[00:00:32] Speaker 01:
Okay, the next case is number 15-17-63, Bascom Global Internet against AT&T Mobility.

[00:00:41] Speaker 01:
Council, come forward.

[00:00:52] Speaker 01:
Okay, Mr. Subramanian, when you're ready.

[00:00:54] Speaker 03:
Thank you, Your Honor.

[00:00:58] Speaker 03:
Good morning, and may it please the Court

[00:01:01] Speaker 03:
Arun Subramanian from Sussman Godfrey on behalf of the plaintiff appellant, Bascom Global Internet Services.

[00:01:08] Speaker 03:
In deciding that the 606 patent was unpatentable as a matter of law at the pleading stage for any discovery had been taken, the district court ignored the specific technological problem that the patent was directed to, as well as the specific technological solution to that problem disclosed in the patent

[00:01:29] Speaker 03:
And in doing so, it ignored the teachings of this court in cases like DDR holdings that when a claimed solution is necessarily rooted in computer technology, in order to overcome a problem specifically arising in the realm of computer networks, it passes muster under section 101.

[00:01:46] Speaker 03:
And I want to start out by talking about what the problem is.

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The district court's decision characterized the issue that the 606 patent was directed to as filtering content in the abstract.

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Now, even just a cursory review of the patent shows that it was not directed to that abstract concept, but rather was specifically directed to a limitation of the technology of the day.

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And specifically, how can you have individualized internet content filtering that you didn't have to implement on the local client machine, that essentially you could do in the cloud instead?

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That was a limitation of the computer network itself, and the patentee endeavored to say, how can we make the network better?

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Let me ask this question.

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Do you believe that you could have an initial computerization of a concept that would be unpatentable, but have a later patent that improves on that computerization be patentable?

[00:02:47] Speaker 03:
Well, I don't know about that question in the abstract.

[00:02:50] Speaker 02:
Let's not use the word abstract.

[00:02:52] Speaker 03:
Yeah, I know.

[00:02:54] Speaker 03:
The issue here is one that arose in the computer network sphere specifically, and it arises for a specific reason.

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You have a network of disparate users.

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You have millions of users, potentially all over the country, and everyone may want to have a particular type of internet content filtering.

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At the time of this patent, however,

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If you wanted to do an individualized solution, it was only implemented on a local client machine.

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You had software out there like Netnanny and SafeSearch at that time.

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You'd have to load it onto your computer.

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And that's, in fact, what this patent talks about.

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It talks about the specific disadvantages of that type of approach.

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It can be circumvented.

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You had to have software that could interface with your particular platform on your computer.

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You had to have it different.

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To restate Judge O'Malley's question in a specific hypothetical, what if

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in 1995, before your application, someone filed an application with claims to a system for filtering content on the internet in which the local computer has certain filtering elements, white listing certain addresses, black listing other addresses.

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Do you think that would be patent eligible?

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I think that would present a closer question than the claims in this case do.

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I mean, obviously, what about a claim that was a claim for filtering content on the internet in which search results are filtered with white lists and black lists?

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Do you think that claim that I just decided would be patent eligible?

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I think that it could be if you looked at the specific logic of the claims.

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And that's an important consideration here.

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If the claim just said that, what I just said,

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I mean, if you're just saying, I mean, what you're proposing, Your Honor, is something that's very close to the concept of filtering content, do it on the internet.

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And I think this court, in several cases, and the Supreme Court, and Alice, and other decisions, have said that when you just take something that is a common, well-understood practice and say, do it on the internet, that poses a Section 101 problem.

[00:05:01] Speaker 04:
OK, so we have a baseline agreement on something.

[00:05:03] Speaker 03:
Yeah, we have a baseline agreement.

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But then, and I think that that underscores the point here, because when you look at the claims of this patent and what it was trying to achieve, it is far more specific than that.

[00:05:12] Speaker 04:
Can you try to answer my other question, though?

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What if in 1995 someone filed the patent application with the claim, you know, I'm going to have software installed on my computer that filters the search results using whitelists and blacklists?

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Do you think that would be patent eligible?

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I think it may be.

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And I think it's because what we're dealing with in cases such as Alice, or even going back as far back as Parker v. Fluke, I mean these were cases where you were talking about just generic natural phenomena or formulas, and it was just like, can we do it on a computer?

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But what you're proposing in your hypothetical, I think is something very closer to, like it almost gets to a specific algorithm of how we would do this.

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And so just to give you an example with respect to this patent, if you look at figure six of the patent and claims 22 and 23, there's a specific architecture for an ISV server that's disclosed.

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And it includes a master inclusive list and separate inclusive and exclusive individual lists.

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That's how the individual filtering is accomplished.

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But I think your problem is, and I think actually your argument is going further against you than you wanted to, because the problem is that

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from Alice or Bilsky, the very simple concepts, all the way through, say, Ultramershal or others where there's actually a lot more computerization.

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That is still determining how to use a computer to carry out a basic concept.

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So my question is, and I think that it's probably a better argument, is that what DDR Holdings was teaching

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is that even if that initial computerization might not be patent eligible, if you then create problems with that computerization that need some inventive step or inventive concept to be fixed and it can be done better, does that all of a sudden make the second generation patent eligible?

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Well, I think that's probably a better way to put it.

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And I agree with that.

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Because in DDR holdings, one of the prime reasons why the patent there was found to pass 101 muster was because it wasn't just using the internet in a routine and conventional way.

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It was disclosing a very specific way to use the internet that was different than what was being done before.

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In a word, it was trying to improve the technology that was existing at the time to make it work in a slightly different way.

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And that's exactly what's happening here.

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And does it matter then what problem you're trying to solve?

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In other words, whether the problem is with the fact that you want to have a simpler way to filter content versus the problem of we want a more sophisticated computer or we want to fix something, a problem that computerization caused.

