The Federal Circuit has released its long-awaited opinion in McRo v. Bandai, reversing the lower court’s decision that the claims were ineligible subject matter. McRo’s invention in U.S. 6,307,576 was a method used in 3D computer animation, specifically how to synchronize positioning of the lips and facial expression of a 3D character to correspond to the character’s dialogue, thus providing a realistic impression of the character speaking. Here is the claim:

A method for automatically animating lip synchronization and facial expression of three-dimensional characters comprising:

obtaining a first set of rules that define output morph weight set stream as a function of phoneme sequence and time of said phoneme sequence;

obtaining a timed data file of phonemes having a plurality of sub-sequences;

generating an intermediate stream of output morph weight sets and a plurality of transition parameters between two adjacent morph weight sets by evaluating said plurality of sub-sequences against said first set of rules;

generating a final stream of output morph weight sets at a desired frame rate from said intermediate stream of output morph weight sets and said plurality of transition parameters; and

applying said final stream of output morph weight sets to a sequence of animated characters to produce lip synchronization and facial expression control of said animated characters.

The court held that this claim is not directed to an abstract idea, but reached this result in a new way, using preemption. Here’s how they did it.

Continue Reading McRo: Preemption Matters After All

By: Robert R. Sachs

The Supreme Court has consistently cautioned that the judicial exceptions to patent eligibility need to be carefully applied:

At the same time, we tread carefully in construing this exclusionary principle lest it swallow all of patent law. Mayo, 566 U. S., at ___. At some level, "all inventions . . . embody, use, reflect, rest upon, or apply laws of nature, natural phenomena, or abstract ideas.”

Alice Corp. v. CLS Bank International, 573 U.S. __, 134 S. Ct. 2347, 2352 (2014) (citations omitted).

On November 14, 2014, exception did in fact swallow the rule in the Federal Circuit’s decision Ultramercial, Inc. v. Hulu, LLC, 2010-1544, 2014 U.S. App. LEXIS 21633 (Fed. Cir. Nov. 14, 2014) (“Ultramercial III”). Judge Lourie, writing for the panel of Judges O’Malley and Mayer, found Ultramercial’s patent claims ineligible. Along the way to that ending the court observed:

[W]e do not purport to state that all claims in all software-based patents will necessarily be directed to an abstract idea. Future cases may turn out differently.

2014 U.S. App. LEXIS, at *11.

This phrasing is precisely how one would state an exception to a rule. Instead of saying that software is generally not directed to abstract ideas, and that in some cases may be, this phrasing implies the opposite: software is presumed to be an abstract idea (hence ineligible) though there may be some case in the future in which it is not. This approach turns the entire patent eligibility framework on its head. This essay explores how Ultramercial III reaches this inversion and its potential consequences.

Continue Reading The Day the Exception Swallowed the Rule: Is Any Software Patent Eligible After Ultramercial III?

By: Stuart P. Meyer

There has been significant commentary, both before and after the Supreme Court’s decision in Alice, that the various judicially created exceptions to patentability under 35 USC § 101 are not only sound, but are also constitutionally mandated.  For instance, a major thesis of the ACLU’s amicus brief in Alice was that the First Amendment naturally limits § 101, as “patents giving control over intellectual concepts and abstract knowledge or ideas—and thus limiting free thought—would violate the First Amendment.”

The Court may have already given some guidance in this area, and lower courts appear to be listening.  In a September 4 decision, one judge in the Central District of California had no difficulty dismissing, via FRCP 12(b)(6), an infringement complaint because the court found that the three patents-in-suit did not satisfy § 101, based on the judicially created exceptions as taught by AliceEclipse IP LLC v. McKinley Equipment Corp., Case No. SACV 14-742-GW (C.D. Cal. September 4, 2014).  Judge George Wu observed that Justice Kennedy in Bilski, delivering the opinion of the Court explained the limitations on  § 101.  The pertinent portion of Bilski reads:  “While these exceptions are not required by the statutory text, they are consistent with the notion that a patentable process must be ‘new and useful.’  And, in any case, these exceptions have defined the reach of the statute as a matter of statutory stare decisis going back 150 years.”

Continue Reading Are the Supreme Court’s exceptions to patentability mandated by the Constitution, or are they just “statutory stare decisis”?

By: Stuart P. Meyer

A recent episode of NPR’s “Planet Money” was entitled “The Case Against Patents.”  Several notable commentators in that episode questioned whether patents help or hinder innovation, whether history supports the benefits of a patent system, and whether patent terms should be tinkered with to determine the amount of protection that is optimal from various socio-economic perspectives.  I am delighted every time this issue is brought up, since the appropriate balance of rights between innovators and society is anything but static.  As reasonable royalty rates fluctuate under case law, as infringement and validity standards shift, and as patents become commodities traded outside of traditional M&A situations, the fulcrum is certain to shift in one direction or the other. 

The Supreme Court gave more than a little consideration to such issues in Alice v. CLS Bank.  In fact, the very focus of this unanimous opinion was on this balance:

We have described the concern that drives [the judicially-created exclusion for laws of nature, natural phenomena and abstract ideas] as one of pre-emption.  … Laws of nature, natural phenomena, and abstract ideas are “‘”the basic tools of scientific and technological work.”’” (slip op. at 5-6)  

Continue Reading Where are You, Congress? Alice v. CLS Bank and “The Case Against Patents”