On June 27, 2016, a three judge panel of the Federal Circuit delivered a decision in BASCOM Global Internet v. AT&T Mobility LLC. The court held that while BASCOM’s asserted claims were directed to the abstract idea of filtering content, the claims contained an “inventive concept” that transformed the abstract idea into a particular, practical application of that abstract idea.
BASCOM sued for infringement of US Patent No. 5,987,606, titled “Method and System for Content Filtering Information Retrieved from an Internet Computer Network” (the ’606 patent). AT&T filed a motion to dismiss under Rule 12(b)(6) of the Federal Rules of Civil Procedure (FRCP). The United States District Court for the Northern District of Texas granted the motion on the grounds that BASCOM failed to state a claim upon which relief can be granted because the claims of the ’606 patent were invalid as a matter of law under 35 U.S.C. § 101. BASCOM appealed.
The ’606 patent describes a filtering system which avoids being “modified or thwarted by a computer literate end-user,” and avoids being installed on and dependent on “individual end-user hardware and operating systems” or “tied to a single local area network or a local server platform” by installing the filter at the ISP server. Unlike prior art filtering tools that existed on local servers and remote ISP servers, the claimed filtering tool retains the advantage of a filtering tool that is located on each local computer in that individuals are able to customize how requests for Internet content from their own computers are filtered instead of having a universal set of filtering rules applied to everyone’s requests.
In practice, the ISP server receives a request to access a website, associates the request with a particular user, and identifies the requested website. The filtering tool then applies the filtering mechanism associated with the particular user to the requested website to determine whether the user associated with that request is allowed access to the website. The filtering tool returns either the content of the website to the user, or a message to the user indicating that the request was denied. The ’606 patent describes its filtering system as a novel advance over prior art computer filters, in that no one had previously provided customized filters at a remote server.
Federal Circuit Opinion on Eligibility
In determining the eligibility of the asserted claims, the court applied the Mayo/Alice two-step analytical framework noting it was “set forth to help courts identify patents that, in essence, claim nothing more than abstract ideas.” It is important to note that Judge Chen was careful to point out that the Federal Circuit has “found software-related patents eligible under both steps of the test Alice sets out.” Specifically, the Federal Circuit found the claims in Enfish LLC v. Microsoft Corp. patent eligible under step one and the claims in DDR Holdings, LLC v. Hotels.com, L.P. patent eligible under step two. Both cases were used in the analysis of the presently asserted claims.
Regarding the first step, the Federal Circuit agreed with the district court that filtering content is an abstract idea because “it is a long-standing, well-known method of organizing human behavior, similar to concepts previously found to be abstract.” However, in addressing BASCOM’s argument that the claims were “directed to the more specific problem of providing Internet-content filtering in a manner that can be customized for the person attempting to access such content,” the court was careful to point out that this case “present[ed] a ‘close call about how to characterize what the claims are directed to.’” Contrasting the asserted claims with those in Enfish, the court noted, “the claims and their specific limitations do not readily lend themselves to a step-one finding that they are directed to a nonabstract idea. We therefore defer our consideration of the specific claim limitations’ narrowing effect for step two.”
Turning to the second step, the search for an “inventive concept,” Judge Chen noted that “[t]he ‘inventive concept’ may arise in one or more of the individual claim limitations or in the ordered combination of the limitations.”
In this case, the Federal Circuit agreed with the district court that “the limitations of the claims, taken individually, recite generic computer, network and Internet components, none of which is inventive by itself.” However, Judge Chen noted, “BASCOM does not assert that it invented local computers, ISP servers, networks, network accounts, or filtering. Nor does the specification describe those elements as inventive.”
When considered as an ordered combination of elements, the Federal Circuit held that “[o]n this limited record, this specific method of filtering Internet content cannot be said, as a matter of law, to have been conventional or generic.” In other words, the “claims do not merely recite the abstract idea of filtering content along with the requirement to perform it on the Internet, or to perform it on a set of generic computer components,” and, therefore, “transform the abstract idea of filtering content into a particular, practical application of that abstract idea.”
