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On Monday, February 27th, the Federal Circuit made its fifth post-Bilski decision regarding the patentability of “computer aided” method claims. Previously, the court was split 2-2 on the issue, with Research Corp Technologies v. Microsoft and Ultramercial v. Hulu finding such claims patentable, and Cybersource v. Retail Decisions and Dealertrack v. Huber finding them unpatentable. The Fort Properties v. American Master Lease panel joins Cybersource and Dealertrack, holding the claims to be invalid under § 101.
Fort Properties reviews a business method patent on a real estate business technique intended to take advantage of a particular tax provision. Claims 1-31 recite the method without any tether to a tangible medium. These claims involve a fairly straightforward application of Bilski v. Kappos, as the various real estate documents manipulated in the Fort Properties method are merely abstract legal entitlements, and are not “tied to the physical world.” However, claims 32-41 use a computer as a physical tie, requiring the use of “a computer to generate a plurality of deedshares.” The Federal Circuit only devoted two pages of the opinion to these claims, yet the opinion continues a vigorous intra-circuit debate on the viability of “computer aided” claims.
The Federal Circuit holds that these claims do not constitute patentable subject matter, despite the computer limitation. The court follows the Cybersource and Dealertrack precedents, in which it ruled that the computer element must “impose meaningful limits on the claim’s scope.” Therefore, merely adding a computer limitation to an otherwise unpatentable process does not render the subject matter patentable.
These decisions contrast with Ultramercial v. Hulu, in which the court distinguished Cybersource by deciding that the method steps “require[d] intricate and complex computer programming.” The Ultramercial process arguably necessitates slightly more intensive computer use than the method in Cybersource, but the two decisions appear to be in conflict. Moreover, Research Corp, the earliest decision of the five, analyzes the claims under a different framework altogether, examining whether there is “a need in the art” for the invention and whether the claim recites a tangible process.
After Fort Properties, it is still entirely unclear what it takes for a computer element to “impose meaningful limits on the claim’s scope.” At least some judges appear to be taking this rule seriously, using it to invalidate patents in Cybersource, Dealertrack, and now Fort Properties. On the other hand, extrapolating from Research Corp and Ultramercial, Chief Judge Rader and Judges Newman, Plager, Lourie, and O’Malley are more permissive toward “computer aided” processes. The court is on a collision course, and this issue may ultimately require en banc consideration.
Fort Properties, however, could provide some guidance. The court could follow a middle path by asking, as in Fort Properties, whether the computer element imposes meaningful limits on the claim’s scope. So long as the Federal Circuit arrives at a workable interpretation of “meaningful limit,” courts could use the test to reject claims that merely use a computer element to claim otherwise unpatentable processes, while allowing room for “computer aided” processes that avoid excessive abstraction.
– Robert Swanson
Robert Swanson is a 2L at Stanford Law School with plans to practice patent litigation.
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