Intellectual Ventures II L.L.C. v. JP Morgan Chase & Co. et al
Filing
381
ORDER AND OPINION GRANTING MOTION FOR PARTIAL SUMMARY JUDGMENT. For the foregoing reasons, JPMC's motion is GRANTED and Intellectual Ventures' claims with respect to the '694 Patent, the '084 Patent, and the '409 Patent (Coun ts 2, 3, and 4 of the Complaint, respectively) are dismissed. The Clerk shall mark the motion (Doc. No. 252) terminated. The parties shall appear for a status conference on May 19, 2015 at 10:30 a.m. to discuss the status of proceedings related to th e remaining Counts of the Complaint: Count 1, relating to Patent No. 5,745,574, and Count 5, relating to Patent No. 7,634,666. re: 252 MOTION for Summary Judgment of Invalidity for Lack of Patentable Subject Matter Under 35 U.S.C. § 1 01 filed by JP Morgan Chase Bank, National Association, Chase Bank USA, National Association, Paymentech LLC, JP Morgan Chase & Co., Chase Paymentech Solutions, LLC. (Status Conference set for 5/19/2015 at 10:30 AM before Judge Alvin K. Hellerstein.) (Signed by Judge Alvin K. Hellerstein on 4/28/2015) (rjm)
f
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
------------------------------------------------------------ x
ORDER AND Oi>INION
GRANTING MOTION FOR
PARTIAL SUMMARY
JUDGMENT
INTELLECTUAL VENTURES II LLC,
Plaintiff,
v.
13-cv-3777 (AKH)
JP MORGAN CHASE & CO., JPMORGAN
CHASE BANK, NATIONAL ASSOCIATION,
CHASE BANK USA, NATIONAL
ASSOCIATION, CHASE PAYMENTECH
SOLUTIONS LLC, and PAYMENTECH LLC,
Defendants.
------------------------------------------------------------ x
AL VINK. HELLERSTEIN, U.S.D.J.:
Plaintiff Intellectual Ventures II LLC ("Intellectual Ventures") sues Defendants
JP Morgan Chase & Co. and subsidiaries ("JPMC") for infringing five patents, each claiming
methods related to computer network security. JPMC moves for summary judgment with respect
to three of the patents on the basis that they claim patent-ineligible subject matter. See 35 U.S.C.
§ 101. For the reasons discussed in this Opinion, JPMC's motion is granted, and Intellectual
Ventures' claims with respect to the three patents are dismissed.
I.
BACKGROUND
A.
The '694 Patent
U.S. Patent No. 6,826,694, entitled "High Resolution Access Control" (the '"694
Patent"), was issued on November 30, 2004. See Deel. Michael A. Feldman Supp. JPMC Mot.
Summ. J. ("Feldman Deel."), Exh. H. The '694 Patent recites a single claim drawn to an
1
allegedly new process for filtering packetized information received by a network's firewall.
Claim 1 recites:
A method for filtering a packet, including the steps of: (a)
receiving packet having at least one header parameter and a
payload; (b) selecting an access rule based upon the contents of the
payload of the packet received in step a; (c) implementing the
access rule for a packet, wherein the access rule is selected based
upon a combination of the contents of the packet received in step
(a) and the contents of at least one other packet.
See id. at 6. The terms of the claim have been defined. A "packet" is a "[d]iscrete unit of
information being routed through a computer network, often to a designated addressee." Order
Regarding Claim Construction and Patent Summaries ("Markman Order") at 11, 13-cv-3777,
ECF No. 82 (S.D.N.Y. Mar. 18, 2014). "Payload" is "[d]ata conveyed by the packet outside the
header segment." Id. at 12. "Access rule" is "[a] rule for filtering information traveling between
a source and a destination." Id. at 11.
According to the patent application, digital information can be bundled into
"packets" composed of a "header" and a "payload." Id. at 2:22-23. A "header" identifies the
packet's source and destination, and information necessary to decode the packet upon arrival.
See id. at 2:26-29. The "payload" consists of the data to be conveyed by the packet from its
source to the destination. See id. at 2:26-28. Firewalls and other network filters use "access
rules" to decide whether a packet, or group of packets, is given access to a network. See id. at
1:29-44. Prior art had filtered packets by analyzing solely the information contained in the
packet "header" and selecting a rule pre-loaded into the firewall. See id. at 1:29-64. The
selected rule, in turn, implemented an action of "pass" or "drop," resulting in the packet being
denied or allowed access to its destination. See id.
2
The '694 Patent claims an improved method for detecting and preventing entry of
a packet containing "malware." The claim describes that by a "rule," constituting part of a
"firewall," the packet is guided to an "access control proxy." See id. at 3:9-30. The "proxy"
analyzes the "header" of the packet, identifying the sender and the intended recipient, the
substance of the message of the packet (the "payload"), and the payload of at least one other
packet. See id. at 3 :9-30. An "Access Rule" then is selected and applied either to "pass" or
"drop" the packet or packets. See id. Intellectual Ventures explains that this method allows
filtering systems to identify threats based upon information that may have been "strategically
fragmented and hidden in multiple packets." Opp'n Br. at 8. According to the '694 Patent, its
method may be implemented by a "general purpose microprocessor" and "any means of storing
digital information," such as "Random Access Memory (RAM), a hard disk, a floppy disk, an
optical storage medium, or any combination thereof." See, e.g., Feldman Deel., Exh. Hat 3:564:40. Nothing in the claim or patent description, however, limits the implementation of the
method to a particular device or program.
B.
The '409 Patent
U.S. Patent No. 6,314,409, entitled "System for Controlling Access and
Distribution of Digital Property" (the '"409 Patent"), recites a method that permits an owner or
distributor to control access to, and use of, digital property after primary distribution to an
authorized user. Intellectual Ventures has asserted infringement of 3 3 claims of the '409 Patent
3
consisting of "method," "device," and "system" claims. 1 The parties have agreed that Claim 1 is
representative.2 Claim 1 recites:
A method of distributing data, the method compnsmg: (a) protecting
portions of the data; and (b) openly distributing the protected portions of
the data, whereby (c) each and every access to an unprotected form of the
protected portions of the data is limited in accordance with rules defining
access rights to the data as enforced by an access mechanism, (d) so that
unauthorized access to the protected portions of the data is not to the
unprotected form of the protected portions of the data.
Feldman Deel., Exh. 0 at 35:33-42. "Protected" means "encrypted." See Markman Order at 7.
"Access rights" are "[p]ermissions that control a user's access to data." Id. at 7. "Access
mechanism" is "[h]ardware and/or software for controlling access to data." Id. at 8.
According to the patent application, the prior art provided a method to protect
intellectual property through executable software-based cryptography. See Feldman Deel., Exh.
1
The method claims include Claims 1-11, 13-21, 23-24. See Feldman Deel., Exh. 0 at 35-40. The device and
system claims include Claims 25-27, 29-30, 32-33, 36-40, and 42. See id Claims 1, 21, 23-25, 30, 32, 33, 36, and
38 are independent. See id.
2
A review of the "device" and "system" claims reveals that they are substantively equivalent to the "method"
claims. For example, Claim 25 recites:
A device for displaying images represented by data comprising protected data portions
and rules defining access rights to the data, the device comprising: means for storing
rules; an access mechanism for accessing the data only in accordance with the rules,
whereby user access to an unprotected form of the protected data portions is permitted by
the access mechanism only if the rules indicate that the user is allowed to access the
protected portions of the data, the access being enforced by the access mechanism; and
means for displaying the images represented by the accessed data.