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Yeah, I think that the question is only relevant because under this court's cases and the Supreme Court's cases, they ask whether at step one of the Alice inquiry there is an abstract idea.

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But I think you're exactly right that when we're dealing with a situation where you're actually trying to improve how the network is functioning to address a problem that has been raised by computing and the way that this has been done in the past,

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then you're not even talking.

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You're not even in the ballpark of what Alice, I think, is directed to.

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In Alice and other cases, the real issue is, are you taking some sort of well-known business method or an economic practice and then trying to monopolize that by saying, well, let's do it on the internet, or let's do it with the computer?

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That's precisely what the court in DDR Holdings said was going on in cases like Ultramershal, that there is an economic practice there.

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I think it was selling advertisements in exchange for copyrighted material.

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with the general instruction to do that on the internet.

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And DDR Holdings distinguished that case and said, well, here, as we're saying, we're not just saying use the internet in a routine and conventional way.

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We're saying use it in this very specific way.

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And that was the distinguishing feature.

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And I think that the problem that we get to in these 101 cases is that, as the Supreme Court said in Alice and as this court has said in the first ultramurcial decision,

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You can always boil down a patent to some conceivably abstract idea.

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You know, I have another case that involves spinal implants.

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And you could say, well, the abstract idea there is fixing spines.

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And you can't just, you know, and the actual implant that you're disclosing is just saying, do it with implants.

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I mean, you could always do that.

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But what the Supreme Court said is a patent is not rendered ineligible simply because it involves an abstract concept.

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And the court in Ultramershal

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went further and said a court shouldn't go hunting for an abstract idea.

[00:10:07] Speaker 02:
Yeah, but that was the first ultramurder.

[00:10:09] Speaker 03:
There were three, unfortunately.

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I think that that's right.

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But I think that the principle is sound.

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And I think it's well represented by what happened here, where the district court really didn't look at the specifics of what the patent was trying to address and then what the solution was.

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But once it latched onto the idea that there was potentially an abstract concept at play, it sort of overgeneralized that and said, well, it's a filtering concept.

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And just to buttress the district court's analysis, it used these real world analogies.

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For instance, a librarian who keeps certain books away from children or parents who have magazines that they don't let their kids look at.

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And I think that really shows the misfit between those analogies and what's going on here, I think, is telling.

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Because the problem that was trying to be addressed here was specifically when you have a network of disparate users.

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and you're trying to achieve individualized internet content filtering from a remote centralized area, how do you do that?

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That's not even a problem that is addressed by any of the real world analogies that we're talking about.

[00:11:13] Speaker 04:
Well, what about a school board that's trying to figure out what kind of lesson plans to give to elementary schools, and then in a sense, they're filtering content by using certain textbooks for the first graders versus textbooks for the fifth graders?

[00:11:29] Speaker 04:
In a sense, that's a remote server filtering content to all these disparate local users.

[00:11:37] Speaker 03:
Well, I guess two responses to that.

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First of all, I don't know that that would qualify as the individualized, customizable type of content filtering that the patent was trying to get to.

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But secondly, the whole thing that we're talking about here, and I think Judge O'Malley, this gets to your point, is content filtering that is built into the communications infrastructure itself.

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That is something that's very unique

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to the internet space and something that's not presented really in these real world examples that we're talking about.

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And I think it gets to the ultimate point that what we're dealing with here is far different than some of the other cases where the idea, the concept that's being addressed is something that really is a real world non-computerized issue that's just being computerized and that's the only innovation that the patent is claiming.

[00:12:21] Speaker 03:
This is a problem that was arising in the computer space and the question was how do we make it?

[00:12:26] Speaker 01:
The problem with your case it seems

[00:12:28] Speaker 01:
Based on all of this exchange, here we have these two extremely broad claims that, if you look at them again in the abstract, could very well read on the school kindergarten filtration.

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And yet they were presented as typical, as representative.

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You now ask us to review

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why the more detailed claims were not considered by the court.

[00:13:00] Speaker 01:
It doesn't look from the record as if that was presented.

[00:13:05] Speaker 01:
There is a stage, we all know there is a stage, between the abstract and the concrete at which a boundary is crossed.

[00:13:14] Speaker 01:
It's always hard to find that boundary, but here we aren't really even presented with that boundary except now on appeal

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you complain that the district court did not find a boundary and move on to the detailed claims.

[00:13:31] Speaker 01:
Now our general observation is that by the time you get to sufficient detail to avoid what we're calling abstraction, we may have claims that are readily circumvented and therefore the argument is on the broader claims.

[00:13:48] Speaker 01:
But where does that leave us in that case?

[00:13:52] Speaker 01:
I really didn't see

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any basis for criticizing the trial judge's concentration on the two claims that you presented as representative, and yet there we have almost unlimited breadth.

[00:14:07] Speaker 03:
Well, I would disagree that there's unlimited breadth here.

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And one of the claims that the district court did address was Claim 22, which specifically discloses a new type of ISB server.

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And that's the ISB server that has a master exclusive list

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coupled with the plurality of sets of two types of lists, inclusive and exclusive lists, if you consider the dependent claim 23.

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And in terms of what the district court did in dealing with that claim, the district court did not consider all the elements as a combination to determine whether on the inventive step inquiry there was an attempt to limit the invention to something so that it wasn't just covering all of filtering content.

[00:14:48] Speaker 03:
But if you look at the claim, that's specifically what it does.

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It talks about one way

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of orienting an ISP server that didn't exist in the prior art that would be able to accomplish individualized content filtering for all of the local client machines that it was servicing.

[00:15:03] Speaker 03:
But the court didn't consider it as a combination.

[00:15:05] Speaker 03:
The court just looked at every element in isolation.

[00:15:08] Speaker 03:
But that's the opposite of what you're supposed to do in cases like Diamond v. Deere all the way through Alice, which say you have to look at the claims as a combination.

