[00:00:08] Speaker 03:
Good morning.

[00:00:08] Speaker 03:
We have three cases set for oral argument.

[00:00:13] Speaker 03:
We also have one case set for resolution on the briefs.

[00:00:21] Speaker 03:
The first case for oral argument is eAssociate Inc.

[00:00:25] Speaker 03:
versus Click Booth 15-1332.

[00:00:28] Speaker 03:
Mr. Newman?

[00:00:32] Speaker 01:
Good morning, Your Honors, and may it please the Court.

[00:00:35] Speaker 01:
Associates 660 patent claims are not directed at an abstract idea, but rather the very specific process of providing webmasters with access to an existing merchant affiliate system without ever having to join that system.

[00:00:53] Speaker 01:
The gist of the 660 patent is accessed.

[00:00:57] Speaker 01:
The gist of the patent is not the abstract idea of tracking and receiving of referrals.

[00:01:02] Speaker 01:
What do you mean by the gist?

[00:01:05] Speaker 01:
When the court reads the claims, either alone or in combination with one another, the theme, the gist, the heart of the patent, is it provides access.

[00:01:17] Speaker 01:
Webmasters have access to multiple merchant affiliate systems that they never have to join.

[00:01:23] Speaker 03:
What's your legal authority that would compel the district court to hunt for the gist or the heart of a patent?

[00:01:31] Speaker 01:
Your Honor, the court must

[00:01:33] Speaker 01:
if there is an abstract idea, search for an inventive concept.

[00:01:37] Speaker 01:
But the first step is to look at the claims and find out what are they directed at.

[00:01:42] Speaker 01:
What's the purpose of the patent?

[00:01:44] Speaker 01:
The purpose of this patent is to provide access.

[00:01:46] Speaker 01:
So that's looking at the limitations, claim limitations?

[00:01:49] Speaker 01:
Yes, Your Honor.

[00:01:50] Speaker 01:
Looking at the claim limitations.

[00:01:52] Speaker 01:
So it's not the heart or the gist we're looking for, correct?

[00:01:56] Speaker 01:
Your Honor, I would disagree, but perhaps it's just a semantic game.

[00:02:00] Speaker 01:
The purpose of the patent, what

[00:02:02] Speaker 01:
Claims are directed at the gist of the patent.

[00:02:06] Speaker 01:
I believe that jurisprudence would find is the same.

[00:02:10] Speaker 01:
And in this case, the gist of the patent, the purpose of the claims, what the claims are directed at is access.

[00:02:16] Speaker 01:
It's not the abstract idea of tracking and receiving of referrals.

[00:02:20] Speaker 01:
Rather, the merchant has always been capable of tracking and receiving of referrals.

[00:02:24] Speaker 01:
And even after the invention is implemented, the merchant will continue to track and receive referrals in the same way it always has.

[00:02:32] Speaker 01:
The only difference is that now webmasters have access to multiple merchant affiliate systems, whereas before, in order to gain that access, the webmasters had to join each and every system and adopt unique coding systems from every single merchant.

[00:02:49] Speaker 01:
The merchants similarly have access to a huge pool of webmasters, and the merchants need not provide codes to all these webmasters.

[00:02:58] Speaker 01:
The webmasters come ready to access the system through the virtual affiliate system.

[00:03:02] Speaker 01:
The 660 patent adds an inventive concept on the pre-existing technology on the prior art.

[00:03:08] Speaker 01:
Specifically, the patent requires that there are three specialized computer systems.

[00:03:14] Speaker 01:
Two existed before their pre-existing technology.

[00:03:16] Speaker 01:
The third is added by the invention.

[00:03:18] Speaker 01:
And not until those three specialized computers are in place... Which specialized computer are you talking about?

[00:03:24] Speaker 02:
There are three.

[00:03:25] Speaker 02:
The first is... Why don't you talk about the one that you think is the new inventive concept?

[00:03:31] Speaker 01:
Well, the inventive concept is a four-step process built upon the three computers.

[00:03:34] Speaker 01:
The three computers is a foundation.

[00:03:36] Speaker 01:
For the computers specialized.

[00:03:38] Speaker 01:
Yes, Your Honor.

