Intellectual Property > IP Newsflash > Federal Circuit Affirms Invalidity of Patent for Oil Well Management under § 101
18 Aug '16

On Monday, the Federal Circuit affirmed a decision by the Southern District of Texas dismissing a patent infringement lawsuit under Rule 12(b)(6) because the asserted patent directed to managing oil well data is invalid for claiming patent-ineligible subject matter under § 101. The asserted patent describes various processes and systems for determining the current state of an oil well through receiving and validating data from sensors in the well. Applying the Supreme Court’s Alice test for determining invalidity under § 101, the Federal Circuit found both elements of the test were met: (1) the claim is “directed to one of the patent-ineligible concepts (i.e., law of nature, natural phenomena, or abstract idea),” and (2) the claim elements do not “transform the nature of the claim into a patent-eligible application.”

Under the first step of the Alice test, the Federal Circuit noted that the disputed claim merely recites operations performed by any generic computer. Citing to its recent Electric Power decision, the court reiterated that “claims generally reciting ‘collecting information, analyzing it, and displaying certain results of the collection and analysis’ are ‘a familiar class of claims directed to a patent-ineligible concept.’” Here, the court determined that the disputed claim essentially recites simply “collecting” and “analyzing” data and thus is directed to an abstract idea under Alice.

Turning to the second step of the Alice test, the Federal Circuit held that nothing in the disputed claim transforms an otherwise abstract idea into a patent-eligible application. Notably, the court recognized that the plaintiff could not reasonably argue that any element of receiving data, storing data, validating data, or determining a “state” from that data, or any ordered combination thereof, is individually inventive. Although the court recognized the specification discloses specific embodiments that may provide sufficient detail for patent-eligible matter, none of that detail is included in the disputed claim. Again citing to Electric Power, the court found that “the claims of the ’812 patent recite the what of the invention, but none of the how that is necessary to turn the abstract into a patent-eligible application.”

TDE Petroleum Data Sols., Inc. v. AKM Enter., Inc., No. 2016-1004 (Fed. Cir. August 15, 2016).