Enfish, LLC v. Microsoft (Fed. Cir. 2016)

By Steve Shumaker and Al Vredeveld

On May 12, 2016, in Enfish, LLC v. Microsoft, an appeal from the U.S. District Court for the Central District of California, the U.S. Court of Appeals for the Federal Circuit reversed a summary judgment of invalidity of claims related to self-referential database technology as being ineligible for patenting under 35 U.S.C. § 101. 

In concluding that the claimed technology was patent-eligible, the Court found that the claims were not abstract for purposes of the first step of the eligibility analysis pronounced in Alice Corp. v. CLS Bank Int'l.[1]  Rather, the Court found that the claims were directed to a specific improvement to computer-related technology instead of use of a computer in its ordinary capacity, e.g., for economic or other tasks.[2]  

Judge Hughes wrote the opinion on behalf of a panel including Judges Moore and Taranto.  Notably, Enfish is only the second case in which the Federal Circuit has found claims to be patent-eligible under section 101 under the Alice framework.  The first was DDR Holdings, LLC v. Hotels.com, L.P. (Fed. Cir. 2014) (Judges Chen, Wallach and Mayer, with Mayer dissenting), [3] which the Court in Enfish did not cite.

The patents asserted by Enfish, U.S. Patent Nos. 6,151,604 and 6,163,775, describe self-referential database technology, which the Court characterized as using a “logical model [that] includes all data entities in a single table, with column definitions provided by rows in that same table.”[4]   Representative claim 17 of U.S. Patent No. 6,151,604 recites:

A data storage and retrieval system for a computer memory, comprising:

means for configuring said memory according to a logical table, said logical table including: a plurality of logical rows, each said logical row including an object identification number (OID) to identify each said logical row, each said logical row corresponding to a record of information;

a plurality of logical columns intersecting said plurality of logical rows to define a plurality of logical cells, each said logical column including an OID to identify each said logical column; and

means for indexing data stored in said table.

Enfish gives a clear boost to prospects for patent eligibility of software-related inventions.  There are several key observations to be taken from the Enfish opinion, and which should be noted by patent prosecutors for purposes of not only patent prosecution, but also patent application drafting.  Some aspects of the Enfish opinion also reinforce recent guidance provided to Examiners by the United Statement Patent and Trademark Office (USPTO).[5]

Identification of Abstract Ideas by Pattern Matching

First, the Court in Enfish reiterated the two-step Alice analysis for subject matter eligibility and, in regard to the first step, noted that there is no established, definitive rule for determining whether claims are directed to an abstract idea.  Rather, the Court noted that it is sufficient to compare claims to the claims previously found to be directed to an abstract idea in other cases.[6]  This reinforces the notion, expressed in USPTO guidance, that the first step in the Alice analysis is something akin to a “pattern matching” exercise involving comparing and contrasting between the claims and subject matter recognized as abstract ideas in previous cases.  This exercise will tend to filter out, as abstract ideas, “fundamental economic and conventional business practices . . ., even if performed on a computer.”[7]

Ineligible Claims Must Be “Directed To” Abstract Idea

Second, in determining whether a claim is directed to an abstract idea for purposes of the first step, the Court made clear that it is not sufficient to simply ask whether the claim involves a patent-ineligible concept.[8]  Because all patent-eligible claims involve, at some level, a law of nature, natural phenomena or abstract idea, per the Court, the claims must be “considered in light of the specification, based on whether ‘their character as a whole is directed to excluded subject matter.’”[9]  This reinforces the point, also expressed in recent USPTO guidance, that the determination of whether a claim is directed to an abstract idea should be framed by the abstract idea as it is recited in the claim limitations.

Taking issue with an overly broad reading of the claims by the District Court, which amounted to the abstract idea of “’storing, organizing, and retrieving memory in a logical table’” or “’organizing information using tabular formats,’” the Court warned that “describing the claims at such a high level of abstraction and untethered from the language of the claims all but ensures that the exceptions to § 101 swallow the rule.”[10]  Accordingly, the Court made clear that the emphasis of the first step is on what the claims actually recite, which appears to be consistent with recent USPTO guidance.

