Patent Docs

United States v. Gilead Sciences, Inc.

By Daniel Boehnen --

Last month, the United States government, acting on behalf of its Department of Health and Human Services (HHS), filed suit in Delaware against Gilead Sciences, Inc. and Gilead Sciences Ireland UC for infringing four patents covering inventions developed by scientists at the Centers for Disease Control and Prevention.  The patents all cover methods for a type of medical regimen known as "pre-exposure prophylaxis" (PrEP) for the prevention of HIV.  More specifically, each of the four patents'  claims recite:

• A process for protecting a primate host from a self-replicating infection by an immunodeficiency retrovirus comprising . . . .

• A process for inhibiting establishment of a human immunodeficiency virus self-replicating infection of human immunodeficiency virus infection in a human comprising . . . .

The lawsuit is highly noteworthy for many reasons.  It is very unusual -- not unheard of, but very unusual -- for the U.S. government, acting as a patent owner, to sue a company for patent infringement.  Second, the Complaint is extremely detailed in explaining the history of events leading to the invention as well as the history of interaction between HHS and Gilead leading to the filing of the Complaint.  Third, it does not take much reading between the lines to see that one of the government's goals is to make the PrEP regimen as readily available and cost effective in the U.S. as it already is in many European and other countries, with Gilead being alleged as a primary roadblock in that path.

Gilead is of course well-known for discovering Truvada® (a fixed dose combination of tenofovir disoproxil fumarate (TDF) and emtricitabine (FTC)) as well as Descovy® (a combination of FTC and tenofovir alafenamide fumarate (TAF)).  Truvada® and Descovy® are regularly used in treating active HIV infections with the goal of reducing the active virus load to undetectable levels.  The Complaint notes that Gilead's patents on these products expire in 2021.

The Complaint explains that the CDC developed innovative pre-clinical models that proved to be keys in testing and proving the CDC scientists' concepts in the claimed inventions.

Still further, the Complaint goes to significant length to explain that Gilead provided absolutely no support in developing the inventions, aside from providing certain drug compounds under an MTA.  Indeed, the Complaint addresses and squarely shoots down Gilead's public statement claiming credit for the development of the PrEP regimine.

The Complaint notes the significant benefits achieved by Truvada® and Descovy® for treating established HIV infections, but focuses on the efforts that were being made in the 1990s and 2000s to discover a way to prevent HIV infection from becoming established.  In particular, the Complaint provides a great summary of the substantial -- yet unsuccessful -- R&D that had been and was being undertaken to develop a vaccine and/or post-exposure prophylaxis treatment of HIV prior to the invention, as well as the reasons why PrEP was then-deemed unachievable.  In this respect, the Complaint is like a great survey article on the history of HIV treatment research, but the document is written in a much more readable manner than most survey articles.

Jaguar Land Rover Ltd. v. Bentley Motors Ltd. (E.D. Va. 2019)

Land Rover's Patented "Terrain Response Technology" Found Patent Eligible

By Joseph Herndon --

In 2016, Bentley Motors Ltd. and Bentley Motors, Inc. launched their first SUV, the Bentayga, which is a direct competitor to Jaguar Land Rover Ltd.'s (JLR) Range Rover model.  JLR's patented Terrain Response technology is included on certain vehicles, and the Bentayga has a Drive Dynamics system, which can be equipped with an "All Terrain Specification" that provides four off-road settings:  Snow, Ice & Wet Grass, Dirt & Gravel, Mud & Trail, and Sand.

JLR filed a complaint, in the U.S. District Court for the Eastern District of Virginia, alleging that Bentley knowingly copied the Terrain Response system installed on JLR's Range Rover, and which is covered by U.S. Patent No. 7,349,776 that was later reissued as U.S. Patent No. RE46,828.  Specifically, JLR asserted that Bentley infringed at least claims 21, 41, and 46 of the '828 patent.

Defendants Bentley Motors Ltd. and Bentley Motors, Inc. filed a Motion to Dismiss.  The Court denied Defendant's Motion to Dismiss, instead finding that the technology embodied in the '828 patent claims improves computer functionality and is directed to "a particular way of performing that function," rather than merely being directed to performing a function in a computerized manner.

The Patent

U.S. Patent No. RE46,828, titled "Vehicle Control" is a reissue of U.S. Patent No. 7,349,776.  The '828 patent generally relates to coordinated control of a number of subsystems of a vehicle in different configuration modes so as to suit different conditions.  The '828 patent operates as follows:  "the control of a number of the vehicle subsystems is coordinated by a central vehicle controller, which can be switched between a number of modes thereby controlling all of the subsystems in a coordinated way which is simple for the driver to control."  Other systems, however, do not provide the driver with the ability to provide direct input regarding the surface terrain in an attempt to better select the appropriate subsystem configuration modes.  The invention of the '828 patent offers a Terrain Response technology that electronically controls various vehicle subsystems, including the engine, the transmission, the brakes, the traction control, the suspension and the steering, to operate in a manner that is suitable for driving on a particular off-road surface (see Figure 4 block diagram below).  The driver of the vehicle uses an input panel to select from several off-road driving surfaces including Grass/Gravel/Snow, Mud and Ruts, Sand, and Rocks.

The technology also allows the driver to further adjust the operation of the subsystems.  The claimed elements in combination are alleged to be implemented in an unconventional and non-trivial manner, and are not generic vehicle components, but a control system that is not standard and cannot be purchased off-the-shelf.

Representative claim 21 recites:

A vehicle control system having a driver input device for selecting a driving surface, the vehicle control system arranged to control a plurality of vehicle subsystems each of which is operable in a plurality of subsystem configuration modes, wherein the vehicle control system is operable in a plurality of driving modes in each of which it is arranged to select the subsystem configuration modes in a manner suitable for a respective driving surface, and further wherein the plurality of driving modes includes at least two off-road modes in which the subsystem configurations are controlled in a manner suitable for driving on respective off-road driving surfaces, and an on-road mode in which the subsystem configurations are controlled in a manner suitable for driving on-road and still further wherein one of the off-road modes is a sand mode in which the vehicle subsystems are controlled in a manner suitable for driving on sand.

That is, claim 21 and its dependents are directed to a vehicle control system that optimizes control of the vehicle on a sand surface.  The '828  patent describes that when a vehicle is driven on sand, the build up of matter in front of the wheels under braking can improve braking performance.  Low wheel spin at low speeds prevents the wheel from digging into the sand but high wheel spin at high speeds is less of a problem and can even improve traction.

Claim 41 recites:

A vehicle control system having a driver input device for selecting a driving surface, the vehicle control system arranged to control a plurality of vehicle subsystems each of which is operable in a plurality of subsystem configuration modes, wherein the vehicle control system is operable in a plurality of driving modes in each of which it is arranged to select the subsystem configuration modes in a manner suitable for a respective driving surface, and further wherein the plurality of driving modes includes at least two off-road modes in which the subsystem configurations are controlled in a manner suitable for driving on respective off-road driving surfaces, and an on-road mode in which the subsystem configurations are controlled in a manner suitable for driving on-road and still further wherein one of the subsystems is a suspension subsystem and, in a second off-road mode, the suspension system is arranged to provide a higher ride height than in a first off-road mode.

That is, claim 41 is directed to a vehicle control system that optimizes control through adjustment of the suspension system based on the particular driving surface.  The '828 patent describes that when traveling at high speeds on flat surfaces with good levels of friction, a suspension ride height that is set at low for low wind resistance and good stability is optimal.

Claim 46 recites:

A vehicle control system having a driver input device for selecting a driving surface, the vehicle control system arranged to control a plurality of vehicle subsystems each of which is operable in a plurality of subsystem configuration modes, wherein the vehicle control system is operable in a plurality of driving modes in each of which it is arranged to select the subsystem configuration modes in a manner suitable for a respective driving surface, and further wherein the plurality of driving modes includes at least two off-road modes in which the subsystem configurations are controlled in a manner suitable for driving on respective off-road driving surfaces, and an on-road mode in which the subsystem configurations are controlled in a manner suitable for driving on-road, and still further wherein one of the subsystems is a speed control system arranged to control the speed of the vehicle when descending a hill, and wherein the peed control system is arranged to be switched on in at least one of the off-road modes and switched off in the on-road mode.

That is, claim 46 is directed to a vehicle control system that optimizes control through adjustment of the speed control system.  The '828 patent describes that to provide maximum control on hills, a vehicle has the standard default target speed of 6 kph.  Claim 46 recites limitations that would capture this benefit through a specific implementation that requires a speed control system "arranged to control the speed of the vehicle when descending a hill" and "arranged to be switched on in at least one of the off-road modes and switched off in the on-road mode."

Motion to Dismiss

Defendants argued that Plaintiff's patent infringement claim should be dismissed because Plaintiff's patents are invalid for failure to claim patent-eligible subject matter under 35 U.S.C. § 101.

Abstract Idea

First, the Court addressed Alice Step 1 — whether the claims are directed to an abstract idea.

The Federal Circuit has distinguished between claims directed towards merely performing a function and claims directed to "a particular way of performing that function."  The former generally fall into the abstract-idea category, while the latter generally do not.  Claims that improve the functioning of a computer provide a particular means to perform a function, and therefore, fall in the latter category and are not directed towards an abstract idea.

Plaintiff argued that the claims are directed to an improvement in computer functionality because the technology permits the manipulation of multiple vehicle subsystems at once.  In particular, Plaintiff alleged that the Terrain Response technology is a technological improvement to vehicle control systems.  Prior to the '828 patent, drivers had to know the appropriate configurations of various subsystems when driving off-road on particular driving surfaces, the subsystems had to be manually changed one at a time, and a limited number of subsystems could be manipulated at one time.  The '828 patent allegedly improves vehicle control technology by permitting a driver to control multiple subsystems at once and provides preset configurations of various subsystems for particular surfaces.

On the other hand, Defendants characterized the claims as mere computerization of what drivers already do in their mind — for instance, by slowing down while going downhill.  Courts have found that merely using computers to perform what people can otherwise do is patent-ineligible.

