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Research Corporation Technologies, Inc. v. Microsoft Corp.

Connecting the dots on 35 U.S.C. § 101 patentable-subject-matter questions just got easier.  In Research Corporation Technologies, Inc. v. Microsoft Corp., the Federal Circuit reiterated that § 101 broad patent-eligibility principles have only three exceptions:  laws of nature, physical phenomena and abstract ideas. Reversing a district court holding of § 101 invalidity, the court identified characteristics that can serve in the assessment of abstractness. The Federal Circuit said that abstractness must "exhibit itself so manifestly" as to override the Patent Act's statutory context and expansive categories of patent-eligible subject matter-likely making future challenges to patent validity under § 101 unpleasantly pixilated.

Research Corporation Technologies' (RTC's) patents covered a process for digital image halftoning-a display methodology that works at the pixel level to generate a broad range of  electronic display and print images using a few primary pixel colors.  The patents at issue claimed a process that produces higher quality images while using less processor power and memory space. RTC sued Microsoft for infringement.  Microsoft won in the district court on an inequitable conduct defense, but the Federal Circuit reversed it. On remand, the district court again sided with Microsoft, granting summary judgment. The district court held RTC's patents invalid under § 101 and also rejected certain priority claims associated with the patents. 

On appeal, the Federal Circuit turned to the Supreme Court's decision in Bilski v. Kappos for direction on the patentability of processes under § 101. Because the claimed process did not involve a patent-precluding law of nature or physical phenomena, the court looked to Bilski  instructions on abstractness to resolve the question of § 101 validity. Bilski warns courts to avoid creating rigid formulas or definitions of abstractness. The Federal Circuit used this guidance and engaged in a more open-ended examination of the process claimed by RTC's patent.

The court noted that RTC's halftoning process presented a "functional and palpable application" in the field of computer technology and made use of a variety of physical components. The panel said the process' use of mathematical algorithms was not enough, in and of itself, to make it abstract-particularly because RTC did not seek to patent the algorithm, but rather the process that the algorithm facilitates. The RTC court also observed that "inventions with specific applications or improvements to technologies in the marketplace are not likely to be so abstract that they override the statutory language and framework of the Patent Act." These factors convinced the court that RTC's patents were not impermissibly abstract under § 101, but the Federal Circuit also said inventions that survive an abstractness challenge under § 101's broad principles must also pass the more stringent standards of § 112, which weeds out claims that present a vague or indefinite disclosure of invention.

The RTC decision moves § 101 abstractness disputes to the low-res end of the effectiveness spectrum. Process patent holders defending a claim of abstractness who can point to a specific application or improvement to technologies in the marketplace will likely satisfy RTC's broad patentability standards. Alleged infringers seeking higher‑definition defenses will turn to § 112 and argue that, even if the invention passes § 101, the claims are nonetheless invalid because they are so conceptual that the written description does not enable one of ordinary skill in the art to replicate the process.  Either way, trying to define what constitutes § 101 abstractness-as opposed to illustrating processes that are not abstract-looks like an analog effort in a digital world.

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