CAREDX, INC. V. NATERA, INC., FEDERAL CIRCUIT 2022 (SOFTWARE PATENTS)

The Federal Circuit stated in this decision that CareDx’s patents apply conventional measurement techniques to detect a natural phenomenon—the level of donor cfDNA and the likelihood of organ transplant rejection.

CareDx and Stanford appealed a decision holding that Stanford’s Patents 8,703,652, 9,845,497, and 10,329,607 are ineligible for patent under 35 U.S.C. § 101.  The three patents share the same specification and are entitled “Non-Invasive Diagnosis of Graft Rejection in Organ Transplant Patients.” These patents discuss diagnosing or predicting organ transplant status by using methods to detect a donor’s cell-free DNA (“cfDNA”). When an organ
transplant is rejected, the recipient’s body, through its natural immune response, destroys the donor cells, thus releasing cfDNA from the donated organ’s dying cells into the blood. These increased levels of donor cfDNA—which occur naturally as the organ’s condition deteriorates—can be detected and then used to diagnose the likelihood of an organ
transplant rejection.

Claim 1 of the ’652 patent reads as follows:
1. A method for detecting transplant rejection, graft dysfunction, or organ failure, the method comprising:

  • (a) providing a sample comprising [cfDNA] from a subject who has received a transplant from a donor;
  • (b) obtaining a genotype of donor-specific polymorphisms or a genotype of subjectspecific polymorphisms, or obtaining both a genotype of donor-specific polymorphisms and subject-specific polymorphisms, to establish a polymorphism profile for detecting donor [cfDNA], wherein at least one single nucleotide polymorphism (SNP) is homozygous for the subject if the genotype comprises subject-specific polymorphisms comprising SNPs;
  • (c) multiplex sequencing of the [cfDNA] in the sample followed by analysis of the sequencing results using the polymorphism profile to detect donor [cfDNA] and subject [cfDNA]; and
  • (d) diagnosing, predicting, or monitoring a transplant status or outcome of the subject who has received the transplant by determining a quantity of the donor [cfDNA] based on the detection of the donor [cfDNA] and subject [cfDNA] by the multiplexed sequencing, wherein an increase in the quantity of the donor [cfDNA] over time is indicative of transplant rejection, graft dysfunction or organ failure, and wherein sensitivity of the method is greater than 56% compared to sensitivity of current surveillance methods for cardiac allograft vasculopathy (CAV).

The other patents are similar.  In summary, the methods disclosed in the representative claims have four steps for detecting a donor’s cfDNA in a transplant recipient:

  • 1. “obtaining” or “providing” a “sample” from the recipient that contains cfDNA;
  • 2. “genotyping” the transplant donor and/or recipient
    to develop “polymorphism” or “SNP” “profiles”;
  • 3. “sequencing” the cfDNA from the sample using
    “multiplex” or “high-throughput” sequencing; or performing “digital PCR”; and
  • 4. “determining” or “quantifying” the amount of donor cfDNA.

CareDx argued that, regarding Alice/Mayo step one, the patents’ claimed advance is not the discovery of a natural correlation between organ rejection and the donor’s cfDNA levels in the recipient’s blood. Rather, the claimed
advance is improved measurement methods spelled out in the claims as superior to the inadequate prior art measurement techniques. CareDx also argued that the district court did not properly perform the step one analysis because it concluded that step one is essentially the same as step two and centers on conventionality. It asserted that there is no basis
in the law for a one-step application of Alice/Mayo.

Regarding Alice/Mayo step two, CareDx argued that using digital PCR and next-generation sequencing (“NGS”) to identify and measure donor-specific SNPs was an inventive breakthrough and that the patents claim this specific and useful application.

The Federal Circuit concluded that CareDx’s patents apply conventional measurement techniques to detect a natural phenomenon—the level of donor cfDNA and the likelihood of organ transplant rejection. They stated that the claimed methods are indistinguishable from other diagnostic method claims the Supreme Court found ineligible in Mayo and that we found ineligible on multiple occasions.

Cosmokey Solutions GMBH & Co. v. Duo Security LLC, Federal Circuit 2021 (Software Patents)

Reducing complexity, in an authentication method, provides a technical improvement over conventional authentication methods. Applicant’s specification emphasizes the inventive nature of these steps and describes how authentication complexity is reduced.

CosmoKey’s U.S. Patent No. 9,246,903 was found to be ineligible under 35 U.S.C. 101 by a District Court.

The patent is titled “Authentication Method” and discloses an authentication method that is both low in complexity and high in security.

The patent specification indicates that when a user communicates with a remote transaction partner (e.g., a bank, a store, or a secured database) via the Internet, “it is important to assure that an individual that identifies itself as an authorized user is actually the person it alleges to be.”  The specification also describes several conventional authentication methods involving a user’s mobile phone.

The specification purports to improve on conventional mobile phone authentication methods in that the “authentication function is normally inactive and is activated by the user only preliminarily for the transaction, said response from the second communication channel includes the information that the authentication is active, and the authentication function is automatically deactivated.”  “In this method, the complexity of the authentication function can be reduced significantly” because all that is required “from the authentication function is to permit the authentication device to detect whether or not this function is active” and “the only activity that is required from the user for authentication purposes is to activate the authentication function [within] a suitable timing.” The authentication function is activated within a certain (preferably short) time window after the transmission of the user identification. Since the authentication function is normally inactive, the authentication will almost certainly fail when a third party fraudulently identifies itself as the user in order to initiate a transaction. Then, the authentication would be successful only in the very unlikely event that the true user happens to activate the authentication function of his mobile device just in the right moment. Even in this unlikely case the fraud could be detected. Thus, notwithstanding the low complexity, the method according to the invention offers a high level of security.

