The Software IP Report

Federal Circuit Clearly Says Software Can Be Patentable

By Charles Bieneman

Categories: Patent Eligibility, Software Patents, The Software IP Report

A Federal Circuit panel (Judges Moore, Taranto, and Hughes) has unambiguously stated that some — one might even say much — software is patent-eligible, reversing findings of invalidity under 35 U.S.C. § 101 for two patents “directed to an innovative logical model for a computer database.”  Enfish, LLC v. Microsoft Corp., No. 2015-1244 (Fed. Cir. May 12, 2016) (opinion by Judge Hughes).  In addition to reversing a summary judgment of Section 101 invalidity, the court vacated a summary judgment of invalidity under 35 U.S.C. § 102, and left intact a summary judgment of non-infringement.  But the reason why this case will be a big deal is the holding — and analysis — pertaining to the patent-eligibility of software inventions.

The “patented logical model” of U.S. Patent Nos. 6,151,604 and 6,163,775, the court explained, “includes all data entities in a single table, with column definitions provided by rows in that same table.”  This so-called “self-referential property” stood in contrast “with the more standard ‘relational’ model,” where “each entity (i.e., each type of thing) that is modeled is provided in a separate table.”  To illustrate this point, the opinion explained how relational tables are conventionally separately provided for entities such as a “document,” a “person,” and a “company.”  The “self-referential model” embedded additional information in table rows to allow this information to be combined into a single table.

Further, the court emphasized benefits flowing from the patented logical model.  These include indexing to support faster searching, more effective storage of data, and more flexibility in database configuration.

To reach its holding, the court of course reviewed the familiar Alice/Mayo two-part patent-eligibility test: (1) is a patent claim drawn to an abstract idea or law of nature, and (2) if so, does the claim include a significant additional innovation to render the abstract idea patent-eligible?  The court then delivered a statement that will undoubtedly draw a lot of attention, because it unambiguously conveys that software is not, as some patent examiners would have it, per se patent-ineligible.  Quite to the contrary:

We do not read Alice to broadly hold that all improvements in computer-related technology are inherently abstract and, therefore, must be considered at step two.  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 and therefore only properly analyzed at the second step of the Alice analysis. 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 and necessarily analyzed at the second step of Alice, nor do we believe that Alice so directs. Therefore, we find it relevant to ask whether the claims are directed to an improvement to computer functionality versus being directed to an abstract idea, even at the first step of the Alice analysis.

Here, the claims were not directed to an abstract idea because “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.”  Moreover, the independent claim that the court analyzed included a means-plus-function claim term that, agreeing with the District Court, the Federal Circuit held was adequately supported under 35 U.S.C. § 112.

The court disagreed with the District Court that the claims were directed to the abstract idea “of organizing information using tabular formats.”  Instead, “[h]ere, 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.”  The specification explained how “the self-referential table functions differently than conventional database structures.”  This different function achieved improved computing efficiencies.  Thus, the mere fact that the invention ran on a general purpose computer, or was not defined by a physical system, was not fatal to the claims.  The court explained that

we are not faced with a situation where general-purpose computer components are added post-hoc to a fundamental economic practice or mathematical equation. Rather, the claims are directed to a specific implementation of a solution to a problem in the software arts. Accordingly, we find the claims at issue are not directed to an abstract idea.

As mentioned above, the court also declined to find the means-plus-function claim invalid for indefiniteness.  A “four-step algorithm” was sufficiently disclosed to support “the claimed function of ‘configuring said memory according to a logical table.’”  As also mentioned above, the court also reversed a finding of Section 102 invalidity and affirmed a summary judgment of non-infringement.

The takeaway here hardly needs to be stated: this opinion unambiguously rejects the thesis that patent claims directed to data processing, or “pure” software, cannot be patent-eligible.  And note that this decision goes even further: not all software claims recite an abstract idea.  Assuming this decision stands, patent owners in litigation and patent applicants alike have a new strong authority to cite in support of patent-eligibility of their software claims.

A caveat – this decision does not, of course, mean that all software is patent-eligible.  I believe Judge Hughes opinion, at least implicitly, makes that very clear.  I read this decision as in line with those (see Judge Mayer’s Ultramercial concurrence) who say that the true test for patent-eligibility post-Alice is whether claims are of a technical nature, e.g., achieve a “technical effect.”  Business methods in particular remain – and likely will remain – under siege.