ERICSSON V TCL, FEDERAL CIRCUIT 2020 (SOFTWARE PATENTS)

This case involves U.S. Patent No. 7,149,510 relating to securing mobile phones against improper access by apps.

Claim 1 recites:

1. A system for controlling access to a platform, the system comprising:

  • a platform having a software services component and an interface component, the interface component having at least one interface for providing access to the software services component for enabling application domain software to be installed, loaded, and run in the platform;
  • an access controller for controlling access to the software services component by a requesting application domain software via the at least one interface, the access controller comprising:
  • an interception module for receiving a request from the requesting application domain software to access the software services component;
  •  and a decision entity for determining if the request should be granted wherein the decision entity is a security access manager, the security access manager holding access and permission policies; and
  • wherein the requesting application domain software is granted access to the software services component via the at least one interface if the request is granted.

The Federal Circuit concluded that claim 1 is directed to the abstract idea of controlling access to, or limiting permission to, resources. Although written in technical jargon, a close analysis of the claims reveals that they require nothing more than this abstract idea. By the plain language of claim 1, the “security access manager” and the “decision entity” are the same thing.  According to the specification, this combined decision entity/security access manager can further be the same as the “interception module.” Because the security access manager/decision entity/interception module is the only claimed component of the “access controller,” all four components collapse into simply “an access controller for controlling access” by “receiving a request” and then “determining if the request should be granted.” That bare abstract idea, controlling access to resources by receiving a request and determining if the request for access should be granted, is at the core of claim 1.

Neither of the remaining limitations altered the Federal Circuit’s conclusion that claim 1 is directed to the abstract idea of controlling access to resources. The first limitation recites “a platform having a software services component and an interface component,” for the ultimate goal of “enabling application domain software to be installed, loaded, and run in the platform.” ‘510 patent claim 1. This recitation of functional computer components does not specify how the claim “control[s] access to a platform,” nor does it direct the claim to anything other than that abstract idea. It merely provides standard components that are put to use via the “access controller” limitation. Similarly, the “wherein” limitation simply recites the necessary outcome of the abstract idea, “grant[ing] access … if the request is granted.”

The Federal Circuit, referring to Enfish, stated that the step one inquiry looks to the claim’s “character as a whole” rather than evaluating each claim limitation in a vacuum.

Ericsson made two arguments as to why the asserted claims are not directed to an abstract idea at Alice step one. Neither is persuasive. First, it argued that the idea of controlling access to resources is not an abstract idea because it does not resemble one previously recognized by the Supreme Court.

This argument was dismissed by the Federal Circuit.  Controlling access to resources is exactly the sort of process that “can be performed in the human mind, or by a human using a pen and paper,” which the Federal Circuit has repeatedly found unpatentable.

Second, Ericsson contended that its claims are not directed to an abstract idea because they “solve the specific computer problem … of controlling app access in resource-constrained mobile phones.”

The Federal Circuit disagreed. As an initial matter, the district court was incorrect to conclude that the claims of the ‘510 patent are limited to mobile platform technology,” and Ericsson is wrong to repeat that point.

Moreover, according to the Federal Circuit, the claims here do not have the specificity required to transform a claim from one claiming only a result to one claiming a way of achieving it.

In summary, the Federal Circuit wants to see, in the claims, greater details of how a computer problem is solved.

 

BOZEMAN FINANCIAL LLC V FEDERAL RESERVE BANK, FEDERAL CIRCUIT 2020 (SOFTWARE PATENTS)

Bozeman Financial LLC appealed from a decision of the U.S. Patent and Trademark Office’s Patent Trial and Appeal Board holding all of the claims of U.S. Patent Nos. 6,754,640 and 8,768,840 ineligible under 35 U.S.C. §101.

