All posts by enriqueperez59

Post-Alice Rulings On Subject Matter Eligibility Of Software Patents So Far

The Supreme Court ruled on Alice Corp. v. CLS Bank Int’l, 573 U.S. __, 134 S. Ct. 2347 (2014) on June 19, 2014. Since then, the Court of Appeals for the Federal Circuit has cited to Alice v. CLS Bank in deciding 4[1] cases and district courts have cited to Alice v. CLS Bank in 21[2] cases involving software patents. In all four Federal Circuit cases, the claims at issue were found to recite ineligible subject matter. In three[3] of the district court cases, the claims at issue survived the § 101 challenge and were found to be eligible subject matter. Two[4] of the district court cases involved motions on the pleadings in which the court found that discovery and/or a claim construction was required in order to assess eligibility under § 101, and the motions were dismissed without prejudice.

It has only been a little more than five months since the Supreme Court ruled on Alice v. CLS Bank. The post-Alice jurisprudence will continue to evolve. Still, the numbers do not look good for software patents. The courts in several of these cases made it clear that software is, in general, patentable subject matter.[5] However, the numbers so far suggest that software will always have a hard time proving itself eligible for patents.

It would help to see what we’ve learned so far. What do these cases say about what constitutes an abstract idea, an issue left unclear by Alice v. CLS Bank? What sets claims that survived the § 101 challenge apart from the majority that did not? And, what can practitioners do to improve the odds of surviving a § 101 challenge when drafting claims?

  • What is an abstract idea?

Step 1 of the analysis set forth in Alice v. CLS Bank requires that the court determine if the claim at issue is drawn to an abstract idea. One criticism of the Supreme Court’s opinion in Alice v. CLS Bank is the lack of clarity as to when a claim is directed to an “abstract idea.” It was hoped clarification would come as courts interpret Alice v. CLS Bank.

The courts that have addressed subject matter eligibility so far have generally performed Step 1 by looking at the claims at issue as a whole to determine if the claims are directed to an idea or a concept, then whether that idea or concept has a particular tangible or concrete form, or is tied to a specific structure or machine.[6] Courts are finding claims directed to abstract ideas when the claims recite:

  1. Organizing information through mathematical correlations or algorithms.[7]
  2. Human Activity. Claims directed to processes, activities, or practices that can be, or are known to be performed by humans.[8]
  3. Subject matter comparable to the claims at issue in Alice v. CLS Bank and Bilski.[9]

Claims directed to abstract ideas recite processes, activities, or practices, such as, business practices, advertising, marketing, or any other field involving human activity having meaning independent of a structural, physical or technological form. The subject matter recited in claims directed to abstract ideas may not be “abstract” in a real, or non-patent eligibility, sense. It can be argued that a bingo game, or transaction verification information, or charitable giving, or meal-planning are not abstract outside of a subject matter eligibility context. These activities are considered abstract in the context of patent eligibility when presented in a claim with no meaningful structure or physical form.

For those who draft claims, it may help to consider the term “abstract” in a § 101 context to simply mean a lack of recitation of, or lack of any tie to, any meaningful structure or machinery. In some of the claims in the cases so far, no structure or machine is recited and that fact is used to support the conclusion that the claim is directed to an abstract idea.[10] In other cases, the use of a computer is either recited, mentioned in the specification, or implied by the functional language of the claims. If such use merely involved generic computers or conventional computer functionality, claims were deemed drawn to an abstract idea under Step 1 of the analysis.[11]

  • What did the subject matter eligible claims have that the ineligible claims didn’t?

Quite simply, more limitations.

In Cal. Inst. Of Tech. v. Hughes Communs., Inc. (“Caltech”), the court found that the claims at issue were drawn to abstract ideas in Step 1 of the Alice v. CLS Bank inquiry. The claims in the Caltech case were found to recite the fundamental concepts of encoding and decoding data, which have existed long before the patents and were well known in the field.[12] In the Court’s Step 2 analysis, the claims were found to recite “meaningful limitations that represent sufficiently inventive concepts.”[13] Examples of such limitations include irregular repetition of bits and the use of linear transform operations. The Court noted that these limitations are mathematical algorithms, but that they were narrowly defined and tied to a specific error correction process. These limitations were deemed to be not necessary or obvious tools for achieving error correction, and were found to ensure that the claims do not preempt the field of error correction.[14] The Court concluded that “Caltech’s patents improve a computer’s functionality by applying concepts unique to computing (like using a linear transform operation to encode data) to solve a problem unique to computing (data corruption due to noise).”[15] The software patent claims in the Caltech case are examples of claims that were found to be directed to an abstract idea, but also to recite “something more” so that the claims recite patent eligible subject matter.

