Every month, Erise’s patent attorneys review the latest inter partes review cases and news to bring you the stories that you should know about:

Federal Circuit Affirms PTAB’s Analogous Art Finding

As IP Watchdog reported, the U.S. Court of Appeals for the Federal Circuit denied Daedalus Blue LLC’s appeal of a Patent Trial and Appeal Board (PTAB) ruling that found claims of U.S. Patent No. 8,671,132 on a data management system unpatentable.

The appeal centered on whether the PTAB erred in claim construction and erred in finding that one of the three prior art references was analogous art.

According to the USPTO, a reference is analogous art to the claimed invention if: (1) the reference is from the same field of endeavor as the claimed invention (even if it addresses a different problem); or (2) the reference is reasonably pertinent to the problem faced by the inventor (even if it is not in the same field of endeavor as the claimed invention). In order for a reference to be “reasonably pertinent” to the problem, it must “logically … have commended itself to an inventor’s attention in considering his problem.”

Daedalus argued Gelb was not analogous art because it was not in the same field of endeavor as the ’132 patent and because it was not reasonably pertinent to the problems identified in the ’132 patent.

The court found that the ’132 patent addressed the problem that prior art systems didn’t “permit a user to automatically select between multiple storage options” or address “files with varying storage or performance requirements or equipment with varying capacities and performance levels” and agreed with the PTAB that Gelb addresses the same problem, “namely that prior art storage access methods did not permit programmers to write code that would allow users to automatically select the appropriate storage devices based on ‘high or logical level’ concepts, such as ‘data sets, data bases and the like.’”

Because that evidence supported the PTAB’s finding that Gelb would be reasonably pertinent to at least one problem identified in the ’132 patent, the court did not address Daedalus’ other arguments and affirmed the PTAB’s cancellation of the patent.

One takeaway from the decision, as stated by Dennis Crouch at PatentlyO, is the importance of explicitly stating the problem solved in patent applications to limit the scope of analogous art that could be relied upon by the examiner and by post-grant challengers.

Tracking Patent for Gemstones Using Blockchain Invalid Under Alice

PatentlyO also wrote about the Federal Circuit recently affirming the dismissal of a patent infringement lawsuit under 35 USC § 101. (Coincidentally, the Supreme Court also recently declined to take up a challenge to Alice v. CLS Bank, which set precedent for the two-part test determining patentability under Section 101.)

The district court in Rady v. The Boston Consulting Group, Inc., found U.S. Patent No. 10,469,250 owned by Max Rady to be unpatentable. The patent describes a method for scanning a gemstone, such as a diamond, determining the unique pattern of imperfections (the “signature”) and then recording the signature to a blockchain if it has not been previously registered.

Section 101 defines patent-eligible subject matter as “any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof.” Laws of nature, natural phenomena, and abstract ideas have long been recognized as ineligible under Section 101.

Rady’s patent failed the first part of the Alice test because the courts found it was an abstract idea. Identifying items by their unique physical features is a long-standing and well-established practice, the Federal Circuit wrote, and a patent describing the use of specialized hardware does not, standing alone, mean that the claims are not directed to an abstract idea. As the Federal Circuit has previously recognized, “claims are not saved from abstraction merely because they recite components more specific than a generic computer.”

“Rady’s claimed system may be useful in preventing the counterfeiting of gemstones, but utility is not the measure of patent eligibility,” the court wrote.

From an eligibility perspective, the Federal Circuit found that the principal shortcoming in Rady’s claims was that they “recite generic steps and results—as opposed to a specific solution to a technological problem.”

On step two, the Federal Circuit concluded that Rady’s claims fail to transform this abstract idea: “Rather than purporting to disclose any new type of blockchain or any improvement in blockchain functionality, the specification incorporates by reference papers describing conventional blockchain construction and performance.”

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