Claim 1 of the ’840 patent is representative:

1. A computer implemented method for detecting fraud in financial transactions during a payment clearing process, said method comprising:

  • receiving through one of a payer bank and a third party, a first record of an electronic financial transaction from at least one of the following group: a payer, a point-of-sale terminal, an online account and a portable electronic device;
  • storing in a database accessible by each party to said payment clearing process of said electronic financial transaction, said first record of said electronic financial transaction, said first record comprising more than one parameter;
  • receiving at said database at least a second record of said electronic financial transaction from one or more of a payee bank and any other party to said payment clearing process as said transaction moves along said payment clearing process, wherein said second record comprises at least one parameter which is the same as said more than one parameter of said first record;
  • each of said first and second records received at said database comprise at least two of the same said more than one parameters;
  • determining by a computer when there is a match between at least two of said parameters of said second record of said first financial transaction received at said database and the same parameters of said first record of said financial transaction stored in said database, and wherein any party to said payment clearing process is capable of verifying said parameters at each point along said financial transaction payment clearing process;sending a notification to said payee bank participant with authorization to process said electronic financial transaction when said parameters match;
  • and sending a notification to said payee bank participant to not process said electronic financial transaction when said parameters do not match.

The Board determined that the ’640 patent’s claims are directed to the abstract idea of “collecting, displaying, and analyzing information to reconcile check information against a ledger.” The Board determined that the ’840 patent claims are directed to the abstract idea of “collecting and analyzing information for financial transaction fraud or error detection.”  The Board found that the claims do not contain an inventive concept to render them eligible under §101.

The Federal Circuit applied the two-step framework set forth in Alice to determine patent-eligibility under §101.

Considering Alice Step 1, the Federal Circuit stated that verifying financial documents to reduce transactional fraud is a fundamental business practice that, without more, is not eligible for patent protection.

The Federal Circuit stated that their recent decision in Solutran, Inc. v. Elavon, Inc. held claims like the claims of the ’840 patent ineligible. 931 F.3d 1161 (Fed. Cir. 2019). In Solutran, the claims recited a method for electronic check processing.

Bozeman argued that the claimed method is a physical process that improves handling and processing of checks, not an abstract idea. It argued that because the process involves tangible steps, it cannot be an abstract idea, even if the claims additionally involve or include otherwise abstract concepts.

The Federal Circuit dismissed this argument.  As they explained in Solutran, “the physicality of the paper checks being processed and transported is not by itself enough to exempt the claims from being directed to an abstract idea.”

Considering Alice Step 2, the Federal Circuit stated that he technological components recited in claim 1 of the ’840 patent were conventional, off-the-shelf computer components.  Nothing in the claims, understood in light of the specification, appears to require anything more than off-the-shelf, conventional computer, storage, network, and display technology for collecting the data related to financial transactions, and displaying the data to the users.

The Federal Circuit did not consider that a programmed computer becomes a new machine.  They also did not find that the claims met the machine-or-transformation test.

One must wonder if the outcome could have been different if the Federal Reserve Banks were not involved.  The Federal Reserve Banks do not believe in patents covering financial methods.  On the other hand, there are plenty of issued patents covering Bitcoin and blockchain.

CUSTOMEDIA TECHNOLOGIES, LLC V DISH NETWORK, FEDERAL CIRCUIT 2020 (SOFTWARE PATENTS)

Customedia appealed a decision by the U.S. Patent and Trademark Office holding claims of U.S. Patent No. 8,719,090 and 9,053,494 ineligible under 35 U.S.C. § 101.

The patents both relate to a cable TV set-top box.  A cable distributor may provide customers with a cable set-top box with built-in storage sections that may be leased or sold to advertisers.

Claim 1 of U.S. Patent No. 8,719,090 is representative and recites:

1 A data delivery system for providing automatic delivery of multimedia data products from one or more multimedia data product providers, the system comprising:

  • a remote account transaction server for providing multimedia data products to an end user, at least one of the multimedia data products being specifically identified advertising data; and
  • a programmable local receiver unit for interfacing with the remote account transaction server to receive one or more of the multimedia data products and for processing and automatically recording the multimedia data products, said programmable lo-cal receiver unit including at least one individually controlled and reserved advertising data storage section adapted specifically for storing the specifically identified advertising data, said at least one advertising data storage section being monitored and controlled by said remote account transaction server and such that said specifically identified advertising data is delivered by said remote ac-count transaction server and stored in said at least one individually controlled and reserved advertising data storage section.

The Federal Circuit said that they must follow the  Supreme Court’s two-step framework for determining patent-eligibility under § 101 according to Alice Corp. Pty. Ltd. v. CLS Bank Int’l.

