This decision is bad.  Not an American Axle level of bad, but still quite far from good.

Simio sued FlexSim in the District of Utah for alleged infringement of its U.S. Patent No. 8,156,468.  FlexSim moved for dismissal on the pleadings under 35 U.S.C. § 101, on the grounds that the claims were directed to no more than an abstract idea.  The District Court granted the motion, and Simio appealed.

The claimed invention relates to object-oriented simulations by way of graphical user interfaces.  In the past, these simulations had required at least some programming.  The '468 patent describes its advance as simplifying this process by facilitating the development of simulations in a completely graphical manner, with no programming necessary.  Claim 1 of the patent recites:

A computer-based system for developing simulation models on a physical computing device, the system comprising:
    one or more graphical processes;
    one or more base objects created from the one or more graphical processes,
    wherein a new object is created from a base object of the one or more base objects by a user by assigning the one or more graphical processes to the base object of the one or more base objects;
    wherein the new object is implemented in a 3-tier structure comprising:
        an object definition, wherein the object definition includes a behavior,
        one or more object instances related to the object definition, and
        one or more object realizations related to the one or more object instances;
    wherein the behavior of the object definition is shared by the one or more object instances and the one or more object realizations; and
    an executable process to add a new behavior directly to an object instance of the one or more object instances without changing the object definition and the added new behavior is executed only for that one instance of the object.

In Alice Corp. v. CLS Bank Int'l, the Supreme Court set forth a two-part test to determine whether claims are directed to patent-eligible subject matter under § 101.  One must first decide whether the claim at hand involves a judicially-excluded law of nature, a natural phenomenon, or an abstract idea.  If so, then one must further decide 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 elements or combinations of elements that are well-understood, routine, and conventional will not lift the claim over the § 101 hurdle.  While this inquiry is generally carried out as a matter of law, factual issues can come into play when determining whether something is well-understood, routine, and conventional.

Recently, the Federal Circuit provided a major clue as to how to think about patent eligibility in practice.  In Dropbox Inc. v. Synchronoss Techs. Inc., the Court wrote that "an inventive concept exists when a claim recites a specific, discrete implementation of the abstract idea where the particular arrangement of elements is a technical improvement over the prior art."  This suggests that in order for a claim that is otherwise directed to an abstract idea to be successful under § 101, it should have three qualities: specificity, a technical solution that it provides, and some degree of novelty.  More particularly, there should be a nexus between these three factors -- specificity, technical character, and novelty should appear in the same claim element or at least be explicitly linked in some fashion in the recitation of the claim.

Starting with part one of Alice, the Federal Circuit focused almost entirely on how the specification describes the invention rather than how it is claimed.  The portion of the specification that the Court considered is at a higher level and is less detailed than the actual claim language, and describes how the claimed invention makes it easier for non-programmers to construct object-oriented simulations.  The Court summarized the preamble of claim 1 and a few of its broader elements, waving its hands over the rest (the Court was apparently willing to ignore any claim elements that Simio did not rely on in its arguments).  Staying at this high level, the Court also noted that the '468 patent "acknowledges, using graphical processes to simplify simulation building has been done since the 1980s and 1990s."

All of this led the Court to conclude that "[s]imply applying the already-widespread practice of using graphics instead of programming to the environment of object-oriented simulations is no more than an abstract idea."  The Court justified its analysis by stating that when "the abstract idea tracks the claim language and accurately captures what the patent asserts to be the focus of the claimed advance, characterizing the claim as being directed to an abstract idea is appropriate."

The problem here is that the Court rendered its decision based on what the claimed invention purports to do (as described in the parts of the specification that the Court considered and the preamble), rather than how it gets done (recited in the claim as a whole).  This type of superficial reasoning is unfortunately common in § 101 cases, and does violence to the actual language of the claim by relegating it to secondary status.

Simio argued that "claim 1 is not directed to an abstract idea because it presents improvements to computer-implemented simulation, resulting in improvements in the computers' capabilities."  Particularly, Simio stated that the claim "improves on the functionality of prior simulation systems through the use of graphical or process modeling flowcharts with no programming code required."  The Court, however, did not buy into this point, stating that "this argument does not explain how the computer's functionality is improved beyond the inherent improvement of the experience of a user who cannot (or maybe, would rather not) use programming."

