Federal Circuit Continues to Struggle With Patent Eligibility in Accenture Case | Practical Law

Federal Circuit Continues to Struggle With Patent Eligibility in Accenture Case | Practical Law

In Accenture Global Services v. Guidewire Software, Inc., a divided panel of the US Court of Appeals for the Federal Circuit affirmed the district court's judgment finding that Accenture's computer-aided system patent claims for generating tasks to be performed by an insurance company were directed to patent-ineligible abstract ideas. Chief Judge Rader wrote a dissenting opinion reiterating his position that the court restrict itself to Section 101 of the Patent Act's statutory language in deciding issues of patent eligibility.

Federal Circuit Continues to Struggle With Patent Eligibility in Accenture Case

Practical Law Legal Update 6-540-6006 (Approx. 5 pages)

Federal Circuit Continues to Struggle With Patent Eligibility in Accenture Case

by Practical Law Intellectual Property & Technology
Published on 10 Sep 2013USA (National/Federal)
In Accenture Global Services v. Guidewire Software, Inc., a divided panel of the US Court of Appeals for the Federal Circuit affirmed the district court's judgment finding that Accenture's computer-aided system patent claims for generating tasks to be performed by an insurance company were directed to patent-ineligible abstract ideas. Chief Judge Rader wrote a dissenting opinion reiterating his position that the court restrict itself to Section 101 of the Patent Act's statutory language in deciding issues of patent eligibility.
On September 5, 2013, in Accenture Global Services v. Guidewire Software, Inc., the US Court of Appeals for the Federal Circuit issued an opinion affirming the US District Court for the District of Delaware's grant of summary judgment holding that all claims of Accenture's US Patent 7,013,284 ('284 patent) directed to a computer-aided system were invalid under 35 U.S.C. § 101 because they recited patent-ineligible subject matter. This case highlights the Federal Circuit's continuing efforts, as witnessed in CLS Bank Int'l v. Alice Corp. and Ultramercial Inc. v. Hulu LLC, to apply workable standards for determining the patent subject matter eligibility of computer-aided process and system claims.

Background

Plaintiff Accenture's '284 patent claimed computer-aided systems and methods for generating and organizing insurance-related tasks involving insurance transactions, policies and claims. The patent contained two independent claims, claim 1 (a system claim) and claim 8 (a method claim). Both claims expressly or impliedly disclosed the use of the same software system components, like an insurance transaction database and server and client components, and the same database fields.
Accenture sued Guidewire for alleged infringement of the '284 patent. Guidewire moved for summary judgment alleging that the '284 patent was invalid under Section 101 of the Patent Act because it claimed ineligible patent subject matter. The district court granted Guidewire's motion for summary judgment, ruling all of the '284 patent claims patent ineligible because they were drawn to abstract ideas. The district court held method claim 8 patent-ineligible because:
  • None of the claim limitations restricted claim 8 to a concrete application of the abstract idea.
  • The dependent method claims (9 through 22) only add limitations regarding potential claim information categories.
The district court similarly found system claim 1 ineligible because the claim language mirrored the language of claim 8 and, like claim 8, failed to include any limitations restricting the claim to a specific application of the claim's underlying abstract idea. Accenture appealed the district court's judgment solely with respect to its system claims (1 through 7). The parties's briefings and arguments focused only on the independent system and method claims (claim 1 and 8, respectively), a fact that the Federal Circuit seized upon to conclude that the eligibility of the dependent system claims (claims 2 through 7) depended on the patent eligibility of claim 1.

Outcome

On appeal, the Federal Circuit, in a split decision, affirmed the district court's grant of Guideline's motion for summary judgment. The court followed the two-step process for analyzing patent eligibility under CLS Bank Int'l v. Alice Corp. as guided by the Supreme Court's decision in Mayo Collaborate Servs. v. Prometheus Labs., Inc.. This process requires the court to:
  • Identify whether the claimed invention fits within one of the four statutory classes of patent eligible subject matter under Section 101, namely, a process, machine, manufacture or composition of matter.
  • Assess whether any of the judicially recognized exceptions to subject-matter patent eligibility apply, including whether the claims are directed to patent-ineligible abstract ideas, as well as a determination of whether the claim poses any risk of preempting an abstract idea. This preemption analysis requires the court to:
    • identify and define whatever abstract idea is embodied by the claim; and
    • review the balance of the claim to determine whether any substantive limitations narrow the claim so that it does not fully cover, and thereby preempt, all uses of the abstract idea itself.
Relying on the plurality opinion in CLS Bank, the court ruled that, because Accenture's '284 patent system claims so closely track its method claims and merely recite a system that implements the method claims on a general purpose computer without disclosing any meaningful limitations, these system and method claims must rise or fall together. The Federal Circuit then further concluded that, because Accenture failed to appeal the district court judgment holding the '284 patent method claims invalid, the system claims must necessarily follow suit.
However, the court did not confine itself to the rather mechanical analysis, but rather, proceeded to evaluate Accenture's system claims both individually and in comparison with the invalidated method claims. Based on this analysis the majority concluded that:
  • The '284 patent system claims merely restated the invalid method claims as applied by a generic, general purpose computer.
  • These system claims added no meaningful limitations to the method claims and, like the method claims, merely recited a computer-implemented abstract idea.
The court therefore affirmed the district court's holding that the system claims were invalid as directed to patent ineligible subject matter under Section 101.

Chief Judge Rader's Dissent

Chief Judge Rader filed a dissenting opinion in which he argued that:
  • The majority's reliance on the plurality opinion in CLS Bank was misguided because this opinion lacks precedential effect.
  • The majority erred in estopping Accenture from arguing that its method claims were directed to patent eligible subject matter based merely on Accenture's failure to appeal the district court's ruling to the contrary with the result that:
    • Accenture's system claims were found similarly invalid based on the unchallenged premise of the patent ineligibility of the method claims; and
    • future patent infringement claimants would be needlessly compelled to appeal district court rulings on the invalidity of all of their claims under a patent or risk the potential waiver or estoppel of their right to appeal a ruling on fewer than all of these patent claims.
  • Patent eligibility must be determined on a claim-by-claim basis and, for example, a system claim based on the same abstract idea as a patent-ineligible method may disclose additional computer-based or other limitations that narrowly apply the idea in a patent-eligible application.
  • Accenture's system claims recited concrete and meaningful limitations, did not preempt all applications of an abstract idea, and for these reasons, presented patent-eligible subject matter.

Practical Implications

This case demonstrates the Federal Circuit's continuing uncertainty concerning and evolving formulation of the law of patent subject matter eligibility as applied to computer-aided system and method claims.