Posts Tagged: "Enfish v. Microsoft"

If you innovate and invest more than $10,000 to obtain patent protection on your idea, do you trust a government-issued patent to be a valid one?  And if you believe you have a valid patent, would you trust that government’s judicial system to protect you from sanctions for believing in its validity? These underlying assumptions provide the foundation to any system. If you purchase and obtain title to a car, stock, or real estate, you expect that title to be valid. And you expect not to be penalized for believing in that title’s validity.     For patents, it’s quite the opposite. It has become so commonplace for government-issued patents to be invalidated after issuance, we hardly bat an eye. But with the development of Section 101 law, the patent system has turned down a twisted path—one that sanctions patent holders for believing their patent to be valid. In Finnavations LLC v. Payoneer, Inc., the U.S. District court for the District of Delaware unfortunately advanced our patent system down this path

Trading Technologies International, Inc. (TT) has filed a petition for certiorari with the U.S. Supreme Court asking it to clarify U.S. patent eligibility law, including whether the Court should overrule its “abstract idea” precedents. The petition relates to the Federal Circuit’s April 2019 decision siding with the Patent Trial and Appeal Board (PTAB) that certain claims of TT’s patents for graphical user interfaces (GUI) for electronic trading were eligible for covered business method (CBM) review and also patent ineligible. IPWatchdog has written much about this and related Trading Technologies cases. Though earlier Federal Circuit panels had found other TT patents not eligible for CBM, as the court found they were directed to technological inventions, Judge Moore said in her April opinion that the patents at issue here—numbers 7,533,056, 7,212,999, and 7,904,374—”relate to the practice of a financial product, not a technological invention,” and that “the specification makes clear that the invention simply displays information that allows a trader to process information more quickly.”

In each of the recent Federal Circuit decisions on medical diagnostics inventions, Athena Diagnostics v. Mayo Collaborative Services, 2017-2508, (Fed. Cir. Feb. 6, 2019) (“Athena”) and Cleveland Clinic Found. v. True Health Diagnostics LLC, 2018-1218 (Fed. Cir. April 1, 2019; non-precedential) (“Cleveland Clinic II”), the court affirmed a district court ruling that found a medical diagnostic or a related patent invalid for being directed to ineligible subject matter. Athena and Cleveland Clinic II follow the hard stance taken by the Federal Circuit against medical diagnostics inventions, first in Ariosa Diagnostics, Inc. v. Sequenom, Inc., 788 F.3d 1371, 1376 (Fed. Cir. 2015) (“Ariosa”) and next in Cleveland Clinic Found. v. True Health Diagnostics LLC, 859 F.3d 1352, 1361 (Fed. Cir. 2017) (“Cleveland Clinic I”). In Athena, the patent covered a method for diagnosing a disease in a subpopulation of affected individuals based on the discovery of a correlation between the disease and certain autoantibodies found only in that subpopulation. In Cleveland Clinic I, the patent claims were directed to diagnosing the risk of atherosclerotic cardiovascular disease (CVD) based on the correlation between elevated levels of a protein found in the blood and occurrence of atherosclerotic CVD. In Cleveland Clinic II, the claims were directed to methods of identifying elevated levels of the protein but did not include any recitation of the correlation…. The requirement for an improvement to the technology involved in carrying out the claimed method is a steep hurdle for the eligibility of most medical diagnosis inventions, since the essence of such inventions is applying a newly discovered correlation to deliver a practical benefit—not improving the technology used to provide the diagnosis. In this regard, medical diagnostic inventions are unique. This point was highlighted by the Athena dissent through reference to the amici curiae Five Life Sciences Patent Practitioners’ brief, which stated, “[medical] diagnostic methods . . . are so tightly bound to underlying natural laws and phenomen[a], they are especially susceptible to undue expansion of the eligibility standards…” Athena Dissenting opinion at 13.

Obtaining a U.S. software patent is still harder than it was five years ago, but studying these “lighthouse” cases can improve one’s chances of success. While the Federal Circuit’s decision in Berkheimer v. HP Inc., 881 F.3d 1360 (Fed. Cir. 2018) and the USPTO’s guidance to patent examiners on the Berkheimer decision have recently improved the landscape for software patents, the following cases contain critical lessons for drafters that can further ensure claims are patent eligible.

Last week, in Ancora Technologies v HTC America, the Federal Circuit reversed a lower court’s invalidity ruling under 35 USC §101 by concluding that Ancora’s claimed subject matter was concrete—not abstract—because it assigned specific functions to specific parts of a computer to improve computer security… This case is yet another in a string of post-Alice cases suggesting that patents should be drafted with an emphasis on the technical problem and technical solution delivered by the claims.

Much of the havoc wrought in the software patent system by the landmark decision Alice v. CLS Bank International, 134 S. Ct. 2347 (2014) stems from the unworkable two-part patent eligibility test based on vaguely defined and nebulous Abstract idea and significantly more constructs… In a patent eligibility landscape riddled with Alice-based rejections and invalidation it behooves patent practitioner and applicants alike to appreciate that not every innovation that achieves “a new, useful, and tangible result” is patentable… It is now more imperative than ever for practitioners to probe inventors with the right set of questions directed at identifying any distinctive technical features in the implementation, structure, configuration or arrangement of the software invention.

