Patents Directed to Database Organization of Information Affirmed Invalid

On August 15, 2018, the Federal Circuit affirmed the invalidation of BSG Tech LLC’s (“BSG”) patents as ineligible subject matter. See BSG Tech LLC v. Buyseasons, Inc., No. 2017-1980, 2018 WL 3862646 (Fed. Cir. Aug. 15, 2018) (before Reyna, Wallach, and Hughes, J.) (opinion by Hughes, J.).

BSG asserted three patents with similar specifications that were directed to a “self-evolving generic index” for organizing information stored in a database — U.S. Patents No. 6,035,294, 6,243,699, and 6,195,652.  The patents were “self-evolving” because users of the database could “add new parameters for use in describing items”, with guidance from the system, which would allow the database to be searched according to the new and existing parameters.

The defendant, BuySeasons, moved to dismiss for failure to state a claim based on the argument that the patents were directed to ineligible subject matter. The district court did not treat the motion to dismiss as such, instead treating it as a motion for summary judgment. Ultimately, however, the district court did agree with BuySeasons and found the claims ineligible. Judge Schroeder of the Eastern District of Texas found that the claims were directed to the abstract idea of “considering historical usage information while inputting data” (Alice Step 1) and also lacked an inventive concept sufficient to transform them into patent-eligible subject matter (Alice Step 2).

The Federal Circuit agreed with the district court that the claims were directed to the abstract idea of considering historical information while inputting data.  To reach this conclusion, the Court analyzed the claims in the context of its precedent, Enfish, noting that the Court was assessing whether “the focus of the claims is on a specific asserted improvement in computer capabilities or, instead, on a process that qualifies as an ‘abstract idea’ for which computers are invoked merely as a tool.”  Here, the Court said, BSG “does not purport to have invented database structures that allow database users to input item data as a series of parameters and values.”  Rather, the claims amounted “to having users consider previous item descriptions before they describe items to achieve more consistent item descriptions,” which the Court found was an abstract idea no matter how it was characterized or “labeled.”

The Court rejected BSG’s three arguments that the claims were not directed to an abstract idea.  First, BSG argued that because its claims required a specific database structure it was not using a generic computer and therefore the claims could not be directed to an abstract idea.  The Court pointed to precedent, however, for the proposition that “claims are not saved from abstraction merely because they recite components more specific than a generic computer.”  Second, BSG argued that the claims were not directed to an abstract idea because of the requirement that users consider a specific type of information, “summary comparison usage information,” rather than any type of historical usage information.  The Court rejected this argument, focusing on the breadth of the claim in light of the specification—the claim would cover “any historical information about parameter or value usage.”  Moreover, the Court noted that it had “never suggested” that the recitation of “limitations that render [a claim] narrower than [the] abstract idea” was sufficient to satisfy the first step of Alice.  In other words, “a claim is not patent eligible merely because it applies an abstract idea in a narrow way.”  Third, BSG argued that its claimed invention “improves the quality of information added to the database and the organization of information in the database” and therefore that “its claims focus on a non-abstract improvement in database functionality.”  The Court rejected this argument, instead characterizing the improvements as the result of “performing an abstract idea in conjunction with a well-known database structure.”  Unlike the Court’s precedents, the claims at issue were abstract ideas because they did not result in a “non-abstract improvement[] in computer functionality” and, instead, were “unrelated to how databases function.”  Perhaps importantly, the court distinguished between “an improvement to the information stored by a database” and “an improvement in the database’s functionality.”

The Court also briefly analyzed Alice Step 2.  The Court rejected BSG’s argument that, like in Berkheimer, the patents contained “unconventional features” that precluded summary judgment because they introduced an issue of fact.  The Court noted that its precedents preclude the finding of an inventive concept where the patentee attempts to rely on the abstract idea to supply the inventive concept.  For example, in Alice, the Supreme Court “did not consider whether it was well-understood, routine, and conventional to execute the claimed intermediated settlement method on a generic computer.  Instead, the Court only assessed whether the claim limitations other than the invention’s use of the ineligible concept to which it was directed were well-understood, routine and conventional.”  Thus, BSG’s argument that its claims’ “requirement that users are guided by summary comparison usage information or relative historical usage information” was unconventional was without merit because it “simply restates what we have already determined is an abstract idea.”  The Federal Circuit also rejected BSG’s argument that its claims did not broadly preempt the field of use, noting that “the absence of complete preemption does not demonstrate patent eligibility.”

