On January 18, 2017, the Federal Circuit in Trading Technologies International, Inc. v. CQG, Inc., CQG, LLC, FKA CQGT, LLC, issued another ruling on the amorphous 35 U.S.C. § 101. Without diving too deep into the factual details of the case, the Federal Circuit was tasked with determining whether U.S. Patents No. 6,772,132 and No. 6,766,304 recite patentable subject matter in accordance with section 101. In making this determination, the Federal Circuit provided us with a succinct, yet insightful, summary of recent landmark cases. The Court begins with Alice Corporation Pty. Ltd. v. CLS Bank International, 134 S.Ct. 2347 (2014), which provided the initial framework for a patent-eligibility analysis. The Court directly quoted the two-step analysis from Alice, which is provided below:
claim falls outside § 101 where (1) it is “directed to” a patent-ineligible concept, i.e., a law of nature, natural phenomenon, or abstract idea, and (2), if so, the particular elements of the claim, considered “both individually and ‘as an ordered combination,’” do not add enough to “‘transform the nature of the claim’ into a patent-eligible application.” Id at. 2355 (citations omitted).
See pg. 5 of the Decision.
The Court then explains the findings of the District Court and explains how those findings are in accord with precedent. The Court’s consolidation of 101 precedent is quite enlightening and is provided in whole below:
Precedent has recognized that specific technologic modifications to solve a problem or improve the functioning of a known system generally produce patent-eligible subject matter. In DDR Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245 (Fed. Cir. 2014), the court upheld the patent eligibility of claims “necessarily rooted in computer technology” that “overcome a problem specifically arising in the realm of computer networks.” Id. at 1257. Similarly, “claimed process[es] us[ing] a combined order of specific rules” that improved on existing technological processes were deemed patent-eligible in McRO, Inc. v. Bandai Namco Games America Inc., 837 F.3d 1299, 1315 (Fed. Cir. 2016). Claims that were “directed to a specific improvement to the way computers operate, embodied in [a] self-referential table,” were deemed eligible in Enfish, LLC v. Microsoft Corp., 822 F.3d 1327, 1334 (Fed. Cir. 2016).
Illustrating the operation of this principle to facts that negated patent eligibility, claims “drawn to the idea itself” of “out-of-region broadcasting on a cellular telephone,” without implementing programmatic structure, were deemed ineligible in Affinity Labs of Tex. v. DIRECTV, LLC, 838 F.3d 1253, 1258 (Fed. Cir. 2016). Similarly, claims directed to the “idea of generating a second menu from a first menu and sending the second menu to another location” were held patent-ineligible in Apple, Inc. v. Ameranth, Inc., 842 F.3d 1229 (Fed. Cir. 2016). Claims directed to the “process of gathering and analyzing information of a specified content, then displaying the results,” without “any particular assertedly inventive technology for performing those functions,” were held ineligible in Electric Power Grp., LLC v. Alstom S.A., 830 F.3d 1350, 1354 (Fed. Cir. 2016). As these cases illustrate, ineligible claims generally lack steps or limitations specific to solution of a problem, or improvement in the functioning of technology.
For some computer-implemented methods, software may be essential to conduct the contemplated improvements. Enfish, 822 F.3d at 1339 (“Much of the advancement made in computer technology consists of improvements to software that, by their very nature, may not be defined by particular physical features but rather by logical structures and processes.”). Abstraction is avoided or overcome when a proposed new application or computer-implemented function is not simply the generalized use of a computer as a tool to conduct a known or obvious process, but instead is an improvement to the capability of the system as a whole. Id. at 1336.
We reiterate the Court’s recognition that “at some level, all inventions . . . embody, use, reflect, rest upon, or apply laws of nature, natural phenomena, or abstract ideas.” Alice, 134 S. Ct. at 2354, quoting Mayo 566 U.S. at 71. This threshold level of eligibility is often usefully explored by way of the substantive statutory criteria of patentability, for an invention that is new, useful and unobvious is more readily distinguished from the generalized knowledge that characterizes ineligible subject matter. This analysis is facilitated by the Court’s guidance whereby the claims are viewed in accordance with “the general rule that patent claims ‘must be considered as a whole’.” Alice, 134 S. Ct. at 2355 n.3, quoting Diamond v. Diehr, 450 U.S. 175, 188 (1981).
As demonstrated in recent jurisprudence directed to eligibility, and as illustrated in the cases cited ante, the claim elements are considered in combination for evaluation under Alice Step 1, and then individually when Alice Step 2 is reached. See BASCOM Global Internet Services v. AT&T Mobility LLC, 827 F.3d 1341 (Fed. Cir. 2016). Applying an overview of this evolving jurisprudence, the public interest in innovative advance is best served when close questions of eligibility are considered along with the understanding flowing from review of the patentability criteria of novelty, unobviousness, and enablement, for when these classical criteria are evaluated, the issue of subject matter eligibility is placed in the context of the patent-based incentive to technologic progress.
See pg. 7-9 of the Decision.
The Court’s detailed interpretation of 101 precedent helps to further solidify an appropriate analysis of patent-eligibility and provides a strong framework for Patent Attorneys contending with a 101 issue. Section 101, however, remains an evolving area of jurisprudence that requires a diligent mindfulness of present and future case law.
 “Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title.” 35 U.S.C § 101.