This dichotomy between an improvement to a computer versus an improvement to one's experience when using the computer is a sticky one at best.  To be sure, an improvement in user experience is fundamentally rooted in computer technology itself.  The Court's distinction is that software for improving a computer (by making the computer faster, better, more efficient) can be the basis of an eligible invention whereas software for improving a use of the computer (by making the user's interaction with the computer faster, better, more efficient) cannot.

But this reasoning does not stand up to logical scrutiny or even the Court's prior case law.  One of the main purposes of invention (perhaps the main purpose) is to improve lives through technological advancement.  If a device is not eligible for patenting because it merely improves user experience, then there is a long list of classic inventions that would not be patentable (sorry Alex Bell, sorry Tom Edison).  But the invention of claim 1 does improve the device -- it makes the computer perform new and useful functions that (at least according to the specification) were not previously performed.  The Federal Circuit, however, often takes a reductionist view that differentiates between improvements to the "computer" (the hardware, operating system, and certain utilities) and "other applications" that run thereon (pretty much all the other software aside from the operating system and the aforementioned utilities).  The former are much more likely to be eligible than the latter, presumably because improving a "computer" is more technical than improving the usefulness of the computer -- never mind that trying to drawn a line between improvements to the "computer" and the "other applications" is an exercise in futility.  Try to square the reasoning in this case with that of Trading Technologies Int'l, Inc. v. CQG, Inc., Data Engine Technologies LLC v. Google LLC, and McRO, Inc. v. Bandai Namco Games America Inc., all of which involved an interface that improved user experience and that the Court deemed eligible.[1]  Hint: you can't.

In any event, Simio also argued that the final limitation of claim 1 ("an executable process . . ."), was a sufficiently significant improvement to computer technology.  The Court looked to the specification and found that it "dedicates relatively little attention to the functionality reflected in the executable-process limitation."  Once again, the specification appears to have primacy over the claims.  Notably, the Court wrote, that "disparity—in both quality and quantity—between how the specification treats the abstract idea and how it treats the executable-process limitation suggests that the former remains the claim's focus."

Finding the claim directed to an abstract idea, the Court moved on to part two of Alice.  Not helping its own case, Simio argued again for eligibility based on the executable process limitation but ended up admitting that this feature was conventional in object-oriented programming.  Simio attempted to render this admission harmless in further arguments.  In the words of the Court, "while Simio acknowledges that implementing the executable process's functionality through programming was conventional or known, it contends that doing so with graphics in a simulation provides the inventive concept necessary to confer eligibility."  But according to the Court, this purported inventive concept was "just the abstract idea itself, which cannot supply the inventive concept that renders the invention significantly more than that abstract idea at step two."

Simio's further arguments that limitation exhibited some novelty fell on deaf ears.[2]  The Court wrote that what it had in front of it was "a claim directed to the idea of using graphics instead of programming to create object-oriented simulations—maybe a new idea, but still an abstract one—and lacking any inventive concept, any meaningful application of this idea, sufficient to save the claim's eligibility."  Thus, the Court found the claim invalid under § 101.

Put in terms of the Dropbox factors, the Court found the claim to be non-technical and to lack a requisite degree of specificity.  Despite the Court appearing to be willing to grant that the claim may exhibit a modicum of novelty, two factors out of three working against the claim was enough for it to be patent-ineligible.

Again, we have the Federal Circuit playing prior art games under the guise of a § 101 decision.  The claim's "conventional" elements counted toward it being found ineligible because conventional elements are, by definition, in the prior art.  But arguments that the elements exhibit novelty -- and therefore are not in the prior art -- had no weight at all.  In other words, if someone contends that a claim element is in the prior art, the claim can be considered abstract.  Rebutting this contention is not possible.

[1] To be fair, the Court addressed McRO, stating that its "claims were eligible at step one because they used a combined order of specific rules to achieve an improved technological result."  This still does not sit well with the Court's reasoning in this case because the outcome of McRO was a patent-eligibile invention that improved animated lip-synching -- still an improvement to user experience. 

[2] Here, the opinion is confusing, as the Court seems to indicate that Simio admitted the limitation in question is conventional but argued that it is novel.  These positions are contradictory.

Simio, LLC v. FlexSim Software Products, Inc. (Fed. Cir. 2020)
Panel: Chief Judge Prost and Circuit Judges Clevenger and Stoll
Opinion by Chief Judge Prost