IP Law Daily, PATENT—Fed. Cir.: Patent for evaluating oil well data invalid under Alice, (Aug 15, 2016)

By Cheryl Beise, J.D.

A patent directed to processing and evaluating sensor data on an oil well drill did not claim patent-eligible subject matter, according to the U.S. Court of Appeals for the Federal Circuit. The federal district court in Houston properly invalidated all 115 claims of the patent as claiming the abstract concept of applying mathematical rules to interpret data gathering (TDE Petroleum Data Solutions, Inc. v. AKM Enterprise, Inc., August 15, 2016, Hughes, T.).

Oil rig monitoring service TDE Petroleum Data Solutions, Inc. sued competitor AKM Enterprise, Inc., dba Mobilize, Inc., for infringement of U.S. Patent 6,892,812 (the ’812 patent), issued on May 20, 2005, and entitled “Automated method and system for determining the state of well operations and performing process evaluation.” The ’812 patent describes various processes for determining the state of an oil well drill.

AKM moved for dismissal, arguing that the patent was invalid under 15 U.S.C. § 101 for claiming ineligible subject matter. The district court granted AKMs motion. The court found that the ’812 patent was directed to the concept of applying mathematical rules to interpret data, which was an abstract idea, and the method of the patent contained no inventive concepts that transformed the abstract idea into a patent eligible application.

The Federal Circuit agreed with the district court. The Alice test instructs that a patent claim is ineligible under § 101 if (1) the claim is directed to one of those patent-ineligible concepts (i.e., a law of nature, natural phenomena, or abstract idea) and (2) the claim elements, when considered both individually and as an ordered combination do not transform the nature of the claim into a patent-eligible application. Alice Corp. v. CLS Bank Int’l, 134 S. Ct. 2347, 2354 (2014).

Abstract idea. The Federal Circuit recently 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.” Electric Power Group, LLC v. Alstom S.A., No. 2015-1778, (Fed. Cir. Aug. 1, 2016),

The parties agreed that independent Claim 1 was representative. Claim 1 disclosed processes of the ’812 patent receive data from various sensors deployed on the oil well. The processes then validate the data, i.e., accept data that is within an expected range and discard data that is expected to be erroneous. Finally, based on the valid sensor data, the processes determine what the present state of the oil well drill is, e.g., drilling, sliding, or bore hole conditioning. The ’812 patent also discloses several specific flowcharts that may be used in this last step to determine the state of the oil well drill.

This was precisely the sort of data gathering and processing claim that is directed to an abstract idea under step one of the Alice analysis, the court said.

Inventive concept. Nothing in Claim 1 added anything more to the abstract idea of storing, gathering, and analyzing data, according to the Federal Circuit. Storing state values, receiving sensor data, validating sensor data, or determining a state based on sensor data individually was not inventive. And TDE failed to show that an inventive concept arose from the ordered combination of these ordinary data gathering and analysis steps. In addition, Claim 1 recited only generic computer functions that amount to nothing more than the goal of determining the state of an oil well operation. “[T]he claims of the ’812 patent recite the what of the invention, but none of the how that is necessary to turn the abstract idea into a patent-eligible application,” the court observed.

TDE asserted the other 114 claims contained in the ’812 patent, but made no attempt in either its briefs or at oral argument to distinguish those claims from representative Claim 1, other than to state that the systems (reciting generic hardware) were different from the methods, the court noted.

The court affirmed the district court’s judgment finding claims 1–115 patent-ineligible under § 101.

The case is No. 2016-1004.

Attorneys: Malcolm Edwin Whittaker (Whittaker Law Firm) for TDE Petroleum Data Solutions, Inc. Peter E. Mims and Jeffrey Ta-Hwa Han (Vinson & Elkins LLP) for AKM Enterprise, Inc., dba Mobilize, Inc.

Companies: TDE Petroleum Data Solutions, Inc.; AKM Enterprise, Inc., dba Mobilize, Inc.

Cases: Patent FedCirNews