On June 27, 2016, the United States Court of Appeals for the Federal Circuit (CAFC) issued a decision in Bascom Global Internet Services, Inc., v. AT&T Mobility LLC, AT&T Corp., (2015-1763). This decision is the latest in a recent series of opinions that continue to develop the post-Alice subject matter eligibility jurisprudence for computer related inventions.

The subject matter eligibility inquiry set forth by the Supreme Court in Alice Corp. Pty. Ltd. v. CLS Bank International, 134 S. Ct. 2347 (2014) and Mayo Collaborative Services v. Prometheus Laboratories, Inc., 566 U.S. (2012) is often conveniently summarized as a two step test in which step one is the determination of whether the claims are directed to a patent-ineligible concept, such as an abstract idea, and step two is the determination of whether the claims limitations (either individually or as an ordered combination) amount to significantly more than the patent-ineligible concept thus transforming the claim into a patent-eligible application of the concept.

In Alice, the claims were held to be directed to an abstract idea (fundamental economic practice of intermediated settlement) under step one and to not amount to significantly more than the abstract idea under step 2 (generic computer implementation), and were thus not patent eligible subject matter under 35 U.S.C. § 101. Alice is a seminal case in the current subject matter eligibility jurisprudence for computer related inventions and takes the more general framework laid out in Mayo and applies it to the abstract idea exception to patent eligibility often at play in patent applications directed to such inventions (as opposed to laws of nature and natural phenomena which are more often at issue in applications in the chemical and pharmaceutical fields).

DDR Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245 (Fed. Cir. 2014) is of importance as the first Federal Circuit decision applying the Mayo/Alice test to a computer-related invention and finding the claims to be patent eligible under 35 U.S.C. § 101. The claims were directed to an automatically-generated webpage. The CAFC did not definitively determine whether or not the claims at issue were directed to an abstract idea under step one. Rather, the court noted that “under any of these characterizations of the abstract idea” as proffered by the alleged infringer, the “patent’s claims satisfy Mayo/Alice step two.” DDR, pages 19-20. The court considered the claims to be a solution “necessarily rooted in computer technology in order to overcome a problem specifically arising in the realm of computer networks” and thus held that they did amount to significantly more than the mere idea at issue, and were thus patent eligible under 35 U.S.C. § 101.

The importance of step one of the analysis was highlighted in Enfish LLC v. Microsoft Corp., 2016 WL 2756255, (Fed. Cir. May 12, 2016) where the CAFC pointed out that the first step of the Mayo/Alice inquiry was indeed intended to be a meaningful analysis, and that claims fail the first step only if they are “directed to” a patent ineligible concept, not when they merely “involve” a patent ineligible concept. The claims at issue in Enfish were determined to not be directed to an abstract idea under step one, even though the claims were directed to a computer-related invention, because the claims were directed to an improvement to computer functionality (internal computer data structure in the form of a self-referential table). Thus, no analysis under step two was necessary. The Enfish decision is helpful for patent prosecution practice because it provides a sound precedent against seemingly presumptive assertions that claims to computer implemented inventions are directed to abstract ideas.

The most recent case, Bascom, further splits the hairs of step two of the Alice inquiry by analyzing the claim elements both individually and as “an ordered combination” as suggested by the Supreme Court in Mayo and Alice. In Bascom, the CAFC held that the claim limitations are each known generic computer components which taken individually are not enough to amount to significantly more than the abstract idea. However, the CAFC held that the claim limitations taken as an “ordered combination” under step two are an inventive concept sufficient for patent eligibility under 35 U.S.C. § 101.

The patent at issue in the Bascom case “describes its invention as combining the advantages of the then-known filtering tools while avoiding their drawbacks. The claimed filtering system avoids being ‘modified or thwarted by a computer literate end-user,’ and avoids being installed on and dependent on ‘individual end-user hardware and operating systems’ or ‘tied to a single local area network or a local server platform by installing the filter at the ISP server. … And, unlike the filtering tools that existed on local servers and remote ISP servers at the time, the claimed filtering tool retains the advantage of a filtering tool that is located on each local computer; individuals are able to customize how requests for Internet content from their own computers are filtered instead of having a universal set of filtering rules applied to everyone’s requests.” Bascom, pages 4-5, internal citations omitted.

The CAFC agreed and held that “the invention is not claiming the idea of filtering content simply applied to the Internet. The ’606 patent is instead claiming a technology-based solution (not an abstract-idea-based solution implemented with generic technical components in a conventional way) to filter content on the Internet that overcomes existing problems with other Internet filtering systems. By taking a prior art filter solution (one-size-fits-all filter at the ISP server) and making it more dynamic and efficient (providing individualized filtering at the ISP server), the claimed invention represents a ‘software- based invention[ ] that improve[s] the performance of the computer system itself.’” Id at page 18.

Thus, because of the ordered combination elements, the claims in Bascom were considered to improve the functionality of the computer, and thus amounted to significantly more under step two of the Alice analysis.

Bascom should serve as another potentially useful tool for patent practitioners in drafting applications and claims for computer related inventions, and in effectively advocating subject matter eligibility for patent applicants and patentees.