University of Florida Research Foundation, Inc. v. General Electric Co. (Fed. Cir. 2019)

By Kevin E. Noonan --

Legal creativity in argument is the lifeblood of the litigator's craft, and nowhere more than in patent litigation in view of the complexities of the law applied to technological fact.  But occasionally creative arguments can be a bridge too far, which was the case regarding a claim of sovereign immunity by plaintiffs in University of Florida Research Foundation, Inc. v. General Electric Co.

The case arose over patent infringement brought by the University of Florida Research Foundation (UFRF) against General Electric (GE) over U.S. Patent No. 7,062,251 regarding automated (computer) management of critical care physiologic data (collected bedside for critically ill patients).  GE, unsurprisingly, filed a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), on the grounds that the claims (see below) were invalid for being ineligible for patenting under Alice Corp. Party Ltd. v. CLS Bank International, 573 U.S. 208 (2014).  The District Court granted the motion and UFRF appealed.

The Federal Circuit affirmed, in an opinion by Judge Moore joined by Chief Judge Prost and Judge Wallach.  Before reaching the merits, the panel opined on UFRF's argument that GE was barred under the Eleventh Amendment from moving for dismissal because UFRF was an arm of the State of Florida and thus enjoyed sovereign immunity against GE's Section 101 challenge.  As pithily put by Judge Moore, the Court's response to this argument was:  "We do not agree."  Sovereign immunity under the Eleventh Amendment can be waived, said the panel, and one way for such waiver is to bring a patent infringement action, citing Regents of the Univ. of N.M. v. Knight, 321 F.3d 1111, 1124 (Fed. Cir. 2003) (citing Clark v. Bernard, 108 U.S. 436, 447 (1883)), and Regents of the Univ. of Cal. v. Eli Lilly & Co., 119 F.3d 1559, 1564–65 (Fed. Cir. 1997).  The Federal Circuit expressly rejected UFRF's argument that "defenses" to a patent infringement allegation were limited under 35 U.S.C. § 282(b) to § 102 and § 103 challenges, citing the Court's decision directly to the contrary in Dealertrack, Inc. v. Huber, 674 F.3d 1315, 1330 n.3 (Fed. Cir. 2012).  The panel also rejected UFRF's argument that the Supreme Court had "undermined" Dealertrack in SCA Hygiene Products Aktiebolag v. First Quality Baby Products, LLC, 137 S. Ct. 954 (2017), saying that "[u]nlike laches [the subject of the SCA Hygiene decision], which conflicts with the statute of limitations set forth in § 282, treating a § 101 eligibility challenge as a defense to a claim of patent infringement poses no conflict with § 282 and, thus, no risk of 'jettison[ing] Congress' judgment'" (emphasis in opinion).  The opinion also notes that both the Federal Circuit's own precedent and that of the Supreme Court had long recognized that § 101 was a "condition for patentability" along with § 102 and § 103, citing inter alia Graham v. John Deere Co., 383 U.S. 1, 12 (1966), and Aristocrat Techs. Austl. PTY Ltd. v. Int'l Game Tech., 543 F.3d 657, 661 (Fed. Cir. 2008) (as well as, with particular relevance to the merits, Mayo Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66, 75−76 (2012)).  It was an easy task for the Court to hold that UFRF had waived sovereign immunity in this case.

On the merits, this is a garden-variety, § 101 subject matter eligibility opinion.  Claim 1 of the '251 patent is representative:

1.  A method of integrating physiologic treatment data comprising the steps of:
    receiving physiologic treatment data from at least two bedside machines;
    converting said physiologic treatment data from a machine specific format into a ma- chine independent format within a computing device remotely located from said bedside machines;
    performing at least one programmatic action involving said machine-independent data; and
    presenting results from said programmatic actions upon a bedside graphical user interface.

Applying the Alice two-step framework the panel held that under the first prong the claim was directed to a patent-ineligible abstract idea, "collecting, analyzing, manipulating, and displaying data" in agreement with the District Court.  Using the language of the '251 patent against the claims the Court easily held that there was nothing that rescued the claim from § 101 subject matter ineligibility:

On its face, the '251 patent seeks to automate "pen and paper methodologies" to conserve human resources and minimize errors.  This is a quintessential "do it on a computer" patent: it acknowledges that data from bedside machines was previously collected, analyzed, manipulated, and displayed manually, and it simply proposes doing so with a computer.  We have held such claims are directed to abstract ideas.  See, e.g., Intellectual Ventures I LLC v. Capital One Fin. Corp., 850 F.3d 1332, 1340 (Fed. Cir. 2017) (holding abstract claims "directed to . . . collecting, displaying, and manipulating data"); Elec. Power Grp., LLC v. Alstom S.A., 830 F.3d 1350, 1353–54 (Fed. Cir. 2016) (holding abstract claims directed to "collecting information, analyzing it, and displaying certain results of the collection and analysis").  That the automation can "result in life altering consequences," '251 patent at 1:54−56, is laudable, but it does not render it any less abstract.