On August 15, 2018, Fall Line Patents, LLC asserted U.S. Patent No. 9,454,748 against a number of companies. Specifically, Fall Line alleged in nine separate lawsuits that the mobile applications provided by AMC Entertainment, McDonald’s, Boston Market, Panda Express, Papa John’s, Pizza Hut, Regal Cinemas, Starbucks, and Zoe’s Kitchen directly infringe at least Claim 1 of the ‘748 patent. All of the lawsuits were filed in the Eastern District of Texas and request permanent injunctions as well as damages.

In Vanda, Chief Judge Prost, one of the judges on the CellzDirect panel, dissented from the majority’s decision that found claims patent eligible for not being directed to a judicial exception in step one of the Mayo/Alice test. What differences between the claims in Vanda and those in CellzDirect led Judge Prost to dissent? Can these differences shed further light on the characteristics necessary for a claim to be found not directed to a patent-ineligible concept in step one?

In accordance with the above discussion, particularly point (a), the client should be apprised of the necessity of fully fleshing out the inventive aspects of the technical implementation (i.e. the fuzzy logic). The client, however, may not know what the technical implementation is or what technical problems may need to be overcome. At this point, there may be no harm in filing a provisional patent application to capture the earliest priority date for the client. The next step under point (b) is to work with the client to develop a plan for implementation. Actual technical implementation can be expensive, but it is a very effective way to reveal technical problems that have to be solved. Technical implementation always (in our humble experience) reveals unforeseen technical problems. At some point, what is readily available may need to be modified or customized to serve the specific needs of the new business application, particularly as that application is scaled up. This is where patentable innovation occurs.

The Federal Circuit held that the claim was directed to the abstract idea of encoding and decoding image data. According to the panel, the claim recited “a method whereby a user displays images on a first display, assigns image codes to the images through an interface using a mathematical formula, and then reproduces the image based on the codes… This method reflects standard encoding and decoding, an abstract concept long utilized to transmit information.” The Federal Circuit went on to note under step one that RecogniCorp’s Claim 1 differed from the invention in Enfish, LLC v. Microsoft Corp., 822 F.3d 1327 (Fed. Cir. 2016) because, unlike Enfish’s invention, Claim 1 did not recite a software method that improved the functioning of a computer but instead recited a process “for which computers are invoked merely as a tool.”

The USPTO Memorandum of November 2, 2016 as to Recent Subject Matter Eligibility Decisions (“USPTO Memo”) inappropriately attributes the phrase “computer-related technology” to McRO, Inc. dba Planet Blue v. Bandai Namco Games America Inc., 120 USPQ2d 1091 (Fed. Cir. 2016). The phrase “computer-related technology” does not appear in McRO or even in Alice Corp. Pty Ltd. v. CLS Bank Int’l, 134 S. Ct. 2347 (2014); rather, it appears in Enfish, LLC, v. Microsoft Corp., 822 F.3d 1327 (Fed Cir. 2016) and only after Enfish appropriately cites Alice.

When addressing the issue of generality vs. particularity, we come across a situation where the inventors described the most crucial aspect of the invention, the classification unit, in general terms in the claim. Consequently, in the PTAB’s assessment, the representative claim did not rise above the threshold test of patentability under section 101. But much of what the PTAB seems concerned about relates to disclosure and there is nothing in the PTAB panel decision in Itagaki to suggest that the PTAB reviewed the specification to determine whether the somewhat generally described terms were given particularized meaning by the applicant. It also raises questions about how the PTAB could have properly conducted an obviousness review if the classification unit was so abstract as to be infirm from a patent eligibility point of view.

The Alice/Mayo framework is the decisional approach adopted by the United States Supreme Court for determining whether a patent claim exhibits, such as software patent claims, embody patent eligible subject matter… Over the last six months the Federal Circuit has provided a great deal of clarity, with 9 judges (Judges Moore, Taranto, Hughes, Chen, Newman, O’Malley, Reyna, Stoll, and Plager) signing on to decisions that found software patent claims to be patent eligible. What follows is a a summary of the significant developments over the last six months.

In a nutshell, if you are going to write a patent application in such a way that at the end of the it the reader is left wondering what the innovation is, what the problem being solved is, or the technical particulars on how the innovation actually solves the problem, you should not expect a patent. In other words, if you write your patent applications without actually defining the technological solution and how it is implementing the desired functionality you describe, and how that is an improvement, you will not get a patent because the claims will be patent ineligible. On the other hand, if you write your patent applications to describe (and claim) an invention that is adequately described so that someone of skill in the art will understand what is innovative (i.e., how and why), thick with technical disclosure and explanation as to how computer functionality is being improved, or even generic components are working in unconventional ways, then you will get a patent because your claims will be patent eligible.