Computerized Restaurant Ordering Menu Patents Found to Be Directed to Unpatentable Subject Matter

The U.S. Court of Appeals for the Federal Circuit reviewed a Patent Trial and Appeal Board (PTAB) decision in three Covered Business Method (CBM) reviews between Apple, Inc. et. al v. Ameranth, Inc.  The decisions addressed the subject matter eligibility of certain claims of U.S. Patent Nos. 6,384,850, 6,871,325, and 6,982,733.  Ultimately, the Federal Circuit affirmed the Board's decisions finding certain claims unpatentable under § 101, and reversed the Board's decisions confirming the patentability of certain claims under § 101.  Thus, the Federal Circuit found all challenged claims unpatentable under § 101 as directed to unpatentable subject matter.

The Patents at Issue

Ameranth, Inc. owns the patents, of which two of the patents have the same specifications (parent and continuation) and the third patent is largely the same as the other patents (continuation-in-part).  The patents disclose a first menu that has categories and items, and software that can generate a second menu from that first menu by allowing categories and items to be selected.  The patents describe a preferred embodiment for use in the restaurant industry.  In that embodiment, a menu consists of categories such as appetizers and entrees, items such as chicken Caesar salad, modifiers such as dressing, and sub-modifiers such as Italian and bleu cheese.  The menu can be configured on a desktop computer and then downloaded onto a handheld device.  The menu may be displayed to a user and then another menu may be generated in response to and comprised of the selections made.

Figure 7, reproduced above, represents a point of sale interface for use in displaying the claimed menus in a preferred embodiment.  The specifications note that ordering prepared foods has historically been done verbally, either directly to a waiter or over the telephone, whereupon the placed order is recorded on paper by the recipient or instantly filled.  They explain that the unavailability of any simple technique for creating restaurant menus and the like for use in a limited display area wireless handheld device or that is compatible with ordering over the internet had prevented widespread adoption of computerization in the hospitality industry.  Dependent claims further link ordered items to a certain table in the restaurant (e.g., the device is positioned at a table to be used by customers).  Claim 1 of the '850 patent is representative and is reproduced below.

1.  An information management and synchronous communications system for generating and transmitting menus comprising:
    a central processing unit,
    a data storage device connected to said central processing unit,
    an operating system including a graphical user interface,
    a first menu consisting of menu categories, said menu categories consisting of menu items, said first menu stored on said data storage device and displayable in a window of said graphical user interface in a hierarchical tree format,
    a modifier menu stored on said data storage device and displayable in a window of said graphical user interface,
    a sub-modifier menu stored on said data storage device and displayable in a window of said graphical user interface, and
    application software for generating a second menu from said first menu and transmitting said second menu to a wireless handheld computing device or Web page,
    wherein the application software facilitates the generation of the second menu by allowing selection of catagories [sic] and items from the first menu, addition of menu categories to the second menu, addition of menu items to the second menu and assignment of parameters to items in the second menu using the graphical user interface of said operating system, said parameters being selected from the modifier and sub-modifier menus.

CBM Patents?

Petitions for CBM review of the patents were filed and the Board found that each patent met the statutory definition of "covered business method patent," and instituted CBM reviews.  In its final decisions, the Board found certain claims in each of the patents unpatentable under 35 U.S.C. § 101, and other claims patentable.

Ameranth appeals the Board's decision that the patents are CBM patents eligible for CBM review.  The term "covered business method patent" means "a patent that claims a method or corresponding apparatus for performing data processing or other operations used in the practice, administration, or management of a financial product or service, except that the term does not include patents for technological inventions."

On appeal, Ameranth did not argue the financial product element of the statute, but rather argued that the patents fall within the "technological inventions" exception because they recite technological features, including specific software which was distinctive over the prior art.  But the Federal Circuit disagreed, finding that the claims do not solve technical problems using technical solutions.  The specifications disclosed that the hardware used in the claimed systems was "typical," and that the programming steps were "commonly known."

Second, the neither the solutions nor the problems recited in the claims were found to be technical.  Ameranth had argued that the patents solved the problem of how to display and synchronize computerized menus on non-standard devices/interfaces, but the claims did not recite a solution to this problem, as they do not include recitations about how to display or synchronize the menus, but instead include descriptions about menu generation.  Similarly, Ameranth had argued that the '733 patent was intended to solve a problem in restaurant ordering when customers wanted something unusual and unanticipated, but it was found that this was "more of a business problem than a technical problem."

