Will the Federal Circuit Clarify En Banc the Section 101 Test for Computer-Related Inventions?

By Condo Roccia Koptiw LLP // February 4th, 2015

In Alice Corp. v. CLS Bank Int’l, 134 S. Ct. 2347 (2014) the Supreme Court reinforced the Mayo Collaborative Srvs. v. Prometheus Labs., Inc., 132 S. Ct. 1289 (2012) two-part test for assessing patent eligibility under 35 U.S.C. § 101 for computer-related inventions: (i) whether the patent claims are directed to a patent-ineligible abstract idea, and (ii) if so, whether an “inventive concept” exits in the claim limitations sufficient to turn the abstract idea into a patent-eligible application of that abstract idea.  However, the Supreme Court provided little guidance as to whether these questions are questions of law or fact and how the “abstract idea” and “inventive concept” should be determined.  Since Alice many courts have been making these assessments based on the patent alone without considering other evidence such as expert testimony.  Now, in Ultramercial, LLC v WildTangent, Inc.., No. 2010-1544 (Fed. Cir.), Ultramercial has asked the Federal Circuit en banc to provide more guidance regarding this two-part test.  Specifically, Ultramercial frames the question as whether under the Mayo-Alice test computer-related inventions only claim patent ineligible subject matter if they claim implementing on a computer practices that were known, fundamental, or routine prior to the Internet.

After Alice had been decided en banc by the Federal Circuit, but before Alice was decided by the Supreme Court, the Federal Circuit held in Ultramercial, LLC v. Hulu, L.L.C., 722 F. 3d 1335 (Fed. Cir. 2013), that claims directed toward using advertisement[s] as an exchange for currency in an internet application claimed patent eligible subject matter.  In the opinion, the Federal Circuit stressed that the section 101 analysis should not be performed by simply stripping away a claim’s meaningful limitations leaving behind what could then be characterized as an ineligible “abstract idea.”  After Ultramercial was remanded by the Supreme Court to the Federal Circuit to be reconsidered in light of Alice, the Federal Circuit held that the Ultramercial patent claims claimed ineligible subject matter.

Following the Ultramercial decision on remand, the Federal Circuit held in DDR Holdings, LLC v. Hotels.com, L.P., 2014 U.S. App. LEXIS (Dec. 5, 2014 Fed. Cir.) that claims directed towards solving the problem of website merchants having their users lured to other websites by clicking on advertising links on the merchant’s website claimed patent-eligible subject matter.  According to Ultramercial, DDR Holdings and Ultramercial are in conflict because both cases involve computer-related claims that do not recite a known, fundamental, or routine commercial practice from the pre-Internet world, yet the Federal Circuit reached different decisions regarding whether they claimed patent eligible subject matter.  Ultramercial has asked the Federal Circuit to clarify whether the MayoAlice test is limited to application of known pre-Internet concepts to computer or whether Alice is more expansive and how the lines are to be drawn under the two-part test.

Although Ultramercial has framed the issue in terms of application of known pre-Internet concepts to a computer, at a fundamental level, the basic issue is how the “abstract idea” and “inventive concept” are determined under the Mayo-Alice test.  For example, in its most recent assessment, the Federal Circuit held that the abstract idea in Ultramercial was simply using “advertisement[s] as an exchange for currency,” a well-known pre-Internet concept.  But Ultramercial argues that the “abstract idea” is electronically pairing content with an advertisement and blocking access to internet content until a user affirmatively and actively, as opposed to passively, selects and views the advertisement.  What is not clear from the decisions is how claim limitations relate to determining the “abstract idea” and “inventive concept,” and what claim limitations matter for determining the “abstract idea” and “inventive concept.”  For example, it is axiomatic that in determining novelty under 35 U.S.C. § 102 all limitations matter, but it is not clear that the same analysis applies in determining an “inventive concept” under 35 U.S.C. § 101.  If the Federal Circuit grants the petition for en banc review, hopefully it will provide more guidance as to how to determine the Mayo-Alice “abstract idea” and “inventive concept.”




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