Federal Circuit Clarified Abstractness in the Context of Software

Court Finds Software Patentable Unless Unmistakably Abstract

In Research Corp. Technologies, Inc. v. Microsoft Corp., Civ. Case. No. 10-1037 (Fed. Cir. December 8, 2010), Research Corporation Technologies, Inc. (“RCT”) owns six related patents: U.S. Patent Nos. 5,111,310 (“’310 patent”); 5,341,228 (“’228 patent”); 5,477,305 (“’305 patent”); 5,543,941 (“’941 patent”); 5,708,518 (“’518 patent”); and 5,726,772 (“’772 patent”).  The six related patents relate to digital image half toning which allows a computer to create more colors than otherwise possible with the limited number of pixel colors available in a typical printer.  In order to measure the quality of the half toning, the inventors created a method of detecting a power spectrum which measures the frequency of the dots used to create the half tone and compares this power spectrum to an ideal spectrum stored in a mask.  By comparing the stored mask and detected power spectrum, the method determines half tone quality.

RCT sued Microsoft asserting that Microsoft infringed the six patents.  After a first remand from the Federal Circuit, the District Court found that the claims of the ’310 and the ’228 patents were not directed to patentable inventions under 35 U.S.C. § 101 as being too abstract.

On its second appeal, the Federal Circuit began its analysis by noting that 35 U.S.C. §§ 100 & 101 define a process as a “process, art, or method, and includes a new use of a known process, machine, manufacture, composition of matter, or material”, and what is patentable is “any” such process. The Federal Circuit noted that the Supreme Court noted the significance of the word “any” in Bilski v. Kappos, 130 S. Ct. 3218, 3225 (2010) as being that what constitutes a patentable inventions should be broadly defined.  That being said, the Supreme Court also confirmed that patentable processes are limited by three exceptions: laws of nature, physical phenomena, and abstract ideas.

Relying on Bilski, the Federal Circuit noted that laws of nature and physical phenomena are not patentable as they relate to “the basic tools of scientific and technological work.” Gottschalk v. Benson, 409 U.S. 63, 67 (1972).  Moreover, abstractness as a concept for invalidity is also “a disclosure problem addressed in the Patent Act in section 112”.  Lastly, the Federal Circuit noted that patentability under 35 U.S.C. §101 is at most a threshold problem, with the Supreme Court rejecting the “machine or transformation” since “section 101 eligibility should not become a substitute for a patentability analysis related to prior art, adequate disclosure, or the other conditions and requirements of Title 35.”  Thus, the Federal Circuit determined that unless a process is determined to fit within these three exceptions, the process should be compliant with 35 U.S.C. § 101 regardless of any considerations of disclosure or obviousness.

Turning to the claims at issue in the ‘310 patent, the Federal Circuit first noted that the recited method is a process as defined by 35 U.S.C. § 101, and therefore the inquiry turns as to whether one of the three exceptions apply.  As the parties did not dispute that the recited method was not a law of nature or a natural phenomenon, the Federal Circuit reviewed whether the claims violated 35 U.S.C. § 101 by being too abstract.

In reviewing these factors as opposed to applying a bright line test, the Federal Circuit then noted that, as there was no good rigid test for determining abstractness, the Supreme Court in Bilski invited the Federal Circuit “to develop ‘other limiting criteria that further the purposes of the Patent Act and are not inconsistent with its text.’” 130 S. Ct. at 3231.

The Federal Circuit first noted that when an invention is abstract as to not fit within the confines of 35 U.S.C. §101, “this disqualifying characteristic should exhibit itself so manifestly as to override the broad statutory categories of eligible subject matter and the statutory context that directs primary attention on the patentability criteria of the rest of the Patent Act.”  In reviewing the claims for this manifestation, the Federal Circuit noted that invention has “palpable applications in the field of computer technology” and addresses a need in the technology relating to performing half toning.  The Federal Circuit supported this conclusion with citations to the specification that discussed the use of digital processors and the recitation in the claims of various computer components in performing the method.  In summary, the Federal Circuit found that “this court notes that inventions with specific applications or improvements to technologies in the marketplace are not likely to be so abstract that they override the statutory language and framework of the Patent Act.”  As such, the Federal Circuit found that, while the invention utilizes algorithms, the mere use of the algorithms did “not bring this invention even close to abstractness that would override the statutory categories and context.”

The Federal Circuit cautioned that merely passing the abstract test does not mean that a claim has satisfied other statutory requirements.  Thus, an invention, which is a patentable process and is not abstract for purposes of 35 U.S.C. §101 can still not be sufficiently described as to be compliant with 35 U.S.C. §112 or be sufficiently nonobviousness to survive 35 U.S.C. §103.  Therefore, the Federal Circuit found that the claims were valid under 35 U.S.C. §101 as being drawn to a non-abstract process.

Significance for Patent Owners and Applicants

The Research Corp. Technologies decision provides valuable clues as to how an applicant can protect inventions which incorporate algorithms.  Specifically and as discussed in Supreme Court Confirms Broad Standard for Patentability, Vol. 6, Issue 2 of the Stein McEwen Newsletter (June 2010), the Supreme Court in Bilski did very little to provide guidance to applicants as to how to protect software-based inventions beyond broad assertions that such inventions cannot be too abstract.  The Federal Circuit in Research Corp. Technologies provided such guidance by placing an affirmative burden that abstractness must be manifest.  Further, evidence as to the non-abstractness can be found in the specification or other claims which can establish the real world utility of a recited process in situations where the claims themselves may not include specific hardware limitations.  As such, applicants in drafting applications need to be especially vigilant in ensuring that the specification includes real world examples as to how the software invention interacts with hardware elements, and possibly include such hardware elements within a claim set to prove that the invention, while broadly defined, is not abstract.

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