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Unlike the infamous Seinfeld “Soup Nazi” episode – in which you could get your soup if you just kept your head down, did not engage in small talk with the owner, or ask for free bread – software inventors are finding it difficult, and sometimes impossible, to obtain patents or enforce their existing patents no matter how novel their inventions are, and no matter how narrow they are willing to claim their invention.

Two years after the Supreme Court issued its § 101 ruling in Alice, the Federal Circuit has upheld software-related patents as being patent-eligible under §101 only three times, while affirming dozens of District Court decisions invalidating such patents under §101. The patents at issue in the first and second of these three decisions (DDR and Enfish) are highly technological in nature and addressed improvements to computer hardware and software, per se, which is one category of invention that the Alice court deemed to be §101-eligible. These decisions have not been helpful to the vast majority of software inventors whose inventions rely on conventional, generic computer elements programmed via software to perform an endless variety of novel and unobvious real-world functions, as opposed to improving computer hardware or software, per se.

However, the Federal Circuit’s third decision ruling that a software-related patent is §101-eligible addressed such an invention. In Bascom Global Internet Services, Inc. v. AT&T Mobility LLC et al., decided June 2016, the patent at issue allows an Internet Service Provider (“ISP”) to perform user-customizable content filtering of information retrieved from the Internet. Like most software applications, the invention uses conventional, generic computer elements to perform its function.

In Bascom, the Federal Circuit held that “an inventive concept can be found in the non-conventional and non-generic arrangement of known, conventional pieces.” The Federal Circuit further explained that “[t]he claims therefore describe a specific, discrete implementation of the abstract idea of filtering content that provides a technical improvement over the prior art method of filtering internet content” and that “[t]his technical improvement transforms the abstract idea of filtering content into a patent-eligible application under step two of the Alice test.”

Bascom breaks significant new ground in the post-Alice bloodbath faced by software inventions. First, it reemphasizes and endorses the analysis in Alice that conflates patent eligibility issues under §101 with patentability issues under 35 USC §§102 and 103. While this conflation has been criticized by legal purists, it can be beneficial for inventors because if novelty and unobviousness can be shown to exist, then the invention is more likely to be §101-eligible under step two of the Alice test.

Second, the court in Bascom warned against using a claim analysis process which reviews claim limitations individually for inventiveness. This type of analysis, which has found favor in District Courts, almost always results in invalidity under §101. The court in Bascom explained that an “inventive concept” can be found in an “ordered combination” of limitations, even if each of the limitations is performed using non-inventive, generic computers and components. The Supreme Court also endorsed and performed an “ordered combination” analysis in Alice, but the invention in Alice failed the “ordered combination” test for inventiveness.

Third, the court performed a “preemption” analysis to determine if the claim wholly preempts the identified abstract idea. Preemption was a significant part of the analysis in Alice, but has been largely ignored in post-Alice cases. The USPTO even explicitly instructs Examiners to ignore separate preemption arguments made by patent applicants attempting to traverse §101 rejections, taking the position that the preemption analysis is inherent in the two-part Alice test. In Bascom, the court explained that the claims recite a specific, discrete implementation of the abstract idea of filtering content using “a particular arrangement of elements.” Thus, the claims recite a technical improvement over prior art ways of filtering such content.

Going forward, if the claim analysis performed in Bascom (which is fully supported by Alice) is followed by the courts and the USPTO, patent owners and patent applicants who can demonstrate that their computer-implemented inventions recite an “inventive concept,” and do not preempt an abstract idea, should be able to avoid or overcome invalidity challenges under §101, regardless of whether the claims recite only generic computer elements.

While Bascom will likely be helpful for a wide swath of software-related inventions, business-related software inventions, where the claims are directed to a delivery of a business-related service, still are likely to face hostility in the courts. New analysis paradigms may be developed by the courts to prevent such inventions from being enforced and/or patented.

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