Source: https://www.ipwatchdog.com/2018/05/30/no-matter-advance-claims-recite-patent-ineligible/id=97886/
Timestamp: 2019-04-19 00:21:05+00:00

Document:
In SAP Am., Inc. v. InvestPic, LLC, the Federal Circuit affirmed a decision by the United States District Court for the Northern District of Texas, which granted SAP’s motion for judgment on the pleadings finding admittedly innovative financial software patent ineligible.
Procedurally, SAP had filed a declaratory judgment action in 2016 alleging, among other things, that the patent claims of U.S. Patent No. 6,349,291, owned by InvesetPic, were are invalid because their subject matter is ineligible for patenting under 35 U.S.C. § 101. Ultimately, the district court determined that the patent claims in question were directed to an abstract idea and lacked an inventive concept necessary to save the invention under 35 U.S.C. § 101.
In order to remedy specifically identified deficiencies in the prior art, the ‘291 patent proposes a technique for analyzing, displaying and disseminating financial information using resampled statistical methods. The innovation disclosed in the ‘291 patent does not assume a normal probability distribution, and the patent teaches several different methods in some detail.
Before applying the familiar Alice/Mayo two-part test for determining the presence of patent eligible subject matter, Judge Taranto seemed to recognize that the claimed invention found in the ‘291 patent was, in fact, innovative. Nonetheless, under the test established by the Supreme Court it is an innovation that falls outside the realm of innovations that are patent eligible in the United States.
The claims here are ineligible because their innovation is an innovation in ineligible subject matter. Their subject is nothing but a series of mathematical calculations based on selected information and the presentation of the results of those calculations (in the plot of a probability distribution function). No matter how much of an advance in the finance field the claims recite, the advance lies entirely in the realm of abstract ideas, with no plausibly alleged innovation in the non-abstract application realm. An advance of that nature is ineligible for patenting.
This case and the passage above merely confirms what we have long known to be true. The magnitude of the innovation does not matter. Whether there is an innovation does not matter. Certain advances, certain innovations, are simply patent ineligible in America. No longer is “anything made by man under the sun” patent eligible.
The Federal Circuit would go on to apply the Alice/Mayo two-part test for determining patent-eligible subject matter, explaining that a court must determine if the invention is (1) directed to a judicially created exception to patent eligibility (i.e., a law of nature, natural phenomenon, or abstract idea), and (2), if it is, whether the claims individually or in combination add enough (i.e., significantly more) to transform the invention into one that displays patent-eligible subject matter.
The claims in this case are directed to abstract ideas. The focus of the claims, as is plain from their terms, quoted above, is on selecting certain information, analyzing it using mathematical techniques, and reporting or displaying the results of the analysis. That is all abstract.
The Federal Circuit would distinguished this case from its holding in McRO and Thales Visionix because the claims in McRO were directed to the creation of something physical — namely, the display of lip synchronization and facial expressions of animated characters on screens for viewing by human eyes.
The Federal Circuit also distinguished the claims from Enfish, BASCOM and Thales Visionix explaining that in both cases the claims were found patent eligible because they were directed to improvements in the way computers and networks carry out their basic functions. In this case, however, the focus of the claims was not on any computer or network, but rather an improved mathematical analysis.
Because the claims are directed to an abstract idea, the Federal Circuit proceeded to part two of the Alice/Mayo test, where they concluded that there is nothing in the claims sufficient to transform them into patent eligible subject matter.
What is needed is an inventive concept in the non-abstract application realm. Here, all of the claim details identified by InvestPic fall into one or both of two categories: they are themselves abstract; or there are no factual allegations from which one could plausibly infer that they are inventive. In these circumstances, judgment on the pleadings that the claims recite no “inventive concept” is proper.
Ultimately, even though some of the claims of the ‘291 patent required databases and processors, those limitations did not improve computer resources. Instead, InvestPic used available computers, with available functions, as tools in executing the claimed innovative process. Therefore, there was nothing inventive about the claims insofar as the Supreme Court is concerned, either individually or in combination, according to the Alice/Mayo framework.
