Federal Circuit Finds Internet-Based Claims Directed to an Abstract Idea Still Patent-Eligible

In the aftermath of the Supreme Court’s 2014 decision in Alice Corp. Pty. Ltd. v. CLS Bank International, the U.S. Court of Appeals for the Federal Circuit (CAFC) has rarely found Internet-based patent claims challenged under 35 U.S.C. § 101 and Alice to be patent-eligible. The Court’s recent decision in BASCOM Global Internet Servs., Inc. v. AT&T Mobility LLC marks just the third such occurrence.

Bascom initially sued AT&T for infringement of U.S. Patent No.5,987,606 (“the ‘606 Patent”) in the U.S. District Court for the Northern District of Texas. The District Court granted a motion by AT&T to dismiss the suit by finding that the ‘606 Patent was invalid as a matter of law under 35 U.S.C. § 101. Bascom appealed the District Court decision to the CAFC.

The ‘606 Patent is directed to the filtering of Internet content retrieved from an Internet computer network by an Internet Service Provider (ISP) server in response to requests received from users via local client computers. Prior art schemes provided filtering software specific either to the ISP or to the users. The ‘606 Patent improves over the prior art software by implementing a hybrid filtering scheme at the ISP server based on a master-inclusive Internet site list for the ISP and individual customizable Internet site exclusion lists for the users, taking advantage of the technical capability of certain communication networks that enable the ISP server to identify individual users making the requests.

In its de novo review of the District Court decision, the CAFC applied the familiar two-step patent eligibility test of Alice: 1) are the claims of the patent directed to a prohibited category (in this case, an “abstract idea”), and if so, 2) do the claims entail an “inventive concept” that produces something more than an attempt to claim prohibited subject matter. With reference to the two earlier decisions in which the CAFC found patent-eligible claims (DDR Holding, LLC v. Hotels.com, L.P. et al. and Enfish LLC v. Microsoft Corp.), the CAFC acknowledged that Internet-based patent claims directed to specific improvements in computer technology may pass the abstraction test. Regarding the ‘606 Patent, the CAFC however agreed with the District Court that the claims are directed to the general concept of “filtering content retrieved from an Internet computer network,” which represents a “long-standing, well-known method of organizing human behavior” and constitutes an abstract idea.

Under step 2) of the Alice test, the CAFC disagreed with the District Court’s conclusion that the claims of the ‘606 Patent failed to provide significantly more than the abstract idea identified in the step 1) inquiry. The CAFC described the claims as presenting the inventive concept of “[installing] a filtering tool at a specific location, remote from the end-users, with customizable filtering features specific to each end user.” The Court found that this concept represents a “specific technical solution of the abstract idea” that neither “merely [recites] the abstract idea with the requirement to perform it on the Internet,” nor “[preempts] all ways of filtering content on the Internet.” While not disagreeing with the District Court’s conclusion that individual claim limitations recited in the ‘606 Patent were well-known or routine, the CAFC found that the individual claim limitations formed an “ordered combination” that [transforms] the abstract idea of filtering content into a particular, practical application of [the] abstract idea.” As such, the Court found that the claims of the ‘606 Patent satisfy step 2) of the Alice test and are patent-eligible.

Together with DDR Holding and Enfish, Bascom unveils a pathway to patent eligibility for Internet-based inventions. Eligible Internet-based inventions solve a specific problem in computer or computer technology, claim a particularized application that is distinguishable over the prior art, and provide tangible technological improvements and/or benefits. Gibbons will continue to monitor this pathway to report on new insights and developments.

Thomas J. Bean is a Director in the Gibbons Intellectual Property Department.