In AutoForm Engineering GmbH v. Engineering Technology Associates, 2-10-cv-14141 (E.D. MI. September 5, 2014), the Court found patents pertaining to computer software that is used to create a tool, which is used to form sheet metal into different objects were drawn to eligible subject matter because they were not drawn to an abstract idea under Step 1.[16] The claims were found to contain “numerous limitations that narrow the scope of the patent.” Examples of the types of limitations found to narrow the scope of the patent include “(1) smoothing an irregular component edge; (2) filling in a fill surface; (3) forming a smooth component edge; (4) where the fill surface runs into the predefined component geometry by a continuous tangent; and (5) arranging sectional profiles along the smooth component edge … .”[17] Despite the fact that these steps were performed using generic computer automation, the Court found the patent at issue covers more than a mere abstract idea.[18] The software patent claims in the Autoform Engineering case are examples of software claims that do not recite an abstract idea under Step 1.

In Ameranth, Inc. v. Genesis Gaming Solutions, Inc., 11-00189 (C.D. Cal. November 12, 2014), the Court found system claims directed to a computer system/computerized method for monitoring a physical casino poker game were not drawn to an abstract idea in Step 1 of the Alice v. CLS Bank test.[19] The Court’s discussion focuses on the defendant’s arguments and provides little actual analysis of the claim language. The claims at issue in Ameranth v. Genesis Gaming Solutions include many computer-related elements and functions, such as “Computer system for monitoring … poker game,” “software enabled to …,” “a database …,” etc. The Court noted that the many different player reward systems could be implemented without infringing the claims, thereby ensuring that the abstract idea is not preempted.[20] The software patent claims in the Ameranth case are examples of software claims that do not recite an abstract idea under Step 1.

A common theme evident in the three cases that survived the § 101 challenge is a narrow claim scope. All three cases involved claims that recite computer-implemented applications that performed data transformations using algorithms, and conventional computer functions such as storing, retrieving and comparing data. However, the courts in these three cases found the claims to be sufficiently narrow to ensure concepts and abstract ideas are not preempted.

These cases in which the patents at issue survived the Alice v. CLS Bank test are district court cases likely headed to the Federal Circuit. It will be interesting to see how they fare on appeal.

  • What can practitioners drafting claims do to stay clear of § 101 challenges?

Shortly after the Supreme Court issued its ruling in Alice v. CLS Bank, the USPTO issued preliminary examination instructions to examiners in view of the Alice v. CLS Bank decision. See http://http://www.uspto.gov/patents/announce/alice_pec_25jun2014.pdf. These instructions to examiners essentially break down the Supreme Court’s opinion in a manner that would permit examiners to more easily apply the two-step process, which of course, can be helpful to practitioners as well. As far as the case law is concerned, any guidance that can be gleaned so far on surviving subject matter eligibility challenges is rather troublesome.

The post-Alice case law thus far suggests that patent eligible software claims should (1) recite meaningful structural limitations or ties to structure or machinery, and (2)  have a narrow scope so as to preclude preemption of an idea, concept or field. Of course, reciting meaningful structural limitations, or ties to structure, is only possible if the invention includes such features. Many software inventions are implemented using a generic computer and involve no other structure, hardware, or other physical element. Nevertheless, it may help to recite the computer-based elements as structural limitations. The claims at issue in Ameranth v. Genesis Gaming Solutions are examples of claims reciting as much structure as possible for an invention implemented as software.

