Patentee Fairwarning loses 101 case at CAFC; McRO, Inc. v. Bandai Namco Games America Inc. distinguished

Fairwarning v Iatric was a 101 case that came out unfavorably to the patentee:


FairWarning IP, LLC, appeals a judgment of the
United States District Court for the Middle District of
Florida dismissing its suit with prejudice after holding
that the asserted patent, U.S. Patent No. 8,578,500,
claims patent-ineligible subject matter under 35 U.S.C.
§ 101. Because we agree with the district court that
FairWarning’s ’500 patent claims patent-ineligible subject
matter, we affirm.



As to Alice



Following the two-step test for patent-eligibility identified
in Alice Corp. v. CLS Bank International, 134 S. Ct.
2347 (2014), the court first found the claims were directed
to a patent-ineligible abstract idea: “the concept of analyzing
records of human activity to detect suspicious behavior.”
FairWarning IP, LLC v. Iatric Sys., Inc., No. 8:14-
CV-2685, 2015 WL 3883958, at *2 (M.D. Fla. June 24,
2015) (quotation marks omitted). This concept, the court
explained, “is a basic and well-established abstract idea.”

(...) [Of step 2 of Alice]

The court analyzed the
elements of the claim individually and as an ordered
combination, but found “nothing significantly more than
an instruction to apply the abstract idea . . . using some
unspecified, generic computer.” Id. (quoting Alice, 134
S. Ct. at 2360) (alteration in original).



The CAFC cited a September 2016 decision:



While the claims here recite using one of a few possible
rules to analyze the audit log data, this does not make
them eligible under our decision in McRO, Inc. v. Bandai
Namco Games America Inc., No. 15-1080, 2016 WL
4896481 (Fed. Cir. Sept. 13, 2016), which also involved
claims reciting rules. In McRO we held that, in analyzing
step one, “the claims are considered in their entirety to
ascertain whether their character as a whole is directed to
excluded subject matter.” Id. at *6 (quoting Internet
Patents Corp. v. Active Network, Inc., 790 F.3d 1343, 1346
(Fed. Cir. 2015)). Of course, claims cannot be directed to
“laws of nature, natural phenomena, and abstract ideas,”
but must instead “claim patent-eligible applications of
those concepts.” Alice, 134 S. Ct. at 2355 (citing Mayo,
132 S. Ct. at 1296–97). Indeed, even though a claim can
be abstracted to the point that it reflects a patent-ineligible
concept—for, “[a]t some level, ‘all inventions . . .
embody, use, reflect, rest upon, or apply laws of nature,
natural phenomena, or abstract ideas,’” id. at 2354 (quoting
Mayo, 132 S. Ct. at 1293)—that claim may nevertheless
be patent eligible if the claim language is directed to
a patent-eligible application of that concept. See Rapid
Litig. Mgmt. Ltd. v. CellzDirect, Inc., 827 F.3d 1042, 1050
(Fed. Cir. 2016).

( )
The claims in McRO were not directed to an abstract
idea, but instead were directed to “a specific asserted
improvement in computer animation, i.e., the automatic
use of rules of a particular type.” McRO, 2016 WL
4896481, at *8. We explained that “the claimed improvement
[was] allowing computers to produce ‘accurate and
realistic lip synchronization and facial expressions in
animated characters’ that previously could only be produced
by human animators.” Id. at *8 (quoting U.S.
Patent No. 6,307,576 col. 2 ll. 49–50). The claimed rules
in McRO transformed a traditionally subjective process
performed by human artists into a mathematically automated
process executed on computers. Id. at *8–9.
Indeed, Defendants conceded that prior animating processes
were “driven by subjective determinations rather
than specific, limited mathematical rules,” such as the
mathematical rules articulated in McRO’s claimed method.
Id. at *8. Thus, the traditional process and newly
claimed method stood in contrast: while both produced a
similar result, i.e., realistic animations of facial movements
accompanying speech, the two practices produced
those results in fundamentally different ways.
As such, we explained that “it [was] the incorporation
of the claimed rules, not the use of the computer, that
‘improved [the] existing technological process’ by allowing
the automation of further tasks.” Id. (alteration in original)
(quoting Alice, 134 S. Ct. at 2358). “This [was] unlike
Flook, Bilski, and Alice, where the claimed computer-automated
process and the prior method were carried
out in the same way.” Id. (citing Parker v. Flook, 437 U.S.
584, 585–86 (1978); Bilski v. Kappos, 561 U.S. 593, 611
(2010); Alice, 134 S. Ct. at 2356).
The claims here are more like those in Alice than
McRO.



link to decision: http://www.cafc.uscourts.gov/sites/default/files/opinions-orders/15-1985.Opinion.10-6-2016.1.PDF