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The United States Court of Appeals for the federal Senate is now open and in session.

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God save the United States and this honorable court.

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Please be seated, ladies and gentlemen.

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Good morning.

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We have five cases on the calendar this morning, two patent cases from the district court, a patent case from the PTO, two government employee cases, one of which is

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been submitted in the briefs and will not be argued.

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The first case is fair warning for Societrics Systems 2015-1985, Mr. Pacino.

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Thank you, Your Honor.

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May it please the Court.

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The district court made findings of the fact

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The invention of the 500 patent was not necessarily rooted in computer technology.

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These findings were incorrect, not supported by the complaint or other pleadings.

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And there's no real-world analog.

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There's zero evidence.

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Well, let's cut right to the claim, which is what it's all about.

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This is a method comprising generating a rule, applying the rule, and storing a hit.

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Why isn't that for the abstract?

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Your Honor, in the context of the audit logs, some of this isn't abstract.

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The generating is done by the computer.

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There's no dispute on that.

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But just adding a computer to an abstract method doesn't pass 101 muster.

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We appreciate that it doesn't pass 101 muster, Your Honor.

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However, what we're doing is applying a rule in a manner it hasn't been done before in a way to achieve a result, a more secure system.

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potentially mitigate against losses that could be financial, economic, or personal.

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What do you think the trial judge understood as an abstract idea?

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What was the understanding between you and the trial judge as to exactly what is an abstract idea?

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I don't think there was ever any articulation other than the judge's order.

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I'm sorry.

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Other than the judge's order, I don't think there was ever any understanding between us and the judge.

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Well, surely the judge wouldn't rule it's an abstract idea without knowing what an abstract idea is.

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Right.

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I appreciate your position, Your Honor, but the abstract idea here was so general, you might as well have said it was a method.

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that there was no distinction between saying... Methods are not abstract ideas.

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We have lots of method patterns.

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Right, but a method is a paradigm abstract, just like chess or machine.

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These things are abstract until we have some reflection of what is described in the claims, Your Honor.

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What do you think is an abstract idea?

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If the judge didn't have an idea, what did you have as an idea?

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In this particular case, the abstract would be to applying the rules in order to provide a more secure system, Your Honor.

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Well, I have a problem, as Judge Lurie alluded to, with the rule.

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It kept talking about the invention was to create a rule.

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What does that mean?

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Creating the rule is kind of like the Arrhenius equation here, in the sense that the rule is related to the autolog data and the information in the autolog, and using that information to determine whether

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across multiple applications is the problem being solved.

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Across multiple applications.

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Is it an algorithm and instructions for the computer to carry out?

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Is the rule an algorithm?

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I think the brain at the computer level can be considered like an algorithm.

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Could it be something as simple as whenever a user accesses a particular kind of database, the rule will be triggered?

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The rule is whenever somebody

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accesses this database, then we're going to hit that.

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I don't think so.

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But it could be as simple as that, couldn't it, since rule is pretty broad?

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Applying a rule to the autolog data, I think, has to occur after the activity, the application, is executed.

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And there's some activity in the computer environment.

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And at that time, that information is created for multiple applications, for example.

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And across multiple applications, the inventor, Kurt Lahn, realized that there was no mechanism in place to monitor a given user activity in the electronic environment across multiple applications.

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And what his solution is, and you could find out, Your Honor, at the 25th.

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I'm not familiar with that.

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I don't see it in the claim, though.

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Where is it in the claim, the idea of across various applications?

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Your Honor, that's not recited in a claim across various applications.

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However, that is a problem that was being addressed and stated in the specification of column one.

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And across this, there was also further problems that you could access different data stores, or you could access through different means, through different login names, through different mechanisms of that nature.

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And what Inventor Long realized is that there was no means to detect across multiple applications.

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and for a given user.

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Help me understand exactly what is it the trial judge did wrong other than rule against you.

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I think the trial judge made determinations of fact that this invention wasn't in the computer environment.

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Well, it clearly is in a computer environment.

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Does that make it abstract?

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Isn't this invention clearly part of the computer environment?

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Right, but we're actually using the rules to achieve a result to get a more secure system, Your Honor.

