A District Court committed error, says a Federal Circuit panel, “by presuming that terminally disclaimed continuation patents are patentably indistinct variations of their parent patents without analyzing the scope of the patent claims.” SimpleAir, Inc. v. Google LLC, No. 2016-2738 (March 12, 2018) (precedential) (opinion by Judge Lourie, joined by Judges Reyna and Chen). The question here was whether SimpleAir could allege infringement of a terminally-disclaimed patent in a chain of continuations when prior litigation with Google had resulted in judgments of non-infringement of three other patents, including the parent, in the chain. The district court had granted Google’s Rule 12(b)(6) motion to dismiss on grounds that the KesslerDoctrine and claim preclusion barred SimpleAir from its claim that Google infringes other, never-litigated, patents in the family. The Federal Circuit vacated that decision.
The court agreed with Google that just because the prior litigation had not included the presently-asserted patents did not mean that claim preclusion was foreclosed. However, even though “there is a substantial overlap between” the present and the previously-asserted patents, including “a common specification and terminal disclaimer to a common parent,” there was nonetheless an insufficient record to support a holding of claim preclusion.
Claim preclusion requires accused activity to be “essentially the same,” which was also the standard that the court here adopted “for comparison of the claims between asserted patents.” Further, in “the particular context here, [the court] conclude[d] that claims which are patentably indistinct are essentially the same.”
Google argued that the claims were essentially the same “without any direct analysis of the claims,” based simply on the fact that the patent Examiner made an obviousness-type double patenting rejection, and the applicant filed a terminal disclaimer. The court disagreed, citing a line of cases that “foreclose the inference that filing a terminal disclaimer functions as an admission regarding the patentability of the resulting claims.” But then the court suggested that perhaps it would have liked to have made this inference, noting that a panel could not “deviate from this precedent.”
Further, the panel noted that the terminal disclaimer should get “strong weight.” A patent applicant waives “potentially valuable rights” by sacrificing patent term with a terminal disclaimer. The court would not “lightly presume” that these rights were forfeited “as a mere procedural expedient.” But even if “a terminal disclaimer is a strong clue” that the patent examiner and applicant regarded continuation claims as patentably indistinct from a parent, this does not excuse a comparison of “the patents’ claims along with other relevant transactional facts.”
The court also suggested that the claims might in fact be patentably indistinct. It considered SimpleAir’s arguments, and noted similarities between the current and the prior asserted patents. The district court on remand had discretion to determine “whether formal claim construction is necessary.”
And giving even more ammunition to the district court on remand, the panel agreed that its findings concerning SimpleAir’s delaying and duplicative litigation tactics were potentially “persuasive” policy considerations. However, improper litigation contact could be dealt with in other ways; the district court needed to correct its error in presuming that “filing a terminal disclaimer during prosecution of a continuation patent implies that the continuation patent is patentable he indistinct from its parent.”
The court further disagreed with Google that the Kessler doctrine applied. The Kessler doctrine “preclude[s] assertions of a patent against even post-judgment activity if the earlier judgment held that ‘essentially the same’ accused activity did not infringe that patent.” The point of the Kessler doctrine is “only to bar assertion of the claims at issue against essentially the same products made or sold after the judgment of noninfringement in the earlier case, i.e., products that claim preclusion could not reach because of their timing.” (Emphasis in original; citation omitted.) On the other hand, if the District Court finds on remand that claim preclusion applies, the Kessler doctrine would likewise apply to “Google’s provision of essentially the same . . . services post-judgment.”
Lessons for Practice
There is a big, albeit indirect, lesson for patent prosecutors in this case. People often think that terminal disclaimers are of little moment, because these days (see 35 U.S.C. § 154(a)(2) and (c)(1)) the term of a continuation patent is measured from the earliest effective filing date of its parent. Different patent term adjustments potentially applying to different patents in a chain is one reason to challenge such thinking. But the big lesson is this: the risk that, even if not conclusive, an applicant’s submission of a terminal disclaimer will be persuasive evidence that claims are patentably indistinct.