At Alice step one, the Federal Circuit must determine whether the claims are directed to an abstract idea.  in Alice, the Supreme Court made clear that the invocation of a computer does not necessarily transform an abstract idea into a patent-eligible invention. There, the Supreme Court held ineligible claims directed to a method of exchanging financial obligations using a computer system as a third-party intermediary. The Court explained that the claims were merely implemented “using some un-pecified, generic computer” and did not “purport to improve the functioning of the computer itself.

Customedia argued that its claims are patent-eligible because they provide for improvements to the functioning of computer systems.  The Federal Circuit disagreed.

By dedicating a section of the computer’s memory to advertising data, the claimed invention ensures memory is available for at least some advertising data. This does not, however, improve the functionality of the computer itself, according to the Federal Circuit.

Even if the court accepted Customedia’s assertions, the claimed invention merely improves the abstract concept of delivering targeted advertising using a computer only as a tool. This is not what the Supreme Court meant by improving the functioning of the computer itself, according to the Federal Circuit.

Berkheimer v. HP, Federal Circuit 2018 (Software Patents)

Mr. Berheimer sued HP.  HP moved for summary judgment that claims 1–7 and 9 of U.S. Patent No. 7,447,713 are patent ineligible under 35 U.S.C. § 101, and the district court granted the motion.

The patent relates to digitally processing and archiving files in a digital asset management system.  The system parses files into multiple objects and tags the objects to create relationships between them. These objects are analyzed and compared, either manually or automatically, to archived objects to determine whether variations exist based on predetermined standards and rules. This system eliminates redundant storage of common text and graphical elements, which improves system operating efficiency and reduces storage costs. The relationships between the objects within the archive allow a user to “carry out a one-to-many editing process of object-oriented data,” in which a change to one object carries over to all archived documents containing the same object.

Independent claim 1 recites:
1. A method of archiving an item in a computer processing system comprising:

  • presenting the item to a parser;
  • parsing the item into a plurality of multipart object structures wherein portions of
    the structures have searchable information tags associated therewith;
  • evaluating the object structures in accordance with object structures previously
    stored in an archive;
  • presenting an evaluated object structure for manual reconciliation at least where
    there is a predetermined variance between the object and at least one of a predetermined standard and a user defined rule.

The Federal Circuit stated that because patent protection does not extend to claims that”monopolize the “building blocks of human ingenuity,” claims directed to laws of nature, natural phenomena, and abstract ideas are not patent eligible. Alice Corp. Pty. Ltd. v. CLS Bank Int’l.  The Supreme Court instructs courts to distinguish between claims that claim patent ineligible subject matter and those that “integrate the building blocks into something more.”  First, the Federal Circuit is to determine whether the claims at issue are directed to a patent ineligible concept. If so, the Federal Circuit is to 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.

The Federal Circuit noted that, at Alice step one, they must “determine whether the claims at issue are directed to a patent-ineligible concept.”  The district court held claim 1 is directed to the abstract idea of “using a generic computer to collect, organize, compare, and present data for reconciliation prior to archiving.” Mr. Berkheimer argued that the district court characterized the invention too broadly and simplistically, ignoring the core features of the claims. The Federal Circuit held that claims 1–3 and 9 are directed to the abstract idea of parsing and comparing data; claim 4 is directed to the abstract idea of parsing, comparing, and storing data; and claims 5–7 are directed to the abstract idea of parsing, comparing, storing, and editing data.   The Federal Circuit noted that the claims are similar to claims that they held directed to an abstract idea in prior cases In re TLI Commc’ns LLC Patent Litig. and Content Extraction & Transmission LLC v. Wells Fargo Bank, Nat’l Ass’n.  In Content Extraction, the claims at issue generally recited a method of 1) extracting data from hard copy documents using an automated digitizing unit such as a scanner, 2) recognizing specific information from the extracted data, and 3) storing that information in a memory. The Federal Circuit held those claims were directed to the abstract idea of 1) collecting data, 2) recognizing certain data within the collected data set, and 3) storing that recognized data in a memory.  Similarly, in TLI, the claims recited a “method for recording and administering digital images,” which involved “recording images using a digital pick up unit in a telephone unit,” digitally storing them, transmitting the digital images and classification information to a server, and storing the digital images in the server based on the
classification information. The Federal Circuit held that those claims used only conventional computer components to implement the abstract idea of classifying and storing digital images in an organized manner.

