More Humans Have Walked on the Moon than have Won Eligibility Cases Before the CAFC

Between July 1969 and December 1972, 12 humans walked on the moon. Since the Alice decision, a comparable period of time, only five have won an eligibility appeal to the CAFC.

Astronaut walking on moon with galaxy background.Since the Supreme Court’s decision in Alice v. CLS Bank, the opinion has been used to invalidate over 450 patents. Among them is my client TDE Petroleum Data Solutions, Inc.’s U.S. Patent No. 6,892,812. The ‘812 patent claims a method and system for determining the state of well operations and performing process review. The claims provide a novel implementation of existing sensor technology to control and improve drilling operations. Until the CAFC stopped following the Supreme Court’s decision in Diamond v. Diehr, the ‘812 patent was unquestionably patent eligible.

The representative claim considered by the Court of Appeals for the Federal Circuit (CAFC) was claim 1 of the ‘812 patent, which covers:

An automated method for determining the state of a well operation, comprising:

storing a plurality of states for a well operation;

receiving mechanical and hydraulic data reported for the well operation from a plurality of systems; and

determining that at least some of the data is valid by comparing the at least some of the data to at least one limit, the at least one limit indicative of a threshold at which the at least some of the data do not accurately represent the mechanical or hydraulic condition purportedly represented by the at least some of the data; and

when the at least some of the data are valid, based on the mechanical and hydraulic data, automatically selecting one of the states as the state of the well operation.

Unfortunately, the CAFC has recently affirmed the dismissal of my client’s suit on the basis that the patent ineligibility of the ‘812 patent’s, which the Court determined were “directed to” an abstract idea. Under the Alice test, the CAFC determined that the claims recite nothing more than “collecting information, analyzing it, and displaying certain results of the collection and analysis,” which are “a familiar class of claims ‘directed to’ a patent ineligible concept.” See page 4, CAFC’s August 15, 2016 Opinion, TDE v. AKM (Appeal No. 16-1004). The Federal Circuit relied on the judicially created “abstractness” exception to patent eligibility to reach this result.

In reaching its decision, the CAFC ignored the U.S. Supreme Court’s decision in Diamond v. Diehr, 450 U.S. 175 (1981). The claims in dispute are unlike the claims in Alice, which merely applied conventional computer functionality to a financial problem.  Here, TDE’s claims are materially the same as Diehr’s claims and solve technological problems in the industry using existing sensors in a novel implementation to improve the drilling process itself.

A comparison of the claims of the Diehr patent application, held patent-eligible by the Supreme Court, to the ‘812 patent’s claims demonstrates that far from being abstract, both claim the same four parts of similar technological/industrial processes. Namely: (A) storing a data base; (B) collecting raw data representative of the machinery performing the process; (C) transforming the raw data into interpreted data; and, (D) interpreting the transformed data and, if necessary, controlling the industrial process. In Diehr, the industrial process that was improved was curing rubber. In the case of the ‘812 patent’s claims, the industrial process that is improved is “an automated process for determining that state of the well operation,” (preamble, claim 1, ‘812 patent) and, if necessary, controlling the operation of an oil rig.

By finding such claims patent ineligible, the CAFC’s decision threatens patent eligibility in multiple fields of innovation and renders all software using existing hardware components as inherently suspect.  Alice is intended to guard against patent claims that merely use a computer as a tool to implement an abstract idea, not claims, as here, which improve the process itself; in this case an industrial process, which has always been considered patent eligible until now.

The TDE decision will also stifle innovation by rendering patents ineligible that claim software that receives data from industrial equipment, analyzes the data and improves the process by controlling it. Far from merely “collecting information, analyzing it and displaying the results and analysis,” computer controlled industrial processes are at the heart of the American economy and should be entitled to patent protection. The CAFC’s rulings further threaten any system whose improvements are based in software, as opposed to novel hardware. Many fields of innovation are furthered by solutions that solve technological problems using novel implementations of existing hardware.

Anyone concerned about the CAFC’s overturning of the Supreme Court’s Diamond v. Diehr decision and its effect on innovation in the United States should submit an amicus brief to the United States Supreme Court in support of TDE’s Writ of Certiorari. TDE plans on filing its Writ on January 13, 2017 and any amicus will be due no later than 30 days later, i.e. February 10, 2017.

