Amdocs (Israel) Ltd. v. Openet Telecom, Inc., No. 2015-1180 (Fed. Cir. Nov. 1, 2016)
In a recent case, the U.S. Court of Appeals for the Federal Circuit revisited the vexing problem of assessing patent eligibility for computer-related technologies. The court ruled that four patents claiming systems and methods used to collect data from a network and filtering and aggregating the data for use in billing for Internet communication services all claimed eligible subject matter under 35 U.S.C. § 101 because the claimed inventions were not directed to abstract ideas and, in any event, recited inventive concepts. The case may signal a broadening of the eligibility rationale adopted by the court in DDR Holdings, LLC v. Hotels.com, LP, 773 F.3d 1245 (Fed. Cir. 2014), and suggests strategies for drafting patent applications to address anticipated eligibility issues.
Background
Amdocs (Israel) Ltd. filed suit in the U.S. District Court for the Eastern District of Virginia alleging that Openet Telecom, Inc. and other defendants infringed four patents: U.S. No. 7,631,065, U.S. Patent No. 7,412,510, U.S. Patent No. 6,947,984, and U.S. Patent No. 6,836,797. The patents all describe and claim distributed systems of software and components operating over a computer network that solve the accounting and billing problem faced by network service providers in charging users for services based on their amount and type of network usage. For example, the’065 patent is directed to “a system, method, and computer program for merging data in a network-based filtering and aggregating platform as well as a related apparatus for enhancing networking accounting data records.” Slip op. at 3.
Following the Supreme Court’s decision in Alice Corp. v. CLS Bank Int’l, 134 S. Ct. 2347 (2014), the district court granted Openet’s motion for judgment on the pleadings, ruling that the asserted claims in the four patents were patent-ineligible abstract ideas. Amdocs appealed to the Federal Circuit.
Federal Circuit Rules that Patents Are Eligible
In a divided panel opinion written by Senior Circuit Judge Plager, the appeals court reversed the district court and ruled that all four Amdocs patents claimed eligible subject matter under Section 101.
The court applied the now-familiar Alice/Mayo framework for assessing patent-eligibility to each of the Amdocs patents. Under that framework, if the claims at issue recite a process, machine, manufacture, or composition of matter, the court determines in a first step whether they are directed to a judicially-established exception, such an as abstract idea, natural phenomenon, or law of nature. In that event, the court performs a second step of dissecting the “elements of each claim both individually and as an ordered combination to determine whether the additional elements transform the nature of the claim into a patent-eligible application.” Slip op. at 8 (quotation omitted).
As to the first step of the Alice/Mayo framework, the appeals court noted that although a court must identify whether the claims at issue are directed to an abstract idea, “a search for a single test or definition in the decided cases concerning § 101 from this court, and indeed from the Supreme Court, reveals that at present there is no such single, succinct, usable definition or test.” Slip op. at 9. Rather than attempting to fashion a working definition for an abstract idea, the court compared the technology claimed in the Amdocs patents with the inventions in earlier cases considering whether patents were directed to abstract ideas. The cases discussed included Digitech Image Techs., LLC v. Elecs. for Imaging, Inc., 758 F.3d 1344 (Fed. Cir. 2014); Content Extraction & Transmission LLC v. Wells Fargo Bank, Nat’l Ass’n, 776 F.3d 1343 (Fed. Cir. 2014); In re TLI Commc’ns LLC Patent Litig., 823 F.3d 607 (Fed. Cir. 2016); DDR Holdings, 773 F.3d at 1257; and BASCOM Glob. Internet Servs., Inc. v. AT&T Mobility LLC, 827 F.3d 1341 (Fed. Cir. 2016).
Turning first to the ‘065 patent, the court concluded that the claimed invention was not directed to an abstract idea. The court noted that the claims were “much closer” to those in BASCOM and DDR Holdings, where the court found that the claimed inventions were not abstract ideas, than to those in Digitech, Content Extraction, and In re TLI Commc’ns, where the claims were found to be abstract.
An important issue in the majority decision was the court’s construction of the claimed invention. In an earlier appeal, a different Federal Circuit panel had relied on the patent specifications in construing the claims to require a “number of field enhancements in a distributed fashion.” The court noted that the distributed enhancement was an...
