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Further Guidance on Subject-Matter Eligibility in Apple, Inc. v. Ameranth, Inc.

A new § 101 decision provides a little more insight into subject-matter eligibility. In Apple, Inv. v. Ameranth, Inc., Case Nos. 2015-1703, and -1704, the Federal Circuit reviewed decisions in CBM2014-00013, -00015, and -00016 (decision dated November 29, 2016). The CBMs involved subject matter eligibility challenges against the claims of U.S. Patent Nos. 6,384,850; 6,871,325; and 6,982,733.  The claims generally relate to an information management and synchronous communications system for generating and transmitting menus.  The system includes, inter alia, “a first menu … displayable in a window of said graphical user interface in a hierarchical tree format;” and “application software for generating a second menu from said first menu and transmitting said second menu to a wireless handheld computing device or Web page,” where the generation is facilitated “by allowing selection of [categories] and items from the first menu … using the graphical user interface.” (See ’850 claim 1.)

The Board’s decisions had found some claims (including all independent claims) ineligible under § 101. However, the Board found that petitioners failed to meet their burden as to some dependent claims. The Federal Circuit affirmed the Board where it found claims ineligible, but reversed where it had found claims not ineligible—that is, all claims at issue were held to recite ineligible subject matter by the Court.

The Court’s decision, at Alice step one, turned on the fact that what may be broadly referred to as functional claims (“claims directed to certain functionality”) may require programming detail as to how the function is achieved, to pass muster at Alice step one. According to the Court:

“The patents claim systems including menus with particular features. They do not claim a particular way of programming or designing the software to create menus that have these features, but instead merely claim the resulting systems. Essentially, the claims are directed to certain functionality—here, the ability to generate menus with certain features. Alternatively, the claims are not directed to a specific improvement in the way computers operate.” (Slip op. at 19.)

Cf. Amdocs (Isreal) Ltd. v. Openet Telecom, Inc. (Fed. Cir. Nov. 1, 2016) (Reyna, J., dissenting) (“For example, a claim is ‘directed to’ an abstract goal if the claim fails to describe how—whether by particular process or structure—the goal is accomplished.”).

The Court also agreed with the Board that there was nothing more in the claims. For example, the Court approvingly observed that “the Board noted that menus were commonly printed on paper, and that it was known to use pens in the hospitality industry.” (Slip op. at 20.) The Court noted that “[t]he patents can readily be understood as adding conventional computer components to well-known business practices.” (Slip op. at 22.) It did not help the patent owner that “the specifications describe the hardware elements of the invention as ‘typical’ and the software programming needed as ‘commonly known.’” (Slip op. at 21.)

The Court also addressed the claims where the Board had found the petitioners to have not met their burden of showing ineligibility. Some of these claims “call[] for the desired result of associating a customer’s order with said customer, and do[] not attempt to claim any method for achieving that result.” (Slip op. at 24.) This the Court says is improper, quoting Internet Patents Corp. v. Active Network, 790 F.3d 1343, 1348 (Fed. Cir. 2015), which had held that merely describing an “effect or result dissociated from any method by which [it] is accomplished” does not give rise to patent-eligible subject matter. (Id.) For the other claims not held ineligible by the Board, the Court noted that those claims were similar to Content Extraction, where the Court had previously said that use of “existing scanning and processing technology to recognize and store data from specific data fields such as amounts, addresses, and dates” did not amount to significantly more than the “abstract idea of recognizing and storing information from hard copy documents using a scanner and a computer.” (Slip op. at 26-27.) Likewise, the present claims also involved preexisting technology. The Court said: “[a]ppending these preexisting technologies onto those independent claims does not make them patentable.” (Id.)

Going forward, it appears that some of the reasoning found in Judge Reyna’s dissent in Amdocs (Isreal) Ltd. v. Openet Telecom, Inc. (Fed. Cir. Nov. 1, 2016) is finding its way into the Federal Circuit’s subject-matter eligibility jurisprudence.  Admittedly, this same reasoning is found in other cases, but Practitioners would be well advised to take that into account when drafting and defending patent claims against subject-matter eligibility challenges.