Husky v. Athena – In a divided opinion, the Circuit rules that it lacks jurisdiction to hear Husky’s appeal as to whether assignor estoppel bars Athena from filing for IPR. After discussing the Supreme Court’s and the Circuit’s decisions in Cuozzo, as well as the ‎Circuit’s decision in Achates,‎ the majority ultimately relies on 35 U.S.C. § 314(d), which provides that the decision of the Board ‎whether to institute IPR “shall be final and nonappealable,” and that assignor estoppel is not within one of the limited exceptions to such finality. Readers will recall that both Cuozzo decisions held that the exception to appealability in ‎§ 314(d)‎ was broad. In the present case, the majority concludes that the assignor estoppel defense is analogous to the time-barred defense raised in Achates,which the panel held was not appealable.

The doctrine of assignor estopple prevents one who formerly owned a patent from subsequently challenging the validity of the patent. In the present case, Husky’s former owner and president, Schad, was also a co-inventor on the patent being challenged in this IPR. Schad assigned his invention to Husky, sold Husky, and then formed Athena. Athena filed this IPR, and Husky argued that assignor estoppel barred Athena from filing the petition. The Board rejected the argument that assignor estoppel bars Athena from filing the petition because the IPR statute provides that only patent owners are barred. The Board went on to decide that many but not all of the challenged claims were anticipated.

Judge Plager dissents from the ruling on appealability, arguing that assignor estoppel is a common law doctrine, and an administrative agency such as the Board should not be able to reject the application of the doctrine. He concludes his dissent: “Regrettably, the majority’s view may contribute to the already existing confusion regarding which ‎matters this court can review on appeal from a final decision by the Board.‎”

Affinity Labs v. Directv –In two cases involving related patents, the Circuit affirms rulings that the patents are directed to ineligible subject matter. In the first case, against Directv and the media affiliates of the NBA, MLB and NHL, the patent was directed to streaming regional broadcast signals to cellular ‎telephones located outside the region served by the regional broadcaster.

The panel conceded that the patent claims the wireless delivery of regional broadcast content only to cellphones so in that sense, the claims are not as broad as the abstract idea underlying them. However, that restriction does not alter the ‎result because all that limitation does is to confine the abstract idea to a particular technological environment—in ‎this case, cellular telephones. The panel explains that the Supreme Court and the Circuit have repeatedly made clear that merely ‎limiting the field of use of the abstract idea to a particular existing technological environment does not ‎render the claims any less abstract.

The panel rejects Affinity’s reliance on DDR and Enfish, noting that in DDR, the challenge of retaining website visitors was a novel one particular to the ‎Internet: the invention was “necessarily rooted in computer technology in ‎order to overcome a problem specifically arising in the realm of computer networks.” In Enfish, the focus of the claims was on “an improvement to computer functionality ‎itself, not on economic or other tasks for which a computer is used in its ordinary capacity.” In the present case, ‎the claims are directed not to an improvement in cellular telephones but simply to the use of cellular ‎telephones as tools in the aid of a process focused on an abstract idea. ‎

In applying step two of the Mayo/Alice analysis, the panel finds no “inventive concept” that ‎transforms the abstract idea of out of region delivery of regional broadcasting into a patent eligible ‎application of that abstract idea. The claim simply recites the use of generic features of cellular ‎telephones, such as a storage medium and a graphical user interface, as well as routine functions, such ‎as transmitting and receiving signals, to implement the underlying idea.‎ That is not enough.‎ 

Affinity Labs v. Amazon.comAlthough the patent at issue in this second Affinity case is different, the patents share a similar specification. Affinity sued Amazon, alleging that it infringed by marketing the Amazon Music ‎system, which allows customers to stream music from its customized library. The district court granted Amazon’s motion for ‎judgment on the pleadings, holding that the asserted claims were not directed to patentable subject ‎matter. ‎

In first looking to see whether the patent was directed to an abstract idea, the panel agrees with the district court that the concept of delivering user-selected media content to portable devices is an abstract idea. The opinion compares the claim to that in TLI Commc’ns, which involved a patent on a method for uploading digital images from a cellular telephone to a server, which would then classify and store the images. Although the claim at issue in that case recited physical components such as a telephone unit and a server, “not every claim that recites concrete, tangible components escapes the reach of the abstract idea inquiry.” Similarly, in Ultramercial, the Circuit found the process of allowing a consumer to receive copyrighted media in exchange for watching a selected advertisement was an abstract idea. The panel determines that the idea in the present case is even broader and more abstract than the idea in Ultramercial since the patent in suit here covers streaming content generally, not even including an additional feature such as exchanging the consumer’s access to the streaming content for the consumer’s viewing of an advertisement.

