Federal Circuit Affirms § 101 Patent Ineligibility in Information Exchange Patent Application: Key Takeaways from In re McFadden

DEREK FAHEY, ESQ.

The United States Court of Appeals for the Federal Circuit issued a nonprecedential decision in In re McFadden affirming the Patent Trial and Appeal Board’s rejection of a patent application directed to an information-exchange system. Although nonprecedential, the opinion reinforces recurring themes under 35 U.S.C. § 101 for software and data-processing inventions.

1. Background and Claimed Invention

The application at issue, No. 15/891,363, concerned systems and methods for operating an information exchange, such as a social network, advertising platform, or other system that distributes content between producers and consumers. The specification described assigning values to information items from producer and consumer perspectives and using those values to determine distribution.

The sole claim on appeal focused on generating and comparing distributions of information to derive an exchange-value metric. The examiner rejected the claim both as anticipated under §102 and as ineligible under §101. The Board affirmed both rejections, and the Federal Circuit found the §101 issue dispositive.

2. The Federal Circuit’s §101 Analysis

At Alice step one, the court agreed that the claim was directed to the abstract idea of organizing and presenting information. The claim involved collecting, analyzing, and presenting information using generic computing components, and the specification described the hardware and software only at a high level of generality.

At Alice step two, the court concluded that the claim lacked an inventive concept sufficient to transform the abstract idea into patent-eligible subject matter. The “means for generating” and “means for computing” limitations amounted to generic computer implementation of routine data processing.

The applicant’s reliance on algorithms did not change the result because they were described only at a high level and amounted to generalized mathematical operations. Improving abstract calculations alone, even if more efficient, did not establish a concrete technological improvement.

3. Practical Implications For Software Patent Applicants

Claims directed to ranking, filtering, distributing, or otherwise processing information remain vulnerable under §101 unless they are tied to a specific technological improvement. Applicants should explain how the invention improves computer functionality itself rather than merely using a computer as a tool.

Algorithms can support patentability when described with sufficient specificity and connected to a concrete technological solution. The decision also underscores the importance of preserving arguments at every stage because the court declined to consider certain points raised for the first time in a reply brief.

4. Conclusion

In re McFadden illustrates the stringent application of §101 to software and data-processing claims. Applicants should evaluate whether their inventions can be framed as technological improvements and ensure that both the claims and specification substantiate that position.