Supreme Court Denies Cert in Two-Way Media v. Comcast, Refuses Another 101 Case

By Gene Quinn & Steve Brachmann
October 18, 2018

On Monday, October 15th, the U.S. Supreme Court denied a petition for writ of certiorari in Two-Way Media Ltd. v. Comcast Cable Communications, refusing to hear yet another appeal in a case involving a question of patent eligibility.

In appealing the Federal Circuit’s affirmation that its asserted patents were invalid under 35 U.S.C. § 101, petitioner Two-Way Media was asking the nation’s highest court to answer two important questions. First, whether the claims — when read in isolation — must be so specific to fully describe the nature of the innovation and the means of achieving it? Second, whether a court’s determination of ineligibility require the resolution of underlying factual questions that prevent resolution on a motion to dismiss.

Two-Way Media appealed this case to the Supreme Court after both the district court and the Federal Circuit found that Two-Way Media’s asserted patents covering a system for streaming audio/visual data over the Internet aren’t patent-eligible under Section 101 despite both courts finding that the patents were directed to innovative scalable architecture. The Federal Circuit had affirmed the district court’s invalidation of the asserted patents in a decision issued last November where the appellate court found that the asserted claims were directed to abstract ideas and contained no additional elements transforming the nature of the claims into a patent-eligible application of the abstract ideas. Two-Way Media’s patents stemmed from a patent application filed in 1996 and covered a method of solving an existing technical problem, namely a user’s inability to play a media file until that file was completely downloaded to local computer storage.

“Judges, practitioners, and commenters agree that the Federal Circuit’s interpretation of Section 101 of the Patent Act, 35 U.S.C. § 101, is a confusing and conflicting morass,” Two-Way Media’s petition for writ reads. The petition argued that various Federal Circuit panels are in “complete disarray” regarding whether isolated claims must set forth a “specific means or method” of implementing an inventive concept to survive a Section 101 challenge. In cases such as Smart Systems Innovation vs. Chicago Transit Authority (2017), a Section 101 eligibility analysis under the Alice two-step framework only looked at the text of the claims and didn’t rely on the written description. However, in cases such as 2016’s BASCOM Global Internet Services v. AT&T Mobility LLC, the Federal Circuit has relied on the written description in resolving a Section 101 challenge.

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Indeed, the throughout patent law the specification always informs a proper understanding of the meaning of claims, that is except when claims are being considered under Section 101 for purposes of a motion to dismiss, which is rather nonsensical. When interpreting a patent claim, intrinsic evidence (i.e., the patent itself, including the claims, the specification and prosecution history) must be considered in order to understand the true meaning of the claim. See Markman v. Westview Instruments, Inc., 52 F.3d 967, 979  (Fed.Cir.1995) (en banc),aff’d, 517 U.S. 370 (1996). How a district court judge, a Federal Circuit panel, or the Supreme Court can know whether there is an inventive concept, or even whether the claim covers an abstract idea is a true mystery when there has not been even a perfunctory claim construction, and no attempt to determine what, if anything, the specification imparts in terms of meaning into claim terms.

Simply put, the answer to the first question asked by Two-Way Media in its Petition for Certiorari is absolutely not. There never has been a requirement that a patent claim must be — or even should be or can appropriately be — read in isolation. In fact, decisions that purport to ascertain the meaning of claim languagewithout the pomp and circumstance of Markman are openly violating the clear dictates of the Supreme Court.

In any event, Two-Way Media further argued that the Federal Circuit panel’s refusal to consider the specification’s written description when deciding the abstract idea issue in the Alice test cannot be reconciled with the Patent Act. The statutory text of Section 101 requires consideration of the patent as a whole, while the specification required by 35 U.S.C. § 112 includes both the claims and the written description. “Nothing in the text of Section 101 or Section 112 suggests that a court must determine patent eligibility based only on the concluding claims of the specification, without considering the preceding written description,” the petition reads. Further, Two-Way Media sensibly argued that the Federal Circuit’s concern that the claims didn’t explain how the invention improves live streaming compared to the prior art should be limited to a Section 112 inquiry and not fall within the scope of a Section 101 analysis.