Claim 1 is the sole independent claim of the patent and recites:

1. A method of authenticating a user to a transaction at a terminal, comprising the steps of:

  • transmitting a user identification from the terminal to a transaction partner via a first communication channel,
  • providing an authentication step in which an authentication device uses a second communication channel for checking an authentication function that is implemented in a mobile device of the user,
  • as a criterion for deciding whether the authentication to the transaction shall be granted or denied, having the authentication device check whether a predetermined time relation exists between the transmission of the user identification and a response from the second communication channel,
  • ensuring that the authentication function is normally inactive and is activated by the user only preliminarily for the transaction,
  • ensuring that said response from the second communication channel includes information that the authentication function is active, and
  • thereafter ensuring that the authentication function is automatically deactivated.

Under Alice step one, the Federal Circuit considered “what the patent asserts to be the `focus of the claimed advance over the prior art.'”  The district court held that the claims “are directed to the abstract idea of authentication —that is, the verification of identity to permit access to transactions.” The Federal Circuit was not convinced that this broad characterization of the focus of the claimed advance is correct. Rather, the claims and written description suggest that the focus of the claimed advance is activation of the authentication function, communication of the activation within a predetermined time, and automatic deactivation of the authentication function, such that the invention provides enhanced security and low complexity with minimal user input. The critical question then is whether this correct characterization of what the claims are directed to is either an abstract idea or a specific improvement in computer verification and authentication techniques.

The Federal Circuit stated that they need not answer this question, however, because even if they accepted the district court’s narrow characterization of the patent claims, the claims satisfy Alice step two.

The patent claims and specification recite a specific improvement to authentication that increases security, prevents unauthorized access by a third party, is easily implemented, and can advantageously be carried out with mobile devices of low complexity. Contrary to the district court’s conclusion, the patent discloses a technical solution to a security problem in networks and computers. While authentication of a user’s identity using two communication channels and a mobile phone was known at the time of the invention, nothing in the specification or anywhere else in the record supports the district court’s suggestion that the last four claim steps—including (1) “as a criterion for deciding whether the authentication to the transaction shall be granted or denied, having the authentication device check whether a predetermined time relation exists between the transmission of the user identification and a response from the second communication channel”; (2) “ensuring that the authentication function is normally inactive and is activated by the user only preliminarily for the transaction”; followed by (3) “ensuring that said response from the second communication channel includes information that the authentication function is active”; and (4) “thereafter ensuring that the authentication function is automatically deactivated,” are conventional.

Mentone Solutions LLC v Digi International, Federal Circuit 2021 (Software Patents)

Characterization of an invention must reflect the claimed invention at an appropriate level of abstraction, for an Alice analysis.

U.S. Patent No. 6, 952,413 relates to resource allocation in general packet radio systems.  In those systems, a number of mobile stations communicate with a single network through physical links called Packet Data Channels. When the mobile stations receive information from the network, they are engaging in downlink (DL) communication, and when
the mobile stations are transmitting information to the network, they are engaging in uplink (UL) communication. These mobile stations communicate within time frames, each divided into eight timeslots. To control access to the Packet Data Channels, which are shared among mobile stations, the network uses an uplink status flag (USF). That flag can take eight values, 0 through 7, allowing allocation of resources for up to eight mobile stations.  According to the patent, to most effectively utilize the available bandwidth, access to packet data channels may be dynamically allocated.  The amounts of time that the mobile station receives downlink or transmits uplink may be varied and
slots allocated accordingly.  In systems using an extended dynamic allocation method, there is a fixed relationship between the downlink slot in which a valid USF is received and the uplink slot in which transmission begins; a mobile station’s receipt of a valid USF in a certain downlink timeslot indicates the availability for that station to begin transmission in the corresponding uplink slot.  The patent allows a mobile station access to previously restricted multislot configurations through “altering the fixed relationship in the timing of the downlink allocation signalling and subsequent uplink transmission for certain classes of mobile station.” For example, it purports to allow configurations that would otherwise be impossible due to insufficient
turnaround time.

Claim 5 is representative and recites:
5. A multiple access communication method in a mobile station, comprising the steps of:

  • receiving an assignment of at least a first PDCH (packet data channel) and a second
    PDCH;
  • monitoring an assigned PDCH to detect a USF; and
  • transmitting on an assigned PDCH corresponding to the USF, wherein (i) if shifted USF operation is not
    used then a first assigned PDCH is monitored to detect a USF corresponding to the first assigned PDCH and (ii) if the shifted USF operation is used then a second assigned PDCH is monitored to detect the USF corresponding to the first assigned PDCH and a USF corresponding to the second assigned PDCH.

The district court held that claim 5 is patent ineligible, directed to the abstract idea of receiving a USF and transmitting data during the appropriate timeslots. It further held that the shifted uplink status flag combined with the abstract idea, functional limitations, and anything else is not significantly more than a claim to the abstract idea.

