Inventive concept needed to transform abstract ideas into patent eligible subject matter.

Inventive concept needed to transform abstract ideas into patent eligible subject matter.

A patent is a set of exclusive rights granted to the inventor of a new, useful and not obvious invention.  In the United States an inventor gains a patent by filing a patent application with the United States Patent and Trademark Office.  The patent application is reviewed by a patent examiner at the United States Patent and Trademark Office and if the patent application meets all the requirements, the inventor is granted a patent on the invention.  A patent gives its owner the exclusive right to make, use, sell and import the invention in the United States.

Patent law is constantly evolving so even once a patent is granted, it can still be invalidated.  One of the grounds for invalidating a patent is the subject matter to which the invention relates.  A patent can be granted on any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof.  This requirement is articulated in  §35 U.S.C. 101 of United States Patent Law.  There are also some judicially created exceptions to patent eligible subject matter, namely, laws of nature, physical phenomena, and abstract ideas.  Patents that have been granted in the past can be deemed invalid if court precedent changes the definition of these judicially created exceptions.

Take for example computer software.  Computer software typically takes algorithms, which can be considered an abstract idea, and applies these algorithms to perform a task.  The first United States patent on a piece of computer software was issued in April 23, 1968.  Since that time the law surrounding patents on computer software has changed significantly, enlarging and then shrinking the definition of what is considered patent eligible.  Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 573 U.S. 208 (2014) articulates the present test to determine if computer software is eligible for patent protection.  The first step in the Alice test is to determine whether the claims of the patent are directed to a patent-ineligible concept, like an abstract idea.  If the first step is true, then each patent claim is reviewed both individually and ‘as an ordered combination’ to determine whether the additional elements ‘transform the nature of the claim’ into a patent-eligible application.  This can be a difficult concept to grasp.

A case which illustrates how a court will determine whether a patent related to computer software is eligible for patent protection is TRADING TECHNOLOGIES INTERNATIONAL, INC., v. IBG LLC, INTERACTIVE BROKERS, LLC, 2017-2257 (C.A.F.C. 2019). The plaintiff in this case is the owner of U.S. Patent Nos. 7,533,056, 7,212,999, and 7,904,374. Each patent relates generally to a graphical user interface (“GUI”) for electronic trading. The ’056 and ’999 patents, which share a specification, disclose “a user interface for an electronic trading system that allows a remote trader to view trends in the orders for an item, and provides the trading information in an easy to see and interpret graphical format.” The ’374 patent, which is from a different patent family, discloses “a display and trading method to ensure fast and accurate execution of trades by displaying market depth on a vertical  or horizontal plane, which fluctuates logically up or down, left or right across the plane as the market prices fluctuate.”

The defendant petitioned the Untied States Patent and Trademark Office to have each of the patents reviewed pursuant to the Transitional Program for Covered Business Method Patents.  The Patent Trial and Appeal Board instituted review of the patents and held that claims of each patent are ineligible under 35 U.S.C. § 101.

The plaintiff appealed the Patent Trial and Appeal Board’s decision to the Court of Appeals for the Federal Circuit.  The Federal Circuit affirmed the Patent Trial and Appeal Board’s decision.  The Federal Circuit reviewed each of the patents and found that the claims were directed to abstract ideas, and that the patent claims lacked an inventive concept to transform the abstract ideas into an inventive concept.

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