‘Goal’ Is Not Enough for Alice Patent Eligibility: CAFC Affirms TDE’s Oil Patent as Ineligible Under 101

The Federal Circuit issued another (nonprecedential) opinion regarding patent subject matter eligibility and Alice. TDE Petroleum Data Solutions, Inc. (“TDE”) sued AKM Enterprise, Inc. (known as “Mobilize, Inc.”) for infringement of TDE’s U.S. Patent No. 6,892,812 for an “Automated Method and System for Determining the State of Well Operations and Performing Process Evaluation.”

Claim 1 recites:

1. An automated method for determining the state of a well operation, comprising:
storing a plurality of states for a well operation;
receiving mechanical and hydraulic data reported for the well operation from a plurality of systems; and
determining that at least some of the data is valid by comparing the at least some of the data to at least one limit, the at least one limit indicative of a threshold at which the at least some of the data do not accurately represent the mechanical or hydraulic condition   purportedly represented by the at least some of the data; and
when the at least some of the data are valid, based on the mechanical and hydraulic data, automatically selecting one of the states as the state of the well operation.

At the Southern District of Texas, the $200MM lawsuit was dismissed by U.S. Judge Gray H. Miller, who said the ‘812 patent is nothing more than “simple steps of storing data, receiving data and using mathematics or a computer to organize that data and generate additional information.” The district court found the claims to be directed to an abstract idea with no “inventive concept” or meaningful limitations—prior to claim construction.

On appeal, the Federal Circuit agreed. Judge Hughes delivered the opinion affirming that claim 1 is patent ineligible. The de novo Alice/101 analysis extensively cites another CAFC case from two weeks ago, Electric Power Group, LLC v. Alstom S.A., No. 2015-1778, 2016 WL 4073318 (Fed. Cir. Aug. 1, 2016) to say that “claims generally reciting ‘collecting information, analyzing it, and displaying certain results of the collection and analysis’ are ‘a familiar class of claims ‘directed to’ a patent-ineligible concept’” and that “claim 1 is the sort of data gathering and processing claim that is directed to an abstract idea under step one of the Alice analysis.” TDE, p. 4.

In the second step of the Alice inquiry, the Court found nothing in claim 1 that adds anything more than the storing, gathering, and analyzing data. Judge Hughes uses the “inventive concept” language and concludes that “none of TDE’s arguments show that some inventive concept arises from the ordered combination of these steps, which, even if true, would be unpersuasive given that they are the most ordinary of steps in data analysis and are recited in the ordinary order.” (emphasis added).

Reviewing the importance of the specification, the Court decided that “[w]hile the specification arguably provides specific embodiments for the step of ‘automatically selecting one of the states as the state of the well operation,’ claim 1 recites none of those details” and “[i]nstead, claim 1 simply recites generic computer functions that amount to nothing more than the goal of determining the state of an oil well operation.” Id. (emphasis added).

The opinion closed by again citing Electric Power and stating “… the claims of the ’812 patent recite the what of the invention, but none of the how that is necessary to turn the abstract idea into a patent-eligible application.”

While the opinion does little to clarify the intricate analysis under Alice, it does reiterate the importance of claiming concrete series of steps rather than a mere goal of solving a problem. For instance, in Electric Power the Court quoted the Central District of California’s opinion, stating that “there is a critical difference between patenting a particular concrete solution to a problem and attempting to patent the abstract idea of a solution to the problem in general” (emphasis added). This, of course, alludes to the original pro-Alice argument that patenting abstract ideas could effectively prevent others from using those ideas—rather than granting a monopoly on just one implementation or solution.

Claim breadth (or apparent overbreadth) continues to be a theme in the Alice invalidations at the CAFC.

One thought on “‘Goal’ Is Not Enough for Alice Patent Eligibility: CAFC Affirms TDE’s Oil Patent as Ineligible Under 101

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