In Affinity Labs of Texas, LLC v. DirecTV, LLC, [2015-1845, 2015-1846, 2015-1847, 2015-1848] (September 23, 2016), the Federal Circuit affirmed the dismissal of the Complaint for patent infringement for failure to state a claim, because U.S. Patent
No. 7,970,379 was directed to an abstract idea.  The patent was directed to to streaming regional broadcast signals to cellular telephones located outside the region served by the regional broadcaster.

The Federal Circuit began with the “abstract idea” stage of the two-stage framework device by the Supreme Court to determine patentability under Section 101.  The “abstract idea” stage requires focus on the claimed advance over the prior art to determine if the “claim’s character as a whole” is directed to excluded subject matter.

The Federal Circuit said that the concept of providing out-of-region access to regional
broadcast content is an abstract idea, as that term is used in the section 101 context. It is a broad and familiar concept concerning information distribution that is untethered to any specific or concrete way of implementing it.  The Federal Circuit further noted that rhere is nothing in the claims directed to how to implement out-of-region broadcasting on a cellular telephone. Rather, the claims were drawn to the idea
itself.

The Federal Circuit noted that the claims were limited to cellphones, but merely limiting the field of use of the abstract idea to a particular existing technological environment does not render the claims any less abstract.  The Federal Circuit further noted that the idea underlying the inventions in this case was akin to the ideas underlying the claims in several of this court’s recent cases.  Although the technology at issue differed from that involved in TLI and Ultramercial, the Federal Circuit found the analysis of the “abstract idea” step in those cases instructive, as the patent involves the conveyance and manipulation of information using wireless communication and computer technology.

The Federal Circuit distinguished DDR Holdings as requiring doing something to a web
page, not simply doing something on a web page.  The patent in suit was not directed to a technological problem, it claims the general concept of out-of-region delivery of
broadcast content through the use of conventional devices, without offering any technological means of effecting that concept.  The Federal Circuit also distinguished Enfish as related to an improvement to computer functionality itself, while the claims in the patent in suit were not directed to an improvement in cellular telephones but simply to the use of cellular telephones as tools in the aid of a process focused on an abstract idea.

As to the second stage of the analysis, the Federal Circuit found no “inventive concept” that transforms the abstract idea of out-of-region delivery of regional broadcasting into a patent-eligible application of that abstract idea. The Federal Circuit said that the claim simply recites the use of generic features of cellular telephones, such as a storage medium and a graphical user interface, as well as routine functions, such as transmitting and receiving signals, to implement the underlying idea, and that was not enough.

In MCRO, Inc. v. Bandai Namco Games America, Inc., [2015-1080] (September 13, 2016), the Federal Circuit reversed judgment on the pleadings that U.S. Patent Nos. 6,307,576 and 6,611,278 on the automated synchronization of animations with sound was invalid as directed to an abstract idea.

The Federal Circuit began by noting that one cannot assume that claims are directed to patent ineligile subject matter because all inventions, at some level embody, use, reflect, rest upon, or apply laws of nature, natural phenomena, or abstract ideas.  Instead, the claims must be considered as a whole to ascertain whether their character as a whiole is directed to excluded subject matter.  If the claims are not directed to an an abstract idea, then the inquiry ends, otherwise the analysis proceeds to Step II of the Alice frameword to determine whether the claims contain an inventive concept sufficient to transform the claim into a patent-eligible application.  one way of deciding Step II in computer implemented inventions is to consider whether there is an improvement to the underlying technological process, and not simply implementing the method on a computer.

The Federal Circuit disagreed that the claims were drawn to an abstract idea, saying that it has previously cautioned that court must be careful to avoid oversimplifying claims by looking at them generally and failing to account for their specific requirements.

The Federal Circuit noted that the claims at issue were limited to rules with specific characteristics.  The claims were directed to animation methods that previously could only be performed by humans.  While the defendants did not dispute that such inventions were patent eligible if properly claimed, but argued that the claims were improper because they did not claim the specific rules.  The Federal Circuit found that the claims were limited to rules with certain characteristics, former a proper genus.  The key issue was whether the claims focus on a “specific means or method” that improves the relevant technology, or whether the are directed to the result or effect.

In the end the Federal Circuit found that it was the incorporation of the claimed rules, and not the mere use of a computer, that improved the existing technological process,  Interestingly the Federal Circuit found that it made no difference that the result was not tangible, as there is no requirement that the invention be tied to a machine or transform an article to be patentable.

