Epicor Software Corp. v. Protegrity Corp.; Google Inc. v. Unwired Planet, LLC

Addressing the issue of unpatentable subject matter in a post-Alice world, the U.S. Patent and Trademark Office Patent Trial and Appeal Board (PTAB) recently invalidated two patents under § 101 in separate covered business method (CBM) proceedings. Epicor Software Corp. v. Protegrity Corp., Case CBM2015-00006 (PTAB, Apr. 21, 2015) (Petravic, APJ); Google Inc. v. Unwired Planet, LLC, Case CBM2014-00004 (PTAB, Apr. 6, 2015) (Bisk, APJ).

In Epicor, petitioner filed a petition to institute a CBM review of a patent directed to protecting data against unauthorized access, asserting the subject matter was not patent eligible under § 101. Prior to analyzing the merits of the § 101 contentions, the PTAB addressed whether the patent was eligible for CBM review. A CBM patent claims “a financial product or service,” and “does not include patents for technological inventions.” The patent owner argued that the petition should be rejected because it fails to satisfy either prong. With respect to the first prong, the PTAB noted that legislative history indicates that “financial product or service” should be interpreted broadly, and concluded that the claimed “method for performing data processing or other operations that are at least incidental or complementary to the practice, administration, or management of a financial product or service qualified under the statute so the technological exception did not apply.” As to the second (technical) prong, the PTAB found that at least one claim did not recite a technological feature that is novel or unobvious over the prior art.

Next, the PTAB addressed the patent subject matter eligibility issue under Alice’s two-part test, clarifying that petitioners may raise § 101 challenges as part of CBM proceedings. The first step of the Alice test is to “determine whether the claims at issue are directed to one of [the] patent-ineligible concepts” of “laws of nature, natural phenomena, and abstract ideas.” If the claims are directed to a patent-ineligible concept, the second step is to “search for an inventive concept—i.e., an element or combination of elements that is sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the ineligible concept itself.” 

Regarding the first step, petitioner argued that the claims were directed to an abstract idea of determining whether access to data should be granted based on rules. Patent owner argued that the claims were directed to a specific improvement in computing technologies to protect data in a database at the data element level. The PTAB disagreed with the patent owner, finding that its arguments were not commensurate with the scope of the claims.

As for the second step, petitioner argued that maintaining a database, maintaining a separate data protection table, receiving a request to access a data portion and granting access to a data portion were insignificant pre- and post-solution activity. Patent owner argued that the claims were directed toward data protection systems on the data element level, which required specific programming of a computer.

The PTAB concluded that “[t]o be limited meaningfully, the claim must contain more than mere field-of-use limitations, tangential references to technology, insignificant pre- or post-solution activity, ancillary data-gathering steps, or the like.” The PTAB found that maintaining a database and a separate data protection table were data gathering steps, that granting access was insignificant pre- and post-solution activity, and that determining whether to grant access based on rules did not require specific programming of the computer. Accordingly, the PTAB found that the claims were directed to unpatentable subject matter.

In Google, petitioner sought to institute a CBM review of a patent related to providing mobile services using short-range radio communication devices. Petitioner challenged the patent eligibility of the claimed subject matter under § 101, arguing that the patent is directed to the abstract idea of receiving information and providing services or advertisements based on that information. 

In response, the patent owner argued that the underlying idea was not abstract because the claims included specific recitations regarding the type of information, how the information was acquired and use of the acquired information for authentication. The PTAB concluded that the details emphasized by patent owner are “characteristic of the invention’s implementation, rather than its general idea.” According to the PTAB, the claims recited an abstraction because the steps had “no particular concrete or tangible form” and were “devoid of a concrete or tangible application.”

The patent owner also argued that the claims were not abstract because they indicated the technical environment that the method operated in, overcame challenges previously identified in the technical environment and provided benefits not readily available prior to the patent. The PTAB found, however, that arguing novelty in implementation of the idea was a factor to be considered only in the second step of the Alice analysis. Nor was the PTAB persuaded by patent owner’s assertion that the claimed invention did not fall withinAlice’s articulated examples of abstract ideas.

For the second step, the PTAB looked for additional elements that can “transform the nature of the claim” into a patent-eligible application of an abstract idea. Again, the PTAB was not persuaded that the involvement of mobile network and short-range radio communication technologies added meaningful and concrete limitations to the claimed subject matter. Instead, the PTAB found that patent owner “fail[ed] to identify any language in the claims or the specification demonstrating that the generic communication systems function in an unconventional manner.” The PTAB also concluded that “the claimed subject matter does not do anything more than simply instruct the practitioner to implement the abstract idea of gathering, authenticating, and transmitting data and services on generic technology.”