Alice two-step test Archives

The Alice Eligibility Two-Step Dance Continues

The US Court of Appeals for the Federal Circuit affirmed a district court’s dismissal of a Fed. R. Civ. P. 12(b)(6) motion, holding that patent claims directed to abstract ideas and lacking inventive steps that transform abstract ideas into patent-eligible inventions fail the Alice two-step test and are not patent eligible under 35 U.S.C. § 101. Hawk Tech. Sys., LLC v. Castle Retail, LLC, Case No. 22-1222 (Fed. Cir. Feb. 17, 2023) (Reyna, Hughes, Cunningham, JJ.)

35 U.S.C. § 101 states that laws of nature, natural phenomena and abstract ideas are not patentable. The Supreme Court of the United States in Alice v. CLS Bank Int’l (2014) articulated a two-step test for examining patent eligibility: a patent claim falls outside § 101 if it is directed to a patent-ineligible concept such as an abstract idea and lacks elements sufficient to transform the claim into a patent-eligible application.

Hawk Technology sued Castle Retail alleging infringement of its patent directed to security surveillance video operations in Castle Retail’s grocery stores. The patent relates to a method of viewing multiple simultaneously displayed and stored video images on a remote viewing device of a video surveillance system using result-based functional language. Castle Retail moved to dismiss on the basis that the claims were not patent eligible under § 101. After conducting a technology briefing, the district court granted the motion. The district court ruled that the claims were abstract because surveillance monitoring is a common business practice and the claims recited little more than taking video surveillance and digitizing it for display and storage in a conventional computer system, and the claims did not limit the abstract idea to a new technological improvement in video storage/display that could transform the abstract idea into a patent-eligible invention. Hawk Technology appealed.

The Federal Circuit, reviewing de novo, affirmed. Addressing Alice step one, the Court found that the patent’s required functional results of receiving/digitizing video images, converting images to selected format and storing/displaying/transmitting the images were similar to claims that the Court previously ruled as abstract. The results-oriented claim language failed to concretely recite how the claimed invention improved the functionality of video surveillance systems and was therefore abstract. Regarding Alice step two, the Court analyzed the claim elements, both individually and as an ordered combination in light of the specification, for transformative elements. The Court explained that although the claims recited the purported inventive solution and referenced specific tools/parameters, they neither showed how monitoring and storage was improved nor required anything other than off-the-shelf, conventional computer, network and display technology for gathering, sending and presenting the specified information.

Procedurally, the Federal Circuit found that the motion to dismiss was not decided prematurely because the technology briefing was purely a procedural step conducted in each patent case and there was no evidence that the district court’s decision hinged on new facts constituting matters beyond the pleadings. Hawk had argued that because the district court considered Castle’s testimony and evidence, it was required to convert the [...]

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Patenting a Nice Cool Glass of Nicotinamide Riboside? Claims Covering Milk Invalid under § 101

The US Court of Appeals for the Federal Circuit found that claims covering a naturally occurring composition were not patent eligible under 35 U.S.C. § 101 merely because one component of the composition had been “isolated.” ChromaDex, Inc. v. Elysium Health, Inc., Case No. 2022-1116 (Fed. Cir. Feb. 13, 2023) (Chen, Prost, Stoll, JJ.)

ChromaDex sued Elysium (a former ChromaDex customer) for infringement of its patent directed to dietary supplements containing nicotinamide riboside (NR). Elysium moved for summary judgment, arguing that the asserted claims were invalid under the § 101 prohibition against patenting natural phenomena. After the district court granted summary judgment, ChromaDex appealed.

The asserted claims were directed to a composition comprising:

Isolated NR
One or more of tryptophan, nicotinic acid or nicotinamide
One of 22 carriers
Increased NAD+ biosynthesis after eating.

Both parties conceded that milk satisfies every element of the asserted claims with the exception that its NR is not “isolated.” Both parties also conceded that milk is a naturally occurring material and thus not patent eligible under § 101.

On these facts, the issue presented was whether the claim limitation that the NR must be “isolated” (which does not occur in nature) was sufficient to make the claims patent eligible. The Federal Circuit responded “no.”

The Federal Circuit analyzed the asserted claims under two tests: the “markedly different characteristics” test set out in Chakrabarty, and the Alice two-step test (unsure whether Chakrabarty remains controlling precedent).

Under the Chakrabarty test, a claimed composition is not a natural phenomenon if it has “markedly different characteristics” from what occurs in nature. The Federal Circuit found that ChromaDex’s claimed composition had no markedly different characteristics from natural milk. While ChromaDex argued that isolation potentially allowed for unnaturally high concentrations of NR, the claims did not require such concentrations. The claims included compositions structurally and functionally identical to milk and therefore failed the “markedly different characteristics” Chakrabarty test.

Proceeding to the two-part Alice test, under step 1 the Federal Circuit found that the claims were directed to a product of nature because there were no structural differences between the claimed composition and natural milk. Under step two, the Court found that there was no “inventive step” because the claims were merely directed to increasing NAD+ biosynthesis, which was a natural principle that resulted from drinking milk.

Practice Note: During claim drafting, care should be taken to avoid claims that encompass all structural and functional components of a naturally occurring material.

The Alice Eligibility Two-Step Dance Continues

Patenting a Nice Cool Glass of Nicotinamide Riboside? Claims Covering Milk Invalid under § 101

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