[00:00:04] Speaker 04:
Before we proceed with our arguments this morning, we have one of the pleasurable events we have from time to time, admitting the departing law clerk, or at least the law clerk, into our bar.

[00:00:26] Speaker 04:
And for that, I will entertain a motion by Judge O'Malley.

[00:00:31] Speaker 02:
Thank you, Judge Laurie.

[00:00:33] Speaker 02:
I move the admission of Gabriella Hutt, who is a member of the Bar and is in good standing at the highest court of Oregon.

[00:00:40] Speaker 02:
I have knowledge of her credentials and am satisfied that she possesses the necessary qualifications.

[00:00:45] Speaker 02:
I know a lot about Gabby.

[00:00:48] Speaker 02:
She's been my law clerk for the last year.

[00:00:51] Speaker 02:
She also was a graduate of my alma mater, went to Case Western Reserve Law School, and graduated at the top of her class there.

[00:01:00] Speaker 02:
But unlike me, she was much more industrious, and she also got her master's in biochemistry at the same time.

[00:01:06] Speaker 02:
She clerked before me for Leonard Davis on the Eastern District of Texas, so we know she has lots of patent experience.

[00:01:14] Speaker 02:
And I am going to be very sorry to see her go, but very welcome to it.

[00:01:20] Speaker 02:
But I want to welcome her to our bar and would love to see her appearing before us on a regular basis.

[00:01:28] Speaker 02:
So I move for admission.

[00:01:30] Speaker 04:
Thank you, Judge O'Malley.

[00:01:31] Speaker 04:
I'll consult with my colleague here.

[00:01:35] Speaker 04:
We grant the motion and we welcome you to the bar.

[00:01:38] Speaker 05:
Please stand and take the oath from the clerk of court.

[00:01:55] Speaker 04:
Congratulations.

[00:01:57] Speaker 04:
Hope to see you in the future.

[00:01:58] Speaker 04:
Good luck.

[00:01:59] Speaker 04:
You're welcome.

[00:02:04] Speaker 04:
Getting to our regular course of business, we have four cases on the calendar this morning.

[00:02:12] Speaker 04:
Two from patent cases from the Patent and Trademark Office, a case from the Court of Federal Claims, a fourth case, a government employee case from the Merit Systems Protection Board is submitted in the Greece and will not be argued.

[00:02:28] Speaker 04:
The first case is Retirement Capital Access Management versus U.S.

[00:02:34] Speaker 04:
Bancorp 2015-10-39.

[00:02:36] Speaker 04:
Mr. Griffith.

[00:03:07] Speaker 00:
May it please the court, my name is Casey Griffith and I'm here with my client and one of the co-inventors of the 582PET, Mr. Craig Singer.

[00:03:14] Speaker 00:
We're here this morning appealing a decision, a final decision in validating claims of United States Pet number 6625582 and we have appealed this decision because we believe there are at least four independent reasons that there is no basis for the board's invalidation of

[00:03:33] Speaker 00:
our claims and those reasons are that the claims pose no risk.

[00:03:37] Speaker 04:
Let me interrupt you first, Mr. Griffith.

[00:03:39] Speaker 04:
Do you accept that the question whether 101 is encompassed by the CBO analysis has been settled by Versada?

[00:03:54] Speaker 00:
Your Honor, I accept that the SAP versus Versada panel a few weeks ago did rule that 101

[00:04:00] Speaker 00:
is a proper basis for seed beam review.

[00:04:02] Speaker 00:
Our position is that the panel decision was incorrectly decided on that issue.

[00:04:06] Speaker 00:
But we're bound by it, right?

[00:04:08] Speaker 00:
Yes.

[00:04:10] Speaker 00:
Right.

[00:04:10] Speaker 00:
So we intend to pursue that position and seek on-bond review or Supreme Court review.

[00:04:15] Speaker 00:
And I'm happy to make, I would point out, Your Honor, that we believe there are at least a couple of reasons that were not addressed by the panel decision a few weeks ago that warrant a different outcome.

[00:04:25] Speaker 00:
And I'm happy to discuss those with the Court here this morning.

[00:04:29] Speaker 00:
But turning back to the substantive basis for the claims not being invalid, the first reason that the claims of the 582 patent are not invalid is that there is no risk of preemption posed by these claims.

[00:04:44] Speaker 00:
In the Supreme Court's Alice petition, the court confirmed that a preemption concern undergirds its 101 jurisdiction or jurisprudence.

[00:04:52] Speaker 04:
And furthermore... But these are abstract steps, aren't they?

[00:04:57] Speaker 04:
Simply abstract steps.

[00:04:59] Speaker 00:
Your Honor, we don't believe they are.

