This Patent-Eligibility Decision Could Have Gone Either Way

Providing a common data format for “out-of-band network management” is patent-eligible, said a court in denying a motion to dismiss under FRCP 12 and 35 U.S.C. § 101.  Avocent Huntsville LLC v. ZPE Systems, Inc., No. 3:17-cv-04319-WHO (N.D. Cal. March 21, 2018).  In applying the Alice patent-eligibility test, the court thought that the claims of U.S. Patent Nos. 7,478,152 and 7,853,682 fell under the umbrella of cases like Enfish, LLC v. Microsoft Corp. (Fed. Cir. 2016), and were distinguishable from cases in which claims were found patent-ineligible, like In re TLI Commc'ns LLC Patent Litig. (Fed. Cir. 2016), and Digitech Image Techs., LLC v. Elecs. for Imaging, Inc. (Fed. Cir. 2014). 

Claim 1 of the ’152 patent is reproduced below.

1. An out-of-band management system for devices on a computer network employing data transmission interfaces for the devices to communicate substantive data on the network, the devices also having management systems to communicate management data associated with the device, the management data being different from the substantive data, the system comprising:

a plurality of network nodes manageable through a dedicated management interface other than through the data transmission interfaces wherein the plurality of network nodes use at least a plurality of different types of management interfaces that communicate a plurality of different types of the management data over the dedicated management interface and not over the data transmission interfaces;

a management module, executing on a computer, that receives the plurality of different types of the management data, converts the different types of management data into a common management data format, and communicates the common management data format to a network management system;

wherein the management module further comprises:

plural modules with a,[sic] corresponding plural computer instructions executed by the computer to communicate with corresponding ones of the devices on corresponding ones of the plurality of network nodes using the plurality of different types of management data, wherein the management module monitors and accesses said devices remotely to restore network connectivity when a network node fails; and

the network management system further comprising a web server application, executing on a computer, that generates a graphical user interface based on the common management data format and a web-browser that permits a user to access each of the devices through the same management module.

Section 101 Analysis

According to the defendant, “[t]he asserted claims are directed to the abstract idea of converting different data types into a common data format for transmission over a network.” The defendant argued that the claims were directed to processing data without being tied “to a specific structure or machine, and thus were like the patent-ineligible claims in Digitech.

But the court found that “[t]he claims do not simply use computers as a tool; rather, they are tied to specific structures.” Referring to claim 1 of the ’152 patent, the court pointed to the recited “management system for devices…comprising: a plurality of network nodes… a management module…” Further, the court found the claims to be “directed to specific improvements in computer -related technology” because of teachings in the patent specifications of enhancements to “conventional systems by converting different types of management data into a common management data format, and communicating that common management data to a network management system that enables remote monitoring and accessing of devices.”

The court further rejected the defendant’s argument that the claims simply recited “black box” functionality, and did not “disclose how to perform the disclosed technological improvement.”  This case was unlike  Clarilogic, Inc. v. FormFree Holdings Corp. (Fed. Cir. 2017), in which patent-ineligible claims had merely analyzed and displayed information. The claims here, said the court, “are tied to concrete structures, with the specific goal of improving the functioning of network management systems.”

Then, pouring salt into the defendant’s wounds, the court turned to step two of the Alice test, and found that, “at this stage of the proceedings,” the court could reasonably infer that the claims recited an inventive concept related to “localized automated alarm handling.” The patent specifications explained improvements over conventional systems with respect to this feature.

Section 112 and Other Holdings

The court also denied the plaintiff’s motion for a preliminary injunction, granted in part and denied in part the defendant’s motion to dismiss infringement allegations, and dismissed the plaintiff’s contributory infringement allegations without leave to amend. Those holdings are largely beyond the scope of this post. However, one may wish to note the court’s comments in response to the defendant’s argument that certain claim terms were likely indefinite under 35 USC § 112 and Williamson v. Citrix Online, LLC (Fed. Cir. 2017). The court agreed that certain claim terms appeared to be “nonce words” that would require construction with reference to the patent specifications. But the court also agreed, based on the plaintiff pointing to certain portions of the specification and an expert declaration, that the defendant’s “indefinite defense ‘lacks substantial merit.’”

Lessons for Practice

So: why do I think this case could have gone either way? Because the claims are, as the defendant argued, and as the court seemed to acknowledge in its Section 112 discussion, replete with descriptions of functionality. That functionality could be characterized as fairly abstract, e.g., receiving data converting data and communicating data. Further, it certainly seems that the court could have supported a finding that this functionality was simply implemented with generic hardware.

Thus, was the court really so clearly bound to follow Enfish, and to distinguish from  cases finding patent claims unpatentable under § 101?  Well, you might think that, but I couldn’t possibly comment. And in all seriousness, my real point is that under our current case law, one can read patent claims like the ones here and see arguments both for and against patent-eligibility.  Regardless of how one feels about how this case came out, we should all be frustrated by it.

There is another, more practical lesson here, I hasten to add. This is another case in which a specification laid out what could be characterized as technical problems, and that provided an explanation of improvements over conventional systems that the patentee could point to as technological improvements satisfying the Alice test. And perhaps for this reason, this is an example of a close case in which claims were found patent-eligible.

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