In this case, the defendants filed a Rule 12(c) motion for judgment on the pleadings aimed at four patents on the ground that all are directed to abstract ideas. As discussed below, the Western District of Washington, (“The Court”) granted the motion as to two of the patents and provided a comprehensive review of the current status of the law regarding Section 101 unpatentability of abstract ideas.
There is no “single, succinct, usable definition or test” for an abstract idea.[1] Instead, the framework is to apply Alice[2] by determining (1) whether the claims are directed to an abstract idea and (2) whether the claims plausibly revealed an inventive concept. Courts do this by examining earlier cases and evaluating whether the matter at hand is analogous.[3] Various judges have expressed dissatisfaction with this approach and analogized it with the rule for obscenity—i.e., you will know it when you see it. Id. at 1351.
Here, the first patent addressed by the Court, the ‘389 Patent, claimed a “system and method for displaying objects in a plurality of layers.” The Court found that the ‘389 Patent was directed to the unpatentable abstract ideas of categorizing and displaying information as well as altering the manner of display upon user demand. The Court further added that there was no inventive concept because these tasks have long been done by humans using pen and paper, so the patent failed to recite patentable subject manner.
The other patent the Court found to be directed to an unpatentable abstract idea, the ‘789 Patent, claimed methods for geospatial and list-based mapping, including the use of customizable lists of elements. The allegedly novel element was concurrent updating of both the map and the lists based on a user’s selection of a portion of the map. The Court concluded that the ‘789 Patent was directed to the abstract idea of responding to a user’s selection of a portion of a displayed map by simultaneously updating the map and list of items on the map and found that the claimed methods could be and had been performed by hand.
As for the third patent considered by the Court, the ‘183 Patent, the Court found that, although it was directed to an abstract idea, it was plausible that the ‘183 Patent was directed to an inventive concept under step 2 of the Alice analysis because it claimed the improvement of the analysis of unstructured data by computer systems. Thus, the Court denied the defendants’ motion.
Finally, the Court denied the defendants’ motion regarding the final patent, the ‘346 Patent, on the basis that the defendants had not proved it claimed unpatentable subject matter because the subject matter could seek to solve a problem inherent in computer networking by using single sign on technology to automatically create user accounts at the service provider level.[4]
[1] See Amdocs (Israel) Ltd. v. Openet Telecom, Inc., 841 F.3d 1288, 1294 (Fed. Cir. 2016).
[2] Alice Corp. v. CLS Bank Int’l, 573 U.S. 208 (2014).
[3] See Interval Licensing LLC v. AOL, Inc., 896 F.3d 1335, 1350 (Fed. Cir. 2018).
[4] See Int’l Bus. Machs. Corp. v. The Priceline Grp. Inc., 2016 WL 626495, at *16 (D. Del. 2016).
The Court of Appeals for the Federal Circuit (“CAFC”) held a patent directed to delivering targeted advertising via bypassing mobile devices’ security systems was directed to an abstract idea, and thus invalid under 35 U.S.C. §101. This decision reinforces that neither unclaimed functionalities, nor vague, results-centric descriptions give rise to patentability. Free Stream Media Corporation, d/b/a Samba TV (“Samba”), a major player in the digital advertising industry, owns U.S. Pat. No. 9,386,356 (“the ’356 Patent”), titled “Targeting with Television Audience Data Across Multiple Screens.” The system targets advertisements to a user’s mobile phone based on data gathered from a user’s television. The District Court had previously found the claims to be patent-eligible. Alphonso then obtained summary judgment of noninfringement, and the parties each appealed.
