The Software IP Report

2 of 3 Intellectual Ventures Patents Killed Under Alice in E.D. Texas

By Charles Bieneman

Categories: Patent Eligibility, The Software IP Report

On a Rule 12(b)(6) motion to dismiss based on invalidity under 35 U.S.C. § 101, Judge Gilstrap of the Eastern District of Texas held that “the claims of U.S. RE43,715 and U.S. Patent No. 6,782,370 are directed to patent-ineligible subject matter, and the claims of U.S. Patent No. 5,969,324 are not directed to patent-ineligible subject matter.” Intellectual Ventures I LLC v. J. Crew Group Inc., No. 6:16-CV-196-JRG (E.D. Texas Aug. 24, 2016).

U.S. RE43,715

The ’715 patent claimed “a method of integrating and delivering data available over a network.”  The court found that “the ’715 Patent is directed toward the abstract idea of combining data from two sources for delivery to a user.”  There was no innovation to overcome the abstract idea; claimed “computer components are generic and tangential,” including a generic network and a generic database.  The “only arguably inventive concepts,” distinguishing between public and private data, and determining public data from private data, were “vague and uninventive,” as well as “subjective.”

U.S. Patent No. 6,782,370

The ’370 patent claimed “[a] computer-implemented method for the recommendation of goods and/or services to potential customers over a distributed network based on customer buying history.” The court stated that the claimed steps amounted to “the basic marketing concept of making product recommendations to a current customer based on the purchase history of other customers.  There was no inventive step; instead, “the ’370 Patent discloses nothing more than an abstract marketing idea implemented by general computer components.”

U.S. Patent No. 5,969,324

Claim 1 of the ’324 patent recites

A database management method comprising the steps of:

receiving and storing transaction information associated with a nonpredictable bar code, the transaction information generated by a transaction terminal;

receiving a request for the transaction information including data associated with the nonpredictable bar code;

retrieving the transaction information based upon the nonpredictable bar code; and

communicating the transaction information.

One of the defendants argued that the patents “is directed toward the abstract idea of retrieving transaction records.”  However, the defendant’s “recitation of the claims ignores (or at least evades) the elements of ‘nonpredictable bar code’ and ‘transaction information associated with a nonpredictable bar code,” which “elements place substantial limitations on the scope of the asserted claims.”  Further, the patent specification supported the limited definition of “nonpredictable.”  The limitation did “not fail Alice scrutiny merely because it recites elements known in the prior art.”  In this case, “the invention lies in the combined use of nonpredictable bar codes with transaction information.

Editorial Comment

The claims of the ’715 patent may have been, as the court stated, “subjective,” but so then, as this case demonstrates, is patent-eligibility analysis under Alice.  It is not so surprising that the ’370 patent was held invalid under Section 101.  But one can see the ’715 and ’324 patents both being found valid, or both invalid, under Section 101.  Or one can imagine the ’715 patent being found patent-eligible, and the ’324 patent being found patent-ineligible.  That is, of course, the opposite of how the court here came out.  Alice and its predecessors (Bilski, Mayo, etc.) have introduced much subjectivity into patent law – not a good place for it to be.