March 2, 2015

More on Patent Eligible Subject Matter

In DDR HOLDINGS, LLC. v. NATIONAL LEISURE GROUP, INC. and WORLD TRAVEL HOLDINGS, INC., CAFC, 2013-1505 (DDR), decided 5 December 2014, the Court of Appeals of the Federal Circuit (CAFC) again addressed the consequences of the Supreme Court's ALICE Decision (ALICE CORPORATION PLY. LTD. V. CLS BANK INTERNATIONAL, ET AL.). In the DDR decision, the CAFC found that a claim directed to keeping control of internet traffic at a first website by duplicating the look and feel of a second website, is not an abstract idea using conventional computer technology but a different way to operate a computer network. It is therefore patent eligible subject matter.

In line with my previous comments about the "I know it when I see it" standard for abstract ideas, the CAFC here notes 'the Supreme Court did not "delimit the precise contours of the 'abstract ideas' category"'. However, the CAFC did list those things which have explicitly been ruled abstract ideas -- "mathematical algorithms" and "economic and conventional business practices" such as: "advertising as currency;" "transaction performance guaranty;" "insurance response to an event;" and "managing a life-insurance policy value."

I might add that DNA sequences separate from their molecular embodiments are also suggested to be abstract ideas. In the MYRIAD case (ASSOCIATION FOR MOLECULAR PATHOLOGY ET AL. v. MYRIAD GENETICS, INC., ET AL., April 2013) the Supreme Court suggests "Myriad ... claim is concerned primarily with the information contained in the genetic sequence, not with the specific chemical composition of a particular molecule" (emphasis on information provided here, the Court emphasized the word sequence).

In my practice, I consider "information not tied to a physical phenomenon" as an abstract idea and look for novel changes in physical phenomena as a result of the information to generate patent eligible claims. Financial instruments like money and debt and contractual obligations are not considered physical phenomena in this line of thought.

In my past comments I recommended that the practitioner is wise to make use of the safe harbor of the machine or transformation test. I should have qualified that this is provided that the method modifies the machine operation or transforms the matter. A claim that merely uses a known machine (e.g., general purpose computer, memory device or network) to process information not tied to a physical phenomenon will not move past the abstract idea. I have had success with claims in which signals indicating some physical phenomenon ( e.g., magnetic resonance) are changed to signals representing a different physical phenomenon (e.g., lymph node) as the transformation, because these signals do not represent any of the taboo types of non-physical information. Whether this success will continue under the new US Patent Office guidelines for patentable subject matter updated this January 2015 remains to be seen.