In Enfish, LLC v. Microsoft Corporation, the Federal Circuit reversed a California district court’s summary judgment of invalidity for claiming ineligible subject matter under 35 U.S.C. § 101. This decision represents the Federal Circuit’s first reversal of a § 101 decision after the Supreme Court’s 2014 Alice decision, and only the second Federal Circuit decision finding claims patent-eligible under the Alice test. The Federal Circuit based its decision on step one of Alice, which it emphasized is a “meaningful one,” and explained that it did not understand Alice to require “that all improvements in computer-related technology are inherently abstract and, therefore, must be considered at step two.”

Background

Enfish asserted two related patents against Microsoft in the Central District of California directed to a logical model for a computer database. The patents describe a table where rows correspond to records and columns contain attributes of the record. The patents describe this table-based model as “self-referential” because all data entities are maintained in a single table, and the attributes in a particular column may be defined by reference to a record in another row in the same table. The patents purport to claim an improvement over conventional relational databases, which maintain different data entities in separate tables.

Under the two-part Alice test, the district court found the asserted patents invalid for being directed to an abstract idea without providing an inventive concept sufficient to transform the claims into a patent-eligible invention. Notably, the district court determined that the claims were directed to the ineligible abstract idea of “storing, organizing, and retrieving memory in a logical table,” or, even more simply, “the concept of organizing information using tabular formats.”

The Federal Circuit’s Alice Step One Analysis

The Federal Circuit (Judges Moore, Taranto, and Hughes) found that the district court had improperly analyzed the abstract idea by describing the claims at too high a level of abstraction, and in a way “untethered from the language of the claims.” The district court had “oversimplified the self-referential component of the claims,” and improperly downplayed the benefits of the invention in its abstract idea analysis. The Federal Circuit pointed to language in the district court’s construction of the exemplary means-plus-function claim, and similar language in other asserted claims, which showed that the claims are not directed to just any form of storing tabular data, but to the specific “self-referential” features of the database model claimed in the patents. In addition to the claim language, the court further pointed to the patents’ description of the invention in the Abstract, and passages in the specification touting the improvement over prior art relational database models. Thus, the court concluded that the claims were “not directed to an abstract idea within the meaning of Alice,” but rather “a specific improvement to the way computers operate, embodied in the self-referential table.”

Software Claims Not Necessarily Abstract

The Federal Circuit also distinguished a number of arguments applied against software claims in other cases. For example, the court noted that the “invention’s ability to run on a general-purpose computer” did not alter its conclusion that the claims were patent eligible. The court contrasted the claims at issue, which it explained “are directed to an improvement in the functioning of a computer,” to claims held patent ineligible that “simply add[ed] conventional computer components to well-known business practices.”

The court likewise observed that the fact that “the improvement is not defined by reference to ‘physical’ components does not doom the claims,” positing that to hold otherwise would revive “a bright-line machine-or-transformation test.” The court explained that “[m]uch of the advancement made in computer technology consists of improvements to software that, by their very nature, may not be defined by particular physical features,” and that it did not see in Supreme Court or Federal Circuit precedent a categorical “exclusion to patenting this large field of technological progress.”

Thus, the court found that the claims at issue are directed to “a specific implementation of a solution to a problem in the software arts,” and not an abstract idea. Accordingly, the claims were found to be patent eligible based on the first step of the Alice inquiry. While the court concluded it need not proceed to step two of the Alice inquiry, it noted that in less clear cases “an analysis of whether there are arguably concrete improvements in the recited computer technology could take place under step two.”

Further Guidance Forthcoming?

The Federal Circuit may provide further guidance on software patent eligibility in at least two pending cases, AmDocs (Israel) Ltd. v. Openet Telecom, No. 15-1180 (argued on Oct. 8, 2015) and McRO, Inc. v. Bandai Namco Games America, No. 15-1080 (argued on Dec. 11, 2015).