Even though the parser here separates the documents or items into smaller components than the claims determined to be abstract in Content Extraction and TLI, the concept is the same, according to the Federal Circuit. The parsing and comparing of claims 1–3 and 9 are similar to the collecting and recognizing of Content Extraction,  and the classifying in an organized manner of TLI.  Claim 4 adds the abstract concept of storing, and claims 5–7 add the abstract concept of editing.

That the parser transforms data from source to object code does not demonstrate non-abstractness without evidence that this transformation improves computer functionality in some way. Visual Memory LLC v. NVIDIA Corp.  The second step of the Alice test is satisfied when the claim limitations involve more than performance of ‘well understood, routine, and conventional activities previously known to the industry. Content Extraction.

The interesting holding in this case was that the Federal Circuit held that the question of whether a claim element or combination of elements is well-understood, routine and conventional to a skilled artisan in the relevant field is a question of fact. Any fact, such as this one, that is pertinent to the invalidity conclusion must be proven by clear and convincing evidence.

At this stage of the case, there is at least a genuine issue of material fact in light of the specification regarding whether claims 4–7 archive documents in an inventive manner that improves these aspects of the disclosed archival system. Whether claims 4–7 perform well-understood, routine, and conventional activities to a skilled artisan is a genuine issue of material fact making summary judgment inappropriate with respect to these claims.
The Federal Circuit did not decide that claims 4–7 are patent eligible under § 101. They only decided that on this record summary judgment was improper, given the fact questions created by the specification’s disclosure.

Amdoc (Israel) Ltd. v. Openet Telecom, Inc., Federal Circuit Nov 2016 (Software Patents)

Amdoc sued Openet over four software patents directed to solving accounting and billing problems faced by network service providers. The district court held that the software patents were directed to patent-ineligible abstract ideas.

A split panel of the Federal Circuit reversed the district court.

The written descriptions of the software patents describe the same system, which allows network service providers to account for and bill for internet protocol (“IP”) network communications. The system includes network devices; information source modules (“ISMs”); gatherers; a central event manager (“CEM”); a central database; a user interface server; and terminals or clients. Network devices represent any devices that could be included on a network, including application servers, and also represent the source of information accessed by the ISMs. The ISMs act as an interface between the gatherers and the network devices and enable the gatherers to collect data from the network devices. The ISMs represent modular interfaces that send IP usage data in real time from network devices to gatherers. Gatherers can be hardware and software installed on the same network segment as a network device or on an application server itself to minimize the data traffic impact on a network; gatherers “gather the information from the ISMs.” Gatherers also normalize data from the various types of ISMs and serve as a distributed filtering and aggregation system. The CEM provides management and control of the ISMs and gatherers, and the CEM can perform several functions including performing data merges to remove redundant data. The central database is the optional central repository of the information collected by the system and is one example of a sink for the data generated by the system. The user interface server allows multiple clients or terminals to access the system, and its primary purpose is to provide remote and local platform independent control for the system.

Importantly, these components are arrayed in a distributed architecture that minimizes the impact on network and system resources. Through this distributed architecture, the system minimizes network impact by collecting and processing data close to its source.

The system includes distributed data gathering, filtering, and enhancements that enable load distribution. This allows data to reside close to the information sources, thereby reducing congestion in network bottlenecks, while still allowing data to be accessible from a central location. The software patents explain that this is an advantage over prior art systems that stored information in one location, which made it difficult to keep up with massive record flows from the network devices and which required huge databases.

The Federal Circuit noted that the two-step framework set out by the Supreme Court for distinguishing patents that claim so-called laws of nature, natural phenomena, and abstract ideas from those that claim patent-eligible applications of those concepts, is now familiar law. See Alice, (following Mayo Collaborative Servs. v. Prometheus Labs., Inc., 132 S. Ct. 1289 (2012)). This framework is sometimes collectively referred to as Alice/Mayo. First, the court is to determine whether “the claims at issue are directed to one of those patent-ineligible concepts.” If so, the court is to next consider 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.”

The Federal Circuit noted that its cases generally follow the step one/step two Supreme Court format, reserving step two for the more comprehensive analysis in search of the ‘inventive concept.’ Recent cases, however, suggest that there is considerable overlap between step one and step two, and in some situations this analysis could be accomplished without going beyond step one. See Enfish, LLC, v. Microsoft Corp.

The Federal Circuit began with an examination of eligible and ineligible claims of a similar nature from past cases. They considered the claims in In re TLI Communications LLC Patent Litigation.

