Alice Update: Recent Developments in Patent Subject Matter Eligibility

Alice Update: Recent Developments in Patent Subject Matter Eligibility

Preface I did not want to do this. The patent office hadn t issued new guidance in over a year (most recent was 12/15/2016) Big questions like what s an abstract idea still hadn t (and still haven t) been answered. Amorphousness made eligibility a more useful club for people who didn t like software patents, and so I wasn t optimistic about it being clarified. 2

Things have changed a LOT in the last 6 months Patentees have been much more successful From Alice through 12/31/2017, Fed. Cir. found against patentees about 90% of the time. From 1/1/2018 to today, Fed. Cir. has found in favor of patentee slightly below 50% of the time We haven t answered the old questions, but some new ones have been raised that might be even more important. The patent office has gotten back into the guidance business, and so far has been doing so in a way that primarily helps patentees. 3

Finjan v. Blue Coat (1) Finjan sued Blue Coat for infringement of patents directed to identifying and protecting against malware. Basic concept Intercepting a downloadable before it gets to a client. Analyzing to determine if it includes any suspicious code. Adding a security profile to the downloadable that identifies any suspicious code in the downloadable. Allowing the downloadable to get to the client. 4

Finjan v. Blue Coat (2) This is clearly going to be unpatentable, because we already dealt with this in Intellectual Ventures v. Symantec. IV v. Symantec dealt with three patents relating to different ways of using intermediaries to filter incoming communications. One invalid because people already filter their own mail by looking at the sender and throwing away junk mail. One invalid because corporate mailrooms already apply rules to incoming mail and route accordingly. One invalid because virus screening is an abstract idea. IV says that they weren t generic, well known and conventional because the jury said not obvious, but Fed. Cir. said 102 and 103 are irrelevant to 101. 5

Finjan v. Blue Coat (3) IV v. Symantec notwithstanding, Finjan won. Why? The invention was treated as improving on the matching from IV v. Symantec and instead providing behavior based scanning. This behavior-based virus scan was an improvement in computer functionality. Employs a new kind of file that enables a computer security system to do things it couldn t before. Therefore not directed to an abstract idea and patent eligible at step 1. 6

Finjan v. Blue Coat (4) This is different from IV v. Symantec because Finjan s claims recite how they improve computer functionality IV v. Symantec: the 610 patent does not describe or require a solution to the protection gap. The district court [which found in favor of IV] erred in relying on technological details set forth in the patent s specification and not set forth in the claims to find an inventive concept. Finjan: the claims recite more than a mere result. Instead, they recite specific steps generating a security profile that identifies suspicious code and linking it to a downloadable that accomplish the desired result. 7

Finjan v. Blue Coat (5) Finjan A method comprising: - receiving by an inspector a Downloadable; - generating by the inspector a first Downloadable security profile that identifies suspicious code in the received Downloadable; and - linking by the inspector the first Downloadable security profile to the Downloadable before a web server makes the Downloadable available to web clients. IV v. Symantec A virus screening method comprising the steps of: - routing a call between a calling party and a called party of a telephone network; - receiving, within the telephone network, computer data from a first party selected from the group consisting of the calling party and the called party; - detecting, within the telephone network, a virus in the computer data; and - in response to detecting the virus, inhibiting communication of at least a portion of the computer data from the telephone network to a second party selected from the group consisting of the calling party and the called party. 8

Core Wireless v. LG (1) Core Wireless sued LG based on patents that describe improved display interfaces for electronic devices with small screens like mobile telephones. Basic concept: Display a menu that can be used to access applications and a summary list. The summary list shows commonly used applications and commonly accessed data. The user can directly access the applications or the data from the summary list. Essentially: The asserted claims in this case are directed to an improved user interface for computing devices. 9

Core Wireless v. LG (2) We know a mobile device interface with quick access list isn t eligible because we already saw it in Intellectual Ventures v. Erie Indemnity Already found claims directed to a mobile interface on a user s device device to be ineligible. In that case, the mobile interface listed a plurality of pointers to data on either the user s device or a network drive. The user could access the data by selecting the pointer from the list on his or her mobile device interface. 10