Drafting claims with a narrow scope seems to be the best strategy for surviving subject matter eligibility challenges. The courts in the three cases in which software claims were deemed eligible subject matter found the narrow scope of the claims to be an important factor in finding subject matter eligibility. The narrow scope appealed to the courts because it helped preclude preemption of any fields, concepts or ideas. However, the cases only noted that the claims had limitations that narrowed the scope of the claims, or allowed for non-infringing implementations[21]. No distinction was made between narrowing the scope to preclude preemption and broadening the scope in the context of novelty or infringement. This is the troubling part.

Drafting narrow claims to ensure software is patent-eligible presents a challenge for patent practitioners. Patent practitioners are trained to draft claims with the broadest possible scope in order to ensnare as many infringers as possible. Claims are narrowed as required by the prior art. Practitioners must now ensure claims are sufficiently narrow to be patent eligible. The problem is claims have a scope regardless of the context. A claim that is narrowed for purposes of subject matter eligibility is also narrowed in the context of an infringement analysis. How narrow must a claim be to be patent eligible and still have a sufficient scope to ensnare as many infringers as possible?

Perhaps this is a question practitioners will have to consider on a case-by-case basis. The case law so far does not suggest any answer and it likely never will. Some guidance may come as post-Alice jurisprudence evolves. However, it would be far better if courts moved away from considering the scope of a claim in determining subject matter eligibility.

[1] Digitech Image Technologies, LLC v. Electronics for Imaging, Inc., 758 F.3d 1344 (Fed. Cir. 2014); Planet Bingo, LLC v.VKGS LLC, 576 Fed. App’x 1005 (Fed. Cir. 2014) (non-precedential); buySafe, Inc. v. Google, Inc., 765 F.3d 1350 (Fed. Cir. 2014); Ultramerical v. Hulu, 10-1544 (Fed. Cir. 2014).

[2] Hemopet v. Hill’s Pet Nutrition Inc., 8-12-cv-01908 (C.D. Cal. November 24, 2014); Ameranth, Inc. v. Genesis Gaming Solutions, Inc., 11-00189 (C.D. Cal. November 12, 2014); Enfish, LLC v. Microsoft Corp, 2-12-cv-07360 (C.D. Cal. Nov. 3, 2014); Cal. Inst. Of Tech. v. Hughes Communs., Inc., 2-13-cv-07245 (C.D. Cal. November 3, 2014); Peter H. Wolf v. Capstone Photography, 2-13-cv-09573 (C.D. Cal. October 28, 2014); Amdocs (Israel) Limited v. Openet Telecom, Inc. et al., 1-10-cv-00910 (E.D. Va. October 24, 2014); DietGoal Innovations LLC v. Chipotle Mexican Grill, Inc., 2-12-cv-00764 (E.D. Tx. October 3, 2014); Cogrent Medicine Inc. v. Elsevier Inc., 5-13-cv-04479 (N.D. Cal. September 30, 2014); Card Verification Solutions, LLC v. Citigroup, Inc., 1-13-cv-06339 (N.D. Ill. September 29, 2014); McRo, Inc. v. Namco Bandai Games America, Inc., 2-12-cv-10322 (C.D. Cal. September 22, 2014); Open Text S.A. v. Alfresco Software LTD et al., 3-13-cv-04843 (N.D. Cal. September 19, 2014); Every Penny Counts, Inc. v. Wells Fargo Bank N.A., 8-11-cv-02826 (M.D. Fla. September 11, 2014); AutoForm Engineering GmbH v. Engineering Technology Associates, 2-10-cv-14141 (E.D. Mi. September 5, 2014); Eclipse IP LLC v. McKinley Equipment Corporation, 8-14-cv-00742 (C.D. Cal. September 4, 2014); Loyalty Conversion Systems Corporation v. American Airlines, Inc.,k 2-13-cv-00655 (E.D. Tx. September 3, 2014); Tuxis Technologies LLC v. Amazon.com Inc., 1-13-cv-01771 (D. Del. September 3, 2014); Walker Digital LLC v. Google Inc., 1-11-cv-00318 (D. Del. September 3, 2014); CMG Financial Services Inc. v. Pacific Trust Bank FSB et al., 2-11-cv-10344 (C.D. Cal. August 29, 2014); Data Distribution Technologies LLC v. BRER Affiliates Inc. et al., 1-12-cv-04878 (D. NJ. August 19, 2014); Comcast IP Holdings I LLC v. Sprint Communications Company LP et al., 1-12-cv-00205 (D. Del. July 16, 2014); DietGoal Innovations LLC v. Bravo Media LLC, 1-13-cv-08391 (S.D. NY July 8, 2014).