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And I would just add one point, which is this is a

[00:15:19] Speaker 03:
patent, and especially Claim 22, the district court reviewed that.

[00:15:22] Speaker 03:
That is a claim that was found valid and infringed in a case that went to trial against AOL.

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A jury looked at these patents after there was full discovery and after there was experts on both sides to talk about what was new in the ARC, what was non-obvious.

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And that jury determined that the patents were valid.

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Here we don't have any discovery.

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And one of the things that the other side does and that the district court did here

[00:15:48] Speaker 03:
is to say, well, all of these elements are really well known in the art, but we're at the pleading stage and the facts have to be construed in our favor.

[00:15:56] Speaker 03:
So on the issue of novelty, there's a presumption that these patents are new and novel and non-obvious and not anticipated, but the district court appears to have taken those presumptions and thrown them out the window.

[00:16:10] Speaker 03:
We don't think that was proper, especially when there's no effort to look at the

[00:16:14] Speaker 03:
The elements of the claims is an ordered combination.

[00:16:17] Speaker 04:
As I understood your claim in the face of the prior art, it was known, and it had been done before, to put filters on local computers, individualized filters, correct?

[00:16:30] Speaker 03:
Well, they're individualized as a matter of just the fact that they're out of local computers.

[00:16:33] Speaker 04:
And then it was also known to put a filtering scheme on the remote ISP server.

[00:16:40] Speaker 04:
But then it would be a one size fits all.

[00:16:44] Speaker 04:
Each of those was a solution to filtering content on the internet, but they both had respective disadvantages.

[00:16:52] Speaker 04:
The first one, local users could hack through it on the local computer.

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The second one, it was a one-size-fits-all scheme.

[00:17:01] Speaker 04:
You wouldn't be able to individualize or customize the filtering for particular disparate users.

[00:17:07] Speaker 04:
That's correct.

[00:17:08] Speaker 04:
And then your claimed invention is directed towards having the filter

[00:17:13] Speaker 04:
physically located at the remote server, but at the same time having the feature of being able to customize using individual filtering elements, the filtering done for all the different local disparate users.

[00:17:31] Speaker 04:
And the ISP server is able to do that because due to the TCPIP protocol, the server is able to recognize

[00:17:42] Speaker 04:
the address of the particular users requesting information from the internet.

[00:17:47] Speaker 04:
Is that right?

[00:17:48] Speaker 04:
That's correct.

[00:17:49] Speaker 04:
And so therefore, you're saying that this is some kind of technical solution overcoming the problems of prior art filters.

[00:18:00] Speaker 03:
Well, that's right.

[00:18:01] Speaker 03:
And I would point out two things that I just want to make sure are clear.

[00:18:05] Speaker 03:
In the prior art, a local client machine, we say that it was doing individualized filtering.

[00:18:11] Speaker 03:
But it wasn't really doing individualized filtering.

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It's just that since it was loaded on the person's machine, it just had to filter for one user.

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So that's not exactly what's implemented here.

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And you mentioned that the ISP server is able to do this, I think, through the TCP IP connection.

[00:18:27] Speaker 03:
But it's able to do this because of the specific logic that's disclosed in the claims.

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I mean, if there's another way to do it that isn't what we've disclosed here, then that's fair game in the case.

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And I'm sure AT&T will have strong

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You know, they'll have a robust non-infringement report that they submit later in the case.

[00:18:45] Speaker 03:
We just don't have that now because we're dealing with this at the pleading stage.

[00:18:48] Speaker 03:
If we have to show that the specific logic that is disclosed in these claims is what infringes AT&T's system, and it's that logic that allows us to do this.

[00:18:58] Speaker 03:
And I think, Judge Chen, what we're getting to here, I think, is very close to an invalidity analysis where we're trying to figure out if this is something that is really new.

[00:19:06] Speaker 03:
But of course, we're at the pleading stage again.

[00:19:08] Speaker 03:
and it would be improper.

[00:19:09] Speaker 03:
And that's what the court said in Diamond v. Deere.

[00:19:11] Speaker 03:
You must presume that this is a novel invention, because we're not dealing with the question of obviousness or anticipation under some of the other prongs of the title.

[00:19:20] Speaker 02:
But isn't there a novelty inquiry that's at step two of myriad?

[00:19:25] Speaker 03:
I actually think that there's a little bit of distinction, because inventive step is specifically the purpose of it, is to make sure that you're not trying to monopolize the whole idea

[00:19:37] Speaker 03:
And the idea the district court says here is filtering content writ large.

[00:19:41] Speaker 03:
There's no question when you look at these claims that there's no attempt to monopolize the entire field of filtering content because of the specificity.

[00:19:49] Speaker 03:
It's not a question really of novelty.

[00:19:51] Speaker 03:
It's one more of specificity.

[00:19:53] Speaker 03:
That's what DDR Holdings said.

[00:19:55] Speaker 03:
The question that the court asks is, are we talking about the routine and conventional use of the internet?

[00:20:00] Speaker 03:
or is what's being disclosed here a specific way of doing things, something that was different than what was done before?

[00:20:05] Speaker 04:
Right.

[00:20:05] Speaker 04:
And then the judge below, Judge Lynn, I think, said that everything here is known, routine, and conventional.

[00:20:13] Speaker 04:
So where do you think she lost track of the right analysis?

[00:20:19] Speaker 03:
Well, I think that what the district court judge did here, I think, was look at those elements

[00:20:24] Speaker 03:
in isolation, and she didn't have any discovery in the record.

[00:20:28] Speaker 03:
The proper thing to have done at this stage, if the real question in her mind and in this court's mind is, well, are these innovations really new?

[00:20:35] Speaker 03:
Is there really something that is not obvious or that not anticipated by the prior art?

[00:20:40] Speaker 03:
The proper course would be to have discovery in the case and actually see where we end up.

[00:20:45] Speaker 03:
Because we're at a stage right now that no discovery's in the record.