Core Wireless v. LG (3) IV v. Erie notwithstanding, Core Wireless won. Why? Various limitations specified a particular manner in which a summary list would be accessed, specified types of data that would be displayed in the summary list, and required that the applications whose information would be displayed in the summary list be in a particular (i.e., unlaunched) state. Specification described how the claim features solved problems with prior art interfaces. Therefore the claims were directed to an improvement in the functioning of computers, particularly those with small screens and so were not directed to an abstract idea. 11

Core Wireless v. LG (4) Difference from IV v. Erie was in the how: IV v. Erie the claimed invention does not recite any particular unique delivery of information through this mobile interface. Rather, it merely recites retrieving the information through the mobile interface. Nor do the claims describe how the mobile interface communicates with other devices or any attributes of the mobile interface, aside from its broadly recited function. Core Wireless: These limitations disclose a specific manner of displaying a limited set of information to the user, rather than using conventional user interface methods to display a generic index on a computer these claims recite a specific improvement over prior systems, resulting in an improved interface for electronic devices. 12

Core Wireless v. LG (5) Core Wireless A computing device comprising a display screen, the computing device being configured to - display on the screen a menu listing one or more applications, and additionally being configured to - display on the screen an application summary that can be reached directly from the menu, - wherein the application summary displays a limited list of data offered within the one or more applications, - each of the data in the list being selectable to launch the respective application and enable the selected data to be seen within the respective application, and - wherein the application summary is displayed while the one or more applications are in an un-launched state. IV v. Erie A system for storing and accessing user specific resources and information, the system comprising: - a network for accessing the user specific resources and information stored in a network server; and - a local device communicating with the network and having a local memory and a mobile interface, - wherein the local memory also includes user specific resources and information, and - the mobile interface includes pointers corresponding to the user specific resources and information that are stored either on the local device or the network server, - wherein the pointers provide links to access the corresponding user specific resources and information. 13

Berkheimer v. HP (1) Patent relates to digitally processing and archiving files in a digital asset management system. Basic concept: Parse files into objects. Tag objects and evaluate tagged objects in a parsed file using an archive of existing object structures. Determine if there is a variance between the parsed file and the archived structure Present the parsed file for reconciliation based on the variance Storing and editing files in an efficient manner using links between objects. 14

Berkheimer v. HP (2) All claims are directed to abstract ideas based on similarity to Content Extraction and Transmission v. Wells Fargo and In re TLI Communications Patent Litigation Content Extraction was about recognizing information in input files and mapping it to pre-defined fields. In re TLI was about categorizing content and storing it based on its categorization. Berkheimer argued that the claimed combination improves computer functionality through the elimination of redundancy and the one-to-many editing feature, which provides inventive concepts. The Federal Circuit said he was partially right. 15

Berkheimer v. HP (3) Fed. Cir. said noted that the specification did talk about the identified concepts as improving on conventional practices. The real question was whether they were captured in the claims. For claim 1, the answer was no. This claim described a method of archiving an item. Had steps that could lead to the benefits, but didn t actually recite the benefits themselves. For dependent claims 4 and 5, the answer was yes. Those claims explicitly recited the features Berkheimer was relying on to provide inventive concepts. 16

Berkheimer v. HP (4) Ineligible 1. A method of archiving an item in a computer processing system comprising: - presenting the item to a parser; - parsing the item into a plurality of multi-part object structures wherein portions of the structures have searchable information tags associated therewith; - evaluating the object structures in accordance with object structures previously stored in an archive; - presenting an evaluated object structure for manual reconciliation at least where there is a predetermined variance between the object and at least one of a predetermined standard and a user defined rule. Eligible 4. The method as in claim 1 which includes storing a reconciled object structure in the archive without substantial redundancy. 5. The method as in claim 4 which includes selectively editing an object structure, linked to other structures to thereby effect a one-to-many change in a plurality of archived items. 17

