System and Method Claims Directed to Abstract Idea Properly Bounced on 12(b)(6) Motion

by Harness, Dickey & Pierce, PLC
Contact

Harness, Dickey & Pierce, PLC

In Fairwarning IP, LLC v. Iatric Systems, Inc., [2015-1985] (October 11, 2016), the Federal Circuit affirmed the district court’s dismissal of the complaint because U.S. Patent No. 8,578,500, claimed patent-ineligible subject matter under 35 U.S.C. § 101.

The patent related to ways to detect fraud and misuse by identifying unusual patterns in users’ access of sensitive data.  At step I of the Supreme Court’s two step framework for determining patent eligibility, the Federal Circuit found that the patent was directed to the abstract idea of analyzing records of human activity to detect suspicious behavior.  The Federal Circuit noted that the “realm of abstract ideas” includes “collecting information, including when limited to particular content.”  Furthermore, analyzing information according to the steps people go through in their minds, or by mathematical algorithms, without more, is essentially mental processes within the abstract-idea category.  Finally, “merely presenting the results of abstract processes of collecting and analyzing information, without more (such as identifying a particular tool for presentation), is abstract as an ancillary part of such collection and analysis.”

The Federal Circuit distinguished McRO where it was the incorporation of the claimed rules, not the use of the computer, that improved the existing technological process.  In contract, the Federal Circuit found the claims in suit to be more like those in Alice, merely implement an old practice in a new environment.  The “rules” in the patents in suit pose the same questions that humans in analogous situations detecting fraud have asked for decades, if not centuries.  The Federal Circuit also distinguished Enfish where the claimed invention was “directed to a specific improvement to the way computers operate.”

Because it found the claims were directed to an abstract idea at step one of the patent-eligibility inquiry, the Federal Circuit proceeded to step two.  After scrutinizing the claim elements more microscopically under step two, the Federal Circuit found nothing sufficient to transform the nature of the claim into a patent eligible application.  The claim limitations, analyzed alone and in combination, fail to add “something more” to “transform” the claimed abstract idea of collecting and analyzing information to detect misuse into “a patent-eligible application.”

The Federal Circuit also found the system claim patent ineligible, noting that while it is not always true that related system claims are patent-ineligible because similar method claims are, when they exist in the same patent and are shown to contain insignificant meaningful limitations, the conclusion of ineligibility is inescapable.

FairWarning tried to save the claims, arguing that they solved the problem of compiling and combining disparate information sources, but the Federal Circuit that these features were not in the claims.  The Federal Circuit concluded:

After closely examining the claims of the ’500 patent in search of “something more” to transform the underlying abstract idea into a patent-eligible application, we conclude that there is nothing claimed in the patent — either by considering the claim limitations individually or as an ordered combination — that makes its claims patent eligible.

FairWarning complained that the district court’s reliance on the finding that “the human mind can perform each step” was improper.  The Federal Circuit dodged the issue, commenting that “the inability for the human mind to perform each claim step does not alone confer patentability.”  Likewise, the Federal Circuit rejected FairWarning’s argument about preemption, noting that while preemption may signal patent ineligible subject matter, the absence of complete preemption does not demonstrate patent eligibility.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Harness, Dickey & Pierce, PLC | Attorney Advertising

Written by:

Harness, Dickey & Pierce, PLC
Contact
more
less

Harness, Dickey & Pierce, PLC on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.