Two-Way Media Ltd v. Comcast Cable Communs., LLC, Nos. 2016-2531, 2016-2532, 2017 U.S. App. LEXIS 21706 (Fed. Cir. Nov. 1, 2017) (Before Lourie, Reyna, and Hughes, J.) (Opinion for the court, Reyna, J.).
The Federal Circuit affirmed a district court decision finding four patents owned by Two-Way Media (“Two-Way”) were directed to ineligible subject matter under 35 U.S.C. § 101. Claim 1 of the ‘187 patent was representative of the ‘187 and ‘005 patents, and described a method for transmitting message packets over a communications network, like the Internet. Claim 29 was representative of the ‘622 patent, and described a method for forwarding real time information to one or more users having access to a communications network. Claim 30 was representative of the ‘686 patent, and recited a method for metering real-time streaming media for commercial purposes.
The Alice Two-Part Test for Patent Eligibility
The court evaluated Two-Way’s patent claims under the Alice two-part test for patent eligibility. See Alice Corp. v. CLS Bank Int’l, 134 S. Ct. 2347 (2014). Step one of the Alice test considers whether the representative claims, when considered in their entirety, are “directed to” a judicial exception to patent eligibility under § 101. These are laws of nature, natural phenomenona, and abstract ideas. “[T]he court considers whether the claims in the patent focus on a specific means or method, or are instead directed to a result or effect that itself is the [judicial exception] and merely invokes generic processes and machinery.” McRO, Inc. v. Bandai Namco Games Am. Inc., 837 F.3d 1299, 1314 (Fed. Cir. 2016). If the claims are directed to a judicial exception, the court moves to step two and considers whether the claims contain an “inventive concept sufficient to transform the nature of the claim[s] into a patent-eligible application.”
The District Court’s Findings
With respect to the ‘187 and ‘005 patents, the district court determined representative Claim 1 was directed to the abstract idea of (1) sending information, (2) directing the sent information, (3) monitoring receipt of the sent information, and (4) accumulating records about receipt of the sent information. Two-Way argued that the ‘187 and ‘005 patent claims contained an inventive concept because they were related to “computer architecture.” However, the district court cited the claim constructions (which it adopted from Two-Way) and found that the claims did not recite a “saving inventive concept” under Alice step two because they did not “recite or refer to anything that could be described as architecture.”
Regarding the ‘622 and ‘686 patents, the district court found the ‘622 patent to be directed to the abstract idea of monitoring the delivery of real-time information to a user, and the ‘686 patent to be directed to the abstract idea of measuring the delivery of real-time information for commercial purposes. Under Alice step two, both patents had no saving inventive concept because “although [the claims] recited some computer components, they required only ordinary functionality of these components.” Claims directed to generalized steps and utilizing conventional computer activities are not patent eligible under § 101. See Internet Patents Corp. v. Active Network, Inc., 790 F.3d 1343, 1348-49 (Fed. Cir. 2015).
The ‘187 and ‘005 Patents
The Federal Circuit agreed with the district court’s step one Alice analysis, finding that representative Claim 1 recited a “method for routing information using result-based functional language.” The claim was directed to an abstract idea because it failed to indicate “how the claim [was] directed to a scalable network architecture that itself lead to an improvement in the functioning of the system.”
The Court then proceeded to Alice step two. While the specification may have described a possible innovative “scalable architecture” concept, representative Claim 1 of the ’187 patent did not. This lack of inventive concept in the claim itself could not be overcome and thereby precluded eligibility. Further, the Court found that Claim 1 did not require anything other than a conventional order of steps to be carried out on conventional computer and network components operating according to their ordinary functions. Therefore, there was no inventive concept present to transform the patents into an eligible application under § 101.
The ‘622 and ‘686 Patents
The Federal Circuit agreed with the district court and found the ‘622 and ‘686 were directed to abstract concepts. Moving to Alice step two, the claims did not contain an inventive concept sufficient to transform them into something patent eligible. The Court once again found that no inventive concept relating to “system architecture” resided in the claims. Additionally, the claims were directed to conventionally ordered steps and utilized conventional computer activities. Therefore, there was no inventive concept in either the ‘622 or ‘686 patent, and the patents were ineligible under § 101.
For claims directed to judicial exceptions under § 101, a patent cannot identify a sufficient inventive concept solely in the specification and survive the Alice inquiry; the inventive concept must be found in the claims themselves in order to transform the nature of the claims into a patent-eligible application.
Join the Discussion
15 comments so far.
