What Questions Should Courts Ask When Applying Step One of the Alice Framework?
Following Mayo Collaborative Servs. v. Prometheus Labs, Inc., 566 U.S. 66 (2012), the Supreme Court set forth the Alice framework—a two-step inquiry—to determine patent eligibility. Alice Corp. v. CLS Bank Int’l, 573 U.S. 208 (2014). At step one, the Court asks whether a litigant’s patent claims are “directed to a patent ineligible concept.” An open question is how courts should define, and then apply, this standard.
1. Post-Alice cases have focused on determining which tests should affect step one
From 2014 to 2016, the Federal Circuit mostly took the common law approach, where the panel compared the claims at issue with claims decided before. In 2016, Genetic Techs. v. Merial LLC, 818 F.3d 1369 (Fed. Cir. 2016) coined a new terminology—the focus of the claimed advance. This test was accepted and used in an array of cases, performing the same function as what used to be “the plain focus of the claim” or “directed essentially to” tests at Alice step one. See, e.g., Affinity Labs of Texas, LLC v. DIRECTV, LLC, 838 F.3d 1253, 1257 (Fed. Cir. 2016); Enfish, LLC v. Microsoft Corp., 822 F.3d 1327, 1335 (Fed. Cir. 2016); Intellectual Ventures I LLC v. Capital One Fin. Corp., 850 F.3d 1332, 1338 (Fed. Cir. 2017); Finjan, Inc. v. Blue Coat Sys., Inc., 879 F.3d 1299, 1303 (Fed. Cir. 2018); Trading Techs. Int’l, Inc. v. IBG LLC, 921 F.3d 1378, 1384 (Fed. Cir. 2019). In the same year, the Federal Circuit in Enfish reframed step one in the context of a computer-related technology to ask whether “the plain focus of the claims is on an improvement to computer functionality itself,” thus, “improving an existing technological progress,” rather than inventions where “computers are invoked merely as a tool.” Enfish, 822 F.3d at 1335–36. The reframed inquiry, together with the focus of the claimed advance and specificity, laid the groundwork for the current inquiry at step one. After 2016, the Federal Circuit seemed to reach an agreement that in order to pass muster, the claims should meet at least one of the following requirements: (1) the claims are specific; (2) the focus of the claimed advance is eligible; and (3) the claims solve a technological problem.
2. Survey of 52 cases: which tests have proven most popular?
A. Does the claim contain specific steps?
After surveying 52 cases, 32 cases explicitly involved specificity-related test in their inquiry. The basic principle is that claims have to be specific to be patent eligible. Athena Diagnostics, Inc. v. Mayo Collaborative Serv., LLC, 915 F.3d 743, 752 (“that the routine steps are set forth with some specificity is not enough.”); Capital One Fin. Corp., 850 F.3d at 1340 (“[a]lthough these data structures add a degree of particularity to the claims, the underlying concept embodied by the limitations merely encompasses the abstract idea itself.”).
This gives rise to more complicated questions. First, what types of specificity are courts looking for? Second, how specific should the patent claims be? As to the first question, there are generally two types of specificity. Amdocs, 841 F.3d at 1294; Packet Intelligence LLC v. NetScout Sys., Inc., 2020 WL 3966973; DDR Holdings, 773 F.3d at 1266; Visual Memory LLC v. NVIDIA Corp., 867 F.3d 1253, 1263. First, there are specific technologies, solutions, and improvements. Second, there are specific implementations, methods, and steps. As to the second question, courts have a problem drawing the line at the appropriate level of abstraction. Take a recent case as an example. In Am. Axle & Mfg. v. Neapco Holdings LLC, 2020 WL 4380419, Judge Moore reasoned in dissent that inserting a liner inside a propshaft and tuning the system was a sufficiently specific solution to satisfy Alice step one. However, the majority required more for specificity, such as codes for computational models. If a detailed finite element model was included in the claims, it seemed that the majority was ready to reach a different conclusion.
B. Does the invention solve a technological problem?
Judge Mayer on the Federal Circuit strongly advocated using this test in two cases before 2016. See Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709, 717 (Fed. Cir. 2014) (“Because the purported inventive concept in Ultramercial’s asserted claims is an entrepreneurial rather than a technological one, they fall outside section 101.”); see also DDR Holdings, 773 F.3d at 1266 (Mayer, J., dissenting) (“Because this purported inventive concept is an entrepreneurial rather than a technological one, DDR’s claims are not patentable.”). However, the effort did not draw much attention until Enfish rephrased this factor as “an improvement to computer functionality itself.” Enfish, 822 F.3d at 1336. Eventually, 41 out of 52 cases I surveyed used this test. For all 41 cases, whenever the claimed improvement on a kind of technology itself, the claims were patent eligible; however, when the claims were framed as some kind of economic or business practice, the claims were patent ineligible. Therefore, this test bears a very heavy weight in reaching the ultimate conclusion.
C. Is the focus of claimed advance directed to ineligible subject matter?
Among 52 cases, only 15 mentioned this test—this is likely because it was only recently developed. There are three reasons justifying the focus on the claimed advance. First, this analysis identifies post hoc analysis. For example, in Customedia Techs., LLC v. Dish Network Corp., 951 F.3d 1359 (Fed. Cir. 2020), the focus of the claimed advance was reserving space to ensure the delivery of advertisement to users of certain programs, which was an abstract idea. The patentee smartly framed the plain focus of the claim to be a technological improvement—making computers run faster and more reliable—which appeared to favor patent eligibility. However, making computers run faster was merely a bonus, or side effect, of executing the abstract idea of reserving space for advertisement. Therefore, the panel properly concluded that the claim at issue was directed to an abstract idea. Second, the analysis discourages artful drafting. Third, through identifying the claimed advance, judges are compelled to conduct an analysis on what is actually claimed, which is a useful analysis for the specificity test, too.
There is one reason against identifying the focus of the claimed advance. This process adds another layer of uncertainty. Sometimes, distilling the focus of the claimed advance can be difficult. Take a case from last year as an example. In SRI Int’l, Inc. v. Cisco Sys., Inc., 930 F.3d 1295 (Fed. Cir. 2019), the majority described detecting suspicious activities in enterprise network as the focus of the claimed advance. However, it is equally persuasive to frame the focus of the claimed advance as an entrepreneurial practice: protecting a company’s confidential information. Depending on the claimed advance chosen, judges could reach two opposite conclusions.
When applying Alice step one, litigants would be advised to ask three questions when bringing their claims before a court: Is the claim sufficiently specific? What is the claimed advance? Does the claimed advance solve a technological problem? Three affirmative answers usually lead to a conclusion that the subject matter at issue is patent eligible. Although the three tests mentioned above are the most popular tests at the moment, none of them is itself determinative to Alice step one. Even the combination of the three tests can be insufficient to reach a conclusion. In fact, other tests are also important in many cases. At bottom, what really matters is the tension between incentivizing innovators and promoting downstream inventors. The three tests above provide some insights into how the Federal Circuit addresses this tension.