The Supreme Court’s two-step Alice framework for evaluating patent eligibility under § 101 considers (1) whether the challenged claims are directed to a patent ineligible concept, and if so; (2) whether the challenged elements of the claim individually or as an ordered combination transform the nature of the claim into a patent-eligible application. Samba asserted that the patent’s claimed advance was its “ability to pierce the sandbox of a mobile device” without action or intervention by the user. Id. at 16. Normally, having a software application pass information between a user’s mobile phone and another networked device (e.g. a smart TV) would be prevented by a “security sandbox,” which is a software construct within which each application runs. The sandbox is designed to prevent applications from accessing off-limits parts of the device they are running on, and often tightly restricts network access. An application could request the user’s permission to access functions outside the sandbox, but a cornerstone of Samba’s system seems to be that it only requests the user’s permission once, from their Smart TV, necessitating piercing the sandbox of the user’s mobile device. However, the claims neither identified any particular or novel mechanism for doing so (presumably because they are trade secrets), nor any improvement to the computers’ functionality, and thus the claims were held directed to an abstract idea.
The ’356 Patent fared no better at Alice step two. Samba argued that the claims enabled the devices to function in an unconventional manner patent by overriding their “routine and conventional inability to share information with each other.” However, the Court reinforced that “an abstract idea is not patentable if it does not provide an inventive solution to a problem in implementing the idea,”, butthe claims “simply recite[d] that the abstract idea will be implemented using conventional components and functions generic to the technology.” Likewise, the Court held that the patent’s methods of bypassing the security sandbox relied on generic computing components in a conventional arrangement. Thus, like so many Internet-related patents, Samba’s turned out to be just another castle made of sand, swept away with the first tide.
In the fiercely contested case of Google v. Oracle, theSupreme Court held that Google’s copying of 11,500 lines of code from Sun Microsystems’ Java Application Programming Interface (“API”) to allow software developers to leverage their accrued Java coding skills on Android constituted fair use as a matter of law. Case No. 18-956 (Apr. 5, 2021). The decision underscores the importance of considering the nature of the copyrighted work, its real-world applications, and the constitutionally mandated purpose of the copyright laws (i.e. not to reward the labor of authors, but to promote the progress of science and the useful arts).
The decision came on the heels of the Federal Circuit (CAFC)’s 2018 reversal as a matter of law of the District Court’s finding and jury’s verdict of fair use, where the CAFC unemphatically stated: “there is nothing fair about taking a copyrighted work verbatim and using it for the same purpose and function as the original in a competing platform.” The CAFC found only the second factor (the nature of the work) to favor fair use but disregarded it as typically “relatively unimportant.” Yet the Supreme Court held that all four factors favored fair use. So, how did two panels arrive with such conviction at opposite conclusions? Context.
The Java API streamlines development by “allow[ing] programmers to use … prewritten code to build certain functions into their own programs, rather than write their own code to perform those functions from scratch.” This prewritten code, known as “implementing code,” lets a programmer simply name the function they want performed and fill in a few blanks with parameters the function will need. When the program runs the system will automatically pull in the appropriate unit of implementing code (known as a “method”), which contains the specific computer instructions needed to perform the function on that user’s operating system and hardware.
In Java, methods are each contained within a “class.” Similar classes are grouped into and made available by the API in “packages.” This nested organizational structure is known as Java’s Structure, Sequence, and Organization (“SSO”). Java’s “declaring code” defines the names of these methods, how those methods are organized into classes and packages, the input parameters each method receives, and the outputs it returns. A programmer usually “calls” a method to action by spelling out its full path, which generally looks like: [package].[class].[method](parameters). Programmers learn this SSO and the associated commands with experience coding in Java. The diagram appended to the Court’s decision illustrates these units of code and how they work:
As proved important to the Court’s fair use analysis, Google did not copy Java’s implementing code; only the declaring code for the 37 Java packages most important for the mobile device environment. Starting with the second fair use factor (the nature of the work), the Court found the copied material to be part of the Java API’s “user interface,” which, “if copyrightable at all, [is] further than are most computer programs (such as the implementing code) from the core of copyright,” and that “its use is inherently bound together with uncopyrightable ideas (general task division and organization) and new creative expression (Android’s implementing code).” Further much of the code’s value derived from effort third-party software developers invested to learn Java’s SSO. The Court not only gave weight to this second fair use factor but used it to color its analysis of every other factor.