Together, we can change the IP world! Join me and TDE in making this happen. I can be reached at changingtheipworld@pronova-tde.com.

You can also go to our webpage www.pronova-tde.com/changingtheipworld for further information.

 

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20 comments so far.

  • [Avatar for Curious]
    Curious
    November 7, 2016 09:46 pm

    There is no positive recitation of any hardware in the claim.
    Not a requirement — see second paragraph of 35 USC 112. The purpose of the claims is not to fully enable the invention — that is the province of the specification (see first paragraph of 35 USC 112). As such, all of the hardware elements need not be claimed. Moreover, the fact that the hardware elements aren’t claimed do not necessarily establish that the invention is directed to an abstract idea.

    Regardless of what is in the claims, I am also shocked that a single claim would be chosen to represent all 115. At a bare minimum, I would think they should certainly evaluate all six independent claims. Considering everything at stake, it’s appalling to look at only one claim.
    This point I agree with.

  • [Avatar for Curious]
    Curious
    November 7, 2016 09:40 pm

    I didn’t come across this article until just today. The title of the article made me laugh (to keep myself from crying).

  • [Avatar for Gene]
    Gene
    November 7, 2016 07:20 pm

    What part of a well is involved with this claim 1? It’s abstract beyond question. “mechanical or hydraulic condition” is abstract. Diehr claimed operation of a press. I think the case you need to read is O’Reilly v. Morse.

  • [Avatar for Mike Archbold]
    Mike Archbold
    November 7, 2016 06:36 pm

    Gene,

    Sorry, did not mean to be disrespectful. I like reading your columns.
    Actually, I am a software developer. My opinion is that the a patent lawyer would look upon something like this favorably, because that is your stock in trade, no?

    The problem is that there really isn’t enough to qualify as an invention. I agree with the Alice decision. It’s needed. Whether it is software, a process, whatever… reading your data slightly differently, storing it differently, these are so easily contrived that they don’t rise to the level of something that should ever be patented.

  • [Avatar for Dale B Halling]
    Dale B Halling
    November 5, 2016 12:39 pm

    Any invention is any human creation that has an objective (repeatable) result. A patent should issue to the person who creates the invention (meaning there is no such thing as a second to invent). Is this a human creation? yes. Is the applicant the inventor? I don’t know.

  • [Avatar for Gene Quinn]
    Gene Quinn
    November 5, 2016 12:22 pm

    Mike Archbold-

    “but it’s part of a process. So what?”

    The statute actually says processes are patent eligible. That’s what. I know the Supreme Court ignores the law, but that really is another problem altogether and one that goes well beyond the patent space. We no longer have a Supreme Court. We have a bunch of Supreme Ayatollahs that write and rewrite the law as they see fit.

    As far as Alice being a sound decision, that is clearly wrong, but thanks for visiting anyway.

  • [Avatar for Mike Archbold]
    Mike Archbold
    November 4, 2016 11:11 pm

    This claim absolutely should be rejected. I can see immediately that it is nothing. A couple of data points measured, stored, compared, whatever. You contend, “oh, but it’s part of a process.” So what? There’s no patent here. No amount of hairsplitting will help it. Alice is a sound decision.

  • [Avatar for Dale Halling]
    Dale Halling
    November 4, 2016 05:15 pm

    Great article, one minor point “he claims in dispute are unlike the claims in Alice, which merely applied conventional computer functionality to a financial problem.” Alice’s invention was not merely conventional computer functionality applied to a financial problem. It solved a major problem in banking, it was novel, and there was a reason the big banks decided to steal the invention.

  • [Avatar for Dave O]
    Dave O
    November 4, 2016 01:03 pm

    I don’t know how many “hardware” limitations are built into the claims, but a word search shows that “sensor” is not found in any of them. Of course, in 2005 when this patent issued, limiting the claims to include hardware would have been considered poor drafting.

    Regardless of what is in the claims, I am also shocked that a single claim would be chosen to represent all 115. At a bare minimum, I would think they should certainly evaluate all six independent claims. Considering everything at stake, it’s appalling to look at only one claim.

  • [Avatar for Gene Quinn]
    Gene Quinn
    November 4, 2016 12:26 pm

    Everyone-

    Couple thoughts.

