McRO: Everything You Need to Know
McRO is a Federal Circuit sued Bandai Namco Games America, Inc under patent eligibility.McRO set new precedents for understanding patentability of software.11 min read
McRO: What Is it?
McRO is the plaintiff in the landmark Federal Circuit Court case McRO, Inc. v. Bandai Namco Games America, Inc., No. 15-1080, that was heard on September 13, 2016. McRO, Inc. v. Bandai Namco Games America, Inc. is considered a landmark case because the court's decision provided additional guidance on applying the abstract idea prong of the two-step process to determine patent eligibility set forth in Alice Corp. v. CLS Bank.
McRO, Inc. v. Bandai Namco Games America, Inc., dealt specifically with a patent for a process of automated lip synchronization in animation. McRO sued multiple video game developers and publishers in the Central District of California and the District of Delaware.
McRO was suing for patent infringement on U.S. Patent numbers 6,307,576 and 6,611,278. The lawsuits in the District of Delaware were moved to the Central District of California and all became part of the appeal discussed above.
The decision made in McRO, Inc. v. Bandai Namco Games America, Inc. was the most anticipated Federal Circuit § 101 decision since Ultramercial v. Hulu from November 2014.
The judges who heard the case were Judges Reyna, Taranto, and Stoll.
Why Is McRO Important?
The McRO, Inc. v. Bandai Namco Games America, Inc. case is so important because it set a new definition with more clarity for the abstract idea prong of the two-prong test for patent eligibility. This means that the McRO, Inc. v. Bandai Namco Games America, Inc. case has changed how all patent-eligibility cases will be litigated in the future.
McRO is also very important because it shows that a technological improvement upon an industry practice that traditionally has been done manually is eligible for a patent. This could signal a big win for software patent holders and those who are seeking patents for software.
One of the questions that had to be confronted during this case was not only if there had been patent infringement, but if the process was eligible for patent protection.
Claim 1 of Patent '576 was considered representative of the two patents. It read:
"A method for automatically animating lip synchronization and facial expression of three-dimensional characters comprising:
obtaining a first set of rules that define output morph weight set stream as a function of phoneme sequence and time of said phoneme sequence;
obtaining a timed data file of phonemes having a plurality of sub-sequences;
generating an intermediate stream of output morph weight sets and a plurality of transition parameters between two adjacent morph weight sets by evaluating said plurality of sub-sequences against said first set of rules;
generating a final stream of output morph weight sets at a desired frame rate from said intermediate stream of output morph weight sets and said plurality of transition parameters; and
applying said final stream of output morph weight sets to a sequence of animated characters to produce lip synchronization and facial expression control of said animated characters."
The invention is for generating automated lip-synchronization and facial features for 3D animated characters. Before this invention, creating facial expressions and synchronized lip movements to match to words was time-consuming for artists and animators.
McRO's invention automated the process of matching lip movements to words by feeding transcripts into a computer that had set rules for how to match lip movements to certain sounds, creating accurate facial expressions and movements.
From the court decision, "these rule sets aim to produce more realistic speech by taking into consideration the differences in mouth positions for similar phonemes based on context."
Alice Corp. v. CLS Bank
One of the important components to the McRO, Inc. v. Bandai Namco Games America, Inc. decision came from Alice Corp. v. CLS Bank, a Supreme Court case.
Alice Corp. v. CLS Bank set up § 101, which requires the use of a two-prong test for determining patent eligibility. The two-prong test works as such:
The court must determine whether a claim is a judicially excluded law of nature, natural phenomenon, or an abstract idea. If the answer is yes, then the court must determine:
does any element or combination of elements in the claim make it sufficient to be significantly more than the judicial exception?
A generic computer implementation of an abstract process doesn't qualify as "significantly more." The goal of this test is to protect basic scientific tools and laws of nature to be excluded from patent eligibility and therefore free to use by all.
The Two Prong Test Applied to McRO, Inc. v. Bandai Namco Games America, Inc.
When McRO, Inc. v. Bandai Namco Games America, Inc. was heard by the District Court, it ruled that the automatic lip synchronization for computer-generated 3D animation didn't meet the requirements of § 101 and the two-prong test. In the District Court's eyes, this invention wasn't eligible for a patent.
So the case went to the Federal Circuit. The Federal court disagreed with the ruling of the District Court, stating that the District Court ruling was oversimplifying and "failing to account for the specific requirements of the claims."
