Patent Eligible Subject Matter: Guidance on 101 Rejections Decision in Enfish, LLC v. Microsoft Corp.

IP Reports

On May 12, 2016, the U.S. Court of Appeals for the Federal Circuit handed down its decision in Enfish, LLC v. Microsoft Corporation, providing additional guidance concerning patent eligible subject matter in the electronic arts under 35 U.S.C. §101.¹ Interestingly, the court found that the claims at issue were not directed to an “abstract idea” under the framework set forth in Alice Corporation Pty. Ltd. v. CLS Bank Int., 134 S.Ct. 2347 (2014), for analyzing patent eligibility.

Background

Enfish, holding two patents generally directed to a “self-referential” database, sued Microsoft in California’s district court, alleging that Microsoft’s product, ADO.NET, infringed two patents (U.S. Patent 6,151,604 and U.S. Patent 6,163,775) through the creation and manipulation of self-referential tables as part of its operation. In contrast to a “relational” model, which stores and provides each entity in a separate table, the self-referential table could purportedly store all data types in a single table and define table columns by rows in the same table.

Microsoft argued the claims were invalid under §101 because they were directed to the concepts of “organizing data into a logical table with identified columns and rows where one or more rows are used to store an index or information defining columns.”² The district court found that “the claims were directed to the abstract idea of storing, organizing, and retrieving memory in a logical table, or more simply, the concept of organizing information using tabular forms.”³ As such, the court summarily determined that all claims were invalid for being directed to patent ineligible subject matter.

Alice Step One Analysis

The Federal Circuit reversed the district court’s grant of summary judgment based on §101 and concluded that the claims were not directed to an abstract idea within the meaning of Alice. Rather, it concluded the claims were directed to a “specific improvement to the way computers operate, embodied in the self-referential table.”⁴ Its decision focused on the first step of the Alice inquiry, which asks whether the claims are directed to a patent-ineligible concept. The court emphasized this Alice step as the “meaningful one” that applies a filter to claims based on whether their character as a whole is directed to patent ineligible subject matter.⁵ The Federal Circuit did not proceed to step two of the Alice analysis, since the court did not consider the claims to be directed to an abstract idea. However, the Federal Circuit recognized that there can be cases where “an analysis of whether there are arguably concrete improvements in the recited computer technology” under step two may be necessary.⁶

The Federal Circuit considered the self-referential table to be a specific type of data structure directed to a specific way a computer stores and retrieves data in memory. The court identified how the self-referential table functions differently than conventional database structures, and concluded that the district court oversimplified the self-referential component of the claims when it found “the claims were directed simply to the concept of organizing information using tabular formats.”⁷ Moreover, it stated that analyzing the claims at such high level of abstraction all but “ensures the exceptions to §101 swallows the rule.”⁸

Software Claims Not Inherently Abstract

The Federal Circuit also recognized that software claims are not necessarily abstract, and thus, “the invention’s ability to run on a general-purpose computer does not doom the claim.”⁹ It explained that software can make non-abstract improvements to computer technology, and therefore, it can be sufficient to define improvements by logical structures and processes without any reference to “physical components.” Holding otherwise could risk creating a categorical ban on software patents since “much of the advancement made in computer technology consists of improvements to software that, by their very nature, may not be defined by particular physical feature.”¹⁰ Thus, the court found the claims at issue to be patent eligible since they were directed to “a specific implementation of a solution to a problem in the software arts” and not an abstract idea.¹¹

Forthcoming Guidance

In the wake of the Federal Circuit’s holding in Enfish, the USPTO issued further guidance for examiners on determining what an abstract idea is and reminded the examiners that claims involving improvements in computer related technology may still not be “directed to” an abstract idea.¹² It stated that examiners, when performing an analysis of whether a claim is directed to an abstract idea (Step 2A), are to continue to determine if the claim recites a concept that is similar to concepts previously found abstract by the courts.¹³ However, “the fact that a claim is directed to an improvement in computer-related technology can demonstrate that the claim does not recite a concept similar to previously identified abstract ideas.”¹⁴