[00:03:39] Speaker 01:
The first is an existing merchant affiliate system.

[00:03:41] Speaker 01:
That's not a generic system.

[00:03:43] Speaker 01:
I can't run that on my common, everyday laptop.

[00:03:46] Speaker 01:
It's a system that's capable of receiving requests from merchants, of assigning a specialized coding system, of tracking, accounting for revenue, and making payouts.

[00:03:56] Speaker 02:
Why couldn't you write it on your laptop if you had the right software?

[00:04:00] Speaker 01:
Your Honor, I suppose that any specialized computer could run, or any specialized system could run on any computer with the right.

[00:04:07] Speaker 02:
You can't call it a specialized computer if you're just talking about a computer that's programmed to do a certain thing.

[00:04:13] Speaker 02:
The Supreme Court's made that really clear.

[00:04:16] Speaker 01:
Well, Your Honor, for example, a GPS system was found to be specialized.

[00:04:19] Speaker 01:
But GPS is in every device.

[00:04:23] Speaker 01:
It's on common everyday computers.

[00:04:25] Speaker 01:
It's on cell phones.

[00:04:27] Speaker 01:
But it's considered specialized because of the software that underlies it.

[00:04:31] Speaker 01:
And here, the merchant affiliate system, the existing system, is capable of doing what a common everyday computer cannot.

[00:04:38] Speaker 01:
Can GPS run on a common everyday computer?

[00:04:41] Speaker 01:
It can, Your Honor.

[00:04:43] Speaker 01:
So you've answered your own question.

[00:04:44] Speaker 01:
My laptop is GPS enabled.

[00:04:46] Speaker 01:
I don't know, however, that my laptop could run an existing merchant affiliate system.

[00:04:51] Speaker 01:
I don't believe my laptop is powerful enough.

[00:04:53] Speaker 01:
certainly isn't programmed to assign codes to multiple webmasters.

[00:04:57] Speaker 02:
I mean, you can't be arguing that a computer is a special purpose computer or not, depending upon its capacity and operating memory and the like.

[00:05:07] Speaker 02:
It's still a general purpose computer until you program it.

[00:05:11] Speaker 01:
Your Honor, every computer is a general purpose computer until programmed.

[00:05:14] Speaker 02:
That's why the Supreme Court has basically said you don't get a patentable invention by programming a computer.

[00:05:23] Speaker 01:
You don't get a patentable invention.

[00:05:25] Speaker 02:
Unless the program itself is some kind of technological innovation.

[00:05:28] Speaker 04:
So how does your program improve the general purpose computer?

[00:05:33] Speaker 04:
Improve it in its running?

[00:05:35] Speaker 01:
The existing merchant affiliate system is only capable of accepting requests from webmasters that sign up with the system who adopt the coding system of the existing merchant affiliate system.

[00:05:46] Speaker 01:
With the invention.

[00:05:48] Speaker 01:
Is that an internet-centric problem?

[00:05:50] Speaker 01:
It is, Your Honor, because affiliate systems never existed before the internet.

[00:05:55] Speaker 01:
The affiliate system is unique to the internet.

[00:05:57] Speaker 01:
It allows for a webmaster to provide referrals to merchants.

[00:06:05] Speaker 01:
And it's done through a computer coding system.

[00:06:08] Speaker 03:
Your innovation isn't an affiliate system, is it?

[00:06:11] Speaker 01:
It is not, Your Honor.

[00:06:12] Speaker 03:
Your innovation is you've created a broker who broke these deals.

[00:06:19] Speaker 01:
No, Your Honor, it's not a broker.

[00:06:21] Speaker 01:
It's an access point.

[00:06:23] Speaker 01:
It's not a broker because it's not offering the services of the merchant, but rather provides technology that allows a webmaster to gain access to the merchant affiliate system without ever having to join.

[00:06:35] Speaker 01:
Before the 660 patent, the way of affiliate systems was every webmaster had to join multiple merchant affiliate systems.

[00:06:45] Speaker 01:
And there are two kinds.

[00:06:46] Speaker 01:
There is the direct and the hub.

[00:06:47] Speaker 01:
So webmasters had to join several direct, several hub, and each had its own coding system.