Feldman Deel, Exh. 0 at 38:1-13. Similarly, Claim 36 recites:
A process control system comprising a device for controlling access to data, the data
comprising protected data portions and rules defining access rights to the data, the device
comprising: means for storing the rules; and an access mechanism for accessing the
unprotected form of the protected data portions only in accordance with the rules,
whereby output of an unprotected form of the protected data portions is permitted by the
access mechanism only in such manner as is permitted by the rules.
Feldman Deel, Exh. 0 at 39:42-40:4. Because all of the claims in the '409 Patent are substantively equivalent to
Claim 1, they "rise and fall together" and need not be considered individually. See Accenture Global Servs., GmbH
v. Guidewire Software, Inc., 728 F.3d 1336, 1341 (Fed. Cir. 2013); see also Content Extraction & Transmission
LLC v. Wells Fargo Bank, N.A., No. 12 Civ. 2501, 2013 WL 3964909, at *5 (D.N.J. July 31, 2013) ("Where the
claims, as here, are substantially similar and linked to the same abstract idea, the Court is free to dispose of the
additional claims in a less detailed fashion." citing Bilski, 130 S. Ct. at 3231)).
4
0 at 3:30-43. Authorized users, such as retail consumers, were provided with a decryption key
that permitted access and use. See Feldman Deel., Exh. 0 at 3:37-43. However, the prior art
was unable to "protect[] the data after it ha[d] been decrypted," leading to various unauthorized
uses and secondary distributions, resulting in billions of dollars of lost opportunities. See
Feldman Deel., Exh. 0 at 5:4-12 ("In each case, once the data are available to an authorized user,
they are basically unprotected and may be copied, modified, or transmitted at will.").
The '409 Patent claims to control post-distribution access. As described in the
patent, an owner or distributor first chooses a "data-encrypting algorithm," or set of rules, based
on the particular security risk posed by the data, and determines the use to which the data may be
put after distribution. See Feldman Deel., Exh. 0 at 11:56-12:53. The algorithm may be
packaged with the data by an "authoring mechanism," or sent separately. See Feldman Deel.,
Exh. 0 at 12:23-26. After distribution of the data, an "access mechanism," with pre-selected
rules, controls the nature and extent of a user's access. See Feldman Deel., Exh. 0 at 15:31-35.
For example, secondary distribution may be controlled by access rules that limit the subsequent
transmission of data, either altogether (i.e., "no output"), or by causing the data to be encrypted,
randomized, or destroyed if tampering is detected.3 See Feldman Deel., Exh. 0 at 17:1-3, 25:6326:6. The Patent claims that its method may be implemented on varied equipment including, for
example, a fax machine, VCR, or computer. See Feldman Deel., Exh. 0 at 7:61-64 ("The device
containing the mechanism of the present invention can be a stand-alone device such as a
facsimile machine, a television, a VCR, a laser printer, a telephone, a laser disk player, a
computer system or the like.").
C.
The '084 Patent
3
Other examples of access rules include prohibitions against executing, modifying, copying, printing, or accessing
specified data. See Feldman Deel., Exh. 0 at 23:17-65. Access rules may also limit data use to certain classes of
users, such as those over the age of 18. See Feldman Deel., Exh. 0 at 24:53-25: 14.
5
U.S. Patent No. 6,715,084, entitled "Firewall System and Method Via Feedback
from Broad-Scope Monitoring for Intrusion Detection" (the "'084 Patent"), claims a method for
monitoring multiple computer hosts within a network for anomalies, and alerting the various
hosts of possible intrusion. Intellectual Ventures has asserted infringement of 25 "method" and
"system" claims. 4 The parties agree that Claim 1 is representative. 5 Claim 1 recites:
A method of alerting at least one device in a networked computer system
comprising a plurality of devices to an anomaly, at least one of the
plurality of devices having a firewall, comprising: (a) detecting an
anomaly in the networked computer system using network-based intrusion
detection techniques comprising analyzing data entering into a plurality of
hosts, servers, and computer sites in the networked computer system; (b)
determining which of the plurality of devices are anticipated to be affected
by the anomaly by using pattern correlations across the plurality of hosts,
servers, and computer sites; and (c) alerting the devices that are
anticipated to be affected by the anomaly.
4
The method claims include Claims l-7, 9, 12-14, and 16-17. See Feldman Deel., Exh. Pat 12:19-13:30. The
system claims include Claims 19-20, 22-24, and 26-33. See Feldman Deel., Exh. Pat 13:34-14:57. Claims 1, 9, 19,
and 26 are independent.
5
A review of the system claims reveals that they are substantively equivalent to the method claims. For example,
Claim 19 recites:
An intrusion detection and alerting system for a computer network comprising: a plurality
of devices coupled to the computer network, each device adapted to at least one of: (1)
sense data and provide the data to a data collection and processing center, and (2) be
adjustable; and the data collection and process center comprising a computer with a
firewall coupled to the computer network, the data collection and processing center
monitoring data communicated to at least a portion of the plurality of devices coupled to
the network, detecting an anomaly in the network using network-based intrusion
detection techniques comprising analyzing data entering into a plurality of hosts, servers,
and, computer sites in the networked computer system, determining which of the devices
are anticipated to be affected by the anomaly by using pattern correlations across the
plurality of hosts, servers, and computer sites, and alerting the devices.
Feldman Deel., Exh. Pat 13:34-52. Similarly, Claim 26 recites:
A data collection and processing center comprising a computer with a firewall coupled to
a computer network, the data collection and processing center monitoring data
communicated to the network, and detecting an anomaly in the network using networkbased intrusion detection techniques comprising analyzing data entering into a plurality
of hosts, servers, and computer sites in the networked computer system.
Feldman Deel., Exh. Pat 14:18-25. As with the '409 Patent, I find that all of the claims in the '084 Patent
"rise and fall together" and, therefore, need not be considered individually. See Accenture Global Servs.,
GmbH, 728 F.3d at 1341; Content Extraction & Transmission LLC, 2013 WL 3964909 at *5.
6
Feldman Deel., Exh. Pat 12:19-33. "Network based intrusion detection techniques" are
"techniques for detecting, by analyzing network communications, whether unauthorized
computers have entered or are seeking to enter a network, or are conducting reconnaissance
activities." Markman Order at 5. An "anomaly" is "an irregularity in the data." Id at 5.
"Alerting the devices" means "notifying the device, an associated firewall, or administrator." Id
at 5.
According to the '084 Patent application, prior art taught methods that monitored
data from a single host location. See Feldman Deel., Exh. Pat 4:64-67 ("Intrusion detection
products and services presently available are directed to the analysis of a single customer's data
to determine intrusion events, but lack the capability to perform broad-scope intrusion
analysis/detection."). The claimed method purports to improve upon the prior art by analyzing
data traffic directed at multiple hosts. See Feldman Deel., Exh. P at 5 :45-51. First, the method
calls for a "data collection and processing center" attached to a computer network to receive
information from various network devices and monitors; second, by the use of "different types of
algorithms," the data collection and processing center analyzes the data for broad patterns of
suspicious activity; and, third, if any intrusions are detected, "appropriate alerts or notifications
are transmitted to the pertinent administrators of the hosts on the network." Feldman Deel., Exh.
Pat 7:31-44; 8:66-9:8; 10:54-11:13; see also Markman Order at 5. As with the '694 Patent and
the '409 Patent, neither the claim nor the description of the invention in the specifications limit
the '084 Patent to any particular device or machine. See Feldman Deel., Exh. Pat 12:19-14:57;
10:13-15 ("[E]mbodiments of the invention are not limited to any specific combination of
hardware circuitry and software.").
