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.

MRCO v. Bandai Shows the Way to Broader Method Claims that Satisfy Alice and MayoIt is said that one should cast a “wide net to catch the big fish.” In patent parlance, the wide net is the claims and the big fish are the competitors and customers. The computer/software industry and diagnostic industry, among others, generally rely on method claims to protect IP. However, method claims in these areas typically face increased scrutiny under the patent eligibility standard set forth in 35 USC §101 due to the nature of the claims (covering subject matter that may be considered abstract ideas, laws of nature, or natural phenomena).

To pass muster under §101, the claims must satisfy the Alice/Mayo framework set forth by the U.S. Supreme Court. The Alice/Mayo framework asks two questions: (1) are the claims directed to a patent-ineligible concept such as an abstract idea, law of nature, or natural phenomenon; and if so, (2) do the steps when considered individually and as an ordered combination transform the nature of the claim into a patent-eligible application. The Federal Circuit (CAFC) has also stressed the possibility of preemption as “the concern underlying the exceptions to §101.”

Previous CAFC cases have given important pointers on how to satisfy the Alice/Mayo framework. For example, in Enfish the CAFC found claims directed to an improved relational databased eligible under §101 as directed to an improvement in the operation of a computer. In Enfish, the courts specifically noted that the claims set forth a specific method by which the relational database operated and cited this factor as one that favored patentability of the claims. Enfish represented the first instance where the CAFC held a software claim was not directed to an abstract idea. In making this determination, the court noted specifically how the claims were limited to the specific methods in which the database structures were improved. In being so limited, the claims were clearly not focused on claiming an abstract idea or general concept but rather an improvement. While providing for eligibility of the claims, the opinion seemed to indicate such claims should be narrowly focused and contain clear limitations on how the concept claim is implemented.

As a result, even when method claims are found to be allowable the scope of the method claims may be limited to specific implementations of the method that were reduced to practice.

The CAFC, in MRCO v. Bandai, sets guidelines under which broad method claims, in this case software claims, are properly analyzed under the Alice/Mayo framework of §101 and opens the door to broad method claims.

The Prior Art and the Invention

In MRCO, the patents-at-issue, US 6,307,576 (‘576 patent) and US 6,611,278 (‘278 patent), relate to automating particular steps of a preexisting 3-D animation method. The preexisting 3-D animation method used multiple 3-D models of a character’s face to represent the different facial expressions the character makes when making certain sounds, termed “morph targets.” The resting facial expression was termed the “neutral model.” The morph target and the neutral model were characterized by certain points (vertices) on the face. The transition from the neutral model to a morph target was characterized by a “delta set” of vectors which represented the change in location of vertices between the neutral model and the morph target. To create the animation sequence, an animator manually assigned the “morph weight set” value between 0 and 1 at certain critical times (keyframes) following a time-aligned phonetic transcript. As such, the prior art methods relied heavily on the animator’s subjective judgment.

The invention was directed to automation of this task, specifically by determining when to set

keyframes and setting those keyframes without the input of the animator. The automation is accomplished through rules that are applied to the timed transcript to determine the morph weight outputs. While the specification provided many exemplary rule sets, they presented those rules in a broad form.

Claim 1 of the ‘576 patent is representative of the claims exampled and reads:

A method for automatically animating lip synchronization and facial expression of three-dimensional characters comprising:

  • obtaining a first set of rules that define output morph weight set stream as a function of phoneme sequence and time of said phoneme sequence;
  • obtaining a timed data file of phonemes having a plurality of sub-sequences;
  • generating an intermediate stream of output morph weight sets and a plurality of transition parameters between two adjacent morph weight sets by evaluating said plurality of sub-sequences against said first set of rules;
  • generating a final stream of output morph weight sets at a desired frame rate from said intermediate stream of output morph weight sets and said plurality of transition parameters; and
  • applying said final stream of output morph weight sets to a sequence of animated characters to produce lip synchronization and facial expression control of said animated characters.

As is obvious from the claims, the manner in which the various rules are implemented is not recited in the claims.

District Court Invalidates the Claims

The district court held that the claims were not patent eligible under §101. While recognizing the claims at issue were not clearly drawn to an abstract idea (finding the directed to a specific technological process), the district court was concerned that the entire field of automated lip synchronization would be preempted because the claims are not limited to specific rules by which the methods described by the claims are carried out (as was the case in Enfish).

Classification as an Abstract Idea Dependent on the Actual Language of the Claims

The CAFC took issue with the district court’s oversimplified characterization of the claims. This is in agreement with the Alice Court which cautioned that “describing the claims at such a high level of abstraction and untethered from the language of the claims all but ensures that the exceptions to §101 swallow the rule.” Defendants argued that MRCO’s method claims “simply use a computer as a tool to automate conventional activity,” similar to the programmed alarm system of Flook. The Federal Circuit disagreed, stating that the claimed method was unlike the methods in Flook, Bilski, and Alice because the prior art method carried out manually by the animators was not the same as the claimed computer-implemented method. The CAFC found the patented methods “improved the existing technological process” by automating the animator’s task (the determination of the morph weigh sets), but did so in a way not taught or suggested in the prior art. The claimed methods defined the morph weight sets as a function of the timing of phoneme sub-sequences, something not taught or suggested in the prior art. In short, the CAFC found that “the claims are limited to rules with specific characteristics” despite the fact the rules were broadly and categorically claimed. The court noted that while such a broad claim approach increases the risk of preemption, this does not mean that such claims are unpatentable.

