Patent drafters are often advised, in the wake of Alice Corp. Pty. Ltd. v. CLS Bank Int’l.,to use technical-sounding language in their patent claims. Here is a case that both bears out that advice – and at the same time illustrates the vagaries of our current regime of patent-eligibility law. In Ronald A. Katz Technology Licensing, L.P. v. Fedex Corp., No. 2:15-cv-02329-JPM-tmp (W.D. Tenn. March 24, 2016), the court denied a motion for judgment on the pleadings under FRCP 12(c) that claim 18 (the only claim in dispute) of U.S. Patent No. 6,292,547 was invalid under 35 U.S.C. § 101.
Claim 18, which depends from claim 11, is reproduced below:
11. An analysis control system for use with a communication facility including remote terminals for individual callers, wherein each of said remote terminals comprises a telephonic instrument including a voice communication device and digital input device in the form of an array of alphabetic numeric buttons for providing data and wherein said communication facility has a capability to automatically provide terminal digital data, indicating a calling telephone number, said analysis control system comprising:
interface structure coupled to said communication facility to interface said remote terminals for voice and digital communication and including means to provide caller data signals representative of data relating to said individual callers provided from said remote terminals or automatically provided by the communication facility with respect to the remote terminals prior to the close of communication with the callers including caller personal identification data entered by the caller via the digital input device and said terminal digital data indicative of a calling telephone number;
record testing structure connected to receive and test said caller data signals indicative of said terminal digital data representative of said calling telephone number and said caller personal identification data against previously stored terminal digital data and caller personal identification data;
storage structure for storing certain of said data provided by said individual callers including item data for ordering particular items; and
analysis structure for receiving and processing said caller data signals under control of said record testing structure.
18. A control system according to claim 11, wherein the data identifying the order is number data.
The court agreed with the defendants’ contention that “item-ordering is an abstract idea and that restricting access is also likely abstract.” But then, in a curious and seemingly logic-defying turn, the court found that the claim was not limited to the abstract idea of “item-ordering” because the claim was broader than the abstract idea. Claim 11 was not limited to order data, the court said. The court then further explained that claim 18 recited “a testing structure for analyzing caller data against stored data, which is a specific way of performing the function of processing calls to determine an entitled subset of callers.”
After having decided that claim 18 was not directed to an abstract idea, at least when considering “the claim in the light most favorable to Plaintiff” as required at the pleadings stage, the court then went on to explain that “Defendants could not succeed on the second part of the Alice analysis, which considers the “transformative” aspects of the claim which would make it patent-eligible.” Of the four structures recited in claim 18, the court focused on the “the record testing structure,” finding that it “is not a conventional processor because it is specialized and its components limit and define the system that is claimed.” And even if the structure included “generic” elements, the court found that “the structure utilizes them for a specific purpose that is not conventional and thus, is likely patent-eligible.”
Finally, the court commented that, even if all of the structures recited in the patent claim were generic, this would not necessarily preclude patent-eligibility. Instead, the court explained, “the combination of the claim elements plausibly recites patentable subject matter because the claim as a whole solves a technological problem in the computer-telephony industry.” As the cognoscenti would expect, the court cited bothDiamond v. Diehr, 450 U.S. 175 (1981) and DDR Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245 (Fed. Cir. 2014). Claim 18, the court explained, solved the problem of caller verification with “a system that enables such a form of unconventional caller verification.”
The court thus denied the defendants’ motion for judgment on the pleadings. Moreover, the court’s comments, and the thoroughness of its opinion, seem to say that the court will be no more receptive to a motion seeking a judgment of patent-ineligibility if and when this litigation gets through claim construction and proceeds to the summary judgment stage.
Editorial comment: had I realized, four years ago, how much of this blog would be devoted to 35 U.S.C. § 101 and patent-eligibility, I might have considered calling it the “Nose of Wax” blog. See White v. Dunbar, 119 US 47, 51 (1886); Sterner Lighting, Inc. v. Allied Electrical Supply, Inc., 431 F. 2d 539, 546 (5th Cir. 1970). In reading my discussion of the present court’s analysis, one might sense a certain frustration, and even pejorative tone. And while I do think that, whatever one thinks of Alice, the court misapplied its teachings here (most blatantly, saying a claim is not directed to an abstract idea because it is broader than the abstract idea seems just crazy). But that is not the source of the frustration. Instead, the difficulty lies with the loose definition of the patent-eligibility test itself, and the sense that, as time goes on, the test is becoming less, rather that more clear.