In a recent decision, the Federal Circuit Court of Appeals decided that a patent’s specification may be dispositive when examining whether a software invention is patentable under Step 2 of the Alice test. Despite allegations raised in court pleadings, a software invention may be deemed an abstract idea just by looking at the patent specification. Such reasoning makes specification drafting even more critical for software patents.
In Beteiro, LLC v. Draftkings, Inc, et al., the Federal Circuit addressed patent eligibility for Beteiro’s software inventions under Step 2 of the Alice framework, which interprets 35 U.S.C. § 101. Beteiro holds several patents involving gaming and gambling activities, specifically a software application that determines a user's location and checks if remote gambling activities are permissible based on state law in that jurisdiction.
Beteiro sued the defendants in district court for infringement of its gaming patents. The defendants successfully moved to dismiss the case, arguing that the patents were invalid under Alice for not claiming patent-eligible subject matter. Beteiro then filed the present appeal.
The Federal Circuit confirmed under Alice Step 1 that Beteiro’s patents were directed toward an abstract idea, namely “exchanging information concerning a bet and allowing or disallowing the bet based on where the user is located.” The court identified several reasons for this conclusion:
Beteiro’s argument that the patents represented a technological improvement was dismissed. The court noted that the patents merely used conventional computers as tools without enhancing computer-related technology itself.
Under Alice Step 2, the Federal Circuit concluded that the patents lacked an inventive concept, despite Beteiro’s argument in the pleadings that the inclusion of GPS technology on mobile phones was not conventional in 2002. The court found this unconvincing for several reasons:
The court highlighted that the patents did not advance GPS or mobile device technology in any significant way. Thus, no factual dispute raised in the pleadings could transform the claims into patent-eligible subject matter. Thus, the Federal Circuit upheld the district court’s decision, emphasizing that the asserted patents simply applied an abstract idea using conventional technology.
The court’s reasoning underscores the importance of a patent’s description in establishing whether the claimed software innovation includes an inventive concept that is significantly more than an abstract idea.