The Software IP Report

Courts Hold Three Out of Four Patents Invalid Under 35 U.S.C § 101

By Charles Bieneman

Categories: Patent Eligibility, Software Patents, The Software IP Report

I do not warrant the accuracy of the title of this post, which is based on anecdotally collected and reviewed data.  It is nonetheless instructive that, in cases I located after a fairly through search, an overwhelming majority of patents facing patent-eligibility challenges in federal courts since my last blog post on the subject, i.e., between December 15, 2014, and January 10, 2015, have been held invalid under 35 U.S.C. § 101.  In addition to two Federal Circuit cases upholding finding of patent-ineligibility, the district court cases summarized below evaluated twenty-two patents for patentable subject matter under Section 101.  Seventeen of these patents were held invalid, while five were upheld (and in each of the three cases where motions of invalidity were denied, the accused infringer remains free to assert the patent-ineligibility invalidity defense at a later stage of proceedings).

A summary of these recent cases is as follows:

Federal Circuit

BRCA1- & BRCA2-Based Hereditary Cancer Test Patent Litig. v. Ambry Genetics Corp., Nos. 2014-1361, 2014-1366 (Fed. Cir. Dec. 17, 2014.) Claims of U.S. Patent Nos. 5,753,441, 5,747,282, and 5,837,492 were ineligible for patent protection under 35 U.S.C. § 101. Composition of matter claims were directed to patent-ineligible products of nature, because claimed compositions were “structurally identical to the ends of DNA strands found in nature.” Method claims “simply identify a law of nature (the precise sequence of the BRCA genes, and comparisons of the wild-type BRCA sequences with certain mutations of those gene sequences found in the test subject) and apply conventional techniques.”

Content Extraction & Transmission Llc v. Wells Fargo Bank, N.A., Nos. 2013-1588, 2013-1589, 2014-1112, 2014-1687 (Fed. Cir. Dec. 23, 2014). Affirmed Rule 12(b)(6) dismissal, based on patent-ineligibility under 35 U.S.C. § 101, of suit alleging infringement of U.S. Patent Nos. 5,258,855, 5,369,508, 5,625,465, and 5,768,416, all of which were in a common priority chain. The court characterized the patent claims as follows:

The claims generally recite a method of 1) extracting data from hard copy documents using an automated digitizing unit such as a scanner, 2) recognizing specific information from the extracted data, and 3) storing that information in a memory. This method can be performed by software on an automated teller machine (ATM) that recognizes information written on a scanned check, such as the check’s amount, and populates certain data fields with that information in a computer’s memory.

The claims were drawn to the “basic concept of data recognition and storage.” Their abstractedness was not overcome by reciting a scanner in addition to a computer. Claim construction was not needed, and therefore it was proper for the district court to have resolved the defendant’s “motion to dismiss at the pleading stage.”

District Courts

OpenTV, Inc. v. Netflix Inc., Case No. 14-cv-01525-RS (N.D. Cal. Dec. 16, 2014). Granted summary judgment of invalidity under 35 U.S.C. § 101 for U.S. Patent Nos. 7,305,691, and 8,332,268, but denied motion relating to U.S. Patent No. 7,055,169.

• U.S. Patent No. 7,055,169: the motion was denied as premature on the ’169 patent because, as in DDR Holdings, LLC v. Hotels.com, “the patent appears to be directed at providing a technological solution to a problem that arises in the computer/interactive television context.” The defendant had argued that the ’169 patent claims were directed to “the abstract idea of ‘ensuring that the necessary resources are available before commencing a presentation that requires those resources.’”
• U.S. Patent No. 7,305,691 claimed “[a] method for providing [16] targeted programming to a user outside of the user’s home.” The claim recited an unpatentable abstract idea because “[t]he concept of gathering information about one’s intended market and attempting to customize the information then provided is as old as the saying, ‘know your audience.’” Implementation by a generic computer did not save the claims.
• U.S. Patent No. 8,332,268 claimed “[a] method of scheduling delivery of multiple items of content [19] selectively to a plurality of online users.” The courts likened the claims of this patent to those at issue in the Ultramercial case, explaining that “even assuming the claims are limited to the online technology context, plaintiffs have not shown how the claims describe anything more than the abstract idea of attempting to provide as much appropriately-selected content to users as possible, based on predictions as to their online availability and other information gathered about them.”