Turning to the second step of the Mayo/Alice inquiry, the representative claim is written in largely functional terms, claiming “a collection of instructions” that perform the functions of displaying a selection of available content on a graphical user interface and allowing the user to request streaming of that content. The claim does not go beyond stating the relevant functions in general terms, without limiting them to technical means for performing the functions that are arguably an advance over conventional computer and network technology.

Cox v. Sprint – The Circuit reverses a ruling that the asserted claims of a Sprint patent are invalid as indefinite under 35 U.S.C. § 112, ¶ 2. The patent in suit is ‎directed to so-called voice-over-IP, which allows telephone calls to be transmitted over ‎the Internet, instead of through traditional telephone lines. The majority opinion initially notes that this case presents a peculiar scenario: the sole source of indefiniteness that Cox complains of, “processing system,” plays no discernable role in defining the scope of the claims. All of the asserted claims are method claims, and the point of novelty resides with the steps of these methods, not with the machine that performs them. “Processing system” is merely the locus at which the steps are being performed. The plain language of the claims proves this point: if representative claim 1 is revised to remove the word “processing system,” the meaning would not discernably change.

As Nautilus instructs, if a person of ordinary skill cannot discern the scope of a claim with reasonable certainty, it may be because one or several claim terms cannot be reliably construed. Nevertheless, indefiniteness under § 112, ¶ 2 must ultimately turn on the question set forth by Nautilus: whether the “claims, read in light of the specification delineating the patent, and the prosecution history, fail to inform, with reasonable certainty, those skilled in the art about the scope of the invention.” The Circuit concludes that, applied here, “processing system” does not prevent the claims from doing just that.

Cox contended that “processing system” is indefinite because the asserted claims only describe it in functional terms. The Circuit disagrees, pointing out that claims are not per se indefinite merely because they contain functional language.

In a concurring opinion, Judge Newman notes that she reads the majority opinion as providing “a new protocol of claim construction” with which she disagrees.  She argues that, according to the majority’s analysis, the adjudicator (1) first removes ‎the challenged term from the claim, then (2) decides ‎whether the claim has the same meaning without the ‎challenged term, and (3) if the answer is “yes,” rules that ‎the claim is not indefinite as a matter of law.  “This new style of claim construction will confound ‎the already confused determination of patent rights.”

 
   

Husky Injection Molding Systems Ltd. v. Athena Automation Ltd., Fed. Cir. 2015-1726, -1727 (September 23, 2016)

I. Husky’s Appeal

Husky’s appeal focuses exclusively on whether assignor estoppel may bar a party from filing a petition for inter partes review. Husky contends that Athena is in privity with Schad, the assignor of the ’536 patent, and, as such, is estopped from challenging the claims of the ’536 patent. Accordingly, Husky continues, the Board acted outside of its statutory authority when it instituted review and found claims 1, 4–16, 18, and 20–22 unpatentable as anticipated. As Husky only argues that Athena is estopped from seeking inter partes review, and not that the claims are not anticipated on the merits, we consider only the estoppel question. For the reasons that follow, we dismiss Husky’s appeal for lack of jurisdiction.

To Determine Whether an Appeal Is Appropriate, the Question Is Whether the Challenge Is Closely Tied to the Interpretation of IPR Statutes, Implicates Constitutional ‎Questions, or If It Depends on Less Closely Related Statutes‎

We begin with necessary context. In 2011, Congress created the inter partes review process, inter alia, as a means for the PTO to efficiently review issued patents. Sections 311 through 319 carefully describe the requirements of and mechanism for review. See 35 U.S.C. §§ 311–319. Of particular importance is § 314(d), which provides that “the determination by the Director whether to institute inter partes review under this section shall be final and nonappealable.” Id. § 314(d). Since § 314(d)’s inception, we have had several opportunities to address whether and to what extent it limits our ability to review the institution decision. E.g., Achates Reference Publ’g, Inc. v. Apple Inc., 803 F.3d 652 (Fed. Cir. 2015); In re Cuozzo Speed Techs., LLC, 793 F.3d 1268 (Fed. Cir. 2015), aff’d, Cuozzo Speed Techs., LLC v. Lee, 136 S. Ct. 2131 (2016); In re Procter & Gamble Co., 749 F.3d 1376 (Fed. Cir. 2014); In re Dominion Dealer Sols., LLC, 749 F.3d 1379 (Fed. Cir. 2014); St. Jude Med., Cardiology Div., Inc. v. Volcano Corp., 749 F.3d 1373 (Fed. Cir. 2014).

