United States: Latest Post-Alice Guidance From The Federal Circuit

Last Updated: May 24 2016
Article by Michael D. Van Loy, PhD, Howard Wisnia and Robert T.S. Latta

On Thursday, May 12, 2016, the Federal Circuit reversed a lower court's finding of invalidity under 35 U.S.C. § 101, as an unpatentable abstract idea, of a software patent concerning a "self-referential" database in Enfish v. Microsoft. In so doing, the Federal Circuit provided some helpful guidance on avoiding Alice rejections for software patents.  This is only the second §101 decision from the Federal Circuit in a high tech case since the Supreme Court's Alice v. CLS Bank decision in June, 2014 that has upheld the validity of a patent.

Importantly, in Enfish the Federal Circuit gave teeth to the first step of the test developed by the Supreme Court in Mayo v. Prometheus, which was adopted in Alice as the standard for analysis of subject matter eligibility.  In the nearly two years since the Supreme Court's Alice decision many district courts, Patent Trial and Appeal Board (PTAB) panels, and Patent Examiners have generally considered the inquiry required by this first step – whether the challenged claims cover an abstract idea (and are therefore directed to ineligible subject matter absent the presence of "significantly more" in the claim) – to be met in software cases.

The Federal Circuit in Enfish rejected the notion that software patents should automatically fail the first step of the Alice analysis.  The Court reiterated that there is no definitive rule for establishing what constitutes an "abstract idea," and that both the Supreme Court and the Federal Circuit rely on comparing claims at issue to claims already found abstract to make that determination. Helpfully, for patent practitioners, the Federal Circuit spent some time explaining that software patents are not inherently abstract, but can, in their own right, be directed toward improvements to computer functionality. Consequently, there should not be a default assumption that the first step of the Mayo analysis is satisfied for all software patent claims because "[s]oftware can make non-abstract improvements to computer technology just as hardware improvements can, and sometimes the improvements can be accomplished through either route."

For applications under examination (or re-examination) at the USPTO, the Enfish ruling may have shifted some of the burden from the patentee to the Examiner.  Instead of declaring all software claims as meeting step one of the Mayo test, and focusing the inquiry on the "something more" of step two, the Federal Circuit held that the relevant question is "whether the claims are directed to an improvement to computer functionality versus being directed to an abstract idea, even at the first step of the Alice analysis." This subtle change in the question asked of software patents may result in a profound change in the USPTO's approach to software patents.  Potentially, we may find that some of the burden shifts, from the patentee being required to prove that their invention is not abstract to the USPTO  being required to prove that the invention provides no improvement to computer functionality.  This would go some way to put the burden under § 101 inline with the burdens under § 102 and § 103.

The Federal Circuit provided fodder against those Examiners requiring physical components introduced into claims that logically do not require it.  The fact that "the improvement provided by the invention is not defined by reference to 'physical' components does not doom the claims." The Federal Circuit found that to do otherwise would risk resurrecting the bright-line machine-or-transformation test.  The Court held that "[m]uch of the advancement made in computer technology consists of improvements to software that, by their very nature, may not be defined by particular physical features but rather by logical structure and processes."

The Federal Circuit placed significant emphasis on the patent specification's explanation of the benefits of the invention over the prior art and quoted parts of the patent specification that characterized the prior art and the differences between those and the present invention. In fact, the specification used the phrase the "present invention" when describing the features that were an improvement over the prior art, which the Federal Circuit used as a basis for confirming that the court's "characterization of the 'invention' for the purposes of the § 101 analysis has not been deceived by the 'draftman's art.'" For some software patents, patent practitioners may benefit from explicitly characterizing the prior art and explaining the benefits provided by the invention, even at the expense of narrowing the invention in the process.

Lastly, the claim concentrated on by the Federal Circuit was a means-plus-function claim.  The lower court interpreted the "means for configuring" language of the claim under 35 U.S.C. § 112 ¶ 6, importing a four-step algorithm into the claim.  In so doing, the lower court introduced, into the claims, the specific improvements over the prior art. Based on this case, and until more guidance is provided by the Supreme Court on subject matter eligibility, patent practitioners may find it worthwhile to think about including a means-plus-function claim – while being sure to include the necessary description in the specification to support such a claim under 35 U.S.C. §112(a) (pre-AIA 35 U.S.C. §112, ¶1) – if only to provide a path to subject matter eligibility.