[00:06:54] Speaker 01:
So the webmaster was burdened with signing up in multiple systems and adopting multiple codes and programming its system to work with every single one of these merchants.

[00:07:06] Speaker 01:
Whereas now, with the virtual affiliate system... Can I ask you this?

[00:07:09] Speaker 02:
I mean, you're trying to say that yours is patentable because it improves the pre-existing merchant affiliate system.

[00:07:15] Speaker 02:
Why is the pre-existing merchant affiliate system patentable under recent Supreme Court precedent?

[00:07:21] Speaker 02:
Isn't it just doing an abstract idea, organizing conventional human economic activity through a computer?

[00:07:29] Speaker 01:
Here I have two answers to that question.

[00:07:32] Speaker 01:
Why is the existing merchant affiliate system patentable?

[00:07:34] Speaker 01:
The first obvious answer is because

[00:07:37] Speaker 01:
the Patent Office granted a patent to Amazon.com.

[00:07:39] Speaker 02:
Well, that's not a very good answer.

[00:07:41] Speaker 02:
I mean, we've rejected, the District Court has rejected, and the Supreme Court has rejected dozens of patents under 101 that the Patent Office granted.

[00:07:48] Speaker 01:
Yes, Your Honor.

[00:07:49] Speaker 01:
I'm not here to argue that the existing merchant affiliate system is patentable.

[00:07:52] Speaker 01:
I'm here to argue that the improvement fund is.

[00:07:53] Speaker 02:
Well, if the existing ones contains an abstract idea that's not patentable, you're doing it slightly better because you program it differently.

[00:08:01] Speaker 02:
Surely isn't patentable either, is it?

[00:08:03] Speaker 01:
Your Honor, the 660 patent

[00:08:06] Speaker 01:
provides access to the existing merchant affiliate system.

[00:08:09] Speaker 01:
The existing merchant affiliate system is patentable because it provides for a transaction that was never capable before the internet.

[00:08:16] Speaker 03:
You have an existing affiliate system and you're saying that your patent directs traffic between these affiliate systems?

[00:08:26] Speaker 01:
No, Your Honor.

[00:08:27] Speaker 01:
The patent provides access.

[00:08:28] Speaker 01:
It doesn't direct traffic.

[00:08:30] Speaker 03:
It provides access.

[00:08:32] Speaker 03:
So it's like a portal?

[00:08:35] Speaker 03:
It's, what would you call that, traffic light?

[00:08:38] Speaker 01:
It allows for a portal that never existed.

[00:08:41] Speaker 01:
In the past, a webmaster had to join multiple systems, and merchants had to attract multiple webmasters.

[00:08:47] Speaker 03:
Whereas with the 660, what happens now is there's a single... I've called this a broker before, and then I thought, well, maybe I should ask whether we're dealing with a middleman.

[00:08:58] Speaker 03:
But now that we're dealing with a portal, how is that not an abstract idea?

[00:09:03] Speaker 01:
Well, I suppose that

[00:09:04] Speaker 01:
if we limit it just to a portal, a portal.

[00:09:08] Speaker 03:
You're the one that's arguing the gist of a patent.

[00:09:10] Speaker 03:
It's access.

[00:09:11] Speaker 03:
I don't agree that we look for the gist of a patent or the heart of a patent when we're conducting a Section 101 analysis trying to determine whether the claims are directed to an abstract idea.

[00:09:22] Speaker 03:
So now I'm going to buy your approach.

[00:09:25] Speaker 03:
I disagree with that.

[00:09:26] Speaker 03:
So if I look at what's the gist of your patent and you tell them it's a portal, then I say you've embraced

[00:09:34] Speaker 03:
an abstract idea.

[00:09:36] Speaker 01:
Well, Your Honor, if the patent said, provide a portal and apply it to the internet, that would be an abstract idea.

[00:09:42] Speaker 03:
But that's what you said.

[00:09:44] Speaker 01:
But, Your Honor, this patent is specific and has four steps that weren't implemented before the 660 invention.

[00:09:53] Speaker 01:
It requires the three computer systems, which, Your Honor, I believe are specialized, and builds upon them with four steps that didn't exist in the prior art.