Technological Improvements Considered at First Step of Alice Analysis

Third, the Court recognized that claims directed to improving the functioning of a computer or an existing technological process may recite patent-eligible subject matter, for purposes of the first step of the Alice analysis.  More particularly, although the Supreme Court referred to improvements to computer-related technology in the second step of its analysis in Alice, the Court in Enfish indicated that it did not “read Alice to broadly hold that all improvements in computer-related technology are inherently abstract and, therefore must be considered at step two.”[11]

In this aspect of Enfish, the Court provided some helpful guidance on the manner in which an improvement to computer-related technology may be patent-eligible within the Alice analytical framework.  The DDR Holdings opinion, which was not cited by the Enfish court, left some room for interpretation as to whether the subject invention was patent-eligible because it was not directed to an abstract idea under the first step of the Alice analysis or whether it was patent-eligible because it was considered to add significantly more than an abstract idea under the second step of the Alice analysis.  In Enfish, the Court made clear that some improvements to a computer-related technology are not abstract for purposes of the first step of Alice, such that analysis under the second step (“significantly more than an abstract idea”) is not necessary.         

Software Versus Hardware Not Dispositive

Fourth, the Court refused to find an inherent distinction between software and hardware for purposes of the abstract idea determination under the first step of the Alice analysis.  On the contrary, the Court held that “[s]oftware can make non-abstract improvements to computer technology just as hardware improvements can, and sometimes the improvements can be accomplished through either route.”[12]  On this basis, the Court concluded that it is not necessary to evaluate all claims directed to software-related improvements in computer-related technology at the second step of Alice.

Specific Improvements Distinguished from Ordinary Use

Fifth, in finding that the claims were not directed to an abstract idea under the first step of Alice, the Court distinguished claims that focus on a specific improvement to computer functionality itself from those reciting economic or other tasks for which a computer is used in its ordinary capacity.[13]  In particular, the Court defined the proper inquiry, in the instant case, as being “whether the focus of the claims is the specific asserted improvement in computer capabilities (i.e., the self-referential table for a computer database) or, instead on a process that qualifies as an ‘abstract idea’ for which computers are invoked merely as a tool.”[14]

The Court held that the claims are directed not to an abstract idea, but to a “specific improvement in the way computers operate, embodied in the self-referential table.”[15]  For further emphasis, the Court distinguished addition of “general-purpose computer components . . . post hoc to a fundamental economic practice of mathematical equation” from a “specific implementation of a solution to a problem in the software arts.”[16] 

Refusing to find that the ability of the claimed invention to “run on a general-purpose computer dooms the claims,” the Court highlighted improvements to the functioning of a computer itself.  Unlike “adding conventional computer components to well-known business practices,” or “use of an abstract mathematical formula on any general purpose computer,”[17] the Court found the claimed invention to be “directed to a specific implementation of a solution to a problem in the software arts,”[18] and not an abstract idea under the first step of the Alice analysis.

In support of the finding that the claims were directed to specific improvements, the Court’s conclusion was “bolstered”[19] by particular benefits of the claimed self-referential database technology, as described in the specification, such as “increased flexibility, faster search times, and smaller memory requirements.”[20]  The “specific type of data structure” recited by the claims was “designed to improve the way a computer stores and retrieves data in memory,” as noted by the Court, a point reinforced by the “specification’s disparagement of conventional data structures.”[21]  Accordingly, it appears that the characterization of the invention in the specification played a significant role in establishing that the claimed invention was not directed to an abstract idea.

Summary

In summary, Enfish makes clear that claims directed to specific improvements to underlying computer-related technology, whether implemented in software or hardware, may constitute patent-eligible subject matter under the first step of the Alice analysis.  In these cases, there is no need for further evaluation of the claim under the second step of the Alice analysis to determine whether the claim adds significantly more than an abstract idea.  In evaluating claims under the first step, Enfish emphasizes the need to focus on what is actually recited in the claims, and described in the specification, rather than rely on abstraction that is “untethered”[22] from claim language.  Finally, description of benefits provided in the specification may play an important role in establishing that the claimed subject matter constitutes a specific improvement in the way a computer works, in contrast to mere use of a general purpose computer as a tool to perform an otherwise conventional economic or business practice. 

 

[1] 134 S. Ct. 2347 (2014).

[2] Opinion, page 12.

[3] 773 F.3d 1245 (Fed. Cir. 2014).

[4] Opinion, pages 2-3.

[5]See, e.g., “Formulating a Subject Matter Eligibility Rejection and Evaluating the Applicant’s Response to a Subject Matter Eligibility Rejection, United States Patent and Trademark Office (USPTO), May 4, 2016.

[6] Opinion, page 9.

[7] Opinion page 10.

[8] Id.

[9] Id.

[10] Opinion, page 14.

[11] Opinion, page 11.

[12] Id.

[13] Id.

[14] Id.

[15] Opinion, page 12.

[16] Id.

[17] Opinion, page 17.

[18] Opinion, page 18.

[19] Opinion, page 15.

[20] Id.

[21] Opinion, page 18.

[22] Opinion, page 14.