Other Notable Aspects of the Decision
1. Procedural Posture
This case reached the Federal Circuit on appeal from the district court’s decision to grant a motion to dismiss under Rule 12(b)(6). As noted in a previous post, in federal district court patent infringement cases in 2015 where subject matter eligibility under § 101 was an issue cited in a motion to dismiss for 1) failure to state a claim, 2) summary judgment – patent invalid, or 3) summary judgment – patent not invalid, 70% of those motions were granted and at least one of the asserted claims was held to be invalid. In the majority (if not all) of these cases, there had been no discovery, no claim construction, and on a motion to dismiss the procedural laws forbid consideration of the merits. In the current decision, Judge Chen hints at the court’s concern with deciding the issue of patent eligibility without the benefit of the above listed tools:
“On this limited record, this specific method of filtering Internet content cannot be said, as a matter of law, to have been conventional or generic.”
Further, Judge Chen emphasized that the court was giving all inferences to the non-moving party, which he seems to imply did not happen at the district court.
“Thus, construed in favor of the nonmovant—BASCOM—the claims are more than a drafting effort designed to monopolize the abstract idea.”
“As explained above, construed in favor of BASCOM as they must be in this procedural posture, the claims of the ’606 patent do not preempt the use of the abstract idea of filtering content on the Internet or on generic computer components performing conventional activities.”
As Gene Quinn asserts in his analysis of this case on www.ipwatchdog.com, “[n]owhere else in the law is it so easy for a defendant to prevail on a motion to dismiss.” Before Alice, the Federal Circuit reasoned that a finding of patent ineligible subject matter was rare at the pleading stage of a patent infringement suit. See Ultramercial, Inc. v. Hulu, LLC, 722 F.3d 1335, 1339 (Fed. Cir. 2013)(Ultramercial II), vacated sub nom. WildTangent, Inc. v. Ultramercial, LLC, 134 S. Ct. 2870, 189 L. Ed. 2d 828 (2014). Following Alice, Mr. Quinn notes “to my knowledge this is the first decision to actually apply basic civil procedure protections in the context of a 12(b)(6) motion that argues patent claims are ineligible.” Just as he concluded, given all of the infringement cases decided on pre-trial motions, I think it will be interesting to see if other panels of the Federal Circuit and the district courts begin to apply one of the most fundamental rules of civil procedure to give the holders of a constitutionally protected property right their day in court.
2. Conflating Obviousness with Patent Eligibility
In the decision, Judge Chen explained that “[t]he district court’s [eligibility] analysis in this case... looks similar to an obviousness analysis under 35 U.S.C. §103.” As many have observed, this is not an isolated issue. Judge Chen goes on to illuminate one of the veiled issues with such an approach, the analysis “lack[s] an explanation of a reason to combine the limitations as claimed.” In other words, the analysis is performed without any of the constraints limiting how and under what circumstances a combination of disparate prior art elements can lead to a proper conclusion of obviousness under Section 103. By circumventing the proper analysis, the test becomes more subjective and less transparent, never a good combination in the law.
Regarding the shortcomings of the district courts analysis in the current case, Judge Chen notes “[t]he inventive concept inquiry requires more than recognizing that each claim element, by itself, was known in the art. As is the case here, an inventive concept can be found in the non-conventional and non-generic arrangement of known, conventional pieces.”
3. Judge Newman’s Concurrence
In Judge Newman’s concurrence, couched in an argument for a more flexible approach to the determination of patent eligibility, she calls for a return “to the letter of Section 101, where eligibility is recognized for ‘any new and useful process, machine, manufacture, or composition of matter.’” She argues that any inventive concept that falls into one of the statutory categories that “is claimed so broadly or vaguely or improperly as to be deemed an ‘abstract idea,’ could be [invalidated] on application of the requirements and conditions of patentability” (i.e. novelty, nonobviousness, or subject matter eligibility).
Addressing preemption concerns, Judge Newman noted that while “limiting patentable scope may restrict preemption, it is not the policy of patent law to permit only narrow claims when an inventor has made a new, broad invention.” She went further to assert that an invention that meets the patentability requirements should not be “barred on policy grounds.”