IP Law Daily, PATENT—Fed. Cir.: Rejection of information exchange patent application affirmed on appeal, (Apr 9, 2026)

By Carolin Dennis, B.Sc., LL.B., LL.M.

PTAB correctly found that claim 14 of an information exchange patent application was directed to an ineligible subject matter.

In a nonprecedential disposition, the U.S. Court of Appeals for the Federal Circuit affirmed the Patent Trial and Appeal Board’s (PTAB’s) determination that sustained the rejection of a patent application for a system that would operate an information exchange, such as a social network. The Federal Circuit determined that there was no error in the PTAB’s analysis that claim 14 did not contain an inventive concept sufficient to transform the abstract idea into a patent-eligible application (In Re: Brian McFadden, No. 25-1834 (Fed. Cir. Apr. 7, 2026)).

Background. In February 2018, Brian McFadden filed patent application No. 15/891,363 (’363 application) titled “System and Methods for Operating an Information Exchange,” and its abstract stated that it is generally directed toward “methods and apparatuses useful for operating, regulating, and controlling” such an exchange. The application’s specification explained that an information exchange could be a “social network,” “ad network,” “digest,” or “any service that facilitates a flow of information items from producers to consumers.” During prosecution, the examiner rejected claim 14 of McFadden’s application as (1) anticipated under 35 U.S.C. § 102 by McFadden’s previous patent application publication No. 2015/0088879 and (2) directed to ineligible subject matter under 35 U.S.C. § 101. The PTAB affirmed the examiner’s rejection on both grounds. On appeal, McFadden challenged the PTAB’s determinations with respect to both patent eligibility under § 101 and anticipation under § 102(a)(1).

Patent eligibility. Applying the Alice Corp. v. CLS Bank Int’l, 573 U.S. 208 (2014) framework, the Federal Circuit agreed with the PTAB that: (1) claim 14 is directed toward an abstract idea, and (2) claim 14 does not contain an inventive concept sufficient to transform this abstract idea into a patent-eligible application.

At Alice step one, the PTAB concluded that claim 14 was directed to an abstract idea because it “recites a method of organizing human activity, i.e., an abstract idea,” and “the claim does not include additional elements or a combination of elements that integrates the recited abstract idea into a practical application.” McFadden argued that the PTAB could not have made a meaningful finding on patent eligibility because it failed to construe certain limitations of claim 14 as means-plus-function limitations and disregarded the structure disclosed in the specification associated with these limitations. The Federal Circuit disagreed. Indeed, the PTAB explicitly credited the examiner’s treatment of certain claim limitations as “means-plus-[function] limitations,” and agreed that the only structure disclosed in the specification supporting these terms was “software running on generic computer elements.” The Federal Circuit also found that the PTAB correctly concluded that “nothing in the Specification or elsewhere of record,” compelled a contrary conclusion, and McFadden did not direct the PTAB to any other structures potentially disclosed that could controvert this finding.

McFadden also alleged that the PTAB erred by determining that a combination of generic computing elements, rather than “algorithm(s) described in the Specification,” provides structure to the means-plus-function limitations. The Federal Circuit noted that while McFadden directed the court’s attention in his briefing to alleged algorithmic structures associated with the means-plus-function limitations of claim 14, each of these “algorithms” merely describes computing differences between information distributions at a high level of generality. For instance, one such “algorithm” sets forth four mathematical formulas for calculating distribution difference. These general instructions for how a standard computer is to manipulate, transform, and compare data fare no better in the abstract idea analysis than generic software or computing components. Thus, even if the PTAB misidentified structures in the specification as associated with the means-plus-function limitations of claim 14, any error was harmless.

At Alice step two, McFadden raised only one discernible argument: that the algorithms disclosed in the ’363 application improve information exchange functioning and thus supply an inventive concept that is more than mere implementation of an abstract idea. However, this argument was raised on reply, and arguments raised for the first time in a reply brief are not properly before the Federal Circuit.

Moreover, even if the Federal Circuit were to consider the merits of this argument, it would find that McFadden’s broad and generic algorithms are merely an innovation in ineligible subject matter. That is, improving abstract and generic calculations on a standard computer, without more, is still abstract. Thus, McFadden failed to show that any part of the PTAB’s § 101 determination was erroneous.

As, the Federal Circuit agreed with the PTAB regarding its ineligibility determination, it need not reach anticipation. Accordingly, the Federal Circuit affirmed the PTAB’s rejection of claim 14 on § 101 grounds.

The Case is No. 25-1834.

Judge: Per Curiam.

Attorneys: Brian McFadden, pro se. Omar Farooq Amin, U.S. Patent and Trademark Office, for John A. Squires.

Cases: Patent FedCirNews USPTO