The Court of Appeals for the Federal Circuit confirmed a district court’s determination (on a motion to dismiss) that several patented methods of verifying email and reduce potential hacking events were abstract ideas and, since the patent claims contained no additional elements that transform the nature of the claims into a patent-eligible application of the abstract idea, the patents were invalid under the Patent Act, 35 U.S.C. sec. 101. Secured Mail Solutions LLC v. Universal Wilde, Inc., Case No. 2016-1728 (Fed. Cir. 2017) (Available Here).
Secured Mail Solutions LLC appeals from the United States District Court for the Central District of California’s grant of a motion to dismiss on grounds that the claims of seven asserted patents are directed to subject matter ineligible for patenting under 35 U.S.C. § 101. The Court of appeals affirmed the decisions because the claims of the asserted patents are directed to an abstract idea and the claims contain no additional elements that transform the nature of the claims into a patent-eligible application of the abstract idea.
All the patents involve methods whereby a sender affixes an identifier on the outer surface of a mail object (e.g. envelope or package) before the mail object is sent. One patent group, the Intelligent Mail Barcode patents, recite a method for verifying the authenticity of the mail object. The barcode is affixed to the outside of the mail object and an authenticating portion of the barcode is stored in a database. The recipient of the mail object can access the database and use that authenticating portion to verify that a mail object is authentic.
Other groups of patents, the QR Code patents and Personalized URL patents, additionally require that a reception device (e.g., personal computer) be used to scan the encoded data and display the resulting data on the reception device’s display screen. In the QR Code patents, the identifier is a QR code (two-dimensional barcode) which a user can scan to look up additional electronic information related to the mail object.
A third group of patents, the Personalized URL patents, uses a method similar to the QR Code patents is used, except the identifier is a personalized network address, or URL. For example, the user can type the URL into her web browser and be directed straight to a specific account, or to other personalized information. The types of data provided by the sender include content information, warranty information, and account information.
A representative claim in the Intelligent Mail Barcode patent recites: 1. A method of verifying mail identification data, comprising: [a] affixing mail identification data to at least one mail object, said mail identification data comprising a single set of encoded data that includes at least a unique identifier, sender data, recipient data and shipping method data, wherein said unique identifier consists of a numeric value assigned by a sender of said at least one mail object; [b] storing at least a verifying portion of said mail identification data; [c] receiving by a computer at least an authenticating portion of said mail identification data from at least one reception device via a network, wherein said authenticating portion of said mail identification data comprises at least said sender data and said shipping method data; and [d] providing by said computer mail verification data via said network when said authenticating portion of said mail identification data corresponds with said verifying portion of said mail identification data.
A representative claim in the QR Code patents recites: 1. A method for providing electronic data to a recipient of a mail object, comprising: [a] Generating, by a processor, a barcode for a mail object, said barcode including at least a first set of mail data, said first set of mail data including data corresponding to said recipient of said mail object; [b] affixing said barcode to said mail object; [c] submitting said mail object to a mail carrier for delivery to said recipient of said mail object; [d] receiving said first set of mail data, including data corresponding to said recipient of said mail object, from a reception device of said recipient via a network; [e] providing said electronic data to said reception device via said network in response to receiving said first set of mail data, said electronic data including a content of said mail object; [f] wherein said reception device displays said electronic data to a recipient of said mail object by displaying said electronic data on a screen of said reception device.
A key claim in the Personalized URL patents group recites: 1. A method for providing electronic data to a recipient of a mail object, comprising: [a] using an output device to affix a single set of mail ID data to said mail object, said single set of mail ID data including at least recipient data, said recipient data comprising a personalized network address associated with said recipient of said mail object; [b] submitting said mail object to a mail carrier for delivery to said recipient of said mail object; [c] receiving said recipient data from a reception device of said recipient via a network; and [d] providing by at least one processor said electronic data to said reception device via said network in response to receiving said recipient data, said electronic data including data on a content of said mail object; [e] wherein said reception device displays said electronic data to a recipient of said mail object by displaying said electronic data on a screen of said reception device.
