“inventive concept”

An oil well drilling rig is not an abstract idea. A method of operating an oil well drilling rig is also not an abstract idea. This proposition should be clear to all, but in TDE Petroleum Data Solutions v AKM Enterprise, the Federal Circuit held that a method of operating an oil well drilling rig is directed to the abstract idea of “storing data, receiving data, and using mathematics or a computer to organize that data and generate additional information.”

Section 101 of the Patent Act has been interpreted to prohibit the patenting of abstract ideas, laws of nature, and natural phenomena. Although recent Supreme Court cases have universally found the patents at issue ineligible, Bilski, Alice and Mayo cite approvingly to a previous Supreme Court case, Diamond v. Diehr, which found a process for molding rubber articles with the aid of a computer to be patent eligible.

Alice and Mayo established a now-famous two-part test to determine whether a patent claims ineligible subject matter. The first step of the Alice/Mayo test asks whether the claim is “directed to” one of the prohibited categories. The second step asks whether the claim involves an “inventive concept” sufficient to confer patent eligibility. The Federal Circuit has applied this test with ruthless efficiency to invalidate patents, although sanity is slowly returning as the court has upheld patents improving computer animation of faces and the preservation of liver cells.

Unfortunately, the Federal Circuit rarely compares the facts of the cases before it to controlling Supreme Court precedent. The clear similarity between the claims to operating an oil well drilling rig in TDE and the claims to curing rubber in Diehr show how far off course the Federal Circuit has veered in interpreting section 101.

In Diehr, the claimed method used a computer to precisely control a rubber molding process. The computer allowed the inventors to measure and recalculate the time to cure the rubber while it was in the mold. At the end of the method, a rubber article was produced. In TDE, the claimed method used a computer to control the drilling of an oil well. The computer permitted the inventors to accurately determine the state of the well operation. Different claims provided for different ends of the method, including adjusting the operation of the drill (claim 30) and selecting the state of the well operation (claim 1).

A side-by-side analysis of representative claims from TDE and Diehr at the bottom of this post shows exactly how similar they are. Each claim recites (1) an industrial process that uses (2) initial data combined with (3) newly collected data that is (4) analyzed to (5) improve the output or operation of the industrial process.

It is worth repeating: in both Diehr and TDE, the claims were directed to an industrial process. The general industrial processes existed previously in the art. Molding rubber using the defined equation was well known. Drilling an oil well with consideration of the state of the well operation was known. The contributions in both Diehr and TDE were the addition of data collection and analysis to improve the operation of the industrial process. Neither portion of the Federal Circuit’s analysis in TDE cites to Diehr, let alone analyzes the obvious similarities between the claims at issue and those found patent eligible by the Supreme Court.

In a single paragraph of analysis regarding step one of the Mayo/Alice test, the Federal Circuit held that claim 1 of the TDE patent was directed to the abstract idea of “storing data, receiving data, and using mathematics or a computer to organize that data and generate additional information.” It completely ignored parts of the claim that required the data to be collected from an oil well drilling operation and to be used for the oil well drilling operation. Of course, ignoring these parts of the claim was required to find that the claim was directed to an abstract idea of data manipulation.

Also taking only a single paragraph, the Federal Circuit’s analysis of Mayo/Alice step two was similarly devoid of engagement with the explicit claim requirements of an oil well drilling operation. Instead, it focused only on what the computer was doing in the process, rather than the process as a whole. Diehr, along with many other cases, explicitly requires that the process be considered as a whole in the section 101 analysis.

The Federal Circuit’s error here is worse than it was in Ariosa v. Sequenom. In Ariosa, the court engaged with the closest factual Supreme Court precedent, although it felt bound by Mayo to find the claims ineligible. However, the court in TDE completely ignored and disregarded Diehr, the Supreme Court case that aligns in both law and fact with the claims at issue. Had the court analyzed or considered Diehr, it is likely the outcome would have been different.

To the extent that one asserts the final method of utilizing the data distinguished claim 1 in Diehr from claim 1 in TDE, dependent claim 30 of the patent at issue in TDE cured this defect. Claim 30 recites: “[t]he method of claim 1, further comprising using the state of the well operation to evaluate parameters and provide control for the well operation.” (emphasis added). Thus, the patent in TDE explicitly claimed the actual operation of the industrial machinery, just as the claim in Diehr.

The Federal Circuit stated that it was not considering separately the remaining claims of the patent, ostensibly because TDE did not “distinguish those claims from representative claim 1.” On the contrary, TDE argued claim 30 and related claims separately on precisely the ground that claim 30 “closed [the] loop” and required control of the well.

At this point, it is clear that neither the Federal Circuit nor the Supreme Court are going to step in to fix the wayward path of patent eligibility law. It will therefore be up to Congress to affirm what should be apparent to all: an oil rig is not an abstract idea.

