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Federal Circuit Nixes'Insurance Claims'Under Section 101

On Sept. 5, 2013, the Federal Circuit panel of Judges Rader, Lourie, and Reyna released its opinion in Accenture Global Services, GmBH v. Guidewire Software, Inc., No. 2011-1486. The opinion, by Judge Lourie, affirmed the district court's holding that all system claims of Accenture's patent for generating tasks to be performed in an insurance organization are invalid under 35 U.S.C. '101. The asserted patent, 7,013,284, claims a system that stores information on insurance transactions in a database, and, upon the occurrence of an event, determines which tasks need to be accomplished and assigns those tasks to various individuals to complete them. Slip Op. at 3.

Judge Sue L. Robinson of the District of Delaware held on summary judgment that the '284 patent was 'directed to concepts for organizing data rather than to specific devices or systems, and limiting the claims to the insurance industry does not specify the claims sufficiently to allow for their survival.' Slip Op. at 7 (internal quotations omitted). Judge Robinson held that both the system and method claims were invalid under Section 101, and Accenture appealed the determination regarding the system claims only.

The Federal Circuit, relying heavily on the recent opinion in CLS Bank Int'l v. Alice Corp. , 717 F.3d 1269 (Fed. Cir. 2013) (en banc), held that the decision on patent-ineligibility of the system claims must also be affirmed, 'both because the system claims offer no meaningful limitations beyond the method claims that have been held patent-ineligible, and because, when considered on their own, under Mayo and our plurality opinion in CLS Bank, they fail to pass muster.' Slip Op. at 10. Accenture attempted to point to the structural limitations present in the system claims to differentiate them from the ineligible method claims, including 'an insurance claim folder, a task library database, a server component, and a task engine ”. Id. at 11. The court held that 'these software components are all present in the method claims, albeit without a specific reference to those components by name.' Id. 'Because the system claim and method claim contain only minor differences in terminology but require performance of the same basic process, they should rise or fall together.' Id. at 13 (internal quotations omitted).

Chief Judge Rader filed a dissenting opinion, stating that 'no part of CLS Bank, including the plurality opinion, carries the weight of precedent.' Slip Op. at 2 (Rader, C.J., dissenting). He also took issue with the majority's conclusion that Accenture's failure to appeal the eligibility of the method claims estops it from arguing that the elements contained therein, and shared by the system claims, are directed to patent eligible subject matter. Id. Chief Judge Rader reasoned that the claims require a specific combination of computer components, which the majority opinion 'strips away' in order to conclude that 'the abstract idea at the heart of system claim 1 is generating tasks based on rules to be completed upon the occurrence of an event.' Id. at 4 (Rader, C.J., dissenting). He also reiterated his view that the patent statute must be considered in making Section 101 determinations. Id. at 5 (Rader, C.J., dissenting) (quoting CLS Bank, 717 F.3d at 1335 (additional reflections of Rader, C.J.)).

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Federal Circuit:'Clarification'of Injunction Terms'Not Appealable

On Aug. 29, 2013, the Federal Circuit released its opinion in Aevoe Corp. v. AE Tech Co., Ltd., No. 2012-1422, holding that the district court's clarification of language in an already-existing injunction is not appealable, and dismissed for lack of jurisdiction. The district court litigation began with a temporary restraining order issued by the District of Nevada, barring AE Tech from selling two lines of products, as well as an order to show cause as to why a preliminary injunction should not issue. AE Tech did not answer the complaint, respond, or otherwise appear. Slip Op. at 4. The district court then issued a preliminary injunction, and AE Tech filed a motion to reconsider and vacate the preliminary injunction.

Shortly thereafter, AE Tech informed Aevoe that it had redesigned its product, and had already been selling the redesigned product using the same product packaging and identification numbers used for the original allegedly infringing devices. Id. at 6. After examining the redesigned product, the district court 'found that the added channels were a non-functional and trivial attempt to design around the [patent].' Id. at 8. The court held all defendants in contempt and concluded that sanctions were appropriate, and also altered the language of the preliminary injunction to add the redesigned products to the injunction, or 'colorable imitations' of the same. Id.

On appeal, the Federal Circuit panel of judges Rader, Lourie, and O'Malley held that the 'modification' of the original injunction did not create a new injunction, and therefore the appeal is not timely. Id. at 10. The court held that the 'language effected no substantive change and did not alter the legal relationship between the parties.' Id. at 12-13. Agreeing that 'the distinction between an order interpreting an injunction and one modifying an injunction is not always clear,' the court held that 'the district court never modified the injunction such that it would reset AE Tech's time to appeal, and, therefore, AE Tech's appeal is untimely.' Slip Op. at 13-14. The court also noted that the contempt order is an unappealable interlocutory order. Id. at 14.