Considering the problems and solutions discussed in the specification of the patent, the Federal Circuit took the position that claim 5 is directed to a patent-eligible improvement to computer functionality, namely permitting additional multislot configurations for certain classes of mobile stations using extended bandwidth allocation. It adds this capability through using a shifted USF that breaks the fixed relationship in the timing of downlink allocation signaling (i.e., receipt of a USF on a timeslot) and subsequent uplink transmission. The specification shows how
using the shifted USF, as in Figure 4, allows a mobile station to utilize the otherwise impermissible configuration of
Figure 3 because the mobile station has sufficient turnaround time to switch from a receive condition to a
transmit condition.  And this newly allowed multislot configuration provides an additional uplink slot.  Like the claims the Federal Circuit held patent eligible in DDR Holdings, LLC v. Hotels.com,  claim 5 improves
the normal operation of the communication system itself to “overcome a problem specifically arising in the realm of
computer networks.”

The Federal Circuit stated that the specification also provides important details on the technological problem and how the claimed invention solves that problem. The specification is of particular importance here, as “shifted USF” appears to be a coined term by the inventor.  Here, there is no functional claiming, nor are there abstract
steps.

The district court held that claim 5 was directed to the abstract idea of “receiving a USF and transmitting data
during the appropriate timeslots.”  The Federal Circuit did not agree. The district court’s formulation of the abstract idea appears to be a high-level description of how USFs operate in mobile stations using extended bandwidth allocation generally. However, the claimed invention departs from this conventional use through a
shifted USF, which breaks the fixed relationship between USFs in a downlink slot and the availability for transmission in the corresponding uplink slot. The district court’s abstract idea fails to mention a shifted USF, nor does it capture the receipt of two PDCH assignments that permit monitoring and detecting the PDCHs for a shifted USF and
transmission based thereon. Accordingly, it is untethered to the invention as claimed.

The Federal Circuit found the claims to be patent eligible under Alice step one.

A problem with all Alice analyses is how high of a level of abstraction to apply.  Everything can be found to be abstract at a high level, if detail found in the claim is ignored.  Discussing a problem and solution in detail in the specification seems to have helped the patentee in this case.

In Re Elbaum, Federal Circuit 2021 (Software Patents)

Enabling an internet seller to pay a finder’s fee to a retail store when a customer finds the internet seller’s product through advertising in the retail store is not patent-eligible.

Mr. Elbaum’s patent application number 15/948,447 relates to selling products or services on the internet using physical retail locations. The specification describes the disclosed method as “enabling the sale of products or services which are available on the internet. The disclosed method allows an internet seller to provide a retail store with information about products or services available on the internet. The information includes a website address and a code, wherein the code is associated with that particular retail location. A customer entering the retail store who obtains this information can then use the code to make a purchase from an internet seller via a computer. The computer is comprised of a central processing unit, a main internal memory, and output/input modules. Because the code is associated with the particular retail location, the internet seller can then pay the retail location a finder’s fee.

It sounds like a pretty reasonable concept. Many buyers prefer to see certain products in person, such as clothing or furniture, to better assess size or color than can be done online. If the customer then buys online, the retailer has an unfair disadvantage because they have the overhead of a retail location and display models. If all retailers go out of business, online businesses might have increased returns from customers who received something that is very different from what they expected.

Claim 48 is representative and recites:
48. A method of selling non-stocked items in addition to stocked items in a traditional walk-in store comprising:

  • a) providing the store with photos of items which are available for sale on the internet but not stocked in the store;
  • b) providing the store with website addresses of the sellers of the non-stocked items;
  • c) providing visitors to the store with discount codes associated with the non-stocked items, said discount codes applicable to purchases made directly from the sellers;
  • d) enabling the sellers of said non-stocked items to recognize when a purchase is made with one of said discount codes;
  • e) enabling the sellers of the non-stocked items to identify the walk-in store in which the non-stocked items were displayed; and
  • f) paying a finder’s fee from each seller of a non- stocked item to the store.Mr. Elbaum only argued that the Appeals Board erred in concluding the claim is directed to an abstract idea. He conceded that the claim is not directed to any improvement in computer functionality.

    The Appeals Board had concluded that the claim is directed to an abstract idea, a commercial transaction that amounts to a method of organizing human activity. At step two of the Alice inquiry, the Board determined that the claim elements recite purely conventional computer functions of storing, receiving, analyzing, and processing data. Because the claim recites no more than the abstract idea, the Board concluded the claim lacked an inventive concept.

    The Federal Circuit agreed with the Board’s analysis. The plain language of claim 48 recites a method for enabling an internet seller to pay a finder’s fee to a retail store when a customer finds the internet seller’s product through advertising in the retail store. Accordingly, the claim is directed to an abstract idea, specifically a method of providing information and allowing customers to utilize that information to engage in a commercial transaction. The Federal Circuit believed that this was similar to the situation in Content Extraction & Transmission LLC v. Wells Fargo Bank, Nat’l Ass’n, 776 F.3d 1343 , 1347 (Fed. Cir. 2014) (“[C]laims directed to the mere formation and manipulation of economic relations may involve an abstract idea.”). Regarding Alice step two,the Federal Circuit stated that nothing in the claim recites an inventive concept to transform the abstract idea into patent-eligible application. If anything, the claim recites generic computer functions, which the specification describes are carried out by conventional computer components. Mr. Elbaum argued that the claim elements of providing photos, website addresses, and discount codes motivate customers to return to traditional retail stores and that these additional elements provide an inventive concept. According to the Federal Circuit, these claim elements merely recite the abstract idea itself as was the case in Trading Techs. Int’l, Inc. v. IBG LLC, 921 F.3d 1378 , 1385 (Fed. Cir. 2019) (“The abstract idea itself cannot supply the inventive concept, no matter how groundbreaking the advance.”). Accordingly, the Federal Circuit agreed with the Board that the claim does not include an inventive concept that would render it patent eligible. The problem with this decision, and with Trading Techs, is that the reasoning is somewhat circular. If you use broad strokes to paint an invention as an abstract concept, ignoring detail, then any detail that could have provided something more is still ignored as being part of the abstract concept.

