[00:00:00] Speaker 02: Even if it was a quote from the most perfect of all courts. [00:00:06] Speaker 02: Sure. [00:00:08] Speaker 02: Yeah, sure. [00:00:27] Speaker 02: OK. [00:00:30] Speaker 02: inventor holdings versus bed bath and beyond mr. wine black [00:01:09] Speaker 03: Good morning, Your Honors. [00:01:10] Speaker 03: May it please the court? [00:01:11] Speaker 03: The district court's opinion regarding U.S. [00:01:13] Speaker 03: patent number 6381-582 should be reversed for the following four reasons. [00:01:19] Speaker 03: First, the district court's opinion recognized that not all claims were asserted and nevertheless invalidated claims where there was no case or controversy and thus no jurisdiction. [00:01:29] Speaker 04: Did you ask us to correct that error in your blue brief? [00:01:33] Speaker 03: Yes, we did. [00:01:34] Speaker 03: We said that not all the claims were asserted. [00:01:37] Speaker 04: Where did you ask us to vacate and remand that part of the holding? [00:01:43] Speaker 03: We asked for that to be vacated and remanded, I believe. [00:01:47] Speaker 03: No, you asked for the whole thing. [00:01:49] Speaker 04: Where specifically did you say the district court's invalidation of the entire patent was overbroad and for the claims that weren't asserted should be vacated? [00:02:04] Speaker 04: Because I see your argument, but I don't see where you asked us in your blue brief to make that point. [00:02:11] Speaker 04: Maybe I missed it. [00:02:14] Speaker 03: I know that we've pointed out in a footnote. [00:02:22] Speaker 04: Well, if you're going to a footnote, you're in trouble already, because we've often held you don't preserve things by putting it in a footnote. [00:02:31] Speaker 03: There it is. [00:02:31] Speaker 03: It's on page 14 of [00:02:34] Speaker 03: the blue brief. [00:02:35] Speaker 03: It says, and this is not the footnote, second sentence. [00:02:41] Speaker 03: However, the district court failed to examine or analyze all of the claims, including but not limited to claims 69 and 73, which contain means plus function elements when ruling that all the claims of the 582 patent were invalid. [00:02:54] Speaker 04: See, I don't understand that because this is not separately saying even if the district court is right as regards to the asserted claims, it still should be [00:03:03] Speaker 04: vacated with all of these others. [00:03:05] Speaker 04: It seems to me that you were trying to argue that these weren't invalid because of these other claims, but they weren't an issue. [00:03:13] Speaker 04: I mean, is this what you have to specifically set out that the district court's judgment was overly broad? [00:03:25] Speaker 04: Because the heading here is, the district court erred in invaliding the 582's patents claims. [00:03:33] Speaker 03: And Your Honor, we put that heading because the district court was wrong to invalidate all of the claims, because not all of the claims were at issue. [00:03:41] Speaker 03: Even Bed Bath and Beyond acknowledged this in its brief on page eight and in the appendix at page A 1014, it showed that seven claims were asserted. [00:03:53] Speaker 03: And then prior to the 14th. [00:03:57] Speaker 04: I just have a heart. [00:03:57] Speaker 04: I mean, I see what you're saying. [00:04:00] Speaker 04: Maybe that's enough, but it's a pretty [00:04:03] Speaker 04: pretty you know ambiguous way to preserve that because you don't certainly don't in your prayer for relief or conclusion or anything recognize that the district court's judgment should be vacated at least in part with to the unasserted claims. [00:04:21] Speaker 04: You have that one sentence that talks about it being overbroad but you never specifically ask us even if we affirm the judgment to vacate and remand as to the unasserted claim. [00:04:33] Speaker 03: that we believe that the district court's opinion should be reversed because it invalidated all the claims. [00:04:42] Speaker 03: Well, I understand. [00:04:43] Speaker 04: But that's the problem is if we disagree with you on your reasons for reversing all of the claims because we think the district court was entirely right on 101, [00:04:55] Speaker 04: It does not seem to me that you specifically laid out an alternative argument as to the asserted claim, unasserted