Interval Licensing LLC v. AOL, Inc. (Fed. Cir. 2018)

By Michael Borella --

Interval Licensing brought an action against AOL and several other defendants in the Western District of Washington, alleging infringement of U.S. Patent No. 6,034,652.  In a previous ruling, all asserted claims of this patent were invalidated as being indefinite.  At issue in this decision are claims 15-18, which were subsequently ruled invalid for failing to recite patent-eligibile subject matter under 35 U.S.C. § 101.

As an example, claim 18 recites:

A computer readable medium, for use by a content display system, encoded with one or more computer programs for enabling acquisition of a set of content data and display of an image or images generated from the set of content data on a display device during operation of an attention manager, comprising:
    acquisition instructions for enabling acquisition of a set of content data from a specified information source;
    user interface installation instructions for enabling provision of a user interface that allows a person to request the set of content data from the specified information source;
    content data scheduling instructions for providing temporal constraints on the display of the image or images generated from the set of content data;
    display instructions for enabling display of the image or images generated from the set of content data;
    content data update instructions for enabling acquisition of an updated set of content data from an information source that corresponds to a previously acquired set of content data;
    operating instructions for beginning, managing and terminating the display on the display device of an image generated from a set of content data;
    content display system scheduling instructions for scheduling the display of the image or images on the display device;
    installation instructions for installing the operating instructions and content display system scheduling instructions on the content display system; and
    audit instructions for monitoring usage of the content display system to selectively display an image or images generated from a set of content data.

According to the Court, the invention involves a software application referred to as an "attention manager."  This application "makes use of 'unused capacity' of a display device, by displaying content in that unused capacity."  Thus it can display "content when the display device is turned on but the user is not actively engaged with the display device" as well as displaying "content in an area of the display screen not used by already-displayed content with which the user is actively engaged."

In Alice Corp. v. CLS Bank Int'l, the Supreme Court set forth a two-part test to determine whether claims are directed to patent-eligible subject matter under § 101.  One must first decide whether the claim at hand is directed to a judicially-excluded law of nature, a natural phenomenon, or an abstract idea.  If so, then one must further decide whether any element or combination of elements in the claim is sufficient to ensure that the claim amounts to significantly more than the judicial exclusion.  But generic computer implementation of an otherwise abstract process does not qualify as "significantly more," nor will elements that are well-understood, routine, and conventional lift the claim over the § 101 hurdle.

Applying step one of Alice, the Court quickly concluded that the claimed invention was directed to "providing information to a person without interfering with the person's primary activity."  This, in and of itself, is an abstract idea according to the Court due to it being analogous to news tickers on television programs, for example.  The Court also frowned upon the claim's "broad, result-oriented" structure that "demands the production of a desired result (non-interfering display of two information sets) without any limitation on how to produce that result."

Regarding step 2, the Court again criticized the claim's lack of detail, stating that it "do[es] not recite any arguably inventive method of how the secondary information is displayed, such as what portion of the screen is utilized or how the primary activity on the screen is monitored."  Interval Licensing argued that the claim "improve[s] computer display devices by combining the acquired information with the user's primary display interaction."  But the Court did not view this ability as an improvement, largely because the claim is broad enough to encompass any mechanism to achieve this goal.  Arguably, this would include prior known mechanisms.

Consequently, claims 15-18 were ruled invalid as directed to non-eligible subject matter.

This opinion would just be another ho-hum, run-of-the-mill § 101 decision if not for Judge Plager filing a concurrence-in-part and dissent-in-part.  While not binding law, he has provided the most pointed (and sarcastic) criticism of the Alice test and how § 101 is currently applied that we have yet to hear from a sitting Federal Circuit judge.  Even a casual read of his concurring / dissenting remarks indicate that he has chosen his language carefully.  Thus, we will block quote much of what he wrote.

He begins with an indication of what is to come:

Given the current state of the law regarding what inventions are patent eligible, and in light of our governing precedents, I concur in the carefully reasoned opinion by my colleagues in the majority, even though the state of the law is such as to give little confidence that the outcome is necessarily correct.  The law, as I shall explain, renders it near impossible to know with any certainty whether the invention is or is not patent eligible.

He then indicates that the term "abstract idea" as used by the courts is far removed from its plain meaning:

An idea itself by definition is "[s]omething, such as a thought or conception, that is the product of mental activity."  The definitions of "abstract" include "[c]onsidered apart from concrete existence," "[d]ifficult to understand; abstruse," and "[n]ot applied or practical; theoretical."  An idea, whether abstract or not, is something that lives in the interstices of someone's brain, a psychophysiological area not fully understood to this day.

