Tag Archives: Alice v. CLS Bank

Federal Circuit finds credit reporting patent ineligible; calls it the “height of abstraction”

A recent Federal Circuit decision illustrates the high eligibility hurdles that fintech software patents continue to face in view of the Supreme Court’s 2014 Alice v CLS Bank decision.

In Clarilogic, Inc. v. FormFree Holdings Corp. (Fed. Cir. Mar. 15, 2017), the court addressed the eligibility of U.S. Patent 8,762,243, which was directed to methods for electronic account certification and  credit reporting. The representative claim of the patent was: Continue reading

Federal Circuit finds Internet content filtering patent eligible after Alice

For the second time in two months, the Federal Circuit has issued a decision that describes a situation in which a software invention can be eligible for patenting.

In Bascom Global Internet Services, Inc. v. AT&T Mobility et al., the court vacated and remanded a district court’s decision that found a content filtering system invention to be not patent-eligible.

The patent at issue covered a system by which a remote ISP server filters content that a client computer requests from a website. Claim 1 of the patent is directed to:

1. A content filtering system for filtering content retrieved from an Internet computer network by individual controlled access network accounts, said filtering system comprising:
  a local client computer generating network access requests for said individual controlled access network accounts;
  at least one filtering scheme;
  a plurality of sets of logical filtering elements; and
  a remote ISP server coupled to said client computer and said Internet computer network, said ISP server associating each said network account to at least one filtering scheme and at least one set of filtering elements, said ISP server further receiving said network access requests from said client computer and executing said associated filtering scheme utilizing said associated set of logical filtering elements.

The Federal Circuit passed on considering whether the claims were directed to an abstract idea, but instead focused on the second prong of the Alice v CLS Bank patent-eligibility analysis and found the claims to include an inventive concept. The Federal Circuit noted that “[t]he claims do not merely recite the abstract idea of filtering content along with the requirement to perform it on the Internet, or perform it on a set of generic computer components…nor do the claims preempt all ways of filtering content on the Internet; rather, they recite a specific, discrete implementation of the abstract idea of filtering content.”

The court also cautioned against confusing patent-eligibility with obviousness: “The district court’s analysis in this case … looks similar to an obviousness analysis under 35 U.S.C. 103, except lacking an explanation of a reason to combine the limitations as claimed. The inventive concept inquiry requires more than recognizing that each claim element, by itself, was known in the art. As is the case here, an inventive concept can be found in the non-conventional and non-generic arrangement of known, conventional pieces.”

The decision closely follows the Federal Circuit’s recent decision in Enfish LLC v. Microsoft Corporation, in which the court cautioned against a broad interpretation of Alice v. CLS Bank as holding that all improvements in computer-related technology are inherently abstract.

For a summary of more Federal Circuit, district court, and PTAB decisions that have found software patents to be eligible for patenting since Alice, click here.

Thanks to my colleague Brienne Terril for her help writing this post.

Software patent-eligibility after Alice: where are we now?

Since the June 2014 U.S. Supreme Court decision in Alice Corporation Pty Ltd. v. CLS Bank Int’l, the vast majority of district court decisions, Federal Circuit decisions, and Patent Trial and Appeals Board (PTAB) decisions that considered the issue have overturned software and business method patents under the new patent-eligibility standard of Alice.  In the first quarter of 2015 alone, when considering a motion to dismiss or a motion for judgment on the pleadings on the basis of patent-eligibility under §101, U.S. district courts have granted the motions and ruled the patents to be invalid over 66% of the time.

In November 2014, I published a post that summarized court and PTAB decisions that bucked this trend and found software to be patent-eligible. Since then, a small but growing number of cases refused to overturn patents that involved software, and the USPTO issued an Interim Guidance document describing actual and hypothetical claims that could survive post-Alice scrutiny.

To track the activity since then, I have updated my original post. It’s still available via this link. I intend to keep it updated on a periodic basis, so feel free to bookmark it or simply check back for future updates.

Patent-eligibility after Alice: a summary of decisions that found software inventions eligible for patenting

Since the June 2014 U.S. Supreme Court decision in Alice Corporation Pty Ltd. v. CLS Bank Int’l, the vast majority of district court decisions, Federal Circuit decisions, and Patent Trial and Appeals Board (PTAB) decisions that considered the issue have overturned software and business method patents under the new patent-eligibility standard of Alice.

While many of the early cases explained why the specific claims failed to satisfy patent-eligibility requirements, for the most part the early cases provided little guidance to help the patent community identify what types of claims would be patent-eligible.

On December 16, 2014, the USPTO issued an Interim Guidance document on the topic. The Interim Guidance summarized the cases that upheld patents as of that date. It also included some hypothetical claims that could be considered to be patent-eligible. The Interim Guidance started to break the post-Alice logjam at the USPTO, and it gave applicants and Examiners the ability to move some cases forward. In July 2015, the USPTO issued a Subject Matter Eligibility Update with additional examples and caselaw summaries. The USPTO issued a second Subject Matter Eligibility Update in May 2016.

However, in certain areas — notably USPTO Technology Center 3600 — applicants still have a difficult time overcoming patent-eligibility rejections, even when they submit claims that are closely aligned with the examples of the Interim Guidance. Instead, applicants often find themselves simply trying to place cases in a better position for appeal.

To prepare for this process, patent applicants can find some insight from the growing number of court and PTAB decisions that declined to overturn patent claims.  A summary of those cases, with links to the cases and patents, follows:

Continue reading

Federal Circuit reverses course in Ultramercial v. Hulu; finds method of delivering advertisements to be an abstract idea

Yes or NoA method of providing advertising in connection with streaming media is not eligible for patenting, according to the latest decision of the Federal Circuit in the long-running Ultramercial v. Hulu patent saga.