claims. [00:05:02] Speaker 00: Let me follow that by pointing to your statement of the issues. [00:05:07] Speaker 00: In an earlier case, we had 10 issues, all of which, silly. [00:05:13] Speaker 00: But in your case, you only have three. [00:05:17] Speaker 00: And the issue that Judge Hughes is pointing to is not one of your issues. [00:05:23] Speaker 00: So technically, [00:05:25] Speaker 00: You have not raised before us the issue of whether the court erred in including claims that were not being asserted. [00:05:36] Speaker 03: In the effort to not list more than three issues, we believe that invalidating claims that were not an issue is encompassing issue one, whether the district court erred in finding the 582 patent invalid under 101, [00:05:54] Speaker 03: Bed Bath & Beyond's own brief acknowledged that there were unasserted claims. [00:05:58] Speaker 03: So Bed Bath & Beyond knows as well that there were claims not at issue and the order went too far. [00:06:03] Speaker 00: You want us to read issue number one to include two subsets, A, 101 and B, unasserted claims. [00:06:15] Speaker 03: We think that because the district court has validated [00:06:19] Speaker 03: all of the claims, including those not at issue, that the unasserted claims are encompassed in issue one. [00:06:23] Speaker 03: That's correct, Your Honor. [00:06:27] Speaker ?: Okay. [00:06:31] Speaker 03: Now, the district report should also be overturned because Bebath-Meyon did not satisfy its burden of production. [00:06:39] Speaker 03: Questions of fact exist. [00:06:41] Speaker 03: And the district court has since recognized on March 17, 2016, when denying a motion to dismiss of Bristol-Meyer's squib [00:06:48] Speaker 03: the Merck & Company, that patents are presumed valid, the clear and convincing burden of proof applies to 101 challenges, and questions of fact can exist when parties disagree as to whether step two of Alice is satisfied. [00:07:03] Speaker 00: Why is your claim not an abstract idea, sir? [00:07:10] Speaker 00: Would you give us a definition of an abstract idea and tell us why your claims do, or your invention, whichever it is, [00:07:18] Speaker 00: do not fall within the concept. [00:07:21] Speaker 00: What is your definition of the concept? [00:07:25] Speaker 03: Looking at ALICE step one for what the claims are directed to, the claims of the 582 patent are directed to methods, apparatuses, and articles of manufacture for processing payments that make local and remote sellers and the tracking of their respective orders interoperable. [00:07:41] Speaker 00: All right. [00:07:41] Speaker 00: And why does that [00:07:44] Speaker 00: not fit within your definition. [00:07:46] Speaker 00: You haven't given me your definition of an abstract idea. [00:07:51] Speaker 00: My question to you, what is an abstract idea and why are you not one of them? [00:07:58] Speaker 03: An abstract idea, looking at the case law by the Supreme Court, has been items such as algorithms or fundamental economic practices. [00:08:12] Speaker 03: Neither of which are what the 582 patent is directed to. [00:08:15] Speaker 02: Doesn't it involve a commercial transaction while providing protection for the consumer's financial information? [00:08:24] Speaker 03: It does do that, Your Honor. [00:08:27] Speaker 03: With the matter in which it does it, it is then concrete and tangible, which takes it out of any abstractness. [00:08:34] Speaker 03: Which does what? [00:08:35] Speaker 03: It's concrete and tangible, so then it takes it out of being abstract. [00:08:41] Speaker 04: What about its concrete and tangible? [00:08:44] Speaker 03: So at the time of the invention. [00:08:46] Speaker 03: That you go to a store? [00:08:47] Speaker 03: That's overlooking what the invention did and what the state of the art was at the time. [00:08:55] Speaker 03: In 1997, persons of ordinary skill in the art did not know how to combine technology such as database management, electronic communications, operations and logistics, and payment reconciliation. [00:09:08] Speaker 03: And what that means here is that [00:09:10] Speaker 03: If you went into a store and went to a point of sale terminal, that terminal was programmed in a specific language. [00:09:17] Speaker 03: That point of sale terminal could not communicate