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IP Alert: Another Patent Survives Eligibility Challenge Post-Alice

July 12, 2016

On June 27, 2016, in BASCOM Global Internet Services, Inc., v. AT&T Mobility LLC, AT&T Corp., the U.S. Court of Appeals for the Federal Circuit held that claims to an approach to Internet content filtering were patent-eligible. The case involved U.S. Patent No. 5,987,606, titled “Method and system for content filtering information retrieved from an internet computer network.” The patent’s claims generally recite an Internet content filtering approach tied to specific implementations with respect to Internet Service Provider (ISP) servers. BASCOM is a significant case in the law of patent eligibility as the first case where the Federal Circuit found a claim eligible for patenting based on the ordered combination of elements recited by a claim.

The U.S. Supreme Court’s opinions in Alice Corp. v. CLS Bank International and Mayo v. Prometheus constructed a two-step framework for determining patent eligibility for claims challenged under section 101 as based on abstract ideas. In the first step, a court must determine whether the claims at issue are directed to a patent-ineligible concept, which include laws of nature, natural phenomena, and abstract ideas. In the second step, the court must determine whether the patent adds to the idea something extra that embodies an inventive concept. Since Alice, many software patents have been held invalid for indefiniteness.

The district court, the Northern District of Texas, had held all of the BASCOM claims as ineligible under section 101 pursuant to a motion to dismiss the action filed by AT&T. The district court determined that the claims were directed to the abstract idea of "filtering content” and recited no inventive concept because they only recited well-known computing components such as an ISP server in communication over the Internet with a general-purpose computer.

On appeal, the Federal Circuit applied the two-step test for determining patent eligibility but sidestepped the first step. Instead of making a specific holding as to whether the claims recite an abstract idea under step one of the analysis, the court stated, “the claims and their specific limitations do not readily lend themselves to a step-one finding that they are directed to a nonabstract idea. We therefore defer our consideration of the specific claim limitations’ narrowing effect for step two.”

In considering step two, the Federal Circuit rejected the district court’s analysis of the patent claims’ ordered combination of elements, holding that the claims recited an inventive concept requiring implementation of the claimed filtering “at a specific location” with “customized filtering features.” The opinion concludes that “[t]he claims do not merely recite the abstract idea of filtering content along with the requirement to perform it on the Internet, or to perform it on a set of generic computer components.” The opinion also states that the claims do not “preempt all ways of filtering content on the Internet; rather they recite a specific, discrete implementation of the abstract idea of filtering content.”

The Federal Circuit also considered the BASCOM claims as directed to a technology-based solution by “taking a prior art filter solution (one-size-fits-all filter at the ISP server) and making it more dynamic and efficient (providing individualized filtering at the ISP server)” in a way that improves the performance of the system itself.

The BASCOM case includes a concurring opinion by Judge Newman, which is notable in that it recognizes the convergence of the patent eligibility analysis under section 101 and patent validity analysis under sections 102 and 103 of the Patent Act. Given this convergence, Judge Newman suggests that both patent eligibility and patent validity should be addressed together to conserve judicial resources.

For more information, please contact Fitch Even partner Nicholas T. Peters, author of this alert.

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