Research Corporation Technologies, Inc. v Microsoft Corporation, 627 F.3d 859, US Court of Appeals for the Federal Circuit, 8 December 2010 '(RCT II)'
Abstract
The US Federal Circuit recognizes the broad reach of patent-eligible subject matter and narrow scope of the ‘abstract idea’ exception under 35 USC §101.
Legal context
Over the past few years, culminating in the US Supreme Court decision in Bilski v Kappos, the scope of what type of inventions are eligible for patent protection has been addressed and clarified. In the first significant decision since the Supreme Court decided Bilski, the Federal Circuit addressed patent-eligible subject matter, and the ‘abstract idea’ exception to patent-eligibility in particular. The Federal Circuit has now taken a big step towards providing more clarity to the scope of patent-eligible subject matter.
Facts
RCT is the owner of six related US patents directed to digital half-toning technology: 5,111,310, 5,341,228, 5,477,305, 5,543,941, 5,708,518 and 5,726,772. Almost a decade ago, RCT filed a patent infringement lawsuit against Microsoft in the Arizona federal court, alleging that Microsoft's operating systems, office suites, and other applications infringe these six RCT patents (Research Corp. Techs., Inc. v Microsoft Corp., No. 01-CV-658 (D. Ariz. filed 21 Dec. 2001)).
In prior proceedings, a District Court assigned to the case granted a series of summary judgment motions without opinions relating to non-infringement and invalidity in favour of the defendant, Microsoft. The District Court also issued a finding of inequitable conduct. These decisions were the subject of a prior appeal, which resulted in reversal and an order that on remand the case be assigned to a new District Court judge (Research Corp. Techs., Inc. v Microsoft Corp., 536 F.3d 1247, 1254 (Fed. Cir. 2008) '(RCT I))'.
On remand, the new judge assigned to the case held, inter alia, that the asserted claims of the '310 and '228 patents were invalid under 35 USC §101. This ruling (as well as others relating to the effective date of claims of four of the asserted patents) was appealed in the present appeal. This Current Intelligence addresses only the Section 101 issues raised in it.
Analysis
On appeal, the Federal Circuit again reversed the District Court's summary judgment, finding that the '310 and '228 patents did not claim patent-eligible inventions under 35 USC §101. In reaching this decision, the court (per Chief Judge Rader) provided a helpful state of the law on patent-eligibility after the Supreme Court's decision in Bilski.
II begins its analysis with a restatement of Section 101 itself, and the statutory definition of ‘process’ found at 35 USC §100(b). Relying upon the Supreme Court's decision in Bilski v Kappos, 130 S. Ct. 3218, 3225 (2010), II confirmed the broad words of the statute, and the ‘wide scope’ of patent-eligible subject matter. Drawing from Bilski's discussion of previous Supreme Court cases, II, at 867–68 (citations omitted), explains:
RTC II concludes that ‘section 101 does not permit a court to reject subject matter categorically because it finds that a claim is not worthy of a patent’. Id. at 868. Thus Section 101 is merely a ‘threshold’ test, and the other provisions of the US Patent statute (eg Sections 102, 103, and 112) serve better gate-keeping functions.
With respect to the case-at-hand, RTC II found that the claims at issue met the statutory aspects of Section 101 and the statutory definition of process found in Section 100(b). The court then considered whether the claims were subject to one of the three judicial exceptions. In this regard, the only issue raised was whether the ‘abstract’ exception applied. RTC II took this opportunity to follow the Supreme Court's mandate in Bilski to avoid applying a rigid formula or definition for abstractness but instead develop ‘other limiting criteria that further the purposes of the Patent Act and are not inconsistent with its text’. Bilski, 130 S. Ct. at 3231. Thus RTC II, at 868, held: Id.
With this guiding principle, RTC II recognized that
II found support for its conclusion in ‘[t]he fact that some claims in the ’310 and ’228 patents require a “high contrast film,” “a film printer,” “a memory,” and “printer and display devices” … .’ It also offered as a new touchstone ‘that inventions with specific applications or improvements to technologies in the marketplace are not likely to be so abstract that they override the statutory language and framework of the Patent Act' Id. at 869 (emphasis added).
Relying upon the Supreme Court's decision in Diamond v Diehr, 450 U.S. 175 (1981), RTC II flatly rejected the notion that the inclusion in the claims of ‘algorithms and formulas, even though admittedly a significant part of the claimed combination, do not bring this invention even close to abstractness that would override the statutory categories and context’. Id.
As a concluding note, returning to the court's original point that Section 101 does not replace the other requirements of the Patent Act, II distinguished its holding that the claims at issue were not so abstract as to override the statutory language of Section 101 from a holding that the claims were concrete enough to meet the specificity requirements of Section 112: "
Practical significance
II appears to offer a first taste of the new standard governing patent-eligible subject matter that we can expect to see coming out of the Federal Circuit with Chief Judge Rader in charge. In II, the court rejects myopic rules that would unduly narrow the scope of patent-eligible subject matter, and keeps the focus on the other protections of the US Patent Act as mechanisms to protect against patent claims that are vague and of suspect validity.
* Mr. Macedo is a Partner at Amster, Rothstein & Ebenstein LLP and author of The Corporate Insider’s Guide to U.S. Patent Practice, published by Oxford University Press. Mr. Macedo’s practice specializes on intellectual property issues including litigating patent, trademark and other intellectual property disputes, prosecuting patents before the U.S. Patent and Trademark Office and other patent offices throughout the world, registering trademarks and service marks with the U.S. Patent and Trademark Office and other trademark offices throughout the world, and drafting and negotiating intellectual property agreements. He may be reached at [email protected].
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