Berkheimer v. HP (5) Berkheimer more than provides an example of how to claim an inventive concept, it also re-opens the question of what role facts play in the eligibility determination. Before Berkheimer, facts had been used in some cases McRO v. Bandai Namco: Defendants provided no evidence that the process previously used by animators is the same as the process required by the claims. Alice v. CLS: Cited historical records showing intermediated settlement is a long prevalent economic practice. but it wasn t clear that facts were actually necessary. PTO took the position that they were not. July 2015 Eligibility update: courts do not rely on evidence that a claimed concept is a judicial exception, and in most cases resolve the ultimate legal conclusion on eligibility without making any factual findings. 18

Berkheimer v. HP (6) Berkheimer brought facts back in a big way: For whether the claims are directed to an abstract idea, Berkheimer argued they aren t and that the parser tied them to technology. The Federal Circuit disagreed due to lack of evidence. That the parser transforms data does not demonstrate non-abstractness without evidence that this transformation improves computer functionality in some way. No such evidence exists on this record. For whether the claims had an inventive concept, the Fed. Cir. didn t say that they actually did. Instead it said that the statements in the specification raised a question of fact as to whether they did. 19

Berkheimer v. HP (7) The question of whether a claim element or combination of elements is well-understood, routine and conventional to a skilled artisan in the relevant field is a question of fact. What kind of fact? We don t know. The mere fact that something is disclosed in a piece of prior art, for example, does not mean it was well-understood, routine, and conventional. But remember IV v. Symantec 20

Aatrix v. Green Shades (1) Aatrix sued Green Shades for infringing patents directed to systems and methods for designing, creating, and importing data into a viewable form on a computer so that a user can manipulate the form data and create viewable forms and reports. Basic concept: Have form file for modeling a paper form and establish conditions for filling in the form. Import a background image from a paper form and allow the user to adjust and test print the image before creating the form file. Put data from a user application into a data file. Use a form viewer to perform the calculations for putting data from the data file into the form file to create viewable forms and reports. 21

Aatrix v. Green Shades (2) Procedural history: Green Shades moved to dismiss based on ineligibility. District court granted Green Shades motion. Aatrix moved to modify and vacate the judgment and to amend the complaint. District court said no. 22

Aatrix v. Green Shades (3) Federal Circuit builds on Berkheimer We have held that patentees who adequately allege their claims contain inventive concepts survive a 101 eligibility analysis under Rule 12(b)(6). Says that Aatrix s proposed amended complaint included allegations sufficient to establish eligibility. Improves importing data from third party applications. Increases efficiencies of computers processing taxforms. Saves storage space in hard disk and RAM. Reduces the risk of thrashing. Results in faster processing speed. 23

Aatrix v. Green Shades (4) Two more neat quotes: Green Shades argues that this purported improvement in importation of data is in fact a routine and conventional use of a computer, however, at oral argument, Green Shades conceded that nothing in the specification describes this importation of data as conventional. the district court could not conclude at the Rule 12(b)(6) stage that the claimed elements were well-understood, routine, or conventional. Content Extraction, 776 F.3d at 1347 (noting the concept of data collection, recognition, and storage is undisputedly well-known (emphasis added)). 24

Inventor Holdings v. Bed Bath and Beyond (1) Alice changed the law. Basic outline: Inventor Holdings sued in April of 2014 on a patent for a method of purchasing goods at a local point-of-sale system from a remote seller Place an order with a remote seller Get a code from the remote seller Enter order code and pay for at a local POS terminal BBB moved to invalidate post-alice, and, when that was done, requested attorney fees. 25

Inventor Holdings v. Bed Bath and Beyond (2) IH defended against the attorney fees motion using the history of the patent. IH argued it was reasonable to believe that its claims were patent eligible because: In 2013 IH had asserted the same patent against Amazon, Wal-Mart and others, and defeated a 101 motion in that case. Supposedly Alice did not fundamentally change 101 law, noting that the Supreme Court applied the same test in Alice that it previously set out in Mayo. The Federal Circuit didn t buy it: we find that Alice was a significant change in the law as applied to the facts of this particular case. 26

