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Fresh From the Bench: Precedential Patent Cases From the Federal Circuit

December 2, 2016

Overview

In Apple v. Ameranth, the single precedential case decided this week,the Circuit invalidated under ‎§ 101 ‎the only claims that remained after CBM patent review of several patents directed to handheld devices that permitted waiters to take orders by scrolling through menus and identifying specific customers and tables. The patents had been asserted against Apple as well as companies as diverse as Domino’s Pizza, Fandango, Open Table, Expedia, Orbitz, Marriott, TicketMaster and StubHub.

Apple v. Ameranth – Apple had succeeded in invalidating many of the claims in CBM review and in this appeal is successful in reversing the PTO’s determination of patentability as to the remaining claims. The patents are directed to the use of handheld devices for permitting restaurant waiters to order and assign orders to customers at specific tables.  Siri can apparently be used in a similar fashion.

The Board invalidated many of the claims as being unpatentable under ‎§ 101. The panel finds that these claims are directed to the abstract idea ‎of “generating a second menu from a first menu and sending the second menu to another location.”  The claims do not recite a particular way of ‎programming or designing the software to create menus that have these features, but instead merely ‎claim the resulting systems.  Essentially, the claims are directed to certain functionality—here, the ability ‎to generate menus with certain features. As to the second step under Alice, the panel agrees with the Board that the recited central processing unit, data storage device, and ‎operating system components are “typical” hardware elements, reciting insignificant post-solution activities that do not support the invention having “an inventive concept.”

With respect to the claims that were upheld by the Board under ‎§ 101‎, some of the claims require that a second menu, after being modified, can be “linked to ‎a specific customer at a specific table directly from the graphical user interface of a hand-held ‎device.” The Board found that, while Apple had argued that the claimed linking is a “classic ‎example of manual tasks that cannot be rendered patent eligible merely by performing them with a ‎computer,” Apple had not “provided sufficient evidence to support that statement.” The panel has no trouble reversing the Board as to these claims, ruling that these linking limitations are routine and conventional, pointing out that the specification explains that the hardware needed was typical and ‎that the programming steps were commonly known.‎ The claimed linking of orders to customers is a ‎classic example of manual tasks that cannot be rendered patent eligible merely by performing them with ‎a computer.‎

Other claims upheld by the Board specify that the manual modification involves ‎handwriting capture or voice capture, and some of the claims require that the captured inputs be ‎recognized and converted to text. The panel notes that the specification refers to the use of handwriting and voice capture technologies without providing how ‎these elements are to be technologically implemented. At oral argument, Ameranth conceded that it had ‎not invented voice or handwriting capture technology, and that it was known at the time it filed its ‎applications to use those technologies as ways of entering data into computer systems. ‎

The opinion characterizes these claims as reciting ‎no more than the use of existing handwriting and voice capture technologies using a computer system.‎ Therefore, the panel concludes that appending preexisting technologies onto other claims that are directed to unpatentable subject ‎matter does not make them patentable.

Apple, Inc. v. Ameranth, Inc., Case No. 2015-1703, -1704 (November 29, 2016)

Ameranth owns three patents directed to a first menu that has categories and items, and software that can generate a second menu from that first menu by allowing categories and items to be selected. Representative claim 1 in the ’850 patent recites:

1. An information management and synchronous communications system for generating and transmitting menus comprising:

a. a central processing unit,

b. a data storage device connected to said central processing unit,

c. an operating system including a graphical user interface,

d. a first menu consisting of menu categories, said menu categories consisting of menu items, said first menu stored on said data storage device and displayable in a window of said graphical user interface in a hierarchical tree format,

e. a modifier menu stored on said data storage device and displayable in a window of said graphical user interface,

f. a sub-modifier menu stored on said data storage device and displayable in a window of said graphical user interface, and

g. application software for generating a second menu from said first menu and transmitting said second menu to a wireless handheld computing device or Web page, wherein the application software facilitates the generation of the second menu by allowing selection of catagories [sic] and items from the first menu, addition of menu categories to the second menu, addition of menu items to the second menu and assignment of parameters to items in the second menu using the graphical user interface of said operating system, said parameters being selected from the modifier and sub-modifier menus.

