Another Win to Software Inventors

US Court Hands Another Win to Software Inventors

Those with an interest in software patents most likely will be familiar with the infamous Alice decision. The Alice decision was made by the US Supreme Court on 19 June 2014, in Alice Corporation PTY. LTD v CLS Bank International.

Before the Alice decision, the US Patent and Trademark Office (USPTO) took a more lenient approach towards software inventions in comparison to other patent offices, such as the European Patent Office (EPO). Generally, before Alice a software invention could be patented, if the invention was “tied to a particular machine or apparatus”. Thus, software could be patented, so long as it was implemented on a processor.

In Alice, the US Supreme Court set out a two-step test for determining whether a software invention is patentable or not. The result of this new test was that some inventions, that would have been patentable before Alice, became non-patentable overnight. In addition, this meant that the validity of a huge number of existing patents was thrown into doubt.

In general terms, the test laid out in Alice analyses whether an invention is directed towards significantly more than an abstract idea. If an invention is not directed towards an abstract idea, the invention is capable of being patented. However, if an invention is directed towards an abstract idea, but that invention does not amount to significantly more than an abstract idea, the invention is not able to be patented.

The difficulty with the Alice test is that no one at the time really knew what the Supreme Court meant by terms “abstract idea” and what constituted being “significantly more than an abstract idea”. What the Alice decision did tell us though was that the specific invention in that case, which was directed towards an electronic escrow service, was not patentable. However, this in itself was not particularly helpful in assessing the patentability of other software inventions.

Since 2014 there have been a number of Federal Court of Appeal decisions that have shed some light on this area of confusion. One of the first post-Alice Federal Circuit decisions to find that a software invention was patentable was in DDR Holdings LLC v Hotels.com. This case considered the patentability of a method of generating a composite web-page.  In the invention, the composite web-page was generated by combining certain visual elements of a “host” website with content from a third party merchant. This invention was found to be patentable because its inventive concept was directed towards a specific “Internet-centric” problem.

Later, in Enfish LLC v Microsoft Corp, a logical model for a computer database was found to be patentable because the invention in this case was “directed to a specific implementation of a solution to a problem in the software arts”. Then, in Bascom Global Internet Services Inc v AT&T Mobility LLC, a system for filtering internet content was found to be patentable because the claims in the patent carved out a specific location for a filtering system and required the filtering system to give users the ability to customise filtering for their individual network accounts.

A common theme in the DDR, Enfish and Bascom cases was that the inventions that were found to be patentable each provided some kind of technical advantage, rather than simply implementing an existing concept in a general-purpose computer. These cases help to clarify what the USPTO would consider to be “significantly more than an abstract idea” in their examination of US patent applications.

Recently, the Court of Appeal for the Federal Circuit handed down another favourable decision for software patents in McRo Inc v Bandi Namco Games America Inc. This decision provides yet another positive decision upon which software inventors can argue that their inventions are patentable.

In McRo, the court issued a decision stating that a “method for automatically animating lip synchronization and facial expression of animated characters” was patentable. In this case, the court considered whether the method provided “an improvement to the relevant technology or whether the claimed invention was directed towards a result or effect that was itself an abstract idea merely invoking generic processes and machinery”. The court decided that the claimed method was patentable because it defined a process specifically designed to achieve an improved technological result.

The McRo decision reinforces the approach in the other US cases discussed earlier. It provides a further indication that, if a software invention provides an improved technological result, then that invention is more likely to be patentable.

The decisions in favour of software inventions demonstrate that the US approach is becoming aligned with the European approach. The European approach requires software inventions to provide a technical solution to a technical problem in order to be patentable, and although the US does not use the exact same test, it seems as though the tests are becoming similar to one another.

For quite some time, European patent attorneys have become used to drafting patent applications which highlight the technical advantages of the invention described in the application. Patent applications relating to software inventions drafted in this way may be more likely to succeed at the USPTO under the new rules, based on the recent decisions from the US courts. However, it will be interesting to see whether or not US law will continue to converge with European law in its assessment of the patentability of software.

Guest blog written by Philip Naylor, Associate (Patent Attorney) at Olswang

Philip Naylor, Associate (Patent Attorney) Olswang - headshot

Sources:
https://www.supremecourt.gov/opinions/13pdf/13-298_7lh8.pdf
http://www.cafc.uscourts.gov/sites/default/files/opinions-orders/13-1505.Opinion.12-3-2014.1.PDF
http://www.cafc.uscourts.gov/sites/default/files/opinions-orders/15-1244.Opinion.5-10-2016.1.PDF
http://www.cafc.uscourts.gov/sites/default/files/opinions-orders/15-1763.Opinion.6-23-2016.1.PDF
http://www.cafc.uscourts.gov/sites/default/files/s15-1080.Opinion.9-9-2016.2.pdf