IP News

The Federal Circuit, in Bascom Global Internet Services, Inc. v. AT&T Mobility LLC, case 15-1763 (June 27, 2016), recently provided an important clarification to step 2 of the Mayo '101patentability test set forth in Mayo Collaborative Servs. v. Prometheus Laboratories, Inc., 132 S. Ct. 1289 (2012). The case came on appeal from the district court in the Northern District of Texas, which dismissed the patent-infringement complaint under Rule 12(b)(6) for failure to state a claim for relief, agreeing with defendant AT&T that the asserted patent was invalid under '101. Bascom's patent, filed in 1997, is directed to an Internet filtering software tool that allows control over the type of information that certain groups of users are able to receive over the Internet. Several filtering tools were in existence at the time the patent was filed, and Bascom's invention combined their advantages and avoided the drawbacks: the “claimed filtering system avoids being 'modified or thwarted by a computer literate end-user,' and avoids being installed on and dependent on 'individual end-user hardware and operating systems' or 'tied to a single local area network or a local server platform' by installing the filter at the ISP server.” Slip op. at 4 (quoting the '606 patent). The Federal Circuit, conducting a de novo review of the district court's determination of patent-eligibility under '101, performed the two-step Mayo analysis. In step 1, the court agreed with AT&T and the district court that Bascom's claims were directed to an “abstract idea” of “filtering content on the Internet,” because content-filtering “is a longstanding, well-known method of organizing human behavior, similar to concepts previously found to be abstract.” Slip op. at 12. In step 2, the Federal Circuit also agreed with the district court that none of the individual limitations is inventive by itself. But the court disagreed with the district court's analysis of the ordered combination of the'606 patent claim limitations, holding that, on the record before it, the “specific method of filtering Internet content cannot be said, as a matter of law, to have been conventional or generic.” Id. at 16. The Federal Circuit criticized the district court's analysis under Mayo step-two as being “similar to an obviousness analysis under 35 U.S.C. '103, except lacking an explanation of a reason to combine the limitations as claimed.” The Federal Circuit explained that the “inventive concept inquiry requires more than recognizing that each claim element, by itself, was known in the art. ' [A]n inventive concept can be found in the non-conventional and non-generic arrangement of known, conventional pieces.” Id. at 15. The Federal Circuit thus vacated the district court's dismissal order, and remanded.

Judge Newman concurred in the result, but argued that the '101 inquiry should, when appropriate, be made in the context of a complete patentability/validity determination, because the determination of patentability issues always resolves or moots the patent-eligibility inquiry under '101, but not vice versa: “When evidence of patentability is needed or presented to resolve a challenge to eligibility of claims to a new method or machine or manufacture or composition, the district court and the parties should have the flexibility to resolve patentability at this threshold. If the claims are unpatentable, any issue of abstractness, however defined, is mooted. And if the subject matter is patentable, it is not an abstract idea.” Id., Newman, J., concurring, at 6.

Public Interest Factor Does Not Bar a Permanent Injunction Against a Direct Competitor