Even where patents are filed with the United States Patent and Trademark Office (USPTO) or can be located through the World Intellectual Property Organization (WIPO), these patents can be found to be patent ineligible by the United States federal courts when a dispute arises, if they do not meet the requirements of Section 101 of the Patent Act.
Under Section 101 of the Patent Act, an inventor may obtain a patent on “any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof”. See 35 USC Section 101.
Courts, however, “have long held that this provision contains an important implicit exception: Laws of nature, natural phenomena, and abstract ideas are not patentable”. See Ass’n for Molecular Pathology v. Myriad Genetics, Inc., 569 U.S. 576, 589, 133 S. Ct. 2107, 186 L. Ed. 2d 124 (2013).
If an idea can be achieved through existing systems and in some instances can be achieved mentally, it is considered an abstract idea. The concern behind these excepted categories is “one of pre-emption” – if an inventor could obtain patent protection over these “building blocks of human ingenuity”, then the patent scheme would work to undermine, not promote, future innovation. But courts are careful to balance concerns over preemption with the fact that “all inventions at some level embody, use, reflect, rest upon, or apply laws of nature, natural phenomena, or abstract ideas.” See Mayo Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66, 71, 132 S. Ct. 1289, 189 L. Ed. 2d 321 (2012).
Thus, where an invention moves beyond an abstract idea by applying it “to a new and useful end”, the invention will meet the Section 101 standard. See Gottschalk v. Benson, 409 U.S. 53, 67, 93 S. Ct. 253, 34 L. Ed. 2d 273 (1972) applied in Nexrf Corp. v. Playtika Ltd., 547 F. Supp. 3d 977, 2021 WL 2874114.
Considering these competing concerns, the Supreme Court has developed a two-part test to assess whether a patent covers an abstract idea. First, courts must determine whether a patent’s claims are directed to a “patent-ineligible concept” such as an abstract idea. Abstract ideas may be “preexisting, fundamental truth[s]” such as mathematical equations, and encompass “method(s) of organizing human activity” or “longstanding commercial practice(s)” like intermediate settlement or risk hedging.
Second, if a court “determine(s) that the patent is drawn to an abstract idea or otherwise ineligible subject matter”, then that court examines “whether the remaining elements, either in isolation or combination with the non-patent ineligible elements, are sufficient to ‘transform the nature of the claim into a patent-eligible application’”. See Intellectual Ventures 1 LLC v. Capital One Bank (USA) (“Capital One”), 792 F.3d 1363, 1366-67 (Fed. Cir. 2015).
For example, in Planet Bingo, LLC v. VKGS LLC., 576 F. App’x 1005, 1007-08 (Fed Cir. 2014), the Federal Circuit Court of Appeals affirmed the district court’s finding that patent claims directed to “managing a bingo game while allowing a player to repeatedly play the same sets of numbers in multiple sessions” were directed to an abstract idea. This claim was directed to an abstract idea because not only can these steps be carried out in existing computers long in use, but they also can be done mentally.
The essentially result focused, functional character of claim language has been a frequent feature of claims held ineligible under Section 101, especially in the area of using generic computer and network technology to carry out economic transactions.
A claim for a new abstract idea is still an abstract idea. See Synopsys, Inc. v. Mentor Graphics Corp., 839 F.3d 1138, 1151 (Fed. Cir. 2016).
Instructing one to ‘apply’ an abstract idea and reciting no more than generic computer elements performing generic computer tasks does not make an abstract idea patent eligible. See Capital One, 792 F.3d at 1368.
If a claim’s only ‘inventive concept’ is the application of an abstract idea using conventional and well-understood techniques, the claim has not been transformed into a patent-eligible application of an abstract idea. See BSGG Tech LLC v. Buyseasons, Inc., 899 F.3d 1281, 1290-91 (Fed. Cir. 2018).
The advantage of engaging Pendulum Legal PC to provide advice in Patent Law, for Patent Agreements, and Patent Infringement claims or defenses, is that we are specialized in the decision making process of legal and factual determinations made in final hearings; and are better equipped to provide you with a high-quality assessment of patent eligibility before entering a Patent Agreement and before initiating and/or defending legal proceedings of Patent Infringement. You will not need to wait until a dispute arises and a court delivers a final decision years down the track before receiving a more accurate assessment by us in relation to whether the patent subject matter is indeed Patent Eligible.
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