Several weeks ago, the United States Court of Appeals for the Federal Circuit shook up the patent world with a somewhat unexpected gift for patent owners, particularly patent owners and applicants seeking software patents. The Court issued an important decision on software patent eligibility in Enfish LLC v. Microsoft.
The opinion by Judge Hughes, who was joined by Judge Moore and Judge Taranto, doubles the total of Federal Circuit decisions where claims in a software patent were deemed to be patent eligible because they are not abstract. In other words, DDR Holdings is no longer the only point of hope for innovators and patent owners in the software space.
This case stared when Enfish sued Microsoft for patent infringement. The patents at issue were U.S. Patent No. 6,151,604 and U.S. Patent No. 6,163,775, both issued in late 2000 and both claiming priority to the same application filed in March 1995. The ’604 and ’775 patents are directed to an innovative logical model for a computer database. A logical model is a model of data for a computer database explaining how the various elements of information are related to one another. Contrary to conventional logical models, the patented logical model includes all data entities in a single table, with column definitions provided by rows in that same table. The patents describe this as the “self-referential” property of the database.
The patents explain that the claimed invention is an improvement, which the Federal Circuit focused on in their patent eligibility analysis.
The patents teach that multiple benefits flow from this design. First, the patents disclose an indexing technique that allows for faster searching of data than would be possible with the relational model. Second, the patents teach that the self-referential model allows for more effective storage of data other than structured text, such as images and unstructured text. Finally, the patents teach that the self-referential model allows more flexibility in configuring the database.
Microsoft filed a motion for summary judgment, arguing that the claims were invalid as ineligible under 35 U.S.C. § 101. The district court agreed. The district court also ruled some claims invalid as anticipated under 35 U.S.C. § 102, and one claim was not infringed. Enfish appealed. The Federal Circuit did not even find it necessary to reach the second step of the Mayo/Alice framework, instead finding that the claims at issue were not directed to an abstract idea. The Federal Circuit also found that the prior art did not anticipate the “self- referential” feature of the claims and, therefore, vacated the summary judgment based on § 102. The Federal Circuit found no error in the district court’s determination on non-infringement and affirmed the summary judgment of non-infringement.
Judge Hughes wrote:
The Supreme Court has not established a definitive rule to determine what constitutes an “abstract idea” sufficient to satisfy the first step of the Mayo/Alice inquiry. Rather, both this court and the Supreme Court have found it sufficient to compare claims at issue to those claims already found to be directed to an abstract idea in previous cases.
Hughes would go on to cite the language from Alice where the Supreme Court explained that laboring to define what is an abstract idea is not necessary.
The Federal Circuit would go on to explain that the Supreme Court suggested in Alice that claims that improve the functioning of a computer might not succumb to the abstract idea exception.
From there, the Federal Circuit said:
We do not read Alice to broadly hold that all improvements in computer-related technology are inherently abstract and, therefore, must be considered at step two. Indeed, some improvements in computer-related technology when appropriately claimed are undoubtedly not abstract, such as a chip architecture, an LED display, and the like. Nor do we think that claims directed to software, as opposed to hardware, are inherently abstract and therefore only properly analyzed at the second step of the Alice analysis. Software can make non-abstract improvements to computer technology just as hardware improvements can, and sometimes the improvements can be accomplished through either route. We thus see no reason to conclude that all claims directed to improvements in computer-related technology, including those directed to software, are abstract and necessarily analyzed at the second step of Alice, nor do we believe that Alice so directs. Therefore, we find it relevant to ask whether the claims are directed to an improvement to computer functionality versus being directed to an abstract idea, even at the first step of the Alice analysis.
The Federal Circuit explained that the claims at issue plainly focus on improvements to computer functionality. This led the panel to unanimously conclude, “the claims at issue in this appeal are not directed to an abstract idea within the meaning of Alice. Rather, they are directed to a specific improvement to the way computers operate, embodied in the self-referential table.”
The Federal Circuit also explicitly put a nail in the coffin of the argument that software shouldn’t be patent eligible if it could run on a general-purpose computer. The Federal Circuit explained: “We are not persuaded that the invention’s ability to run on a general-purpose computer dooms the claims.”
The Federal Circuit also explained that physical elements are not a prerequisite for a claim to be patent eligible. The Court explained:
Similarly, that the improvement is not defined by reference to “physical” components does not doom the claims. To hold otherwise risks resurrecting a bright-line machine-or-transformation test…Much of the advancement made in computer technology consists of improvements to software that, by their very nature, may not be defined by particular physical features but rather by logical structures and processes. We do not see in Bilski or Alice, or our cases, an exclusion to patenting this large field of technological progress.
There will no doubt be much more written about this case in the coming days and weeks. Stay tuned!
Tags: CAFC, Federal Circuit, patent, Patent eligibility, patents, software patents
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