In re McFadden — Federal Circuit Affirms Patent Ineligibility for Information Exchange Claims Under Section 101

Background

Brian McFadden, proceeding pro se, filed patent application No. 15/891,363 in February 2018, titled “System and Methods for Operating an Information Exchange.” The application described methods and systems designed to operate, regulate, and manage an information exchange. The Patent Trial and Appeal Board (PTAB) found claim 14 of the application directed to ineligible subject matter under 35 U.S.C. § 101, and McFadden appealed to the Federal Circuit.

Court’s Holding

The Federal Circuit affirmed the PTAB’s decision. The court agreed that claim 14 was directed to an abstract idea and did not contain an inventive concept sufficient to transform the abstract idea into a patent-eligible application. The court found that McFadden’s algorithms merely described computing differences between information distributions at a high level of generality, characterizing them as general instructions for how a standard computer manipulates, transforms, and compares data. The court concluded that these broad and generic algorithms amount to nothing more than inputting information into a generic computer and running computations, which is insufficient to supply an inventive concept under the Alice/Mayo framework.

Key Takeaways

• Patent claims describing high-level algorithms for manipulating data on generic computing hardware continue to face significant hurdles under Section 101.
• Describing how a standard computer should manipulate, transform, and compare data at a high level of generality does not provide an inventive concept, even when the underlying algorithms are specified.
• Pro se applicants face the same substantive Section 101 standards as represented parties when seeking patent protection for software-related inventions.

Why It Matters

This decision reinforces the Federal Circuit’s ongoing strict application of the Alice/Mayo framework to software-related patent claims. For patent applicants, it underscores the importance of tying algorithmic claims to concrete technical improvements rather than describing general-purpose data processing at a high level of abstraction. The ruling is particularly relevant for applications directed to exchange platforms and data analytics systems, which regularly face Section 101 challenges.