Thus, by the very nature of the term, it is difficult if not impossible to apply the test to claimed inventions, and that focusing on whether a claim is to an outcome or a process to achieve that outcome does little to clarify the situation:

And ideas can have an infinite range of abstractness, if by that we imply concreteness—for example, compare "I have an idea—let's have hamburgers for dinner," with "I have an idea—I am going to invent how to make time go backwards."  How much of abstractness is a function of concreteness?  How do we pick the line where the articulation and explication of an idea is sufficiently concrete to be 'non-abstract,' but not so much as to be 'generic and conventional'?  Does it help to phrase the notion as the difference between claiming a desired result and claiming how to produce that same result?  Or are we just substituting one set of vague notions for the other, with the same line-drawing problem?

He backs this up by noting that "a search for a definition of 'abstract ideas' in the cases on § 101 from the Supreme Court, as well as from this court, reveals that there is no single, succinct, usable definition anywhere available."  Further, "[t]he problem with trying to define 'abstract ideas,' and why no court has succeeded in defining it, is that, as applied to as-yet-unknown cases with as-yet-unknown inventions, it cannot be done except through the use of equally abstract terms."

Judge Plager then fires a shot:  "[t]he 'abstract ideas' idea, when used for denying a claimed invention's patent eligibility either before or after a patent is issued, cannot thus function as a valid rule of law."  Making an analogy to the I-know-it-when-I-see-it notion of obscenity, he writes:  "the 'abstract ideas' idea falls short in the sense of providing a trial judge with confidence that the judgment will be understood by the judges who come after."

He goes on to question whether step two of Alice, the search for an "inventive concept" in an abstract claim, makes any sense at all:

A small puzzle—if a court, after reviewing challenged claims in light of their terminology and written description, determines the claims to be 'abstract' in Step 1, how can the same court be expected to determine on a second reading that the same claims have become 'un-abstract' via Step 2?  Could it be that an 'inventive concept' cannot exist until the court reads the patent at least one more time?  Perhaps courts cannot be expected to read the claims carefully enough the first time?

Judge Plager then makes an analogy between the notion of an inventive concept and similar "inventive requirements" that were eliminated from the § 103 obviousness inquiry by the 1952 Patent Act:

As a decisional construct for validation of a property right—a patent—the idea of a necessarily underlying 'inventive concept' proved unworkable.  The concept provided no discernable boundaries for decision-making in specific cases, resulting in an incoherent legal rule that led to arbitrary outcomes.  Judge Rich, who devoted his life to patent law, saw this clearly, and gave the Congress a workable alternative—nonobvious subject matter—which they adopted.

Finally, Judge Plager focuses on recent criticism of Alice from his colleagues, Judges Linn and Lourie, as well as academics, commentators, and the former head of the USPTO.  He also points to the bases of this criticism:

There is little consensus among trial judges (or appellate judges for that matter) regarding whether a particular case will prove to have a patent with claims directed to an abstract idea, and if so whether there is an 'inventive concept' in the patent to save it.  In such an environment, from the viewpoint of counsel for the defense, there is little to be lost in trying the § 101 defense.  We are left with a process for finding abstract ideas that involves two redundant steps and culminates with a search for a  concept—inventiveness—that some 65 years or so ago was determined by Congress to be too elusive to be fruitful.  Is it any wonder that the results of this process are less than satisfactory?

Turning to those who view modern, information-age inventions with disfavor, he adds:

With the rise of software and business method patents, the 'abstract idea' became a weapon of choice for summary execution of what many decried as 'bad' patents.  The problem is that it does not distinguish good from ill in any coherent sense, and thus does not serve well either patent law or the public.

Judge Plager then encourages district courts to defer § 101 determinations until after challenges under §§ 102, 103, and 112 have been decided, and suggests that many of the so-called "bad" patents killed off under § 101 would fail to meet these other statutory requirements.  Thus, in his view, there is no need to address § 101 on the pleadings for example.

Judge Plager finishes with another strong statement:

This emperor clearly has no clothes; we need not wait for our children to tell us this.  The legitimate expectations of the innovation community, as well as basic notions of fairness and due process, compel us to address this § 101 conundrum.