A district court faced with a defendant’s motion to dismiss has ordered supplemental briefing because “Berkheimer v. HP, Inc. (Fed. Cir. Feb. 8, 2018)] may impact the analysis to be applied at the motion to dismiss stage under the second step of the standard set forth in Alice Corp. Pty. Ltd. v. CLS Bank International, 134 S. Ct. 2347 (2014).” Pace Anti-Piracy, Inc. v. Inside Secure, No.17-cv-05860-HSG (N.D. Cal. March 16, 2018). Of course, simply ordering supplemental briefing does not mean that a court will find that fact questions preclude deciding the patent-eligibility question at the pleadings stage. But the fact that this court and others are heeding Berkheimer as a potentially significant turn in the law – and one that would impede a court’s ability to hold patents invalid under 35 U.S.C. § 101 – is a trend worth noting, and watching.
As discussed in this post, the district court held claims of the ’533 patent, which recite “[a] method for remote mirroring of digital data,” directed to the “abstract idea of backing up data.” The Federal Circuit agreed with scant comment concerning the lower court’s analysis. But the court here did address (in a footnote) Intellectual Ventures’ argument that Berkheimer compelled reversing and remanding back to the district court based on an alleged “genuine issue of material fact” concerning whether the patent claims in dispute “improve remote data mirroring in ‘an inventive manner’ or perform ‘well-understood, routine, and conventional activities to a skilled artisan.’”
The district court had in fact provided detailed findings that the claims did not encompass an inventive concept. Further, IV offered no “evidence to show that the order of the steps was unconventional.” IV could have provided expert testimony to show unconventionality, but it had not done so.
Lessons for Practice
First, recent hullaballoo about Judge Moore’s dicta in Berkheimer, and then again in Aatrix Software, Inc. v. Green Shades Software, Inc., No. 2017-1452 (Fed. Cir. Feb. 14, 2018), stating the need for factual determinations in patent-eligibility analyses, may be overstated. At the end of the day, applying the Alice test remains a subjective exercise. If courts want to find facts one way or the other, Alice gives them the framework to do it.
Second, I don’t mean to say that Berkheimer and Aatrix Software are devoid of an important lesson. If patent-eligibility is a close question, consider whether you can put in testimony or other evidence of unconventionality of claimed subject matter. Just as when arguing prior art rejections, attorney argument only goes so far.
Claims from two out of three patents for providing haptic feedback to computer users survived a motion to dismiss based on a patent eligibility challenge under the Mayo/Alice test and 35 U.S.C. § 101. Considering their character as a whole, the court found that the claims were not directed to abstract ideas. Immersion Corp. v. Fitbit, Inc., No. 17-CV-03886-LHK, (N.D. Ca., March 5, 2018). The court held claims of a third patent to be patent-ineligible.
Plaintiff, Immersion Corporation filed suit against Defendant Fitbit, Inc. alleging infringement of claims of U.S. Patent No. 8,059,105, U.S. Patent No. 8,351,299, and U.S. Patent No. 8,638,301. Fitbit moved to dismiss, contending that the asserted claims failed to recite patent-eligible subject matter under 35 U.S.C. § 101. The court denied Fitbit’s motion as to the claims of the ‘105 and ‘299 patents and granted Fitbit’s motion to dismiss as to the ‘301 patent claims.
The ‘105 Patent
The ‘105 patent is directed to a haptic feedback device such as a touchpad that provides haptic feedback to computer users based on a position of a cursor on a display, e.g., a haptic signal when the cursor is moved over an icon. The haptic feedback “can assist and inform the user of interactions and events within a graphical user interface or other environment and ease cursor targeting tasks.” (‘105 patent at column 2, lines 63-66.)
Claim 19, chosen as representative, recites:
19. A haptic feedback device, comprising:
one or more processors configured to receive an input signal and generate a force signal based on the input signal,
wherein the input signal is associated with a user-independent event,
the user-independent event comprising one or more of a reminder event, an initiation of a task, a processing of the task, a conclusion of the task, a receipt of an email, or an event occurring in a game; and
one or more actuators configured to receive the force signal and impart a haptic effect based on the force signal.