II.
STANDARD OF REVIEW
7
"The court shall grant summary judgment if the movant shows that there is no
genuine dispute as to any material fact and the movant is entitled to judgment as a matter of
law." Fed. R. Civ. P. 56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). A genuine issue
of material fact exists "if the evidence is such that a reasonable jury could return a verdict for the
nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). In ruling on a
motion for summary judgment, the court must view all evidence in the light most favorable to
the nonmoving party, see Overton v. NY State Div. ofMilitary & Naval Affairs, 373 F.3d 83, 89
(2d Cir. 2004), and must "resolve all ambiguities and draw all permissible factual inferences in
favor of the party against whom summary judgment is sought," Sec. Ins. Co. of Hartford v. Old
Dominion Freight Line Inc., 391 F.3d 77, 83 (2d Cir. 2004).
III.
APPLICABLE LAW
The determination whether a claim is drawn to patent-eligible subject matter is a
"pure question oflaw." Lumen View Tech. v. Findthebest.com, Inc., 984 F. Supp. 2d 189, 204
(S.D.N.Y. 2013). Patent-eligible subject matter is defined in section 101 of the Patent Act:
Whoever invents or discovers any new and useful process, machine,
manufacture, or composition of matter, or any new and useful
improvement thereof, may obtain a patent therefor, subject to the
conditions and requirements of this title.
35 U.S.C. § 101 (2012). The relevant term is "process,'' for that is what each of these patents
involve. "Process" is defined by the statute as a "process, art or method, and includes a new use
of a known process, machine, manufacture, composition of matter, or material." Id. § 1OO(b).
The Supreme Court long has upheld the patentability of processes:
A process is a mode of treatment of certain materials to produce a
given result. It is an act, or a series of acts, performed upon the
subject-matter to be transformed and reduced to a different state or
thing. If new and useful it is just as patentable as is a piece of
machinery. In the language of the patent law, it is an art. The
8
machinery pointed out as suitable to perform the process may or
may not be new or patentable; whilst the process itself may be
altogether new, and produce an entirely new result. The process
requires that certain things should be done with certain substances,
and in a certain order; but the tools to be used in doing this may be
of secondary consequence.
Diamondv. Diehr, 450 U.S. 175, 183 (1982) (quoting Cochrane v. Deener, 94 U.S. 780, 787-88
(1877)). However, "laws of nature, physical phenomena, and abstract ideas" are not patenteligible subject matter under§ 101. Bilski v. Kappas, 561 U.S. 593, 601 (2010). If they were,
the "basic tools of scientific and technological work" would be preempted. Gottschalk v.
Benson, 409 U.S. 63, 67 (1972); see also Alice Corp. Pty. Ltd. v. CLS Bank Int'l, 134 S. Ct.
2347, 2354 (2014). "[M]onopolization of those tools through the grant of a patent might tend to
impede innovation more than it would tend to promote it." Mayo Collaborative Servs. v.
Prometheus Labs., Inc., 132 S. Ct. 1289, 1293 (2012).
The Supreme Court also has cautioned against too broadly interpreting the
exceptions to§ 101 patentability. "[A]ll inventions at some level embody, use, reflect, rest upon,
or apply laws of nature, natural phenomena, or abstract ideas." Mayo, 132 S. Ct. at 1293; see
also Alice, 134 S. Ct. at 2354 ("[W]e tread carefully in construing this exclusionary principle lest
it swallow all of patent law."). Courts "must distinguish between patents that claim the building
blocks of human ingenuity and those that integrate the building blocks into something more ...
thereby transforming them into a patent-eligible invention." Alice, 134 S. Ct. at 2354.
The Supreme Court recently reaffirmed the two-step inquiry courts are to use in
drawing the distinction between patent-ineligible concepts, and patent-eligible applications of
such concepts. First, a court must "determine whether the claims at issue are directed to one of
those patent-ineligible concepts." Alice, 134 S. Ct. at 2355. If the answer is yes, the court
proceeds to the second step, which asks whether "the elements of each claim both individually
9
and 'as an ordered combination' ... 'transform the nature of the claim' into a patent-eligible
application." Alice, 134 S. Ct. at 2355 (quoting Mayo, 132 S. Ct. at 1298). The Supreme Court
described the second step of the analysis as "a search for an 'inventive concept'-i.e., an element
or combination of elements that is 'sufficient to ensure that the patent in practice amounts to
significantly more than a patent upon the [ineligible concept] itself."' Alice, 134 S. Ct. at 2355
(quoting Mayo, 132 S. Ct. at 1294).
"To transform an unpatentable law of nature into a patent-eligible application of
such a law, one must do more than simply state the law of nature while adding the words 'apply
it."' Mayo, 132 S. Ct. at 1294. Additional steps that "consist of well-understood, routine,
conventional activity," which, "when viewed as a whole, add nothing significant beyond the sum
of their parts" will not save an otherwise patent-ineligible claim. Mayo, 132 S. Ct. at 1298.
Further, the "prohibition against patenting abstract ideas 'cannot be circumvented by attempting
to limit the use of the formula to a particular technological environment' or adding 'insignificant
postsolution activity."' Bilski, 561 U.S. at 610-11. "Wholly generic computer implementation is
not generally the sort of' additional feature' that provides any 'practical assurance that the
process is more than a drafting effort designed to monopolize the [abstract idea] itself."' Alice,
134 S. Ct. at 2358.
The Federal Circuit Court of Appeals has acknowledged that the line between an
abstract idea and a patent-eligible application may, at times, be difficult to draw. See DDR
Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245, 1255 (Fed. Cir. 2014) ("Distinguishing
between claims that recite a patent-eligible invention and claims that add too little to a patentineligible abstract concept can be difficult, as the line separating the two is not always clear.").
This is particularly true with computer software patents. Courts must be careful not to mistake a
10
difficulty in conceptualizing an esoteric-but potentially patent-eligible-invention with a
patent-ineligible abstraction. Indeed, in Alice, which involved software implementing the
financial strategy of intermediated settlement of financial instruments, the Supreme Court
expressly declined to provide any bright-line rule. Alice, 134 S. Ct. at 2357 ("In any event, we
need not labor to delimit the precise contours of the 'abstract ideas' category in this case."); see
also Bilski, 130 S. Ct. at 3232 (declining to "define further what constitutes a patentable
'process,' beyond pointing to the definition of that term provided in§ lOO(b)"). Nonetheless, in
a line of cases stretching back over 40 years, the Supreme Court has provided several
"guideposts" to which courts may look in determining what constitutes patent-ineligible subject
matter.
The Supreme Court first addressed the patent-eligibility of processes involving
computer software in Gottschalkv. Benson, 409 U.S. 63 (1972). In that case, the Supreme Court
invalidated a patent claiming "a method of programming a general-purpose digital computer to
convert signals from binary-coded decimal form into pure binary form." Id. at 65. While the
method was applicable only to digital computers, the claims were not limited to a particular
machine, technology, or purpose. See id. at 64. The Court concluded that the claim was "so
abstract and sweeping as to cover both known and unknown uses of the [binary-coded decimal],"
and that "the patent would wholly preempt the mathematical formula and in practical effect
would be a patent on the algorithm itself." Id. at 72.
