By:  Greg Kirsch, SGR Partner, Head of Intellectual Property Department

The past two years have been challenging times for developers of software and other computer-implemented technology seeking to patent their inventions.  In June 2014, the US Supreme Court handed down its Alice Corp. v. CLS Bank decision, which created new stricter rules for determining whether such inventions may be deemed eligible for patent protection (regardless of whether they are novel and non-obvious).  The new rules comprise a two-step inquiry:

(1)  determine if a patent-ineligible concept is claimed (law of nature, natural phenomena or abstract idea), and if so,

(2)  determine whether additional claim elements transform the claim into a patent-eligible invention.

As a result, lower courts (including the US Court of Appeals for the Federal Circuit, the federal appellate court that reviews all appeals involving patents) in a long string of cases over nearly two years rejected most patents for computer-implemented inventions that were being challenged.  Taking guidance from the Alice Corp. decision, the US Patent and Trademark Office (USPTO) similarly began rejecting (at least initially) the vast majority of patent applications that claimed software-related inventions.

Until last week, the Federal Circuit had upheld patent-eligibility for a computer-implemented invention in only one case after the Alice Corp. decision – the DDR Holdings v. Hotels.com et al. decision from December 2014.  I had the pleasure of being personally involved with this case, having drafted the original patent applications for DDR Holdings, and working closely with DDR Holdings and patent litigation co-counsel in helping to craft the patent claims which were ultimately granted by the USPTO and asserted against the various defendants.

While the DDR Holdings case has been used widely as precedent in subsequent patent litigation and at the USPTO, to argue in favor of patent-eligibility, it stood alone in a sea of many other Federal Circuit decisions that applied the Alice Corp. rules but which found the patent claims to define patent-ineligible inventions.

Fortunately, two recent developments provide promising news to those who wish to patent their computer-implemented inventions:

On May 4, 2016, the USPTO promulgated updated guidelines, for use by patent examiners in determining whether claims in a patent application are patent-eligible, in light of the Alice Corp. rules.  The new guidelines require that to reject a patent claim as being patent-ineligible, patent examiners working at the USPTO must specifically identify claim language that includes an abstract idea, and explain why it is abstract.  Furthermore, the new guidelines require that the patent examiners justify this reasoning by analogizing the claim language to prior judicial decisions where patent-ineligibility was found. Finally, the new guidelines require that patent examiners must review and specifically respond to any rebuttals being made by patent applicants.

In sum, the new USPTO guidelines appear to make it harder for patent examiners to reject patent claims on patent-ineligibility grounds.  Of course, it’s too early to tell how closely patent examiners will follow these new guidelines, but the spirit of the new guidelines is promising.

Just over a week after the USPTO promulgated its new examination guidelines, the Federal Circuit decided its Enfish LLC v. Microsoft Corp. case on May 12, 2016.  In Enfish, the court was presented with the question as to whether patent claims directed to a “self-referential” database were patent-eligible.  When applying the Alice Corp. rules, the court determined that the claims focus on a specific asserted improvement in computer capabilities (the self-referential table in a computer database), and not what would otherwise be deemed abstract.  Ultimately, the court held that the Enfish patent claims were patent-eligible subject matter – only the second Federal Circuit decision (after DDR Holdings) applying the Alice Corp. rules to so hold.

With the new USPTO guidelines requiring more from patent examiners to demonstrate patent-ineligibility, and the Federal Circuit holding patent-eligible the patent claims in the Enfish case, patent attorneys and litigators now have additional ammunition to demonstrate patent-eligibility for computer-implemented inventions, whether at the USPTO or in the courts.  While not all types of software and other computer-implemented inventions will likely be patent-eligible going forward, the pendulum appears to be swinging back to the point where an appropriate balance is found, to allow patent protection for worthy software and computer inventions.

For further information regarding these recent developments, as well as SGR’s Intellectual Property Department and our significant software, computer and electronics patent practice, please contact Greg Kirsch at gkirsch@sgrlaw.com or 404-815-3759.