09/12/2016
The Alice Corporation Pty Ltd. v CLS Bank International et al. US Supreme Court decision (Alice v CLS Bank) on patent eligible subject matter of 19 June 2014 has had a massive impact. As soon as this decision came out, it immediately made it harder to obtain and maintain US patents for computer-implemented inventions. However, there is increasing hope that the position is softening and that it is becoming easier to obtain and maintain US patents for computer implemented inventions.
Recently, the US Patent and Trade Mark Office issued a memorandum on patent eligible subject matter for software inventions. It highlights three decisions from the Court of Appeals of the Federal Circuit (CAFC) that all found that the patents in suit related to patent eligible subject matter. From when Alice v CLS Bank was decided on 19 June 2014 to 1 November 2016, there have been 59 CAFC decisions on patent eligibility and only ten of these were found to include a patent with at least one claim directed to patent eligible subject matter and most of these are recent decisions.
We have blogged extensively already on Alice v CLS Bank. Briefly, it sets out a test for patent eligible subject-matter as follows.
Determine whether a claim is directed to an abstract idea, examples given in Alice v CLS Bank of an abstract idea include: (a) fundamental economic practices; (b) certain methods of organizing human activities; (c) an idea of itself; and (d) mathematical relationships/formulas. If an abstract idea is present in the claim, then determine whether any element, or combination of elements, in the claim is sufficient to ensure that the claim amounts to significantly more than the abstract idea itself. In other words, are there other limitations in the claim that show a patent-eligible application of the abstract idea, e.g., more than a mere instruction to apply the abstract idea? If the answer is no, then the claim is patent ineligible.
A summary of the three positive CAFC decisions in the memorandum is set out below. Coincidentally, all of the patents in suit are old with priority dates in 1997.
In the McRO, Inc. v Bandai Namco Games America Inc. decision of 13 September 2016, claims of the patents in suit were found not to be abstract and therefore patent eligible. The claims were directed to a method for automatically animating lip synchronization including a set of steps that are then applied to a sequence of animated characters. The claims of the patents in suit were found to be an improvement in computer-related technology as the method allowed computers to produce accurate and realistic lip synchronisation and facial expressions in animated characters that could previously only be produced by human animators.
In the BASCOM Global Internet Services v AT&T Mobility LLC decision of 27 June 2016, claims of the patents in suit were found to be abstract, but significantly more than the abstract idea itself and therefore patent eligible. The claims of the patents in suit were directed to a system including generic computer hardware on a network that filtered content in a particular way. The CAFC found that the claims were directed to an abstract idea because filtering content is a long-standing, well-known method of organizing human behaviour, similar to concepts previously found to be abstract. Nevertheless, the claims were found to be patent eligible as the combination of the claim limitations describes an inventive concept. The generic computer, network and Internet components individually do not amount to ‘significantly more’, but they do in combination. Installing filtering tools at remote ISP servers would allow users to customise their filtering criteria because unlike known local filtering systems the claimed system prevents user circumvention of the filters.
In the Amdocs (Israel) Ltd. v Openet Telecom, Inc. (Amdocs v Openet) decision of 1 November 2016, the CAFC did not make a decision as to whether or not the claims of the patents in suit were abstract as they considered that if they were abstract then they would also be significantly more than the abstract idea itself and therefore patent eligible. The claims of the patents in suit were directed to solving accounting and billing problems faced by network service providers. Distributed computers on a network, as described in the patents in suit, prevent network bottlenecks. The CAFC concluded that the claims of the patents in suit were significantly more than the abstract idea itself because they related to an unconventional technological solution (enhancing data in a distributed fashion) to a technological problem (massive record flows which previously required massive databases).
Of the three cases, we understand that only patents of the Amdocs v Openet have non-US equivalents: they are in the UK. These UK patents granted back in 2003 at a time when the UK was more lenient in granting patents for computer-implemented inventions than it is now. Are we seeing a return to a more lenient approach in the US?
This article is for general information only. Its content is not a statement of the law on any subject and does not constitute advice. Please contact Reddie & Grose LLP for advice before taking any action in reliance on it.