Two-Way Media also pointed out to the Supreme Court that the Federal Circuit is split on whether a Section 101 patent eligibility challenge can be answered as a question of law decided on a motion to dismiss or on summary judgment, even when parties disagree about underlying factual questions regarding the state of the art. The petition cited to two 2018 cases decided by the Federal Circuit to note that other panels have held that such a factual inquiry should take place: Aatrix Software v. Green Shades Software, and Berkheimer v. HP. By contrast, the Federal Circuit’s decision in Two-Way Media involved the resolution of patent-eligibility issues on the pleadings without either citing any evidence supporting its factual conclusion or considering evidence proferred by Two-Way Media.

“The holdings of cases like Berkheimer — that disputed factual questions underlying Section 101 eligibility determinations cannot be decided on the pleadings — directly conflict with cases such as this one in which Federal Circuit panels themselves undertake to resolve such questions,” Two-Way Media’s petition reads. Thus, whether the resolution of disputed facts underlying a Section 101 analysis is resolved at the pleadings stage or not differs based on the Federal Circuit panel assigned to the case. 

Panel dependency at the Federal Circuit is one of the issues that is increasingly undermining the Federal Circuit. With decisions supporting every issue it is sometimes hard to rationalize the need for a subject matter specific appellate court. It is hard to imagine the Regional Circuits being any less split on the law than Federal Circuit panels.

The Author

Gene Quinn

Gene Quinn is a Patent Attorney and Editor and founder of IPWatchdog.com. Gene is also a principal lecturer in the PLI Patent Bar Review Course and an attorney with Widerman Malek. Gene’s specialty is in the area of strategic patent consulting, patent application drafting and patent prosecution. He consults with attorneys facing peculiar procedural issues at the Patent Office, advises investors and executives on patent law changes and pending litigation matters, and works with start-up businesses throughout the United States and around the world, primarily dealing with software and computer related innovations. is admitted to practice law in New Hampshire, is a Registered Patent Attorney and is also admitted to practice before the United States Court of Appeals for the Federal Circuit. CLICK HERE to send Gene a message.

Gene Quinn

Steve Brachmann is a writer located in Buffalo, New York. He has worked professionally as a freelancer for more than a decade. He has become a regular contributor to IPWatchdog.com, writing about technology, innovation and is the primary author of the Companies We Follow series. His work has been published by The Buffalo News, The Hamburg Sun, USAToday.com, Chron.com, Motley Fool and OpenLettersMonthly.com. Steve also provides website copy and documents for various business clients.

Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com. Read more.

Discuss this

There are currently 11 Comments comments. Join the discussion.

  1. Bemused October 18, 2018 9:32 am

    Gene/Steve: Your commentary in the last paragraph exactly pinpoints the core issue implicated in this 101 analysis (as well as many, many other aspects of patent law): disharmony at the CAFC between its judges.

    In all the years I’ve been involved in this morass called US patent law I’ve never seen it this bad. Some of the blame can be put on Google-appointed judges and some of the blame can be put on judicial activism (read: anti-patent activism).

    Personally, I place most of the blame on the purported “Chief Judge” Sharon Prost who is both weak and ineffectual in maintaining uniformity on the CAFC. Most (all) of this nonsense would never have been allowed by discplined and principled former CAFC leaders like Giles, Michel, Rader.

  2. Concerned October 18, 2018 9:39 am

    I was told that winning my appeal is based on which judges are assigned.

    So whether facts matter is based on the luck of the judical draw. And SCOTUS appears content with such outcomes by refusing cert.

  3. EG October 18, 2018 9:40 am

    “Judges, practitioners, and commenters agree that the Federal Circuit’s interpretation of Section 101 of the Patent Act, 35 U.S.C. § 101, is a confusing and conflicting morass,”

    Hey Gene,

    Absolutely correct statement of what SCOTUS has created with the nonsensical and broken Mayo/Alice framework. As I’ve often stated, I could do better with a Ouija board then try to apply this framework. That SCOTUS refuses to fix this mess is appalling, reflects poorly on our highest court as being too arrogant to correct its egregious mistakes in patent law jurisprudence, and leaves us “mere mortals” with feeling that the Rule of Law has been instead supplanted by the Rule of Judicial Fiat. We can only wish and hope that Congress will finally a get a grip on the fact that SCOTUS has muddled, fumbled, as well as exceeded its Constitutional authority as it relates to patent law jurisprudence, and needs to be “reined in” again as happened when the Federal Circuit was created back in 1980.

