Post-Alice District Court Decisions Regarding the Patent Eligibility of Computer-Implemented Inventions

by McDonnell Boehnen Hulbert & Berghoff LLP
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It has been about 9 months since Alice Corp. v. CLS Bank International was decided by the Supreme Court.[1] In that time, many district court and Federal Circuit cases have resulted in grants of summary judgment or dismissal based on findings of patent invalidity. Specifically, courts have found the patents at issue to be directed to patent-ineligible subject matter based on the two part framework laid out in Mayo Collaborative Services v. Prometheus Laboratories, Inc.,[2] as reiterated and refined in Alice.

Under this framework, one distinguishes claims that incorporate laws of nature, natural phenomena, and abstract ideas from those that claim patent-eligible applications of those concepts:

First, we determine whether the claims at issue are directed to one of those patent-ineligible concepts. If so, we then ask, [w]hat else is there in the claims before us? To answer that question, we consider the elements of each claim both individually and as an ordered combination to determine whether the additional elements transform the nature of the claim into a patent-eligible application. We have described step two of this analysis as a search for an inventive concept—i.e., an element or combination of elements that is sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the [ineligible concept] itself.[3]

Using this framework, the Court held that the patents in Alice were not patent eligible under 35 U.S.C. § 101.[4] The claims were drawn to the financial concept of intermediated settlement, which was deemed an abstract idea by the Court.[5] Analyzing the claims under the second prong, the Court found no inventive concept sufficient to transform the claimed abstract idea into a patent-eligible application, despite explicit recitation of computer devices in the claims. In part, the Court stated that “the mere recitation of a generic computer cannot transform a patent-ineligible abstract idea into a patent-eligible invention.”[6]

But Alice has produced more questions than answers regarding patent eligibility. First, in the realm of claims performed by a computer, what exactly does the Court consider to be patent-eligible subject matter? Second, what steps can a practitioner take when drafting an application to prevail under the two prong Alice framework, or to avoid getting caught up in a § 101 challenge at all?

Recent Cases

Two recent cases decided in December 2014 may shed some light on how district courts are interpreting Supreme Court precedent in this area. The following cases involved an analysis of five patents using the Alice framework, four of which were found to claim patent-ineligible subject matter, with one being found to claim patent-eligible subject matter.

Intellectual Ventures I LLC v. Manufacturers and Traders Trust Co.

At issue in this case were four patents varying in scope and subject matter. The ‘137, ‘587, and ‘701 patents were found to be directed to patent ineligible subject matter.[7] The ‘382 patent, however, was found to pass muster under the Alice framework.

The ‘137 Patent

The claims here were found to be directed to patent-ineligible subject matter. The claims were directed to “a system and method which allows consumer users to establish self‑imposed limits on the user’s spending (borrowing) such that when the limit is reached the consuming user is notified.”[8] Essentially, the representative claims included the steps of (1) storing a user profile containing a user-selected category with a preset limit, and (2) presenting “transaction summary data” for such category and limit.[9]

Under prong one, the court first determined that “the core idea of the patent is allowing users to set self‑imposed limits on their spending and receive notifications regarding such limits, i.e., setting up a budget and tracking their spending.” The court also stated that “[b]udgeting is a longstanding and fundamental practice.”[10] As a result, the court determined that representative claim 12 was directed to an abstract idea.

Under prong two, the court looked for an “inventive concept” in the claim elements.[11] However, the court noted that the claims were directed to generic computing functions such as storing and processing data, and that these functions were essentially synonymous with the term “computer.”[12] As such, storing and processing data added little or nothing beyond the use of a general purpose computer, which the Supreme Court stated “cannot transform a patent ineligible abstract idea into a patent eligible invention.”[13]

The ‘587 Patent

The claims here were directed to “a method, system and apparatus for automatically organizing a large number of images that may be obtained from a variety of different sources.”[14]

Under the first prong, the court noted that the core idea of the patent, “scanning groups of images and organizing them … is akin to a computerized photo album, a routine and conventional idea.”[15] Thus, the claims were directed to an abstract idea.

Under prong two, the court again looked for an inventive concept. To start, the court discussed the “scanner” and “computer” mentioned in the claims and specification. The court found that neither the scanner nor computer amounted to a meaningful limitation, because the focus of the claims was on the method of organizing digital photos, not on the use of the scanner.[16] Thus, although the claims included the use of a scanner and computer, the claims did “no more than ‘computerize’ a known idea for organizing images.”[17] The patent was therefore deemed to be directed to patent-ineligible subject matter.

The ‘701 Patent

The claims here were directed to facilitating “electronic purchases while maintaining privacy of customer billing data.”[18] Essentially, the representative claims cover “providing a user with aliases to use in conducting transactions.”[19]

Under prong one, the court noted that “the claimed solution is not necessarily rooted in computer technology in order to overcome a problem specifically arising in the realm of computer networks.”[20] The claimed solution (i.e., providing aliases to achieve privacy in financial transactions) existed prior to and independent from the Internet, and thus the court found that the claims were directed to an abstract idea.[21]

Under prong two, the court examined the specification and determined that the computing devices and components disclosed (e.g., “electronic device,” “storage medium,” and “processor”) were generic, not specialized.[22] In addition, the claims were written such that they could be practiced with minimal or no use of a computer. Thus, the court found no additional “inventive concept” and the patent was held to be directed to patent-ineligible subject matter.[23]

The ‘382 Patent

The claims here were found to meet the requirements that the Supreme Court set forth in Alice. The claims covered “a system for selectively tailoring information delivered to an Internet user depending upon the particular needs of the user.”[24] Essentially, the claims cover the idea of providing a customized web page to a user with content based on the user’s profile and navigation history.

