Focusing Questions of Software Patent Eligibility on the Specific Technological Solution and Specific Technological Problem Being SolvedThe U.S. Supreme Court presented a two-step framework for determining whether a claim contains patentable subject matter under the abstract idea exception to 35 U.S.C. § 101 in Alice Corp. Pty. Ltd. v. CLS Bank Int’l. According to the framework erected in Alice, one must first “determine whether the claims at issue are directed to one of those patent-ineligible concepts,” such as an abstract idea. Then, if so, one must determine whether “additional elements transform the nature of the claim into a patent-eligible application.” Despite the Supreme Court’s Alice decision, Alice and its progeny have yet to provide a consistent and specific definition and/or test for what exactly is an abstraction under 35 U.S.C. § 101. As a result, the Federal Circuit has struggled to consistently apply Alice to computer software, and the law continues to be in flux.

Ancora Technologies, Inc. vs. HTC America, Inc. appears to be an attempt by the Federal Circuit to provide a test to determine whether the claimed computer-related subject matter is an abstraction. As noted by the Federal Circuit at page 11 of Ancora, the test provided in Ancora relates to step one of the Alice analysis. In short, Ancora requires that software claims identify the specific technological technique being used to solve a specific technological problem. Under this analysis, the Federal Circuit in Ancora held that the claims in the Ancora Technologies’ U.S. Patent 6,411,941 (the “‘941 patent”) were specific enough to pass step one of the Alice test. The Federal Circuit thus reversed the United States District Court for the Western District of Washington’s ruling that the claims of the ‘941 patent were directed to patent ineligible subject matter under Alice.

Claims of 941 and Technological Background

Ancora Technologies, Inc.’s ‘941 patent describes and claims methods of preventing a computer from running unauthorized software. Specifically, claim 1 of the ‘941 patent recites:

  1. A method of restricting software operation within a license for use with a computer including an erasable, non-volatile memory area of a BIOS of the computer, and a volatile memory area; the method comprising the steps of:

selecting a program residing in the volatile memory,

using an agent to set up a verification structure in the erasable, non-volatile memory of the BIOS, the verification structure accommodating data that includes at least one license record,

verifying the program using at least the verification structure from the erasable non-volatile memory of the BIOS, and

acting on the program according to the verification.

Of particular importance to the Federal Circuit’s analysis in Ancora is the verification structure stored in the erasable, non-volatile memory of the BIOS. BIOS memory is typically utilized to store start-up programs in a computer. However, this is not how the BIOS memory is being used in the ‘941 patent. Instead, the ‘941 patent teaches using the BIOS memory to store a verification structure that can be used to determine whether the program stored in volatile memory is licensed to run on that computer. The innovation taught by the ‘941 patent thus lies in the interaction between the verification structure stored in BIOS memory and the program that is stored in another memory structure to check for permission to run the program. This was a new and specific use of the BIOS memory. According to the ‘941 patent, using the BIOS memory instead of other computer memory makes it much harder to hack the verification structure because successfully hacking the BIOS memory would render the computer inoperable. The teachings of the ‘941 patent therefore solved a particular technological problem.

Federal Circuit’s Analysis

The Federal Circuit’s analysis is interesting in that it attempts to synthesize many of the Federal Circuit’s post-Alice computer-related decisions. The Federal Circuit focuses the question of abstraction in computer-related technologies by stating:

In cases involving software innovations, this inquiry often turns on whether the claims focus on ‘the specific asserted improvement in computer capabilities . . . or, instead, on a process that qualifies as an ‘abstract idea’ for which computers are invoked merely as a tool.’ Ancora at pg. 8 (citing Finjan, Inc. v. Blue Coat System, Inc., 879 F.3d 1299, 1303 (Fed. Cir. 2018) (external citations omitted)).

