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.


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.


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.

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