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Federal Circuit: Another Internet-Based Patent Passes Muster under Alice

Posted on Jul 6, 2016 in Blog

The Federal Circuit, in BASCOM Global Internet Servs., Inc. v. AT&T Mobility, LLC, 2016 U.S. App. Lexis 11687 (June 27, 2016), reversed a grant of a motion to dismiss in which a district court held that the patentee of U.S. Patent No. 5,987,606 (‘606 patent) failed to state a claim of infringement because the claims of that patent were invalid as a matter of law under 35 U.S.C. §101.  The Federal Circuit concluded that the “ordered combination of [claim] limitations [were] sufficient to satisfy the second step of the Supreme Court’s Alice [patent-eligibility] test.”

In particular, BASCOM Global Internet Services, Inc. (BASCOM), owner of the ‘606 patent, accused AT&T Mobility, LLC (AT&T) of infringing its Internet filtering technology (IFT).  The IFT implements restrictions to prevent end users from accessing particular “off-limit” websites. Unlike conventional Internet filtering software that either resides on each local computer, or on a single local area network server, the filtering software of the ‘606 patent is installed at the ISP server, while allowing individuals 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.

AT&T argued that the claims of the ‘606 patent failed to meet both Steps 1 and 2 of the Alice test, namely, that the claimed IFT is an abstract idea (Step 1) and that the claims did not recite any additional elements that amounted to significantly more than the abstract idea (Step 2).    With regard to Step 1, the Federal Circuit concluded that the claims of the ‘606 patent were directed to an abstract idea because “filtering content…is a longstanding , well-known method of organizing human behavior…” and that “An abstract idea on an Internet computer network or on a generic computer is still an abstract idea.” However, as to Step 2, the Court disagreed with district court’s analysis under Step 2 as being similar to a 35 U.S.C. §103 Obviousness analysis, i.e., first, the district court looked at each claim limitation individually and noted that each limitation was a well-known generic computer component; secondly, the district court then looked at the limitations collectively and concluded that “filtering software, apparently composed of filtering schemes and filtering elements, was well-known in the prior art and using ISP servers to filter content was well-known to practitioners.” The Federal Circuit concluded that “the 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.” In particular, the Federal Circuit found that the inventive concept rested on “taking advantage of the ability of at least some ISPs to identify individual accounts that communicate with the ISP server, and to associate a request for Internet content with a specific individual account.” As such, the Court found that the ‘606 claims did “improve an existing technological process” and as such the claims met the criteria of Step 2, namely, they did amount to significantly more than the abstract idea of Internet filtering.

What is interesting to note is that both the district court and the Federal Circuit applied a “patentability” style (viz., 35 U.S.C. §103 Obviousness) analysis to Step 2 of the Alice patent-eligibility test. Judge Newman, in her concurrence, makes that argument that if the Court is going to apply patentability analyses when applying the Alice test, why even have the Alice test in the first place? She recommends, simplifying the “cumbersome procedures for separate determinations of patent eligibility [Alice test] and patentability [35 U.S.C. §§102 and 103] which have added to the cost and uncertainty of patent-supported commerce” by skipping the Alice test and moving directly to the patentability analyses under 35 U.S.C. §§102 and 103.

In view of this case, software patent applicants should consider the “ordered combination” of their claim limitations from an obviousness standard as transforming, what may be considered an abstract idea, into “a particular, practical application of that abstract idea” for complying with Step 2 of the Alice test.

– by Scott Slomowitz


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