AnonNovember 14, 2017 10:26 am
You persist in fallacies as onerous as the deceptions of the ACT | The App Association.
One simply cannot “just use” a machine (computer) until – and first – that machine is changed and reconfigured with the software that is going to be “just used.”
You continue to omit this critical step in your proselytizing even as you are reminded of your omissions, which means that you are omitting this critical element purposefully.
Please desist from such shenanagins, at least here in this forum.
Edward HellerNovember 13, 2017 10:59 am
John, “inventive concept” is indeed unfortunate. The Nielson case, from which all this began, was only looking for a new or improved manufacture, which included machines. Thus, if the machine is improved, that should be “enough” under 101. Whether the improvement was expected or not is, or should be, a separate inquiry.
The point the Supreme Court seems to be making with software is that software that only uses the machine does not improve the machine. Think math. Software that improves the utility of the machine qua machine is eligible. Think OS. Think encryption.
Another point is that one cannot claim the invention so broadly that it essentially claims a principle in the abstract. Think claim 8 of Morse, or the Rubber-Tip Pencil case. This comes up in combination claims when the combination is old, novelty is in the one element, and that element is claimed as a result.
GeneNovember 13, 2017 10:40 am
“For claims directed to judicial exceptions under § 101, a patent cannot identify a sufficient inventive concept solely in the specification and survive the Alice inquiry; the inventive concept must be found in the claims themselves in order to transform the nature of the claims into a patent-eligible application.”
tell that to the patent attorneys who are able and willing to write abstract claims for an inventive shovel, or an inventive “MRI machine”.
AnonNovember 12, 2017 03:29 pm
I believe that is exactly what my posts do.
Whether someone on the Court’s staff picks this up and acts accordingly is quite a different matter. Unfortunately, the “policing” of Amicus Briefs seems to be a nonexistent thing, and F A R too many people have no checks (ethical or otherwise) on what is provided by such “friends” of the Court.
In no small sense though, I blame the Court themselves for this, as they have shown a proclivity to act as if they were above the law, above the Constitution themselves, to act as if such things as “separation of powers” and “void for vagueness” are somehow below them. Brazenness begets brazenness.
It is perhaps a good thing that most state attorney oaths (outside of the oath of the Commonwealth of Massachusetts that is) place the duty of an attorney first and foremost to the Constitution rather than one single branch under that Constitution.
Edward HellerNovember 12, 2017 02:39 pm
I am dumbfounded, anon, about the brazenness of their misrepresentation. Perhaps Gene should expose these people for who they really are and why their brief is a fraud on the court.
AnonNovember 12, 2017 12:05 pm
Further, Mr. Heller,
A quick check of the USPTO patent database for “members” reveals the sum total of ZERO patents for:
Colorado Technology Consultants, Inc.
In other words, not a single registered patent among ALL listed members.
This goes beyond mere spin – I would daresay that this presents a sanctionable misrepresentation to the Court.
AnonNovember 12, 2017 10:53 am
Wikipedia includes this statement:
ACT | The App Association has large, independent sponsors such as Microsoft, Apple, eBay, Oracle, Intel and VeriSign.
There appears to be no shortage of doublespeak from the organization, and this tends to mirror the “vocal” software communities that are largely anti-software patent (with philosophies that are in truth, merely anti-patent).
There seems no shortage of those saying that they are for “strong patent systems” while at the exact same time trying to gut those “strong” aspects of patent systems.
As to who controls the entity, it is beyond clear that it is NOT the “little guys” touted as “members.” Check out their blog and the lack of accreditation for what is actually written for consumption. Note as well that the brief itself that you linked to is a “K-street” vehicle. Even the Wiki posts a warning note that the content appears to be “written like an advertisement.”
Reading the brief itself reveals a classic Infringers’ Rights mantra (at page 5):
“ In addition, our members rely on
access to patents and are threatened by aggressive
licensors, often Patent Assertion Entities (PAEs), who
may bring them into costly court proceedings that force
them to accept a license in a short timeframe.”
Note that there is a stated reliance on patents – of others – and it is those others who have the patents that are “slowing down the members’ “innovation”
Also note the fallacy of pages 5-6:
“They also serve the public
interest by streamlining patent dispute resolutions that
would otherwise congest Article III courts more than
they are already.”
The follow up to IPRs have actually increased the load on federal courts.
On page 7, the doublespeak continues (but emphasis added):
“Article I of the Constitution clearly gives Congress
the authority to define a patent right and where it can
be adjudicated. McClurg, 42 U.S. at 206 (holding “…
the powers of Congress to legislate upon the subject of
patens is plenary by the terms of the Constitution, and
as there are no restraints on its exercise, there can be no
limitation of their right to modify them at their pleasure,
so that they do not take away the rights of property
in existing patents.”