On the first factor, the purpose and character of the use, the Court found Google’s use—a “reimplementation,” i.e, a repurposing of the words and syntaxes of the Java language—transformative because it expanded the use and usefulness of Android smartphones” (versus desktop and laptop computers). The Court again reinforced that Google sought to leverage programmers’ acquired skills in the Java language, stating: “[t]o the extent Google used parts of the Sun Java API to create a new platform that could be readily used by programmers, its use was consistent with that creative ‘progress’ that is the basic constitutional objective of copyright itself.”
The Court also found the third fair use factor, the amount and substantiality of the work used, to favor fair use. Notwithstanding the 11,500 lines of code copied the Court noted the millions of lines of implementing code that Google did not copy, instead correlating the declaring code with its own implementing code tailored for the mobile environment. And again, the Court emphasized that the specific portion copied was important not because of its “beauty” or even “purpose,” but because it, again, enabled programmers to employ their accrued skills.
On the fourth fair use factor, market effects, the Court weighed the amount and type of harm against the public benefits of the copying. The Court held that Google’s monetary gains were not cognizable market losses under the Copyright Act because that value flowed from the efforts of third-party programmers who had learned to use Java, and “correspondingly [had] less to do with Sun’s investment in creating the Sun Java API.” Finally, the Court held that enforcing Oracle’s copyright “would risk harm to the public” because it would turn the declaring code into “a lock limiting the future creativity of new programs,” running counter to “copyright’s basic creativity objectives.” Thus, the Court found the fourth factor also favored fair use.
Two jury trials, two appellate reversals, and a trip to the Supreme Court later, thus ends of one of the most closely watched rallies in at least recent fair use, copyright, and intellectual property law history. It closed with a whisper rather than a bang as the Court maintained the industry status quo. But, in some mirror world, our mirror selves are weathering the aftershocks of a copyright monopoly over the dictionary (not just the definitions, but the words and grammar too) of one of the most ubiquitous programming languages on Earth. The difference is context.
Invalidating claims of a patent directed to system architecture combining imaging sensors with timing and control circuits, the Patent Trial and Appeal Board (“PTAB”) clarified the landscape of state-of-the-art developments at pixel scale. In a seventy-seven page final written decision, the PTAB determined five claims of U.S. Patent No. 9,198,565 were obvious in light of two references, clearing the way for Samsung to continue selling endoscope products embodying related technology advances.
Subject to infringement allegations in the District of Colorado—Cellect, LLC v. Samsung Elecs. Co., Ltd., 1-19-cv-00438—Samsung petitioned for inter partes review of the ’565 Patent, along with ten other related patents. The ’565 Patent relates to “camera on a chip” technology with rearranged circuitry to minimize the volumetric profile for use in surgical instruments, such as an endoscope. Generally, the claims at issue cover an imaging device, including an imaging sensor and processing circuits that are combined in a housing. Further, the patent discloses two system architectures: one with the image sensor data being processed via planarly adjacent timing and control circuits, and a second arrangement where the processing circuitry is stacked.
Samsung petitioned for invalidity for obviousness under 35 U.S.C. § 103 in light of two references: U.S. Patent No. 5,903,706 (“Wakabayashi”) and U.S. Patent No. (“Ackland”). Addressing Cellect’s evidence of nonobviousness in light of KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398, 406 (2007)first, the PTAB addressed the patent owner’s argument that five secondary considerations identified in Graham v. John Deere Co., 383 U.S. 1, 17–18 (1966)provided support: 1) commercial success, 2) satisfaction of a longfelt but unresolved need, 3) industry praise, 4) unexpected results, and 5) industry skepticism/proceeding contrary to accepted wisdom. The PTAB was unpersuaded. The panel failed to find a nexus of the evidence provided and the claims for any of the factors. For example, no specific license of the ’565 Patent was identified, the claims do not require an endoscope as identified in evidence of a need for smaller such devices, the generalized language of an industry award failed to identify claim features, and Samsung’s expert testimony as to rearranging chip components was credited as within skilled artisans knowledge and was unrebutted. In sum, “the objective evidence of nonobviousness submitted by and relied on by Patent Owner is weak.”