The Supreme Court explained that "[t]ransformation and reduction of an article
'to a different state or thing' is the clue to the patentability of a process claim that does not
include particular machines." Id. at 70. However, the Court went on to make clear that the socalled "machine-or-transformation" test is not a requisite for patent eligibility, particularly with
11
respect to computer program patents. Id. at 71. The Supreme Court also made clear that it was
not holding that a generally-applicable software program was unpatentable solely because it was
not tied to a particular machine or failed to transform material into "a different state or thing."
Id.
In Parker v. Flook, the Supreme Court invalidated another patent aimed at a nonpatentable mathematical formula, but the use of which was limited to a narrow category of "postsolution" applications. See 437 U.S. 584 (1978). The patent in that case claimed a method for
"updating" alarm limits for certain variables in the catalytic conversion process, such as
temperature, pressure, and flow rate, during transient operating conditions. See id. at 585. The
only novel step of the claimed process consisted of the application of a mathematical algorithm
to calculate the updated limits. See id. at 585-86. The Court concluded that the patent claimed
ineligible subject matter. In doing so, it rejected the argument that "the presence of specific
'post-solution' activity-the adjustment of the alarm limit to the figure computed according to
the formula"-distinguished the case from Benson and made the process patent-eligible. Id. at
590.
Diamond v. Diehr, 490 U.S. 175 (1981), involved a patent for a process of curing
synthetic rubber by constantly measuring temperature within a mold, feeding the measurements
automatically into a computer, and then having the computer repeatedly recalculate cure times
according to a recognized formula. Since, under Benson and Flook, mathematical formulas and
computer algorithms alone could not be claimed for patent protection, the question presented was
whether a claim for a rubber curing process that utilized such formulas and algorithms could be
protected. The Supreme Court held that it could because the claims were focused, not on
mathematical formulas, but on a process for curing rubber which, if performed as claimed, could
12
transform an article "into a different state or thing." See id at 184. The claim of the patent did
not purport to preempt others from using the formulas, but described "specific, concrete, and
otherwise patentable subject matter" relating to curing rubber. See id. at 192. As the Supreme
Court stated, "when a claim containing a mathematical formula implements or applies that
formula in a structure or process which, when considered as a whole, is performing a function
which the patent laws were designed to protect (e.g., transforming or reducing an article to a
different state or thing), then the claim satisfies the requirements of § 101." Id The Supreme
Court made no rulings whether the statutory conditions of novelty or nonobviousness were
satisfied. It ruled only on whether the claim of the patent was drawn to subject matter eligible
for patent protection.
The Supreme Court has carried forward these holdings in more recent cases. In
Bilski v. Kappas, for example, the patent claimed a process by which energy suppliers could
apply statistical formulas via a computer program to hedge against market fluctuations. See 561
U.S. 593, 598 (2010). The Supreme Court held that the petitioners' attempt to patent "both the
concept of hedging risk and the application of that concept to energy markets" was invalid. Id. at
609. The Court reasoned that the concept of hedging-a "fundamental economic practice long
prevalent in our system"-was an unpatentable abstract idea, like the formulas in Benson and
Flook, because it "would pre-empt use of this approach in all fields, and would effectively grant
a monopoly over an abstract idea." Id. at 612. The remaining claims simply tried to limit the
application of the concept to the commodities markets and apply well-known statistical analysis,
neither of which sufficed to transform the claims into patent-eligible subject matter. 6 See id.
6
The Supreme Court also rejected the Federal Circuit's holding that the "machine-or-transformation" test is the
exclusive test for§ 101 analysis of process patents. Id. at 604 ("This Court's precedents establish that the machineor-transformation test is a useful and important clue, an investigative tool, for determining whether some claimed
inventions are processes under§ 101."). The Court further explained that the invention of computer programs, in
13
Most recently, the Supreme Court invalidated a patent drawn to a process for
mitigating settlement risk by effectuating trades through a third party intermediary, empowered
to confirm the ability of both counterparties to honor their obligations before authorizing
payments. See Alice, 134 S. Ct. at 2352. The specific method recited in the patent at issue in
Alice consisted of the following steps:
(1) "creating" shadow records for each counterparty to a transaction; (2)
"obtaining" start-of-day balances based on the parties' real-world accounts
at exchange institutions; (3) "adjusting" the shadow records as
transactions are entered, allowing only those transactions for which the
parties have sufficient resources; and (4) issuing irrevocable end-of-day
instructions to the exchange institutions to carry out the permitted
transactions.
Id. at 2359. Beginning with the first step of the above-described two-step analysis, determining
if the claims at issue were directed to a patent-ineligible concept, the Supreme Court held that
they were, stating, the "[method] claims are drawn to the abstract idea of intermediated
settlement," "a fundamental economic practice long prevalent in our system of commerce," and
"a building block of the modem economy." Id., 134 S. Ct. at 2355-56.
Turning to the second step, whether the method claims included any additional
features transforming the abstract idea into a patent-eligible application, the Supreme Court held
that the patent failed that step as well. See id. at 2357. "[S]imply appending conventional steps,
specified at a high level of generality, was not enough to supply an inventive concept," the Court
held, and added that using a conventional computer to implement intermediated settlement did
not satisfy step two. Id. at 2357-59 (citing Benson, 409 U.S. at 64 (holding that an algorithm
implemented on a "general purpose digital computer" was unpatentable)). The patent involved,
particular, required a more flexible test because previously "well-established principles of patent law probably
would have prevented the issuance of a valid patent on almost any conceivable computer program." Bilski, 561 U.S.
at 605. The Court similarly rejected the broad contention that the term "process" "categorically excludes business
methods." Bilski, 561 U.S. at 607-09.
14
essentially, recordkeeping, adjustment of account balances, and the issuance of automated
instructions-all "basic functions of a computer." Id. The Supreme Court concluded that the
claims did not amount to patentable subject matter under 35 U.S.C. § 101.
IV.
DISCUSSION
A.
The '694 Patent
1.
Step One of the Mayo/Alice Test
I hold that the '694 Patent claims a patent-ineligible abstraction for three reasons.
First, the claim of the patent amounts to a mental process. The '694 Patent claims a method for
filtering a "packet" of information based upon the contents of two or more packets. See Feldman
Deel., Exh. Hat 3:9-30. According to the claim, the method involves "selecting an access rule"
according to the data contained in two or more packets, i.e., who sent the packet and who is to
receive it (the "header") as well as the message being sent (the "payload"). See id. The patent
does not describe the nature of the rule, what in the header or payload determines the rule to be
selected, how the rule determines who may access the packet and to what degree, or anything
about the rule itself. A "firewall" is not a physical thing, but a metaphor connoting separation
and impenetrability implemented by some undescribed mathematical formula. The "access
control proxy" is but another metaphor, intended to suggest that the mathematical formula is
grounded in some independent thing, working in some undefined fashion to determine what may
pass to an intended recipient and what may not. There is nothing concrete to make the patent
eligible for protection. See, e.g., Compression Techs. Solutions LLC v. EMC Corp., No. 12 Civ.
1746, 2013 WL 2368039 (N.D. Cal. May 29, 2013), ajf'd, 557 F. App'x 1001 (Fed. Cir. 2014)
(holding that software patent claiming method for "parsing similar information streams into
identical packets" amounted to patent-ineligible mental process).
15
Intellectual Ventures argues that the claim is not a mental process because one
would need a computer to decode the "packetized" information. See Opp'n Br. at 10-11.
