Patents protect inventions. However, patents protect only certain inventions. In order to be patentable, an invention must fall within one of four categories of patent-eligible subject matter: articles of manufacture, machines, processes, and compositions of matter. 35 U.S.C. §101. There are some things that are not patentable (i.e. are patent-ineligible subject matter): laws of nature, natural phenomena, and abstract ideas.
In 2014, in Alice Corp. Pty. Ltd. v. CLS Bank International, 573 U.S. 208, 216, 219 (2014), the Supreme Court established a two-part test to determine whether an invention is patent-eligible. In the first step, a determination is made as to whether the claimed invention falls within one of the categories of patent-ineligible subject matter. If it does, the second step is performed: a determination of whether the claimed invention has an inventive concept that transforms the patent-ineligible subject matter into something patentable.
Since 2014, the federal courts have invalidated hundreds of patents on the grounds that they are directed to patent-ineligible subject matter under Alice. In the first five years after the Supreme Court’s decision, the federal courts invalidated 62% of the claims that had been challenged under §101, which amounted to claims from 781 patents.
Recently, in WhitServe LLC v. Dropbox Inc., U.S. App. LEXIS 12285 (April 26, 2021), Dropbox prevailed in a §101 challenge. In 2018, WhitServ sued Dropbox in the district court for the District of Delaware for infringement of a patent that covered a system for backing up Internet-based data to a client’s computer. The claims required a central computer, a client computer, a database with Internet-based data, and data processing software that transmits a backup copy.
Dropbox filed a motion to dismiss the complaint under Rule 12(b)(6) on the grounds that the claims were directed to patent-ineligible subject matter under §101.
The district court granted the motion, holding that the claims were directed to the abstract idea of “backing up data records” and that the abstract idea was not transformed into patent-eligible subject matter. The court found that the claims contained generic computer components which performed routine functions. The court stated that the claimed system was essentially the same as when “humans secure critical documents, such as wills… in a bank safe deposit box, but keep a copy at home for quick reference when needed.” The court also held that there were no factual issues, such as claim construction or discovery, that were necessary to address patent eligibility under §101 on a motion to dismiss.
On appeal, the Federal Circuit Court of Appeals affirmed the district court’s decision. In the first step of the Alice test, the court rejected WhitServe’s contention that the claims were directed to “a practical solution to an Internet-based problem,” holding that the claims were directed to an abstract idea. The court stated: “the system is for requesting, transmitting, receiving, copying, deleting, and storing data records. Such transmitting, saving, and storing of client records is a fundamental business practice that ‘existed well before the advent of computers and the Internet’…..” According to the court, “the computer function of maintaining data records, including storing records at different sites for added protection….is an abstract idea.”
In the second step of the Alice test, the court held that the claims did not contain an inventive concept and thus did not transform an abstract idea into patent-eligible subject matter. The claim elements “lack[ed] a non-conventional and non-generic arrangement.” The court explained that the claims covered generic computer components that performed routine conventional functions. The court noted that in previous cases, it had held that databases and communications media, including the Internet, are generic computer components; and that editing and modifying data, storing data, and sending and receiving information over a network are routine conventional functions.
The court disagreed with WhitServe’s argument that there were factual issues that precluded a determination of patent eligibility. The court explained that “patent eligibility may be determined on the intrinsic record alone where, as here, the specification provides that the relevant claim elements are well-understood, routine and conventional.”