Enfish v. Microsoft: The Pendulum Might Be Changing Direction For Software Patents, But Challenges Still Exist

The Federal Circuit’s recent decision in Enfish v. Microsoft Corp. was significant in that it was the first time that the court reversed a trial court’s finding of invalidity under § 101 based on the Supreme Court’s Alice decision, and only the second time that it upheld validity under that section post-Alice (the first being DDR Holdings v. Hotels.com).

The opinion was well-received by the patent bar, and the software industry in particular, as powerful precedent that can be used to fight rejections by the USPTO, defend counterclaims of invalidity in court, and otherwise strengthen the value of software patents. While the line between eligible and ineligible subject matter has become somewhat clearer, there is still ambiguity in certain areas, and questions exist regarding practical implications.

The Claimed Invention

Enfish involved patent claims directed to a “self-referential” database. The court referred to the following representative claim:

A data storage and retrieval system for a computer memory, comprising:

means for configuring said memory according to a logical table, said logical table including:

a plurality of logical rows, each said logical row including an object identification number (OID) to identify each said logical row, each said logical row corresponding to a record of information;

a plurality of logical columns intersecting said plurality of logical rows to define a plurality of logical cells, each said logical column including an OID to identify each said logical column; and

means for indexing data stored in said table.

Enfish's "self-referential database"
Enfish’s “self-referential database”

The court referred to the invention generally as “an innovative logical model for a computer database.” The primary contribution to the art of the invention was the “self-referential” aspect, which purportedly avoided the need in conventional “relational database model” systems to define and maintain many separate tables. Instead, the claimed invention can store the pertinent information in a single table. According to the patents, the new approach improved searching efficiency and resulted in more-effective storage of unstructured data.

 

The Court’s Reasoning

The court began with the two-step analysis set forth in Alice and prior cases, in which the first step determines whether the claims are directed to a patent-ineligible concept, such as an abstract idea, and the second step considers whether the particular elements of the claims transform the nature of the claim into a patent-eligible application.

There is no doubt that the Federal Circuit took aim at some of the more egregious gaps that Alice left open. Primary among these gaps was the perceived Alice takeaway that there was no real limit on the height of abstraction that can be carried out on software claims in step one. In other words, one could conclude from Alice, and courts often did conclude, that a software claim is abstract if it can be summarized into something reasonably conventional, specific claim limitations be damned.

Enfish at least partly rectified this misconception by recognizing that “[t]he ‘directed to’ inquiry, therefore, cannot simply ask whether the claims involve a patent-ineligible concept, because essentially every routinely patent-eligible claim involving physical products and actions involves a law of nature and/or natural phenomenon—after all, they take place in the physical world.” Further, “describing the claims at such a high level of abstraction and untethered from the language of the claims all but ensures that the exceptions to § 101 swallow the rule.” Instead, claims must be considered as a whole and in light of the specification.

Accordingly, the Enfish panel carefully considered each element of the claims, including applying § 112, sixth paragraph, to interpret means-plus-function limitations, and examined the patent specification to both (i) shed light on the claim language; and (ii) express the advantages of the claimed invention over the prior art.

The court ultimately held that the relevant question is “whether the claims are directed to an improvement to computer functionality versus being directed to an abstract idea.” It concluded that the claimed self-referential database logic model is “a specific type of data structure designed to improve the way a computer stores and retrieves data in memory” and is therefore not an abstract idea. Having satisfied the first step of the Alice inquiry in the patentholder’s favor, the court did not need to address step two.

The Enfish holding gives teeth to the first step of the Alice inquiry and requires that the analysis take into consideration the nature of the invention and how it affects computer capabilities. In cases where the claims simply add conventional computer components to “well-known business practices,” they might be more likely to be found abstract under step one of the Alice inquiry.

Implications

Enfish is certainly a useful precedent for owners and seekers of software patents and should serve to strengthen patents as a general matter, but it does not (and cannot) fix the real havoc that was wreaked by the Supreme Court in Alice. Namely, the biggest problem with Alice is that it conflated and blurred the lines between questions of eligibility and those of prior art (i.e., novelty and obviousness).

Questions as to whether a claimed idea is “conventional,” “well known,” or is a “fundamental practice” have no place in an abstractness inquiry. These are questions that can be answered only by proving the existence or absence of prior art, not by some common sense-based purely mental exercise. Whether a claimed invention is abstract or practical is completely independent of novelty. The “abstractness” question should rely predominantly, if not entirely, on an isolated analysis of the actual features of the invention and whether it has some technical or practical component that makes it more than a mere idea in the ether. But that is a battle for another day, and one which the Federal Circuit does not appear to have the authority to fight until Alice is overturned or distinguished by future Supreme Court decisions.

Know Your Portfolio

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“Which of our patents cover what the competitors are doing?”

“Where are the holes in our patent coverage?”

“Which of our patents cover our products?”

What the heck is in our patent portfolio?!?!”

 


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These are some of the most critical questions asked of in-house patent counsel, but they can also be the most dreaded. Experienced practitioners know there are no easy answers. Reliable results can be expensive and are often reached only after a significant investment in time.

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For example, the cornerstone to any successful licensing program is “to have a detailed understanding of what you own and where the most value lies. It is also important to have an understanding of the technologies within your patent portfolio and how they are connected (a “taxonomy”).” In an effective defensive strategy, “good portfolio management requires monitoring of your competition’s patent holdings to identify opportunities and threats.” Key to these efforts is not just having a vague sense of generally protected subject matter, but identifying specific product-to-patent correlations with confidence and agility.

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