Grüneberg and Myers - Intellectual Property Law


News and Recent Developments

A Light at the End of the Subject Matter Eligibility Tunnel?

The Court of Appeals for the Federal Circuit issued a ruling that could help patent holders on Wednesday, finding patent subject matter eligibility where a claim recites a specific technique to solve a technological problem arising in computer networking.

When the first set of cases and guidelines were instituted by the United States Patent and Trademark Office after the 2014 Alice decision on patent subject matter eligibility under section 101, things did not look so good for some of the affected technologies. Software and business methods-related inventions appeared to be hit hardest. Eventually, Alice-based eligibility rejections started appearing in other technological fields, including hardware-related inventions.

A typical rejection might assert without any evidence that the claims are directed to an abstract idea and any additional claim elements do not add substantially more to the claims, therefore rendering the claims unpatentable. The Patent Office maintained such rejections even while indicating that the claims were novel over the prior art.

When first encountering this type of formulation, a question arose: if the claims are directed to a well-known abstract idea, such as a fundamental economic principle, and the additional claim elements do not add substantially more to the claims, then how could the claims also be novel and inventive over the prior art? The case law eventually came to a similar conclusion as evidenced by the latest USPTO subject matter eligibility guidelines and a recent case SRI International, Inc. v. Cisco Systems, Inc. Under the new 2019 Revised Patent Subject Matter Eligibility Guidance, even if the Examiner can properly assert that the claims are directed to an abstract idea (a type of “judicial exception” to patent eligibility), the eligibility inquiry ends if the claims as a whole are integrated into a practical application. Even if this practical application argument does not apply, the claims can survive the eligibility inquiry if the claims, as a whole, provide an inventive concept.

The recent SRI case, which also favors patent holders, received a decision from judges Lourie, O’Malley, and Stoll at the United States Court of Appeals for the Federal Circuit (CAFC) on an Appeal from the District of Delaware. In essence, the court ruled that, under step one of the Alice test for eligibility, a claim is not directed to an abstract idea when the claim recites a specific technique to solve a technological problem arising in computer networks, and when the specification supports that improvement. This case arose from a suit by SRI against Cisco for infringement of two SRI network surveillance patents. At the district court, Cisco launched a summary judgment effort attacking various issues, including that the claims are drawn to patent ineligible subject matter. The district court denied Cisco, also finding that Cisco was willfully infringing the patents. On appeal, Cisco argued against the denial of summary judgment of patent ineligibility, the denial of a motion for judgment as a matter of law that it did not willfully infringe the patents, and other issues.

The CAFC affirmed the district court's decision that the claims were not directed to an abstract idea under step one of the Alice analysis, finding that the claims were directed to using a specific technique (i.e., using a plurality of network monitors that each analyze specific types of data on the network and integrating reports from the monitors) to solve a technological problem of identifying hackers or potential intruders into a computer network. The CAFC cited the specification as bolstering their conclusion that the claims are directed to a technological solution to a technological problem. 

Cisco argued that the claims were analogous to the ineligible claims in Electric Power Group, LLC v. Alstom S.A., as they are merely directed to generic steps required to collect and analyze data. However, the CAFC distinguished the Electric Power case because those “claims were drawn to using computers as tools to solve a power grid problem,” whereas the claims at issue here are drawn to “improving the functionality of computers and computer networks themselves.”

The CAFC did, however, agree with Cisco in finding a lack of substantial evidence to support the Delaware jury’s finding that Cisco willfully infringed the patents-in-suit. The appeals court therefore vacated and remanded on this issue. Specifically, SRI presented evidence that Cisco expressed interest in the patented technology and met with SRI’s inventor in 2000 before developing its infringing products. Neither party disputed that Cisco did not know of SRI’s patent until May 8, 2012, when SRI sent its notice letter to Cisco. The CAFC directed the district court to decide in the first instance whether the jury’s presumed finding of willful infringement after May 8, 2012 is supported by substantial evidence.

Judge Lourie dissented, arguing that claims recite nothing more than deploying network monitors, detecting suspicious network activity, and generating and handling reports and add nothing concerning specific means for detecting of the suspicious activity based on “analysis” of traffic data.

Eric Myers