Software that makes a non-abstract improvement to computer technology may be eligible for patent
In Enfish LLC v. Microsoft Corp., decided on May 12, 2016, the Federal Circuit reversed the trial court on § 101 in finding software patent claims were not abstract and patent eligible.
At issue in Enfish was the patent eligibility of logical models for computer databases. Conventional logical models explain how data is related to each other through tables. In Enfish, the logical model included all data entities in a single table.
In finding the table to be patent eligible, the Federal Circuit reiterated the Supreme Court analytics for deciding § 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).
Not All Software Claims Are Abstract
Courts often assume that software is abstract. Thus courts often skip over the first step of Alice and go straight to the second step: Determine whether the software transforms the nature of the claim into a patent-eligible application. In Enfish, the Federal Circuit explained that software claims should not be presumed to be abstract. To the contrary, the Federal Circuit explained that courts should apply the first step of Alice to make that determination first. If the software is found to be not abstract, then the Alice patent eligibility analysis ends there. There is no need to consider the second step.
On the “non-abstractness” of some software, the Federal Circuit explained that “[s]oftware can make non-abstract improvements to computer technology just as hardware improvements can, and sometimes the improvements can be accomplished through either route. We thus see no reason to conclude that all claims directed to improvements in computer-related technology, including those directed to software, are abstract and necessarily analyzed at the second step of Alice, nor do we believe that Alice so directs.”
In TLI Communications v AV Automotive, decided on May 17, 2016, a few days after Enfish, the patent holder did not fare as well. There, the Federal Circuit applied both steps of Alice in finding the claims to be not eligible for patent. The claims at issue recited non-physical elements like recording digital images, communicating the digital images from the recording device to a storage device, and administering the digital image in the storage device.
Applying the first step of Alice, the Federal Circuit found the claims to be the abstract idea of classifying and storing digital images in an organized manner. The reciting of physical elements such as a “telephone unit” and a “server” in the recording, communicating, and administering steps did not transform the abstract nature of the claim of non-physical elements into a patent-eligible application the Federal Circuit explained. The physical elements merely provide a generic environment in which to carry out the non-physical elements. Since the non-physical elements failed to improve the computing environment as they did in Enfish, the claims were not eligible for patent.
Enfish and TLI expand upon the holding of the Federal Circuit in DDR Holdings v. Hotels.com, where the court found patent eligible claims directed to a link generator that allows a host to create and maintain a shopping opportunity on their website. For software practitioners, the take-away is this: Just as software claims in DDR Holdings addressing improvements in computer technology applied to the Internet are patent eligible, so too software claims that address improvements in computer technology applied to other computing applications as in Enfish are eligible for patent. Whether the improvement is done via hardware or software does not matter.
In response to the Enfish and TLI decisions, the USPTO issued a set of examiner guidelines that urge examiners to assess whether the software claims are directed to an improvement in computer-related technology. If they are, that can demonstrate that the claim is not abstract and so is eligible for patent. While these guidelines fall short of mandating examiners to make this assessment, they are a step in the right direction of culling out non-abstract software claims that are deserving of a patent.
About Paul R. Juhasz