Commissioner for Patents
`United States Patent and Trademark Office
`P.O. Box 1450
`Alexandria, VA 22313-1450
`www.uspto.gov
`
`MEMORANDUM
`
`DATE:
`
`November 2, 2016
`
`TO:
`
`FROM:
`
`Deputy Commissioner
`
`for Patent Examination Policy
`
`
`SUBJECT: Recent Subject Matter Eligibility Decisions
`
`The U.S. Court of Appeals for the Federal Circuit (Federal Circuit) has issued a number of
`subject matter eligibility decisions since the May 2016 Update to the USPTO's subject matter
`eligibility (SME) guidance. These decisions do not change the basic subject matter eligibility
`framework explained in the SME guidance and training examples, but provide additional
`information about finding eligibility for software claims. Accordingly, the USPTO will be
`updating its SME guidance in view of these decisions and feedback from patent stakeholders.
`
`This memorandum provides a discussion of two of the recent decisions identifying eligible
`subject matter, namely McRO, Inc. dba Planet Blue v. Bandai Namco Games America Inc., 120
`USPQ2d 1091 (Fed. Cir. 2016) and BASCOM Global Internet Services v. AT&T Mobility LLC,
`827 F .3d 1341 (Fed. Cir. 2016). Yesterday, the Federal Circuit issued another precedential
`decision finding eligibility (Amdocs (Israel) Ltd. v. Openet Telecom, Inc., No. 2015-1180 (Fed.
`Cir. Nov. 1, 2016)), which will be discussed further in the forthcoming update to the SME
`guidance, along with McRO, BASCOM, and other recent decisions concerning patent eligibility. 1
`These decisions have also been added to the chart of court decisions available on the·usPTO's
`SME Webpage.
`
`1 Other decisions since the May 2016 Update to the USPTO's SME guidance finding eligibility (Rapid Litigation
`Management Ltd v. CellzDirect, Inc., 827 F.3d 1042 (Fed Cir. 2016), and Enfish, LLC, v. Microsoft Corp., 822 F.3d
`1327 (Fed Cir. 2016)) have been discussed in prior memoranda, which are available on the USPTO's SME
`Webpage. In addition, there also have been a number of precedential decisions since the May 2016 Update to the
`USPTO's SME guidance finding ineligibility. See Synopsys v. Mentor Graphics Corp., 2016 WL 6068920 (Fed.
`Cir. 2016), Fair Warning IP, LLC v. Iatric Systems, 120 USPQ2d 1293 (Fed. Cir. 2016), Intellectual Ventures I LLC
`v. Symantec Corp., 120 USPQ2d 1353 (Fed Cir. 2016), Affinity Labs ofTX, LLC v. DirecTV, LLC, 120 USPQ2d
`1201 (Fed Cir. 2016), Affinity Labs ofTX, LLC, v. Amazon.com Inc., 120 USPQ2d 1210 (Fed Cir. 2016), Electric
`Power Group, LLC v. Alstom S.A., 830 F.3d 1350 (Fed Cir. 2016), and In re TL! Communications LLC Patent
`Litigation, 823 F.3d 607 (Fed Cir. 2016).
`
`1
`
`SUPERCELL OY
`EX. 1004
`
`

`

`McRO: In McRO, the Federal Circuit held the claimed methods of automatic lip synchronization
`and facial expression animation using computer-implemented rules patent eligible under
`35 U.S.C. § 101, because they were not directed to an abstract idea (Step 2A of the USPTO's
`SME guidance). The basis for the McRO court's decision was that the claims were directed to an
`improvement in computer-related technology (allowing computers to produce "accurate and
`realistic lip synchronization and facial expressions in animated characters" that previously could
`only be produced by human animators), and thus did not recite a concept similar to previously
`identified abstract ideas.
`
`As part of its analysis, the McRO court examined the specification, which described the claimed
`invention as improving computer animation through the use of specific rules, rather than human
`artists, to set morph weights (relating to facial expressions as an animated character speaks) and
`transition parameters between phonemes (relating to sounds made when speaking). As explained
`in the specification, human artists did not use the claimed rules, and instead relied on subjective
`determinations to set the morph weights and manipulate the animated face to match pronounced
`phonemes. The McRO court thus relied on the specification's explanation of how the claimed
`rules enabled the automation of specific animation tasks that previously could not be automated
`when determining that the claims were directed to improvements in computer animation instead
`of an abstract idea. The McRO court indicated that it was the incorporation of the particular
`claimed rules in computer animation that "improved [the] existing technological process", unlike
`cases such as Alice where a computer was merely used as a tool to perform an existing process.
`
`The McRO court cautioned that 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. The
`McRO court also noted that the claims at issue described a specific way (use of particular rules to
`set morph weights and transitions through phonemes) to solve the problem of producing accurate
`and realistic lip synchronization and facial expressions in animated characters, rather than merely
`claiming the idea of a solution or outcome, and thus were not directed to an abstract idea.
`
`Notable Points from McRO: Examiners should consider the claim as a whole under Step 2A of
`the USPTO's SME guidance, and should not overgeneralize the claim or simplify it into its
`"gist" or core principles, when identifying a concept as a judicial exception. See also the
`discussion of identifying an abstract idea in the May 4, 2016 Memorandum (in Section II.A) and
`the discussion of claims directed to improvements in computer-related technology in the May 19,
`2016 Memorandum about Enfish, which is available on the USPTO's SME Webpage.
`
`An "improvement in computer-related technology" is not limited to improvements in the
`operation of a computer or a computer network per se, but may also be claimed as a set of
`"rules" (basically mathematical relationships) that improve computer-related technology by
`allowing computer performance of a function not previously performable by a computer.
`
`An indication that a claim is directed to an improvement in computer-related technology may
`include­
`
`(1) a teaching in the specification about how the claimed invention improves a computer
`or other technology (e.g., the McRO court relied on the specification's explanation of
`how the claimed rules enabled the automation of specific animation tasks that previously
`
`2
`
`
`2
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`

