Eligibility: Patent’s Claims of Inventive Concept Overcome Eligibility Dismissal

By Dennis Crouch

Cooperative Entertainment, Inc. v. Kollective Tech, Inc., — F.4th — (Fed. Cir. 2022)

This pro-patentee eligibility decision offers some ideas for patentees seeking to help ensure that their patents survive eligibility challenges. The district court dismissed the case for lack of eligibility. On appeal, the Federal Circuit has reversed.

We know that eligibility is a question of law, but the doctrine at times requires examination of underlying questions of fact. Berkheimer v. HP, Inc., 881 F.3d 1360 (Fed. Cir. 2018) (J.Moore).  That distinction is important at the motion to dismiss stage.

An accused infringer’s motion to dismiss is only appropriate when “there are no plausible factual disputes after drawing all reasonable inferences from the intrinsic and Rule 12 record in favor of the” patentee. Slip Op. Here, that “intrinsic record” is the patent document and the “Rule 12 record” is the complaint.  In its amended complaint, the patentee alleged two “inventive concepts.” These include (1) a dynamic peer-to-peer network designed to “consume the same content within a predetermined time” and are controlled by a a content distribution network; and (2) the use of trace routs in content segmentation.  The complaint particularly notes that those novel features were discussed by the examiner in the reasons for allowance.  In addition, the patent application itself treats these features as important improvements to content distribution systems.

To be clear, I don’t know whether or not these features count as “inventive concepts” under Alice. But, all that is required at the pleading stage of a case are allegations that make the patentee’s claim plausible. And the allegations here seem to to at least meet that low standard.  The appellate decision finds some importance in the fact that the intrinsic evidence recognizes the inventive concept as inventive.

The specification explains how claim 1’s dynamic P2P network structure is different from and improves upon the prior art.

The patent repeatedly explains that the “prior art fails …” and that the feature “does not exist in the prior art.”  The specification also notes how the invention solves a network capacity problem.   Although the opinion focuses on these features, it does not explain how important it is for the patent documents to expressly call out their innovative features.  Bottom line here though is that these allegations (as supported by the intrinsic record) establish a plausible showing that the patent covers an patent eligible inventive concept under Alice Step 2.

The district court had sided with the accused infringer and dismissed the case on eligibility grounds. The district court first concluded that the claims were directed to the abstract idea of peer-to-peer communication via computer network.  And that the alleged inventive concepts were “merely” implementing that generic idea using conventional technology.  On appeal, that dismissal was reversed. But, the appellate panel refused to pass judgment on the district court’s Alice Step 1 opinion. This leaves the eligibility fight still alive at the district court.

We do not decide today that the claims are patent eligible under § 101. We hold only that there are plausible factual allegations that the claims include inventive concepts, and that is enough to preclude dismissal.

Slip Op.  On remand, the parties will need to present evidence (likely to a jury) on whether the patent is directed toward an inventive concept.  In addition, the district court will be asked to reconsider its Alice Step 1 determination.

= = = =

The decision is authored by Chief Judge Moore and joined by Judges Lourie and Stark.  Meredith Martin Addy (AddyHart) argued for the patentee; Michael Dowler (Park Vaughan) for the defendant-appellee.

 

38 thoughts on “Eligibility: Patent’s Claims of Inventive Concept Overcome Eligibility Dismissal

  1. 4

    This COOPERATIVE ENTERTAINMENT v. KOLLECTIVE TECHNOLOGY Fed. Cir. decision should not be surprising, as it falls under a now well-established exception to 12(b)(6) “abstraction” unpatentable subject matter decisions for improvements in computer operations. As the decision states: “This is not an “abstract idea implemented on a generic computer,” and it is alleged to improve the performance of the content delivery network with reductions in costs and improvements in several aspects of system performance. See BASCOM Glob. Internet Case .. v. AT&T Mobility LLC, 827 F.3d 1341, 1352 (Fed. Cir. 2016); Amdocs (Israel) Ltd. v. Openet Telecom, Inc., 841 F.3d 1288, 1299 (Fed. Cir. 2016) (citing BASCOM, 827 F.3d at 1351).”

    1. 4.1

      Fed. Cir. decision should not be surprising, as it falls under a now well-established exception to 12(b)(6) “abstraction” unpatentable subject matter decisions for improvements in computer operations.
      SMH. Successfully asserting an affirmative defense under 35 USC 101 is the exception.

