Federal Circuit Ruling Significantly Clarifies Patent Subject Matter Eligibility Standard
A recent ruling of the Federal Circuit Court of Appeal, which has plenary jurisdiction over all patent appeals, has clarified the application of the standard for patent subject matter eligibility, i.e., whether the subject matter of the patent meets the threshold requirements for being considered for patent protection.
The decision in Constellation Designs, LLC v. LG Electronics Inc 174 F.4th 888 (Fed. Cir. Apr. 28, 2026 is significant in that the decision denied subject matter eligibility for one set of patent claims under consideration, while approving subject matter eligibility for another group of patent claims and explained for the distinction between the two. The application of the standard and corresponding explanation by the Federal Circuit therefore provides significant help to lower courts in application of the standard for determining subject matter eligibility.
By way of background, Section 101 of the Patent Act defines the subject matters that are eligible for patent protection as follows: “Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title.” 35 U.S.C. § 101. Although this statutory language contains no specific limitation on subject matters which may be protectable, courts long ago carved out certain exceptions for which such protection was not available. These areas included “laws of nature, natural phenomena, and abstract ideas.” O’Reilly v. Morse, 15 How. 62, 112–120 (1854); Association for Molecular Pathology v. Myriad Genetics, Inc., 133 S.Ct. 2107, 2116 (2013).
These decisions have explained the purpose of carving out an exception for patent protection as allowing claims that are so broad that they amount to effective prevention of monopolies over entire fields or subject matters. For example, the U.S. Supreme Court in Bilski v. Kappos 561 U.S. 593, 612 (2010) explained that allowing a patent in that case would pre-empt use of all approaches to reach the claimed result, and, as such, “would effectively grant a monopoly over an abstract idea”. Despite such language, neither Congress nor courts had promulgated an objective standard, for evaluation and application of subject matter eligibility. In 2013 the Supreme Court decided the landmark “Alice” which devised a two-step test for evaluation and application of patent claims to determine their subject matter eligibility. Under what has since become known as the “Alice Test,” courts are to first examine the patent claims to determine if they are directed to a patent-ineligible concept, such as a law of nature, scientific principle or other abstract ideas. If the result of that inquiry is negative, the claim passes eligibility muster under Section 101. If, however, the claims is directed to ineligible subject matter, it gets another chance at meeting the eligibility standard if the court finds that the otherwise ineligible claim contains elements or aspects which transform the otherwise ineligible claim nature and make it patent eligible.
With respect to the case at bar, the patents at issue in Constellation dealt with communication technology, specifically use of non-uniform constellations aimed to generate enhanced capacity compared with conventional constellations. The Federal Circuit appeal panel divided the examined claims into two categories; the broadly recited “optimization” claims and the more narrowly described “constellation” claims.
The decision framed its eligibility analysis under step one of the Alice Test as determining whether the “claim language is directed to an abstract idea—and thus ineligible—or a technological solution to a technological problem—and thus eligible for patent protection.” Constellation, supra at 773. In that regard, the appeal panel pointed out that the examined claim was described in a result oriented matter, namely it was directed to a symbol constellation that is “optimized” to achieve a particular result. The panel thus found that the claim was too abstract in that it did not recite how to achieve the recited optimization.
The Constellation decision referred back to a 19th century decision of the High Court that involved the invention of the telegraph by famed inventor Samuel Morse, who invented the telegraph and what became known as the “Morse code.” Morse applied for patent application on his inventions, which were challenged and ultimately reached the U.S. Supreme Court. The High Court in Morse had distinguished between the patent claims which included details of Morse’s invention and a claim which it deemed to be too broad. In particular, Morse did allow claims dealing with specific technology sufficiently described in the Morse patent application, but did not allow a claim which broadly recited use of “electromagnetism, however developed for marking or printing intelligible characters, signs, or letters, at any distances.” O’Reilly v. Morse, 56 U.S., 62(1853). The Supreme Court denied the broad claim on the basis that it would include all distant printings accomplished through use of electromagnetism, without necessarily describing those techniques, or, in the words of the decision, “no matter how implemented.” Morse, 56 U.S. at 113.
The Constellation court, applying these principles, came to the same conclusion as Morse, finding the “optimization” claims to be directed to the abstract idea of “optimizing” a constellation for PD capacity and “written so broadly that it covers the mathematical concept of optimizing a constellation for PD capacity to accomplish improved capacity.” The decision noted that the patent attempted to claim the abstract idea of “optimizing” a constellation for capacity without limiting the optimization to any meaningful process or any constraints.
On the other hand, the appeal court found the “constellation” claims to be directed to “specific constellations” that the inventors developed using the techniques described in the specifications, covering “specific constellations.” The court found “this distinction between the result-oriented optimization claims and constellation claims makes all the difference.” Constellation at 905.
The Constellation decision is particularly significant because the appeal court examined two sets of claims, finding one set to be subject matter eligible for patent protection while finding the other ineligible for such protection, and explaining the reason for the distinction.
In sum, patent practitioners would greatly enhance passing muster on subject matter eligibility for their clients’ patent applications by closely adhering the scope of the patent claims to the specific disclosure in the application, which clearly and in sufficient detail describes the inventive methodology that gets to the claimed results.
Dariush Adli | President