Affinity Labs, LLC v. Amazon.Com Inc. et al
Filing
75
UNITED STATES COURT OF APPEALS FOR THE FEDERAL CIRCUIT NOTICE OF ENTRY OFJUDGMENT ACCOMPANIED BY OPINION. (jch)
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UNITED STATES COURT OF APPEALS FOR THE FEDERAL CIRCUIT
NOTICE OF ENTRY OF
JUDGMENT ACCOMPANIED BY OPINION
OPINION FILED AND JUDGMENT ENTERED: 09/23/2016
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FOR THE COURT
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Peter R. Marksteiner
Clerk of Court
cc: Patrick M. Arenz
Gabriel Bell
Jeffrey H. Dean
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15-2080 - Affinity Labs of Texas, LLC v. Amazon.com Inc.
United States District Court for the Western District of Texas, Case No. 6:15-cv-00029-WSS
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United States Court of Appeals
for the Federal Circuit
______________________
AFFINITY LABS OF TEXAS, LLC,
Plaintiff-Appellant
v.
AMAZON.COM INC.,
AMAZON DIGITAL SERVICES, INC.,
Defendants-Appellees
______________________
2015-2080
______________________
Appeal from the United States District Court for the
Western District of Texas in No. 6:15-cv-00029-WSS,
Judge Walter S. Smith, Jr.
______________________
Decided: September 23, 2016
______________________
CYRUS ALCORN MORTON, Robins Kaplan LLP, Minneapolis, MN, argued for plaintiff-appellant. Also represented by RONALD JAMES SCHUTZ, PATRICK M. ARENZ, BRENDA
L. JOLY, BENJAMEN LINDEN.
J. DAVID HADDEN, Fenwick & West, LLP, Mountain
View, CA, argued for defendants-appellees. Also represented by TODD RICHARD GREGORIAN, SAINA S. SHAMILOV;
RAVI RAGAVENDRA RANGANATH, ADAM MICHAEL LEWIN,
San Francisco, CA; GABRIEL BELL, GREGORY G. GARRE,
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AFFINITY LABS OF TEXAS, LLC
Filed: 09/23/2016
v. AMAZON.COM INC.
Latham & Watkins LLP, Washington, DC; JEFFREY H.
DEAN, Amazon.com, Inc., Seattle, WA.
______________________
Before PROST, Chief Judge, BRYSON and WALLACH,
Circuit Judges.
BRYSON, Circuit Judge.
This appeal is related to the appeal in Affinity Labs of
Texas, LLC v. DirecTV et al., No. 2015-1845, decided
today. Although the patents at issue in the two cases are
different, they share a similar specification. Because the
legal issues presented in the two cases are closely related,
our discussion of the governing legal principles in that
case will not be repeated here, except to the extent that
the difference between the claims in the two cases calls
for a somewhat different legal analysis.
I
The patent in suit, U.S. Patent No. 8,688,085 (“the
’085 patent”), is entitled “System and Method to Communicate Targeted Information.” The abstract describes
the patent as directed to a “method for targeted advertising” in which an advertisement is selected for delivery to
the user of a portable device based on at least one piece of
demographic information about the user.
Despite the title of the patent and the description in
the abstract, only three sentences in the specification and
only one of the 20 claims deal with targeted advertising. 1
The only portion of the specification that deals
with targeted advertising reads: “A user may also provide
demographic information allowing advertisers to access
the demographic information and provide advertisements
based upon the demographic information. For example,
an advertiser may want to target Hispanic females in the
1
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The rest of the specification and claims are directed to
media systems that deliver content to a handheld wireless
electronic device.
Claim 14 of the ’085 patent is representative2 and
provides as follows:
A media system, comprising:
a network based media managing system that
maintains a library of content that a given user
has a right to access and a customized user interface page for the given user;
21-25 year old age group. Through providing demographic information to advertisers, when a user logs into [the
depicted homepage] selective advertising can be ‘targeted’
for a group of users.” ’085 patent, col. 10, ll. 18-26. The
only claim dealing with targeted advertising is claim 5,
which is directed to the media system of claim 1, “further
comprising a targeted advertising component configured
to communicate an advertisement to the given user based
at least in part on a demographic of the given user.”
