Two-Way Media Ltd v. Comcast Cable Communs., LLC, Nos. 2016-2531, 2016-2532, 2017 U.S. App. LEXIS 21706 (Fed. Cir. Nov. 1, 2017) (Before Lourie, Reyna, and Hughes, J.) (Opinion for the court, Reyna, J.).
The Federal Circuit affirmed a district court decision finding four patents owned by Two-Way Media (“Two-Way”) were directed to ineligible subject matter under 35 U.S.C. § 101. Claim 1 of the ‘187 patent was representative of the ‘187 and ‘005 patents, and described a method for transmitting message packets over a communications network, like the Internet. Claim 29 was representative of the ‘622 patent, and described a method for forwarding real time information to one or more users having access to a communications network. Claim 30 was representative of the ‘686 patent, and recited a method for metering real-time streaming media for commercial purposes.
The Alice Two-Part Test for Patent Eligibility
The court evaluated Two-Way’s patent claims under the Alice two-part test for patent eligibility. See Alice Corp. v. CLS Bank Int’l, 134 S. Ct. 2347 (2014). Step one of the Alice test considers whether the representative claims, when considered in their entirety, are “directed to” a judicial exception to patent eligibility under § 101. These are laws of nature, natural phenomenona, and abstract ideas. “[T]he court considers whether the claims in the patent focus on a specific means or method, or are instead directed to a result or effect that itself is the [judicial exception] and merely invokes generic processes and machinery.” McRO, Inc. v. Bandai Namco Games Am. Inc., 837 F.3d 1299, 1314 (Fed. Cir. 2016). If the claims are directed to a judicial exception, the court moves to step two and considers whether the claims contain an “inventive concept sufficient to transform the nature of the claim[s] into a patent-eligible application.”
The District Court’s Findings
With respect to the ‘187 and ‘005 patents, the district court determined representative Claim 1 was directed to the abstract 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. Two-Way argued that the ‘187 and ‘005 patent claims contained an inventive concept because they were related to “computer architecture.” However, the district court cited the claim constructions (which it adopted from Two-Way) and found that the claims did not recite a “saving inventive concept” under Alice step two because they did not “recite or refer to anything that could be described as architecture.”
Regarding the ‘622 and ‘686 patents, the district court found the ‘622 patent to be directed to the abstract idea of monitoring the delivery of real-time information to a user, and the ‘686 patent to be directed to the abstract idea of measuring the delivery of real-time information for commercial purposes. Under Alice step two, both patents had no saving inventive concept because “although [the claims] recited some computer components, they required only ordinary functionality of these components.” Claims directed to generalized steps and utilizing conventional computer activities are not patent eligible under § 101. See Internet Patents Corp. v. Active Network, Inc., 790 F.3d 1343, 1348-49 (Fed. Cir. 2015).
The ‘187 and ‘005 Patents
The Federal Circuit agreed with the district court’s step one Alice analysis, finding that representative Claim 1 recited a “method for routing information using result-based functional language.” The claim was directed to an abstract idea because it failed to indicate “how the claim [was] directed to a scalable network architecture that itself lead to an improvement in the functioning of the system.”
The Court then proceeded to Alice step two. While the specification may have described a possible innovative “scalable architecture” concept, representative Claim 1 of the ’187 patent did not. This lack of inventive concept in the claim itself could not be overcome and thereby precluded eligibility. Further, the Court found that Claim 1 did not require anything other than a conventional order of steps to be carried out on conventional computer and network components operating according to their ordinary functions. Therefore, there was no inventive concept present to transform the patents into an eligible application under § 101.
The ‘622 and ‘686 Patents
The Federal Circuit agreed with the district court and found the ‘622 and ‘686 were directed to abstract concepts. Moving to Alice step two, the claims did not contain an inventive concept sufficient to transform them into something patent eligible. The Court once again found that no inventive concept relating to “system architecture” resided in the claims. Additionally, the claims were directed to conventionally ordered steps and utilized conventional computer activities. Therefore, there was no inventive concept in either the ‘622 or ‘686 patent, and the patents were ineligible under § 101.
For claims directed to judicial exceptions under § 101, a patent cannot identify a sufficient inventive concept solely in the specification and survive the Alice inquiry; the inventive concept must be found in the claims themselves in order to transform the nature of the claims into a patent-eligible application.