By: Jeffrey G. Sheldon, Esq.

image00McRO v. Bandai Namco, et al. (Fed. Cir. 2016) is only the fourth decision where the Federal Circuit has reversed a lower court’s holding of patent ineligibility since the U.S. Supreme Court’s decision in Alice v. CLS Bank.

In McRO, the Federal Circuit reached its holding without even reaching step two of the two-part Alice test, which says (1) “determine whether the claims at issue are directed to one of those patent-ineligible concepts”; and (2) “search for the ‘inventive concept’ —i.e., “an element or combination of elements that is “sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the [ineligible concept] itself.”

After a detailed analysis in step one of the Alice test, the Court held “that the ordered combination of claimed steps, using unconventional rules that relate sub-sequences of phonemes, timings, and morph weight sets, is not directed to an abstract idea and is therefore patent-eligible subject matter under § 101.”

For step one of the Alice test, the Court cautioned against oversimplifying the claims.  Claim 1 of the McRO patent recites evaluating sub-sequences, generating transition parameters, and applying transition parameters to create a final morph weight set. The Court performed initial claim construction and determined that the claims “are limited to rules that evaluate subsequences consisting of multiple sequential phonemes,” and the Court later reasoned that “[i]t is the incorporation of these claimed rules, not the use of the computer, that improved the existing technological process.”

The court wrote:  “Here, the structure of the limited rules reflects a specific implementation not demonstrated as that which “any [animator] engaged in the search for [an automation process] would likely have utilized.” By incorporating the specific features of the rules as claim limitations, claim 1 is limited to a specific process for automatically animating characters using particular information and techniques and does not preempt approaches that use rules of a different structure or different techniques. When looked at as a whole, claim 1 is directed to a patentable, technological improvement over the existing, manual 3-D animation techniques. The claim uses the limited rules in a process specifically designed to achieve an improved technological result in conventional industry practice. Claim 1 of the ’576 patent, therefore, is not directed to an abstract idea.”

Takeaway: The Federal Circuit rejects District Court Judge Wu’s holding that McRO’s software patent’s non-business method claims, directed towards automatically animating lip synchronization and facial expression of animated characters, were invalid based upon claiming an abstract idea. These types of inventions are valid subject matter for patentability.

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