[3] Ameranth, Inc. v. Genesis Gaming Solutions, Inc., 11-00189 (C.D. Cal. November 12, 2014); Cal. Inst. Of Tech. v. Hughes Communs., Inc., 2-13-cv-07245 (C.D. Cal. November 3, 2014); AutoForm Engineering GmbH v. Engineering Technology Associates, 2-10-cv-14141 (E.D. Mi. September 5, 2014).

[4] Card Verification Solutions, LLC v. Citigroup, Inc., 1-13-cv-06339 (N.D. Ill. September 29, 2014); Distribution Technologies LLC v. BRER Affiliates Inc. et al., 1-12-cv-04878 (D. NJ August 19, 2014).

[5] See e.g. Cal. Inst. Of Tech. v. Hughes Communs., Inc., 2-13-cv-07245, pg. 12-13 (C.D. Cal. Nov. 3, 2014); Enfish, LLC v. Microsoft Corp, 2-12-cv-07360, pg. 4-5 (C.D. Cal. Nov. 3, 2014).

[6] See Ultramerical v. Hulu, 10-1544, pg. 9-10 (Fed. Cir. 2014), Digitech Image Technologies, LLC v. Electronics for Imaging, Inc., 758 F.3d 1344 (Fed. Cir. 2014).

[7] See e.g. Digitech Image Technologies, LLC v. Electronics for Imaging, Inc. at 11 (organizing information through mathematical correlations); Enfish, LLC v. Microsoft Corp, 2-12-cv-07360, pg. 11-12 (Concept of organizing information using tabular formats); Cogrent Medicine Inc. v. Elsevier Inc., 5-13-cv-04479 (N.D. Cal. September 30, 2014) (Maintaining and searching a library of information); Every Penny Counts, Inc. v. Wells Fargo Bank N.A., 8-11-cv-02826 (M.D. FL. September 11, 2014) (Modifying transaction amounts and depositing designated differences into a recipient account).

[8] See e.g. Planet Bingo, LLC v.VKGS LLC, 576 Fed. App’x 1005 (Fed. Cir. 2014) (non-precedential) (Computer-aided management of a bingo game); buySafe, Inc. v. Google, Inc., 765 F.3d 1350 (Fed. Cir. 2014) (creating a contractual relationship); Card Verification Solutions, LLC v. Citigroup, Inc., 1-13-cv-06339 (N.D. Ill. September 29, 2014) (Verifying transaction information); Every Penny Counts, Inc. v. Wells Fargo Bank N.A., at 9 (concept of routinely modifying transaction amounts and depositing designated, incremental differences into a recipient account is “basic concept” and a “fundamental economic practice long prevalent in our system of commerce.”); CMG Financial Services Inc. v. Pacific Trust Bank FSB et al., 2-11-cv-10344 (C.D. Cal. August 29, 2014) (Mortgagee paying down a mortgage early when funds are available and borrowing funds as needed to reduce the overall interest charged by the mortgage); DietGoal Innovations LLC v. Bravo Media LLC, 1-13-cv-08391 (S.D. NY July 8, 2014) (Computerized meal-planning).

[9] See Planet Bingo, LLC v.VKGS LLC, 576 Fed. App’x 1005; Card Verification Solutions, LLC v. Citigroup, Inc., 1-13-cv-06339.

[10] See Digitech Image Technologies, LLC v. Electronics for Imaging, Inc. at 11 (abstract idea of organizing information through mathematical correlations and not tied to a structure or machine); Ultramerical v. Hulu, 10-1544, pg. 9 (The claim’s “ordered combination of steps recites an abstraction-an idea, having no particular concrete or tangible form”); Card Verification Solutions, LLC v. Citigroup, Inc., 1-13-cv-06339, pg. 6-8 (Claims are drawn to concept of verifying transaction information … and silent regarding machinery.”); CMG Financial Services Inc. v. Pacific Trust Bank FSB et al., 2-11-cv-10344, pg. 27 (Abstract idea … not tied to a specific structure.).