The Federal Circuit begins its analysis by characterizing its holding in Enfish. The Federal Circuit in Ancora describes Enfish as holding that the patent claims at issue were not directed to an abstract idea. According to Ancora, the claimed self-referential tables in Enfish improved the way that computers operated and handled data, which enabled programmers to construct databases in new ways and with less configuration prior to launch.

The Federal Circuit then moves onto its holding in Visual Memory LLC v. NVIDIA Corp. According to the Federal Circuit in Ancora, the claims in Visual Memory were directed to an improved memory system that configured operational characteristics of a computer’s cache memory to accommodate different types of processors without compromising performance. Thus, the patent in Visual Memory was characterized by the Federal Circuit as being specifically directed to an improved computer memory system, not to the abstract idea of categorical data storage.

Next, the Federal Circuit characterizes its holding in Core Wireless Licensing S.A.R.L. v. LG Electronics, Inc. The claims in Core Wireless were directed to a method for making websites easier to navigate on a small-screen device. According to the Federal Circuit in Ancora, the claims were not directed to the abstract idea of indexing information but rather directed to a specific type of index for a specific type of user and thus were not abstract.

Finally, the Federal Circuit discusses its holding in Data Engine Technologies LLC v. Google LLC. According to the Federal Circuit in Ancora, the claims in Data Engine were a specific technological solution in the art of electronic spreadsheets. The claimed method in Data Engine solved the navigation difficulties of prior art spreadsheets by providing a highly intuitive, user-friendly interface with familiar notebook tabs for navigating the three-dimensional worksheet environment. In Data Engine, the court distinguished other cases in which the claims were held to be directed to abstract subject matter, such as displaying a graphical user interface, or collecting, manipulating and organizing information. According to the court in Ancora, the claims in Data Engine recited a specific structure of notebook tabs within a spreadsheet display that performs the specific function of navigating within a three-dimensional spreadsheet. This provided the specificity required to find that the claims were patent eligible.

The Federal Circuit in Ancora then asserts that claim 1 of the ‘941 patent is not directed to an abstract idea based on the precedents of the aforementioned cases. According to the Federal Circuit, preventing a computer from using a program without authorization is not abstract “if done by a specific technique that departs from earlier approaches to solve a specific computer problem” (Ancora at pg. 10). Claim 1 of the ‘941 patent specifically identifies how a functionality improvement is effectuated. More specifically, claim 1 recites a structure containing a license record (i.e., verification structure) stored in a particular modifiable portion of the computer’s BIOS memory and that structure is used for verification by interacting with the distinct computer memory that contains the computer program to be verified. The technological problem solved is the vulnerability of license-authorization software to hacking. The Federal Circuit in Ancora thus concludes that claim 1 of the ‘941 patent is not abstract under step 1 of Alice because “[i]n short, claim 1 of the ‘941 patent is directed to a solution to a computer-functionality problem: an improvement in computer functionality that has ‘the specificity required to transform a claim from one claiming only a result to one claiming a way of achieving it’” (Ancora at pg. 11, quoting SAP America, Inc. vs. InvestPic, LLC).

Key Takeaway

The court’s holding in Ancora is a reminder to patent prosecutors that vague and generic software claims are unlikely to pass the Alice test. Whenever writing a software patent, patent counsel should be able to identify the specific technological technique being used and the particular technological problem being solved by the technique. The specific technological technique should be worked into the claims, and the particular technological problem being solved should be discussed in the specification in detail. Certainly, identifying the electronic components and working these electronic components into the claims will go a long way to ensure patent eligibility. If not, the claims should at least identify the virtual “structures” produced by the software in order to solve the particular technological problem, like in Data Engine. Software claims that merely recite actions (e.g., the processing of information) performed by a computer are not likely to pass step one of the Alice test under Ancora.

