Electronic Communication Technologies, LLC v. ShoppersChoice.com, LLC (Fed. Cir. 2020)

By Michael Borella --

Electronic Communication Technologies (ECT) sued ShoppersChoice in the Southern District of Florida for allegedly infringing claim 11 of U.S. Patent No. 9,373,261.  The claim recites:

11.  An automated notification system, comprising:
    one or more transceivers designed to communicate data;
    one or more memories;
    one or more processors; and
    computer program code stored in the one or more memories and executed by the one or more processors, the computer program code comprising:
        code that enables a first party associated with a personal communication device (PCD) to input or select authentication information for use in connection with a subsequent notification communication session involving advance notice of a delivery or pickup of a good or service at a stop location by a mobile thing (MT);
        code that causes storage of the authentication information;
        code that monitors location or travel information in connection with the MT;
        code that causes initiation of the notification communication session to the PCD with the one or more transceivers, in advance of arrival of the MT at the stop location, based at least in part upon the location or travel information associated with the MT;
        code that, during the notification communication session, provides the authentication information to the PCD that indicates to the first party that the notification communication session was initiated by an authorized source; and
        code that, during the notification communication session, enables the first party to select whether or not to engage in a communication session with a second party having access to particulars of the pickup or delivery.

ShoppersChoice moved that the claim was invalid under 35 U.S.C. § 101, and the District Court granted this judgment on the pleadings.  ECT appealed.

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 involves 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 elements or combinations of elements that are well-understood, routine, and conventional will not lift the claim over the § 101 hurdle.  While this inquiry is generally carried out as a matter of law, factual issues can come into play when determining whether something is well-understood, routine, and conventional.

Notably, procedure for the proper application of this test with the abstract idea exception has been inconsistently defined and is confusing in practice.  A potentially more workable definition of patent eligibility is that a claim is directed to an abstract idea if all of its elements are either non-specific, address a non-technical problem, or known in the art.  Thus, a claim is more likely to survive a § 101 challenge if it has three qualities:  specificity, a technical problem that it solves, and some degree of novelty.

Applying part one of Alice, the Court rapidly determined that the claim is directed to the abstract idea of "providing advance notification of the pickup or delivery of a mobile thing."  Particularly, the Court agreed with the District Court judge that "business practices designed to advise customers of the status of delivery of their goods have existed at least for several decades, if not longer."  And as we know from Alice, claims to longstanding business practices are given a dim view under § 101.

ECT argued that the claimed invention incorporated security enhancements, such as authentication of the notification communication session.  But the Court found these features to be claimed, and described in the specification, at so high a level that they could be virtually anything.  Therefore, they did not render the claim any less abstract.  Furthermore, "the process of recording authentication information . . . and including that information in a subsequent communication with the customer is abstract not only because it is a longstanding commercial practice, but also because it amounts to nothing more than gathering, storing, and transmitting information."

ECT also argued that its procedural openness and success at the USPTO should be factored into the § 101 inquiry.  ECT noted that the application "sailed through" the USPTO with "complete and total transparency."  Moreover, ECT requested that the USPTO reconfirm its findings of patentability under § 101 after receiving a notice of allowance, which the USPTO did.  Nonetheless, it should be surprising to absolutely nobody that the Federal Circuit does not put much weight on what the USPTO thinks about § 101 in any given matter.  The Court wrote:

These specific details relating to the procedure of prosecution before the USPTO bear no relationship to the subject matter to which claim 11 is directed and do not negate the fact that claim 11 is directed to longstanding business practices.  Nor do ECT's purported diligence and good faith during patent prosecution before the USPTO in any way shield the patent's claims from Article III review for patent eligibility.

Accordingly, the Court found the claim abstract and moved on to step two of Alice.  Here, it found that claim 11 did not pass muster "[b]ecause [it] is specified at a high level of generality, is specified in functional terms, and merely invokes well-understood, routine, conventional components and activity to apply the abstract idea identified previously."

ECT made an interesting argument, stating that in another § 101 case, the Court "held a far shorter, far less enabled claim valid."  The Court shot down this comparison, stating that "patent eligibility turns on the content of the claims, not merely on the number of words recited in the claims."  The Court went on to observe that "just because a patent claim is enabled does not mean that the claim is patent eligible—subject matter eligibility and enablement are separate inquiries, irrespective of any overlap between the two."

So the Court seems to be affirming that there is -- or at least can be -- some commonality between the § 101 and § 112(a) inquiries.  But this commonality is not fleshed out any further.  For that matter, the Court's earlier statements also imply overlap between the analyses of § 101 and § 112(f), but again we are left to guess as to the extent and implications of any such overlap.

Finally, ECT argued that the District Court should have construed the claims before rendering a § 101 decision.  But ECT did not identify any terms needing construction, so the Court dismissed this notion and held that claim 11 does not meet the requirements of § 101.

Electronic Communication Technologies, LLC v. ShoppersChoice.com, LLC (Fed. Cir. 2020)
Panel: Chief Judge Prost and Circuit Judges Dyk and Wallach
Opinion by Circuit Judge Wallach

Comments

[skeptical]

This is nothing but a mess.

More of the rope for the Gordian Knot.

By the way, the 'attempt' to make sense of that mess with writing like: "A potentially more workable definition of patent eligibility is that a claim is directed to an abstract idea if all of its elements are either non-specific, address a non-technical problem, or known in the art. Thus, a claim is more likely to survive a § 101 challenge if it has three qualities: specificity, a technical problem that it solves, and some degree of novelty."

is NOT helpful.