It is difficult to read decisions that say the magnitude of the innovation does not matter with respect to patent eligibility. This is not to say that the Federal Circuit is wrong. Unfortunately, the Federal Circuit is correct, at least under the jurisprudence of the Supreme Court. Nevertheless, it is utterly ridiculous that America’s patent laws have been so corrupted by the Supreme Court that innovation and invention mean nothing anymore.
Where is Congress? Where are the corporations that need patents? For goodness sake, when is someone going to stand up and do something to fix this mess created by an anti-patent cabal that is destroying America’s patent system.
The Big boys like Google and Apple are the winners!!! They have closed the door shut on patents that have helped them become the successful companies they are today. Greed has killed the patent system in stopping a small IP holder from building his/her company and being able to get paid for their IP. Patents are worthless no point even filing for a patent in the United States. GAME OVER!!!
The whole concept (pun intended) of Alice/Mayo is absurd. We have Google CAFC judges telling us that information has an ethereal form.
The whole thing is beyond my ability to even express how outrageous Alice is.
Step 1: is it directed to an abstract idea? Everything is directed to an abstract idea.
Step 2: Does it recite something more? It depends on what you picked as your abstract idea.
I know there are minor details in there, but what difference does it make when the judges go in their chambers with a wet towel and make these decisions.
It’s fun to bash the Fed. Cir.’s hyperbolic dicta and all, but perhaps the independent claims should include a little more detail for “using a re-sampled statistical method”. The dependent claims have plenty of detail. Why not argue that these details are not well-understood, routine, and conventional activities? The court states that the mathematical calculations themselves are routine and conventional. But isn’t this a piecemeal attack on the claims, which violates that the claims must be considered as a whole? (Diamond v. Diehr, 450 US 175, 188 (1981)). When considered as a whole, it could be argued that the method of claim 7 or claim 10 (at least) are not routine and not conventional, as a whole. If the Fed Cir thinks otherwise, what else can the Fed. Cir do other than to (1) remand back down to a trial court so that actual evidence can be entered to show that the exact method with all of its unique steps, features, details, and limitations are both known and routine in the prior art or (2) commit clear error by sustaining a conclusion that is arbitrary and capricious for which there is no evidence?
Those that insist that the Supreme Court is not writing law should pay attention.
Those that forsake their attorney oath and celebrate the Supreme Court placing its agenda above the Constitution should be disbarred.
Looking forward to you providing the reference to the statistics textbook that teaches the claim. Please also be sure to cite to the parts of that textbook that define the core terms as the specification of the application does.
Obviously, that will be the last we hear from Opampan. Sick and tired of known-nothings claiming extraordinarily ignorant things like “oh my college text teaches every software patent claim every written, dude.” How extremely ignorant. Read the specification and learn the invention and understand how to interpret a claim before you come here with that garbage!
d) if you believe that Alice is counter-productive to incentivize inventions, what is at least one legislative step you propose to help independent inventors protect their invention to develop new business.
While most MoCs probably don’t give a hoot about RSA (if they even know what it is), I agree with the Dude that RSA is one of the key technologies that enabled secure transactions over the Internet. As such it is a critical US based invention that was instrumental in the economic use and development of the Internet and probably worthy of consideration by the staff of MoCs.
Noticeably MISSING from the “opinion” – Any mention of preemption, the one and only reason to find a patent claim ineligible according to the Supreme Court.
The CAFC is like two retarded trains heading for a train wreck.
Gene – two words that are NOT found in this opinion: EVIDENCE and PREEMPTION.
This is another cluster-foxtrot spewed by Taranto – the author of Electric Power Group.
The real tragedy here, aside from what happened at the CAFC, is that the client didn’t get what s/he paid for. S/he didn’t even know what questions to ask, how to critically read a patent application, or how to talk to their patent practitioner about the quality of the work.
This is a common story.
So many seem to think that just because a patent practitioner has a reg number, their work product will not only get past a patent examiner, but it will also get past a District Court Judge, CAFC, and the Supreme Court, all while being opposed by experienced and professional patent experts hired to kill their patent. This is especially true if that practitioner has a big law firm name on their business card.
