An Obviousness Rejection in Patent-Eligibility Clothing?

In Mayo v. Prometheus, the Supreme Court wrote "[w]e recognize that, in evaluating the significance of additional steps, the § 101 patent-eligibility inquiry and, say, the § 102 novelty inquiry might sometimes overlap."  The ongoing existence of this overlap has resulted in a catch-22 for patentees -- one can use prior art (or just an unsupported allegation that a claim element is conventional) to attack the validity of a patent, but the patentee cannot use the absence of such prior art to establish eligibility under § 101.  Given that the § 101 inquiry is considered (or at least it is supposed to be considered) as a matter of law, patent challengers often take the less rigorous path of attacking claims under § 101 rather than § 102 or § 103, both of which have effectively higher evidentiary standards.  As a consequence, § 101 has become overworked, often performing the duties of both § 102 and § 103, as well as § 112.

Or expressed in a more cynical tone, when invalidating a patent under § 101, facts don't matter.

In Mayo, Justice Breyer contended that "to shift the patent-eligibility inquiry entirely to these later sections risks creating significantly greater legal uncertainty, while assuming that those sections can do work that they are not equipped to do."  His rationale was that "§§ 102 and 103 say nothing about treating laws of nature as if they were part of the prior art when applying those sections" and that "studiously ignoring all laws of nature when evaluating a patent application under §§ 102 and 103 would make all inventions unpatentable."

In practice, however, §§ 102 and 103 are often better-equipped to handle invalidity contentions in a consistent and logical fashion than § 101.  Laws of nature are by definition not human-made, and therefore must be part of the prior art -- and they can be invoked as such by judicial notice.  Reading this into §§ 102 and 103 would do far less damage than what has been done by the reading of the largely unworkable two-prong test of Mayo and Alice Corp. v. CLS Bank Int'l into § 101.  And to rebut Justice Breyer's second point, § 103 is already used to evaluate claims that combine elements both in the prior art and not in the prior art (or combinations of elements all within the prior art).

In short, the Court's reasoning for stuffing analyses traditionally undertaken as part of §§ 102 and 103 into § 101 might sound reasonable in theory, but falls apart in practice.

To that point, on June 23, 2017, the Federal Circuit used conclusory reasoning to invalidate claims under § 101, even though it is likely that these claims could have been easily disposed of under § 103 in a more rationally-grounded fashion.

Prism Technologies LLC brought an infringement action against T-Mobile USA, Inc. in the District of Nebraska, asserting its U.S. Patent Nos. 8,127,345 and 8,387,155.  The '155 patent is a continuation of the '345 patent, and the earliest priority date of each (by way of a continuation–in-part) is in 1997.  T-Mobile moved for summary judgment on the pleadings, contending that Prism's claims were ineligible under § 101.  The District Court sided with Prism, the case continued to trial, and the jury determined that T-Mobile did not infringe.  Prism appealed, requesting a new trial, and T-Mobile cross-appealed, re-raising its § 101 position.

Claim 1 of the '345 patent was deemed representative, and it recites:

A method for controlling access, by at least one authentication server, to protected computer resources provided via an Internet Protocol network, the method comprising:
    receiving, at the at least one authentication server from at least one access server, identity data associated with at least one client computer device, the identity data forwarded to the at least one access server from the at least one client computer device with a request from the at least one client computer device for the protected computer resources;
    authenticating, by the at least one authentication server, the identity data received from the at least one access server, the identity data being stored in the at least one authentication server;
    authorizing, by the at least one authentication server, the at least one client computer device to receive at least a portion of the protected computer resources requested by the at least one client computer device, based on data associated with the requested protected computer resources stored in at least one database associated with the at least one authentication server; and
    permitting access, by the at least one authentication server, to the at least the portion of the protected computer resources upon successfully authenticating the identity data and upon successfully authorizing the at least one client computer device.

This claim describes a common authentication technique that has been used since the early- to mid-1990s.  Remote access to a computer network by an device or user often requires that the device and/or user first be authenticated before they are permitted access to use the network or the information therein.  Originally focused on dial-up modem Internet access, servers centralize the authentication, authorization, and accounting (AAA) procedures so that individual remote access gateways (e.g., modem pools) do not need to maintain separate databases of device and user profiles.  Such a AAA server is often referred to as a RADIUS server, as RADIUS is the protocol with which it communicates with the remote access gateways.

In any event, the Federal Circuit applied the Mayo / Alice test to evaluate the claim under § 101.  In this test, one must first determine whether the claim at hand is directed to a judicially-excluded law of nature, a natural phenomenon, or an abstract idea.  If so, then one must further determine whether any element or combination of elements in the claim is sufficient to ensure that the claim amounts to significantly more than the judicial exclusion.  But generic computer implementation of an otherwise abstract process does not qualify as "significantly more."  On the other hand, a claimed improvement to a computer or technological process is not abstract.

With respect to prong one, the Court agreed with the District Court that "the asserted claims are directed to the abstract idea of providing restricted access to resources."  Apparently, the Court was swayed by T-Mobile's analogies between the claim and pre-computer access control technologies.

Turning to prong two, the Court rejected the District Court's conclusion that the claim includes an inventive concept beyond the aforementioned abstract idea, because its elements "modify the way the Internet functions to provide secure access over a protected computer resource."  Instead, the Court found that the claim merely recites "a host of elements that are indisputably generic computer components."  Looking to the text of the specification, the Court found enough evidence to conclude that the applicant admitted, or at least implied, that the additional elements of the claim were conventional.  The Court further asserted that the combination of these elements was merely a set of "generic computer components employed in a customary manner."

As such, the Court ruled the claims invalid under § 101.

The irony here is that, as discussed above, there would be ample evidence to challenge the validity of these claims under § 103.  Prior to 1997, companies such as Livingston Enterprises and Funk Software were designing, implementing, and selling RADIUS servers, and these servers were deployed within several large telecommunications networks (see the Wikipedia page on RADIUS and the citations therein for detail).  The functions of these servers were largely indistinguishable from the plain language of claim 1.

In viewing the prosecution history of the '345 patent, the applicant submitted numerous non-patent literature (NPL) references disclosing the existence of such RADIUS servers.  In fact, the applicant submitted so many of these references that the Examiner contended that the volume of references was excessive and that he only performed a "cursory review" thereof.  None of these NPL references were cited against the claims during prosecution of the '345 patent.  Therefore, it is questionable whether they were fully considered by the Examiner, and this may explain why these claims were allowed in view of well-known prior art.

Thus, even if it is proper to invalidate this patent (or at least claim 1), this case demonstrates that doing so under § 101 rather than § 103 can be fraught with peril.  Here, the Federal Circuit applied conclusory reasoning under both prongs of Alice to do so, despite its recent insistence in Enfish v. Microsoft and McRO v. Bandai Namco Games America that such a practice of viewing the claims at a high level was inappropriate.  On the other hand, it is likely that a reasoned analysis under § 103 could have come to the same result without all of the judicial hand waving, and without doing further violence to the patent statute.

Prism Technologies LLC v. T-Mobile USA, Inc. (Fed. Cir. 2017)
Nonprecedential disposition
Panel: Chief Judge Prost and Circuit Judges Lourie and Schall
Opinion by Chief Judge Prost