FairWarning IP, LLC v. Iatric Systems, Inc.

Docket No. 2015-1985

October 11, 2016

Brief Summary: DC decision that claims are directed to patent-inelgible subject matter under § 101 affirmed (“nothing significantly more than an instruction to apply the abstract idea…using some unspecifieid, generic computer”).

Summary: FairWarning (FW) appealed DC dismissal of its suit with prejudice regarding US 8,578,500 relating to “[a] method of detecting improper access of a patient’s protected health information (PHI)”, which the DC concluded is invalid under § 101. Independent claim 1 is directed to a method “comprising: generating a rule for monitoring audit log data….applying the rule to audit log data to determine if an event has occurred…storing, in memory, a hit if the event has occurred; and providing notification if the event has occurred.” Under the two-step Alice test (US 2014; BASCOM, FC 2016), the DC found the claims were directed to the “the concept of analyzing records of human activity to detect suspicious behavior”, “a basic and well-established abstract idea.” In step two, the DC found “nothing to ‘transform[] the abstract idea into a patentable concept” (“nothing significantly more than an instruction to apply the abstract idea…using some unspecifieid, generic computer”). The FC panel agreed with the DC’s first step analysis, noting that it has “explained that the ‘realm of abstract ideas; includes ‘collecting information, including when limited to particular content’” and has “treated analyzing information by steps people go through in their minds, or by mathematical algorithms, without more, as essentially mental processes within the abstract-idea category” (Elec. Power Grp., FC 2016). And it found the ‘500 claims to be “directed to a combination of these abstract-idea categories” (e.g., unlike McRO (FC 2016) “which also involved claims reciting rules” but also “a specified asserted improvement in computer animation”). As in McRO, it explained that a “claim may…be patentable if…directed to a patent-eligible application of [an abstract] concept” (McRO “transformed a traditionally subjective process performed by human artists into a mathematically automated process executed on computers…it [was] 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”; Rapid Lit., FC 2016; Enfish (FC 2016) (patent eligible as claims are “directed to a specific improvement to the way computers operate,’ rather than an abstract idea implemented on a computer”)). The FC panel also agreed with the DC regarding step two (e.g., “the features of claims 12 and 13 do not recited that ‘something more’ required to make these claims patent eligible…the use of a generic computer elements like a microprocessor or user interface do not alone transform an otherwise abstract idea into patent-eligible subject matter” (DDR, FC 2014)). It concluded “[t]he claims here do not propose a solution or overcome a problem ‘specifically arising in the realm of computer [technology]’…[a]t most, the claims require that these processes be executed on a generic computer.” The FC panel also explained that the fact that the ‘500 claims “might not preempt the entire field of HIPAA compliance ‘does not make them any less abstract” (OIP Techs., FC, cert. denied (2015)).

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