      This case merely brings 12b6 (at the Federal Circuit) closer to what it is intended to be — a determination whether the complaint alleged sufficient facts to lay out a cause of action.

    2. 4.2

      P.S. Note that reversals of 12(b)(6) “abstraction” motion decisions based on useful complaint assertions [per Berkheimer v. HP or otherwise] as here does not preclude challenges after remand to insufficient 112 specification enablement support for those complaint assertions. But that would normally require a full blown expensive trial on that and all other possible disputed issues. Most defendants will settle unless huge infringement damages are asserted.

      1. 4.2.1

        does not preclude challenges after remand to insufficient 112 specification enablement support for those complaint assertions.
        You do realize that everything asserted in a complaint does not require 112 specification enablement?

        Under 112(a), “The specification shall contain a written description of the invention, and of the manner and process of making and using it, in such full, clear, concise, and exact terms as to enable any person skilled in the art to which it pertains, or with which it is most nearly connected, to make and use the same, and shall set forth the best mode contemplated by the inventor or joint inventor of carrying out the invention.”
        For example, one is not required to spell out advantages of the invention in the specification. While it may be useful, it isn’t required, and the lack, in the specification, of advantages alleged in a complaint is not the basis for a 112 rejection.

      2. 4.2.2

        Yes, I should have expressed it better by saying that certain specific computer improvements or advantages arguments made in the complaint to avoid a 12(b)(6) “abstraction” motion may not help latter on in the remanded case if what is claimed or taught in the specification is proven not to actually provide or enable them, or is “well known.”

        1. 4.2.2.1

          Or, to put it even more simply, suitable complaint contents may help avoid a 12(b)(6) motion, but they are not evidence, and claims can be held to be “abstraction” [Alice-type] unpatentable subject matter in a final decision even if they were not killed off preliminarily with a 12(b)(6) motion.
          In response to some other comments below, on a different issue, there is a difference between potentially dangerously reciting specific asserted advantages or features of the invention in a “Summary of the Invention” or other such patent introduction, as opposed to just mentioning in the later specification description of an embodiment that certain beneficial things were accomplished in an experiment.
          As noted in one other comment here, if the invention is important enough to not surrender patent rights in the larger market outside the U.S., then you may actually need an EPO and other acceptable “problem > solution” statement in the spec.

          1. 4.2.2.1.1

            to put it even more simply, suitable complaint contents may help avoid a 12(b)(6) motion, but they are not evidence
            Well yeah. That is basic civil procedure that most US law students should know by their 2nd year. Complaint alleges facts — it doesn’t prove facts. The facts alleged in a complaint must set forth a cause of action. In response to a 12b6 motion, a court evaluates whether the facts alleged do so.

            1. 4.2.2.1.1.2

              Yes, this being a patent law educational blog, with a substantial number of readers who are not law school graduates, but are involved in patent application prep and prosecution, I do err on the side of comments obvious to most patent attorneys.

              1. 4.2.2.1.1.2.1

                Yes, this being a patent law educational blog, with a substantial number of readers who are not law school graduates, but are involved in patent application prep and prosecution, I do err on the side of comments obvious to most patent attorneys.
                I assume most readers are halfway intelligent and conversant in the intricacies of patent law. If not, I’ll be spending 30 minutes typing up a primer before I post my remark that took 30 seconds to type.

  2. 3

    OC: “For the last 15 years or so, it has been borderline malpractice to “plainly describe[ ] the inventive concept.”

    Only in the kindergarten art units where there was no invention to begin with and the whole game was using new lingo to describe old tech or old logical abstractions.

    In the grown up arts, competent practitioners described their invention carefully because we were prosecuting in Europe where written support mattered.

  3. 2

    Imagine that: drafting a patent specification that plainly describes the inventive concept(s) WITHOUT trying to hide the ball actually helps the patentee.

    Nobody could have predicted that.

    1. 2.1

      Typical nondescript mouthing from Malcolm.

      You do realize that most all applications — by way of the required oath — affirmatively supply any necessary “factual statement of advance” eh?

      But do tell (as you have NEVER done so), do you feel that these claims are eligible?

      Have you found a computing claim that you have ‘deemed’ eligible?

    2. 2.2

      >Nobody could have predicted that.

      To be honest, I kind of agree. For the last 15 years or so, it has been borderline malpractice to “plainly describe[ ] the inventive concept.” Ditto wrt drafting a useful/meaningful background section.

