In Amdoc (Israel) Ltd. v. Openet Telecom, Inc., No. 15-1180 (Fed. Cir. Nov. 1, 2016), a split panel of the Federal Circuit reversed the district court’s finding that four patents directed to solving accounting and billing problems faced by network service providers were directed to patent-ineligible abstract ideas.

On appeal, the Federal Circuit reversed the district court decision and provided additional guidance for applying the two-step patent-eligibility test in Alice. The majority examined the claims in light of the Court’s prior decisions to determine whether the claims at issue are similar to those previously found ineligible. The Court explained that the claims at issue, even if they are directed to an abstract idea, “contain[] a sufficient ‘inventive concept’” to render them patent-eligible. The Court relied on the claims constructions of certain terms that required a specific distributed architecture and network devices “working together in a distributed manner.” The Court recognized that, although the claims may recite generic components, those components work “in an unconventional distributed fashion to solve a particular technological problem.”

Judge Reyna dissented. In his view, the majority avoided identifying the abstract idea under the first step of the Alice test and incorrectly imported limitations from the specification into the claims. Although Judge Reyna acknowledged that the “network monitoring system disclosed [in the specification] is eligible for patenting,” he thought the claims should not be patent-eligible because they are not directed to any specific structure.