There is little that Judge Plager writes in this concurrence / dissent that has not already been said many times by many individuals.  But his position as an active appellate jurist and the power of his choice of words lend additional weight to the growing sense of institutional disapproval over current patent-eligibility practice.  There still might not be enough momentum for the Supreme Court or Congress to rectify the situation, but a strong voice that cannot be ignored has joined the fray.

Interval Licensing LLC v. AOL, Inc. (Fed. Cir. 2018)
Panel:  Circuit Judges Taranto, Plager, and Chen
Opinion by Circuit Judge Chen; opinion concurring-in-part and dissenting-in-part by Circuit Judge Plager

Comments

[Greg DeLassus]

Naturally, I love Judge Plager's concurrence as much as anyone else around here, but I quibble at the disparagement of the majority opinion as "ho-hum." In terms of setting forth a clear and intelligible presentation of the § 101 analysis, Judge Chen's opinion really is surprisingly good. Much better than most of the "we know it when we see it, so don't worry your pretty little heads" pablum we get in the usual § 101 opinion.

Basically, what I take away is that instead of collapsing § 101 into § 103 (as looked likely to happen in the immediate wake of Mayo), § 101 has instead collapsed into § 112(a) (written description). This is still sub-optimal, but at least we know where we stand now. The CAFC is spending less and less effort in hiding the ball, and basically admitting that the new § 101 is just the old written description analysis. It is good to know this, even if---as a matter of statutory construction---it makes little sense.

Also, the court basically comes out and says (and Judge Plager has a good laugh about it) that step 1 and step 2 are really the same thing. Good for them. At least we have, at last, an honest explanation of what how the new § 101 analysis is *really* going to work.

[Atari Man]

Well, there IS another way out: in every 101 case that reaches them, the judges of the CAFC could cursorily say, "There is no 101 problem here", without further explanation, and then dispose of the case on 102/103/112 grounds, or if there are other outstanding issues under 102/103/112 (e.g. if they were raised in the pleadings below but not decided by the trial court), remand to the trial court for further proceedings.

But I don't expect the CAFC judges to do this.

[Mike Borella]

@Greg:

This opinion collapses both 103 and 112 into 101. Here is a discusion of the prior art under prong one:

"As the district court aptly observed, this basic and longstanding practice can be found in, for example, a television station’s use of a breaking news ticker across the bottom of the screen. The court also pointed to the nontechnical human activity of passing a note to a person who is in the middle of a meeting or conversation as further illustrating the basic, longstanding practice that is the focus of the claimed invention."

But you are right in that the focus is on written description.

[Skeptical]

As I being one of those “other voices” have oft stated:

Void for Vagueness

[Paul Cole]

To what extent could the claimed computer-readable medium fall within the "manufacture" category of Section 101?

Wearing my European hat, I would comment that all the allegedly novel features fall within the non-technical domain of business administration. Interestingly, however, corresponding EP-B-0888604 was granted with the following main claim which arguably has a somewhat more technical presentation:

A system for engaging the peripheral attention of a person in the vicinity of a display device of an apparatus, comprising:

a content display system (203a, 203b or 203c) associated with the display device, the content display system further comprising:

means for enabling a user to request the acquisition of a set of content data from a content providing system (202a, 202b or 202c);

means for receiving a set of content data;

means for receiving a set of instructions for enabling a display device to selectively display, in an unobtrusive manner that does not distract a user of the apparatus from a primary interaction with the apparatus, an image or images generated from a set of content data; and

means for using the display device to selectively display the image or images using a received set of instructions;

a content providing system (202a, 202b or 202c), separate from the content display system including means for providing a set of content data to the content display system;

means for providing to the content display system a set of instructions for enabling a display device to selectively display, in an unobtrusive manner that does not distract a user of the apparatus from a primary interaction with the apparatus, an image or images generated from a set of content data;

first communication means for enabling communication between the means for providing and the content display system; and

second communication means for enabling communication between the content providing system and the content display system.

During prosecution it was emphasized that the content providing system and the content display system were completely separate. No opposition was filed which is unfortunate since it would he interesting to know to what extent the claim could have survived a determined third-party attack. There is also a granted Japanese equivalent.