Turning to the petitioner’s Wakabayashi and Acklund references, the PTAB found the elements of the imaging device claims with little difficulty. The more substantial task was analyzing the motivation to combine the teachings of Wakabayashi and Ackland, where “Wakabayashi discloses using a solid-state imager without indicating a specific type of solid-state imager [ ], and Ackland teaches using a CMOS imager for use in a solid-state camera [ ].” The petitioner’s “adequate reasoning with rational underpinnings” carried the day. This decision is a simple reminder to clearly and rationally connect specific facts to the specific issues when motivation to combine prior art is under the PTAB’s lens.
On appeal from the Patent Trial and Appeal Board (“the PTAB”) and the Federal Circuit (“the CAFC”), the Supreme Court (“the Court”) held that unreviewable Administrative Patent Judge (“APJ”) rulings are inconsistent with the Appointments Clause of the Constitution and, thus, rendered unenforceable any statutory restrictions preventing the Director of the Patent and Trademark Office (“the Director”) from reviewing APJ inter partes review (“IPR”) final written decisions (“FWDs”).
In 2015, Arthrex, Inc. (“Arthrex”) was granted U.S. Patent No. 9,179,907 (“the ’907 Patent”). Arthrex alleged Smith & Nephew, Inc. and ArthroCareCorp (collectively “Smith”) infringed the ’907 Patent. Smith filed an IPR petitionand the ’907 Patent was ultimately found to be anticipated. Arthrex appealed to the CAFC arguing that APJs were “principal” officers under the Appointments Clause of the Constitution and that their appointment by the Secretary of Commerce (“Secretary”) without the confirmation of the Senate was unconstitutional. Under the Appointments Clause, the President may nominate “principal” officers to assist in executive responsibilities if the officer is confirmed by the Senate as well as other “inferior” officers, who need not be confirmed by the Senate, if a nominated and confirmed officer directs and supervises the work. The CAFC agreed that APJs were principal officers because they could not be removed at will, and their decisions were unreviewable. To fix this issue, the CAFC invalidated tenure protections for APJs and remanded. Each party’s en banc rehearing request was denied. The parties then petitioned the Court, which granted certiorari to decide whether the PTAB’s structure is consistent with the Appointments Clause and, if not, what the appropriate remedy should be.
The Court relied on Edmond, wherein the Court stated “[w]hether one is an ‘inferior’ officer depends on whether he has a superior” other than the President. Inferior officers must be “directed and supervised at some level by others who were appointed by Presidential nomination with the advice and consent of the Senate.” In Edmond, Coast Guard Court of Criminal Appeals judges were found to have no power to render a decision unless permitted to do so by other Executive officers. Applying Edmond, the Court found APJs lacked superior executive officer review. The Court noted, although the Director had some oversight, neither the Director nor any other superior executive officer could review APJs’ final decisions. Although Smith and the Government identified ways the Director could affect the APJ decision-making process—e.g., deciding whether to initiate an IPR, designating APJs for a particular case, picking APJs predisposed to the Director’s views—the Court found these abilities to be part of the problem, not the solution: IPR parties would have neither an “impartial decision” nor a decision in which a political officer must take responsibility for. As such, the Court found APJs’ powers to be in conflict with the Appointments Clause. Despite this constitutional violation, the Court rejected Arthrex’s request that the whole IPR regime be found unconstitutional and disbanded. The Court held that the Director may review final PTAB decisions and reissue decisions on behalf of the PTAB.
