Not surprisingly, the decision of the latest Federal Circuit case on software patent eligibility – Accenture Global Services, GMBH v. Guidewire Software, Inc. – could be predicted from the makeup of the CAFC panel. Judge Lourie, joined by Judge Reyna, issued the majority opinion that the system claims were invalid. The Court followed the analysis for determining patent eligibility from CLS Bank,, 717 F.3d 1269 (Fed. Cir. 2013) and affirmed the district court’s finding that the system claims of U.S. Patent No. 7,013,284 (“the ‘284 patent”) were ineligible. Judge Rader dissented.
Accenture appealed the district court’s holding that system claims 1-7 and method claims 8-22 were invalid as not directed to patentable subject matter. Interestingly, Accenture only appealed the ruling on the system claims, thus waiving its appeal on the method claims.
But here are the claims:
1. A system for generating tasks to be performed in an insurance organization, the system comprising:
an insurance transaction database for storing information related to an insurance transaction, the insurance transaction database comprising a claim folder containing the information related to the insurance transaction decomposed into a plurality of levels from the group comprising a policy level, a claim level, a participant level and a line level, wherein the plurality of levels reflects a policy, the information related to the insurance transaction, claimants and an insured person in a structured format;
a task library database for storing rules for determining tasks to be completed upon an occurrence of an event;
a client component in communication with the insurance transaction database configured for providing information relating to the insurance transaction, said client component enabling access by an assigned claim handler to a plurality of tasks that achieve an insurance related goal upon completion; and
a server component in communication with the client component, the transaction database and the task library database, the server component including an event processor, a task engine and a task assistant;
wherein the event processor is triggered by application events associated with a change in the information, and sends an event trigger to the task engine;
wherein in response to the event trigger, the task engine identifies rules in the task library database associated with the event and applies the information to the identified rules to determine the tasks to be completed, and populates on a task assistant the determined tasks to be completed,
wherein the task assistant transmits the determined tasks to the client component.
8. An automated method for generating tasks to be performed in an insurance organization, the method comprising:
transmitting information related to an insurance transaction;
determining characteristics of the information related to the insurance transaction;
applying the characteristics of the information related to the insurance transaction to rules to determine a task to be completed, wherein an event processor interacts with an insurance transaction database containing information related to an insurance transaction decomposed into a plurality of levels from the group comprising a policy level, a claim level, a participant level and a line level, wherein the plurality of levels reflects a policy, the information related to the insurance transaction, claimants and an insured person in a structured format;
transmitting the determined task to a task assistant accessible by an assigned claim handler, wherein said client component displays the determined task;
allowing an authorized user to edit and perform the determined task and to update the information related to the insurance transaction in accordance with the determined task;
storing the updated information related to the insurance transaction; and
generating a historical record of the completed task.
The Court concluded that the district court’s decision on patent-ineligibility of the system claims must be affirmed because the system claims offer no meaningful limitations beyond the method claims that have been held patent-ineligible.
“Because the system claim and method claim contain only ‘minor differences in terminology [but] require performance of the same basic process,’ id. at 1291, they should rise or fall together. Accenture only cited four additional limitations in system claim 1, and we have already indicated why those limitations do not meaningfully distinguish the abstract idea over the patent ineligible method claim. While it is not always true that related system claims are patent-ineligible because similar method claims are, when they exist in the same patent and are shown to contain insignificant meaningful limitations, the conclusion of ineligibility is inescapable. Thus, like the unappealed method claims, the system claims of the ’284 patent are invalid under 35 U.S.C. § 101.”
The Court also looked to the system claims on their own and applied the two-step process identified in CLS Bank to analyze whether these claims are patent eligible under §101.
- Identify “whether the claimed invention fits within one of the four statutory classes set out in §101 (i.e., process, machine, manufacture, or composition of matter).” CLS Bank, 717 F.3d at 1282.
- Assess whether any of the judicially recognized exceptions to subject-matter eligibility apply, including whether the claims are to patent-ineligible abstract ideas. Id. (citing Mayo, 132 S. Ct. at 1302–03).
The Court explained that in the case of abstractness, the court must determine whether the claim poses “any risk of preempting an abstract idea.” To do so the court must first “identify and define whatever fundamental concept appears wrapped up in the claim.” Then, the court must evaluate the claim to determine whether “additional substantive limitations . . . narrow, confine, or otherwise tie down the claim so that, in practical terms, it does not cover the full abstract idea itself.”
