18th Oct 2016

New Ruling on Software Patent Eligibility

The US Court of Appeals for the Federal Circuit is unique among the 13 US Circuit Courts of Appeals since it has nationwide jurisdiction in a variety of subject areas, including patents and trademarks.

In the case of McRO Inc. v. Bandai Namco Games America Inc. et al (September 13, 2016), on software patent eligibility, the court further clarifies the requirements and how software patentability should be examined. 

The court held that "the ordered combination of claimed steps, using unconventional rules that relate sub-sequences of phonemes, timings, and morph weight sets, is not directed to an abstract idea and is therefore patent-eligible subject matter" and reversed the district courts' ruling.

Ruling in Short

In short the court held that the following 3 key points must be met when evaluating patent eligibility:

1. Patent claims need to be considered as a whole - "courts 'must be careful to avoid oversimplifying the claims' by looking at them generally and failing to account for the specific requirements of the claims".

2. Claims must demonstrate and be directed to technological improvement - in the specific case the claimed improvement was allowing computers to produce “accurate and realistic lip synchronization and facial expressions in animated characters” that previously could only be produced by human animators. The court rejected the Defendants argument that the patent claims simply use a computer as a tool to automate conventional activity.

3. Tangible result is not a requirement - data processing claims eligibility does not necessarily depend on production of physical product or result and may be granted even if the result is information - " While the result may not be tangible, there is nothing that requires a method 'be tied to a machine or transform an article' to be patentable".

Case Details

In the case of McRO inc., the patents under dispute were related to 3-D animation, lip sync and facial expression of animated characters software. The court noted that "Essentially, the patents aim to automate a 3-D animator’s tasks, specifically, determining when to set keyframes and setting those keyframes. This automation is accomplished through rules that are applied to the timed transcript to determine the morph weight outputs".

The Appeal was from a grant of judgment on the pleadings that the asserted claims of US Patents No. 6,307,576 and No. 6,611,278 were invalid. "The patents criticized the preexisting keyframe approach as 'very tedious and time consuming, as well as inaccurate due to the large number of keyframes necessary to depict speech'. They suggested that "the invention overcomes many of the deficiencies of the prior art and obtains its objectives by providing an integrated method embodied in computer software for use with a computer for the rapid, efficient lip synchronization and manipulation of character facial expressions, thereby allowing for rapid, creative, and expressive animation products to be produced in a very cost effective manner".

 Section 101 of the US Patent Act (35 USC 101), titled "Inventions Patentable", defines patent eligible subject matter as "any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof", with the exceptions made by the Courts, such as abstract ideas, which are not patentable. The Court referred to pervious ruling, which held that "The abstract idea exception prevents patenting a result where 'it matters not by what process or machinery the result is accomplished.'"

The court noted that in the US Supreme Court case of Alice Corp. PTY. LTD v. CLS Bank International ET AL., the supreme court applied a two-step framework for analyzing whether claims are patent eligible and combined with other previous rulings on the matter these two steps are:

1. Determining "whether the claim at issue is 'directed to' a judicial exception, such as an abstract idea" - "the claims are considered in their entirety to ascertain whether their character as a whole is directed to excluded subject matter.”

2. If the answer to 1 is positive considering "whether the claims contain an 'inventive concept' sufficient to 'transform the nature of the claim into a patent-eligible application.' - to do so it is required to look to both the claim as a whole and the individual claim elements to determine whether the claims contain '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.’'”

In Alice the Supreme Court explained why step (2) is required - "At some level, 'all inventions . . . embody, use, reflect, rest upon, or apply laws of nature, natural phenomena, or abstract ideas […] Thus, an invention is not rendered ineligible for patent simply because it involves an abstract concept".  But since Patent Law grants a monopoly, it is required to distinct between "patents that claim laws of nature, natural phenomena, and abstract ideas from those that claim patent-eligible applications of those concepts".

In the McRo case the court held that "Whether at step one or step two of the Alice test, in determining the patentability of a method, a court must look to the claims as an ordered combination, without ignoring the requirements of the individual steps", and in the case under discussion "The specific, claimed features of these rules allow for the improvement realized by the invention" . 

 McRo argued that "the [patent] claims are not directed to an abstract idea because they generate a tangible product, namely 'a video of a 3-D character speaking the recorded audio” and that "the claimed process is technological because it provides 'a method for getting a computer to automatically generate video of a 3-D animated character speaking in sync with pre-recorded dialogue—without requiring an artist’s constant intermediation'"

 The court rejected the Defendants' argument that the patent claims were abstract because they do not claim specific rules and also rejected their argument that the patent claims simply use a computer as a tool to automate conventional activity: "While the rules are embodied in computer software that is processed by general-purpose computers, Defendants provided no evidence that the process previously used by animators is the same as the process required by the claims […] It is the incorporation of the claimed rules, not the use of the computer, that 'improved [the] existing technological process' by allowing the automation of further tasks".

The court further held that "the automation goes beyond merely 'organizing [existing] information into a new form' or carrying out a fundamental economic practice. The claimed process uses a combined order of specific rules that renders information into a specific format that is then used and applied to create desired results: a sequence of synchronized, animated characters. While the result may not be tangible, there is nothing that requires a method 'be tied to a machine or transform an article' to be patentable" (emphasis added).

 Finally the court rejected the Defendants’ argument "that any rules-based lip-synchronization process must use the claimed type of rules has appeal", since "no record evidence supports this conclusion. Defendants again rely only on the patents’ description of one type of rules, but the description of one set of rules does not mean that there exists only one set of rules, and does not support the view that other possible types of rules with different characteristics do not exist. The only information cited to this court about the relationship between speech and face shape points to the conclusion that there are many other possible approaches to automating lip synchronization using rules. […] This complex interaction permits development of alternative rules-based methods of animating lip synchronization and facial expressions of three-dimensional characters, such as simulating the muscle action underlying characters’ facial expressions. Under these circumstances, therefore, we need not assume that future alternative discoveries are foreclosed". 

The court concluded that "When looked at as a whole, claim 1 is directed to a patentable, technological improvement over the existing, manual 3-D animation techniques. The claim uses the limited rules in a process specifically designed to achieve an improved technological result in conventional industry practice […] Claim 1 of the ’576 patent, therefore, is not directed to an abstract idea. Because we find that claim 1 is not directed to ineligible subject matter, we do not reach Alice step two".

Berwins guest writer is Asaf Avidan, owner of A Avidan Law Firm and an expert in digital law

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