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And by having this information, you're able to secure the system and have to mitigate against potential loss, whether economic, financial, emotional, personal losses.

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And so what inventor Long realized is that looking at one application or activity in one application wasn't sufficient to capture all the activities that were occurring.

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or it could be fraud or misuse, a computer.

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This is spelled out in the column one at appendix 25.

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Are you saying that there isn't an abstraction here or that there's something more?

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Your Honor, to the extent I'm asked to say there's an abstraction, I would say we would be applying the rules to auto log data in order, in this case, we're achieving the result of something more as we're targeting

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specific user, the authorized user, and nobody had applied the auto log data in this manner before?

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Well, it's a two-step process, right?

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The first step is, is the patent directed to an abstract idea, whatever that may mean?

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Is that where your problem is, or are you in step two?

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I think we have a problem at both levels, Your Honor.

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Your problem is with both of them.

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Right.

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At the beginning level, if you're saying that in this case it was looking at human activity, that doesn't reflect the claims.

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Because in this case, the autolog reflects the electronic trail of activities that are executed in a computer environment.

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And that is not like the human activity.

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And the failure to appreciate that distinction, Your Honor,

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may have stifled the community, but not inventor Long, who actually was able to hide these rules in a manner which hadn't been applied before in order to achieve a result, which was to make the system more secureable to help mitigate against these losses.

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So the district court said that the abstract idea is the concept of analyzing records of human activity to detect suspicious behavior, right?

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And so you're saying that you think that there was a misunderstanding there because it should be instead directed to the idea of analyzing electronic records to detect.

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Well, you're looking at the trail of activities that are executed in a computer environment.

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I think that's a little different.

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And with such a sweeping statement of the abstract idea, I submit it's no different than saying this would have been a method.

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And it's effectively reading out the statute that does allow improvements based on old combinations of metastats, improvements in Section 101.

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Do you think this is an improvement patent?

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Is that your idea?

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I think this improves on what had been done before up in the field.

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Nobody has been applying the audit law data in this manner, Your Honor.

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Wouldn't the other patents that you're improving also be invalid as abstract ideas if they're all on the same subject matter?

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I'm not following the rationale here.

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But if you're improving a prior invention, there are at least two other patents in the background, right?

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Yes, Your Honor.

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And this is an improvement on those ideas, right?

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It's an improvement, yes, Your Honor.

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So if your improvement is invalid because it's an abstract idea, doesn't that by definition make those other patents invalid by definition?

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I don't know how you can improve.

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We're not improving the abstract idea, Your Honor.

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We're looking at the actual underlines of the system.

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OK.

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Your Honor, it's not like we're looking for snooze.

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It's not like Colombo or somebody of that nature got a computer.

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This is an information security specialist who understood the electronic systems and computer environments

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Nobody had looked at these autolog data and applied them in this manner.

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And nobody understood how to look at multiple applications.

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If you have apps on your phone or applications on your phone, you'll be able to look and see activity across multiple applications.

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Nobody had done that before.

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And in this case, that's the problem that had been solved.

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And I don't think IATRIK has disputed that in the red brief at all.

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And I think what they characterized the invention as was a business method.

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I think one of the other things they pointed out is that idea of across applications is not in your claims.

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So how do you respond to that?

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When you're talking about how what makes this different or makes this something that is a specific solution to a problem in the computer environment, you keep on mentioning that it's across various applications.

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That's where the technical

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aspect is that makes it something that was difficult to do as a technical matter.

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But where is that in the claim?

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I think the fact that nobody has done this before, the claims are broader than just across multiple applications.

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I don't think there's any language that says two applications or more are required, Your Honor.

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I think we're maybe delving into some concepts from the obviousness and the secondary considerations.

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I understand what you're saying, but when the claim isn't telling us more than

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It's a rule for monitoring audit log data that's pretty broad with respect to whether we're looking at an abstract idea or not with 101.

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And so I don't know if it's helpful to then look to the spec and say, oh, well, there's this specific technical problem we're trying to solve if it's not in the claim.

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Right.

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Your Honor, the application of the rule to data log data is in the claim.

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And that was the solution, and nobody had to go to the autolog data before.