Here, the Court found that the claims of the '828 patent are "directed to" manipulating multiple vehicle subsystems to allow a vehicle to better adapt to driving on various types of on-road and off-road surfaces.  The claims asserted (claims 21, 41, 46) recite different components of the overall technology.  For instance, claim 41 controls the suspension subsystem and claim 46 controls the vehicle's speed.

Applying these principles and construing the pleadings in the light most favorable to Plaintiff, the Court found that the claims are not directed to an abstract concept.  The Court found that the most analogous technology to that embodied by the '828 patent is cruise control technology, which commonly exists in vehicles.  Courts have found that such systems, which allow a driver to set and maintain a steady speed, are patentable and not directed at an abstract idea.

Plaintiff alleged that the technology embodied in the '828 patent claims improves computer functionality by allowing a driver to select one configuration on an input panel and then control multiple subsystems, which is an improvement to existing vehicle control technology.  However, more fundamentally than that, the technology physically changes the subsystems of the vehicle.  For instance, claim 21 and its dependents "allow lower levels of wheel spin when the vehicle is travelling at lower speeds than when the vehicle is travelling at higher speeds," (claim 23), and "allow a relatively high degree of wheel slip under braking," (claim 24).

Claim 41 adjusts the suspension subsystem, and changes the actual height of the vehicle.  Claim 46 controls the speed of the vehicle in certain conditions, for instance, when the vehicle is going downhill, which is nearly identical to the claims made by cruise control systems.  These claims do more than just perform a function, which Defendants characterized as driving differently in different conditions, but rather provide "a particular way of performing that function."

Similarly, in this case, drivers may engage in various mental processes while driving, for instance, driving slower while going downhill, avoiding sharp accelerations or braking while driving on certain surfaces.  The Court found that the technology embodied in the '828 patent, however, physically changes the vehicle's subsystems — wheel spin changes while driving on certain surfaces (claim 21), the suspension changes the height of the vehicle (claim 41), and speed controls are engaged while going downhill (claim 46).  It does not computerize what humans would otherwise do by replacing the mental process entirely.

Drivers may continue to engage in the same mental processes, but the vehicle itself has adapted to optimize and make driving on different surfaces more efficient.

Finally, the Court noted that it is not clear that people could do what the '828 patent claims to do.  Although Defendants provided the example of driving slower downhill or applying the brakes in a different manner, drivers are generally not able to change the wheel spin of their vehicles or change the suspension while the vehicle is moving.  Therefore, unlike tabulating a vote or performing basic economic principles, the technology here is more than mere computerization of functions that people can already do.

Because the claims of the patent are directed at both improvements in computer functionality and providing concrete, physical means of implementing the functionality, the Court concluded that the '828 patent is not directed at an abstract idea.

Thus, for these reasons, the Court denied Defendants' Motion to Dismiss.

Opinion and Order by Chief District Judge Mark S. Davis

Ubisoft Entertainment, S.A. v. Yousician Oy (E.D.N.C.)

By James Korenchan --

In August 2018, Plaintiffs Ubisoft Entertainment, S.A. and Ubisoft, Inc. (collectively, "Ubisoft") sued Defendant Yousician Oy ("Yousician"), alleging that Yousician's software products infringed Ubisoft's U.S. Patent No. 9,839,852 (the '852 patent).  In November 2018, Yousician moved to dismiss on grounds that the claims of the patent are directed to patent-ineligible subject matter under 35 U.S.C. § 101.  On August 9, 2019, Judge Louise W. Flanagan of the U.S. District Court for the Eastern District of North Carolina granted the motion and dismissed Ubisoft's complaint.

The '852 patent is generally related to Ubisoft's music video game, Rocksmith®, which is an interactive game designed to help users learn how to play guitar, such as by allowing users to play guitar along with visual learning aids displayed on a screen and providing users with useful feedback and statistics based on their performance.  More particularly, the claims of the '852 patent relate to a computer program that receives signals from a guitar device while a user is playing a song, assesses the user's performance  of the song, and determines a portion of the song where the user can improve the performance.  Once the program determines where the user can improve, the program changes a difficulty level of the fingering notations for the determined portion of the song (e.g., changing a frequency or speed at which the notations are presented) and generates a "mini-game" targeted to improving the user's performance of the determined portion.  As an example, the mini-game might prompt the user to play the determined portion (or the entire song) without missing a note or without the aid of the displayed fingering notations.

Claim 1 is provided as follows as a representative example:

1.  A non-transitory computer readable storage medium with a computer program stored thereon, wherein the computer program is operable to present an interactive game for playing a song on a guitar, wherein the computer program instructs one or more processors to perform the steps of:
    presenting, on a display device, a plurality of fingering notations corresponding to the song to be played by a user;
    receiving, from a guitar input device, an analog or digital audio signal when the guitar is played by the user, wherein the received signal corresponds to the song played by the user;
    assessing a performance of the song as played by the user, based on the assessed performance, determining a portion of the performance that should be improved;
    based on the assessed performance and the determined portion of the performance that should be improved, selectively changing a difficulty level of at least a portion of the presented plurality of fingering notations corresponding to the song; and
    generating at least one mini-game different from the game for the song being played targeted to improving the user's skills associated with the performance of the determined portion.

The '852 patent criticizes conventional techniques (e.g., CDs, video tapes, music teachers/books) for learning how to play musical instruments as limited in their quality of instruction and the manners in which they present information.  As such, the '852 patent purports to improve on existing techniques with an "interactive method and system" that provides an integrated learning approach as well as audio and visual feedback.  Specifically, Ubisoft alleges that the claimed invention improves over the prior art by assessing a user's performance for improvement, selectively changing the difficulty level of the song based on the assessment, and generating a different game target to improve the user's skills based on the assessment.

Abstract Idea

Regarding step one of the Alice test, the Court asserted that the '852 patent is directed toward the abstract idea of teaching guitar by evaluating a user's performance and generating appropriate exercises to improve that performance.  According to the Court, a "typical music teacher" performs the steps of claim 1 when teaching a musical instrument.

In reaching its abstract idea conclusion, the Court found the Federal Circuit's 2016 decision in Apple Inc. v. Ameranth, Inc. to be instructive.  The patents in Ameranth were related to a computerized menu for ordering food.  The Federal Circuit struck down the claims of those patents as patent ineligible, asserting that the claims did not involve a way of programming or designing the software to create menus, but instead "merely claim[ed] the resulting systems" for a practice that has historically been done verbally.

Here, the Court asserted that the '852 patent merely claims the resulting systems for evaluating a user's performance and generating appropriate exercises.  More particularly, the Court asserted that the '852 patent merely adds a computer to well-established, real world activities that have been historically performed by music teachers and does not claim or describe details as to how the video game software assesses the user's performance, targets a particular portion of the performance, and generates a mini-game targeted towards improving the user's skill with regard to that portion.  Without such details, the Court found the claims to be more akin to those in Electric Power Group -- namely, those directed to "collecting information, analyzing it, and displaying certain results of the collection and analysis" without a claimed technological improvement.  And, to explain why no technological improvement was present, the Court cited to the '852 patent's specification:

[T]he '852 patent's specification does not describe an improvement regarding operating computers and states instead "[t]he invention may be applied as a standalone game engine system or as a component of an integrated software solution," and that "the processes presented herein are not inherently related to any particular computer, processing device, article or other apparatus."

The Court thus concluded that the claims are directed toward an abstract idea.

Inventive Concept

Turning to step two of the Alice test, the Court found no additional element or combination of elements in the claims that elevated the claim beyond, in its view, wholly generic computer implementation of established teaching methods.  The Court highlighted what it believed to be the "only arguable inventive concept" in the claims:  the limitation of changing the difficulty level of a song responsive to the assessment of the user's performance, such as in real time while the song is being played.  Indeed, Ubisoft had argued that a human music teacher cannot selectively change a difficulty level of the same song that the user was playing in the manner recited by the claims.  But after further examination, the Court ultimately found the concept to be "vague and lacking innovation" in the sense that the claims and specification did not explain how the difficulty level feature (and, likewise, the targeted mini-game generation feature) would be accomplished in a level of detail beyond what a music teacher would normally do (e.g., changing a frequency or speed of the presented fingering notations, breaking the song into sections having different difficulties).

Ubisoft also argued that the dependent claims of the '852 patent further emphasize the improvements that the claimed invention provides to existing approaches, but the Court dismissed the claims as substituting a generic computer for a human teacher, instead distinguishing them from the types of improvements to computer technology identified by the Federal Circuit over the past three years in Ancora Techs., Inc. v. HTC Am., Inc.; Enfish, LLC v. Microsoft Corp.; Data Engine Techs LLC v. Google LLC; and others.  Ubisoft also found no help in the prosecution history of the '852 patent, as the Court paid no heed to the Examiner's previous decision of patent eligibility and noted that the mini-game generation feature -- the one feature the Examiner hadn't found in the prior art -- was not a technological improvement or an advance in computer function.

Lastly, the Court dismissed Ubisoft's arguments that Yousician failed to prove that the recited steps in the claims are well-understood, routine, and conventional.

Thus, the Court concluded that the claims were patent-ineligible and granted Yousician's motion to dismiss.

Ubisoft Entertainment, S.A. v. Yousician Oy (E.D.N.C.)
Order by District Judge Louise W. Flanagan

Yu v. Apple Inc. (N.D. Cal. 2019)

Patent Claims for Digital Camera Are Not Patent Eligible

By Joseph Herndon --

In two related actions in the U.S. District Court for the Northern District of California brought by Yanbin Yu and Zhongxuan Zhang (patentee), Apple Inc. and Samsung Electronics Co., Ltd. were sued for infringement of U.S. Patent No. 6,611,289, entitled "Digital Cameras Using Multiple Sensors with Multiple Lenses".  The dispute is over use of dual-lens cameras in cell phones.  Yu alleged that the dual-lens cameras in Apple and Samsung cell phones infringe the '289 patent.

