In Customedia Techs. v. Dish Network Corp., No. 18-2239, the Federal Circuit affirmed a pair of PTAB judgments in CBM reviews canceling claims directed to the use of “a computer to deliver targeted advertising to a user” as ineligible under 35 U.S.C. § 101. More specifically, the claims recite reserving memory for advertising data in a data management system audio-visual processor recorder, like a set-top cable box. The court said that these claims recite nothing more than “an improvement to the abstract concept of targeted advertisement” with the aid of “generic computer components.”

The Supreme Court set forth a two-step framework for determining patent eligibility under section 101 in Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 573 U.S. 208, 216 (2014).  First, at “Step One,” the Court determines whether the claims are directed to a “patent-ineligible concept” such as an abstract idea.  If so, the Court moves to “Step Two” and “considers the elements of each claim both individually and ‘as an ordered combination’ to determine whether the additional elements ‘transform the nature of the claim’ into a patent-eligible application.”

The court identified many cases where it applied this framework to conclude patent claims recited 101-eligible subject matter. Generally, in each of these cases, the court determined that the claims recited features that improved the way a computer functioned or improved computer-network security. To offer a contrast, the court also identified many cases where it applied this framework to conclude patent claims recited 101-ineligible subject matter. There, the court noted that to be patent-eligible “it is not enough” that claims invoke a computer to “merely improve a fundamental practice or abstract process.”  The court recalled that the relevant inquiry often turns on whether the claim focuses on a specific improvement in computer capabilities or instead on an abstract process undertaken by a computer. The cited cases, along with the referenced holding, are included below.

Claims were patent eligible:

Enfish, LLC v. Microsoft Corp., 822 F.3d 1327, 1337–39 (Fed. Cir. 2016)(claims reciting a self-referential database that improved the way computers stored and retrieved data in memory were patent eligible). See our previous discussion of the Enfish saga here.

Visual Memory LLC v. NVIDIA Corp., 867 F.3d 1253, 1259–60 (Fed. Cir. 2017)(claims directed to an improved computer memory system that focused on a specific accommodation of different types of processors without compromising performance were patent eligible).

Koninklijke KPN N.V. v. Gemalto M2M GmbH, 942 F.3d 1143, 1151 (Fed. Cir. 2019) (claims directed to a system for generating check data that enabled the detection of persistent systematic errors and improved the functioning of the overall technological process of detecting systematic errors in data transmissions were patent eligible).

Ancora Techs. Inc. v. HTC America, Inc., 908 F.3d 1343, 1347–49 (Fed. Cir. 2018)(claims directed to storing a verification structure in computer memory were directed to a non-abstract improvement in computer functionality because they improved computer security related to license authorization software and thus were patent eligible).

Finjan, Inc. v. Blue Coat System, Inc., 879 F.3d 1299, 1304–06 (Fed. Cir. 2018)(claims to a “behavior-based virus scan” provided greater computer security and were thus directed to a patent eligible improvement in computer functionality).

Data Engine Techs. LLC v. Google LLC, 906 F.3d 999, 1007–08 (Fed. Cir. 2018)(claims reciting a specific method for navigating through three-dimensional electronic spreadsheets were patent eligible because the claimed invention improved computers’ functionality).

Core Wireless Licensing S.A.R.L. v. LG Elecs., Inc., 880 F.3d 1356, 1359–63 (Fed. Cir. 2018) (claims reciting an improved user interface for electronic devices that improved the efficiency of the electronic device, particularly those with small screens, were patent eligible).

SRI Int’l, Inc. v. Cisco Sys. Inc., 930 F.3d 1295, 1303 (Fed. Cir. 2019)(claims directed to an improved method of network security using network monitors to detect suspicious network activity, generating reports of that suspicious activity, and integrating those reports using hierarchical monitors, were patent eligible).

Claims were not patent eligible:

Affinity Labs. of Texas, LLC v. DIRECTV, LLC, 838 F.3d 1253, 1262 (Fed. Cir. 2016)(claims directed to a method of providing out-of-region access to regional broadcasts were directed to an abstract idea and not patent eligible because they simply used cellular telephones “as tools in the aid of a process focused on an abstract idea”).

