At the Federal Circuit
The Federal Circuit Offers Instruction on Alice’s First Step
The Federal Circuit recently provided guidance post-Alice for courts analyzing motions for judgment on the pleadings under Fed. R. Civ. P. 12(c) seeking to invalidate claims for lack of patentable subject matter under 35 U.S.C. § 101. In McRo, Inc. v. Bandai Namco Games America Inc., No. 2015-1080 (Fed. Cir. Sept. 13, 2016), a unanimous panel of the court―presided over by Judge Reyna (opinion author) and joined in the decision by Judges Taranto and Stoll―determined that the district court erred in granting the motion invalidating U.S. Patent Nos. 6,307,576 (“the ’576 patent”) and 6,611,278 (“the ’278 patent”). The court held, focusing on the first prong of the two-part test established by the Supreme Court, “that the ordered combination of claimed steps, using unconventional rules that relate sub-sequences of phonemes, timings, and morph weight sets, is not directed to an abstract idea and is therefore patent-eligible subject matter under § 101.” Slip op. at 4. The Federal Circuit, accordingly, reversed and remanded. Id.
The ’576 patent and the ’278 patent, both entitled “Method for Automatically Animating Lip Synchronization and Facial Expression of Animated Characters,” share a common specification and are directed to automating part of a preexisting 3-D animation method. Id. “[T]he primary object of this invention [is] to provide a method for automatically . . . producing accurate and realistic lip synchronization and facial expressions in animated characters.” ’576 patent col. 2 ll. 45‑50. According to the court, “This automation is accomplished through rules that are applied to the timed transcript” and “go beyond [prior art methods] simply matching single phonemes from the timed transcript with the appropriate morph target.” McRo, slip op. at 9. The patents-at-issue claim that the use of rule sets produce more realistic speech by “tak[ing] into consideration the differences in mouth positions for similar phonemes based on context.” ’576 patent col. 10 ll. 6–7 . Claim 1 of the ’576 patent was deemed representative and dispositive as to the outcome on this issue:
A method for automatically animating lip synchronization and facial expression of three-dimensional characters comprising:Id. at col. 11 ll. 27‑47.obtaining a first set of rules that define output morph weight set stream as a function of phoneme sequence and time of said phoneme sequence;
obtaining a timed data file of phonemes having a plurality of sub‑sequences;
generating an intermediate stream of output morph weight sets and a plurality of transition parameters between two adjacent morph weight sets by evaluating said plurality of sub-sequences against said first set of rules;
generating a final stream of output morph weight sets at a desired frame rate from said intermediate stream of output morph weight sets and said plurality of transition parameters; and
applying said final stream of output morph weight sets to a sequence of animated characters to produce lip synchronization and facial expression control of said animated characters.
Asserting the above patents, among others, Plaintiff-Appellant McRo, Inc. (d/b/a Planet Blue), filed numerous lawsuits across the country against video game developers. Eight such suits were transferred and consolidated with other existing actions in the United States District Court for the Central District of California, where the cases were consolidated for pretrial purposes on two tracks. After claim construction in the Track 1 cases, all defendants from both tracks filed a motion for judgment on the pleadings under Rule 12(c), asserting that the claims were directed to patent-ineligible subject matter. On September 22, 2014, the trial court granted the motion, invalidating claims under 35 U.S.C. § 101. The court applied the two-step analysis prescribed by the Supreme Court in Alice Corp. v. CLS Bank International, 134 S. Ct. 2347, 2355 (2014).
According to the Federal Circuit, in finding the claims patent ineligible under Alice step one, the district court “attempted to ‘factor out conventional activity’ by comparing the claims to the admitted prior art process that the patent sought to improve.” McRo, slip op. at 14 (citation omitted). The district court accepted that “a central part of the patents is ‘using morph weight set representations of the facial shape coupled with rules . . . to generate keyframes.’” Id. (citation omitted). The district court determined “whether the inclusion of that concept in the claims satisfies § 101 given (1) the prior art, and (2) the fact that the claims do not require any particular rules.” Id. (citation omitted). The district court found the claims “too broadly preemptive to satisfy § 101,” because the claims were not limited to specific rules, but rather “purport to cover all such rules.” Id. (citation omitted). As such, in the district court’s opinion, the claims “merely call for application of the abstract idea of using rules,” which is prohibited under Alice. Id. The district court concluded that the claims were unpatentable because “the novel portions of [the] invention are claimed too broadly.” Id. (alteration in original) (citation omitted).
On appeal, McRo argued that the claims are not directed to an abstract idea, because they generate a tangible product, i.e., “a video of a 3-D character speaking the recorded audio.” Id. at 15 (citation omitted). McRo specifically contended that the claim teaches “a method for getting a computer to automatically generate video of a 3-D animated character speaking in sync with pre-recorded dialogue—without requiring an artist’s constant intermediation,” which is technological by nature. Id. (citation omitted). “These limitations are specific enough in McRO’s view because the rules will necessarily vary by character as, for example, ‘a swamp monster will use different rules than a tight-lipped cat.’” Id. at 16 (citation omitted). The Defendants-Appellees argued, on the other hand, that the claims represent merely unpatentable algorithms, which can be performed with pencil and paper. These preexisting algorithms, according to Defendants-Appellees, are not rendered patentable by simply automating the process on a general-purpose computer. Id. “The relationships expressed by these rules, Defendants[-Appellees] argue, inevitably capture ‘a preexisting fundamental truth’ about how a human mouth looks while speaking certain sounds over time, preempting all possible rules-based methods.” Id. at 17 (quoting Alice, 134 S. Ct. at 2356).
