Software, biotech, and business method arts clients are increasingly presenting questions concerning patentable subject matter pronouncements from the Patent Board of Appeals, the Federal Circuit Court of Appeals, and the U.S. Supreme Court. Often, these clients are targets of patent infringement threats. This brief overview is offered as a foundation for answering such inquiries, and illustrates how present patent eligibility law can be applied to a hypothetical business method patent threat.

Patentable Subject Matter:

Generally, a patent may be obtained for any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, subject to an important implicit exception: laws of nature, natural phenomena, and abstract ideas are not patentable, as they are the basic tools of scientific and technological work. Although a law of nature or an abstract idea by itself is not patentable, the practical application of these concepts may be deserving of patent protection.

Patent Eligibility for the Exceptions:

Patents that claim laws of nature, natural phenomena, and abstract ideas can be distinguished from those that claim patent-eligible applications of those concepts. The first step in the analysis is to determine whether the claims at issue are directed to one of those patent-ineligible concepts. If the claims are directed to a patent-ineligible concept, the second step in the analysis is to consider the elements of the claims individually and as an ordered combination to determine whether there are additional elements that transform the nature of the claim into a patent-eligible application. This second step seeks to find an inventive concept – an element or combination of elements that is sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the ineligible concept itself. For example, the prohibition against patenting abstract ideas cannot be circumvented by attempting to limit the use of the formula to a particular technological environment or adding insignificant post-solution activity.

Analysis Applied to a Hypothetical Business Method Patent:

First Step:

Claims in a hypothetical patent asserted against a client are drawn to a business method and system for entering data relating to an insurance claim for a damaged vehicle, wherein the data is processed into a valuation report that is transmitted through the world wide web, where each prospective claim is directed to the fundamental concept of providing a vehicle valuation using information about the vehicle. Methods of organizing human activity have been held to be a fundamental economic practice long prevalent in our system of commerce. Thus, a method and system for entering data relating to an insurance claim for a damaged vehicle, wherein the data is processed into a valuation report that is transmitted through the world wide web, is an abstract idea beyond the scope of patentable subject matter. There is no meaningful distinction between the concept of method and system for entering data relating to an insurance claim for a damaged vehicle and the concept of data processed into a valuation report that is transmitted through the world wide web – both are squarely within the realm of abstract ideas.
Here, the claims recite nothing more than the collection of information to generate a valuation report for a damaged vehicle. Moreover, all the claimed steps could be performed without the use of a computer. Specifically, the steps and calculations covered by the claims essentially require determining the value of a damaged vehicle by entering data related to an insurance claim, such as mileage and vehicle condition, and processing the data to generate a valuation report for the damaged vehicle; a calculation that can be performed by the human mind, or with the aid of pencil and paper. The fact that the claims are not per se drawn to an algorithm does not insulate them from being found an abstract idea.

Accordingly, I determine and would advise that the claims are directed to a patent-ineligible abstract idea.

Second Step:

Are there any additional elements that can transform the nature of the claims into a patent-eligible application of an abstract idea, that is, whether the claims do significantly more than simply describe that abstract idea? To address this inquiry, I determine whether the claims include an inventive concept, i.e., an element or combination of elements sufficient to ensure that the patent in practice amounts to significantly more than a patent on the abstract idea itself. The relevant inquiry here is whether additional substantive limitations narrow, confine, or otherwise tie down the claim so that, in practical terms, it does not cover the full abstract idea itself. Merely limiting the use of an abstract idea to a particular technological environment or implementing the abstract idea on a wholly generic computer is not sufficient as an additional feature to provide practical assurance that the process is more than a drafting effort designed to monopolize the abstract idea itself.
As presented, the claims lack any form of an inventive concept because they merely employ conventional and generic components, such as a client computer, web pages, and a web server, to collect insurance data and value a vehicle. The elements added by the claims do not add any meaningful limitation to the abstract idea of valuing a damaged vehicle based on information regarding that vehicle. In other words, the claimed methods and systems for providing a vehicle valuation are nothing more than a generic computer programmed to perform the steps of the abstract concept. The only technological features recited in the claims are generic computer implementation systems performing generic computer functions which 1) do not improve the function of the computer, 2) do not solve a problem unique to the internet, 3) are not tied to a particular machine or apparatus.
In the context of patent-eligible subject matter, I discern no meaningful distinction between independent method claim(s), and prospective independent claims drawn to a system, server, and a computer program storage medium, respectively, as those claims simply recite the same functions as the process steps of the method claim(s). Upon review, the dependent claims, and, for similar reasons as discussed above, do not add any limitations that would transform the dependent claims into patent-eligible subject matter. The specification does not point to any specific limitation in any of the dependent claims that would change the patent-eligibility analysis.

In view of the foregoing, I determine and would advise that the claims are directed to patent-ineligible subject matter.

For more information on patentable subject matter under current U.S. patent statutes and case law, contact ASCENDANT IP℠.