Apple moved to dismiss for patent ineligibility under 35 U.S.C. § 101, and Samsung joined the motion.  In Defendants' view, the asserted claims cannot be patented because they "are directed to the abstract idea of creating an image by using one image to enhance another image," without any saving inventive concept.  The Court agreed and dismissed the complaints.

The '289 Patent

The '289 patent issued August 26, 2003, and is directed to improving digital photos that were said to lack resolution and dynamic color range of traditional film images.  The patent claims an invention of a digital camera capable of producing high resolution images with better colors and details in a greater range through an arrangement of multiple image sensors, lenses, and a processor to produce high quality and film-like true color digital images.

Claim 1 is representative and recites:

1.  An improved digital camera comprising:
    a first and second image sensor closely positioned with respect to a common plane, said second image sensor sensitive to a full region of visible color spectrum;
    two lenses, each being mounted in front of one of said two image sensors;
    said first image sensor producing a first image and said second image sensor producing a second image;
    an analog-to-digital converting circuitry coupled to said first and said second image sensor and digitizing said first and said second intensity images to produce correspondingly a first digital image and a second digital image;
    an image memory, coupled to said analog-to-digital converting circuitry, for storing said first digital image and said second digital image; and
    a digital image processor, coupled to said image memory and receiving said first digital image and said second digital image, producing a resultant digital image from said first digital image enhanced with said second digital image.

Patent Ineligibility under Section 101

For the merits of the Section 101 issue, the scope of patentable subject matter includes "any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof."  35 U.S.C. § 101.  But, of course, abstract ideas are specific exceptions to § 101's broad patent-eligibility principles.  According to Alice, Courts must distinguish between patents that claim the building blocks' of human ingenuity and those that integrate the building blocks into something more, because overbroad patent protection would risk disproportionately tying up the use of the underlying ideas.

Applying the two-step analysis of Alice, the District Court first determined whether the claims at issue are directed to a patent-ineligible concept such as an abstract idea.

Claim 1 recites a digital camera, comprising "[1] a first and a second image sensor closely positioned with respect to a common plane . . . [2] two lenses . . . [3] said first image sensor producing a first image and said second image sensor producing a second image . . . [4] an analog-to-digital converting circuitry coupled to said first and said second image sensor . . . [5] an image memory . . . and [6] a digital image processor . . . producing a resultant digital image from said first digital image enhanced with said second digital image."

The Court concluded that this plain language makes clear that claim 1 is drawn to the abstract idea of taking two pictures and using those pictures to enhance each other in some way.  The Court stated that since the earliest years of the photographic medium, those having skill in the art have used multiple exposures, or the combining of multiple images, to enhance images.

From a patent attorney's viewpoint, however, if the issue is that it has been known for some time to use multiple exposures, surely that issue would be better addressed under 35 U.S.C. § 102 or 35 U.S.C. § 103 as a prior art issue, and not as a patent eligibility issue.  But I digress.

Next, the Court noted that the claims here are defined only in terms of their functions.  For support of this statement, the Court noted that the '289 patent does not require special hardware or software, but instead, describes that "there is a great need for a generic solution that makes digital cameras capable of producing high resolution images without enormously incurring the cost of photosensitive chips with multimillion photocells."

This is an odd statement by the Court, however, since the claim explicitly recites structure of the camera (e.g., a first and second image sensor closely positioned with respect to a common plane, . . . two lenses, each being mounted in front of one of said two image sensors), so the claim in fact is not "only" defined in terms of function.

The patentee attempted to equate Thales Visionix Inc. v. United States, 850 F.3d 1343 (Fed. Cir. 2017), to the present case.  Thales upheld a patent that dealt with an arrangement of sensors, and Yu contends the result should be the same here because the '289 patent similarly instructs a "particular configuration" of sensors.  The Court, however, found that Thales is distinguishable because its patent-in-suit stated why and how the "particular configuration" of sensors contributed to an advancement over the prior art.  In contrast, the only configuration to which "benefits and advantages" are attributed in the specification in the '289 patent is the mere use of multiple lenses and sensors.

The Court noted that the '289 patent expressly eschews any special hardware or software in favor of a "generic solution," and other components in the claim are described at a high level and lack detail (the analog-to-digital circuitry is described simply as "digitiz[ing] the output signals"; the image processor is described functionally as "[u]sing a set of digital image processes embedded in a digital signal processing chip, images . . . are processed . . . and subsequently produce high quality and film-like true color digital images.").

Thus, it would appear that the Court found the claim directed to an abstract idea due to lack of a detailed description having a technical effect.  This is generally a European requirement or standard, and is not a requirement in the U.S.  The claim clearly recites structure or a configuration of tangible components, and it would seem that the claim should have been found to have satisfied step 1.

Since the Court found the patent to be directed to a patent-ineligible concept under step 1, the Court turned to the second step in Alice to look for an "'inventive concept'—i.e., an element or combination of elements that is sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the ineligible concept itself."

The Court found that there were no allegations that the asserted combination and arrangement of "well-understood, routine and conventional" digital camera components goes beyond the abstract idea of using multiple images to enhance one image.  The Court stated that once the abstract idea is removed from the claim, all that is left here is the "conventional technology" of a digital camera, such as image sensors, lenses, circuitry, memory, and a processor being used in conventional ways.

Thus, the Court found that because the '289 patent is directed to an abstract idea and does not add an inventive concept, the patent was directed to ineligible patent subject matter and the complaints were dismissed.  Since the motion was decided at this early stage, the Court dismissed the complaints with leave to file amended complaints with more detail.

Yu v. Apple Inc. (N.D. Cal. 2019)
Order Re Motion to Dismiss by District Judge Donato

Intellectual Ventures II, LLC v. Sprint Spectrum, L.P. (E.D. Tex. 2019)

By Donald Zuhn --

In April, in Intellectual Ventures II, LLC v. Sprint Spectrum, L.P., U.S. Magistrate Judge Roy S. Payne of the U.S. District Court for the Eastern District of Texas issued a Report and Recommendation that Defendants' Motion for Partial Summary Judgment that Certain Disputed References are Prior Art should be granted in part and denied in part.  In particular, Judge Payne recommended that summary judgment should be denied for four references (i.e., Hwang, Liebetreu, CATT, and LG) and granted for one reference (i.e., Yang).

In arriving at his recommendation, Judge Payne noted that an important fact question in determining whether a reference qualifies as a printed publication under 35 U.S.C. § 102 is the public accessibility of the reference.  Citing Jazz Pharm., Inc. v. Amneal Pharm., LLC, 895 F.3d 1347 (Fed. Cir. 2018), for the proposition that "[a] reference is considered publicly accessible if it was 'disseminated or otherwise made available to the extent that persons interested and ordinarily skilled in the subject matter or art, exercising reasonable diligence, can locate it,'" Judge Payne pointed out that several factors are used by courts to determine whether a reference was publicly accessible.  Such factors include "how widely circulated the reference was, whether the reference was indexed in a manner that would have made it accessible to interested persons with a reasonable degree of effort, and whether the reference was distributed with a pledge or understanding that the contents would remain confidential"; another factor to be considered is the expertise of the target audience.

Judge Payne addressed the Yang reference first, noting that Plaintiff Intellectual Ventures did not contest the public accessibility of this reference.  Judge Payne therefore concluded that the Yang reference was publicly accessible before the priority date of the asserted patents, and as a result, recommended that Defendants' Motion be granted with respect to this reference.

Judge Payne next turned to the Hwang and Liebetreu references, which the Defendants (except for Nokia) argued were submissions to the March 2004 IEEE 802.16 Working Group Session #30 meeting, were publicly accessible by at least March 15, 2004, and thus qualified as prior art to U.S. Patent No. 8,953,641.  Despite Defendants' argument, however, Judge Payne determined that "fact questions remain as to whether the Hwang and Liebetreu references were publicly accessible before the relevant priority date," since "[b]oth references were filed on a website with somewhere between 4,000 to 10,000 references (by the estimate of the applicable Defendants' own witness) with the references listed primarily in chronological order."  Judge Payne also noted that "the Hwang reference was withdrawn, so it likely was not discussed at the meetings, making it even more difficult for this reference to be found."  Finding that "a question of fact exists as to whether these references were publicly available as it is unclear whether persons interested and ordinarily skilled in the subject matter would be able to locate these references using reasonable diligence," Judge Payne recommended that Defendants' Motion be denied with respect to the Hwang and Liebetreu references.

Finally, Judge Payne addressed the CATT and LG references, which Defendants argued were publicly accessible by at least March 31, 2006, and thus qualified as prior art to U.S. Patent Nos. 8,682,357 and 9,532,330.  Finding that questions of fact remained as to the public accessibility of these references, Judge Payne recommended that Defendants' Motion also be denied with respect to the CATT and LG references.  In support of this recommendation, Judge Payne noted that "[w]hile the references were distributed by email to the working group and then placed on the 3GPP server, it remains unclear whether the references were indexed in a way that would allow persons interested and ordinarily skilled in the subject matter or art, exercising reasonable diligence, to locate the two references."  In response to Defendants' argument that indexing is not a prerequisite to finding that a reference qualifies as a printed publication, Judge Payne stated that "a failure to appropriately index may still create a question of fact as to whether a reference qualifies as a printed publication."  Moreover, Judge Payne noted that Intellectual Ventures' expert asserted that the CATT and LG references were not publicly available, and therefore, he indicated that "this suggests that summary judgment would be inappropriate."

Judge Payne therefore recommended that Defendants' Motion for Partial Summary Judgment that Certain Disputed References are Prior Art should be denied for the Hwang, Liebetreu, CATT, and LG references, and granted for the Yang reference.

Intellectual Ventures II, LLC v. Sprint Spectrum, L.P. (E.D. Tex. 2019)
Report and Recommendation by Magistrate Judge Payne

Xlear, Inc. v. STS Health, LLC (D. Utah 2019)

By Donald Zuhn --

In April, in Xlear, Inc. v. STS Health, LLC, District Judge David Nuffer of the U.S. District Court for the District of Utah denied a motion for summary judgment filed by Defendant STS Health, LLC, finding that the asserted claims of U.S. Patent No. 6,054,143 "do not point to an ineligible subject matter."  In denying STS's motion, the District Court also noted that "even if it were necessary to analyze the '143 patent under step two of the Alice Framework, STS has not carried its burden under that step."