The Federal Circuit disagreed with the unpatentable subject matter determination and reversed the trial court’s Rule 12(c) disposition entirely under Alice step one. Id. at 27. While noting generally that “[m]athematical formulas are a type of abstract idea,” id. at 19 (citing Gottschalk v. Benson, 409 U.S. 63, 64 (1972)), the court reminded that “the claims are considered in their entirety to ascertain whether their character as a whole is directed to excluded subject matter,” id. at 19-20 (quoting Internet Patents Corp. v. Active Network, Inc., 790 F.3d 1343, 1346 (Fed. Cir. 2015)). In Diamond v. Diehr, 450 U.S. 175 (1981), for example―where the claims “employed a ‘well-known’ mathematical equation”―the patentable claims “used that equation in a process designed to solve a technological problem in ‘conventional industry practice.’” Alice, 134 S. Ct. at 2358 (quoting Diehr, 450 U.S. at 177‑78). When looked at as a whole, the Federal Circuit reminded, “the claims in Diehr were patent eligible because they improved an existing technological process, not because they were implemented on a computer.” McRo, slip op. at 21 (quoting Alice, 134 S. Ct. at 2358). According to the court:
We have previously cautioned that courts “must be careful to avoid oversimplifying the claims” by looking at them generally and failing to account for the specific requirements of the claims. Here, the claims are limited to rules with specific characteristics[,] [a]s the district court recognized during claim construction . . . . Whether at step one or step two of the Alice test, in determining the patentability of a method, a court must look to the claims as an ordered combination, without ignoring the requirements of the individual steps. The specific, claimed features of these rules allow for the improvement realized by the invention.
Id. (first quoting In re TLI Commc’ns LLC Patent Litig., 823 F.3d 607, 611 (Fed. Cir. 2016); and then citing Diehr, 450 U.S. at 189 n.12)). The Federal Circuit explained that the specification at issue confirms that “the claimed improvement here is allowing computers to produce ‘accurate and realistic lip synchronization and facial expressions in animated characters’ that previously could only be produced by human animators.” Id. at 22 (quoting ’576 patent col. 2 ll. 49‑50).
The Defendants-Appellees, according to the court, “do not dispute that processes that automate tasks that humans are capable of performing are patent eligible if properly claimed; instead, they argue that the claims here are abstract because they do not claim specific rules.” Id. But, the court determined, “[t]he claimed rules here . . . are limited to rules with certain common characteristics, i.e., a genus,” and “[c]laims to the genus of an invention, rather than a particular species, have long been acknowledged as patentable.” Id. (citing Diamond v. Chakrabarty, 447 U.S. 303, 305 (1980)). It clarified:
Patent law has evolved to place additional requirements on patentees seeking to claim a genus; however, these limits have not been in relation to the abstract idea exception to § 101. . . . It is self-evident that genus claims create a greater risk of preemption, thus implicating the primary concern driving § 101 jurisprudence, but this does not mean they are unpatentable. . . . We therefore look to whether the claims in these patents focus on a specific means or method that improves the relevant technology or are instead directed to a result or effect that itself is the abstract idea and merely invoke generic processes and machinery.Id. at 23.
With respect to claim 1 of the ’576 patent, the court found it “focused on a specific asserted improvement in computer animation, i.e., the automatic use of rules of a particular type,” and not merely an attempt to “use a computer as a tool to automate conventional activity.” Id. at 24. “The computer here is employed to perform a distinct process to automate a task previously performed by humans. . . . It is the incorporation of the claimed rules, not the use of the computer, that ‘improved [the] existing technological process’ by allowing the automation of further tasks.” Id. (alteration in original) (quoting Alice, 134 S. Ct. at 2358). Further, the court observed, “While the result may not be tangible, there is nothing that requires a method ‘be tied to a machine or transform an article’ to be patentable. The concern underlying the exceptions to § 101 is not tangibility, but preemption.” Id. at 25 (first quoting Bilski v. Kappos, 561 U.S. 593, 603 (2010); and then citing Mayo Collaborative Servs. v. Prometheus Labs., Inc., 132 S. Ct. 1289, 1301 (2012)). And “[t]he limitations in claim 1 prevent preemption of all processes for achieving automated lip-synchronization of 3-D characters . . . . The specific structure of the claimed rules would prevent broad preemption of all rules-based means of automating lip synchronization, unless the limits of the rules themselves are broad enough to cover all possible approaches.” Id. at 25-26. And the court found that there had been no showing to that effect by Defendants-Appellees. Id. at 26 (“There has been no showing that any rules-based lip-synchronization process must use rules with the specifically claimed characteristics. Defendants’ attorney’s argument that any rules-based lip-synchronization process must use the claimed type of rules has appeal, but no record evidence supports this conclusion.”). Thus, “[b]y incorporating the specific features of the rules as claim limitations, claim 1 is limited to a specific process for automatically animating characters using particular information and techniques and does not preempt approaches that use rules of a different structure or different techniques.” Id. at 27. The court reversed and remanded. Id.
Decided completely under Alice’s first prong, the Federal Circuit reiterated that in order to find an unpatentable abstract idea, the claim must be “looked at as a whole.” Id. Following this analysis, claim 1 was deemed patentable subject matter teaching a “technological improvement over the existing, manual 3-D animation techniques,” because “[t]he claim uses the limited rules in a process specifically designed to achieve an improved technological result in conventional industry practice.” Id. (citing Alice, 134 S. Ct. at 2358). Practitioners should familiarize themselves with this opinion and its extensive analysis and insight in the first step of the Alice inquiry.
