At Federal Circuit, Death of Software Patents Exaggerated

Scott Graham,

June 28, 2016

The U.S. Court of Appeals for the Federal Circuit continues to carve out a sliver of room for software patents.

A three-judge panel on Monday found that a Texas federal judge jumped the gun when she ruled that software designed to filter internet content was ineligible for patent protection under the Supreme Court’s Alice decision.

Judge Raymond Chen acknowledged that the patent claimed an abstract idea and that the claim limitations, taken individually, recite generic computer, network and internet components.

But taken as “an ordered combination,” those same limitations were sufficiently specific that they did not preempt the entire field of internet content filtering, Chen concluded “on this limited record.”

“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,” Chen wrote. “Nor do the claims preempt all ways of filtering content on the Internet; rather, they recite a specific, discrete implementation of the abstract idea of filtering content.”

The ruling is a win for a Susman Godfrey team led by partner Arun Subramanian. Partner Daniel Shih and Associate Jordan Connors also helped on the case for Bascom Global Internet Services Inc.

Reed Smith patent partner John Bovich, who is not involved in the case, said Bascom Global v. AT&T is “one of the more detailed discussions on how consideration of the ordered combination might yield a different result than just consideration of the individual elements.”

Bascom holds a 1990s vintage patent on filtering content for objectionable language or images. The company markets its own filter to schools and libraries. The company’s 5,987,606 patent places the filter at the ISP server, rather than on local computers where they’re more vulnerable to hacking. The filters also can be customized for individual users. Bascom, for example, promotes that its filters can be adjusted to allow YouTube videos for classroom instruction.

Bascom sued AOL in 2008 and won a $10 million verdict. But that was before the Supreme Court began expanding its interpretation of Section 101 of the Patent Act, making more abstract ideas ineligible for patent protection. Six years later, it targeted AT&T.

U.S. District Judge Barbara M.G. Lynn of the Northern District of Texas ruled for AT&T last May on an early motion to dismiss. She seemed on pretty safe ground, since the Federal Circuit didn’t overturn a Section 101 invalidation once in 2015 or during the first four months of this year.

Last month, Judge Todd Hughes declared for a unanimous panel in Enfish v. Microsoft that the Supreme Court could not have intended to invalidate all software patents. Narrowly drawn claims that improve the functioning of computers or other technological fields are not abstract, he wrote.

Chen, meanwhile, 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,” Chen wrote.

Unlike Alice, when it came to implementing the idea, the patent did not simply say, “Do it on a computer.”

“As is the case here,” Chen wrote, “an inventive concept can be found in the non-conventional and non-generic arrangement of known, conventional pieces.”

Judges Pauline Newman and Kathleen O’Malley concurred. Newman wrote separately to suggest the district courts decide patent eligibility and other, more traditional concepts of patentability at the same time.

AT&T was represented by Baker Botts and Johnson Kuriakose Kuncheria.

Monday’s ruling probably won’t be the last from the Federal Circuit this year to strike down Section 101 rulings. Some judges made noise at oral argument last fall about doing likewise in at least three other cases.

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