The court conducted an Alice/Mayo analysis of claim 19. Rejecting Fitbit’s characterization of claim 19 as being directed to “vibrating to communicate that an event that is independent of the user of a device, e.g., receipt of an email, has occurred” the court cited Enfish, LLC v. Microsoft Corp., 822 F.3d (Fed. Cir. 2016), for the proposition that the [Alice test] step one requires claims to be considered “in light of the specification, based on whether their ‘character as a whole’ is directed to excluded subject matter.” The court further noted that under Diamond v. Diehr, 450 U.S. 175 (1981), and Thales Visionex Inc. v. United States, 850 F.3d (Fed. Cir. 2017), “simply incorporating an abstract idea in part of a claim that is otherwise directed to patentable subject matter does not necessarily render the entire claim ineligible.”
Applying the above, the court characterized claim 19 to be directed to “a device that provides haptic feedback to communicate that one of several predetermined user-independent events has occurred.”
Based on this characterization, the court found that “[t]he weight of the claim clearly focuses on a tangible, non-abstract device as the invention which, through the allegedly unconventional combination of components, contains the new and useful feature of notifying the device’s user of independent events through vibration.” The court concluded that “Immersion’s invention of a touchpad or other similar device that provides haptic feedback is a new arrangement of known components that solves the problem of how to provide non-audio, non-visual notification to a user. Such an invention is patent-eligible.”
The ‘299 Patent
The ‘299 patent is directed to systems and methods for monitoring motion parameters of an object manipulated by a user and providing notification once a certain target is reached. For example, one embodiment discussed in the specification is a toothbrush that monitors the number of brush strokes that a user has completed. When the number of strokes reaches a predetermined threshold, the device provides a haptic output indicating that the threshold has been reached.
Claim 14 was analyzed as representative. It recites:
14. An apparatus comprising:
a sensor that senses motion of at least a portion of the apparatus and provides a sensor output based on the sensed motion;
a timer that provides a periodic timer output;
a vibrotactile device responsive to the timer that provides a corresponding periodic haptic output; and
a processing device that receives the sensor output and accumulates counts associated with the sensor output, the processing device providing an output to the vibrotactile device providing an output to the vibrotactile device once a threshold associated with the accumulated counts is reached.
The analysis of claim 14 of the ‘299 patent proceeded along the same lines as claim 19 of the ‘105 patent. The court rejected Fitbit’s characterization of claim 14 as directed to the abstract idea of vibrating to communicate when a motion threshold has been reached.” Rather, the court characterized claim 14 as an apparatus that senses motion, counts the number of motions that occur, and notifies a user through haptic feedback once a threshold number of motions occur. Again citing Thales, the court found that the claimed invention was not directed to an abstract idea, but rather to “a tangible device comprising a new and useful arrangement of components that solves the problem of now to notify a user that a predetermined number of motions have occurred in an environment where audio and visual alerts would not be effective.”
Here again, finding claim 14 not an abstract idea, the court did not reach the second step of the Alice/Mayo test.
The 301 Patent
The court granted dismissal of the complaint to the extent based on the ‘301 patent. The ‘301 patent is directed to systems and methods for mobile devices to be configured to exchange data or messages with each other via network interfaces and provide haptic effects partially based on the exchanged data or messages transmitting haptic messages. Representative claim 27 recites:
27. A system comprising:
a processor configured to:
receive a first sensor signal from a first sensor, the first sensor configured to detect a movement of a first mobile device;
receive a second sensor signal from a second sensor, the second sensor configured to detect an interaction with the first mobile device;
receive a first data signal from the network interface, the network interface configured to receive signals transmitted by a second mobile device;
determine a change in a display signal based at least in part on the first data signal and the second sensor signal;
determine a change in a display signal based at least in part on the first data signal and the second sensor signal;
determine a haptic effect based at least in part on the first data signal; and
output the haptic effect.
The court interpreted claim 27 to be “directed to receiving sensor and data signals, analyzing those signals, and outputting other signals in response.” The court found that claim 27 “did not provide any limiting rules or algorithms that describe how the processor performs these functions” and was directed to an abstract idea for two reasons.