In response to this decision, the PTO implemented an interim procedure where the Director may review FWDs either sua sponte or in response to a rehearing request. If a party requests the Director’s review, and the request is denied, the party may not then request the APJ panel to rehear the decision. If, however, a rehearing is granted by the original APJ panel, the party may likewise request Director review of the rehearing decision. A request for a rehearing by the Director must be filed within thirty days of the FWD or a rehearing decision by the APJ panel. A Director rehearing request resets the time to file an appeal to the CAFC. The current “Acting Director” was not appointed by the President nor confirmed by the Senate. Litigation surrounding whether any such challenges satisfy the Appointment’s Clause or whether any FWD issued prior to such appointment will likely be remanded and stayed pending the appointment and availability of a properly appointed Director’s review. Stay Tuned!
Irwin IP is excited to announce that two seasoned litigators have joined the firm, Robyn Bowland and Joseph Saltiel. 
Robyn graduated Magna Cum Laude from the University of Notre Dame Law School in 2008 and since then has successfully represented clients in connection with a variety of litigation matters, including patent infringement, trademark and trade dress infringement, trade secret litigation, tortious interference litigation, breach of restrictive covenant litigation, and ITC Section 337 Investigation Hearings. Robyn has also had experience with transactional matters.
Joe is a registered patent agent with a MS and BS in Electrical Engineering/Computer Science. Joe has more than 15 years’ experience in over a hundred intellectual property and related matters in courts across the country, the USPTO, and the ITC.
Earlier this year,Irwin IP welcomed Mike Bregenzer, former General Counsel to Ranir, LLC and a former IP litigation partner at Reed Smith and Kirkland & Ellis. Irwin IP’s founder, Barry Irwin, could not be more pleased to have Robyn, Joe, and Mike join Irwin IP’s growing practice to help support and drive the continued success of the firm.
“Irwin IP is committed to providing premier, ethical legal services at reasonable rates, and our clients are showing their appreciation for our approach with repeat business,” Barry said. Adding, “Robyn, Joe, and Mike provide the experience and expertise we need to meet this demand and our continuing commitment to quality.”
On June 11, 2021, The Court of Appeals for the Federal Circuit (the “CAFC”) upheld the Northern District of California’s grant of Apple’s and Samsung’s (collectively, the “Defendants”) Rule 12(b)(6) motion to dismiss Yanbin Yu and Zhongxuan Zhang’s (collectively, the “Patent Owners”) patent infringement action.
The patent in suit, U.S. Patent No. 6,611,289 (the ‘289 patent), teaches a digital camera using multiple lenses to capture and combine several images for an enhanced final image. Despite the fact that it claimed a mechanical device, the Federal Circuit held that the ‘289 patent failed under Step 1 of the Alice–Mayo analysis because it merely covered the abstract idea of “using one picture to enhance another in some way[,]” a common practice of photographers for “over a century,” and included no specific improvement beyond the ineligible claimed concept. The CAFC considered the Patent Owners’ counterargument that the ‘289 taught a unique and specific improvement to camera technology functionality, but found a “mismatch” between a broadly claimed result and detailed technology taught only in the specification—the latter not being expressly claimed and the former failing to claim more than an idea with routine and conventional devices and components. This case seems to expand the CAFC’s commitment to the precedent that the “machine-or-transformation” test is not dispositive of eligibility under 35 U.S.C. § 101—adding cameras to a list that includes computers, garage door openers, and axles that do not pass Alice/Mayo Step 1 simply by virtue of being claimed.
The CAFC further found that the representative claim failed Step 2 of the Alice–Mayo test by generically claiming well-understood, routine, and conventional components and not transforming the abstract idea into a patent eligible invention. The Patent Owners argued that the invention cleared 35 U.S.C. §§ 102 and 103 novelty and non-obviousness requirements over multiple prior art references by virtue of a unique hardware configuration and architecture. But again, the CAFC found that recitation of novel subject matter does not necessarily confer eligibility—the representative claim still contemplated a generic configuration adding no substance to the abstract idea as claimed.
Finally, the CAFC found that the district court had not erred in making these determinations at the Rule 12(b)(6) motion to dismiss stage. The Court held that a determination of patent validity is appropriate, even absent expert testimony and disregarding allegations that contradict judicially noticed facts (such as a patent specification and claims) even in a technically complicated determination.
