United States: Important Federal Circuit Decision Provides More Clues On Software Eligibility

Last Updated: September 19 2016
Article by Brendan E. Clark

On Sept. 13, 2016, the Court of Appeals for the Federal Circuit gave applicants and patentees another tool with which to argue for the patent eligibility of their software innovations, finding that McRO's lip-synchronizing patents were eligible under 35 U.S.C. § 101. Judge Reyna, joined by Judges Taranto and Stoll, determined that representative claim 1 of the McRO patent was not directed to an ineligible abstract idea. This is because the genus of rules limiting the claim contains sufficient specificity to go beyond the abstract by rendering and applying information, rather than merely organizing it, and avoids preempting all means of arriving at the result.

As we previously begged for a repeatable test not turning on subtleties of the individual matter,1 we would enjoy ending the blog post here. Unfortunately, we cannot.

The patented technology

McRO's two patents at issue, 6,307,576 and child 6,611,278, are directed to automatically producing accurate and realistic facial expressions synchronizing three-dimensional animated characters with a speech audio track. An audio track is segmented by time into particular phonemes (speech sounds). Visemes (facial arrangements) correspond to each phoneme and make the animated face appear to match the "spoken" sound when applied. The transitions between successive visemes bear significantly on the quality of animation. These transitions were previously programmed by manual animators, a labor-intensive and inconsistent practice. McRO sought to automate high-quality transitions using a category of rules, i.e., morph weight sets and transition parameters. Its invention was claimed as follows.

  1. A method for automatically animating lip synchronization and facial expression of three-dimensional characters comprising:

    obtaining a first set of rules that define output morph weight set stream as a function of phoneme sequence and time of said phoneme sequence;

    obtaining a timed data file of phonemes having a plurality of sub-sequences;

    generating an intermediate stream of output morph weight sets and a plurality of transition parameters between two adjacent morph weight sets by evaluating said plurality of sub-sequences against said first set of rules;

    generating a final stream of output morph weight sets at a desired frame rate from said intermediate stream of output morph weight sets and said plurality of transition parameters; and

    applying said final stream of output morph weight sets to a sequence of animated characters to produce lip synchronization and facial expression control of said animated characters.

U.S. Patent 6,307,576, Claim 1. The district court focused its eligibility analysis on this claim, and the Federal Circuit did the same, as neither party disputed this approach or argued claims separately.

Since oral argument

It was a busy summer for patentable subject matter. The Federal Circuit found eligible subject matter in two cases since oral argument was completed in McRO v. Bandai Namco.

The first, Enfish v. Microsoft, found that a self-referential database was not directed to an abstract idea under the first step of analysis under the Alice/Mayo framework.2 This decision made showing ineligibility more challenging, requiring that any alleged abstract idea be detailed and bear on the claims rather than on high-level generalization and expressly noting that an invention's ability to run on a general-purpose computer need not render it ineligible.

The second, Bascom v. AT&T, turned to the second step of the Alice/Mayo framework.3 The invention in Bascom dealt with a content-filtering architecture offering different filtering schemes from the remote server of an internet service provider. Reaching the second prong of § 101 analysis (determining whether an inventive concept transforms the abstract idea into a patent-eligible invention), the Federal Circuit found that the ordered combination of claim limitations was sufficient to establish eligibility. While local custom filters or generic remote filters might be ineligible, customizable filters remote from the users are eligible. The Federal Circuit closely analyzed preemption, stating that the specific, discrete solution claimed did not risk preempting all techniques for filtering content on the internet.

After the court's detailed questioning during McRO's oral arguments and with the eligibility stage set on both prongs of the Alice/Mayo framework, the patent community waited eagerly for the outcome.

The court's approach

The Federal Circuit began with step one of the eligibility analysis and disagreed with the conclusion that the representative claim is directed to the abstract idea of "automated rules-based use of morph targets and delta sets for lip-synchronized three-dimensional animation."4 While this is a thoroughly more informative description than many of the often argued categories – such as a "fundamental economic practice" or a "certain method of organizing human activity" – the court deemed the alleged abstract idea to be an oversimplification of the claims, which are "limited to rules with specific characteristics."5

But, the defendants argued, the exact rules are not claimed. On this point, the court invoked a concept not recently visited in § 101 reasoning, concluding that the claimed rules implicitly fall into a genus because of their particular and common characteristics.6 The court emphasized the propriety of genus claiming but observed the tension between claim breadth and preemption risk.

This led to the opinion's treatment of preemption analysis. While it is improper to monopolize the basic tools of technology, specificity in limiting the claims allows patentees to leverage the basic tools without preempting all uses thereof. In deducing that McRO did not preempt the entirety of animation techniques matching phonemes to visemes by using rules, the court paraphrased several claim limitations in greater detail than was captured by the earlier description of the alleged abstract idea. "This activity [of animators setting keyframes for fine-tuning expressions in animated characters based on an audio track], even if automated by rules, would not be within the scope of the claims because it does not evaluate sub-sequences, generate transition parameters or apply transition parameters to create a final morph weight set."7

Unlike in Bascom, concern over preemption was reached during the first step of the Alice/Mayo framework. But as in Bascom, this issue was given meaningful weight, with the court stating, "The concern underlying the exceptions to § 101 is not tangibility, but preemption."8 Also as in Bascom, the assessment was made in view of the prior art, here the "prior art 'animator,'"9 indicating that blurring statutory sections for purposes of determining inventive concept or preemption will continue.

