Emphasizing that “the appealed claims represent a non-abstract improvement in the functionality of an existing technological process and not simply an abstract idea of manipulating data” or “a mere desired result,” for which computers are invoked merely as a tool, the Federal Circuit reversed the district court in Koninklijke KPN N.V. v. Gemalto M2M GmbH and held that the claims met the requirements of 35 U.S.C. § 101. This case adds to the rapidly growing body of Federal Circuit clarifications on the application of Section 101 to software related patents.

In the underlying district court litigation, Koninklijke KPN (KPN) asserted U.S. Patent No. 6,212,662 (“the ’622 Patent”) against several defendants (“the Appellees”). The ’622 Patent covers an improvement to error detection systems used in data transmission. In the prior art, these systems would detect transmission errors by having the transmitting side of the system compute “check data” based on the underlying data to be transmitted and then send the check data as part of the transmission. This check data serves as a short-hand representation of the underlying data. The receiving side would then use the same method to also compute check data based off of the received underlying data and compare this with the check data that had been sent as part of the transmission. If the two check data segments did not match, then that would show that some portion of the transmission had been corrupted.

However, in some instances, the check data itself can be corrupted by certain functions, in which case, transmission errors go undetected. This is particularly problematic when the errors are “systematic” or repeat across several data blocks.

The ’622 Patent solved the systematic error problem by varying the way the check data is generated for different data blocks. By changing how the check data is generated for different data blocks, the inventors were able to reduce the likelihood that a systematic error would repeat itself in the check data and therefore, increase the likelihood that errors are detected.

The Appellees moved for judgment on the pleadings under Rule 12(c), arguing that all four claims of the ’622 Patent were invalid, because they were directed to a patent-ineligible abstract idea under Section 101. The district court applied the two-step framework from Alice Corp. v. CLS Bank International, 573 U.S. 208 (2014), which determined that the claims were directed to a patent-ineligible abstract idea with no saving inventive concept, and granted the motion. Specifically, at step one of Alice, the district court found that the claims were directed to the “abstract idea of reordering data and generating additional data.” More specifically, the district court found the claims fail to specify how the data is modified to accomplish the invention. As a result, the district court found at step two of Alice that the invention was not captured in the claims.

KPN appealed with respect to claims 2-4, and the Federal Circuit reversed. The court held that the claims “employ[] a new way of generating check data that enables the detection of persistent systematic errors in data transmissions that prior art systems were previously not equipped to detect.” Thus, the claims recite a “sufficiently specific implementation…of an existing tool…that improves the functioning of the overall technological process of detecting systematic errors in data transmissions.” The Federal Circuit concluded that “the appealed claims are not directed to an abstract idea because they sufficiently capture the specific asserted improvement in detecting systematic errors contributed by the inventors of the ’662 patent.”

Practice Tip: To survive the Alice analysis, the claims of this type must identify a specific solution that improves on or solves a problem in an existing technological process. Thus, Section 101 analysis should focus on whether claims describe specific improvements to the technological process, i.e., a new way of doing something, as opposed to just an improved result.

Citation: Koninklijke KPN N.V. v. Gemalto M2M GmbH, No. 2018-1863 (Fed. Cir. Nov. 15, 2019) (Dyk, Chen, and Stoll; opinion by Chen).

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