With the ongoing Supreme Court challenge to a similar CAFC outcome in American Axle & Manufacturing Inc. v. Neapco Holdings LLC, uncertainty shrouds this area of patent law. Likely, the vital connection between the subject matter taught in the specification and that which is specifically claimed is dispositive of whether the patent claims an ineligible concept or a new and useful technological advancement.
No luck this week for food-related marks. The United States District Court for the Western District of North Carolina (“District Court”) and the Trademark Trial and Appeal Board (“TTAB”) each refused registration of marks “COOKINPELLETS.COM” and “PRETZEL CRISPS,” respectively. Each proceeding considered the “primary significance” of the mark to the “relevant public” in making determinations of whether a mark is generic. Although the TTAB found “COOKINPELLETS.COM” was not generic for “processed wood fuel in the nature of pellets for use in barbecue grills,” it found the claimed mark highly descriptive without sufficient acquired distinctiveness. The District Court held “PRETZEL CRISPS” generic for “pretzel crackers,” and therefore it did not even address acquired distinctiveness.
Both opinions relied heavily on Supreme Court opinion Booking.com B.V., 140 S. Ct 2298 (2020), in which addition of “.com” to an otherwise generic term could transform it into a protectable mark. Here, each proponent argued, in part, that addition of “.COM” to “COOKINPELLETS,” and “CRISPS” to “PRETZELS” was sufficient to render the claimed marks not generic. The TTAB found that “.COM when added to COOKINPELLETS as signifying that Applicant is a commercial entity with an online presence and does not have source identifying significance in relation to the goods.” Accordingly, “COOKINPELLETS.COM” indicates a source for a website, rather than a source for “processed wood fuel in the nature of pellets for use in barbecue grills.” However, the District Court found that both “PRETZEL” and “CRISPS” as a source for “pretzel” were individually generic terms and their combination “yields no additional meaning to consumers capable of distinguishing the goods.”
Both proceedings addressed similar evidence. Applicant for “COOKINPELLETS.COM” presented evidence including (1) length of continuous use, (2) $3,000,000 in revenue, (3) $25,000 expended in advertising, (4) social media presence, and (5) its “best-selling” market hold. The TTAB found these facts insufficient in part because the advertising expenditures and sales were both too “modest,” and expressed annoyance with the “partially legible evidence” provided. Proponent of “PRETZEL CRISPS” presented evidence for non-genericness including (1) consumer surveys, (2) social media presence, (3) media references and press releases, and (4) industry usage. The District Court found these facts insufficient to overcome a generic label: “no matter how much commercial success the product enjoys, Plaintiffs are not entitled to monopolize the common name of the product being sold.” The District Court ordered “PRETZEL CRISPS” cancelled from the Supplemental Register.
Overcoming genericness and showing acquired distinctiveness can be significant barriers to overcome, and the Booking.com case did not hold otherwise. Companies hoping to make this leap should keep “clear and legible” records about its commercial presence and successes, as well as contextual information about its competitive marketplace.
Before the court, in this case concerning design patent infringement, was a motion in limine to preclude Defendants’ witnesses from testifying about expense deductions from net profits that are not tied specifically to the sales of the products at issue. In its decision, the court denied the motion, stating that this calculation is “not prejudicial, confusing, or misleading.” Opinion at 7.
Plaintiff Delta T accused Defendants Dan’s Fan City and TroposAir (“Defendants”) of infringing three patented designs of a modern residential ceiling fan. As the case was nearing trial, the parties moved to exclude the introduction of various arguments and evidence at trial. The motion in limine of relevance, here, covered expense deductions. Defendants intended to calculate the amount of fixed costs associated with the sales of the fan by multiplying their total fixed costs by the ratio of their fan sales to their total sales. Plaintiff argued that such “across-the-board” calculation is inadmissible because Defendants did not demonstrate that their “overhead (or other comparable expenses) would have been any different had they not been selling the infringing goods[.]” Dkt. 163 at 8 (emphasis in the original). Defendants countered that it is for the jury to decide which expenses should be considered in determining their profits[1] and that Plaintiff may challenge the calculation at trial.