Ultramercial’s patent claimed a method of distributing media over the Internet.  Claim 1 included eleven steps.  The steps described a process of associating ads with streaming media, allowing a consumer to access the media for free if the consumer first views the ad, and receiving payment from the advertiser after the consumer views the ad.

When the Federal Circuit first considered the claims in 2013, it found the claims to be patent-eligible. At the time, the court stated that ” it wrenches meaning from the word to label the claimed invention ‘abstract.'”  The court’s 2013 decision also stated that “the claim appears far from over generalized, with
eleven separate and specific steps with many limitations and sub-steps in each category.”

Fast forward to 2014, after the United States Supreme Court issued its decision in Alice v. CLS Bank.  The Alice decision established a two-part test for determining patent-eligibility: (1) Is the claim directed to an abstract idea? (2) If so, are there other elements in the claim sufficient to ensure that the claim amounts to significantly more than the abstract idea itself?

When faced with a new post-Alice appeal in the case, the Federal Circuit applied the new two-part test of Alice.  This time, the court reached a different conclusion Continue reading

U.S. patent law needs a definition of “abstract idea”

Recent U.S. Patent and Trademark Office actions relating to software patents have confused and frustrated many patent applicants. After the U.S. Supreme Court published its opinion in Alice Corporation Pty Ltd. v. CLS Bank Int’l, the USPTO’s application of the Court decision to software inventions has been anything but consistent. Does the USPTO’s action signal a need for Congressional action or another Supreme Court decision with more concrete guidelines?

In Alice, and as explained by the recent USPTO Preliminary Examination Instructions in view of the Supreme Court Decision in Alice, the determination of subject matter eligibility involves a two part test:  (1) Is the claim directed to an abstract idea?  (2) If so, are there other elements in the claim sufficient to ensure that the claim amounts to significantly more than the abstract idea itself?

However, rather than a rigorous application of any test, in the past few months the USPTO’s patent-eligibility determinations contain little analysis of any specific claim language. Instead, they primarily consist of a boilerplate paragraph stating that the claimed invention is directed to an abstract idea.

To illustrate this problem, the USPTO recently issued a rejection asserting that the following claim was patent-ineligible because it is directed to a “fundamental economic practice:”

8.   A device for predicting a future occurrence of a transportation system incident, the device comprising:
  a processor; and
  a computer readable medium operably connected to the processor, the computer readable medium containing a set of instructions configured to instruct the processor to perform the following:
          collect historic operating information related to the previous operation of a vehicle along a transportation route,
          determine schedule deviation information for the transportation route based upon the historic operating information and observed schedule adherence for the vehicle along the transportation route, the schedule deviation information comprising at least an identification of a driver and a sequence number for a period of time associated with the historic operating information and the observed schedule adherence,
          construct a plurality of models, each of the plurality of models including at least one combination of factors that contribute to schedule deviation,
          rank each of the plurality of models according to at least one information criterion,
          assess an impact of the driver and the sequence number on a highest ranked model to produce a results set, wherein the results set comprises at least a highest ranked model showing at least one combination of factors that most contributes to schedule deviation, and
          present the results set. Continue reading

Is the predicted “death of hundreds of thousands of patents” coming true?

In May 2013, Judge Moore of the U.S. Court of Appeals for the Federal Circuit predicted that the court’s decision in CLS Bank Int’l v. Alice Corporation Pty Ltd. would result in the “death of hundreds of thousands of patents, including all business method, financial system, and software patents as well as many computer implemented and telecommunications patents.”

In the year that followed, not much changed.  The U.S. Patent and Trademark Office continued to issue patents in these areas.  And the Federal Circuit issued other decisions affirming that software was still patentable.  While patents covering financial business methods and purely human activity faced difficulty, patents for non-financial software inventions continued to grant at a fast clip.

Then, in June 2014, the U.S. Supreme Court issued an opinion that affirmed the Federal Circuit’s decision. The Court’s decision in Alice Corporation Pty. Ltd. v CLS Bank Int’l said: “there is no dispute that many computer-implemented claims are formally addressed to patent-eligible subject matter,” and subsequent USPTO guidance suggested that “the basic inquiries to determine subject matter eligibility remain the same.” Soon afterward, however, the practical effect of the Court’s decision became quite different.

In the weeks following the Supreme Court decision, I’ve seen that the USPTO is rejecting nearly every application assigned to its business methods examining unit for failure to meet the post-Alice patent eligibility standard. Other patent attorneys have noted this too, and have commented on it with concern.

District Courts and the Patent Trial and Appeal Board have been similarly critical of software patents in recent weeks. Dennis Crouch of Patently-O recently published a comprehensive summary of District Court and PTAB decisions that overturned software patents after the Alice decision.

In addition, in one of its first published opinions that addressed the Alice decision, the Federal Circuit found an invention for a computer-implemented method and system for playing bingo to be a mere abstract idea and thus not patent-eligible. Although the case (Planet Bingo LLC v. VKGS LLC) is non-precedential, it may serve as a harbinger of things to come in future software patent cases.

The USPTO is continuing to issue patents for software-related inventions that are assigned to it’s non-business-method examining units, so it’s clear that at least some software remains eligible for patenting. However, it’s also clear that new and potentially significant challenges are now in place for those who want to obtain or enforce software patents in the future.