YU V. APPLE INC., FEDERAL CIRCUIT 2021 (SOFTWARE PATENTS)

Two image sensors, two lenses, analog-to-digital converting circuitry, an image memory, and a digital image processor were not enough hardware. The claims were still found to be too abstract here.

There has been a lot of uncertainty in the field of Software Patents since the Supreme Court’s decision in Alice v. CLS.  The Supreme Court struck down a software patent covering a financial method involving hedging.  Roughly speaking, the Supreme Court invalidated a software patent in which conventional steps were computerized as being “not statutory;” i.e., not meeting the requirements of patent statute 35 U.S.C. 101.  The Federal Circuit and other courts have struggled to interpret this decision and apply it to software patents and business method patents.

In this decision, that uncertainty has been extended dramatically to an invention that involves A Lot of hardware, not just software.

Yu and Zhang sued Apple and Samsung alleging infringement of their U.S. Patent No. 6,611,289 for Digital Cameras Using Multiple Sensors with Multiple Lenses.  The patent relates to a digital camera having multiple analog image sensors with lenses mounted on the image sensors.  Analog-to-digital circuitry digitizes images from each camera and the images are stored in memory. An image processor creates a resultant digital image using images from the two lenses.

Claim 1 is representative and recites:

1. An improved digital camera comprising:

  • a first and a second image sensor closely positioned with respect to a common plane, said second image
    sensor     sensitive to a full region of visible color spectrum;
  • two lenses, each being mounted in front of one of said two image sensors;
  • said first image sensor producing a first image and said second image sensor producing a second image;
  • an analog-to-digital converting circuitry coupled to said first and said second image sensor and digitizing said first and said second intensity images to produce correspondingly a first digital image and a second digital image;
  • an image memory, coupled to said analog-to-digital converting circuitry, for storing said first digital
    image     and said second digital image; and
  • a digital image processor, coupled to said image memory and receiving said first digital image and
    said second     digital image, producing a resultant digital image from said first digital image enhanced with said second digital image.

That sounds like a lot of hardware, doesn’t it?  Lenses, sensors, converters, an image processor.  How can it be considered to be too abstract?

Defendants filed a Rule 12(b)(6) motion to dismiss, which the district court granted after concluding that each asserted claim was patent ineligible under 35 U.S.C. § 101. The district court held that the asserted claims were directed to “the abstract idea of taking two pictures and using those pictures to enhance each other in some way.”

In analyzing whether claims are patent eligible under 35 U.S.C. § 101, the Federal Circuit employed the two-step Mayo/Alice framework.  First, they determine whether a patent claim is directed to an unpatentable law of nature, natural phenomenon, or abstract idea. If so, they then determine whether the claim nonetheless includes an “inventive concept” sufficient to “‘transform the nature of the claim’ into a patent–eligible application.”

In step 1, the Federal Circuit agreed with the district court that claim 1 is directed to the abstract idea of taking two pictures (which may be at different exposures) and using one picture to enhance the other in some way.

The problem, according to the Federal Circuit, is that only conventional camera components are recited in the claim–two image sensors, two lenses, an analog-to-digital converting circuitry, an image memory, and a digital image processor.  It was undisputed that these components were well known and conventional.  According to the Federal Circuit, what was claimed is simply a generic environment in which to carry out the abstract idea.

Turning to step two, the Federal Circuit concluded that claim 1 does not include an inventive concept sufficient to transform the
claimed abstract idea into a patent-eligible invention. Because claim 1 is recited at a high level of generality and merely invokes well-understood, routine, conventional components to apply the abstract idea, claim 1 fails at step two.

Yu argued that the digital camera architecture was unconventional because the asserted claims were allowed  over multiple prior art references.  Unfortunately, according to the Federal Circuit, even if claim 1 recites novel subject matter, that fact is insufficient by itself to confer eligibility.

Judge Newman dissented and stated that observation of the claims makes clear that that they are for a specific digital camera.  According to Judge Newman, claim 1 is for a digital camera having a designated structure and mechanism that perform specified functions; claim 1 is not for the general idea of enhancing camera images.  The camera of the ’289 patent may or may not ultimately satisfy all the substantive requirements of patentability, for this is an active field of technology. However, that does not convert a mechanical/electronic device into an abstract idea.

Judge Newman noted how much instability is being caused by these Alice cases, and how this case further expands this instability: “In the current state of Section 101 jurisprudence, inconsistency and unpredictability of adjudication have destabilized technologic development in important fields of commerce. Although today’s Section 101 uncertainties have arisen primarily in the biological and computer-implemented technologies, all fields are affected. The case before us enlarges this instability in all fields, for the court holds that the question of whether the components of a new device are well-known and conventional affects Section 101 eligibility, without reaching the patentability criteria of novelty and nonobviousness.

IN RE SARADA MOHAPATRA, FEDERAL CIRCUIT 2021 (SOFTWARE PATENTS)

Enabling a credit card user to change the security code on the card by using a web application, to counter credit card fraud, is too abstract to be patent-eligible.

Mr. Mohapatra’s patent application is directed to a method for countering credit card fraud by enabling a cardholder to change the card’s security code at any time by using a card account management facility accessible over the Internet. The claimed method provides that the new security code will be different from the code printed on the card and different from the last recorded code.

