Litigators’ Perspective on the Patent Eligibility of Software: Courts Continue to Refine the Analysis in the Wake of Key Supreme Court Decision

 

 

 

 

 

By Lisa Tittemore and Brandon Scruggs. Ms. Tittemore is Co-Chair of the Litigation Practice Group and Mr. Scruggs is a member of the Litigation Practice Group

Recent precedential opinions from the Federal Circuit Court of Appeals – one of which represented a victory for our client Iatric Systems^[1] – allow some insight regarding the boundary between what is and what is not patent-eligible subject matter in the field of computers and computer software.  In the two cases, FairWarning IP, LLC v. Iatric Systems, Inc. and McRO, Inc. v. Bandai Namco Games America Inc., the Federal Circuit interpreted the Supreme Court’s controversial 2014 decision in Alice Corp. Pty. Ltd. v. CLS Bank Int’l, which we have previously discussed.

In Alice, the Supreme Court announced the applicability of a two-step framework for determining patent eligibility under Section 101 of the Patent Act in the context of computer-related patents:

• First, courts must determine whether the patent claims at issue are “directed to” a patent-ineligible concept, such as an abstract idea.
• Second, if the claims are directed to patent-ineligible subject matter, courts must ask whether any of the additional limitations in the patent claims transform the claim into a patent-eligible application of a patent-ineligible concept.

Using that framework, which the Supreme Court had earlier articulated in the biotechnology context, the court in Alice invalidated patents that covered mitigating settlement risk in financial transactions using a computer system.  The court cautioned that patent eligibility requires more of a patent claim than simply stating an abstract idea and saying “apply it.”  However, the court also warned against reading its decision broadly, “lest it swallow all of patent law,” acknowledging that at some level all inventions rest upon laws of nature, natural phenomena, or abstract ideas.  Although simply implementing a process on a computer does not impart patent eligibility, patents that “improve an existing technological process” may be patent-eligible.

The analysis in Alice dramatically altered the approach that courts had applied in evaluating patent-eligibility for computer-related inventions.  Trial judges and the Federal Circuit alike have struggled to apply the Alice framework without slipping into an impenetrably vague “I know it when I see it” standard.  The Federal Circuit’s September and October 2016 decisions in McRO and Fairwarning IP provide useful guideposts.

McRO involved patent claims that describe a method for automatically producing lip synchronization and facial expressions in animated characters, a process which was previously done by human animators, using a computer, to manipulate the character model using an intuitive process.  The invention automated the 3D animator’s task, using rules with specific characteristics that require several variables to interact in a certain way.  The federal court in Los Angeles granted the defendant’s motion to throw out the case, finding the asserted claims “too broad” and unpatentable. More...