However, a computer does not convert a mental process into something concrete. See Benson,
409 U.S. at 67 (invalidating patent even though the "mathematical formula involved ... has no
substantial practical application except in connection with a digital computer"); Cybersource
Corp. v. Retail Decisions, Inc., 654 F.3d 1366, 1375 (Fed. Cir. 2011) (holding that limitations to
a particular computer readable medium are insufficient to save an otherwise patent-ineligible
mental process); Compression Techs. Solutions LLC, 2013 WL 2368039, at *5 (holding patent to
claim a mental process and rejecting argument that "if digital data is required, the human mind
cannot utilize or comprehend it"); see also Bancorp Servs. v. Sun Life Assurance Co. of Canada,
687 F.3d 1266, 1277-78 (Fed. Cir. 2012) (noting the "interchangeability of certain mental
processes and basic digital computation"). The mental nature of the '694 Patent is not cured by
introducing computers to decipher packetized information and implement mathematical
formulas.
Second, the claim is broad enough to raise concerns of preemption. See Alice,
134 S. Ct. at 2354 ("We have described the concern that drives this exclusionary principle as one
of pre-emption."); see also Benson, 409 U.S. at 68 ("Here the 'process' claim is so abstract and
sweeping as to cover both known and unknown uses .... "). The '694 Patent is not limited to a
particular application but, rather, covers all network filtering by any firewall on any computer
network where an access rule is chosen based upon the data of multiple packets. See Feldman
Deel., Exh. Hat 2:21-6:33; Markman Order at 11-12. Nor is it limited to a type of packetized
information, a defined set of access rules, or particular devices. See id., Exh. Hat 2:21-6:33;
Markman Order at 11-12. It is not an inventive application of an abstract idea but, rather, an
16
attempt to patent the abstract idea itself in nearly limitless embodiments. The Supreme Court has
disapproved such attempts, noting that they "risk disproportionately tying up the use of the
underlying [abstract ideas], inhibiting their use in making further discoveries." Mayo, 132 S. Ct.
at 1294.
Intellectual Ventures argues that the "pre-emption concern" is "wholly absent"
because, by referring to more than one packet, it improves upon prior art. Opp'n Br. at 8.
Specifically, the '"694 patent distinguishes its claimed method from the filtering methods
covered by the prior art," and "does not cover all methods of filtering computer network
packets." Opp'n Br. at 8. But this is merely a claim of alleged novelty, which is an entirely
separate and unrelated question than whether the claimed method amounts to an abstract idea.
See Diehr, 450 U.S. at 190 ("The question therefore of whether a particular invention is novel is
wholly apart from whether the invention falls into a category of statutory subject matter."). It is
no less abstract to refer to two packets as it is to refer to one, and a new idea is equally capable of
abstraction as an old one. Whether the '694 Patent claims a novel process or not, it broadly
preempts every concrete application of the idea of choosing access rules based upon multiple
sources of packetized information.
Finally, the patent fails the "machine-or-transformation" test. The test, although
not dispositive, is a "useful and important clue" to subject matter eligibility. See Bilski, 561 U.S.
at 604. The "machine-or-transformation" test provides that a claimed process is patent eligible if
it "is tied to a particular machine or apparatus," or "transforms a particular article into a different
state or thing." In re Bilski, 545 F.3d 943, 954 (Fed. Cir. 2008). Claim 1 of the '694 Patent fails
both prongs. The method is neither limited to a particular machine or apparatus, nor does it
result in the transformation or creation of an article. See Feldman Deel., Exh. H. Rather, it
17
claims a process for filtering packages that is implementable by any "known firewall" within a
generic computer network. Id, Exh. Hat 1:29-36; 4:12-23 (describing the processor required for
implementation as a "a general purpose microprocessor" and a "network" as "any information
systems network across which the information in the packet can be sent").
2.
Step Two of the Mayo/Alice Test
The remaining elements of the '694 Patent, considered "both individually and as
an ordered combination," fail to "transform" the abstract idea of the Patent "into a patent-eligible
invention." Alice, 134 S. Ct. at 2354, 2357. When one looks beyond the abstract idea of
selecting an access rule based upon multiple packet payloads, one is left with the steps of
"receiving a packet having at least one header parameter and a payload" and "implementing the
access rule for a packet." Feldman Deel., Exh. Hat 6:34-44. The former step merely describes
the "packetized" form of information conventionally sent to a firewall. See id, Exh. H at 1: 1628. The latter step simply calls for "generic computer implementation" of the process. See id.,
Exh. Hat 3:56-4:40 (explaining that the method may be implemented by a "general purpose
microprocessor" and "any means of storing digital information" such as "Random Access
Memory (RAM), a hard disk, a floppy disk, an optical storage medium, or any combination
thereof'). The '694 Patent fails to claim additional steps that provide any "practical assurance
that the process is more than a drafting effort designed to monopolize the [abstract idea] itself."
Alice, 134 S. Ct. at 2358.
Relying heavily on the Federal Circuit's recent decision in DDR Holdings, Inc. v.
Hotels.com, 773 F.3d 1245 (Fed. Cir. 2014), Intellectual Ventures argues that any method
solving a problem peculiar to a technological context is patent-eligible. The '694 Patent, it
argues, purports to solve the problem of fragmented malware hiding within multiple packets of
18
data. Because this problem is limited to computer networks and is not a pre-existing longstanding principle, Intellectual Ventures argues that the Patent is distinguishable from the patents
invalidated in Alice and Bilski, and patent-eligible. Intellectual Ventures misreads both DDR
Holdings and Supreme Court precedent.
In DDR Holdings, the Federal Circuit reviewed a patent that claimed a method for
retaining website traffic after a website user clicked a third party merchant's link. See 773 F.3d
at 1253. The Court described the claimed system as one that:
1) stores "visually perceptible elements" corresponding to numerous host
websites in a database, with each of the host websites displaying at least
one link associated with a product or service of a third-party merchant, 2)
on activation of this link by a website visitor, automatically identifies the
host, and 3) instructs an Internet web server of an "out-source provider" to
construct and serve to the visitor a new, hybrid web page that merges
content associated with the products of the third-party merchant with the
stored "visually perceptible elements" from the identified host website.
Id. at 1257. In this way, the website owner would retain web traffic rather than lose it to a third
party merchant's website. See id. at 1258. The Court noted that the claims recited neither a
"mathematical algorithm" nor a "fundamental economic or longstanding commercial practice."
Id. at 1257. While the patent claimed a "business practice," the Court distinguished it from prior
cases, such as Alice and Bilski, which had invalidated patents claiming computer applications of
conventional business practices:
[T]hese claims stand apart because they do not merely recite the
performance of some business practice known from the pre-Internet world
along with the requirement to perform it on the Internet. Instead, the
claimed solution is necessarily rooted in computer technology in order to
overcome a problem specifically arising in the realm of computer
networks.
19
Furthermore, the Court held that the claims "do not attempt to preempt every application of the
idea of increasing sales by making two web pages look the same." Id. Thus, the Federal Circuit
held that the claims were drawn to patent-eligible subject matter under § 101.
The Federal Circuit in DDR Holdings, contrary to Intellectual Ventures'
argument, did not hold that all claims to methods solving a problem "necessarily rooted in
computer technology" constitute patent-eligible subject matter. In fact, the Court expressly
rejected the argument as an excessively broad reading of its decision. See id. at 1258 ("We
caution, however, that not all claims purporting to address Internet-centric challenges are eligible
for patent."). The patent at issue in DDR Holdings was patent-eligible because it recited "a
specific way to automate the creation of a composite web page," and thus was transformative.