The court went on to state that "the claimed improvement here is allowing computers to produce accurate and realistic lip synchronization and facial expressions in animated characters that previously could only be produced by human animators."
What they meant by that is that this case differed from other invention cases such as Parker v. Flook, Bilski v. Kappos, and Alice Corp. v. CLS Bank. They believed that the human animator's methods were different than those used by the computer, constituting patent eligibility.
The court clarified by saying, "processes that automate tasks that humans are capable of performing are patent eligible if properly claimed."
The defendant's position was that the invention wasn't patent eligible because the claim was too abstract and didn't claim specific rules. The court disagreed, going on to say, "A patent is not good for an effect, or the result of a certain process because such patents would prohibit all other persons from making the same thing by any means whatsoever." But "[a] patent may issue for the means or method of producing a certain result, or effect, and not for the result or effect produced."
What this means is that the method isn't patentable if it is simply automation of a known manual process. But, if it was a specific method to improve animation technology and not a generic process done by generic machinery, it might be patent eligible.
Because the defendants provided no information to prove that the process created by McRO was previously used by animators, patent eligibility isn't lost. The Court decided that the process used by the animators was subjective while the McRO process was determined by specific and limited mathematical rules.
Another concern was that if this technology was patented, did it close the field to all other future discoveries in the field? The court's answer was no. The court found academic literature that showed that other mathematical formulas and rules could be used to automate facial expressions and animation of speech.
Under prong 1 of the Alice Corp. v. CLS Bank the court found that the McRO invention was non-abstract and therefore patent eligible. Prong 2 did not need to be addressed as the claim had already been decided to be patent eligible.
How Interpretation of "Abstract Ideas" Changed in McRO
One of the major changes that happened under McRO, Inc. v. Bandai Namco Games America, Inc. was that it changed the interpretation of prong one of the Alice test and the understanding of "abstract ideas."
Under Alice, "a court must look to the claims as an ordered combination, without ignoring the requirements of the individual steps." Courts must decide whether an invention has a "focus on a specific means or method that improves the relevant technology" or is "instead directed to a result or effect that itself is an abstract idea."
Specifically, in McRO, the court found that the process wasn't the same as that performed manually and therefore the "claimed rules, not the use of the computer," were what "improved [the] existing technological process."
As well, the court emphasized how to read future cases. The court wanted to make sure that future cases were viewed in their entirety "to ascertain whether their character as a whole is directed to excluded subject matter."
The court also shared that when courts are looking at cases and applying part two of the prong test, they should "look to both the claim as a whole and the individual claim elements" to decide whether or not it constitutes "significantly more."
All this comes down to the Federal Circuit court's caution that other courts should avoid looking at claims in general, which would cause oversimplification and fail to account for specific requirements.
The court also instructed that the two prong Alice test must be considered as "an ordered combination, without ignoring the requirements of the individual steps." In conclusion, the claim must be considered as a whole as well as by its underlying element to determine patent eligibility.
What to Take Away from McRO
The major takeaway and new information that came out of the McRO case is that the Federal Circuit court found that an invention was patent eligible even though the invention was software processed by a general purpose computer. In the past, this had not been the precedent set by the courts when using the two-prong test in Alice.
This new interpretation allows that something might be patent eligible when the improvement allows the computer to do something that before could only be produced by intuitive human processes. This could hold true even when the invention doesn't improve the technological performance of the computer, computer functionality, or computer network.
The McRO decision also brought forth some clarity on the importance of preemption in § 101 analysis. It opens doors for diagnostic techniques and particular analytic techniques for data processing might be patent eligible.
McRO proved that evidence can prove a lack of preemption. But, the court didn't say whether preemption needed to be considered narrowly and broadly.
The entire effect that the McRO decision can have on computer-implemented inventions and on patent eligible law in the future will unfold slowly, but with many watching carefully.
Another Important Patent Eligibility Case
McRO, Inc. v. Bandai Namco Games America, Inc. isn't the only important patent eligibility case in recent years.
Thales Visionix, Inc., v. United States was heard in 2015 and dealt with claims on specific hardware elements. These elements were used for tracking motion within a moving reference frame.
In this case, the invention was found to be an abstract idea under § 101 and therefore not eligible for a patent.
The case has been appealed and will be heard by the Federal Circuit where they can reapply and reconfirm their precedent that was set in the McRO case.
Further Guidance on § 101 or Alice Test
The McRO, Inc. v. Bandai Namco Games America, Inc. case has created quite a stir for its interesting outcome and that the Federal Circuit court disagreed with the District Court. But, this case doesn't change the core principles of deciding patent claims or whether or not computer improvements are patent-eligible.
