February 6, 2015
Law360
By Doris Johnson Hines
Authored by Cortney S. Alexander and Doris Johnson Hines
Since the U.S. Supreme Court issued Alice v. CLS Bank, district courts and the Federal Circuit have considered how to apply its two-part test for determining patent eligibility. Three recent cases, two from California district courts and one from the Federal Circuit highlight how different approaches result in opposite outcomes in seemingly analogous cases. Considering the analyses of these cases, as well as examples the U.S. Patent and Trademark Office provided last month, may assist practitioners in drafting claims to patent-eligible subject matter and considering patent eligibility with respect to issued claims.
In Synopsys Inc. v. Mentor Graphics Corp.1, the court granted summary judgment that claims were invalid under 35 U.S.C. § 101. It stands in contrast to the Federal Circuit's decision in DDR Holdings LLC v. Hotels.com LP.2 and a district court's decision in California Institute of Tech. v. Hughes Comm's Inc.,3 both finding that computer-related claims were patent-eligible.
In Synopsis, the claims recited methods for using a computer to design a semiconductor chip layout based on a human designer's description of the chip's desired functionality (referred to as logic synthesis). This saved the designer from designing a complex logic circuit and meant that the designer need not have a detailed understanding of the logic circuits necessary to perform the required functionality.4 According to the district court, the claimed steps could "be performed by a skilled designer either mentally or with the aid of pencil and paper."
In DDR Holdings, the claims addressed the problem faced by website owners in retaining visitors who click on an advertisement link and are then transported away from the owner's site. The system addressed this problem by directing users who click on advertisements to an automatically generated webpage allowing the user to purchase the advertiser's products, while still retaining the look and feel of the host's website.5
The Cal. Tech. claims recited a specific method for performing error correction to address corruption. Using this technique, certain data bits are repeated an irregular number of times during transmission. The redundant information is used to determine whether errors occurred in transmission.6
All three courts applied the Supreme Court's two-step test for evaluating patent eligibility: (1) whether the claims are directed to a patent-ineligible abstract idea; and (2) if so, whether the claim elements, individually or in combination, contain an inventive concept sufficient to ensure that the claims recite significantly more than the abstract idea itself. See Alice Corp. Pty. Ltd. v. CLS Bank Int'l, 134 S. Ct. 2347, 2355 (2014).
The focus of these cases was not whether the claims were directed to an abstract idea. Instead, differences arose in the courts' analyses of the second step, namely whether there was an "inventive concept." The courts differed on two considerations, namely whether the claims: (1) merely recite mental steps or apply a pre-existing activity to a computer/Internet environment; and (2) effectively preempt any application of the abstract idea.
Cal. Tech. addressed whether the claims covered a prohibited mental process by assessing whether the claimed invention could be performed using a pen and paper. The court held that even though the claimed error-correction method could theoretically be done on paper, it would take months or years and would produce nothing useful. The court reasoned that a pen-and-paper analysis "oversimplifies § 101 and ignores the fact that the [asserted] patent creates an algorithmic solution for a computing problem—the corruption of data during transmission."7 Because the solution of the claims (correcting data errors) could not be effectively performed via pen and paper, asking whether the algorithm could be performed using a pen and paper was the wrong question.
Synopsis, in contrast, focused on the fact that the claims could be performed using a pen and paper in finding patent ineligibility.8 However, in Synopsis, pen and paper could really be used to practice the invention. In fact, the examples provided in the patents were created that way.9 Thus, as distinct from Cal Tech., in Synopsis, there was nothing else created by the claimed methods other than what the inventors agreed could be and was created by pen and paper.
DDR Holdings demonstrated the importance of this consideration, as the majority and the dissent debated whether the claimed method (generating a hybrid web page that looked like a host website but sold a third party's product) was analogous to pre-Internet "store within a store" concepts, such as a warehouse store that contains a kiosk for selling a third-party partner's vacation packages. The majority distinguished between the Internet-specific problem addressed by the claims and the old warehouse-store example, noting that there is "no possibility that by walking up to this kiosk, the customer will be suddenly and completely transported outside the warehouse store and relocated to a separate physical venue associated with the third party—the analog of what ordinarily occurs in 'cyberspace' after the simple click of a hyperlink."10
Judge Haldane Robert Mayer's disagreement with this conclusion was one of the main points of his dissent. He concluded that "any doubt as to whether the claimed system is merely an Internet iteration of an established business practice is laid to rest by the fact that one of the named inventors acknowledged that the innovative aspect of his claimed invention was '[t]aking something that worked in the real world and doing it on the Internet.'"11
The USPTO's just-released examples of eligible and ineligible computer-implemented claims supplementing its 2014 interim eligibility guidance help explain these different outcomes. Example 3, claim 1 recites a computer-implemented method for half-toning a grayscale image.12 The USPTO explains that this claim recites patent-eligible subject matter because the steps work together to produce an improved digital image. In contrast, Example 5, claim 10 recites a patent-ineligible method intended to reduce distortion of a digital image.13 The USPTO explains that this claim is ineligible because it uses mathematical relationships to manipulate existing information without limiting the process to, for example, use in producing an improved digital image. Had the claim been so limited, it likely would have been patent-eligible.