Data can be accretive to patentability if there’s a characteristic of that data used to beget modification to, or creation of a new, technology. Here, we don’t have that. All we have is a label on data: “investment”.
No attempt to attributes or characteristics of investment data in any way, much less a technically meaningful way to limit the claim. The data in this claim is simply that – data – and it would be reasonable for a court to treat it as such (and it looks like they did).
We select a sample space that has a data sample. Known; can be done with pencil and paper. No technology limitations.
Generate a distribution function using a re-sampled statistical method and a bias parameter that determines a degree of randomness in a resampling process (no connection/modification to any claim element).
–	Known; a common practice. Distribution functions are generated as a common practice and generating a distribution function with a re-sampling a method is common practice. You can find a few here: https://en.wikipedia.org/wiki/Resampling_(statistics) The inclusion of bias in statistics is a common practice, even one that includes randomness (e.g. https://en.wikipedia.org/wiki/Bias_of_an_estimator ). The combination of these are common practice, and moreover, could readily be done with pencil and paper. There aren’t any limitations present in the claim that require any technical limitations, no specific statistical functions/methods, no particular bias parameters, and no investment data attributes or characteristics.
–	Admittedly, the pencil and paper could only be done on a simple data set. However, no investment data characteristics or attributes required by the claim, allowing use of any data set we want (so long as we call it “investment”), making a simple pencil/paper exercise a valid consideration.
Generate a plot. Known; can be done with pencil and paper. No technology limitations. No use of the data in technology that could tie this to eligible subject matter.
There’s no technology claimed, only mathematical operations, all of which could be done with pencil and paper.
I don’t need to find prior art that also recites the spec core terms – they’re not in the claims. Yes…there’s CAFC case law on both sides of this. A good patent practitioner will seek survival of a patent regardless of the CAFC panel.
The name of the game is the claim: The patent practitioner *decided* to leave out limitations that could have lent technical character to the core terms (e.g. ‘investment data’ characteristics/attributes, the distribution function, the re-sampled statistical method, the bias parameter, bias parameter determines a degree of randomness), and a court doesn’t need to read them in. The case has a fair amount of detail in the spec; it’s sad that the practitioner didn’t include any of these in the claims.
The case was allowed pre-Alice, and like most Examiners at that time, s/he let this one get allowed with an overly broad claim. Alice took care of that. Would it have passed CAFC absent Alice? Maybe.
The patent practitioner made money, the Examiner earned a salary, the litigators all made money.
The client lost, and probably still thinks their patent is a shining example of what a patent should be (I’m they were told this by a big name law firm), when it was likely DOA at the beginning of the dispute.
SCOTUS and the CAFC: Dumb and Dumber.
Why even wrife a summary or a soec when these corrupt idiots, who seem to me are just doing what they are told to do? The one thing I have not heard on this site is that mere mistakes do not sxplain what is happening. If something upon inspection does. not make sense, then the model is wrong.
To harmonize the US patent system with the EU. Alice looks a lot like eligibility process in the EU and there was a good ABA presentation on this in 2014.
The big tech players know their business and technical models can be wiped out in six months with a few big advances from startups out of left field. So this is a rear guard protection mechanism that enables them to protect their revenue streams from black swan startups that dont want to sell out.
Thirdly, the crushing of the patent system crushes American IP asset prices, which means prices go down and things get scoped up for a song.
The open season on enables massive amounts of IP theft. For background on that, study leader technologies, which invented the core methods and system for social media.
What we are dealing with is flat out corruption and theft of IP through a broken USSC algo that functions like a wood chipper to innovative inventions.
But even worse for America is how this prevents our most innovative minds from succedding as they might have.
Instead, they labor at a disadvantage and we wind up with an economy distorted and run by people who should not have won, or who should no longer be winning. It is a death blow to meritocracy itself.
