January 24, 2023
On December 16, in Adasa Inc. v. Avery Dennison Corporation, the Federal Circuit upheld patentability of claims reciting an RFID transponder with storage for a particular type of serial number—affirming the district court’s summary judgment that claim 1 of U.S. Patent No. 9,798,967 satisfies 35 U.S.C § 101. The decision is among a handful of cases where the court has found improvements in data indexing and data structures to be patent-eligible subject matter and not unpatentable abstract ideas.
Adasa’s ’967 patent relates to methods and systems for commissioning radio-frequency identification transponders (RFID tags). Commissioning refers to the process of encoding RFID tags with unique object-associated information, similar to barcodes, that facilitates the object’s identification and tracking in commerce. To ensure each RFID tag is commissioned to a unique code, the RFID industry assigns each tag a serialized object number (Electronic Product Code or EPC) in accordance with global formatting standards. Each EPC comprises object class information and a serial number. To ensure serial number uniqueness, a central authority issues EPC numbers from a central database for manufacturers, products, and items based on a strategic serialization that avoids duplication.
One of the drawbacks with commissioning RFID tags from a central database is that it requires encoders to maintain a continuous network connection with the central database. The ’967 patent overcomes this connectivity limitation through a system and method that commissions RFID tags without requiring external authorization from the central authority on a transponder-by-transponder basis. The ’967 patent teaches subdividing serial number ranges into blocks that are defined by a fixed number of “Most Significant Bits” (MSBs). This subdivision of serial numbers into blocks based on MSBs allows individual encoders to commission unique serial numbers within their respectively assigned blocks without the need to reconnect to a central database, or at least until all numbers in the assigned block have been exhausted.
At issue on appeal was whether the claim was directed to the abstract idea of mentally assigning meaning to a sub-section of a data field, as argued by Avery Dennison, or to “an encoded RFID transponder implemented with a memory structure accommodating a specific hardware-based number scheme,” as held by the district court. The Federal Circuit reviewed the decision de novo and applied the two-step Alice framework. Under Alice, courts apply a first step that determines whether a claim is directed to a “patent-ineligible concept,” such as an abstract idea. If it is not, the inquiry stops, and the subject matter is deemed eligible. If the claim is directed to a patent-ineligible concept, the court then moves to a second step and considers the claim elements, individually and as an ordered combination, to determine whether the additional elements transform the nature of the claim into a patent-eligible subject matter.
Applying the first step of the Alice framework, the court determined that claim 1 was directed to patent-eligible subject matter. In reaching this determination, the court considered how the claim focused on the hardware-based data structure of the serial number space and required the space to include a serial number selected from an allocated block. The court also considered how the serial number necessarily comprised (1) a limited, predefined sequence of higher order bits at the leading end of the serial number (the MSB block) and (2) the remaining bits of lesser significance. The court noted how the claimed MSBs functioned as an additional data field that uniquely identified the allocated block from which it came and emphasized how the resulting improvements came from the unique correspondence between the physically encoded data on the claimed RFID tags and the pre-authorized blocks of serial numbers, which were hardware-based data structure improvements to the technological process and not mere mental processes.
In support of its decision, the court cited two earlier decisions, Enfish v. Microsoft and Uniloc v. LG,where it likewise held that claims directed at data structures were not abstract ideas despite also having a mental processing component. In Enfish, the court highlighted improvements in a computer’s ability to process data in holding that claims reciting the storing and retrieving of data using a self-referential database were eligible subject matter. In Uniloc, the court focused on improvements in latency reduction in computers and held that claims reciting the appending of an additional data field to a prior art data structure used for polling stations in a communication system were eligible subject matter.
This decision represents further development in the post-Alice analysis of claims under § 101, and in particular with respect to claims directed to improvements in computer-related technologies. In evaluating the eligibility of patent claims under § 101, the Federal Circuit has compared claims to analogous claims it evaluated in earlier cases. This case along with Enfish and Uniloc provides practitioners a useful roadmap for claiming inventions involving data structures in a manner that bolsters their status as patent-eligible subject matter under § 101 and step 1 of the Alice framework.