The court did not definitively state whether the claims were directed to an abstract idea. Instead, the court listed the steps of the representative claims, and ended the discussion of prong one by stating that “[d]efendants argue that such an idea is ‘abstract and non-inventive.’”[25] The court then moved directly to prong two, perhaps because the outcome of the this analysis turned out to be determinative.

Under prong two, the court noted that both the problem solved by, and solution claimed by the ‘382 patent were necessarily rooted in computer technology.[26] It seems that the court focused on the idea that the problem of inconsistent webpage display for a user could not exist without the presence of computers. Likewise, the solution claimed also could not exist without computers. As a result, the claims did not merely apply a known business process to the technological environment of the Internet, and therefore, the claims recited patent-eligible subject matter.[27]

MyMedicalRecords, Inc. v. Walgreen Co.

In this case, the claims of the ‘466 patent were directed to “methods for providing a user with the ability to access and collect personal health records associated with the user in a secure and private manner.”[28]

The court used the two step analysis from Mayo and Alice, and explained that under the first prong the court determines the purpose of the claims, and then determines whether that purpose is abstract.[29] A given purpose is abstract if it is an age-old idea, such as natural laws and fundamental mathematical relationships.[30] Here, the court determined that the concept of secure record access and management (the purpose of the ‘466 claims) was an age-old idea, and was thus abstract.[31]

Under prong two, the court looked for an inventive concept. The court determined that all concepts in the representative claim were routine, conventional functions of a computer and server (e.g., associating access information with a user, providing a user interface, receiving files, receiving requests, sending files, and maintaining files).[32] As such, the patent broadly and generically claimed the use of a computer and the Internet to perform the abstract purpose of the claims. Because the claims only contained routine and conventional functions, the addition of a computer to the claims did not amount to adding an inventive concept, and the patent failed on the second prong.[33]

Questions and Takeaways

As discussed in the introduction, Alice left some questions unanswered. First, in the realm of claims performed by a computer, what exactly does the court consider to be patent-eligible subject matter? While the cases above do not provide a succinct answer, they do point us in the right direction. For instance, much of the courts’ analyses revolved around the idea that a claimed solution that makes use of an already existing idea merely performed by a computer is not patent eligible. Each idea in the ‘137 patent (budgeting), the ‘587 patent (organizing images into a photo album), and the ‘701 patent (providing aliases to complete financial transactions) existed well before computers, and each was deemed abstract. More specifically, budgeting was deemed a “longstanding and fundamental” idea, and a digitized photo album was deemed a “routine and conventional” idea. Thus it would seem that novel ideas are more likely to be deemed patent eligible, even where they are arguably abstract.

Other attempts to clarify the questions left by Alice are related to determining what constitutes an “inventive concept,” or enough additional limitation to an abstract idea, law of nature, or natural phenomenon, to render a claim patent eligible. This is essentially asking “what does it take to pass muster under the second prong?” Arguably, all five patents described above were found to be abstract under the first prong. However, only the ‘382 patent was found to meet the requirements of the second prong. The court noted, regarding the ‘382 patent, that both the problem solved and solution claimed were necessarily rooted in computer technology. Thus, problems arising specifically in the computer realm (and not existing outside that realm) are more likely to have solutions that are deemed to pass muster under the second prong. It seems that even where the claimed solution is arguably abstract, if the underlying problem is one arising solely in the computer realm, this may be sufficient for the claims to cover patent-eligible subject matter.

Finally, what steps can a practitioner take when drafting an application to prevail in a post-Alice world? A practitioner may want to frame the problem being solved in a light more closely associated with the operation of computers and computer networks. For example, where possible, a given problem should be explained in a way that considers the problem one unique to the computer realm, e.g., an improvement to a computer, such as an enhancement to its hardware, operating system, user interface, and/or applications. The courts may be more likely to consider the claimed solution one necessarily arising in the field of computers, and thus more likely to cover patent-eligible subject matter.

[1] Alice Corp. v. CLS Bank Int’l, 573 U.S. __, 134 S. Ct. 2347 (2014).

[2] Mayo Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. __, 132 S. Ct. 1289 (2012).

[3] Alice, 134 S. Ct. at 2355 (citing Mayo, 132 S. Ct. 1294, 96-97) (internal citations omitted).

[4] Id. at 2360.

[5] Id. at 2357.

[6] Id. at 2358.

[7] Intellectual Ventures I LLC v. Mfrs. and Traders Trust Co., No. 13-1247-SLR, 2014 WL 7215193 (D. Del. Dec. 18, 2014).

[12] Id. (citing Fuzzysharp Techs. Inc. v. 3DLabs Inc., 447 Fed. Appx. 182, 185 (Fed. Cir. 2011)).

[13] Alice, 134 S. Ct. 2358.

[14] Intellectual Ventures, at *10.

[28] MyMedicalRecords, Inc. v. Walgreen Co., No. 2:13-cv-00631-ODW (SHx), 2014 WL 7339201, at *2 (C.D. Cal. Dec. 23, 2014).

[33] Id.

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