1. 2017 Subject Matter Eligibility Update

2. Agenda 2017 101 District Court Review 2017 101 Federal Circuit Update
Life Science 101 Update
Trends and Predictions

3. § 101 Motion Success After Alice (Nationwide)
Since the initial flurry of § 101 decisions post-Alice, there has been a decline in successful or partially-successful § 101 motions nationwide, with an uptick of successful motions this year:
2014: 71%
2015: 59%
2016: 49%
2017*: 58%
*Through November 28, 2017

4. § 101 Motion Success After Alice
Section 101 motion practice has been heavily skewed towards a small number of districts. In fact, approximately 54% of post-Alice § 101 motions have been decided in four districts: D. Del. (73), E.D. Tex. (53), N.D. Cal (38), and C.D. Cal (36).
Note that this may change with In re Cray and the number of patent cases that may be brought in E.D. Tex.
Despite the national trend of decreasing § 101 success rates, outcomes vary by jurisdiction. In fact, some jurisdictions seem to resist the trend, or at the very least, are slower to adopt the new CAFC guidance.

5. § 101 Motion Success After Alice (D. Del.)

6. § 101 Motion Success After Alice (E.D. Tex.)

7. § 101 Motion Success After Alice (N.D. Cal.)

8. § 101 Motion Success After Alice (C.D. Cal.)

9. § 101 Motion Success After Alice (10 Most Active Jurisdictions)
The top 10 jurisdictions with the most active § 101 motion practice (73%) are:
When considered together, these 10 jurisdictions follow the national trend of declining § 101 motion success:
2014: 80%
2015: 56%
2016: 43%
2017: 52%
C.D. Cal.
M.D. Fla.
D. Del.
N.D. Cal.
D. Mass.
N.D. Ill.
E.D. Tex.
S.D.N.Y.
E.D. Va.
W.D. Tex.

10. § 101 Motion Success – Procedural Posture

11. § 101 Motion Success – Procedural Posture

12. § 101 Motion Success – Procedural Posture

13. Agenda 2017 101 District Court Review 2017 101 Federal Circuit Update
Life Science 101 Update
Trends and Predictions

14. Overview of CAFC § 101 Decisions
Since Alice was decided in June 19, 2014, the CAFC has only found patents valid in nine of the fifty-eight § 101 cases.
First was DDR Holdings v. Hotels.com in December 2014.

15. Overview of CAFC § 101 Decisions
Then, after a year and a half of invalidating patents, the CAFC issued seven decisions in ten months finding for patent validity:
Enfish, LLC v. Microsoft Corp. (May 12, 2016)
Bascom Global Internet Servs., v. AT&T Mobility LLC (June 27, 2016)
Rapid Litig. Mgmt. LTD., v. CellzDirect (July 5, 2016)
McRO, Inc. v. Bandai Namco Games Am. (Sept. 13, 2016)
Amdocs (Israel) v. Openet Telecom (Nov. 1, 2016)
Trading Techs. Int’l, v. CQG. (Jan. 18, 2017)
Thales Visionix Inc. v. United States (Mar. 8, 2017)
The CAFC most recently issued one more decision finding for patent validity:
Visual Memory LLC v. NVIDIA Corp. (Aug. 15, 2017)

16. Subject Matter Eligibility: The Past Year*
Written opinions from the Federal Circuit:
16 out of 20 appeals were decided against the patent owner (down from 18 out of 20 in the previous year)
Does not include Rule 36 affirmances
Only 1 out of 8 patents asserted by NPEs was determined to be drawn to patent eligible subject matter
*Nov to Oct. 2017

17. Subject Matter Eligibility: Recent CAFC Decisions
* Visual Memory LLC v. NVIDIA Corporation, 867 F.3d 1253
Improved computer memory system
Thales Visionix Inc. v. United States, 850 F.3d 1343
Inertial tracking system for tracking the motion of an object relative to a moving reference frame
Trading Techs. Int'l, Inc. v. CQG. Inc., 675 Fed.Appx. 1001
Dynamic display of bid and asked prices for electronic trading
Step 1
Patent
Eligible Concepts
*indicates NPE

18. Subject Matter Eligibility: Recent CAFC Decisions
Trading Techs. Int'l, Inc. v. CQG. Inc., 675 Fed.Appx. 1001
Dynamic display of bid and asked prices for electronic trading
Amdocs (Israel) Ltd. v. Openet Telecom, Inc., 841 F.3d 1288
System and method for compiling accounting and billing information for network providers
Step 2
Inventive Concept –
“Significantly More”

