In Apple, Inc., v. Ameranth, Inc., [2015-1703, 2015-1704] (November 29, 2016), the Federal Circuit affirmed in part and reversed in part the PTAB’s subject matter eligibility determination of claims of U.S. Patent Nos. 6,384,850, 6,871,325, and 6,982,733 in three separate CBM proceedings. The patent specifications disclose a first menu that has categories and items, and software that can generate a second menu from that first menu by allowing categories and items to be selected. The patents describe a preferred embodiment of the invention for use in the restaurant industry.

The Patent Trial and Appeal Board (“Board”) construed the claims, found that each patent met the statutory definition of “covered business method patent,” and instituted CBM reviews. In its final decisions, the Board found certain claims in each of the patents unpatentable under 35 U.S.C. § 101.

On appeal, the patent owner did not contest that the claims were directed to a “financial product or service,” but it did argue that the patents fall within the exception for technological inventions. 37 C.F.R. § 42.301(b) provides:

"In determining whether a patent is for a technological invention solely for purposes of the Transitional Program for Covered Business Methods (section 42.301(a)), the following will be considered on a case-by-case basis: whether the claimed subject matter as a whole recites a technological feature that is novel and unobvious over the prior art; and solves a technical problem using a technical solution."

The Federal Circuit observed that this regulation offers little towards understanding the meaning of the term “technological invention,” but noted that determining whether these patents are a technological invention does not require this court to determine “the full sweep of the term.” The Federal Circuit affirmed the Board’s determinations that the patents were not for technological inventions.

In the first step of the Alice test, the Board determined that the claims in all three patents are directed to the abstract idea of “generating a second menu from a first menu and sending the second menu to another location.” The patent owner complained that the characterization of the abstract idea changed from the institution decision to the final written decision. The Federal Circuit noted that an abstract idea can generally be described at different levels of abstraction, but concluded that the Board’s slight revision of its abstract idea analysis does not impact the patentability analysis. The Federal Circuit affirmed the Board’s conclusion that the claims in these patents are directed to an abstract idea.

In the second step of the Alice test, the Board found that the recited central processing unit, data storage device, and operating system components were “typical” hardware elements. The Board rejected the various elements identified by the patent owner as insignificant post-solution activity, and the Federal Circuit agreed. The Federal Circuit pointed out that the specifications describe the hardware elements of the invention as “typical” and the software programming needed as “commonly known.” Lastly, the Federal Circuit rejected the patent owner’s argument that the required programming was difficult, and this difficulty indicated that the claims were not directed to an abstract idea. The difficulty of the programming details for this functionality is immaterial because these details are not recited in the actual claims. The degree of difficulty in implementing an abstract idea in this circumstance does not itself render an abstract idea patentable.

The Federal Circuit went on to reverse the confirmation of patentability of several of the claims.