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And then that's what allowed Kurt to be able to detect, monitor what is being executed across multiple applications.

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What's the best case that you can cite that you are the closest to that has upheld a patent like this?

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And my understanding, in recent times, there's only been one case, CDR, Your Honor.

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But before that, in deer.

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In deer, the improvement was the thermocouple, being able to detect the temperature of the curing polymer inside the mold.

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Deer, of course, was pre-ALICE, if we can say that.

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I understand, Your Honor.

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It's kind of hard to evaluate the significance of deer.

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You're into your rebuttal time.

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Would you like to save it?

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I'd like to save rebuttal here.

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We will do that.

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Ms.

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Tiddemore?

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Ms.

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Tiddemore, let's start out with the same set of questions that I started out with your colleague, which is you think this is an abstract idea.

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At least the judge thought it was an abstract idea.

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Yes, sir.

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And you're going to defend that proposition.

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Yes, your honor.

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Would you explain to the court

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what you understand, A, to be an idea, and B, to be an abstract idea.

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Certainly.

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Going back to your earlier question, I think that what the court understood an abstract idea to be was something that could be done in mental steps in the human mind.

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And that is what the district court looked at and looked at these claims and was able to see that the claims talked about some general criteria

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that could be used for generating a rule, which could be done by a human in the specification it talked about.

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It could be done by a consultant, or it could be done by the computer.

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Are you on the word idea, or are you on the word abstract?

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Well, I'm on the concept that this is an abstract idea, and the district court looked at that and looked at the claims, was focused on what was in the claims.

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Well, let's begin with the first proposition, which is that under step one, we have to conclude that this whole thing, including all of the claims, because if any one claim is not directed to an abstract idea, then the trial court is wrong.

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So first of all, the idea of idea.

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What do you think an idea is?

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Something in the head.

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Correct.

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A thought.

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Yes.

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And that's why the judge and the district court... Do you think all of these claims are thoughts?

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Yes, correct.

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Thoughts plus computer.

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Thank you.

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Thoughts plus computer, but we know from Alice that adding a computer doesn't save these claims.

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What's the opposite of an abstract idea?

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A tangible idea?

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And so what is a tangible idea?

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An idea that has been reduced to practice in the form of a transformation or

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Yes, we have to look to see an instantiation of the idea.

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So we have to look to see how the idea has been applied in the claims to, in the context of a computer environment, change the function of the computer itself.

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Why doesn't the DDR test?

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DDR was a different situation.

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DDR was a situation where the claims themselves specifically talked about using a hyperlink that would change the way that the computer normally operated, so that instead of being taken away from the web page, you would retain that information.

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Does that change the way?

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Is that guided by software, or is it by the construction of the computer?

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physical construction.

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I believe that in DDR, they were talking about software.

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And in this case, they're talking about software because if you look at the claimed invention, it says, according to one embodiment, a system and method are provided for tracking a user across logs.

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Well, logs are physical.

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are kept in a physical form, aren't they?

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It's software that keeps a record.

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Isn't that what a log is?

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Yes.

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Yeah, it's a record of something that's kept in a computer.

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The fact that it uses a computer, that makes it abstract?

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No, what makes it abstract... Well, just answer my question.

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The fact that it uses a computer doesn't make it abstract?

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No.

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So according to one embodiment, a system and method are provided for tracking a user across logs at an application layer of various applications that a user may access.

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Well, it's a lot of words.

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It may be that the problem with this invention, these claims, are it doesn't meet the requirements of 112 because 112 does say

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And that the specification shall conclude with one or more claims, particularly pointing out and distinctly claiming the subject matter which the inventor regards as it may be that their words don't quite do the job.

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But I'm not technically as skilled, I'm sure, as you are.

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But I understand what they're trying to do.

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What they're trying to do is set up a system that will go into the logs

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that record people's medical care.

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And in their system, they're trying to say, let's look at it in terms of time.

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Let's look at it in terms of number of entries, et cetera, et cetera.

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And let's see if we can figure out whether there is an abuse indicated by the way in which that log is being reviewed by someone using a computer.

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Isn't that what the invention is?

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That's generally my understanding, but the issue is that... It seems to me that's a very practical set of ideas.