Under step one, the court found that the claims were directed to the abstract idea of “classifying and storing digital images in an organized manner.” Also under step one, the court found that the claims were not directed to a specific improvement in computer functionality, but instead were directed to the “use of conventional or generic technology in a nascent, but well-known environment.

The Federal Circuit stated that claim 1 of one of the software patents could be described as focusing on correlating two network accounting records to enhance the first record. Claim 1 could also be described in several other ways—such as focusing on a computer program that includes computer code for receiving initial information, for correlating that initial information with additional information, and for using that additional information to enhance the initial information.

The Federal Circuit explained that even if they were to agree that claim 1 is directed to an ineligible abstract idea under step one, the claim is eligible under step two because it contains a sufficient inventive concept. The Court relied on the distributed architecture. Claim 1 of one of the software patents requires “computer code for using the accounting information with which the first network accounting record is correlated to enhance the first network accounting record.” In a previous decision, the Federal Circuit construed “enhance” as being dependent upon the software invention’s distributed architecture. The court held that this distributed architecture was a critical advancement over the prior art. In other words, they were looking primarily at novelty and found novelty in a hardware arrangement.

I have long believed that the main issue that should be considered is novelty, not 101 issues. While this was a sensible decision, unfortunately, the Federal Circuit is divided. Some judges are quite hostile to all software. The Federal Circuit is continuing to struggle with interpreting the vague Alice v CLS Supreme Court decision. Until they can come up with brighter line rules, there cannot be any business certainty.

Post-Alice Decision on Software Patents, buySAFE v. Google, 2014

In buySAFE v. Google, decided by the Federal Circuit on September 3, 2014, claims were held to be invalid as non-statutory in view of 35 U.S.C. 101.  The Federal Circuit affirmed the district court’s grant of the defendant’s motion to dismiss.

U.S. Patent No. 7,644,019, owned by buySAFE, Inc., claims methods and machine-readable media encoded to  perform steps for guaranteeing a party’s performance of  its online transaction.

A representative method claim is claim 1, which recites:

A method, comprising:
     receiving, by at least one computer application program running on a computer of a safe transaction service provider, a request from a first party for obtaining a transaction performance guaranty service with respect to an online commercial transaction following closing of the online commercial transaction;
     processing, by at least one computer application program running on the safe transaction service
provider computer, the request by underwriting the first party in order to provide the transaction
performance guaranty service to the first party, wherein the computer of the safe transaction
service provider offers, via a computer network, the transaction performance guaranty service that
binds a transaction performance guaranty to the online commercial transaction involving the first
party to guarantee the performance of the first party following closing of the online commercial transaction.
The Federal Circuit noted that laws of nature, natural phenomena, and abstract ideas, no matter how
groundbreaking, innovative, or even brilliant,  are outside what the statute means by “new and useful process, machine, manufacture, or composition of matter,” 35 U.S.C. § 101. See Alice, 134 S. Ct.
at 2357; Myriad, 133 S. Ct. at 2116, 2117.

The Federal Circuit then stated that defining the excluded categories, the Supreme Court has ruled that the exclusion applies if a claim involves a natural law or phenomenon or abstract idea, even if the particular natural law or phenomenon or abstract idea at issue is narrow. Mayo, 132 S. Ct. at 1303. Mayo explained the point with reference to both natural laws and one kind of abstract idea, namely,
mathematical concepts.

A claim that directly reads on matter in the three identified categories is outside section 101. But the provision also excludes the subject matter of certain claims that by their terms read on a human-made physical thing (“machine, manufacture, or composition of matter”) or a human-controlled
series of physical acts (“process”) rather than laws of nature, natural phenomena, and abstract ideas. Such a claim falls outside section 101 if (a) it is “directed to” matter in one of the three excluded categories and (b) “the additional elements” do not supply an “inventive concept” in the physical realm of things and acts—a “new and useful application” of the ineligible matter in the physical
realm—that ensures that the patent is on something “significantly more than” the ineligible matter itself, according to the Federal Circuit, in interpreting Alice.