Thus, the determination that the patents were CBM patents and eligible for CBM patent review was upheld.

Section 101 Determinations

To determine whether a claim is eligible under § 101, the Federal Circuit first determines whether the claims at issue are directed to a patent-ineligible concept, and if they are, then considers the elements of each claim both individually and "as an ordered combination" to determine whether the additional elements "transform the nature of the claim" into a patent-eligible application.

Claims the Board Found Unpatentable

At the first step, the Board determined that the claims in all three patents are directed to the abstract idea of "generating a second menu from a first menu and sending the second menu to another location."

The Federal Circuit noted that for step one, they must determine whether the claims "focus on a specific means or method that improves the relevant technology" or are "directed to a result or effect that itself is the abstract idea and merely invoke generic processes and machinery."  In doing so, the Federal Circuit affirmed the Board's conclusion that the claims in these patents are directed to an abstract idea.  The patents claim systems including menus with particular features.  They do not claim a particular way of programming or designing the software to create menus that have these features, but instead merely claim the resulting systems.

In the second step, the Board found that the recited central processing unit, data storage device, and operating system components were "typical" hardware elements.  The specifications state that the discrete programming steps are commonly known.  But Ameranth argued that none of the claims are directed to something conventional or routine, and pointed to the term "second menu is manually modified after generation" in claim 1 of the '733 patent.  However, the Board explained that manual modification of a menu could also include printing the second menu and then writing on it with a pen, and cited other examples for which modification of the menu is routine, and was ultimately considered to be insignificant post-solution activity.  The Federal Circuit agreed.

The preferred embodiment of the claimed invention described in the specifications is a restaurant preparing a device that can be used by a server taking orders from a customer.  The claimed invention replaces a server's notepad or mental list with an electronic device programmed to allow menu items to be selected as a customer places an order. As noted above, the specifications describe the hardware elements of the invention as "typical" and the software programming needed as "commonly known."  The invention merely claims the addition of conventional computer components to well-known business practices.

Thus, the Federal Circuit affirmed the Board's conclusion in step two that the elements of the patents' claims -- both individually and when combined -- do not transform the claimed abstract idea into a patent-eligible application of the abstract idea.

Claims the Board Found Patentable

The Board had found some dependent claims satisfied section 101, but the Federal reversed that decision.

First, looking at the dependent claims that involve linking orders to specific customers, these claims require that the second menu, after being modified, can be linked to a specific customer at a specific table.  Ameranth argued to the Board that these claims were patentable because they recited limitations that were unconventional or unique in 2001 because the very capability of linking a particular order to a particular customer at a table was novel then and unique to mobility and wireless handhelds.

The Federal Circuit noted that, generally, a claim that merely describes an effect or result dissociated from any method by which it is accomplished is not directed to patent-eligible subject matter.  Here, the linked orders claim limitation calls for the desired result of associating a customer's order with said customer, and does not attempt to claim any method for achieving that result.  These claims cover the process of a restaurant server taking an order from a customer and keeping track of what customer placed that order, when done using a computer.  The Federal Circuit found that linking of orders to customers is a classic example of manual tasks that cannot be rendered patent eligible merely by performing them with a computer.  Merely appending this preexisting practice to the independent claims is an insignificant post-solution activity.

Next, the Federal Circuit analyzed the dependent claims that involve handwriting and voice capture technologies, and claim features include that the second menu is manually modified by handwriting or voice recording.

The Federal Circuit noted that the patent refers to the use of handwriting and voice capture technologies without providing how these elements were to be technologically implemented.  Ameranth conceded that it had not invented voice or handwriting capture technology, and that it was known at the time it filed its applications to use those technologies as ways of entering data into computer systems.  Because Ameranth claims no more than the use of existing handwriting and voice capture technologies using a computer system, appending these preexisting technologies onto those independent claims did not make them patentable.

Thus, on appeal, the Federal Circuit affirmed the Board's decisions finding certain claims unpatentable under § 101, and reversed the Board's decisions confirming the patentability of certain claims under § 101, resulting in all challenged claims being found unpatentable under § 101.

Apple, Inc. v. Ameranth, Inc. (Fed. Cir. 2016)
Panel: Circuit Judges Reyna, Chen, and Stoll
Opinion by Circuit Judge Reyna