Docket No. 2016-2013, -2049
PROST, LOURIE, SCHALL
June 23, 2017
Brief Summary: DC decision of eligibility under § 101 reversed; decision of no exceptional case damages under § 285 affirmed.
Summary: Prism appealed final DC decision denying its motions for new trial and JMOL regarding US 8,127,345 and 8,287,155 (‘345 continuation) relating to security systems on computer networks (systems and methods that control access to protected computer resources by authenticating identity data, i.e., unique identifying information of computer components). Prism requested the FC to vacate the jury’s verdict of non-infringement and T-Mobile requested reversal of the DC’s finding that the claims are patent eligible under § 101 and its denial of T-Mobile’s request for an exceptional case finding under § 285. The FC panel first addressed the § 101 issue, explaining that that “is an issue of law reviewed de novo” (Accenture, FC 2013) subject to the “two-step process under Alice” (US 2014; Affinity Labs, FC 2016). It also explained that the denial of a JMOL is to be reviewed de novo under Eigth Circuit rules (Revolution Eyewear, FC 2009; Walsh, 8th Cir. 2003). The FC panel agreed with T-Mobile that claims are directed to an abstract idea under Alice’s first step (In re TLI, FC 2016; Intell. Ventures, FC 2015). The FC panel also found, while not explicitly disagreeing with Prism’s argument the inclusion of “identity data” may “represent a specific and novel solution to a real problem” that “provides real benefits”, that “this does not rise to the level of an inventive concept” (Alice step two; e.g., “there is no indication that their inclusion produces ‘a result that overrides the routine and conventional’ use of this known feature” (DDR Holdings, FC 2014)). Citing Intell. Ventures (FC 2016), the FC panel explained: “Viewed as an ordered combination, the asserted claims recite no more than the sort of ‘perfectly conventional’ generic computer components employed in a customary manner that we have previously held insufficient to transform the abstract idea into a patent-eligible invention.” The DC § 101 decision was therefore reversed. The FC panel then turned to the § 285 decision, explaining that “[a]n exceptional case is ‘simply one that stands out from the others with respect to the substantive strength of a party’s litigating position (considering both the governing law and the facts of the case) or the unreasonable manner in which the case was litigated” detrmined “on a case-by-case basis, considering the totality of the circumstances” (Octane Fitness, US 2014; Highmark, US 2014 (§ 285 decisions reviewed for an abuse of discretion)). T-Mobile argued this case should be considered exceptional because “Prism’s case ‘was exceptionally weak’”, “Prism deliberately elicited testimony to obscure the facts that demonstrate non-infringement”, and “Prism presented an entirely new and unsupported infringement theory during closing argument”. The FC panel disagreed, however, finding no abuse of discretion by the DC due in part to “T-Mobile’s decision to forego [SJ] of non-infringement.”