After the Supreme Court case of Alice v. CLS Bank in 2014, the Patent Office has issued a series of examination guidelines and examples to guide examiners and patent practitioners in determining patent eligible subject matter. On December 15, 2016, the Patent Office issued its latest set of example inventions and corresponding patent claims, along with guidance on application of current §101 case law in determining subject matter eligibility of the claims. These Subject Matter Eligibility Examples: Business Methods are available at: https://www.uspto.gov/sites/default/files/documents/ieg-bus-meth-exs-dec2016.pdf (“December Examples”).
The “Bascom” Case (Example 34)
The first new example is from the recent Federal Circuit case BASCOM Global Internet v. AT&T Mobility LLC. The invention in BASCOM involves a customizable content filter that limits a user’s access to certain websites or content. The Federal Circuit found that the claim at issue is directed to the abstract idea of filtering content, but also found that the claim as a whole is significantly more than that abstract idea. Echoing the Federal Circuit, the Patent Office confirms that “an inventive concept can be found in the unconventional and non‐generic combination of known elements,” as is discussed further in our previous post here. December Examples, p. 4. Interestingly, the fact that this case is part of the Patent Office’s “business methods” examples provides some insights into its broad view of what constitutes a “business method.”
Verifying a Bank Customer’s Identity (Example 35)
Example 35 provides three hypothetical claims directed to fraud prevention by verifying the authenticity of a customer’s identity prior to proceeding with a banking transaction. Id., p. 8. The Patent Office notes that each of the three example claims are directed to an abstract idea, because “[f]raud prevention by verifying the identity of the customer is as fundamental to business as the economic concepts that were identified as abstract ideas” in Alice, Bilski, and Cybersource. Id. However, it then indicates that claims 2 and 3 are patent eligible as providing significantly more than that abstract idea. Below is a comparison of these example claims, which illustrates the additional limitations that the Patent Office felt satisfied the “significantly more” requirement. Each of the three example claims begins with the same elements:
A method of conducting a secure automated teller transaction with a financial institution by authenticating a customer’s identity, comprising the steps of:
obtaining customer‐specific information from a bank card,
comparing, by a processor, the obtained customer‐specific information with customer information from the financial institution to verify the customer’s identity.
Claim 1 then recites only “determining whether the transaction should proceed when a match from the comparison verifies the authenticity of the customer’s identity.” The Patent Office noted that, “[u]nlike the eligible claims in Diehr and Bascom, in which the elements limiting the exception were individually conventional but taken together provided an inventive concept because they improved a technical field,” the claim here “is no more than the sum of their parts, and provides nothing more than mere automation of verification steps that were in years past performed mentally by tellers when engaging with a bank customer.” Id. (emphasis added).
Claim 2, which was eligible as having significantly more than the abstract idea, adds several further limitations:
generating a random code …
reading, by the automated teller machine, an image from the customer’s mobile communication device that is generated in response to receipt of the random code…
decrypting the code data from the read image, and
analyzing the decrypted code data…, and
determining whether the transaction should proceed when a match from the analysis verifies the authenticity of the customer’s identity.
The Patent Office reasoned here that “like in BASCOM, the claimed combination of additional elements presents a specific, discrete implementation of the abstract idea. Further, the combination of obtaining information from the mobile communication device (instead of the ATM keypad) and using the image (instead of a PIN) to verify the customer’s identity by matching identification information does not merely select information by content or source.” Id., p. 10 (emphasis added).
Claim 3, which was also eligible as having significantly more than the abstract idea, includes some different details:
generating a random code and visibly displaying it …,
obtaining, by the automated teller machine, a customer confirmation code …
determining whether the customer confirmation code matches the random code, and
automatically sending a control signal to an input for the automated teller machine to provide access to a keypad when a match from the analysis verifies the authenticity of the customer’s identity, and to deny access to a keypad so that the transaction is terminated when the comparison results in no match.
The Patent Office indicated that these additional elements, beyond those included in claim 1, “operates in a non‐conventional and non‐generic way to ensure that the customer’s identity is verified in a secure manner that is more than the conventional verification process employed by an ATM alone. In combination, these steps … set up a sequence of events that address unique problems associated with bank cards and ATMs (e.g., the use of stolen or “skimmed” bank cards and/or customer information to perform unauthorized transactions).