Cuozzo petitioned the Supreme Court to grant certiorari, and the Court did so. Following oral argument, the Court affirmed our decision, concluding that the “text of the ‘No Appeal’ provision, along with its place in the overall statutory scheme, its role alongside the Administrative Procedure Act, the prior interpretation of similar patent statutes, and Congress’[s] purpose in crafting inter partes review, all point in favor of precluding review of the Patent Office’s institution decisions.” Cuozzo Speed Techs., LLC v. Lee, 136 S. Ct. 2131 (2016) (“Cuozzo II”). The Court acknowledged the “strong presumption” in favor of judicial review, but noted that “‘clear and convincing’ indications, drawn from ‘specific language,’ ‘specific legislative history,’ and ‘inferences of intent drawn from the statutory scheme as a whole’” show that Congress intended to bar review. The Court relied on two aspects in particular: the language of § 314(d), and the nature of the legal dispute at issue.

With respect to the first, the Court noted that § 314(d) unquestionably provides that the determination whether to institute inter partes review “shall be final and nonappealable.” That mandate operates with particular force in view of Congress’s objective in creating the inter partes review process, “giving the Patent Office significant power to revisit and revise earlier patent grants,” as well as the existence of similar provisions in related patent statutes. Id. at 2139–40 (citing both 35 U.S.C. § 319 and 35 U.S.C. § 312 (2006) (repealed) (highlighting the nonreviewability of the determination to initiate inter partes reexamination) with respect to the latter point).

With respect to the second, the Court noted that “the legal dispute at issue [there was] an ordinary dispute about the application of certain relevant patent statutes concerning the Patent Office’s decision to institute inter partes review,” particularly the “related statutory section, § 312,” and that the express language of § 314(d) “must, at the least, forbid an appeal that attacks a ‘determination . . . whether to institute’ review by raising this kind of legal question.” The Court emphasized that review is foreclosed “where the grounds for attacking the decision to institute inter partes review consist of questions that are closely tied to the application and interpretation of statutes related to the Patent Office’s decision to initiate inter partes review.”

The Court did, however, leave open the possibility that § 314(d) may nevertheless allow for review of appeals that “implicate constitutional questions, that depend on other less closely related statutes, or that present other questions of interpretation that reach, in terms of scope and impact, well beyond ‘this section.’”  The Court further noted that it did not “categorically preclude review” of any final decision where the agency acted outside of its statutory authority, e.g., “canceling a patent claim for ‘indefiniteness under § 112’ in inter partes review.” See also 35 U.S.C. § 311(b) (“A petitioner may request to cancel [a claim] only on a ground that could be raised under section 102 or 103.”).

In line with the latter exception, we have similarly determined that we may review a challenge to the institution decision if it relates to the Board’s ultimate authority to invalidate a particular patent. That ultimate invalidation authority is purely tied to the patent challenged and the nature of the review requested; it is not a question of who petitions for review. Achates; see Wi-Fi One, LLC v. Broadcom Corp. (Fed. Cir. Sept. 16, 2016) (holding that Achates remains good law in light of the Supreme Court’s decision in Cuozzo II, specifically concluding that § 315 is a statute closely related to the decision whether to institute); Versata Dev. Grp., Inc. v. SAP Am., Inc., 793 F.3d 1306 (Fed. Cir. 2015), cert. denied, 2016 WL 1029054 (U.S. June 27, 2016).

The above-discussed cases establish a two-part inquiry for determining whether we may review a particular challenge to the decision whether to institute. First, we must determine whether the challenge at issue is “closely tied to the application and interpretation of statutes related to the Patent Office’s decision to initiate inter partes review,” or if it instead “implicates constitutional questions,” “depend[s] on other less closely related statutes,” or “present[s] other questions of interpretation that reach, in terms of scope and impact,” “well beyond ‘this section.’” Cuozzo II. If the latter, our authority to review the decision to institute appears unfettered. But if the former, § 314(d) forbids our review. One further exception remains, however. At the second step of the inquiry, we must ask if, despite the challenge being grounded in a “statute closely related to that decision to institute,” it is nevertheless directed to the Board’s ultimate invalidation authority with respect to a specific patent, see also Versata; Achates. If so, we may review the challenge.

The Circuit Lacks Jurisdiction to Determine Whether Assignor ‎Estoppel Precludes the PTO from Instituting Inter Partes Review

It is with that context in mind that we now turn to the instant case. As in the cases noted above, Husky’s appeal challenges the institution decision, specifically the Board’s determination during the institution phase that assignor estoppel cannot bar an assignor or his or her privies from petitioning for inter partes review. We are mindful of the otherwise powerful presumption favoring judicial review of agency determinations, but in applying the foregoing framework, we conclude that we lack the authority to review the Board’s determination in its institution decision that assignor estoppel does not apply at the PTO.