[00:05:01] Speaker 00:
In fact, one of the issues is that, or one of our points is that the abstract concept that was identified by U.S.

[00:05:07] Speaker 00:
Bancorp, we don't believe that's even an abstract concept.

[00:05:11] Speaker 00:
If you look at the petition they originally filed, they indicated that the abstract concept was the concept of advancing funds against future retirement payments.

[00:05:22] Speaker 00:
And yet if you look carefully at their petition, they don't even take the position that anyone had ever

[00:05:27] Speaker 00:
advance funds against future retirement payments in their petition.

[00:05:30] Speaker 00:
Instead, what they really say is that the concept of advancing funds has been practiced.

[00:05:35] Speaker 00:
And the problem with that, Your Honor, is that in the final decision made by the board, they took the position over our objections that the concept of advancing funds

[00:05:48] Speaker 00:
against future retirement payments was a long prevalent economic practice when in fact there's no evidence that anyone was doing that before Mr. Singer invented the concept that's encompassed by the claims of the 5-8-2 patent.

[00:06:03] Speaker 03:
So this idea that was...

[00:06:05] Speaker 03:
Do you think because of the specific reference to retirement as opposed to advancing funds in anticipation of future income, you wouldn't dispute that that proposition is

[00:06:21] Speaker 03:
commonly found in the lending economy, right?

[00:06:26] Speaker 00:
Your Honor, I would not, Judge Bryson, I would not dispute that prior to the time that my client conceived of the invention that loans, funds were advanced based upon future income, yes.

[00:06:38] Speaker 03:
So your argument is that when you specify that the future income will be retirement benefits, then now you've crossed the line from abstract to non-abstract?

[00:06:49] Speaker 03:
Is that your position?

[00:06:52] Speaker 00:
What I'm arguing, Jess Bryson, is that U.S.

[00:06:55] Speaker 00:
Bancorp chose that as the abstract concept.

[00:06:59] Speaker 00:
And that being the abstract concept, it's an issue in this case because it's their choice.

[00:07:03] Speaker 00:
It was not present before, so that alone does take it outside of the scope of the exceptions to subject matter eligibility.

[00:07:11] Speaker 02:
You take some language.

[00:07:13] Speaker 02:
I can see that there is language about something being well known in terms of practice in the past, and there's language about preemption in the

[00:07:22] Speaker 02:
Supreme Court cases, but those aren't actually the tests.

[00:07:26] Speaker 02:
Those are simply factors that the court looked at.

[00:07:29] Speaker 02:
Are you saying that either the PTAB or a district court would have to make an express finding that this precise type of concept was practiced in the past before it could be deemed abstract?

[00:07:42] Speaker 00:
Judge, I do believe that in the con so if you look at natural laws That would be one area where the natural law might be discovered something that nobody knew about before I don't believe you would have to show that's known before but in the context of advertising or abstract business concepts or Things that aren't don't involve natural laws I do believe that if someone's going to take the position that a business practice is

[00:08:10] Speaker 00:
has been around for centuries or decades, they should have to show evidence to prove that.

[00:08:16] Speaker 00:
And the reason that's important is that, and what's frustrating for my client, is that one month after the board issued its final decision in our case, Judge Ward, who authored our final decision, was on a panel in another case involving reversal of the rejections of claims under 101 coming up in ex parte prosecution.

[00:08:35] Speaker 00:
And that panel said that they reversed the 101 objection on grounds that there was no substantive evidence to support the idea that what those party or the examiner contend was an abstract concept was actually abstract.

[00:08:49] Speaker 00:
And the other reason we may have a difference here is that the board's final decision

[00:08:55] Speaker 00:
is dependent upon and expressly states that this abstract concept is something long prevalent in our economic system, and there's just no evidence to support that finding whatsoever.

[00:09:04] Speaker 04:
But look, Mr. Griffith, why can't we just read the claims?

[00:09:08] Speaker 04:
A method of creating a source of funds, designating an account, designating a benefit provider, authorizing a repository,

[00:09:18] Speaker 04:
providing a monetary benefit.

[00:09:20] Speaker 04:
This is all, it may be very clever, it may be very useful in a commercial sense, but they are still abstract ideas that are shuffling data back and forth and ultimately money.

[00:09:39] Speaker 00:
Well, just Laurie, I would take the position that since

[00:09:42] Speaker 00:
Business method patents, and those are the method claims you're referring to.

[00:09:45] Speaker 00:
I'll get to the system claims shortly.

[00:09:47] Speaker 00:
But the method claims involve numerous steps.

[00:09:51] Speaker 00:
There's only, you know, getting back to the issue of preemption.

[00:09:54] Speaker 00:
which is ultimately what the abstract concept exception to subject matter eligibility arises out of.

[00:10:01] Speaker 00:
There's no risk of preemption here.