Federal Circuit Decision

Broadsoft, Inc. v. Callwave Communications, LLC, No. 2018-1124, 2018 WL 4999375, at *1 (Fed. Cir. Oct. 16, 2018) (per curiam) (affirming district court’s order finding claims invalid)

District Court Decision

Broadsoft, Inc. v. Callwave Commc’ns, LLC, 282 F. Supp. 3d 771 (D. Del. 2017)

Federal Circuit Affirms Decision Finding Telephone Dialing Claims IneligibleAdd internet telephony systems to the list of computer-related technologies considered for patent eligibility under 35 U.S.C. § 101. Under current law, among other requirements, in order to qualify as patent-eligible under § 101, a patent claim involving computer-related technology must be directed to something more than simply an abstract idea that fails to implement an inventive concept. A patent’s claims will fail this test if a court finds that they are simply directed to “method[s] of organizing human activity” or “a known idea” that “is routine and conventional.”

In Broadsoft, Inc. v. Callwave Communications, LLC, a three-judge Federal Circuit panel issued a per-curiam decision affirming the United States District Court for the District of Delaware’s grant of a motion for judgment on the pleadings as to patent ineligibility under 35 U.S.C. § 101. The trial court’s order examined claims in two patents assigned to Callwave Communications, U.S. Patent Nos. 8,351,591 and 7,822,188. The trial court found that the claims covered telephony methods involving conventional elements and lacking an inventive concept.

The Asserted Patents

The ’591 and ’188 patents have common specifications and are directed to techniques for placing internet telephone calls. The patents had two general types of claims: sequential dialing claims and single number outcall claims. Claim 40 of the ’188 patent was selected as an exemplary “sequential dialing” claim:

40. A method of processing calls, comprising:

receiving at a call processing system a message from an Internet protocol proxy regarding a first call from a caller;

determining if the first call is directed to a telephone address of a subscriber of services offered by the call processing system, wherein at least partly in response to determining that the telephone address is that of a subscriber:

accessing an account record associated with the subscriber, the account record including at least one subscriber instruction;

based at least in part on the subscriber instruction, placing a first outcall to a first communication device associated with the subscriber;

if the first outcall is not answered within a first number of rings or period of time, placing a second outcall to a second communication device associated with the subscriber; and [sic]

receiving a call connect instruction from the subscriber; and

instructing the call processing system to connect the first call to a third communication device.

Claim 1 of the ’591 Patent was selected as an exemplary “single number outcall” claim:

1. A method of processing calls, the method comprising:

storing in computer readable memory associated with a call processing system a first phone address associated with a first subscriber;

storing in computer readable memory a plurality of phone addresses for the first subscriber;

participating at the call processing system in a first call associated with the first subscriber, the first call associated with a second phone address different than the first phone address;

placing a first outcall from the call processing system to a first called party, wherein the call processing system inserts at least a portion of the first phone address in a callerlD field associated with signaling information associated with the first outcall;

causing the first call and the first outcall to be bridged;

participating at the call processing system in a second call associated with the first subscriber, the second call involving a subscriber communication device associated with a third phone address different than the first phone address;

placing a second outcall from the call processing system to a second called party, wherein the call processing system inserts at least a portion of the first phone address in a callerlD field associated with signaling information associated with the second outcall; and

causing the second call and the second outcall to be bridged.

The District Court Proceedings

Broadsoft filed a declaratory judgment action in the United States District Court for the District of Delaware seeking declaratory judgment that claims in Callwave’s patents were invalid. Callwave’s patents came under attack from Broadsoft after Callwave asserted those patents against Telovations, Inc., which had licensed accused software products from Broadsoft, and Bright House Networks, LLC, which had acquired Telovations. The software license agreement between Broadsoft and Telovations specified that Broadsoft owed an obligation to defend Telovations against patent infringement claims based on the software.

Broadsoft submitted motions seeking judgments that Callwave’s ’591 and ’188 patents were directed to patent ineligible subject matter under § 101. The motions also argued that the patents were invalid as anticipated under § 102 and obvious under 35 U.S.C. § 103.