  4. Anonymous October 18, 2018 11:08 am

    Good post Gene, but don’t forget the mental gymnastics that the Federal Circuit went through to find the claims patentable in Amdocs. The Court relied heavily on the specification and wrote “An understanding of how this is accomplished is only possible through an examination of the claims in light of the written description.”

    Should the “plain and ordinary” meaning of a claim term control in a patent eligibility analysis under the Alice/Mayo framework? Should a district court or the CAFC look at the written description to determine whether the patentee ascribed a particular meaning to a claim term? Do the standards differ for a patent being scrutinized at the district court versus a patent application undergoing examination?

    A missed opportunity to bring much needed clarification to the divergent views on subject matter eligibility.

  5. BP October 18, 2018 2:28 pm

    Another great victory for monopolies. As Judge Taranto says – forget patents, turn to secrecy. Secrecy in employment agreements, secrecy in collusion, secrecy in consumer “contracts”, secrecy in pricing, secrecy in court appointments, secrecy in ethics violations/conflicts, secrecy in discrimination/harassment, secrecy in transfers of cash, etc. Where a country has given into “o mecanismo”, innovation and patents are threats. Countries that foster monopolies and collusion to screw the people have no need for patents.

  6. Pro Say October 18, 2018 8:03 pm

    The only certain solution to this eligibility morass is the abolishment of 101.

    102, 103, and 112 do the job just fine.

  7. Stuart Bowie October 19, 2018 6:28 am

    The strict constructionists on SCOTUS are sending repeated messages: “if the law is a vague mess, get the legislature to fix the problem. We don’t rewrite law”.

    In addition, most Justices (and their clerks) are clueless about science.

  8. Joachim Martillo October 20, 2018 4:14 pm

    When one carefully reads the Mayo v. Prometheus decision and the Alice v. CLS Bank decision together, one must conclude they are logically inconsistent.

    There is no problem of vagueness. One judge from district court, PTAB, ITC, or CAFC could find a claim valid under 101 while another could find it invalid, and both judges would be following guidance of SCOTUS.

    I discuss in Did SCOTUS Botch Its Own Test in Mayo v. Prometheus and Break the US Patent System?.

    Sorry for indirection. I have difficulty with alternative character sets on this blog.

    BTW, when I serve as an expert, I usually have no problem with explaining science & technology to judges (unless the judge is senior and losing his marbles) or to lawyers. Most judges and lawyers are intelligent enough to understand most patents with a reasonable amount of guidance.

  9. concerned October 21, 2018 7:03 am

    Mr. Martillo:

    One complaint (of many) during the prosecution of my patent application was bits and pieces from key court cases were used to reject the application under s101, while the gist of those same cases could have approved the application. The huge bias is reject first and continuously.

    I have no s102, s103 or s112 rejections. Since s101 is an enabling provision or gateway to patents, my application should have been approved void of any other valid rejection issues. Instead s101 has become a be all/reject all provision.

    Does the USPTO approve any business methods using software, regardless of the problem it solves, or does the USPTO reject everything and force the courts to approve the application’s claims upon remand? To me, it is the latter and that in my opinion is the most harmful approach to everyone.

    If no s102, s103 or s112 issues, approve the application, let the consumer decide what is new and useful. Let the infringer argue in court why using the invention was not novel, not non-obvious or vague when the infringer never used the technology before it was disclosed to the world, a disingenuous position to argue.

    The extremes to deny my business method was obvious to me, Mr. Quinn and an author who both reached out for me to share my story. I was grateful for that opportunity to share.

  10. Eric Berend October 21, 2018 9:22 am

    @ 9. ‘concerned’:

    “I have no s102, s103 or s112 rejections.”

    Nose.
    Of.
    Wax.

    The stench of the Royal Nine’s cowardice repels the capable, legally conversant inventor who has created new, superior, world-changing inventions.

    And the (Alpha/Google-owned, liberal media led) peanut gallery cheered!
    Inspired by the Cheerleader-in-Chief, former U.S. President Obama himself!

    Once upon a time, a U.S. President made an inspirational speech about reaching the Moon, and it drove this nation for two decades. More recently, a U.S. President made an inspirational speech that included antagonism against so-called “patent trolls”, and so far, it is driving the nation forth with a similar effect.

  11. IP Newbie November 15, 2018 5:00 am

    Have any of you read the claims of the patent at issue? The claims recite totally generic functions and do not at all relate to the scalable architecture. Also: if the patent was issued in 1996 what is the point of litigating it in 2016?

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