Case Information
*2 Before L OURIE , R EYNA , and H UGHES , Circuit Judges. R EYNA , Circuit Judge .
Two-Way Media Ltd. appeals from a decision of the United States District Court for the District of Delaware that found the claims of the asserted patents to be di- rected to patent ineligible subject matter under 35 U.S.C. § 101. Because the claims are directed to abstract ideas and contain no additional elements that transform the nature of the claims into a patent-eligible application of the abstract ideas, we affirm.
B ACKGROUND A. Technical Background
The patents-in-suit are related as a series of continua- tion applications, and thus share substantially the same specification. U.S. Patent No. 5,778,187 (“’187 patent”) issued first, followed by U.S. Patent Nos. 5,983,005 (“’005 patent”), then 6,119,163 (not at issue here), then 6,434,622 (“’622 patent”), and then 7,266,686 (“’686 pa- tent”). The patents are entitled “Multicasting Method and Apparatus,” and generally relate to a system for streaming audio/visual data over a communications system like the internet. Claim 1 of the ’187 patent is representative of all claims of the ’187 patent and ’005 patent, claims 1 and 29 of the ’622 patent, and claims 1, 22, 26, and 30 of the ’686 patent are representative of their respective patents.
The patents explain that internet systems typically operate on a point-to-point, or unicast, basis. In unicast systems, a message is converted into a series of addressed packets which are routed from a source node to a destina- tion node. But these unicast systems lack the capability to broadcast a message from a source node to all the other recipients in a network, as this type of operation could easily overload the network.
IP Multicasting, in contrast, provides a way to trans- mit one packet of information to multiple recipients. In such a system, packets destined for several recipients are encapsulated in a unicast packet and forwarded from a source to a point in a network where the packets are replicated and forwarded on to all desired recipients. A multicast packet can be routed from a source node through a plurality of multicast routers to one or more devices receiving the multicast packets. The packet can then be distributed to all the host computers that are members of the multicast group. The patents explain that this technology had previously been used to provide internet-based audio/visual conferencing servicing as well as radio-like broadcasts to interested parties.
The patents describe the invention as an improved scalable architecture for delivering real-time information. Embedded in the architecture is a control mechanism that provides for the management and administration of users who are to receive real-time information. Figure 1 pro- vides a schematic diagram depicting an overview of the system:
J.A. 80. In this system, the Primary Servers and Media Servers are interconnected by the internet. The Control Servers connect users with Media Servers using a series of message exchanges. The patents also describe monitor- ing network conditions and generating records about the real-time streams.
The parties agree that claim 1 of the ’187 patent is representative of the claims of the ’187 patent and ’005 patent. It recites:
1. A method for transmitting message packets over a communications network comprising the steps of:
converting a plurality of streams of audio and/or visual information into a plurality of streams of addressed digital packets complying with the specifications of a network communication proto- col,
for each stream, routing such stream to one or more users,
controlling the routing of the stream of packets in response to selection signals received from the us- ers, and
monitoring the reception of packets by the users and accumulating records that indicate which streams of packets were received by which users, wherein at least one stream of packets comprises an audio and/or visual selection and the records that are accumulated indicate the time that a user starts receiving the audio and/or visual selection and the time that the user stops receiving the au- dio and/or visual selection.
J.A. 111 at col. 18 ll. 17–34; J.A. 114 (certificate of correc- tion). Two-Way Media asserts that the claims of the ’622 patent are directed to the features described in the speci- fication, but are claimed more broadly. For example, claim 29 recites:
29. A method for forwarding real-time information to one or more users having access to a communi- cations network comprising: processing one or more streams of audio or visual information into one or more streams of packets for forwarding over the communications network, wherein at least one stream of packets comprises audio or video information, forwarding the digital packets to the users in re- sponse to information selection signals received from the users,
verifying the operational status of the users’ ac- cess to the communications network during deliv- ery of the real-time information, and updating a database with indications of: (i) which streams of packets were received by which users, (ii) the time when delivery of each stream to each user commenced, and (iii) the time when delivery of each stream to each user terminated.
J.A. 202 at col. 20 ll. 19–36. Claim 30 of the ’686 patent includes certain “commercial purposes” and recites:
30. A method for metering real-time streaming media for commercial purposes, said method com- prising:
selecting an intermediate server from multiple in- termediate servers;
forwarding at least one copy of a real-time media stream from said intermediate server toward a user device;
detecting a termination of said forwarding; after said termination, determining an extent of said real-time media stream forwarded toward said user device; and
logging said extent for commercial purposes. J.A. 248 at col. 20 ll. 6–16; J.A. 251 (certificate of correc- tion).
