Federal Circuit Rules Software Patent for a User Interface is Patentable Subject Matter

Tarter Krinsky & Drogin LLP

In the recent decision Trading Technologies International, Inc., v. CQG, Inc. et al., the Federal Circuit affirmed a district court's ruling that a software patent on a graphical user interface was patentable subject matter, and not directed to an abstract idea under Alice.

In Alice, the Supreme Court ruled that a software patent was directed to a patent-ineligible concept under 35 U.S.C. § 101 if (1) the patent claimed an abstract idea, and (2) if the claim elements, considered both individually and as an ordered combination, do not transform the abstract idea into a patent-eligible application. Since Alice, numerous district courts and the Federal Circuit have invalidated hundreds of software patents as being directed to abstract ideas under step (1), and not meeting the requirements of step (2). Many of these patents included language for generic computer components, such as a display, processor or storage device.

In Trading Technologies, the defendants CQG were sued for patent infringement. The patents in suit are directed to solving the problems of traders attempting to enter an order at a particular price, but missing the price because the market moved before the order was entered and executed. The patents also attempt to cover when trades are executed at prices different than intended due to rapid market movement. In the patented system, bid and asked prices are displayed dynamically along the static display, and the system pairs orders with the static display of prices and prevents order entry at a changed price. CQG argued that the patents were invalid since they were directed to the abstract idea of commodities trading, and that simply displaying information on a graphical user interface did not transform the abstract idea into a patent eligible invention under Alice.

The Federal Circuit affirmed the District Court's finding that the patents were not directed to an abstract idea, finding that the patents solved problems of prior graphical user interface devices. The court found that, because the patents claimed technological improvements to the interface that commodities traders use, and, that this was "not an idea that has long existed," the patents were not directed to an abstract idea. The court further affirmed the District Court's findings that the claims would pass muster under step (2) of Alice since they recite an "inventive concept." Specifically, the court identified the claimed "static price index" as an inventive concept that allows traders to more efficiently and accurately place trades using this graphical user interface, and distinguished the claims from the routine or conventional use of computers or the Internet.

Importantly, the Federal Circuit noted that at some level, all inventions embody or use abstract ideas and stated that for some computer-implemented methods, software is "essential to conduct the contemplated improvements." This case is noteworthy as it may open the door to the Patent Office allowing more software patents where a novel technique "is an improvement to the capability of the system as a whole."

What does this mean? In the software field, it can be extremely important to craft your patent application to the improved functioning of a specific technology. Before filing any paperwork with the Patent Office, it is critical to meet with an experienced patent attorney to specifically discuss what existing problems your technology solves, what technology it uses, and what the key differences are between the existing technology and your product.

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.

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