First, we conclude that the question whether assignor estoppel applies in full force at the PTO does not fall into any of the three categories the Supreme Court specifically mentioned as reviewable. Nevertheless, a determination whether assignor estoppel applies at the PTO in the inter partes review context necessarily requires an interpretation of 35 U.S.C. § 311(a). We must therefore assess whether § 311 constitutes a “closely related” or an “other less closely related” statute. See Cuozzo II.

Even though the Supreme Court did not set forth any specific framework for determining if a statute is “closely related,” the statutes “closely related” to the decision whether to institute are necessarily, and at least, those that define the metes and bounds of the inter partes review process. And an interpretation of § 311 and its prescription of “a person who is not the owner of a patent may file” to either include or foreclose assignor estoppel is very “closely related” to any decision to initiate inter partes review. Although we conclude that the assignor estoppel question is not entitled to review under the three exceptions in Cuozzo II, we must nevertheless further determine if, despite the question’s close ties to the decision to institute, the question relates to the Board’s ultimate invalidation authority. We conclude that it does not.

We conclude that we lack jurisdiction to review the Board’s determination on whether assignor estoppel precludes it from instituting inter partes review. We therefore dismiss Husky’s appeal, and express no opinion on the merits of the Board’s conclusion that assignor estoppel may not bar an assignor or his or her privies from petitioning for inter partes review.

II. Athena’s Cross-Appeal

The question before us in the cross-appeal relates to incorporation by reference, and ultimately to anticipation. A prior art document may anticipate a claim if it describes every element of the claimed invention, either expressly or inherently. Other material may be considered as part of that prior art document if it is incorporated by reference.

Athena’s cross-appeal contests the Board’s determination that the prior art Glaesener does not incorporate the prior art Choi by reference, and thereby the Board’s finding that claims 2, 3, 17, and 19 are not unpatentable as anticipated. On appeal, Athena contends that it provided evidence establishing that a skilled artisan would understand with sufficient particularity what the “pineapple and toothed ring mechanism” language referred to in Choi. We agree; the Board erred in determining that Glaesener does not incorporate Choi for purposes of anticipation. Because the Board provided no further reasoning why claims 2, 3, 17, and 19 were not anticipated, we vacate and remand for the Board to evaluate anticipation in the first instance in light of Glaesener/Choi.

Judge Plager; Concurring in Part and Dissenting in Part

I concur in the majority’s judgment regarding vacating and remanding the cross-appeal. I dissent from the judgment that we lack jurisdiction to review the determination by the Board regarding whether assignor estoppel precludes it from instituting inter partes review in this case. I believe the majority’s reasoning is mistaken, and I respectfully dissent from it and the conclusion to which it leads. Regrettably, the majority’s view may contribute to the already-existing confusion regarding which matters this court can review on appeal from a final decision by the Board.

 
   

Affinity Labs of Texas, LLC v. Directv, LLC, Fed. Cir. 2015-1845, -1846, -1847, -1848 (September 23, 2016)

Affinity Labs owns a ’379 patent, which is directed to streaming regional broadcast signals to cellular telephones located outside the region served by the regional broadcaster. Stripped of excess verbiage, claim 1 is directed to a broadcast system in which a cellular telephone located outside the range of a regional broadcaster (1) requests and receives network-based content from the broadcaster via a streaming signal, (2) is configured to wirelessly download an application for performing those functions, and (3) contains a display that allows the user to select particular content.

Affinity sued nine defendants, who moved to dismiss the complaints for failure to state a claim, arguing that the asserted claims were not directed to patentable subject matter. Following the two-stage inquiry for patentability set forth by the Supreme Court in Mayo and Alice, the magistrate judge found that the ’379 patent was directed to an “abstract idea” and that the claims did not contain an “inventive concept.” The district court accepted the magistrate judge’s recommendation and entered judgment against Affinity.

The Supreme Court has devised a two-stage framework to determine whether a claim falls outside the scope of section 101. The prescribed approach requires a court to determine (1) whether the claim is directed to a patent-ineligible concept, i.e., a law of nature, a natural phenomenon, or an abstract idea, and if so, (2) whether the elements of the claim, considered “both individually and ‘as an ordered combination,’” add enough to “‘transform the nature of the claim’ into a patent-eligible application.” Alice, quoting Mayo. In the context of claims that are challenged as containing only abstract ideas, those two stages are typically referred to as the “abstract idea” step and the “inventive concept” step.

The ’379 Patent Claims an Abstract Idea

The concept of providing out-of-region access to regional broadcast content is an abstract idea, as that term is used in the section 101 context. It is a broad and familiar concept concerning information distribution that is untethered to any specific or concrete way of implementing it.

The practice of conveying regional content to out-of-region recipients has been employed by nearly every form of media that has a local distribution. It is not tied to any particular technology and can be implemented in myriad ways ranging from the low-tech, such as by mailing copies of a local newspaper to an out-of-state subscriber, to the high-tech, such as by using satellites to disseminate broadcasts of sporting events. As the magistrate judge noted, such out-of-region broadcasts have been commonplace since the late 20th century, in the form of systems delivering local radio and television broadcasts of sporting events to a national audience.