This case is the first case since DDR to find claims patent eligible under § 101 and is therefore rather significant.  DDR had a profound effect on prosecution through the USPTO and this case, Enfish, is likely to have a similar effect.

For those interested, the following paragraphs describe the more technical aspects of the claims of the patents at issue in Enfish.

The Federal Circuit concentrated on claim 17 of U.S. Pat. No. 6,151,604 (the '604 Patent).  Claim 17 of the '604 Patent is a means-plus-function claim that recites "means for configuring said memory according to a logical table...."  The district court interpreted the "means for configuring" language, under 35 U.S.C. § 112 ¶ 6, as requiring a four-step algorithm taken from the specification of the '604 Patent.  The Court held that the claims were "directed to a specific improvement to the way computers operate, embodied in the self-referential table."

To understand the significance of a "self-referential" table, traditional databases are relational, i.e., each entity in a database has its own separate database table of rows and columns that contains information associated with that entity.  For example, a typical business order entry database would include a table that describes a customer with columns for name, address, phone number, and the like.  Another table would describe an order with columns for the product, the customer, date, sales price, and the like.  The order table and the customer table will be linked by the customer identification information.  The "self-referential" table structure described in the patents allows information that normally is found across multiple relational tables to be stored in a single table.  Some of the information that appears in columns in relational tables may be translated into rows of a self-referential table.

Claim 17 of the '604 Patent recites as follows:

A data storage and retrieval system for a computer memory, comprising:

means for configuring said memory according to a logical table, said logical table including:

a plurality of logical rows, each said logical row including an object identification number (OID) to identify each said logical row, each said logical row corresponding to a record of information;

a plurality of logical columns intersecting said plurality of logical rows to define a plurality of logical cells, each said logical column including an OID to identify each said logical column; and

means for indexing data stored in said table.

The lower court interpreted the "means for configuring" language of the claims under 35 U.S.C. § 112 ¶ 6, importing a four-step algorithm into the claim:

  1. Create, in a computer memory, a logical table that need not be stored contiguously in the computer memory, the logical table being comprised of rows and columns, the rows corresponding to records, the columns corresponding to fields or attributes, the logical table being capable of storing different kinds of records.
  2. Assign each row and column an object identification number (OID) that, when stored as data, can act as a pointer to the associated row or column and that can be of variable length between databases.
  3. For each column, store information about that column in one or more rows, rendering the table self-referential, the appending, to the logical table, of new columns that are available for immediate use being possible through the creation of new column definition records.
  4. In one or more cells defined by the intersection of the rows and columns, store and access data, which can include structured data, unstructured data, or a pointer to another row.

The Federal Circuit disagreed with the lower court's conclusion "that the claims were directed to the abstract idea of 'storing, organizing, and retrieving memory in a logical table' or, more simply, 'the concept of organizing information using tabular formats.'" The Federal Court concluded that "the claims are not simply directed to any form of storing tabular data, but instead are specifically directed to a self-referential table for a computer database.  For claim 17, this is reflected in step three of the "means for configuring" algorithm."

Interestingly, without the importing of limitations from the specification by the lower court as part of the analysis of the means-plus-function claim language required under 35 U.S.C. §112, ¶6, this conclusion on the specificity of the claims likely would not have been possible.

The Federal Circuit put great emphasis on the content of the specification of the '604 Patent, including the patentee's statement that "the present invention comprises a flexible, self-referential table that stores data," and the detailed analysis of the differences between the prior art and the invention and how the prior art was inferior to the invention. The Court relied on a recent Apple case which found that a specification's disparagement of the prior art is relevant to the determination of the scope of an invention. The Federal Circuit dismissed the notion that the invention's ability to run on a general-purpose computer dooms the claims.  The Court found that, unlike the claims in Alice, or claims in other cases which found subject matter ineligibility, the claims in Enfish were directed to an improvement in the function of a computer. The Court described the prior cases as involving claims that merely added conventional computer elements to well-known business practices.

The Federal Circuit concluded that the claims of the '604 Patent are not directed to an abstract idea under step one of the Alice analysis and that proceeding to step two was therefore unnecessary. The Court did caution that when there is a close call under step one of the Alice analysis, a discussion of whether the claimed invention provides concrete technological improvements may be necessary, but in this instance, the case was so clear that there was no need.

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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Michael D. Van Loy, PhD
Howard Wisnia
Robert T.S. Latta
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