[The panel first affirms the claim constructions reached by the Board and then turns to the ‎issue of ‎whether these patents are in fact CBM patents.‎]

There Is Substantial Evidence to Support the Board’s Determination that the Claims Do Not Solve Technical Problems Using Technical Solutions

The Board first found that the patents meet the “financial product or service” component of the definition of CBM patents. The Board then found that the patents did not fall within the “technological invention” exception of the definition. Ameranth does not appeal the Board’s “financial product or service” determination, but it argues that the patents fall within the exception for technological inventions.

The term “covered business method patent” means “a patent that claims a method or corresponding apparatus for performing data processing or other operations used in the practice, administration, or management of a financial product or service, except that the term does not include patents for technological inventions.” AIA, § 18(d)(1). The PTO promulgated the following regulation defining technological inventions:

In determining whether a patent is for a technological invention solely for purposes of the Transitional Program for Covered Business Methods (section 42.301(a)), the following will be considered on a case-by-case basis: whether the claimed subject matter as a whole recites a technological feature that is novel and unobvious over the prior art; and solves a technical problem using a technical solution. 37 C.F.R. § 42.301(b).

The Board found that neither prong of 37 C.F.R. § 42.301(b) was satisfied. First, the Board found that the patents did not claim a technological feature that is novel and unobvious over the prior art. The Board explained that the specifications disclosed that the hardware used in the claimed systems was “typical,” and that the programming steps were “commonly known.”  Second, the Board found that the claimed inventions did not solve a technical problem using a technical solution. The Board explained that the claims did not recite a solution to this problem, as they do not include recitations about how to display or synchronize the menus, but instead include descriptions about menu generation. The Board found that this was “more of a business problem than a technical problem.”

The Board’s determinations were supported by substantial evidence and are neither arbitrary nor capricious. We agree with the Board’s determination that these claims do not solve technical problems using technical solutions.

The Board Determination that Certain Claims Are Ineligible Under ‎§ 101‎ Is Affirmed

To determine whether a claim is eligible under § 101, we must “first determine whether the claims at issue are directed to a patent-ineligible concept.” Alice Corp. v. CLS Bank Int’l, 134 S. Ct. 2347 (2014). If they are, we then “consider the elements of each claim both individually and ‘as an ordered combination’ to determine whether the additional elements ‘transform the nature of the claim’ into a patent-eligible application.”

The Claims Are Directed to an Abstract Idea

At the first step, the Board determined that the claims in all three patents are directed to the abstract idea of “generating a second menu from a first menu and sending the second menu to another location.”  We affirm the Board’s conclusion that the claims in these patents are directed to an abstract idea. The patents claim systems including menus with particular features. They do not claim a particular way of programming or designing the software to create menus that have these features, but instead merely claim the resulting systems.  Essentially, the claims are directed to certain functionality—here, the ability to generate menus with certain features. Alternatively, the claims are not directed to a specific improvement in the way computers operate. Cf. Enfish.

The Claim Recitations Are “Typical” Hardware Elements

In the second step, the Board found that the recited central processing unit, data storage device, and operating system components were “typical” hardware elements. The Board found that all four of the features argued by Ameranth as being novel were insignificant post-solution activity. We agree that these limitations are insignificant post-solution activities that do not support the invention having “an inventive concept.” Mayo (“The prohibition against patenting abstract ideas cannot be circumvented by . . . adding insignificant post-solution activity.”).

The Board Determination that Certain Claims Are Eligible Under ‎§ 101‎ Is Reversed

The Board found certain dependent claims were not unpatentable. The Apple petitioners appeal these determinations. We address first the dependent claims that involve linking orders to specific customers, and then those that involve handwriting and voice capture technologies.

