India: Software-Patentability Test in United States---- Federal-Circuit Offers Clarification

Last Updated: 18 August 2017
Article by Rahul Sharma

Adjudications by Federal Circuit (United States) last year in respect of software related patents clarifies the test as had propounded in wake of Alice judgement few years ago. The clarification is indeed a breather for an innovator vying for a software related patent. While an invention caused by generic-computer executing software remains difficult to be patented in India, the adjudications indicate that United States remains an un-disputably attractive destination for patenting said inventions till date.

Yet, the scenario has not always been such favourable since in the year 2014, the United States Supreme Court had come down heavily against software-patents in Alice Corp. v. CLS Bank International decision while considering the principle patentability of software patents. A two-step Alice test was propounded in respect of examining software related patent applications and made the road-ahead difficult.

As may be recollected, Step 1 of the Alice test requires that the claims shall be considered in their entirety to ascertain whether their 'character as a whole' is directed or pointing towards patent ineligible subject matter, say an abstract idea. If no, then the subject matter is indeed considered statutory and evaluated on other grounds of patentability. However, in case the answer to Step 1 is yes, then the Step 2 of test swings into action and requires a more in-depth analysis of the claim-elements to determine whether they identify an 'inventive concept' in the application of the otherwise ineligible matter.

Post Alice, gaining US software patents became comparatively difficult owing to lack of clarity. District courts rejected hundreds of patents under 35 USC § 101 of the US patent laws, finding they're nothing more than abstract-ideas.

Yet, the year 2016 proved favourable as Federal Circuit Court while hearing appeals from lower courts on computer-related patents (that were challenged under the Alice precedent) found instances where they believed that software patents were wrongly rejected. 

Such pronouncements clarify that the Alice ruling certainly didn't mean that 'all' software patents were prima facie non-patentable. Moreover, the adjudications further tend to enlighten as to what a software patent might require to survive examination and opposition. In other words, the judgements in 2016 by Federal Circuit Court have tendered a respite to software-patent aspirants by providing a long-awaited clarity in terms of Alice ruling and facilitated the patent applicants in keeping their interests alive.

In Enfish LLC v. Microsoft, the Federal Circuit was confronted with determining whether the claimed elements such 'filtering internet content' and 'self-referential tables' for a database are 'patent-eligible' subject matter? The court arrived at a conclusion that both indeed led to an improved-functionality of computer systems. More specifically, the court was especially influenced by the specification, which disclosed that the 'indexing technique' in tables allowed for faster searching of data and more effective storage of data within a computing-system.

'Improvements to computer functionality' as a concept was subsequently re-analyzed by Federal circuit in later decisions, where the court found that the processes like classifying an image and storing the image based on the classification, collecting information, analysing it, and displaying results for an electric power grid (Electric Power Group v Allstom) never improve upon a computer's functionality. In fact, the Court criticised the claims considered in Electric Power Group as being overly broad and aspirational, commenting that

"there is a critical difference between patenting a particular concrete solution to a problem and attempting to patent the abstract idea of a solution to the problem in general."

The court clarified that the focus of the claims in Electric Power Group is not as such an improvement in computers during their usage. On the contrary, the improvements lie in certain independent abstract ideas that use computers merely as tools.

In McRO v. Bandai Namco Games America, the Federal Circuit again adjudicated the appealed software patent as not directed to the patent ineligible subject, let alone evaluating the matter based on Step-2 test. The Court determined that lip synchronisation for 3D animated characters (McRO) is patent-eligible and is accordingly in compliance with the first step of Alice. More specifically, the court averred that the claims defined specific rules required to produce lip synchronisation and therefore do not pre-empt any automated method of lip synchronisation.

The ratio-decidendi in McRO was that the claims define the 'specific' method for producing a particular effect, not for the effect itself. In other words, neither the claims were overly broad nor directed towards desired-result. The decision of the Court in McRO can be contrasted with the afore-discussed Electric Power Group, where the claims failed to comply with Step 2 requirement for being directed towards the desired-effect and not a specific method of producing the effect.

The Court in McRO further opined that "processes that automate tasks that humans are capable of performing are patent eligible if properly claimed". It was held that the claims in McRO were "limited to rules with specific characteristics." Quoting the specification, the court held that "the claimed improvement here is allowing computers to  produce 'accurate and realistic lip synchronization and facial expressions in animated characters,' which could previously only have been produced by human animators."

Further, in Amdocs v. Openet Telecom, the district court found that Amdocs' claim wasn't much more than the abstract idea of correlating two networks and rejected the claims. On the other hand, the Federal Circuit while hearing the appeal recognized that claims despite being directed to non-eligible matter should have been allowed. The Federal Circuit went on to say that "the claims entail an unconventional technological solution (enhancing data in a distributed fashion) to a technological problem (massive record flows that previously required massive databases)" The appellate court further remarked that the components needed were "arguably generic" but had been used in such an "unconventional manner" that they  led to "an improvement in computer functionality."


The Federal Circuit's opinions in 2016 reaffirm that software remains worthy of patent protection just as any other field of technology. Yet, overly broad, aspirational, result oriented claims in software related inventions are likely to be rejected. To put it differently, the claims to an effect / result that pre-empt other methods of achieving the same effect are unlikely to pass the Alice test. More specifically, when considering step 2 of the Alice test to detect the possibilities of pre-emption, it has been unanimously affirmed by the United States courts that the claims shall be assessed to identify an 'inventive concept' in the application of the ineligible matter. Such identification of an inventive concept is undertaken by examiners with recourse to 35 USC § 103 (inventive step) based considerations.

Based upon aforesaid affirmation, one may think that the automation of known processes (which is usually perceived as obvious in nature) will mostly fail the 'inventive concept' based criteria and thus step 2 of the Alice test. However, in McRO, the Federal Circuit opined that "processes that automate tasks that humans are capable of performing are patent eligible if properly claimed". Accordingly, a substantive depiction of inventive merit within the claims not only overcomes cited prior art(s), but also clears the hurdle posed as posed by Step 2 of Alice test.

As far as India is concerned, the fact of the matter remains that "a general purpose computer executing one or more sequences of instructions stored in the memory" remains a highly opposed proposition by Indian Patent regime till date. The same stands evidenced by a latest Indian Patent Office order dated August 9, 2017 in respect of Indian Patent Application No. 1208/DEL/2004. However, the Federal circuit's adjudication at least in Enfish substantiates the fact that United States regime continues to opine otherwise .

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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