June 2016

Software Claims to Demand Forecasting and Inventory Management, Predictably, Not Patent-Eligible

The Supreme Court has refused to implement a rule that business methods claims are per se patent-ineligible.  Nonetheless, courts now routinely invalidate business method patent claims under 35 U.S.C. § 101, as exemplified in the recent case of Smart Software, Inc. v. PlanningEdge, LLC, No. 15-13814-PBS (D. Mass. June 17, 2016).  In this case, it can have been no surprise to either party that claims of U.S. Patent No. 6,205,431, entitled “System and Method for Forecasting Intermittent Demand,” were invalidated on the defendants Rule 12(b)(6) motion to dismiss. Here, the claims of the ’431 patent recited steps of analyzing data to forecast demand and/or inventory requirements.  The court here was able to make short work of the Mayo/Alice two-part patent-eligibility test, concluding at step one that the ’431 Patent claims are directed at forecasting intermittent demand, an abstract idea, analogous to the risk hedging in Bilski and intermediated settlement in Alice. At step two, the ’431 Patent describes a method for implementing an abstract idea (Claim 1), claims a software product with means to perform the necessary calculations (Claim 10), and describes a generic computer system to carry out the entire process (Claim 16). The court acknowledged that “the Supreme… Read More »Software Claims to Demand Forecasting and Inventory Management, Predictably, Not Patent-Eligible

Enfish Does Not Save Patent Claims to Testing Computer Memory

U.S. Patent Nos. 6,574,759 and 6,704,891 are directed to “Verifying and Improving Run-Time of a Memory Test.”  This seeming technical improvement, deemed by the court to be a mere automation of a known manual process, was not enough to save the patent claims from a finding of invalidity under 35 U.S.C. § 101 after the defendant filed a motion for judgment on the pleadings.  Papst Licensing GmbH & Co. KG v. Xilinx Inc., Nos. 16-CV-00925-LHK,  16-CV-00926-LHK (N.D. Cal. June 9, 2016).  Along the way, the court interestingly distinguished Enfish, LLC v. Microsoft Corp., No. 2015-1244 (Fed. Cir. May 12, 2016), explaining that, unlike the claims here, which could have provided, but did not require, a technical improvement, in Enfish, the technical improvement was recited in the clams. In this case, the defendants argued, and the court agreed, “that each of the asserted claims, at its heart, is directed to the use of a simulator to determine whether a memory test violates a set of rules.”  The plaintiff could not save the claims by pointing to “error message” limitations. It is true that, as the Enfish court cautioned, “determining the concept to which a claim is directed at the first step… Read More »Enfish Does Not Save Patent Claims to Testing Computer Memory

Patent Claim Construction Lessons, or Not, from Indacon v. Facebook

When a case goes against the patentee on the issue of claim construction, one wonders whether different actions by patent prosecution counsel could have changed the result. The prosecutor uniquely influences claim construction, a legal determination that is unlike the question of infringement, which depends on the accused infringer’s products, and validity, which often turns on previously undiscovered prior art. The recent Federal Circuit case of Indacon, Inc. v. Facebook, Inc. raises that question of prosecution strategy. Like many patent cases, Indacon hinged on claim construction. After an adverse Markman ruling by the district court, Indacon stipulated that Facebook did not infringe and proceeded to the Federal Circuit. The patent at issue describes automatically generating and inserting hyperlinks for terms in a database. The district court construed three related terms about linking to require that all instances of a term be linked: “Custom link” “a link the user can define using a chosen term that allows each instance of the term in the plurality of files to be identified and displayed as a link to a file chosen by the user, without modifying the original database files” “Custom linking relationship” “a linking relationship the user can define using a chosen… Read More »Patent Claim Construction Lessons, or Not, from Indacon v. Facebook

Federal Circuit Upholds Claim Construction Limiting Claim Scope to Disclosed Embodiments

The Federal Circuit recently limited construction of patent claims to a scope supported by intrinsic evidence of embodiments disclosed in a patent specification. Ruckus Wireless, Inc. v. Innovative Wireless Solutions, 2016 U.S. App. LEXIS 9786 (Fed. Cir. May 31, 2016). In a 2-1 decision, the panel upheld the district court’s construction of the asserted claims, which limited the scope of key terms based on embodiments described in the specification. The district court decision resulted in a declaratory judgment of non-infringement. Innovative Wireless Solutions (“IWS”) owns patents (U.S. 5,912,895, 6,327,264, 6,587,473) that are directed to communicating between two modems with a LAN over telephone lines for a collision avoidance scheme. The patents describe the system using physical wires, making no mention of wireless communication, but the claims recite a connection via a “communications path.” IWS argued that off-the-shelf WiFi equipment sold by Ruckus Wireless (“Ruckus”) embodied the claimed “communications path,” and Ruckus responded by filing for a declaratory judgment of invalidity and non-infringement in the Western District of Texas. Ruckus at *2-*4. The central dispute was whether the recited “communications path” is limited to wired communication or reads on wireless communication. The district court construed “communications path” as limited to wired… Read More »Federal Circuit Upholds Claim Construction Limiting Claim Scope to Disclosed Embodiments

