Secured Mail Solutions LLC v. Universal Wilde, Inc.

Docket No. 2016-1728

October 16, 2017

Brief summary: DC grant of UW’s motion to dismiss because SM’s patents are patent-ineligible under § 101 affirmed ((e.g., “not directed to an improvement in computer functionality” (Alice step one) and “cite well known and conventional ways to allow generic communication between a sender and recipient using generic computer technology” (Alice step two)).

Summary: Secured Mail appealed DC grant of UW’s motion to dismiss because the claims of SM’s “Intelligent Bar Code”, “QR Code” and “Personalized URL” patents are invalid under § 101. Each patent relates to “methods whereby a sender affixes an identifier on the outer surface of a mail object (e.g., envelope or package) before the object is sent” such that computers and networks can communicate information about the mail content and sender after it is delivered. The DC concluded “the asserted claims, viewed individually or in combination, do not meaningfully limit the abstract idea of communicating information about a mailpiece by use of marking.” The FC panel explained that “procedural questions not unique to patent law” are reviewed according to the law of the regional circuit (here the Ninth, so de novo regarding the failure to state a claim) (Univ. Utah, FC 2013) and § 101 issues de novo (McRO, FC 2016).

The FC panel reviewed the “two-step framework” for analysis under § 101: 1) “determine whether the claims at issue are ‘directed to’ a judicial exception, such as an abstract idea” (“if not, the inquiry ends”) (Thales, FC 2017; Enfish, FC 2016 (issued after the DC’s opinion in this case)); and 2) “consider…whether the claims contain an ‘inventive concept’ sufficient to ‘transform the nature of the claim into a patent-eligible concept’” (Alice, US 2014 (quoting Myriad, US 2013); Content Extraction, FC 2014; Recognicorp, FC 2017 (“To save a patent at step two, an inventive concept must be evident from the claims.”); Versata, FC 2015 (“Merely reciting the use of a generic computer or adding the words ‘apply it with a computer’” will not suffice.); DDR (FC 2014 (inventive concept in claims incorporating “elements from multiple sources in order to solve a problem”)). The Enfish claims, relating “to organization of data in a table in computer memory and a system for indexing that data”, were found “patent-eligible under Alice step one because the claims focused on an improvement to computer functionality itself, not on economic or other tasks for which a computer is used in its ordinary capacity.” Enfish prohibits analysis under the first step from “describing the claims at such a high level of abstraction and untethered from the language of the claims”, as this would “all but ensure[] that the exceptions to § 101 swallow the rule.”

Here, the FC panel concluded that even though the DC considered the claims under the first step at “a reasonably high level of generality”, the DC correctly found the claims to be directed to an abstract idea (e.g., “not directed to an improvement in computer functionality”; not, e.g., a “new barcode format, an improved method for generating or scanning barcodes, or similar improvements”; “the claim…merely recites that the unique identifier is generated by the sender”). The FC panel distinguished SM’s claims from those in McRO (“eligibility where the ‘claimed process uses a combined order of specific rules that renders information into a specific format that is then used and applied to create desired results”) and Thales (eligibility where the ‘claims specify a particular configuration of inertial sensors and a particular method of using the raw data from the sensors’”). The FC panel also agreed the claims do not include an “inventive concept” since, e.g., unlike in DDR, SM’s claims “cite well known and conventional ways to allow generic communication between a sender and recipient using generic computer technology.”

The FC panel also found it was appropriate for the DC to dismiss the case via Rule 12(b)(6) and that the DC “did not place any special burden of proof on [SM], but simply concluded from the claims that they were directed to patent-ineligible subject matter.”

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