[00:20:48] Speaker 03:
The normal procedures on a 12b6 motion would apply to this case.

[00:20:53] Speaker 03:
in which you would presume all of the facts and take all inferences in the plaintiff's favor, I really don't think that that's been done here.

[00:20:59] Speaker 03:
And I do think that there's a disconnect between the question of novelty, which is informed by facts.

[00:21:05] Speaker 03:
You have to actually look and see what was in the prior art, what was really known and conventional.

[00:21:10] Speaker 03:
You can't just make assumptions about that.

[00:21:12] Speaker 03:
The reason why the district judge and the appellees here are able to say that certain things in isolation are well known in the art,

[00:21:21] Speaker 03:
Because some of the different elements are.

[00:21:24] Speaker 03:
But the same thing goes for DDR holdings.

[00:21:26] Speaker 03:
I mean, if we look at some of the aspects of the claims there, I mean, they were all conventional when you look at the elements.

[00:21:32] Speaker 03:
I mean, I think a lot of the claims talked about things like receiving a signal, generating a web page.

[00:21:38] Speaker 03:
If you broke out all of those elements out, you would find that they were all conventional.

[00:21:42] Speaker 03:
But what the court said is when you put them together, this was something more than just the routine and conventional use of the internet.

[00:21:49] Speaker 03:
And in the prior cases where there's been a 101 problem found, that's been the issue, is that you really have something from the real world with an instruction to use it on the internet, do it on the internet.

[00:22:01] Speaker 03:
And this is something far beyond that.

[00:22:03] Speaker 03:
This is something where we have a claim that is disclosing specific logic on how to filter content at an ISP level.

[00:22:11] Speaker 03:
This is a technologically-based solution to a technologically-based problem.

[00:22:15] Speaker 03:
I see them way over my time.

[00:22:17] Speaker 03:
So there's no further questions.

[00:22:20] Speaker 04:
Can you just identify what's the technologically based problem?

[00:22:24] Speaker 03:
How do you define it?

[00:22:26] Speaker 03:
Sure.

[00:22:27] Speaker 03:
And the patent talks about that in columns one and columns two, which is at the time of this patent, content filtering was done at the local client machine level if you wanted to have any chance of individualization.

[00:22:39] Speaker 03:
And that ran into four technological issues, which is one, you could have circumvention.

[00:22:44] Speaker 03:
Two, it was hard to customize.

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the features.

[00:22:48] Speaker 03:
Three, you'd have to have specific software that interface with your local client platform.

[00:22:54] Speaker 03:
And four, that you'd have to have a database that you'd have to update yourself.

[00:22:59] Speaker 03:
And so obviously, in a world where we have networks of disparate users, the question is, can we do it better?

[00:23:05] Speaker 03:
Can we do it on the cloud, essentially?

[00:23:07] Speaker 03:
And that was the object of this patent.

[00:23:09] Speaker 03:
And look, Bascom was not someone who acquired this patent and has just been trying to litigate against people.

[00:23:15] Speaker 03:
Bascom is a company based in New York.

[00:23:17] Speaker 03:
that actually made and sold these solutions to clients, including schools in New York.

[00:23:24] Speaker 03:
Because there was a perceived need for this type of solution, for someone to do this on an ISV server level.

[00:23:30] Speaker 03:
But again, there are a lot of factual questions here that have just gone unanswered.

[00:23:33] Speaker 03:
And I think if we had a more complete record, this court would see, just as the jury saw in the AOL case, where the patent was found to be infringed and valid, that this is a particular technological solution to something arising

[00:23:47] Speaker 03:
in the computer network space.

[00:23:49] Speaker 01:
Okay.

[00:23:49] Speaker 01:
Let's hear from the other side.

[00:23:50] Speaker 01:
We'll save you rebuttal time.

[00:23:57] Speaker 01:
Mr. Board.

[00:23:58] Speaker 00:
Good morning, Your Honor.

[00:23:59] Speaker 00:
May it please the Court.

[00:24:02] Speaker 00:
There seems to be agreement that the concept here, or that the patent goes to an abstract idea, and that is the idea of filtering content.

[00:24:12] Speaker 00:
And the idea of filtering internet content adds nothing to that.

[00:24:16] Speaker 00:
This court has been very clear with respect to that.

[00:24:19] Speaker 00:
I believe in the Ultramershal case, the court referred to the internet as a ubiquitous information transmission medium.

[00:24:26] Speaker 00:
So the question, as I understand it, as it's been posed by the appellant in this case, is whether filtering here is different from filtering there is different from filtering anywhere else.

[00:24:39] Speaker 00:
The answer to that question is no, because in each of the three instances, the first instance being the computer on the desk, the second being the computer that is in a local area network, the third being the computer that is the ISP server itself, the instructions that each of those computers are executing are essentially the same instructions.

[00:25:03] Speaker 00:
They are pedestrian, they are well-known, they are simple if-then logical statements.

[00:25:09] Speaker 02:
Are you disputing the arguments that your friend on the other side has made with respect to the problems posed by just doing filtering at the local level?

[00:25:22] Speaker 00:
There are different ways or different, I guess, benefits of filtering in each location.

[00:25:31] Speaker 00:
There's no question about that.

[00:25:32] Speaker 00:
The question is whether the recognition of those differences is inventive.

[00:25:37] Speaker 00:
That's really the question.

[00:25:38] Speaker 02:
Well, how do we make the determination on a 12b6?

[00:25:41] Speaker 00:
Yeah, and that also sounds like an obviousness inquiry.

[00:25:45] Speaker 00:
It isn't an obviousness inquiry.

[00:25:46] Speaker 00:
In fact, in this particular case, what the specification of this patent tells us is that we can do filtering here.

[00:25:53] Speaker 00:
It talks about the local computer.

[00:25:55] Speaker 00:
We can do filtering there.

[00:25:57] Speaker 00:
It talks about the computer in the local area network.