Here, the Court defined the abstract idea at the heart of the system claim to be “generating tasks [based on] rules . . . to be completed upon the occurrence of an event.”
The Court then proceeded with its preemption analysis and rejected Accenture’s argument that system claim 1 “is patent-eligible because the ‘284 patent implements the general idea of generating tasks for insurance claim processing, but narrows it through its recitation of a combination of computer components including an insurance transaction database, a task library database, a client component, and a server component, which includes an event processor, a task engine, and a task assistant.” The Court remarked:
“Accenture attempts to limit the abstract idea of claim 1 by applying it in a computer environment and within the insurance industry. However, those types of limitations do not ‘narrow, confine, or otherwise tie down the claim’ … simply implementing an abstract concept on a computer, without meaningful limitations to that concept, does not transform a patent-ineligible claim into a patent-eligible one.”
The Court held that the system claim of the ‘284 patent is more akin to the patent-ineligible claims of CLS Bank and Bancorp, because they “contain only generalized steps of generating a task in response to events” and therefore “do not provide additional substantive limitations to avoid preempting the abstract idea of system claim 1.”
Thus, the Court affirmed the district court’s decision granting summary judgment of invalidity under §101 because (1) Accenture was unable to point to any substantial limitations that separate the system claims from the similar, patent-ineligible method claims, and (2) under the two-part test of CLS Bank, the system claim does not, on its own, provide substantial limitations to the claim’s patent-ineligible abstract idea.
Judge Rader predictably dissented from the majority and stated that he would hold the system claims to be patent-eligible subject matter.
“The claims require a specific combination of computer components, including an insurance transaction database, a task library database, a client component, and a server component that includes an event processor, task engine, and task assistant. Transaction information is stored in an electronic “claim folder” organized into a plurality of different levels. The event processor is triggered upon the occurrence of certain events, which in turn, triggers the task engine and the task assistant to perform certain functions. The claims also require the server component to be in communication with the client component, the insurance trans- action database, and the task library database.”
Judge Rader also argued that the court stripped away these limitations when it concluded that “the abstract idea at the heart of system claim 1 is generating tasks based on rules to be completed upon the occurrence of an event.” Majority Op. at 15. According to Judge Rader, “all inventions at some level embody . . . [an] abstract idea,” and dissecting from a claim all of its concrete limitations is one step closer towards “eviscerat[ing] patent law.” Mayo, 132 S. Ct. at 1293. Accordingly, Rader concluded that the claims offer “significantly more” than the purported abstract idea, id. at 1298, and meaningfully limit the claims’ scope.
One takeaway from this decision is that the Court remains predictably divided. In this case, all three judges on the panel ruled in a way that was consistent with their ruling in CLS Bank, 717 F.3d 1269 (Fed. Cir. 2013). See below.
Another takeaway is that a party should not waive an appeal of a §101 rejection of a set of methods claims that relate to a set of system claims being appealed.
A final takeaway is to draft your patent application in a way that better avoids “abstractness.” For example, demonstrate in the specification that the invention is an improvement on an existing technology and define the existing technology as a very broad concept (e.g., several existing accounting programs track the worth of insurance policy profiles) and then disclose several embodiments that are specific improvements on aspects of the concept. This may help to avoid having the CAFC come to its own conclusion about abstractness.
EDITOR’S NOTE: For more on this topic please see:
Join the Discussion
15 comments so far.
John SmithSeptember 16, 2013 06:25 pm
“A final takeaway is to draft your patent application in a way that better avoids “abstractness.” For example, demonstrate in the specification that the invention is an improvement on an existing technology and define the existing technology as a very broad concept (e.g., several existing accounting programs track the worth of insurance policy profiles) and then disclose several embodiments that are specific improvements on aspects of the concept. ”
An interesting suggestion but I’m afraid that I cannot see, just from what you’ve presented, how demonstration of your invention being an improvement on a very broad concept would help in avoiding a 101 rejection. That would seem to be walking right into a 101 rejection to me. As in, setting forth the abstract idea (the concept) at issue for the examiner to pounce on it, or for a court to pounce on it later.
