Federal Circuit Decision Provides Example of Computer-Related Claims that are not Directed to an Abstract Idea Under Step One of Mayo/Alice Analysis

May 2016

By: Sheri L. Gordon

The Federal Circuit’s May 12, 2016, opinion in Enfish, LLC v. Microsoft Corp., Appeal No. 2015-1244, marks the first time since the Supreme Court decided Alice that the Federal Circuit reversed a district court’s determination that computer-related claims are patent ineligible under the Mayo/Alice test. The interesting aspect of the Enfish decision is that the Federal Circuit determined that the claims at issue were not directed to an abstract idea under the first step of the Mayo/Alice test and that it was unnecessary to proceed to step two of the analysis, because the focus of the claims was unquestionably not an abstract idea, particularly in view of the specification.

The Enfish patents at issue are directed to a “self-referential” database (an “innovative logical model for a computer database”). Slip op. at 2. Enfish asserted the patents against Microsoft’s software product called ADO.NET. On summary judgment, the United States District Court for the Central District of California found: all claims invalid under Section 101 as claiming an abstract idea; some claims invalid as being anticipated; and one claim not infringed. The Federal Circuit reversed the district court’s judgment of invalidity under Section 101, vacated the judgment of anticipation under Section 102, and affirmed the judgment of non-infringement. The Court’s review of the Section 101 issue is of particular interest.

Discussing the claimed inventions, the Federal Circuit explained that a logical model “generally results in the creation of particular tables of data, but it does not describe how the bits and bytes of those tables are arranged in physical memory devices.” Slip op. at 3. Unlike conventional logical models, the claimed logical model “includes all data entries in a single table, with column definitions provided by rows in that same table” and can best be understood in contrast to the standard relational model. Slip op. at 3. The claimed logical model has at least two features that a relational model does not have: (1) it can “store all entity types in a single table” and (2) it can “define the table’s columns by rows in that same table” (and is thus “self-referential”). Slip op. at 6-7. The Federal Circuit also took note of the many benefits the patents described as resulting from the claimed logical model, such as faster searching of data due to the disclosed indexing technique, more effective storage of images and unstructured text, and greater flexibility in configuring the database. Slip op. at 7. The detailed description and disclosure in the specification relating to the prior art and benefits of the claimed logical model played a key role in the Court’s determination.

Applying the Mayo/Alice framework, the Federal Circuit observed that the first step – determining whether the claims are directed to a patent-ineligible concept such as an abstract idea – “is a meaningful one, i.e., that a substantial class of claims are not directed to a patent-ineligible concept.” The Federal Circuit also observed that the “directed to” inquiry “cannot simply ask whether the claims involve a patent-ineligible concept, because essentially every routinely patent-eligible claim involving physical products and actions involves a law of nature and/or natural phenomenon—after all, they take place in the physical world.” Instead, this inquiry “applies a stage-one filter to claims, considered in light of the specification, based on whether ‘their character as a whole is directed to excluded subject matter.’” Slip op. at 10 (quoting Internet Patents Corp. v. Active Network, Inc., 790 F.3d 1343, 1346 (Fed. Cir. 2012)) (emphasis in original).

The Federal Circuit also focused on the Supreme Court’s suggestion in Alice that patent claims that purport to improve upon the functioning of the computer itself or that improve upon an existing technological process might escape a finding that they come within the ineligible concept of an abstract idea. Although the Supreme Court made this suggestion in the context of step two of the Mayo/Alice analysis, the Federal Circuit explained that this was because there was no need in that case to discuss step one at length. In that regard, the Federal Circuit stated:

We do not read Alice to broadly hold that all improvements in computer-related technology are inherently abstract and, therefore, must be considered at step two. Indeed, some improvements in computer-related technology when appropriately claimed are undoubtedly not abstract, such as a chip architecture, an LED display, and the like. Nor do we think that claims directed to software, as opposed to hardware, are inherently abstract and therefore only properly analyzed at the second step of the Alice analysis. Software can make non-abstract improvements to computer technology just as hardware improvements can, and sometimes the improvements can be accomplished through either route. We thus see no reason to conclude that all claims directed to improvements in computer-related technology, including those directed to software, are abstract and necessarily analyzed at the second step of Alice, nor do we believe that Alice so directs. Therefore, we find it relevant to ask whether the claims are directed to an improvement to computer functionality versus being directed to an abstract idea, even at the first step of the Alice analysis.

Slip op. at 11. In the context of the Enfish patents, the Federal Circuit’s analysis looked at the focus of the claims, i.e., whether they focus on the specific asserted improvements in computer capabilities (here, the “self-referential” table for a computer database), or whether they focus on a process qualifying as an abstract idea, wherein computers are recited merely as a tool to implement the abstract idea. Slip op. at 11. Under this analysis, the Federal Circuit found that “the plain focus of the claims is on an improvement to computer functionality itself, not on economic or other tasks for which a computer is used in its ordinary capacity.” Slip op. at 12.

In reaching its conclusion of patent eligibility, the Federal Circuit found that the district court’s description of the claims was at an unreasonably high level of abstraction that oversimplified the “self-referential” component and was not tethered to the claim language itself (the district court found that the claims were directed to “storing, organizing and retrieving memory in a logical table,” i.e., the abstract idea of organizing information using tabular formats). However, it was clear to the Federal Circuit that, when viewed in context, the claims are not directed merely to any form of storing tabular data, but that they are instead specifically directed to a “self-referential” table for a computer database that improves the functioning of the computer itself and/or improves upon an existing technology. The Federal Circuit found strong support for its determination in the patents’ specification, and particularly the distinction over prior art data structures and the description of the benefits provided by the claimed logical database. Slip op. at 7-8, 12-16.

That the claimed logical database could run on a general-purpose computer did not alter the Federal Circuit’s conclusion of patent eligibility. This is primarily because the Court found that, unlike in prior decisions relied upon by Microsoft, the claims here are directed to improving the functioning of the computer itself, and do not simply implement a well-known business practice using conventional computer components. Slip op. at 16-17. The Federal Circuit also observed that failure to define the claimed improvements by referring to any physical component is not fatal to a finding of patent eligibility of computer-implemented inventions, particularly because “[m]uch of the advancement made in computer technology consists of improvements to software that, by their very nature, may not be defined by particular physical features.” Slip op. at 17-18. Importantly, the Federal Circuit stated that it does not read applicable precedent on Section 101 as “an exclusion to patenting this large field of technological progress.” Slip op. at 18. The Federal Circuit summed up its opinion stating that the claims recite “a specific implementation of a solution to a problem in the software arts,” not an abstract idea, and that it was not necessary to proceed to step two of the Mayo/Alice analysis. Slip op. at 18. The Federal Circuit was careful to note, however, that an analysis under step two may be necessary in other cases involving computer-related claims, in which identifying what the claims are directed to under step one presents a close call. In that case, the Court said that “an analysis of whether there are arguably concrete improvements in the recited computer technology could take place under step two” of the Mayo/Alice framework. Slip op. at 18.