[00:26:00] Speaker 00:
And we can do filtering anywhere.

[00:26:02] Speaker 02:
But that's in description of the prior art.

[00:26:05] Speaker 00:
It is in the description of the prior art, but it also tells us what's inventive and what's not.

[00:26:10] Speaker 00:
And as this court has pointed out, there is some overlap between those two issues and between those two considerations.

[00:26:17] Speaker 04:
Well, as far as we know, there's no anticipatory section 102 reference that teaches physically locating a filter over at the ISP server in which that filter has the feature of being able to provide individualized filtering

[00:26:36] Speaker 04:
for all the different local disparate users requesting information.

[00:26:40] Speaker 04:
As far as we know, there's no 102 reference about that.

[00:26:43] Speaker 04:
Is that fair to say?

[00:26:44] Speaker 00:
Yeah, there's no such reference.

[00:26:45] Speaker 04:
And is it also fair to say that a filter located there with those kind of features overcomes disadvantages of the described prior art forms of filtering as described in the PAT?

[00:27:01] Speaker 00:
I would disagree with that.

[00:27:04] Speaker 02:
Don't you have to agree with it for purposes of the motion to dismiss?

[00:27:09] Speaker 02:
I don't think so.

[00:27:10] Speaker 00:
Because in this particular case, what we're looking at is we're looking at the execution of statements on a regular general purpose computer.

[00:27:19] Speaker 00:
I want to, if I can step back a little bit and separate the abstract idea part of the test from the implementation part of the test.

[00:27:29] Speaker 00:
The abstract idea includes multi-level filtering.

[00:27:32] Speaker 00:
The abstract idea includes filtering that is customized to the particular individual.

[00:27:37] Speaker 01:
What is an abstract?

[00:27:40] Speaker 01:
What's abstract about that?

[00:27:43] Speaker 01:
You might say that there are obvious elements, but you get to the point at which you lose the abstract concept and get into the next phase of, in fact, was there

[00:27:57] Speaker 01:
a contribution, not in the prior art?

[00:28:00] Speaker 00:
Yes, Your Honor.

[00:28:01] Speaker 00:
If we step back a little bit and look at the way filtering occurs in the real world, it can be very helpful.

[00:28:08] Speaker 00:
Judge Lynn did that, in her opinion.

[00:28:10] Speaker 00:
Multi-level filtering, filtering that is customized to a particular individual is all over the real world.

[00:28:18] Speaker 00:
Judge Lynn talks about different children in the same family, whether they would have access to a particular book or some particular material.

[00:28:24] Speaker 01:
So that's a matter of obviousness, is it not?

[00:28:26] Speaker 00:
It could be, but the obviousness inquiry is a fairly structured inquiry that deals with whether a particular combination of references can invalidate or make obvious a particular claim.

[00:28:38] Speaker 00:
In this case, the question is not the rigorous obviousness analysis.

[00:28:43] Speaker 00:
It is rather whether what is disclosed in the claims contains an inventive concept

[00:28:49] Speaker 00:
that takes the claim out of the realm of the abstract idea to which the patent itself is addressed.

[00:28:55] Speaker 04:
So let's pose the question like this.

[00:28:57] Speaker 04:
Sure.

[00:28:57] Speaker 04:
The district court found that filtering content is the abstract idea underlying these claims.

[00:29:02] Speaker 04:
And that is, in fact, something that your side agreed to.

[00:29:05] Speaker 04:
The next question then becomes, is there an inventive concept here?

[00:29:09] Speaker 04:
And why isn't the inventive concept here the invention, as recited in the claims, of a tool of locating the filter

[00:29:18] Speaker 04:
not at the local computer, but at the ISP server, where this tool has the, as far as we know, unique feature at that location for the tool, the ability to do individualized filtering, thanks to the fact that the ISP server, by virtue of how communication networks work, knows the particular address of each user requesting information across the network.

[00:29:47] Speaker 00:
I do think that the court's opinion in the intellectual adventures case really does resolve that problem, takes care of that problem in talking about the customization of responses to inquiries.

[00:30:01] Speaker 00:
The intellectual adventures case deals with that.

[00:30:05] Speaker 00:
Judge Mayer's concurring opinion in the IP case also addresses that.

[00:30:13] Speaker 00:
But in connection with this particular issue here,

[00:30:17] Speaker 00:
Let's look at what's being added when you move the filter to the ISP server.

[00:30:24] Speaker 00:
The ISP server is already filtering in a number of senses.

[00:30:30] Speaker 00:
We don't know how many, but at least it's deciding who gets to talk to the IP server.

[00:30:34] Speaker 00:
That is, conceptually, an event of filtering.

[00:30:39] Speaker 00:
What this patent describes is a series of if-then statements

[00:30:46] Speaker 00:
that are located on the ISP server, which is a generic computer, but a series of if-then statements that are really exchangeable with one another.

[00:30:57] Speaker 00:
For example, what is the difference between an inclusive list and an exclusive list?

[00:31:01] Speaker 00:
What is the difference between a master inclusive list and a master exclusive list?

[00:31:05] Speaker 00:
If you have, let's say, there are three doors, A, B, and C.

[00:31:12] Speaker 00:
A particular individual is to be denied access to C. You can write a routine that simply says that person gets into A and B. Or you can write a routine that says that person is excluded from C. That's an inclusive list.

[00:31:30] Speaker 00:
It's an exclusive list.

[00:31:31] Speaker 00:
But what it really is, is a very well-known

[00:31:37] Speaker 00:
often implemented well-understood computer concept of how to define what data gets retrieved.

[00:31:44] Speaker 00:
In that sense, it is very much like, although less complicated than the database cases such as, for example, the intellectual ventures case where data is being returned, it's similar to that in that you have the ability

[00:32:04] Speaker 00:
to retrieve information and send it back.

[00:32:06] Speaker 00:
This court has recognized that that is a well-understood concept.