	Diehr – Claim 1* (US Application No. 05/602,463)	TDE – Claim 1 (US Patent No. 6,892,812)	Analysis
1 – Preamble	A method of operating a rubber-molding press for precision molded compounds with the aid of a digital computer, comprising:	An automated method for determining the state of a well operation, comprising:	Both claims are directed to industrial processes where the underlying process (rubber molding or oil well drilling) existed prior to the invention
2 – Initial Data	providing said computer with a database for said press, including at least, natural logarithm conversion data (ln), the activation energy constant (C) unique to each batch of said compound being molded, and a constant (x) dependent upon the geometry of the particular mold of the press,	storing a plurality of states for a well operation;	Both claims require data to be provided prior to operation of the method to interpret data collected.
3 – New Data Collection	initiating an interval timer in said computer upon the closure of the press for monitoring the elapsed time of said closure, constantly determining the temperature (Z) of the mold at a location closely adjacent to the mold cavity in the press during molding, constantly providing the computer with the temperature (Z),	receiving mechanical and hydraulic data reported for the well operation from a plurality of systems;	Both claims require collecting data from sources that are specific to the machinery being operated. Therefore, both claims require specific machinery, not just a general purpose computer.
4 – Data Analysis	repetitively calculating in the computer, at frequent intervals during each cure, the Arrhenius equation for reaction time during the cure, which is ln v = CZ + x where v is the total required cure time, repetitively comparing in the computer at said frequent intervals during the cure each said calculation of the total required cure time calculated with the Arrhenius equation and said elapsed time, and	and determining that at least some of the data is valid by comparing the at least some of the data to at least one limit, the at least one limit indicative of a threshold at which the at least some of the data do not accurately represent the mechanical or hydraulic condition purportedly represented by the at least some of the data; and when the at least some of the data are valid, based on the mechanical and hydraulic data,	Both claims analyze the data. Although not apparent on the face of the claims, the underlying data analysis existed in the art for both claims. The Arrhenius equation was well known. Validating well drilling data against a limit was known in the art although its usefulness was disputed.
5 – Utilizing the Data	opening the press automatically when a said comparison indicates equivalence.	automatically selecting one of the states as the state of the well operation.	Both claims use the data generated in the industrial process. Selecting an individual state of a well operation in a necessary component of operating the well.

*Claim 1 is representative for both the application in Diehr and the patent in TDE.

In Tuesday’s McRO v. Bandai decision, the Federal Circuit has once again reversed a district court’s determination that a computer-implemented invention (aka “software patent”) was not patent eligible under Section 101 of the Patent Act. This continues the Federal Circuit’s recent trend of clarifying the Supreme Court’s two-step patent-eligibility test under Mayo and Alice. The first step asks whether the invention is “directed to” a patent-ineligible concept, such as an abstract idea. If so, the second step then asks whether there is an “inventive concept” that transforms the concept into a patent-eligible invention. While the Supreme Court gave little guidance on what “directed to” and “inventive concept” mean in practice, the Federal Circuit’s recent decisions have made the Mayo-Alice test far less abstract—rather ironic, given that the test itself assesses abstractness.

This past May, the Federal Circuit held in Enfish that, in the software context, the “directed to” inquiry looks at whether “the plain focus of the claims is on an improvement to computer functionality itself.” Since the database claims at issue focused on specific improvements to computer capabilities, they were not “directed to” a patent-ineligible concept under Section 101. Two months later in Bascom, the Federal Circuit stated that an “inventive concept can be found in the non-conventional and non-generic arrangement of known, conventional pieces.” And even though each software claim, related to filtering content on the internet, was “known in the art” when taken individually, the Federal Circuit held that the claims, in combination, were patent eligible because they transformed “the abstract idea of filtering content into a particular, practical application of that abstract idea.”

Adding to this recent line of cases upholding the patent-eligibility of computer-implemented inventions, the Federal Circuit’s new opinion in McRO v. Bandai sheds even more light on the Section 101 analysis under the Mayo-Alice test. The invention at issue involved automated lip-syncing for computer-generated animation, which the district court held was drafted too broadly to be patent eligible. The Federal Circuit reversed, noting that courts “must look to the claims as an ordered combination,” even under the first step of the Mayo-Alice test. The Court of Appeals thus found that the proper analytical centerpiece was “whether the claims in these patents focus on a specific means or method that improves the relevant technology.” Since the invention constituted a “combined order of specific rules that renders information into a specific format that is then used and applied to create desired results,” the Federal Circuit held it patent eligible under Section 101.

Several commentators have praised the Federal Circuit’s decision. Bob Sachs, who specializes in patentable subject matter as a partner at Fenwick & West, points out that the Federal Circuit, for the first time, has used preemption to find that the invention was not “directed to” patent-ineligible subject matter. The Federal Circuit here looked at preemption as part of the first step of the Mayo-Alice test, finding it relevant to whether the invention was “directed to” a patent-ineligible concept in the first place. As Sachs explains, the Federal Circuit “confirms Enfish’s holding that the improvement provided by the specific claim limitations can be considered” under the first step of the Mayo-Alice test. Moreover, Sachs notes that the “panel here makes clear that a demonstration of meaningful non-preemption is sufficient to establish that a claim is not ‘directed to’ an abstract idea, and thus eligible at step 1.”

Other observers, including Erich Andersen, VP and Deputy General Counsel at Microsoft, and Gene Quinn of IPWatchdog, have applauded the Federal Circuit for making the patent-eligibility analysis even more concrete in light of the Supreme Court’s rather abstract abstractness test in Mayo and Alice. If anything, the Federal Circuit here has not only built upon its prior precedents in Enfish and Bascom, it has tied them together by explaining that ordered combinations are relevant to both the first and second steps of the Mayo-Alice test. In the end, the patent eligibility of a computer-implemented invention appears far more settled than ever before–a great result for inventors of so-called “software patents.” The Federal Circuit’s decision is certainly a far cry from the supposed death-knell for “software patents” predicted by several commentators after the Supreme Court’s opinion in Alice.

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