Bloomberg Law
Feb. 13, 2020, 9:00 AM

INSIGHT: Federal Circuit Helps Clarify Patent Eligibility for Tech Improvements

Irah Donner
Irah Donner

The Federal Circuit, in a precedential November ruling, revived a software patent involving a data transmission system. The case indicates that claims focusing on a specific improvement in computer capabilities are patent eligible.

In addition, the decision explains that claims must recite a specific means or method that solves a problem in an existing technological process. However, a claim reciting an improved result, without more, will not be sufficient to establish patent eligibility.

In Koninklijke KPN N.V. v. Gemalto M2M GmbH , the court held that an improved check data generating device that enabled a data transmission error detection system to find errors other systems could not was patent eligible. The court also found that a claim directed to improving the functionality of one tool that is part of an existing system doesn’t need to recite how that tool is applied in the overall system to be patent eligible.

Koninklijke, which owns U.S. Patent No. 6,212,662 (662 patent), an improved data transmission error detection system, sued Gemalto and others for patent infringement. Gemalto convinced the U.S. District Court for the District of Delaware that the patent was directed to the abstract idea of data manipulation.

“Rather than being merely directed to the abstract idea of data manipulation, these claims are directed to an improved check data generating device that enables a data transmission error detection system to detect a specific type of error that prior art systems could not,” the Federal Circuit said.

Observations and Practice Pointers

The Federal Circuit explained that a claim directed to improving the functionality of a tool that is part of an existing system does not necessarily need to recite how that tool is applied in the overall system.

Taking into consideration these points, patent litigants/practitioners would be well served, to the extent possible, to:

  • assert/describe the technical problem being solved in the specification;
  • assert/draft claims that describe the solution to a technical problem;
  • be aware that improved functionality of a tool that is part of a computer system should be eligible; and
  • be aware that specific improved computer capabilities should be eligible.

The court also listed/re-affirmed the following software related or implemented inventions that were held patent eligible that should be useful for patent litigants/practitioners:

  • A process for lip-synching animated characters that used specific rules to automate a previously subjective manual process
  • A self-referential database that improved how computers stored and retrieved data in memory
  • A process for generating a security profile that improved the ability of a computer system to identify potentially suspicious operations that it could not previously identify
  • A process for storing a verification structure in a part of computer memory that is less vulnerable to hacking to improve security against unauthorized use of licensed software

Patent Eligibility Test

To determine whether claimed subject matter is patent eligible, the U.S. Supreme Court’s 2014 two-step Alice framework asks the following:

  1. Are the claims directed to a “patent-ineligible concept” such as an abstract idea?
  2. Do the elements of the claim contain an inventive concept sufficient to transform the abstract idea into a “patent-eligible application”?

The Federal Circuit explained that the “claimed invention is also directed to a non-abstract improvement because it employs a new way of generating check data that enables the detection of persistent systematic errors in data transmissions that prior art systems were previously not equipped to detect.”

The court, however, side-stepped the issue regarding whether the specification is required to describe the technological advantage, but did allow consideration of the “specification as a whole in determining patent eligibility.”

The court reasoned that “because these claims specifically recite how this permutation is used (i.e., modifying the permutation applied to different data blocks), and this specific implementation is a key insight to enabling prior art error detection systems to catch previously undetectable systematic errors, … we conclude that the appealed claims are not directed to an abstract idea because they sufficiently capture the specific asserted improvement in detecting systematic errors contributed by the inventors of the ’662 patent.”

Unanswered Questions

The decision left open some important questions:

  • Do technical improvements need to be described in the specification? The court avoided addressing this question. When does the specification need to describe benefits/improvements, whether specifically or “as a whole”?
  • What does it mean that claims that focus on a “specific asserted improvement in computer capabilities” are patent eligible? Is a new functionality/application akin to an improved capability for patent eligibility?
  • Is the Supreme Court’s statement in Diamond v. Diehr that claims must be “considered as a whole” dead? Should Diehr be specifically overruled by the high court?
  • Why doesn’t the Supreme Court adhere to its own acknowledgment in Festo Corp. v. Shoketsu that the “language in claims may not capture every nuance of the invention” or claim “language remains an imperfect fit for invention”? And what about its statement some time ago in Rubber Co. v. Goodyear that a “patent should be construed in a liberal spirit, to sustain the just claims of the inventor” ?
  • Finally, are the Federal Circuit and Supreme Court promoting or exacerbating the purported “evils” of “clever claim drafting”? And if patent application drafters adjust (which is likely) to draft the specification to include “technological improvements,” will that result in the “evils” of “clever specification drafting”?

This column does not necessarily reflect the opinion of The Bureau of National Affairs, Inc. or its owners.

Author Information

Irah Donner is a partner in Manatt’s intellectual property practice and is the author of Patent Prosecution: Law, Practice, and Procedure, Eleventh Edition, and Constructing and Deconstructing Patents, Second Edition, both published by Bloomberg Law.

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