The Software IP Report

Courts Splits Patent-Eligibility of Method and System Claims

The Central District of California recently granted, in part, a motion to dismiss based on lack of patent-eligible subject matter, under 35 U.S.C. § 101 and the Alice/Mayo test, in claims of U.S. Patent No. 8,934,535,  directed to a method for data compression and decompression. Realtime Adaptive Streaming LLC v. Google LLC, et al., No. CV 18-3629-GW(JCx) (C.D. Cal. Oct. 25, 2018). The court denied the motion for two other patents (U.S. Patent Nos. 9,769,477 and 7,386,046) with claims directed to system of data compression and decompression. The method claims of the ’535 patent were ineligiblebecause the patent failed to state that the claimed method would result in an increased compression speed. Concerning the’477 and ’046 patents, on the other hand, Google failed to show that the claimed systems, which included multiple compression encoders selected for use based on evaluating data, did not impart structural organization to computer processing comparable to the computer memory system in Visual Memory LLC v. NVIDIA Corp., 867 F.3d 1253, 1259 (Fed. Cir. 2017).

The ’535 and ’477 patent are each continuations of the ’046 patent and share a common specification. The ’406 and ’477 patents cover a system of data compression and decompression, while the ’535 patent covers a method of compressing and decompressing data. Claim 15 of the ’535 patent is reproduced here:

15. A method, comprising:

determining a parameter of at least a portion of a data block;

selecting one or more asymmetric compressors from among a plurality of compressors based upon the determine parameter or attribute;

compressing the at least the portion of the data block with the selected one or more asymmetric compressors to provide one or more compressed data blocks; and

storing at least a portion of the one or more compressed data blocks.

The court applied the two-step Alice framework to Google’s Rule 12(b)(6) motion to dismiss.  For the ’406 and ’477 patents, the court found that Google failed to establish the claimed systems comprising multiple compression encoders lacked structural organization to computer processing. Citing Berkheimer v. HP Inc., 881 F.3d 1360, 1367 (Fed. Cir. 2018), the court noted that the ’046 and ’477 patent claims recited systems that would improve computer functionality.  Under Visual Memory, where an improvement to accessing and storing data was held patent-eligible, there was enough evidence of a technical improvement for the ’046 and ’477 patents to survive a motion to dismiss.

For the ‘535 patent, Google argued that the claim did not require a computer to perform the steps of the method automatically. In fact, “language in the specification states that a computer user can perform the step of selecting the appropriate asymmetric compressor to use.” While Realtime tried to argue that the method improved compression/decompression speed, the court found that the ’535 patent fails to “state that performance of the claimed method will result in a faster rate of compression,” and “there [wa]s no suggestion from the claim language that the available compressors are related to improving…compression speed.” Therefore, the court found that claim 15 of the ‘535 patent was an “abstract idea of making a choice between known options based on an identified parameter.”

Moreover, under Alice step two, Realtime could show no unconventional innovation in the claimed method.  Instead, the court found, claim 15 of the ’535 patent recites the abstract idea itself, namely “selecting one or more asymmetric compressors from a plurality of compressors based upon a determined parameter or attribute.” The court found no requirements about relationships between the compressors or whether the compressors were required to be in the same system.

Therefore, the court found claim 15 failed the Alice framework and was drawn toward ineligible subject matter.

It should be noted that the court’s order was without prejudice on all patents; Google can renew its arguments that the ’046 and ’477 patents are ineligible, and Realtime can amend its complaint to try to allege more facts to support patent-eligibility of the ’535 patent.

Lessons for Practice

When drafting software applications, including details of technical improvements in the specification and the claims are helpful in defending against an ineligibility argument. Even though system and method claims are often indistinguishable for patent-eligibility purposes, this case illustrates that technical improvements and structure must be incorporated into method claims just as with claimed systems.

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