Regarding potential preemption concerns, the defendants argued that the claims would prohibit any automated method of using the rules-based lip-synchronization process. The CAFC noted that the art was aware of alternative methods for automating lip-synchronization and that the claims at issue only cover methods that defined the morph weight sets as a function of the timing of phoneme sub-sequences. Therefore, other methods were available for an automated rules-based lip-synchronization process.

The CAFC’s decision in MRCO provides guidance on how to navigate the difficult path between obtaining claims of broad scope while maintaining eligibility under §101. First, as was stressed in prior cases, discuss in the specification how the claims are directed to a specific improvement in a technological process and clearly articulate the advantages of the claimed methods. Second, clarify that the claimed methods do not preempt other solutions to the same technical problem.

The approach taken by the CAFC here should also be applicable to other technological areas as well. Consider claims to diagnostic methods using a particular biomarker or natural relationship.  Showing that the claimed use of the biomarker does not preempt all uses of the biomarker should provide a foundation on which to argue the claims are patent eligible under the existing §101 jurisprudence.

Patent Examiners Who Cut Corners in Subject Matter Eligibility Decisions Can Be ReversedDue to the rapidly shifting requirement for subject matter eligibility, some patent examiners seem to believe that, when it comes to software inventions, they are entitled to assume the invention is not patent eligible subject matter under § 101, and it is the applicant’s duty to prove otherwise. A recent decision by the Patent Trial and Appeals Board (the “Board”) in Ex parte Cohen, Appeal No. 2014-000444, is a reminder of the examiner’s duty to follow the established test in Alice Corp. Pty. Ltd. v. CLS Bank Int’l (citing to Mayo Collaborative Services v. Prometheus Laboratories).

Cohen invented a method of evaluating the sustainability of a brand. The method was claimed as six method steps, with the final caveat that at least one step must be performed with a processor or a computer. Cohen’s base claim reads as follows:

A method for determining a composite rating for sustainability for a brand, comprising the steps of:

  • Selecting a number of sustainability factors that are applicable to the brand;
  • Associating each sustainability factor with a list of activities pertaining thereto, wherein the activities are ranked by level of sustainability;
  • Selecting an activity from the list that is an attribute of the brand for each applicable sustainability factor;
  • Determining a score for each selected activity based on its rank in the list of activities for that sustainability factor;
  • Calculating the composite rating based on the scores for the selected activities; and
  • Displaying the composite rating where in at least one of the steps of the method is performed with a processor or computer.

The patent examiner’s rejections included one for ineligible subject matter. On appeal to the Board, the examiner explained that the claims did not meet the requirements of the “machine or transformation test” (MT test), and that Cohen had failed to explain why her invention was eligible subject matter in light of this failure. The Board reversed the examiner, concluding that the examiner had failed to meet his burden of making a basic case for ineligibility (a “prima facie case”). Specifically, the Board believed that “the Examiner’s statements do not rise to the level of a finding that claim 1 discloses an abstract idea.”

The general test in Alice for patent eligibility has been described as a two-part test, but in fact the test has three distinct parts. The first step is to determine whether the claim is one of the categories of subject matter Congress intended should be patented, as expressed in 35 U.S.C. § 101: “any new and useful process, machine, manufacture, or composition of matter, or new and useful improvement thereof” (the “statutory categories”). If the first answer is “no,” then the claim is not eligible subject matter. If the first answer is “yes”, the second step is to determine whether the claim is “directed to” one of the judge-made exceptions to the statutory categories: an abstract idea, a physical phenomenon, or a law of nature. If the second answer is “no,” then the claim is eligible. If the second answer is “yes,” then the third step is to determine whether the claim as a whole encompasses “substantially more” than the judicial exception itself. Finally, if the answer to the third step is “yes,” then the claim is patent eligible; if it is “no,” then the claim is not patent eligible.

In Cohen, the examiner jumped directly to the third step. The MT test is one way to determine whether a claim to a process (which is one of the statutory categories) that is directed to an abstract idea (one of the judicial exceptions) is “significantly more” than the abstract idea itself. The Board’s message to the examiner (and probably to the examiner’s art unit) is that one must go through each step of the analysis in order to make a prima facie case that the claim is not eligible subject matter.

After a full and proper analysis, the examiner might reach the same final conclusion that the claim is not eligible subject matter. Cohen’s claim 1 is a “process,” which is one of the statutory categories. Although the Board chastised the examiner for failing to explain why the claim is directed to an abstract idea, the claim does appear to be at least partially abstract. The term “directed to” in this context simply means “recites or includes” reference to at least one abstract idea. Steps such as selecting factors, associating factors with activities, ranking activities, and the like can be performed purely mentally without the aid of a computer (although the claim is restricted to the use of a computer). Assuming the examiner can make a full and well-reasoned finding that the claim is directed to an abstract idea, then the examiner would properly apply the MT test.

Although the final result might be the same, legal conclusions by governmental decision makers must be arrived upon systematically and transparently. All relevant reasoning and facts must be included on the record, to give the applicant a real opportunity to respond. This is an aspect of due process of law that is the foundation of our legal system. On a practical level, such explicit analysis can reveal flaws in the examiner’s understanding of the invention (which can be corrected) or reveal versions of the invention which are eligible subject matter, even if the claim at bar is not. This is a good case to cite to an examiner who has cut corners in the subject- matter eligibility analysis.