MacroPoint, LLC v. FourKites, Inc. (N.D. Ohio 2015)

By Michael Borella --

In a previous article on the USPTO's publication of its 2014 Interim Guidance on Patent Subject Matter Eligibility, we wrote:

Despite the Interim Guidance offering a reasonably fair and thorough overview of the current law of patent-eligibility, applicants must remain cautious.  The Interim Guidance is for examination of patents only.  Courts may give little or no weight to its reasoning.  As a result, claims that are allowable by the USPTO under a particular rationale may be invalidated by a reviewing court, even in the presence of this rationale.

Last week, the U.S. District Court for the Northern District of Ohio found five patents owned by MacroPoint to be invalid under 35 U.S.C. § 101, despite the USPTO allowing four of these patents after the Supreme Court's June 2014 Alice v. CLS Bank Int'l decision.

MacroPoint brought an infringement action against FourKites, claiming infringement of U.S. Patents 8,604,943, 9,070,295, 9,082,097, 9,082,098, and 9,087,313.  Of these, the '943 patent issued in December, 2013, while the others issued on June 30, 2015, July 14, 2015, July 14, 2015, and July 21, 2015, respectively.  Notably, none of these patents was allowed after the USPTO published its July Update to the Interim Guidance, which provides detailed examples of patent-eligible and patent-ineligible claims for examiners.  Further, none of these patents was subject to a § 101 rejection during prosecution.

MacroPoint did not dispute that claim 1 of the '943 patent is a representative claim of all 94 claims at issue.  This claim recites:

A computer implemented method for indicating location of freight carried by a vehicle, the method comprising:
    [a] correlating the freight to a communications device;
    [b] receiving a first signal including data representing a request for information regarding the location of the freight;
    [c] transmitting to the communications device a second signal including data that prompts an automated message to be communicated to a user of the communications device, the automated message representing a notice communicating to the user of the communications device that the location information of the communication device will be obtained;
    [d] receiving from the communications device a third signal including data indicative of consent from the user to the obtaining of the location information of the communications device;
    [e] transmitting a fourth signal to a location information provider, the fourth signal including data representing a request for location information of the communications device, wherein the location information provider corresponds to a party or device other than the communications device and the location information provider corresponds to at least one of:
    [e][i] a wireless service provider providing wireless service to the communications device,
    [e][ii] a third party that obtains the location information of the communications device from the wireless service provider providing wireless service to the communications device, and
    [e][iii] a party that has access to the location information of the communications device but is other than the wireless service provider or the third party that obtains the location information of the communications device from the wireless service provider;
    [f] receiving a fifth signal from the location information provider, the fifth signal including data representing the location information of the communications device;
    [g] correlating the location information of the communications device to the location of the freight based at least in part on the correlation between the freight and the communications device; and
    [h] transmitting a sixth electronic signal including data representing the location of the freight.

The Court characterized the invention as being directed to "a system for providing location information of a vehicle that includes a communications interface and a correlation logic that correlates location information of a communications device to location of the vehicle."

FourKites filed a motion to dismiss the case for failure to state a claim upon which relief can be granted, contending that the patents in suit were invalid under Alice.  Addressing this motion, the Court noted that "it is procedurally proper to address defendant's arguments concerning invalidity based on patent-eligibility at the 12(b)(6) stage" especially because "plaintiff does not argue that claim construction is necessary for a resolution of the instant dispute."  The Court went on to state that it would "presume that the patents are valid and grant the motion only if defendant is able to show invalidity by clear and convincing evidence."  The fact that four of the patents were granted post-Alice influenced the Court's decision in this regard.

In Alice, the Supreme Court provided a two-prong test for patent-eligibility under 35 U.S.C. § 101, requiring that one first determine whether the claim at issue is directed to a judicially-excluded law of nature, a natural phenomenon, or an abstract idea.  If so, then one must further determine whether any element, or combination of elements, in the claim is sufficient to ensure that the claim amounts to something more than the judicial exclusion.  Notably, generic computer implementation of an otherwise abstract process does not qualify as "something more."

Applying the test to claim 1, FourKites opined that the claim "discloses nothing more than a process for tracking freight, including monitoring, locating, and communicating regarding the location of the freight . . . [t]hese ideas are all abstract in and of themselves."  The Court cited a somewhat analogous invention in Wireless Media Innovations, LLC v. Maher Terminals, LLC, in which the U.S. District Court for the District of New Jersey found the claimed process for tracking freight to be abstract.  MacroPoint argued that its patents were distinguishable because they were granted after the Alice decision, while those of Wireless Media Innovations were not.  The Court, however, held that "the fact that the PTO may have considered Alice-based guidelines before issuing the patents-in-suit does not mandate a finding that the patents are valid."

