Patent-Ineligible Claims Dismissed Based On Intrinsic Evidence

Secured Mail Solutions LLC v. Universal Wilde, Inc., No. 2016-1728, 2017 (Fed. Cir. Oct. 16, 2017) (Before Prost, C.J., Clevenger, and Reyna, J.) (Opinion for the court, Reyna, J.)

Appellant Secured Mail Solutions LLC (“Secured Mail”) appeals from the grant of a motion to dismiss on grounds that the claims of seven asserted patents are directed to subject matter ineligible for patenting under 35 U.S.C. § 101.

The patents relate to methods whereby a sender affixes an identifier on the outer surface of a mail object (e.g. an envelope or package). Secured Mail groups the patents into three categories. The “Intelligent Mail Barcode” patents recite a method for verifying the authenticity of a mail object. The “QR Code” patents requires scanning of the encoded data enabling the recipient to request data directly from the sender. The “Personalized URL” patents are similar to the QR Code patents, except the identifier is a personalized network address, or URL.

Appellee Universal Wilde, Inc. (“Wilde”) moved to dismiss Secured Mail’s complaint under Fed. R. Civ. P. 12(b)(6), arguing that the patents were not patent-eligible under Section 101. The district court found all seven patents were directed to patent-ineligible subject matter. The court reasoned that “the asserted claims, viewed individually or in combination, do not meaningfully limit the abstract idea of communicating information about a mail piece by use of marking.”  Secured Mail appealed.

The Federal Circuit reviews a district court’s determination of patent eligibility under 35 U.S.C. § 101 de novo. See, e.g., McRO, Inc. v. Bandai Namco Games Am. Inc., 837 F.3d 1299, 1311 (Fed. Cir. 2016).  The Court analyzed Secured Mail’s patents pursuant to the two-step process in Alice. Alice Corp. v. CLS Bank Int’l, 134 S. Ct. 2347, 2354 (2014). Under Alice step one, the Court held that all seven patents were directed to abstract ideas. “The claims of the three sets of patents are not limited by rules or steps that establish how the focus of the methods is achieved. Instead, the claims embrace the abstract idea of using a marking affixed to the outside of a mail object to communicate information about the mail object, i.e. the sender, the recipient, and contents of the mail object.”

Under Alice step two, the Court found the claims had “no inventive concept that transforms the nature of the claims into a patent-eligible application of the abstract idea.”  The Court contrasted Secured Mail’s patents to those of DDR Holdings, LLC v. Hotels.com, L.P., finding that Secured Mail’s claims do not cite to “a specific way to solve a specific problem as in DDR.” Instead, “the asserted claims cite well known and conventional ways to allow generic communication between a sender and recipient using generic computer technology.”

Finally, the Court held that it was appropriate for the district court to dismiss the case via Rule 12(b)(6). “…[T]his court has determined claims to be patent-ineligible at the motion to dismiss stage based on intrinsic evidence from the specification without need for “extraneous fact finding outside the record.”  See, e.g., In re TLI Commc’ns LLC Patent Litig., 823 F.3d 607, 613-14 (Fed. Cir. 2016); Content Extraction, 776 F.3d at 1349; cf. OIP Techs., Inc. v. Amazon.com, Inc., 788 F.3d 1359, 1362 (Fed. Cir. 2015) (holding that a Section 1011 inquiry is a question of law).

Therefore, the Federal Circuit affirmed the district court’s grant of Universal’s motion to dismiss.

Claims determined to be patent-ineligible based on intrinsic evidence from the specification can be dismissed, at the motion to dismiss stage, without need for “extraneous fact finding outside the record.”

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Robert Schaffer is an intellectual property partner at Troutman Sanders. Bob applies more than 30 years of experience to IP counseling and litigation. His work includes patent procurement, strategic planning and transactional advice, due diligence investigations, district court patent cases, and Federal Circuit appeals. He regularly handles complex and high-profile domestic and international patent portfolios, intellectual property agreements and licensing, IP evaluations for collaborations, mergers, and acquisitions. In disputed court cases Bob’s work includes representing and counseling client in ANDA litigations, complex patent infringement cases and appeals, and multidistrict and international cases. In disputed Patent Office matters his work includes representing and counseling clients in interferences, reexaminations, reissues, post-grant proceedings, and in European Oppositions. For more information and to contact Bob please visit his profile page at the Troutman Sanders website.

Robert Schaffer

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