Wednesday, August 15, 2018

CAFC in BSG Tech gives a way around the fact inquiry of Berkheimer

The outcome

BSG Tech LLC sued BuySeasons, Inc. for infringement
of several patents related to systems and methods
for indexing information stored in wide access databases.
BuySeasons sought dismissal of the suit based on its
contention that none of the asserted patent claims were
patent-eligible under 35 U.S.C. § 101. The district court
ultimately agreed with BuySeasons and held all asserted
claims invalid as ineligible under § 101. We agree with
the district court that the asserted claims are ineligible
and, thus, affirm.

As to Alice

Section 101 provides that a patent may be obtained
for “any new and useful process, machine, manufacture,
or composition of matter, or any new and useful improvement
thereof.” This provision contains an implicit exception
that “[l]aws of nature, natural phenomena, and
abstract ideas are not patentable.” Ass’n for Molecular
Pathology v. Myriad Genetics, Inc., 569 U.S. 576, 589
(2013) (quoting Mayo Collaborative Servs. v. Prometheus
Labs., Inc., 566 U.S. 66, 70 (2012)). We determine whether
a claim covers ineligible subject matter under § 101
through a two-step test. Alice Corp. v. CLS Bank Int’l,
134 S. Ct. 2347, 2355 (2014). At step one, we “determine
whether the claims at issue are directed to one of those
patent-ineligible concepts.” Id. If so, we consider at step
two whether the elements of each claim, both individually
and as an ordered combination, “‘transform the nature of
the claim’ into a patent-eligible application.” Id. (quoting
Mayo, 566 U.S. at 78).

As to Berkheimer:

At step two, if claims are directed to a patentineligible
concept, “we consider the elements of each claim
both individually and ‘as an ordered combination’ to
determine whether the additional elements ‘transform the
nature of the claim’ into a patent-eligible application.”
Alice, 134 S. Ct. at 2355 (quoting Mayo, 566 U.S. at 78–
79). These transformative elements must supply an
“inventive concept” that ensures the patent amounts to
“significantly more than a patent upon the [ineligible
concept] itself.” Id. (quoting Mayo, 566 U.S. at 72–73)
(alteration in original). Claim limitations that recite
“conventional, routine and well understood applications in
the art” are insufficient to “supply an inventive concept.”
Ariosa Diagnostics, Inc. v. Sequenom, Inc., 788 F.3d 1371,
1378 (Fed. Cir. 2015).
Whether a combination of claim limitations supplies
an inventive concept that renders a claim “significantly
more” than an abstract idea to which it is directed is a
question of law. Underlying factual determinations may
inform this legal determination. See Berkheimer v. HP
Inc., 881 F.3d 1360, 1368 (Fed. Cir. 2018). We have
recently held that whether a claim limitation or combination
of limitations is well-understood, routine, and conventional
is a factual question. Id. Accordingly, in cases
where the only issue at step two is whether claim limitations
are well-understood, routine, and conventional, a
genuine dispute over that issue will preclude summary
judgment that a claim is ineligible under § 101. This was
the case for some of the claims at issue in Berkheimer. In
that case, certain claims recited non-abstract features of a
digital asset management system that the specification
described as unconventional improvements over conventional
systems. Id. at 1370. While the Berkheimer defendant
argued those features were conventional, there
was a genuine issue of material fact in that case. Id.
Under those circumstances, summary judgment was
inappropriate. Id.

This case is different. BSG Tech points to the ’699,
’294, and ’652 patent specifications to argue that the
asserted claims recite unconventional features that provide
benefits over conventional prior art databases. But
the relevant inquiry is not whether the claimed invention
as a whole is unconventional or non-routine. At step two,
we “search for an ‘inventive concept’ . . . that is ‘sufficient
to ensure that the patent in practice amounts to significantly
more than a patent upon the [ineligible concept]
itself.’” Alice, 134 S. Ct. at 2355 (internal quotation marks
omitted) (quoting Mayo, 566 U.S. at 72–73). After identifying
an ineligible concept at step one, we ask at step two
“[w]hat else is there in the claims before us?” Mayo, 566
U.S. at 78.

It has been clear since Alice that a claimed invention’s
use of the ineligible concept to which it is directed cannot
supply the inventive concept that renders the invention
“significantly more” than that ineligible concept. In Alice,
the Supreme Court held that claims directed to a computer-implemented
scheme for mitigating settlement risks
claimed a patent-ineligible abstract idea. 134 S. Ct. at
2352, 2355–56. Some of the claims at issue covered
computer systems configured to mitigate risks through
various financial transactions. Id. After determining
that those claims were directed to the abstract idea of
intermediated settlement, the Court considered whether
the recitation of a generic computer added “significantly
more” to the claims. Id. at 2357. Critically, the Court did
not consider whether it was well-understood, routine, and
conventional to execute the claimed intermediated settlement
method on a generic computer. Instead, the
Court only assessed whether the claim limitations other
than the invention’s use of the ineligible concept to which
it was directed were well-understood, routine and conventional.
Id. at 2359–60.
Our precedent has consistently employed this same
approach. If a claim’s only “inventive concept” is the
application of an abstract idea using conventional and
well-understood techniques, the claim has not been transformed
into a patent-eligible application of an abstract
idea. See, e.g., Berkheimer, 881 F.3d at 1370 (holding
claims lacked an inventive concept because they “amount
to no more than performing the abstract idea of parsing
and comparing data with conventional computer components”);
Affinity Labs of Tex., LLC v. DIRECTV, LLC, 838
F.3d 1253, 1262 (Fed. Cir. 2016) (holding a claim lacked
an inventive concept because it “simply recites the use of
generic features . . . as well as routine functions . . . to
implement the underlying idea”); cf. Ariosa, 788 F.3d at
1379–80 (rejecting the argument that a newly discovered
natural phenomenon can supply an inventive concept).

Here, the only alleged unconventional feature of BSG
Tech’s claims is the requirement that users are guided by
summary comparison usage information or relative historical
usage information. But this simply restates what
we have already determined is an abstract idea. At Alice
step two, it is irrelevant whether considering historical
usage information while inputting data may have been
non-routine or unconventional as a factual matter. As a
matter of law, narrowing or reformulating an abstract
idea does not add “significantly more” to it. See SAP Am.,
Inc. v. InvestPic, LLC, No. 2017-2081, slip op. at 14 (Fed.
Cir. Aug. 2, 2018) (“What is needed is an inventive con-
cept in the non-abstract application realm. . . .
[L]imitation of the claims to a particular field of information
. . . does not move the claims out of the realm of
abstract ideas.”). BSG Tech does not argue that other,
non-abstract features of the claimed inventions, alone or
in combination, are not well-understood, routine and
conventional database structures and activities. Accordingly,
the district court did not err in determining that the
asserted claims lack an inventive concept.


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