In Apple, Inc. v. Ameranth, Inc. (Fed. Cir. 2016), the Federal Circuit reviewed the final written decisions in CBM reviews of three related patents owned by Ameranth, Inc., directed to computerized systems for generating and displaying menus for use in the restaurant industry. The court determined that the PTAB properly construed all disputed claim terms, determined that the patents are CBM patents, and determined that most challenged claims were unpatentable under § 101, but that the PTAB erred in concluding that some dependent claims were not unpatentable under § 101.

More specifically, the claims in the disputed Ameranth patents are directed to a “first menu that has categories and items, and software that can generate a second menu from the first menu by allowing categories and items to be selected.” In its decisions, the PTAB had canceled claims in all three patents for patent ineligibility under 35 U.S.C. § 101, and upheld some dependent claims that had been challenged on the same basis. The PTAB found that the Apple petitioners had not met their burden of showing that certain dependent claims in the ’733 patent were unpatentable under § 101.

On appeal, Ameranth argued that the Board’s CBM patent and § 101 determinations were “based on a misapprehension of the actually claimed subject matter.” A CBM patent, as defined in the AIA, means “a patent that claims a method or corresponding apparatus for performing data processing or other operations used in the practice, administration, or management of a financial product or service, except that the term does not include patents for technological inventions.” Ameranth did not appeal the Board’s “financial product or service” determination, but argued that the patents fall within the exception for technological inventions because they recite technological features, including specific software which was distinctive over the prior art, and because the petitioners made no showing that these features were known or conventional. The court was not persuaded by Ameranth’s arguments that theirs was a technological invention. The court found that there was substantial evidence in support of the PTAB’s determination that the challenged claims “do not solve technical problems using technical solutions,” and that all challenged patents met the statutory definition of CBM patents.

The court did not address the Board’s “financial product or service” determination, because that issue had not been raised by Ameranth; however, the challenged claims do not appear to recite a method or apparatus “used in the practice, administration, or management of a financial product or service,” as required by the statute, which was recently construed by the court in Unwired Planet, LLC v. Google Inc., and discussed here.

The court also reversed the PTAB’s decision that some of Ameranth’s challenged dependent claims were patentable. In making that determination, the court found no disclosure of how the linking of orders with customers would be technologically implemented. In its § 101 analysis, the court determined that the challenged claims are directed to the abstract idea of a restaurant server taking an order from a customer and keeping track of what customer placed that order, using a computer. The court further determined that the elements of the challenged claims did not transform the nature of the claim into a patent-eligible application of the abstract idea. Instead, the claims simply add conventional computer components to well-known business practices, which is not sufficient for patent eligibility under Enfish, LLC v. Microsoft Corp., 822 F.3d 1327 (Fed. Cir. 2016).

The court also noted that Ameranth, in its patent specification, expressly recited that the hardware needed was typical and that the programming steps were commonly known. As a result the court found no inventive method. The court cited Internet Patents Corp. v. Active Network, Inc., 790 F.3d 1343, 1348 (Fed. Cir. 2015), in concluding that a claim that merely describes an “effect or result dissociated from any method by which [it] is accomplished” is not patent-eligible. In view of the outcome here, patent practitioners should be careful about using words like “typical” and “commonly known” in describing various aspects of an invention in a patent application.