Addressing the issue of subject matter eligibility, the US Court of Appeals for the Federal Circuit reversed the district court’s finding that the limitations of the challenged claims, when considered as an ordered combination, lacked an inventive concept under step two of the Supreme Court of the United States’ Alice test. Bascom Global Internet v. AT&T Mobility LLC, Case No. 15-1763 (Fed. Cir., June 27, 2016) (Chen, J) (Newman, J, concurring).

The patent owner’s claimed invention provides individually customizable filtering at a remote ISP server. After Bascom sued AT&T for patent infringement, AT&T moved to dismiss the complaint on the basis that the asserted patent was directed to patent-ineligible subject matter. Applying the two-step Alice test for subject matter eligibility, the district court concluded that under step one of the analysis, the claims were directed to the abstract idea of “filtering content.” Under the second step, the district court determined that the claim limitations, when considered individually and as an ordered combination, lacked an inventive concept. The district court thus granted AT&T’s motion to dismiss, and Bascom appealed.

With respect to step one of the Alice analysis, the Federal Circuit agreed with the district court that the claims were directed to the abstract idea of filtering content. Turning to step two, the Federal Circuit again agreed with the district court that the limitations of the claims, when considered individually, described well-known generic computer components, such as a “local client computer” and an “[i]nternet computer network.”

The Federal Circuit disagreed, however, that the claims lacked an inventive concept when considered as an ordered combination. Here, the Federal Circuit found the district court’s Alice analysis to be similar to an obviousness analysis under § 103, except that it lacked an explanation of a reason to combine the limitations. According to the Federal Circuit, the district court’s analysis was not sufficient because the inventive concept inquiry requires more than recognizing that each claim element, by itself, was known in the art. Rather, as the Federal Circuit explained, an inventive concept can be found in the non-conventional and non-generic arrangement of known, conventional pieces.

In this case, the Federal Circuit found the installation of a filtering tool at a specific location, remote from the end users, with customizable filtering features specific to each end user, to be an inventive concept. The Federal Circuit also explained that the claims did not merely recite the abstract idea of filtering content along with the requirement to perform it on a set of generic computer components. Because the claims carve out a specific location for the filtering system, they do not preempt the use of the abstract idea of filtering content on the internet or generic computer components performing conventional activities. Accordingly, the Federal Circuit concluded that the ordered combination of claim limitations transformed the abstract idea of filtering content into a particular, practical application of that abstract idea.