Eugene J. Rath III
ANOTHER ONE BITES THE DUST
Queen frontman Freddie Mercury famously belted out the line “and another one gone, and another one gone” in the song “Another One Bites the Dust.” Although the song had nothing to do with intellectual property rights, that line now seems prophetic due to the number of patents that have been invalidated recently for being patent ineligible under 35 U.S.C. § 101.
Section 101 defines the subject matter which is eligible for patents. It states that “any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof” is patent eligible. However, under the Supreme Court ruling in Alice Corp. v. CLS Bank Int’l, a claim directed to an “abstract idea” is not patent eligible unless it includes an inventive concept “sufficient to transform the nature of the claim into a patent-eligible application.”
The case of cxLoyalty, Inc. v. Maritz Holdings Inc., Nos. 2020-1307, 2020-1309 (Fed. Cir. February 8, 2021) involved U.S. Pat. No. 7,134,087, which is directed to customer loyalty programs. Specifically, the invention of the patent at issue aims to eliminate human intervention to redeem customer loyalty rewards. The invention utilizes a graphic user interface (GUI) for the participant which communicates with a web-based vendor system. An application programming interface (API) is used to facilitate information between the GUI and the vendor system. Claim 1 of the ‘087 patent reads, in pertinent part:
1. A computerized system for use by a participant of a program which awards points to the participant . . . for defining:
an application programming interface (API) for interfacing with the vendor system;
a program account hidden from the participant connected to the program for use in currency transactions;
a graphical user interface (GUI) for providing an interface between the participant and the API and for communicating with the program;
wherein said GUI includes instructions for receiving participant-related information from the participant and providing the received participant-related information to the API;
wherein said GUI includes instructions for receiving information regarding the program account hidden from the participant and for providing the received program account information to the API;
wherein said API is adapted to receive the participant-related information and the program account information from the GUI and adapted to provide the received participant-related information and the received program account information to the vendor system;
wherein said API is adapted to receive vendor-related information from the vendor system and adapted to provide the received vendor-related information to the GUI; and
wherein said GUI includes [i]nstructions for receiving vendor-related information from the API and for providing the received vendor-related information to the participant . . . .
The Court of Appeals for the Federal Circuit held that the claims of the ‘087 patent are ineligible under § 101. In doing so, the court stated that the claims are directed to facilitating, or brokering, a commercial transaction using a first form of value and a second form of value. The transaction is facilitated using transfers of information between the participant, vendor system, and an intermediary. The appeals court found that “[h]umans have long intermediated these very transactions by collecting and relaying the very same information.” The court held that because this was a “longstanding commercial practice,” the claims of the ‘087 patent are directed to an abstract idea. The court also held that the claims failed the second part of the Alice test too: “The claims amount to nothing more than applying the . . . abstract idea using techniques that are . . . well-understood, routine, and conventional.” The court thus held the claims to be patent ineligible.
The patentee also proffered substitute claims which added that the GUI includes instructions for converting vendor-related information from one format into another format (that of the GUI), and that the GUI communicates with multiple APIs. The patentee argued that these limitations were technological solutions to technological problems. The court noted that no argument was made that the claimed invention improved the use of the computers as a tool, so the substitute claims did not claim a patent-eligible technological solution. Thus, the substitute claims were held to also be patent ineligible under § 101.
As many computer program and mobile application patents continue to be invalidated, it is clear that the USTPO and courts are taking a hard line about § 101. Three ways that a computer program claim may survive are when (1) there is something novel about the way the claimed program works, (2) the invention involves unusual components, or (3) the program enhances the capability or use of the device.
If your computer program or mobile app has a unique way of working, enhances the capability of the device it is on, or involves uncommon devices, your invention may be patent-eligible. If not, it may just be another invention that will be ripped by the interpretation bullets of § 101.