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Federal Circuit Finds Another Software Invention Patentable: SRI INTERNATIONAL, INC.

SRI International, Inc. v. Cisco Systems, Inc. (“SRI”), serves as yet another example of how software may be patent eligible.  In SRI, the Federal Circuit held that a claimed invention that used network monitors to detect suspicious network activity by analyzing network traffic data, generating and integrating reports of that suspicious activity using hierarchical monitors, was patent eligible.  This article discusses how the requirements of patentability (35 U.S.C. 101) and how the “abstract idea” exception affected that case.

Before discussing SRI, a brief understanding of what software-related technology may be patentable is necessary.  Whether a software-related technology is patent eligible subject matter must always be taken into consideration bef ore drafting and filing a patent application for software-related inventions. Congress has established five subject-matter classes that are patentable subject matter (35 U.S.C. 101).  These classes are: (1) process (also known as a method), (2) machine, (3) article of manufacture, (4) composition, or (5) a “new use” of one of the first four.  However, there are THREE EXCEPTIONS to the five subject-matter classes (35 U.S.C. 101) established by Congress — (1) laws of nature; (2) natural phenomena; (3) abstract ideas.  One major challenge that patent applications for software related technology face are whether the claimed software related invention is an “abstract idea.”

Whether a software-related technology is an “abstract idea” must always be taken into consideration before drafting and filing a patent application for software-related inventions.  The “abstract idea” exception of 35 U.S.C. 101 is at the center of the 2014 Supreme Court case, Alice Corp. Pty. Ltd. v. CLS Bank Int’ l (“Alice”) and its progeny.  The Supreme Court in Alice concluded that claims drawn to a method using computers to minimize settlement risk in financial transactions were attempts to patent an abstract idea and thus not patent-eligible under 35 USC 101.  More particularly, the patented invention in Alice concerned computer-implemented methods, systems, and media for mitigating “settlement risk,” which the Court defined as “the risk that only one party to a financial transaction will pay what it owes.”

To determine whether a patent claims ineligible subject matter, the Supreme Court established the two-step Alice framework:

  • Determine whether the claim is drawn to an ineligible concept (abstract idea)
  • If so, decide whether the patentee adds “inventive concept” that is enough so that the claim isn’t effectively the concept itself

The two-part test outlined above is now known as the “Alice test.”  An analysis of software related technology using the Alice test should be completed before drafting a patent application on software related inventions.  Additionally, an analysis of the Alice test should be a component of a patentability opinion for software related inventions.

Moving to SRI, in SRI International, Inc. (“SRI”), the patent owner filed a patent infringement lawsuit against Cisco Systems, Inc. (“Cisco”) for infringement of U.S. Patent No. 6,711,615 titled “Network Surveillance” (the “‘615 patent”) and U.S. Patent No. 6,484,203 titled “Hierarchical Event Monitoring and Analysis (the “‘203 patent”).  The diagrams below are diagrams of network monitors that monitor event streams associated with the technology associated with the ‘615 and ‘203 patents.


‘615 patent 
‘203 patent


The ‘615 and ‘203 patents describe and claim systems and methods that detect suspicious network activity by analyzing network traffic data and generating and integrating reports of that suspicious activity using hierarchical monitors.  Both the ‘615 and ‘203 patents are closely related, so the Federal Circuit treated claim 1 of the ‘615 patent as illustrative.  Claim 1 of the ‘615 patent recites:

A computer-automated method of hierarchical event monitoring and analysis within an enterprise network comprising:

deploying a plurality of network monitors in the enterprise network;

detecting, by the network monitors, suspicious network activity based on analysis of network traffic data selected from one or more of the following categories: network packet data transfer commands, network packet data transfer errors, network packet data volume, network connection requests, network connection denials, error codes included in a network packet, network connection acknowledgements, and network packets indicative of well-known network-service protocols;

generating, by the monitors, reports of said suspicious activity;

and automatically receiving and integrating the reports of suspicious activity, by one or more hierarchical monitors.

Cisco moved for judgment asserting the claims of the ‘615 and ‘203 patents were directed to patent-ineligible subject matter and thus invalid.  To determine if claim 1 of the ‘615 and ‘203 patents were valid, the district court first applied Step 1 of the Alice test’s two-step framework (See above).  The district court held that the claimed invention was not abstract under the first step of the Alice test, because the court concluded, that the claims were “more complex than merely reciting the performance of a known business practice on the Internet and are better understood as being necessarily rooted in computer technology in order to solve a specific problem in the realm of computer networks.”  The claims were not directed to just analyzing data from multiple sources to detect suspicious activity.  Instead, the claims are directed to an improvement in computer network technology.  An analysis of the second step of Alice test was not necessary because the district court found the claims were not directed to an abstract idea under the first step.  As a result, the district court found that the claims were patent-eligible subject matter under 101.  Cisco appealed to the Federal Circuit.

The Federal Circuit affirmed the district court’s decision that the ‘615 and ‘203 patents are patent-eligible subject matter.  The Federal Circuit found that claims would not be considered “abstract” under step one of Alice test because the “focus of the claims is on the specific asserted improvement in computer capabilities.”  In this case, the improvement in computer capabilities was providing a network defense system that monitored network traffic in real-time to automatically detect large-scale attacks.  Additionally, the Federal Circuit did not require the improvement to be in computer processing efficiency (more specific) and that improved computer “capabilities” (broader) was sufficient to be considered patent-eligible under step one of the Alice test, so there was no need to consider step two of the Alice test.

The technology at issue in SRI is yet another example of patent-eligible software.  The law related to software-related inventions continues to evolve post-Alice, and the 101 landscape will continue to come into focus as more precedential decisions are issued involving patent-eligible software claims.  As technology evolves, the software will continue to be critical in creating new and innovative improvements over existing technology.  Patent protection is and will remain an integral component in protecting the resources spent developing software. This article was written by William Furlow and Derek Fahey.  To learn more about Derek Fahey, click HERE.

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