      1. 2.2.1

        I would bet you that the facts of the case (specification versus specification comparison) would be indistinguishable from dozens of cases dismissed by District Judges under Rule 12.

        What THIS case stands for is the notion that the Gordian Knot of 101 jurisprudence is “alive and well.”

      2. 2.2.2

        Yeah, KSR was one of the worst decisions ever. The backlash was no actual background.

        If Alice + progeny did anything beneficial, at least you can now discuss some background so you have a technical problem to solve. And you can present a technical solution.

        1. 2.2.2.2

          >at least you can now discuss some background

          We go back and forth. For now, I think it depends whether you are optimizing for litigation or optimizing for licensing/sale. A literally-infringed patent-in-being is worth something in the later case.

      3. 2.2.3

        For the last 15 years or so, it has been borderline malpractice to “plainly describe[ ] the inventive concept.” Ditto wrt drafting a useful/meaningful background section.

        Regrettably true.

      4. 2.2.4

        For the last 15 years or so, it has been borderline malpractice to “plainly describe[ ] the inventive concept.” Ditto wrt drafting a useful/meaningful background section.
        Only if you don’t know what the invention is and how it differs from the prior art. Mind you, that isn’t necessarily the fault of the inventor/attorney. The inventor knows what he/she invented — not necessarily what exists in the prior art. They know it is different but don’t know precise why it is different. In those situations, I can see why a background of the invention is light and there are little discussions as to the advantages of the invention.

        However, when you do know have knowledge of the prior art and/or why the invention is advantageous, then it is good practice to discuss the prior art and your advantages. This helps focus examination and allows for you (as the patent practitioner) to write a better story.

        1. 2.2.4.1

          “ The inventor knows what he/she invented — not necessarily what exists in the prior art.”

          Right, especially logic inventors who were born yesterday, live in a vacuum and invent and build their own computers from scratch. It’s really impossible to know what existed before you improved it, especially if you invented everything yourself the day before.

          It’d be different if there was any historical record anywhere on earth where people keep a record of previously existing stuff. Hey now, I just had a great idea!

        2. 2.2.4.2

          Interesting observation from WT. From where I stand though, outwith the USA, the time when you can afford to dispense with the “Background” section is exactly the opposite of what WT avers, namely when you DO know the prior art in all its glory.

          When you are not (yet) privy to the totality of the prior art , all the more reason to pack the specification with all that your imagination generates, about technical effects delivered by the claimed combination of technical features. Why, because you need to prepare for the moment when the EPO search throws up prior art you didn’t know about (but the PHOSITA did) and the Examiner formulates an obviousness attack (obvious to that PHOSITA) based on that art that you didn’t take into account when writing your claims.

          1. 2.2.4.2.1

            Do you really have to be told — again — about the patent profanity in the US?

            … talk about a mind with the opposite of ‘open to learn’…

          2. 2.2.4.2.2

            the time when you can afford to dispense with the “Background” section is exactly the opposite of what WT avers, namely when you DO know the prior art in all its glory.
            You can always trust MD to get it wrong.

            When you know the prior art, you can better tell the story as to why your invention is different/better over the prior art. This involves writing a more extensive “Background” section. If you don’t know the prior art, you are more likely to be flailing in the wind not knowing which direction to go — hence, a shorter Background.

            Why, because you need to prepare for the moment when the EPO search throws up prior art you didn’t know about (but the PHOSITA did) and the Examiner formulates an obviousness attack (obvious to that PHOSITA) based on that art that you didn’t take into account when writing your claims.
            You cannot prepare for something you don’t know about. You cannot distinguish your invention from unknown prior art. Yeesh.

            1. 2.2.4.2.2.1

              WT, I suspect that the word “distinguish” is key to your dismissal of my viewpoint. Of course you are right, that you can only start to “distinguish” when you are presented with the thus far unknown art and the up till then unknown obviousness attack.

              But is that any reason to refrain from drafting a specification that is optimised for the “distinguishing” process that you are going to be faced with? Can this be done without recourse to an explicit “Background” section. Yes. Also at the EPO.

              1. 2.2.4.2.2.1.1

                drafting a specification that is optimised for [anything]”

                Statement — in and of itself — is a bit of a Mom and Apple Pie truism.

                Where MaxDrei wanders into the weeds is his constant neglect of understanding US practice which DOES ‘optimize’ by taking into account Patent Profanity (in this case, related to the fact that pretty much anything in a Background section is taken as applicant admitted prior art — and can provide legal reasoning for Obviousness rejections.