[11] See Planet Bingo, LLC v.VKGS LLC, 576 Fed. App’x 1005, pg. 4 (steps of selecting, storing, and retrieving … can be carried out in existing computers long in use.); Enfish, LLC v. Microsoft Corp, 2-12-cv-07360, pg. 12 (When a claim recites a computer generically, the Court should ignore this element in defining the claim’s purpose); Eclipse IP LLC v. McKinley Equipment Corporation, 8-14-cv-00742, pg. 10-11 (C.D. Cal. September 4, 2014) (using “generic communication devices” is insufficient).

[12] Cal. Inst. Of Tech. v. Hughes Communs., Inc., 2-13-cv-07245, pg. 27.

[13] Id. at 28.

[14] Id.

[15] Id. at 37.

[16] AutoForm Engineering GmbH v. Engineering Technology Associates, 2-10-cv-14141, pg. 6-8 (E.D. MI. September 5, 2014).

[17] Id. at 7.

[18] Id. 8.

[19] Ameranth, Inc. v. Genesis Gaming Solutions, Inc., 11-00189, pg. 7-10 (C.D. Cal. November 12, 2014).

[20] Id. at 10.

[21] Id. at 10.

In re Cuozzo Speed Technologies, LLC: Is BRI the correct standard for IPR claim construction?

On November 3, 2014, the Federal Circuit heard oral arguments in the appeal of the first inter partes review decided under the America Invents Act. In the case, In re Cuozzo Speed Technologies, LLC, Fed. Cir. 14-1301, the Federal Circuit has been asked to review the procedures of the new inter partes review proceedings, especially the standard of claim construction and the availability of appeals for IPR institution decisions.

In re Cuozzo Speed Technologies was the first inter partes review instituted by the PTAB after the AIA went into effect in September 2012. Since that time, the IPR procedure has been highly popular with accused infringers. The USPTO reported that, as of September 25, 2014, a total of 1,821 petitions for IPR had been filed. The PTAB has reached a decision on whether to institute review for 938 of those petitions. In 731 of those decisions, the PTAB instituted an IPR. At this time, the first appeals out of the IPR proceedings are beginning to reach the Federal Circuit, with various challenges to the PTAB’s rules and regulations.

One of the primary concerns raised by patent owners is that the standard relied upon during an instituted IPR, the “broadest reasonable interpretation,” in contrast to the “ordinary and customary meaning” construction standard relied upon during court proceedings.

During the oral arguments, the judges appeared largely supportive of the overall IPR procedure, although they also noted concerns about some of the IPR rules. As asked by Judge Pauline Newman, “So after the patent has issued, why should the result be different in the office than in the court, based on how the claims are construed?” Under the BRI standard, a broader swath of prior art is available to patent challengers and/or accused infringers. The primary justification raised for using the BRI standard is that patentees can amend their claims during the IPR proceeding in response to the PTAB’s construction of the claims. Judge Newman also pushed back on this claim, noting that “It’s not so easy.”

As noted by attorneys for Cuozzo Speed Technologies, in the two years of AIA IPR proceedings, no opposed motion to amend has been granted. Previously, former Federal Circuit Chief Judge Randall Rader even referred to the IPR proceedings as “death squads.”

The other main issue raised by In re Cuozzo Speed Technologies, LLC is whether “non-discretionary” jurisdictional requirements of the IPR proceedings may be appealed. According to briefs filed by Cuozzo, the “non-discretionary” requirements encompass: 1) “the petition must be filed by a person who is not the patent owner (35 U.S.C. § 311(a))”; 2) “the grounds of un-patentability must be limited to 35 U.S.C. § 102 or 103 and only based on patents or printed publications (35 U.S.C. § 311(b))”; 3) “the petitioner or real party in interest cannot have filed a civil action challenging the validity of a claim of the patent (35 U.S.C. § 315(a))”; and 4) “the petitioner, real party in interest or privy of the petitioner cannot have been served with a complaint alleging infringement of the patent more than 1 year before the date on which the petition is filed (35 U.S.C. § 315(b)).” See Reply Brief of Appellant, In re Cuozzo Speed Techs., LLC, No. 2014-1301, 2014 WL 3055159, at *2-3 (Fed. Cir. June 23, 2014). The issues raised by Cuozzo are relevant, because under 35 U.S.C. § 314(d) “The determination by the Director whether to institute an inter partes review under this section shall be final and non-appealable.”

