Federal ruling on Enfish builds on earlier decision

The United States Court of Appeals for the Federal Circuit recently shook up the software world with its decision in Enfish, LLC v. Microsoft Corp. The ruling doubles the total number of federal circuit cases in which claims to a software patent were deemed patent eligible, at least since the Supreme Court issued its decision in Alice v. CLS Bank in June 2014. In other words, the Dec. 2014 ruling on DDR Holdings v. Hotels.com is no longer the only point of hope for innovators and patent owners in the software space.

The patents at issue explain that the claimed invention is an improvement, which the federal circuit would make a great deal about in its patent eligibility analysis. The fact that the claimed  invention improved computer functionality was, in fact, why the circuit ultimately found the invention to be patent-eligible subject matter.

The patents teach that multiple benefits flow from this design. First, the patents disclose an indexing technique that allows for faster searching of data than would be possible with the relational model. Second, the patents teach that the self-referential model allows for more effective storage of data other than structured text, such as images and unstructured text. Finally, the patents teach that the self-referential model allows more flexibility in configuring the database.

Patent eligibility

The major issue in this decision relates to patent eligibility under U.S. Section 101.

So many in the patent community who represent innovators seeking patents, and innovators themselves, have long complained that the Supreme Court has never given a definition of what  constitutes an “abstract idea.” Rather than fight this unfortunate reality, the federal circuit embraced it—recognizing that the U.S. Supreme Court has steadfastly refused to define the critical term, even expressly saying that such a definition is unnecessary because all that is required is comparison to other inventions that have either been deemed patent eligible or patent ineligible and then
working backwards.

The federal circuit went on to say that because the Supreme Court has never found it necessary to define what is or what is not an “abstract idea,” it was unnecessary for the circuit to provide a definition. Instead, the circuit explained all that was required was for it to subjectively determine whether this claimed invention seemed more like those that have been held patent eligible in
the past, or more like those that have been held patent ineligible in the past. The court explained that this game of comparison has been accepted and even employed by the Supreme Court. After employing this subjective test, the panel found the claims to be more like those cases in which inventions have been found to be patent eligible.

In reaching the ruling, the federal circuit explained along the way that the claims at issue plainly focus on improvements to computer functionality. This led the panel to unanimously conclude: “The claims at issue in this appeal are not directed to an abstract idea within the meaning of Alice. Rather, they are directed to a specific improvement to the way computers operate, embodied in the self-referential table.” That said, it was not necessary for the federal circuit to address the second step of Mayo v. Prometheus/Alice, which asks whether there is substantially more than an abstract idea being claimed.

Argument put to rest

The federal circuit also explicitly put a nail in the coffin of the argument that software shouldn’t be patent eligible if it could run on a general-purpose computer. The circuit explained: “We are not persuaded that the invention’s ability to run on a general-purpose computer dooms the claims.” Some jurists have long claimed that if software can run on a general-purpose computer it cannot be patented—utterly asinine given that software is most useful when it can run, regardless of the platform selected. This statement, as correct as it is profound, will no doubt lead those in the anti-patent community to fly into an apoplectic fit.

The federal circuit also explained that physical elements are not a prerequisite for a claim to be patent eligible. To rule otherwise, the circuit explained, would be to ignore the Supreme Court’s holding in Bilski v. Kappos, which expressly overruled the so-called machine-or-transformation test that specifically required software patent claims to be tethered to a machine in all cases in order to be patent eligible.

There will be much more written about this case. If I had to guess, I’d say I expect Microsoft will file a petition for en banc rehearing (before all judges of the court) and ultimately probably file a petition for certiorari (a writ or order by which a higher court reviews a lower-court decision) to the Supreme Court. Meanwhile, this case will cheer those who have been long frustrated by what had seemingly become a de facto rule that software was not patent eligible in the United States.