More Post-Alice Guidance

By Barry R. Lewin

As more patents are challenged in view of Alice v. CLS Bank, which was directed to the patentability of algorithm-based inventions (among others), the courts provide additional clarity as to what is and is not patent eligible subject matter with respect to software-based and algorithm-based inventions.

In Trading Technologies v. CQG, decided in January 2017, the Court of Appeals for the Federal Circuit affirmed a lower court decision that the claims of the patents in suit do indeed, on a type of non-tangible computer display, detail eligible subject matter. The claims are directed to a graphical user interface related to financial market trading. The claims recite a method for dynamically displaying various indicators as well content relation to other content based on an action. See U.S. Patent Nos. 6,766,304 and 6,772,132.

The Court noted that “[t]he claims require a specific, structured graphical user interface paired with a prescribed functionality directly related to the graphical user interface’s structure … and resolves a specifically identified problem in the prior state of the art. “ The Court further noted that “the graphical user interface system of these two patents is not an idea that has long existed, the threshold criterion of an abstract idea and ineligible concept”.

So what does this mean for potential patentees? First, this opinion suggests that some algorithm-based inventions remain patentable, but only under certain criteria. In this case, the criteria include (1) that the display is directly tied to a function or action; (2) the invention solves a previously unsolved problem; and (3) the invention is “new”.

Consequently, it remains important for a patent specification to articulate the problem being solved and to articulate either that the idea to solve the problem is new, or that the idea itself is new. Also, the specification and claims need to tie the algorithm to a specific function or action, thereby providing functionality to the implementation of the algorithm.

As more post-Alice cases are decided, the dos and don’t about patent eligible subject matter become clearer. However, it remains important for patent applicants to rely on patent professionals to develop claims that meet the evolving criteria.