Intellectual Ventures I LLC, et al. v. Capital One Financial Company et al.

Docket No. 2016-1077

March 7, 2017

Brief Summary: DC grant of SJ for collateral estoppel (issue preclusion) affirmed under Fourth Circuit law and finding of ineligibility under under § 101 affirmed under the two-step Alice/Mayo “abstract idea” / “inventive concept” test.

Summary: IV appealed DC grant of SJ finding all claims of two patents (US 7,984,081; 6,546,002) ineligible under § 101, and barring IV from pursuing infringement claims regarding US 6,715,084 under a collateral estoppel (issue preclusion) theory. IV also appealed DC certification of its judgment under FRCP 54(b) (“the court may direct entry of a final judgment as to one or more, but fewer than all, claims or parties only if the court expressly determines that there is no just reason for delay”) so this appeal could proceed concurrently with Capital One’s antitrust counterclaims in MD. The FC panel opinion first addressed the certification issue, concluding the DC did not abuse its discretion since its reasoning was sufficient and “the mere existence of some factual overlap between the parties’ claims and counterclaims does not necessarily lead to the conclusion that the [DC] abused its discretion” (W.L. Gore, FC 1992). The issue preclusion issue was reviewed “de novo, applying the law of the regional circuit” (here the Fourth Circuit; Aspex, FC 2013; DDR, FC 2014). The Fourth Circuit “has established five requirements for collateral estoppel” but “[h]ere, the parties only dispute the finality requirement” (“a ‘final and valid’ judgment”) which the FC panel found was met “in light of the [related JPMC matter (see FN2)] court’s partial [SJ] order” (“IV’s reliance on Vardon is misplaced because in that case, we applied the law of the Seventh Circuit”, a more rigid test). The Fourth Circuit “neither demands final judgment, nor requires a party’s appeal” and describes “finality for the purposes of collateral estoppel [as] a flexible concept and ‘may mean little more than that the litigation of a particular issue has reached such a stage that a court sees no really good reason for permitting it to be litigated again” (Swentek, 4th Cir. 1987). Regarding ineligibility under § 101, the FC panel explained that this “is an issue of law that we review without deference” (OIP Techs., FC 2015) and applied the two-step Alice/Mayo test (Alice, US 2014; Mayo, US 2012) (1) the “abstract idea” step: is the “character” of the claim “as a whole” directed to a patent-ineligible concept (law of nature, natural phenomenon, abstract idea)? 2) the “inventive concept” test: do the claim elements “add enough to ‘transform the nature of the claim’ into a patent-eligible application” (“must be more than ‘well-understood, routine, conventional activity”)?). The FC panel found that “the ‘081 patent concerns a system and method for editing XML document”, the claims of which it found to be “at their core, directed to the abstract idea of collecting, displaying, and manipulating data” (Content Extraction, FC 2014; Intell. Vent., FC 2015; Elec. Power Grp., FC 2016). And it found no “inventive concept” transforming that abstract idea into patent-eligible subject matter (claim elements “merely describe the functions of the abstract idea itself”, “only a result-orientated solution, with insufficient detail on how a computer accomplishes it”). Finally, it notes the ineligibility of the ‘002 patent was addressed in the Erie opinion. Thus, the DC decision was affirmed.

This entry was posted in Appeal, Collateral estoppel, Issue Preclusion, Patentability. Bookmark the permalink.

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