In Alice Corp. v. CLS Bank International, the Supreme Court applied its two-part test for patent eligibility under 35 U.S.C. § 101 – i.e., (1) whether the claims are drawn on a law of nature, natural phenomenon or abstract idea, and (2) whether the claims provide sufficient "inventive concept." In Alice, the Supreme Court ultimately held that the claims were directed to the abstract idea of "intermediate settlement" and that the requirement of a general purpose computer was insufficient inventive concept to confer patent eligibility.
Since the Alice decision, many courts have referenced the Supreme Court's discussion of a general purpose computer. However, in a recent precedential decision, the Federal Circuit further commented on whether reciting a conventional cellular telephone could provide sufficient inventive concept for patent eligibility.
In Affinity Labs of Texas, LLC v. DirectTV, LLC, Nos. 2015-1845, -1846, -1847, -1848 (Fed. Cir. Sept. 23, 2016), the Federal Circuit examined claims "directed to a broadcast system in which a cellular telephone located outside the range of a regional broadcaster (1) requests and receives network-based content from the broadcaster via a streaming signal, (2) is configured to wirelessly download an application for performing those functions, and (3) contains a display that allows the user to select particular content." The district court had found the claims to be patent ineligible and the Federal Circuit affirmed.
Addressing the first step of the analysis, the Federal Circuit found that "[t]he concept of providing out-of-region access to regional broad cast content is an abstract idea . . ." because "[i]t is a broad and familiar concept concerning information distribution that is untethered to any specific or concrete way of implementing it." Notably, the Federal Circuit endorsed the district court's observation that "out-of-region broadcasts have been commonplace since the late 20th century, in the form of systems delivering local radio and television broadcasts of sporting events to a national audience" (emphasis added).
As to Alice's second step, the Federal Circuit found that the "claim simply recites the use of generic features of cellular telephones, such as a storage medium and a graphical user interface, as well as routine functions, such as transmitting and receiving signals, to implement the underlying idea. That is not enough." The patent owner argued in response "that the use of a downloadable application for presenting a graphical user interface on a cellular telephone" was novel as of the priority date and, therefore, a source of sufficient inventive concept. But, the Federal Circuit disagreed, because the nature of the invention was not an advancement in downloading applications or displaying information. Rather, "[t]hose additional limitations describe purely conventional features of cellular telephones and the applications that enable them to perform particular functions."
The Federal Circuit's decision is notable for its deviation beyond the typical discussion of the general purpose computer mentioned in Alice. Instead, the Federal Circuit compared the claims to an understanding of the "conventional features of cellular telephones." Although cellular telephones may have some similarities to a general purpose computer, the Federal Circuit did not view the differences between those devices as sufficient inventive concept.
Among other things, the Federal Circuit's decision suggests that practitioners should not evaluate a patent solely on the basis of whether the claims can be characterized as being implemented on a general purpose computer. Rather, practitioners should also examine whether the claims recite merely "conventional" steps in the field.
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