Take Away

The Federal Circuit continues to focus on the distinction between an improvement in computer capabilities and an abstract idea for which computers are invoked merely as a tool.  Here, in the context of a database, the Court distinguished between “an improvement to the information stored by a database” and “an improvement in the database’s function”—the former being what the patent covered and also patent-ineligible subject matter.  The Court also rejected multiple arguments related to the breadth of the patents, finding that a narrowed application or scope was not sufficient to meet either step of Alice. 

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Joseph Robinson

Joseph Robinson has over 20 years of experience in all aspects of intellectual property law. He focuses his practice in the pharmaceutical, life sciences, biotechnology, and medical device fields. His practice encompasses litigation, including Hatch-Waxman litigation; licensing; counseling; due diligence; and patent and trademark prosecution. He has served as litigation counsel in a variety of patent and trademark disputes in many different jurisdictions, and has also served as appellate counsel before the Court of Appeals for the Federal Circuit. Joe also focuses on complex inter partes matters before the U.S Patent and Trademark Office, inventorship disputes, reexaminations and reissues. His experience includes numerous interferences, a particular advantage in new U.S. Patent and Trademark Office post-grant proceedings. He also counsels on patent–related U.S. Food and Drug Administration issues, including citizen petitions, Orange Book listing, and trademark issues. For more information and to contact Joe please visit his profile page at the Troutman Sanders website.

Joseph Robinson

Robert Schaffer is an intellectual property partner at Troutman Sanders. Bob applies more than 30 years of experience to IP counseling and litigation. His work includes patent procurement, strategic planning and transactional advice, due diligence investigations, district court patent cases, and Federal Circuit appeals. He regularly handles complex and high-profile domestic and international patent portfolios, intellectual property agreements and licensing, IP evaluations for collaborations, mergers, and acquisitions. In disputed court cases Bob’s work includes representing and counseling client in ANDA litigations, complex patent infringement cases and appeals, and multidistrict and international cases. In disputed Patent Office matters his work includes representing and counseling clients in interferences, reexaminations, reissues, post-grant proceedings, and in European Oppositions. For more information and to contact Bob please visit his profile page at the Troutman Sanders website.

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Discuss this

There are currently 20 Comments comments. Join the discussion.

  1. B August 28, 2018 10:07 am

    “The Federal Circuit continues to focus on the distinction between an improvement in computer capabilities and an abstract idea for which computers are invoked merely as a tool.”

    Respectfully, the Federal Circuit is clues as to what an “abstract idea” is.

    Further, there is nothing in the patent laws that demands an “improvement.” Heck, Alice corp. doesn’t require an improvement.

    Useful, new and nonobvious are the statutory requirements.

    “Inventive concept” is a meaningless term.

    That said – a well-written article

  2. Night Writer August 28, 2018 1:30 pm

    Wow, three judges selected by Google invalidate a patent. What a surprise.

  3. Night Writer August 28, 2018 1:32 pm

    >>The Federal Circuit agreed with the district court that the claims were directed to the abstract idea of considering historical information while inputting data.

    Well written article. Thanks. I just cannot believe that statements like the above are actually written by judges at the CAFC. It is disgraceful and seems to some kind of bizarre farce.

  4. Curious August 28, 2018 5:11 pm

    First, BSG argued that because its claims required a specific database structure it was not using a generic computer and therefore the claims could not be directed to an abstract idea. The Court pointed to precedent, however, for the proposition that “claims are not saved from abstraction merely because they recite components more specific than a generic computer.”
    The “generic computer” thing is just an excuse. The real reason why something is an abstract idea is because the Federal Circuit subjectively believes it.

    No preemption? They don’t care.

    Passes the machine or transformation test? Despite being called “an important and useful tool” by the Supreme Court, that test is dead on arrival at the Federal Circuit.

    Invention not directed to one of the “basic tools of scientific and technological work”? That argument is also dead on arrival.