Claim 18 of the application, which is representative, recites the following:

18. A method for countering credit card fraud arising from compromised credit card information
by utilizing cardholder changeable card security code (CSC; also known as card verification value
CVV2 or card verification data CVD or card identification code CID or card verification code CVC2)
comprising:

  • a) A card issuer enabling change of card security code printed on the card, by
  • allowing cardholder to choose a new security code value as often as cardholder wishes,
  • facilitating recordation of chosen card security code by the cardholder by providing an internet
    connected card account management facility,
  • using most recently recorded card security code to verify subsequent transaction authorization requests without requiring any change in existing credit cards, terminals, equipment, computer software and communication protocols used in transaction authorization, and
  • denying transactions when card security code provided during authorization does not match card security code on record;
  • b) Cardholder changing card security code any time s/he deems it necessary to mitigate risk from possible card security code compromise, by
  • selecting a new security code value to be used as personal secret separate from the card without requiring assistance from any software program running on any device,
  • ensuring that selected new security code value is different from the printed code on first change and is different from last recorded code on subsequent changes,
  • recording the new card security code value using issuer provided internet connected card account management facility, and
  • remembering and providing the new card security code when prompted during subsequent credit card authorizations.

The Federal Circuit held that Mohapatra’s claims are directed to an abstract idea and that the claims do not contain any additional elements sufficient to render them patent eligible.

Mr. Mohapatra contended that his claims are not directed to abstract ideas, because the claims are narrowly
directed to a specific purpose and because they are capable of providing well-defined benefits.

The Federal Circuit stated that neither of those contentions is sufficient to confer patent eligibility on an otherwise abstract idea.

A claim does not cease to be abstract for section 101 purposes simply because the claim confines the abstract idea to a particular technological environment in order to effectuate a real-world benefit.  The abstract idea underlying Mr. Mohapatra’s claims is for an individual to alter the identification code associated with a financial instrument, such as a credit card, to protect against fraud. The fact that the claims are directed to a specific subset of that abstract idea—in this case, enabling a credit card user to change the security code on the card by using a web application—does not render the idea any less abstract.

Moreover, the fact that an abstract idea may have beneficial uses does not mean that claims embodying the abstract idea are rendered patent eligible.

Mr. Mohapatra’s final argument with regard to the section 101 issue is that his claims embody an inventive concept that renders them patentable under step two of the Alice test. He identified the inventive concepts of his invention as making security code numbers changeable, providing for “card account management on web/mobile devices” to update the changes, and using those features to prevent fraud. As the Board concluded, however, those asserted inventive concepts are in fact just the benefits or goals that Mr. Mohapatra contends will flow from the
claimed abstract idea. The claims do not disclose an inventive way by which those goals are to be achieved; instead, they merely announce the goals themselves. That does not constitute an “inventive concept” for purposes of step two of Alice.

Claim 18 recites enabling a cardholder to change the card’s security code and to choose a new security code, but
it does not recite any specific method for doing so. The claim recites using the new security code to validate transactions without altering the card or any of the supporting equipment, but it does not specify how that is to be done. And it recites recording and using the new security code by the “internet connected card account management facility,” but it does not provide any specificity as to what that facility is or how that function will be performed.

The functions of recording, storing, and verifying both the card security code and changes to that code thus
amount to no more than the implementation of an abstract idea on a computer operating in a conventional manner. That is not enough to convert an abstract idea into patent-eligible subject matter.

In summary, it is important to provide details into specific methods.

 

SIMIO, LLC V FLEXSIM SOFTWARE PRODUCTS, INC, FEDERAL CIRCUIT 2020 (SOFTWARE PATENTS)

According to the Federal Circuit, simply applying the already-widespread practice of using graphics instead of programming to the environment of object-oriented simulations is no more than an abstract idea.

Simio, LLC sued FlexSim in District Court for infringing U.S. Patent No. 8,156,468. The district court found the patent to be ineligible for patenting under 35 U.S.C. § 101. Simio appealed.

The patent also describes a trend that emerged in the 1980s and 1990s: using graphics to simplify building simulations. The patent’s purported invention concerns making object-oriented simulation easier and more accessible by letting users build simulations with graphics instead of programming.

Claim 1 is the only independent claim and recites:

A computer-based system for developing simulation models on a physical computing device, the system comprising:

  • one or more graphical processes;
  • one or more base objects created from the one or more graphical processes,
  • wherein a new object is created from a base object of the one or more base objects by a user by assigning the one or more graphical processes to the base object of the one or more base objects;
  • wherein the new object is implemented in a 3-tier structure comprising:
    • an object definition, wherein the object definition includes a behavior,
    • one or more object instances related to the object definition, and
    • one or more object realizations related to the one or more object instances;
  • wherein the behavior of the object definition is shared by the one or more object instances and the one or more object realizations; and
  • an executable process to add a new behavior directly to an object instance of the one or more object instances without changing the object definition and the added new behavior is executed only for that one instance of the object.

The district court applied the two-step framework set forth in Alice Corp. Pty. Ltd. v. CLS Bank International, and held the asserted claims ineligible.

At step one of Alice’s two-step framework, the courts are to determine whether the claim at issue is directed to an abstract idea. If so, we move to step two, where we “examine the elements of the claim to determine whether it contains an ‘inventive concept’ sufficient to ‘transform’ the claimed abstract idea into a patent-eligible application.