"Technical" is just not the same as the US Sovereign's choice of Useful Arts, and Justice Stevens was rebuffed and LOST his majority position on the Bilski case when he tried to overwrite the words of Congress in an attempt to make it so.

Just because the years have passed does NOT mean that we should 'boil the frog' by trying to insert the very thing that was rejected back then.

[Michael S. Borella]

The two-part Alice test, in my view, is not being applied in a cogent or reasonable fashion. Thus, trying to understand how it impacts what we (patent professionals) do is a futile exercise.

But the three factors (specificity, a technical character, and novelty) are a much better description of how the courts and the PTO are actually viewing 101 these days.

This is not to say that I like it. I don't.

This is not to say that it is a correct interpretation of the law. It is not.

But you can draw a pretty clear line between eligible and ineligible in CAFC cases by looking at these three factors. You cannot do it with the two part test (or at least, I am not aware of anyone who has).

Still not on board? Take a look at the recent DropBox case, where the Court wrote "Our cases have consistently held that an inventive concept exists when a claim recites a specific, discrete implementation of the abstract idea where the particular arrangement of elements is a technical improvement over the prior art." There it is, plain as day.

[MaxDrei]

Michael, I like your summary except for one niggle: if we are going to focus on the word "technical" let us please try to keep in mind the crucial difference between the EPO's "technical character" test of eligibility and the UK's "technical contribution" approach. You begin with a reference to technical "character" but end with a quote about technical "improvement". As you (I suspect) already know, the patent judges in England dismiss the EPO's "technical character" approach as "intellectually dishonest". I suspect you yourself do understand the difference but I wonder if your readers do and I'm not sure your comment will be helpful to anybody who is unclear as to the difference.

Why "technical"? At least because i) that is the modern way to talk about what were in the 18th Century the "useful arts", and ii) GATT-TRIPS (to which the USA has signed up) equates eligibility with "all fields of technology".

The reason why the EPO "technical character" approach attracts the opprobrium of the patent judges in England is that it takes the claim "as a whole". Why does SCOTUS nevertheless adopt the English "contribution" approach? Is it also uneasy about the intellectual dishonesty jibe? Or is it perhaps because 35 USC 101 includes the word "new"?

The problems with the contribution approach are obvious though. It requires i) dissection of the claim and ii) an enquiry into novelty and the "inventive concept" even before one has prepared to embark on the task of enquiring into the prior art relevant to Sections 102 and 103.

I should add that the EPO avoids tainting its eligibility enquiry with any enquiry into novelty or "inventive concept" only because there is a "technical" filter at the heart of its unique to the EPO 103 enquiry. I look forward to the day when it dawns on other jurisdictions how intellectually rigorous, efficient, economical and fair is the EPO approach to eligibility/patentability. But for as long as patent academics, attorneys and judges still don't grasp how the EPO approach works, that day will never dawn. A pity, in my opinion.

[Michael Borella]

Max, I was writing about US law.

[skeptical]

Dr. Borella,

With all due respect, you were talking about the 'boiled frog' abomination of the attempt to rewrite US law.

I simply do not accept any such abomination.

[skeptical]

MaxDrei,

Yet again, you provide a plainly false statement with:

"Why "technical"? At least because i) that is the modern way to talk about what were in the 18th Century the "useful arts"

This is simply not so.

Do not attempt falsehoods.

[MaxDrei]

Dr Borella, quite properly, you remind me that you are talking about US law. But it was you who wrote:

"...the three factors (specificity, a technical character, and novelty) are a much better description of how the courts and the PTO are actually viewing 101 these days."

so I thought that "technical character" must be part of US law.

If this notion of "technical character" is being appropriated out of the case law of the EPO, then I would like readers to understand the difference between i) looking at the claim as a whole to see if it exhibits "technical character" and ii) dissecting the claim to find its "inventive concept" (or the contribution to the art) and then enquiring whether that "contribution" has "technical character".

Or is it that you don't see any such difference. Under US law, of course.

[Michael Borella]

Max,

There is absolutely no notion of technical character in Section 101 and it is only implied by Alice. What we are seeing is feature-creep on the part of the Federal Circuit.

It is not defined clearly, but the terms are showing up on 101 decisions pretty frequently. Not to mention the PTAB uses it as well.

Mike

[skeptical]

I pit it you Dr. Borella that THAT "feature creep" is the improper use of Common Law law writing, not to 'discern' or even to 'gap fill,' but to re-write the statutory law in violation of the Separation of Powers.

Most** attorneys per the state bar oaths have an ethical duty to the Constitution and should be speaking out against the inappropriate use of Common Law law writing.

**the SINGLE case of the oath of the Commonwealth of Massachusetts provides a hint of one of the states in which it may be argued otherwise.

[MaxDrei]

Mike many thanks for your explanation (feature creep) of the appearance in Fed Ct and PTAB decisions of the notion of "technical character", so eponymous by now in the established case law of the Boards of Appeal of the EPO. They find it so useful and so apt, despite the clamour from the UK, the past decade or so, that it can be found nowhere in the patentability/validity provisions of the EPC.

Yesterday I saw a summary of a learned Paper, reporting that the COVID-19 virus is circulating up in the clouds. Here another example of "feature creep". Today, we all live in a small and densely interconnected world. Good thing or bad? Who knows.