The Software IP Report

Guidance from Patent Claims Surviving Alice

By Charles Bieneman

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

A Delaware magistrate judge has provided some insights for patent drafters who contemplate scrutiny under the Alice abstract idea test. In M2M Solutions, LLC v., Inc., Civil Action No. 17-202-LPS-CJB (D. Del. Dec. 11, 2017), Magistrate Judge Burke provided a report and recommendation to deny, albeit without prejudice, the defendant’s Rule 12(b)(6) motion seeking dismissal, based on an allegation of patent-ineligibility under 35 USC § 101, of a complaint alleging infringement of United States Patent Nos. 8,504,007, 8,577,358, and 8,577,359.

All three of the patents-in-suit are entitled “System and Method for Remote Asset Management,” and claim priority to a common PCT application. The court characterized the patents as directed to wireless machine-to-machine applications for managing and monitoring “consumer device assets.” The patent claims were of similar scope, and the court focused on the claims of the ’007 patent is exemplary. (The claims are not reproduced here due to their length, but the ’007 patent is linked to above.)

Analyzing the claims in light of Federal Circuit cases including Enfish, LLC v. Microsoft Corp. and BASCOM Global Internet Services, Inc. v. ATT Mobility LLC., the court concluded that it was a “close call” whether the claims were directed to the abstract idea of identifying and organizing information, “as opposed to a non-abstract consumer usage information solution.” But under Alice step two, and considering that at the pleading stage the court had to consider the facts in the light most favorable to the plaintiff, the court saw enough to prevent a conclusion of patent-ineligibility.

The court gave three reasons for its “difficult” decision. First, citing BASCOM, the court saw “evidence in the patents suggesting that the consumer usage information solution amounts to a specific technological step forward in the realm of [machine-to-machine] communication systems.” The background section in the specification discussed benefits that could be provided to consumers by a centralized asset management system, including an ability to provide better-prioritized menus.

Second, the court thought that the claims had just enough specificity to survive at the pleading stage. The claims recited a “remote computer server” that “does receive particular types of information,” including “consumer usage information” as well as “operational status information.” Even if the claims did not recite more than generic computer hardware, or explain how the server would be programmed to use this information, these were facts that might help the defendant “when the day at summary judgment,” but not “at the pleading stage.”

Third, the court accepted the patent owner’s argument that the Federal Circuit’s decision in Visual Memory, LLC v. NVIDIA Corp. supported denying the present motion. In that case, a divided Federal Circuit panel reversed a lower court’s decision holding that claims directed to an enhanced computer memory were patent-ineligible. Acknowledging that the Visual Memory court had carried out its analysis under Alice step one, as opposed to step two being visited by the present court, the court nonetheless thought that Visual Memory supported its present conclusion.

The court reasoned that, as in Visual Memory, here the patent specification provided sufficient indication “at this stage, to plausibly suggest patent eligibility” that a “technological improvement” could be found in the claimed “consumer usage information solution,” specifically, an improvement providing “foreign enhanced, non-conventional [machine-to-machine] communications system.” Possibly, the court said, “the necessary innovation” lay not in any specific programming, but “simply in the creation of [a machine-to-machine] communications system that uses consumer usage information to modify stored data on consumer device assets.”

Lessons for Practice

I of course would caution against reading too much into any one district court case, especially the denial without prejudice of a motion to dismiss, but the opinion here took pains to emphasize the closeness of its conclusion, and the fact that it’s conclusion could be different at a later stage of the proceedings. Nonetheless, there are some valuable lessons here. Specifically, although many of us have been taught to draft short background sections, and to dispense with discussion of advantages and benefits achieved by a disclosed invention, this conventional wisdom should be rethought in the post-Alice world. Explaining a technical problem, a technical solution, and technical benefits can help overcome patent-eligibility challenges both at the USPTO, and, as here, in district courts.