    Check your facts and legal precedent at the door when it comes to the Federal Circuit. The prime determining factor as to whether your patent will survive is the judges that hear your appeal.

    It is one big, fat &^%^ing joke, and that joke is at the expense of inventors and the US intellectual property system.

  5. B August 28, 2018 6:55 pm

    @ curious “The “generic computer” thing is just an excuse. The real reason why something is an abstract idea is because the Federal Circuit subjectively believes it.”

    No evidence cited that the man-made something is abstract. Go figure!!!!

    That and the words “inventive concept.” Can one of these judges please define that term?

    “No preemption? They don’t care.”

    Ariosa cited three times! Nothing like a retarded piece of law to write out the only doctrine justifying

  6. concerned August 28, 2018 8:18 pm

    SCOTUS adds words to 101 without authority. Inventors convince Congress to re-write 101 to stop the madness. What keeps SCOTUS from adding their words to any new legislation?

    Can SCOTUS be completely impeached like those Supreme Court justices in West Virginia?

  7. Anon August 28, 2018 9:14 pm

    concerned,

    Your point is exactly why I have advanced the notion that Congress should also employ its Constitutionally granted authority of jurisdiction stripping of the non-original jurisdiction of patent appeals away from the Supreme Court.

  8. Night Writer August 28, 2018 10:29 pm

    @6 concerned

    I have made arguments that the holding of Alice does not change no matter what 101 is turned into by Congress. I think the holding of Alice is that if a claim does not pass the test in Alice then it was unconstitionally granted. This cannot be changed by Congress.

  9. Lost In Norway August 29, 2018 2:08 am

    Thank you for the well written article. It makes me want to teach my monitor how to fly, but that isn’t your fault.

  10. concerned August 29, 2018 2:29 am

    Anon @7 and Night Writer @8: Agree with both points. Any official correction would be undone unofficially.

    In addition, the courts do not even follow Alice. Only parts of Alice that deny patents are used against applicants. The other parts of Alice are not given any weight for consideration, such as evidence was used to prove long-standing practices and generic computers on known processes are the issue.

    Ironically, I received an Office Action on a companion application this week. The patent examiner is probably 100% correct on how I fashioned the response (pro se). The USPTO is quick to point out when regulations are not followed by inventors but does not acknowledge the fact when the USPTO is outside their own regulations and official memos.

    Certain people wanted software patents dead on arrival. Those people received their wish in a way that was unofficial, but the authorities could deny as happening.

    Could I get a patent on a Pinocchio doll that nose grew every time rules/laws were not followed against inventors to deny them patents? Or would that be routine, well understood and conventional under 101 or obvious under 103?

  11. Night Writer August 29, 2018 8:49 am

    @10, 7

    The problem is that the CAFC is a stacked court. Obama let Google choose the judges and they picked lots of anti-patent people.

    I think that they should disband the CAFC. If we wanted to rebuild patents in the USA, then the Google selected judges have to go.

    One way would be to require a science background and then remove all the judges that don’t have science backgrounds. I think, though, constitutionally, they would have to disband the CAFC and reform it. (As if the Google selected judges care about the constitution.)

  12. Anon August 29, 2018 10:24 am

    Night Writer @8,

    You have advanced this before, and the same rebuttal applies: The Supreme Court does not have authority to write substantive patent law because of the Constitution granting this authority solely to the Legislative branch**.

    The Court would be ultra vires if they did as you suggest. Instead, the limits on the Court would be for the Court to find the patent law itself to be unconstitutional (as opposed to finding any particular item that was granted under that law). As you would have it, “Alice” has to override ANY Act of Congress – and that is NOT an interpretation OF the law written by Congress – that’s a substantive patent law writing.

    We have separation of powers for a reason.

    **Outside of those areas in which the Legislature chooses to share its authority.

    ..

    concerned @ 10,

    To your “but does not acknowledge the fact when the USPTO is outside their own regulations and official memos.” I would share this: the Office must answer the substance of your arguments. If they do not, then their reply is not complete. One then merely needs to point out the incompleteness of the Office action (with particularity, repeating the substance of arguments not answered as need be), and one then has a solid position.

    Sadly (as can be attested by many here), having the solid position may not alleviate the “fight city hall” syndrome, and there is an all too real “wear down the applicant” effect that the Office no doubt banks on.