The panel found nothing in the '251 patent that identified and "specific improvement to the way computers operate" such as was found in Enfish, LLC v. Microsoft Corp., 822 F.3d 1327, 1336 (Fed. Cir. 2016).  The very generality used to avoid unduly limiting the scope of the invention became in the Court's hands evidence that there was nothing analogous to the improvement in computer function that the Court held sufficient to avoid invalidation in Visual Memory LLC v. NVIDIA Corp., 867 F.3d 1253 (Fed. Cir. 2017) (eliciting another "We are not persuaded" from Judge Moore).  The distinction is that here the claimed components UFRF attempts to rely upon are "described in purely functional terms" (emphasis in opinion) in both the specification and claims, without providing any "technical details for the tangible components."  Accordingly the Court held that "at Alice step one that representative claim 1 is directed to the abstract idea of 'collecting, analyzing, manipulating, and displaying data.'"

Nor did anything in the '251 specification or claims satisfy the requirement in step 2 of the Alice calculus that the claims recite something more than what was "well-understood, routine, [and] conventional."  UFRF's assertion of BASCOM Global Internet Services, Inc. v. AT&T Mobility LLC, 827 F.3d 1341, 1350 (Fed. Cir. 2016) was (consistently) unpersuasive to the panel, for failing to show any technical improvement over the prior art (fatally, reciting the use of a general-purpose computer for "collecting, analyzing, manipulating, and displaying data").  Under these facts, the Court readily affirmed the District Court's invalidation of the '251 patent for failure to claim a patent-eligible invention under § 101.

University of Florida Research Foundation, Inc. v. General Electric Co. (Fed. Cir. 2019)
Panel: Chief Judge Prost and Circuit Judges Moore and Wallach
Opinion by Circuit Judge Moore

Comments

[EG]

"The opinion also notes that both the federal Circuit's own precedent and that of the Supreme Court had long recognized that § 101 was a "condition for patentability" along with § 102 and § 103."

Hey Kevin,

May be "long recognized," but as Professor Hrick correctly observes, a misinterpretation of the patent statutes, especially by SCOTUS. The Graham decision cited to is full of problematical statements and questionable historical research by SCOTUS about the patent statutes and the Patent Clause as Professor Mossoff has also correctly observed. That SCOTUS continues to repeat this error and that the Federal Circuit meekly complies doesn't make it right, only a Rule of Judicial Fiat.

[BP]

This poorly constrained decision as to 101 fails to drive home J. Moore's point in Digitech where she said:

“if your claims were to a formula for digital image processing, namely take the image on the front end, modify it in a device independent way, output it and you’ll have a better quality, that’s a whole different ballpark, that’s like a manufacturing process. Your claims aren’t directed to that at all. Your claims are directed to only the data that’s going to be used within that process.”

The oral argument in UF v GE finds the Fed Cir drawing a comparison to a child setting the table. With 101 "abstract idea" being "a matter of law", who cares about the PHOSITA; rather we have: "I know an abstract idea when I see one" (with analogy to tasks performed by a child).

J. Moore needs to make clear the DISTINCTION between her words in Digitech and those in UF v GE (especially as to "in a device independent way"). She lost an opportunity to clarify the muddy waters. Digital image processing claims will remain uncertain, i.e., "in the dark", when it comes to 101. Thank you Fed Cir!

[Greg DeLassus]

"Legal creativity in argument is the lifeblood of the litigator's craft..."

Yes, to give credit where due, this was at least a creative appellate strategy. I thought it was just as hopeless as it eventually proved when I listened to the oral argument, but even then I thought to myself "points for creativity." They had a set of claims that stood no hope of surviving Alice scrutiny, so instead of trying to address the Alice merits, they tried to turn this into a sovereign immunity issue.

The XI amendment argument went about a dozen miles past the farthest reaches that the SCotUS has ever acknowledged for XI amendment immunity. There was no way that a mere *lawyer* could convince the CAFC to push XI amendment immunity out that far. Such work would require a hypnotist ("... when you hear the word 'Constantinople,' you will write a precedential opinion saying that subject matter ineligibility is not an affirmative defense to patent infringement, but is rather a non-compulsory counterclaim...").

Still and all, this effort was at least *creative*...

[Skeptical]

Greg's notion that "you will write a precedential opinion saying that subject matter ineligibility is not an affirmative defense to patent infringement, but is rather a non-compulsory counterclaim" comes completely out of the blue with no tether to any prior position is simply incredulous.

As Greg is a regular over at Patently-O, and there is an entire section of that blog run by Prof. Hricik, and within that section, there have been MANY detailed arguments directly on point, Greg's view here comes across more than a bit disingenuous.

And I will note, that I share this NOT because I agree with Prof. Hricik. Quite in fact, I do not, and I have provided detailed counter points in dialogue with Prof. Hricik (rather than, as Greg has now done across multiple forums, dismissed out of hand positions that deserve at least a cogent reply).

[Greg DeLassus]

"Greg's notion that "you will write a precedential opinion saying that subject matter ineligibility is not an affirmative defense to patent infringement, but is rather a non-compulsory counterclaim" comes completely out of the blue with no tether to any prior position..."

Not so. This was actually an argument that Univ of Florida made at oral arguments. I encourage folks to listen to the oral arguments for this case. They were wild.

http://oralarguments.cafc.uscourts.gov/default.aspx?fl=2018-1284.mp3