Review of Section 101 Decisions by the Federal Circuit

Article co-written by Yuri Levin-Schwartz, Ph.D., a law clerk at MBHB.

Since the Supreme Court decided Alice Corp. v. CLS Bank Int’l in 2014, patent practitioners and the courts alike have struggled to find clarity in the patent eligibility framework of 35 U.S.C. § 101. For the Federal Circuit in particular, applying the two-step framework set forth in Mayo Collaborative Servs. v. Prometheus Labs., Inc. and Alice with any consistency has proven difficult, as the lines between abstract and non-abstract ideas, between step one and step two of the framework, and between eligibility (§ 101) and patentability (§§ 102, 103, or 112) have grown fainter. This summer, the Federal Circuit decided nine cases concerning patent eligibility under 35 U.S.C. § 101.[1] This article provides an overview of these decisions, as well as a discussion of the highlights from, and implications of, the Federal Circuit’s opinions that found the claims eligible.

The now-familiar Alice framework for determining patent eligibility first asks the court to determine whether the claims are “directed to” a patent-ineligible concept (e.g., an abstract idea, law of nature, or natural phenomenon).[2] The second step is to determine whether the claims also supply an “inventive concept” such that the claim limitations, individually or as an ordered combination, amount to significantly more than a patent on the ineligible concept itself.[3] The decisions listed below each applied this framework.



Step 1 – Determining Whether a Claim is “Directed To” Ineligible Subject Matter


While most decisions since Alice have simply found an ineligible concept at step one, three decisions this summer discussed the first step of the Alice analysis in detail.

In Enfish, the Federal Circuit noted that “claims purporting to improve the functioning of the computer itself, or improving an existing technological process might not succumb to the abstract idea exception.”[4] Thus, a relevant inquiry in step one is whether the invention improves the operation of a computer or a technological process. Conducting this analysis, the court rejected Microsoft’s notion that claims were directed to “the concepts of organizing data into a logical table with identified columns and rows,” noting that “describing the claims at such a high level of abstraction and untethered from the language of the claims all but ensures that the exceptions to § 101 swallow the rule.”[5] Instead the court looked to the teachings of the specification to conclude that the invention involves an improvement to an existing technology that exhibits “benefits over conventional databases, such as increased flexibility, faster search times, and smaller memory requirements.”[6]

In CellzDirect,[7] the Federal Circuit discussed what “directed to” actually means. The court explained that “[i]n recent cases, we found claims ‘directed to’ a patent-ineligible concept when they amounted to nothing more than observing or identifying the ineligible concept itself.”[8] The court found the claims eligible at step one, determining that, while the claims achieved a desired result, and utilized a law of nature (a liver cell’s ability to survive multiple freeze-thaw cycles) to achieve that result, they were not “directed to” the law of nature itself. Rather, the claims were “directed to a new and useful method of preserving [liver] cells.”[9] Though the defendant argued that the court’s careful analysis of whether the claimed invention was “directed to” ineligible subject matter improperly shoehorned step two of the analysis into step one, the court stated that “an invention is not rendered ineligible for patent simply because it involves one of the patent-ineligible concepts.”[10] The court also warned that over-application of the judicial exceptions to § 101 would “eviscerate patent law.”[11] This response reminds us that “the [step one] filter is a meaningful one,” and “the two [steps] involve overlapping scrutiny to the content of the claims.”[12] As such, the court made it clear that step one does not end after identifying a patent-ineligible concept that underlies a claim, but rather requires that one “determine whether that patent-ineligible concept is what the claim is directed to.”[13]

The McRO decision similarly focused on the first step of Alice in its analysis. In McRO, the court started by warning against oversimplifying the claims “by looking at them generally and failing to account for the specific requirements of the claims.”[14] As in Enfish and CellzDirect, the McRO court seemed to acknowledge that its step one analysis overlapped with step two. The court noted that “[w]hether at step one or step two of the Alice test, in determining the patentability of a method, a court must look to the claims as an ordered combination, without ignoring the requirements of the individual steps.”[15] And, as in Enfish and CellzDirect, the court in McRO found it significant that the claims recited an improvement over the art.[16] Specifically, the claims improved the prior art through “the use of rules, rather than artists,”[17] to perform lip-synchronized three-dimensional animation. As such, the claim was a specific process that did not preempt other approaches to automatically animating characters. Rather, when viewed as a whole, the claims were “directed to a patentable, technological improvement over the existing, manual 3–D animation techniques.”[18] The McRO court explained that one should determine “whether the claims in these patents focus on a specific means or method that improves the relevant technology or are instead directed to a result or effect that itself is the abstract idea.”[19] Thus, patent applicants should claim the “specific means” of improving a relevant technology, rather than the “result or effect,” of those means.[20]