19. Subject Matter Eligibility: Recent CAFC Decisions
* Smart System Innovations, LLC v. Chicago Transit Authority
* Recognicorp, LLC v. Nintendo Co., LTD.
* West View Research, LLC v. Audi AG
Secured Mail Solutions LLC v. Universal Wilde, Inc.
Clarilogic, Inc. v. FormFree Holdings Corporation
Return Mail, Inc. v. United States Postal Service
In re Salwan
Prism Technologies LLC v. T-Mobile USA, INC.
* Intellectual Ventures I LLC v. Erie Indemnity Company
Cleveland Clinic Foundation. v. True Health Diagnostics LLC
* Intellectual Ventures I LLC v. Capital One Financial Corporation
Credit Acceptance Corp. v. Westlake Services
* Smartflash LLC v. Apple Inc.
Apple, Inc. v. Ameranth, Inc.
* Easyweb Innovations, LLC v. Twitter, Inc.
* Tranxition, Inc. v. Lenovo (United States), Inc.
Ineligible
1) Non-Patent
Eligible Concepts
2) Non-Inventive
Concept
*indicates NPE

20. Four Key 2017 CAFC Decisions

21. Thales Visionix Inc. v. United States, Elbit Systems of America
The ’159 patent claims “an inertial tracking system for tracking the motion of an object relative to a moving reference frame.” Thales, 850 F.3d at 1344.

22. Thales Visionix Inc. v. United States, Elbit Systems of America
Case decided at Alice Step 1: The ’159 patent claims were directed to a new and useful technique for using sensors to more efficiently track an object on a moving platform. Thales, 850 F.3d at 1349.
That a mathematical equation is required to complete the claimed method and system does not doom the claims to abstraction. Id.
“The mathematical equations are a consequence of the arrangement of the sensors and the unconventional choice of reference frame in order to calculate position and orientation.” Id.

23. Amdocs (Israel) Limited v. Openet Telecom, Inc.
Patents-in-suit claim systems, methods, and computer program products for collecting, processing, and compiling customers’ network usage for tracking and billing purposes. Amdocs, 841 F.3d at 1291.
Claims require enhancing records “in a distributed fashion,” “close to the source” of the data. Amdocs I, 761 F.3d 1329, 1337 (Fed. Cir. 2014).

24. Amdocs (Israel) Limited v. Openet Telecom, Inc.
Step 1: The court did not make a determination on the issue of whether the claims were directed to an abstract idea at Alice Step one.
Case decided at Alice Step 2: Claims added sufficient inventive concept to be eligible for patenting because the claimed invention “entails an unconventional technological solution (enhancing data in a distributed fashion) to a technological problem (massive record flows which previously required massive databases).” Amdocs, 841 F.3d at 1300.

25. Visual Memory LLC v. NVIDIA Corp.
Patent-in-suit directed to a memory system with programmable operational characteristics that can be tailored for use with multiple different processors without accompanying reduction in performance.

26. Visual Memory LLC v. NVIDIA Corp.
Claim 1
A computer memory system connectable to a processor and having one or more programmable operational characteristics, said characteristics being defined through configuration by said computer based on the type of said processor, wherein said system is connectable to said processor by a bus, said system comprising:
a main memory connected to said bus; and
a cache connected to said bus;
wherein a programmable operational characteristic of said system determines a type of data stored by said cache.

27. Visual Memory LLC v. NVIDIA Corp.
Case decided at Alice Step 1: Claims directed to an improved computer memory system, not to abstract idea of categorical data storage.
“As with Enfish’s self-referential table and the motion tracking system in Thales, the claims here are directed to a technological improvement: an enhanced computer memory system.”
Use of conventional computer components, by itself, not fatal to patent eligibility where claims “are directed to an improvement in the functioning of a computer.”

28. Smartflash LLC v. Apple Inc.
Patents-in-suit generally relate “to a portable data carrier for storing and paying for data and to computer systems for providing access to data to be stored.”

29. Smartflash LLC v. Apple Inc.
Patents failed Alice Step 1: They were directed to abstract idea of “conditioning and controlling access to data based on payment.”
“The asserted claims here invoke computers merely as tools to execute fundamental economic practices.”
Patents failed Alice Step 2: “’Interfaces,’ ‘program stores,’ and ‘processors’ are all generic computer components and do not, taken individually or as an ordered combination, ‘transform [the] abstract idea into a patent-eligible invention.’”