The Federal Circuit noted that the claims did not preempt all processes for achieving automated lip-synching of 3-D characters, although the absence of preemption does not always indicate patent eligibility.  The Federal Circuit noted that the claims were limited to a specific kind of rules, thereby preventing broad preemption of all automated methods of lip-synching.  The defendants arguedd that all methods of animation must use the same specific kind of rules, but there was no such evidence in the record.

The Federal Circuit concluded that the claims were not directed to an abstract idea, and ended the Alice inquire at Step I.

In Electric Power Group, LLC, v. Alstom S.A., [2015-1778] (August 1, 2016), the Federal Circuit affirmed summary judgment of invalidity of U.S. Patent Nos. 7,233,843, 8,060,259, and 8,401,710, on systems and methods for performing real-time performance monitoring of an electric power grid by collecting data from multiple data sources, analyzing the data, and displaying the results.

The Federal Circuit noted that although lengthy and numerous, the claims do not go beyond requiring the collection, analysis, and display of available information in a particular field, stating those functions in general terms, without limiting them to technical means for performing the functions that are arguably an advance over conventional computer and network technology. The claims, defining a desirable information-based result and not limited to inventive means of achieving the result, fail under §101.

The Federal Circuit began with the familiar two-step analysis, noting that a claim falls outside § 101 where (1) it is “directed to” a patent-ineligible concept, i.e., a law of nature, natural phenomenon, or abstract idea, and (2), if so, the particular elements of the claim, considered “both individually and ‘as an ordered combination,’” do not add
enough to “‘transform the nature of the claim’ into a patent-eligible application.”  The Federal Circuit said that the Supreme Court’s formulation makes clear that the first-stage filter is a meaningful one, sometimes ending the § 101 inquiry.  The Federal Circuit explained that the first-stage inquiry looks at the “focus” of the claims, their “‘character as a whole,’” and the second-stage inquiry (where reached) as looking more
precisely at what the claim elements add—specifically, whether, in the Supreme Court’s terms, they identify an “‘inventive concept’” in the application of the ineligible matter to which (by assumption at stage two) the claim is directed.

The Federal Circuit reasoned that information as such is an intangible, and thus collecting information, including when limited to particular content (which does not change its character as information), as within the realm of abstract ideas.  In a
similar vein, the Federal Circuit said that it has treated analyzing information by
steps people go through in their minds, or by mathematical algorithms, without more, as essentially mental processes within the abstract-idea category.  Finally, the Federal Circuit added that it has recognized that merely presenting the results of abstract processes of collecting and analyzing information, without more (such as identifying a particular tool for presentation), is abstract as an ancillary part of such collection and analysis.

The Federal Circuit concluded that the claims are clearly focus on the combination
of abstract-idea processes.  The Federal Circuit distinguished the Enfish, which involved computer-functionality improvements, with the current case which uses existing computers as tools in aid of processes focused on “abstract ideas.”

Moving on to Step 2, the Federal Circuit noted that limiting the claims to the particular technological environment was not sufficient.  The Federal Circuit found nothing nothing significant to differentiate the claimed process from ordinary mental processes.  The Federal Circuit said that the claims do not require a new source or type of information, or new techniques for analyzing it.  As a result, they do not require an arguably inventive set of components or methods, such as measurement devices or techniques, that would generate new data. They do not invoke any assertedly inventive programming. Merely requiring the selection and manipulation of information—to provide a “humanly
comprehensible” amount of information useful for users, does not transform the otherwise-abstract processes of information collection and analysis.  The Federal Circuit also found that there was nothing in how the steps were accomplishes, because the claims did require any nonconventional computer, network, or display components, or even a “non-conventional and nongeneric arrangement of known, conventional pieces,” but merely call for performance of the claimed information collection, analysis, and display functions “on a set of generic computer components” and display devices.

The Federal Circuit concluded that nothing in the claims, understood in light of the specification, requires anything other than off-the-shelf, conventional computer, network, and display technology for gathering, sending, and presenting the desired information.

In Rapid Litigation Management Ltd. v. Cellzdirect, Inc., [2015-1570] (July 5, 2016), the Federal Circuit vacated summary judgment that U.S. Patent No. 7,604,929 on hepatocytes capable of surviving multiple freeze-thaw cycles was invalid under §101 as directed to a patent ineligible law of nature.