Pump for Monitoring and Controlling Delivery of Fluids to a Patient Held Patent-Eligible

A complaint alleging infringement of two patents directed to monitoring and controlling an infusion pump has survived a motion to dismiss based on an allegation of unpatentable subject matter under 35 U.S.C. § 101. Baxter International, Inc., v. CareFusion Corp., No. 15-ev-09986 (N.D. Ill. May 13, 2016).  The court found, under the Mayo/Alice test, that the claims are not abstract, but instead are “anchored to a concrete form, and to a particular application,” and therefore are patent eligible. U.S. Patent No.  5,764,034 is directed to “an infusion pump capable of estimating the amount of time left on a battery by monitoring both the voltage available from the battery and the amount of current flowing from the battery.” A representative claim recites in part a pump drive mechanism for applying the pumping action to a liquid for infusion in a patient;a battery for powering the pump drive mechanism; a circuit which monitors the voltage and current from the battery; * * * a circuit responsive to the monitoring circuit which determines the remaining time of charge in the battery; [and] a battery alarm which occurs when the remaining time of charge in the battery is below a predetermined level. Defendant CareFusion… Read More »Pump for Monitoring and Controlling Delivery of Fluids to a Patient Held Patent-Eligible

Complaint Alleging Business Methods Patent Infringement Results in Exceptional Case Finding and Fee Award

After granting a Rule 12 motion for judgment on the pleadings of invalidity of US Patent No. 6,381,582, and after the Federal Circuit affirmed that judgment without comment, a Delaware District Court found an exceptional case under 35 U.S.C. § 285 and ordered the plaintiff to pay the defendant’s fees and costs.  Inventor Holdings, LLC v.  Bed Bath & Beyond Inc., No. 14-448-GMS (D. Del. May 31, 2016). The plaintiff had filed its lawsuit two months before the Supreme Court’s June 19, 2014, decision in Alice Corp. Pty. v. CLS Bank Int’l., 134 S. Ct. 2347 (2014).  Over a year after Alice, on August 21, 2015, the court found that the claims of the ’582 patent solved “business problems,” and granted the defendant’s motion to dismiss for invalidity.  In particular, the court had found that the patent addressed the problems of providing additional payment options for remote customer orders, and “processing those payments without having to provide credit card information over the Internet, phone, or mail.”  The court found that “retailers have long sought to provide their customers with convenient, flexible payment options and to protect their customers’ financial information,” and that the claimed invention was an abstract idea because… Read More »Complaint Alleging Business Methods Patent Infringement Results in Exceptional Case Finding and Fee Award

Patent Drafting for Patent-Eligibility (Following Alice, Enfish, and TLI Communications)

Practitioners’ continuing frustrations notwithstanding, recent cases have demonstrated that the metes and bounds of patent-eligibility under 35 U.S.C. § 101 are gaining in clarity.  Undeniably, much subjectivity and unpredictability remain.  Nonetheless, at the June 3, 2016, University of Dayton School of Law Program in Law and Technology (PILT) Seminar, I was able to present some concrete practice tips, particularly with respect to drafting patent applications that could face Section 101 rejections.  If you download the slides at the foregoing link and want to jump right to the practice tips, they start at slide 27.  If you don’t want to look at the slides, here is the (really, really) short version: draft to show you are presenting a technical solution to a technical problem.  That is certainly the takeaway from, and in my view the path to reconciling, the Federal Circuit’s recent decisions in TLI Communications LLC v. AV Automotive LLC and Enfish, LLC v. Microsoft Corp.

Claims to a “Computer Memory System” Patent-Ineligible Even After Enfish

Claims of U.S. Patent No. 5,953,740, directed to “a computer memory system connectable to a processor and having one or more programmable operational characteristics,” were held invalid under 35 U.S.C. § 101 in Visual Memory, LLC v. NVIDIA Corp., No. 15-789-RGA (D. Del. May 27, 2016).  Accordingly, the court granted the defendant’s motion, brought under FRCP 12(b)(6), to dismiss for failure to state a claim. The ’740 patent proposed to solve the problem that, when “’both code and non-code data are being cached, there will be overlap in their respective’ physical locations in the cache, which may result in a significant decline in performance (known as ‘thrashing’) ‘as data is replaced in response to memory accesses.’”  The ’740 patent’s solution to this problem was to segregate processor caches and/or pages of main memory to contain “either code or non-code data.” Claim 1 of the ’740 patent, the shortest of the three independent claims, is reproduced below: A computer memory system connectable to a processor and having one or more programmable operational characteristics, said characteristics being defined through configuration by said computer based on the type of said processor, wherein said system is connectable to said processor by a bus, said… Read More »Claims to a “Computer Memory System” Patent-Ineligible Even After Enfish