[00:10:03] Speaker 00:
There's so many reasons that we pointed out below, deficiencies in the arguments made by U.S.

[00:10:08] Speaker 00:
Bancorp.

[00:10:09] Speaker 04:
Just saying the idea of preemption preempts the idea of abstractness.

[00:10:15] Speaker 00:
I do believe that if there's no risk of preemption whatsoever, and I think that was even step forth in the plurality opinion.

[00:10:22] Speaker 04:
I think Judge Romali was suggesting that the idea of preemption is really subordinate to abstractness.

[00:10:30] Speaker 04:
It's the abstract idea, which is basic Supreme Court doctrine, from which the preemption idea arises.

[00:10:40] Speaker 00:
Well, Judge Laurie, our position is that you start with what they claim was the abstract concept, and there are numerous limitations on what they say is the abstract concept.

[00:10:51] Speaker 00:
They didn't even address some of those limitations before they didn't take the position that some of the limitations.

[00:10:56] Speaker 00:
Actually, the only thing they took the position with abstract below was the concept of advancing funds based on future retirement payments.

[00:11:03] Speaker 00:
They didn't take the position that any other limitation on the claims was abstract.

[00:11:07] Speaker 03:
Well, if it's true that

[00:11:10] Speaker 03:
the concept of advancing funds based on future retirement payments is abstract because it would seem to be at least modestly preemptive, not as preemptive as advancing funds based on any future income, but nonetheless a pretty large portion of future income would be represented by retirement benefits, I suppose.

[00:11:34] Speaker 03:
But if that's preemptive and abstract,

[00:11:40] Speaker 03:
isn't narrowing that field to social security benefits, for example, just

[00:11:48] Speaker 03:
choosing a field of use within the broader abstract idea.

[00:11:52] Speaker 03:
And isn't that what Alice said you couldn't do by way of getting around the abstract idea?

[00:12:00] Speaker 00:
Well, Judge Bryson, narrowing retirement payments to Social Security might be a field of use limitation that would not be sufficient under Alice.

[00:12:08] Speaker 00:
But there are many other limitations that aren't field of use, aren't post-solution activity.

[00:12:14] Speaker 00:
Such as the repayment provision?

[00:12:16] Speaker 00:
Well, it's the requirement of a direct deposit, the requirement that funds be.

[00:12:23] Speaker 00:
The way it's specific has to happen a certain way.

[00:12:26] Speaker 00:
It has to be a non-collateralized, non-securitized loan.

[00:12:30] Speaker 00:
They can't encumber the right of the person receiving the funds.

[00:12:35] Speaker 00:
and their future retirement payments, they have to absolutely, if the beneficiary revokes the ability of the source of funds to come after those retirement payments, they have to go get them at another source.

[00:12:49] Speaker 00:
And because of the involvement of direct deposit and human nature and people not changing where they're having funds deposited, it's all part of a total solution.

[00:12:59] Speaker 00:
None of these limitations

[00:13:01] Speaker 00:
When they're added together, it's not just post-solution activity.

[00:13:05] Speaker 00:
It's not just field of use limitations.

[00:13:06] Speaker 00:
It's a specific, in the case of method claims, a specific method of generating a source of funds.

[00:13:13] Speaker 00:
And again, the other issue is from a preemption standpoint is

[00:13:16] Speaker 00:
U.S.

[00:13:18] Speaker 00:
Bancorp doesn't even contend that they don't even address some of the limitations on the claim.

[00:13:22] Speaker 00:
And some of these limitations they don't address.

[00:13:24] Speaker 00:
Judge Bryson, for example, it's not the social security limitation.

[00:13:27] Speaker 00:
It's limitations that we know are significant because they take the position that

[00:13:31] Speaker 00:
They don't infringe by not practicing that.

[00:13:34] Speaker 00:
And one other thing, and I'm running out of time, and I want to reserve some for Will.

[00:13:37] Speaker 00:
I do want to point out that our system claims, as pointed out in our briefing, satisfy the machine or transformation test under this court's precedent.

[00:13:46] Speaker 00:
And no court has held that claims that satisfy the machine or transformation test are directed to an eligible subject matter on a 101.

[00:13:55] Speaker 00:
So the board's decision on that issue alone is unprecedented.

[00:13:59] Speaker 00:
and ruling that way.

[00:14:00] Speaker 02:
I mean, how can it be unprecedented?

[00:14:02] Speaker 02:
Isn't that exactly what happened in Alice?

[00:14:04] Speaker 02:
I mean, that if you had applied a pure machine or transformation test in the Alice case, then at least the system claims would have survived, would they not?

[00:14:16] Speaker 00:
Well, Judge Romali, the system claims here, though, include the reason I say under the court's precedent that satisfies the machine or transformation test is because the system claims in our patent include non-indefinite means plus limitations.