[00:10:02] Speaker 03:
Why are they specialized?

[00:10:03] Speaker 01:
They're specialized because they only exist in the realm of merchant affiliate systems.

[00:10:08] Speaker 01:
It's not off the shelf software.

[00:10:09] Speaker 01:
They're highly specialized.

[00:10:10] Speaker 01:
They're not specialized computers.

[00:10:14] Speaker 01:
There's three systems in place.

[00:10:16] Speaker 01:
Earlier you had said specialized computers.

[00:10:18] Speaker 01:
You're walking away from that.

[00:10:20] Speaker 02:
Where in claim one does it talk about three specialized computers?

[00:10:26] Speaker 02:
You're talking about all this as if the claims actually say this, but I mean, is claim one representative?

[00:10:33] Speaker 02:
It seems like it's representative about your system.

[00:10:36] Speaker 02:
And it talks about configuring systems and adding URLs and things like that.

[00:10:42] Speaker 01:
Your Honor, claim one is representative.

[00:10:44] Speaker 01:
And I can identify the three systems as we review the claim.

[00:10:48] Speaker 01:
There's four steps to the claim.

[00:10:50] Speaker 01:
The first claim is the virtual affiliate system will configure the existing merchant affiliate system.

[00:10:55] Speaker 01:
Now, before the patent, there was never a configuration of an existing merchant affiliate system.

[00:11:01] Speaker 01:
Rather, merchant affiliate systems assigned codes to webmasters, and both the webmasters and the merchants were limited to that coding system.

[00:11:08] Speaker 01:
But now with step one of the patent.

[00:11:10] Speaker 02:
So when somebody goes to a certain web page and clicks on a link to a merchant, that webmaster gets credit somehow for that click.

[00:11:19] Speaker 02:
It may get even more credit if a sale goes through.

[00:11:22] Speaker 02:
Is that right?

[00:11:22] Speaker 02:
Is that the basics of what's happening here?

[00:11:26] Speaker 01:
Yes, Your Honor, with one exception.

[00:11:28] Speaker 01:
Yeah.

[00:11:30] Speaker 01:
Your honor is missing the fact that the webmaster never joined the system.

[00:11:35] Speaker 01:
In your patent.

[00:11:36] Speaker 01:
That's correct, your honor.

[00:11:38] Speaker 02:
This is simply a referral system.

[00:11:41] Speaker 01:
No, your honor, because the referral system is already in place.

[00:11:44] Speaker 01:
The merchant operates the referral system and has a system in place for tracking and receiving referrals.

[00:11:51] Speaker 01:
That system remains.

[00:11:53] Speaker 01:
The only difference is that now the webmaster is receiving many more referrals

[00:11:59] Speaker 01:
from webmasters that never signed up with it.

[00:12:01] Speaker 01:
It doesn't have to market.

[00:12:03] Speaker 01:
It doesn't have to direct its code to compatible systems.

[00:12:08] Speaker 01:
It simply operates an existing merchant affiliate system.

[00:12:10] Speaker 02:
But your problem is that this referral system itself is an abstract idea.

[00:12:15] Speaker 02:
And so it fails under step one of Alice.

[00:12:19] Speaker 02:
You have to find something that takes us out of the abstract realm under step two of Alice.

[00:12:24] Speaker 03:
You're into your rebuttal time.

[00:12:27] Speaker 03:
I'd like for you to pursue Judge Hugh's question.

[00:12:29] Speaker 03:
Let's move to step two of Alice and see if you can salvage the patent there.

[00:12:37] Speaker 01:
Thank you, Your Honor.

[00:12:38] Speaker 01:
The answer to your question is the patent does not claim tracking and receiving of referrals.

[00:12:42] Speaker 01:
The existing merchant affiliate system tracks and receives referrals, has always been able to, and will continue to in the same way it always has.

[00:12:49] Speaker 01:
This patent does not tie that up, does not preempt it, does not claim it.

[00:12:53] Speaker 01:
This patent claims providing access webmasters to the existing merchant affiliate system, which never occurred before.

[00:13:00] Speaker 03:
And it saves both the webmasters and the merchants the administrative burden of signing up for multiple... Wouldn't you say that the application steps of the claim are conventional and well-known?