Whilst training to become a patent agent it was clear (and repeatedly drilled) that one of the core principles of the patent system was to encourage disclosure of one’s innovation to the world. The reasoning behind this, of course, is to improve efficient innovation by obviating unnecessary replication of work (and the duplicated costs that go with that). The reward for that disclosure? A time-limited exclusivity period.
That’s patent law 101 out of the way.
If it is now the case that disclosure of such innovation (and, in this case, innovation that has been expressly recognized by the judge as being a significant step forward in the financial field) will no longer be rewarded by legal exclusivity then there is no incentive to disclose one’s innovation, at least not in an enabling manner. That is a seriously backward step, the result of which will undo the underlying purpose of the patent system – disclosure of innovation.
If there is no longer any protection associated with disclosure of such “non-patent eligible” inventions, does this now mean that it is now preferable to just keep them as trade secrets? Perhaps, yes. At least in that regard they will be subject to trade secrets laws, hence at least some amount of legal security will be maintained.
The only real winners from all of this are the big money players (Google, Apple, Facebook, etc.). I would be so bold as to suggest that they are the real “patent trolls” of the system, as they are all too grateful to make use of others innovations (by dangling a pay day in front of competitors in return for early access – did someone mention Coretophonics?), but would rather not pay for that privilege, instead choosing to squash their competitor’s patents (and thus in many cases their competitors per se) using prohibitively expensive litigation (at least for the “little guy”) and/or this arbitrary and capricious non-patent eligible nonsense.
You hit the exact argument that I was thinking. Diamond v. Diehr, 450 US 175, 188 (1981) means that they have to examine it as a whole. Something there was patentable. Maybe 7 or 8? Watching them try to get around the case way was disgusting. You don’t get to apply case law that way.
The arrogance… The absolute arrogance! “The claims here are ineligible because their innovation is an innovation in ineligible subject matter”. Huh? What?
But doesn’t Step 2B state that it needs to have “significantly more” (whatever that means)? How can’t it pass 2B if it an innovation?
Gene, your articles are starting to make me angry and depressed all at the same time. I am not sure how much more of this abuse I can take. Keep on doing what you are doing.
Respectfully, the listed judges are LOURIE, O’MALLEY, and TARANTO, not Judge Linn. I checked the original Federal Circuit opinion on this.
It is difficult to see how that subject matter even falls within the “useful arts” definition of the US constitution, that term referring to the skills and methods of practical subjects such as manufacture and craftsmanship. It is also difficult to see how it falls within the definition of an eligible “process” as defined in Gottschalk v. Benson, 409 U.S. 63, 70, 175 USPQ 673, 676 (1972) quoting Cochrane v. Deener, 94 U.S. 780 (1876) and defining a process as a mode of treatment of certain materials to produce a given result i.e. an act, or a series of acts, performed upon the subject matter to be transformed (“certain substances”) and reduced to a different state or thing. Notwithstanding that a series of steps are defined here, a process which is purely a matter of mathematical calculation does not fall within this definition, especially where, as here, nothing tangible is recited for performing the defined steps.
There is also a system claim, but in broad terms.
Readers will know my interest over many years in developing a better approach to section 101. Unfortunately bringing cases in a manifestly undeserving category, such as the present does nothing to assist.
Please explain how “(c) generating a plot of the distribution function” is merely a “mathematical calculation”.
This opinion will preclude most future inventions in AI. After the hardware design is mature, what a machine can do will entirely depend upon mathematical operations and computer algorithms. Even physical tools such as additional hands and unique feet will be obvious except the computer algorithms (mainly the mathematical part). When hardware is mature, it will be the time to stop inventing, patenting, commercializing, and AI. The judges seem not understand that most critical features in advanced technologies lie in algorithms especially mathematical manipulations.
sorry, but what part of the following example claim (or any of the reexamined claims) was “made by man”. it may have been “conceived by man” but patents are not granted for conceptions. i swear some patent attorneys could take an innovation for a new snow shovel and abstract it to the point of rendering it patent ineligible. the court addressed THE CLAIMS not the innovation behind it which apparently went unclaimed. there was not a “resampling process” claimed, rather it was just a label: “resampling process”. oy!
This opinion will preclude inventions in AI.
