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IP Insights - November 2019

A Ray of Hope under Alice?

By: Barry Bretschneider

On November 15, 2019, the Federal Circuit offered a ray of hope, and in doing so some pointers, in what has been a dismal outlook for patentability under 35 USC 101 for computer-related inventions since the Supreme Court’s Alice decision.  In Koninklijke KPN N.V. v. Gemalto M2M GmbH, CAFC App. No. 2018-1863, a CAFC panel (Dyk, Chen and Stoll, JJ., opinion by Judge Chen) delivered a rare reversal of a judgment of patent ineligibility under 35 USC 101 on the pleadings.

The district court (D. Del., Chief Judge Stark) held that the device claimed in KPN’s independent claim 1 and dependent claims 2-4 for producing error checking based on original data and including “a varying device configured to vary original data prior to supplying said original data to the generating device as original data” set forth “no more than mere abstract data manipulation operations, such as ‘reordering data and generating additional data.’”  The district court also found that KPN’s “purported inventive concept [was] not captured in the claims.”  KPN appealed only on dependent claims 2-4, which read (emphasis by the court):

2. The device according to claim 1, wherein the varying device is further configured to modify the permutation in time.
3. The device according to claim 2, wherein the varying is further configured to modify the permutation based on the original data.
4. The device according to claim 3, wherein the permutating device includes a table in which subsequent permutations are stored.

The CAFC reversed, finding that claims 2-4 were patent eligible “because they are directed to a non-abstract improvement in an existing technological process (i.e., error checking in data transmissions).”  Although, the court noted, “[a]n improved result, without more stated in the claim, is not enough to confer eligibility to an otherwise abstract idea,” citing Finjan, Inc. v. Blue Coat System, Inc., 879 F.3d 1299, 1305 (Fed. Cir. 2018), the court found that claims 2-4 did “recite a specific means or method that solves a problem in an existing technological process.”  In particular, the court found that “[b]y requiring that the permutation applied to original data be modified ‘in time,’ claim 2, which is incorporated into all appealed claims, recites a specific implementation of varying the way check data is generated that improves the ability of prior art error detection systems to detect systematic errors.” 

The court rejected appellee Gemalto’s argument that claims 2-4 were patent ineligible because they did not recite a step of using the generated check data to perform error correction, on the basis that:
 
The court’s opinion contains a lot more useful discussion, to which the reader is directed.  In particular, the court distinguished the line of cases including Digitech Image Technologies, LLC v. Electronics for Imaging, Inc., 758 F.3d 1344 (Fed. Cir. 2014), and RecogniCorp, LLC v. Nintendo Co., 855 F.3d 1322 (Fed. Cir. 2017), on the basis that the claims in those cases either did not specifically capture the asserted improvement or recited nothing more than standard encoding and decoding as the asserted technological contribution.

On the whole, the court’s reasoning is encouraging and suggests approaches that improve the chances of avoiding 35 USC 101 challenges to patents directed to inventions in computer technology:

• If you lose before the district court, don’t appeal on every claim; choose those that recite specific technical features that show some improvement over prior systems or processes in the same area of technology.  KPN’s concentration on claims 2-4 deflected any attempt to undermine its case with the weaknesses of claim 1.
• Focus on how the claimed improvements actually enable a known system o process “to do things it could not do before.”  Finjan, 879 F.3d at 1305.  The court was persuaded that the claimed invention was not merely directed to an abstract idea, avoiding the need to go to Alice step 2.