[00:13:12] Speaker 01:
No, Your Honor.

[00:13:13] Speaker 01:
The claim is not conventional and well-known because before the 616, there was a different world in affiliate system technology, where webmasters signed up directly with hubs,

[00:13:22] Speaker 01:
or direct merchants and had to adopt coding systems from multiple sources.

[00:13:28] Speaker 01:
Whereas now there's only a single coding system and a single access point, the virtual affiliate pool system.

[00:13:33] Speaker 01:
Thank you very much.

[00:13:35] Speaker 03:
I'll add back to the little time given the questions we were asking.

[00:13:38] Speaker 03:
Thank you very much.

[00:13:44] Speaker 03:
Mr. Franklin?

[00:13:46] Speaker 03:
Yes.

[00:13:46] Speaker 03:
Is that correct?

[00:13:48] Speaker 03:
Now, you've divided your time

[00:13:51] Speaker 03:
Let's see here.

[00:13:52] Speaker 03:
So you have, oh, seven minutes, right?

[00:13:55] Speaker 00:
Correct.

[00:13:55] Speaker 03:
OK.

[00:13:57] Speaker 00:
May it please the court.

[00:13:59] Speaker 00:
A point of e-Societ has talked about access.

[00:14:02] Speaker 00:
But access is just the flip side of receiving referrals.

[00:14:07] Speaker 00:
And e-Societ's patent is undeniably related to receiving referrals and tracking referrals from referral sources.

[00:14:16] Speaker 00:
e-Societ has merely applied that idea to the pre-existing technological environment of the internet

[00:14:21] Speaker 00:
with its pre-existing affiliate systems, which eSociate's patent admits were commonplace on the internet.

[00:14:30] Speaker 00:
eSociate may have moved some of the record keeping to a merchant middleman.

[00:14:34] Speaker 02:
Do you think that pre-existing affiliate system is patentable?

[00:14:38] Speaker 00:
No.

[00:14:39] Speaker 00:
It's just a computer that's been programmed to run a merchant's affiliate program.

[00:14:45] Speaker 00:
And not only is it not patentable, but it is a conventional part of the internet.

[00:14:50] Speaker 00:
The patent tells us that most merchants currently use some sort of affiliate system to run their affiliate program.

[00:14:58] Speaker 00:
And merely taking that conventional and pre-existing part of the internet and using it in the claims does not suffice to transform the nature of the claim to something that's not abstract.

[00:15:10] Speaker 00:
So here we've got an intermediary performing the electronic record keeping.

[00:15:15] Speaker 00:
That's not an inventive concept sufficient to transform the abstract idea to a patent-eligible invention.

[00:15:22] Speaker 00:
And merely reorganizing the economic relationships so that the webmaster, instead of contracting directly with the merchant, instead contracts with the middleman, is merely a method of reorganizing human relationships, which under Alice is not patentable.

[00:15:40] Speaker 00:
Additionally, the patent really isn't directed to the idea of access

[00:15:45] Speaker 00:
The patent talks about receiving the referrals, and the end result of the patent claim, claim one, which is representative, is the generation of a URL, which is just a string of characters.

[00:15:59] Speaker 00:
The claim doesn't talk about what happens with that URL after it's generated.

[00:16:06] Speaker 00:
Additionally, webmasters were already able to access the merchant.

[00:16:11] Speaker 00:
You could always put a URL hyperlink on a webpage,

[00:16:14] Speaker 00:
and be able to link to Amazon.com or Target.com or what have you, the issue was one of tracking for purposes of compensation.

[00:16:25] Speaker 00:
That's electronic record keeping, which as we know from Alice, is not sufficient to transform the nature of the claim.

[00:16:34] Speaker 00:
So let's go through the steps of the claim.

[00:16:38] Speaker 00:
We start with the preamble, which merely identifies the referring webmasters,

[00:16:44] Speaker 00:
those are the virtual affiliates, and the referral recipient, which is the existing target affiliate system.

[00:16:52] Speaker 00:
These are commonplace participants on the internet.

[00:16:56] Speaker 00:
They're just people, the merchant and the webmaster.

