Ancora Technologies, Inc. v. HTC America, Inc. et al.


Docket Nos. 2018-1404

DYK, WALLACH, TARANTO
Nov. 16, 2018

Brief summary: DC grant of HTC’s motion to dismiss under § 101 reversed and remanded since “‘[t]he claimed method…specifically identifies how [a] functionality improvement is effectuated in an assertedly unexpected way” (i.e., not an abstract concept under Alice step one; Enfish, FC 2016).

Summary: This FC panel opinion notes that the patent disputed in this case (Ancora’s US 6,411,941) was previously before the FC (Ancora, FC 2014) that raised issued of claim construction and indefiniteness (DC construction of “program” reversed/remanded, “volatile memory”/“non-volatile memory” not indefinite). In this case, the DC granted HTC’s motion to dismiss for invalidity under § 101 (“the claims are directed to, and ultimately claim no more than, an abstract idea”). This FC panel reversed the DC’s holding under Enfish (FC 2016), finding “the claimed advance is a concrete assignment of specified functions among a computer’s components to improve computer security” to be patentable under § 101. The FC panel opinion explains that “the ‘941 patent describes an asserted improvement based on assigning certain functions to particular computer components and having them interact in specified ways” using a “key” (“‘a unique identification code’ for the computer”) “embedded in the read-only memory (ROM) of the computer’s Basic Input Output System (BIOS) module” and a “license record” that confirms the software is licensed to be run on that computer. “The inventive method”, the FC panel wrote, “uses a modifiable part of the BIOS memory-not other computer memory…to determine whether the program is licensed to run on that computer.” The ‘914 patent claims “[a] method of restricting software operation within a license for use” by “selecting a program residing in the volatile memory”, “using an agent to set up a verification struction in the erasable non-volatile memory of the BIOS”, “verifying the program”, and “acting on the program according to the verification.” The FC panel explained that, in addition to the DC action leading to this appeal, HTC petitioned the USPTO for review of the ‘941 patent as a Covered Business Method, alleging invalidity under § 101, which was denied as the Board concluded “that the ‘941 patent claims a technical solution to a technical problem and comes within the ‘technological inventions’ exception for such reviews” (§ 18(d)(1), 37 CFR § 42.301(b)). The DC found that the claims were focused on an “abstract concept” under Alice’s step one analysis (Alice, US 2014), and “contained no ‘inventive concept’” under Alice’s step two analysis (“calls for nothing more than ‘[s]toring data in the memory of a computer component that generally stores data”). Under Finjan (FC 2018 (“behavior-based virus scan” is “a specific improvement to computer functionality”), Enfish (FC 2016 (“self-referential tabs [that] improved the way that computers operated and handled data”), BSG Tech. (FC 2018), Visual Memory (FC 2017 (patentable as “specifically ‘directed to an improved computer memory system, not to the abstract idea of categorical data storage”), Core Wireless (FC 2018 (“method for making websites easier to navigate…not directed to an abstract idea”), and Data Engine (FC 2018 (“method for navigating through three-dimensional spreadsheets” not abstract), the FC panel explained that the § 101 inquiry for software “of turns on whether the claims focus on ‘the specific asserted improvement in computer capabilities…or, instead, on a process that qualifies as an ‘abstract idea’ for which computers are invoked merely as a tool.” The FC panel explained that “[i]mproving security…can be a non-abstract computer-functionality improvement if done by a specific technique that departs from earlier approaches to solve a computer-specific problem”. And, here, the FC panel determined, “‘[t]he claimed method…specifically identifies how that functionality improvement is effectuated in an assertedly unexpected way” (also citing BASCOM, FC 2016 (not abstract as “claimed invention addressed the disadvantages of the prior art…technical improvement over the prior art ways”) and Intell. Ventures I, FC 2016 (abstract as “claim at issue did not ‘recite[] any improvement to conventional virus screening software, nor…solve any problem”)). Thus, the DC decision was reversed and remanded.

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