Federal Circuit: Software Enhancement of Network Accounting Records Patentable


On November 1, 2016, the Court of Appeals for the Federal Circuit reversed a lower court ruling (E.D.V.A.) that certain claims of patents owned by Amdocs, Ltd. were ineligible under Section 101 of the Patent Act. The case is Amdocs (Isr.) Ltd. v. Openet Telecom, Inc., 2016 U.S. App. LEXIS 19593 (Fed. Cir. Nov. 1, 2016). One of the representative claims from that ruling (claim 1 of U.S. Patent No. 7,631,065) is recited as follows:

1. A computer program product embodied on a computer readable storage medium for processing network accounting information comprising:

computer code for receiving from a first source a first network accounting record;

computer code for correlating the first network accounting record with accounting information available from a second source; and

computer code for using the accounting information with which the first network accounting record is correlated to enhance the first network accounting record.

The majority (Judges Newman and Plager) first recited the standards for determining whether a patent claim is directed to patent-ineligible subject matter, including the standard for determining what an "abstract idea" constitutes. In addressing the dissent (Judge Reyna), the majority confirmed that there is currently no set standard for what constitutes an "abstract idea," other than the "flexible" court precedent approach, comparing the claims at issue to claims prior decisions have found to be ineligible abstract ideas.

The majority went on to analyze the claims at issue against court precedent and found the claims to be patent eligible, at one point seizing upon the "enhance" language in claim 1 as helping that claim clear the second hurdle of the Supreme Court's Alice decision (i.e., whether the claim, although directed to an abstract idea, are nonetheless directed to an inventive concept -- "i.e., an element or ordered combination of elements that is 'sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the [ineligible concept] itself.'").

This decision is instructive for companies operating in the software space and who seek to obtain protection for their valuable software innovations. It also serves to dispel the myth that it is not possible to obtain patent protection for software-based inventions. The decision also provides a nice explanation and list of prior precedents finding both eligible and ineligible subject matter.

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