Sequential Dialing Claims

Broadsoft argued that the idea of sequentially dialing a list of telephone numbers is an abstract idea that fails to provide any improvement to computer or technological processes. According to Broadsoft, the claims simply identify steps that automate the task of accessing a list of telephone numbers and sequentially dialing them, a task previously performed manually by a human. Callwave countered that the claims allow a call to be redirected without hanging up and redialing, a process impossible for a human operator who does not know any additional phone numbers for the party being called.

The court agreed with Broadsoft’s arguments, and found the sequential dialing claims were directed to an abstract idea. The court noted that the problem of callers receiving busy signals or being sent to voicemail rather than reaching the called party was a “human unavailability problem” that was not specific to telephone technology.

Broadsoft also argued that the sequential dialing claims lacked an inventive concept, partly because they simply use computer telephony to implement the idea of sequential dialing, and because no inventive concept is conveyed in claims that narrow an abstract idea to a particular technological application. Callwave cited McRo, Inc. v. Bandai Namco Games America, Inc., and argued that its claims did identify an inventive concept, focusing on three limitations addressing: 1) internet protocol proxy messaging for receiving or placing calls, 2) use of timing or number of rings to determine when to place a second call, and 3) use of a hybrid network to handle calls from different interfaces by converting call protocols.

The court found that none of the limitations Callwave identified represented an inventive concept. The court noted that the patent intended to solve the problem of calls ending in busy signals or voicemails, and failed to identify a technological solution for network interoperability, describing its call processing elements as “standard.” Use of timing rules to determine when to place a second call similarly failed to constitute an inventive concept because “there is nothing inventive about using a preset amount of time to determine when to initiate a particular step in a process, and it is difficult to imagine using in this system alternative rules not based on the passage of some period of time.” Unlike the decision in McRo, the sequential dialing claims did not require that the rules be obtained first. The patent lacked discussion about protocol conversion, leading the court to conclude that the process was just “routine.”

Single Number Outcall Claims

The single number outcall claims similarly identified an abstract idea and failed to include an inventive concept. The court found that exemplary claim 1 was essentially “directed to storing data in a database, looking up data from that database in response to the initiation of a phone call, and inserting at least a portion of that data in the already-existing callerID field,” and concluded that the “problem of being unable to reach a particular individual is a practical, human unavailability problem, not a technological one.” The court also noted that the claims could be practiced in an office setting by a human assistant. The court found no improvement to telephony technology or solution to a specific phone problem.

The court also agreed with Broadsoft regarding the lack of an inventive concept, stating that the call processing techniques of the claims were not directed to solving network interoperability problems, and that the patents “simply append[ ] conventional steps, specified at a high level of generality, [which is] not enough to supply an inventive concept.”

The Federal Circuit’s Decision

The Federal Circuit panel’s per curiam affirmance leaves Callwave with the option to request rehearing by the panel or the Federal Circuit as a whole en banc. Callwave has 30 days from the date of the opinion, or until November 16, 2018, to submit a petition for rehearing by the panel or rehearing en banc.

Impact on Current Law

The trial court’s decision occurred before Berkheimer v. HP, Inc., which generally states that factual issues may prevent a grant of judgment on the pleadings as to patent eligibility under § 101. But the Federal Circuit’s post-Berkheimer affirmance here indicates its agreement with the trial court’s conclusion that no such factual issues existed. Notably, the trial court’s decision finds absence of any factual issues as to whether an Internet Protocol proxy server, Session Internet Protocol proxy and computer telephony system are “conventional” elements. The trial court also determined that the problem the claims attempt to solve is that of a caller having to hang up and redial a new number if they get a busy signal or reach voicemail, which the court found is a “human unavailability problem,” not a technical one. Without contradictory evidence to consider, a court may find a lack of factual issues as to patent eligibility when the patent’s specification describes technology as “standard” or “conventional” and the claims identify a problem that can be solved by adding a human actor.

