Background of Section 101 or patent eligibility issue
Ever since Alice (2014), the USPTO and the courts have to a large extent invalidated software patents. Also, the USPTO has had a significantly lower than average patent allowance rate for software inventions. The reason is that Alice caused the courts and the USPTO to treat many software inventions as though they were abstract ideas and not eligible for patent protection. Intellectual Ventures stands for the proposition that using a new coined term to describe a convention process will not transform an abstract idea into an invention eligible for patent protection.
New coined term to describe a convention process will not transform an abstract idea into an invention eligible for patent protection
The following case teaches us that a new coined term or unique label used to reference a conventional process will not transform an otherwise abstract idea into patent eligible subject matter.
Facts of Intellectual Ventures v. Capital One
In Intellectual Ventures v. Capital One (Fed. Cir. 2017), the case relates to U.S. Pat. Nos. 7,984,081 (hereinafter referred to as “’081 Patent) and 6,546,002. The opinion described the patents as directed to the following:
“The ’081 patent identified what its inventor perceived as a need to “allow[] the user to view and update XML documents in different formats, and allow[] the user to manipulate the data and perform actions without programming skills.” ’081 patent col. 1 ll. 45–48. To fulfill this need, the patent describes presenting the user with a second document—the “dynamic document”— which is based upon data extracted from the original XML document. According to the patent, the user can then make changes to the data displayed in the dynamic document and the changes will be dynamically propagated back into the original XML document (despite the acknowledged compatibility problems with such documents).”
Two-Step inquiry for patent eligibility analysis
The Supreme Court set forth a two-step inquiry to determine if an invention is eligible for patent protection. First, the court must determine whether the claim is directed to a patent-ineligible concept, i.e., a law of nature, a natural phenomenon, or an abstract idea. If so, then the court must determine whether the elements of the claim, considered “both individually and ‘as an ordered combination,’” add enough to “‘transform the nature of the claim’ into a patent eligible application.”
Application of patent eligibility analysis on Intellectual Ventures
Under step one of the eligibility analysis, the Federal Circuit concluded that the ‘081 patent claims at their core was directed to the abstract idea of collecting, displaying and manipulating data.
Under step two, the Patent Owner proffered two reasons that the claimed invention of the ‘081 patent recites an inventive concept. Firstly, the Patent Owner argued that the patent accomplishes a unique improvement to a technological process by specifying how to manage and modify XML documents of varying formats and syntax in a way that departed from convention. They did this through a dynamic document based upon MRTs and PRTs so the system can modify multiple sets of XML data components at once through a user interface.
MRTs and PRTs were new coined term(s) in software and coined by the inventor. The Patent Owner (Intellectual Ventures) proffered these coined term as the “how-to” in achieving the stated benefits. The inventor coined the coined term to describe the organizational structure of the data.
Coined term does not make abstract idea patent eligible
The Federal Circuit looked beyond the coined terms (i.e., MRT and PRT) recited in the claims. They looked to its underlying definition. By looking at the definitions of the coined terms, the Federal Circuit found that each of the coined term merely referred to conventional structures. In particular, MRT refers to “management record types” and PRT refers to “primary record types” (PRTs). The Federal Circuit found that a PRT is simply a data structure that contains unspecified data extracted from an XML documents and an MRT is merely a collection of PRTs. For this reason, the Federal Circuit explained that these coined labels or terms do not make the underlying concept inventive.
Coined labels or terms do not make the underlying concept invention
The Patent Owner argued for patentability by stating that the specific combination of PRTs, MRTs and dynamic document overcomes the previous problem of incompatibility of XML documents with different XML syntaxes and different XML formats, relational database schemes, and messages formats. The Federal Circuit disagreed in that the claims do not recite particular features to yield these advantages. Although the claims purport to modify the underlying XML document in response to modifications made in the dynamic document, this merely reiterates the patent’s stated goal itself. Nothing in the claims indicate what steps are undertaken to overcome the stated incompatibility problems with XML documents to propagate those modifications into XML document. The Federal Circuit found that the claim language provided only a results oriented solution, with insufficient detail for how a computer accomplishes it. The law demands more. In this regard, the Federal Circuit appears to be asking more for the “how to” of achieving the stated benefit. How do the databases take data and modify it so that it can be used to overcome incompatibility issues?
Although merely coming up with new terms or unique labels will not overcome patent eligibility issues, the court appears to recommend that claims be drafted to state the steps or structures that achieve the stated benefit to overcome the patent eligibility issues under Alice.
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