To be sure, the ’379 patent claims the wireless delivery of regional broadcast content only to cellphones. In that sense, the claims are not as broad as the abstract idea underlying them, which could apply to the delivery of out-of-region content to any electronic device. That restriction, however, does not alter the result. All that limitation does is to confine the abstract idea to a particular technological environment—in this case, cellular telephones. The Supreme Court and this court have repeatedly made clear that merely limiting the field of use of the abstract idea to a particular existing technological environment does not render the claims any less abstract. See Alice; Mayo; Bilski v. Kappos, 561 U.S. 593, 612 (2010); Content Extraction & Transmission LLC v. Wells Fargo Bank, Nat’l Ass’n, 776 F.3d 1343 (Fed. Cir. 2014); buySAFE, Inc. v. Google, Inc., 765 F.3d 1350 (Fed. Cir. 2014).

The idea underlying the inventions in this case is akin to the ideas underlying the claims in several of this court’s recent cases. In In re TLI Communications LLC Patent Litigation, 823 F.3d 607 (Fed. Cir. 2016), the claimed invention was a “method for recording and administering digital images,” which entailed “recording images using a digital pick up unit in a telephone unit,” storing the images as digital images, transmitting the digital images and classification information to a server, and then storing the digital images in the server in light of the classification information.

The court held that the claim at issue in TLI was abstract in that it was drawn to the abstract idea of classifying an image and storing the image based on its classification. While the claim required the use of concrete, tangible components such as a telephone unit and a server, the court noted that the specification made clear that the recited physical components “merely provide a generic environment in which to carry out the abstract idea of classifying and storing digital images in an organized manner.”

Another case involving a similar abstract idea is Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709 (Fed. Cir. 2014). The patent at issue in that case was drawn to a method for distributing copyrighted content over the Internet, in which a consumer would be given access to copyrighted material in exchange for viewing an advertisement and the advertiser would pay for the copyrighted content. The court held that “[t]he process of receiving copyrighted media, selecting an ad, offering the media in exchange for watching the selected ad, displaying the ad, allowing the consumer access to the media, and receiving payment from the sponsor of the ad all describe an abstract idea, devoid of a concrete or tangible application.”

Affinity relies on two of this court’s cases to support its contention that the claims in this case are not directed to an abstract idea. The first of those cases is DDR Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245 (Fed. Cir. 2014). We held that the patents in DDR Holdings were not ineligible under section 101. First, we noted that the claims did not embody a fundamental economic principle or a longstanding commercial practice. Rather, the challenge of retaining website visitors was a novel one “particular to the Internet.” Moreover, we held that the claimed invention did not simply use computers to serve a conventional business purpose; instead, the invention was “necessarily rooted in computer technology in order to overcome a problem specifically arising in the realm of computer networks.” The invention entailed the storage of visually perceptible elements of numerous websites and the construction of new, hybrid web pages that merge the “content associated with the products of the third-party merchant with the stored ‘visually perceptible elements’ from the identified host website.”

That is not the case here. The patent in this case is not directed to the solution of a “technological problem,” Alice, nor is it directed to an improvement in computer or network functionality. Instead, it claims the general concept of out-of-region delivery of broadcast content through the use of conventional devices, without offering any technological means of effecting that concept.

The second case relied on by Affinity is Enfish, LLC v. Microsoft Corp., 822 F.3d 1327 (Fed. Cir. 2016). As in DDR Holdings, the focus of the claims in Enfish was on “an improvement to computer functionality itself, not on economic or other tasks for which a computer is used in its ordinary capacity.” In this case, the claims are directed not to an improvement in cellular telephones but simply to the use of cellular telephones as tools in the aid of a process focused on an abstract idea. That is not enough to constitute patentable subject matter. See McRo, Inc. v. Bandai Namco Games Am. Inc., (Fed. Cir. Sep. 13, 2016) (claims held patent-eligible because they made “a specific asserted improvement in computer animation”).

The Claims Do Nothing More than Simply Describe the Abstract Idea and Do Not Transform the Abstract Idea into Patentable Subject Matter

In applying step two of the Mayo/Alice analysis, our task is to “determine whether the claims do significantly more than simply describe the abstract method” and thus transform the abstract idea into patentable subject matter. Ultramercial. We look to see whether there are any “additional features” in the claims that constitute an “inventive concept,” thereby rendering the claims eligible for patenting even if they are directed to an abstract idea. Alice. Those “additional features” must be more than “well-understood, routine, conventional activity.” Mayo; Ultramercial.

