Patent Eligibility

Software Patent Eligibility

Software patents survive Alice when they improve computer functionality itself or solve a specific technical problem with a specific technical solution. Generic implementations of abstract ideas on conventional computers do not.

What is the current framework for software patent eligibility under § 101?

Section 101 provides that any 'process, machine, manufacture, or composition of matter' that is 'useful' may be patented — but the Supreme Court has carved out exceptions for laws of nature, natural phenomena, and abstract ideas: THE ALICE TWO-STEP (Alice Corp. v. CLS Bank, S.Ct. 2014): STEP 1 — Is the claim directed to a patent-ineligible concept? For software, the relevant exception is abstract ideas: mathematical concepts (formulas, algorithms, mathematical relationships, mathematical calculations); certain methods of organizing human activity (fundamental economic principles, commercial interactions, managing relationships); mental processes (observations, evaluations, judgments, opinions); STEP 2 — If directed to an abstract idea, does the claim add significantly more — an 'inventive concept' — beyond the abstract idea? The combination of elements must add something more than generic computer implementation; claims that merely implement an abstract idea on a generic computer by 'applying it' with conventional computer functions do not satisfy step 2; the additional elements must be something that was NOT well-understood, routine, conventional at the time; USPTO 2019 REVISED GUIDANCE (Step 2A): Step 2A, Prong 1: Is the claim directed to a mathematical concept, certain method of organizing human activity, or mental process? Step 2A, Prong 2: Does the claim integrate the abstract idea into a practical application? (practical application = real-world technical improvement beyond the abstract idea); Step 2B: If not, does the claim add a specific limitation beyond what is well-understood, routine, conventional? CURRENT PATENT OFFICE APPROACH: 2019 guidance gives more structure; practical application focus helps claims that tie abstract ideas to concrete technical improvements; examiner must now affirmatively identify why elements are routine/conventional — cannot just assert it..

Which software patent claims survive § 101 under Federal Circuit decisions?

The Federal Circuit has upheld some software claims and invalidated many others — the pattern reveals what works.

Claims That Survive — Federal Circuit Decisions

ENFISH LLC v. MICROSOFT CORP. (Fed. Cir. 2016): patent on a specific database table structure that improved computer function by enabling faster searching
The claim was directed to a specific improvement in computer functionality — the self-referential database

Step 1 Survival. Not directed to an abstract idea — improving computer function itself is not abstract

Key Lesson

Claim the technical improvement to the computer system, not the application result
McRO INC. v. BANDAI NAMCO (Fed. Cir. 2016): patent on specific rules for animating lip synchronization using phoneme sequences
Improved a specific technical process (3D animation)
The specific rules produced a specific technical result that prior art methods couldn't achieve

Technical Focus Lesson

Tie the algorithm to a specific technical improvement in how machines process and output data
BASCOM GLOBAL INTERNET SERVICES v. AT&T MOBILITY (Fed. Cir. 2016): internet content filtering patent
Individual elements were conventional
But the specific ordered combination was inventive — locating filtering logic at a specific ISP-level location in the network architecture was unconventional

Combination Lesson

Even if individual elements are known, an unconventional arrangement or architecture may survive step 2
FINJAN INC. v. BLUE COAT SYSTEMS (Fed. Cir. 2018): patent on behavioral-based malware detection (scanning for potential behavior, not known signatures)
New type of technical result (security profile)
Behavioral detection approach was a different way to achieve technical security
CORE WIRELESS LICENSING v. LG ELECTRONICS (Fed. Cir. 2018): improved user interface for small-screen mobile devices
Claimed a specific structural and functional improvement to how an application window operates on a limited-display device

Claims That do not Survive

Purely abstract ideas (electric power generation management, data organization)
Conventional computer functions (storing, retrieving, transmitting) with no technical twist
Implementing a known process (auction, hedging, escrow) on the internet.

How do you draft software patent claims to survive § 101?

Drafting software claims that survive § 101 requires deliberate strategy.

