Bascom v. AT&T Fine Tunes Alice Guidance; Reveals Importance of the Background Section of a Patent in the Analysis
Bascom nicely fine tunes guidance on determining § 101 eligibility of software patents as follows:
- Stop at Alice Step 1 if claim recites an unambiguous technical improvement
- Advance to Alice Step 2 if Step 1 is a “close call”
- Claim is patent eligible at Step 2 only if the claim recites specific improvement to and does not preempt the underlying technical application
And Bascom yields one addition key insight:
- Background Section Can Make or Break Your Patent Eligibility Argument
In Bascom v. AT&T, decided on June 27, 2016, the Federal Circuit reversed the trial court on § 101 in finding software patent claims were not abstract and therefore, patent eligible. This is an important § 101 case because the claims the Federal Circuit found to be patent eligible are an obvious “close call.” Arguably, they lie just inside the § 101 patent eligibility boundary line (i.e., that line inside of which defines what subject matter is eligible for patent and outside which defines what is not.) So it provides much needed guidance on how far a software patent can go in claiming an abstract idea and still be found by a court to be patent eligible.
At issue in Bascom was the patent eligibility of software tools for filtering out content that a user may receive over the internet. Conventionally, an individual user may configure what content his local computer may receive through software filters on his local computer or a network may configure what content local computers on the network may receive through software filters on the network server; but not both. With Bascom technology, an individual user may create a “wish list” of content he may want his computer to receive by configuring filtering software through his local computer but it is the network that makes the ultimate determination what content on the individual users “wish-list” the local computer of the user will actually receive based upon configuration settings in filtering tools on the servers.
Go Ask Alice for Answers to § 101 Questions
It is quickly becoming black letter law that for answers to § 101 patent eligibility questions: Go Ask Alice! Specifically, in finding the claimed internet content filter to be patent eligible in Bascom, the Federal Circuit reiterated Supreme Court analytics first applied in Alice Corp v. CLS Bank to decide these § 101 questions: “First determine whether the claims at issue are directed to a patent-ineligible concept.” Alice Corp. Pty Ltd. v. CLS Bank Int’l, — U.S. —-, 134 S. Ct. 2347, 2355 (2014). If this threshold determination is met, then “consider the elements of each claim both individually and ‘as an ordered combination’ to determine whether the additional elements ‘transform the nature of the claim’ into a patent-eligible application.” Id. (quoting Mayo, 132 S. Ct. at 1298, 1297).
In the Bascom decision, if, as the Federal Circuit explained in Enfish, the claims are unambiguously directed to an improvement in computer capabilities, the Alice patent eligibility analysis ends at step one. Op. 13. Where, however, as here, there is a “close call about how to characterize what the claims are directed to,” the Alice patent eligibility analysis must advance to step two to search for an ‘inventive concept’. Id.
In applying the second step of Alice, the Federal Circuit agreed with the District Court in finding no inventive concept in each limitation standing alone. (“Considered individually” the limitations “are no more than routine additional steps involving generic computer components and the Internet, which interact in well-known ways to accomplish the abstract idea of filtering Internet content.” Op. 14. “The limitations of the claims, taken individually, recite generic computer network and Internet components, none of which is inventive by itself. Bascom does not assert that it invented local computers, ISP servers, networks, network accounts, or filtering. Nor does the specification describe those elements as inventive.” Id.)
However, the Federal Circuit found much to fault with the District Court’s analysis of the ordered combination of limitations. “The inventive concept inquiry requires more than recognizing that each claim element, by itself, was known in the art.” Id, at 15. As the Federal Circuit explained, “an inventive concept can be found in the non-conventional and non-generic arrangement of known, conventional pieces.” Id. In Bascom, “the prior art filtering tool provided benefits of a filter on a local computer or benefits of a filter on an ISP server but not both as claimed in the patent.” Id. The “installation of a filtering tool at a specific location, remote from the end-users, with customizable filtering features specific to each end user” is an inventive concept since this design gives the filtering tool both the benefits of a filter on a local computer and the benefits of a filter on the ISP server. Id.
Bascom nicely fine tunes this guidance on determining the § 101 eligibility of software patents:
1. Stop at Alice Step 1 if Claim Recites an Unambiguous Technical Improvement
2. Advance to Alice Step 2 if Close Call
3. A Claim is Patent Eligible at Step 2 if Claim Recites Specific Improvement to and does not Preempt Underlying Technical Application
Guidance on Close Calls
Bascom further provides much needed guidance on the patent eligibility of software claims that are a very “close call about how to characterize what the claims are directed to” and that arguably lie just inside the § 101 patent eligibility boundary line (i.e., that line inside of which defines what subject matter is eligible for patent and outside which defines what is not.)
Background Section Can Make or Break Your Patent Eligibility Argument
Perhaps the most important lesson from Bascom may be the important role that the Background Section of a patent specification can play in deciding the § 101 question. In many patents, the Background Section is sparse on content with not enough description and analysis of the state and shortcomings of the prior art, and how the disclosure of the specification addresses those shortcomings.
Some of that may be due to estoppel concerns (i.e., anything you say can be used against you in litigation). Some of it may be due to small budgets often allotted a practitioner for drafting a patent which leads to cutting corners often at the expense of the Background Section of the patent. The Bascom patent did provide a reasoned description and analysis and it may have played a big role in the patent eligibility decision. Certainly, Judge Chen relied heavily on the Background Section of the patent specification in the opinion of the Federal Circuit he authored. Considering that, according to Judge Chen, the patent eligibility of the claims was a “close call,” in the final analysis the reasoned description and analysis in the Background Section of the patent may have tipped the balance toward patent eligibility.
While it is true that litigators argue the background prior art in § 101 cases all the time, those arguments often draw upon extrinsic evidence (i.e. evidence outside of the patent specification and file history), especially where the Background Section of the patent is short on description. In Bascom, Judge Chen found the intrinsic evidence description of the Background Section of the patent itself not only probative but quite helpful in deciding the patent eligibility question since it clearly articulated ways in which the prior art addressed the problem.
This not only showed that the claims do not preempt the abstract idea since there were other ways in which the abstract idea of filtering could be demonstrably used to address the problem. But it also focused the disclosure on a specific problem which supported the finding that the claims were directed to a specific improvement. In short, the Background Section of the patent provided compelling support for the Court to find that the claims recited a specific improvement to and did not preempt an underlying technical application. So spending a bit more time on drafting a more thorough Background Section of the patent may help position claims to better withstand a § 101 challenge later.
That may be the biggest take-away from the Bascom decision!