Upon examining claim 1 and the specification of the ’379 patent, we find no “inventive concept” that transforms the abstract idea of out-of-region delivery of regional broadcasting into a patent-eligible application of that abstract idea. The claim simply recites the use of generic features of cellular telephones, such as a storage medium and a graphical user interface, as well as routine functions, such as transmitting and receiving signals, to implement the underlying idea.

That is not enough. As the Supreme Court stated in Alice, “generic computer implementation” is insufficient to transform a patent-ineligible abstract idea into a patent eligible invention. Alice. More generally, “simply appending conventional steps specified at a high level of generality” to an abstract idea does not make that idea patentable. Mayo. The ’379 patent does not provide an inventive solution to a problem in implementing the idea of remote delivery of regional broadcasting; it simply recites that the abstract idea of remote delivery will be implemented using the conventional components and functions generic to cellular telephones.

[The opinion then compares the patent at issue with those in the recent cases of Ultramercial, Content Extraction, Mortgage Grader and others and holds that they all support the finding of invalidity under section 101. Affinity attempts to argue that the recent case of BASCOM Global Internet Services, Inc. v. AT&T Mobility LLC, (Fed. Cir. June 27, 2016) supports its position but that is rejected by the panel as well.] According to the opinion, the Bascom invention took advantage of the ability of some Internet service providers to associate a request for Internet content with a specific individual account. Exploiting that capability, the invention was able to provide customized filtering by locating the filtering system on the Internet service provider’s server. The specificity of the technical solution provided by the claims in BASCOM stands in sharp contrast to the absence of any such specific technical solution in the claims of the ’379 patent.

 
   

Affinity Labs of Texas, LLC v. Amazon.com Inc., Fed. Cir. 2015-2080 (September 23, 2016)

This appeal is related to the appeal in Affinity Labs of Texas, LLC v. DirecTV,also decided today. Although the patents at issue in the two cases are different, they share a similar specification. Because the legal issues presented in the two cases are closely related, our discussion of the governing legal principles in that case will not be repeated here, except to the extent that the difference between the claims in the two cases calls for a somewhat different legal analysis.

Representative claim 14 of the ’085 patent in suit is directed to a network-based media system with a customized user interface, in which the system delivers streaming content from a network-based resource upon demand to a handheld wireless electronic device having a graphical user interface.

Affinity sued Amazon, alleging that they infringed the ’085 patent by marketing the Amazon Music system, which allows customers to stream music from a customized library. Amazon moved for judgment on the pleadings, arguing that the asserted claims were not directed to patentable subject matter. Following the two stage inquiry for patent eligibility set forth by the Supreme Court in Mayo, and Alice, the magistrate judge found that the ’085 patent is directed to an abstract idea—“delivering selectable media content and subsequently playing the selected content on a portable device.”

Turning to the next step of the eligibility analysis, the magistrate found that the claims of the ’085 patent do not contain an “inventive concept.” Instead, he concluded, the claims are directed to applying the abstract idea “to the Internet and a generic, electronic device—in this case, a wireless handheld device operating as a ‘ubiquitous information-transmitting medium, not a novel machine.’” The magistrate also found that the components recited in the claims are generic. He explained that the “network based media managing system” is a generic database and that the “non-transitory storage medium” could be any kind of memory. The district court agreed with the magistrate’s recommendation and entered judgment against Affinity.

The Concept of Delivering User-Selected Media Content to Portable Devices Is an Abstract Idea ‎

We begin by addressing the first step of the Mayo/Alice inquiry: whether the claims of the ’085 patent are directed to an “abstract idea.” Like the district court, we hold that the concept of delivering user-selected media content to portable devices is an abstract idea, as that term is used in the section 101 context. The district court’s conclusion is consistent with our approach to the “abstract idea” step in prior cases. For example, In re TLI Communications LLC Patent Litigation, 823 F.3d 607 (Fed. Cir. 2016), involved a patent on a method for uploading digital images from a cellular telephone to a server, which would then classify and store the images.

Although the claim at issue in that case recited physical components such as a telephone unit and a server, the court noted that “not every claim that recites concrete, tangible components escapes the reach of the abstract idea inquiry,” and it pointed out that the specification made clear that the recited physical components “merely provide a generic environment in which to carry out the abstract idea of classifying and storing digital images in an organized manner.” The TLI court concluded that, as in this case, the claims were directed to “the use of conventional or generic technology in a nascent but well-known environment, without any claim that the invention reflects an inventive solution to any problem presented by combining the two.”

Similarly, in Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709 (Fed. Cir. 2014), we found the process of allowing a consumer to receive copyrighted media in exchange for watching a selected advertisement was an abstract idea. The idea in this case is even broader and more abstract than the idea in Ultramercial: The ’085 patent covers streaming content generally, not even including an additional feature such as exchanging the consumer’s access to the streaming content for the consumer’s viewing of an advertisement.