B. District Court Decision
The district court granted Appellees’
[1]
motion for
judgment on the pleadings and held that the ’187 patent,
’005 patent, ’622 patent, and ’686 patent were ineligible
under § 101.
Two-Way Media Ltd. v. Comcast Cable
Commc’ns, LLC
, Nos. 14-1006-RGA, 14-1212-RGA, 2016
WL 4373698 (D. Del. Aug. 15, 2016). The district court
first addressed claim construction, then addressed eviden-
tiary arguments, and finally addressed the patents’
eligibility under the two-step framework espoused in
Alice
Corp. v. CLS Bank Int’l
,
Two-Way Media argued before the district court that Appellees’ motion was premature because claim construc- tion was necessary to evaluate whether the representative claims were eligible under § 101. Two-Way Media provid- ed proposed claim constructions for certain terms of the asserted patents. J.A. 599–602. Appellees agreed that the district court should adopt Two-Way Media’s claim constructions, but argued that the constructions did not alter the § 101 analysis. The district court ultimately adopted Two-Way Media’s proposed constructions for the purposes of the motion. Two-Way Media , 2016 WL 4373698, at *3.
Two-Way Media also argued that the district court should take judicial notice of certain materials from prior proceedings before the U.S. Patent and Trademark Office and other federal courts. Id. at *3–4. The materials, consisting of expert report excerpts, expert trial testimo- ny, inventor trial testimony, and a press release, [BB45; RB31] purportedly related to other tribunals’ evaluation of the novelty and nonobviousness of the claimed inven- tions. Id. The district court denied the request, reasoning that the proffered materials were irrelevant to a § 101 inquiry: “The novelty and nonobviousness of the claims under [35 U.S.C.] §§ 102 and 103 does not bear on wheth- er the claims are directed to patent-eligible subject matter under § 101.” Id. at *4.
The district court then addressed the eligibility of the claims of the ’187 patent and ’005 patent and determined that the claims were directed to an abstract idea:
The ’187 and ’005 patents are directed to the ab- stract idea of (1) sending information, (2) directing the sent information, (3) monitoring receipt of the sent information, and (4) accumulating records about receipt of the sent information. The claims are thus directed to methods of sending and moni- toring the delivery of audio/visual information.
Id. at *5 (citations omitted). The district court deter- mined that the claims did not recite a saving inventive concept under Alice step two. Although Two-Way Media had argued that the claims were directed to computer architecture that solved the technical problems of load, bottlenecking, and inadequate records, the district court disagreed, holding that “[n]one of the claims, however, recite or refer to anything that could be described as an architecture.” Id. The district court expressly considered Two-Way Media’s proffered claim constructions when making this determination: “The claims cannot fairly be read to recite computer architecture even in light of [Two- Way Media’s] proposed claim constructions, some of which explicitly incorporate the words ‘intermediate comput- ers.’” Id. at *5 n.3 (citations omitted).
Having concluded that the claims of the ’187 patent and the ’005 patent were patent ineligible under § 101, the district court next addressed the ’622 patent and ’686 patent. The district court determined that the ’622 patent was directed to the abstract idea of monitoring the deliv- ery of real-time information to a user or users, and the ’686 patent was directed to the abstract idea of measuring the delivery of real-time information for commercial purposes. Id. at *6–7. The claims contained no saving inventive concept because although they recited some computer components, they required only ordinary func- tionality of these components. Id. at *6–8.
Two-Way Media appealed. We have jurisdiction under 28 U.S.C. § 1295(a)(1).
S TANDARD OF R EVIEW
We review procedural aspects of the grant of judg-
ment on the pleadings under Federal Rule of Civil Proce-
dure 12(c) based on the law of the regional circuit, in this
case the Third Circuit.
McRO, Inc. v. Bandai Namco
Games Am. Inc.
, 837 F.3d 1299, 1311 (Fed. Cir. 2016).
The Third Circuit exercises plenary review of Rule 12(c)
motions.
E.g.
,
CoreStates Bank, N.A. v. Huls Am., Inc.
,
D ISCUSSION
Section 101 of the Patent Act defines patent eligible subject matter:
Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title.
35 U.S.C. § 101. The Supreme Court has long held that
there are certain judicial exceptions to this provision:
laws of nature, natural phenomena, and abstract ideas.
Alice
,
In
Alice
, the Court supplied a two-step framework for
analyzing whether claims are patent eligible. First, we
determine whether the representative claims are “di-
rected to” a judicial exception, such as an abstract idea.
Id
. at 2355. If the claims are directed to eligible subject
matter, the inquiry ends.
Thales Visionix Inc. v. United
States
,
We conclude that the ’187 patent, ’005 patent, ’622 pa- tent, and ’686 patent are patent ineligible under § 101. We discuss each in turn.