First, claim 27 falls within the category of gathering and processing information, which the Federal Circuit has established is an abstract idea, citing Electric Power Group, LLC v. Alstom S.A., 830 F.3d 1350 (Fed. Cir. 2016). The first three functions that the processor is configured to perform are receiving sensor and data signals.
Second, claim 27 is analogous to claims the Federal Circuit has held to be directed to an abstract idea in part because they use function-based claiming. Claim 27 requires receiving sensor and data signals, determining a resulting change in display, and determining a resulting haptic effect, but “[t]here is nothing in claim  that is directed to how to implement” these functions.
Finding claim 27 directed to an abstract idea, the court proceeded with the second step of the Alice analysis. Again citing to Electric Power Group, the court found that claim 27 follows a conventional order of receiving, processing and outputting data. There is nothing in the ordered combination of the elements of claim 27 to bring it outside the realm of the abstract idea of data collection and analysis.
Lessons for Practice
This is yet another case in support of the proposition that software claims for processing data can be patent-eligible. The court found claims not directed to abstract ideas when it could find an answer to the question of “how the processor performs these functions.” It never reached step two of the Alice/Mayo analysis. Providing some detail in the claims such as algorithms or limiting rules, along with some support in the specification identifying a technological improvement can go a long way in overcoming the patent-eligibility hurdle.
This case also illustrates that, for patent practitioners, Core Wireless (discussed previously in this blog, see link above), the recent precedential decision from the Federal Circuit, provides a strong tool for defending software claims directed to data-processing applications.
This dispute started with Solutran suing U.S. Bank for infringement of U.S. Patent No. 8,311,945. The ’945 patent covers a method of processing checks. U.S. Bank retaliated by petitioning for CBM review, claiming that the ’945 patent was obvious over admitted prior art in the patent and U.S. Patent App. No. 2005/0071283 to Randle. The Patent Trial and Appeal Board instituted review but eventually sided with Solutran. Solutran now argues that at trial, U.S. Bank cannot argue obviousness and cannot rely on a reference related to the Randle ’283 application.
The estoppel provision for CBM reviews states that the “[p]etitioner … may not assert … in a civil action … that the claim was invalid on any ground that the petitioner raised during” the CBM review. (Pub. L. 112-27, § 18(a)(1)(D), 125 Stat. 330 (2011).) The scope is ostensibly narrower than estoppel from inter partes review or post-grant review, which cover “any ground that the petitioner raised or reasonably could have raised during” the review. (35 U.S.C. §§ 315(e)(2), 325(e)(2).)
But Solutran swung for the fences, pushing for a much, much broader scope of estoppel. Solutran argued that the “ground” of invalidity is the statutory basis, in this case, obviousness; therefore, U.S. Bank is estopped from raising any obviousness arguments at trial. The court first referenced Shaw Industries Group, Inc. v. Automated Creel Systems, Inc. (Fed. Cir. 2016), in which the Federal Circuit held that a party would not be estopped from raising a ground of invalidity on which the PTAB had not instituted review. According to Federal Circuit usage of “ground” in that case and others, a “ground” is “a discrete claim of invalidity based upon a prior art or a combination of prior art.” The court found that this usage foreclosed Solutran’s aggressive interpretation.
Solutran also argued to exclude a reference relied on by U.S. Bank’s expert, U.S. Patent App. No. 2006/0106717 to Randle. The Randle ’283 application and the Randle ’717 application are both continuations-in-part from the same three parent applications. Solutran pointed to substantial overlap between the two related applications, and U.S. Bank noted that the Randle ’717 application disclosed elements of the claims not disclosed by the Randle ’283 application. “If Randle ’717 does not provide any new disclosures or features that Defendants could not have argued from Randle ’283, then it will be estopped.” The court thought that the record was insufficient and demanded more specific evidence from U.S. Bank on the unique disclosures of the Randle ’717 application before ruling on admissibility.