30. Lessons from Enfish to Thales
In DDR, the CAFC found that the challenged patent was eligible because “the claimed solution is necessarily rooted in computer technology in order to overcome a problem specifically arising in the realm of computer networks.”
So for a year and a half, most patentees defending § 101 challenges asserted that the patents were “rooted in” the technological field “in order to overcome a problem specifically arising in the realm” of that field.
Then, Enfish and its progeny gave patentees a new hook.

31. Lessons from Enfish to Thales
The subject matter of the challenged patents Enfish to Thales was broad, ranging from software, to hardware, to life science methods.
However, one key thread tied these decisions together: The CAFC found that the challenged claims made “non-abstract improvements” to the prior art systems or methods.
In other words, the analysis shifted more broadly to whether the asserted claims were directed to a system or process that was better than the prior art.

32. Lessons from Enfish to Thales
Enfish, LLC v. Microsoft Corp. (May 12, 2016)
The claimed self-referential tables allowed for faster searching, more effective data storage, and more flexible configurations over the prior art “relational databases” and provided “a specific improvement to the way computers operate”
Bascom Global Internet Servs., v. AT&T Mobility LLC (June 27, 2016)
The claimed nonconventional configuration of known ISP filtering technology allowed the system to reap the advantages prior art system while avoiding the setbacks
Rapid Litig. Mgmt. LTD., v. CellzDirect (July 5, 2016)
The repeated application of prior art techniques to isolate hepatocytes with specific characteristics constituted a “new and useful laboratory technique for preserving the hepatocytes” that “improve[d] an existing technological process”

33. Lessons from Enfish to Thales
McRO, Inc. v. Bandai Namco Games Am. (Sept. 13, 2016)
The claimed system of using “rules” to automatically animate faces “improved the existing technological process,” where the prior art method required animators to manually assign values at different intervals
Amdocs (Israel) v. Openet Telecom (November 1, 2016) (cert. denied)
The claimed system of arranging conventional components in a “distributed architecture” that minimized the impact on a network and system resources “by collecting and processing data close to its source” achieved “an improvement in computer functionality”

34. Lessons from Enfish to Thales
Trading Techs. Int’l, v. CQG. (Jan. 18, 2017)
The claimed graphical interface for securities trading provided has “no ‘pre-electronic’ trading analog” and the specific claimed structure of the interface, which allowed trades to more efficiently and accurately place trades, constituted an “improvement to the capability of the claimed system as a whole”
Thales Visionix Inc. v. United States (March 8, 2017)
The mathematical equations of the claimed inertial tracking system did not “doom the claims to abstraction” but were, instead, “a consequence of the arrangement of the sensors and the unconventional choice of reference frame” that allowed the claimed system to be more accurate and simpler to install

35. Lessons Applied: Visual Memory v. NVIDIA (August 15, 2017)
Most recently, we say this new emphasis on “improvement” over the prior art play out in Visual Memory.
The challenged patent taught that because of costs associated with designing multiple memory systems, prior art cache memory was designed to be operated on one type of processor. This “one-size-fits-all” approach caused tradeoffs in processor performance.
The asserted claims were directed to a memory system with programable characteristics based on the processor connected to the memory system, which allowed the system to be “tailored for use with multiple different processors without the accompanying reduction in performance.”
The CAFC concluded that the claimed system was “directed to a technological improvement: an enhanced computer memory system,” and therefore patent eligible under § 101.

36. Agenda 2017 101 District Court Review 2017 Federal Circuit Update
Life Science 101 Update
Trends and Predictions

37. Predictions for § 101 Motions
These CAFC cases provide that software is patentable if it improves the way the computer or the prior art technology operates.
McRO further provides that methods of automation can also be patent eligible if they (1) are sufficiently narrow, and (2) improve upon the prior art.
Bascom, Amdocs, Thales Visionix, and Visual Memory further reaffirmed that conventional components that are used or arranged in unconventional ways can confer patent eligibility.

38. Predictions for § 101 Motions
Similarly, for life sciences patents, Rapid Litigation provides that new techniques that solve problems in the prior art are patent eligible, even if the new technique comprises entirely of conventional subparts.
As such, future 101 motions will likely turn more heavily on characterizations of what the prior art problems were and whether claimed invention discloses novel improvements over the prior art technology or processes.