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Federal Circuit Finds Software Patent Claims Eligible Under Step One of the Alice Framework

McRO, Inc. v. Bandai Namco Games Am. Inc., et al2016 U.S. App. LEXIS 16703 (Fed. Cir. Sep. 13, 2016) (opinion by Judge Reyna, joined by Judges Taranto and Stoll)

On September 13, 2016, the Federal Circuit held that McRO’s patent claims are subject matter eligible for protection under 35 U.S.C. § 101. Notably, the Federal Circuit found that the challenged claims, which define a “method for automatically animating lip synchronization and facial expression of three-dimensional characters” to a spoken-word audio track, are not directed to an abstract idea. This is the first Federal Circuit opinion to hold that software is patent eligible subject matter under step one of the Alice Corp. v. CLS Bank Int’l 134 S. Ct. 2347, 2355 (2014) two-step patent eligibility analysis framework. Does it signal a shift in the Federal Circuit’s thinking of software-based patents?

Background of the Patents and Procedural History

As background, the patents at issue describe an animation of a 3-D character’s face (for 3-D movies, video games, etc.) being traditionally carried out by hand. An animator, with assistance of a computer, manually synchronized a “morph weight set,” a mathematical representation of a character’s face pronouncing a phoneme, to a “keyframe” of the audio track of the character pronouncing that phoneme. The animator could then manipulate the character’s face to look as if it were talking naturally. On the other hand, the invention aimed to improve on the prior art by having a computer automatically synchronize “morph weight sets” to timed phonemes using specific rule sets.
Over McRO’s argument that the claims were not directed to an abstract idea, the Central District of California disagreed, finding (only three months after the Supreme Court’s Alice decision) that the claims merely call for application of the abstract idea of using rules to automate the lip-synchronization process. See McRO, Inc. v. Sony Computer Entm’t Am., LLC, 55 F. Supp. 3d 1214, 1226-27 (C.D. Cal. 2014). The court therefore granted defendants’ motion for judgment on the pleadings that the asserted claims were directed to patent ineligible subject matter under 35 U.S.C. § 101 and ruled the patents invalid.

The Federal Circuit’s Analysis

The Federal Circuit cautioned against oversimplifying claims terms at both steps of the analysis so as to strip out the specific requirements of the claims.

For step one, the Federal Circuit invoked the concept of preemption to determine whether a claim is directed to an abstract idea. Specifically, the Federal Circuit looked “to whether the claims in these patents focus on a specific means or method that improves the relevant technology or are instead directed to a result or effect that itself is the abstract idea and merely invoke generic processes and machinery.” McRO2016 U.S. App. LEXIS 16703, at *28.

The Federal Circuit found that no preemption concern exists because the claims recite specific rules that define “morph weight sets” as a function of the timing of phoneme sequences and apply the set of specific rules to each sub-sequence of timed phonemes. Notably, the Federal Circuit found, that the claims use specific rules to create a new process that is different than merely automating the prior art synchronization-by-hand process, which is evidence that not all automated lip-synchronization processes are preempted. The Federal Circuit therefore held that the claims are not directed to an abstract idea.

Because the Federal Circuit found the claims were patent eligible under step one of the Alice framework, there was no need to further analyze the claims under step two.

Takeaway – Is The Pendulum Swinging Back to Patent Eligibility?

McRO is the latest in a string of cases since the Alice decision in 2014 where the Federal Circuit has found software claims patent eligible. As such, we believe the Federal Circuit is placing district courts on notice that software claims should not be dismissed out of hand as per se abstract and therefore patent ineligible. Rather, the decision emphasizes that specific, narrowly tailored software claims that do not preempt “future alternative discoveries” are not abstract and are patent eligible under step one of the Alice framework.

McRO provides guidance as to how to determine whether a claim is “directed to an abstract” concept. The Federal Circuit focused on conducting a preemption analysis, but this approach may only be practical where the patent describes prior art approaches in great detail. Time will tell whether a preemption analysis becomes an essential part of step one of the Alice framework. But, for now, it seems that a trend to finding more software patents eligible is developing.

Authored by Robert M. Masters & Ted M. Nissly
Compliments of Fried Frank – a member of the EACCNY