Voter Verified v. Election Systems (1) Alice did not change the law. Basic outline VV sued Election Systems in 2009. Election Systems filed various motions alleging invalidity and non-infringement. Ultimately, one of the claims was found to be invalid, and the other were found not infringed. VV sued Election Systems again in 2016. Election Systems filed a 12(b)(6) motion based on Alice, and VV responded by saying that the motion was barred based on issue preclusion from the previous litigation. 27

Voter Verified v. Election Systems (2) Fed. Cir. sided with Election Systems issue preclusion doesn t prevent 12(b)(6) motion Claims are ineligible under Alice. Claims allowed self-verification of ballots by voters. Voting machine would store vote electronically and print out the ballot so the voter could compare and verify that they matched. Voting itself was treated as a fundamental activity, and the comparison was abstract because it was done in the human mind. Interesting part was why Fed. Cir. said no preclusion. It was because the no infringement ruling from the previous case meant that the defeat the older invalidity motions wasn t necessary to the holding. Specifically not because Alice changed the law: we conclude that Alice, which was decided after the first litigation ended, did not alter the governing law of 101. 28

Why Would the Federal Circuit Change its Mind? 12/8/2017 Inventor Holdings (Fed. Cir. says change) 2/5/2018 Director Iancu confirmed 2/8/2018 US falls to 12 th in Chamber of Commerce s global IP index 4/2/2018 PTO Finjan and Core Wireless memorandum 4/11/2018 Iancu makes presentation to statement of commerce emphasizing issues with section 101 4/18/2018 Iancu testifies before senate judiciary committee 4/20/2018 Voter Verified (Fed. Cir. says no change) 29

New Memorandum to the Examining Corps Changes in Examination Procedure Pertaining to Subject Matter Eligibility, Recent Subject Matter Eligibility Decision (Berkheimer v. HP, Inc.) 4/19/18 No change to basic subject matter eligibility framework, but clarifies how to determine whether an additional element (or combination of additional elements) represents well-understood, routine, conventional activity in Step 2B An examiner should conclude that an element (or combination of elements) is well-understood, routine, conventional activity only when the examiner can readily conclude that the element(s) is widely prevalent or in common use in the relevant industry, as explained in MPEP 2106.05(d)(I) NEW: Conclusion must be based upon factual determinations 30

Eligibility Flowchart PRODUCTS AND PROCESSES ESTABLISH THE BROADEST REASONABLE INTERPRETATION OF THE CLAIM AS A WHOLE THE STATUTORY CATEGORIES Step 1 IS THE CLAIM TO A PROCESS, MACHINE, MANUFACTURE OR NO COMPOSITION OF MATTER? YES CAN CLAIM BE AMENDED TO FALL WITHIN A STATUTORY CATEGORY? Claims that do not recite a judicial exception or that are directed to an improvement in technology are eligible at Step 2A Claims that are directed to a judicial exception must be analyzed under Step 2B to look for an inventive concept in the additional elements A WHEN VIEWED AS A WHOLE, THE ELIGIBILITY OF THE CLAIM IS SELF- EVIDENT CAN ANALYSIS BE STREAMLINED? YES B C CLAIM QUALIFIES AS ELIGIBLE SUBJECT MATTER UNDER 35 USC 101 NO YES THE JUDICIAL Step 2A EXCEPTIONS IS THE CLAIM DIRECTED TO A LAW OF NATURE, A NATURAL PHENOMENON ( PRODUCT OF NATURE), OR AN ABSTRACT IDEA? YES THE INVENTIVE CONCEPT Step 2B DOES THE CLAIM RECITE ADDITIONAL ELEMENTS THAT AMOUNT TO SIGNIFICANTLY MORE THAN THE JUDICIAL EXCEPTION? NO CLAIM IS NOT ELIGIBLE SUBJECT MATTER UNDER 35 USC 101 C CLAIM QUALIFIES AS ELIGIBLE SUBJECT MATTER UNDER 35 USC 101 YES THE INVENTIVE CONCEPT Step 2B DOES THE CLAIM RECITE ADDITIONAL ELEMENTS THAT AMOUNT TO SIGNIFICANTLY MORE THAN THE JUDICIAL EXCEPTION? NO CLAIM IS NOT ELIGIBLE SUBJECT MATTER UNDER 35 USC 101 31