Plaintiff Xlear initiated the dispute between the parties when it filed suit against STS for infringement of the '143 patent.  In response, STS filed a motion to dismiss, arguing that the asserted claims were directed to the naturally occurring product xylitol, which was administered using well-understood, routine, conventional activity previously engaged in by researchers in the field.  The District Court denied the motion, finding that the '143 patent did not claim the naturally occurring product xylitol/xylose, but rather was directed to a method for delivery of the xylitol/xylose to clean out the nasopharynx in a human.  The Court also found that STS had not presented evidence of similar applications of xylitol prior to the '143 patent.  STS then filed its motion for summary judgment that the asserted claims were invalid under 35 U.S.C. § 101 for failing to recite patent eligible subject matter, citing seven issued patents as evidence that the nasal administration of xylitol/xylose was well-known, conventional, and routine when Xlear filed the application that issued as the '143 patent.

In dismissing STS's motion for summary judgment, the District Court noted that when it denied STS's motion to dismiss, the Court had determined that under step one of the Alice framework the asserted claims were directed to a process or method that is not a law of nature or natural phenomenon.  In particular, the Court found that "the '143 patent does not claim the discovery of xylitol/xylose or the product itself," and "does not claim the exclusive right to every application of xylitol/xylose," but rather, the asserted claims "focus on the process of practically applying xylitol/xylose to clean the nasopharynx."  The Court therefore noted that:

Because it was determined that the claims do not point to an ineligible subject matter, it was unnecessary to proceed to the second step and determine "whether additional elements 'transform[ed] the nature of the claims' into a patent-eligible application."  The analysis in the Previous Order should have stopped after concluding that the claims of the '143 patent do not point to patent ineligible subject matter.  The Previous Order should not have stated that additional evidence was needed to resolve the second step of the Alice Framework.

However, the Court also noted that STS's motion for summary judgment would have failed even if it had been necessary to analyze the '143 patent under step two of the Alice framework.  In support, the District Court cited the Federal Circuit's decision in Berkheimer v. HP, Inc. for the proposition that whether "something is well-understood, routine, or conventional to a skilled artisan at the time of the patent is a factual determination" that "goes beyond what was simply known in the prior art."  In particular, the Court noted that:

STS has not shown how the seven cited patents teach the same invention as the '143 [patent].  The seven cited patents address the use of xylitol/xylose to aid in the absorption of other compounds through mucosal membranes, such as that found in the nose.  None of the cited patents address using xylitol/xylose to clean the nasopharynx.

The Court also pointed out that notwithstanding the seven patents identified by STS, Xlear continued to argue that nasal administration of xylose/xylitol for cleaning the nasopharynx in a human was not conventional at the time of application, and the Court determined that "[t]he seven cited patents do not disprove that contention and STS has not demonstrated the absence of an underlying genuine issue of material fact that would permit deciding patent eligibility 'on summary judgment as a matter of law.'"

The District Court concluded its opinion by noting that "[a]s the Previous Order determined under the first step of the Alice Framework, the claims of the '143 patent do not point to patent ineligible subject matter," and finding that "[t]he ‘143 Patent is therefore not invalid under § 101."  The Court therefore denied STS's motion for summary judgment.

Xlear, Inc. v. STS Health, LLC (D. Utah 2019)
Memorandum Decision and Order Denying Motion for Summary Judgment by District Judge Nuffer

Tangelo IP, LLC v. Tupperware Brands Corp. (D. Del. 2019)

By Donald Zuhn --

Last week, in Tangelo IP, LLC v. Tupperware Brands Corp., District Judge Richard G. Andrews of the U.S. District Court for the District of Delaware denied a motion for exceptional case filed by Defendant Tupperware Brands Corp., finding that Tupperware Brands had failed to establish that the case was exceptional under 35 U.S.C. § 285.  Plaintiff Tangelo IP, LLC had filed suit against Tupperware Brands, alleging infringement of U.S. Patent No. 8,429,005.  Tupperware Brands responded by filing a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), arguing that the '005 patent was invalid under 35 U.S.C. § 101.  The District Court granted the motion, and Tupperware Brands then moved for a finding of exceptional case and requested attorneys' fees under § 285.

In determining that the case was not exceptional, the District Court noted that although it had found the '005 patent to be invalid under § 101, "that does not mean Plaintiff's contrary position was unreasonable."  In support, the Court cited SFA Sys., LLC v. Newegg Inc., 793 F.3d 1344, 1348 (Fed. Cir. 2015), for the proposition that "it is the substantive strength of the party's litigating position that is relevant to an exceptional case determination, not the correctness or eventual success of that position" (emphasis in opinion).

In response to Tupperware Brands' argument that Tangelo had "ignored substantial precedent dismissing analogous claims directed to concepts long-practiced in society," the Court noted that Tupperware Brands had "identifie[d] no precedent addressing claims analogous to those in the '005 patent, at least beyond the broad category of claims directed to 'concepts long-practiced in society.'"  Judge Andrews also noted that he had not identified any cases in which analogous claims had been found to be patent ineligible.

Judge Andrews concluded the opinion by distinguishing the instant case from his decision in Finnavations LLC v. Payoneer, Inc., 2019 WL 1236358 (D. Del. Mar. 18, 2019).  In Finnavations, Judge Andrews had granted motions for exceptional case and attorneys' fees based on claims that were "plainly directed at a patent ineligible concept," where there was "no question" that the patent at issue was invalid because the claims were analogous to those struck down in Alice.  Judge Andrews found the instant case to be "clearly a different situation," explaining that while he ultimately agreed with Tupperware Brands regarding the validity of the '005 patent, "there is room for argument."  Judge Andrews also pointed out that he was not aware of any precedent that leaves "no question" as to the validity of the '005 patent, "particularly in view of the somewhat opaque nature of § 101."  The Court therefore denied Tupperware Brands' motion for a finding of exceptional case.

Tangelo IP, LLC v. Tupperware Brands Corp. (D. Del. 2019)
Memorandum Order by District Judge Andrews

Hyper Search LLC v. Facebook Inc. (D. Del. 2018)

By Michael Borella --

In October 2017, Hyper Search brought a patent infringement action against Facebook in the District of Delaware, asserting U.S. Patent Nos. 6,085,219, 6,271,840, and 6,792,412.  Facebook sought to dismiss the complaint under Rule 12(b)(6), alleging that all asserted claims were invalid under 35 U.S.C. § 101.  While all three patents suffered a similar fate, the '412 patent and the Court's reasoning regarding this patent is of particular interest because the claims thereof specifically address machine learning.

Machine learning is a subset of artificial intelligence in which a data set -- usually a large one -- is used to train a computational model.  This model is then applied to new instances of data to provide a result in line with the training.  In this fashion, software can be used to classify and/or predict outcomes often with greater accuracy than can be expected from human performance or programs developed in a more traditional manner.  Notably, the exact algorithm and rules used by the model are not explicitly provided by the programmer -- instead, the process of training the model develops these rules from the training data.  Machine learning has been applied with success to various technological fields, such as speech recognition, image classification, supply chain management, drug efficacy, genetic similarity, and information technology services, just to name a few.

The patent eligibility of artificial intelligence, machine learning in particular, is an open issue.  There have been no substantive Supreme Court or Federal Circuit § 101 cases to date, and just a handful in the district courts.  But this handful has not been representative of how machine learning claims are now drafted (or should be drafted), and the machine learning content therein was often tangentially related to the actual claim language.  Thus, any proceeding that can provide insight on the nuances of how machine learning inventions are being viewed by the courts is potentially helpful.

Why is patent-eligibility an issue for machine learning inventions?  This is because the validity of software patents as a whole has been subject to an additional layer of scrutiny for the last five years.

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 elements that are well-understood, routine, and conventional will not lift the claim over the § 101 hurdle.

Considering machine learning from one viewpoint, it is no more than abstract mathematics enabled by generic computing devices and applied to data; therefore, it is inherently ineligible under § 101.  From the other end of the spectrum, machine learning can be thought of as solving complex problems by creating new algorithms that in practice can only be used by computers; thus, it is inherently technical.  Most uses of machine learning lie between these two extremes.  Applying a vanilla model to any data -- even new data -- is probably not eligible and may even be obvious as well.  On the other hand, most practical uses of machine learning require at least some innovative model design, training techniques, data preparation, mapping of the prepared data to the model, and post-processing of model output.  Any of one or more of these latter mechanisms may be enough to lift a claim over the § 101 hurdle.

In any event, claim language and the problem being solved matters in the § 101 inquiry, as Hyper Search found out the hard way.  Claim 1 of the '412 patent recites:

A system for controlling information output based on user feedback about the information comprising:
    a plurality of information sources providing information;
    at least one neural network module that selects one or more of a plurality of objects to receive information from the plurality of information sources based at least in part on a plurality of inputs and a plurality of weight values;
    at least one server, associated with the neural network module, that provides one or more of the objects to one or more recipients;
    the recipients enabling for one or more users to generate feedback about the information; and
    wherein the neural network module generates a rating value for a plurality of the objects at the end of an epoch, redetermines the weight values using the rating values, and selects which objects to receive information during a subsequent epoch using the redetermined weight values and the inputs for that subsequent epoch.

In a nutshell, the invention uses a neural network (which is a type of machine learning model) to determine how to provide information from particular sources to particular output objects.  The neural network periodically re-evaluates the weights based on ratings from the objects.

Facebook contended that this claim "is directed to the abstract idea of providing information based on feedback from recipients."  Hyper Search countered that its invention is "an improvement in computer capability because the system controls information output based on user feedback about the information itself" and "that this is a specific process that is new, performed by a computer, iterative, and adaptive."

