Accenture Global Servs., GmbH v. Guidewire Software, Inc., No. 2011-1486 (Fed. Cir. Sept. 5, 2013)

Few issues have divided the Federal Circuit more deeply in recent years than the question of patent eligible subject matter under 35 U.S.C. § 101.  The Federal Circuit’s most recent decision in Accenture Global Servs., GmbH v. Guidewire Software, Inc. continues that division.  In a majority opinion authored by Judge Lourie, the court agreed with the US District Court for the District of Delaware that certain claims directed to a system for generating tasks to be performed in an insurance organization recited patent-ineligible subject matter under the statute.1 Judge Reyna joined the opinion and Judge Rader dissented.

Plaintiffs Accenture Global Services, GmbH and Accenture, LLP first filed a complaint against defendant Guidewire Software, Inc., in December 2007 asserting, among other things, infringement of the system and method claims of U.S. Patent 7,013,284 (the '284 patent).  Guidewire subsequently moved for summary judgment of invalidity, arguing that the claims of the '284 patent recited patent-ineligible subject matter.  The district court granted Guidewire’s motion and the plaintiffs appealed, but only as to the system claims.
On appeal, the majority reasoned that the claims did not cover patent-eligible subject matter for two reasons.  First, it held that the system claims offered no meaningful limitations beyond the method claims that were held to be patent-ineligible below and never appealed.  Second, the court found that even when considered apart from the invalid method claims, the system claims still failed to pass muster under § 101.

The court began by comparing the system claims to the method claims, the latter of which were found to be conclusively invalid because the plaintiffs did not appeal them.  Relying on a plurality opinion in CLS Bank Int’l v. Alice Corp.,2 the court held that system claims that closely track method claims and are grounded by the same “meaningful limitations” will generally rise and fall together.  The court concluded that the system claims in Accenture were essentially “the method claims implemented on a system for performing the method.” Because the court could not find any meaningful limitations in any of the system claims beyond those contained in the abstract method claims already held invalid, it held the system claims invalid under § 101 on that basis.

In addition, the court independently reviewed the district court’s analysis of the system claims and found that the court appropriately utilized an abstractness analysis similar to the methodology set forth in the plurality opinion in CLS Bank.  To determine whether a claim attempts to cover an ineligible abstract idea, the plurality in CLS Bank held that a court “must first identify and define whatever fundamental concept appears wrapped up in the claim.” Then, it must determine whether “additional substantive limitations … narrow, confine, or otherwise tie down the claim so that, in practical terms, it does not cover the full abstract idea itself.”

In Accenture, the court agreed with the district court’s analysis of the claims.  In doing so, it held that, for example, the abstract idea at the heart of claim one of the '284 patent is “generating tasks [based on] rules … to be completed upon the occurrence of an event.” Although plaintiffs attempted to limit this abstract idea by applying it in a computer environment and within the insurance industry, the court noted that precedent dating back to In re Bilski is clear that limiting the field of use or technological environment alone is not sufficient to transform an abstract idea into a patent-eligible claim.  Rather, substantive limitations to the concept itself must be present to survive § 101. 
Chief Judge Rader’s dissent criticized the majority’s reliance on CLS Bank, a case heard en banc that resulted in a divided court and the issuance of seven separate opinions reflecting at least three distinct approaches to patent-eligible subject matter.  One of these approaches was the methodology set forth in the plurality opinion in CLS Bank (joined by Judges Lourie, Dyk, Prost, Reyna, and Wallach) on which the majority in Accenture (Judges Lourie and Reyna) predominantly relied.

The Chief Judge also warned against the incentives the majority opinion espoused.  “Accenture’s willingness to narrow issues should not create an admission that defeats its appealed claims,” he wrote.  Arguing that the majority invoked untenable theories of estoppel in tying the fate of the system claims on appeal to that of the method claims that were not appealed, he cautioned that “[t]he Court today sends a signal that cautious litigants must appeal everything to avoid losing important claims.” Consistent with the broad view of § 101 that he espoused in Ultramercial, Inc. v. Hulu, LLC,3 he also indicated that on the merits, he would have held the claims in Accenture to be valid under the statute.

The Federal Circuit has demonstrated a strong interest in § 101 issues in recent years.  Although more opinions on this issue are sure to follow, practitioners are wise to note Chief Judge Rader’s cautionary tale about the fate of litigants who appeal system claims without appealing any closely related method claims.  Although the outcome in Accenture suggests that the success of a § 101 appeal to the Federal Circuit may simply be panel dependent, under the majority view in Accenture, closely related system and method claims “should rise and fall together,” making the appeal of one set of claims but not the other a potentially risky endeavor.