November 2015

Surviving Alice

Recent cases in which patent claims survived challenges under 35 U.S.C. § 101 provide lessons, albeit perhaps narrow ones, to both patent owners and defendants navigating the law of patent-eligibility after Alice Corp. v. CLS Bank. These lessons are perhaps not news: venue and procedural posture both matter, and unpredictability still reigns. Perhaps least surprising of the three cases discussed in this post is Intellectual Ventures I LLC v. Canon Inc., 1-13-cv-00473 (D. Del. November 9, 2015). There, considering a spate of summary judgment motions, Judge Robinson declined to hold that claims of U.S. Patent No. 6,130,761  patent-ineligible. The defendant had argued that “the ‘761 patent is drawn to the idea of extracting digital data at a purportedly improved scan rate by implementing a mathematical relationship on a conventional scanner.” The court disagreed that the claims were directed to an abstract idea because they recited “steps including determining the parameters (which meet a certain mathematical formula) and applying parameters to operate a scanner,” but “such claims do not claim the mathematical formula nor do they seek to simply ‘implement’ such a formula.” Further, the claims were not pre-empting because there were many other possible relationships among claimed elements besides those… Read More »Surviving Alice

Broadest Reasonable Interpretation Has Limits

Every patent practitioner has felt the frustration that the USPTO’s “broadest reasonable interpretation” standard for claim construction seems to mean that claims say whatever the Patent Office wants them to mean. However, the Federal Circuit has reaffirmed that the standard does have limits. In Straight Path IP Group, Inc. v. Sipnet EU S.R.O., No. 15-1212 (Fed. Cir. Nov. 25, 2015), the court held that the Patent Trial and Appeal Board’s claim construction of claims of U.S. Patent No. 6,108,704, on which the PTAB relied in canceling claims in an Inter Partes review, unreasonably departed from the plain meaning of the claim language. Judge Taranto, joined by Judge Hughes, wrote for a split panel; Judge Dyk dissented. At issue was the meaning of “connected to the computer network” in the recitation of “program code for transmitting, to the server, a query as to whether the second process is connected to the computer network.” The PTAB had found, in part relying on the patent Specification, that “connected to the computer network” was satisfied by a process that had been active and on-line at the time of registration of the server. The patent owner contended, in contrast, that the claim language required that… Read More »Broadest Reasonable Interpretation Has Limits

Some Cases Are Easy Under Alice

For all the uncertainty engendered by Mayo v. Prometheus and Alice Corp. v. CLS Bank and their lower court progeny, many patent claims on their face simply will not be found patent-eligible under 35 U.S.C. § 101 after Alice and Mayo. Two patents illustrative of this proposition recently met their fate on motions for summary judgment, one directed to managing real estate listings, and another to telephone directory lookups. Listingbook, LLC v. Market Leader, Inc., 1-13-cv-00583 (M.D. N.C. Nov. 13, 2015); Stanacard, LLC v. Rubard, LLC, No. 1-12-cv-05176 (NYSD Nov. 18, 2015). U.S. Patent No. 7,454,355, at issue in the Listingbook case, was entitled “Method and system for providing real estate information using a computer network, such as the internet.” If that title wasn’t enough, independent claim 1, though really long, gave the game away in the preamble: A computer-implemented method of providing client-accessed real estate information to a real estate professional associated with a first client and a second client, and for providing professional-accessed real estate information to the first client and the second client. After a long detour into the standards and burdens of proof in a patent-eligibility determination, it was not difficult for the court to conclude… Read More »Some Cases Are Easy Under Alice

PTAB Finds Means-Plus Function Indefiniteness

Following Williamson v. Citrix Online, LLC, the Patent Trial and Appeal Board has held means-plus-function patent claims indefinite under 35 U.S.C. § 112 for failing to “disclose sufficient corresponding structure for the [means-plus-function claim] limitation.”  Boku Account Services, Inc. v, Xilidev, Inc., Cases CBM2014-00140 and CBM2014-00148 (US Patent 7,273,168) (Nov. 2, 2015).  Even assuming the patent disclosed a specially programmed computer, the patent did not disclose “means for completing the transaction request by deducting a transaction amount from a payment source in response to an output from the means for verifying.” The ‘168 patent disclosed a “payment authorization source 130” that could be used to complete a transaction, “but does not describe any particular structure for payment authorization source 130, instead merely referring to it as a ‘credit card company,’ ‘provider of wireless service,’ or ‘interface to various banks, credit card companies, [or] wireless service providers.’”  Further, even if the payment authorization source 130 were a specially programmed computer, the process disclosed in the specification and Figure 3 did not include “any steps pertaining to ‘completing [a] transaction request by deducting a transaction amount from a payment source in response to an output from the means for verifying,’ as recited… Read More »PTAB Finds Means-Plus Function Indefiniteness

Multi-Player Gaming System Survives Patent-Eligibility Challenge

Finding that patent claims reciting hardware elements and functionality of a multi-player gaming system encompassed more than an abstract idea, and, moreover, claimed an innovative concept, a court denied a motion to dismiss for lack of patent-eligible subject matter under Federal Rule of Civil Procedure 12(b)(6). Timeplay, Inc. v. Audience Entertainment LLC, No. CV 15-05202 SJO (JCx) (C.D. Cal. Nov. 10, 2015). U.S. Patent Number 8,951,124 included claims to “a multi-player game system.” A representative independent claim recited “a game server,” “a display system,” “a plurality of handheld game controllers,” and “a communication controller.” Various functionality was associated with each of these elements. The court began by noting that it was appropriate to rule on patent-eligibility at the pleading stage. The claimed subject matter must be understood, but need not be subjected to a formal claim construction. Then, having concluded that a ruling was appropriate on a Rule 12 motion, the court proceeded with its analysis. The court disagreed with the defendant’s contention that the claims were directed to an abstract idea. The parties appeared to agree that the claims were “directed to the ‘idea of multi-player gaming using a hand-held controller that has a display screen where the players… Read More »Multi-Player Gaming System Survives Patent-Eligibility Challenge