The Court appeared to adopt Facebook's interpretation of the claim, finding that "[c]laims directed to providing information based on feedback have previously been held patent-ineligible by this court" due to their being abstract.  The Court further asserted that the "claims of the '412 patent implement a generic computer system to obtain functional results of providing information based on feedback from recipients" and that "Hyper Search does not show how the system of claim 1 is an improvement in computer capability."  The Court further criticized the breadth and vagueness of the asserted claims, stating that this "sets the [them] apart from the claim language deemed sufficient to establish patent eligibility in the Federal Circuit's recent decisions, such as [Enfish v. Microsoft]."

Finding claim 1 abstract, the Court moved on to the second part of the Alice test.  The Court noted that the claim "recites generic computer functionality such as a 'neural network module' and a 'server.'"  Hyper Search's specification worked against it, as "[t]he specification states that neural networks were well-known in the art, and the inventors stated that the alleged invention is not limited to neural networks but rather to 'any artificial intelligence agent.'"

Hyper Search attempted to rely on BASCOM Glob. Internet Servs., Inc. v. AT&T Mobility LLC to establish that its claimed arrangement of elements provides a technical improvement.  But the Court was not convinced since "Hyper Search does not identify any such example in the specifications in the patents-in-suit, and does not show how any of the prior elements are particularly arranged in the claimed inventions such that they improve the performance of the computer itself."  Further, "Hyper Search does not identify any concrete improvements to specific computer functionality or solutions rooted in problems that only existed on computers, but instead generally asserts that each of the asserted claims is directed to solving a computer-related problem."

Consequently, the Court concluded that the asserted claims were invalid under § 101 and that the case should be dismissed.

Not unlike previous cases where the patent-eligibility of machine learning inventions was considered, the patentee here was hobbled by overly broad and non-specific claims that did not focus on exactly how the model operated or was trained.  Additionally, there was no particular detail in the claim of how this model's input or output was processed.  As a result, the facts of this case are so skewed against finding the claims eligible that it is a not a great data point.  Thus, it would be a mistake to conclude that the outcome here does anything more than reiterate that generic claims with sweeping language are likely to have difficulties under § 101.

Ways to avoid or at least mitigate patent-eligibility challenges for machine learning inventions have been discussed previously and still apply.  Until a claim written in accordance with these techniques is subject of a § 101 challenge, the eligibility landscape of machine learning inventions will remain largely unmapped.

Finnavations LLC v. Payoneer, Inc. (D. Del. 2019)

Court Grants Exceptional Case/Attorney Fees When Software Patent Has Invalid Claims under § 101

By Joseph Herndon --

In the U.S. District Court for the District of Delaware, motions for an exceptional case and attorneys' fees were granted on the basis that the patent owner brought suit with a software patent having claims so "ugly" that they had no chance to survive a challenge under 35 U.S.C. § 101.  The case is Finnavations LLC v. Payoneer, Inc. and Finnavations LLC v. Stitch Labs, Inc.  Here, Defendant Payoneer Inc. filed a Motion for Exceptional Case and Defendant Stitch Labs, Inc. filed a Motion for Attorneys' Fees after prevailing in the action by invalidating the asserted patent under § 101.  The District Court granted each of these motions and offered some strong opinions on the invalidity of the patent.  However, it's difficult to see, based on current standards, how the patent claim is as "ugly" as the Court stated.

Background

Plaintiff sued Defendants on March 23, 2018, alleging infringement of U.S. Patent No. 9,569,755 ('755 Patent).  Defendants filed Motions to Dismiss for Failure to State a Claim based on patent ineligibility of the '755 Patent under 35 U.S.C. § 101.  The Court granted the motions, and specifically found that the '755 Patent was directed to the patent ineligible abstract idea of bookkeeping and did not contain an inventive concept.

The '755 Patent

The '755 Patent is directed to a "Financial Managment System," and is described as a system designed to facilitate the record keeping associated with online transactions to increase the amount of transaction data relating to an online purchase of goods or services that is retained by a personal financial management system.

Claim 1 recites:

1.  A method for transferring payment information to a personal financial management program comprising:
    invoking a financial assistant operating on a network device upon a determination of a transmission of transaction data to a commercial web server configured to conduct online financial transactions;
    intercepting, by the financial assistant on the network device, the transaction data in a first data structure comprising a plurality of components of transaction data, the first data structure compatible with conducting an online transaction with the commercial web server;
    copying, by the financial assistant on the network device, each component of the transaction data into a second data structure compatible with the personal financial management program, wherein the second data structure differs from the first data structure;
    entering, by the financial assistant on the network device, additional transaction data not included in the transmitted transaction data into the second data structure including at least one of a category and remarks; and
    transmitting, by the network device, the copied transaction data and the additional transaction data to the personal financial management program.

Analysis

The Patent Act provides that "in exceptional cases [the court] may award reasonable attorney fees to the prevailing party."  35 U.S.C. § 285.  Under the statute, there are two basic requirements:  (1) that the case is "exceptional," and (2) that the party seeking fees is a "prevailing party."

The Supreme Court defines an "exceptional" case as "simply one that stands out from others with respect to the substantive strength of a party's litigating position (considering both the governing law and the facts of the case) or the unreasonable manner in which the case was litigated."  Octane Fitness, LLC v. ICON Health & Fitness, Inc., 134 S. Ct. 1749, 1756 (2014).

Here, the Defendants are prevailing parties.  Thus, the only issue is whether the cases are exceptional.

The Court had a strong opinion that there was "no question" that the '755 Patent is patent ineligible under the Federal Circuit's current precedent.  Even though the Court noted that since Alice, the law of patent eligibility has perhaps become unpredictable and unclear, the Court stated that patents that look like those at issue in Alice are ineligible.  The Court issued further strong statements, declaring that "I have rarely been more confident in the patent ineligibility of a set of claims or more confident in the unreasonableness of a Plaintiff's decision to sue on a patent."  It seems that the Court easily found this case to be "one that stands out from others" with regard to the substantive weakness of Plaintiff's litigation position.

Even though the Examiner allowed the '755 Patent despite four separate § 101 rejections, the Court still found that the USPTO's decision to grant the patent does not relieve the patent holder from making an independent evaluation of the strength of the patent prior to suing.  The Court stated that the "issuance of a patent cannot and should not be a license to sue with abandon."  The Court further noted that patent examiners are non-lawyers, and an Examiner's opinion on the legal question of patent eligibility does not relieve a patent attorney from his or her obligation to make an independent assessment based on an evaluation of the relevant law.

The Court issued yet another strong opinion:

I have resolved scores of Section 101 motions and seen a wide array of validity arguments.  Usually the quality of an argument falls somewhere between good and mediocre.  Infrequently, I have encountered arguments which I would classify as bad.  Plaintiff's defense of the validity of the '755 Patent was not just mediocre or bad; it was ugly.

Plaintiff argued that the law is unclear and that it made reasonable arguments in response to Defendants' motions.  But the Court disagreed and found that the claims of the '755 Patent are plainly directed at a patent ineligible concept and amount to no more than the underlying idea, and further that "[a]ny reasonable patent attorney with an understanding of Section 101 law could have predicted the outcome."

Thus, the Court found that Plaintiff should not have filed suit, asserting "the clearly patent ineligible claims of the '755 Patent."  The Court found that this decision was unreasonable under the law and Plaintiff's behavior should be deterred.  Thus, the Court granted Defendant Payoneer's Motion for Exceptional Case and Defendant Stitch Labs' Motion for Attorneys' Fees.

Commentary

At times, I believe I am a reasonable patent attorney with an understanding of § 101 law, and perhaps I could have predicted that the claims of the '755 Patent would face § 101 challenges, BUT, the claims at issue in this case are far from "ugly," and in view of the prosecution history, it would have been reasonable to consider the claims valid on their face.

The District Court made much of the claims looking like those at issue in Alice, which, if true, then of course they should be found invalid under § 101.  But the representative claim in Alice, shown below, appears far different, in my opinion, from the claims of the '755 Patent:

(Alice claim)   A method of exchanging obligations as between parties, each party holding a credit record and a debit record with an exchange institution, the credit records and debit records for exchange of predetermined obligations, the method comprising the steps of:
    (a) creating a shadow credit record and a shadow debit record for each stakeholder party to be held independently by a supervisory institution from the exchange institutions;
    (b) obtaining from each exchange institution a start-of-day balance for each shadow credit record and shadow debit record;
    (c) for every transaction resulting in an exchange obligation, the supervisory institution adjusting each respective party's shadow credit record or shadow debit record, allowing only these transactions that do not result in the value of the shadow debit record being less than the value of the shadow credit record at any time, each said adjustment taking place in chronological order, and
    (d) at the end-of-day, the supervisory institution instructing one of the exchange institutions to exchange credits or debits to the credit record and debit record of the respective parties in accordance with the adjustments of the said permitted transactions, the credits and debits being irrevocable, time invariant obligations placed on the exchange institutions.

In particular, the claims of the '755 Patent are grounded in computer technology, and include exchange of data between network components.  This is not to say that the claim at issue in this case should survive a § 101 challenge, as the '755 Patent appears to be void of description to support a factual analysis that the invention solves a technical problem with a technical solution.  However, the patent owner would appear to be on sufficiently solid ground asserting this patent, as the claims were heavily tested during prosecution, and the USPTO issued the patent after a long examination process.  Since the claims at issue in this case differ from Alice in this way, the granting of motions for an exceptional case by the District Court are hard to accept.