Lessons for Practice
This case shows the importance of finding multiple theories of invalidity, if possible. Administrative review of patents—whether IPR, PGR, or CBM—creates the opportunity for accused infringers to have a second chance to prove invalidity. But the invalidity arguments cannot be purely recycled. An accused infringer should always try to generate more than one good story why the patent is invalid; whether the prior art cooperates is another matter.
The Federal Circuit in Steuben Foods, Inc. v. Nestle, Inc. (Appeal No. 2017-1290, Fed. Cir., decided March 13, 2018) rejected the patent owner’s claim construction as impermissibly restricting the claim term to a specific embodiment disclosed in the specification. Based on this claim construction, the Court affirmed the final decision of the Patent Trial & Appeal Board in the appealed inter partes review finding the claims to be unpatentable as obvious.
The claim term at issue is “sterilant concentration levels” in US6,475,435. An annotated copy of a figure used by the Court is reproduced below. This figure shows a sterilization tunnel used for packaging food. The sterilization tunnel is pressurized to create a flow of sterile air out of the tunnel to prevent contaminants from flowing into the tunnel. The tunnel is divided into the color-coded zones shown below and each zone has a different purpose (the fourth zone provides bottles, the first zone provides drying, etc.). The claims are directed toward maintaining “different sterilant concentration levels in the plurality of zones.”
In the IPR, the Board construed “sterilant concentration levels” to be levels measured “at any point within the sterilization tunnel – including ‘residual’ concentration on bottle surfaces.” On appeal, the patent owner argued that this construction is so broad that it could cover the concentration at any point, including at a random droplet on a container, and argued that the term should instead be construed as “the amount of sterilant in the volume of pressurized gas within the zone.”
The Court rejected this argument as impermissibly restricting the claim term to a specific embodiment disclosed in the specification. Specifically, the Court noted that the specification does discuss “different concentration levels of gas laden sterilant,” but one section of the specification also discusses “residual concentration” of sterilant on bottle surfaces. The Court affirmed the Board’s conclusion that, since “neither the claims nor the specification limit how or where…the sterilant concentration levels should be assessed,” the broadest reasonable interpretation must include both gas laden concentrations and residual sterilant concentrations on bottle surfaces.
In general, explicit definitions/descriptions of claim terms should be considered at the time of drafting the patent application, especially if the drafter suspects a term to be important and/or open to an overly broad construction. Many considerations must be weighed to make that decision at the time of preparation, but with the benefit of 20/20 hindsight, such a definition/description to directly limit the specific term “sterilant concentration levels” to concentration levels of gas laden sterilant may have resulted in a different outcime in the specific fact pattern of this Federal Circuit appeal.
The Federal Circuit recently upheld two patents against an obviousness challenge by Google. (Google v. At Home Bondholders Liquidating Trust (Fed. Cir. 2018).) This case demonstrates the importance of contemporary evidence to support what a piece of prior art truly would have disclosed to a person of ordinary skill in the art.
At Home Bondholders’ Liquidating Trust, as the name indicates, formed from the ashes of a practicing entity. As part of monetizing the leftover assets, At Home sued Google for infringing U.S. Patent Nos. 6,014,698 and 6,286,045. Google responded with two inter partes review petitions against each of the patents.
The Patent Trial and Appeal Board focused on one limitation common to all the challenged claims, that an advertising request is nonblockable. When a user requests a webpage, the webpage and corresponding banner ads are cached at an intermediary server, and if the user requests the same webpage, the webpage and banner ads are delivered from the intermediary server. But the website may not get an accurate count of how many times the banner ad is loaded because it doesn’t see those multiple requests from the user. The patents solve that problem by specifying that a first request for a banner ad is nonblockable by the intermediary server. One example in the specification is to include the strings “?” and “cgi-bin” in the URL, making the request dynamic and thus “unsuitable for caching.”
Against that limitation, Google used the same reference against all the claims, U.S. Patent No. 5,933,811 to Angles. Angles disclosed an advertising request referencing a Common Gateway Interface (“CGI”) script. Google argued that, because CGI scripts are nonblockable by default, a person of ordinary skill in the art would have understood Angles to disclose a nonblockable advertising request.