[00:17:00] Speaker 00:
The configuring step merely configures the existing system, the existing affiliate system, to do what affiliate systems do, and that's receiving referrals.

[00:17:11] Speaker 00:
The subset of assigning IDs,

[00:17:14] Speaker 00:
Again, that's just part of conventional electronic record keeping on the internet.

[00:17:19] Speaker 00:
The patent, not only does that just make common sense, but the patent tells us that unique ID numbers would have been apparent to those of skill in the art.

[00:17:28] Speaker 00:
That's a column 11.

[00:17:31] Speaker 00:
And so here we're just talking about the assignment of ID numbers for electronic record keeping.

[00:17:37] Speaker 00:
The next step, the receiving.

[00:17:39] Speaker 00:
That's just using the internet for its conventional communication function.

[00:17:44] Speaker 00:
And it's conventional to receive a URL.

[00:17:47] Speaker 00:
It's also conventional to receive a URL containing an ID.

[00:17:51] Speaker 00:
And we know that because the prior art system in the patent had an ID in the URL.

[00:18:00] Speaker 00:
And conveying IDs in a URL, well, that's how the internet works.

[00:18:04] Speaker 00:
That's the pre-existing technological environment.

[00:18:08] Speaker 00:
The next step is correlating.

[00:18:10] Speaker 00:
Again, this is mundane record keeping.

[00:18:13] Speaker 00:
like the updating of the activity log in the ultramutual case.

[00:18:18] Speaker 00:
The specification talks about the lookup table that cross-references two codes.

[00:18:25] Speaker 00:
And then finally, the generating step.

[00:18:27] Speaker 00:
This just uses conventional internet communication for its communication function.

[00:18:34] Speaker 00:
The priority example already shows that URLs were used to convey ID codes.

[00:18:38] Speaker 00:
And once we've been through the steps of the claim,

[00:18:42] Speaker 00:
There's nothing left in the claim that would be sufficient to transform its nature into something that's patent-eligible.

[00:18:53] Speaker 00:
And with that, I will reserve the remaining time for my co-counsel, unless the panel has any questions.

[00:18:59] Speaker 03:
Thank you very much.

[00:19:10] Speaker 04:
Mr. Jets?

[00:19:11] Speaker 04:
Thank you, your honor.

[00:19:11] Speaker 04:
May it please the court?

[00:19:12] Speaker 04:
You have eight minutes.

[00:19:14] Speaker 04:
I think I'll use two.

[00:19:16] Speaker 04:
Two minutes?

[00:19:17] Speaker 04:
That'd be great.

[00:19:18] Speaker 04:
Maybe not quite that much.

[00:19:20] Speaker 04:
The court asked whether or not the system was a broker.

[00:19:23] Speaker 04:
In effect, I think the court was more correct later in Middleman.

[00:19:27] Speaker 04:
Really, this is a system that takes over the bookkeeping from the merchant so that they can do it all in this e-associates computer instead of on the merchant's computer.

[00:19:41] Speaker 04:
In terms of the improved or specialized computer, I think the Supreme Court's been clear that when you program a general purpose computer to do normal general purpose functions, you're there.

[00:19:52] Speaker 04:
And I would refer the court to the blue brief, page 52.

[00:19:55] Speaker 04:
The existing merchant affiliate system is improved because webmasters, this is the associates, can now send it traffic, excuse me, its traffic in exchange for compensation, even if the webmasters are enrolled in a different affiliate system.

[00:20:10] Speaker 04:
What that's telling you is that this invention, if there is a gist, is directed to the human relationships of where you've signed your contracts.

[00:20:21] Speaker 04:
Are you going to sign them with the middleman, who then contracts with the merchant, or are you going to sign them with the merchant?

[00:20:26] Speaker 02:
So if I run a cooking blog, and during the course of this cooking blog, I write articles about products that I suggest you buy, like this is a good knife, this is a good waffle iron.

[00:20:35] Speaker 02:
And I put a link to a certain merchant to

[00:20:40] Speaker 02:
go purchase this from.

[00:20:41] Speaker 02:
If I'm part of their affiliate system, I'm probably going to get credit when somebody reading my blog goes to this web system and buys it.