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Now, the idea... Well, I shouldn't say set of ideas.

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That's a very practical thing they're trying to do.

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They're trying to create a program, a method, and if you look, for example, which

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There is one claim in particular, which seems to me to be kind of troublesome from the judge's viewpoint.

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It's pretty specific as to exactly what you're supposed to do with all this information.

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And they're using off-the-shelf hardware, admittedly, apparently, although it may be

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specially programmed computer.

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I don't know the difference, frankly, between a general computer that's given instructions and a special program computer that's given instructions to have a special program.

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I've never figured that out.

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You understand it better than I do.

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But either way, it seems to me what they're trying to do is a practical activity of evaluating how often there is a record in the log

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that that particular individual's health record has been accessed unusually a number of times.

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What is abstract about that?

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Help me understand what you understand is abstract.

[00:20:18] Speaker 04:
Sure.

[00:20:19] Speaker 04:
So what I understand is abstract is that the claims and you know this court in Accenture observed that we must look to the claims not to the specification and

[00:20:31] Speaker 04:
Maybe there is a 112 issue, but there's also a 101 issue here.

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Because when you look at the claims, the claims are talking generally about the concept of taking some criteria, generating a rule, applying the rule, and storing a hit in memory.

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And this is just the general idea of looking at human activity, whether it's

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human activity that was recorded electronically or human activity that was recorded on paper, the idea is what is in the claims.

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It's this idea of looking at this kind of data.

[00:21:09] Speaker 02:
Have you ever seen a patent that didn't have an idea in it?

[00:21:14] Speaker 04:
I think that all patents have ideas in them.

[00:21:17] Speaker 04:
I would agree with that.

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I bothered to look up a dictionary definition of abstract and it says,

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denoting something that is immaterial, conceptual, or nonspecific as an idea or quality.

[00:21:34] Speaker 02:
There's a lot of specific use of logs and records and information.

[00:21:40] Speaker 04:
But I think this case is no different than many other cases that this court has heard.

[00:21:45] Speaker 04:
I think this is very similar to the situation in the Accenture case, where

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the patent applied information to rules to determine tasks that were going to be used in the processing of insurance claims.

[00:21:57] Speaker 05:
I think it's very similar to ultramarcial.

[00:22:00] Speaker 05:
Is it your thought that there are a lot of very smart, good ideas that are just ideas, and therefore, if only supplemented with a computer in a standard way, don't meet the current test?

[00:22:17] Speaker 04:
Correct.

[00:22:20] Speaker 04:
We have to look at what the Supreme Court did in Alice and we have to understand what that means for taking an abstract idea and saying apply it on a computer and that's no longer enough.

[00:22:33] Speaker 02:
If somebody came up with an idea for a new combination of chemical elements and said, let's work it out through

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computer programs that would show us exactly how the balance is going to come out.

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And they patented that.

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You would say that's an abstract idea.

[00:23:01] Speaker 04:
It would depend what the claims said.

[00:23:04] Speaker 04:
If the claims were that broadly written, I think that might be an abstract idea.

[00:23:10] Speaker 05:
Well, if there was a method of determining

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what the ratio of the atoms in the compound would be.

[00:23:16] Speaker 05:
Maybe that's an abstraction.

[00:23:19] Speaker 05:
But if it's the result of the composition containing a particular ratio, that's a composition of matter.

[00:23:29] Speaker 04:
And I suppose it would depend on whether or not that had already been known in that field or not.

[00:23:36] Speaker 05:
Well, that's 102.

[00:23:40] Speaker 04:
Well, to some degree when we're looking at 101, we're also looking at whether there is an inventive concept that's involved.

[00:23:50] Speaker 04:
So it's not the same thing as 102 or 103, but there is that aspect that comes in in 101.

[00:23:56] Speaker 02:
Let's assume I want to patent an improvement on teaching swimming.

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And what I have come up with is an improved way to teach swimming.

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You get a pool.

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It has to be at least four feet deep so people don't hurt themselves.

[00:24:15] Speaker 02:
You have a student and you have a teacher.

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And your teacher says to the student, jump in the water and move your arms and legs.