But the PTAB instead credited At Home’s argument that a person of ordinary skill would not have understood Angles to disclose a nonblockable advertising request because CGI scripts are not necessarily blockable. To back up its point, At Home presented two contemporary sources on the understanding of a person of ordinary skill in the art, a CGI programming textbook and a publication by the World Wide Web Consortium, which both gave examples of blockable CGI requests. To explain the argument, At Home used expert testimony that relied partly on the two contemporary sources. The Federal Circuit found no error in the PTAB’s reasoning.
Lessons for Practice
As the Federal Circuit helpfully noted, “Obviousness is a question of law based on underlying factual findings.” And what helps support factual findings? Evidence. Google may have thought that unearthing a reference showing, essentially, one of the embodiments of the claims would be enough to carry the day. But actual contemporary references showing blockable CGI requests, along with some persuasive testimony, turned the case around, convincing the PTAB that a person of ordinary skill in the art would have considered it quite normal to deviate from the default setting for CGI scripts. Determining validity over prior art is often a sort of historical expedition—in this case, back to the 90s—and contextual evidence contemporary to the challenged patent can be invaluable.
A split Federal Circuit panel has affirmed a district court’s holding that patent claims directed to a “temporal artery temperature detector” are patent-eligible under 35 USC § 101 and the Mayo/Alice test. Exergen Corp. v. Kaz USA, Inc., Nos. 2016-2315, 2016-2341 (Fed. Cir. Mar. 8, 2018) (opinion by Judge Moore, joined by Judge Bryson; dissent by Judge Hughes) (non-precedential). This case has several instructive aspects. First, the dispute between the majority and Judge Hughes in dissent concerning whether the claims involved steps that were not conventional, routine, and well understood, is interesting. But perhaps even more interesting is Judge Moore’s dicta concerning the role of factual determinations in patent-eligibility analysis, especially in light of other recent Federal Circuitopinions (also authored by Judge Moore) addressing this topic.
The patents at issue were U.S. Patent Nos. 6,292,685 and 7,787,938. Representative method claims from the ’938 patent  recite:
14. A method of detecting human body temperature comprising making at least three radiation readings per second while moving a radiation detector to scan across a region of skin over an artery to electronically determine a body temperature approximation, distinct from skin surface temperature.
24. The method of claim 14 wherein the artery is a temporal artery.
Representative system claims from the ’938 patent recite:
48. A body temperature detector comprising:
a radiation detector; and
electronics that measure radiation from at least three readings per second of the radiation detector as a target skin surface over an artery is viewed, the artery having a relatively constant blood flow, and that process the measured radiation to provide a body temperature approximation, distinct from skin surface temperature, based on detected radiation.
49. The body temperature detector of claim 48 wherein the artery is a temporal artery.
The majority’s opinion began by acknowledging the well-settled law that patent-eligibility under § 101 is a matter of law to be reviewed de novo at the Federal Circuit. Then the court dived into the dispute about
 The court’s opinion (page 3) appears to have inadvertently listed claims 14 and 24 from the ’938 patent as being from the ’685 patent.
whether the additional claim steps beyond calculating the temperature present a novel technique in this computation “to calculate core temperature based on ambient and skin temperature readings] or add an inventive concept sufficient to transform the claims into a patent-eligible application.
The district court, following trial, had found that there was no evidence that the claimed techniques “were well-understood, routine, and conventional prior to the introduction of Exergen’s invention.” The majority of this Federal Circuit panel agreed, and then went out of its way – as Judge Moore has done in the opinions linked to above – to stress the factual component of § 101 analysis.
The patent-eligibility analysis in this case was different than than both Mayo and Ariosa Diagnostics, Inc. v. Sequenom, Inc., 788 F.3d 1371 (Fed. Cir. 2015), because in those cases “well-known, existing methods were utilized to determine the existence of a natural phenomenon.” In this case, even if a measurement was made using “a natural phenomenon and is abstract at step one, the measurement method here was not conventional, routine, and well-understood.” The court seem influenced by the fact that the patent owner had invested considerable time and money in research and development to discover “the coefficient representing the relationship between temporal-arterial temperature and core body temperature.”