                Savvy US practitioners would immediately reject MaxDrei’s line of thinking.

                (this is not to say that a compelling tale can NOT be told in the specification — but the Art in the Craft is to do so in the Detailed Description, leaving the Background section as bare-bones as possible).

                1. Indeed, anon. Thanks for that comment.

                  When prior art emerges for the first time after the patent application is filed, and the inventor then duly explains persuasively that it does not anticipate or render obvious that which they have contributed to the art, attention turns (at least in a First to File jurisdiction) to the question whether there is sufficient disclosure in that application as filed of precisely that contribution which the invention makes, from a prior art starting point of that newly emerged prior art. You don’t get a second chance, to write a replacement specification. Rather, you only get one chance.

                  Dependent claims, for example. Why else are they there?

                  But also a specification which reveals that each such dependent claim delivers a level of non-obvious patentability enhanced relative to that of the as-filed independent claim.

                  Chemists do it as a matter of course. Their successive dependent claims track ever better experimental results, results revealed in the specification as filed. Engineer patent attorneys can here learn from their chemical colleagues.

                  OK, put the text in after the Brief Description of the Drawings instead of up ahead of that section, if that’s what it takes to avoid being profane. But put it in somewhere otherwise the inventor is going to be disappointed at the thin patent coverage outside the USA.

                2. But also a specification which reveals that each such dependent claim delivers a level of non-obvious patentability enhanced relative to that of the as-filed independent claim.
                  How does a specification reveal that a dependent claims deliver non-obvious patentability when you don’t know what the prior art is?

                  Chemists do it as a matter of course. Their successive dependent claims track ever better experimental results, results revealed in the specification as filed.
                  Many inventions don’t provide quantifiable “experimental results.”

              2. 2.2.4.2.2.1.2

                But is that any reason to refrain from drafting a specification that is optimised for the “distinguishing” process that you are going to be faced with? Can this be done without recourse to an explicit “Background” section. Yes. Also at the EPO.
                Explain how one goes about optimizing a specification in this situation.

                1. How? 1) Grasp the idea that a patentable invention is a solution to a technical problem, then 2) write a specification which ties each claimed combination of technical features to those technical effects delivered by that feature combination,

                  Later, as and when necessary, you can parse the achieved technical effect into a problem solved, demonstrating patentability of that claimed feature combination.

                  This works in a TSM environment. But OK, perhaps it is counter-productive in the USA, currently. Oh well then, any chance of TSM making a come-back some time in the distant future?

                2. “ Many inventions don’t provide quantifiable “experimental results.”

                  Those are the “pioneering” inventions, like every invention in the “do logic on a computer” arts.

                  LOL

  4. 1

    Intriguingly, this patent traces back to a Sept 2012 priority filing date. In other words, the fact that it was well drafted to fend off a Rule 12(b) Alice challenge cannot be put down to the idea that the prep & pros. attorney was drafting with Alice challenges in mind. Well done, nevertheless. I tip my hat to JiNan George at NeoIP.

    1. 1.1

      –The decision is authored by Chief Judge Moore and joined by Judges Lourie and Stark. Meredith Martin Addy (AddyHart) argued for the patentee; Michael Dowler (Park Vaughan) for the defendant-appellee.–

      Yes, let’s not overlook the prosecution attorney(s) or their budgets.

    2. 1.2

      If you look at those claims, it’ll be interesting to see what happens. Get the “wrong” three judges at the CAFC, and it’s over. Get judges willing to look at technical problems/technical solutions, it might be different.

      1. 1.2.1

        Get the “wrong” three judges at the CAFC, and it’s over. Get judges willing to look at technical problems/technical solutions, it might be different.

        Sure, but that is true in all 101 cases. I expect that most lawyers can foreknow the outcome of their 101 appeal as soon as they walk into the Markey building and see the composition of their panel.

        1. 1.2.1.1

          Sure, but that is true in all 101 cases. I expect that most lawyers can foreknow the outcome of their 101 appeal as soon as they walk into the Markey building and see the composition of their panel.
          I can assure you, that observation is very accurate.

        2. 1.2.1.2

          Greg: “that is true in all 101 cases”

          Not even close. There are plenty of claims asserted or sought that no panel of three judges on the CAFC will accept as eligible. You need to pay closer attention.

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