According to the Federal Circuit, the relevant Supreme Court cases are those which find an abstract idea in certain arrangements involving contractual relations, which are intangible entities. Bilski v. Kappos, 561 U.S. 593 (2010), involved a method of entering into contracts to hedge risk in commodity prices, and Alice involved methods and systems for “exchanging financial obligations between two parties using a third-party intermediary to mitigate settlement risk,” Alice, 134 S. Ct. at 2356. More narrowly, the Court in both cases relied on the fact that the contractual relations at issue constituted “a fundamental economic practice long prevalent in our system of commerce.” Bilski, 561 U.S. at 611; see Alice, 134 S. Ct. at 2356, 2357.

The Federal Circuit went on to say that in simultaneously rejecting a general business method exception to patent eligibility and finding the hedging claims invalid, moreover, Bilski makes clear that the recognition that the formation or manipulation of economic relations may involve an abstract idea does not amount to creation of a business-method exception. The required section 101 inquiry has a second step beyond identification of an abstract idea. If enough extra is included in a claim, it passes muster under section 101 even if it amounts to a “business method.”

The Supreme Court in Alice made clear that a claim directed to an abstract idea does not move into section 101 eligibility territory by “merely requiring generic computer implementation.”

The claims in this case, according to the Federal Circuit, do not push or even test the boundaries of the Supreme Court precedents under section 101. The claims are squarely about creating a contractual relationship—a “transaction performance guaranty”—that is beyond question of ancient lineage.

The Federal Circuit concluded that the claims thus are directed to an abstract idea.

The claims’ invocation of computers adds no inventive concept. The computer functionality is generic—indeed, quite limited: a computer receives a request for a guarantee and transmits an offer of guarantee in return. There is no further detail. That a computer receives and sends the information over a network—with no further specification— is not even arguably inventive. The computers in
Alice were receiving and sending information over networks connecting the intermediary to the other institutions involved, and the Court found the claimed role of the computers insufficient.

And it likewise cannot be enough that the transactions being guaranteed are themselves online
transactions. At best, that narrowing is an “attempt[] to limit the use” of the abstract guarantee idea “to a particular technological environment,” which has long been held insufficient to save a claim in this context.

According to the Federal Circuit, it is a straightforward matter to conclude that the claims in this case are invalid.

One thing disturbing about this case is the phrase “is not even arguably inventive” that the Federal Circuit used when describing the computer functionality.  If the Federal Circuit requires inventiveness in the hardware, all software patents are invalid.  I don’t think this is where we are headed, though.  They also used the term “functionality” which implies that method steps are part of the consideration.

Post-Alice Decision on Software Patents, Planet Bingo v. VKGS, 2014

In Planet Bingo v. VKGS, decided by the Federal Circuit on August 26, 2014, claims were held to be invalid as non-statutory in view of 35 U.S.C. 101.  The Federal Circuit affirmed the district court’s decision.

Planet Bingo, LLC, owns two patents for computer-aided management of bingo games. After Planet Bingo filed an infringement action against VKGS, the district court granted summary judgment of invalidity, concluding that the patents do not claim patentable subject matter under 35 U.S.C. § 101.

The Federal Circuit stated that because a straight-forward application of the Supreme Court’s recent holding in Alice Corp. v. CLS Bank International, 134 S. Ct. 2347 (2014), led them to the same result, they affirmed.

Generally, the claims recite storing a player’s preferred sets of bingo numbers; retrieving one such set upon demand, and playing that set; while simultaneously tracking the player’s sets, tracking player payments, and verifying winning numbers.

Following a Markman order, VKGS filed a motion for summary judgment that the asserted claims are directed to a patent-ineligible concept. Applying the majority opinion’s approach in CLS Bank International v. Alice Corp., the district court determined that “each method claim encompasses the abstract idea of managing/playing the game of Bingo.”

The Federal Circuit agreed with the district court that there was no meaningful distinction between the method and system claims or between the independent and dependent claims. According to the Federal Circuit, the system claims recite the same basic process as the method claims, and the dependent claims recite only slight variations of the independent claims.