[00:14:29] Speaker 00:
U.S.

[00:14:30] Speaker 00:
court didn't challenge that they were indefinite under 112.

[00:14:33] Speaker 00:
The board construed the limitations, found they were, didn't find they were indefinite, they construed those limitations, and under the court's precedent, system claims, machine claims, having non-indefinite means plus function limitations are deemed to satisfy the machine or transformation test as a matter of law.

[00:14:49] Speaker 00:
And I believe that was actually an en banc decision by the Federal Circuit in Alipat.

[00:14:54] Speaker 00:
And so that's something that would have to be overruled and en banc by the Federal Circuit in our opinion.

[00:14:58] Speaker 04:
Unless the Supreme Court pretty much overruled it.

[00:15:02] Speaker 00:
And Judge Laurie, I would take the position that in fact, if you look at Bilstein, Bilstein specifically made references to the fact that they referred to State Street, and they said State Street involved in the machine claims, not process claims.

[00:15:16] Speaker 00:
So even in that case, the Supreme Court was recognizing that machine claims should be treated differently.

[00:15:22] Speaker 00:
And there's simply no machine claims under the court's press.

[00:15:25] Speaker 00:
In other words, we wouldn't even necessarily hear about Bilstein if the claims at issue in that case had originally satisfied the machine or transformation test.

[00:15:33] Speaker 04:
We'll save three minutes for rebuttal.

[00:15:36] Speaker 05:
Thank you, Your Honor.

[00:15:40] Speaker 04:
Bangkok and the Patent Office are splitting their time.

[00:15:43] Speaker 04:
Mr. Dowd?

[00:15:53] Speaker 06:
Good morning, Your Honor.

[00:15:54] Speaker 06:
May I please report?

[00:15:55] Speaker 06:
Matthew Dowd for the appellee.

[00:15:57] Speaker 06:
I have ten minutes.

[00:15:57] Speaker 06:
My colleague from the Patent Office has five minutes.

[00:16:00] Speaker 06:
I'd like to address the last point that my colleague, Mr. Griffith, raised in his proposition that this Court's precedent requires a finding that a claim to means plus function format is patent-eligible under 101.

[00:16:14] Speaker 06:
I mentioned Alice.

[00:16:17] Speaker 06:
There is no discussion in Alice, the Supreme Court case itself, that deals with means plus function.

[00:16:22] Speaker 06:
But if you look at some of the underlying claims of the 720 patented issue, there are about five dependent claims that have a means plus function limitation in there.

[00:16:34] Speaker 06:
So under that ruling itself, the Supreme Court found no reason to distinguish between a system claim and a means plus function claim.

[00:16:43] Speaker 02:
Well, they didn't actually address that question.

[00:16:46] Speaker 06:
That's correct, Judge O'Malley.

[00:16:47] Speaker 06:
But more specifically, if you go back to this court's precedent from CCPA cases, there are at least two instances where this court has expressly stated and ruled that simply because a claim is a means plus function format, that doesn't mean it satisfies 101.

[00:17:07] Speaker 06:
And so if you look at Inray and Belli, for example,

[00:17:09] Speaker 06:
Inrediabelli dealt with a CAT scan type invention.

[00:17:13] Speaker 02:
Of course, those were before Allopat, right?

[00:17:15] Speaker 06:
That's right.

[00:17:16] Speaker 06:
But Allopat itself, if you go back to Allopat, Allopat itself does not rule expressly that simply because a claim is in means plus function format, it satisfies 101.

[00:17:26] Speaker 06:
The underlying method claims in Allopat dealt with a so-called rasterizer that dealt with the specifics of analyzing oscilloscope type wave signals.

[00:17:37] Speaker 06:
Judge Lurie, you're on that panel, so you know it better than I do.

[00:17:40] Speaker 06:
But the point in that case was that the method claim itself was deemed to satisfy 101.

[00:17:45] Speaker 06:
And so there's no basis to say that means plus function by itself made it patent eligible.

[00:17:53] Speaker 06:
If you go back to Abele, Abele's a good example.

[00:17:56] Speaker 06:
Because in Abele, there were three claims discussed in detail, claims five, six, and seven.

[00:18:02] Speaker 06:
Claim five was a method claim.

[00:18:05] Speaker 06:
And claim five talked about this method of calculating.

[00:18:10] Speaker 06:
And it wasn't tied to the specific use of analyzing CAT scan, for example.

[00:18:16] Speaker 06:
Claim six was more narrow, and it dealt with a specific tangible result that related to CAT scan.

[00:18:24] Speaker 06:
Both were method claims.

[00:18:25] Speaker 06:
And the court found that claim five was patent ineligible.

