Ex Parte Hafner Provides Clarity in Assessing Patent Subject Matter Eligibility for Software Patents

Written by Keith Lim and Maria Anderson

Note: an Addendum has been added to this previously published article.

In Ex Parte Hafner, the U.S. Patent and Trademark Office Patent Trial and Appeal Board (the “Board”) reversed the Examiner’s rejection that claims directed to an energy transaction plan were subject-matter ineligible. Ex parte Hafner et al., No. 2015-002200 (P.T.A.B. Jan. 31, 2017). This decision provides guidance for navigating the changing landscape of software patents in a post-Alice era. The Board’s ruling cautions examiners not to make overly-simplified characterizations of the claims, and advises patent practitioners to focus on how the claim limitations solve a technical problem.

Procedural History

This case originates from an appeal filed with the Board requesting reversal of a patent subject matter eligibility rejection made during prosecution of a patent application in the U.S. Patent and Trademark Office (“USPTO”).

Board’s Analysis

The Board made clear in its decision that the analysis put forward by the Examiner did not “plac[e] the Board in a position to perform a meaningful review of the [§ 101] rejection.” Id., at 5. The Board noted that the Examiner, in applying the Mayo/Alice abstract idea framework, merely stated that: (1) the claims were “deemed to claim an abstract idea (generating a plan)” because “[g]enerating an energy transaction plan based upon various attributes, including requirements, constraint and preferences, is a basic economic or administrative practice;” (2) “[t]here are no meaningful limitations that transform the exception into a patent eligible application;” (3) “[t]he claims only manipulate abstract data elements;” and (4) “generic computing elements recited are known and conventional.” Examiner’s Answer dated October 8, 2014, at 3. The Board also explicitly noted that “there was no further analysis” by the Examiner. Ex Parte Hafner, at 5.

In weighing the Examiner’s analysis, the Board relied upon USPTO guidance and recognized that Examiners are to “[c]onsider the claims as a whole by considering all claim elements, both individually and in combination.” Id.(citing “Preliminary Examination Instructions in view of the Supreme Court Decision in Alice Corporation Ply. Ltd. v. CLS Bank International, et al.,” Memorandum, Andrew Hirshfeld, Deputy Commissioner for Patent Examination Policy, June 25, 2014.) Thus, the Board was troubled that the following particular claim limitation, which could not be simply characterized as “only manipulat[ing] abstract data elements,” was not addressed in the Examiner’s Answer:

starting, conducting, and ending charging of the electric vehicle charging transaction using the processor in the computer configured to execute the generated energy transaction plan to control all aspects of the charging, discharging, and storing operations with the electric vehicle.

Id., at 6-7.

The Board further found persuasive the Appellant’s arguments that the invention provided a technical solution. The Board compared the paucity of the explanation in support of the Examiner’s rejection to the Appellant’s comprehensive explanation on how the claim limitations rooted the solution of a problem being solved in technology, thereby rendering the claim limitations as meaningful beyond simply employing a generic computer. The Appellant’s explanation stated in part:

The energy transaction plan is accordingly a "logical controller" used to control each of charging, discharging, and storing operations with the electric vehicle, and includes terms of the charging transaction to account for each of charging, discharging, and storing electric power. The "controller" aspect of the energy transaction plan is accordingly used to maximize, minimize, or optimize each preference in accordance with the weighting value assigned to each preference, to control charging, discharging, and storing electric power. An implementation of the claimed method to produce the energy transaction plan effectively transforms the computer on which the method is implemented and the plan materialized into an electric power charging, discharging, and storing controller.”

Appellant’s Reply Brief dated November 25, 2014, at 6.

Conclusion

In reversing the Examiner’s rejection under § 101, the Board in Ex Parte Hafner not only confirmed the applicability of USPTO guidance regarding § 101, but also confirmed recent Federal Circuit precedent that software can be patent-eligible technological improvement, even with generic hardware recitations. As such, Ex Parte Hafner may be a valuable case to make precedential. In fact, the Patent Law Committee of the American Intellectual Property Law Association (the “AIPLA”) has proposed to request the USPTO to designate the decision as precedential. As a precedential decision, it would be the first Board decision to follow the Mayo/Alice framework and would add to the clarity and predictability of computer-related inventions for applicants, examiners, and administrative judges. The proposal and has been provided to the AIPLA Board for their consideration. In the interim, it may still be useful for patent practitioners to bring this Board decision to the attention of examiners, particularly during interviews, when arguing how the claim limitations solve a technical problem and/or when encouraging application of the USPTO guidance regarding § 101.

Addendum

Update: The Patent Law Committee recently decided not to pursue the proposal to nominate this decision as precedential. However, this case may still be useful to patent practitioners as persuasive support, particularly during Examiner interviews, when arguing how the claim limilations solve a technical problem and/or when encouraging application of the USPTO guiadance regarding § 101.