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And I write a series of claims explaining how that's to be done, how you're supposed to have a pool, and you're supposed to have students who understand the language, et cetera, et cetera.

[00:24:38] Speaker 02:
Would you say that's an abstract idea, that patent is an abstract idea?

[00:24:43] Speaker 02:
It's a bad patent for a variety of reasons, but it's hardly abstract, do you think?

[00:24:52] Speaker 04:
Well, the claims are about teaching, the claims say... A method for improved teaching of swimming.

[00:25:04] Speaker 04:
Comprising a pool and a student.

[00:25:07] Speaker 02:
And all those things.

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And a student who is at least two feet tall and has two arms and two legs.

[00:25:14] Speaker 02:
And the method ultimately is to the student, jump in and move your arms and legs.

[00:25:20] Speaker 02:
Certainly not abstract.

[00:25:22] Speaker 02:
There's nothing abstract about that, is there?

[00:25:25] Speaker 02:
It's a crappy patent, but there's nothing abstract about it.

[00:25:30] Speaker 04:
Right?

[00:25:30] Speaker 04:
Probably not.

[00:25:32] Speaker 02:
OK, good.

[00:25:32] Speaker 02:
That's helpful.

[00:25:34] Speaker 02:
We know it when we see it, don't we?

[00:25:39] Speaker 02:
Yes, Your Honor.

[00:25:41] Speaker 02:
OK.

[00:25:41] Speaker 02:
Thank you.

[00:25:44] Speaker 03:
Earlier you said an abstract idea is something that you would do in your mind, you could do in your mind.

[00:25:51] Speaker 03:
What about the fact that your adversary has pointed out that this isn't something that one could just do in their mind?

[00:25:55] Speaker 03:
Instead, isn't something you could do with a pen and paper?

[00:25:59] Speaker 03:
It's not something accessing these files and all the computations that are required

[00:26:04] Speaker 03:
is not something that a person could do in their head.

[00:26:08] Speaker 04:
Well, the issue is that you have to look at the claims and what the claims are talking about.

[00:26:14] Speaker 04:
And this court's precedent has made pretty clear that even claims that require the use of a computer, you can still find that the underlying invention that's claimed is something that could be performed in the human mind.

[00:26:32] Speaker 04:
And that's what the district court did.

[00:26:35] Speaker 04:
And that's what I was talking, you know, I was starting to talk about at the very beginning about the way that the district court looked at these different claims and said, okay, so we're applying rules to, you know, data about user activity and we're going to see if there's a hit and all these are things that could be done in the human mind and, you know,

[00:26:58] Speaker 04:
Anyone doing any kind of auditing in medical records could do that in that way, to look to see, or certain criteria met.

[00:27:07] Speaker 04:
OK, it's met.

[00:27:09] Speaker 03:
All right, now I'm going to note that down on my paper.

[00:27:12] Speaker 03:
You'd have to use the tangible computer in order to be able to access those files to look at all that data, right?

[00:27:18] Speaker 03:
I mean, there's no doubt that the claim is talking about doing this on a computer.

[00:27:21] Speaker 03:
It's a specific environment.

[00:27:24] Speaker 04:
Right, but even if some physical steps are required to get the information from the database, like printing something from the database, that kind of data gathering is not enough.

[00:27:38] Speaker 04:
I mean, we know that from the cyber source case that talked about that, that said that those kinds of mental steps were not patent eligible.

[00:27:47] Speaker 04:
And cyber source is a very similar case in the sense that cyber source was also looking

[00:27:54] Speaker 04:
a method of detecting fraud in credit card transactions over the internet.

[00:28:00] Speaker 04:
And so it was looking at internet addresses and taking the internet addresses and creating a map and then using that map to determine... So if that's abstract, this is certainly abstract.

[00:28:12] Speaker 02:
Now there's always a possibility that was wrong, but that's besides the view.

[00:28:16] Speaker 02:
If you go to claim 14 for us, can you look at claim 14 for a minute?

[00:28:22] Speaker 02:
Claim 14 is a non-transitory.

[00:28:25] Speaker 02:
That language was put in at the request of the examiner because the examiner thought that saved it from being abstract.

[00:28:33] Speaker 02:
OK, I'm glad the examiner thought so.

