For the second time since the Supreme Court issued its decision regarding patentable subject matter in Alice, the Federal Circuit has found a software invention executable on generic computer hardware to be patent-eligible subject matter. Enfish had sued Microsoft for infringement certain claims of U.S. Patent Nos. 6,151,604 and 6,163,775, each of which related to “self-referential” models for generating, managing, and indexing databases. The district court had granted Microsoft’s motion for summary judgment that the asserted claims were directed to abstract ideas ineligible for patenting, were anticipated by the prior art, and were not infringed by Microsoft’s accused product.
On May 12, 2016, the U.S. Court of Appeals for the Federal Circuit in Enfish, LLC v. Microsoft Corp., No. 2015-1244, 2016 U.S. App. LEXIS 8699 (Fed. Cir. May 12, 2016) reversed the decision of the District Court. Although certain decision-makers have read Supreme Court precedent broadly to mean that software inventions are always directed to ineligible abstract ideas but may be saved through hardware implementation, the Court here stated that “[s]oftware can make non-abstract improvements to computer technology just as hardware improvements can ….” Id. at *11–12. The Court focused its analysis on whether the claimed models resulted in an improvement to the computer’s functionality. The Court stated that “the plain focus of the claims is on an improvement to computer functionality itself, not on economic or other tasks for which a computer is used in its ordinary capacity.” Id. at *13. For that reason, the Court concluded that the claims were not directed to an abstract idea and were, therefore, patent-eligible.
The District Court had looked at the claims through a more generalized lens divorced from the claims’ focus and purpose to find that they were directed to “‘storing, organizing, and retrieving memory in a logical table’ or, more simply, ‘the concept of organizing information using tabular formats.’” Id. at *15. However, the Federal Circuit clarified that analyzing the claims “at a high level of abstraction and untethered from the language of the claims” specifically setting forth the purported advance over the prior art was improper because it oversimplifies the claimed subject matter and downplays the benefits of the claimed invention. Id. at *15–18. The Court stated that invalidating these claims would have resurrected the bright-line machine-or-transformation test rejected by the Supreme Court in Bilski or improperly created a categorical ban on software patents. Id. at *20. Because the claims required “a specific type of data structure designed to improve the way a computer stores and retrieves data in memory,” rather than a fundamental economic practice or mathematical equation to which a general-purpose computer was added post-hoc, the Court concluded that they were patent-eligible. Id. at *21.
This decision will be a breath of fresh air to patent-owners and patent-applicants attempting to claim software inventions, particularly when they can characterize their claimed advancements as being specific and rooted in improving the function of a computer. When claims can be characterized as presenting a specific, focused improvement over preexisting software techniques and that improvement results in a better-functioning computer, this decision provides support for their patent-eligibility.
Unfortunately, this decision does little to clarify what kinds of subject matter should receive the treatment the Court gave to these claims because the claims at issue in this case could equally have been construed as an abstract scheme for data organization and storage implemented on a generic computer. The Court distinguishes other software-related decisions, like Internet Patents, as involving insufficiently specific solutions. But viewed at a corresponding level of abstraction to that employed in this decision, those claims presented the specific improvement of storing information entered into online forms. Such an improvement enables computer functionality not previously practiced: retaining form information across backward and forward webpage renderings. Therefore, it remains unclear which software claims will be treated as presenting a specific solution rooted in improving computer functionality and which software claims will be treated as presenting an abstract solution implemented on generic computer hardware.
Because the outcome depends largely on the perspective employed by the decision-maker, the test for subject-matter eligibility needs clarifying.
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