with a remote seller's backend server or system where the order was placed and where inventory is made. [00:09:30] Speaker 00: So your invention is an improvement in software for financial transactions. [00:09:41] Speaker 00: That is, you're going to add certain... Well, let me ask you this hypothetical. [00:09:46] Speaker 00: I go into Joseph A. Banks and I want to buy a suit. [00:09:52] Speaker 00: One suit, they're going to give me four free. [00:09:56] Speaker 00: That's okay. [00:09:58] Speaker 00: They don't have my size, so the clerk says to me, let's look in the catalog and see if we carry your size. [00:10:04] Speaker 00: They look in their catalog and they find, yes, they do carry my size. [00:10:10] Speaker 00: in other stores. [00:10:13] Speaker 00: So the clerk calls the store in Omaha, and Omaha has, yes, we have four in his size. [00:10:21] Speaker 00: And the clerk says, fine. [00:10:24] Speaker 00: We want to get those. [00:10:25] Speaker 00: We'll reimburse you because it's in your inventory. [00:10:30] Speaker 00: And you'll ship it directly to the customer. [00:10:33] Speaker 00: They agree. [00:10:35] Speaker 00: I pay the clerk here in Washington. [00:10:38] Speaker 00: Is that an example of your invention? [00:10:41] Speaker 03: No, it is not, Your Honor. [00:10:43] Speaker 03: Why not? [00:10:43] Speaker 03: In that situation, you only have one seller. [00:10:45] Speaker 03: There's a fake bank. [00:10:47] Speaker 03: You have no remote order because at that point in time, the person is at the store placing the order at the store. [00:10:56] Speaker 03: There's no code that's being used by the point of sale terminal. [00:10:59] Speaker 03: Judge Plager forgot to mention he was on the phone with the salesman. [00:11:05] Speaker 03: It's still, there's only one seller. [00:11:07] Speaker 03: So there's not one. [00:11:07] Speaker 03: There's not a local or remote seller. [00:11:09] Speaker 03: There's only one. [00:11:09] Speaker 03: So there, it's the local seller. [00:11:12] Speaker 03: There's no code. [00:11:14] Speaker 03: There's no point of sale system determining if the code relates to a local or remote order. [00:11:19] Speaker 04: Are you saying that the remote seller and the local seller are different entities in your claims? [00:11:29] Speaker 03: What we were saying is that they are different entities. [00:11:35] Speaker 03: Or there is the potential that they can be basically affiliated entities under the same umbrella. [00:11:45] Speaker 00: But in the hypothetical... That's what my two stores are. [00:11:47] Speaker 00: They're affiliated entities because they're individually owned. [00:11:53] Speaker 00: They're franchises. [00:11:55] Speaker 00: Now, I don't know whether Joseph A. Bank actually has franchises, but let's assume they do. [00:12:01] Speaker 00: They're franchise stores. [00:12:03] Speaker 00: And so the local store, who I've called on the phone to get the thing, says, don't worry about it. [00:12:10] Speaker 00: We know where we can get them for you. [00:12:13] Speaker 00: And they get them for me by paying the other store, because it's in their inventory. [00:12:19] Speaker 00: They take their commission, and they have it delivered to me. [00:12:22] Speaker 00: And I've paid for it by going to the local store and giving them my credit card, which they didn't accept. [00:12:29] Speaker 00: But that's a separate issue. [00:12:31] Speaker 03: Right. [00:12:32] Speaker 03: So first, they're still [00:12:34] Speaker 03: If they're separate franchises, you could still say that there is still no code at all. [00:12:41] Speaker 03: Zero. [00:12:42] Speaker 03: There's also no point of sale terminal determining the price for the order or any determination. [00:12:49] Speaker 04: Wait. [00:12:50] Speaker 04: So here's where I think you're getting into trouble, at least for me. [00:12:55] Speaker 04: When you talk about point of sale terminal, what do you mean? [00:12:58] Speaker 04: A point of sale terminal is some type of program computer. [00:13:04] Speaker 03: That's correct. [00:13:04] Speaker 03: That itself has been independently patentable. [00:13:07] Speaker 03: It's been independently patented. [00:13:09] Speaker 03: There are patents on point of sale terminals. [00:13:12] Speaker 03: It is a concrete