IpLearn v. K12 Inc., Civil Action No. 11-1026-RGA (D. Del. Dec. 17, 2014). Granted summary judgment of invalidity of claims of U.S. Patent No. 6,688,888 under 35 U.S.C. § 101. The patent generally described and claimed “[a] computer-aided learning method and apparatus based on a super-recommendation generator, which is configured to assess a user’s or a student’s understanding in a subject.” The court thought it “beyond dispute that the claims are directed to an abstract idea—instruction, evaluation, and review.” Further, “generic computers, networks and Internet do not add any meaningful transformations to the claims.”

Cloud Satchel, LLC v. Amazon.com, Inc., Civ. No. 13-941-SLR; Civ. No. 13-942-SLR (D. Del. Dec. 18, 2014). Granted summary judgment of invalidity under 35 U.S.C. § 101 of U.S. Patent Nos. 5,862,321 and 6,144,997. The patents were “directed to . . . enabling the transmission and storage of document references or ‘tokens,’ each of which is associated with an electronic document stored in a database,” which allows “mobile users to access all of their electronic documents without being limited by the memory available on a mobile device.” The representative patent claim recited “the implementation of the abstract idea of cataloguing documents to facilitate their retrieval from storage in the field of remote computing.” The claimed method used standard hardware, and therefore its abstractedness, was not saved by any inventive concept.

Intellectual Ventures I LLC v. Mfrs. & Traders Trust Co., Civ. No. 13-1274-SLR (D. Del. Dec. 18, 2014). On the same day as her opinion in the Cloud Satchel case, Judge Sue Robinson considered the patent-eligibility under 35 U.S.C. § 101 of U.S. Patent Nos. 7,664,701, 8,083,137, 7,603,382, and 7,260,587. Finding three of four patents under consideration invalid under Section 101, Judge Robinson ruled as follows:

• U.S. Patent No. 8,083,137 was invalid. The patent had “the core idea of . . . allowing users to set self-imposed limits on their spending and receive notifications regarding such limits, i.e., setting up a budget and tracking their spending.” The patent claims were directed to an abstract idea: “[b]udgeting is a longstanding and fundamental practice, utilized in personal and business finances.” Further, there was no saving inventive concept: “the claims are not directed to specific algorithms, instead implementing the conventional concept of budgeting on general computers.”
• U.S. Patent No. 7,603,382 recited patentable subject matter. The parties “generally agree[d] that the central idea of the claims is providing a customized web page with content based on the user’s profile and website navigation history.” The claims recited patentable subject matter because they “recite[d] a specific method of customizing web pages based on user data.”
• U.S. Patent No. 7,260,587 recited patent-ineligible subject matter. A representative independent claim recited “[a] method of automatically organizing digital images obtained from a plurality of hard copy prints.” The claims were patent-ineligible because they did “no more than ‘computerize’ a known idea for organizing images.”
• U.S. Patent No. 7,664,701 recited patent-ineligible subject matter. The claims recited, e.g., a “method for a user to provide substitute billing data in lieu of personal billing data.” The claims were directed to the abstract idea of “providing a user with aliases to use in conducting transactions.”

