Deciphering TLI Communications and FairWarning IP


Beginning in May 2016 with the Federal Court’s decision in Enfish, carrying over into the July decision in BASCOM, and then into the Court’s Fall decision in McRO (sometimes referred to as “the Blue Planet case”), the patent stakeholder community finally started receiving some much-needed guidance with respect to patent eligibility of computer-implemented inventions.

While decisions where claims have been ruled patent eligible have been helpful, decisions finding claims patent ineligible have been at least as informative, at least from a patent drafting standpoint. Indeed, as important as the aforementioned pro-patent-eligible decisions are two decisions where the Federal Circuit found the claims to be patent ineligible. In TLI Communications and then more recently in FairWarning IP, LLC v. Iatric Systems, Inc., the Federal Circuit distinguished the claims at hand from those that have been held patent eligible, which help identifies brighter lines and nuances of software practice.

What follows is a brief summary of TLI Communications and FairWarning IP, LLC v. Iatric Systems, Inc.

TLI Communications, LLC v. AV Automotive, LLC (May 17, 2016)

The patent at issue related to a method and system for taking, transmitting, and organizing digital images. With respect to the Alice/Mayo framework – Step 2A, the abstract idea was defined as “classifying and storing digital images in an organized manner.” The court pointed out that the claims were not directed to any specific improvement to computer functionality, but rather were directed to the use of conventional technology in a well-known environment. The Federal Circuit found that no claims exhibited an inventive solution to any problem presented. Further, the Federal Circuit explained that specification did not describe any new physical components or combinations, and failed to provide any technical details for the tangible components that were mentioned. Instead, the court explained that the specification “predominately describes the system and methods in purely functional terms.” The court also explained: “Likewise, the server is described simply in terms of performing generic computer functions such as storing, receiving, and extracting data.” Ultimately, the claims: (1) were not directed to a solution for a technological problem; and (2) did not attempt to solve “a challenge particular to the Internet.” As a result, the claims were held to be directed to an abstract idea under Step 2A. With respect to Step 2B, the court determined that the claims failed to recite any elements (either individually or when considered as an ordered combination) that transform the abstract idea into a patent-eligible application of that idea. Ultimately, the court reaffirmed that generic computer components that operate in well-understood, routine, conventional ways, are insufficient to add inventive concept to an otherwise abstract idea. For more please see TLI Communications archive.

FairWarning IP v. Iatric Systems (October 11, 2016)

The claims generally covered a method of detecting improper access of a patient’s protected health information (PHI) in a computer environment. The Federal Circuit determined under Step 2A that the claims were directed to an abstract idea, which was defined as analyzing records of human activity to detect suspicious behavior. The analyzed claim merely collects information regarding accesses of a patient’s personal health information, analyzes the information according to several rules to determine if the activity indicates improper access, and then provides notification if it determines that improper access has occurred. The court explained that, while the claims recite one of a few possible rules, they were distinguished from McRo because in McRo there was a specific asserted improvement that transformed a process traditionally carried out by human artists into an automated process executed on computers. “The claims here are more like those in Alice than McRo,” the Federal Circuit wrote. “FairWarning’s claims merely implement an old practice in a new environment.” The Federal Circuit also distinguished Enfish, saying: “The claims here, in contrast, are not directed to an improvement in the way computers operate, nor does FairWarning contend as much.” With respect to Step 2B, the Federal Circuit concluded that, after searching for “something more,” there was nothing in the patent, either with respect to the individual limitations or as ordered combinations, that made the claims eligible.

For more discussion of patent eligibility, please see How to Patent Software Post-Alice and A Guide to Software Patent Eligibility at the Federal Circuit.

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