The decision of the Federal Circuit in In re Cuozzo Speed Technologies, LLC will impact the IPR decisions that are just beginning to reach the courts, and potentially alter the course of the IPR proceedings if the Federal Circuit agrees that the BRI standard is inappropriate.

Regardless of the decision, the IPR proceedings remain an attractive option for accused patent infringers, given the substantially lower cost of the IPR proceedings versus litigation, as well as the accelerated timeline of IPRs. But for patent owners, the decision could signal an attempt to balance the IPR proceedings from thus far being heavily in favor of the patent challenger.

By: Matt Remissong

And All For The Want Of A Day

In 14.5 years, the drug Lipitor (Pfizer) has generated more than $125 billion in sales. A quick calculation would show that this drug has seen revenues of roughly $24 million a day. It goes without saying that each day counts in the pharmaceutical world. Now imagine missing four years of patent protection over a flagship drug because of one day. This was the situation in a recently filed malpractice suit filed by The Medicines Company (MDCO) against its former patent counsel, Fish & Neave. See The Medicines Co. v. Fish & Neave, et al., No. MRS L-2516-14 (N.J. Super. Ct. Oct. 10, 2014).

Fish & Neave missed a critical deadline for filing a Patent Term Extension (or PTE) application for Angiomax, an anticoagulant used to inhibit a key contributor to the formation of blood clots. According to an Annual Report provided by MDCO, MDCO’s 2013 U.S. sales of the drug exceeded $550 million.

The extension concerned U.S. patent number 5,196,404, the “principal patent covering Angiomax in the United States.” On December 23, 1997, MDCO filed a new drug application for Angiomax with the FDA. Under U.S. law, a new drug cannot be commercially marketed or used until it receives FDA approval. During the FDA review period, the applicant receives no commercial benefit from any patents on the drug. However, to balance the restrictions on commercially benefiting from drugs pending FDA approval, 35 U.S.C. § 156 (the Hatch-Waxman Act) allows the holder of a drug patent to apply for a patent term extension to compensate for the delay in obtaining FDA approval. The timing to file the PTE to the USPTO is “within the sixty-day period beginning on the date the product received permission . . . for commercial marketing or use.” 35 U.S.C. § 156(d)(1).

The FDA’s approval of the new drug application for Angiomax was set forth in a letter faxed to MDCO at 6:17 p.m. on Friday, December 15, 2000. Assuming that Friday December 15, 2000 was day 1, and the 60 day period means calendar days, the critical date for the PTE application for Angiomax was Tuesday, February 13, 2001. If approved, the extension application would have changed the expiration date of the ’404 patent from March 23, 2010 until December 2014. MDCO alleged that the additional patent term translated into approximately $2.0 billion in sales.

The USPTO denied MDCO’s application for patent-term extension, stating that it was untimely because it should have been filed on February 13, 2001, not February 14, 2001. MDCO alleges that Fish & Neave was at fault for the late filing. MDCO further alleges Fish & Neave failed to calculate and docket the correct filing date. Instead, Fish & Neave allegedly assigned responsibility for the filing to an unsupervised part-time law student.

In March 2010, MDCO sought review of the USPTO’s denial of the patent term extension application in the U.S. District Court for the Eastern District of Virginia. Ultimately, the court found for MDCO since the FDA’s approval was sent at 6:17 p.m. on Friday, December 15, 2000. Current FDA practice dictates that submissions received after the close of business are considered filed on the next business day. The court found no reason why the same standard should not apply when the FDA issues approval after the close of business, and thus the clock should start from the next business day. If day 1 started on the day following the day of the faxed transmission, the critical date would fall on February 14, 2001.  MDCO’s application was filed within this time period as determined by Judge Hilton.  See The Medicines Co. v. Kappos, et al., 731 F. Supp. 2d 470 (E.D. Va. 2010).