A. ’187 Patent and ’005 Patent 1. Alice Step One
Under
Alice
step one, “the claims are considered in
their entirety to ascertain whether their character as a
whole is directed to excluded subject matter.”
Internet
Patents Corp. v. Active Network, Inc.
,
The district court found that claim 1 of the ’187 pa-
tent, which is representative of all of the claims of the
’187 patent and ’005 patent, is directed to the abstract
idea of (1) sending information, (2) directing the sent
information, (3) monitoring the receipt of the sent infor-
11
mation, and (4) accumulating records about receipt of the
sent information.
Two-Way Media
,
Claim 1 recites a method for routing information us-
ing result-based functional language. The claim requires
the functional results of “converting,” “routing,” “control-
ling,” “monitoring,” and “accumulating records,” but does
not sufficiently describe how to achieve these results in a
non-abstract way.
Affinity Labs of Tex., LLC v.
DIRECTV, LLC
,
Two-Way Media’s proposed constructions do not change this outcome. Though Two-Way Media argues that its proposed claim constructions sufficiently tie the claims to particular scalable network architecture, the constructions recite only conventional computer compo- nents. For example, Two-Way Media proposed a con- struction of “controlling the routing of the stream of packets in response to selection signals received from the users” as “directing a portion of the routing path taken by the stream of packets from one of a designated group of intermediate computers to the user in response to one or more signals from the user selecting the stream.” J.A. 600. This construction fails to indicate how the claims are directed to a scalable network architecture that itself leads to an improvement in the functioning of the system. Enfish , 822 F.3d at 1338. Nor does the construction provide any parameters for the “signals” purportedly dictating how the information is being routed. At best, the constructions propose the use of generic computer components to carry out the recited abstract idea, but that is not sufficient. In re TLI Commc’ns LLC Patent Litig. , 823 F.3d 607, 611 (Fed. Cir. 2016) (holding that, despite reciting “concrete, tangible components,” the claims were directed to an abstract idea where “the physi- cal components merely provide[d] a generic environment in which to carry out the abstract idea”). The claim is therefore directed to an abstract idea.
Because the claim is directed to an abstract idea, we proceed to Alice step two to determine whether the repre- sentative claims disclose a saving inventive concept.
2. Alice Step Two
In
Alice
step two, we consider the elements of the
claim, both individually and as an ordered combination, to
assess whether the additional elements transform the
nature of the claim into a patent-eligible application of
the abstract idea.
Content Extraction & Transmission
LLC v. Wells Fargo Bank
,
The district court found no saving inventive concept in
claim 1 of the ’187 patent. While acknowledging that the
specification of the ’187 patent describes a system archi-
tecture as a technological innovation, the district court
concluded that the claim does not recite this architecture,
even taking into account Two-Way Media’s proposed
constructions.
Two-Way Media
,
The lack of an inventive concept recited in claim 1
precludes eligibility here. For example, the claim refers
to certain data “complying with the specifications of a
network communication protocol” and the data being
routed in response to one or more signals from a user,
without specifying the rules forming the communication
protocol or specifying parameters for the user signals.
Neither the protocol nor the selection signals are claimed,
precluding their contribution to the inventive concept
determination.
See Clarilogic, Inc. v. FormFree Holdings
Corp.
,
Two-Way Media asserts that the claim solves various technical problems, including excessive loads on a source server, network congestion, unwelcome variations in delivery times, scalability of networks, and lack of precise recordkeeping. But claim 1 here only uses generic func- tional language to achieve these purported solutions. “Inquiry therefore must turn to any requirements for how the desired result is achieved.” Elec. Power Grp. , 830 F.3d at 1355. Nothing in the claims or their construc- tions, including the use of “intermediate computers,” requires anything other than conventional computer and network components operating according to their ordinary functions. Intellectual Ventures I LLC v. Symantec Corp. , 838 F.3d 1307, 1319–21 (Fed. Cir. 2016) (holding ineligi- ble a claim directed to a method of virus screening even where the method required use of an “intermediary com- puter in forwarding information”).
We likewise see no inventive concept in the ordered
combination of these limitations.
BASCOM Glob. Internet
Servs., Inc. v. AT&T Mobility LLC
, 827 F.3d 1341, 1350
(Fed. Cir. 2016) (“[A]n inventive concept can be found in
the non-conventional and non-generic arrangement of
known, conventional pieces.”). The claim uses a conven-
tional ordering of steps—first processing the data, then
routing it, controlling it, and monitoring its reception—
with conventional technology to achieve its desired result.
As the court in
BASCOM
noted, merely reciting an ab-
stract idea performed on a set of generic computer compo-
nents, as claim 1 does here, would “not contain an
inventive concept.”
Id.
