RecogniCorp, LLC v. Nintendo Co., Ltd.
Case number 16-1499
United States Court of Appeals for the Federal Circuit
Decided: April 28, 2017

In December 2011, Texas-based RecogniCorp, LLC sued Nintendo Co. Ltd. in Oregon federal court. The company claimed Nintendo’s Wii console contains image customization software used to create and customize facial features of Mii avatars, which violated RecogniCorp’s image processing patent. The patent document describes that the technology “creates images on the basis of assembling components to form a complete image” by taking an image on one end, encoding it, and then decoding it for viewing on the other end. It also explains that the visual creations could potentially be used for “law enforcement, artistic creations, recreations and education.” RecogniCorp argued in particular that their technology involved a transformative element of simple message-passing that would protect its patent under Section 101 of the Patent Act. The case was transferred to Washington’s Western District in October 2012.

In December 2015 U.S. District Judge Richard A. Jones ruled that there was nothing new about the idea of distilling an image down to code that could be transmitted to an end user more easily. The Court therefore invalidated the patent. On appeal on April 28, 2017, the United States Court of Appeals for the Federal Circuit affirmed the December 2015 decision. The Court found that the patent was ineligible under the landmark decision in Alice Corp. v. CLS Bank, which found abstract ideas implemented using a computer were patent-ineligible under Section 101 of the U.S. Patent Act. The Court focused on whether the claims improved the functioning of the computer, and found that the mathematical algorithms described by the patent were not “inventive concepts.” The court found that the patent owner’s formula was an abstract concept. On May 30, 2017, RecogniCorp asked the Federal Circuit for a panel rehearing or a rehearing en banc. RecogniCorp told the Court that the April opinion contradicted both Supreme Court and Federal Circuit Court precedent and “threatens the validity of all encoding and decoding patents,” including those that deal with such commonly used technology as MP3s. RecogniCorp added that “the panel opinion employs categorical rules regarding subject matter patentability that are inconsistent with the Supreme Court’s Alice standard and with this court’s precedents.”

Due to a proliferation of cases regarding the patent-eligibility of computer-related inventions, it is important to determine in what direction patent law is heading. In Alice the Supreme Court held that section 101 prohibits the formation of broad, categorical exclusions for particular classes of technology. It is possible that the Supreme Court did not intend Alice to be so broadly applied: its sentiment that it “need not labor to delimit the precise contours of the ‘abstract ideas’ category” was possibly attached to an assumption that the application of this test would not result in “swallowing all of patent law.” The implications of Alice will continue to grow, and the emergence of problematic cases will continue to push this issue to the forefront. The future of patent law will be defined by the courts’ evolving application of both Alice and future software patent decisions.

RecogniCorp appealed the decision to the U.S. Supreme Court but cert was denied.  It’s game over for this case.

Additional Research By: Rachel Johns