[00:28:37] Speaker 02:
A non-transitory computer readable medium.

[00:28:43] Speaker 02:
What do those words mean?

[00:28:44] Speaker 02:
What does a computer readable medium mean to you?

[00:28:48] Speaker 02:
Is that like a disk or a hard drive or something?

[00:28:52] Speaker 04:
Yes.

[00:28:53] Speaker 02:
It's a thing, right?

[00:28:56] Speaker 02:
Thumb drive.

[00:28:57] Speaker 02:
Thumb drive.

[00:28:57] Speaker 02:
Could be any number of those things.

[00:28:59] Speaker 02:
OK.

[00:29:00] Speaker 02:
But it's a thing.

[00:29:01] Speaker 02:
You could hold it in your hand.

[00:29:03] Speaker 02:
A non-transitory computer readable medium with executable instructions embodied thereon for performing a method of detecting improper access of a patient's protected health information

[00:29:21] Speaker 02:
in a health care system computing environment.

[00:29:25] Speaker 02:
And then it goes on and on and on with the usual words.

[00:29:29] Speaker 02:
Is that abstract in your view?

[00:29:32] Speaker 04:
Yes, under Alice.

[00:29:33] Speaker 02:
Pardon?

[00:29:34] Speaker 04:
Under Alice, the court has determined that those kinds of claims.

[00:29:38] Speaker 02:
What is it under Alice?

[00:29:40] Speaker 02:
What is it in Alice that says that's abstract?

[00:29:42] Speaker 04:
The court has specifically said that system claims and computer readable medium claims

[00:29:47] Speaker 04:
you know, that don't add anything besides a reference to a computer readable medium are no different than the impermissible method claim.

[00:29:58] Speaker 05:
In other words, the medium is equivalent to the method.

[00:30:00] Speaker 04:
Yes.

[00:30:02] Speaker 04:
Yes, Your Honor.

[00:30:03] Speaker 04:
I did also want to just quickly address one point.

[00:30:06] Speaker 05:
Well, quickly, I didn't give you fair warning, but your time is up.

[00:30:12] Speaker 05:
And so we'll give a bottle for Mr. Persino.

[00:30:24] Speaker 00:
Your Honor, returning to the question about what case is closest, and this is going to be in the Post Office, would be DDR.

[00:30:31] Speaker 00:
And we have explained why the problem exists in the computer environment, that there's multiple applications, that the user name, the identity of different data stores, they existed.

[00:30:41] Speaker 00:
And I don't think that's been disputed.

[00:30:43] Speaker 00:
And furthermore, the solution

[00:30:46] Speaker 00:
in a computer environment and measure the activities that are executed in a computer environment.

[00:30:56] Speaker 00:
We think this falls directly under the rationale of DDR.

[00:30:59] Speaker 00:
And in all honesty, Your Honor, as far as I could tell, that's the only case post-ALICE that this Court has affirmed patentability of claims under Section 101.

[00:31:09] Speaker 00:
Returning to ALICE, if

[00:31:11] Speaker 00:
Alice at the Supreme Court, there was a stipulation about the computer readable medium claims and the method claims as standing and falling together.

[00:31:20] Speaker 00:
Here, we don't think that the method itself would be unfathomable under Alice or any other test.

[00:31:27] Speaker 00:
And for that reason, it should be patable in and of itself.

[00:31:31] Speaker 03:
Just to clarify, are you saying all the claims stand and fall together?

[00:31:35] Speaker 00:
No, I think we argue the method and the system claims.

[00:31:41] Speaker 00:
separately, but we didn't in all fairness argue the CRM claims differently, the method claims to be honest with you, Your Honor.

[00:31:49] Speaker 00:
So we put the method as CRM similar to Alice, but I don't think Alice is probative in that regard.

[00:31:58] Speaker 05:
There's nothing further.

[00:31:59] Speaker 05:
We'll take the case under advisement.

[00:32:01] Speaker 05:
Thank you.

[00:32:02] Speaker 05:
Thank you, Your Honor.

[00:32:04] Speaker 05:
Next case is due.

[00:32:05] Speaker 05:
Please ceremonially sit and let me announce