Enfish, LLC v. Microsoft Corp
822 F.3d 1327 (Fed. Cir. 2016)
Authored by Mario Kolev
Statement of Facts: Through the late 1990s and early 2000s, Enfish developed and sold a new type of “self-referential” data-base program. In late 2000, Enfish received U.S. Patents 6,151,604 (“the ‘604 patent”) and 6,163,775 (“the ‘775 patent”), which are directed to an innovative logical model for a computer database. The patented logical model differed from conventional logical models because it included all data entities in a single table with column definitions provided by rows in that same table. Due to this property, the innovative model is said to be “self-referential.” The self-referential model is in contrast with the conventional relational model that places data entities in multiple tables. The two patents Enfish received reveal that the self-referential model has multiple benefits over the relational model by allowing faster searching of data, more effective storage, and more flexibility in configuring the database. Enfish claims that ADO.NET, a product Microsoft develops and markets, infringes the ‘604 and ‘775 patents by creating and manipulating self-referential tables as part of its operation. Enfish asserted five claims: claims 17, 31, and 32 in relation to the ‘604 patent and claims 31 and 32 in relation to the ‘775 patent.
Procedural History: Enfish brought suit against Microsoft in the United States District Court for the Central District of California for infringement of several patents related to a “self-referential” database. The district court granted summary judgment in favor of Microsoft, finding that all five claims were invalid as directed to an abstract idea under 35 U.S.C. § 101, claims 31 and 32 of both patents were invalid under 35 U.S.C. § 102(b) as anticipated by the prior public sale and use of Microsoft’s Excel 5.0 product, and claim 17 was not infringed by ADO.NET. Enfish appealed to the Federal Circuit.
Questions Presented: (1) Did the district court err in finding all claims invalid under 35 U.S.C. § 101 as directed to an abstract idea? (2) Did the district court err in finding claims 31 and 32 of both patents invalid under 35 U.S.C. § 102(b) as anticipated by the prior public sale and use of Microsoft’s Excel 5.0 product? (3) Did the district court err in finding claim 17 not infringed by ADO. NET?
Holdings: (1) Yes, the district court erred in granting summary judgment based on 35 U.S.C. § 101 because all five claims on appeal are patent eligible. (2) Yes, the district court erred in granting summary judgment based on 35 U.S.C. § 102. (3) No, the district court did not err in granting summary judgment as to non-infringement. ADO.NET does not infringe claim 17. The case was remanded to the district court for further proceedings consistent with this holding.
Reasoning: The Federal Circuit reviewed the district court’s grant of summary judgment de novo. The court took Enfish’s three arguments in turn. First, the Court addressed the invalidity of all claims under 35 U.S.C. § 101. Second, the court addressed the invalidity of claims 31, 32 under § 102. Finally, the court addressed the district court’s finding of claim 17’s non-infringement.
First, the court rejected the district court’s ruling as to § 101 invalidity. Under 35 U.S.C. § 101, a patent can be obtained for “any new and purposeful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof.” Enfish LLC v. Microsoft Corp., 822 F.3d 1327, 1334 (Fed. Cir. May 12, 2016). The court reiterated the Supreme Court’s recognized exception to patent-eligibility under § 101—“[l]aws of nature, natural phenomena, and abstract ideas are not patentable.” Ass’n for Molecular Pathology v. Myriad Genetics, Inc., 133 S. Ct. 2107, 2116 (2013) (quoting Mayo Collaborative Servs. v. Prometheus Labs., Inc., 132 S Ct. 1289, 1293 (2012)). To determine whether the claims are patent-eligible, the court engaged in what it calls the Mayo/Alice inquiry, which first asks “whether the claims at issue are directed to a patent-ineligible concept,” Alice Corp. Pty Ltd. V. CLS Bank Int’l, 134 S. Ct. 2347, 2355 (2014), and, if this is met, then asks the court to “consider the elements of each claim both individually and ‘as an ordered combination’ to determine whether the additional elements ‘transform the nature of the claim’ into a patent-eligible application.” Id. (quoting Mayo, 132 S. Ct. at 1289, 1297). The court recognized that the Supreme Court has not established a ready test to determine what constitutes an “abstract idea” under the first step of the Mayo/Alice inquiry. Enfish, 822 F.3d at 1334-35. In order to conduct the inquiry, the court looked to whether the claims at issue are comparable to those claims already found to be directed to an abstract idea in previous cases.
The Federal Circuit emphasized that the first step of the Mayo/Alice inquiry is a crucial one because the question as to “whether the claims at issue are directed to a patent-ineligible concept,” Alice, 134 S. Ct. at 2355, implies that there are several claims that are inherently not directed to a patent-ineligible concept. The “directed to” inquiry does not simply ask whether the claims involve a patent-ineligible concept, because every patent-eligible claim that involves a physical product involves a law of nature occurring in the physical world. Rather, the first step of the inquiry serves as a filter for claims that are considered in light of certain specifications and asks whether “[the claims’] character as a whole is directed to excluded subject matter.” Internet Patents Corp. v. Active Network, Inc., 790 F.3d 1343, 1346 (Fed. Cir. 2015).
