Federal Circuit Finds In-Store Product Locator Patents Ineligible as Abstract

The U.S. Court of Appeals for the Federal Circuit (CAFC) on Friday affirmed a district court’s summary judgment ruling that six patents owned by Innovaport LLC are invalid for claiming ineligible subject matter under 35 U.S.C. § 101. The Federal Circuit agreed that the patents, which are directed to systems and methods for providing in-store product location information, claimed an abstract idea without adding a sufficient inventive concept to make them patent-eligible.

Innovaport LLC originally filed a suit against Target Corporation in the U.S. District Court for the Western District of Wisconsin, alleging that Target’s systems infringed 55 claims of the U.S. Patent Nos. 8,775,260, 8,787,933, 9,489,690, 9,990,670, 7,231,380, and 7,819,315. The patented technology was designed to solve the common problem of shoppers struggling to locate desired goods in large retail stores. The specification for the patents criticized existing solutions, such as in-store signs, which it described as being “difficult to read” and limited in the amount of information they could convey. The patents also noted the “significant disadvantages” of asking store employees for help, explaining that “store employees are not always able to provide clear instructions and, indeed, frequently do not themselves know where various products are located.”

The patents at issue claimed systems and methods that use a central hub, databases, and user interfaces to provide shoppers with not only product location but also product quantity, price, and availability. A key feature was linking products in a “cross-referential manner” to provide customers with suggestions and promotional information, sometimes for products they had not specifically requested.

In the district court proceedings, Judge William M. Conley granted Target’s motion for summary judgment of invalidity. The district court found that the asserted claims were directed to the abstract idea of “collecting, analyzing, retrieving, and displaying information.” Innovaport then appealed to the Federal Circuit, arguing that the lower court had misapplied the Supreme Court’s two-step Alice/Mayo framework for determining patent eligibility.

Judge Cunningham, writing for the Federal Circuit, addressed Innovaport’s arguments under both steps of the Alice test. At the first step, which asks whether the claims are directed to a patent-ineligible concept, the Federal Circuit agreed with the district court’s characterization of the claims. The opinion stated that the claimed functions are mental processes that “can be performed in the human mind or using a pencil and paper.” The court provided an analogy of a human store clerk who could “receive a question from a customer regarding where a product is, use a catalog to determine where that product is, tell a customer where that product is, and give that customer a suggestion of another product location based on past inquiries from the customer.”

Innovaport had contended that its claims were not abstract because they were directed to a specific technical improvement and the Federal Circuit was not persuaded by this argument. The court stated that “improving a user’s experience while using a computer application is not, without more, sufficient to render the claims directed to an improvement in computer functionality.” The opinion concluded that the patents focused on solving a business problem using generic computer technology as a tool, rather than on improving computer capabilities. The decision noted that linking related products and providing suggestions based on a user’s history are “longstanding methods of human activity.”

Moving to the second step of the Alice analysis, the Federal Circuit looked for an “inventive concept” sufficient to “transform the nature of the claim” into a patent-eligible application. Innovaport argued that the inventive concept was found in the combination of linking products, providing suggestions, and using a mobile device, which the court rejected. It explained that the act of “linking” products and providing recommendations was the abstract idea itself, and an abstract idea cannot serve as its own inventive concept. Furthermore, the court found that the recitation of a “mobile device” was the inclusion of a “generic computer” component, which under Supreme Court precedent in Alice “cannot transform a patent-ineligible abstract idea into a patent-eligible invention.”

The Federal Circuit also found no inventive concept in the “ordered combination of limitations,” concluding that the claims recited “routine business steps, implemented on a computer,” and did not improve the way a computer functions. The court also addressed Innovaport’s argument that summary judgment was improper because of factual disputes over whether the claimed steps were unconventional. Moreover, it referenced Association for Molecular Pathology v. Myriad Genetics, Inc., to support its position that even if the ideas of cross-referencing and providing suggestions were “‘groundbreaking, innovative, or even brilliant,’…that is not enough for eligibility.”

Ultimately, the Federal Circuit addressed Innovaport’s argument that the district court should have been bound by its own prior ruling in a related case Innovaport had filed against Lowe’s. The court rejected the argument, stating that Innovaport “cites no basis to preclude the district court from changing its mind about the merits of Innovaport’s litigation position.” The Federal Circuit concluded that all 55 asserted claims were directed to abstract ideas and lacked an inventive concept, rendering them invalid under § 101.

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Author: sharafmaksumov