Fairfield Indus. v. Wireless Seismic, Inc., Civil Action No. 4: 14-CV-2972 (S.D. Tex. Dec. 23, 2014). Denied a Rule 12(b)(6) motion to dismiss a suit alleging infringement of U.S. Patent No. 8,644,111 (and other patents that were not at issue in the motion to dismiss).   The ’111 patent claimed “[a] method of seismic data acquisition” that used a string of “acquisition units” to send data to “concentrator units.” The defendant argued that the patent claims were directed to “the abstract idea of replacing the cables in seismic sensor arrays with wireless communications” and “the concept of relaying messages through intermediaries, a method that has been known and used for years.” However, the court found “that the use of a string of seismic acquisition units and different transmission parameters constitute inventive concepts that transcend the abstract idea of a relay.” The court also thought that “[t]he claim’s close connection to a specific machine, the seismic acquisition unit, further supports a finding of patent-eligibility.” The court therefore denied the motion, albeit without prejudice.

KomBea Corp. v. Noguar L.C., Case No. 2:13-CV-957 TS (D. Utah Dec. 23, 2014). Granted summary judgment of “invalidity of United States Patents Nos. 8,503,619; 7,933,387; 8,438,494; and 7,640,510 under 35 U.S.C. § 101.” The patents “generally pertain to a telemarketing system that allows an agent to use prerecorded scripts, live voice, and interjections during a telemarketing call to tailor the call to potential customers while giving the impression that the conversation is person-to-person.” The court agreed that the “patents simply apply abstract ideas through a computer,” and hence failed to recite patentable subject matter.

MyMedicalRecords, Inc. v. Walgreen Co. , Case Nos. 2:13-cv-00631-ODW (SHx); 2:13-cv-02538-ODW (SHx); 2:13-cv-07285-ODW (SHx); 2:13-cv-03560-ODW(SHx) (C.D. Cal. Dec. 23, 2014). Granted a motion under FRCP 12(c) “for Judgment on the Pleadings of Invalidity of U.S. Patent No. 8,301,466.” The patent was directed to a “method for providing users with a way to collect, access, and privately manage their medical records using conventional computer components and the Internet.” The claims were directed to the “age-old” abstract idea of “secure record access and management.” There was no saving inventive concept; the claims only “broadly and generically claim[ed] the use of a computer and Internet to perform the abstract purpose of the asserted claims.”

Morales v. Square, Inc., Civil Action No. 4: 14-CV-2972 (W.D. Tex. Dec. 30, 2014). Claims of U.S. Patent No. 5,872,589 held patent-ineligible and Rule 12(b)(6) motion to dismiss granted. Claim directed to “method of data communication” encompassed “an abstract idea because it describes the fundamental concept of relaying a signal containing the sender’s identity.” The claimed method used only conventional hardware and thus no additional inventive concept saved the claims.

Ameranth, Inc. v. Genesis Gaming Solutions, Inc., case no. 8:11-cv-00189 (C.D. Cal. Jan 2, 2015). Denied motions for summary judgment of invalidity under 35 U.S.C. § 101 for U.S. Patent Nos. 7,431,650 and 7,878,909. The patents claimed “systems and software programs that help casinos run poker games, including the maintenance, processing, and display of player and game information, and an electronic player wait list,” as well as “the creation, modification, and display of dealer schedules based on dealer preferences and other criteria.” Concerning the ’909 patent, it claimed “computer system elements might only amount to a generic computer in the context of implementing the claimed program suite.” However, this was a motion for summary judgment where there needed to be no dispute as to material fact, and the defendant had not met its burden of showing “that the computer system elements [do not] combine to provide a sufficient ‘inventive concept’ beyond the abstract idea.” A similar analysis pertained to the ’650 patent. Further, the court had already found U.S. Patent No. 8,393,969 patent-eligible in a November 14, 2014, decision.

Tenon & Groove, LLC v. Plusgrade S.E.C., Civil Action No. 4: 14-CV-2972 (D. Del. Jan 6, 2015). A magistrate judge recommended granting defense motion for summary judgment of invalidity under 35 U.S.C. § 101, and dismissing action. Plaintiff had alleged infringement of U.S. Patent Nos. 7,418,409 and 8,145,536 directed to “concurrent optimization of value in a transaction between at least two entities,” and “generating revenue based on conditional options for products.”