The determination of “whether claim elements are well-understood, routine, and conventional in a particular art at a particular time is a fact-finding,” said the majority opinion, and such fact findings “are entitled to deference and should be reviewed for clear error.” The defendant-appellant, Kaz, had argued that it was improperly deprived of its Seventh Amendment right to a jury trial on the question of patent-eligibility. But, as Kaz acknowledged, patent cases could present legal questions that included “underlying factual components such as claim construction to which there is no right to a jury.” Then, after seeming to head in the direction of endorsing jury trials for patent-eligibility questions, the majority turned away, saying that it could leave the Seventh Amendment question for another day because Kaz had waived its right to a jury trial.
The court thus affirmed the district court’s holding with respect to § 101 patent-eligibility. Although beyond the scope of this post, we note that the court also affirmed a denial of enhanced damages, and reversed a verdict of infringement with respect to claims of the ’685 patent, and because of this, vacated and remanded the trial court’s damage award.
Judge Hughes’ Dissent
Judge Hughes dissented, arguing that the claims at issue failed under step one (abstract idea or law of nature) of the Mayo/Alice test, and that the court never should have reached step two (additional inventive step). According to Judge Hughes, the claims were directed to a patent-ineligible law of nature, specifically to using a “heat balance equation” which was “a mathematical representation of the law of nature that governs the relationship between skin, air, and core temperatures.”
Judge Hughes then took the majority to task for reaching step two of the Mayo/Alice test. The majority had stated that Judge Hughes did not dispute that the trial court’s factual findings or subject to clear error review; his actual statement was a little different, that “[e]ven under a deferential standard of review,” there was clear error in finding an inventive concept in the claims at issue. Looking at previously existing products, discussed in the patent specifications, Judge Hughes noted that “prior art products combined skin scanning, obtaining peak temperatures, and taking multiple temperature measurements per second.” Therefore the claimed invention, “aside from its use of a newly discovered heat balance coefficient,” simply used pre-existing and conventional technology. As such, there was no inventive concept to make the claims patent-eligible.
Finally, Judge Hughes took pains to state that it was not always improper to consider “the integration of a law of nature into the claimed invention . . . at every stage of the § 101 analysis.” Claims should be looked at holistically under step one of the Mayo/Alice test. But under step two, a more narrow focus is appropriate. The majority had looked at the claims as a whole, but that was a step one analysis, and regardless, “a claimed invention’s unconventionality, by itself, is not sufficient to render the claim patent eligible.”
Lessons for Practice
Not every non-precedential decision by a Federal Circuit panel is worth reading, but this one is if your practice in any way touches patent-eligibility questions under § 101. First, the question of how much, if any, of a factual component and/or question for a jury lies in the patent-eligibility analysis is one we can expect to hear more of. Second, this case is a poster child for the subjectivity of patent-eligibility law at present. Can anyone dispute that the § 101 questions would have come out differently with different judges constituting the panel? Finally, if you are a patent prosecutor and an examiner rejects your claim on the basis that simply taking a measurement can never be patent-eligible, this case (perhaps alongside cases designated precedential) demonstrates that such a rejection would be improper.
 The court’s opinion (page 3) appears to have inadvertently listed claims 14 and 24 from the ’938 patent as being from the ’685 patent.
One should never say never in the constantly-evolving world of patent-eligibility law, but a recent case demonstrates the perhaps insurmountably steep obstacles faced by patent claims directed to Internet advertising under the Mayo/Alice test and 35 U.S.C. § 101. In Quantum Stream Inc. v. Charter Communications, Inc., No. 17 Civ. 1696 (PAE) (SDNY March 1, 2018), the court granted a motion to dismiss under FRCP 12(b)(6), finding claims of U.S. Patent Nos. 9,047,626, 9,117,228, and 9,349,136 invalid under § 101.