[Skeptical]

Another echo:

Judge Plager then makes an analogy between the notion of an inventive concept and similar "inventive requirements" that were eliminated from the § 103 obviousness inquiry by the 1952 Patent Act:

As a decisional construct for validation of a property right—a patent—the idea of a necessarily underlying 'inventive concept' proved unworkable. The concept provided no discernable boundaries for decision-making in specific cases, resulting in an incoherent legal rule that led to arbitrary outcomes. Judge Rich, who devoted his life to patent law, saw this clearly, and gave the Congress a workable alternative—nonobvious subject matter—which they adopted.

Those that truly understand patent law and its history have long noted the ultra vires nature of the Court acting as if Congress did not strip away the tool of common law development for "invention," and replaced that by carving out of the former single paragraph the new section of 103.

The modern day Court - much like the anti-patent Court of the 1930s and 1940s - needs to be held accountable to the limitations of that Court.

"Supreme" in name does NOT mean absolute supremacy.

[Paul Cole]

@ Skeptical

At the time of his first inaugural, Abraham Lincoln was fresh from law practice in the firm of Lincoln & Herndon and judicial precedent is a matter on which he had daily and personal experience. Here is what he had to say on the Supreme Court:

"I do not forget the position assumed by some that constitutional questions are to be decided by the Supreme Court, nor do I deny that such decisions must be binding in any case upon the parties to a suit as to the object of that suit, while they are also entitled to very high respect and consideration in all parallel cases by all other departments of the Government. And while it is obviously possible that such decision may be erroneous in any given case, still the evil effect following it, being limited to that particular case, with the chance that it may be overruled and never become a precedent for other cases, can better be borne than could the evils of a different practice. At the same time, the candid citizen must confess that if the policy of the Government upon vital questions affecting the whole people is to be irrevocably fixed by decisions of the Supreme Court, the instant they are made in ordinary litigation between parties in personal actions the people will have ceased to be their own rulers, having to that extent practically resigned their Government into the hands of that eminent tribunal."

The attention paid to Supreme Court opinions nowadays goes far beyond what Abraham Lincoln would have considered reasonable. And people gold plate those decisions and give them an impact far beyond what the Justices intended.

Good argument and careful legal and factual presentation can achieve much, and as it is all we can do at the moment should be strenuously implemented in the cases with which we have to deal.

And by the way, we in Europe know precisely what an invention is. It is the solution to a technical problem. And the technical problem is a reconstruction based on the closest prior art, the difference from that prior art, and the new function or result that flows from that difference in the context of the combination of features claimed.

Echoing Groucho Marx, I have discovered the secret of success in patent law. The secret of success in patent law is new function or new result. If you can fake one of them, you've got it made.

[Skeptical]

Mr. Cole,

Please be aware of (and wary of NOT being aware of) the difference between "technical" and the Useful Arts.

A wanting to wear a European hat when looking at the US law of 101 will only guarantee that you are not looking at OUR law properly.

[Skeptical]

Mr. DeLassus makes a few comments that indicate that while he may have read the concurrence, he does not grasp the point of the concurrence.

To wit, and to the extent that Mr. DeLassus believes that some "final clear answer" has now been laid forth that all subsequent courts will follow, he is sadly mistaken.

The point of the concurrence is that NO such clear path will - even CAN - be found.

It is only "this time" that the court finds its path (as noted, a collapsed 103/112 path).

The point is that the NEXT adjudication may find some completely different path. There is NO "and this is how it is 'really' going to work."

Let alone the fact that 101 is NOT 103/112, this "method" of letting 101 "be" anything that any particular judge wants it to be is what is at the heart of both the concurrence and what HAS LONG BEEN NOTED by voices such as mine.

[Skeptical]

Mr. Cole,

To echo your point with that fantastic quote from Mr. Lincoln, I have long advocated that attorneys in EVERY** State have a sworn a duty to NOT place the Supreme Court ABOVE the Constitution.

Each - and every - branch of our government is below the Constitution and each branch is a branch of limited powers (along with having checks and balances). An attorney has a SWORN ETHICAL duty to fight a Supreme Court ruling that is not proper. We - even more than Mr. Lincoln's 'candid citizen' - must not resign our Government improperly into the hand of that eminent tribunal, as our nexus with the law creates a more pressing duty.

** the only arguable exception may rest in the attorney oath for the Commonwealth of Massachusetts which seems to call for attorneys to treat the Court merely as some 'favored client.'

[Greg DeLassus]

"This opinion collapses both 103 and 112 into 101... [b]ut... the focus is on written description."

This is a good point. I would not wish to downplay the extent to which even this panel's opinion taints §101 with §103.

