On May 19, 2016, the United States Patent and Trademark Office issued a memo titled Recent Subject Matter Eligibility Decisions (Enfish, LLC v. Microsoft Corp. and TLI Communications LLC v. A.V. Automotive, LLC). This memo is the latest in a series of pieces issued by the USPTO to guide Examiner’s and practitioners in dealing with subject matter eligibility under 35 U.S.C. § 101 under the evolving case law. The memo and other guidance materials can be found on the USPTO website in the section: 2014 Interim Guidance on Subject Matter Eligibility

Primarily, the memo addresses the May 12, 2016 CAFC decision Enfish LLC v. Microsoft Corp. et. al. The main impact of the Enfish decision, which is reflected in the USPTO memo, is its direct holding that the invention at issue is not an abstract idea due to its computer-function-improving nature, i.e., that the computer implemented invention at issue is not directed to an abstract idea under the first step of the two-stage Mayo/Alice inquiry. This is in contrast with recent decisions, such as “Bilski and Alice and virtually all of the computer-related § 101 decisions … issued in light of those Supreme Court decisions” in which it was clear that the claims were directed to abstract ideas “for which computers are invoked merely as a tool”, such as ordinary use of computers to effect fundamental economic tasks and conventional business practices. Enfish slip opinion at p. 11.

The Court 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. Id.

The CAFC thus does not “broadly hold that all improvements in computer-related technology are inherently abstract and, therefore, must be considered at step two” or that “claims directed to software, as opposed to hardware, are inherently abstract and therefore only properly analyzed at the second step of the Alice analysis.” Id.

Enfish provides practitioners with other potentially useful arguments in favor of patentability of computer-implemented inventions, including software as well:

“Software can make non-abstract improvements to computer technology just as hardware improvements can, and sometimes the improvements can be accomplished through either route. We thus see no reason to conclude that all claims directed to improvements in computer-related technology, including those directed to software, are abstract and necessarily analyzed at the second step of Alice, nor do we believe that Alice so directs. Therefore we find it relevant to ask whether the claims are directed to an improvement to computer functionality versus being directed to an abstract idea, even at the first step of the Alice analysis.”

The other CAFC opinion addressed in the USPTO memo is TLI Communications LLC v. A.V. Automotive, LLC, which was issued on May 17, 2016, shortly after the Enfish decision. In contrast with the invention of Enfish, which improved computer functionality with a logical model for computer storage of data in a “self-referential table,” the claims at issue in TLI were held to be directed to an abstract idea performed on a computer using conventional computer activity. As noted in the USPTO memo “the court stated that the TLI claims describe steps of recording, administration and archiving of digital images, and found them to be directed to the abstract idea of classifying and storing digital images in an organized manner (Step 2A). The court then found that the additional elements of performing these functions using a telephone unit and a server did not add significantly more to the abstract idea because they were well-understood, routine, conventional activities (Step 2B).”

The USPTO memo exemplifies a framework within which to analyze computer implemented inventions, with Enfish on one hand, and TLI on the other. However, expect this to continue to be a rapidly evolving area of patent law.