The patent showcases its key advance: using graphics instead of programming to create object-oriented simulations.  Objects are built using the concepts of object-orientation. Unlike other object-oriented simulation systems, however, the process of building an object in the present invention is simple and completely graphical. There is no need to write programming code to create new objects.

Using graphical processes to simplify simulation building has been done since the 1980s and 1990s.

According to the Federal Circuit, simply applying the already-widespread practice of using graphics instead of programming to the environment of object-oriented simulations is no more than an abstract idea.

Simio argued that the claim “improves on the functionality of prior simulation systems through the use of graphical or process modeling flowcharts with no programming code required.” But, according to the Federal Circuit this argument did not explain how the computer’s functionality is improved beyond the inherent improvement of the experience of a user who cannot use programming.

Simio also argued that claim 1 improves a computer’s functionality “by employing a new way of customized simulation modeling with improved processing speed.” FlexSim responded, however, that this allegedly improved “processing speed” is not that of the computer; rather, it concerns only a user’s ability to build simulation models faster by using graphics instead of programming.  The Federal Circuit agreed with FlexSim and rejected Simio’s argument because claiming the improved speed or efficiency inherent with applying the abstract idea on a computer is insufficient to render the claims patent eligible as an improvement to computer functionality.

The Federal Circuit also stated that that the nature of the claim here, read in light of the specification, confirmed that it was not directed to an actual technological improvement.

It is important, for patentability of software, to improve the hardware or at least the operation of the computer, as opposed to making things more efficient for the user.

TECSEC V ADOBE, SAP, CISCO, SYBASE, SOFTWARE AG, ORACLE, FEDERAL CIRCUIT 2020 (SOFTWARE PATENTS)

Multilevel security claims were patent eligible because they were directed to solving a technical problem specific to computer network security. The district court correctly rejected Adobe’s ineligibility challenge.

TecSec owns U.S. Patent Nos. 5,369,702, 5,680,452, 5,717,755, and 5,898,781, the patents involved in this case. The patents are entitled “Distributed Cryptographic Object Method” (“DCOM”) and claim particular systems and methods for multi-level security of various kinds of files being transmitted in a data network. The DCOM patents describe a method in which a digital object—e.g., a document, video, or spreadsheet—is assigned a level of security that corresponds to a certain combination of access controls and encryption. The encrypted object can then be embedded or “nested” within a “container object,” which, if itself encrypted and access-controlled, provides a second layer of security.

U.S. Patent No. 5,369,702

Claim 1 of U.S. Patent No. 5,369,702 is representative of the asserted claims and recites:

A method for providing multi-level multimedia security in a data network, comprising the steps of:

  • A) accessing an object-oriented key manager;
  • B) selecting an object to encrypt;
  • C) selecting a label for the object;
  • D) selecting an encryption algorithm;
  • E) encrypting the object according to the encryption algorithm;
  • F) labelling the encrypted object;
  • G) reading the object label;
  • H) determining access authorization based on the object label; and
  • I) decrypting the object if access authorization is granted.

Alice v CLS Two Step Test

35 U.S.C. § 101 contains an important implicit exception: Laws of nature, natural phenomena, and abstract ideas are not patentable. Alice Corp. Pty. Ltd. v. CLS Bank Int’l. In Alice, the Supreme Court explained that a “claim falls outside § 101 where (1) it is ‘directed to’ a patent-ineligible concept, i.e., a law of nature, natural phenomenon, or abstract idea, and (2), if so, the particular elements of the claim, considered ‘both individually and “as an ordered combination,”’ do not add enough to ‘“transform the nature of the claim” into a patent-eligible application.’”

The Federal Circuit We has approached the Step 1 “directed to” inquiry by asking “what the patent asserts to be the ‘focus of the claimed advance over the prior art.  And the Federal Circuit has reiterated the Supreme Court’s caution against “overgeneralizing claims” in the § 101 analysis, explaining that characterizing the claims at “a high level of abstraction” that is “untethered from the language of the claims all but ensures that the exceptions to § 101 swallow the rule.” Enfish

The Federal Circuit stated that, in cases involving software innovations, this inquiry often turns on whether the claims focus on specific asserted improvements in computer capabilities or instead on a process or system that qualifies an abstract idea for which computers are invoked merely as a tool.  Software can make patent-eligible improvements to computer technology, and related claims are eligible as long as they are directed to non-abstract improvements to the functionality of a computer or network platform itself.

The Federal Circuit stated that they have found claims directed to such eligible matter in a number of cases where they made two inquiries of significance here: whether the focus of the claimed advance is on a solution to “a problem specifically arising in the realm of computer networks” or computers, as in DDR v Hotels.com, and whether the claim is properly characterized as identifying a “specific” improvement in computer capabilities or network functionality, rather than only claiming a desirable result or function, Uniloc v LG Electronics.

Alice Step 1

The Step 1 “directed to” analysis called for by the cases depends on an accurate characterization of what the claims require and of what the patent asserts to be the claimed advance.  Unfortunately, a case can turn out either way depending on whether the Federal Circuit decides to characterize a claim as being directed to an abstract concept.

Adobe argued to the district court that “the claims are directed to the impermissibly abstract idea of managing access to objects using multiple levels of encryption.” But that characterization of the representative claims is materially inaccurate. To arrive at it, Adobe had to disregard elements of the claims at issue that the specification makes clear are important parts of the claimed advance in the combination of elements.  According to the Federal Circuit, It goes beyond managing access to objects using multiple levels of encryption, as required by “multi-level . . . security.” Notably, it expressly requires, as well, accessing an “object-oriented key manager” and specified uses of a “label” as well as encryption for the access management.  To disregard those express claim elements is to proceed at “a high level of abstraction” that is “untethered from the claim language” and that overgeneralizes the claim.