[00:18:29] Speaker 06:
Claim six was eligible.

[00:18:33] Speaker 06:
Claim seven

[00:18:35] Speaker 06:
was essentially the method claim, but in means plus function format.

[00:18:40] Speaker 06:
It had the same process steps, but the only distinction was that it said this is a system and it included means plus function limitations.

[00:18:49] Speaker 06:
And the court said that there was no reason to distinguish an abstract method claimed in process format versus a means plus function that really recites the same process steps.

[00:19:03] Speaker 06:
Again, in Inre Meyer,

[00:19:05] Speaker 06:
The court came to the same conclusion.

[00:19:08] Speaker 06:
If you go back to another case, in-rate Freeman, and this goes back to the old Freeman-Walter belly test, and I'm not suggesting that the court revise that, but in in-rate Freeman, there's a really good discussion about means plus function.

[00:19:20] Speaker 06:
And in that case, specifically the court found that the system claims satisfied the 101, but it was basically because the method itself was specific enough, tangible enough,

[00:19:35] Speaker 06:
not preempting that it satisfied 101.

[00:19:40] Speaker 06:
But within that discussion, the court said, and I'm paraphrasing, to the extent that we agree with the solicitor's contention that it would be anomalous to allow a claim in means plus function format if the underlying method did not satisfy 101.

[00:19:59] Speaker 06:
And so this proposition that means plus function by itself

[00:20:05] Speaker 06:
can satisfy patent eligibility.

[00:20:08] Speaker 06:
Even in the face of an abstract underlying method is, in our opinion, wrong.

[00:20:14] Speaker 06:
It's consistent with the forced case law in the holding that a mean plus function format is ineligible.

[00:20:21] Speaker 06:
And it's consistent with the newer case law as well.

[00:20:24] Speaker 06:
And I think when you look at the underlying patent here at issue, it's consistent with some of the newer cases that deal with system claims, for example.

[00:20:32] Speaker 06:
Now, system claims.

[00:20:35] Speaker 02:
Aren't factors like preemption and whether or not something was well known, those are facts that our things were supposed to at least consider.

[00:20:45] Speaker 02:
They may not each be determinative, but it seems that the board sort of just blew past those facts.

[00:20:52] Speaker 06:
I wouldn't say the board blew past those facts, Your Honor.

[00:20:55] Speaker 06:
And I think from what we've heard today and what we heard at the underlying case of the board, we didn't hear anything from the patentee that indicated that

[00:21:05] Speaker 06:
there were facts that needed to be determined or found to say that even the narrower claims were specific enough to get out of the current case law under Alice and this court's more recent precedent.

[00:21:20] Speaker 06:
Let me turn to one point that my colleague makes.

[00:21:24] Speaker 06:
And he, in the brief and today, complains about the lack of so-called evidence.

[00:21:30] Speaker 06:
And I think this court has addressed this issue quite fulsomely.

[00:21:34] Speaker 06:
in the line of cases that have countenance the decisions by district courts to deal with these patents under a 12b6 motion.

[00:21:44] Speaker 06:
The court knows that under such circumstances there's no fact finding and there's no expert opinion and more expressly in content

[00:21:52] Speaker 06:
extraction technology is a more recent case from this court, I think within the past month or two, the court specifically addressed this.

[00:22:01] Speaker 06:
There isn't always a need to have an expert opinion or a fact.

[00:22:06] Speaker 06:
And to Judge Bryson's point, in terms of trying to get out of the holding or the rulings of Alice and this court's precedent, simply be trying to make this distinction between future retirement payments

[00:22:20] Speaker 06:
and social security payments.

[00:22:23] Speaker 06:
That type of distinction, we agree it makes the subsequent claims or dependent claims narrower, but it is not the type of distinction that is the basis of patent eligibility.

[00:22:35] Speaker 06:
And if anything, that type of distinction and that type of subject matter

[00:22:39] Speaker 06:
goes to the very heart of what Alice, Bilski, and other cases have said are the types of inventions, if you will, that don't need patent protection.

[00:22:51] Speaker 06:
They go to economic relationships.

[00:22:53] Speaker 06:
They go to contractual relationships.

[00:22:56] Speaker 06:
And that's exactly what Alice and Bilski dealt with.

[00:22:59] Speaker 06:
And I could recite cases from this court as well.

[00:23:03] Speaker 06:
For example, Judge Laurie Cybersource,

[00:23:07] Speaker 06:
A number of other cases, Fort Properties for example, Fort Properties dealt with managing real estate portfolios.

[00:23:14] Speaker 04:
And all these cases, the underlying theme is that when there is a question or a process or even a system that embodies that process, and all it is doing... Do you think all business method patents should be ineligible and that the courts have crept up to the edge but not been willing to cross the red line?

