Federal Circuit Clarifies the Boundaries of the Elusive “Abstract Idea” in Section 101 Challenges

Affinity Labs of Texas, LLC v. DirecTV, LLC et al. (Fed. Cir. 2016)

On September 23, 2016, the Federal Circuit provided further clarity as to what constitutes an “abstract idea” with its decisions in Affinity Labs of Texas, LLC v. DirecTV, LLC, et al.,[i] and its companion case Affinity Labs of Texas, LLC v. Amazon.   The Affinity Labs decisions provide valuable insights that help reconcile for practitioners and litigants some recent, seemingly disparate, § 101 decisions.[ii]

The Affinity Labs Court considered the claims of U.S. Patent No. 7,970,379, which were directed to broadcast systems in which a cellular telephone located outside the range of a regional broadcaster (1) requests and receives network-based content from the broadcaster via a streaming signal, (2) is configured to wirelessly download an application for performing these functions, and (3) contains a display that allows the user to select particular content.[iii]  The district court had held these claims to be ineligible, finding that the purpose of the claimed invention—to disseminate regionally broadcast content to users outside the region—was a well-known, longstanding business practice, and that the claim directed to that purpose were not tangible and concrete.  Further, the district court had held that the “downloadable application with graphical user interface” did not qualify as an “inventive concept.”  Affinity Labs appealed.

On appeal, Affinity Labs contended that its claim met both prongs of the Alice analysis, namely that the claims were not directed to an abstract idea and, in any event, disclosed an inventive concept.  With regard to the first argument, Affinity Labs relied primarily on the DDR Holdings and Enfish decisions, arguing that its claims were directed to the solution of a technological problem and a non-abstract improvement in computer and network functionality.  The Federal Circuit disagreed, holding that the claims were directed to an abstract idea, namely “the general concept of out-of-region delivery of broadcast content through the use of conventional devices, without offering any technological means of effecting that concept.”  Slip Op. at 14.  The Court further held that “there is nothing in claim 1 that is directed to how to implement out-of-region broadcasting on a cellular telephone.  Rather, the claim is drawn to the idea itself.”  Id. at 8.

With regard to the second argument, that its claims disclosed an inventive concept, Affinity Labs relied upon the Federal Circuit’s holding in BASCOM, arguing that its claims were supported by ample technical specificity to support a finding of an inventive concept.  The Federal Circuit again disagreed, citing Electric Power: “In applying the principles emerging from the developing body of law on abstract ideas under section 101, this court has noted that claims that are “so result-focused, so functional, as to effectively cover any solution to an identified problem” are frequently held ineligible under section 101. Elec. Power Grp., slip op. at 12. That is true in this case, as the claims are drafted in a way that would effectively cover any wireless delivery of out-of-region broadcasting content to a cellular telephone via a network.  The only limitations on the breadth of the result-focused, functional claims in this case are (1) that the application used by the cellular telephone must be wirelessly downloadable, and (2) that the cellular telephone must have a graphical user interface display that allows the user to select the regional broadcasting channel. Those additional limitations describe purely conventional features of cellular telephones and the applications that enable them to perform particular functions. They therefore do not meaningfully limit the scope of the claims.”  Slip Op. at 21.

The Court thus affirmed the district court’s decision that the claims were directed to an abstract idea, and that there was no inventive concept that would meaningfully limit the application of that idea.

This case injects some much-needed clarity into the question of what constitutes an “abstract idea.” As the Federal Circuit acknowledged in its decision, “precision has been elusive in defining an all-purpose boundary between the abstract and the concrete.”  Slip. Op. at 7.  The Affinity Labs decision, however, underscores the question that the Federal Circuit applied in both Electric Power and McRO, with different results: do the claims describe how to implement the idea, or are they drawn to the idea itself? See Slip Op. at 8.  Given the Federal Circuit’s reliance on the answer to this question in its analysis of recent cases, it is a question that should be considered by both practitioners and litigants in crafting arguments in connection with § 101.