• Split Dealertrack  Court sinks abstract clearinghouse method claims reciting a “computer aided method”; but “means-plus-function” claim helps keep other software patent alive for another day[1]

The patent community continues to seek clarification on the post-Bilski boundary.  The Dealertrack v Huber case gets us a little closer.

In Dealertrack, the Federal Circuit provides one more new post-Bilski precedent on what constitutes patentable subject matter; this time in connection with software patents. On January 20, 2012, in a split decision, the Federal Circuit affirmed the invalidity of software patent claims because they preempted a general concept. The two patents before the court U.S. Patent No. 7,181,427 (“’427 Patent”) and U.S. Patent No. 6,587,841 (“’841 Patent”) were directed to a computer aided use of a clearinghouse specifically for car loan applications.

The ‘427 pre-empted the abstract idea of a clearinghouse, the court held, because the term “computer” did nothing more than the general computer in Benson, one of the trilogy of cases relied upon by the Supreme Court in its Bilski decision.  Slip Op. 36

Unlike in its predecessor Ultramercial decision where “the patent claimed [a computer having] a practical application with concrete steps requiring an extensive computer interface,” the claimed computer in Dealertrack was neither a specific computer nor was involved in the method claims, the court explained. Ibid. The recited computer amounted to an extra-solution activity that is not meaningful in the subject matter patentability analysis. Ibid.

With the general computer removed from the subject matter patentability equation, the court found only the restriction of the clearinghouse process to a “car loan” field of use recited in the claims to be of any consequence in the Bilski analysis.  Slip Op. 37  But like the recited computer, the “car loan” field of use restriction was nothing more than an extra-solution activity that, like the recited computer, was not meaningful in the subject matter patentability analysis, the court said.  Ibid. The court found the limitation in the claim of restricting the general clearinghouse method to car loans in Dealertrack to be no different than the limitation in Bilski of restricting the general method of hedging to the energy market. Ibid.  When the claims were stripped of the limitations to a “computer” and the “car loans” field of use restriction, all that remained were claims that recited a general concept; the preemption of which is prohibited and hence is not subject matter patentable under the Bilski precedent.  Slip Op. 35

Just as important for what the Dealertrack court said about the ‘427 patent claims is what the court said about the claims of the ‘841 patent some of which were written in means-plus-function format and which arguably for that reason dodged the Bilski bullet.[2][3][4]  As noted by the court, the application-specific algorithms described in the specification and incorporated into the means-plus-function recitation of the ‘841 patent made those ‘means-plus-function’ claims specific computers. “[I]n a means-plus-function claim ‘in which the disclosed structure is a computer, or microprocessor, programmed to carry out an algorithm, the corresponding] structure is not the general purpose computer, but rather the special purpose computer programmed to perform the disclosed algorithm,” the court explained.  Slip. Op. 25  In contrast, the “computer” recited in the ‘427 patent was without the structure of the algorithmic limitations found in the specification. As a general purpose computer that carried no weight in the subject matter patentability analysis, the ‘427 claims amounted to no more than the preemption of the clearinghouse abstraction, the court held.   Slip Op. 36.

Hence, claiming software using means-plus-function language may provide one way to protect the software patent against a Bilski challenge since it can make a computer recited in a claim, “application specific,” as compared to a general purpose computer that may carry little weight in the Bilski analysis. Another may be to draft the claim so that one or more of the recited limitations physically or virtually links the data manipulated by the software to a physical or tangible object. This approach is what we at Juhasz Burge PC have suggested as the test for accurately defining the boundary line beyond which a business, software, or diagnostic method preempts a fundamental idea.  By using the physical or virtual links argument, your claims may also be written much broader than by using means-plus-function language, since you are not limiting the claims to the specification but are allowing the claim to cover any uses to which the claimed invention may be put. For more on this approach to claim drafting go to Physical and Virtual Links.

The Juhasz Burge PC Firm can help you to better understand the effect of Dealertrack on your software patents.  For more information regarding these cases and advice on how these decisions may affect your patents, please contact The Juhasz Burge PC Firm. Your patents may be your most important asset.  To help you protect your patents contact Juhasz Burge PC, the firm committed to Guiding Your Patent Beyond The Horizon℠.

[1] Means-plus-function claim 12 of the ‘841 patent survived to live another day.  Means-plus-function claims 14, 16, 17 of the ‘841 patent, that were before the court on a summary judgment of noninfringement, were invalidated on other grounds, i.e., indefiniteness.  Slip Op. 29  Claims 7-9 of the ‘841 patent, before the court on a summary judgment of noninfringement, were apparently never brought before the court on Bilski patentable subject matter grounds despite reciting “computer processor” limitations arguably analogous to claims 1, 3, and 4 of the ‘427 patent, which were invalidated by the court under Bilski.  The ‘427 patent recited (a) “a computer aided method,” which the lower court did not define, (b) a “remote application entry and display device,” which the court construed to mean “any device, e.g., personal computer or dumb terminal, remote from the central processor, for application entry and display,” and (c) “terminal devices” which the court construed to mean “any device, e.g., personal computer or dumb terminal, located at a logical or physical terminus of the system.  Slip op. 32

[2] See footnote 2, supra.

[3] The comments of the court in connection with construing the claims in the ‘841 patent that were written in means-plus-function format provides some insight into some differences between an application specific computer and a general computer that may be useful in a Bilski analysis.  Interestingly, the remaining claims of the ‘841 patent before the court, namely, claims 7-9, recite “computer processor” limitations arguably analogous to the “general computer” limitations recited in claims 1, 3, and 4 of the ‘427 patent, which were invalidated by the court under Bilski.  The issue of claims 7-9 of the ‘841 patent under Bilski were not before the court because the appeal of these claims were limited to a summary judgment of noninfringement.

[4]  The lower court’s construction of the term “communications medium” was reversed as an improper carve-out of the internet.  Slip Op. 16   The lower court’s construction of the term “routing” was affirmed.   Slip Op. 21  The lower court’s construction of the term “selectively forwarding” was affirmed.  Slip Op. 22  The lower court’s construction of the term “central processing means operably coupled to said communications medium, for executing a computer program which implements and controls credit application processing and routing” was reversed.  Slip Op, 28