Since the Supreme Court's decision in Alice Corp. v. CLS Bank International, courts have grappled with the scope of subject matter eligibility under § 101 of the Patent Act in determining whether the claimed subject matter is eligible for patent protection. In Visual Memory v. Nvidia Corp., a district court analyzed the Federal Circuit’s recent Enfish opinion on patent-eligibility, and concluded that claims directed to categorical data storage, which generically purported to improve computer functionality, failed to meet the threshold requirement for patent-eligibility.
The Supreme Court's 2014 decision in Alice Corp. v. CLS Bank International reaffirmed the framework for distinguishing claims directed to areas that are ineligible for patent protection—laws of nature, natural phenomena, and abstract ideas—from claims that recite applications of those concepts that are eligible for patent protection.
The Federal Circuit recently clarified the first-step of the Alice framework—whether the claims are drawn to a concept that is ineligible for patent protection—in Enfish, LLC v. Microsoft Corp., finding claims to a specific software-implemented data structure were eligible for patent protection. Subsequently, in Visual Memory LLC v. Nvidia Corp., a Delaware court considered the Enfish decision and concluded that claims directed to categorical data storage were not eligible for patent protection despite arguments by the patent owner based on Enfish, that the claims were directed to a specific improvement in the functioning of a computer.
Visual Memory sued Nvidia, alleging infringement of U.S. Patent No. 5,953,740. The '740 patent is generally directed to a computer system having a three-tiered memory hierarchy: (1) slow, low-cost memory for bulk storage, (2) medium-speed memory as the main memory, and (3) a high-speed processor cache memory. Data is transferred between the three memories to facilitate quicker access. The '740 patent claims a computer memory system having “programmable operational characteristics” specifying the type of data in the memory. After Visual Memory filed suit, Nvidia filed a motion to dismiss for failure to state a claim, arguing that the '740 patent was not directed to subject matter eligible for patent protection.
The Federal Circuit's Enfish Decision
The Federal Circuit’s recent decision in Enfish, LLC v. Microsoft Corp. held that patent claims directed to a "self-referential table for a computer database" were eligible for patent protection because they described a "specific type of data structure designed to improve the way a computer stores and retrieves data in memory." The Federal Circuit reversed the district court's finding that the claims were directed to the abstract idea of "storing, organizing, and retrieving memory in a logical table." In reaching this conclusion, the Federal Circuit noted that the first step of Alice is a "meaningful one" and cautioned against district courts oversimplifying the abstract idea inquiry to describe the claims at "a high level of abstraction and untethered from the language of the claims." The Federal Circuit also directed that Alice should not be read to broadly hold that all improvements in computer-related technology or claims directed to software are inherently abstract. Because the subject claims were directed to a specific improvement in computer technology, the Federal Circuit found that they were not directed to an abstract idea under Alice and were therefore eligible for patent protection.
The District Court's Decision
Applying the first step of the Alice test, the district court found that the '740 patent’s claims are directed to the abstract idea of "categorical data storage." The court rejected Visual Memory's Enfish-based argument that the claims are patent-eligible because they "improve the functioning of a computer itself." The court explained that merely improving the way a computer works is not, by itself, determinative. Rather, the court explained that the "central question" under Enfish is whether the claims focus "on the specific asserted improvement in computer capabilities" or whether they recite an abstract idea "for which computers are invoked merely as a tool."
According to the district court, although Enfish cautions against oversimplification of the first step of the Alice test, it does not exempt all patents that purport to improve the functioning of a computer from the § 101 analysis. Comparing the claims of the '740 patent to those found patent-eligible in Enfish, the court concluded that the '740 patent’s claims did not recite a "'specific' or 'concrete' improvement in the way software operates" and that there was "no analog to the ‘specific type of data structure'" found patent-eligible in Enfish. The court then held that the claims are directed to the abstract idea of categorical data storage.
Having found that the claims were drawn to a patent-ineligible abstract idea, the court turned to the second step of the Alice test, which asks whether the claims include an "inventive concept." Again rejecting Visual Memory's argument that the claims improve the functioning of a computer, the court explained that necessarily tying the claims to a computer does not resolve patent eligibility. Moreover, the court explained that, to be patent-eligible, the claimed solution should "overcome a problem specifically arising in" a particular technological realm. According to the district court, the claims of the ’740 patent recite computer functionality that is "generic and conventional" and the recited hardware components are "generic computer components."
The district court also found that the claimed "programmable operational characteristic" did not supply an inventive concept because it referred to the generic concept of "determin[ing] a type of data stored by [a] cache." The patent did not include an explanation of the mechanism for accomplishing this, and therefore, it did not provide an inventive concept. Accordingly, the district court found the claims to be directed to patent-ineligible subject matter and granted Nvidia’s motion to dismiss.
Strategy and Conclusion
After the Federal Circuit's Enfish decision confirmed that improvements in computer-related technology are not categorically abstract and ineligible for patent protection, lower courts have continued to define the boundaries of inventions eligible for patent protection in the software and electronics fields on a case by case basis, and have not interpreted the Enfish decision as a basis for finding all claimed improvements in computer-related technology eligible for patent protection.
In the current case, the court noted that the Enfish case found patent eligibility for claims directed to a specific improvement in the functioning of a computer. And it differentiated Enfish by noting that the claims in the current case were abstract and not eligible for patent protection because they were categorical data storage claims that did not recite a specific or concrete improvement in the way software operates and had no analog to the specific type of data structure.