Finnavations LLC v. Payoneer, Inc. (D. Del. 2019)
Memorandum by District Judge Andrews

Bio-Rad Laboratories, Inc. v. 10X Genomics, Inc. (D. Del. 2019)

By Donald Zuhn --

Last month, in Bio-Rad Laboratories, Inc. v. 10X Genomics, Inc., District Judge Richard G. Andrews of the U.S. District Court for the District of Delaware denied a motion to dismiss and/or strike filed by Defendant 10X Genomics, finding that U.S. Patent Nos. 9,562,837 and 9,896,722 were not directed to patent-ineligible subject matter under 35 U.S.C. § 101.  The '837 and '722 patents, which are assigned to Plaintiff Bio-Rad Laboratories, are directed to assemblies and methods for handling samples in a way that reduces sample contamination and sample loss.  Asserted claim 1 of the '837 patent recites:

1.  An assembly, the assembly comprising:
    a microchannel in a horizontal plane;
    at least one droplet formation module comprising a sample inlet, an immiscible fluid inlet, and a junction, wherein the junction is located between the sample inlet and the microchannel and the droplet formation module is configured to produce droplets comprising the sample surrounded by the immiscible fluid; and
    at least one downstream separation chamber comprising a droplet receiving chamber inlet and at least one droplet receiving outlet, wherein the separation chamber is upright to the microchannel and out of the horizontal plane;
    wherein the droplet formation module and the separation chamber are in fluid communication with each other via the microchannel; and wherein the separation chamber has a wider cross-section than the microchannel cross-section to accumulate a plurality of droplets comprising the sample and is of a volume sufficient to separate the plurality of droplets comprising the sample from the immiscible fluid within the separation chamber.

Asserted claim 1 of the '722 patent recites:

1.  A method of reducing contamination associated with sample handling, comprising:
    providing an aqueous fluid comprising a sample through a sample inlet;
    providing an immiscible fluid flowing through a main channel that is in fluidic communication with the sample inlet, wherein the main channel is in a horizontal plane;
    partitioning the aqueous fluid with the immiscible fluid to form a plurality of droplets in the main channel, wherein at least one droplet comprises a sample;
    flowing the droplets toward a downstream separation chamber that is in fluidic communication with the main channel,
    wherein the separation chamber has a wider cross-section than the main channel cross-section and the separation chamber is disposed perpendicular to the main channel; and
    separating the plurality of droplets from the immiscible fluid in the separation chamber based on the different densities of the droplets and the immiscible fluid.

Bio-Rad initiated the dispute between the parties by filing a complaint against 10X Genomics for infringement of claim 1 of the '837 patent and claim 1 of the '722 patent.  10X Genomics responded by filing a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) for lack of patent eligibility under 35 U.S.C. § 101, or in the alternative, to dismiss and/or strike under Rules 12(b)(6) and/or 12(f) for failure to state a claim of induced, contributory, or willful infringement.

With respect to patent eligibility, Judge Andrews noted that the framework laid out in Mayo Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66 (2012), "for distinguishing patents that claim laws of nature, natural phenomena, and abstract ideas from those that claim patent-eligible applications of those concepts" was reaffirmed by the Supreme Court in Alice Corp. Pty. v. CLS Bank Int'l, 573 U.S. 208 (2014).  In describing that framework, Judge Andrews explained that:

First, the court must determine whether the claims are drawn to a patent-ineligible concept.  If the answer is yes, the court must look to "the elements of the claim both individually and as an 'ordered combination"' to see if there is an '"inventive concept'––i.e., an element or combination of elements that is 'sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the [ineligible concept] itself."' [citations omitted]

With respect to its motion to dismiss for lack of patent eligibility, 10X Genomics argued that the asserted patents are directed to "the natural phenomenon of allowing two different liquids of different densities to separate from each other."  Bio-Rad responded that the asserted patents are directed to the patent-eligible result of a method and apparatus to reduce sample contamination when handling samples.

Applying the Mayo/Alice framework to the asserted patents, Judge Andrews agreed with Bio-Rad, finding that "[t]he Asserted Patents claim methods and an assembly designed to reduce contamination when handling samples," and that 10X Genomics' argument that the claims are directed to the natural phenomenon of allowing two different liquids of different densities to separate from each other "improperly oversimplifies the claims by reducing them to a single claim element."  Judge Andrews explained that "[w]hile the claims certainly utilize the separation of liquids with different densities to effect the desired outcome, this is insufficient to determine that the claims are wholly directed to a patent ineligible concept," adding that "here, '[t]he end result of the [] claims is not simply an observation or detection of the ability' of liquids to separate by density" (quoting Rapid Lit. Mgmt. Ltd. v. CellzDirect, Inc., 827 F.3d 1042, 1048 (Fed. Cir. 2016)).  Judge Andrews noted that "[t]he Federal Circuit has continued to endorse this distinction in recent cases" citing as examples the Federal Circuit's decisions in Athena Diagnostics, Inc. v. Mayo Collaborative Servs., LLC and Endo Pharms., Inc. v. Teva Pharms. USA, Inc. Finding that the recited steps and assembly of the asserted claims achieve an improved way of handling samples that reduces the sample contamination that would otherwise occur, Judge Andrews determined that the asserted patents are not directed to patent-ineligible subject matter under 35 U.S.C. § 101.

Judge Andrews also denied 10X Genomics' motion to dismiss and/or strike portions of Bio-Rad's prayer for relief, finding that "Plaintiff's complaint merely preserves a broad range of potential remedies by requesting relief that could be granted, depending on the facts as ultimately proven."  Judge Andrews therefore denied 10X Genomics' motion to dismiss and/or strike.

Bio-Rad Laboratories, Inc. v. 10X Genomics, Inc. (D. Del. 2019)
Memorandum Order by District Judge Andrews

United Cannabis Corp. v. Pure Hemp Collective Inc. (D. Colo. 2019)

By Donald Zuhn --

Last week, in United Cannabis Corp. v. Pure Hemp Collective Inc., District Judge William J. Martinez of the U.S. District Court for the District of Colorado issued an order denying a motion for partial summary judgment filed by Defendant Pure Hemp Collective Inc., finding that Pure Hemp was not entitled to summary judgment on the record.  Pure Hemp had filed an Early Motion for Partial Summary Judgement, arguing that the asserted claims of U.S. Patent No. 9,730,911, which is owned by United Cannabis Corp. ("UCANN"), were invalid under 35 U.S.C. § 101 (claims 10, 12, 14, 20–22, 25, 27, 28, 31, and 33 of the '911 patent) or 35 U.S.C. § 112(e) (claim 31).

UCANN had initiated the dispute between the parties by filing a complaint against Pure Hemp for infringement of claims 10, 12, 14, 20–22, 25, 27, 28, 31, and 33 of the '911 patent.  Pure Hemp responded by filing its motion for partial summary judgment, contending that all of the asserted claims were invalid.

The '911 patent, which is entitled "Cannabis extracts and methods of preparing and using same," is directed to liquid cannabinoid formulations.  Claims 10, 20, and 25 (the independent claims asserted in UCANN's complaint) recite:

10.  A liquid cannabinoid formulation, wherein at least 95% of the total cannabinoids is cannabidiol (CBD).

20.  A liquid cannabinoid formulation, wherein at least 95% of the total cannabinoids are THC [tetrahydrocannabinol] and CBD.

25.  A liquid cannabinoid formulation, wherein at least 95% of the total cannabinoids are CBD, cannabinol (CBN) and THC.

Asserted claim 31 also recites:

31.  The formulation of any one of the proceeding claims, wherein the formulation is infused in a medium chain triglyceride (MCT).

Judge Martinez began his Order by describing the two-part patent eligibility inquiry set forth by the Supreme Court in Alice Corp. Pty. v. CLS Bank Int'l, 573 U.S. 208, 216 (2014):

"[D]istinguishing patents that claim laws of nature, natural phenomena, and abstract ideas from those that claim patent-eligible applications of those concepts" first requires a court to "determine whether the claims at issue are directed to one of those patent-ineligible concepts."  Id. at 217.  If the answer is no, the inquiry ends; but if the answer is yes, a court must then determine whether the claims in question nonetheless offer "an inventive concept—i.e., an element or combination of elements that is sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the ineligible concept itself."  Id. at 217–18 (internal quotation marks omitted; alterations incorporated).

Judge Martinez then "summarize[ed] certain Supreme Court and Federal Circuit decisions in which those courts have examined questions of patentability in roughly similar contexts," including Funk Brothers Seed Co. v. Kalo Inoculant Co., 333 U.S. 127 (1948); Diamond v. Chakrabarty, 447 U.S. 303 (1980); Mayo Collaborative Services v. Prometheus Laboratories, Inc., 566 U.S. 66 (2012); and Ariosa Diagnostics, Inc. v. Sequenom, Inc., 788 F.3d 1371 (Fed. Cir. 2015).  After providing summaries of the above cases, Judge Martinez offered his comments on the Alice test, stating that:

[T]he proper application of the Supreme Court's Alice standard is an evolving and sometimes hazy area of law.  Deciding whether a patent claim is "directed to" a law of nature is not as straightforward as the Supreme Court makes it sound in Alice itself.  Moreover, the Federal Circuit itself has remarked on the difficulty, at times, of distinguishing the first Alice inquiry from the second, see, e.g., Elec. Power Grp., LLC v. Alstom S.A., 830 F.3d 1350, 1353 (Fed. Cir. 2016); or distinguishing the two Alice inquiries (comprising a patentability analysis rooted in 35 U.S.C. § 101) from other common inquiries such as anticipation and obviousness (which are rooted in 35 U.S.C. §§ 102–03), see, e.g., Rapid Litig. Mgmt. Ltd. v. CellzDirect, Inc., 827 F.3d 1042, 1052 & n.2 (Fed. Cir. 2016).

However, after applying the Alice test to the asserted claims, Judge Martinez determined that "[d]espite the potential ambiguities [of the Alice test], the Court is convinced under the current state of the case law that the challenged claims of the 911 Patent are not directed at unpatentable subject matter."  With respect to the first Alice inquiry, Pure Hemp had argued that the asserted claims are "directed to" the patent ineligible natural phenomenon of the specified chemical compounds (cannabinoids, terpenes, and flavonoids).  UCANN had countered that "the claims are not directed to laws of nature or natural phenomena because they claim human-modified liquid formulations that require converting solid cannabinoids into a different state with markedly different physiological characteristics" (citation omitted).