Eligibility Framework MPEP 2106 Step 1: The Four Categories of Statutory Subject Matter MPEP 2106.03 Step 2A: Whether a Claim is Directed to a Judicial Exception MPEP 2106.04 Step 2B: Whether a Claim Amounts to Significantly More MPEP 2106.05 2106.05(a)-Improvements to the Functioning of a Computer or To Any Other Technology or Technical Field 2106.05(b)-Particular Machine 2106.05(c)-Particular Transformation 2106.05(d)-Well-Understood, Routine, Conventional Activity 2106.05(e)-Other Meaningful Limitations 2106.05(f)-Mere Instructions To Apply An Exception 2106.05(g)-Insignificant Extra-Solution Activity 2106.05(h)-Field of Use and Technological Environment 32

Limitations that the courts have found to qualify as significantly more Improvements to the functioning of a computer MPEP 2106.05(a); Improvements to any other technology or technical field MPEP 2106.05(a); Applying the judicial exception with, or by use of, a particular machine MPEP 2106.05(b); Effecting a transformation or reduction of a particular article to a different state or thing MPEP 2106.05(c); Adding a specific limitation other than what is well-understood, routine, conventional activity in the field, or adding unconventional steps that confine the claim to a particular useful application MPEP 2106.05(d); or Other meaningful limitations beyond generally linking the use of the judicial exception to a particular technological environment MPEP 2106.05(e). 33

Limitations that the courts have found not to be enough to qualify as significantly more Adding the words apply it (or an equivalent) with the judicial exception, or mere instructions to implement an abstract idea on a computer MPEP 2106.05(f); Simply appending well-understood, routine, conventional activities previously known to the industry, specified at a high level of generality, to the judicial exception MPEP 2106.05(d); Adding insignificant extra-solution activity to the judicial exception MPEP 2106.05(g); or Generally linking the use of the judicial exception to a particular technological environment or field of use MPEP 2106.05(h). 34

Well-Understood, Routine, Conventional Activity If the element is not widely prevalent or in common use, it should not be considered to be a well-understood, routine, conventional element The question of whether additional elements represent wellunderstood, routine, conventional activity is distinct from patentability over the prior art under 35 U.S.C. 102 and 103 Obviousness or lack of novelty does not establish that the additional elements are well-understood, routine, conventional activities or elements to those in the relevant field. See MPEP 2106.05. 35

Revised Examination Procedure in view of Berkheimer Formulating Rejections: In a step 2B analysis, an additional element (or combination of elements) is not well-understood, routine or conventional unless the examiner finds, and expressly supports a rejection in writing with, one or more of the following four options 36

Option 1 Statement(s) by Applicant An explanation based on an express statement in the specification (e.g., citation to a relevant portion of the specification) that demonstrates the wellunderstood, routine, conventional nature of the additional element(s) or A specification demonstrates the well-understood, routine, conventional nature of additional elements when it describes the additional element(s) as conventional (or an equivalent term); as a commercially available product; or, in a way that shows the element is widely prevalent or in common use; A statement made by an applicant during prosecution, that demonstrates the well-understood, routine, conventional nature of the additional element(s) 37

Option 2 Court Decisions in MPEP 2106.05(d)(II) A citation to one or more of the court decisions discussed in MPEP 2106.05(d)(II) as noting the wellunderstood, routine, conventional nature of the additional element(s) The additional element in the claim must be the same as the element addressed in the court case Citation should be limited to the list of cases in the MPEP 38

