On March 6, 2020, the United States Court of Appeals for the Federal Circuit (“CAFC”) issued an Opinion affirming a final written decision by the Patent Trial and Appeal Board (“PTAB”) of the United States Patent and Trademark Office (“USPTO”). Customedia Techs., LLC v. Dish Network Corp., Case Nos. 2018-2239, 2019-1000, ____ F.3d ____ (Fed. Cir. Mar. 6, 2020). The CAFC held that the PTAB correctly found that the challenged patent claims were unpatentable under 35 U.S.C. § 101 because they were directed to patent ineligible subject matter, as interpreted by the Supreme Court’s decision in Alice Corp. v. CLS Bank International, 573 U.S. 208 (2014).
Section 101 of the United States patent laws prescribes the categories of inventions and discoveries that can properly be the subject of a patent: “any new and useful process, machine, manufacture, or composition of matter.” These categories are limited by judicially created proscriptions against patenting abstract ideas, laws of nature, and natural phenomena.
The Supreme Court has set out a two-step framework for determining patent eligibility:
- determine whether the claims at issue are directed to one of the patent-ineligible concepts (such as an abstract idea); and, if so, then,
- determine whether the elements of the claim, considered both individually and as an ordered combination, recite an “‘inventive concept’—i.e., an element or combination of elements that is ‘sufficient to ensure that the practice amounts to significantly more than a patent upon the [ineligible concept] itself.’”
Alice, 573 at 217-18 (quoting Mayo Collaborative Servs. v. Prometheus Labs., Inc., 132 S. Ct. 1289, 1294 (2012)).
The CAFC has drawn a distinction, in the Section 101 context, between software/computer-based claims that are focused on a specific asserted improvement in computer capabilities (which claims are patent eligible) and claims that are focused on a process that qualifies as an abstract idea for which computers are invoked merely as a tool (which claims are not patent eligible).
In the instant case, Dish Network filed petitions for covered business method review before the PTAB, arguing that the patent claims were, among other things, patent ineligible under Section 101.
Claim 1 of one of the patents recited:
- A data delivery system for providing automatic delivery of multimedia data products from one or more multimedia data product providers, the system comprising:
a remote account transaction server for providing multimedia data products to an end user, at least one of the multimedia data products being specifically identified advertising data; and a programmable local receiver unit for interfacing with the remote account transaction server to receive one or more of the multimedia data products and for processing and automatically recording the multimedia data products, said programmable local receiver unit including at least one individually controlled and reserved advertising data storage section adapted specifically for storing the specifically identified advertising data, said at least one advertising data storage section being monitored and controlled by said remote account transaction server and such that said specifically identified advertising data is delivered by said remote account transaction server and stored in said at least one individually controlled and reserved advertising data storage section.
At Alice step one, the CAFC found that the claims were directed to the abstract idea of using a computer to deliver targeted advertising to a user, not to an improvement in the functioning of a computer. According to the CAFC, the claims do not enable computers to operate more quickly or efficiently, nor do they solve any technological problem. Instead, the claims merely recite reserving memory to ensure storage space is available for at least some advertising data. Further supporting the fact that the claims do not improve the functioning of a computer, the patent specification was silent as to any specific structural or inventive improvements in computer functionality related to the claimed system. The only improvements identified in the specification were generic speed and efficiency improvements, inherent in applying the use of a computer to any task. Thus, per the CAFC, the claimed invention was, at most, an improvement to the abstract concept of targeted advertising, where a computer was merely used as a tool.
At Alice step two, the CAFC found that, aside from the abstract idea of delivering targeted advertising, the claims recite only generic computer components, including a programmable receiver unit, a storage device, a remote server and a processor. Here, too, the patent specification was informative. The patent specification acknowledged that the storage device “may be any storage device for audio/video information known in the art” and the receiver unit may include “any digital or analog signal receiver and/or transmitter capable of accepting a signal transmitting any kind of digital or broadcast information.” Such generic and functional hardware was insufficient to render eligible claims directed to an abstract idea.
This decision is the latest example in claims that do not improve the functioning of a computer being patent ineligible, and highlights the difficulty a patent owner faces when the underlying specification relies on generic computers and fails to explain how the claimed invention improves the functioning of a computer.