The Court was persuaded by UCANN's argument that the claims are directed to human-modified liquid formulations, and did not feel the need to address the second part of UCANN's argument (i.e., that the claimed liquid formulations had been converted into a different state having markedly different physiological effects).  Judge Martinez explained that:

Pure Hemp has failed to establish beyond genuine dispute that a liquefied version of cannabinoids and related chemicals at the concentrations specified in the 911 Patent is anything like a natural phenomenon.  It may be true, as Pure Hemp insists, that cannabinoids in nature can take the form of a resin; that a resin can be highly viscous; that a highly viscous substance may at times be considered a liquid; and therefore it is logically possible that cannabinoids in nature might appear in a form that could, in some sense, be deemed a "liquid."  . . .  Even accepting as much, the 911 Patent specifies threshold concentrations of cannabinoids and related chemicals.  Pure Hemp nowhere claims that these precise concentrations, or anything close to them, occur in liquid form in nature.  Accordingly, UCANN's claims are not restatements of "the handiwork of nature," Funk Brothers, 333 U.S. at 131, "but [UCANN's] own [handiwork]," Chakrabarty, 447 U.S. at 310.

While noting that "the Court sees reason to question whether the 911 Patent claims anything novel, useful, or nonobvious," with respect to the Alice inquiry, the Court determined that "the 911 Patent is not 'directed to' an unpatentable law of nature, a natural phenomenon, or an abstract idea," but "is instead 'directed to' a non-naturally occurring delivery method of naturally occurring chemicals in (as far as the record reveals) non-naturally occurring proportions and concentrations."  Finding that the asserted claims did not fail at step one of the Alice inquiry, the Court determined that it did not need to address step two.

As for claim 31, Pure Hemp argued that this claim was invalid for depending from a multiple dependent claim when claim 31 is itself a multiple dependent claim (i.e., claim 31 depends from "any preceding claim" -- following UCANN's correction of the claim -- and claim 9 depends from claim 1 or 5, and claim 24 depends from claim 16 or 20).  Judge Martinez noted, however, that UCANN had disclaimed claim 9 and 24, and cited Guinn v. Kopf, 96 F.3d 1419, 1422 (Fed. Cir. 1996), for the proposition that "[a] statutory disclaimer under 35 U.S.C. § 253 has the effect of canceling the claims from the patent and the patent is viewed as though the disclaimed claims had never existed in the patent."  While noting that "[o]ne would expect that this would end the argument as to Claim 31," the Order points out that Pure Hemp insisted in its reply brief that the Court could still declare claim 31 to be invalid for depending from multiple dependent claims, even though those multiple dependent claims are now deemed to be nonexistent.  To support its argument, Pure Hemp relied on Rembrandt Wireless Technologies, LP v. Samsung Electronics Co., 853 F.3d 1370 (sFed. Cir. 2017), in which the patentee had disclaimed one of two claims in order to seek damages that would have been otherwise prohibited by a failure to mark its products.  Pure Hemp argued that the same public notice concerns raised in Rembrandt Wireless undergird the requirements of 35 U.S.C. § 112(e) with respect to multiple dependencies, and therefore contended that there must be "clear public notice" of invalidity.  Judge Martinez, however, noted that Pure Hemp's argument was circular, since "Claim 31 is not invalid anymore, at least not on account of the multiple dependency problem that existed before UCANN's disclaimer," finding that "there is neither a good reason nor a statutory basis to declare Claim 31 invalid, even though it previously depended on multiple dependent claims."

Rejecting both of Pure Hemp's invalidity arguments, the District Court denied Pure Hemp's Early Motion for Partial Summary Judgment.

United Cannabis Corp. v. Pure Hemp Collective Inc. (D. Colo. 2019)
Order Denying Defendant's Early Motion for Partial Summary Judgment by District Judge Martinez

Novartis Pharmaceuticals Corp. v. Par Pharmaceutical Inc. (D. Del. 2019)

By Donald Zuhn --

Last week, in Novartis Pharmaceuticals Corp. v. Par Pharmaceutical Inc., District Judge Richard G. Andrews of the U.S. District Court for the District of Delaware granted a Motion for Estoppel under 35 U.S.C. § 315(e)(2) filed by Novartis Pharmaceuticals Corp.  Defendant Par Pharmaceutical Inc. had taken no position on the estoppel issue.

The dispute between the parties began when Novartis filed three suits against Par (as well as related suits against Breckenridge Pharmaceutical, Inc. and West-Ward Pharmaceutical Corp.), with the parties agreeing that the validity of the patent at issue, U.S. Patent No. 5,665,772, would be tried only once.  Defendants challenged the validity of claims 1-3, 7, and 10 of the '772 patent, arguing that the claims were obvious in view of 27 references.

While litigation was pending, Par challenged claims 1-3 and 8-10 of the '772 patent in an inter partes review proceeding.  After the U.S. Patent and Trademark Office Patent Trial and Appeal Board instituted Par's IPR, the other Defendants filed four additional IPR petitions challenging the '772 patent, along with motions to join Par's IPR.  The Board instituted two of the four additional IPRs and joined them with Par's IPR.  The Board declined to institute and join IPRs challenging claim 7 of the '772 patent because claim 7 had been omitted from Par's IPR.

In March 2017, the District Court determined that the asserted claims of the '772 patent were invalid for obviousness-type double patenting, but did not address Defendants' obviousness defenses or counterclaims, and the District Court's decision was appealed.  The Federal Circuit reversed the District Court's finding of obviousness-type double patenting in Novartis Pharmaceuticals Corp. v. Breckenridge Pharmaceutical Inc., 909 F.3d 1355, 1367 (Fed. Cir. 2018).  Prior to the Federal Circuit's reversal, the Board issued a final written decision in Par's IPR upholding the patentability of claims 1-3 and 8-10 of the '772 patent.

Following the Board decision and appeal, the District Court asked the parties to file a status report summarizing the issues that still needed to be addressed in litigation.  Novartis suggested that 35 U.S.C. § 315(e)(2) would possibly estop Defendants' obviousness defenses and counterclaims based on the Board's final written decision, and the District Court issued an order requesting briefing from Novartis on estoppel and from Defendants on obviousness.  Following that order, the suits involving Breckenridge and West-Ward were dismissed by joint stipulation, and Novartis filed its Motion for Estoppel under 35 U.S.C. § 315(e)(2).  In addition to taking no position on the estoppel issue, Par also declined to file a brief on obviousness, stating that it believed that a decision could be rendered based on the briefing and testimony already submitted to the Court.

In considering Novartis' motion, the Court noted that § 315(e)(2) provides that:

The petitioner in an inter partes review of a claim in a patent under this chapter that results in a final written decision under section 318(a) . . . may not assert in either a civil action arising in whole or in part under section 1338 of title 28 . . . that the claim is invalid on any ground that the petitioner raised or reasonably could have raised during that inter parties review.

While pointing out that the Federal Circuit has not directly addressed the issue of whether estoppel applies to prior art references that were not raised in the IPR proceeding, the District Court listed a number of decisions in which a majority of District Courts had determined that IPR estoppel applies to any prior art reference that reasonably could have been raised, even if not actually raised, in an IPR proceeding (including decisions in the District of Delaware, the Eastern District of New York, the Eastern District of Wisconsin, and the Eastern District of Texas).  The Court also noted that:

[T]he general purpose of the statute as well as the statutory language indicate that the most plausible interpretation is that any prior art that the IPR petitioner could have raised in the proceeding is estopped if there is a final written decision from the PTAB that the challenged claims are valid.

In addition, the Court pointed out that "one of the policy objectives behind the introduction of IPR proceedings was an intention to conserve judicial resources," adding that "[a]llowing an IPR petitioner to have two bites at the apple by holding back certain obviousness combinations runs counter to both the clear language and purpose behind § 315."  Despite Breckenridge's argument that IPR estoppel should not apply after a district court has held trial, the Court indicated that it did "not think the application of IPR estoppel is dependent on the order in which certain events occur," and stated that "[t]he plain language of the statute does not indicate that Congress intended for there to be a time limitation upon the estoppel effect of a final written decision of an IPR."

On the issue of whether estoppel should apply to the 27 references put forward by Defendants at trial, Novartis argued that the 27 references all "could reasonably have been raised" in the IPR proceeding because they were used in the September 2016 trial which occurred before the reply due date in the IPR.  The District Court therefore determined that Defendants were precluded from pursuing a § 103 invalidity argument as to claims 1-3 and 8-10 of the '772 patent.  However, because no IPR was instituted as to claim 7 of the '772 patent, the Court determined that IPR estoppel did not apply for this claim.  Nevertheless, Novartis had withdrawn its infringement contention as to claim 7 and had agreed to provide Par with a covenant not to sue on that claim.  The Court therefore granted Novartis' Motion for Estoppel with respect to claims 1-3 and 8-10 of the '772 patent.

Novartis Pharmaceuticals Corp. v. Par Pharmaceutical Inc. (D. Del. 2019)
Memorandum Order by District Judge Andrews

Chen v. Jung (C.D. Cal. 2019)

By Donald Zuhn --

Earlier this month, in Chen v. Jung, District Judge Manuel L. Real of the U.S. District Court for the Central District of California issued an order denying a motion for summary judgment filed by Defendants, finding that genuine issues of material fact existed with respect to Plaintiff's contribution to the conception of the claimed inventions of U.S. Patent Nos. 8,445,507, 8,802,689, and 9,388,159.  Plaintiff Degui Chen, Ph.D., had filed suit against Michael Jung, Ph.D., and Charles L. Sawyers, M.D., seeking correction of inventorship of the '507, '689, and '159 patents, which are directed to pharmaceutical compositions comprising the chemical compounds, A51 and A52 ("the A-series compounds"), and methods of administering those compounds.

In his complaint, Dr. Chen asserted that he had been a significant contributor to the conception of the A-series compounds.  Judge Real's order notes that the A-series compounds, which are used in the treatment of prostate cancer, were developed in the summer of 2004 in two labs at the University of California, Los Angeles, the labs being led by Drs. Jung and Sawyers.  Dr. Chen worked in Dr. Sawyers' lab until September of 2005.  Drs. Jung and Sawyers, along with three other individuals including Dr. Samedy Ouk, are named as inventors on the '507, '689, and '159 patents, which were licensed by The Regents of the University of California to Aargon Pharmaceuticals, Inc. (subsequently acquired by Johnson & Johnson), with the A52 compound ultimately being developed as the drug Erleada.