(citing
CyberSource Corp. v. Retail
Decisions, Inc.
,
Two-Way Media argues that the claims of the ’187 and ’005 patents are not preemptive, and therefore are patent eligible, because many methods of sending and monitoring the delivery of audio/visual remain available. However, where a patent’s claims are deemed only to disclose patent ineligible subject matter under the Alice framework, as they are in this case, preemption concerns are fully addressed and made moot. Ariosa Diagnostics, Inc. v. Sequenom, Inc. , 788 F.3d 1371, 1379 (Fed. Cir. 2015).
Finally, Two-Way Media argues that the district court
erred by excluding its proffered evidence from prior cases
15
relating to the purported technological innovations of its
invention. We find no error in the district court’s deter-
mination to reject Two-Way Media’s proffered material, as
the court correctly concluded that the material was rele-
vant to a novelty and obviousness analysis, and not
whether the claims were directed to eligible subject mat-
ter. Eligibility and novelty are separate inquiries.
Affini-
ty Labs
,
B. ’622 Patent and ’686 Patent 1. Alice Step One
The district court also concluded that the ’622 patent was directed to the abstract idea of monitoring the deliv- ery of real-time information to a user or users, and the ’686 patent was directed to the abstract idea of measuring the delivery of real-time information for commercial purposes. Two-Way Media , 2016 WL 4373698, at *6–7. Two-Way Media argues that the district court erred by oversimplifying the claims down to merely their preamble and failing to recognize the claims solve technical prob- lems. We disagree.
First, we see no error here in the district court citing
to the preamble in its review of whether the claims are
directed to an abstract idea.
See, e.g.
,
BASCOM
, 827 F.3d
at 1348 (citing preamble for distillation of abstract idea).
The district court’s inquiry centered on determining the
“focus” of the claims, and was thus in accord with our
precedent.
E.g.
,
Elec. Power Grp.
,
Second, these claims suffer from the same ineligibility infirmity as claim 1 of the ’187 patent. Two-Way Media admits that the representative claims of the ’622 patent and ’686 patent are broader in several respects than claim 1 of the ’187 patent. Appellant Br. 46, 53. We agree with the district court that the claims here—directed to moni- toring the delivery of real-time information to user(s) or measuring such delivery for commercial purposes—are similar to other concepts found to be abstract. BASCOM , 827 F.3d at 1348 (filtering content is an abstract idea); Elec. Power Grp. , 830 F.3d at 1351–53 (collecting infor- mation, analyzing it, and displaying results is an abstract idea, even when undertaken in “real-time”); Ultramercial, Inc. v. Hulu, LLC , 772 F.3d 709, 715 (Fed. Cir. 2014) (using advertising as an exchange or currency is an abstract idea). For these reasons, we conclude that the representative claims of the ’622 patent and ’686 patent are directed to abstract ideas. Accordingly, we proceed to Alice step two.
2. Alice Step Two
The district court found that that the claims of the ’622 patent and ’686 patent did not contain an inventive concept under Alice step two. Two-Way Media , 2016 WL 4373698, at *6–8. Two-Way Media argues that the dis- trict court erred by failing to account for a central aspect of Two-Way Media’s invention, the system architecture, and failing to credit Two-Way Media’s nonconventional arrangement of components. We disagree.
As with claim 1 of the ’187 patent, the problem is that
no inventive concept resides in the claims. Claim 29 of
the ’622 patent requires processing data streams, trans-
mitting them from “an intermediate computer,” and then
confirming certain information about the transmitted
data. J.A. 202 at col. 20 ll. 19–36; J.A. 600. Claim 30 of
the ’686 patent requires receiving and transmitting a
real-time media stream from an intermediate server,
detecting the termination of the stream, and recording
certain information about the stream. J.A. 248 at col. 20
17
ll. 6–16; J.A. 251; J.A. 601. We agree with the district
court that nothing in these claims requires anything other
than conventional computer and network components
operating according to their ordinary functions.
Intellec-
tual Ventures
,
Nor do we see any inventive concept in the ordered combination of these steps. The steps are organized in a completely conventional way—data are first processed, sent, and once sent, information about the transmission is recorded. The claims thus fail to describe a “specific, discrete implementation of the abstract idea” sufficient to qualify for eligibility under § 101. BASCOM , 827 F.3d at 1350.
C ONCLUSION
We have considered Two-Way Media’s other argu- ments but do not find them persuasive. For the foregoing reasons, we affirm the district court’s judgment that the ’187 patent, ’005 patent, ’622 patent, and ’686 patent are ineligible under § 101.
AFFIRMED
Notes
[1] Appellees are Comcast Cable Communications, LLC, Comcast Interactive Media LLC, Verizon Services Corp., and Verizon Online LLC.