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Explore the latest in patent, trademark, and copyright cases on the Merchant & Gould LLP blog. Stay informed with expert insights on intellectual property law updates.

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Last week, the Federal Circuit issued an opinion in <a href="https://cafc.uscourts.gov/opinions-orders/21-2173.OPINION.4-12-2023_2109659.pdf">Sanderling Management Ltd. v. Snap Inc., 2021-2173 (Apr. 12, 2023)</a>, affirming the dismissal of Sanderling’s patent infringement suit because of the patent claims’ lack of patent-eligible subject matter under 35 U.S.C. § 101.

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In 2021, Sanderling filed a Complaint against Snap asserting three patents disclosing distributed rules to load digital image branding functions to users when certain conditions are met. Snap moved to dismiss, arguing the patent claims covered patent ineligible subject matter. The district court applied the analysis in Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 573 U.S. 208 (2014), concluded the claims were patent ineligible, and dismissed the suit. Sanderling appealed.

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The Federal Circuit affirmed, stating that “Alice directs us to determine whether a patent claims patent-ineligible subject matter in two steps: first, we ‘determine whether the claims at issue are directed to one of [certain] patent-ineligible concepts’ (‘step one’); and, if so, … ‘consider the elements of each claim both individually and as an ordered combination to determine whether the additional elements transform the nature of the claim into a patent-eligible application (‘step two’).” At step one, the Court held “the claims are directed to an abstract idea” because they “are not directed to a specific improvement in computer functionality but, instead, to the use of computers as a tool; here a tool to identify when a condition is met and then to distribute information based on satisfaction of that condition.” Further, the Court ruled that claim construction was not necessary in step one, finding that “[i]f claims are directed to ineligible (or eligible) subject matter under all plausible constructions, then the court need not engage in claim construction before resolving a Section 101 motion.”

At step two, the Court determined that the claimed “distribution rule” was “the application of the abstract idea using common computer components.” Responding to Sanderling’s argument that the invention improved the “scalability and speed” of computer function, the Court held that “‘claiming the improved speed or efficiency inherent with applying the abstract idea on a computer [does not] provide a sufficient inventive concept.’”

Finally, the Court rejected Sanderling’s argument that the claims were found to be patent eligible during prosecution because “courts are not required to defer to Patent Office determinations as to eligibility.”

CAFC Affirms Patent Ineligibility Ruling

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