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Wednesday, 02 November 2016 18:17

Fed. Cir. Upholds Patent Eligibility of Software Patent in Amdocs v. Openet

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The Federal Circuit yesterday, in Amdocs (Israel) Ltd. v. Openet Telecom, Inc., 2015-1180 (Nov. 1, 2016), upheld the patent eligibility under 35 U.S.C. 101 of a software patent, because it constituted a technical improvement over prior art.  This most recent decision on software patent eligibillity (i.e., abstract idea jurisprudence) will hopefully reaffirm many software patent practitioner's understanding that a technical solution to a technical problem is still eligible subject matter in view of the Supreme Court's Alice and Mayo framework.  

In arriving at its decision, the Federal Circuit revisisted its finding in similar eligibility cases where a software patent claim was found to be patent eligible, by using the Alice/Mayo two step framework, as directed to computer-implemented or process oriented inventions: (1) is the claim in question an abstract idea? (2) if so, does an element or combination of elements thereof amount to significantly more than the abstract idea itself?

First, in DDR Holdings --

A system useful in an outsource provider serving web pages offering commercial opportunities, the system comprising:
(a) a computer store containing data, for each of a plurality of first web pages, defining a plurality of visually perceptible elements, which visually perceptible elements correspond to the plurality of first web pages;
(i) wherein each of the first web pages belongs to one of a plurality of web page owners; 
(ii) wherein each of the first web pages displays at least one active link associated with a commerce object associated with a buying opportunity of a selected one of a plurality of merchants; and 
(iii) wherein the selected merchant, the out-source provider, and the owner of the first web page displaying the associated link are each third parties with respect to one other; 
(b) a computer server at the outsource provider, which computer server is coupled to the computer store and programmed to: 
(i) receive from the web browser of a computer user a signal indicating activation of one of the links displayed by one of the first web pages; 
(ii) automatically identify as the source page the one of the first web pages on which the link has been activated; 
(iii) in response to identification of the source page, automatically retrieve the stored data corresponding to the source page; and 
(iv) using the data retrieved, automatically generate and transmit to the web browser a second web page that displays: (A) information associated with the commerce object associated with the link that has been activated, and (B) the plurality of visually perceptible elements visually corresponding to the source page

The court had previously observed that the claimed solutions there were necessarily rooted in computer technology, in order to overcome a problem specifically arising in the realm of computer networks.  Further, its claim involved an ordered combination which was not merely a routine or conventional use of the Internet, and therefore not an abstract idea under step one of the Alice/Mayo framework.  DDR Holdings, 773 F.3d at 1257.

Next, the court revisited its more recent holding in BASCOM -- 

A content filtering system for filtering content retrieved from an Internet computer network by individual controlled access network accounts, said filtering system comprising:
a local client computer generating network access requests for said individual controlled access network accounts;
at least one filtering scheme;
a plurality of sets of logical filtering elements; and
a remote ISP server coupled to said client computer and said Internet computer network, said ISP server associating each said network account to at least one filtering scheme and at least one set of filtering elements, said ISP server further receiving said network access requests from said client computer and executing said associated filtering scheme utilizing said associated set of logical filtering elements.

Here, the court found that because the claim merely recited a number of existing and known elements, it is therefore directed to an abstract idea.  Under step two however, the court construed the claims in favor of the patentee, in finding that although the individual elements were non-inventive, their ordered combination however provided the requisite inventive concept.  BASCOM, 827 F.3d at 1345.

Now, drawing attention to one of the present claims of the Amdocs decision --

A computer program product embodied on a computer readable storage medium for processing network accounting information comprising:
computer code for receiving from a first source a first network accounting record;
computer code for correlating the first network accounting record with accounting information available from a second source; and
computer code for using the accounting information with which the first network accounting record is correlated to enhance the first network accounting record.

The lower court determined that the claim was directed to the abstract idea of "correlating two network accounting records to enhance the first record".  Then, under step two, the district court found that the claim did not add sufficient inventive concept to confer eligibility.  

The Federal Circuit however rejected this finding, finding that the claim was eligible because its language recited was closer to BASCOM and DDR Holdings, rather than those decisions finding ineligibility.  On its face, the claim in question is broad and sweeping; however, the Federal Circuit cited means-plus-function jurisprudence, wherein a patentee could write claim language to broadly describe the purpose or function of their invention, but it is limited only to the particular means (and equivalents) for implementing that function described in the specification.  

Here, the Federal Circuit delved into the specification and constructed the word "enhance" as being dependent on the invention's distributed architecture, and as meaning "to apply a number of field enhancements in a distributed fashion".  Citing the specification, the Federal Circuit noted that it was the distributed enhancement that was the critical enhancement over the prior art, which is intended to reduce congestion and network bottlenecks, while still allowing data to be accessible from a central location.  This "enhancement", as read from the specification, was sufficient to take this claim outside the realm of ineligibility.  This reading is in contrast to the dissent's, which would have required a patent claim to explicitly state the necessary means.

As an aside, in in rendering this finding, U.S. patent law in software patent eligibiltiy appears to be moving towards the current EPO standards, in which Article 52 EPC excludes "programs for computers" to the extent that they relate to a computer program "as such".  This has since been interpreted in that computer-implemented inventions that only solve a business problem using a computer is unpatentable as lacking an inventive step (in the U.S., a business solution claimed and specified only with a general purpose computer, without more, will most likely be viewed as an abstract idea under 35 USC 101).  On the other hand, if a technical contribution is made, or if the patent claim solves a technical problem, then that invention is patentable even if the problem is solved by running a computer program (such as in the three examples cited above).

In summation, one should be mindful that traditionally, 101 has served as a "coarse eligbility filter" in the determination of whether an invention is first and foremost, even an "invention".  Thereafter, the patent application must still pass muster under 102 (novelty), 103 (non-obviousness), as well as the requirement of 112 (written description and enablement). 

For the full opinion and dissent -- http://www.cafc.uscourts.gov/sites/default/files/opinions-orders/15-1180.Opinion.10-28-2016.1.PDF.

Read 2797 times Last modified on Wednesday, 02 November 2016 23:18
Tony Guo

As a specialized technology counsel, Tony supports his clients in the high tech, creative, and online industries. His primary areas of practice include intellectual property protection, Internet law, and startups. Tony is a USPTO registered patent attorney, as well as a licensed lawyer in California and Florida. He comes from a background involving considerable hardware and software development experience, having worked in both development and IT roles in the tech and finance industries.