Dr. Chen asserted in his complaint that he was involved in a related project (the RD-series) to develop and test compounds for the treatment of prostate cancer.  Dr. Chen contended that he and Dr. Ouk met for lunch in October 2004 to discuss which RD-series compound could be used as a starting point for the development of a new compound, which became A51, and that they jointly came to the conclusion that the compound RD37 could be used.  Dr. Chen also contended that Dr. Ouk e-mailed him on October 13, 2004, to obtain a critical ingredient for the synthesis of A51 and that Ouk successfully synthesized A51 on January 23, 2005.  Dr. Chen further contended that he performed a series of complex bioassays, which he had developed himself, to test the biological activity and utility of A51, and established that A51 had therapeutic biological activity and thus could be developed into a drug for prostate cancer.

In denying the motion for summary judgment filed by Drs. Jung and Sawyers, Judge Real determined that genuine issues of material fact existed which prevented the entry of summary judgment.  In particular, those issues involved (1) whether the RD-series and A-series were distinct projects, (2) whether Dr. Chen conceived of the idea for A51 in collaboration with Dr. Ouk at the October 2004 lunch meeting, and (3) whether the bioassays Dr. Chen allegedly developed and utilized to test the biologic activity and utility of A51 were a sufficient contribution to conception to qualify Dr. Chen as an inventor on the A-series patents.

With respect to the first issue, Judge Real found that Dr. Chen "has put forth evidence that he and Dr. Ouk identified RD37 as the starting point for A51 and that his work on another RD-series compound, RD162, was essential to the synthesis of A52," and that the allegations in Dr. Chen's complaint were "sufficient to put Defendants on notice of Plaintiff's theory that the RD-series and A-series are a single project and that his work on the RD-series is a factor supporting his claim for inventorship on the A-series patents."  Drs. Jung and Sawyer also argued that even if Dr. Chen's work on the RD-series provided a foundation for the A-series, that alone was insufficient to confer inventorship because Dr. Chen did not conceive of the addition of a nitrogen molecule to the left-hand ring, a defining characteristic of the A-series compounds.  However, Dr. Chen countered that he did in fact conceive of that idea with Dr. Ouk at the 2004 lunch meeting, and the Court noted that his claim was "supported by multiple documents," including the October 13, 2004 e-mail from Dr. Ouk to Dr. Chen and a November 2013 letter to UCLA from counsel purportedly representing both Dr. Chen and Dr. Ouk that states that "Dr. Ouk and Dr. Chen have both confirmed that they two together conceived the structure of A51 in early October of 2004 on the lunch table at the bombshelter at UCLA."

With respect to the third issue, Dr. Chen contended that he was responsible for developing three bioassays that were used to test A51, that the development of these bioassays took six months, and that the bioassays were novel tests.  Judge Real noted that Drs. Jung and Sawyers "have not provided evidence sufficient to rebut Plaintiff's claims that the assays were non-public and non-routine, or that Plaintiff's alleged development and utilization of the bioassays were so essential to the A-series project as to confer inventorship."  Finding that "Defendants have not met their burden of negating an essential element of Plaintiff's claim or showing that Plaintiff lacks sufficient evidence of an essential element to carry his ultimate burden of persuasion at trial," the District Court denied the motion for summary judgement filed by Drs. Jung and Sawyer.

Chen v. Jung (C.D. Cal. 2019)
Order Denying Defendants' Motion for Summary Judgment by District Judge Real

Symantec Corp. v. Zscaler, Inc. (N.D. Cal. 2018)

Claims for Dynamically Rating Internet Content Deemed Patent-Ineligible

By James Korenchan --

In a suit by Plaintiff Symantec Corp. ("Symantec") against Defendant Zscaler, Inc. ("Zscaler"), Symantec alleged that Zscaler's cloud-based security products infringe seven of Symantec's patents.  Zscaler moved to dismiss infringement claims for four of the patents, U.S. Patent Nos. 6,285,658 (the '658 patent), 7,587,488 (the '488 patent), 8,316,446 (the '446 patent), and 8,316,429 (the '429 patent), on grounds that the claims of the patents are directed to patent-ineligible subject matter under 35 U.S.C. § 101.  Earlier this month, Judge Jon S. Tigar of the U.S. District Court for the Northern District of California granted the motion in part, denied the motion in part as moot, and held the remainder of the motion in abeyance pending briefing on Symantec's assertion of assignor estoppel.

The '658 patent claims relate to a system for managing network bandwidth based on data contained in packets flowing in various Open Systems Interconnection (OSI) protocol layers (e.g., network layer, transport layer, and application layer).  The '488 patent claims relate to filtering and dynamically rating Internet content.  The '446 patent claims relate to a system for blocking unwanted software downloads.  And the '429 patent claims relate to extracting and categorizing encrypted Internet communications between clients and hosts servers without having to decrypt network traffic between those clients and host servers.

During pendency of the motion to dismiss, the parties stipulated to dismiss the infringement claims with respect to the '658 patent with prejudice, and thus the Court denied the motion with respect to the '658 patent as moot.  The Court also holds the motion in abeyance with respect to the '446 and '429 patents until the parties' cross-motions for partial summary judgement on the basis of assignor estoppel are resolved.  Additionally, the Court noted that it would not consider the motion with respect to the '429 patent because the PTAB recently instituted inter partes review of the asserted claims of that patent.

Thus, the Court only addressed patent eligibility with respect to the '488 patent.  Symantec asserted that both claims 1 and 12 of the '488 patent -- which recite similar language -- contain non-abstract and inventive concepts.  Claim 1 is provided as follows as a representative example:

1.  At a computer system, a method for dispatching an Internet-content identifier to a content-rating system, the method comprising:
    receiving an indication that at least one unrated Internet-content identifier is available to be rated;
    receiving an indication that one or more computerized content raters are available for rating the at least one unrated Internet-content identifier, wherein the computerized content raters include a plurality of content classifiers configured to rate content based on respective criteria;
    selecting an Internet-content identifier from among the at least one unrated Internet-content identifier based on content-identifier selection criteria;
    selecting one computerized content rater from among the one or more available computerized content raters to rate the selected unrated Internet-content identifier;
    transferring the selected Internet-content identifier to the selected available computerized content rater, wherein the selected Internet-content identifier identifies a portion of content; and
    dynamically determining a content category rating for the selected Internet-content identifier, wherein determining a content category rating comprises dynamically combining a rating for the selected Internet-content identifier with at least one of a rating for an Internet-content identifier identified within the portion of content for the selected Internet-content identifier and an Internet-content identifier for a portion of content that identifies the selected Internet-content identifier.

The background of the '488 patent suggests that existing approaches for Internet content filtering suffer from accuracy issues and other problems.  For example, a rating of a given website coming from a single rating source might be inaccurate.  The patent also notes that existing approaches primarily used blocked lists of content categories, and so website operators who did not want their websites blocked would circumvent filters by varying their URLs or by including non-blocked content.  The patent thus purports to dynamically filter Internet content by dynamically combining multiple different ratings of that content.  As an example, the patent describes how content raters can employ a variety of different classifiers, each configured to "rate content based on different criteria and/or algorithms," and thus, at a high level, the claimed invention can filter Internet content by using a combination of such ratings.

With respect to step one of the Alice test, Zscaler argued that the claims are abstract because they merely describe filtering Internet content.  The Court agreed, citing primarily to the Federal Circuit's decision in BASCOM, in which the Federal Circuit upheld a district court's determination that "claims were directed to the abstract idea of 'filtering content' because 'content provided on the Internet is not fundamentally different from content observed, read, and interacted with through other mediums like books, magazines, television, or movies.'"  The Court also reiterated that filtering content has long been viewed as a well-known manner of organizing human behavior.  As to the claimed concept of dynamically combining ratings for Internet content, the Court stated that the dynamic nature of the recited functions did not save the claims from abstraction, and that "organizing existing information into a new form or employing mathematical algorithms to manipulate information and generate additional information" is not patent-eligible.

The Court also found the claims to lack inventiveness under step two of the Alice test.  In its defense, Symantec primarily argued that the dynamic nature of rating content recited by the claims provided an improvement over the static, list-based systems of the prior art.  But the Court found this argument unavailing, asserting that "nowhere does the patent describe how this more accurate, non-list-based filtering occurs.  Instead, the claim language reflects that dynamically rating simply means combining several ratings into one."  (As an aside, I assume one can reasonably appreciate that a rating from a single source could be biased, and thus less accurate than a rating that takes into account multiple different sources, but I doubt that notion would have persuaded the Court in any fashion.)

With no more definition in the '488 patent as to the dynamic nature of rating content, the Court and Zscaler likened the idea of combining ratings into one as merely being directed to aggregating multiple data sets.  In fact, the Court even went as far to suggest that the patent does not describe any improvement whatsoever:

[T]he patent may not even describe an improvement.  The specification admits that the prior art included "automated and/or server-based approaches to Internet content filtering" which "constant[ly] updat[ed]" the applicable "list of content categories and . . . approved and non-approved sites" [citation omitted].  The patent is silent as to any differences between dynamic rating and automatic rating.  . . .  Nor does the patent explain how dynamic, non-list-based rating accomplishes more than automatic, continually updated filtering.

Symantec also attempted to argue that the claimed system's alleged scalability made it inventive, but the Court was not convinced by this either.  The specification describes that multiple content-rating machines could be simultaneously connected to the claimed system, thus allowing for scalability (e.g., by adjusting the quantity of raters based on demand).  Still, the Court asserted that the specification does not describe this kind of scalability as an improvement over the prior art, and thus concluded that "it cannot serve as the inventive concept."

Ultimately, neither the claims nor the specification of the '488 patent conveyed improvements over the prior art to a degree sufficient for patent-eligibility.

Symantec Corp. v. Zscaler, Inc. (N.D. Cal. 2018)
Order Granting in Part and Denying in Part Motion to Dismiss by District Judge Tigar