Representative claims of each of the three patents are reproduced in the court’s opinion and can be found at the above links; each of the claims was directed to selecting an advertisement and inserting it into a “vacancy” in video content. Finding the 2015 Federal Circuit decision in Intellectual Ventures v. Capital One to be a particularly applicable case, the court found the claims of all three patents to be “drawn to the patent-ineligible abstract idea of customized advertising, in which a unification of primary content and secondary advertising content is delivered to a consumer based upon various potential functions.”
Under step two of the Mayo/Alice test, the court found that the claims recited no “inventive concept” that could save patent-eligibility. The court cited the Federal Circuit in the 2014 case of Ultramercial, Inc. v. Hulu, LLC, itself addressing Internet advertising patent claims, for the proposition that “the straightforward implementation of the benefits of an abstract idea does not itself give rise to an inventive concept,” including recitations of using generic computing equipment. Moreover, the claims here could have been “performed by a human operator or in the human mind.”
Finally, the court addressed the plaintiff’s argument that claim construction was needed and deciding patent-eligibility at the pleading stage was premature. In this case, “the claims of the three patents are straightforward such that formal claim construction is unnecessary to define or illuminate their content or clarify any uncertain legal determination.”
The Federal Circuit has affirmed a district court’s rule 12(b)(6)dismissal of a complaint alleging direct patent infringement where the patent owner pled that the defendant at most benefited from the claimed system as a whole, and not from every element in the patent claims. Grecia v. McDonald’s Corporation, No 2017-1672 (Fed. Cir. March 6, 2018) (non-precedential, opinion by Judge Reyna). The court predicated its holding on the principle that an accused infringer must benefit from every element of a claimed system, and not the claimed system as a whole, to “use” the system in an infringing manner under 35 U.S.C. § 271(a).
The patents in suit, U.S. Patent Nos. 8,533,860 and 8,402,555, claimed modules to “facilitate access rights between a plurality of data processing devices,” e.g., to authenticate a credit card. The patent owner had alleged that McDonald’s directly infringed the patent claims by using “‘tokenization systems of’ various credit card companies.” The district court granted McDonald’s motion to dismiss, agreeing that the patent claims focused on the actions of a single entity, Visa, and therefore only Visa, and not McDonald’s, could infringe under Uniloc USA, Inc. v. Microsoft Corp., 632 F.3d 1292 (Fed. Cir. 2011).
Although affirming the district court’s result, the Federal Circuit disagreed that Uniloc was controlling because here it was “not facially apparent in the drafting of the asserted claims” that the claims were “drafted in a way that focuses on ‘one entity.’” The court pointed to claim 9 of the ’860 patent which requires system users “to provide a verification token.”
But the Federal Circuit also disagreed with the patent owner that Centillion Data Systems, LLC v. Qwest Communications International, Inc., 631 F.3d 1279 (Fed. Cir. 2011), was controlling. That case held that “to ‘use’ a system for purposes of infringement, a party must put the invention into service, i.e., control the system as a whole and obtain benefit from it.” Unlike Centillion, where different parties undisputedly possessed different claim elements, there was no allegation here that McDonald’s possessed any of the claimed modules. The complaint did not “plausibly allege that McDonald’s benefits from each element of the claimed system necessary to allege ‘use’ under § 271.”
The court explained that, in Intellectual Ventures I LLC v. Motorola Mobility LLC, 870 F.3d 1320 (Fed. Cir. 2017), it had rejected the idea that direct infringement could be predicated on an accused infringer’s “’benefit from the system as a whole’ by deriving a benefit from ‘any claimed component of the claimed system.’” Instead, Intellectual Ventures made clear that a party found to be infringing must be found to benefit from “each and every element of the claimed system.” The patent owner here “only identified a vague benefit to McDonald’s” but did not “explain how McDonald’s benefits from each and every element of the claimed system.”
Finally, the court held that, even though it decided the case on different grounds than did the district court, the lower court nonetheless did not abuse its discretion in deciding to “deny [the patent owner] leave to amend because he failed to describe or attach an amended complaint to his request for leave nor did he ‘offer any meaningful indication of how [he] would plead differently.’” Because the patent owner had not explained how he would amend his complaint to survive rule 12(b)(6), the Federal Circuit refused to remand with instructions to allow him a second bite at the apple.
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