[00:20:49] Speaker 02:
But if I didn't belong to the affiliate system before this invention, I might not have.

[00:20:54] Speaker 02:
Is that basically what we're talking about?

[00:20:56] Speaker 04:
That's correct, Your Honor.

[00:20:57] Speaker 04:
So if you haven't signed up with the merchant, you can always put the hyperlink on your website, and it will always take you to the merchant.

[00:21:03] Speaker 04:
So you can put amazon.com on any website that you want.

[00:21:07] Speaker 04:
Now, you might not get paid.

[00:21:09] Speaker 04:
unless you sign up with the merchant.

[00:21:11] Speaker 04:
Or in this case, with this invention, if it is an invention, the idea is you'll sign up with the middle.

[00:21:18] Speaker 03:
Isn't that what the invention is directed to, to get paid, to get compensated, to ease that traffic?

[00:21:25] Speaker 04:
If we're going to look at the purpose of the invention, and you can see this throughout the patent, including the abstract where it talks about compensation.

[00:21:32] Speaker 03:
Why isn't that a computer-specific or an internet-specific problem that needed resolved?

[00:21:40] Speaker 04:
Well, I think when we look at what's internet specific, we look at the abstract idea first.

[00:21:45] Speaker 04:
And here, what the claim is directed to and what it recites is the receipt of referrals and then the tracking thereof.

[00:21:53] Speaker 04:
So that is not a problem that occurs only on the internet.

[00:21:59] Speaker 04:
That's a problem that, as the district court recognized, is a fundamental economic practice, keeping track of who's sending me referrals so that I can reward them later.

[00:22:10] Speaker 04:
Now, the need to sign up with particular systems is really ordering the relationships between the humans, not an internet-specific problem, like a technical problem that's in, for example, the safe harbors in Alice.

[00:22:28] Speaker 03:
OK, thank you very much.

[00:22:29] Speaker 04:
Thank you, Your Honor.

[00:22:32] Speaker 03:
Mr. Newman, you have five minutes.

[00:22:33] Speaker 01:
Thank you, Your Honor.

[00:22:35] Speaker 01:
The public policy underlying the exception to Section 101.

[00:22:40] Speaker 01:
abstract ideas, is that a patent cannot tie up an idea that's commonplace, such as hedging risk or intermediated settlements by simply saying, apply it to a computer.

[00:22:54] Speaker 01:
In this case, associate's invention doesn't tie up anything.

[00:22:58] Speaker 01:
It doesn't tie up tracking and receiving of referrals.

[00:23:01] Speaker 01:
The merchant affiliate system did it before, and it will continue to do it in the same manner that it has.

[00:23:05] Speaker 01:
Wouldn't it tie up the process of linking actors on the internet

[00:23:10] Speaker 01:
know, Your Honor, that actors are linked because the webmaster before the invention would sign up with the merchant and continues to do that.

[00:23:18] Speaker 01:
In fact, this patent doesn't even tie up the idea of a virtual affiliate system.

[00:23:23] Speaker 01:
Another inventor could come along with a better process and provide access the same as associate 660 patent just in a different way, and that perhaps would be patent-eligible subject matter, and it would be better than the system.

[00:23:37] Speaker 01:
This system does not.

[00:23:39] Speaker 02:
Why isn't this case basically on all fours with Ultramershal?

[00:23:42] Speaker 02:
I mean, it's almost the same kind of idea.

[00:23:44] Speaker 02:
I mean, there it was ads on the internet, I think.

[00:23:48] Speaker 02:
And this is referrals.

[00:23:50] Speaker 02:
I mean, it sounds like the similar kind of commercial activity that's adapted to the internet environment, but is still an abstract idea.

[00:23:57] Speaker 01:
You're under Ultramershal.

[00:23:59] Speaker 01:
It's like commercials on television, but applied to the internet.

[00:24:02] Speaker 01:
The only distinction was the user was allowed to pick as commercial.

[00:24:05] Speaker 02:
But why isn't yours like referrals in the real world applied to the internet?

[00:24:11] Speaker 01:
Because this claim does not, the patent claims are not directed at referrals, but directed at access.

[00:24:19] Speaker 01:
Referrals existed before, they will continue to exist.

