United States: In McRo, Federal Circuit Provides Further Guidance On Section 101

Last Updated: September 26 2016
Article by Michael T. Renaud, Michael C. Newman and Matthew A. Karambelas

Two years after the Central District of California invalidated two 3-D animation patents under Section 101, the Federal Circuit reversed that court's decision, finding that the lower court oversimplified the claims of a computer-related invention. McRO, Inc. v. Bandai Namco Games Am. Inc., Nos. 2015-1080, et al., 2016 U.S. App. LEXIS 16703 (Fed. Cir. Sep. 13, 2016) (opinion by Judge Reyna, joined by Judges Taranto and Stoll). While this case has stimulated discussion in the legal community, as being a ground-breaker for the patentability of software patents since the Supreme Court's decision in Alice Corp. v. CLS Bank Int'l, 134 S. Ct. 2347, 2355 (2014), the Federal Circuit's McRO decision conforms with existing principles in post-Alice Section 101 law. While the Federal Circuit disagreed with the lower court in applying these principles to the facts of this case, the McRO decision does not change the core principle that patent claims directed to specific improvements in computer technology are patent-eligible.

The patents at issue in McRo (U.S. Patent Nos. 6,307,576 and 6,611,278) involve 3-D computer animation. Their specifications describe that in the relevant art, applying the appropriate data points for basic sound phonemes, e.g. 'aah,' 'ee,' or 'oo,' was usually done using a "keyframe" approach. McRO, 2016 U.S. App. LEXIS 16703 at *7. In a keyframe approach, an animator sets the morph weights at certain important times, between which a computer program "interpolates" (filling in the data points between those morph weights). Id. at *8. The patents state that this method requires the animator to manually set a tediously high number of keyframes, which is time consuming, and can be inaccurate. Id.

The patents aimed to address the problems with the keyframe approach by "providing an integrated method embodied in computer software...for the rapid, efficient lip synchronization and manipulation of character facial expressions[.]" Id. The invention utilizes "a plurality of morph weight set transition rules" for "determining when to set keyframes[,] and setting those keyframes...taking into consideration the differences in mouth positions for similar phonemes based on context." Id. at *9. For example, where an animator previously would have had to subjectively identify a problem with an animated face saying "hello" after silence, and insert a keyframe for the appropriate time in which the model would start to open its mouth, the invention uses rules to automatically set that appropriate keyframe. Id. at *9-10.

At the lower court, plaintiff McRO, Inc. argued that the 3-D animation method claims were not directed to an abstract idea. The district court disagreed, finding that the patent is directed to the abstract idea of "automated rules-based use of morph targets and delta sets for lip-synchronized three-dimensional animation." The court stated:

"A consideration of the prior art recited in the patents shows that the point of novelty here is the idea of using rules, including timing rules, to automate the process of generating keyframes...So, what the claim adds to the prior art is the use of rules, rather than artists, to set the morph weights and transitions between phonemes. ...Because the claim purports to cover all such rules, in light of the prior art, the claim merely states 'an abstract idea while adding the words 'apply it.'' Alice, 134 S. Ct. at 2358 (quoting Mayo, 132 S.Ct. at 1294) (some quotation marks omitted)."

McRO, Inc. v. Sony Comput. Entm't Am., LLC, 55 F. Supp. 3d 1214, 1226-27 (C.D. Cal. 2014). The district court decision came down three months after the Supreme Court's June 2014 Alice decision.

The Federal Circuit disagreed with the district court's characterization of the patent claims. In describing the standard used to evaluate patent claims under Alice step one, the Court stated that "[w]e...look to whether the claims in these patents focus on a specific means or method that improves the relevant technology or are instead directed to a result or effect that itself is the abstract idea and merely invoke generic processes and machinery." McRO; 2016 U.S. App. LEXIS 16703 at *28. The Federal Circuit found that here, the claims themselves set out meaningful requirements for the claimed set of rules: i.e. (1) defining a morph weight set stream as a function of phoneme sequence and times associated with the phoneme sequence, and (2) applying the set of rules to each sub-sequence of timed phonemes. Id. at *25. As a result, the Federal Circuit held that the district court oversimplified the claims by not considering these specific requirements as limitations preventing a broad claiming of all ways of using rules to automate morph targets. Id.

This case represents just the fourth time that the Federal Circuit has ruled in favor of a software patent's eligibility since Alice (the other three instances being DDR, Enfish, and BASCOM). McRO underscores the principle that where a patent claims a specific way of improving computer technology, and those specific features "allow for the improvement realized by the invention," such claims are patentable under Section 101. See id. at *25-26. Further, the Federal Circuit distinguished this invention from other computer-automated processes that have been traditionally invalidated under Section 101 since Alice. The Court found that here, "[i]t 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...[thus t]his is unlike Flook, Bilski, and Alice[.] Id. at *29-30 (emphasis added) (also noting that "the automation goes beyond merely 'organizing [existing] information into a new form' or carrying out a fundamental economic practice"). Despite the attention that McRO has received, the case is more of a clarification of post-Alice Section 101 law, rather than an upheaval of these existing core principles.

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