Uniloc USA Inc. v. LG Elecs. USA Inc.

On April 30, 2020, The U.S. Court of Appeals for the Federal Circuit reversed and remanded the U.S. District Court for the Northern District of California’s decision which found that the patent for a process to speed up communications between Bluetooth devices was abstract, did not include an inventive concept and “merely automates the manual wake-up process” with traditional hardware and techniques.

At Alice Step 1, The District Court relied on defendant’s (LG) argument that the claim was directed to generalized steps to be performed on a computer using conventional computer activity. Thus, concluding that Claim 2 of the ‘049 patent was directed to an abstract idea. The District Court stated, “the addition of an additional data field for polling to each inquiry message is similar to a concept found abstract in Digitech Image Techs., LLC v. Elecs. For Imaging, Inc., 758 F.3d 1344 (Fed. Cir. 2014).”

In Digitech, the claims recited “a process of taking two data sets and combining them into a single data set …. The two data sets are generated by taking existing information … and organizing this information in a new form.” 758 F.3d at 1351. Furthermore, Digitech states that merely generating the claimed device profile did not alone reduce image distortion or otherwise improve image processing. Id. at 1347–48. The claims were not directed to a patent-eligible technological improvement but rather recited “the ineligible abstract idea of gathering and combining data that does not require input from a physical device.” Id. at 1351. 

Additionally, the District Court cited another case, believed to be analogous, which had found similar ideas to be abstract. Two-Way Media Ltd. v. Comcast Cable Commc’ns, LLC, 874 F.3d 1329 (Fed. Cir. 2017). In Two-Way Media, the claim was found to be abstract because it did “not sufficiently describe how to achieve the results in a non-abstract way.” Id. at 1337. Specifically, the claim “refers to certain data ‘complying with the specifications of a network communication protocol’ and the data being routed in response to one or more signals from a user, without specifying the rules forming the communication protocol or specifying parameters for the user signals.” Id. at 1339. Therefore the claims were held ineligible because “they merely recited a series of abstract steps” … without the means for achieving any purported technological improvement. Id at 1337

However, The U.S. Court of Appeals for the Federal Circuit took issue with the District Court’s reliance on Digitech and Two-Way which it had characterized as “misplaced.”  The Court of Appeals for the Federal Circuit made a distinction by pointing to recent cases in which it held claims patent eligible. Specifically, the CACF drew comparisons between the present case and DDR Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245 (2014) and Visual Memory LLC v. NVIDIA Corp., 867 F.3d 1253 (2017) respectively. 

In DDR, the Court held claims directed to a system for generating a hybrid web page that maintained the “look and feel” of a host website to be patent eligible. In Visual Memory, the Court likewise held patent eligible claims that focused on “specific asserted improvement[s] in computer capabilities.” The CAFC drew further comparisons by stating:

“Like the claims in DDR, the claimed invention changes the normal operation of the communication system itself to “overcome a problem specifically arising in the realm of computer networks.” In doing so, the claimed invention, like the improvement in computer memory we held patent eligible in Visual Memory, enables the communication system to accommodate additional devices, such as battery-operated secondary stations, without compromising performance.”

The CAFC concluded “In accordance with this precedent, we hold the claims at issue are directed to a patent-eligible improvement to computer functionality, namely the reduction of latency experienced by parked secondary stations in communication systems.”

Is this a new emphasis? The Federal Circuit has routinely held software claims §101 eligible under Alice step one when they are directed to improvements of computer functionality or to the network platform itself. Indeed, in cases involving software innovations, the CAFC stated “this inquiry often turns on whether the claims focus on specific asserted improvements in computer capabilities or instead on a process or system that qualifies an abstract idea for which computers are invoked merely as a tool. Customedia Techs., LLC v. DISH Network Corp., 951 F.3d 1359, 1364 (Fed. Cir. 2020) (citing Finjan, Inc. v. Blue Coat Systems, Inc., 879 F.3d 1299, 1303 (Fed. Cir. 2018)).  This isn’t to say that the claims themselves must expressly articulate the advantages of the claimed invention. In the present case, the Federal Circuit points to the specification, namely the Abstract, to highlight these specific asserted improvements. The importance, here, is that the claimed method is directed to those improvements and not merely reciting a series of abstract steps. 

With an emphasis on software claims focusing on concrete improvements in functionality, perhaps patent claims will increasingly rely on specification support to maintain eligibility in a market with little predictability or consistency. What was once thought of as a section to show basis for novelty, perhaps background sections will become necessary to provide a basis for §101 eligibility as well.