First Stream Media Corp. (“Samba”) v. Alphonso Inc. et al.
Docket No. 2019-1506, -2133 (http://www.cafc.uscourts.gov/sites/default/files/opinions-orders/19-1506.OPINION.5-11-2021_1776030.pdf)
DYK, REYNA, HUGHES
May 11, 2021
Brief Summary: DC eligibility (101) decision reversed (“claims do not at all describe how that result is achieved”); claim construction affirmed (proposed construction “contradicts the specification”).
Summary: Free Stream appealed DC grant of summary judgment (SJ) of noninfringement of US Pat. No. 9,026,668 from the ND of CA and a separate claim construction order from the ED TX. Alphonso cross-appealed denial of its motion to dismiss for patent ineligibility (section 101) of US Pat. No. 9,386,356 by the ND CA DC. The patents relate to systems for providing mobile phone users targeted advertisements. The DC concluded that ‘356 independent claim 1 was not directed to an abstract idea (Alice (US 2014) step one), but the FC panel agreed with Alphonso that it “is directed to the abstract idea of targeted advertising” and not “a specific asserted improvement in computer capabilities” as Samba argued (Citing Enfish (FC 2016 (“specific improvement to the way computers operate”)), Visual Memory (FC 2017), Finjan (FC 2018), Core Wireless (FC 2018), and Uniloc (FC 2019)). The FC panel pointed to its “targeted advertising” patent ineligibility decisions (Intell. Ventures, FC 2015; Bridge & Post, FC 2019) as well as McRO (FC 2016 (“whether the claims in the patent focus on a specific means or method that improves the relevant technology or are instead directed to a result or effect that itself is the abstract idea and merely invoke generic processes and machinery”)). The FC panel explained that “a claim must ‘ha[ve] the specificity required to transform [the] claim from one claiming only a result to one claiming a way of achieving it’ to avoid ineligibility” (SAP, FC 2018) and “is ineligible if it “fail[s] to recite a practical way of applying an underlying idea . . . [and] instead [is] drafted in such a result-oriented way that [it] amount[s] to encompassing ‘the principle in the abstract’ no matter how implemented” (Interval Licensing, FC 2018). Further, “[a]ll that is required at the eligibility phase is that the claim itself “must identify ‘how’ that functional result is achieved by limiting the claim scope to structures specified at some level of concreteness, in the case of a product claim, or to concrete action, in the case of a method claim” (Am. Axle, FC 2020). Here, the FC panel concluded, “[t]he asserted claims provide for how that is achieved only by stating that the mechanism used to achieve this communication is by piercing or otherwise overcoming a mobile device’s security sandbox” and “the asserted claims do not at all describe how that result is achieved.” The DC did not reach Alice’s step two because it did not find the claims to be abstract under step one, but the FC panel considered Samba’s argument “that its claims are also eligible under Step 2 because they recite a specific, ordered combination of elements operating in unconventional ways, such that they override ‘their routine and conventional inability to share information with each other’” (citing DDR Holdings, FC 2014 (“claimed invention solved the problem of allowing a website visitor to view a hyperlinked advertisement”); BASCOM, FC 2016 (“an inventive concept can be found in non-conventional and non-generic arrangement of known, conventional pieces”)). The FC panel concluded that the claimed invention “there is nothing inventive disclosed in the claims that permits communications that were previously not possible” and are not therefore patent eligible (Affinity Labs, FC 2016). Samba also appealed the TX DC claim construction order for the ‘668 patent as “too restrictive of an interpretation and is contrary to both the plain meaning of ‘communication session’ and the intrinsic record”, but the FC panel agreed with the DC’s conclusion (e.g., “Samba’s desired construction, covering one-way communication, contradicts the specification”).