PTAB Reverses 101 Rejection for Internet Technology

May, 19th, 2017

Categories: Articles, Blog Tags: 101, CAFC, litigation, patent, PTAB, software

By Stephen Ball

For practitioners who specialize in computer-implemented inventions, the last several years have been challenging while the USPTO has struggled to consistently apply precedent defining the scope of patentable subject matter. Internet-based technologies have been the most difficult cases, with examiners regularly digging in their heels to maintain rejections on the basis that such inventions are no more than abstract ideas “without significantly more.” In comparison, applicants have had a much better chance at patenting technology tied to special-purpose hardware (e.g., GPS receiver) or an industrial environment (e.g., plant controller). While the atmosphere has generally been improving, a recent PTAB decision stands out because it confirms an Internet-based invention is patentable subject matter.

In Ex parte Drake Sutton-Shearer, a PTAB Board rejected an examiner’s “shorthand description and analysis” to reverse rejections for patentable subject matter. Appeal 2015-003977 (PTAB Feb. 28, 2017). Representative claim 8 is directed to “a computer-implemented method” and has five executing steps, for example, “executing, on the one or more processors of the server, one or more computer program modules configured to assemble webpages defining views of a wall associated with a first entity.” This is a common way to claim computer-related inventions, but also a magnet for 101 rejections by examiners who argue it is no more than computerizing a manual business method. With no special-purpose hardware or industrial environment, one could reasonably conclude that trying to protect this invention is a fool’s errand.

However, the Board in this case relied on the recent decision in Enfish, LLC v. Microsoft Corp and inquired of “the focus of the claimed advance over the prior art.” 822 F.3d 1327, 1335 (Fed. Cir. 2016). In Enfish, the Federal Circuit made it clear that “software can make non-abstract improvements to computer technology just as hardware improvements can.” Id. The Board stated that Drake Sutton-Shearer’s invention addresses a problem of information privacy management through a specific implementation, and “not privacy per se.” The Board found this “advance over the prior art” to be “an improvement in the mechanism by which social networks manage information privacy.” This type of analysis is in some ways similar to the problem-solution approach used in Europe. In addition, it follows the Supreme Court’s repeated guidance to focus on novelty and preemption. Alice Corp. Pty. v. CLS Bank Int’l, 134 S. Ct. 2347, 2354 (2014).

The PTAB’s decision in Ex parte Drake Sutton-Shearer is hopefully an indicator of more to come, and reminds us that there is no specific rule excluding software from patent protection. “In choosing such expansive terms . . . Congress plainly contemplated that the patent laws would be given wide scope.” Diamond v. Chakrabarty, 447 U.S. 303, 308 (1980). A “machine” includes “every mechanical device or combination of mechanical powers and devices to perform some function and produce a certain effect or result.” SiRF Tech., Inc. v. Int’l Trade Comm’n, 601 F.3d 1319, 1332 (Fed. Cir. 2010) (quotations omitted). Most importantly, it has long been held that “programming creates a new machine, because a general purpose computer in effect becomes a special purpose computer once it is programmed to perform particular functions pursuant to instructions from program software.” In re Alappat, 33 F.3d 1526, 1545 (Fed. Cir. 1994) abrogated by In re Bilski, 545 F.3d 943 (Fed. Cir. 2008).

Take Away

There continue to be encouraging signs from the USPTO and the courts regarding patentable subject matter. Just last month, the Federal Circuit found an application for a graphical user interface to be patentable subject matter on the basis that user interfaces are a form of technology and not abstract ideas. Trading Techs. Int’l, Inc. v. CQG, INC., No. 2016-1616, 2017 WL 192716 (Fed. Cir. Jan. 18, 2017). Given the current momentum, it makes sense to maintain a long-term view and continue to file applications for computer-implemented inventions.

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