The Software IP Report

When Does Novelty Confer Patent-Eligibility?

By Charles Bieneman

Categories: Patent Eligibility, The Software IP Report

Refusing to consider only elements of patent claims that differed from the prior art in considering patent-eligibility under the test of Alice Corp. v. CLS Bank and 35 U.S.C. § 101, a court has denied a defendant’s motion to dismiss.  Capstan AG Systems, Inc. v. Raven Indus., Inc., No. 16-cv-04132-DDC-KGS (D. Kans. Jan 11, 2017).  The patents-in-suit, U.S. Patent Numbers 8,191,795 and 8,523,085, claim systems and methods for controlling valves of agricultural sprayers.  For example, the claimed invention controlled flow rates to provide even spraying when a tractor was turning.

There was no dispute that the claimed improvement included a mathematical formula, i.e., an abstract idea. The defendant seized on this fact, and argued that Federal Circuit precedent directed the court to base its patent-eligibility analysis only on claim elements that represented an advance over the prior art.  The court disagreed, citing that old warhorse, the Supreme Court’s 1981 decision in Diamond v. Diehr, to explain that “defendants’ method would require the court to import the novelty inquiry found under § 102 into the § 101 analysis.”  Recent Federal Circuit cases likewise made clear that the claims should be considered as a whole for patent-eligibility purposes.  See Affinity Labs of Tex., LLC v. DIRECTV, LLC; TLI Communications LLC v. AV Automotive LLC; and McRO, Inc. v. Bandai Namco Games America Inc.

This case was like “Diehr and McRO, Inc., [where] claims involving abstract ideas were nonetheless patent-eligible because the claims sought to solve a problem with existing patentable technology.”  The key question, the court explained was

what problem plaintiff’s ’795 and ’085 patents set out to solve. If they aimed to solve a problem that itself is patent-ineligible—like storing the digital images at issue in TLI Communications—then plaintiff’s patents are directed to patent-ineligible concepts. But if the patents set out to solve a problem that itself is patent-eligible—like improving existing 3-D animation technology in McRO, Inc.—then plaintiff’s patents are directed to patent-eligible concepts and survive step one of the Alice inquiry.

Here, the problem being solved supported patent-eligibility: “the focus of the ’795 and ’085 patents’ claimed advance of the prior art is the ability to control each nozzle in an agrochemical spraying system individually, and not a mathematical formula.”  That is, the patents here “use a mathematical formula to improve an existing technological process.”

Further, even after concluding that the claims of the ’795 and ’085 patents passed the abstract idea prong of the Alice test, the court then went on to conclude that the claims passed the second prong; they recited an innovation that would have rendered an abstract idea patent-eligible.  This was because, the court stated without any apparent irony, at the motion to dismiss stage,

the court must conclude that individual nozzle control was not part of the PWM prior art. Improving the existing art in this fashion thus could provide the inventive step needed at step two of the Alice test, and so defendants’ invalidity defense does not appear plainly on the face of the Complaint and attached patents.

Lessons for Practice

Like other cases recently reported on this blog, the present case supports using the problem-solution approach in drafting specifications to support claims that might be attacked under Alice.  An explanation of how claimed subject matter solves a technical problem and improves technology gives a court a hook on which it can reject arguments that claims are not eligible under 35 U.S.C. § 101.

Moreover, please forgive the legal realism, but (based solely on reading the opinion) this appears to be a case in which the background facts, and the venue, mattered.  The plaintiff was a Kansas start-up, and had introduced a product that, according to the plaintiff, enjoyed phenomenal success with farmers.  The defendant has recently broken a supply relationship with the plaintiff, moving to a competitor’s system, now accused of infringement.  These facts are not all that relevant to the question of patentability, but feature prominently in the court’s opinion. And in this light, it would have been far more surprising if the court was unwilling to dismiss this case at the pleadings stage.