[00:23:38] Speaker 06:
Well, that's a good question.

[00:23:40] Speaker 06:
The court hasn't gotten to that edge yet.

[00:23:42] Speaker 04:
Most questions from the court are.

[00:23:46] Speaker 06:
Fair enough, Judge Laurie.

[00:23:49] Speaker 06:
We don't have to reach that decision in this case.

[00:23:52] Speaker 06:
That's for certain.

[00:23:53] Speaker 06:
I think that's the way the case law is trending.

[00:23:56] Speaker 06:
There is certainly the argument that Judge Mayer makes in a number of his concurrences that when you look at the Supreme Court precedent and when you look at this court's precedent, a perhaps better test

[00:24:07] Speaker 06:
then what the Supreme Court has offered currently is what he calls a technological arts test.

[00:24:14] Speaker 06:
And you see some of that in the court's precedent.

[00:24:17] Speaker 06:
And so when you get to inventions that deal with economic activity, when you deal with human behavior, for example there's a 1994 case from this court in Ray Schrader, and that dealt with the method of auctioning,

[00:24:34] Speaker 06:
And it's no different than the more recent case of OIP technologies versus Amazon, which was the same type of invention that someone was trying to patent.

[00:24:43] Speaker 06:
And it's simply a method of conducting an activity.

[00:24:47] Speaker 06:
And those types of inventions, I think, are no longer the types of inventions that warrant patenting.

[00:24:53] Speaker 06:
They occur without the incentive.

[00:24:56] Speaker 06:
On top of that, let me turn to one other

[00:25:02] Speaker 06:
thing that I would like to mention.

[00:25:08] Speaker 06:
Sorry, I lost my train of thought, but this is another trend I think that you see in some of the case law, which they haven't made, there's no per se decision on this, but when you get to perhaps business type method inventions that can't be done with the human mind, that might take it outside of this class of exceptions that the courts have talked about.

[00:25:32] Speaker 06:
And you see types of inventions that involve so much complexity that people by themselves and without complex computer algorithms cannot do.

[00:25:43] Speaker 02:
So where do you draw that line?

[00:25:45] Speaker 02:
I mean, what are we talking about?

[00:25:48] Speaker 06:
Fortunately, that's not my job because I can't tell you where it is.

[00:25:51] Speaker 02:
So if there's a lot of calculus?

[00:25:52] Speaker 03:
We need you to help us with our job.

[00:25:56] Speaker 06:
I would like to, but I would say that I would like to come back with the proper case and help you more.

[00:26:00] Speaker 06:
This is not that case.

[00:26:02] Speaker 06:
because there's no doubt that the underlying process that's claimed here can be done simply by people working together and on top of that using a basic computer without any specific fancy algorithm.

[00:26:16] Speaker 02:
There's no algorithm in this.

[00:26:17] Speaker 02:
At some point things can be done.

[00:26:19] Speaker 02:
much more quickly, much more efficiently.

[00:26:22] Speaker 02:
You can keep track of movements of funds.

[00:26:26] Speaker 02:
Why isn't there a point at which the use of the computer makes it so much of a better method, that it would fall outside the balance of the abstraction?

[00:26:39] Speaker 06:
I think there is, and the problem with a lot of these patents though is that

[00:26:45] Speaker 06:
the claims the way they're drafted don't require those limitations and you saw some of that discussion in the Alice case and I'm thinking back to the oral argument at the Supreme Court and it was mentioned that well this invention covers this

[00:26:59] Speaker 06:
extraordinarily complex system of exchanging risk settlements among parties, among different nations, thousands and thousands, millions of times a day.

[00:27:09] Speaker 06:
The problem was that the claim didn't require that.

[00:27:11] Speaker 06:
And you saw that in other cases at the Supreme Court as well, too, at the Federal Circuit.

[00:27:15] Speaker 06:
And this goes to a non-precedential case, Planet Bingo, for example.

[00:27:19] Speaker 06:
Planet Bingo was directed to a method of managing a bingo game, essentially.

[00:27:24] Speaker 06:
The argument was made that what it's actually covering is so complex because there are so many players and so many numbers involved that you need a computer to do it.

[00:27:35] Speaker 06:
The problem, as this court noted in its opinion, was that the claims weren't tailored that narrowly.

[00:27:40] Speaker 04:
And I think if you get to that point... You've exceeded your time, but we won't deprive Ms.

[00:27:46] Speaker 04:
Arthur for a full five minutes.

[00:27:49] Speaker 06:
Thank you, Your Honor.

[00:27:50] Speaker 04:
Let's move on.

[00:27:59] Speaker 01:
Good morning.

[00:28:03] Speaker 01:
Really, I don't think we have much to add to Mr. Jobs' thorough discussion.