The Federal Circuit stated that the claims here are similar to the claims at issue in Bilski v. Kappos, 130 S. Ct. 3218 (2010), and Alice, 134 S. Ct. 2347, which the Supreme Court held were directed to “abstract ideas.” For example, the claims here recite methods and systems for “managing a game of Bingo.” This is similar to the kind of “organizing human activity” at issue in Alice, 134 S. Ct. at 2356. And, although the ’646 and ’045 patents are not drawn to the same subject matter at issue in Bilski and Alice, these claims are directed to the abstract idea of “solv[ing a] tampering problem and also minimiz[ing] other security risks” during bingo ticket purchases. This is similar to the abstract ideas of “risk hedging” during “consumer transactions,” Bilski, 130 S. Ct. at 3231, and “mitigating settlement risk” in “financial transactions,” Alice, 134 S. Ct. at 2356–57, that the Supreme Court found ineligible. Thus, the Federal Circuit held that the subject matter claimed in the ’646 and ’045 patents were directed to an abstract idea.

Abstract ideas may still be patent-eligible if they contain an “‘inventive concept’ sufficient to ‘transform’ the claimed abstract idea into a patent-eligible application.”

Apart from managing a game of bingo, the claims at issue also require “a computer with a central processing unit,” “a memory,” “an input and output terminal,” “a printer,” in some cases “a video screen,” and “a program . . . enabling” the steps of managing a game of bingo.  These elements, in turn, select, store, and retrieve two sets of numbers, assign a player identifier and a control number, and then compare a winning set of bingo numbers with a selected set of bingo numbers.

“[I]f a patent’s recitation of a computer amounts to a mere instruction to ‘implemen[t]’ an abstract idea ‘on . . . a computer,’ . . . that addition cannot impart patent eligibility.” Alice, 134 S. Ct. at 2358 (quoting Mayo, 132 S. Ct. at 1301).  According to the Federal Circuit, in this case the claims recite a generic computer implementation of the covered abstract idea.

Post-Alice Decision on Software Patents, I/P Engine v. AOL, 2014

In I/P Engine v. AOL, 35 U.S.C. 101 was not addressed by the majority but a concurring opinion would have held the claims non-statutory in view of 35 U.S.C. 101.  The claims were held invalid as obvious.

I/P Engine, Inc. brought an action against AOL Inc., Google Inc., IAC Search & Media, Inc., Gannett Company, Inc., and Target Corporation alleging infringement of U.S. Patent Nos. 6,314,420 and 6,775,664. A jury returned a verdict finding that all asserted claims were infringed and not anticipated.

The ’420 and ’664 patents both claim priority to the same parent patent, U.S. Patent No. 5,867,799. They relate to a method for filtering Internet search results that utilizes both content-based and collaborative filtering.  Content-based filtering is a technique for determining relevance by extracting features such as text from an information item. By contrast, collaborative filtering assesses relevance based on feedback from other users—it looks to what items “other users with similar interests or needs found to be relevant.”

Apparatus claim 10 of the ’420 patent recites:

A search engine system comprising: a system for scanning a network to make a demand search for informons relevant to a query from an individual user; a content-based filter system for receiving the informons from the scanning system and for filtering the informons on the basis of applicable content profile data for relevance to the query; and a feedback system for receiving collaborative feedback data from system users relative to informons considered by such users; the filter system combining pertaining feedback data from the feedback system with the content profile data in filtering each informon for relevance to the query.

Apparatus claim 1 of the ’664 patent provides:

A search system comprising: a scanning system for searching for information relevant to a query associated with a first user in a plurality of users; a feedback system for receiving information found to be relevant to the query by other users; and a content-based filter system for combining the information from the feedback system with the information from the scanning system and for filtering the combined information for relevance to at least one of the query and the first user.

Claim 26 of the ’664 patent is similar to claim 1, but cast as a method claim:

A method for obtaining information relevant to a first user comprising: searching for information relevant to a query associated with a first user in a plurality of users; receiving information found to be relevant to the query by other users; combining the information found to be relevant to the query by other users with the searched information; and content-based filtering the combined information for relevance to at least one of the query and the first user.

The Google Defendants argued that I/P Engine’s claimed invention is obvious as a matter of law because it simply combines content-based and collaborative filtering, two information filtering methods that were well-known in the art.  The Federal Circuit agreed and stated that no reasonable jury could conclude otherwise.

Just Mayer concurred, stating because the claims asserted by I/P Engine disclose no new technology, but instead simply recite the use of a generic computer to implement a well-known and widely-practiced technique for organizing information, they fall outside the ambit of 35 U.S.C. § 101.  And if this determination had been made in the first instance as directed by the Supreme Court, litigation, and nearly two weeks of trial and imposition on citizen jurors, could have been avoided.