According to the Federal Circuit, the specification elaborates in a way that simultaneously shows that the claims at issue are directed at solving a problem specific to computer data networks. The patent focuses on allowing for the simultaneous transmission of secure information to a large group of recipients connected to a decentralized network—an important feature of data networks—but without uniform access to all data by all recipients. The proposed improvement involves, among other things, labeling together with encryption. Using a secure labelling regimen, a network manager or user can be assured that only those messages meant for a certain person, group of persons, and/or location(s) are in fact received, decrypted, and read by the intended receiver.

Thus, the specification, as well as the claims, were used in determining whether the claims are directed to an impermissibly abstract idea.

This kind of analysis arguably should have been performed in Alice Step 2, where the courts are supposed to determine if there is something substantially more than the abstract idea.

MULTI LEVEL SECURITY ISN’T ALWAYS ABSTRACT

The Federal Circuit went on to state that while non-computer settings may have security issues addressed by multilevel security, it does not follow that all patents relating to multilevel security are necessarily ineligible for patenting. Here, although the patent involves multilevel security, that does not negate the conclusion that the patent is aimed at solving a particular problem of multicasting computer networks.

By way of comparison, in Uniloc v LG Electronics, the Federal Circuit held the claims at issue to be directed to solving a problem of reducing communication time by using otherwise-unused space in a particular protocol-based system, even though reducing communication time by using such available blank space (or, generally, reducing resource use by using otherwise-unused available resources) is a goal in many settings.

Adobe came up with a new definition of what it considered to be the abstract idea.  When Adobe discussed its formulation of the asserted abstract idea, it did not meaningfully address the combination. Rather, it asserted the “common-place” character of the individual component techniques generally. But that approach is insufficient where, as is true here for the reasons we have explained, it is the combination of techniques that is “what the patent asserts to be the focus of the claimed advance over the prior art.”

The Federal Circuit concluded that the district court correctly rejected Adobe’s ineligibility challenge.

Thus, novelty comes into play.  Contrary to what is considered to be proper practice, it may be worthwhile to have some discussion, in a patent application, of what combination of techniques may be novel, and how that improves problems in a system.

 

PACKET INTELLIGENCE LLC V NETSCOUT SYSTEMS, INC (FORMERLY TEKTRONIX), FEDERAL CIRCUIT 2020 (SOFTWARE PATENTS)

NetScout Systems appealed from a judgment of the U.S. District Court for the Eastern District of Texas which held that NetScout willfully infringed various claims of U.S. Patent No. 6,665,725; 6,839,751; and 6,954,789 and held that the claims were valid under 35 U.S.C. §101.

The patents disclose a method for monitoring packets ex-changed over a computer network. A stream of packets between two computers is called a connection flow. Monitoring connection flows cannot account for disjointed sequences of the same flow in a network.  The specifications explain that it is more useful to identify and classify “conversational flows,” defined as “the sequence of packets that are ex-changed in any direction as a result of an activity.” Conversational flows provide application-specific views of network traffic and can be used to generate helpful analytics to understand network load and usage.

Claim 19 of the ‘789 patent is representative and recites:

A packet monitor for examining packets passing through a connection point on a computer net-work, each packet conforming to one or more protocols, the monitor comprising:

  • (a) a packet acquisition device coupled to the connection point and configured to receive packets passing through the connection point;
  • (b) an input buffer memory coupled to and configured to accept a packet from the packet acquisition device;
  • (c) a parser subsystem coupled to the input buffer memory and including a slicer, the parsing subsystem configured to extract selected portions of the accepted packet and to output a parser record containing the selected portions;
  • (d) a memory for storing a database comprising none or more flow-entries for previously encountered conversational flows, each flow-entry identified by identifying in-formation stored in the flow-entry;
  • (e) a lookup engine coupled to the output of the parser subsystem and to the flow-entry memory and configured to lookup whether the particular packet whose parser record is output by the parser subsystem has a matching flow-entry, the looking up using at least some of the selected packet portions and determining if the packet is of an existing flow; and
  • (f) a flow insertion engine coupled to the flow-entry memory and to the lookup engine and configured to create a flow-entry in the flow-entry database, the flow-entry including identifying information for future packets to be identified with the new flow-entry, the lookup engine configured such that if the packet is of an existing flow, the monitor classifies the packet as belonging to the found existing flow; and if the packet is of a new flow, the flow insertion engine stores a new flow-entry for the new flow in the flow-entry database, including identifying information for future packets to be identified with the new flow-entry,
  • wherein the operation of the parser subsystem de-pends on one or more of the protocols to which the packet conforms.
NetScout claimed that the patents cover ineligible subject matter under 35 U.S.C. §101.
In evaluating patent eligibility, the Federal Circuit first determines whether the claims at issue are directed to a patent-ineligible concept in accordance with Alice Corp. v. CLS Bank.
The district court first made a series of factual findings about the claimed inventions’ advantages over the prior art. According to the district court, to measure the amount or type of information being transmitted by a particular application or protocol, a network monitor must measure “all of the connection flows through which that application or protocol transmits packets.”  The lower court found that prior art monitors could not identify disjointed connection flows as belonging to the same conversational flow.   The patents addressed this “problem” in the art by parsing packets to extract information that can be used to associate packets with single conversational flows, which correspond to particular applications or protocols.  The Alice analysis was thus really partly a novelty analysis.
With this factual background, the court applied the Alice framework. First, the court rejected NetScout’s argument that claim 19 is directed to the collection, comparison, and classification of information. The court instead held that the claim was directed to “solving a discrete technical problem: relating disjointed connection flows to each other.” The court determined that the claim was directed to “specific technological solutions, such as identifying and refining a conversational flow so that different connection flows can be associated with each other and ultimately an underlying application or protocol.”
At step one, the district court also rejected NetScout’s argument that the claims are directed to an abstract idea because they do not explain how to determine whether packets belong to a conversational flow. According to the district court, NetScout’s argument focused on the claims in isolation instead of the claims as read in light of the specification.
Packet Intelligence faults NetScout for oversimplifying the claims and maintains that the district court was correct to consider the specification in its analysis.
The Federal Circuit agreed with Packet Intelligence that claim 19 is not directed to an abstract idea. In the eligibility analysis, the courts are to consider the claim as a whole, in view of Diamond v. Diehr, and read it in light of the specification. The Federal Circuit has recognized that software-based innovations can make ‘non-abstract improvements to computer technology’ and be deemed patent-eligible subject matter at Alice step 1, as they did in Finjan, Inc. v. Blue Coat Sys., Inc.
According to the Federal Circuit, the asserted patents’ specifications make clear that the claimed invention presented a technological solution to a technological problem. The specifications explain that known network monitors were unable to identify disjointed connection flows to each other, and the focus of the claims is a specific improvement in computer technology: a more granular, nuanced, and useful classification of network traffic.
This was one of the few cases of 2020 in which “pure” software patents were held to be patent-eligible under 35 U.S.C. §101.

