ALICE, AVOIDING WONDERLANDWILLIAM (“BILL”) JAMESPARTNER, VAN PELT, YI & JAMES LLP

OVERVIEW

• USPTO STATISTICS –2019 PEG changed the game

• FEDERAL CIRCUIT STATISTICS – Alice still mostly fatal?

• PTAB PRECEDENT

• RECENT FEDERAL CIRCUIT CASES re 101

ADJUSTING TO ALICE

KEY FINDINGS

• The likelihood of receiving a first office action with a rejection for patent-ineligible subject matter increased by 31% in the 18 months following Alice in 33 “Alice-affected” technology areas.

• For these technologies, uncertainty in patent examination — measured as variability in patent subject matter eligibility determinations across examiners in the first action stage of examination —increased by 26% in the 18 months following the Alice decision.

• One year after the 2019 PEG, the likelihood of Alice-affected technologies receiving a first office action with a rejection for patent-ineligible subject matter decreased by 25%

• Uncertainty in patent examination for Alice-affected technologies decreased by 44% in the 12 monthsfollowing the issuance of the 2019 PEG.

KEY FINDINGS

KEY FINDINGS

KEY FINDINGS

KEY FINDINGS

BOTTOM LINE

FEDERAL CIRCUIT STATISTICS Lessons From a Quantitative Analysis of the

Federal Circuit’s Section 101 Decisions Since Alice

By C. Graham Gerst & Paul Choi

IPWatchdog.com, September 2, 2020

Alice Still Fatal?

ALICE STEP 1Since June 2014, Federal Circuit panels invalidated patent claims based on Section 101 at a high rate. At Step 1, these panels found the claims “directed to” ineligible subject matter 82.1% of the time, leaving just 17.9% where the claims were found to be directed to eligible subject matter.

ALICE STEP 2In analysis of Step 2, 94.6% of the decisions found no inventive concept.

BOTTOM LINE

• The combined result of the Federal Circuit’s Step 1 and 2 analyses is an overall invalidation rate of 78.8%, a Step 2 deferral rate of 1.5%, and a validation rate of 19.7%. Just 1 in 5 challenged patents found eligible.

• Of these decisions, 20 were per curiam opinions of invalidity, but the Federal Circuit has not issued any per curiam opinions of patent eligibility. The resulting message is that Section 101 invalidity is much more likely to be a straightforward, uncontroversial outcome than validity.

FEDERAL CIRCUIT STATISTICS Alice: Benevolent Despot or Tyrant? Analyzing

Five Years of Case Law Since Alice v CLS Bank: Part I

By Robert Sachs IPWatchdog.com, August 29, 2019

Declining mortality over time

FEDERAL *COURT*STATISTICSDECLINING MORTALITY OVERALL?

PTAB – PRECEDENTIAL AND INFORMATIVE OPINIONS RE 101 • Ex Parte Olson, Fautz, Smith - patent

eligible b/c while recite exception not “directed to” b/c integrate into practical application to improve technology

• Ex Parte Kimizuka (fitting golf clubs) and Savenscu (creating lifecycle workflow) directed to judicial exceptions

Step 2A – Prong Two Saves

PTAB – PRECEDENTIAL AND INFORMATIVE OPINIONS RE 101

• Ex Parte Hannun re US 10,540,957

• Speech recognition using machine learning

• Reversed examiner finding ineligible

• Not “directed to” judicial exception because claims recite steps that are not “mental processes” or “method of organizing human activity”• Normalizing an input file• Generating a jitter set of audio files• Generating a set of spectrogram frames• Obtaining predicted character probabilities from a

trained neural net• Decoding … input audio … using the predictions

Step 2A – Prong One Matters Too

IN RE RUDY

• Affirms PTAB decision upholding final rejection under 35 USC 101

• Claim “method for fishing”• Observe water clarity

• Measure light transmittance at hook depth

• Select “colored or colorless quality of the fishing hook” to match water conditions

• PTAB concluded directed to abstract idea = mental process of matching hook to water

(Fed. Cir. April 24, 2020)

IN RE RUDY

• Affirms PTAB decision upholding final rejection under 35 USC 101

• Claim “method for fishing”• Observe water clarity

• Measure light transmittance at hook depth

• Select “colored or colorless quality of the fishing hook” to match water conditions

• PTAB concluded directed to abstract idea = mental process of matching hook to water

(Fed. Cir. April 24, 2020)

CUSTOMEDIATECHNOLOGIES, LLC V. DISH NETWORK CORP.