MDCO ultimately “won” and received the additional four-plus years of patent term extension, but alleges that they suffered “seismic” and “irreparable” damages as a result of millions spent on its legal and legislative battles to obtain the patent term extension. The complaint further alleges reduced stock value and loss of business opportunities.

This case illustrates both the importance of proper IP docketing practices and the duty of law firms to supervise subordinates.  Proper docketing in IP practice is crucial. As the case and numbers show, an error of even one day can make a billion dollar difference.

Novelty is not relevant in determining subject matter eligibility, but claim scope is.

In the aftermath of the Supreme Court’s decision in Alice Corp. v. CLS Bank Int’l, there was a fear that the Supreme Court had brought the issue of novelty into the determination of patent eligibility under 35 U.S.C. § 101. This fear is not entirely unjustified as the second step of the Alice § 101 analysis calls for determining if the claims contain an “inventive concept” sufficient to make the claimed abstract idea patent eligible. Whether or not the fear was real depends on how courts interpret the Alice case. The district court in Peter Wolf v. Capstone Photography, Inc.cacd-2-13-cv-09573-49 (C.D. Cal. Oct. 28, 2014) confirms that novelty is not relevant to subject matter eligibility, yet illustrates why the fear is real.

The defendant in Peter Wolf v. Capstone Photography moved for judgment on the pleadings based on invalidity under § 101. The plaintiff patent owner opposed the defendant’s motion arguing that the claimed process is not abstract because it is distinct from prior art methods. The district court rejected the plaintiff’s argument noting that the novelty of any element or step in a process is of no relevance in determining whether the subject matter of a claim is patent eligible under § 101 citing Diamond v. Diehr, 450 U.S. 175 (1981).

The district court found however that the scope of the claims is relevant to the § 101 analysis under the second step of the Alice test. The district court found the patents did not claim an “inventive concept” because the claims were insufficiently “narrow” to claim something “significantly more” than the claimed abstract idea itself.

Essentially, the court in the Peter Wolf case found that novelty is not relevant in the first step of the Alice test, but it is relevant in the second step of the Alice test. By analyzing the scope of the claims in applying the second step of the Alice test, the court did make novelty relevant to subject matter eligibility; maybe not for analysis in litigation, but for a practitioner drafting claims.

Patent practitioners adjust the scope of the claims they draft to be as broad as possible, yet sufficiently narrow to meet the novelty requirement. The court in the Peter Wolf v. Capstone Photography case requires practitioners to adjust the scope of their claims to be sufficiently narrow to meet the subject matter eligibility requirement. The problem for patent practitioners is that any change to the scope of a claim affects how the claim is compared to the prior art. Adjusting the claim scope to meet these two different requirements creates a risk of giving otherwise patentable subject matter up to the public domain.

It will be interesting to see how other courts, the Federal Circuit in particular, address the relevance of claim scope in analyzing whether a claim recites an inventive concept sufficient to confer patent eligibility. Hopefully, the Peter Wolf case does not signal a trend.

Guidance for determining subject matter eligibility of claims involving laws of nature expected soon.

On March 4, 2014, the USPTO published a guidance memorandum titled Guidance For Determining Subject Matter Eligibility Of Claims Reciting Or Involving Laws of Nature, Natural Phenomena, & Natural Products (Guidance).   The new guidelines express the Office’s approach to examining claims under 35 U.S.C. §101 in the wake of court decisions in Association for Molecular Pathology v. Myriad Genetics, Inc., 569 U.S. ___ and Mayo Collaborative Services v. Prometheus Laboratories, Inc., 566 U.S.___.

The felt and expected impact to the pharmaceutical industry was well expressed by Ms. Sherry Knowles and summarized in the article of the link below:

http://www.patentdocs.org/2014/10/sherry-knowles-addresses-real-world-impact-of-myriad-mayo-guidance-at-bio-symposium.html

On September 17, 2014 at the biotechnology/chemical/pharmaceutical (BCP) customer partnership meeting, Ms. June Cohan, legal Advisor with the USPTO’s Office of Patent Legal Administration, publicly stated that a revised guidance would be released.  For more details follow the link below.

http://www.patentdocs.org/2014/09/uspto-expected-to-issue-revised-myriad-mayo-guidance-in-october.html