The US Court of Appeals for the Federal Circuit found a software patent directed to a technique of analyzing financial data with resampled statistical methods to be invalid under § 101, because the claims, although "[g]roundbreaking, innovative, or even brilliant," were nevertheless directed to an innovation in ineligible subject matter. SAP America, Inc. v. Investpic, LLC, Case No. 2017-2081 (Fed. Cir., May 15, 2018) (Taranto, J).
The patent at issue involves systems and methods for performing certain statistical analyses of investment information. For example, the patent describes "a technique that 'utilizes resampled statistical methods for the analysis of financial data,' which do not assume a normal probability distribution." SAP filed a declaratory judgment action seeking a declaration that the claims of the patent were invalid under 35 USC § 101 because they were directed to patent ineligible subject matter. After SAP moved for judgment on the pleadings, the district court granted the motion, holding all of the challenged claims to be invalid under § 101. The district court explained that the claims were directed to "performing statistical analysis," citing use of specified words in the claims and use of more technical, mathematical notations in the written description. Investpic appealed.
The Federal Circuit affirmed. Regarding step one of the Alice inquiry, the Court found that the challenged claims were directed to an abstract idea because the focus of the claims was on "selecting certain information, analyzing it using mathematical techniques, and reporting or displaying the results of the analysis," citing Electric Power ( IP Update, Vol. 19, No. 9) to explain that claims focused on "collecting information, analyzing it, and displaying certain results of the collection and analysis" are directed to an abstract idea. Distinguishing the case from other Federal Circuit decisions relied on by the patent owner, the Court explained that the claimed improvement in the challenged claims was in a non-physical realm, unlike claims determined to be patent eligible, citing McRO ( IP Update, Vol. 19, No. 10) and Thales ( IP Update, Vol. 20, No. 4) for guidance. Unlike the claimed improvement of how the physical display operated to produce better quality images in McRO, the challenged claims here recited an improvement in a mathematical technique with no improved display mechanism, the Court explained. In contrast to the use of mathematics to achieve an improvement in physical things and actions in Thales, the focus of the claims was not a physical-realm improvement but rather an improvement in the "selection and mathematical analysis of information, followed by reporting or displaying of the results." The Court also dismissed Investpic's contention that the information was limited to "real investments" and hence sufficient to move the claims out of the realm of abstract ideas: "a process of collecting and analyzing information [that] is 'limited to particular content' . . . does not make the collection and analysis other than abstract."
Regarding step two of the Alice inquiry, the Court found that the claims lacked recitation of an inventive concept in the non-abstract application realm, explaining that the claimed "features simply provide further narrowing of what are still mathematical operations." The Court also concluded that, although the claims required "various databases and processors," the claim "limitations require no improved computer resources" but rather "their already available basic functions, to use as tools in executing the claimed process." The Court further concluded that "[u]nder the principles developed in interpreting § 101, patent law does not protect . . . claims [directed to an advance in mathematical techniques in finance], no matter how groundbreaking the advance."
Innovation In Realm Of Abstract Ideas Insufficient For § 101 Subject Matter Eligibility
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