Id. at 1265. Nor does DDR Holdings stand for the proposition that "conventional" or "long
prevalent" business practices are the only form of patent-ineligible abstract ideas. See Benson,
409 U.S. 63 (invalidating patent drawn to process for converting binary-coded decimal form to
pure binary form); Digitech Image Techs., LLC v. Electronics for Imaging, Inc., 758 F.3d 1344
(Fed. Cir. 2014) (invalidating patent drawn to process for creating device profile within a digital
image processing system that reduced distortion between captured and printed images).
DDR Holdings cannot elevate the patent-ineligible status of the '694 Patent. First,
the '694 Patent fails to describe the claimed process at any level of specificity. The patent in
DDR Holdings, in contrast, recited specific steps to accomplish the desired result of retaining
website traffic. Pursuant to the claim language of the patent at issue there, a computer server
was linked to source web pages containing links to third party merchant web pages. See DDR
Holdings, 773 F.3d at 1249-50. When the link was activated, the computer server retrieved data
associated with the source web page and generated and transmitted to a user's browser a new
20
composite web page. See id. By contrast, the '694 Patent broadly claims all processes by which
a filtering decision is based upon two or more sources of information. It specifies neither how
the information in the packets is processed nor how an access rule is selected or implemented;
just that the information is processed and the access rule is implemented. See Feldman Deel.,
Exh. H at 6:34-44.
Second, the process at issue in DDR Holdings was patent-eligible because it
resulted in a change in the standard structure of the internet and the creation of a new composite
web page. See Diehr, 450 U.S. at 187-88 ("While a scientific truth, or mathematical expression
of it, is not patentable invention, a novel and useful structure created with the aid of knowledge
of scientific truth may be.") (quoting Mackay Radio & Tel. Co. v. Radio Corp. ofAm. , 306 U.S.
86, 94 (1939)). The method recited by the '694 Patent, in contrast, fails to result in the creation
of any novel structure or any corporeal, tangible, or visual element. See Feldman Deel., Exh. H
at 6:34-44. Accordingly, I reject Intellectual Ventures' argument that DDR Holdings controls
the outcome here.
The '694 Patent is more akin to the patent invalidated in Digitech. In that case,
the Federal Circuit reviewed a patent reciting a method for improving digital image processing
by adjusting both chromatic and spatial information to minimize distortion between a captured
image and the printed image. See 758 F.3d at 1347-48. Prior art had adjusted only chromatic
information. See id. The Federal Circuit concluded first that the "device" claims were not drawn
to a "machine, manufacture, or composition of matter," 35 U.S.C. § 101, and were, therefore,
patent-ineligible. Id. at 1349-50 ("Data in its ethereal, non-physical form is simply information
that does not fall under any of the categories of eligible subject matter under section 101.").
Second, the Court held that the "method" claim, while describing a process, was drawn to an
21
abstract idea "because it describes a process of organizing information through mathematical
correlations and is not tied to a specific structure or machine." Id. at 1350. Furthermore, the
claims amounted to an unpatentable "process that employs mathematical algorithms to
manipulate existing information to generate additional information." Id. at 1351. Accordingly,
the method claims were not patentable subject matter under 35 U.S.C. § 101. Similarly, the '694
Patent recites a process by which two or more data sets (rather than one) are analyzed to choose
an appropriate (though unspecified) access rule. Also like the patent in Digitech, the '694
Patent's claim language fails to tie the process to any particular device.
Finally, Intellectual Ventures argues that "programming creates a new machine,
because a general purpose computer in effect becomes a special purpose computer once it is
programmed to perform particular functions pursuant to instructions from program software." In
re Alappat, 33 F.3d 1526 (Fed. Cir. 1994). Thus, even if the '694 Patent is directed to a patent-
ineligible abstract idea, the argument goes, it satisfies step two of the MayolAlice test because it
requires general purpose computers to be programmed in a specific way. This argument fails
because the '694 Patent fails to "tie the otherwise abstract idea to a specific way of doing
something with a computer, or a specific computer for doing something." CLS Bank Int'! v.
Alice Corp. Pty. Ltd., 717 F.3d 1269, 1302 (Fed. Cir. 2013). The '694 Patent is not limited to a
specific computer program or configuration. Rather, it broadly claims any network filtering
program that bases the application of an access rule on two or more sources of packetized data.
All software patents, whether drawn to an abstract idea or not, require implementation by way of
a computer program. Intellectual Ventures' argument would result in the validation of all
software patents, whether drawn to an abstract idea or not. This it cannot do. As the Supreme
Court has held, if "a patent's recitation of a computer amounts to a mere instruction to
22
implement an abstract idea on a computer, that addition cannot impart patent eligibility." Alice,
134 S. Ct. at 2347. I hold that the '694 Patent is drawn to patent-ineligible subject matter under
35 U.S.C. § 101.
B.
The '409 Patent
1.
Step One of the Mayo/Alice Test
The '409 Patent is drawn to the idea of using rules to manage access to
unencrypted portions of data after primary distribution. A review of representative Claim 1
reveals that there are three steps: (1) encrypting portions of data; (2) distributing the encrypted
data; and (3) controlling access to decrypted portions of the distributed data by applying various,
unspecified rules defining access rights. It is not disputed that the first two steps consist of
routine, conventional activity. The third step is the purportedly novel aspect of the claimed
process. However, the process of controlling access to decrypted portions of distributed data
describes nothing more than an abstraction, completely lacking any corporeal application or
particular function. Again, under Supreme Court and Federal Circuit precedent, the '409 Patent
is drawn to patent-ineligible subject matter.
The concept of protecting access to otherwise unprotected digital information or
property by the enforcement of rules is a conventional concept. Digital property has long been
protected, and simply limiting the method to data that has been decrypted for use by a primary
user does not make it any less abstract. See Bilski, 561 U.S. at 610-11 ("[T]he prohibition
against patenting abstract ideas cannot be circumvented by attempting to limit the use of [the
idea] to a particular technological environment.").
Furthermore, the claim language is so broad as to preempt any method for
controlling post-distribution use of intellectual property. The claims are not limited to a
23
particular type of intellectual property. See Feldman Deel., Exh. 0 at 33:16-34:26 (discussing
the patent's application to books, movies, software, documents, and map image data). Nor are
they limited to a particular form of distribution. See id., Exh. 0 at 15: 10-24 ("[T]he packaged
data ... provided to the user may be provided and distributed in various ways, including but not
limited to, via digital communications networks (for example, the Internet ... ), magnetic media
(for example, tape or disk), CD-ROM, semiconductor memory modules (for example, flash
memory ... ), and wireless (for example, broadcast)."). The claims apply to the application of
any pre-selected access rule, see id., Exh. 0 at 25: 15-29:6 (discussing numerous ways in which
the invention can control access to data depending upon the access rules selected, including
"local display," printing, copying, modification, and transmission), executable on virtually any
digital device including, but not limited to, televisions, computers, telephones, fax machines, and
printers, see id., Exh. 0 at 7:61-64; 10:32-39. Thus, the '409 Patent seeks to monopolize every
concrete application of post-distribution access to intellectual property and validating such a
patent "would tend to impede innovation rather than promote it, thereby thwarting the primary
object of the patent laws." Alice Corp., 134 S. Ct. at 2354-55 (internal quotations omitted).
