Federal Circuit Expands Alice Ruling After IV Appeals Invalidation of Two Patents

October 7, 2016

The Federal Circuit has expanded a Delaware court’s decision to invalidate two Intellectual Ventures (IV) patents (6,073,142; 6,460,050) under Alice in lawsuits against Symantec (1:10-cv-01067) and Trend Micro (1:12-cv-01581). In a September 30 memorandum opinion and order issued in an appeal filed by IV, the Federal Circuit affirmed the lower court’s invalidity decisions as to the ‘142 and ‘050 patents, but, in the cross-appeal brought by Symantec, overruled District Judge Leonard Stark’s decision that a third patent (5,987,610) is patent-eligible under Alice (2015-1769). Rather, the court held that the ‘610 patent is unpatentable for claiming the abstract idea of “virus screening” without the addition of a sufficient inventive concept.

In December 2010, IV sued both Symantec and Trend Micro, along with Check Point Software and Intel (McAfee), in a single case (the -1067 case), asserting that the anti-malware software offered by each defendant infringed four patents (the ‘610, ‘142, ‘050, and 7,506,155 patents). By early 2015, both Check Point Software and McAfee had been dismissed with prejudice (with earlier court documents suggesting a settlement as to each), the court had severed the claims against Trend Micro into a separate action (the -1581 case), and IV had dropped the ‘155 patent from the two remaining cases.

The suit against Symantec proceeded to trial, which ended with the jury finding on February 6, 2015 that the company had infringed the ‘610, ‘142, and ‘050 patents and awarding IV $17M in damages. On March 13, Symantec filed a Rule 52 motion asserting the invalidity of the asserted claims in each patent under Alice. That same day, Trend Micro filed a motion for summary judgment in the other proceeding asserting the same grounds for invalidity. (On March 19, IV informed Trend Micro that it would not seek to try the ‘610 patent.) Judge Stark partially granted both motions on April 22, finding that the ‘050 patent is directed to the abstract idea of “receiving identifying information, comparing it to other information, and outputting an indication based on the identifying information”, and the ‘142 patent, to the abstract idea of screening information through “well-known post office functionality” such as sorting mail. The court declined to invalidate the ‘610 patent, finding that the patent was saved by the fact that it related to a “computer virus, which has computer-centric implications that cannot be abstracted away so broadly”. The ruling resulted in the reduction of the Symantec verdict to $8M. Meanwhile, final judgment was entered for Trend Micro on June 17, 2015: since IV had previously withdrawn all claims asserting the ‘610 patent against the company, no further claims remained at issue.

In its ruling on Symantec’s cross-appeal, the Federal Circuit began its analysis of the ‘610 patent by noting that the patent actually did involve a concept rooted in computer technology, the idea of “computer virus screening”. However, unlike Judge Stark, the court found that such technology was a “long prevalent practice in the field of computers”, and thus determined that the patent was directed to the “well-known” and abstract idea of “virus screening”. The court then proceeded to the second step of Alice. Comparing the patent to others adjudicated in recent case law, the court noted that its claims do not “improve or change the way a computer functions” as in Enfish or solve a problem unique to the Internet as in DDR Holdings. Furthermore, citing its recent decision in TLI Communications, the court characterized the patent’s implementation as too reliant on “the use of conventional or generic technology”.

Circuit Judge Haldane Mayer concurred with the court’s opinion, also arguing that patents that “constrict . . . the essential channels of online communication” violate the First Amendment. He further asserted that all software patent claims are categorically unpatentable under Alice. Circuit Judge Kara Stoll dissented in part, accepting the majority’s characterization of the ‘610 patent as directed to “virus screening”, but stating that it should have survived Alice’s second step. Judge Stoll noted that the “particular ordering of the components” in the asserted claims was “not conventional at the time”, which she characterized as a meaningful improvement of the functioning of a computer and the associated network.