Federal Circuit Holds Notebook-Tabbed Spreadsheets Are Patent EligibleIn recent years, the Federal Circuit has issued a number of decisions attempting to define the line between computer-implemented claims that are patent ineligible under 35 U.S.C. § 101 for being directed to an abstract idea with no inventive concept applied to it and eligible claims directed to more than simply an abstract idea. The Federal Circuit’s recent decision in Data Engine Technologies LLC v. Google LLC illustrates both types and the key distinctions between them: moving beyond claiming a highly generalized concept or desired result and instead claiming specific structures or implementations that improve computer functionality.

In Data Engine Technologies, the Federal Circuit affirmed in part and reversed in part the district court’s ruling that claims directed to aspects of electronic spreadsheets were not patent-eligible subject matter. The Federal Circuit distinguished patent-eligible claims “directed to a specific improved method for navigating through complex three-dimensional electronic spreadsheets” from ineligible claims “directed to the abstract idea of collecting, recognizing, and storing changed information” or “identifying and storing electronic spreadsheet pages.”

The Asserted Patents

The patents at issue, U.S. Patent Nos. 5,590,259; 5,784,545; 6,282,551; and 5,303,146, all relate to electronic spreadsheets. The ’259, ’545, and ’551 patents (Tab Patents) specifically relate to the use of notebook tabs to navigate through three-dimensional electronic spreadsheets. As explained by the court, the Tab Patents “identify problems with navigation through prior art three-dimensional or multipage electronic spreadsheets” and “claim a method of implementing a notebook-tabbed interface, which allows users to easily navigate through three-dimensional electronic spreadsheets.” Claim 12 of the ’259 patent is representative:

12. In an electronic spreadsheet system for storing and manipulating information, a computer-implemented method of representing a three-dimensional spreadsheet on a screen display, the method comprising:

displaying on said screen display a first spreadsheet page from a plurality of spreadsheet pages, each of said spreadsheet pages comprising an array of information cells arranged in row and column format, at least some of said information cells storing user-supplied information and formulas operative on said user-supplied information, each of said information cells being uniquely identified by a spreadsheet page identifier, a column identifier, and a row identifier;

while displaying said first spreadsheet page, displaying a row of spreadsheet page identifiers along one side of said first spreadsheet page, each said spreadsheet page identifier being displayed as an image of a notebook tab on said screen display and indicating a single respective spreadsheet page, wherein at least one spreadsheet page identifier of said displayed row of spreadsheet page identifiers comprises at least one user-settable identifying character;

receiving user input for requesting display of a second spreadsheet page in response to selection with an input device of a spreadsheet page identifier for said second spreadsheet page;

in response to said receiving user input step, displaying said second spreadsheet page on said screen display in a manner so as to obscure said first spreadsheet page from display while continuing to display at least a portion of said row of spreadsheet page identifiers; and

receiving user input for entering a formula in a cell on said second spreadsheet page, said formula including a cell reference to a particular cell on another of said spreadsheet pages having a particular spreadsheet page identifier comprising at least one user-supplied identifying character, said cell reference comprising said at least one user-supplied identifying character for said particular spreadsheet page identifier together with said column identifier and said row identifier for said particular cell.

The ’146 patent relates to “methods that allow electronic spreadsheet users to track their changes.” Claim 1 of the ’146 patent is representative:

In an electronic spreadsheet system for modeling user-specified information in a data model comprising a plurality of information cells, a method for automatically tracking different versions of the data model, the method comprising:

(a) specifying a base set of information cells for the system to track changes;

(b) creating a new version of the data model by modifying at least one information cell from the specified base set; and

(c) automatically determining cells of the data model which have changed by comparing cells in the new version against corresponding ones in the base set.

The District Court Decision

Data Engine Technologies asserted various claims of the Tab Patents and the ’146 patent against Google. Google sought dismissal of all claims under Rule 12(c) on the grounds that all asserted claims were ineligible under 35 U.S.C. § 101. The district court granted that motion in its entirety. The court found that the Tab Patents were “directed to the abstract idea of using notebook-type tabs to label and organize spreadsheets” and lacked any inventive concept to confer eligibility. Similarly, the court found that the ’146 patent “was directed to the abstract idea of collecting spreadsheet data, recognizing changes to spreadsheet data, and storing information about the changes” and again lacked any inventive concept. Data Engine Technologies appealed.

