CAFC: Patent Claim Directed to Concrete Assignment of Specified Functions is Patent Eligible

The Federal Circuit recently reversed the Western District of Washington’s grant of a motion to dismiss under Rule 12(b)(6) of the Federal Rules of Civil Procedure where the district court held that the claimed subject matter was ineligible for patenting under 35 U.S.C. § 101. Specifically, the Federal Circuit, reviewing the decision de novo, concluded that the claimed method of improving security was a non-abstract computer-functionality improvement because it was done by a specific technique that departs from earlier approaches resulting in a beneficial reduction of the risk of hacking. Ancora Techs. v. HTC Am., Inc., No. 2018-1404, 2018 (Fed. Cir. Nov. 16, 2018) (Before Dyk, Wallach, and Taranto, J.) (Opinion for the court, Taranto, J.)

The patent-in-suit, U.S. Patent No. 6,411,941 (the ’941 patent), describes and claims methods of limiting a computer’s running of software not authorized for that computer to run. The asserted improvement is based on assigning certain functions to particular computer components and having them interact in specified ways. More specifically, the method relies upon a key and a record. The key is embedded within the computer’s Basic Input Output System (BIOS) which is much harder to successfully hack than where past license-verification system had previously stored similar information.

Ancora Technologies, Inc. (“Ancora”) brought this action against HTC America, Inc. and HTC Corporation (collectively, “HTC”) in 2016 alleging infringement of the ’941 patent. HTC moved to dismiss on the ground that the claims of the ’941 patent are invalid as directed to patent-ineligible subject matter under 35 U.S.C. § 101. The district court granted HTC’s motion to dismiss, concluding that the claims are directed to, and ultimately claim no more than, an abstract idea.

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The Federal Circuit, reversing the district court, concluded that the ’941 patent was not directed to an abstract idea—not needing to even reach step two of the Alice analysis. The Court held that the claims were direction to a solution to a computer functionality problem: “an improvement in computer functionality that has ‘the specificity required to transform a claim from one claiming only a result to one claiming a way of achieving it.’” The Court further stated:

The claimed method here specifically identifies how that functionality improvement is effectuated in an assertedly unexpected way: a structure containing a license record is stored in a particular, modifiable, non-volatile portion of the computer’s BIOS, and the structure in that memory location is used for verification by interacting with the distinct computer memory that contains the program to be verified. In this way, the claim addresses a technological problem with computers: vulnerability of license-authorization software to hacking.

Accordingly, the Federal Circuit concluded that the ’941 patent was not directed to an abstract idea— but rather to a computer-functionality improvement—thereby reversing the district court’s grant of HTC’s motion to dismiss.

Take Away

A patent claim directed to a concrete assignment of specified functions among a computer’s components to improve computer security is eligible for patenting.

The Author

Robert Schaffer

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.

Robert Schaffer

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.

Robert Schaffer

Dustin Weeks is an associate in the intellectual property practice group at Troutman Sanders. His practice spans all areas of intellectual property law, including patent prosecution, patent litigation (including Hatch-Waxman litigation), and client counseling. He represents clients ranging from start-ups and solo inventors to Fortune 500 companies. Dustin works closely with his clients to learn their business objectives so that he can tailor strategies to procure, protect, and enforce their intellectual property. Dustin specializes in post-grant proceedings (e.g. Inter Partes Reviews) before the Patent Trial and Appeal Board (PTAB) where he has extensive experience representing both patent owners and petitioners across a wide range of technologies, including wireless networking, pharmaceuticals, MEMs devices, medical devices, and electro-mechanical consumer devices. Dustin's broad experience in patent prosecution, counseling, and patent litigation uniquely positions him to navigate the blended practice of post-grant proceedings.

For more information or to contact Dustin, please visit his Firm Profile Page.

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Discuss this

There are currently 3 Comments comments. Join the discussion.

  1. Paul Cole November 30, 2018 10:33 am

    Useful and instructive opinion. If there is a learning curve, the CAFC is starting to ascend it.

  2. Anon November 30, 2018 12:37 pm

    Mr. Cole,

    Respectfully, the notion of “learning curve” cannot reflect the ping-pong nature of panel to panel variations on the topic.

  3. B December 1, 2018 1:25 pm

    Anon – I agree with you 100,000,000%

    To the authors – this is a well-written article.

    That said, the DECISION (penned by the hapless judge Taranto) is but one more shovel of offal on the vast 101 midden-heap. This decision cannot be reconciled with Taranto’s other decisions. Electric Power Group, for example. All those computer components were “assigned” to improve the process of power monitoring. Also Investpic, where Taranto demanded some improvement to a machine to be patent eligible while also stating that no addition limitations could possible provide sufficient “structure.”

    Oh, yes, I for one am SICK AND TIRED of these morons at the CAFC pretending that software improves the performance of a generic computer. The dolts in black robes have poo-poo’ed the idea that creates software creates a new machine even though every EE knows it does in a fashion. With this in mind Improved software merely improves a process running on a computer. Enfish was a correct decision based on a garbage theory.

    Positives: There’s a slight, passing reference to preemption.

    Negatives: Relies on the need for an “improvement,” and is total nonsense otherwise. You know what assigns “specified functions among a computer’s components.” Every Beauregard claim ever.

    This is a meaningless decision and a bone from the CAFC to quell the masses starving for a decision based on something other than nonsense. It is garbage, surrounded by nonsense and wrapped in delusion.

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