The McRO, Inc. v. Bandai Namco Games America, Inc. case marks just the fourth time that the Federal Circuit court decided that software was eligible for a patent. The clarity that was brought by this case is that something is patent eligible if it makes a specific improvement to computer technology that "allow for the improvement realized by the invention."
So, what was different? The court stated that this software was different from other software that had been previously denied patent eligibility because the software wasn't the invention in McRO, Inc. v. Bandai Namco Games America, Inc. The invention, in this case, were the rules and mathematical formulas used to improve the automation of speech in animated characters.
Not only that, but "the automation goes beyond merely 'organizing [existing] information into a new form' or carrying out a fundamental economic practice."
McRO, Inc. v. Bandai Namco Games America, Inc. has been getting a lot of attention as a landmark case that will forever change patent law when truly it's just a clarification of the Alice test and section 101. Even after McRO, Inc. v. Bandai Namco Games America, Inc., the core principles of patent eligibility remain the same.
Two Problems § 101
Though the Alice test in section 101 has been consistently used to test patent eligibility successfully for a number of years, it's not perfect, as illustrated through the clarification that was set forth with McRO, Inc. v. Bandai Namco Games America, Inc.
All Inventions are Abstract
The first major problem with the Alice test is with the first prong: all inventions can be simplified to an abstract idea, making them ineligible for patent protection. This risk was recognized in Mayo, when the Supreme Court released that statement that all inventions at some level embody, use, reflect, rest upon, or apply laws of nature, natural phenomena, or abstract ideas."
Instead of changing the rule, the Supreme Court set forth the recommendation that courts should be careful to not oversimplify claims when seeking to understand patent eligibility.
What is Abstract?
The second issue with the Alice test is that "abstract" has never been fully defined. The Federal Circuit has provided a framework for understanding "abstract" that looks at the idea through preemption. The court looked for:
Specific limitation to avoid preemption
More than automation of a human activity
To ensure the second prong is applied properly, the court also recommended that the claim and invention be viewed as a whole here, not just as a part.
Software Patent Eligibility in FairWarning
No more than a month after reviewing and ruling on McRO, Inc. v. Bandai Namco Games America, Inc. the Federal Circuit Court has ruled on another case dealing with software and patent eligibility.
FairWarning IP, LLC v. Iatric Systems, Inc. dealt with a similar software that used a computer-implemented application of rules. Though similar, in FairWarning the court upheld that the software wasn't patent eligible.
The court went on to distinguish the two cases and describe why they ended in different outcomes. This gives even more clarity to the two-prong Alice test and how it can be applied to patent eligibility.
As a reminder, in McRO the Federal Circuit found that the set of rules used to "automatically animating lip synchronization and facial expression of three-dimensional characters," wasn't an abstract idea and therefore under the first step of the Alice test, was eligible for a patent.
In contrast, in FairWarning the Federal Circuit found that the software wasn't patent eligible because it was an abstract idea. The Federal Circuit said that a "method of detecting improper access of a patient's health information (PHI) in a computer environment," and application of a rule aren't patent eligible because it's an abstract idea and fails to be "significantly more" which is required under the Alice test.
In McRO the software's rules took a process traditionally done subjectively by humans and turned it into a mathematical process that was automated and executed by a computer. The process done by the human and the computer returned a similar result, but the process was completed in a fundamentally different way.
In FairWarning the Federal Circuit found that the rules were "merely implement[ing] an old practice in a new environment." FairWarning also claimed that it had accelerated the process, but the court found this acceleration was due simply from the improved capabilities of a general-purpose computer.
These two cases, McRO and FairWarning are very important to understanding patent eligibility because they give lawyers an example of both patent-eligible and patent-ineligible software. The court also explained how it applied the Alice test in both of these cases for better understanding.
Frequently Asked Questions
- What is McRO?
McRO is a Federal Circuit court case that set a new precedent for deciding patent eligibility in software and other inventions.
Why is McRO so important?
McRO set new precedents for understanding patentability of software. Because new software is being developed daily, this case could have a major effect on how patent eligibility is interpreted in the future.
What is a patent?
A patent is legal protection given to an inventor for his invention. A registered patent is protected under federal from patent infringement or any unauthorized use of or sale of the protected invention.
If you need help with patent litigation or understanding the ruling in McRO, Inc. v. Bandai Namco Games America, Inc., you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.