(sarcasm intended) At least the CAFC recognizes ‘mental steps’ even when not put down into physical form (i.e. paper) are “printed matter”.
WOO HOO! Berkheimer Request for Rehearing DENIED. Lourie/Newman concurrence nails quite a bit. Reyna (dissenting) apparently never read his own decision in McRo v. Bandai.
Probability and Random Processes–by Venkatarama Krishnan–discusses sample spaces (at 10), bias parameters for distribution functions (at 220, 285, 307, etc.), and plotting a distribution (e.g., at 173).
Couple things missing from Krishnan – re-sampling (at least on first glance–might be obvious; I don’t know), and investment data. Also, Krishnan is dated 2006, which post-dates the patent’s filing date, but Krishnan is all I have on my shelf that’s relevant. These concepts are older than Krishnan, of course.
So if re-sampling and investment data are the inventive concept, is that significantly more? I just can’t see it. While I generally agree with you, Gene, that the Alice framework is non-workable, this claim appears abstract on its face to me.
I understand Gene’s frustration ( even if may disagree with him on this one). It’s frustrating since pre-Alice patentability issues are now being judged under a post-Alice spectrum which no one could have predicted until Alice became the law.
I’m guestimating at least 40% of silicon valley patents are invalid under Alice. But why don’t we hear about them? Because for that you’ll need a lawsuit against the big players. But who wants to mess with the big guys?
In the meantime the big players, like SAP, will continue to root out the smaller players. They have the funds to do that. You and I don’t.
So yes, in the grand schema of things, I understand why Gene decided to write this post.
Think this claim (which reads on a wooden stick, BTW) would be rejected under Alice Corp.?
Possibly related to other posting issues, the comment count indicated on the main page for this thread currently reflects 28 comments, yet jumping to this page shows a comment count of 10 (with 10 comments).
I would not be surprised if 18 comments ARE in limbo.
Comments freed – including some that reference other comments that were “hidden” (outside of the ten that were showing for the longest time).
Gene, you may have a compatiblity issue at play, with comments showing up in some vehicles, but not in others.
The approach is unworkable as I can show in my hypothetical example here. In one invention, claimed mathematical steps are based on a known natural law, and in a second invention, claimed mathematical steps are based upon an empirical equation which appears in the first time. With time passing, this empirical equation will be gradually accepted as natural law. What the PTO would do? The PTO will reject all!
I agree. This case is similar to Mayo, there may be patentable subject matter in the application, but because it was not CLAIMED, the claimed invention encompasses ineligible subject matter. Although I do not agree with everything in the opinion (e.g., the analysis and distinction of McRO is abysmal), based on current case law, the Fed. Cir. reached the right conclusion.
The map is not the land.
Take a view into the history of mankind to see the (great) number of “Laws of Nature” that turned out – in fact – to be either wrong (sometimes outright wrong) or merely “approximations” under very specific sets of circumstances.
The addition of “judicial gloss” should be rejected for what it is: an overreach by one branch of the government (with NO true claim to authority) to write law that another branch of the government has NOT enacted.
The law as written by Congress should be kept within the bounds – as written – BY Congress.
1) does the innovation fit into at least one** statutory category?
2) does the innovation provide the type of utility that falls to the Useful Arts (to be contrasted with the Fine Arts).
**note that innovation may often fit into multiple statutory categories – see Chakrabarty.
Internet mission critical public key exchange methods like RSA, Diffie-Hellman and ElGamal are based on number theoretical concepts. For reasons not to be discussed here, these number theoretical concepts have an equivalent in machine cryptography.
The application of mathematical concepts in machine operations is the new reality, established almost 50 years ago. Kalman filters for instance, are theoretical concepts, which when implemented on a computer with a detector can track a real-life object.
The Alice decision is so utterly and completely out-of-touch with new technologies, there are really no words for it.
Later (unfortunately) we will look back on the Alice decision as in the same class as misguided opinions about for instance “spontaneous generation” and phlogiston theory. That happens when people uneducated in modern science and technology are allowed to decide what is abstract.

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