No. 38
October 2014

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International Association for the Protection of Intellectual Property

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Alice Neither a Wonderland Nor a Wasteland - Yet
(Article by Kelly G. Hyndman, Sughrue Mion, PLLC, Washington, DC, USA)
The decision of the United States Supreme Court in Alice Corporation PTY. LTD. v. CLS Bank Int'l et Al, 573 U.S. ____ (2014), decided now a full three months ago, has had an impact in two recent precedential decisions of the Court of Appeals for the Federal Circuit (CAFC). In brief, Alice stands for the propositions that: (1) a claim drawn to an abstract idea is patent-ineligible unless it contains additional features that ensure the claim does not monopolize the abstract idea; (2) the relevant analysis is whether the claims do more than instruct the practitioner to implement the abstract idea; and (3) the analysis framework to apply is to first determine whether a claim is directed to an abstract idea and, if so, to ask whether the claim elements transform the nature of the claim to a patent-eligible application of the abstract idea.

Digitech Image Technologies, LLC v. Electronics for Imaging, Inc., 758 F.3d 1344 (Fed. Cir. 2014) invalidated the patentee's claims under 35 U.S.C. 101, the U.S. statute that defines patentable subject matter. This statute defines four broad classes of statutory subject matter including apparatus, article of manufacture, chemical composition, and process. In Digitech the Court noted that, even when claims fall within one of these four broad categories, the claims “may nevertheless be ineligible” for a patent “if they encompass laws of nature, physical phenomena, or abstract ideas.” In this context, however, the Court cited Alice as merely a reaffirmance of the point that “fundamental concepts, by themselves, are ineligible abstract ideas”, and for the proposition that a claim may be patent eligible “if it includes additional inventive features such that the claim scope does not solely capture the abstract idea.”

The Court brought Alice to bear against only the patentee's method claims. The sole independent method claim basically recited:
    A method of generating a device profile..., said method comprising:

    generating first data for describing...;

    generating second data for describing...; and

    combining said first and second data into the device profile.
The CAFC concluded that the method was “so abstract and sweeping as to cover any and all uses of a device profile” and thus invalid. Alice actually played only a minor role in the analysis, being mentioned only in connection with a few of the patent's claims.

In contrast, Alice was central to the invalidation of all of patentee's asserted claims in buySAFE Inc. v. Google Inc., ___ F.3d ___ (Fed. Cir. 2014), decided on September 3, 2014. Here, the claims were drawn to guaranteeing a party's performance of an online transaction. The asserted claim 1 basically recited:
    A method, comprising:

    receiving, by at least one computer application program running on a computer..., a request...;

    processing, by at least one computer application program running on the... computer, the request by underwriting...,

    wherein the computer... offers, via a computer network, the transaction performance guaranty service...
The CAFC here found that the asserted claims “do not push or even test the boundaries of the Supreme Court precedents under section 101.” The Court here found the recited computer functionality too generic to transform the abstract idea into patent-eligible subject matter.

Practitioners in the United States anxiously await some decision by the CAFC that helps clarify when a patent claim is directed to an abstract idea as opposed to merely being related to an abstract idea, as well as guidance as to the level of specificity required in the recitation of computer technology to escape classification as merely generic. Digitech and buySAFE, unfortunately, do not yet answer those questions.