Federal Circuit Summary

Before Lourie, O’Malley, and Stoll. Appeal from District of Delaware.

Summary: Under step one of Alice, a claim is not directed to an abstract idea when it recites a specific technique to solve a technological problem arising in computer networks and that improvement is bolstered by the specification.

SRI sued Cisco for infringement of two of SRI’s network surveillance patents. Cisco moved for summary judgement on various issues, including that the claims are drawn to patent ineligible subject matter. The district court denied summary judgment of ineligibility. A jury found that Cisco willfully infringed the patents. Cisco appealed the district court’s denial of summary judgment of patent ineligibility under 35 U.S.C. § 101, the denial of its motion for judgment as a matter of law that it did not willfully infringe the patents, and other issues.

The Federal Circuit affirmed the district court’s finding that the claims are subject matter eligible under step one of Alice as they are not directed to an abstract idea. The Federal Circuit found that the claims use a specific technique to solve a technological problem arising in computer networks, namely identifying hackers or potential intruders into a network by using a plurality of network monitors to analyze data on the network and integrate reports from the monitors. The Federal Circuit cited to the specification as support that the claims are directed to a technological solution to a technological problem. On appeal, Cisco argued that the claims are analogous to the ineligible claims in Electric Power Group, LLC v. Alstom S.A. as they are merely directed to generic steps required to collect and analyze data. The Federal Circuit distinguished Electric Power because those “claims were drawn to using computers as tools to solve a power grid problem,” whereas the claims at issue here are drawn to “improving the functionality of computers and computer networks themselves.”

With respect to willful infringement, the Federal Circuit agreed with Cisco that the jury’s finding of willful infringement going back to 2000 was not supported by substantial evidence. Cisco did not know of the patents until May 2012 when it received a notice letter. The Federal Circuit vacated and remanded for the district court to determine if substantial evidence supported willful infringement from 2012.

Judge Lourie dissented, arguing that, under step one of Alice, the claims are directed to the abstract idea of monitoring network security. At step two, Judge Lourie found no inventive concept because the claims are result-focused without claiming a specific way to monitor network activity.