APPARATUS CLAIMS AS AN ABSTRACT IDEA?

22.08.2017

In 1998, when the CAFC held in State Street Bank & Trust Co. v. Signature Financial Group, that business method claims could be patent eligible, Gottschalk v. Benson represented the Supreme Court’s view of the abstract idea exception as it applied to software. But Benson only involved method claims. There was no clear Supreme Court authority for excluding an apparatus claim from eligibility under the abstract idea exception.

In fact, until Alice Corporation v. CLS Bank was decided in 2014, all the other §101 cases involved only process claims.

However, by 2011, the CAFC began to look specifically at whether only process claims could be ineligible under the abstract idea exception in cases such as CyberSource Corp. v. Retail Decisions, Inc., and in its 2012 decision, in CLS Bank International v. Alice Corp., (a predecessor to the infamous Alice decision) and Bancorp Services v. Sun Life. The CAFC was consistently holding that the format of the claims “d[id] not change the patent eligibility analysis under §101. System claims could therefore be equivalent to method claims.

In Alice, the Supreme Court explicitly held that the system claims were no more than a conventional computer programmed to implement the abstract idea. But what does it mean to say a claim is “directed to an abstract idea”. A look at a dictionary for the word “directed” suggests, perhaps, that the Court meant something like “aimed at”. However, in the opinion, the Court refers to the claims as “drawn to” an abstract idea.

I think that the Court regarded the system claims in Alice to be method claims in apparatus claim clothing. In that case, a true apparatus claim would be one that is not just a dressed-up method claim. And such a claim should not be rejected or invalidated as directed to an abstract idea.

Recent cases suggest where the CAFC is going on this issue. A good example is Intellectual Ventures v. Capital One Financial Corporation. Citing its 2016 decision in Elec. Power Grp. v. Alstom S.A., in the Capital One case, the court stated, [U]nder the “abstract idea” step we evaluate “the ‘focus of the claimed advance over the prior art’ to determine if the claim’s ‘character as a whole’ is directed to excluded subject matter.” To me, that seems like a practical solution.

In applying Step 2, the court, again relying on Elec. Power, held that the claims failed Step 2 because the “computer components as recited in the claims merely restated their individual functions”—i.e., organizing, mapping, identifying, defining, detecting, and modifying. In the court’s words, “[T]hat is to say, they merely describe the functions of the abstract idea itself, without particularity.”

As in Alice itself, the court is saying that the claims are really process claims in apparatus claim clothing. In a way, that sidesteps the “directed to” issue, but it works in practice, allowing evaluation of a claim written in apparatus form under both steps of the Alice test.

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