Summary: On Aug. 15, 2017, the U.S. Court of Appeals for the Federal Circuit reversed and remanded a decision from the District of Delaware that found the claims of U.S. Patent No. 5,953,740 to be drawn to the abstract idea of categorical data storage and, therefore, directed to patent-ineligible subject matter. In the 2-1 opinion, the Federal Circuit found that the claims of the ‘740 patent are directed to an improvement to computer memory systems — not to an abstract idea.

In Alice Corp., the U.S. Supreme Court established a two-step “framework for distinguishing patents that claim laws of nature, natural phenomena, and abstract ideas from those that claim patent-eligible applications of those concepts.” Alice Corp. Pty. v. CLS Bank Int’l, 134 S. Ct. 2347, 2355 (2014). The first step requires the court to “determine whether the claims at issue are directed to one of those patent-ineligible concepts.” Id. If so, the second step requires the court to “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.” Id. (quoting Mayo Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66, 72, 78 (2012)). In applying that framework, the Federal Circuit has seldom found patent subject matter eligibility. As such, the Federal Circuit’s decision in Visual Memory LLC v. Nvidia Corp., No. 2016-2254 (Fed. Cir. August 15, 2017), finding that the claims of the ‘740 patent are directed to patent-eligible subject matter, adds significantly to the body of law directed to applying the Alice framework.

In Visual Memory, the court emphasized that the first step of the Alice framework is a meaningful one in which the subject matter to which the claims are directed must be articulated with specificity. See Visual Memory, slip op. at 7. With that in mind, the court relied on as “guideposts” two recent decisions in which it previously found patent-eligible subject matter: Enfish, LLC v. Microsoft Corp., 822 F.3d 1327 (Fed. Cir. 2016) and Thales Visionix Inc. v. United States, 850 F.3d 1343 (Fed. Cir. 2017). As in each of those cases, the court again looked to the specification of the patent at issue to ascertain the concept to which the subject claims are “directed to.” In doing so, the court stressed the ‘740 patent specification’s teaching of “multiple benefits [that] flow from the ‘740 patent’s improved memory system.” Visual Memory, slip op. at 9. For example, “in addition to enabling interoperability with multiple different processors, the ‘740 patent specification explains that the selective definition of the functions of the cache memory based on processor type results in a memory system that can outperform a prior art memory system that is armed with ‘a cache many times larger than the cumulative size of the subject caches.’” Id. at 10 (quoting the ‘740 patent, col. 4 ll. 21-26).

In view of the specification, the Federal Circuit found that the ‘740 patent’s claims are directed to an enhanced computer memory system, which is a technological improvement. See id. More specifically, the claims “focus on a ‘specific asserted improvement in computer capabilities’ — the use of programmable operational characteristics that are configurable based on the type of processor — instead of ‘on a process that qualifies as an “abstract idea” for which computers are invoked merely as a tool.’” Id. (quoting Enfish, 822 F.3d at 1336). Accordingly, as with the patents at issue in Enfish and Thales, the court found in Visual Memory that the claims of the subject application are directed to a technological improvement and the specification discusses the advantages offered by that technological improvement. See id.

Interestingly, despite authoring the Enfish decision emphasized in the opinion for the court, Judge Hughes dissented in Visual Memory. In doing so, Judge Hughes asserted that although “we must be careful not to overgeneralize a claim, … we must not express the basic concept of the claim in a way that is ‘untethered from the language of the claims.’” Visual Memory, slip op. at 2 (Hughes, J., dissenting).

The Visual Memory panel included Judges O’Malley, Hughes and Stoll. Although the Federal Circuit has found patent subject matter eligibility in only a handful of cases, the judges in the Visual Memory panel were heavily involved in those decisions. For example, Judge Hughes authored the opinion of the court in Enfish. Further, Judge Stoll joined the opinion of the court in Thales, McRO, Inc. v. Bandai Namco Games America Inc., 837 F.3d 1299 (Fed. Cir. 2016) and Rapid Litigation Management Ltd. v. CellzDirect, Inc., 827 F.3d 1042 (Fed. Cir. 2016); and Judge O’Malley joined the opinion of the court in Bascom Global Internet Servs., Inc. v. AT&T Mobility LLC, 827 F.3d 1341 (Fed. Cir. 2016) and Trading Technologies Int’l, Inc. v. CQG, Inc., 675 Fed.Appx. 1001 (Fed. Cir. 2017)(nonprecedential).

Taft Takeaways:

• Patent applicants should carefully consider the technological improvements of their inventions, and patent applications should include claims that focus on those technological improvements and a specification that discusses the advantages offered by those improvements. In doing so, the applicant provides the court with an opportunity to “define the invention” in terms consistent with a finding of patent subject matter eligibility.
• Patent applicants for computer- and software-related inventions would be well-advised to discuss how to frame the technological improvements of their inventions with their patent attorney when drafting the patent application.