CAFC Overrules Delaware’s Judge Andrews on §101 in Visual Memory

In Visual Memory LLC v. NVIDIA Corporation (No. 2016-2254) issued today, the Court of Appeals for the Federal Circuit overruled Judge Andrews of the District Court for the District of Delaware on a 12(b)(6) dismissal for subject matter ineligibility under §101 (i.e., Alice). The panel included Circuit Judges O’Malley and Stoll outnumbering the dissenting Judge Hughes. Judge Stoll wrote the precedential opinion, stating:

Our review of the ’740 patent claims demonstrates that they are directed to an improved computer memory system, not to the abstract idea of categorical data storage. Claim 1 requires a memory system “having one or more programmable operational characteristics, said characteristics being defined through configuration by said computer based on the type of said processor,” and “determin[ing] a type of data stored by said cache.” ’740 patent col. 6 ll. 29–38. Dependent claims 2 and 3 narrow the cache’s programmable operational characteristic to storing certain types of data (“only code data or . . . both code data and non-code data”) and buffering data from certain sources (“buffering of data solely from said bus master or . . . both from said bus master and said processor”), respectively. Id. at col. 6 ll. 39–51. Claim 6 recites the fast page mode embodiment with a programmable operational characteristic, and dependent claim 7 defines the programmable operational characteristic as the type of data to be stored. Id. at col. 7 ll. 3–26. None of the claims recite all types and all forms of categorical data storage (slip op. 9).

The Delaware District Court relied on comparisons to the patent-ineligible claims in Content Extraction & Transmission LLC v. Wells Fargo Bank, 776 F.3d 1343 (Fed. Cir. 2014) and In re TLI Communications LLC Patent Litigation, 823 F.3d 607 (Fed. Cir. 2016) which the opinion deemed “misplaced”:

The claims in Contract Extraction and TLI Communications were not directed to an improvement in computer functionality, which separates the claims in those cases from the claims in the current case. As discussed above, the claims in the ’740 patent recite an allegedly new, improved, and more efficient memory system (slip op. 11-12).

As the panel addresses NVIDIA and the dissent’s arguments that the patent presents no innovation and nothing more than a black box, the majority discusses the benefits outlined in the specification and states:

Third, the dissent assumes that the “innovative” effort in the ’740 patent lies in the programming required for a computer to configure a programmable operational characteristic of a cache memory. This assumption is inconsistent with the patent specification itself. The specification makes clear that the inventors viewed their innovation as the creation of “a memory system which is efficiently operable with different types of host processors,” ’740 patent col. 2 ll. 65–67, and the patent discloses how to implement such a memory system. Specifically, as demonstrated above, both the specification and the claims expressly state that this improved memory system is achieved by configuring a programmable operational characteristic of a cache memory based on the type of processor connected to the memory system. For example, the claims indicate that the programmable operational characteristic is “defined through configuration by said computer based on the type of said processor.”2 See, e.g., id. at col. 6 ll. 30–32. The specification further explains that, in one example, “[f]or a system employing a 386 or 386sx system processor, internal cache 16 holds only code data, whereas for a system employing a 486 processor, internal cache 16 holds both code and non-code data.” Id. at col. 4 ll. 32–35. Configuring the memory system based on the type of processor connected to the memory system is the improvement in computer technology to which the claims are directed. Alice requires no more from the claims or the specification to support our conclusion that the claims are not directed to an abstract idea. This conclusion is particularly proper on a motion to dismiss under Rule 12(b)(6), where all factual inferences drawn from the specification must be weighed in favor of Visual Memory, the non-moving party (slip op. 13-14).

The majority concludes the opinion stating that the claims are not directed to an abstract idea and further evaluation under Alice‘s Step 2 is unnecessary, however the panel made no decision on other grounds of validity at this juncture.

Dissenting, Judge Hughes takes issue with both the characterization of the claims as well as the alleged inventive concepts and states:

Step one of Alice Corp. v. CLS Bank International, 134 S. Ct. 2347 (2014) directs us to examine and determine the character of each claim as a whole. In distilling the purpose of a claim, we must not express the claim’s fundamental concept at an inappropriate level of abstraction but at a level consistent with the level of generality or abstraction expressed in the claims themselves. Following those principles, I would find the ’740 claims are directed to the abstract idea of categorical data storage (dissent op. 1).

For Step 1 under Alice, Judge Hughes’s main point includes a worthwhile look at the concept of characterizing the claim(s) and quotes some relevant case law that will surely be copied in future opinions and rejections:

I am mindful that we must be careful not to overgeneralize a claim because, “if carried to its extreme, [it would make] all inventions unpatentable.” In re TLI Commc’ns LLC Patent Litig., 823 F.3d 607, 611 (Fed. Cir. 2016) (quoting Diamond v. Diehr, 450 U.S. 175, 189 n.12 (1981)); see also Thales Visionix Inc. v. United States, 850 F.3d 1343, 1347 (Fed. Cir. 2017) (“We must therefore ensure at step one that we articulate what the claims are directed to with enough specificity to ensure the step one inquiry is meaningful.”). At the same time, we must not express the basic concept of the claim in a way that is “untethered from the language of the claims.” Enfish, 822 F.3d at 1337. When we assess what the claims are directed to, we must do so at the same level of generality or abstraction expressed in the claims themselves. Id. (dissent op. 2).

Much like many examiner rejections, the dissent’s proposed Step 2 summarily dismisses the rest of the claim stating “The claims refer to generic computer components and use them to perform generic computer functions” and that “These are all routine components and functions used to ‘apply’ the abstract idea of categorical data storage in a computer environment and are not sufficient to constitute an inventive concept and transform the abstract idea into a patent-eligible invention.”

Upon first impression the opinion may not appear to clarify much in terms of determining when a claim is directed to an “abstract idea,” however the dialogue between the majority and the dissent may better elucidate the thought process in characterizing a claim and identifying whether there is an improvement in the technology.