The Federal Circuit analyzed the claims, directed to a method of produce a desired preparation of multi-cryopreserved hepatocytes” finding that the claims are “simply not directed to the ability of hepatocytes to survive multiple freeze-thaw cycles” as the district court erroneously found.  instead, the Federal Circuit said, the claims are directed to a new and useful laboratory technique for preserving hepatocytes.  The Court said:

This type of constructive process, carried out by an artisan to achieve “a new and useful end.” is precisely the type of claim that is eligible for patenting.

The Federal Circuit observed that the inventors discovered the cells’ ability to survive multiple freeze-thaw cycles, but that is not where they stopped nor was that what they patented.  As the first party with the knowledge of the cells ability, they were in an excellent position to claim applications of that knowledge.

Although the Federal Circuit found the subject matter patentable at Step 1 of the Alice/Mayo two part test, the Federal Circuit said that it would have passed Step 2 of the test even though each of the individual steps was well known. The Federal Circuit said that not all processes that employ only independently known steps are unpatentable.  To the contrary, the claims must be viewed as a whole, considering their elements both individually, and as an ordered combination.

In the present case the steps of freezing and thawing were well known, but a process of preserving cells by repeating those steps was itself far routine and conventional. Repeating a step that the art taught should be performed only once “can hardly be considered routine or conventional.”  To require something more at step two ” would be to discount the human ingenuity that comes from applying a natural discovery in a way that  achieves a new and useful end.

In Bascom Global Internet Services, Inc., v. AT&T Mobility LLC, [2015-1763] (June 27, 2016), the Federal Circuit reversed the dismissal of of the Complaint for failure to state a claim upon which relief can be granted on the grounds that the claims of U.S. Patent No. 5,987,606 are invalid as a matter of law under 35 U.S.C. § 101.

AT&T argued that the claims were directed to the abstract idea of “filtering Internet content,” which is a well-known “method of organizing human activity” like the intermediated settlement concept that was held to be an abstract idea in Alice.  BASCOM responded by arguing that the claims are not directed to an abstract idea because they address a problem arising in the realm of computer networks, and provide a solution entirely rooted in computer technology, similar to the claims at issue in DDR
Holdings.

The Federal Circuit agreed with the district court that filtering content is an abstract idea because it is a longstanding, well-known method of organizing human behavior, similar to concepts previously found to be abstract.  The Federal Circuit said that the claims and their specific limitations do not readily lend themselves to a finding that they
are directed to a nonabstract idea, so it defered consideration of the specific claim limitations’ narrowing effect for step two of the Alice analysis.

The Federal Circuit agreed with the district court that the limitations of the claims, taken individually, recite generic computer, but disagreed with the district court’s analysis
of the ordered combination of limitations.  The Federal Circuit said that The inventive concept inquiry requires more than recognizing that each claim element, by itself, was
known in the art. The Federal Circuit said that an inventive concept can be found in the non-conventional and non-generic arrangement of known, conventional pieces.

The Federal Circuit said that on this limited record before it, the specific method of filtering Internet content cannot be said, as a matter of law, to have been conventional or generic.  The Federal Circuit found that the claims do not merely recite the abstract idea of filtering content along with the requirement to perform it on the Internet, or to perform it on a set of generic computer components.

The Federal Circuit concluded that the claims were directed to the abstract idea of filtering content, but that BASCOM had  adequately alleged that the claims pass step two of Alice’s two-part framework.

In Genetic Technologies Limited v. Merial LLC. [2015-1202, -1203] (April 8, 2016) the Federal Circuit affirmed the district court dismissal for failure to state a claim and entry of final judgment that claims 1–25 and 33–36 of U.S. Patent No. 5,612,179 are ineligible for patenting under 35 U.S.C. §101.  The method of the ‘179 patent involved looking in the introns or non-coding regions (aka the junk DNA) for alleles in the exons or coding regions.  No one had previously appreciated that alleles in the exons could be identified by looking in the introns.

The Federal Circuit began by noting that it has repeatedly recognized that in many cases it is possible and proper to determine patent eligibility under 35 U.S.C. § 101 on a Rule 12(b)(6) motion.  The Federal Circuit added that In many cases evaluation of a patent claim’s subject matter eligibility under §101 can proceed even before a formal claim construction, quoting: “[C]laim construction is not an inviolable prerequisite to a
validity determination under §101.”  The Federal Circuit concluded Here, there is no claim construction dispute relevant to the eligibility issue.

