The Software IP Report

Functional Claims Can Survive Alice Challenges If They Seem “Technical”

By Charles Bieneman

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

Patent claims directed to providing portable storage devices with access to terminals have survived a motion for summary judgment that made a patent-eligibility challenge under 35 U.S.C. § 101 and Alice Corp. v. CLS Bank.  IOENGINE LLC v. Interactive Media Corp., No. 14-1571-GMS (D. Del. Jan. 4, 2017).  Claims of U.S. Patent No. 8,539,047 are directed to portable device called “a tunneling client access point (TCP) that provides data storage and processing and connects to “an access terminal.” The independent claim considered by the court essentially recited known hardware programmed to allow the portable device to establish communications with the access terminal. Other courts might have said that reciting abstract functionality in combination with known and generic hardware did not present a significant innovation rendering claims patent ineligible. This court, however, was persuaded that the claims recited a technical solution to a technical problem.

Claim 1 of the ’047 patent is available here. The defendant argued that the claim was “generally directed to the abstract idea of providing communication with computing devices.” According to the defendant, “the specification fails to disclose how or why the first, second, or third program code execution references are anything but a furtherance of an abstract idea.”  The defendant also advanced the argument that “a generic computer implementation” with “a general purpose computer to implement its algorithm for providing communication with the portable device” did not render the claim patent-eligible.

The court thought that the defendant had “oversimplified” the claims.  According to the court, the claims here were like those in McRO, Inc. v. Bandai Namco Games Am. Inc., reciting “a specific arrangement of components and a very specific implementation and structure of the executable program code.”  Ultramercial, Inc. v. Hulu, LLC, the court said, was distinguishable, because “the Independent Claims here define a tangible portable device with an unconventional hardware configuration that is able to run specific program code to provide the claimed functionality.”

Moreover, and notably, the court was swayed by the fact that the ’047 patent specification discussed providing a technical solution to a technical problem. The specification explained that “no effective solution to securely access, execute, and process data is available in an extremely compact form.” After discussing these problems in detail, the specification went on to say that “the above-identified problems of limited computing devices are overcome and a technical advances achieved in the art of portable computing and data access.”

Lessons for Practice

First, this case highlights the usefulness of the problem-solution approach to combating Section 101 rejections and invalidity. That is, in patent applications that could face patent-eligibility challenges, patent drafters are well-advised to state a problem that is characterized as “technical” as much as possible, and then to explain how that technical problem is solved by presently-disclosed subject matter.

Second, this case is another example of a by now well-worn theme of this blog: patent-eligibility jurisprudence under Section 101 and Alice is a model of inconsistency. Often, functional claim language combined with generic computing technology is enough to sink claims under Alice. Here, the patent owner was able to salvage patent-eligibility from the discussion that it could argue was “technical.”

Finally, without knowing anything about the details or the parties in this case, one can only speculate, but it seems likely that this is a case where the procedural posture may have mattered. The patent-eligibility question here was decided on summary judgment. The court’s analysis was cursory, and in fact contained in a two-page footnote to its Scheduling Order.  Perhaps it would have been different if the question had been presented earlier, before the parties and the court had invested the resources to get to the summary judgment stage.