2
The district court treated claim 14 as representative. Although Affinity has not conceded that claim 14 is
representative of the remaining claims, it has not shown
how independent claims 1 and 8 differ materially from
claim 14. Moreover, while Affinity refers in passing to
several of the dependent claims, it presents no substantive argument as to the separate patentability of those
claims. Because Affinity has failed to present “any meaningful argument for the distinctive significance of any
claim limitations” other than those in claim 14, Electric
Power Group, LLC v. Alstom S.A., No. 2015-1778 (Fed.
Cir. Aug. 1, 2016), slip op. at 4, we treat claim 14 as
representative of all the claims for purposes of this appeal.
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a collection of instructions stored in a nontransitory storage medium and configured for execution by a processor of a handheld wireless device, the collection of instructions operable when
executed: (1) to initiate presentation of a graphical
user interface for the network based media managing system; (2) to facilitate a user selection of
content included in the library; and (3) to send a
request for a streaming delivery of the content;
and
a network based delivery resource maintaining a
list of network locations for at least a portion of
the content, the network based delivery resource
configured to respond to the request by retrieving
the portion from an appropriate network location
and streaming a representation of the portion to
the handheld wireless device.
Stated more succinctly, claim 14 is directed to a network-based media system with a customized user interface, in which the system delivers streaming content from
a network-based resource upon demand to a handheld
wireless electronic device having a graphical user interface.
Affinity sued Amazon.com Inc. and Amazon Digital
Services, Inc., alleging that they infringed the ’085 patent
by marketing the Amazon Music system, which allows
customers to stream music from a customized library.
The Amazon entities moved for the entry of judgment on
the pleadings, arguing that the asserted claims were not
directed to patentable subject matter.
The magistrate judge recommended that judgment be
entered in the Amazon entities’ favor. Following the twostage inquiry for patent eligibility set forth by the Supreme Court in Mayo Collaborative Services v. Prometheus Laboratories, Inc., 132 S. Ct. 1289 (2012), and Alice
Corp. v. CLS Bank International, 134 S. Ct. 2347 (2014),
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the magistrate judge found that the ’085 patent is directed to an abstract idea—“delivering selectable media
content and subsequently playing the selected content on
a portable device.”
Turning to the next step of the eligibility analysis, the
magistrate judge found that the claims of the ’085 patent
do not contain an “inventive concept.” Instead, he concluded, the claims are directed to applying the abstract
idea “to the Internet and a generic, electronic device—in
this case, a wireless handheld device operating as a
‘ubiquitous information-transmitting medium, not a novel
machine’” (citing Ultramercial, Inc. v. Hulu, LLC, 772
F.3d 709, 716-17 (Fed. Cir. 2014)). The magistrate judge
also found that the components recited in the claims are
generic. He explained that the “network based media
managing system” is a generic database and that the
“non-transitory storage medium” could be any kind of
memory.
The magistrate judge rejected Affinity’s argument
that the customized user interface supplies the inventive
concept to the claimed invention. The user interface
limitation, the magistrate judge explained, does not
identify “any specific technology or instructions that
explain how the device can do what it purports to do or
direct the practitioner how to carry out the claims.”
The district court agreed with the magistrate judge’s
recommendation and entered judgment against Affinity.
The court agreed with the magistrate judge that the ’085
patent claims are directed to the abstract idea of “delivering selectable media content and subsequently playing
the selected content on a portable device.” The court also
agreed that the claims do not supply an inventive concept
as “[t]he ’085 Patent solves no problems, includes no
implementation software, designs no system. The mere
statement that the method is performed by computer does
not satisfy the test of inventive concept.”
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II
A
We begin by addressing the first step of the
Mayo/Alice inquiry: whether the claims of the ’085 patent
are directed to an “abstract idea.” Like the district court,
we hold that the concept of delivering user-selected media
content to portable devices is an abstract idea, as that
term is used in the section 101 context.
The district court’s conclusion is consistent with our
approach to the “abstract idea” step in prior cases. For
example, In re TLI Communications LLC Patent Litigation, 823 F.3d 607 (Fed. Cir. 2016), involved a patent on a
method for uploading digital images from a cellular
telephone to a server, which would then classify and store
the images.