Identify the Technical Problem and Technical Solution. What specific problem in prior art computing systems does the invention solve? Does it improve speed, efficiency, accuracy, or capability of computing systems? Frame the invention as a specific technical improvement to computer systems — not just a new way to achieve a business result

Claim the Technical Improvement Explicitly

Instead of: 'a method of managing financial transactions comprising applying Rule X'
Try: 'a method for improving the efficiency of transaction processing by reducing state conflicts in distributed systems comprising: [specific technical steps that achieve this improvement]'

Describe the Technical Improvement in the Specification

For Berkheimer (Fed. Cir. 2018) purposes, the specification should explain: what was wrong with the prior art computing approaches
What specific technical limitation was overcome
Why the claimed combination is not routine/conventional
Berkheimer held that whether elements are well-understood, routine, conventional is a factual question — detailed specification language about unconventionality creates a fact dispute that defeats rule 12 dismissal

Avoid Pure Functional Language

'a processor configured to perform X' is vulnerable if X is a purely abstract function
Add: how the processor performs X (the specific algorithm or data structure)
Why this specific approach is technically distinct from prior approaches

Use the Patent's Structure to Show Technical Character

Hardware claims (computer system with specific structural elements) may fare better than method claims
Specific data structures with technical advantages
Specific network architectures

Draft Multiple Independent Claims at Different Levels

A broader claim directed to the technical concept
A narrower claim adding specific algorithmic steps
A system claim
A CRM (computer-readable medium) claim
If the broader claim is killed on § 101, the narrower claims with more specific technical detail may survive.

What happens to software patents in IPR and § 101 challenges in district court?

Software patents face challenges at the PTAB (IPR) and in district courts under different legal frameworks.

District Court § 101 Challenges

Early motions to dismiss under Rule 12(b)(6) or Rule 12(c): § 101 is a threshold question of law that can be decided without a full trial
Courts decide eligibility before claim construction in some cases
Many software patent cases are dismissed at the pleading stage on § 101 grounds
Berkheimer v. HP (Fed. Cir. 2018): whether claim elements are well-understood, routine, conventional is a factual question that may require more than pleadings
AATRIX SOFTWARE (Fed. Cir. 2018): patents survive § 101 at pleadings when the complaint alleges the claimed combination is unconventional
Defendants increasingly argue § 101 in early motions (less expensive than going to trial)

Statistics. Approximately 60-70% of software patent § 101 challenges at district court result in invalidation

PTAB § 101 Challenges

IPR cannot challenge on § 101 grounds (IPR is limited to prior art under §§ 102/103)
Post-Grant Review (PGR): available within 9 months of patent grant
CAN challenge on § 101
CBM (covered business method review): EXPIRED March 16, 2020
Was available for software/financial method patents
§ 101 was a frequent CBM ground

What This Means

For software patents, § 101 is primarily challenged in district court — IPR alone doesn't solve the problem
A strong § 101 defense requires clear prosecution history establishing technical improvements

PTAB Examination Guidance

USPTO examiners apply the 2019 revised guidance
Many software patent applications still get § 101 rejections
Prosecution strategy for § 101 rejections: argue practical application
Emphasize technical improvements described in the specification
Submit declarations if needed showing unconventionality.

What is the state of software patent eligibility internationally?

Software patent eligibility varies significantly across jurisdictions.

European Patent Office (EPO)

Software is patentable if it has a 'technical character' — if it produces a 'technical effect'
The EPO allows software patents that: produce a technical effect beyond normal physical interactions of running software
Solve a technical problem in a non-obvious way

What is Patentable at EPO

Algorithms that improve computer functioning (faster processing, reduced memory usage, improved error correction)
Specific software architectures that improve hardware operations
Signal processing, data compression, image processing algorithms

What is not Patentable at EPO

Purely abstract algorithms without technical effect
Programs that only produce a mental/economic effect (business methods)
Computer implementations of purely mathematical methods

Key Differences from US

EPO does not apply an 'abstract idea' test like Alice
It focuses on technical character and technical effect
In practice, many claims acceptable at EPO are also acceptable under a rigorous Alice analysis — both require technical improvement

Japan

Japan Patent Office (JPO) allows software patents when the software uses hardware resources cooperatively
Machine-readable programs that control hardware are patentable

China

China has become more receptive to software patents
Technical solutions involving software are patentable
Increasingly important given China's large market

PCT Strategy for Software

Given eligibility uncertainty in the US, PCT applicants draft claims carefully
EPO prosecution can be used as evidence that claims have technical character

Take-away

Software patents with genuine technical improvements are broadly protectable internationally
Purely abstract business method implementations on generic computers face rejection in most major jurisdictions.