ELECTRONIC COMMUNICATION TECHNOLOGIES V SHOPPERSCHOICE.COM, FEDERAL CIRCUIT 2020 (SOFTWARE PATENTS)

Electronic Communication Technologies, LLC sued ShoppersChoice.com, LLC (“ShoppersChoice”), alleging that ShoppersChoice infringed claim 11 of U.S. Patent No. 9,373,261. The district court granted ShoppersChoice’s motion for judgment on the pleadings that claim 11 was invalid under 35 U.S.C. § 101.

The ’261 patent is titled “Secure Notification Messaging with User Option to Communicate with Delivery or Pickup Representative.” ’Claim 11 re-cites:

An automated notification system, comprising:

  • one or more transceivers designed to communicate data; one or more memories;one or more processors; and
  • computer program code stored in the one or more memories and executed by the one or more processors, the computer program code comprising:
  • code that enables a first party associated with a personal communication device (PCD) to input or select authentication information for use in connection with a subsequent notification communication session involving advance notice of a delivery or pickup of a good or service at a stop location by a mobile thing (MT);
  • code that causes storage of the authentication in-formation;
  • code that monitors location or travel information in connection with the MT; code that causes initiation of the notification communication session to the PCD with the one or more transceivers, in advance of arrival of the MT at the stop location, based at least in part upon the location or travel information associated with the MT;
  • code that, during the notification communication session, provides the authentication information to the PCD that indicates to the first party that the notification communication session was initiated by an authorized source; and
  • code that, during the notification communication session, enables the first party to select whether or not to engage in a communication session with a second party having access to particulars of the pickup or delivery.

The Federal Circuit began their analysis with step one of the two-step framework. We agree with the district court that claim 11 of the ’261 patent is directed to the abstract idea of “providing advance notification of the pickup or delivery of a mobile thing.”

Monitoring the location of a mobile thing and notifying a party in advance of arrival of that mobile thing—amount to nothing more than the fundamental business practice of providing advance notification of the pickup or delivery of a mobile thing.  As the district court correctly noted, “business practices designed to advise customers of the status of delivery of their goods have existed at least for several decades, if not longer.”

Although claim 11 also recites added measures that purport to increase security—namely, enabling a first party to input authentication information, storing the authentication information, and providing the authentication information along with the advance notice of arrival to help ensure the customer that the notice was initiated by an authorized source—those claimed functions are also abstract. As the patent specification explains, the “authentication information” can be essentially any information recognizable to the party being contacted, “for example but not limited to, any of the following: a logo, trademark, coat of arms, symbol, pre-defined symbol or text or numeric code that has been made or known to or selected by the party being contacted, specific sound or sounds or music, . . . a telephone number that can be called to verify the notification, . . . part of a credit card number, such as the last four digits, [or] an image of a signature, such as the signature of the notified party.”  Businesses have long been supplying customers with order numbers and recording customer information.

The Federal Circuit stated that Claims, like claim 11, that are directed to longstanding commercial practices do not pass step one of the two-part § 101 test.

It can be seen that part of an Alice analysis is really a novelty analysis.

ECT argued that claim 11 is not directed to an abstract idea because it is “unique” in that it “is directed toward and addresses solutions to minimize hacker’s impacts when mimicking order conversations and shipment notification emails.”  ECT’s argument failed.  The Federal Circuit stated that they may assume that the techniques claimed are ‘groundbreaking, innovative, or even brilliant,’ but that is not enough for eligibility.  They did not discuss why the reasoning of their previous BASCOM decision did not apply.  In BASCOM, the claims recited an improvement to an existing solution.  Decisions on patent-eligibility of software inventions can come down largely to which judges decide a case.