The Patent Act defines patent-eligible subject matter as “any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof.” 35 U.S.C. § 101. The courts have created certain exceptions to the literal scope of § 101, determining that laws of nature, natural phenomena, and abstract ideas are not patent-eligible. Alice Corp. v. CLS Bank Int’l, 134 S. Ct. 2347, 2354 (2014) (quoting Ass’n for Molecular Pathology v. Myriad Genetics, Inc., 133 S. Ct. 2107, 2116 (2013)).
In Step One of the Alice Corp analysis, the court determines whether the claims at issue are “directed to” a judicial exception, such as an abstract idea. 134 S. Ct. at 2355. If not, the inquiry ends. Thales Visionix Inc. v. United States, 850 F.3d 1343, 1346 (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 we next consider under Step Two 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.
On appeal, Secured Mail argued that its claims are patent-eligible under Enfish. The court in Enfish held the claims relating to a computer database implementation to be patent-eligible under Alice step one because the claims focused on an improvement to computer functionality itself, not on economic or other tasks for which a computer is used in its ordinary capacity. Id. at 1332–33. The claims in Enfish related to organization of data in a table in computer memory and a system for indexing that data. Id. at 1332–332.
In contrast, the claims of Secured Mail’s patents are not directed to an improvement in computer functionality. For example, the claims are not directed to a new barcode format, an improved method of generating or scanning barcodes, or similar improvements in computer functionality.
Secured Mail argued that the claims are specifically directed to a sender-generated unique identifier, which improved on the existing process both by reliably identifying the sender of the mail object and by permitting the sender to create a bi-directional communication channel between the sender and recipient of the mail object. The fact that an identifier can be used to make a process more efficient, however, does not necessarily render an abstract idea less abstract.
The claims of the Intelligent Mail Barcode patents are not directed to specific details of the barcode or the equipment for generating and processing it. Therefore, the claims are not directed to an improvement in computer functionality.
The claims state that various identifiers are affixed to a mail object, stored in a database, scanned from the mail object, and retrieved from the database. No special rules or details of the computers, databases, printers, or scanners are recited. There is no description of how the unique identifier is generated or how a unique identifier is different from a personal name, or return address.
As for the QR Code patents, the methods are not limited to any particular technology of generating, printing, or scanning a barcode, of sending a mail object, or of sending the recipient specific information over a network. Rather, each step of the process is directed to the abstract process of communicating information about a mail object using a personalized marking.
In Alice Corp Step Two, the courts consider the elements of the claims to determine whether they transform the nature of the claim into a patent-eligible application of the abstract idea. Content Extraction & Transmission LLC v. Wells Fargo Bank, 776 F.3d 1343, 1347 (Fed. Cir. 2014). This is the search for an inventive concept, which is something sufficient to ensure that the claim amounts to significantly more than the abstract idea itself. Id. “To save a patent at step two, an inventive concept must be evident in the claims.” Recognicorp, LLC v. Nintendo Co., 855 F.3d 1322, 1327 (Fed. Cir. 2017).
In the Intelligent Mail Barcode patents, the sender generated identifier is created by combining various pieces of data, such as a unique identifier, sender data, recipient data and shipping method data. The data need not even be in the form of a barcode, much less a specific new type of barcode. The claim language does not explain how the sender generates the information, only that the information itself is unique or new. The claim language does not provide any specific showing of what is inventive about the identifier or about the technology used to generate and process it. The district court is correct that the sender-generated identifier is not a sufficiently inventive concept. Id. at 1051–53.
Secured Mail argued that because the district court’s conclusions address questions of fact, it was inappropriate for the district court to dismiss the case via Rule 12(b)(6). However, the Federal Circuit earlier determined that the claims may be patent ineligible subject matter at the motion to dismiss stage based on intrinsic evidence from the specification without need for “extraneous fact finding outside the record.” See, e.g., In re TLI Commc’ns LLC Patent Litig., 823 F.3d 607, 613–14 (Fed. Cir. 2016); Content Extraction, 776 F.3d at 1349; cf. OIP Techs., Inc. v. Amazon.com, Inc., 788 F.3d 1359, 1362 (Fed. Cir. 2015) (holding that a Section 101 inquiry is a question of law).