Although the claim at issue in that case recited physical components such as a telephone unit and a server, the
court noted that “not every claim that recites concrete,
tangible components escapes the reach of the abstractidea inquiry,” and it pointed out that the specification
made clear that the recited physical components “merely
provide a generic environment in which to carry out the
abstract idea of classifying and storing digital images in
an organized manner.” Id. at 611. The court added that
“the specification’s emphasis that the present invention
‘relates to a method for recording, communicating and
administering [a] digital image’ underscores that [the
claim at issue] is directed to an abstract concept.” Id.
The TLI court concluded that, as in this case, the claims
were directed to “the use of conventional or generic technology in a nascent but well-known environment, without
any claim that the invention reflects an inventive solution
to any problem presented by combining the two.” Id. at
612.
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Similarly, in Ultramercial, Inc. v. Hulu, LLC, 772
F.3d 709 (Fed. Cir. 2014), we found the process of allowing a consumer to receive copyrighted media in exchange
for watching a selected advertisement was an abstract
idea. The idea in this case is even broader and more
abstract than the idea in Ultramercial: The ’085 patent
covers streaming content generally, not even including an
additional feature such as exchanging the consumer’s
access to the streaming content for the consumer’s viewing of an advertisement.
Affinity contends that the ’085 patent embodied a concrete technological innovation because, as of its priority
date (March 28, 2000), wireless streaming of media was
not “routine, conventional, or well-known.” The patent,
however, does not disclose any particular mechanism for
wirelessly streaming content to a handheld device. The
specification describes the function of streaming content
to a wireless device, but not a specific means for performing that function. Claim 14, in turn, recites (1) a “media
managing system” that maintains a library of content, (2)
a “collection of instructions” that are “operable when
executed” by a handheld wireless device to request
streaming delivery of the content, and (3) a “network
based delivery resource” that retrieves and streams the
requested content to the handheld device. At that level of
generality, the claims do no more than describe a desired
function or outcome, without providing any limiting detail
that confines the claim to a particular solution to an
identified problem. The purely functional nature of the
claim confirms that it is directed to an abstract idea, not
to a concrete embodiment of that idea. See Elec. Power
Grp., LLC v. Alstom S.A., No. 2015-1778, slip op. 12
(“[T]he essentially result-focused, functional character of
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claim language has been a frequent feature of claims held
ineligible under § 101.”). 3
In addressing the first step of the section 101 inquiry,
as applied to a computer-implemented invention, it is
often helpful to ask whether the claims are directed to “an
improvement in the functioning of a computer,” or merely
“adding conventional computer components to well-known
business practices.” Enfish, LLC v. Microsoft Corp., 822
F.3d 1327, 1338 (Fed. Cir. 2016). The claims of the ’085
patent fall into the latter category.
Affinity contends that the magistrate judge improperly engaged in fact-finding when he stated that the idea of
delivering media content to a wireless portable device is
one of long standing. It is not debatable, however, that
the delivery of media content to electronic devices was
well known long before the priority date of the ’085 patent, and Affinity does not argue otherwise. The magistrate judge cited transistor radios and portable televisions
as commonplace examples of the delivery of audio media
to portable electronic devices. An example of technology
that is even closer to the idea underlying the ’085 patent
is the delivery of selectable prerecorded messages to
callers on demand in services such as dial-a-prayer and
dial-a-joke, which were available long before the invention
of cellular telephones or the Internet.
Affinity argues that the district court erred in disregarding the statement of its expert that streaming
content to a portable device was novel as of the priority
date of the ’085 patent. But the eligibility finding does
not turn on the lack of novelty of the claim; it turns on the
fact that the claim is drawn to any embodiment of an
abstract idea. The district court therefore properly disregarded the expert’s statement.
3
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While Affinity criticizes the magistrate’s making factual findings on a motion for judgment on the pleadings,
the practice of taking note of fundamental economic
concepts and technological developments in this context is
well supported by our precedents. See, e.g., OIP Techs.,
Inc. v. Amazon.com, Inc., 788 F.3d 1359, 1362-63 (Fed.
