Prior Art Introduced During Prosecution Has Important Implications for 101 Challenges

September 19, 2019

Five years after Alice Corp. Pty. v. CLS Bank Int'l, 573 U.S. 208 (2014) and the institution of the Alice test, district courts are still wading through precedent set by the Federal Circuit while it attempts to apply the test. Recently, one New Mexico District Court turned to prior art introduced during the prosecution process that was aimed at the questions of novelty and non-obviousness to determine whether there was an “inventive concept” for the Alice/Mayo test.

In Applied Capital, Inc. v. ADT Corp., No. 1:16-CV-00815, 2019 WL 3719099 (D.N.M. Aug. 7, 2019). This decision concerned a motion for summary judgement filed by ADT Corporation (ADT) claiming that Applied Capital Incorporated’s Patent No. 8,378,817 (‘817 patent) and Patent No. 9,728,082 (‘082 patent) patent claims are invalid as they are directed to an “abstract idea” under 35 U.S.C. § 101. Both patents disclosed a security system that monitors premises using a graphical floor plan. Independent claim 1 of the ‘817 patent is representative of both patents and reads:

1. A method comprising:

receiving one or more signals containing a device identifier and a device condition from one or more remote alarm monitoring systems; retrieving enhanced information based on the device identifier and the device condition; determining one or more communication methods and communication destinations based on the device identifier and the device condition; and dispatching the enhanced information to the one or more communication destinations using the one or more communication methods; and wherein the retrieving enhanced information based on the device identifier and the device condition comprises retrieving images based on the device identifier and the device condition, the images comprising all of the members selected from the group consisting of superimposed visual indicators, hierarchically organized graphical images, and vector based graphical images.

Previously, ADT filed for inter partes review of Applied’s ‘817 patent, challenging the validity of the patent’s claims for obviousness. The Patent and Trademark Appeals Board (PTAB), declined the review, finding that the ‘817 patent’s claims were non-obvious. Later, Applied brought suit against ADT, claiming that ADT infringed on Applied’s ‘817 and ‘082 patents, and ADT filed the motion for summary judgement against Applied.

Ultimately, the Court ruled that Applied’s claims were not directed towards an abstract idea. It described the claims as “directed to a new way of interacting with the information conveyed by an alarm system” and cited recent precedent that improvements to user graphical interfaces are “improvements to computer functionality,” and thus not directed to an abstract idea. In making this determination, the Court relied on the “Common Specification” that was present in both patent applications’ written descriptions and their prosecution histories, stating:

The Common Specification sets out the deficiencies found in conventional graphical presentation approaches and provides for dispatching the information in a more timely manner. The prosecution history describes the combination of features that make up the dynamically-rendered, event-specific, graphical floor plan.

This analysis highlights the current confusion as to whether courts can use prior art to determine whether claims are directed to an abstract idea. Until this issue concerning step 1 of Alice is clearly resolved, however, patent drafters should be mindful of how references to prior art can influence 101 determinations, even at the first step of Alice.

Further confusion presents itself as the Court applies step two of Alice. After determining that the claims were not directed towards an abstract idea, the Court stated that, alternatively, even if they were found to be directed to an abstract idea, the claims involved an “inventive concept.” The Court found that the earlier determination by the Patent and Trademark Office that the ‘817 patent claims were novel and non-obvious and the PTAB’s rejection of inter partes review on obviousness grounds to find that the patent contained an “inventive concept.” In this analysis, the Court used determinations of novel and non-obvious in place of an “inventive concept” analysis under the Mayo/Alice test. Although this decision did not hang on the Court’s analysis of whether there was an “inventive concept,” it reveals that, in the absence of clear guidance on how to apply “inventive concept,” courts may rely on determinations of novelty and non-obviousness in its place.


The article "Prior Art Introduced During Prosecution Has Important Implications for 101 Challenges," co-authored by Richard D. Kelly and contributed to by Oblon intern and GWU Law student, Sean Wesp.