BASCOM v. AT&T: Section 101 Jurisprudence Continues to Develop

By Jason Rantanen

BASCOM Global Internet Services, Inc. v. AT&T Mobility LLC (Fed. Cir. June 27, 2016) Download Bascom Panel: Newman (concurring in the result), O’Malley, Chen (author)

Since Alice v. CLS Bank, the Federal Circuit has issued four opinions rejecting a lack of patent eligible subject matter challenge: DDR Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245 (Fed. Cir. 2014); Enfish LLC v. Microsoft Corp., 2016 WL 2756255 (Fed. Cir. May 12, 2016); Rapid Litigation Management Ltd. v. Cellzdirect, Inc., 2016 WL 3606624 (Fed. Cir. 2016), and BASCOM v. AT&T, with the latter three coming the last few months.  (Many more decisions affirm invalidity on § 101 grounds.)  Each of these opinions is important for understanding the contours of the post-Mayo/Alice patentable subject matter doctrine.   In this post, I’ll summarize BASCOM and examine its treatment of the relationship between steps one and two of the Mayo/Alice framework.

Background: The claimed invention involved in this case is a “system for filtering Internet content.”  Slip Op. at 6.  The patent’s first claim reads:

1. A content filtering system for filtering content retrieved from an Internet computer network by individual controlled access network accounts, said filtering system comprising:

a local client computer generating network access requests for said individual controlled access network accounts;

at least one filtering scheme;

a plurality of sets of logical filtering elements; and

a remote ISP server coupled to said client computer and said Internet computer network, said ISP server associating each said network account to at least one filtering scheme and at least one set of filtering elements, said ISP server further receiving said network access requests from said client computer and executing said associated filtering scheme utilizing said associated set of logical filtering elements.

At the district court, AT&T moved to dismiss BASCOM’s complaint on the ground that the asserted claims were invalid under 35 US.C. § 101.  “AT&T argued that the claims were directed to the abstract idea of ‘filtering content,’ ‘filtering internet content,’ or ‘determining who gets to see what,” and that none of the limitations “transforms the abstract idea of filtering  content into patent-eligible subject matter because they do no more than recite routine and conventional activities performed by generic computer components.”  Id. at 8.  The district court agreed with AT&T, finding that “the claims were directed to the abstract idea of ‘filtering content’ because ‘content provided on the Internet is not fundamentally different from content observed, read, and interacted with through other mediums like books, magazines, television, or movies,”  Id. at 9, and that “no individual limitation was inventive because each limitation, in isolation, was a ‘well known, generic computer component[]’ or a standard filtering mechanism.”  Id.  Nor were the limitations in combination inventive because “[f]iltering software, apparently composed of filtering schemes and filtering elements, was well-known in the prior art” and “using ISP servers to filter content was well-known to practitioners.”  Id., quoting district court.

“Ordered combination of limitations” can provide the “inventive concept”: On appeal, the Federal Circuit reversed based on the second step of the Mayo/Alice framework.   Critical to its conclusion that the claims were directed to patent eligible subject matter was the court’s focus on the particular arrangement of generic and conventional components in the claims.

“An inventive concept that transforms the abstract idea into a patent-eligible invention must be significantly more than the abstract idea itself, and cannot be simply an instruction to implement or apply the abstract idea on a computer.”  Slip Op. at 14.  Under the court’s step two analysis, the specific limitations were sufficient to establish eligibility on the limited record before the court–not because the limitations themselves provided that “inventive concept,” but because the arrangement of those elements did.  “The inventive concept inquiry requires more than recognizing that each claim element, by itself, was known in the art.  As is the case here, an inventive concept can be found in the non-conventional and non-generic arrangement of known, conventional pieces.”  Slip Op. at 15.  On the limited record before the court, the specific method of filtering content claimed in the patent “cannot be said, as a matter of law, to have been conventional or generic.”  Id. at 16.

The relationship between Mayo/Alice Step One and Step Two:  The court’s step one analysis is, unfortunately, somewhat muddled.  The court first states that the claims are directed to an abstract idea, that of filtering content on the Internet, id. at 12, then shifts to the conclusion that the claims present a “close call,” requiring progression to step two.  Id. at 13 (“This case, unlike Enfish, presents a “close call[] about how to characterize what the claims are directed to….Here, in contrast, the claims and their specific limitations do not readily lend themselves to a step-one finding that they are directed to a nonabstract idea.  We therefore defer our consideration of the specific claim limitations’ narrowing effect for step two.”)

Ultimately, the choice between claims that are clearly directed to an abstract idea and those that are “close calls” may not matter.  If a claim is either unambiguously directed to an abstract idea or is a “close call,” the result is that the claim fails Mayo/Alice step one and the analysis proceeds to step two, the search for an inventive concept.  Viewed in this light, resolving disputes over the articulation of the abstract idea isn’t necessary as long as it fits in the “close call” category.

On the other hand, the articulation of the abstract idea in step does matter because it provides an important ingredient for step two.  Here, the court drew upon the articulation of the “abstract idea” as “filtering content on the Internet” to conduct its step two analysis.  “The claims do not merely recite the abstract idea of filtering content along with the requirement to perform it on the Internet, or to perform it on a set of generic computer components.  Such claims would not contain an inventive concept.”  Id. at 16.  With that articulation of the abstract idea in hand, it is relatively easy to see the method of filtering claimed in claim 1 as providing the necessary “inventive concept.”  The articulation of the abstract idea as “filtering content on the Internet” also provides the foundation for the court’s analysis of the invention here as compared with its previous decisions on patent eligible subject matter.

But if one were to articulate the abstract idea as being “controlling access to content by using centrally-held accounts with different permissions,” it might be significantly more difficult for the claims to pass the step two analysis because that idea is much closer to the inventive concept described by the court.  “The inventive concept described and claimed in the ‘606 patent is the installation of a filtering tool at a specific location, remote from the end-users, with customizable filtering features specific to each end user.”   Id. at 15.  To be sure, it would be harder for such an articulation to fail the Mayo/Alice step 1 analysis, but it’s not immediately clear to me that it would.

Judge Newman’s Concurrence: Concurring in the result, Judge Newman wrote separately “to urge a more flexible approach to the determination of patent eligibility, for the two-step protocol for ascertaining whether a patent is for an “abstract idea” is not always necessary to resolve patent disputes.”  Newman concurrence at 2.  Judge Newman’s concurrence, while raising the academic question of whether there is actually an “abstract ideas” limit on the § 101 categories or instead whether questions of abstractness are fully resolved by application of §§ 102, 103 and 112, does not really offer much in the way of a path forward under current patent law.    To the extent Judge Newman is suggesting that district courts should be able to deny 12(b)(6) motions when there are evidentiary disputes, then I would agree.  But if she is suggesting something else, it is not clear to me how  proposal would fit into the procedural constraints of Rule 12(b)(6) or current § 101 jurisprudence.