Furthermore, like the '694 Patent, the '409 Patent fails both prongs of the
"machine-or-transformation" test. It is explicitly applicable to any medium of intellectual
property and executable on generic computer technology. See Feldman Deel., Exh. 0 at 33:1634:26; 7:61-64; 10:32-39. Neither does the claimed process result in any tangible transformation
of an article or thing-the method simply permits a user to access the property in a particular
(though unspecified) way. See id., Exh. 0 at 15:30-40 ("The access mechanism allows a user to
access the data in packaged data according to the rules provided with (or separately from, as
packaged rules) the packaged data and prevents the user or anyone else from accessing the data
24
other than as allowed by the rules."). While the execution of (unspecified) access rules may
change the property itself in some (unspecified) way, see, e.g., id., Exh. 0 at 17: 1-3 (noting that
certain tamper detection rules will result in the destruction of data), the claim language is not
limited to any particular tangible transformations, see id., Exh. 0 at 35:33-40:47.
A recent Federal Circuit decision supports this conclusion. In Ultramercial, Inc.
v. Hulu, LLC, the Federal Circuit rejected a patent "directed to a method for distributing
copyrighted media products over the Internet where the consumer receives a copyrighted media
product at no cost in exchange for viewing an advertisement, and the advertiser pays for the
copyrighted content." 772 F.3d 709, 712 (Fed. Cir. 2014). Like the '409 Patent, the patent in
Ultramercial sought to patent a method for distribution and control of digital data that lacked any
"particular concrete or tangible form." Id. at 715. The patent holder in Ultramercial argued that
the patent claims were not directed to the type of abstract idea invalidated by the Alice line of
cases because they were not "routine," "long prevalent," or "conventional." Id. at 714. Rather,
the patent holder argued, its patent required users to select the advertisement, which was a
change from existing methods of passive advertisement. The Federal Circuit rejected that
argument reasoning that, despite the purported advancement of the prior art, "the concept
embodied by the majority of the limitations describes only the abstract idea of showing an
advertisement before delivering free content" and had "no concrete or tangible form." Id. at 715;
see also Cloud Satchel, LLC v. Amazon.com, Inc., No. 13 Civ. 941, 2014 WL 7227942, at *7 (D.
Del. Dec. 18, 2014) (invalidating a patent drawn to "the abstract idea of cataloguing documents
to facilitate their retrieval from storage in the field of remote computing").
Here, Intellectual Ventures makes a similar argument that because the '409 Patent
claims a process that was not taught by the prior art, it cannot be a "long-standing" or
25
"conventional" practice. See Opp'n Br. at 17-22. Thus, Intellectual Ventures concludes, it
necessarily claims patent-eligible subject matter. See id Intellectual Ventures' argument makes
two errors. First, it conflates the question of novelty with the question of abstraction. Both the
Supreme Court and Federal Circuit have repeatedly emphasized the independence of the
inquiries. See, e.g., Diehr, 450 U.S. at 190 ("The question therefore of whether a particular
invention is novel is wholly apart from whether the invention falls into a category of statutory
subject matter."); Ultramercial, 772 F.3d at 715 ("We do not agree with Ultramercial that the
addition of merely novel or non-routine components to the claimed idea necessarily turns an
abstraction into something concrete."). Second, patent-ineligible abstractions are not limited to
"long-standing" or "conventional" practices. As addressed above, courts have invalidated
patents under§ 101 without first finding that they claimed "long-standing" or "conventional"
practices. See, e.g., Benson, 409 U.S. 63; Digitech, 758 F.3d 1344.
2.
Step Two of the Mayo/Alice Test
The '409 Patent similarly fails to satisfy step two of the Mayo/Alice test. The
additional features described in the claims consist of the following: encryption and decryption
(Claims 2, 3, 4, 20, 21); descriptions of the data to be protected (Claim 5); descriptions of
different examples of access rules (Claims 6, 7, 8, 9, 10, 11, 13, 14, 15, 18, 19, 23, 24); and
descriptions of devices and systems in which the access mechanism may be located and by
which access rules may be executed (Claims 16, 17, 18, 25, 26, 27, 29, 30, 32, 33, 36, 37, 39, 40,
42). These additional features fail to describe anything beyond "well-understood, routine,
conventional activity." Mayo, 132 S. Ct. at 1298. Nor do they add anything nearing an
"inventive concept." Alice, 134 S. Ct. at 2357. The use of an "access mechanism" to enforce the
pre-selected rules is nothing more than programming conventional software or hardware to apply
26
rules governing access-a routine, conventional practice. See Markman Order at 8 (construing
"access mechanism" as any "hardware and/or software for controlling access to data"). Thus, the
claims call for the implementation of an abstract idea on generic computer technology, see
Feldman Deel., Exh. 0 at 28:32-34 ("It is envisioned that a standard computer, equipped with an
access mechanism will function as an authoring/distribution system."), and the additional
features fail to transform the above-described abstract idea into patent-eligible subject matter.
See Alice, 134 S. Ct. at 2360 (holding that claims requiring use of a "data processing system,"
"communications controller," and "data storage unit" did not offer "meaningful limitations
beyond generally linking the use of the method to a particular technological environment, that is,
implementation via computers."); Ultramercial, 772 F.3d at 715-16 (holding that the additional
steps of "updating an activity log, requiring a request from the consumer to view the ad,
restrictions on public access, and the use of the Internet" were all "routine, conventional
activity"). Accordingly, I hold that the '409 Patent is drawn to patent-ineligible subject matter
under 35 U.S.C. § 101. 7
C.
The '084 Patent
1.
Step One of the Mayo/Alice Test
I hold that the '084 Patent is drawn to the abstract idea of monitoring two or more
computer sites for network-wide intrusions and alerting computer sites of potential threats. The
7
As it did with respect to the '694 Patent, Intellectual Ventures argues that the '409 Patent claims a "specific way"
of doing something with a computer (i.e., controlling access to decrypted data in accordance with pre-selected rules)
and, therefore, amounts to more than the implementation of an abstract idea on a generic computer. See Opp'n Br.
at 24-25 (citing CLS Bank Int'/ v. Alice Corp. Pty. Ltd., 717 F.3d 1269, 1302 (Fed. Cir. 2013) ("The key to this
inquiry is whether the claims tie the otherwise abstract idea to a specific way of doing something with a computer,
or a specific computer for doing something; if so, they likely will be patent eligible, unlike claims directed to
nothing more than the idea of doing that thing on a computer.")). Again, this argument presumes, without
demonstrating, that the '409 Patent claims a specific manner of controlling post-distribution access to decrypted
data. It does not. Rather, it broadly claims all manners of doing so. Thus, the '409 Patent simply seeks to limit the
abstract idea of controlling post-distribution access to digital property to "particular technological environment[s],
which is insufficient to save a claim." Ultramercial, 772 F.3d at 716 (citing Alice, 134 S. Ct. at 2358).
27
claimed process consists of three primary steps: (1) detecting anomalies and intrusions in a
computer network by analyzing network communications entering two or more computer sites;
(2) using "pattern correlations" across the network devices to determine which devices are likely
to be affected by the anomaly or intrusion; and (3) alerting any potentially affected devices. See
Feldman Deel., Exh. Pat 12:19-33. The preamble to Claim I limits the process to networks
comprised of two or more devices, one of which contains a firewall. See id., Exh. Pat 12:19-22.
Under Supreme Court and Federal Circuit precedents, the '084 Patent claims a patent-ineligible
abstract idea.
