Federal Circuit Offers Further Ammunition to Section 101
Challenges in McRO, Inc. v. Bandai Namco Games Amercia, et al. (Fed. Cir. 2016)
On September 13, 2016, the Federal Circuit provided further insight into the limits of § 101 challenges for computer-related patent claims in the aftermath of Alice Corp. v. CLS Bank. See McRO Inc. v. Bandai Namco Games America Inc., et al., http://www.cafc.uscourts.gov/sites/default/files/s15-1080.Opinion.9-9-2016.2.pdf. The McRO decision injects some clarity into the generally murky landscape of §101 challenges that has emerged in the two years since Alice, but raises new questions as well.
In McRO, the Court considered patents covering a method for automated three-dimensional computer animation.[i] The exemplary claimed method provides an alternative to what the patentee describes as a “very tedious and time consuming” approach to depicting speech in animated characters. The patentee, McRO, sued a number of video game developers and publishers in the Central District of California and, following claim construction, the defendants filed motions for judgment on the pleadings arguing the claims covered patent ineligible subject matter under § 101. The district court found that the claims added to the prior art “the use of rules, rather than artists, to set the morph weights and transitions between phonemes.” Slip Op., p. 14. Because the claims were not limited to a specific set of rules, the district court held that the claims covered the application of the abstract idea of applying rules and held that “while the patents do not preempt the field of automatic lip synchronization for computer-generated 3D animation, they do preempt the field of such lip synchronization using a rules-based morph target approach.” Accordingly, the district court found the novel portion of the claims to be “too broad[ ]” and thus patent ineligible. McRO appealed.
On appeal, McRO argued that (1) the claims are not directed to an abstract idea but a tangible product—i.e., “a video of 3-D character speaking the recorded audio;” and (2) even if the claims are directed to an abstract idea, they are patent eligible because they relate to an improvement in a technology—using specific types of rules in a specific technological way. The defendants argued that (1) the claims are ineligible algorithms and that the claimed method simply takes a preexisting process and makes it faster by automating it; and (2) the claims are not limited to particular rules and thus preempt all possible rules-based methods.
In applying the two-step analysis of Alice, the Federal Circuit explained that under prong one, the Court considers the claims in their entirety to determine whether directed to patentable subject matter and the analysis cannot be detached from the specific language of the claims. Under prong two, the Court considers both the claim as a whole and the individual claim elements. Slip Op., pp. 19-20.
The district court’s conclusion that the claims are drawn to the abstract set of automated rules was oversimplified, according to the Federal Circuit. In particular, the Court held that the claims improved the prior art by using “rules, rather than artists, to set the morph weights and transitions between phonemes.” And, in an interesting riff from the landmark 1980 Supreme Court case Diamond v. Chakrabarty, the Federal Circuit noted: “Claims to the genus of an invention, rather than a particular species, have long been acknowledged as patentable.” The Court found the McRO patent rules defined the morph weight sets as a function of the timing of phoneme sub-sequences and thus are “limited to rules with certain common characteristics, i.e. a genus.”
The Court disagreed with defendants that the claims simply used a computer to automate conventional activity. Prior art animation used an artist’s subjective determinations rather than the mathematical rules recited in the claimed invention. Thus, the Court held that the improvement over the prior art was the addition of the claimed rules, not, as defendants argued, simply the use of a computer to apply rules already used in a manual process. In contrast, the prior art method and the computer-based process of the ineligible claims in Alice were the same processes. Slip Op., pp. 22-25.
The Court differentiated processes which merely organized existing information or carried out a fundamental economic practice from those claimed by McRO. McRO’s claims used “a combined order of specific rules that renders information into a specific format that is then used and applied to create desired results: a sequence of synchronized, animated characters.” Slip Op., p. 25. Further, the limitations require the rules be rendered in “a specific way” and thus prevent broad preemption of all rules-based processes for automated lip-synchronization. Thus the claim does not preempt approaches using different structured rules or different techniques. While defendants argued that any rules-based lip-synchronization process must use the claimed type of rules, the Court found no evidence in the record to support this conclusion.
Because it found the claims directed to patentable subject matter, the Court held it did not need to address prong two of the Alice test. Slip Op., p. 27.
This case provides several insights into future §101 challenges and defenses. First, under the first prong of the § 101 analysis, scrutiny cannot be separate from the claims as a whole, and thus limiting elements are important in considering patentability. The Federal Circuit indicated that it will dismiss challenges that boil claims down into high level theories without consideration for a claim’s limiting elements. Second, claims that purport to improve the prior art by adding a step to a process, thereby creating a new process, are more likely to be found patentable than claims that automate a known process. Finally, the Federal Circuit has demonstrated a willingness to find automated processes patentable on the first inquiry of Alice; and thus challenges or defenses should carefully consider this first prong rather than rushing to the second prong.
As we note above, the McRO Court provides a cogent allegory for § 101 computer method challenges in its “genus” and “species” distinction, drawn from the Chakrabarty case (which addressed claims for bacteria rather than computer methods). We expect more courts will draw the lines of eligibility using these distinctions, with challengers urging that certain methods are so general as to be neither but rather more akin to the broader family, class and order categories. Where, amongst these, does preemption of an abstract idea occur? As with all questions of patent eligibility, time and further judicial scrutiny, will tell.
On September 13, 2016, the Federal Circuit provided further insight into the limits of § 101 challenges for computer-related patent claims in the aftermath of Alice Corp. v. CLS Bank. See McRO Inc. v. Bandai Namco Games America Inc., et al., http://www.cafc.uscourts.gov/sites/default/files/s15-1080.Opinion.9-9-2016.2.pdf. The McRO decision injects some clarity into the generally murky landscape of §101 challenges that has emerged in the two years since Alice, but raises new questions as well.