The differences in the claim examples and the USPTO's analysis supports the different outcomes in the Synopsis and Cal. Tech. cases. In Cal. Tech., the court pointed to correcting corrupted data as a non-mental process. Similarly, the USPTO's Example 3 claim 1 produces an improved digital image, which cannot be performed mentally. In contrast, the claims in Synopsis created an "assignment condition," which could be done mentally, similar to generating and combining data in the USPTO's Example 5, claim 10.
This demonstrates that patent applicants should explain in their specifications how their computer-implemented claims address some computing problem, similar to the reasoning in DDR Holdings and Cal. Tech.
The courts' differing outcomes on how much inventive activity a claim would preempt depended on whether the analysis focused on: (1) the abstract purpose as a whole, which was favorable to the patentee, allowing an argument that the claimed implementation leaves other (unclaimed) ways to address the abstract purpose; or (2) the specific implementation in the claim, which was unfavorable to the patentee because a patent claim by definition will preempt the claimed subject matter.
Cal. Tech. took the first approach, focusing on the abstract purpose as a whole. The patentee successfully pointed out various types of error correction that were not preempted by the claims. The court relied on these non-infringing alternatives in concluding that the asserted claims did not significantly preempt inventive activity: "the asserted claims contain meaningful limitations . . . [that] are not necessary or obvious tools for achieving error correction, and they [therefore] ensure that the claims do not preempt the field of error correction."14 Cal. Tech. also cautioned that courts should not overstate the preemption concern because "[b]y definition, every patent preempts an area of technology."15
In contrast, Synopsis rejected the patentee's assertion that the claims did not pose a risk of preemption because the abstract purpose could "be performed 'without using assignment conditions,'" as required by the claims.16 The court stated that "the asserted claims do preempt a building block of human ingenuity, a mental process, albeit a specific one," and declined to analyze whether a big-picture abstract purpose of synthesizing chip design was preempted.17 The court's approach meant the patentee could not successfully rely on the types of non-infringing alternatives emphasized in Cal. Tech.
In DDR Holdings, the majority and dissenting opinions reflect the dichotomy between Synopsis and Cal. Tech. The majority stated it is "clear that the claims at issue do not attempt to preempt every application of the idea of increasing sales by making two web pages look the same."18 The dissent rejected the majority's reliance "on the fact that '[the claims] recite a specific way to automate the creation of a composite web page," stating that the Supreme Court "has emphatically rejected the idea that claims become patent eligible simply because they disclose a specific solution to a particular problem."19
The differing analyses of Synopsis, Cal. Tech., and between the majority and dissent in DDR Holdings, demonstrate how experienced judges can reach varying results in applying the new standard for patent eligibility. Some of this uncertainty should be resolved as the Federal Circuit and USPTO clarify the legal standard and its application.
Endnotes
1 No. 3:12-cv-6467-MMC, (N.D. Cal. Jan. 20, 2105).
2 773 F.3d 1245 (Fed. Cir. 2014).
3 No. 2:13-cv-07245, (C.D. Cal. Nov. 3, 2014).
4 Synopsis.
5 DDR Holdings, 773 F.3d at 1248-49.
6 Cal. Tech.
7 Id.
8 Synopsis.
9 Id.
10 DDR Holdings, 773 F.3d at 1258.
11 Id. at 1265.
12 Example 3, claim 1: A computer-implemented method for half-toning a gray scale image, comprising the steps of: generating, with a processor, a blue noise mask by encoding changes in pixel values across a plurality of blue noise filtered dot profiles at varying gray levels; storing the blue noise mask in a first memory location; receiving a gray scale image and storing the gray scale image in a second memory location; comparing, with a processor on a pixel-by-pixel basis, each pixel of the gray scale image to a threshold number in the corresponding position of the blue noise mask to produce a binary image array; and converting the binary image array to a half-toned image.
13 Example 5, claim 10: A method of generating a device profile that describes properties of a device in a digital image reproduction system for capturing, transforming or rendering an image, said method comprising: generating first data for describing a device dependent transformation of color information content of the image to a device independent color space through use of measured chromatic stimuli and device response characteristic functions; generating second data for describing a device dependent transformation of spatial information content of the image in said device independent color space through use of spatial stimuli and device response characteristic functions; and combining said first and second data into the device profile.
14 Cal. Tech.
15 Id.
16 Synopsis.
17 Id.
18 DDR Holdings, 773 F.3d at 1259.
19 Id. at 1265.
Originally printed in Law360 (www.law360.com). Reprinted with permission. This article is for informational purposes, is not intended to constitute legal advice, and may be considered advertising under applicable state laws. This article is only the opinion of the authors and is not attributable to Finnegan, Henderson, Farabow, Garrett & Dunner, LLP, or the firm's clients.
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