Court Says Alice Test of ‘Limited Utility'; Computerized Task Master Patent Ineligible

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By Tony Dutra

Sept. 9 — Could the Supreme Court's two-step test for patent eligibility—laid out in Alice Corp. Pty. Ltd. v. CLS Bank Int'l—be reduced to a “I know it when I see it” approach?

The possibility clearly concerned Judge George H. Wu of the Central District of California, who called the test “of limited utility” in a Sept. 4 opinion (Eclipse IP LLC v. McKinley Equip. Corp.,C.D. Cal., No. 2:14-cv-00154-GW-AJW, 9/4/14).

Nevertheless, Wu quoted repeatedly from the high court's opinion in dismissing a case—explicitly rejecting the need for claim construction—because Eclipse IP LLC's patented method claims merely use generic computing functions to implement the abstract idea of communicating to people that you want a task performed

Methods of System-to-PDA Communications at Issue

Eclipse is a patent assertion entity that asserted three patents (U.S. Patent Nos. 7,064,681; 7,113,110; and 7,119,716) against multiple defendants in multiple cases, with McKinley Equipment Corp. the defendant here.

The patents share the same specification and cover communications between “an automated computer-based notification system” and “a personal communications device (e.g., telephone, pager, computer, PDA, etc.).” The asserted claims generally follow the pattern of the system sending a notification to the device—typically to identify something that needs to be done—and receiving a response that the device owner is available to do the task or not.

McKinley sought to dismiss under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim.

Alice Criticism First ...

The court postponed discussion of standards for a Rule 12(b)(6) dismissal in a Section 101 case until after it reviewed the Supreme Court's most recent decision on patent eligibility, on June 19 in Alice Corp. Pty Ltd. v. CLS Bank Int'l, 134 S. Ct. 2347, 2014 BL 170103, 110 U.S.P.Q.2d 1976 (2014).

The two-step Alice framework, Wu said, is to ask if the patent claim is directed to a patent-ineligible abstract idea, and if it is, then to see if “the claim contains an ‘inventive concept' that ‘transforms' the nature of the claim into something patent eligible.”

But, he said, there's only one step if the answer to the first question is no, and if one answers the second question in the affirmative, it seems to mean “there was a categorization error” in step one.

“So, the two-step test may be more like a one step test evocative of Justice [Potter] Stewart's most famous phrase,” he said, referring to, “But I know it when I see it,” in Jacobellis v. State of Ohio, 378 U.S. 184, 197 (1964).

“Thus, so far, the two-part test for identifying an abstract idea appears to be of limited utility, while comparisons to previously adjudicated patents—or more precisely, to past cases' characterizations of those patents—have done the heavy lifting,” Wu said.

... But Its Rules Can Be Applied Here

On the other hand, the court's opinion ultimately followed the two-step approach. It characterized Eclipse's claims as abstract ideas and ultimately relied on the “clear rule” from Alice that “mere recitation of a generic computer cannot transform a patent-ineligible abstract idea into a patent-eligible invention.”

And Alice had further laid out a policy objective—to use Section 101 to make sure the claim does not preempt the use of an abstract idea—that served the court's purposes throughout the opinion.

Wu suggested, in fact, that that policy objective could parallel the patent infringement doctrine of equivalents, which relies on whether an allegedly infringing device or method mimics the patented claim “in the same way.”

“Similarly, the question in the abstract idea context is whether there are other ways to use the abstract idea in the same field,” he said. “If so, the Supreme Court has expressly encouraged others to find those other ways, without being held back by patents that preempt the whole concept.”

Motion May Be Right Time

Only then did the court turn to whether a Rule 12(b)(6) motion is appropriate. Eclipse argued that claim construction is necessary first, presumably because it would have the opportunity to limit the scope of its patent claims to be targeted to applications of the abstract idea.

The Federal Circuit has only said that claim construction “will ordinarily be desirable—and often necessary,” Wu said. “But that is true only where claim construction disputes are relevant to the §101 question.”

In the instant case, he said, “based on the substance of the parties['] arguments and the content of the patents,” it is not required.

Applying Alice, Eclipse's Patents Go Down

The problem for Eclipse was that it hoped to import limitations from the preamble of its claims, but the court characterized it as “sweeping” text from the patent specification that would indicate Eclipse's claims were significantly broader.

After reciting the full 150-word “mere recitation of a generic computer” passage from Alice, Wu said, “That analysis fits the '681 Patent's claims precisely.”

As for step one, he said, “The claims are directed to the abstract idea of asking someone whether they want to perform a task, and if they do, waiting for them to complete it, and if they do not, asking someone else.”

As for preemption, “There are likely a myriad number of ways to do so, and the '681 Patent preempts them all.”

And as for step two, Wu rejected the argument that Section 101 can be overcome by “specially programmed” computers to implement the abstract idea. “[T]hat is true of all computer-implemented inventions,” he said.

After similar commentary on the other two asserted patents, the court granted McKinley's motion to dismiss.

Brian James Dunne of Olavi Dunne LLP, Los Angeles, represented Eclipse. Daralyn J. Durie of Durie Tangri LLP, San Francisco, represented McKinley.

To contact the reporter on this story: Tony Dutra in Washington at adutra@bna.com

To contact the editor responsible for this story: Tom P. Taylor at ttaylor@bna.com

Full text at http://www.bloomberglaw.com/public/document/Eclipse_IP_LLC_v_PayByPhone_Technologies_Inc_Docket_No_214cv00154.