The Patent office relies heavily on the Bascom holding for its analysis of Example 35, which provides some helpful further examples of limitations that may be analogized by those attempting to withstand a § 101 challenge.
Tracking Inventory (Example 36)
Example 36 includes three example claims related to managing inventory items by storing images and tracking location of inventory items. Each of the claims recites adding classification data and location data for the images to the inventory record, and updating the inventory record with the physical location of the items in the warehouse to manage the items of inventory. Id., pp. 13-14. Claim 1, however, includes little more regarding how these processes are performed and the Patent Office analogized these steps to the “data collection and management concepts that were held to be abstract ideas in Content Extraction, TLI Communications, and Electric Power Group”. Id., p. 15. The Patent Office further clarified that “[a]lthough the claim enumerates the type of information (i.e., the images, classification data, and location data) that is acquired, stored and analyzed, … the mere selection and manipulation of particular information by itself does not make an abstract concept any less abstract.” Id.
Claims 2 and 3, however, which were also indicated as directed to an abstract idea, were considered patent eligible because the additional claim elements include “meaningful limitations that confine the claim to a particular useful application.” Id., p. 16. Thus, Example 36 provides some basis for eligibility of claims that perform the same process as an ineligible claim by including further “meaningful limitations” on how the process is performed. For example, claim 2 recites additional hardware and software processing elements beyond those recited in claim 1, illustrated below in the redline comparison of claims 1 and 2:
A system for managing an inventory record comprising by tracking the location of items of inventory in a warehouse:
a high‐resolution video camera array, each video camera positioned at pre‐determined locations with overlapping views, for acquiring at least one high‐resolution image sequence of each item of inventory;
a memory and processor configured to perform the steps of:
(a) creating an inventory record for an item of inventory comprising the acquired imagesimage sequence of the item from the video camera array;
(b) adding classification data relating to the acquired imagesimage sequence to the inventory record;
(c) adding location data relating to each acquired image to the inventory record[[; and]], the location data providing a position of the item of inventory in the image sequence;
(d) reconstructing the 3‐D coordinates of an item of inventory using the location data from multiple overlapping images and prior knowledge of the location and field of view of the camera(s); and
(e) automatically updating the inventory record with a physical location the 3‐D coordinates of each item of inventoryofinventory in the warehouse to thereby manage the items of inventory.
See id., pp. 13-14. With reference to claim 2, the Patent Office indicated that “using a high resolution video camera array with overlapping views to track items of inventory was not well understood, routine, conventional activity to those in the field of inventory control.” Id., p. 16. “[T]he video camera array with reconstruction software provides the technological solution to the technological problem of automatically tracking objects and determining their physical position using a computer vision system. Like in DDR, the claimed solution here is necessarily rooted in computer technology to address a problem specifically arising in the realm of computer vision systems.” Id.
Claim 3, in addition to reciting the “high-resolution video camera array” as in claim 2, also recites using computer vision technologies for inventory tracking, including:
(b) extracting characteristics from the acquired image sequence(s) of an item to form feature vectors, the characteristics comprising contour information and character information …
(c) recognizing and tracking the position of item in the image sequence as classification and location data by processing the feature vectors using the stored recognition model and adding the classification and location data to the inventory record;
(d) determining a physical location of the item in the warehouse using the location data relating to the item in the image sequence(s)…
See id., p. 17. Similar to claim 2, the Patent Office notes that these additional elements of claim 3 “provides meaningful limitations to the practical application of inventory tracking with computer vision, by improving the system’s ability to identify and track objects across multiple cameras in a three-dimensional space.” Id.
Summary
These latest examples illustrate the benefits of claiming details on technical improvements to existing technology, such as the details regarding receiving user card data in a more secure and efficient manner as in Example 35 or the details regarding using computer vision technology in a manner that has not been previously used in the industry as in Example 36.
Interestingly, all of the claims in the December Examples were indicated as directed to an abstract idea, even when additional elements and technical details were added. This seems to indicate that there is a better chance for avoiding § 101 rejections by focusing on the technical solution provided by the ordered combination of claim elements, rather than asserting that the claim is not directed to an abstract idea.
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