In arriving at its ultimate conclusion, the court identified a fine, fact-driven line between inventions directed to abstract ideas and those that are patent eligible: "[T]he automation goes beyond merely 'organizing [existing] information into a new form' . . . . The claimed process uses a combined order of specific rules that renders information into a specific format that is then used and applied to create desired results."10 The court judged this transformation sufficient to raise the claims above the abstract in view of its finding that not all such transformations are preempted by the claims.

The court's what-ifs

While determining eligibility is significant, several remarks underscore the fact-specific nature of this decision. In particular, the opinion highlights the importance of claim construction and the evidence of record.

After summarizing the procedural history, the court opened its discussion with a section dedicated to claim interpretation, declaring "in this case, claim construction is helpful to resolve the question of patentability under § 101."11 The court agreed with McRO on disputed construction, interpreting the claimed rules as limited to specific rules evaluating specific information. This ultimately may have influenced the outcome, given concerns of overbreadth in discussing preemption. Whereas the district court said that "[t]his case illustrates the danger that exists when the novel portions of an invention are claimed too broadly,"12 the Federal Circuit read the claims more narrowly to cover a genus of rules with shared particulars, as opposed to all possible rules. The court noted the defendants' admission that "an animator's process was driven by subjective determinations rather than specific, limited mathematical rules. . . . It is the incorporation of the claimed rules, not the use of the computer, that 'improved [the] existing technological process' by allowing the automation of further tasks."13 Because nothing of record proved overbreadth, and contrarily the court identified other approaches for performing similar lip-synching animation, this construction may have turned the Federal Circuit away from the lower court's approach.

Throughout the opinion, the court also repeated that its decision was based on the actual record rather than on alternative or hypothetical records. The opinion stated that "[d]efendants provided no evidence that the process previously used by animators is the same as the process required by the claims"14 and went so far as to aver that "[d]efendants' attorney's argument that any rules-based lip-synchronization process must use the claimed type of rules has appeal, but no record evidence supports this conclusion."15 The court thus maintained the presumption of issued patent validity, placing the burden on the challenger to show preemption exists expressly on the record.

These issues create ample wiggle room to argue construction, evidence, or other factual details when applying this holding.

Conclusions

If Enfish and Bascom gave us guidance for more clearly arguing step one and step two of the Alice/Mayo eligibility framework, McRO turned out to be more of a DDR,16 backing into eligibility using fact-specific analysis, including hypotheticals softening the conclusion.

While preemption analysis continues to grow in significance, these arguments are so far, at least anecdotally, unpersuasive in prosecution and before the Patent Trial and Appeal Board. Thus, it is unlikely applicants will experience any observable eligibility sea change based on the decision. One new issue which may bear on §§ 101 and 112 is the possibility that claimed pluralities of elements sharing particular, common characteristics may be argued as an eligible and definite genus even where no individual item of the genus is exhaustively described.

Litigators may be able to utilize the decision more effectively than prosecutors. Those asserting patents should seek to construe their claims in a manner avoiding overbreadth and stress the burden of the challenger to demonstrate that preemption exists. It is also likely beneficial for patentees to prepare arguments exhibiting alternative approaches in advance, expecting adverse parties to attempt to show preemption. Defendants can do the opposite, and perhaps more valuably seek to identify risky competitor patents early to raise eligibility challenges before the Patent Trial and Appeal Board using post-grant review.

Whether the facts are analogized or distinguished, this will be a frequently cited case given the limited post-Alice appellate case law finding eligibility.

Footnotes

1 B.E. Clark, Upcoming Federal Circuit Decision Presents Opportunity for Clarification of Patentable Subject Matter, http://www.ipintelligencereport.com/2016/02/25/upcoming-federal-circuit-decision-presents-opportunity-for-clarification-of-patentable-subject-matter/ ("a rejection of the district court's approach should be accompanied by an alternative analysis that is repeatable beyond the immediate facts of the case").

2 M.D. Stein, Major 101 Decision – Enfish v. Microsoft, http://www.ipintelligencereport.com/2016/05/12/major-101-decision-enfish-v-microsoft/.

3 M.D. Stein, CAFC Hands Down Significant § 101 Decision in Bascom Global Internet, http://www.ipintelligencereport.com/2016/06/29/cafc-hands-down-significant-%C2%A7-101-decision-in-bascom-global-internet/.

4 McRO v. Bandai Namco Games America, No. 2015-1080 et seq., slip op. at 21 (Fed. Cir. 2016).

5 Id.

6 Id. at 22.

7 Id. at 24.

8 Id. at 25 citing Mayo Collaborative Servs. v. Prometheus Labs., Inc., 132 S. Ct. 1289 (2012).

9 Id. at 24. Cf. Bascom Global Internet v. AT&T Mobility LLC, No. 2015-1763, slip op. at 16 (Fed. Cir. 2016).

10 McRO v. Bandai Namco Games America, No. 2015-1080 et seq., slip op. at 25 (citations omitted).

11 Id. at 18.

12 McRO, Inc. v. Namco Bandai Games America, 2014 WL 4749601 (C.D. Cal. 2014).

13 McRO v. Bandai Namco Games America, No. 2015-1080 et seq., slip op. at 24.

14 Id.

15 Id. at 26.

16 DDR Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245 (Fed. Cir. 2014).

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.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.