  13. Pro Say August 29, 2018 11:14 am

    The only sure way to cure the §101 cancer is to remove the tumor.

    If and until such happens, American will continue its slide to the bottom of the intellectual property world.

    What would our Founding do?

  14. B August 29, 2018 1:58 pm

    @ Pro Say “The only sure way to cure the §101 cancer is to remove the tumor.”

    Congress did this in the 1952 Patent Act. The SCOTUS brought it back

  15. Night Writer August 29, 2018 10:49 pm

    @12 anon

    And yet we have Alice. The way to tell that changing the 101 statute would not change Alice is to read Alice and look for references to 101. It becomes apparent that it doesn’t matter what 101 says that the holding of Alice will stand.

    And get what you are saying about the SCOTUS, but —-here we are.

  16. concerned August 30, 2018 5:08 am

    It becomes apparent that it doesn’t matter what 101 says that the holding of Alice will stand.

    …Or the anti-patent group will find a way to accomplish the same to deny patents.

    Note to Mr. Quinn:

    Representative Steve Stivers (Ohio-R) introduced the Stronger Patent legislation (2018) in the United States House. He is representative of my district. Many of Representative Stiver’s friends (both political parties) are trying to help me with my situation in Ohio. I threw many of those names at him yesterday and asked him to review my situation.

    This situation is costing his/my state a ton of money (not in dispute) and it is a cat and mouse game. Even the possible infringers must weigh the risk/reward if this 101 madness stops, reverses and the infringer gets caught with their pants down.

  17. Anon August 30, 2018 8:00 am

    Night Writer,

    The presence of a broken scoreboard does not mean that one accepts the score presented.

    Being aware that the scoreboard IS broken is a necessary (but not sufficient) step.

    The lack of sufficiency in and of itself does NOT mean that we throw up our collective hands and say “oh well, that’s the end of the game.”

    Most all attorneys have an ethical obligation to NOT do that!

  18. Jianqing Wu August 30, 2018 11:24 am

    I personally viewed this decision as another bad decision of Federal Circuit. After the Supreme Court created many conflicting cases, the judges in the Federal Circuit can easily inject personal wills into national patent law.

    Patent law in the oldest time (started 1474 before the U.S. first patent act) was to protect culinary dishes, devices,… machines. Early patentable subjects were things that could be perceived. I cannot find one single convincing reason for baring patent on inventions for being abstract concept, mental steps, and mathematical algorithm….

    Why do patentable subjects have to be physical? Technologies have changed from machines to nanotechnologies. The computer itself has changed from a giant system to tinny chips. Technologies in extremely small dimensions can deliver high efficiency, high speed with low energy consumption and small space requirement. There are a large number of derivative advantages.

    Current hot research subjects are quantum computing, artificial intelligence, and nanotechnologies.
    Quantum computing started in 80s. Artificial intelligence and nanotechnologies are still very new.

    All concepts like “abstract idea,” “physical transformation” and “mental steps” are meaningless and absurd. There are structure supports in any of the technologies. The only problem is that humans cannot see by eyes. The attempted distinction between “computer capabilities” and other improvement is also absurd.

    The process steps cited in those cases are things that humans can perform only in theory. If those database functions are performed by humans, they have little application value. For example, any one can use an index table to track to a huge number of records. Humans cannot handle a big table to track millions of records. When it is implemented in a computer, it can handle millions to billions of records with a huge index table in very fast speed. Ignoring such huge advantages, the judges said “merely increase in the speed” does not make the subject patentable. What about the massive increase in capacity, a great energy use reduction, and a saved space? To them, everything is irrelevant. So, essentially they look for large things that are slow, bulky and energy-wasting.

    This line of cases will completely cripple future commercial activities in quantum computing. Some big advantages is high speed, energy saving, and space reduction. The judges have stated doing things faster is not a factor. Quantum computing is more abstract than big gears that the judges can understand. They are more abstract and more incomprehensible than human mind. Those cases create great uncertainty in the patentability of this new art.

