Prometheus Rising: In Bancorp, the Battle Between 'Claim' and 'Inventive Concept' Continues (IP Update, Vol. 15, No. 8, August 2012 - Part 1)

Edited by Paul Devinsky and Rita Weeks

PATENTS / § 101

Prometheus Rising: In Bancorp, the Battle Between "Claim" and "Inventive Concept" Continues

by Adam Auchter Allgood

In the wake of the U.S. Supreme Court decision in Mayo Collaborative Services v. Prometheus Labs (see IP Update, Vol. 14, No. 6.) the struggle continues for the proper analysis to determine patent-eligible subject matter if a patent claim is directed to a non-patent-eligible "abstract idea." In a post-Prometheus case, after eliminating the non-integral limitations regarding computer use, the U.S. Court of Appeals for the Federal Circuit determined that Bancorp's method, system and medium claims regarding the administration and tracking of the value of life insurance policies in separate accounts contained the equivalent non-patentable abstract "inventive concept" and affirmed the district court's holding of invalidity under 35 U.S.C. § 101. Bancorp Services, L.L.C. v. Sun Life Assur. Co. of Canada (U.S.), Case No. 11-1467 (Fed. Cir., July 26, 2012) (Lourie, J.).

Initial Claim Construction

Before proceeding with its § 101 analysis, the Federal Circuit concluded that Bancorp's system and media claims required particular computer devices or computer-readable media, as conceded by the parties. However, the Court applied the doctrine of claim differentiation to construe the independent method claims as not requiring implementation on a computer since the computer-use limitations were found only in the dependent claims.

Computer-Based Limitations to Abstract Ideas

In analyzing whether Bancorp's method claims were merely patent-ineligible abstract ideas, the Court noted that the limitation "using a computer" in an otherwise abstract concept must "play a significant part in permitting the claimed method to be performed." Under that premise, the Court recognized that it was the management of the life insurance policy that was integral to each of Bancorp's claims at issue, not the computer machinery that may be used to accomplish it, and concluded that there was no material difference between Bancorp's claims and the claims invalidated in Bilski. (See IP Update, Vol. 11, No. 11.) Setting aside the computer-based limitations, the Court stated that the only features remaining are claims for performing calculations and manipulating values—matters of mere mathematical computation.

Is the Name of the Game Still the Claim?

Even though the system and medium claims contained tangible objects and are non-abstract per se, the Court determined that the "inventive concept" was equivalent with the abstract method claims and, therefore, did not change the patent eligibility analysis under § 101. The Court cited Cybersource (IP Update, Vol. 14, No. 9) and CLS for the proposition that a machine, system, medium or the like may in some cases be equivalent to an abstract mental process for purposes of patent ineligibility. However, in CLS (see IP Update, Vol. 15, No. 7), the majority specifically rejected this type of analysis stating that "[p]atent eligibility must be evaluated based on what the claims recite, not merely on the ideas upon which they are premised."

In CLS, a divided panel concluded that a group of patents directed to a computerized trading platform for exchanging obligations so as to eliminate "settlement risk," defined patent-eligible subject matter under § 101. The CLS majority criticized the "inventive concept" approach cited in the dissent by Judge Prost (a member of the Bancorp panel) and explained that "ignoring claim limitations in order to abstract a process down to a fundamental truth is legally impermissible." They noted that the Supreme Court's reference to an "inventive concept" in Prometheus could not be read to endorse overlooking the actual terms of the claims or the distillation of claim language to mere generalities. The CLS majority concluded "that when after taking all of the claim recitations into consideration it is not manifestly evident that the claim is directed to a patent ineligible abstract idea, that claim must not be deemed for that reason to be inadequate under § 101."

Arriving at a contrary result, the panel in Bancorp explained that its decision is not inconsistent with CLS for multiple reasons. First, the district court in Bancorp evaluated the limitations of the claims as a whole before arriving at invalidity. Second, unlike CLS where the majority was unable to conclude that the computer limitations did not play a significant part in the performance of the invention, the panel in Bancorp affirmatively concluded that the computer limitations did not play a "significant part." Finally, Bancorp sought to broadly claim the concept of managing a stable value protected life insurance policy where CLS's claims were restricted to a "very specific application" of their concept.

