1 Jun

IP lawyer: Dos and don’ts for clearing the Alice hurdle in e-commerce

It has become harder to patent some aspects of e-commerce in the United States, but protection for several other aspects is still possible. As the dust settles, we are getting a better idea of what to emphasise and what to steer clear of when drafting and prosecuting patent applications

The US Supreme Court held in Alice (134 S Ct 2347 (2014)) that an idea is patent eligible when it is not abstract or includes an inventive concept that ensures the patent amounts to significantly more than a patent on the abstract idea. This article presents e-commerce aspects that have been deemed abstract and therefore patent ineligible, those that have been found to be not abstract and thus patent eligible and those that, while abstract, have been deemed to include a patent-eligible inventive concept.

Abstract ideas to avoid

An abstract idea is at least one of a fundamental economic practice, a mathematical relationship or formula, an idea of itself or a certain method of organising human activity.

Fundamental economic practice

A fundamental economic practice is an economic practice that has been long prevalent in our system of commerce. E-commerce aspects deemed as fundamental economic practices include calculating a bill, selecting financial instruments that maximise return while minimising risk of loss, coordinating loans, offer-based price optimisation, exchanging financial obligations between two parties using a third-party intermediary to mitigate settlement risk, creating a contractual relationship and hedging risk in commodity prices.

Mathematical relationships or formulae

E-commerce ideas found to be mathematical relationships include calculating and comparing spatial regions, managing a stable insurance policy by performing calculations and manipulating the results, a mathematical formula for hedging and an algorithm for determining optimum number of visits by a business representative to a client within a certain period.

Idea of itself

An idea of itself is a mental process lying within the inventor’s mind. E-commerce concepts deemed as ideas of themselves include collecting and then storing and analysing data, anonymous loan shopping, delivering user-selected media content to portable devices, retaining information during navigation of online forms, using organisational and product group hierarchies and displaying an advertisement in exchange for access to media.

Certain methods of organising human activity

E-commerce aspects deemed as methods of organising human activity include collecting and manipulating extensible mark-up language data, filtering content, cataloguing data, screening for viruses, distributing email, classifying and storing digital images and using advertising as an exchange or currency.

Ideas that clear the bar for not being abstract

Several e-commerce aspects may not be abstract. For example, the patented claims in Enfish (822 F 3d 1327 (Fed Cir 2016)) were directed to creating a self-referential table, where the column definitions were stored in rows, thereby enabling faster searches of stored data, more efficient data storage and the ability to model items in the database on the fly.

The court deemed the claims not abstract because they were directed to a particular table that was a specific type of data structure designed to improve the way a computer stores and retrieves data in memory, thereby improving the way that computers operate.

Abstract ideas that clear the bar for being ‘significantly more’

Many e-commerce concepts, even if abstract, may have an inventive concept which is significantly more than an abstract idea.

In Amdocs (841 F 3d 1288 (Fed Cir 2016)), the claims taught enhancing records indicating computer network usage by using an architecture with devices distributed across the network to aggregate usage information and a central location where the data records on those devices could be accessed. This allowed network usage data to reside close to the information sources, thereby reducing congestion in network bottlenecks, while allowing data to be accessible from a central location. The court held that the claims were significantly more than abstract because they entailed an unconventional solution of enhancing data in a distributed fashion to a technological problem of massive record flows which previously required enormous databases.

The claims in Bascom (827 F 3d 1341 (Fed Cir 2016)) described an internet filtering tool, where a remote internet service provider server received a request to access a website, associated the request with a user, applied the filtering mechanism associated with that user to the requested website and returned to the user either the content of the website or a message indicating that the request had been denied. The patent specification described this filtering tool as an improvement because no one had previously provided customised filters at a remote server. The court found the claims to be significantly more than an abstract concept because the patent described how its particular arrangement of elements was a technical improvement over well-known ways of filtering.

E-commerce entities can therefore clear the Alice hurdle by delineating technological aspects that have received favourable treatment from the courts and being cautious when presenting the disfavoured aspects.

Gurneet Singh is an experienced US patent agent based in New York, United States

The opinions expressed are those of the author alone and do not necessarily reflect the views of any other entity. This article is for general information purposes and is not intended to be and should not be taken as legal advice.