`

`could not be automated when determining that the claims were directed to improvements
`in computer animation instead of an abstract idea). In contrast, the court in Affinity Labs
`ofTX v. DirecTVrelied on the specification's failure to provide details regarding the
`manner in which the invention accomplished the alleged improvement when holding the
`claimed methods of delivering broadcast content to cellphones directed to an abstract
`idea.
`
`(2) a particular solution to a problem or a particular way to achieve a desired outcome
`defined by the claimed invention, as opposed to merely claiming the idea of a solution or
`outcome (e.g., McRO's claims defined a specific way, namely use of particular rules to
`set morph weights and transitions through phonemes, to solve the problem of producing
`accurate and realistic lip synchronization and facial expressions in animated characters,
`and thus were not directed to an abstract idea). In contrast, Electric Power Group's
`claimed method was directed to an abstract idea because it merely presented the results of
`collecting and analyzing information, without even identifying a particular tool for the
`presentation.
`
`BASCOM: In BASCOM, the Federal Circuit vacated a judgment of ineligibility because the
`district court failed to properly perform the second step of the Mayo/Alice framework (Step 2B
`of the USPTO' s SME guidance) when analyzing a claimed system for filtering content retrieved
`from an Internet computer network. The BASCOM court agreed that the additional elements
`were generic computer, network, and Internet components that did not amount to significantly
`more when considered individually, but explained that the district court erred by failing to
`recognize that when combined, an inventive concept may be found in the non-conventional and
`non-generic arrangement of the additional elements, i.e., the installation of a filtering tool at a
`specific location, remote from the end-users, with customizable filtering features specific to each
`end user (note that the term "inventive concept" is often used by the courts to describe additional
`element(s) that amount to significantly more than a judicial exception).
`
`Notable Point from BASCOM: In Step 2B of the USPTO's SME guidance, examiners should
`consider the additional elements in combination, as well as individually, when determining
`whether a claim as a whole amounts to significantly more, as this may be found in the non­
`conventional and non-generic arrangement of known, conventional elements. See also the
`discussion of evaluating combinations of additional elements in the May 4, 2016 Memorandum
`(in Section Il.B), and the July 2015 Update (in Section I).
`
`Preemption: Several recent decisions discuss the role of preemption in the eligibility analysis,
`and the Office will be addressing preemption in more detail in its forthcoming update to its SME
`guidance. Specifically, some recent decisions discuss the absence of preemption as confirming
`the analysis that the claimed invention is not directed to a judicial exception ( CellzDirect) or
`includes an inventive step (BASCOM). The McRO court discusses the absence of preemption in
`determining that the claimed invention was not "directed to" a judicial exception. Other
`decisions, however, do not consider the absence of preemption as conferring patent eligibility
`(e.g., Synopsys, Fair Warning, Intellectual Ventures v. Symantec, Sequenom, and OIP).
`
`3
`
`
`3
`
`

`

`Examiners should continue to use the Mayol Alice framework (incorporated as Steps 2A and Step
`2B of the US PTO' s SME guidance and further discussed in this memorandum) to resolve
`questions of preemption. If applicant argues that a claim does not preempt all applications of the
`exception, an examiner should reconsider in Step 2A of the eligibility analysis whether the claim
`is directed to an improvement in computer-related technology or a specific way of achieving a
`desired outcome or end result (as discussed in the McRO section of this memorandum and the
`US PTO' s prior SME guidance). If an examiner still determines that the claim is directed to a
`judicial exception, the examiner should then reconsider in Step 2B of the eligibility analysis
`whether the additional elements in combination (as well as individually) are more than the
`non-conventional and non-generic arrangement of known, conventional elements.
`
`Non-precedential decisions: Finally, given the large and ever-increasing number of
`precedential decisions, examiners should avoid relying upon or citing non-precedential decisions
`(e.g., SmartGene, Cyberfone) unless the facts of the application under examination uniquely
`match the facts at issue in the non-precedential decision. The updated chart of court decisions
`available on the US PTO' s SME Webpage indicates whether a decision is precedential or non­
`precedential.
`
`4
`
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`4
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`