[00:24:22] Speaker 02:
You say that, but I mean, you read through the claims, the parts of claim one, and it talks about configuring it to do this, sending a request, doing that.

[00:24:31] Speaker 02:
That all sounds to me like sending referrals back and forth and determining who gets compensated for them.

[00:24:37] Speaker 01:
The referral system is already in place.

[00:24:39] Speaker 01:
Associates patent improves on it by allowing referrals from other sources.

[00:24:44] Speaker 01:
So under Ultramershal.

[00:24:45] Speaker 02:
Yeah, but that's your problem.

[00:24:47] Speaker 02:
The referral system's abstract.

[00:24:48] Speaker 02:
It's not patentable.

[00:24:50] Speaker 01:
A referral system is abstract?

[00:24:52] Speaker 01:
I agree that a referral system is abstract.

[00:24:55] Speaker 02:
Improving an abstract idea, I mean, you still haven't convinced me that that's

[00:25:01] Speaker 02:
you've improved it in a patentable way.

[00:25:03] Speaker 02:
You've just improved it in a way that doesn't require the person to be registered as part of the affiliate system.

[00:25:09] Speaker 02:
But the same could have been said for an in-person affiliate system.

[00:25:15] Speaker 01:
Your Honor, under Ultramershal, were that patent to survive, then it would be impossible to offer content in exchange for advertising.

[00:25:22] Speaker 01:
Here, it's still possible to offer referrals in

[00:25:26] Speaker 01:
every context, even within the context of an affiliate program or virtual regulations.

[00:25:31] Speaker 03:
If a referral system is abstract and you're given access to referrals, then aren't you preempting the entire referral field?

[00:25:42] Speaker 01:
No, Your Honor.

[00:25:43] Speaker 01:
I would challenge my friends on the other side to come up with any idea that's commonplace that could not be practiced

[00:25:52] Speaker 01:
if the associate 660 patent were to survive.

[00:25:56] Speaker 03:
But why is this panel, what can you tell me that it relates to DDR?

[00:26:02] Speaker 01:
This is similar to DDR.

[00:26:04] Speaker 01:
In DDR, users would go to a website and they would click on a link.

[00:26:10] Speaker 01:
Traditionally, those users would be redirected to another website, a merchant's website, just like here.

[00:26:15] Speaker 01:
But under DDR, they'd click on that link.

[00:26:18] Speaker 01:
They'd remain in the same website, which retains the same look and feel.

[00:26:21] Speaker 01:
but they are able to buy products from the merchant.

[00:26:24] Speaker 03:
It recreated that website.

[00:26:26] Speaker 01:
Essentially.

[00:26:27] Speaker 01:
And in this case, that same unconventional result occurs when a user clicks on a link at the webmaster rather than being directed to a merchant affiliate system using the merchant affiliate system's code.

[00:26:41] Speaker 01:
It is directed to the virtual affiliate system where there's a correlation and generating a URL that is functional in the merchant system so that the webmaster can send traffic.

[00:26:50] Speaker 01:
Before, a webmaster could not send traffic without configuring its own system to comply with the system that the merchant provided.

[00:26:59] Speaker 01:
Now, the webmaster need not do that.

[00:27:02] Speaker 01:
The webmaster only needs a single code from a single source and does not need to configure its system to work with several other systems, but rather a single system, the virtual affiliate system.

[00:27:15] Speaker 01:
And so unlike Bilsky or Alice, where there was an idea that we're all familiar with,

[00:27:19] Speaker 01:
simply apply it in a technological field or apply it on the Internet or apply it to a computer.

[00:27:25] Speaker 01:
This is a process for access that never existed before and doesn't preempt anything.

[00:27:31] Speaker 01:
But rather, receiving and tracking of referrals and electronic bookkeeping has always been around, always will be around, can continue.

[00:27:38] Speaker 01:
Associates Patent doesn't claim that.

[00:27:40] Speaker 01:
It's directed at providing webmasters with access to an existing merchant affiliate system without having to join that system.

[00:27:47] Speaker 01:
Thank you.

[00:27:47] Speaker 01:
Okay.

[00:27:48] Speaker 01:
Thank you very much for your argument.