Data Processing Can Be Patent-Eligible, Says Federal Circuit in Koninklijke KPN N.V. v. Gemalto M2M GmbH

A patent claiming a “device for producing error checking based on original data provided in blocks with each block having plural bits in a particular ordered sequence” has survived a patent-eligibility challenge at the Federal Circuit under 35 U.S.C. § 101 and the two-part Mayo/Alice test the. Koninklijke KPN N.V. v. Gemalto M2M GmbH, Nos. 2018-1863, 2018-1864, 2018-1865 (Fed. Cir. Nov. 15, 2019) (precedential) (opinion by Judge Chen, joined by Judges Dyk and Stoll). U.S. Patent No. 6,212,662 includes only four claims, one independent. The district court had granted judgment on the pleadings based on finding all four claims patent-ineligible. KPN, the plaintiff-appellant, appealed with respect to dependent claims 2-4, and the Federal Circuit reversed.

This case is a poster child for setting forth a technical problem, and the inventor’s solution to it, in the patent specification. Check data, the court noted, is well known for confirming the accuracy of data transmissions. However:

Varying the permutation for each data block reduces the chances that the same systematic error will produce the same defective check data across different data blocks. Claims 2–4 thus replace the prior art check data generator with an improved, dynamic check data generator that enables increased detection of systematic errors that recur across a series of transmitted data blocks. As with other claims we have found to be patent-eligible in prior cases, the appealed claims represent a non-abstract improvement in the functionality of an existing technological process and not simply an abstract idea of manipulating data.

That quote is from the introduction to the court’s opinion, but it more or less tells you everything you need to know. But read on for just a little more elucidation.

The ’662 patent did a good job of discussing problems with prior art error checking, explaining how prior art checking could fail to infer errors introduced into data during transmission, especially “systematic errors,” i.e., errors likely to repeat themselves. The inventors on the ’662 patent addressed this problem with “a method that varies the way check data is generated from time to time so that the same defective check data does not continue to be produced for the same type of persistent systematic error.” Further, the ’662 patent disclosed various ways for varying the check data; claim 1 recited the general method, and dependent claims 2-4 recited details of varying the check data.

Claims 2-4 of the ’662 patent were not directed to an abstract idea, and thus were patent-eligible under part one of the Alice test. Citing copiously to the Federal Circuit’s January 2018 decision in Finjan, Inc., v. Blue Coat Systems Inc., the Court found that here “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 appellee had argued that the claims were “doomed to abstraction” because they did not recite a step of actually using the processed data. Not so, said the court: claims don’t have to recite how a tool is applied for a tool to be patent-eligible. These claims improved a technological process. These claims were different than the claims in other “data manipulation” cases, where claims failed to recite how an improvement was achieve but rather recited results-oriented functionality not “limited to a specific improvement in computer functionality.” See Electric Power Group, LLC v. Alstom S.A., (Fed. Cir. Aug. 1, 2016); RecogniCorp, LLC v. Nintendo Co., Ltd(Fed. Cir. 2017), Intellectual Ventures I LLC v. Capital One Financial Corp. (Fed. Cir. 2017); Two-Way  Media  Ltd. v. Comcast Cable Communications (Fed. Cir. 2016);  Digitech Image Techs., LLC v. Elecs. For Imaging, Inc. (Fed. Cir. 2014).

Lessons for Practice

This case provides a nice roadmap to how claims reciting data manipulation, and no more, can be patent-eligible. Read the ’662 patent, especially the “Background” and “Summary” sections. Although it was probably luck happenstance for the patent owner, because the ’662 patent appears to have been drafted way back in the mid-1990s, the drafter did a nice job – for today’s Alice purposes – of detailing the technical problem being solved, and how the claims provided a solution to that problem.