Affinity contends that the ’085 patent embodied a concrete technological innovation because, as of its priority date (March 28, 2000), wireless streaming of media was not “routine, conventional, or well-known.” The patent, however, does not disclose any particular mechanism for wirelessly streaming content to a handheld device. The specification describes the function of streaming content to a wireless device, but not a specific means for performing that function. At that level of generality, the claims do no more than describe a desired function or outcome, without providing any limiting detail that confines the claim to a particular solution to an identified problem. The purely functional nature of the claim confirms that it is directed to an abstract idea, not to a concrete embodiment of that idea. See Elec. Power Grp., LLC v. Alstom S.A., (“[T]he essentially result-focused, functional character of claim language has been a frequent feature of claims held ineligible under § 101.”).

In addressing the first step of the section 101 inquiry, as applied to a computer-implemented invention, it is often helpful to ask whether the claims are directed to “an improvement in the functioning of a computer,” or merely “adding conventional computer components to well known business practices.” Enfish, LLC v. Microsoft Corp., 822 F.3d 1327 (Fed. Cir. 2016). The claims of the ’085 patent fall into the latter category.

While Affinity criticizes the magistrate’s making factual findings on a motion for judgment on the pleadings, the practice of taking note of fundamental economic concepts and technological developments in this context is well supported by our precedents. See, e.g., OIP Techs., Inc. v. Amazon.com, Inc., 788 F.3d 1359 (Fed. Cir. 2015) (affirming district court’s finding on a motion to dismiss that “offer-based price optimization” is a fundamental economic concept and that the claimed computer based implementation of that idea is routine and conventional); Content Extraction & Transmission LLC v. Wells Fargo Bank, Nat’l Ass’n, 776 F.3d 1343 (Fed. Cir. 2014) (affirming district court’s finding on a motion to dismiss that the claims were directed to a well known abstract idea).

The Addition of Customization Features Does Not Add an Inventive Component That Renders the Claims Patentable ‎

Turning to the second step of the Mayo/Alice inquiry, we conclude that there is nothing in the claims or the specification of the ’085 patent that constitutes a concrete implementation of the abstract idea in the form of an “inventive concept.” Alice. As noted, representative claim 14 is written in largely functional terms, claiming “a collection of instructions” that perform the functions of displaying a selection of available content on a graphical user interface and allowing the user to request streaming of that content. The claims thus do not go beyond “stating the relevant functions in general terms, without limiting them to technical means for performing the functions that are arguably an advance over conventional computer and network technology.” Elec. Power Grp. Features such as network streaming and a customized user interface do not convert the abstract idea of delivering media content to a handheld electronic device into a concrete solution to a problem. The features set forth in the claims are described and claimed generically rather than with the specificity necessary to show how those components provide a concrete solution to the problem addressed by the patent.

In sum, the patent in this case is not directed to the solution of a “technological problem,” Alice, nor is it directed to an improvement in computer or network functionality, see In re TLI Commc’ns LLC. It claims the general concept of streaming user-selected content to a portable device. The addition of basic user customization features to the interface does not alter the abstract nature of the claims and does not add an inventive component that renders the claims patentable. We therefore uphold the district court’s judgment that the claims of the ’085 patent are not eligible for patenting.

 
   

Cox Communications, Inc. v. Sprint Communication Company LP, Fed. Cir. 2016-1013 (September 23, 2016)

Sprint appeals from a decision of the District of Delaware finding that the asserted claims of the asserted patents are invalid as indefinite under 35 U.S.C. § 112, ¶ 2. Because “processing system” does not prevent the claims, read in light of the specification and the prosecution history, from informing those skilled in the art about the scope of the invention with reasonable certainty, we reverse.

At the outset, we note that the parties have agreed that “processing system” is not a means-plus-function term. Accordingly, we confine our review to the same question presented to the district court: whether “processing system” renders the asserted patents indefinite under 35 U.S.C. § 112, ¶ 2.

This case presents a peculiar scenario: the sole source of indefiniteness that Cox complains of, “processing system,” plays no discernable role in defining the scope of the claims. All of the asserted claims are method claims, and the point of novelty resides with the steps of these methods, not with the machine that performs them. “Processing system” is merely the locus at which the steps are being performed. The plain language of the claims proves this point: if claim 1 of the ’561 patent (which the parties agree is exemplary for the control patents) were revised to remove the word “processing system,” the meaning would not discernably change.

If “processing system” were not omitted but replaced with “computer,” a similar conclusion results. Indeed, at oral argument, both parties agreed that substituting “computer” for “processing system” would not change the scope of the claims.