Suit Tossed on Alice Grounds Does Not Merit Attorneys Fees Under Octane Fitness

A California district court recently considered the intersection between the patent-eligibility law of Alice and the fee award standard of Octane Fitness, set against the backdrop of a (mostly) successful challenge to the patent-in-suit’s claims before the Patent Trial and Appeal Board.  In Credit Acceptance Corp. v. Westlake Servs., LLC, No. CV 13-01523 SJO (MRWx) (C.D. Cal. Nov. 2, 2015), Plaintiff sued Defendants alleging infringement of U.S. Patent No. 6,950,807, entitled “System and Method for Providing Financing.” One of the Defendants filed a Covered Business Method (CBM) petition seeking post-grant review of all of the ‘807 patent.  The Defendant argued that the claims were either unpatentable or invalid under 35 U.S.C. §§ 101, 112 ¶ 1 and 112 ¶ 2.  Shortly thereafter, the Defendants moved to stay the district court case. The court granted the stay motion.  At the time, the Supreme Court had granted certiorari to review the Federal Circuit’s decision in Alice, but hadn’t issued an opinion on the matter.  While the court acknowledged that the law on patentability under 35 U.S.C. § 101 was in flux, “the possibility of guidance lies on the horizon.” The PTAB granted the Defendant’s petition to review some but not all of… Read More »Suit Tossed on Alice Grounds Does Not Merit Attorneys Fees Under Octane Fitness

A Reminder to Patent Drafters: Consistent and Well-Defined Terminology Is Important

Because the patent specification inconsistently referred to, and failed to define, a critical claim term, the court granted a motion for summary judgment of indefiniteness under 35 U.S.C. § 112, ¶ 2, concerning claims of U.S. Patent No. 5,463,374.  Signal IP, Inc. v. Mazda Motor of North America, Inc., (C.D. Cal. Nov. 2, 2015.)  The plaintiff argued that the phrase “data format” in the claims would have been understood by those skilled in the art.  Unfortunately for the plaintiff, the patent specification used four different “format” terms, never defined “data format,” and, confusingly, both distinguished and conflated “data format” with other the other terms. Independent claim 1 of the ‘374 patent recited in part “the remote transmitters all having the same data format but distinctive codes for tire transmitters and vehicle function transmitters.”  The specification never defined “data format,” but described a “pulse width modulated” data format in conjunction with Figure 3.  The specification also stated that “[b]oth the data format and the message format are compatible with that of fob 16.”  Figure 4 purported to show a “message format,” but the plaintiff argued that this was obviously an error and should have referred to the “data format.”  Compounding the… Read More »A Reminder to Patent Drafters: Consistent and Well-Defined Terminology Is Important

All Want Clarity and Predictability in Patent-Eligibility Debate, but Agreement Ends There

As detailed in this (paywalled) article, the public comments responding to the U.S. Patent and Trademark Office’s “2015 Update on Subject Matter Eligibility” have two overriding themes.  First, the USPTO’s Section 101 examination “Guidance” lacks consistency and clarity to allow practitioners to predict whether claims will be rejected under 35 U.S.C. § 101.  Second, even assuming that the USPTO’s Guidance was clear, USPTO practice under Alice and Mayo is inconsistent and unpredictable.  Different examiners and different art units apply the Guidance in different ways.  Some examiners fail to explain the bases of their patent-eligibility rejections; others set forth bases (e.g., the machine-or-transformation test) that are unsupported by the law. In short, everyone agrees that the USPTO’s implementation of examination for  patent-eligible subject matter is a mess.  The various players enjoy scant agreement, however, concerning how to clean up that mess. On the one end of the spectrum, the  Biotechnology Industry Organization believes that “the addition of steps or elements that optimize or perfect the conventional method for some specific purpose should always be patent-eligible,” and that the USPTO “should consider providing examples of claims to nature-based products where otherwise ‘well-understood, routine and conventional’ activity has been specified with enough detail to render… Read More »All Want Clarity and Predictability in Patent-Eligibility Debate, but Agreement Ends There

Beware: An Enabling Specification Can Also Enable Prior Art

The Federal Circuit has held that a prior art reference was enabled in part because admissions in an applicant’s own specification explained what would have been known to one of ordinary skill in the art.  In re Morsa, No. 2015-1107 (Fed. Cir. Oct. 19, 2015).  Pointing out knowledge of one skilled in the art can be a valuable tool in avoiding rejections, and generally supporting a disclosure, under 35 U.S.C. 112.  This case, however, is a reminder that relying on the black box of knowledge of persons of ordinary skill can be a double-edged sword. The court started with a nice reminder of what constitutes enabled prior art: Enablement of prior art requires that the reference teach a skilled artisan—at the time of filing—to make or carry out what it discloses in relation to the claimed invention without undue experimentation. For a prior-art reference to be enabling, it need not enable the claim in its entirety, but instead the reference need only enable a single embodiment of the claim. (Citations omitted.) It thus follows naturally to “start first with the knowledge that a relevant skilled artisan would have in this case.”  The Federal Circuit agreed with the PTAB “that the… Read More »Beware: An Enabling Specification Can Also Enable Prior Art