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Tuesday, July 5, 2016

The Federal Circuit Helps Software Developers Overcome Patent-Eligibility Rejections under Alice

Bruce D. Sunstein
By Bruce Sunstein. A member of our Patent Practice Group
 

The Federal Circuit’s recent decision in Microsoft v. Enfish has given software developers a new tool—valuable at least sometimes—to resist Alice rejections of patent applications for computer-related inventions.

Under Alice Corp. v. CLS Bank (2014),  the Supreme Court expanded on its finding of “implicit exceptions” to the patent laws, holding that patent claims too closely related to a law of nature, natural phenomenon, or abstract idea are ineligible for patenting, despite the broad scope of section 101, the provision that defines eligible subject matter. The stated justification is that such patent claims would preempt the law of nature, natural phenomenon or abstract idea—the patent-ineligible concept—to which they relate and hinder scientific and technical advancement.

Alice prescribes a two-step test for determining whether patent claims are invalid. Under the first step, one determines whether the patent claims are directed to the patent-ineligible concept, namely a law of nature, natural phenomenon or abstract idea. If the claims are deemed directed to the patent-ineligible concept, then, under the second step, one considers the elements of each claim, both individually and as an ordered combination, to determine whether the claim has elements beyond the ineligible concept that would transform the nature of the claim into a patent-eligible application.  Although, as we discussed here and here, the reasoning behind the Alice decision is flawed, it remains the law of the land.

The two-step test of Alice has led to an epidemic of instances in which courts have invalidated patents for computer-related inventions and the Patent and Trademark Office has similarly rejected applications for such inventions.

In Enfish, the Federal Circuit considered a novel database structure that enables the user to organize data that, in conventional formats, would occupy numbers of tables.  The new database structure permits the user to organize the data in a single self-referential table. The Federal Circuit held this structure to be patent-eligible. Remarkably, Enfish is only the second instance in which the Federal Circuit has found software patent claims to be patent-eligible since the Supreme Court’s 2014 decision in Alice. (The first time was in DDR Holdings, discussed here.)

Enfish held the patent claims eligible on the ground that they were not “directed to” an abstract idea. In other words, the claims survived the first step of the two-step Alice test, and therefore the second step did not have to be applied. (MORE)

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