Beginning with Step 1 of the Mayo/Alice test, the Federal Circuit found that the claims were directed to to the relationship between non-coding and coding sequences in linkage disequilibrium and the tendency of such non-coding DNA sequences to be representative of the linked coding sequences which it characterized as a law of nature.  The Court explained the claimed invention: a method of detecting a coding region of a person’s genome by amplifying and analyzing a linked non-coding region of that person’s genome.  The Court observed that the claim was broad, covering any comparison, for any purpose, of any non-coding region sequence known to be linked with a coding region allele at a multi-allelic locus, concludign the claims broadly cover “essentially all applications, via standard experimental techniques, of the law of linkage disequilibrium to the problem of detecting coding sequences of DNA.”

The Federal Circuit found this “quite similar” to the claims invalidated in Mayo itself. The Federal Circuit also found the claims “remarkably similar” to the claims in Ariosa, which were found in step 1 to be directed to unpatentable subject matter.  The Court said “[t]he similarity of claim 1 to the claims evaluated in Mayo and Ariosa requires the conclusion that claim 1 is directed to a law of nature.

At step two of Mayo/Alice the Federal Circuit examined the elements of the claim to determine whether it contains an inventive concept sufficient to transform the claimed
abstract idea or law of nature into a patent-eligible application.  The Federal Circuit concluded that the additional elements of claim 1 are insufficient to provide the inventive concept necessary to render the claim patent-eligible.  The Federal Circuit found the added physical steps of DNA amplification and analysis of the amplified DNA to provide a user with the sequence of the non-coding region do not, individually or in combination, provide sufficient inventive concept to render claim 1 patent eligible.  A result the Court found directly comparable to Ariosa.  The Federal Circuit was not impressed that the analysis was performed on amplified, i.e. manmade DNA, because it was the genetic sequence that was important, and it was identical,  Finally the Federal Circuit was not impressed that no one had befor analyzed man-made non-coding DNA in order to detal a coding region allele, finding that “to detect the allele” was a mental process step of the type discounted in Mayo.

The Mayo/Alice two step completely discounts new, and even surprising discoveries of natural phenomenon, in considering whether there is patentable subject matter.  This makes unpatentable many important diagnostic advances as in Ariosa and now in Genetic Technologies.  The more appropriate question is, once the naturally occurring phenomenon is known, is particular application of that phenomenon obvious.  Maybe the results would be similar, but important, valuable advances would not simply be discounted as they are under the current Mayo/Alice test.

In In re Smith, [2015-1664] (March 10, 2016) the Federal Circuit affirmed the rejection of claims in Smiths’ application for claiming patent-ineligible subject matter under 35 U.S.C. § 101, because the claims cover only the abstract idea of rules for playing a wagering game and use conventional steps of shuffling and dealing a standard deck of cards.

The Federal Circuit applied the now-familiar two-step test introduced in Mayo, and further explained in Alice, first determining whether the claims at issue are directed to a patent-ineligible concept such as an abstract idea, and second examining the elements of the claim to determine whether it contains an inventive concept sufficient to transform the claimed abstract idea into a patent-eligible application.  On the first step, the Federal Circuit concluded that the claims, directed to rules for conducting a wagering game, compare to other fundamental economic practices found abstract by the Supreme Court.  The Federal Circuit agreed with the Board that a wagering game is, effectively, a method of exchanging and resolving financial obligations based on probabilities created during the distribution of the cards, and the Supreme Court has held that a method of exchanging financial obligations was drawn to an abstract idea.  The Federal Circuit also noted its own cases have denied patentability of similar concepts as being directed towards ineligible subject matter.

As to the second step, the Federal Circuit noted that abstract ideas, including a set of rules for a game, may be patent eligible if they contain an “‘inventive concept’ sufficient to transform the claimed abstract idea into a patent-eligible application.  However, appending purely conventional steps to an abstract idea does not supply a sufficiently inventive concept.  The Federal Circuit rejected that shuffling and dealing physical playing cards were not sufficient to bring the claims within patent eligible territory.

In Vehicle Intelligence and Safety LLC v. Mercedes-Benz USA, LLC, [2015-1411] (December 28, 2015), the Federal Circuit affirmed that claims 8, 9, and 11–18 of U.S. Patent No. 7,394,392 were  invalid as drawn to patent-ineligible subject matter under 35 U.S.C. § 101.  The claims were directed to a method to screen an equipment operator for impairment (and a corresponding system).

