bright-line definition, leaving courts to decide, often inconsistently, whether a computer-implemented invention reflects a true technological improvement or simply automates an existing practice.

Since Alice, the Federal Circuit has attempted to delineate the boundary between eligible and ineligible subject matter. Some panels emphasized eligibility for inventions that improve computer functionality itself, such as in Enfish, LLC v. Microsoft Corp., 822 F.3d 1327 (Fed. Cir. 2016) and DDR Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245 (Fed. Cir. 2014), while others have invalidated claims directed to data analysis or result-oriented processing, such as in Elec. Power Grp., LLC v. Alstom S.A., 830 F.3d 1350 (Fed. Cir. 2016)  and SAP Am., Inc. v. InvestPic, LLC, 898 F.3d 1161 (Fed. Cir. 2018).

The Alice framework remains controlling in both the United States Patent and Trademark Office (USPTO) and the federal courts. Its application, however, remains fractured. The Federal Circuit continues to invalidate a significant number of software claims as abstract, particularly those that automate human or business practices without improving computer functionality. At the same time, the court has upheld claims that recite specific improvements to computing processes or architectures.

The emerging pattern is that the “generic application of known computing techniques” remains ineligible, whereas claims that explain how a computer is improved, such as through new data structures or processing techniques, stand a stronger chance of survival.

Data Analytics and Algorithmic Processing Cases Tend to Fail
The Federal Circuit has repeatedly held that claims directed to data collection, analysis, and display using generic computing technology are abstract. See Elec. Power Grp., 830 F.3d at 1353–54. Similarly, claims focused on mathematical modeling or statistical analysis have been found ineligible where they do not improve computer functionality. See SAP Am., 898 F.3d at 1163–64. In In re Bd. of Trs. of the Leland Stanford Junior Univ., 991 F.3d 1245 (Fed. Cir. 2021), the court treated certain computational methods as abstract mathematical operations.

These cases reinforce that applying generic machine-learning or statistical techniques to new data or domains is unlikely to satisfy § 101 absent a specific technological improvement.

Technological Improvement Cases Fare Better
By contrast, the Federal Circuit has upheld claims directed to specific improvements in computer functionality. In Enfish, the court held that a self-referential database table improved the way computers operate. 822 F.3d at 1335–36. In McRO, Inc. v. Bandai Namco Games America Inc., 837 F.3d 1299 (Fed. Cir. 2016), the court found claims eligible where they used specific rules to improve animation technology. Likewise, DDR Holdings upheld claims addressing a problem unique to computer networks. 773 F.3d at 1257–59.

These decisions illustrate that claims directed to concrete technological mechanisms, rather than functional results, are more likely to survive § 101 scrutiny.

Supreme Court Posture
The Supreme Court has repeatedly declined to revisit § 101 jurisprudence. Notably, it denied certiorari in American Axle & Manufacturing, Inc. v. Neapco Holdings LLC, 141 S. Ct. 2902 (2022), leaving the Federal Circuit’s framework intact.

Conclusion
At present and for the foreseeable future, the law of patent eligibility under § 101 of the Patent Act remains in flux. The Alice framework continues to govern, but its application varies widely. The Federal Circuit has drawn an increasingly clear distinction: claims that merely apply generic computing techniques to abstract goals remain ineligible, while those that disclose specific technological improvements to computer functionality can survive.

For practitioners, the key takeaway is practical: eligibility turns on how the invention is described and claimed. Patent drafting should focus on articulating concrete technological improvements and avoiding purely functional language. Until further guidance emerges from the Supreme Court or Congress, careful patent claim drafting and strategic advocacy remain essential.