[00:32:12] Speaker 04:
Yes, Your Honor.

[00:32:15] Speaker 04:
To me, the specific details of maybe how the filtering operates, whether it's exclusive lists, inclusive lists, maybe let's just put that to the side for a second.

[00:32:27] Speaker 04:
I keep wondering why this isn't

[00:32:32] Speaker 04:
like just looking at an overall communication network, and the invention is locating a tool in a particular location over that overall communication network, and then giving it some specific features.

[00:32:47] Speaker 04:
And those features are individualized filtering.

[00:32:51] Speaker 04:
Let me give you an example.

[00:32:52] Speaker 04:
What about a garden hose that you've connected to a faucet?

[00:32:59] Speaker 04:
All right, and then maybe it was known in the art to put the filter in the spray nozzle.

[00:33:06] Speaker 04:
But somebody comes up later with reciting an invention where the filter is located on the faucet.

[00:33:14] Speaker 04:
So now the filter is located between the faucet and the distal end of the garden hose.

[00:33:20] Speaker 04:
Is that an abstract idea that's not an inventive concept?

[00:33:24] Speaker 00:
It's not an inventive concept in the context of this case, and I'll

[00:33:29] Speaker 00:
tell you why.

[00:33:29] Speaker 00:
This invention is not the idea to move filtering from the local computer to the ISP server because this patent itself tells us that that is there, that already exists, that America Online does it.

[00:33:49] Speaker 00:
So the benefit of where the control is

[00:33:53] Speaker 00:
That's more in the nature of a discovery if you think about the scientific principle cases.

[00:33:58] Speaker 00:
As it turns out, if you do what America Online did, what everybody knows America Online did, it has an added advantage of allowing central administration.

[00:34:09] Speaker 00:
That's true.

[00:34:10] Speaker 00:
Just as picking the computer up,

[00:34:13] Speaker 00:
and moving it into a locked room and locking the door has the advantage of enhancing the security for that computer.

[00:34:20] Speaker 01:
So why isn't your argument based on obviousness rather than abstraction?

[00:34:26] Speaker 01:
Isn't that much easier from your viewpoint as well, rather than worrying about at what stage there are enough details in a claim so that it's no longer abstract but moves towards the concrete or wherever the line is?

[00:34:44] Speaker 01:
But wouldn't the argument based on what you're telling us be the same wherever this line is drawn, if in fact it were obvious because of these prior art events and knowledge?

[00:35:00] Speaker 00:
Your Honor, the answer to that question I think is maybe, but there are two available inquiries for us based on the Supreme Court's decision in Alice and Mayo.

[00:35:13] Speaker 00:
It is not merely obviousness.

[00:35:15] Speaker 00:
There's an additional threshold inquiry that we look at before we ever get to the obvious.

[00:35:19] Speaker 01:
Every such opinion carefully states the Supreme Court was very careful to state that these are fact-dependent, fact-controlled conclusions.

[00:35:31] Speaker 01:
And on those facts, these were the rules to be drawn from those facts.

[00:35:38] Speaker 01:
And so here we have another set of facts.

[00:35:40] Speaker 01:
And we are told again,

[00:35:42] Speaker 01:
when you apply the rules, the criteria of abstraction are not met.

[00:35:50] Speaker 00:
It is certainly true that each one of these cases stands on its own.

[00:35:54] Speaker 00:
And the first thing that we did that I'm sure Appellant did when trying to decide where this case fits is, is it more like DDR holdings or is it more like intellectual ventures, for example.

[00:36:06] Speaker 00:
So every case is certainly different.

[00:36:09] Speaker 00:
But it is certainly also true

[00:36:12] Speaker 00:
that when deciding whether a patent or whether claims in the patent go to patentable subject matter, section 101 stands as a gateway before we even begin the obviousness analysis, which I'll also add, as the court is aware, has some specific requirements and criteria that don't exist when determining whether something is an inventive concept.

[00:36:41] Speaker 00:
Remember, we never get to inventive concept unless we've already determined that the patent is directed toward an abstract idea.

[00:36:49] Speaker 02:
Well, going back to where I started with your friend on the other side, do you agree that the initial computerization with a general purpose computer of a concept could be non-patent eligible, but an improvement

[00:37:06] Speaker 02:
on that type of computerization that is directed to the mechanisms of the computer itself or to how the internet's used, that that could be patent eligible.

[00:37:20] Speaker 00:
I think it's theoretically possible.

[00:37:21] Speaker 02:
Well, let me give you an example.

[00:37:23] Speaker 02:
The concept that you would sell product from a manufacturer to a purchaser, and you would use a computer to do it.

[00:37:35] Speaker 02:
That presumably wouldn't be patent eligible, right?

[00:37:38] Speaker 02:
But you then sell product from a series of manufacturers and you use a one-click to allow the purchase to occur.

[00:37:47] Speaker 02:
Now that's a totally different approach.

[00:37:49] Speaker 02:
It still plays on the original concept of selling product, but it improves the system, the computerized system.

[00:37:59] Speaker 02:
Now why would things going down that road, why wouldn't they be patent eligible?

[00:38:05] Speaker 00:
I think some things could be, I can't really comment on the actual example that the court has given, but again you have to look at, first you look at the concept and then you look at whether the implementation of the concept or the implementation of the abstract idea supplies an inventive concept and what this court has held on increasingly on many occasions.

[00:38:31] Speaker 00:
is that running these very kinds of software routines on a generalized computer is something that does not supply an inventive concept.

[00:38:41] Speaker 04:
I guess that's really the question.

[00:38:43] Speaker 04:
Is this an idea that's being run on the internet network?

[00:38:50] Speaker 04:
Or is this invention something about doing something to the internet network in a specific way by installing a tool in a specific location?

[00:39:00] Speaker 00:
It's definitely the first.

[00:39:02] Speaker 04:
It is.