    First, I have to agree, I absolutely loved the title. I had nothing to do with the title, I thought it was absolutely perfect as suggested. Sad, but true.

    Second, the thing that really caught my attention here is that this decision is non-precedential and it invalidated 115 claims. The only claim discussed was claim 1. Claim was was deemed representative of 115 claims. That is just wrong, period. Invalidity is supposed to be claim by claim. Invalidating 115 claims after analyzing only 1 claim cannot be squared with any sense of fairness. A patent is a property right for crying out loud. Even if 1 or more of the claims are invalid taking away all 115 claims without considering them is unjustified, period.

    -Gene

  • [Avatar for Hillybilly blues]
    Hillybilly blues
    November 4, 2016 12:03 pm

    Drafting is being used to invalidate valid inventions. Not only do the claims have to be considered in 101, but the patent itself as an ordered combination. The claims define the metes and bounds within the patent itself.

    Secondly, dependent claims need to be treated as a valid part of the ordered combination.

    I know this flies in the face of “jurisprudence.” But if patents have specifications and dependent claims that are inherent to understanding and invoking an invention, they why are they discarded so often?

    There is no question that the CAFC has become a “death panel” for inventors. Did you see judge hughes opinion? Patent bar membership should be a requirement for circuit court judges.

  • [Avatar for Joe Allen]
    Joe Allen
    November 4, 2016 10:24 am

    Agree with “B” and Mark– a classic headline. There should be a national award for the most catchy headline of the year. This would be a serious contender.

  • [Avatar for Dave O]
    Dave O
    November 4, 2016 09:29 am

    My initial reaction to Claim 1 is that it is highly abstract. The claim essentially covers a method of storing, collecting, and comparing data. The author says that the claim uses existing sensors in a novel implementation. But Claim 1 doesn’t even include the word “sensor.” There is no positive recitation of any hardware in the claim, but the author’s entire point is that this case could render any software claims suspect when the software implements a new way of using hardware.

    I can certainly understand where the CAFC was coming from here. I think this may be a case where the author can’t see the forest for the trees.

  • [Avatar for Prizzi's Glory]
    Prizzi’s Glory
    November 4, 2016 09:07 am

    Aren’t the claims more similar to those of Flook than to those of Diehr?

  • [Avatar for Mark Nowotarski]
    Mark Nowotarski
    November 4, 2016 08:30 am

    I concur. Best title ever.

  • [Avatar for Paul F. Morgan]
    Paul F. Morgan
    November 4, 2016 07:32 am

    Re: “Since the Alice decision, a comparable period of time, only five [out of 450 D.C. adverse decisions] have won an eligibility appeal to the CAFC.”
    There will undoubtedly be more – only a small portion of those 450 D.C. decisions have had time yet for Fed. Cir. appeals and decisions.

  • [Avatar for Mark Summerfield]
    Mark Summerfield
    November 4, 2016 06:43 am

    While I am not saying that I do not believe that this claim should be patent-eligible, I am not persuaded that it is analogous to Diehr. The end result of implementing what was claimed by Diehr was cured rubber. The end result of implementing what it’s claimed here is… knowledge of the state of a well operation. Claims 30, 60 and 90, for example, go further by reciting a controlling step, though this is in very generic terms compared with the specific use of the Arrhenius equation in Diehr.

    My own view would be that if the claim in this case fails, other than on prior art grounds, it ought to be under 112 (and since I have not read the description, I could not express a view on that). However, I think that it is fairly easily distinguished from Diehr.

  • [Avatar for patent leather]
    patent leather
    November 4, 2016 06:01 am

    the recent Amdocs case (good news for those of us who support software patents) is very significant: http://www.cafc.uscourts.gov/sites/default/files/opinions-orders/15-1180.Opinion.10-28-2016.1.PDF

    In some ways, it is in tension to TDE. 101 outcomes are still panel dependent.

    This case hasn’t been covered by the “other” patent blog yet. Gene, good time to write about it.

  • [Avatar for Night Writer]
    Night Writer
    November 4, 2016 12:33 am

    101 has swallowed 102/103/112. What it allows for is a judge to invalidate any claim for any reason with no facts. The logic that is used is so bizarre that it hurts my brain just to read most of these decisions.

  • [Avatar for B]
    B
    November 3, 2016 09:59 pm

    This is the funniest headline on any IP website ever.