The Federal Circuit Decision

The Federal Circuit applied the standard two-step test from Alice Corp.: 1) whether the claims are directed to a patent-ineligible concept and, if so, 2) whether an element or combination of elements in the claim provides an “inventive concept” that amounts to more than a patent on the ineligible concept itself.

Beginning with the Tab Patents, the Federal Circuit disagreed with the district court’s conclusion that the claims were directed to the abstract idea of using notebook tabs to organize a spreadsheet. Instead, the court concluded that representative claim 12 was directed “to a specific method for navigating through three-dimensional electronic spreadsheets.” The Tab Patents identified a “known technological problem in computers”—the complexity of navigating and using prior art electronic spreadsheets—and then described and claimed a specific solution to that problem—providing user-friendly notebook tabs to navigate the spreadsheet. Rather than claim “the idea of navigating through spreadsheet pages using buttons or a generic method of labeling and organizing spreadsheets,” the Tab Patents claimed “a specific interface and implementation” that provided a “technical solution and improvement in computer spreadsheet functionality” that was lauded in the industry at the time.

In that respect, the claims were similar to those at issue in the Federal Circuit’s prior decision in Core Wireless Licensing S.A.R.L. v. LG Electronics, Inc. In that case, the court held that claims directed to an improved display interface were patent-eligible because the claimed invention “increased the efficiency with which users could navigate through various views and windows.” In both instances, the claims were directed to a particular implementation that improved existing technology.

Google argued the claims were no different than those in several Federal Circuit decisions in which the court held that claims directed to methods of organizing and presenting information are abstract. The court found all of those cases to be distinguishable because those claims lacked “any specific structure or improvement of computer functionality.” On the other hand, reading the claim as a whole as Alice requires, claim 12 moved beyond simply claiming the manipulation or organization of information to improve navigation in electronic spreadsheets and claimed “a specific structure (i.e., notebook tabs)” to perform “a specific function (i.e., navigating within a three-dimensional spreadsheet).”

The Federal Circuit did, however, reach a contrary conclusion as to one claim of the Tab Patents. The court concluded that claim 1 of the ’551 patent did not claim “the specific implementation of a notebook tab interface.” Instead, it generically claimed associating a spreadsheet with a user-settable page identifier and thus was directed to “the abstract idea of identifying and storing electronic spreadsheet pages.” Because the claim was “not limited to the specific technical solution and improvement” found in the remaining claims of the Tab Patents, claim 1 was directed to an ineligible abstract idea. Considering the claim as a whole, the court could find no inventive concept. Thus, the Federal Circuit affirmed the district court’s decision that claim 1 was not directed to patent-eligible subject matter.

The Federal Circuit reached the same conclusion as to the ’146 patent. The court agreed with the district court’s assessment that representative claim 1 was “directed to the abstract idea of collecting spreadsheet data, recognizing changes to spreadsheet data, and storing information about the changes.” The court found nothing in claim 1 that “improve[d] spreadsheet functionality in a specific way sufficient to render the claims not abstract.” Concluding that the ’146 patent claims included only generic steps and lacked any inventive concept, the Federal Circuit affirmed the district court’s decision that the claims of the ’146 patent were not directed to patent-eligible subject matter.

This decision underscores that an applicant seeking to avoid Alice eligibility problems for a computer-implemented invention should focus on defining a technological problem and claiming a specific implementation that solves that problem and improves computer functionality. Broad and generic claims covering any and all implementations of an abstract desired result will continue to be vulnerable under Alice. On the other hand, those alleged to infringe generic, abstract claims should pursue an Alice-based motion to bring litigation to a conclusion as early as practicable.