In re TLI Commc’ns LLC Patent Litig., 823 F.3d 607, 611 (Fed. Cir. 2016) (claims reciting concrete physical components merely as “a generic environment in which to carry out the abstract idea of classifying and storing digital images in an organized manner” are not patent eligible).

Intellectual Ventures I LLC v. Capital One Bank (USA), 792 F.3d 1363, 1369–70 (Fed. Cir. 2015) (claims reciting a system for providing web pages tailored to an individual user were directed to an abstract idea, and claiming improved speed or efficiency inherent with applying the abstract idea on a computer was insufficient to render the claims patent eligible).

Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709, 715–16 (Fed. Cir. 2014) (claims directed to displaying an advertisement in exchange for access to copyrighted material is an abstract idea and not patent eligible).

SAP Am., Inc. v. InvestPic, LLC, 898 F.3d 1161, 1167–68 (Fed. Cir. 2018)(claims directed to “selecting certain information, analyzing it using mathematical techniques, and reporting or displaying the results of the analysis” were not patent eligible because the claims were focused not on a physical-realm improvement to computers as tools but rather an improvement in wholly abstract ideas).

Trading Techs. Int’l, Inc. v. IBG LLC, 921 F.3d 1084, 1092–93 (Fed. Cir. 2019) (Trading Techs. I)(claims directed to a computer-based method for facilitating the placement of a trader’s order were not patent eligible even though the claimed display purportedly “assisted traders in processing information more quickly,” because the purported improvement in user experience did not “improve the functioning of the computer, make it operate more efficiently, or solve any technological problem”).

Trading Techs. Int’l, Inc. v. IBG LLC, 921 F.3d 1378, 1381, 1384–85 (Fed. Cir. 2019) (Trading Techs. II) (claims “focused on providing information to traders in a way that helps them process information more quickly” did not constitute a patent-eligible improvement to computer functionality).

Following this discussion, the court analyzed Customedia’s patents, U.S. Patent Nos. 8,719,090 and 9,053,494, which share a specification and relate to set-top cable boxes and similar data management and processing systems.  Specifically, broadcasters and other content providers transmit advertising data via remote account transaction servers to local host data management systems and audio/video processor recorder players.  The advertising data may then be selectively recorded and stored in specific sections of the system according to a user’s preferences.  The storage sections can be reserved, rented, leased, or purchased from end users, content providers, or others.

Claim 1 of the ’090 patent, for example, recites a data delivery system for providing automatic delivery of specifically identified advertising data, in which the ad data is received and reviewed by a programmable local receiver unit, which includes at least one individually controlled and reserved advertising data storage section adapted specifically for storing the specifically identified advertising data.  By dedicating a section of the computer’s memory to advertising data, the claimed invention ensures that memory is available for at least some advertising data.

The Federal Circuit determined at Alice Step One that the claims are directed to the abstract idea of using a computer to deliver targeted advertising to a user, not to an improvement in the functioning of a computer.  Specifically, the Court noted that dedicating a section of the computer’s memory to advertising data does not improve the function of the computer itself.  The Court further noted that, the claims of the ’090 and ’494 patents do not enable computers to operate more quickly or efficiently, nor do they solve any technological problem. They merely recite reserving memory to ensure storage space is available for at least some advertising data. The specification is silent as to any specific structural or inventive improvements in computer functionality related to this claimed system.

At Alice Step Two, the Federal Circuit also determined that the elements of the claims failed to recite an inventive concept, noting that the claims recite only generic computer components, and did not transform the nature of the claim into a patent-eligible concept.  In reaching its determination, the Federal Circuit referenced two parts of the specification that specifically acknowledged that generic computer components could be used.  For example, the Court referenced that the storage device “may be any storage device for audio/video information known in the art” and the receiver unit may include “any digital or analog signal receiver and/or transmitter capable of accepting a signal transmitting any kind of digital or broadcast information.” Thus, the Federal Circuit concluded, such generic and functional hardware is insufficient to render eligible claims directed to an abstract idea.