"[T]o the extent that Mr. DeLassus believes that some 'final clear answer' has now been laid forth that all subsequent courts will follow, he is sadly mistaken."

This is a very fair point. Judge Plager's concurrence rightly lampoons the way that §101 jurisprudence swings this way and that with each new panel. I would be delighted if other panels were to follow Judge Chen's opinion, not because I think his rule explication of the rule is particularly *sound* (either logically or as a matter of policy), but simply because it is at least clear and easy (or at least easier) to apply. Sadly, however, experience gives us little reason to endorse the hope that the majority opinion here will be honored by anyone other than these panelists.

[Greg DeLassus]

"[I]f the policy of the Government upon vital questions affecting the whole people is to be irrevocably fixed by decisions of the Supreme Court, the instant they are made in ordinary litigation between parties in personal actions the people will have ceased to be their own rulers, having to that extent practically resigned their Government into the hands of that eminent tribunal."

This is a fine sentiment, and totally understandable in the immediate wake of the Dred Scott decision. If, however, we do not care for the idea that "the policy of the Government upon vital questions affecting the whole people is to be irrevocably fixed by decisions of the Supreme Court," how---in practice---is the contrary supposed to work?

In other words, presently it happens that any given portion of the constitution can have a variety of different interpretations, and if there is a question of which of those interpretations will be given acting legal effect, we pose the question to the Supreme Court and their interpretation becomes the legally actionable one. I take it that Pres. Lincoln (at least as of the time of that speech) did not care for this arrangement, but one way or the other, there has to be *some* way of deciding which of a variety of competing interpretations gets put into legal effect. If it is not the SCotUS who decides that question, then who, and how?

[Skeptical]

We really should note that there is a difference between interpretation and legislating from the bench.

[Paul Cole]

I think that the take-away from President Lincoln is that every case before the Supreme Court is between specific parties in a specific situation, and that in that context its decisions should be analysed carefully and correctly and not gold-plated.

If you read Mayo and Alice they are much more careful and limited decisions than is generally appreciated.

[Paul Cole]

A question for my US colleagues. Would the more specific claim granted by the EPO also have been thrown out by the CAFC?

And why was the fact of grant in Japan and Europe not pointed out with some force to the CAFC and discussed in its opinion? TRIPS compliance goes both ways, and as I have pointed out on a number of occasions the US in its 101 case law is NOT currently compliant with TRIPS, contrary to the Charming Betsy doctrine.

[Greg DeLassus]

"A question for my US colleagues. Would the more specific claim granted by the EPO also have been thrown out by the CAFC?"

My expectation is that, yes, the EP claim that you quote would hold up in the U.S. There are a *lot* of means-plus-function limitations in that claim, which means that the claim would be confined to the embodiments disclosed in the application (and "variants" thereof).

This would make it very hard for *this panel* to look at the claim as an instance of claiming "attention management" in the abstract. Rather, I would expect that this panel would have looked at that claim, and concluded that it was claiming *one specific* solution to the problem of "attention management" (whatever that means).

"If you read Mayo and Alice they are much more careful and limited decisions than is generally appreciated."

This is definitely true of Alice. Mayo is a little less clear. After all, the proof of the pudding is in the eating. Mayo is susceptible of both an expansive reading and a narrow one. If the CAFC gives Mayo an expansive reading, then it has a broad holding. If the CAFC gives Mayo a narrow reading, then it has a narrow holding.

My take is that the CAFC started out giving Mayo a narrow read (as when they immediately re-validated their first Myriad holding following the post-Mayo GVR), then they started giving Mayo a much broader reading in the immediate wake of Alice, and now they are starting to trim it back to a narrower reading again. The trendline seems to be moving in the right direction, albeit slowly and fitfully.

"I have pointed out on a number of occasions the US in its 101 case law is NOT currently compliant with TRIPS, contrary to the Charming Betsy doctrine."

And may God bless you for it. I think that you are 100% correct on this point. I also think that a WTO suit against the U.S. for our TRIPS non-compliance is the surest means by which the Congress might be moved to correct the situation. Here's hoping that your regular reminders on this point bear good fruit in time.

[Greg DeLassus]

"[T]here is a difference between interpretation and legislating from the bench."

Indeed? Who makes that determination, and how does one recognize the one from the other?

[Skeptical]

DeLassus - your last question appears to be Tr011ing.

I will let you think about just why.