Standard computer equipment can support the inventive concept under Alice Step 2 | McDermott Will & Emery


The United States Court of Appeals for the Federal Circuit reversed a district court’s dismissal of a patent case for errors in the analysis of the patent eligibility of claims under Alice. The Court concluded that whether or not the claimed invention was abstract at Stage 1, the invention claimed specific improvements making it patentable at Stage 2. Cooperative Entertainment, Inc. v. Kollective Technology, Inc.Case No. 21-2167 (Fed. Cir. Sept. 28, 2022) (Moore, CJ; Lourie, Stark, JJ.)

Cooperative Entertainment sued Kollective Technology for infringement of several claims of Cooperative’s patent to structure a dynamic peer-to-peer (P2P) network for the distribution of large files. After Kollective filed a motion to dismiss under Fed. A. Civil. P. 12(b)(6) arguing that all patent claims were ineligible under 35 USC § 101, Cooperative filed an amended complaint. Kollective again filed its motion to dismiss, and the district court granted the motion, ruling the disputed claims ineligible under Section 101. The co-op appealed.

The patent relates to systems and methods for structuring a dynamic P2P network for the distribution of large files, in particular videos and video games. The patent specification explains that in prior art systems, video streaming was controlled by content delivery networks (CDNs), with content “delivered directly from the CDN server from which the content originated”. In contrast, the contested claims list methods and systems for a network in which content distribution occurs”outside controlled networks and/or [CDNs](emphasis added), and thus outside of a “static network of controlled systems”. Dynamic P2P networks comprising “peer nodes”, which simultaneously consume the same content, transmit content directly to each other instead of receiving content from the CDN. The claimed P2P networks use “content segmentation” to segment a video file into smaller clips and distribute them piecemeal. Viewers can get individual segments as needed, preferably from other viewers. Segmentation techniques described include “CDN address resolution, trace route to CDN and P2P server managerdynamic peer feedback reporting traffic rates between an individual peer and its neighbors, round-robin, other server-side resource scheduling/allocation techniques, and combinations thereof” (emphasis in original).

The Federal Circuit applied the two-step procedure Alice scope: (1) determine whether the claim is “directed to” a “patent-ineligible concept”, such as an abstract idea, and if so, (2) examine “the elements of the claim to determine whether it contains sufficient ‘inventive concept’ to ‘transform’ the claimed abstract idea into a patentable application. Step 2 examines whether the elements of the claim, individually and as an ordered combination, contain an inventive concept that does not merely not to implement an abstract idea using “well understood, routine, [and] conventional activities previously known to the industry.

Below Alice stage 1, the district court had held that “the objective of the [] patent” is the abstract idea of ​​”the preparation and transmission of content to peers via a computer network”. The Federal Circuit disagreed, concluding that regardless of whether the invention could be reduced to an abstract concept, at Stage 2 the claims contained several alleged inventive concepts that the specification touted as specific improvements. in the distribution of data compared to the state of the art. Because the Amended Complaint plausibly alleged these inventive concepts, the Court found the district court’s ruling of ineligibility to be in error. In particular, the Court identified at least two inventive concepts that were supported by the specification and discussed as beneficial in the amended complaint:

  • The required dynamic P2P network in which multiple peer nodes consume the same content and are configured to communicate outside of CDNs
  • The requirement that trace routes be used in content segmentation.

Kollective attempted to argue that the patent was not inventive because P2P networks and CDNs are conventional. However, the Federal Circuit dismissed the argument as missing the point and cited his previous past (for example., Thales quoting Enfish), reiterating that “useful improvements to computer networks are patentable whether or not the network consists of standard computer equipment”. The Court also found it significant that Kollective did not argue that the use of trace routes to segment content into the claimed dynamic P2P network structure was not inventive and relied on statements on the record of the complaint and the patent specification that the limitation of segmentation was not well understood, routine or conventional. A sin BASCOM, the Court found sufficient evidence in the wording of the claim, the patent specification and the amended complaint of technical improvements over the state of the art which should have been weighed in favor of Cooperative. Unlike the District Court, the Federal Circuit said that while supporting the evidence (for example., expert statement or research papers) would have been helpful, such evidence is not always necessary to defeat a Rule 12 motion.

The Federal Circuit further noted that the District Court should have denied the motion to dismiss because Cooperative’s allegations in the claims and written description complaint created a plausible factual issue regarding the inventiveness of the P2P setup. dynamic. Below berkheimersuch a dispute of material fact regarding inventiveness created by alleged improvements, efficiency, functionality or costs also precludes summary judgment.

The Federal Circuit remanded for further proceedings.

Practical note: Whether for a patent application, claims, or complaint, consider the state of the art and whether to explicitly commemorate or refute any advances presented by inventive technology.

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