• Affirmed PTAB 101 rejection in CBM review

• Data delivery system

• Remote content server

• Local receiver with reserved space for ad content, controlled by the remote server

• “the claimed invention merely improves the abstract concept of delivering targeted advertising using a computer only as a tool”

(Fed. Cir. March 6, 2020)

UNILOC USA, INC. V. LG ELECTRONICS USA

• Reaffirmed that software inventions are not per se ineligible

• Here, not abstract because improve computer functioning by reducing the latency experienced by “parked” secondary stations (connected via Bluetooth)• By adding polling data to unused field in other

messages sent under the Bluetooth protocol

(Fed. Cir. April 30, 2020)

DROPBOX, INC. V. SYNCHRONOSSTECHNOLOGIES, INC.

• Affirmed District Court finding three patents ineligible

• 505 patent: access control f(sensitivity of resource, trust level of access mode) Held: doesn’t recite how; computer merely tool

1. Apparatus that provides an information resource in response to a request from a user, the request including an identification of the user according to a mode of identification and the apparatus comprising:

access control information including

a sensitivity level associated with the resource and

a trust level associated with the mode of identification; and

an access checker which permits the apparatus to provide the resource only if the trust level for the mode of identification is sufficient for the sensitivity level of the resource.

(Fed. Cir. June 19, 2020)

DROPBOX, INC. V. SYNCHRONOSSTECHNOLOGIES, INC.

• 399 patent: file upload synchronization, combing web interface with FTP for upload• Recite “shared single session ID” and “synchronizer”,

but in abstract terms

1. A method of synchronizing an interactive connection and a non-interactive data transfer connection between a client and a service provider, comprising:

creating an interactive connection;

creating a data transfer connection; and

generating a single session ID for the two connections, which ID associates between the two connections.

(Fed. Cir. June 19, 2020)

DROPBOX, INC. V. SYNCHRONOSSTECHNOLOGIES, INC.

• 399 patent: file upload synchronization, combing web interface with FTP for upload• Recite “shared single session ID” and “synchronizer”,

but in abstract terms

25. Apparatus for uploading data files, comprising:

a file upload connection server;

an interactive connection server; and

a synchronizer which synchronizes the operation of respective connections formed by the file upload connection server and by the interactive connection server.

(Fed. Cir. June 19, 2020)

DROPBOX, INC. V. SYNCHRONOSSTECHNOLOGIES, INC.

• 541 patent: backup for mobile equipment• Add structure and store; later provide access

• Held: formatting, tagging, transmitting, retrieving data using standard tech not eligible

1. A method for backing up data stored on a mobile customer premises equipment comprising the steps of:

storing data at the mobile customer premises equipment; formatting the data stored at the mobile customer premises equipment into fields by determining data fields, identifying which portions of said data correspond to a respective data field, and tagging said data, transmitting the data … to a server for storage; retrieving said data…; and transmitting said data … in more than one information signal and sequentially numbering each of said information signals.

(Fed. Cir. June 19, 2020)

AMERICAN AXLE & MANUFACTURING, INC. V. NEAPCO HOLDINGS LLC

• On reconsideration, panel modified earlier decision finding all claims ineligible

• Method to manufacture driveline propeller shafts with liners designed to attenuate various modes of vibration

• Held: representative claim 1 may be eligible after all; claim 22 not so much

(Fed. Cir. Issued 10/3/19, Mod. 7/31/20)

Rehearing en banc denied 6-6

AMERICAN AXLE

CLAIM 1• providing a hollow shaft member

• tuning at least one liner to attenuate at least two types of vibration

• positioning the liner within the shaft such that liner damps [in specific ways and to specified degrees]

CLAIM 22• providing a hollow shaft member

• tuning a mass and a stiffness of at least one liner

• inserting the liner into the shaft member

• wherein liner is a tuned resistive absorber re mode 1 and tuned reactive absorber re mode 2

AMERICAN AXLE

DISTRICT COURT• Both claims ineligible; recite

applying Hooke’s law, an equation that describes relationship between an object’s mass, its stiffness, and the frequency at which it vibrates

• “Tuning” is controlling mass and stiffness to match relevant frequency

FEDERAL CIRCUIT

• Claim 22 ineligible• “simply requires the application of

Hooke’s law” without saying anything new about how

• Claim 1 *may* be eligible• because in addition requires

“positioning” liner within shaft