I also don’t know what sort of “embodiments” you’re referring to which would be specific improvements on aspects of the concept. Are we talking about conceptual embodiments? If so, it seems like you’re just walking right into a 101 rejection again.
Perhaps you could give us some good examples of how to apply your suggestion?
SteveSeptember 15, 2013 08:48 pm
Thanks for the excellent article/analysis Darrin.
Darrin and Gene — the article end with “For more on this topic please see:” Was there a link(s) you meant to refer us to for more information?
And I’m with you, Mark N. The battle for this patent should be over 103; and not 101.
Some of the Fed Cir judges are improperly attempting to expand the purposely very, very limited exceptions to 101 patentability.
They should be embarrassed and ashamed of themselves for their intellectual dishonesty.
Mark NowotarskiSeptember 15, 2013 08:31 pm
Please disregard above test. I couldn’t figure out why my earlier comment didn’t post.
In any event. It’s not clear to me why this claim is not obvious. It appears to read on a computer looking up information on a list in response to an input and then outputting that information. Was there some technical hurdle that had to be overcome to look up information related to an insurance claim?
Mark NowotarskiSeptember 15, 2013 08:27 pm
This is a test.
step backSeptember 15, 2013 06:19 pm
A court (i.e. CAFC) is not an island onto itself just as an invention is not an isolated thing onto itself.
Inventions are made by real individual people (inventors).
Court decisions are formed by individual judges.
Over the past decade or so, the CAFC judges who have understanding of science and engineering have been replaced by them who know only how to muddle with mud-pied words. The abstractness of their abstractionist proclamations escapes them. They don’t even know that they don’t even know. A sad state of affairs for the state of our nation.
DejectedSeptember 15, 2013 01:00 am
Thanks for the post. One word comes to mind after reading the decision – disappointing. It seems like every 101 case these days limits inventors’ rights. The CAFC/SCOTUS just don’t get it. And the CAFC has no excuse, they are a special court set to handle this stuff. How can you think about, discuss, write opinions about patent law and not understand it at a fundamental level?
Gene QuinnSeptember 14, 2013 01:00 pm
The appeal strategy might not have backfired if their plan is to try and get the Supreme Court to take the case. System claims have to be patent eligible. If the reasoning of Judge Lourie prevails nothing is patent eligible any more. Ignoring the tangible items and then seeing what is left means that all improvement innovations are patent ineligible. This is the necessary result since we have a one-size-fits-all patent system and the principles in these cases can and will apply to non-software cases as well.
patent leatherSeptember 13, 2013 11:46 pm
Darrin, why do you think Accenture did not appeal the method claims? Maybe because they felt the method claims would be more likely shot down and then the system claims would be on the same boat? Well this strategy apparently backfired.
step backSeptember 13, 2013 07:23 pm
I responded to you here:
Thanks for dropping by.
step backSeptember 13, 2013 07:20 pm
The PTO is like a box of cherries.
You never know who (or what?) you’re going to get. 😉
patent leatherSeptember 13, 2013 06:52 pm
Reyna has no patent experience and has no business making important precedent like this. No doubt, he probably follows all of the ignoramuses out there that say “business method patents are bad” without truly understanding the issues. Wallach isn’t any better. At this point, a 101 case that goes to the CAFC has no need to be litigated. Both sides should just agree ahead of time to look at the panel it will be assigned to, determine the winner from that, and drop the case.
I always tell clients who ask “can I get the patent” that “we will do our best, but the USPTO is like a big lottery and you never know what will happen.” Apparently the CAFC is even worse.
AnonSeptember 13, 2013 06:16 pm
I get the “old” and “new” – but my question remains: since when can a panel decision set precedent over a previous panel decision?
Unless of course, stare decisis is gone and the pecedent of this case lasts only until the next panel meets…
step backSeptember 13, 2013 04:44 pm
Anon. That was the “old” precedent. This is the new precedent, otherwise known as the “new normal”. 😉
AnonSeptember 13, 2013 04:30 pm
How is this precedential panel decision to be read in light of the earlier precedential Ultramercial panel decision? Last I checked, one panel cannot make precedent that negates the earlier precedent of another panel.
step backSeptember 13, 2013 03:47 pm
No need for me to rant poetic here.
I’ve already done so on my blog site:
This is judiciary gone wilder than the girls gone wild.
What’s next? All words are abstract. Patent claims consist of words. Ergo all claims are abstract?