Is My Software Patentable?

Is my software patentable?  Maybe!!!  Does it solve a problem rooted in computer technology?  Does it improve the performance or functioning of a computer?  Does it solve a technological problem by applying well understood operations in non-conventional and/or in non-generic ways?  If the answer to any of these questions is yes, then it is possible your software is patentable. 

Predicting whether or not software is patentable is not an easy task.  This is primarily due to a rather vague test for patentability set forth by the United States Supreme Court in Alice Corp. v. CLS Bank Int’l.  This test requires a court to consider:  1) if the software is directed to an unpatentable concept; and 2) if so, whether the software amounts to something more than the unpatentable concept.  “Unpatentable concepts” include laws of nature, natural phenomena, and abstract ideas.  Whereas laws of nature (e.g. E=mc²) and natural phenomena (e.g. lightening) are relatively well understood concepts, abstract ideas are not.  In fact, a definitive rule to determine what constitutes an “abstract idea” has never been defined.  As such, it is difficult to know whether software is merely directed to an abstract idea or something more.  However, three cases decided by the Federal Circuit have shed light on what types of computer applications are patentable.

DDR Holdings v. Hotels.com was the first Court of Appeals for the Federal Circuit (CAFC) decision to uphold the validity of a software patent since Alice.  DDR’s patents addressed the problem associated with prior art systems that allowed third-party merchants to lure a host website’s visitor away from the host website.  This “luring way” typically occurred when visitors were taken to the third-party merchant’s website when they clicked on the merchant’s advertisement on the host site.  The patents-in-suit provided a solution to this problem by creating a new web page that permits a website visitor, in a sense, to be in two places at the same time.  On activation of a hyperlink on a host website – such as an advertisement for a third-party merchant – instead of taking the visitor to the merchant’s website, the system generates and directs the visitor to a composite web page that displays product information from the third-party merchant, but retains the host website’s “look and feel.”  Thus, the host website can display a third-party merchant’s products, but retain its visitor traffic by displaying this product information from within a generated web page that “gives the view of the page the impression she is viewing pages served by the host” website.

In determining the claims of DDR’s  patents recited patentable subject matter, the CAFC noted the claims did not recite a fundamental economic or longstanding commercial practice (which are generally considered abstract ideas) and although the claims were directed to a business challenge (retaining website visitors), it is a challenge particular to the Internet.  Furthermore, CAFC stated the claims of DDR’s patents “do not merely recite the performance of some business practice known from the pre-Internet words along with the requirement to perform it on the Internet.  Instead, the claimed solution is necessarily rooted in computer technology in order to overcome a problem specifically arising in the realm of computer networks.”  The CAFC went on to state that when the limitations of the claims are taken together as an ordered combination, “the claims recite an invention that is not merely routine or conventional use of the Internet.”  In view of the above, it appears that if software is rooted in computer technology and solves a problem specifically arising in the realm of computer networks, the software might be patentable.  This case further indicates that software that executes an ordered combination of unconventional steps may be patentable.

In Enfish, LLC v. Microsoft, the CAFC upheld the validity of a software patent related to “self-referential” databases.  These types of databases arrange data in a single table, with column definitions provided by rows in the same table (thus, self-referential).  The patents taught the multiple advantages of self-referential databases.  First, the patents disclosed that the self-referential database indexing technique allowed for faster searching of data relative to conventional databases.  Second, the patents taught that a self-referential model allows for more effective storage of data other than structured text, such as images and unstructured text.  Finally, the patents taught the self-referential model allows more flexibility in configuring a database.

During litigation, the district court entered summary judgment against Enfish finding their claims were directed to an unpatentable abstract idea.  On appeal, however, the CAFC found the claims were not directed to an abstract idea.  In finding the claims constituted patentable subject matter, the CAFC stated “[w]e do not read Alice to broadly hold that all improvements in computer-related technology are inherently abstract and, therefore, must be considered at step two.  Indeed, some improvements in computer-related technologies when appropriately claimed are undoubtedly not abstract, such as chip architecture, an LED display, and the like.  Nor do we think that claims directed to software as opposed to hardware are inherently abstract and therefore only properly analyzed at the second step of the Alice analysis.  Software can make non-abstract improvements to computer technology just as hardware improvements can, and sometimes the improvements can be accomplished through either route.”  The CAFC then went on to conclude that the claims in Enfish’s patents were patent eligible since they were directed to “an improvement to computer functionality itself, not on economic or other tasks for which a computer is used in its ordinary capacity.”  In view of the above, it appears software that improves the functionality of a computer may be patentable.

In Bascom Global Internet Services v. AT&T Mobility, LLC, the CAFC upheld the validity of a software patent directed to filtering Internet content.  Conventionally, computer users could place filtering software on their computers, however, such programs were difficult to install and required clients to update their databases which required frequent downloads from the Internet.  In the alternative, filtering software was placed on a local server between a user’s computer and the Internet.  However, a major drawback of this latter method was that a one-size-fits-all filter was not ideal for a plurality of users.  Bascom solved this problem by providing a system where users are provided with customizable filtering features while installing the filtering tool at a specific location in a computer system.  The CAFC  found the claims recited patent eligible subject matter.  More specifically, even though the CAFC found the concept of filtering data was an abstract idea (primarily because it is a well-known method of organizing human behavior), the claims as a whole disclosed an “inventive concept” in the manner that various claim elements were arranged.  That is, the CAFC stated that inventive concepts “can be found in the non-conventional and non-generic arrangements of known, conventional pieces.”  As such, the CAFC concluded that Bascom’s claims “do not merely recite the abstract idea of filtering content along with the requirement to perform it on the Internet or to perform it on a set of generic computer components…[n]or do the claims preempt all ways of filtering content on the Internet; rather, they recite a specific, discrete implementation of the abstract idea of filtering content.”  Furthermore, the CAFC characterized Bascom’s invention as a “technical improvement over the prior art ways of filtering such content.”    As such, Bascom’s claims were characterized as reciting something more than an abstract idea. In view of the above, it appears software that executes relatively common and well known functions, but does so in a non-conventional and/or non-generic way, is likely patentable.

In summary, it is difficult to predict whether software is patentable due to the rather vague test for patentability set forth by the United States Supreme Court.  However, if the software solves a problem rooted in computer technology, improves the performance or functioning of a computer, or solves a technological problem by applying well understood operations in non-conventional and/or in  non-generic ways, then it is possible the software is patentable.