Patent Riffs: Commentary on CAFC’s FairWarning IP case

It’s been a week since the Federal Circuit issued the opinion on FairWarning IP, LLC v. Iatric Systems, Inc., No. 2015-1985 (Fed. Cir. Oct. 11, 2016). This was another precedential opinion regarding patent subject matter eligibility (i.e., Alice and § 101 issues). The patent, U.S. 8,578,500 entitled "System and method of fraud and misuse detection" generally describes "detecting fraud and/or misuse of data in a computer environment through generating a rule for monitoring at least one of transactions and activities that are associated with the data" (Abstract).

Judge Stoll opined for the panel of Judge Lourie and Judge Plager. The district court declared "the ‘500 patent [as] directed to or drawn to the concept of analyzing records of human activity to detect suspicious behavior." The panel agreed.

While the buzzwords of "monitoring" and "rules" certainly warrant attention, the importance of this opinion is likely in the comparisons and discussions of McRO and Enfish as it will guide the interpretation of this line of cases by district courts, examiners, and patent practitioners.

FairWarning IP, LLC v. Iatric Systems, Inc. (Fed. Cir. 2016) – Rule-Based Data Processing Patent Held to Be Directed to Patent-Ineligible Subject Matter | Patent Docs
"The Federal Circuit found that the present claims merely implement an old practice in a new environment. The claimed rules ask whether accesses of PHI, as reflected in audit log data, are 1) "by a specific user," 2) "during a pre-determined time interval," or 3) "in excess of a specific volume." These are the same questions (though perhaps phrased with different words) that humans in analogous situations detecting fraud have asked for decades, if not centuries…[the panel] found that the claimed invention is directed to the broad concept of monitoring audit log data, and the claims here do not propose a solution or overcome a problem specifically arising in the realm of computer technology."

Federal Circuit Affirms 101 Ineligibility of a Patent Claiming Detection of Unauthorized Access to Medical Information | National Law Review
"The court here contrasted FairWarning’s claims with [] the recent [McRO and Enfish cases]…the court appears to base the patentability decision on whether the claimed rules have already been used by people. The ‘subjective nature’ of animators suggests that, even if the rules are the same, perhaps having no previously identified mechanism to perform a task (e.g., written rules) means that any rule claimed would be a patent eligible improvement. In contrast, the court found that the rules claimed by FairWarning were the same rules used by people for ‘decades, if not centuries.’ This is, however, an interesting position to take given that a well-known formula connected to a well-known machine was found patentable in Diamond v. Diehr [and]… Parker v. Flook."

Federal Circuit Clarifies Patent Eligibility Under McRO and Enfish | IPWatchdog
"The claimed rules in McRO transformed a traditionally subjective process performed by humans into a mathematically automated process executed on computers. The human process and computer process in McRO produced a similar result but did so in fundamentally different ways. It was the incorporation of the claimed rules, not the use of the computer, that improved the existing technological process by allowing the automation of further tasks. In contrast, the Court found that FairWarning’s claims did not provide improved rules and ‘merely implement an old practice in a new environment.’ Further, FairWarning’s claims were not like the patentable claims in Enfish, which provided a specific improvement to the way computers operate, not an abstract idea implemented on a computer. Although FairWarning purported to accelerate the process of analyzing audit log data, the Court found that this came from the capabilities of a general-purpose computer, not from the patented method itself."

Federal Circuit nixes FairWarning’s patient-privacy patent | REUTERS

Reuters teaser with a link to Westlaw…"A computer-based method of detecting fraud or other misuse of private healthcare information by an otherwise authorized user is ineligible for a patent because it simply speeds up a human process, a federal appeals court held Tuesday."