Putting Words in the Mouth of McRO: The PTO Memorandum of November 2, 2016

The USPTO Memorandum of November 2, 2016 as to Recent Subject Matter Eligibility Decisions (“USPTO Memo”) inappropriately attributes the phrase “computer-related technology” to McRO, Inc. dba Planet Blue v. Bandai Namco Games America Inc., 120 USPQ2d 1091 (Fed. Cir. 2016).  The phrase “computer-related technology” does not appear in McRO or even in Alice Corp. Pty Ltd. v. CLS Bank Int’l, 134 S. Ct. 2347 (2014); rather, it appears in Enfish, LLC, v. Microsoft Corp., 822 F.3d 1327 (Fed Cir. 2016) and only after Enfish appropriately cites Alice:

The Supreme Court has suggested that claims “purport[ing] to improve the functioning of the computer itself,” or “improv[ing] an existing technological process” might not succumb to the abstract idea exception. See Alice, 134 S. Ct. at 2358–59.

Enfish is correct in that Alice elaborates two, separate bases for patent-eligibility under 35 U.S.C. 101: (i) “purport[ing] to improve the functioning of the computer itself,” or (ii) “improv[ing] an existing technological process”.

McRO is directed to the later, not the former.  By attributing the phrase “computer-related technology” to McRO, the USPTO Memo inappropriately narrows the holding of McRO by introducing “computer-related” into “improving an existing technological process”.

To be clear, McRO states:

We therefore look to whether the claims in these patents focus on a specific means or method that improves the relevant technology or are instead directed to a result or effect that itself is the abstract idea and merely invoke generic processes and machinery. Enfish, LLC v. Microsoft Corp., 822 F.3d 1327, 1336 (Fed. Cir. 2016) (“Enfish”); see also Rapid Litig. Mgmt. Ltd. v. CellzDirect, Inc., No. 2015-1570, 2016 WL 3606624, at *4 (Fed. Cir. July 5, 2016)

It is the incorporation of the claimed rules, not the use of the computer, that “improved [the] existing technological process” by allowing the automation of further tasks.

When looked at as a whole, claim 1 is directed to a patentable, technological improvement over the existing, manual 3-D animation techniques. The claim uses the limited rules in a process specifically designed to achieve an improved technological result in conventional industry practice. Alice, 134 S. Ct. at 2358 (citing Diehr, 450 U.S. at 177). Claim 1 of the ’576 patent, therefore, is not directed to an abstract idea.

Phrases utilized in McRO include: “improves the relevant technology”, “existing technological process”, “technological improvement over the existing”, and “improved technological result in conventional industry practice”.  None of these phrases include “computer-related”, which, as mentioned, appears in Enfish.  Rather, the phrases in McRO squarely point to Alice: “improving an existing technological process”.

Further, the USPTO Memo fails to explicitly recognize the fact that the independent method claim considered by the Federal Circuit in McRO (claim 1 of US 6,307,576) does not recite any hardware.  In other words, according to Federal Circuit precedent (i.e., McRO), which is to be followed by the USPTO, an independent method claim that improves an existing technological process need not recite hardware to be patent-eligible.  That is a position that the USPTO seems unwilling to understand or accept.

By attributing “computer-related” to McRO, the USPTO inappropriately steers away from the actual holding in McRO (as well as a basis for patent-eligibility in Alice).  The USPTO appears to be creating a hybrid, heightened standard (“McFish”?) that conflates the two, separate bases elaborated in Alice.  This is particularly unfortunate given that, in McRO, a method claim was held to be patent-eligible without recitation of hardware (i.e., a patent-eligible method claim that did not recite “a computer” or any other hardware).

To find an “exception” to 35 U.S.C. 101, as explained in Alice, an examiner must consider case law; however, many examiners lack training in analysis of case law.  To address that issue, the USPTO’s Office of Patent Legal Administration (OPLA) has begun a training program, which is broken into two parts.  Part I took place on October 21, 2016 (slides uploaded to USPTO website on January 3, 2017) and Part II is to take place within the coming months.  Given the questionable statements in the USPTO Memo of November 2, 2016, the USPTO should extend that training to all levels, particularly the TQASs that advise examiners; noting that TQASs cannot make decisions as to whether a claim should be rejected or not under 35 U.S.C. 101 (that responsibility lies squarely with the primary or the SPE, for a junior examiner).

The USPTO Memo should be revised to indicate that McRO is precedential case law to be followed by the USPTO as to all applicants seeking claim coverage for an improvement to an existing technological process, whether “computer-related” or not, and further to explicitly recognize that a method claim can be patent-eligible without recitation of hardware.


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4 comments so far.

  • [Avatar for B]
    April 10, 2017 07:13 pm

    “Frankly, the 101 jurisprudence at the Federal Circuit is a joke.”

    Golly, you think? /sarc

    Seriously, the only difference in patent eligible and patent ineligible is the panel selected for review. It is why I intend to go for an initial en banc review. Anyway, patent eligibility does seem to be dependent of the sophistication of the graphics.

  • [Avatar for Curious]
    April 10, 2017 06:40 pm

    All three gather data, analyze it and output a display.
    If you have a GUI, that is what computers do. However, they aren’t all patent ineligible.

    except that the courts paid no attention to 95% of the claim limitations
    That is how the PTAB and Federal Circuit works. Is there is a limitation that doesn’t quite fit their analysis? If so, just ignore it. Frankly, the 101 jurisprudence at the Federal Circuit is a joke. There are a few judges (e.g., Dyk) that would find anything and everything that touches a computer to be patent ineligible. The Supreme Court made it clear that their Alice decisions should be read expansively but that is precisely what the Federal Circuit and the USPTO have done.

    Unfortunately, until the Supreme Court or Congress steps in and rectifies the issue, any patent application or issued patent that involves a computer is in danger of being rejected/invalidated under 35 USC 101. While Google is very happy with those results, this certainly is not fostering innovation. Rather it is protecting those who look to copy/infringe.

  • [Avatar for B]
    April 10, 2017 01:45 pm

    I recently filed an RFR to the PTAB on a 101 issue – claims were rejected because they contained a formula and were performed by a computer. A lot more going on than that, and I reminded the PTAB that they weren’t addressing the claims as a whole. Friday the PTAB affirmed. I could not force these clowns into addressing the claims as a whole.

    The problem as I head to the CAFC is Electric Power Group v. Alstom. Is there any difference between Alstom, McRO, and Trading Techs? All three gather data, analyze it and output a display. For reasons that escape me – except that the courts paid no attention to 95% of the claim limitations – the claims in Alstom were declared patent ineligible.

  • [Avatar for Easwaran]
    April 10, 2017 07:53 am

    Excellent point.

    This reminds me of how many examiners are also improperly suggesting that the reasoning of Bascom Global requires a “technical” improvement, rather than just an unconventional one.