The Claimed Linking of Orders to Specific Customers Is a Classic Example of Manual Tasks that Cannot Be Rendered ‎Patent Eligible Merely by Performing Them with a Computer‎

The Apple petitioners appeal the Board’s determination that dependent claims 3 and 11 in the ’733 patent were not unpatentable. These claims require that the second menu, after being modified, can be linked to a specific customer at a specific table. Claim 3 recites “wherein the modified second menu can be linked to a specific customer at a specific table directly from the graphical user interface of a hand-held device.” Claim 11 is similar. The ’733 patent’s specification describes this feature in the restaurant embodiment as linking orders to specific customer positions at specific tables.

The Board found that, while the Apple petitioners had argued that the claimed linking is a “classic example of manual tasks that cannot be rendered patent eligible merely by performing them with a computer,” the Apple petitioners had not “provided sufficient evidence to support that statement.” On appeal, the Apple petitioners again argue that these linking limitations are routine and conventional. It directs this court to the specification language which explains that the hardware needed was typical and that the programming steps were commonly known.

Ameranth’s arguments are belied by the ’733 patent’s specification. In addition to expressly reciting that the hardware needed was typical and that the programming steps were commonly known, the specification merely states that the user interface could permit linking of orders with customers, with no disclosure of how this would be technologically implemented. After reviewing this disclosure, we find no inventive method for implementing the claimed order linking.

Generally, a claim that merely describes an effect or result dissociated from any method by which it is accomplished is not directed to patent-eligible subject matter. Here, the linked orders claim limitation calls for the desired result of associating a customer’s order with said customer, and does not attempt to claim any method for achieving that result. These claims cover the process of a restaurant server taking an order from a customer and keeping track of what customer placed that order, when done using a computer. We agree with the Apple petitioners that the claimed linking of orders to customers is a classic example of manual tasks that cannot be rendered patent eligible merely by performing them with a computer.

These claims depend from independent claims which were found to be directed to unpatentable subject matter. Merely appending this preexisting practice to those independent claims does not make them patentable. It is an insignificant post-solution activity. We reverse the Board’s finding confirming the patentability of these claims.

The Claims Adding Handwriting Capture and Voice Capture Recite Preexisting Technologies So Do Not Render the Claims Patentable

The Apple petitioners also appeal the Board’s determination that dependent claims 6–9 and 13–16 in the ’733 patent were not unpatentable. These claims depend from claims that recite either that the “said second menu is manually modified after generation,” or “wherein said second menu is manually modified by handwriting or voice recording.” As noted above, the Board found such recitation of general manual modification to be insignificant post-solution activity.

Some of the dependent claims upheld by the Board specify that the manual modification involves handwriting or voice capture. For example, claim 6 recites “wherein the manual modification involves handwriting capture.” The other claims depend from these claims and require that the captured inputs be recognized and converted to text. For example, claim 7 depends from claim 6 and recites “wherein the handwriting capture involves handwriting recognition and conversion to text.”

The Apple petitioners argued before the Board that “manual modification of a menu is a classic example of a manual task which cannot be rendered patent eligible merely by performing it with a computer.” They also argued that none of the claims were directed to any specific software for accomplishing manual modification. On appeal, the Apple petitioners argue that these limitations recite insignificant post-solution activity. We agree that these limitations do not serve to provide an inventive concept.

The ’733 patent refers to the use of handwriting and voice capture technologies without providing how these elements were to be technologically implemented. At oral argument, Ameranth conceded that it had not invented voice or handwriting capture technology, and that it was known at the time it filed its applications to use those technologies as ways of entering data into computer systems.

In Content Extraction, we found that a recitation of the use of “existing scanning and processing technology to recognize and store data from specific data fields such as amounts, addresses, and dates” did not amount to significantly more than the “abstract idea of recognizing and storing information from hard copy documents using a scanner and a computer.” Here, Ameranth claims no more than the use of existing handwriting and voice capture technologies using a computer system.

Appending preexisting technologies onto independent claims that are directed to unpatentable subject matter does not make them patentable. We reverse the Board’s finding confirming the patentability of these claims.

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