The patent owner bears the burden of proving damages. BIC Leisure Prods., Inc. v. Windsurfing Int’l, Inc., 1 F.3d 1214, 1217 (Fed. Cir. 1993). “If the plaintiff satisfies this burden of production, the burden shifts to the defendant to come forward with evidence . . . of a different profit calculation, including any deductible costs.” Apple Inc. v. Samsung Elecs. Co., 2017 WL 4776443, at *12 (N.D. Cal. 2017). The district court concluded that “[n]either case law nor logic provides a clear rule for the proper treatment of fixed expenses in computing an award for profits.” (quoting Schnadig Corp. v. Gaines Mfg. Co., 620 F.2d 1166, 1172 (6th Cir. 1980)). The court further stated that because Plaintiff has not provided any authority requiring that Defendants’ calculation of fixed costs be excluded because it is based on an “across-the-board” calculation, the court found the calculation to be appropriate, thereby denying the requested relief.
[1] Under current design law, design patent infringers are “liable to the [patent] owner to the extent of his total profit,” regardless of how much value the patented design added to the product. 35 U.S.C. § 289 (emphasis added), unlike utility patent damages, which are grounded in the value added by the patented feature.
The Court of Appeals for the Federal Circuit (“CAFC”) held unpatentable under 35 U.S.C. § 101 a Stanford University patent application (Application No. 13/445,925) (“the ’925 Application”) covering improvements to a method for analyzing genetic data because its innovation was to a mathematical algorithm rather than of a technological nature. This decision underscores a now familiar stroke on the map of Wonderland: that in order to be patentable, the claimed innovation should be technological. Improvements to a mathematical algorithm or method of mathematical analysis are not patent eligible on their own regardless of how momentous or scientifically significant the improvement may be. Further, in keeping with Alice, the decision reiterates that incorporating generic technological elements ancillary to the claimed innovation does not render the claim any less abstract or any more patentable.
On April 13, 2012, Stanford filed its ’925 Application covering improvements to prior art methods of haplotype phasing, which is a process for statistically inferring aspects of the genetic makeup of an organism without having to specifically sequence and analyze its genome. Per the patent, prior art methods of haplotype phasing, drawing conclusions by predicting an inheritance state of the genetic data, could only achieve an approximately 80% prediction rate because inheritance state was uninformative in certain regions of the genetic data. Stanford’s method purportedly increased the prediction rate to 97.9% by incorporating two additional types of data into the calculation that could inform the analysis in areas where inheritance state could not.
The PTAB determined that the method was not patent eligible subject matter. It stated that the steps in claim 1 (and the remaining claims in the application) were directed to either the “mental steps of receiving, storing, or providing information” or “mathematical concepts” and that the mathematical process recited in the claims was not integrated into a practical application. Further, the PTAB concluded that neither claim 1, nor the remaining claims included additional limitations that provided an inventive concept transforming the abstract idea into eligible subject matter for a patent.
The CAFC agreed, holding that claim 1 (and the remaining claims) were directed to an abstract idea and thus failed the first Alice step because, even if they did improve the haplotype phasing data, they constituted a “new or different use of a mathematical process” rather than “an improved technological process,” and “[c]laim 1 recite[d] no concrete application for the haplotype phase beyond storing it and providing it upon request.” The CAFC concluded that claim 1 failed Alice step two for a similar reason: it “recites no steps that practically apply the claimed mathematical algorithm” and instead merely stored the results and provided them on request. Further, the CAFC noted that even “the mathematical steps performed, and the types of data received, as claimed, are conventional and well understood in the prior art.” Thus, the Court held that the claims failed both steps of Alice and affirmed the PTAB’s rejection of the ’925 Application.