U.S. Federal Circuit Debates Patent Eligibility for Software Patents in Amdocs (Israel) Limited v Openet Telecom

On November 1, 2016, in Amdocs (Israel) Limited v Openet Telecom, the US Court of Appeals for the Federal Circuit (the Court) reversed the US District Court for the Eastern District of Virginia’s decision and found that a patent claiming a computer program and method for solving an accounting and billing problem faced by network service providers is patent-eligible.  The decision is the most recent application of the Supreme Court of the United States’ Alice Corporation Pty Ltd v CLS Bank International (Alice) decision by the Court.

The Court noted that the analysis of eligibility based on Alice is based on a generally-accepted and understood definition of, or test for, what an abstract idea encompasses.  However, the Court noted that “a search for a single test or definition in the decided cases concerning [patent-eligibility under] § 101 from this court, and indeed from the Supreme Court, reveals that at present there is no such single, succinct, usable definition or test. […] That is not for want of trying; to the extent the efforts so far have been unsuccessful it is because they often end up using alternative but equally abstract terms or are overly narrow.”

The procedure courts now follow for determining patent-eligibility under § 101 is to examine earlier cases in which a similar or parallel descriptive nature can be seen.  After reviewing both pre-Alice and post-Alice decisions, the Court held that the claims at issue, even if they were directed to an abstract idea, contained a sufficient inventive concept to render them patent-eligible.  While the Court recognized that the claims recited generic components, those components worked in an unconventional distributed fashion to solve a particular technological problem, and were accordingly found to be patent-eligible.

Additional commentary by Dennis Crouch of Patentlyo is available here. 

Summary By: Robert Dewald