The Federal Circuit applied the two step Mayo test, determining whether the claims at issue are directed to a patent-ineligible concept, and if so, examining the elements of the claim, individually and as an order combination, to determine whether it contains an “inventive concept” sufficient to “transform” the claimed abstract idea into a patent eligible application.  The Federal Circuit agreed that step 1 was met, the claims being drawn to the abstract idea of testing operators of any kind of moving equipment for any kind of physical or mental impairment.  The Court noted:

None of the cl aims at issue are limited to a particular kind of impairment, explain how to perform either screening or testing for any impairment, specify how to program the “expert system” to perform any screening or testing, or explain the nature of control to be exercised on the vehicle in response to the test results.

The Federal Circuit rejected Vehicle Intelligence’s argument that it did not totally preempt the field, noting that “while assessing the preemptive effect of a claim helps to inform the Mayo/Alice two-step analysis, the mere existence of a non-preempted use of an abstract idea does not prove that a claim is drawn to patent-eligible subject matter.”

The Federal Circuit also agreed that the claims at issue fail the second step of the Mayo test, finding nothing in the claims sufficient to transform the abstract idea of testing operators of any kind of moving equipment for any kind of physical or mental impairment into a patent-eligible application of that idea.  The Federal Circuit further rejected the fact that the method was tied to a particular apparatus, nothing that post-Mayo/Alice, this is no longer sufficient to render a claim patent-eligible.

Vehicle Intelligence attempted to identify inventive concepts, but the Federal Circuit found these to general. The claims merely state the abstract idea of testing an equipment operator for impairments using an unspecified “expert system” running on equipment that already exists in various vehicles, and found that was not enough.

In Telinit Technologies, LLC Alteva, Inc., [2:14-cv-369] (E.D. Tex. September 21, 2015), Judge Shroeder granted Judgment on the Pleadings that U.S. Patent Number 6,192,123 on a Method and Apparatus for Initiating Telephone Calls Using a Data Network is Invalid for Claiming Ineligible Subject Matter.

The Court applied the two-part test of Alice, first determining whether the claims at issue are directed towards one of the three patent-ineligible concepts, and then considering whether 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.

The Court first considered claim 1, directed to “a method for initiating telephone calls on a voice network in response to requests from a data network comprising the steps, performed by a processor.”

The Court rejected Telnit’s reliance on DDR Holdings, finding that the claim “describes a well-known and widely-understood concept—making a telephone call—and then applies that concept to the Internet using conventional computer components as an intermediary to place and monitor the telephone calls.”

The Court found the claim more analogous to the claims from the asserted patent in Dick’s Sporting Goods.Telinit challenged the assertion that the claim is abstract because “because a human being would be unable to receive a ‘data request’ or monitor a telephone call originating from the Internet.” The Court responded that taking an otherwise abstract idea and applying it to the Internet does not transform the claim into patentable subject matter, and found that the remaining stepsare tasks that human beings, such as telephone operators, have been doing for the past century.  The Court further noted that the claim does not contain any specific structural components—beyond a generic “processor” and generic “networks”—that remove it from the realm of an abstract idea.

The Court continued its analysis to determine whether the claims nonetheless disclosed an inventive concept.  The Court said, that even accepting the structures and corresponding functions identified by Telinit as those most favorable to Telinit, none, taken individually or in combination, transform the claim so as to cover an inventive concept. The primary structures identified by Telinit result in nothing more than generic computer and Internet based elements—“processor” and “networks.” Moreover, claim 1 does not direct the generic elements to a specific application beyond “receiving,” “identifying,” “signaling,” “monitoring,” or “providing” information. Consequently, the Court found that claim 1 does not contain any transformative elements, either alone or in combination, that transforms its abstract idea into patentable subject matter.

The Court also considered the application of the Machine-or-Transformation Test.  The Court noted that Bilski made it clear that the machine-or-transformation test is not the sole test for deciding whether an invention is a patent-eligible ‘process, but noted tht it is a useful and important clue, an investigative tool, for determining patentability. The Court found that the patent was not tied to a particular machine or apparatus, and it did not operate to change articles or materials to a different state or thing.  Accordingly, the Court found that the machine-or-transformation test did not aid the Court in determining whether or not the claims recite patent-eligible subject matter.

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