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IP Alert: Federal Circuit Holds Software Invention Patent-Eligible Under Section 101 After Alice

May 16, 2016

On May 12, 2016, in Enfish, LLC v. Microsoft Corp, et al., the U.S. Court of Appeals for the Federal Circuit held that claims to a logical model for computer database technology were patent-eligible and not abstract. The case involved U.S. Patent No. 6,151,604, titled “Method and apparatus for improved information storage and retrieval system,” and U.S. Patent No. 6,163,775, titled “Method and apparatus configured according to a logical table having cell and attributes containing address segments.” The claims of these patents generally recited a data storage and retrieval system for a computer memory and specified how software organizes a logical table in a specific way. Enfish is a significant case in the law of patent eligibility, and it provides guidance in delineating the types of claims that are likely to be struck down as abstract from those likely to be upheld.

The U.S. Supreme Court’s opinions in Alice Corp. v. CLS Bank International and Mayo v. Prometheus constructed a two-step framework for determining patent eligibility for claims challenged under section 101 as based on abstract ideas. In the first step, a court must determine whether the claims at issue are directed to a patent-ineligible concept, which include laws of nature, natural phenomena, and abstract ideas. In the second step, the court must determine whether the patent adds to the idea something extra that embodies an inventive concept. Since Alice, many software patents have been held invalid for indefiniteness.

The district court, the Central District of California, had held all of the Enfish claims as ineligible under section 101 (and some claims invalid as anticipated under 35 U.S.C. § 102.) There, the defendants, including Microsoft, had argued in their motion for summary judgment that the patents claimed only abstract ideas that were implemented using a computer. The district court determined that the claims were directed to the abstract idea of “storing, organizing, and retrieving memory in a logical table,” concluding that the Enfish patents were essentially capturing the abstract concept of organizing information using tabular formats. The district court also relied on the fact that the term “logical table” refers to a logical data structure, as opposed to a physical structure.

The Federal Circuit rejected the district court’s characterization of the patent claims, holding that “describing the claims at such a high level of abstraction and untethered from the language of the claims all but ensures that the exceptions to § 101 swallow the rule.” The opinion concludes that “the claims are not simply directed to any form of storing tabular data, but instead are specifically directed to a self-referential table for a computer database.”

Specifically, the Federal Circuit noted that the Enfish claims “describe how the bits and bytes of those tables are arranged in physical memory devices.” The Enfish patents describe their database as having a “self-referential” property because “the patented logical model includes all data entities in a single table, with column definitions provided by rows in that same table.” The court observed that a self-referential database was contrary to conventional logical models, including the more standard relational database model. The court explained that “[i]n finding that the claims were directed simply to ‘the concept of organizing information using tabular formats,’ the district court oversimplified the self-referential component of the claims and downplayed the invention’s benefits.”

The Federal Circuit also emphasized that the claimed “self-referential” database offers benefits not available in conventional databases, including allowing for faster searching of data, more flexibility in configuring the database, and more-effective data storage in smaller memory. The court explained that “our conclusion that the claims are directed to an improvement of an existing technology is bolstered by the specification’s teachings that the claimed invention achieves other benefits over conventional databases.”

Notably, the Federal Circuit’s opinion addresses and rejects the popular notion that software inventions are all inherently patent-ineligible after Alice, stating there is “no reason to conclude that all claims directed to improvements in computer-related technology, including those directed to software, are abstract. . . .” The opinion explains:

We do not read Alice to broadly hold that all improvements in computer-related technology are inherently abstract. . . . 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. . . . 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. . . .

The Federal Circuit explained that in step one of the Alice/Mayo framework, it is “relevant to ask whether the claims are directed to an improvement to computer functionality versus being directed to an abstract idea” for which “computers are invoked merely as a tool.” In step one a court “cannot simply ask whether the claims involve a patent-ineligible concept because essentially every routinely patent-eligible claim involving physical products and actions involves a law of nature and/or natural phenomenon—after all, they take place in the physical world.” The court repeatedly emphasized that these issues must be part of step one of the Alice/Mayo framework and should not be considered only in step two.

The Federal Circuit’s opinion about the Enfish claims relies on its analysis of step one, holding that “the plain focus of the claims is on an improvement to computer functionality itself, not on economic or other tasks for which a computer is used in its ordinary capacity.” The Federal Circuit then determined that it did not “need to proceed to step two” because “it is clear . . . that the claims are not directed to an abstract idea.”

The court also rejected the idea that because “the improvement is not defined by reference to ‘physical’ components” the claims are patent-ineligible, explaining that “[m]uch 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.”

Significantly, the court also rejected the idea that because the invention “run[s] on a general-purpose computer,” the claims are patent-ineligible. It was important that the Enfish patents were not directed to adding conventional computer components to well-known business practices.

The Enfish case is of particular significance because in it the Federal Circuit reaffirmed that software inventions remain patent-eligible under section 101 after the Supreme Court’s 2014 Alice decision.

For more information, please contact Fitch Even partner Alison Aubry Richards, author of this alert.

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