Practice Note: There is a clear split among panels of the Federal Circuit regarding the correct approach to determining patent eligibility under § 101. In order to survive under either a CLS or Bancorp analysis, practitioners must be able to identify how the use of a computer plays a "significant part" in the implementation of a claimed business method and most sufficiently recite that implementation in the claims.


Prior Art Publications Entitled to Presumption of Enablement

by Amol Parikh

Affirming the U.S. Patent and Trademark Office Board of Patent Appeals and Interferences (the Board) decision upholding a patent examiner's rejection of the claims during the reexamination, the U.S. Court of Appeals for the Federal Circuit held that prior art printed publications cited by an examiner during prosecution are presumptively enabling. In re Antor Media Corp., Case No. 11-1465 (Fed. Cir., July 27, 2012) (Lourie, J.).

Antor owns a U.S. patent relating to a method and apparatus for transmitting information recorded on digital disks from a central server to subscribers via a high data rate telecommunications network. The goal of the patent is to allow subscribers to access and receive information—digital media such as music, images, documents, video, and software—stored on information systems over a telecommunications network. The USPTO granted ex parte reexamination and rejected the claims as being anticipated and obvious based on four separate prior art references and their various combinations. Three of the prior art references were printed publications (referred to respectively as the "Ghafoor reference," the "MINOS reference" and the "Huang reference"). The remaining prior art reference was a U.S. patent.

Antor appealed the PTO's finding to the Board of Patent Appeals and Interferences arguing that the claims of its patent were not anticipated or obvious in light of two of the printed publications because those references were not enabling. The PTO did not submit any rebuttal evidence on the issue. The Board nevertheless upheld the PTO's finding holding that Antor had not shown that the Ghafoor and MINOS references were not enabling or required undue experimentation. Antor appealed the Board's decision to the Federal Circuit.

On appeal, Antor argued that the Board erred by holding that prior art publications cited by an examiner are presumptively enabling during prosecution. Antor argued that the presumption of enablement is applicable to only prior art patents, not to publications, because the PTO must examine patents for enablement before they issue. The Court squarely rejected Antor's argument. The Court recalled its decision in Amgen v. Hoechst Marion Roussel, where it found that in the context of a prior art patent, both claimed and unclaimed materials disclosed in the patent are presumptively enabling. The Court noted that unlike claimed disclosures in a patent, unclaimed disclosures are not examined by the PTO, yet these unclaimed features still receive a presumption of enablement during prosecution of a later patent.

Recognizing that printed publications lack the same scrutiny of examination as unclaimed features in a patent, the Court found it logical that printed publications should receive the same presumption of enablement. Accordingly, the Court held that during prosecution, the PTO is entitled to reject claims by a prior art publication or patent without conducting an inquiry into whether or not the prior art reference is enabling. As long as the PTO makes a proper prima facie showing of anticipation, the burden shifts to the applicant to submit rebuttal evidence of non-enablement.

Turning to the merits of Board's ultimate decision that the claims of the '961 patent were unpatentable, the Court found that the Antor had not rebutted the presumption of enablement of the cited prior art publications because it had not shown that undue experimentation would be need to practice the various limitations of its patent claims based on the disclosure in the cited prior art publications. Accordingly, the Court affirmed the Board's decision.


Statements Made During Reexamination Can Be Used to Limit Claim Scope

by Jung W. Kim

Considering the issue of prosecution disclaimer, the U.S. Court of Appeals for the Federal Circuit found that a patentee's statements during reexamination did not unambiguously disavow or clearly describe the structure of a claim term in dispute, and thus did not limit the scope of the claim term. Grober et al. v. Mako Products, Inc. et al., Case Nos. 10-1519; -1527 (Fed. Cir. July 30, 2012) (Rader, C. J.).

David Grober won an Academy Award in technical achievements for his platform that stabilizes a camera for filming motion pictures, known in the industry as Perfect Horizon. Grober received a patent that covers his camera stabilizing platform. After Grober filed suit alleging that Mako's MakoHead product infringed the patent, Mako commenced an inter partes reexamination of the patent at the U.S. Patent and Trademark Office (PTO) and the district...

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