As I have so oft pointed out – even Congress is not free to write a law that violates other protections (such as protections afforded property). The brief at the same time admits such is in play while also trying to make it appear quite acceptable for Congress to so act.
This is chicanery – nothing more.
They say the best LIES are cloaked in truth – and in truth, there IS a separation of powers at play with what courts may do with statutory law. But the violations of separation of powers is NOT at stake in providing the protection that property rights have – and still*** have even in light of the AIA.
The brief evinces no level of understanding that the patent right involves a Quid Pro Quo. This brief was NOT written by someone who understand patents and the relation of patents to innovation. Brian Scarpelli, the author of the brief is NOT a registered practitioner. IN fact, not one of the listed staff whom may reflect being an attorney is a registered practitioner.
*** the AIA was silent to – and did not change at all – the very basic underpinning that patents are considered to be personal property. On this point alone, the brief implodes.
Edward HellerNovember 12, 2017 08:40 am
ACT | The App Association filed a brief in Oil States that could have been written by Google or Apple (the two companies are mentioned). The brief supports IPR and Alice. But they say they are small companies that rely on venture capital and like IPRs to avoid litigation in court.
Is this organization a front for Google and Apple?
John RoethelNovember 11, 2017 10:54 pm
The patent statutes make no reference to “inventive concept.” 112(2) states that the invention is defined by the claim. I note in passing that a patent that has more than one claim defines more than one invention — each claim being an invention.
Night WriterNovember 11, 2017 03:24 pm
@3 Curious: good post.
@4 I remember that quote as Scalia.
AnonNovember 10, 2017 01:29 pm
“[yes, yes Anon — I know you raise this point all the time]”
I have no problem whatsoever with you also saying this.
Dan HansonNovember 10, 2017 01:09 pm
Eight years and one day ago, the following exchange took place:
MR. STEWART (Deputy Solicitor General on behalf of the USPTO): [W]e opposed cert in this case (Bilski) because we recognized that there are difficult problems out there in terms of patentability of software innovations and medical diagnostic —
JUSTICE KENNEDY: You thought we — you thought we’d mess it up.
CuriousNovember 10, 2017 11:52 am
the inventive concept must be found in the claims themselves in order to transform the nature of the claims into a patent-eligible application
From 35 USC 112: “[t]he specification shall conclude with one or more claims particularly pointing out and distinctly claiming the subject matter which the inventor or a joint inventor regards as the invention.” I see nothing about claims be required to recite a full enabled “inventive concept.” The specification shows one having ordinary skill in the art how to make and use the invention — not the claims.
When seeing this type of judicial activism, I am reminded of the quote from Bilski that Courts “ ‘should not read into the patent laws limitations and conditions which the legislature has not expressed.'”. What is funny is that the Supreme Court then goes on to violate that principle of statutory interpretation that they just held the Federal Circuit violated.
Again, what is funny is that the US Constitution gave the United States Congress the power “To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.” (Article I, Section 8, Clause 8). However, we have both the Federal Circuit and the Supreme Court explicitly ignore the intentionally BROAD language of 35 USC 101. [yes, yes Anon — I know you raise this point all the time]
I must say … Google definitely got their lobbying dollars worth when they decided to advocate for the emasculation of the US Patent System.
AnonNovember 10, 2017 11:16 am
“Are the Courts collectively going Luddite?”
Absolutely – they “know it when they see it,” after all, eh?
TernaryNovember 10, 2017 09:24 am
“…is directed to the abstract idea of (1) sending information, (2) directing the sent information, (3) monitoring the receipt of the sent information, and (4) accumulating records about receipt of the sent information.”
However, in this particular case the claims include the limitations of “digital packets” of “audio/visual information” and “routing.” These are technical limitations. Basically, “audio/visual information” is chopped up in “digital packets” and each “digital packet” is appropriately “routed” to its target where all “digital packets” are re-assembled into the original “audio/visual information.” This is highly technical and the basis for the Internet. Whatever it is, abstract it is not. Are the Courts collectively going Luddite?
The conclusion, based on the Court’s reasoning, is that almost any invention is directed to an abstract idea, because most inventions can be reduced as being “directed to something conventional, routine and well-understood.”
Only machines with no intended or detectable purpose are not directed to an abstract idea. But wait, in that case they are not useful and they are patent ineligible.