[00:39:03] Speaker 04:
I knew you'd say that.

[00:39:05] Speaker 00:
My answer is predictable, Your Honor.

[00:39:07] Speaker 00:
Now say because something something.

[00:39:10] Speaker 00:
Because all that is supplied is programming logic.

[00:39:15] Speaker 00:
All that is being supplied is programming logic on an existing general purpose computer, which is the ISP server.

[00:39:24] Speaker 00:
The logic that's being supplied is logic not only are we able

[00:39:29] Speaker 00:
from looking at the other cases of this court to ascertain that that logic is not inventive.

[00:39:38] Speaker 00:
We know that logic is not inventive because the specification of this very patent tells us so.

[00:39:44] Speaker 04:
Well, stop right there.

[00:39:46] Speaker 04:
Yes.

[00:39:47] Speaker 04:
DDR holdings.

[00:39:49] Speaker 04:
I mean, one could say there's nothing more there inventive than programming logic to co-display visual elements from two different websites

[00:39:59] Speaker 04:
and create a hybrid web page based on the click of a link.

[00:40:08] Speaker 04:
So that doesn't answer the question enough.

[00:40:12] Speaker 00:
One could say that, but one would be wrong.

[00:40:15] Speaker 00:
Because DDR holdings really is different.

[00:40:20] Speaker 00:
And while DDR holdings certainly does involve programming logic, it does not involve well-known

[00:40:28] Speaker 00:
routines the way this does.

[00:40:30] Speaker 02:
And to me, the vivid example... But how can we decide that on our motion to dismiss?

[00:40:35] Speaker 02:
You say there are well-known routines, but there's no evidence in the record of that.

[00:40:38] Speaker 00:
In Alice, for example, the court referred to textbooks.

[00:40:44] Speaker 00:
In this case, one can look at the other opinions of this court

[00:40:50] Speaker 00:
One can look at the language in these claims and one can determine that, in fact, these are the same kinds of concepts that were found not to be inventive in those other cases, for example, in intellectual ventures.

[00:41:01] Speaker 00:
But here, the patentee gives us three extra tools, four extra tools, actually.

[00:41:09] Speaker 00:
The patentee tells us that internet, the content filtering on the local computer is known.

[00:41:17] Speaker 00:
The patentee tells us

[00:41:19] Speaker 00:
that content filtering on the local server is known.

[00:41:24] Speaker 00:
The patentee tells us that content filtering on the ISP server is known.

[00:41:28] Speaker 00:
And then the patentee tells us that a person of ordinary skill in the art would recognize that hybrid filtering schemes that combine a number of filtering schemes are known, are possible.

[00:41:40] Speaker 00:
So we have within the specification of the patent itself

[00:41:44] Speaker 00:
all of the tools we need to make that determination.

[00:41:47] Speaker 04:
To me my reaction to your observations are maybe you've got a compelling case for section 103 that all of these individual elements were known in the art and maybe due to the nature of the problem to be solved because all those different known ways had their own individual disadvantages would lead one

[00:42:09] Speaker 04:
given the nature of communication networks that a remote server knows who it's talking to, would centralize the filter and create individual filters at that remote ISP server.

[00:42:23] Speaker 04:
That's what has been claimed.

[00:42:25] Speaker 04:
That particular ordered combination of all the elements, as far as I know, has not been known, nor did the judge below analyze that as an ordered combination.

[00:42:38] Speaker 04:
But nevertheless, that seems more like a question for obviousness rather than a question of overall patent eligibility.

[00:42:45] Speaker 00:
Well, it could certainly be a question of obviousness.

[00:42:48] Speaker 00:
And the court may well be right that there is a compelling obviousness case here.

[00:42:52] Speaker 04:
I said may.

[00:42:53] Speaker 00:
I didn't say there's compelling.

[00:42:55] Speaker 00:
There may be a compelling obviousness case here.

[00:43:00] Speaker 00:
But we are not talking about obviousness in this case.

[00:43:05] Speaker 00:
It's important to recognize that once we begin with an abstract idea, your ordinary obviousness case doesn't necessarily begin with an abstract idea, and it doesn't require an abstract idea in order to go to that.

[00:43:20] Speaker 00:
It's only where we've already found that these claims are directed to an abstract idea that we look at the inventive concept.

[00:43:29] Speaker 00:
And that creates a different inquiry

[00:43:32] Speaker 00:
And I would submit to the court in some ways, a less rigorous inquiry than the obviousness inquiry would be because you have to look at those claims where you've decided this goes to filtering content.

[00:43:43] Speaker 00:
It goes to filtering internet content.

[00:43:45] Speaker 00:
Is there anything in this claim language, either individually or as an ordered series of statements that removes this, this patent, these claims from the realm of an abstract idea and where as here,

[00:44:02] Speaker 00:
The steps themselves are all well-known.

[00:44:06] Speaker 00:
The patentee tells us they're well-known, that combining the steps are well-known, and that putting the filtering scheme on an ISP computer is well-known.

[00:44:16] Speaker 00:
It does not take the claim out of the realm of subject matter that is not patentable under Section 101.

[00:44:22] Speaker ?:
Okay.

[00:44:23] Speaker 01:
I think we need to move on.

[00:44:25] Speaker 01:
Thank you, Mr. Bohr.

[00:44:30] Speaker 01:
Mr. Supermanian?

[00:44:33] Speaker 03:
Thank you, Your Honor.

[00:44:35] Speaker 03:
I don't think that just listening to my friend on the other side's argument, I don't think you can really call that anything other than an obviousness challenge that's being made at the pleading stage.

[00:44:46] Speaker 03:
And we really don't have any record at all.

[00:44:48] Speaker 03:
There's been no discovery in the case.

[00:44:50] Speaker 03:
And as I said, on a 12b6 challenge, which is what this is, all of those facts concerning obviousness should be construed in our favor.

