United States: The Federal Circuit Finds Software Claims To "Unconventional Rules" Are Patent Eligible

Last Updated: September 30 2016
Article by Walter M. Egbert, III

In McRO, Inc. v. Bandai 1, the Federal Circuit provided important guidance for determining patent eligibility under 35 U.S.C. § 101 for software and related technology patents, particularly involving computer software processed by general-purpose computers.  In a reversal of the decision at the Central District of California, the Federal Circuit concluded that a patent for automated lip-synchronization in computer animation recited "the ordered combination of claimed steps, using unconventional rules" and was not directed to an abstract idea and thus eligible for patent protection.

The claims recited the use of animation "rules" used in 3-D facial animation sequences.  As required by the Alice decision, the patent eligibility analysis began with a determination whether the claim is "directed to" a judicial exception, such as an abstract idea.  The Federal Circuit stressed that "Courts 'must be careful to avoid oversimplifying the claims' by looking at them generally and failing to account for the specific requirements of the claims. . . Whether at step one or step two of the Alice test, in determining the patentability of a method, a court must look to the claims as an ordered combination, without ignoring the requirements of the individual steps."  The Court found that the claims were focused on "a specific asserted improvement in computer animation," the automatic use of rules of a particular type or genus, i.e., rules that are a function of sequence and timing.

The Court then found that "the specific, claimed features allow for the improvement realized by the invention," i.e., "the incorporation of the claimed rules, not the use of the computer, improved [the] existing technological process."  By identifying the improvement, the Court determined that the claims did not "simply use a computer as a tool to automate conventional activity," as was the case with Flook, Bilski and Alice, where "the claimed computer-animated process and the prior method were carried out in the same way."  The Court found no preemption of the use of rule-based lip-synchronization by the genus of rules claimed.  Rather, the genus was narrowly "limited to a specific process [] using particular information and techniques and does not preempt approaches that use rules of a different structure or different techniques."  Thus, the claim was not found to be directed to an abstract idea, and thus patent eligible.  (There was no need to reach step two of the Alice analysis.)  Significantly, the court stressed that while the results of using the claimed process may not be tangible, "there is nothing that requires a method 'be tied to a machine or transform an article' to be patentable."

The McRO decision provides guidelines for stakeholders prosecuting and litigating software patents, whether before the PTO or in Federal Court.  First and foremost, claims should be carefully drafted to articulate the technological innovation that distinguishes the innovation from prior art processes.  The specification should provide sufficient support and examples of the novel process steps or machinery.  Second, since the key to prevailing in a patent eligibility challenge is the manner in which the innovation is framed, arguments should focus on the claim language.  Oversimplification of the claims can be fatal; instead, the Office or the Court should be guided to the specific claim language when determining what the claims are "directed to."  In McRo, the claims were not directed to "all rules" in computer animation.  Rather, it was the narrower, "unconventional," claimed use of rules "as function of sequence and time." Third, when the "focus" of the patent claims has been determined, patent eligibility can be argued where the claims recite a specific means or method for obtaining a desired result or effect, rather than the result or effect itself as obtained by generic processes or machinery.  Preemption can be avoided where the claims leave open other possible approaches to achieving the desired result or effect.

The McRO decision is the third in a trio of Federal Circuit decisions this year holding software patents to be eligible matter, including Enfish, LLC v. Microsoft Corp., 822 F. 3d 1327 (Fed. Cir. 2016) (claims directed to self-referential table for database are patent-eligible subject matter because claimed invention achieves improvements in computer operation over conventional databases) and Bascom Global Internet Services, Inc. v. AT&T Mobility, LLC, __ F. 3d __, 2016 WL 3514158, 2016 U.S. App. LEXIS 11687 (Fed. Cir. June 27, 2016). As in the McRO decision, where the court viewed the claims as an "ordered combination," the Bascom decision held that claims to a system for filtering Internet content are patent eligible subject matter because an "inventive concept" can be found in the non-conventional and non-generic arrangement of the specific method of filtering content.

Footnote

1 McRO, Inc. DBA Planet Blue v. Bandai Namco Games America Inc. et al., 2015-1080 to 2015-1101 (Fed. Cir. 2016)

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