“The CAFC explained that recording and supplying customers with authentication information, such as a customer’s name and address, is abstract for being a longstanding commercial practice that ‘amounts to nothing more than gathering, storing, and transmitting information.’”
Last week, the U.S. Court of Appeals for the Federal Circuit (CAFC) affirmed a decision of the U. S. District Court for the Southern District of Florida in Electronic Communication Technologies, LLC. v. ShoppersChoice.com, LLC. In particular, Electronic Communication Technologies, LLC (ECT) sued ShoppersChoice for infringement of claim 11 of U.S. Patent No. 9,373,261 (“the ’261 patent”) in the district court. The district court granted ShoppersChoice’s motion for summary judgment that claim 11 of the ’261 patent was invalid under 35 U.S.C. § 101. ECT appealed and the CAFC affirmed. Judge Prost delivered the opinion for the Court.
Proceedings Before the District Court
The ‘261 patent, which is assigned to ECT, is directed to systems and methods for automated computer based notification systems. The district court found that claim 11 of the ‘261 patent was directed to “the abstract idea of providing advance notification of the pickup or delivery of a mobile thing.” Further, the district court noted that claim 11 did not include “an inventive concept” and merely recited “generic computer components that can be configured to perform purely conventional computer functions.”
CAFC’s Analysis of Step One of the Two-Step Patent Eligibility Framework
Following the two-step framework as laid out by the Supreme Court in Alice Corp. v. CLS Bank Int’l and Mayo Collaborative Servs. v. Prometheus Labs., Inc., the CAFC initially considered whether claim 11 of the ‘261 patent was directed to “an unpatentable law of nature, natural phenomena, or abstract idea.” The CAFC agreed with the district court that claim 11 was directed to the abstract idea of “providing advance notification of the pickup or delivery of a mobile thing.” The CAFC further noted that claim 11 recites conventional computer components and program code that performs several functions. In analyzing each of the functions, the CAFC reasoned that two of the functions, i.e. monitoring and notifying, “amount to nothing more than the fundamental business practice of providing advance notification of the pickup or delivery of a mobile thing.” Further, the CAFC reasoned that the additional functions, directed to increased security measures including inputting, storing, and providing “authentication information”, were also abstract. Looking to the specification of the ‘261 patent, the CAFC noted that “the ‘authentication information’ can be essentially any information recognizable to the party being contacted, ‘for example but not limited to, any of the following: a logo, trademark, coat of arms, symbol, pre-defined symbol or text or numeric code that has been made or known to or selected by the party being contacted, specific sound or sounds or music, . . . a telephone number that can be called to verify the notification, . . . part of a credit card number, such as the last four digits, [or] an image of a signature, such as the signature of the notified party.’” The CAFC explained that recording and supplying customers with authentication information, such as a customer’s name and address, is abstract for being a longstanding commercial practice that “amounts to nothing more than gathering, storing, and transmitting information.”
The Court considered ECT’s arguments that claim 11 is not abstract because 1.) it is “unique” and directed to security solutions for minimizing hacker’s impacts, and 2.) the ‘261 patent’s prosecution history was brief, transparent, and ECT asked the USPTO to “double-check” the § 101 eligibility of the claims. The CAFC found the arguments unpersuasive. With respect to ECT’s first argument, the CAFC reasoned that uniqueness does not confer patent eligibility and the very features that ECT alleged were unique, i.e. increasing security, were abstract. With respect to the second argument, the CAFC noted that details of the prosecution history “bear no relationship to the subject matter to which claim 11 is directed and do not negate the fact that claim 11 is directed to longstanding business practices.” Thus, the CAFC concluded that claim 11 was directed to an abstract idea.
CAFC’s Analysis of Step Two of the Eligibility Framework
Turning to step two of the patent eligibility framework, the CAFC considered whether claim 11 included “inventive concept sufficient to transform the nature of the claim into a patent-eligible application.” The CAFC concluded that claim 11 failed step two of the framework because it “is specified at a high level of generality, is specified in functional terms, and merely invokes well-understood, routine, conventional components and activity to apply the abstract idea identified previously”.
The CAFC rejected ECT’s argument that claim 11 should be considered valid because a shorter, less enabled claim was held to be valid in Amdocs (Israel) Ltd. v. Openet Telecom, Inc. The CAFC noted that patent eligibility does not depend on the length of the claim or whether it is enabled. In distinguishing Amdocs, the Court noted that the claim in Amdocs was directed to “an unconventional technological solution (enhancing data in a distributed fashion) to a technological problem (massive record flows which previously required massive databases).” In contract, the opinion explained, claim 11 of the ‘261 patent was directed to ineligible “longstanding commercial practices using generic computer components and technology.”
The CAFC also rejected ECT’s argument that the district court failed to construe claim 11 before finding the claim ineligible under Section 101. The CAFC noted that the district court properly determined eligibility without performing a claim construction analysis because ECT “provided no proposed construction of any terms or proposed expert testimony that would change the § 101 analysis.”
Thus, the CAFC concluded that claim 11 of the ‘261 patent was ineligible based on the two-step framework and affirmed the district court’s judgment.
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