Cir. 2015) (affirming district court’s finding on a motion to
dismiss that “offer-based price optimization” is a fundamental economic concept and that the claimed computerbased implementation of that idea is routine and conventional); Content Extraction & Transmission LLC v. Wells
Fargo Bank, Nat’l Ass’n, 776 F.3d 1343, 1347 (Fed. Cir.
2014) (affirming district court’s finding on a motion to
dismiss that the claims were directed to the well-known
abstract idea of “1) collecting data, 2) recognizing certain
data within the collected data set, and 3) storing that
recognized data in a memory”).
Affinity also objects to the magistrate judge’s conclusion that the claims merely set forth “routine and generic
processing and storing capabilities of computers generally.” Yet the claim terms to which the magistrate judge
referred, such as a “network based media management
system” and a “graphical user interface,” are simply
generic descriptions of well-known computer components.
See In re TLI Commc’ns LLC Patent Litig., 823 F.3d at
611 (physical components such as a telephone and a
server “merely provide a generic environment in which to
carry out the abstract idea”); Mortg. Grader, Inc. v. First
Choice Loan Servs. Inc., 811 F.3d 1314, 1324-25 (Fed. Cir.
2016) (claims reciting an “interface,” “network,” and
“database” are directed to an abstract idea). Affinity
makes no claim that it invented any of those components
or their basic functions, nor does it suggest that those
components, at that level of generality, were unknown in
the art as of the priority date of the ’085 patent.
In an effort to show that claim 14 is not directed to an
abstract idea, Affinity focuses in particular on the recita-
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tion of a “customized user interface” in that claim. For
support, Affinity cites passages in the specification that
describe embodiments in which a user may elect to have a
customized interface such as a radio dial, a playlist, or
targeted advertising based on demographic information
provided by the user. See ’085 patent, col. 10, ll. 10-26;
col. 11, ll. 5-35. This court, however, has held that “customizing information based on . . . information known
about the user” is an abstract idea. Intellectual Ventures I
LLC v. Capital One Bank (USA), 792 F.3d 1363, 1369
(Fed. Cir. 2015). The court in the Intellectual Ventures I
case explained that tailoring of content based on information about the user—such as where the user lives or
what time of day the user views the content—is an abstract idea that is as old as providing different newspaper
inserts for different neighborhoods. Id.
The term “customized user interface,” as used in the
’085 patent, is not limited to any particular form of customization, but covers the general idea of customizing a
user interface. Like the basic concept of tailoring content
to a user, as in Intellectual Ventures I, the basic concept of
customizing a user interface is an abstract idea.
B
Turning to the second step of the Mayo/Alice inquiry,
we conclude that there is nothing in the claims or the
specification of the ’085 patent that constitutes a concrete
implementation of the abstract idea in the form of an
“inventive concept.” Alice, 134 S. Ct. at 2355; Mayo, 132
S. Ct. at 1294.
As noted, representative claim 14 is written in largely
functional terms, claiming “a collection of instructions”
that perform the functions of displaying a selection of
available content on a graphical user interface and allowing the user to request streaming of that content. The
claims thus do not go beyond “stating [the relevant]
functions in general terms, without limiting them to
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technical means for performing the functions that are
arguably an advance over conventional computer and
network technology.” Elec. Power Grp., slip op. at 2.
Features such as network streaming and a customized user interface do not convert the abstract idea of
delivering media content to a handheld electronic device
into a concrete solution to a problem. The features set
forth in the claims are described and claimed generically
rather than with the specificity necessary to show how
those components provide a concrete solution to the
problem addressed by the patent.
In particular, claim 14 requires a “network based delivery resource,” but that does not make the claim a
patent-eligible implementation of an abstract idea. The
specification makes clear that any technology capable of
wireless communication of audio information to the device
would be covered. See ’085 patent, col. 4, ll. 41-45 (“The
present invention advantageously allows for several
different embodiments of wirelessly communicating
selected audio information to [an] electronic device
. . . and is not limited to any specific configuration described below.”).