If “processing system” does not discernably alter the scope of the claims, it is difficult to see how this term would prevent the claims (the remainder of which Cox does not challenge on indefiniteness grounds) from serving their notice function under § 112, ¶ 2. As Nautilus instructs, the dispositive question in an indefiniteness inquiry is whether the “claims,” not particular claim terms, “read in light of the specification delineating the patent, and the prosecution history, fail to inform, with reasonable certainty, those skilled in the art about the scope of the invention.” Accordingly, the common practice of training questions of indefiniteness on individual claim terms is a helpful tool. Indeed, if a person of ordinary skill in the art cannot discern the scope of a claim with reasonable certainty, it may be because one or several claim terms cannot be reliably construed. Nevertheless, indefiniteness under § 112, ¶ 2 must ultimately turn on the question set forth by Nautilus: whether the “claims, read in light of the specification delineating the patent, and the prosecution history, fail to inform, with reasonable certainty, those skilled in the art about the scope of the invention.” Applied here, “processing system” does not prevent the claims from doing just that.

Cox nevertheless contends that “processing system” is indefinite because the asserted claims only describe it in functional terms. We disagree. Claims are not per se indefinite merely because they contain functional language. Indeed, here, functional language promotes definiteness because it helps bound the scope of the claims by specifying the operations that the “processing system” must undertake. All of the asserted claims are method claims, so it makes sense to define the inventive method as a series of functions.

Further, Cox cannot complain that the specific functional limitations that describe the operation of the “processing system” in the asserted patents fail to provide sufficient clarity under Nautilus. For example, in the control patents, claim 1 of the ’561 patent requires that the “method of operating a processing system . . . process[es] the signaling message to select a network code that identifies a network element to provide egress from the packet communication system for the user communication.” The specification discloses, as an embodiment of a “processing system,” the CCP and provides details about how it functions to “select the network elements and the connections that comprise the communications path.” Notably, the specification provides certain algorithmic details, including that “selections are made through table look-ups and SCP queries,” and provides detail about how these queries are constructed, and the types of information that are used to determine these mappings. These disclosures are sufficiently detailed such that, reading claim 1 in light of the specification, a person of ordinary skill in the art would understand claim 1’s requirement that the “method of operating a processing system . . . process[es] the signaling message to select a network code . . .” with reasonable certainty.

As another example, in the ATM interworking patents, claim 1 of the ’064 patent requires the step of “processing the set-up signaling in the processing system to select a DS0 connection.” In the specification, the ’064 patent discloses the CCM as an embodiment of a “processing system” and provides details about how it “receive[s] and process[es] . . . signaling to select connections, and to generate and transmit signaling identifying the selections.” Similar to the specification of the control patents, the specification of the ’064 patent describes that “[t]he selection process can be accomplished through table look-ups,” and provides detail about how the look-up process happens. Accordingly, a person of ordinary skill in the art would understand claim 1’s step of “processing the set-up signaling in the processing system to select a DS0 connection . . .” with reasonable certainty.

In sum, “processing system” does not render the claims indefinite because it does not prevent the claims, read in light of the specification and the prosecution history, from informing those skilled in the art about the scope of the invention with reasonable certainty. Although the asserted patents describe the operation of the “processing system” in largely functional terms, the recited steps, read in light of the specification, provide sufficient detail such that a person of ordinary skill in the art would understand them with reasonable certainty. For the foregoing reasons, we reverse the district court’s conclusion that the term “processing system” renders the asserted claims indefinite under § 112, ¶ 2.

Judge Newman’s Concurring Opinion

I agree with the court’s holding that the claims are ‎not invalid on the ground of indefiniteness.  However, the ‎court creates an interesting, but flawed, new mode of ‎analysis, whereby the adjudicator (1) first removes the ‎challenged term from the claim, then (2) decides whether ‎the claim has the same meaning without the challenged ‎term, and (3) if the answer is “yes,” rules that the claim is ‎not indefinite as a matter of law.  This ‎new style of claim construction will confound the already ‎confused determination of patent rights. I write to protest ‎this further inroad on a reasoned and reliable law of ‎patents.‎

No precedent supports the court’s new protocol of ‎claim construction, whereby definiteness of the claim is ‎deemed proved because “if claim 1 of the ’3,561 patent . . . were revised to remove the term ‘processing ‎system,’ the meaning would not discernably change.”  The court criticizes the parties for arguing ‎about the indefiniteness of “processing system” as resulting in a “peculiar scenario,” since, in the majority’s view, ‎the term “processing system,” despite its presence in three clauses of claim 1 and other claims, “plays no discernable ‎role in defining the scope of the claims.”  However, ‎claim 1 is for a “method of operating a processing system” ‎by performing the six specified steps in the claim.  This is ‎not a peculiar scenario.‎

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