Federal Circuit Reverses District Court’s Grant Of 12(c) Motion Under Section 101 Because Claims Were Not Directed To An Abstract Idea
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  • Federal Circuit Reverses District Court’s Grant Of 12(c) Motion Under Section 101 Because Claims Were Not Directed To An Abstract Idea  
     
    11/26/2019
    On November 15, 2019, the Court of Appeals for the Federal Circuit (CAFC) reversed a decision by the United States District for the District of Delaware granting defendants’ motion for judgment on the pleadings based on patent-ineligible subject matter.  Koninklijke KPN N.V. v. Gemalto M2M GmbH, __ F.3d __ (Fed. Cir. Nov. 15, 2019).  The CAFC held that the claims-at-issue are directed to a non-abstract improvement in the functionality of an existing technological process, and thus, the claims passed muster under 35 U.S.C. § 101, as interpreted by the Supreme Court’s decision in Alice Corp. v. CLS Bank International, 573 U.S. 208 (2014).
     
    Section 101 of the United States patent laws prescribes the categories of inventions and discoveries that can properly be the subject of a patent:  “any new and useful process, machine, manufacture, or composition of matter.”  These categories are limited by judicially-created proscriptions against patenting abstract ideas, laws of nature, and natural phenomena.

    The Supreme Court has set out a two-step framework for determining patent eligibility:
    1. determine whether the claims at issue are directed to one of the patent-ineligible concepts (such as an abstract idea); and, if so, then,
       
    2. determine whether the elements of the claim, considered both individually and as an ordered combination, recite an “‘inventive concept’—i.e., an element or combination of elements that is ‘sufficient to ensure that the practice amounts to significantly more than a patent upon the [ineligible concept] itself.’”
    Alice, 573 at 217-18 (quoting Mayo Collaborative Servs. v. Prometheus Labs., Inc., 132 S. Ct. 1289, 1294 (2012)).
     
    The CAFC has drawn a distinction, in the Section 101 context, between software/computer-based claims that are focused on a specific asserted improvement in computer capabilities (which claims are patent eligible) and claims that are focused on a process that qualifies as an abstract idea for which computers are invoked merely as a tool (which claims are not patent eligible).

    In the instant case, claims 1–4 of the asserted patent recited:
    1. A device for producing error-checking based on original data provided in blocks with each block having plural bits in a particular ordered sequence, comprising:
    a generating device configured to generate check data; and
     
    a varying device configured to vary original data prior to supplying said original data to the generating device as varied data;
     
    wherein said varying device includes a per-mutating device configured to perform a permutation of bit position relative to said particular ordered sequence for at least some of the bits in each of said blocks making up said original data without reordering any blocks of original data.
    1. The device according to claim 1, wherein the varying device is further configured to modify the permutation in time.
       
    2. The device according to claim 2, wherein the varying is further configured to modify the per-mutation based on the original data.
       
    3. The device according to claim 3, wherein the permutating device includes a table in which subsequent permutations are stored.
    Defendants moved for judgment on the pleadings that claims 1–4 were patent ineligible under Section 101.  Applying the Alice two-step test, the district court agreed.
     
    At Alice Step One, the district court found that the claims are directed to the “abstract idea of reordering and generating additional data,” analogizing the claims to other data-manipulation claims that the CAFC had previously found patent-ineligible.  According to the district court, the claims are abstract, because they do “not say how data is reordered, how to use reordered data, how to generate additional data, how to use additional data, or even that any data is transmitted.”   
     
    At Alice Step Two, the district court concluded there was no inventive concept because—even if it was disclosed in the patent specification—it was not captured in the claims.
     
    The patent owner appealed the decision as to claims 2–4; it did not appeal the decision with respect to claim 1. 
     
    On appeal, the CAFC reversed.  It held that claims 2–4 are patent eligible, because they are directed to “a non-abstract improvement in an existing technological process (i.e., error checking in data transmissions).”  The CAFC reasoned that, by requiring that the permutation applied to original data be modified “in time,” claim 2 (which is incorporated into all appealed claims) recites a specific implementation of varying the way check data is generated that improves the ability of prior art error detection systems to detect systematic errors.
     
    The CAFC further analogized the claims to those found patent-eligible in prior decisions, such as in Finjan, Inc. v. Blue Coat System, Inc., 879 F.3d 1299, 1303 (Fed. Cir. 2018):
     
    This claimed technological improvement is akin to the type of non-abstract improvement we found to be patent-eligible in Finjan.  In Finjan, the claims at issue recited a method of providing computer security by generating a “security profile” that identifies suspicious code that performs “potentially hostile operations.”  879 F.3d at 1303-04.  Unlike traditional systems that “simply look[ed] for the presence of known viruses,” the claimed method was able to identify “potentially dangerous or unwanted operations.”  Id. at 1304 (emphases added).  Thus, we concluded that the claimed method was directed to a “non-abstract improvement” over the prior art, because it employed “a new kind of file that enable[d] a computer security system to do things it could not do before.” Id. at 1305.  Here, as in Finjan, the claimed invention is also directed to a non-abstract improvement, because it employs a new way of generating check data that enables the detection of persistent systematic errors in data transmissions that prior art systems were previously not equipped to detect.
     
    This decision is the latest example in claims directed to “technological improvements” being patent eligible.

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