Step 2 – Determining Whether the Claim Adds “Significantly More”

In Bascom, the court also found the claims to be inventive, but at step two rather than at step one.[21] Here, the court noted that the step one/step two distinction is particularly blurry in software-related patents. The court wrote that “some inventions’ basic thrust might more easily be understood as directed to an abstract idea, but under step two of the Alice analysis, it might become clear that the specific improvements in the recited computer technology go beyond ‘well-understood, routine, conventional activities’ and render the invention patent-eligible.”[22] The court identified the lower court’s step two analysis as resembling a § 103 rejection, “except lacking an explanation of a reason to combine the limitations as claimed,”[23] and clarified that step two does not amount to recognizing that each claim element was known in the art. Rather, “an inventive concept can be found in the non-conventional and non-generic arrangement of known, conventional pieces.”[24] In this case, that inventive concept involved “taking advantage of the ability of at least some [Internet service providers (ISPs)] to identify individual accounts that communicate with the ISP server, and to associate a request for Internet content with a specific individual account,”[25] to achieve the benefits associated with filtering content on one’s personal computer without the drawback of allowing that user to modify that filtering. The court focused on the fact that the claims recited a “discrete implementation,” of an abstract idea to achieve a technical improvement, rather than simply reciting “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.”[26] In this way, the step two analysis in Bascom is similar to the step one rationale in CellzDirect or McRO: each set of eligible claims recited a “specific means” of improving the relevant technology, rather than reciting the “result or effect” of those means. Stated differently, they each “took advantage of” the ineligible concept to achieve the desired result, rather than directing the claims to effectively preempt others from utilizing that concept themselves.

Implications Moving Forward

The cases decided by the Federal Circuit this summer have shown that this court is willing to acknowledge the blending of steps one and two of the Alice inquiry. The decisions have also noted similarities and differences between the § 101 analysis and those of §§ 102, 103, or 112. Also, whether decided at step one or step two of the Alice inquiry, the cases remind us that the judicial exceptions to § 101 are ultimately about preemption of basic scientific and technological tools. Thus, claims should be drafted concretely to utilize an abstract idea, law of nature, or natural phenomenon as a means to a specific useful end, rather than as an aspirational goal that preempts all other useful applications of a patent-ineligible concept.

[1] We include a case from May in the list of decisions that came down this “summer.” We do this because (i) that particular case (Enfish, LLC v. Microsoft Corp.) has been very influential, and (ii) this past May was unusually warm and summer-like.

[2] Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 134 S.Ct. 2347, 2355 (2014).           

[3] Id. (quoting Mayo Collaborative Servs. v. Prometheus Labs., Inc., 132 S.Ct. 1289, 1298 (2012)).

[4] Enfish, LLC v. Microsoft Corp., 822 F.3d 1327, 1335 (Fed. Cir. 2016).

[5] Id. at 1337.

[6] Id.

[7] Rapid Litigation Mgmt. Ltd. v. CellzDirect, Inc., 827 F.3d 1042 (Fed. Cir. 2016).

[8] Id. at 1048.

[9] Id..

[10] Id. at 1050 (quoting Alice, 134 S.Ct. at 2354).

[11] Id. (quoting Mayo, 132 S.Ct. at 1293).

[12] Electric Power Group, LLC v. Alstom S.A., 830 F.3d 1350, 1353 (Fed. Cir. 2016).

[13] CellzDirect, 827 F.3d at 1050.

[14] McRO, Inc. v. Bandai Namco Games Am. Inc., No. 2015-1080, 2016 WL 4896481, *7 (Fed. Cir. Sept. 13, 2016).

[15] Id.

[16] Id. at *8.

[17] Id.

[18] Id. at *10.

[19] Id. at *8.

[20] Id.

[21] Bascom Global Internet Servs., Inc. v. AT&T Mobility LLC, 827 F.3d 1341 (Fed. Cir. 2016).

[22] Id. at 1348 (quoting Alice, 134 S.Ct. at 2359).

[23] Id. at 1350.

[24] Id.

[25] Id.

[26] Id.


© 2016 McDonnell Boehnen Hulbert & Berghoff LLP


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