The Court of Appeals for the Federal Circuit held that Two-Way Media’s patent claims for a multicasting system for streaming audio/visual data over the internet was patent ineligible subject matter under 35 U.S.C. § 101 because the claims were directed to abstract ideas and contained no additional elements that transform the nature of the claims into a patent-eligible application of the abstract ideas. Two-Way Media Ltd. v. Comcast Cable Communications, LLC, Case No. 2016-2531 (Fed. Cir. Nov. 1, 2017) (Available Here).
Two-Way Media’s patent explains that internet systems typically operate on a point-to-point, or unicast, basis. In unicast systems, a message is converted into a series of addressed packets which are routed from a source node to a destination node. These prior art unicast systems lack the capability to broadcast a message from a source node to all the other recipients in a network, as this type of operation could easily overload the network.
In contrast, IP multicasting provides a way to transmit one packet of information to multiple recipients wherein packets, destined for several recipients, are encapsulated in a unicast packet and forwarded from a source to a point in a network where the packets are replicated and forwarded on to all desired recipients. A multicast packet can be routed from a source node through a plurality of multicast routers to one or more devices receiving the multicast packets. The packet can then be distributed to all the host computers that are members of the multicast group.
The patents describe the invention as an improved scalable architecture for delivering real-time information. Embedded in the architecture is a control mechanism that provides for the management and administration of users who are to receive real-time information.
The ‘187 Patent Claim 1 states: A method for transmitting message packets over a communications network comprising the steps of: [a] converting a plurality of streams of audio and/or visual information into a plurality of streams of addressed digital packets complying with the specifications of a network communication protocol, [b] for each stream, routing such stream to one or more users, [c] controlling the routing of the stream of packets in response to selection signals received from the users, and [d] monitoring the reception of packets by the users and accumulating records that indicate which streams of packets were received by which users, wherein at least one stream of packets comprises an audio and/or visual selection and the records that are accumulated indicate the time that a user starts receiving the audio and/or visual selection and the time that the user stops receiving the audio and/or visual selection.
The district court engaged in claim construction, then addressed evidentiary arguments, and finally addressed the patents’ eligibility under the two-step framework espoused in Alice Corp. v. CLS Bank Int’l, 134 S. Ct. 2347 (2014).
The district court ultimately adopted Two-Way Media’s proposed constructions for the purposes of the motion. Two-Way Media, 2016 WL 4373698, at *3. This claim construction was contested by Comcast.
“The novelty and nonobviousness of the claims under [35 U.S.C.] §§ 102 and 103 does not bear on whether the claims are directed to patent-eligible subject matter under § 101.”
District Court stated that the claimed invention 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. The claims are thus directed to methods of sending and monitoring the delivery of audio/visual information.
Two-Way Media argued that the claims were directed to computer architecture that solved the technical problems of load, bottlenecking, and inadequate records. The district court disagreed, holding that “[n]one of the claims, however, recite or refer to anything that could be described as an architecture.”
If the claims are directed to eligible subject matter under Alice Step One, the inquiry ends. Thales Visionix Inc. v. United States, 850 F.3d 1343, 1349 (Fed. Cir. 2017); Enfish, LLC v. Microsoft Corp., 822 F.3d 1327, 1339 (Fed. Cir. 2016). If the claims are determined to be directed to an abstract idea, the Appeals Court then considers whether the claims contain an “inventive concept” sufficient to “transform the nature of the claim into a patent-eligible application.” Alice, 134 S. Ct. at 2355.
The Appeals Court found that Claim 1 recites a method for routing information using result-based functional language. The claim requires the functional results of “converting,” “routing,” “controlling,” “monitoring,” and “accumulating records,” but does not sufficiently describe how to achieve these results in a non-abstract way. Affinity Labs of Tex., LLC v. DIRECTV, LLC, 838 F.3d 1253, 1258–59 (Fed. Cir. 2016) (holding that claims were directed to an abstract idea where they claimed “the function of wirelessly communicating regional broadcast content to an out-of-region recipient, not a particular way of performing that function”); In Electric Power Group, LLC v. Alstom S.A., 830 F.3d 1350, 1351 (Fed. Cir. 2016), the challenged claims were directed to systems and methods for achieving real-time performance monitoring of an electric power grid. We held that the challenged claims were directed to the abstract idea of “gathering and analyzing information of a specified content, then displaying the results, and not any particular assertedly inventive technology for performing those functions.” Id. at 1354. In the same way, the Two-Way Media Claim 1 manipulates data but fails to do so in a non-abstract way.
Importantly, the Two-Way Media claims do not recite a scalable network architecture that itself leads to an improvement in the functioning of the system.
To save a patent at Alice Corp Step Two, an inventive concept must be evident in the claims. RecogniCorp, LLC v. Nintendo Co., 855 F.3d 1322, 1327 (Fed. Cir. 2017); BASCOM Glob. Internet Servs., Inc. v. AT&T Mobility LLC, 827 F.3d 1341, 1350 (Fed. Cir. 2016) (“[A]n inventive concept can be found in the non-conventional and non-generic arrangement of known, conventional pieces.”).
“The main problem that Two-Way Media cannot overcome is that the claim—as opposed to something purportedly described in the specification— is missing an inventive concept. RecogniCorp, 855 F.3d at 1327. While the specification may describe a purported innovative ‘scalable architecture,’ claim 1 of the ’187 patent does not.” The claim refers to certain data “complying with the specification without specifying the rules forming the communication protocol or specifying parameters for the user signals.” Eligibility and novelty are separate inquiries. Affinity Labs, 838 F.3d at 1263.
Two-Way Media asserts that the claim solves various technical problems, including excessive loads on a source server, network congestion, unwelcome variations in delivery times, scalability of networks, and lack of precise recordkeeping. But Claim 1 only uses generic functional language to achieve these purported solutions.
Two-Way Media also argues that the ‘187 claims are not preemptive, and therefore are patent eligible, because many methods of sending and monitoring the delivery of audio/visual remain available. “However, where a patent’s claims are deemed only to disclose patent ineligible subject matter under the Alice framework, as they are in this case, preemption concerns
are fully addressed and made moot. Ariosa Diagnostics, Inc. v. Sequenom, Inc., 788 F.3d 1371, 1379 (Fed. Cir. 2015).”