In McRO, the Court considered patents covering a method for automated three-dimensional computer animation.[i] The exemplary claimed method provides an alternative to what the patentee describes as a “very tedious and time consuming” approach to depicting speech in animated characters. The patentee, McRO, sued a number of video game developers and publishers in the Central District of California and, following claim construction, the defendants filed motions for judgment on the pleadings arguing the claims covered patent ineligible subject matter under § 101. The district court found that the claims added to the prior art “the use of rules, rather than artists, to set the morph weights and transitions between phonemes.” Slip Op., p. 14. Because the claims were not limited to a specific set of rules, the district court held that the claims covered the application of the abstract idea of applying rules and held that “while the patents do not preempt the field of automatic lip synchronization for computer-generated 3D animation, they do preempt the field of such lip synchronization using a rules-based morph target approach.” Accordingly, the district court found the novel portion of the claims to be “too broad[ ]” and thus patent ineligible. McRO appealed.
On appeal, McRO argued that (1) the claims are not directed to an abstract idea but a tangible product—i.e., “a video of 3-D character speaking the recorded audio;” and (2) even if the claims are directed to an abstract idea, they are patent eligible because they relate to an improvement in a technology—using specific types of rules in a specific technological way. The defendants argued that (1) the claims are ineligible algorithms and that the claimed method simply takes a preexisting process and makes it faster by automating it; and (2) the claims are not limited to particular rules and thus preempt all possible rules-based methods.
In applying the two-step analysis of Alice, the Federal Circuit explained that under prong one, the Court considers the claims in their entirety to determine whether directed to patentable subject matter and the analysis cannot be detached from the specific language of the claims. Under prong two, the Court considers both the claim as a whole and the individual claim elements. Slip Op., pp. 19-20.
The district court’s conclusion that the claims are drawn to the abstract set of automated rules was oversimplified, according to the Federal Circuit. In particular, the Court held that the claims improved the prior art by using “rules, rather than artists, to set the morph weights and transitions between phonemes.” And, in an interesting riff from the landmark 1980 Supreme Court case Diamond v. Chakrabarty, the Federal Circuit noted: “Claims to the genus of an invention, rather than a particular species, have long been acknowledged as patentable.” The Court found the McRO patent rules defined the morph weight sets as a function of the timing of phoneme sub-sequences and thus are “limited to rules with certain common characteristics, i.e. a genus.”
The Court disagreed with defendants that the claims simply used a computer to automate conventional activity. Prior art animation used an artist’s subjective determinations rather than the mathematical rules recited in the claimed invention. Thus, the Court held that the improvement over the prior art was the addition of the claimed rules, not, as defendants argued, simply the use of a computer to apply rules already used in a manual process. In contrast, the prior art method and the computer-based process of the ineligible claims in Alice were the same processes. Slip Op., pp. 22-25.
The Court differentiated processes which merely organized existing information or carried out a fundamental economic practice from those claimed by McRO. McRO’s claims used “a combined order of specific rules that renders information into a specific format that is then used and applied to create desired results: a sequence of synchronized, animated characters.” Slip Op., p. 25. Further, the limitations require the rules be rendered in “a specific way” and thus prevent broad preemption of all rules-based processes for automated lip-synchronization. Thus the claim does not preempt approaches using different structured rules or different techniques. While defendants argued that any rules-based lip-synchronization process must use the claimed type of rules, the Court found no evidence in the record to support this conclusion.
Because it found the claims directed to patentable subject matter, the Court held it did not need to address prong two of the Alice test. Slip Op., p. 27.
This case provides several insights into future §101 challenges and defenses. First, under the first prong of the § 101 analysis, scrutiny cannot be separate from the claims as a whole, and thus limiting elements are important in considering patentability. The Federal Circuit indicated that it will dismiss challenges that boil claims down into high level theories without consideration for a claim’s limiting elements. Second, claims that purport to improve the prior art by adding a step to a process, thereby creating a new process, are more likely to be found patentable than claims that automate a known process. Finally, the Federal Circuit has demonstrated a willingness to find automated processes patentable on the first inquiry of Alice; and thus challenges or defenses should carefully consider this first prong rather than rushing to the second prong.
As we note above, the McRO Court provides a cogent allegory for § 101 computer method challenges in its “genus” and “species” distinction, drawn from the Chakrabarty case (which addressed claims for bacteria rather than computer methods). We expect more courts will draw the lines of eligibility using these distinctions, with challengers urging that certain methods are so general as to be neither but rather more akin to the broader family, class and order categories. Where, amongst these, does preemption of an abstract idea occur? As with all questions of patent eligibility, time and further judicial scrutiny, will tell.
[i] Claim 1 of one of the patents was found to be representative:
A method for automatically animating lip synchronization and facial expression of three-dimensional characters comprising:
obtaining a first set of rules that define output morph weight set stream as a function of phoneme sequence and time of said phoneme sequence;
obtaining a timed data file of phonemes having a plurality of sub-sequences;
generating an intermediate stream of output morph weight sets and a plurality of transition parameters between two adjacent morph weight sets by evaluating said plurality of sub-sequences against said first set of rules;
generating a final stream of output morph weight sets at a desired frame rate from said intermediate stream of output morph weight sets and said plurality of transition parameters; and
applying said final stream of output morph weight sets to a sequence of animated characters to produce lip synchronization and facial expression control of said animated characters.