[00:44:57] Speaker 03:
And I think that presumption is especially strong here given that there's been actually a jury verdict in another case where a jury who did see the evidence found that each of these patents that we're planning to assert in this case was valid over the prior art.

[00:45:11] Speaker 03:
We're not even talking, I think, at this point about whether we're trying to claim ownership to the basic building blocks of ingenuity.

[00:45:20] Speaker 03:
We're not even talking about that.

[00:45:21] Speaker 03:
We're really just talking about whether these inventions were in the prior art or not.

[00:45:26] Speaker 03:
the 101 inquiry, I think, is supposed to be.

[00:45:28] Speaker 03:
And if you look at cases like DDR holdings and look at what the elements of the claims were, I mean, they look pretty conventional to me.

[00:45:36] Speaker 03:
I mean, you're talking about the steps individually, receiving a signal, identifying a web page, retrieving data, and generating and transmitting a web page.

[00:45:45] Speaker 03:
Well, that's all, you know, those are individual steps are conventional.

[00:45:48] Speaker 03:
But the way it was put together was an improved way of using the network, not the routine and conventional use of the network.

[00:45:54] Speaker 03:
And that's the same thing here.

[00:45:55] Speaker 03:
As Judge Shenzhou pointed out, this is a tool by moving filtering to the ISP server level and having particular features with that, we were able to improve upon the functioning of the network itself.

[00:46:07] Speaker 03:
And Judge O'Malley, I think you raised a hypothetical at the beginning and I sort of ran away from it, but it was the question of if you had an abstract idea that could be initially computerized and maybe that poses section 101 problems, could you have an improvement on that that wouldn't raise those same problems?

[00:46:23] Speaker 03:
And I think that's exactly what the Supreme Court said in Diamond v. Deere.

[00:46:27] Speaker 03:
In that case, there was an equation that I think would probably qualify as an abstract idea.

[00:46:32] Speaker 03:
And the question was, well, do the other elements of the claim add anything to that?

[00:46:36] Speaker 03:
And the court said, well, and I'm sure in that case, if it was just to use it on a computer, it would probably run into 101 problems.

[00:46:42] Speaker 03:
But what the court said was, what was being disclosed was an improved process, in that case, for molding rubber.

[00:46:49] Speaker 03:
by solving a practical problem which had arisen in the molding of rubber products.

[00:46:54] Speaker 03:
And because if you looked at the process as a whole, it provided something that showed that you weren't just trying to patent the overall abstract idea that was in fact patentable.

[00:47:03] Speaker 03:
So I think you're exactly right that you can't have situations where an improvement in the case of a network, for instance, that would be in fact patentable.

[00:47:12] Speaker 03:
This is a case where I think if you actually look at the claims at issue,

[00:47:16] Speaker 03:
There was a specific technological solution to a specific technological problem.

[00:47:21] Speaker 03:
And AT&T is going to have full opportunity to make arguments such as anticipation, obviousness, non-infringement as the case goes forward.

[00:47:29] Speaker 03:
And we're going to have a full evidentiary record on which that can be determined.

[00:47:32] Speaker 04:
But throwing out these claims at the pleading stage on 101 grounds, I think, is the- I guess, just to be fair, the other side, they're saying filtering content on the internet, that can't be patent eligible.

[00:47:45] Speaker 04:
and where the filtering occurs doesn't make a difference.

[00:47:49] Speaker 03:
Right.

[00:47:50] Speaker 03:
And I'm glad you reminded me, because I think that the appellee started his argument by saying that we were in agreement on step one as to what the abstract idea here.

[00:47:58] Speaker 03:
We don't agree at all, because the idea here was not just filtering content.

[00:48:03] Speaker 03:
It was specifically how to address a problem that arose in this networking

[00:48:07] Speaker 03:
networking space, which is you have many different users.

[00:48:10] Speaker 03:
You want to have individualized content filtering, but not performed on every remote, on every particular client machine.

[00:48:17] Speaker 03:
So I don't think we agree on that threshold step of all we're trying to do here is filtering content.

[00:48:21] Speaker 03:
But to answer your question, we then have to look at the claims, as Ultramershal and other cases say.

[00:48:26] Speaker 03:
We look at the actual claims.

[00:48:28] Speaker 03:
We're not just saying move it to this particular location, which I think was a novel step.

[00:48:33] Speaker 03:
I think people weren't doing that at that time.

[00:48:35] Speaker 03:
It's moving it there with those particular features that provide a novel combination that answers a problem in the prior art.

[00:48:44] Speaker 03:
That problem, which is talked about in columns one and two, was that having this filtering done at a local client machine level was causing all sorts of problems.

[00:48:52] Speaker 03:
So why don't we not only move it to the ISV server level, but then we have to be able to have the type of logic that would be able to service many different users

[00:49:01] Speaker 03:
and filter content in an individualized way.

[00:49:03] Speaker 03:
And that was a novel solution at the time.

[00:49:05] Speaker 03:
It's one that my client actually incorporated into its products and sold to customers.

[00:49:09] Speaker 03:
And I think it was improper for the district court to, on no factual record whatsoever, essentially make an obviousness determination to throw out this patent on 101.

[00:49:18] Speaker 04:
And just so I understand, the reason why this invention can work the way it does is because it somehow takes advantage of the inherent nature of communication networks, such that a remote server

[00:49:31] Speaker 04:
knows who it's talking to when it's dealing with all these remote users?

[00:49:37] Speaker 03:
I think that's one aspect of the invention.

[00:49:38] Speaker 03:
But then it has to couple that, the fact that it can communicate with the disparate network of users with the type of logic that would allow it to process requests and then either accept a content request or deny a content request.

[00:49:53] Speaker 01:
Any more questions?

[00:49:54] Speaker 01:
Thank you very much.

[00:49:55] Speaker 01:
Thank you both.

[00:49:56] Speaker 01:
The case is taken under submission.