March 9

Are Rewards Points Patentable?


No. That’s the simple answer. You can see the entire decision here: https://ipscaling.com/caselaw-for-patent-eligibility/

Could a computerized system that manages rewards points be patentable?

It can’t if the claims fail to recite unconventional techniques specified in technical terms and with a high degree of specificity. 

Now, most claims that are not deemed to claim abstract ideas do not have to meet this very high bar. It is enough if the arrangement of the conventional is a nonobvious arrangement. But when it comes to abstract ideas like rewards points, financial systems and the like, unconventional techniques, technical terms and specificity are required, according to Court of Appeals for the Federal Circuit. 

According to the appellate court, It’s not enough that claims, if nothing more than an abstract idea, are nonobvious over the prior art. Even if the appellate court assumed “…that the techniques claimed are ‘[g]roundbreaking, innovative, or even brilliant,’ … that is not enough for eligibility.”  See, e.g.SAP Am., Inc. v. In- vestPic, LLC, 898 F.3d 1161, 1163 (Fed. Cir. 2018) (quoting Ass’n for Molecular Pathology v. Myriad Genetics, Inc., 569 U.S. 576, 591 (2013)).  

In trying to understand the caselaw, the patent appeals board “…repeatedly referred to the United States Patent and Trademark Office’s 2019 Revised Patent Subject Matter Eligibility Guidance, 84 Fed. Reg. 50 (Jan. 7, 2019). 

In a footnote in its decision, the appellate court took the time to rebuff patent office guidance, which  “…is not, itself, the law of patent eligibility, does not carry the force of law, and is not binding on our patent eligibility analysis.”  Citing In re Rudy, 956 F.3d 1379, 1382 (Fed. Cir. 2020). Whenever patent office guidance “…contradicts or does not fully accord with our caselaw, it is our caselaw, and the Supreme Court precedent it is based upon, that must control,” according to the appellate court. Citing Id. at 1383. 

This is a pretty strong rebuke given the chaotic state of patent eligibility caselaw. Applying the caselaw of patent eligibility is not easy for anyone, not the courts and not the patent office. There is a lack of consistency in the caselaw, itself, which leaves some practitioners, and even some judges, scratching their heads.

In this case, the recitation in the claims was not solving a “technological problem” requiring a solution that improves the performance of the computer system itself. 

This “performance of the computer system itself” language appears to be one of the “something mores” that turn a computer algorithm into something other than an abstract idea. 

Instead, the claims at issue in this particular case merely “…solve this purported problem by applying an abstract idea using conventional techniques specified in functional terms and at a high degree of generality.” See, e.g., Univ. of Fla. Res. Found., Inc. v. Gen. Elec. Co., 916 F.3d 1363, 1368–69 (Fed. Cir. 2019) (holding claims relating to format conversion ineligible where the “drivers [were] described in purely functional terms” and the claims did not “explain[] how the drivers do the conversion that [the patent owner] points to”). 

Failing to explain how something is done in the claims is ordinarily a Section 112 indefiniteness issue and not a patent eligibility issue, but there are many cases where a thin explanation in the patent about how to implement the invention technologically has caused problems in rebutting Section 101 rejections. 

So, apparently, if the application of the abstract idea in this case had recited unconventional techniques specified in technical terms and with a high degree of specificity, the claims would have been patent eligible? 

The appellate court seems to agree. “To be sure, a patent claim may be eligible under § 101 if it, for example, “reflects something more than the application of an abstract idea using well-understood, routine, and conventional activities.”  Cellspin, 927 F.3d at 1315–16 (internal quotation marks omitted).” Id.

However, in this case, the appellate court compared the claims, unfavorably, to the patent eligible claims in CardioNet, LLC v. InfoBionic, Inc., 955 F.3d 1358, 1370 (Fed. Cir. 2020) (citing “[n]othing in the record in this case suggests that the claims merely computerize pre-existing techniques for di- agnosing atrial fibrillation and atrial flutter”); and DDR Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1257–59 (Fed. Cir. 2014) (but those “…claims did not merely employ conventional techniques to apply an abstract idea but rather involved the use of a computer network operating outside its normal and expected manner”).  

So, the takeaway in this case is to draft claims reciting unconventional techniques in technical terms with a high degree of specificity! 

Good luck to patent practitioners!


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