With respect to the first prong of the test, MacroPoint invoked DDR Holdings, LLC v. Hotels.com L.P., the only post-Alice Federal Circuit case to find claims patent-eligible, as evidence that claim 1 is not abstract.  But the Court found that this case is essentially silent on the first prong, as its conclusion is based on the second prong instead.  Ultimately, the Court held that claim 1 was "directed at a method for tracking freight, which is an abstract concept."

Turning to the second prong of Alice, MacroPoint argued that there were three inventive concepts in the claim that would render the claim patent-eligible.  These include (i) "correlating the location information of a communications device with the location of freight or a vehicle," (ii) "obtain[ing] location information through an intermediary and not directly from the communication device itself," and (iii) signals that "prompt . . . an automated message to be communicated to a use of the communications device" and "include[e] data indicative of consent from the user."  MacroPoint noted that these concepts had the advantage of facilitating the tracking of freight without a GPS receiver.

The Court rejected MacroPoint's contentions.  Particularly, the Court wrote that "[c]orrelating simply connotes the ascertaining of a relationship between two pieces of information [and] involves only the conventional use of a computer."  With respect to the second and third purported inventive concepts, the Court found that the claim language did not recite any advantages over a GPS-based system, and only included "the ordinary use of a computer that transmits and receives data from a communication device."

The Court also rejected MacroPoint's application of DDR Holdings to the second prong of Alice, stating that "the problem identified by plaintiff [does not] specifically arise in the realm of computer networks" because it is analogous to humans inquiring by telephone as to another individual's location.  Finally, the Court addressed preemption by stating that even if the claim does not entirely foreclose all ways that freight can be tracked, the steps therein are only "well-understood, routine, conventional activity [and] upholding the patents would risk disproportionately tying up the use of the underlying conventional steps."

So, as expected, one cannot rely on courts to apply the same § 101 analysis as the USPTO.  But this case exhibits a number of factors that may have helped the Court come to its decision:  the claims were not allowed over an Alice rejection, there is no evidence that the examiner considered the patent-eligibility of the claims, and the examiner did not apply the USPTO's guidance as reflected in the July Update.  As a result, four of these patents were allowed very quickly, and MacroPoint was not forced to make narrowing amendments that might have changed the outcome herein.  Also, MacroPoint made a few moves that did not help, such as implicitly conceding that all 94 claims stood or fell together, not arguing that claim construction was necessary prior to patent-eligibility evaluation, and relying on arguments that go beyond the language of the claim.

Also, despite claiming to conduct its analysis under the presumption of validity, the Court appeared to give little or no deference to the USPTO's allowance of the patents.  Perhaps this is due to a lack of § 101 examination details in the file wrappers, but it implies that the "clear and convincing" bar is set low for patent-eligibility challenges.

Comments

[EG]

Hey Michael,

With all due respect, this 101 invalidity ruling by the N.D. Ohio in MacroPoint is utterly absurd. What is being claimed is a electronic system for tracking freight on a truck. How in the world is that "abstract"? Just proves again that the nonsensical Alice test is completely broken.

[skeptical]

(Sadly), this all sounds in the "I told you so" that I offered previously to Paul Cole.

Bottom line here is that the judicial branch will not let any other branch get in the way of the judicial branch EFFECTIVELY writing statutory patent law.

There is but one path forward for this.

One.

But is Congress up to the task?

Well, I remain...

[Some Random Guy]

The moment a claim can be characterized as "correlating" anything, it is dead.

[Mike Borella]

Eric,

Agreed, I have mostly given up on trying to make actual sense of Alice. Instead I try to make it make sense by ignoring the fact that many "abstract" inventions require computer hardware.

In cases like this one, the court decides whether the claims without computer implementation are directed to something that could have been done by people with existing technology. Then the computer implementation is considered, and if it is just a generic computer performing the claimed steps, that's the end of the claim.

It is just another legal fiction that computer implementation is abstract.

Mike

[skeptical]

Mike,

Your statement of " Instead I try to make it make sense by ignoring the fact that many "abstract" inventions require computer hardware." - will not help you.

Please remember that in that very Alice case, that both sides agreed that claims met the statutory category aspect of the hard goods of "hardware," and such removed that issue from the Court's purview (it was not at the case or controversy that such was met).

Those types of things - not at issue before the Court - are merely "Gisted" away by the Court as if those claim elements (or the words of Congress that would provide merit to those claim elements) did not exist.

SRG (AKA MM, AKA Malcolm Mooney),
Your characterization here begs too much. It is equivalent to saying that the mere presence in a claim of something that can be attributed to a mental step damms the entire claim, no matter what.

That is not only patently not correct, it is not even close to what the Mental Steps Doctrine itself provides.

Instead, any veracity in your statement is more - and merely - a reflection that "the scoreboard is broken" (as that adage goes).

You don't get "points" by "cheering on" a broken scoreboard when the real issue at hand is the fact that the scoreboard is broken and needs to be fixed/replaced.