The first step amounts to a mental process, even if aided by a computer to
translate data or speed up calculations. See Benson, 409 U.S. at 67 (holding that "mental
processes" are not patentable and invalidating patent claiming process for implementing
mathematical formula on generic computer technology); see also SiRF Tech., Inc. v. Int 'I Trade
Comm 'n, 601 F.3d 1319, 1333 (Fed. Cir. 2010) ("In order for the addition of a machine to
impose a meaningful limit on the scope of a claim, it must play a significant part in permitting
the claimed method to be performed, rather than function solely as an obvious mechanism for
permitting a solution to be achieved more quickly, i.e., through the utilization of a computer for
performing calculations."). 8 The second step amounts to the use of a mathematical formula to
identify patterns corresponding to network intrusions. Accordingly, the step is directed to data
analysis and manipulation-processes also held to be patent-ineligible. See, e.g., Digitech, 758
F.3d at 1350 ("The method in the #415 patent claims an abstract idea because it describes a
process of organizing information through mathematical correlations and is not tied to a specific
8
Intellectual Ventures appears to admit as much. See Opp'n Br. at 32 ("[I]fthe data packets were printed out, and
reviewed manually, and the algorithms broken down into steps such that a human could review them, it would take
enormous manpower and time to even attempt to practice the patent by hand.") (emphasis added). The mere fact
that manual review is not a practical implementation of the idea is irrelevant. That the method could be
accomplished within a human mind is enough to demonstrate that the patent is drawn to an abstract idea.
28
structure or machine."). The third step-alerting vulnerable devices-is a conventional, routine
practice incapable of transforming an otherwise patent-ineligible process into a patent-eligible
application. See Flook, 437 U.S. at 590 ("The notion that post-solution activity, no matter how
conventional or obvious in itself, can transform an unpatentable principle into a patentable
process exalts form over substance."). The preamble, which limits the process to computer
networks containing two or more devices and at least one firewall, also fails to save the process.
See Mayo, 132 S. Ct. at 1297 ("[T]he prohibition against patenting abstract ideas cannot be
circumvented by attempting to limit the use of the formula to a particular technological
environment.") (internal quotations omitted).
Furthermore, the '084 Patent claim language is broad enough to raise serious
preemption concerns. The claims are neither limited to a particular device nor even to a
particular software program. The patent application makes this explicit:
It should be understood that the inventive principles described in this
application are not limited to the components or configurations described
in this application. It should be understood that the principles, concepts,
systems, and methods shown in this application may be practiced with
software programs written in various ways, or different equipment than is
described in this application without departing from the principles of the
invention.
Feldman Deel., Exh. Pat 12:5-12; see also Markman Order at 5 ("The patent does not cover
what specific techniques are used to detect an intrusion."). This broad-reaching language
confirms the general and abstract nature of the patent. See Alice, 134 S. Ct. 2354 ("[I]n applying
the § 101 exceptions, we must distinguish between patents that claim the building blocks of
human ingenuity and those that integrate the building blocks into something more."). Validating
such a patent would impede, rather than promote, innovation because every concrete application
29
built upon the idea of monitoring multiple computer sites for network intrusion would be
exposed to a claim for infringement. See id. at 2354-55.
2.
Step Two of the Mayo/Alice Test
The remaining claim limitations of the Patent, considered individually and as an
"ordered combination," lack an "inventive concept" and fail to transform the Patent's abstract
ideas into a patent-eligible application. Alice, 134 S. Ct. at 2355. For example, Claim 3 provides
for the adjustment of"the firewall of each of the devices that is anticipated to be affected by the
anomaly." Feldman Deel., Exh. Sat 12:39-42. Similarly, Claim 17 provides for "controlling the
device that is anticipated to be affected by the anomaly." Id., Exh. Sat 13:29-30. These
additional limitations fail to save the patent because they recite routine, conventional,
"insignificant post-solution activity." Bilski, 561 U.S. at 611; Flook, 437 U.S. at 590. The
remaining claims either repeat the method recited in Claim 1 in slightly more detail, see, e.g.,
Feldman Deel., Exh. Sat 12:48-49 (reciting "[t]he method of claim 5, wherein analyzing the data
packets comprises analyzing data packets that have bene received at at least two of the plurality
of devices"), or limit the method to implementation on generic computer technology, see, e.g.,
id., Exh. Sat 14:18-25 (claiming a "data collection and processing center comprising a computer
with a firewall coupled to a computer network"). As discussed above, these additional features
are insufficient to transform the abstract idea into a patent-eligible application. See Alice, 134 S.
Ct. at 2360 (holding that the recitation of a "handful of generic computer components configured
to implement the [abstract] idea" insufficient to save an otherwise invalid patent).
In Cybersource, the Federal Circuit reviewed a method similar to that claimed by
the '084 Patent. See 654 F.3d 1366. There, the patent recited a method for detecting fraudulent
online credit card transactions. See id. at 1367. The prior art methods had analyzed billing
30
addresses and personal identification information to detect fraud. See id The claimed method,
by contrast, analyzed "internet address" information-such as IP addresses, MAC addresses, and
email addresses-to determine if the information was consistent with past orders placed on the
same credit card. 9 See id. at 1367-68. Like the '084 Patent, the patent in Cybersource was not
limited to a particular formula or mathematical algorithm, but rather, "broadly purport[ed] to
encompass any means of utilizing the map of credit card numbers to determine if the credit card
transaction [was] valid." Id at 1370. The Federal Circuit concluded that the claims failed to
recite patent-eligible subject matter because each step could be "performed in the human mind,
or by a human using a pen and paper." Id. at 1371-72. The Court reasoned that although some
interaction with a computer may be required to retrieve information, "such data-gathering steps
cannot alone confer patentability." Id. at 1372. Here, the '084 Patent similarly claims any
means of analyzing data directed toward two or more computer sites to detect network intrusion
and the practical necessity of some computer technology does not save the claims from
abstraction. Accordingly, I hold that the '084 Patent, reciting no more than a mental process
implemented on generic computer technology, is drawn to patent-ineligible subject matter under
35 U.S.C. § 101. 10
9
Specifically, the representative claim recited:
A method for verifying the validity of a credit card transaction over the Internet
comprising the steps of: (a) obtaining information about other transactions that have
utilized an Internet address that is identified with the [ ] credit card transaction; (b)
constructing a map of credit card numbers based upon the other transactions and; (c)
utilizing the map of credit card numbers to determine if the credit card transaction is
valid.
Cybersource, 654 F.3d at 1370.
10
Intellectual Ventures makes the same arguments with respect to the '084 Patent as it did with respect to the '694
Patent and the '409 Patent. First, it argues that because the '084 Patent provides a novel solution to a problem
unique to a technological context it claims patent-eligible subject matter. See Opp'n Br. at 29-33. Second, because
the patent calls for the programming ofa computer in a "specific" way, it satisfies step two of the Mayo/Alice test
even ifit is drawn to an abstract idea. See Opp'n Br. at 33-39. For the reasons fully explained above, I reject these
arguments. Like the '694 Patent and the '409 Patent, the '084 Patent is drawn to an unpatentable abstract idea and
31
V.
CONCLUSION
For the foregoing reasons, JPMC's motion is GRANTED and Intellectual
Ventures' claims with respect to the '694 Patent, the '084 Patent, and the '409 Patent (Counts 2,
3, and 4 of the Complaint, respectively) are dismissed. The Clerk shall mark the motion (Doc.
No. 252) terminated. The parties shall appear for a status conference on May 19, 2015 at 10:30
a.m. to discuss the status of proceedings related to the remaining Counts of the Complaint: Count
1, relating to Patent No. 5,745,574, and Count 5, relating to Patent No. 7,634,666.
SO ORDERED.
Dated:
New York, New York
April 28, 2015
the additional claim features fail to add any "inventive concept" sufficient to transform it into a patent-eligible
application. Alice, 134 S. Ct. at 2357.
32
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?