D. Colo. Applies Alice Test for Hierarchical Data Storage System

This past week, Magistrate Judge N. Reid Neureiter issued a decision in a patent infringement case, Securenet Solutions Group v. Senstar Corp., No. 19-cv-02, 913-NRN, 2020 U.S. Dist. LEXIS 88637 (D. Colo. May 20, 2020), denying the Defendant's motion to dismiss. The case concerns patents on a hierarchical data storage system used for security and surveillance. The system is used for facilities with 100 or more security cameras that generate terabytes of data on a regular basis. The system assigns weighted averages to the collected data based on its quality and reliability. The Defendant sought to dismiss on the basis of the decision of the Supreme Court of the United States in Alice Corp. c. CLS Bank International, 573 U.S. 208 (2014). The Supreme Court held that implementing an abstract idea on generic computer equipment does not make that idea patentable. The Defendant also relied on Electric PowerGroup, LLC v. Alston S.A., 830 F.3d 1350 (Fed. Cir.2016) in which the Federal Circuit held that systems for monitoring an electric grid that collected data from multiple sources could not be patented.

Judge Neureiter reviewed the patent infringement claims under the two-step analysis of Alice. First, he considered whether the claims at issue were directed to a patent ineligible concept, such as an abstract idea. Note that algorithms and methods of computation are considered to be abstract ideas under Alice. SecureNet argued that its technique for the use of hierarchical storage management systems for surveillance that expedite the processing of more important data does not quality as an abstract idea. Judge Neuereiter disagreed finding that, "the hierarchical storage management system and the weighting of attribute data from the sensors to reduce errors rates should be considered at step two of the Alice analysis." Securenet, 2020 U.S. Dist. LEXIS 88637, at *32.

Step 2 of the Alice test, requires an analysis of whether or not the patent adds something extra to an abstract idea which constitutes an 'inventive concept'. The Court declined to dismiss the case because the question of whether the "limitations of the hierarchy of storage devices, the weighing of attribute data, and the correlating of that data provide the requisite inventive concepts necessary to make Plaintiff's claims patent-eligible" depends on whether or not these methods are well-understood, routine, and conventional activities in the industry. Id. at *36. This is a question of fact, not of law.

While this case doesn't directly concern electronic discovery, it's good to have a general idea of how federal courts are using the Alice test to review patent claims on software and in particular data storage systems. Alice is without question one of the most important SCOTUS decisions related to technology in decades, and some take it as a sign that software patents may eventually be abolished.