The Federal Circuit noted that the Supreme Court has not foreclosed the possibility that claims “purport[ing] to improve the functioning of the computer itself” or “improv[ing] an existing technological process” may survive the abstract idea limitation. See Alice, 134 S. Ct. at 2358–59. The court found that some improvements in computer-related technology, such as chip architecture and LED displays, are plainly not abstract. The court went further and noted that improvements to software can also be non-abstract. As a result, the court found that all claims directed to improvements to computer-technology, whether they be directed to hardware or software, do not have to necessarily be analyzed at the second step of the Alice inquiry. The court thus held that it is relevant to ask whether the particular claims are directed to an improvement to computer functionality as opposed to being directed to an abstract idea at the first step of the Alice inquiry.
The Federal Circuit found that, in this case, the first step of the Alice inquiry examines whether the focus of the claims is on the specific asserted improvement in computer functionality (namely the self-referential table for a computer database) as opposed to a process that can be described as an abstract idea for which a computer is merely used as a tool. The court found that this case involves claims whose plain focus is an improvement to computer functionality and not on other tasks for which a computer is used in its ordinary capacity. Accordingly, the court found that the claims at issue in this case are not directed to an abstract idea under the Alice inquiry.
The Federal Circuit disagreed with the district court that the claims at issue were “directed simply to ‘the concept of organizing information using tabular formats.’” Enfish, LLC v. Microsoft Corp., 822 F.3d at 1337-38. The court found that the district court oversimplified the self-referential component of the claims and discounted the benefits of the invention. In support of its holding that the claims are directed toward an improvement of an existing technology, the court noted that the self-referential component allows for increased flexibility, faster search times, and smaller memory requirements when compared to conventional databases.
The Federal Circuit distinguished the claims in this case from the claims in Alice and Versata Development Group v. SAP America, Inc., 793 F.3d 1306 (Fed. Cir. 2015), a case which Microsoft claimed is similar to this one by noting that the claims at issue in those cases involved simply adding conventional computer components to well-known business practices. The court found that in this case, the claims are directed to actual improvements in the functioning of a computer. Similarly, the court found that other cases differed from this case because they involved patent-ineligible claims characterized by the use of an abstract mathematical formula to be used on any general purpose computer, a purely conventional computer implementation of a mathematical formula, or generalized steps to be performed on a computer using conventional computer activity.
In sum, the Federal Circuit declined to adopt a broad reading of Alice that implies all improvements of computer technology are inherently abstract and thus directed to a patent-ineligible concept under step one of the Mayo/Alice inquiry. The court inquired whether the claims are directed toward an abstract idea or an improvement in computer functionality. The court found that the claims at issue in the appeal are not directed to an abstract idea, but rather are specifically directed to a self-referential table for a computer database. The court noted that this is not a situation in which general-purpose computer components are added post-hoc to a fundamental economic practice or mathematical equation. Instead, the court found that the claims at issue are directed to a specific implementation of a solution to a problem in the software field. The court found that this constitutes an improvement in computer functionality and that the claims are therefore not directed to an abstract idea. Accordingly, the court found it unnecessary to proceed to step two of the Alice inquiry and held that the claims are patent-eligible.
Second, the Federal Circuit rejected the district court’s finding that claims 31 and 32 of both patents are invalid under 35 U.S.C. § 102(b) as anticipated by the prior public sale and use of Microsoft’s Excel 5.0 product. A finding of anticipation necessitates “that the reference describe [sic] not only the elements of the claimed invention, but also that it describe [sic] those elements ‘arranged as in the claim[.]” NetMoneyIN, Inc. v. VeriSign, Inc., 545 F.3d 1359, 1371 (Fed. Cir. 2008) (quoting Finisiar Corp. v. DirecTV Grp., Inc., 523 F.3d 1323, 1334 (Fed. Cir. 2008)). The court found that the district court erred in granting summary judgment of anticipation because Excel 5.0 does not include the claimed single table with a row defining a column within the very same table, but rather introduces two different tables on a single spreadsheet.
Finally, the Federal Circuit agreed with the district court’s holding that Microsoft’s ADO.NET does not infringe claim 17 of the ‘604 patent. The court agreed with the district court’s finding that ADO.NET does not perform the “means for indexing” recited in Claim 17. The district court looked to the language in 35 U.S.C. § 112 (2006) to interpret “means for indexing.” That language states that such a claim element “should be construed to cover the corresponding structure, material, or acts described in the specification and equivalents thereof.” 35 U.S.C. § 112. The district court used Enfish’s own proposed algorithm as the corresponding structure for the “means for indexing.” Enfish, 822 F.3d at 1344. The algorithm is a three-step process, which consists of the following:
1) Extract key phrases or words from the applicable cells in the logical table.
2) Store the extracted key phrases or words in an index, which is itself stored in the logical table.
3) Include, in text cells of the logical table, pointers to the corresponding entries in the index, and include, in the index, pointers to the text cells.
Enfish,822 F.3d at 1344.
Under 35 U.S.C. § 112, an accused product must perform the exact function using an equivalent or identical structure in order to practice a claim element. See Odetics, Inc. v. Storage Tech. Corp., 185 F.3d 1259, 1267 (Fed. Cir. 1999). The Federal Circuit agreed with the district court that ADO.NET does not perform either step two or step three of the above algorithm and that, therefore, it does not infringe the patent under the claim.