    This line of cases will severely distort the research and development direction of artificial intelligence.
    While the computer can run procedural steps much faster than human brains (e.g., sorting a million records), it is extremely poor in retrieving random information and associating different information. True full human intelligence would need to imitate human brains. If one thinks about developing a processor by imitating human brains (e.g., putting 100 billion neutron-like cells in a processor), it would be unpatentable because it practices mental steps. Also, the mental steps doctrine has dispelled interest in finding cures by working on the neurons per the mind-body model. So, every chronic disease is still “incurable.”

    This line of cases will severely impair research, invention and commercialization activities in nanotechnology. This new art is manipulation of matter on an atomic and molecular scale. Every one piece of technologies is concerned with things that judges cannot see. They will find no physical transformation and no hardware like gears and boxes. Increased speed, reduced size, reduced energy usage is not qualified as “physical transformation.”

    Those decisions will have more adverse impacts by destroying the patent system.

    The routine invalidation of patents will discourage 320 million people from inventing and patenting in (N-1) fields (where N is a very large number). By reading court opinions, I know most judges do not understand the difference between variables and RANDOM variables, and keep using what they actually see as what it is. The reality is what they see is NOT what it really is. The true impact is one world we see versus another world we never see. The passion to invalidate patents has wiped out the public trust that took nearly two hundred years to develop.

    Routine changes of patent law in the middle of game is responsible for creating the worst infringing culture and prevalent security fraud. Several published articles in this blog tend to show how decisions had killed patent licensing values and sale values. Yet, operating companies have dramatically increased the values of their intellectual properties and patents in their corporate assets (from a fraction in the past to now 70%-80% of total assets). When an operating company fails, stock holders will find how the IP values suddenly disappear. The chances are its values cover inventions it has never acquired or licensed or goodwill in products that are made by infringing patents.

    Those decisions will continue damaging the nation in multiple dimensions, Congress should overrule all cases on abstract concepts, mental steps, law of nature (as applied to the computer art), and mathematical algorithm (as applied in computer art), plus nearly hundreds of obsolete cases. In addition, Congress needs to develop a court infrastructure that has a built-in mechanism for preventing ignorant judges from doing violent damages to the patent system. Those cases have caused irreparable damages to the national economical foundation and severely precluded inventing, research and commercial activities in the hottest technologies.

  19. Night Writer August 31, 2018 7:34 am

    @18 Jianqing Wu All concepts like “abstract idea,” “physical transformation” and “mental steps” are meaningless and absurd.

    I really enjoy your posts. Great that someone else gets this. I think the way to think of these words is that they are placed on top of the legal structure of the patent system as a means of judicial activism. We have the “bottom” level of the patent system in 103 and 112. By that I mean you put the evidence to a juror and they can say if it obvious or not.

    These are like the word witch. Because if you think of what a witch was it was something that was placed on top of the criminal codes. So you weren’t found guilty of murder or another crime. You were found guilty of this word that had subjective determinations (you were a witch or weren’t) and the test was just like Alice where there was no escaping being a witch if the judge felt you were a witch.

  20. LazyCubicleMonkey September 9, 2018 1:49 am

    @Jianqing Wu:

    “I cannot find one single convincing reason for baring patent on inventions for being abstract concept, mental steps, and mathematical algorithm….”

    You really don’t see a problem of patenting mathematical algorithms? Derivatives & Integrals are mathematical algorithms… should they be patentable (ignore the prior art case for a minute)?

    “When it is implemented in a computer, it can handle millions to billions of records with a huge index table in very fast speed. ”

    So the invention here is the smaller/faster/more efficient transistor (since that’s what makes it fast), if the increase in speed should be patentable…

    And once again, there’s somehow this belief that more intellectual property is better. Why? The whole point of the copyright clause is to promote the progress of arts and sciences. And obviously, that’s still happening. I’d argue that if anything, (software) patents hinder instead of promote the creation of new code. Finally, open-source software proves that people will write software for no monetary gain, so the argument that patents are needed to promote more/better software isn’t an obvious truthism – it’s something that (I think) hasn’t been proven.

    As a software developer, I see software patents as hurting the industry – diverting money away from coders who produce software and towards lawyers that don’t. I’ve come up with plenty of creative solutions (independently) for some of the issues I’ve encountered. How would someone holding a patent on that “promote the Progress of Science and useful Arts” as required by the Constitution?

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