Option 3 Publication(s) A citation to a publication (e.g., book, manual, review article) that demonstrates the well-understood, routine, conventional nature of the additional element(s) An appropriate publication can include a book, manual, review article, or other source that describes the state of the art and discusses what is well-known and in common use in the relevant industry Does not include all items that might otherwise qualify as a printed publication under 102 Merely finding the additional element in a single patent or published application would not be sufficient to demonstrate that the additional element is well-understood, routine, conventional, unless the patent or published application demonstrates that the additional element is widely prevalent or in common use in the relevant field 39

Publication Requirements Publication must: Be dated on or before the effective filing date of the application, or Establish that the well-understood, routine, conventional nature of the activity is on or before the effective filing date of the application Identify the publication in the Office action and on a PTO-892 Practice Tip: Check patents, PGPubs, and non-patent literature cited by applicant or found in the prior art search first as they will often discuss the state of the art there should be no need for a separate search 40

Option 4 Official Notice A statement that the examiner is taking official notice of the well-understood, routine, conventional nature of the additional element(s) Used only when the examiner is certain, based upon his or her personal knowledge, that the additional element(s) represents well-understood, routine, conventional activity engaged in by those in the relevant art, in that the additional elements are widely prevalent or in common use MPEP 2144.03 discusses taking official notice in the context of making a rejection under 35 U.S.C. 103 If the additional element(s) is well-known, a best practice is to provide a publication before resorting to official notice 41

Official Notice Practice Reminders Should be used only where facts asserted to be well-known, or to be common knowledge in the art, are capable of instant and unquestionable demonstration as being well-known Must provide specific factual findings predicated on sound technical and scientific reasoning to support the conclusion of common knowledge Identify which element is subject to notice and explicitly explain the basis on which the notice is taken so that the applicant can adequately traverse the finding in the next reply Should be rare when an application is under final rejection When properly traversed by the applicant, examiner must provide documentary support Options 1-3 above; or An affidavit or declaration must be provided setting forth specific factual statements and explanation to support the finding. See 37 CFR 1.104(d)(2) 42

Traversing Official Notice MPEP 2144.03(C): To adequately traverse such a finding [that a fact is well known based on official notice], an applicant must specifically point out the supposed errors in the examiner s action, which would include stating why the noticed fact is not considered to be common knowledge or well-known in the art. 43

Reminder: Consider Additional Elements Individually and in Combination Additional elements must be evaluated individually and in combination to determine whether a claim includes significantly more than a judicial exception Must also consider the combination of elements To support a rejection of a claim where the examiner takes the position that additional elements A and B are routine, the combination of A and B must be shown to represent well-understood, routine, conventional activity in the pertinent art 44

Evaluating Applicant s Response If an applicant challenges the examiner s position that the additional element(s) is well-understood, routine, conventional activity by providing arguments and/or evidence: Reevaluate whether it is readily apparent that the additional elements are in actuality well-understood, routine, conventional activities to those who work in the relevant field, and If it is appropriate to maintain the rejection, specifically respond to the arguments and/or evidence as normal in accordance with MPEP 707.07(f) 45

Evaluating Applicant s Response to Official Notice If the examiner has taken official notice and the applicant properly challenges the examiner s position by specifically pointing out the supposed errors and stating why the noticed fact is not considered common knowledge or well-known in the art Reevaluate whether it is readily apparent that the additional elements are in actuality well-understood, routine, conventional activities to those who work in the relevant field, and Provide one of the items in Options 1-3, or an affidavit or declaration under 37 CFR 1.104(d)(2) setting forth specific factual statements and an explanation that supports the position 46

Finality and Applications in Process If the examiner cites to a new publication that was not previously of record in response to an argument by applicant, the next Office action may not be made final (except as discussed below) If the examiner responds to applicant s argument by relying upon applicant s own specification, a statement made by applicant during prosecution, or prior art already of record, or relies upon a court decision discussed in MPEP 2106.05(d)(II), it may be appropriate to make the next action final In addition, if the examiner cites a publication to rebut a challenge of official notice and that publication supports the facts taken as official notice, it may be appropriate to make the next action final 47

Questions? Frost Brown Todd LLC William Morriss 513.651.6915 wmorriss@fbtlaw.com 48