The only putatively narrowing limitation in that result-focused claim is the limitation requiring that the
“network based media managing system” have “a customized user interface page for the given user.” But neither
the claim nor the specification reveals any concrete way of
employing a customized user interface. The specification
simply states that a user interface can be customized “in a
plurality of ways” by allowing users to select and receive
“on-demand customized audio information.” Id., col. 16,
ll. 21-22, 25-26. That disclosure and the accompanying
“customized user interface” limitation in the claim do not
constitute a concrete application of the abstract idea of
delivering content to a wireless device and thus do not
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embody an “inventive concept,” as that term has been
used in the Mayo/Alice line of cases.
In sum, the patent in this case is not directed to the
solution of a “technological problem,” Alice, 134 S. Ct. at
2358, nor is it directed to an improvement in computer or
network functionality, see In re TLI Commc’ns LLC Patent
Litig., 823 F.3d at 612. It claims the general concept of
streaming user-selected content to a portable device. The
addition of basic user customization features to the interface does not alter the abstract nature of the claims and
does not add an inventive component that renders the
claims patentable. We therefore uphold the district
court’s judgment that the claims of the ’085 patent are not
eligible for patenting.
AFFIRMED
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UNITED STATES COURT OF APPEALS
FOR THE FEDERAL CIRCUIT
Questions and Answers
Petitions for Panel Rehearing (Fed. Cir. R. 40)
and
Petitions for Hearing or Rehearing En Bane (Fed. Cir. R. 35)
Q. When is a petition for panel rehearing appropriate?
A. Petitions for panel rehearing are rarely considered
meritorious. Consequently, it is easiest to first answer when
a petition for panel rehearing is not appropriate. A petition
for panel rehearing should not be used to reargue issues
already briefed and orally argued. If a party failed to
persuade the court on an issue in the first instance, they do
not get a second chance. This is especially so when the
court has entered a judgment of affirmance without opinion
under Fed. Cir. R. 36, as a disposition of this nature is used
only when the appellanVpetitioner has utterly failed to raise
any issues in the appeal that require an opinion to be
written in support of the court's judgment of affirmance.
Thus, as a usual prerequisite, the court must have filed
an opinion in support of its judgment for a petition for panel
rehearing to be appropriate. Counsel seeking panel
rehearing must be able to identify in the court's opinion a
material error of fact or law, the correction of which would
require a different judgment on appeal.
Q. When is
a petition for rehearing en bane appropriate?
A. En bane decisions are extraordinary occurrences. To
properly answer the question, one must first understand the
responsibility of a three-judge merits panel of the court. The
panel is charged with deciding individual appeals according
to the law of the circuit as established in the court's
precedential opinions. While each merits panel is
.
empowered to enter precedential opinions, the ultimate duty
of the court en bane is to set forth the law of the Federal
Circuit, which merits panels are obliged to follow.
Thus, as a usual prerequisite, a merits panel of the court
must have entered a precedential opinion in support of its
judgment for a petition for rehearing en bane to be
appropriate. In addition, the party seeking rehearing en
bane must show that either the merits panel has failed to
follow decisions of the Supreme Court of the United States
or Federal Circuit precedential opinions. or that the
merits panel has followed circuit precedent, which the party
seeks to have overruled by the court en bane.
Q. How frequently are petitions for panel rehearing granted
by merits panels or petitions for rehearing en bane granted
by the court?
A. The data regarding petitions for panel rehearing since
1982 shows that merits panels granted some relief in only
three percent of the petitions filed. The relief granted usually
involved only minor corrections of factual misstatements,
rarely resulting in a change of outcome in the decision.
En bane petitions have been granted less frequently.
Historically, the court has initiated en bane review in a few
of the appeals decided en bane since 1982.
Q. Is it necessary to have filed either of these petitions
before filing a petition for certiorari in the U.S. Supreme
Court?
A. No. All that is needed is a final judgment of the Court of
Appeals.
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UNITED STATES COURT OJ' APPEALS FOR THE FEDERAL CmCillT
INFORMATION SHEET
FILING A PETITION FOR A WRIT OF CERTIORARI
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and should be consulted before you start drafting your petition. (See Rule 14.) Rules 33 and 34
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Number of Copies. Forty copies of a petition must be filed unless the petitioner is proceeding in
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Where to File. You must file your documents at the Supreme Court.
Clerk
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No documents are filed at the Federal Circuit and the Federal Circuit provides no information to
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