[00:28:07] Speaker 01:
I know we did reserve the five minutes, but I think he did a good job of covering much of what we would want to say.

[00:28:13] Speaker 02:
Does the PTO think there's any business method that would be patent eligible?

[00:28:18] Speaker 01:
We certainly leave that open.

[00:28:20] Speaker 01:
It's true that it's hard to come up with a great example that does not involve some technology.

[00:28:26] Speaker 01:
The Supreme Court argument, for example, the Solicitor General's attorney gave the example that involved a point of sale transaction that included a level of encryption.

[00:28:39] Speaker 01:
So we certainly don't rule out there could be, and recently we don't take that position in the brief, but I will admit that

[00:28:48] Speaker 01:
It's somewhat hard, and I don't have one today, I've been trying to think of one, to think of a good example of a business method that doesn't involve some technology that would meet the Supreme Court's test.

[00:29:01] Speaker 01:
Now that might just be a failure of our imagination, of my imagination at this point.

[00:29:05] Speaker 02:
Well, what do we make of the fact that when the Congress passed the AIA, they set up this whole business method review, but they didn't just say all business patents should go down.

[00:29:16] Speaker 01:
That's a good point, Your Honor.

[00:29:17] Speaker 01:
They did not and their test does not make it clear.

[00:29:22] Speaker 01:
It makes clear that there needs to be a technological to get in the CBM proceeding.

[00:29:26] Speaker 01:
There needs to be a solution to a technological problem or to get out of it, excuse me.

[00:29:32] Speaker 01:
There was not any conscious decision in the AIA to exclude all business method patents.

[00:29:37] Speaker 01:
I think it's somewhat of an open question, and I think that, as Mr. Dodd said, this case doesn't present this.

[00:29:45] Speaker 01:
We're not in that territory, and there may be a case that will come up with a factor a lot more interesting, at least from my perspective, where the line is closer to being met, where there is no technology, but it's a pure business method.

[00:30:02] Speaker 01:
where that might meet the 101 tab.

[00:30:04] Speaker 03:
Of course, I suppose in part this is a problem of trying to define what we mean when we say business method.

[00:30:10] Speaker 03:
If what we mean when we say business method is a method of interacting with other people without any technological implementation, then we've defined the term in a way that's perhaps narrow enough to say that all of those kinds of claims go away.

[00:30:25] Speaker 03:
Let me give you an example that actually my law clerk came up with.

[00:30:29] Speaker 03:
It struck me as being maybe astride the line, depending on how you define business method, but Google's method of linking searches to advertisements.

[00:30:43] Speaker 03:
could call that I suppose a business method at least as broadly stated if not limited just to internet searches.

[00:30:53] Speaker 03:
How would that strike you as a patentable invention?

[00:30:57] Speaker 03:
It certainly had a significant effect on the market and the internet.

[00:31:05] Speaker 01:
I think it would depend on how it was claimed, but looking at discords, for example, the DDR opinion or even Alice, there could be a substantial technological portion of that, that maybe the idea might be abstract of linking advertisers to search results.

[00:31:24] Speaker 01:
That might be an abstract idea, but there might be enough more in the claim, especially where it's a problem that would not necessarily arise in the same way that it arises on the internet as it might have earlier.

[00:31:40] Speaker 01:
You can always make an analogy in these cases at some level of generality that this is just like something else that we've already known about almost always.

[00:31:49] Speaker 01:
And it seems that much of what the Supreme Court wants us to do here is reason by analogy.

[00:31:56] Speaker 01:
And unlike a lot of patent law,

[00:31:58] Speaker 01:
where the rules are a lot clearer and the history of patent law seems to have depended on more clear rules.

[00:32:04] Speaker 01:
I think that the Supreme Court is making this more of an open test.

[00:32:09] Speaker 01:
It seems more of a, like I've had a lot of antitrust experience.

[00:32:13] Speaker 01:
It seems more like some of the antitrust tests where it's really analogizing a lot to the court's prior findings.

[00:32:22] Speaker 01:
So I think in that case, in the Google search case,

[00:32:25] Speaker 01:
You could envision, depending on the claims, you could envision enough more in the claims where there's nothing that's conventional and routine and where the idea may not be so abstract, particularly where it is applied to a technological arena that

[00:32:48] Speaker 01:
was at the time novel, at the time not long standing, at the time the idea was not sufficiently connected, the abstract idea of connecting advertisers to

[00:33:05] Speaker 01:
to search results.

[00:33:07] Speaker 01:
I mean, there may not have been search results before.

[00:33:09] Speaker 01:
Like looking up in the white pages and connecting, looking at ads in the white pages and putting an ad next to the thing that you're looking up in the white pages, right?

[00:33:17] Speaker 01:
That's the analogy one could make.

[00:33:20] Speaker 01:
And I think that case

[00:33:21] Speaker 01:
I think that these are really fact-by-fact cases that depend on the claims.

[00:33:26] Speaker 01:
So almost anything, if you phrase it broadly enough, can be an abstract idea.

[00:33:31] Speaker 03:
That's the problem in this area.

[00:33:35] Speaker 01:
Exactly.

[00:33:35] Speaker 01:
Exactly.

[00:33:36] Speaker 01:
And it's something that I think remains to be worked out.

[00:33:39] Speaker 01:
And I think the intention must be to work it out by analogy on a case-by-case basis and to try to draw the line.

[00:33:45] Speaker 04:
Do you have a final thought on this case?

[00:33:48] Speaker 01:
I'm sorry.

[00:33:48] Speaker 04:
Do you have a final thought relating to this case?

[00:33:50] Speaker 01:
My final thought is just that we would agree that Prasada binds on the 101 issue.

[00:33:56] Speaker 04:
Thank you.

[00:33:57] Speaker 04:
Mr. Griffith has a little rebuttal time.

[00:34:01] Speaker 04:
Thank you.

[00:34:03] Speaker 00:
We do have clear rules here.

[00:34:05] Speaker 00:
The clear rule is, we're not just saying that if you add, if you include means plus limitations, you satisfy the machine or transformation test, but if they're not indefinite, that is the holding, that is the existing case law.

[00:34:16] Speaker 00:
If they're not indefinite, they satisfy that test, and no court again has held that claims that satisfy the machine or transformation test are merely directed to an abstract concept.

[00:34:27] Speaker 00:
The other thing I want to point out is... Let me make sure I understand your position.

[00:34:32] Speaker 03:
Are you saying that a claim such as Alice, which read on a computer, would have been patent eligible if instead of saying a computer does the following?

[00:34:44] Speaker 03:
It said means for calculating.

[00:34:48] Speaker 00:
Well, Judge Bryson, I'm not sure that would be sufficient to satisfy section 112 paragraph 6, and the issue is they didn't challenge our claims on that basis here.

[00:34:56] Speaker 03:
Let's suppose that it would satisfy 112.6, because I would assume that means for calculating and describing in the specification the computer would be sufficient for 112.6.

[00:35:09] Speaker 03:
Are you saying that would be enough of a tweak to the patent in Alice to make Alice's patent eligible?

[00:35:17] Speaker 00:
I'm saying under this court's existing law, that would be enough.

[00:35:20] Speaker 00:
So yes.

[00:35:21] Speaker 00:
Yes, I am.

[00:35:24] Speaker 00:
Quickly, I want to point out that neither U.S.

[00:35:26] Speaker 00:
Bancorp or the Patent Office have really addressed a lot of the deficiencies in the final decision that we've raised.

[00:35:33] Speaker 00:
We don't believe that it's proper for that decision to be rewritten by the Federal Circuit to correct those deficiencies.

[00:35:41] Speaker 00:
Congress has specified this procedure and to the extent that 101 is a proper basis for CBIM review, they were required to come forward with evidence.

[00:35:49] Speaker 00:
They were required to do this properly, and there's going to be thousands of appeals coming from the Patent Office.

[00:35:54] Speaker 00:
And if the Patent Office and the petitioners don't do their job and introduce evidence to the extent it is required, when required, and make the proper arguments and apply the law correctly and not inconsistently as they've done with respect to my client, the decision should not be affirmed.

[00:36:10] Speaker 00:
It should be reversed.

[00:36:11] Speaker 02:
Before you sit down, what are the two issues that the panel missed in Fursata?

[00:36:16] Speaker 00:
You're on the two issues of the panel, Mr. Versada.

[00:36:19] Speaker 00:
The first issue is, I want to point out that they implied that Congress passed the covered business method review knowing the court had already, the courts with long standing precedent had already established that 101 was a defense to patent infringement.

[00:36:33] Speaker 00:
We've gone back and looked and noted that no decision by the Federal Circuit or the Supreme Court had invalidated an issued patent.

[00:36:41] Speaker 00:
on the basis of 101 until the cyber source decision, which was in August of 2011.

[00:36:46] Speaker 00:
And in fact, the Senate and the House had both already passed the covered business method review procedure prior to that decision.

[00:36:56] Speaker 00:
So to the extent that Congress is presumed to have acted, knowing what the law is, the law at that time actually was that 101 is not a defense to patent infringement, which actually supports our argument that it's not a condition of patentability.

[00:37:08] Speaker 04:
Thank you, Mr. Griffin.

[00:37:10] Speaker 04:
We'll take the case on revising.

[00:37:11] Speaker 00:
Thank you, Your Honor.