machine. [00:13:13] Speaker 00: Yeah, but that's not what your claims or your invention requires, because your invention says that the seller, the remote seller, will have a contract with the local store. [00:13:27] Speaker 00: And that's the preliminary step. [00:13:29] Speaker 00: The remote seller comes in and makes a contract with the local store [00:13:34] Speaker 00: that the local store will work with the remote seller. [00:13:38] Speaker 00: Isn't that what you're... No, Your Honor. [00:13:40] Speaker 03: There's nothing in the claims that require there be a contract at all. [00:13:45] Speaker 04: Why does it matter that the point of sale computer is independently patentable? [00:13:51] Speaker 04: At some point, all computers were patentable, but Alice and all these other cases have recognized that doing an abstract idea on a computer is not enough to make it 101 eligible. [00:14:05] Speaker 04: You're not claiming a specialized point of sale computer. [00:14:11] Speaker 03: The manner in which it is programmed does make it a special point of sale terminal. [00:14:17] Speaker 04: So you're saying that your method involves a programmed computer and that takes it out of 101. [00:14:29] Speaker 03: We are saying that a point of sale system is concrete and tangible, so therefore it's out of point of order. [00:14:33] Speaker 04: And it's concrete and tangible because it's programmed in a special device? [00:14:41] Speaker 04: Yes, and it's an actual physical device that you can actually pick up and use. [00:14:44] Speaker 04: Isn't that entirely inconsistent with just hordes of precedent from the Supreme Court and this court on that point? [00:14:52] Speaker 03: Well, because there are machines, it's a machine. [00:14:56] Speaker 03: And machines are still eligible subject matter. [00:14:59] Speaker 04: Are you really arguing to me today that a program general purpose computer renders this patent eligible? [00:15:08] Speaker 04: Because you could go do a Westlaw search in five minutes and find at least 20 cases where we've held the opposite. [00:15:17] Speaker 03: Your Honor, a point of sale terminal is not a general purpose computer. [00:15:21] Speaker 03: I see that in my rebuttal time. [00:15:22] Speaker 03: But it's a specific machine that is used solely for consumer transactions, in fact, [00:15:28] Speaker 03: IBM created it, the whole notion of having like a SKU, which is the code that's entered into the machine and pulling up a price, that is solely for point of sale terminals. [00:15:39] Speaker 03: It's not just like an IBM computer that you could buy at Best Buy or a Dell or a Gateway. [00:15:46] Speaker 00: Okay, may we continue our non-alarm question? [00:15:51] Speaker 00: Open up your patent to column nine, please, sir. [00:15:56] Speaker 00: beginning at line 18. [00:16:02] Speaker 00: In practicing the present invention, preliminary relationships are preferably established between the catalog merchant who operates remote seller system, the processing merchant who operates remote processor system, and the retail merchant who operates local POS system. [00:16:19] Speaker 00: More specifically, contractual relationships. [00:16:24] Speaker 00: That's a contract. [00:16:26] Speaker 00: Contractual relationships are established between the parties where under the retail merchant agrees to accept and forward customer payments to the catalog merchant in exchange for an agreed upon payment for other remuneration. [00:16:41] Speaker 00: Other contractual relationships are preferably established, etc., etc. [00:16:47] Speaker 00: There's nothing in there that calls for some sort of special machine or anything else. [00:16:53] Speaker 00: There's going to be an agreement between the remote merchant and the local merchant that this is the way the thing's going to work. [00:17:03] Speaker 00: Am I in the wrong place, or is there something I'm missing? [00:17:08] Speaker 03: Your Honor, that's the best mode description in order to get the remote seller and the local seller to actually want to do this together. [00:17:17] Speaker 03: But the place you should be looking at is column five, [00:17:24] Speaker 03: line 29, the system overview. [00:17:28] Speaker 00: That section has... A retail system is shown including a remote seller system connected to a local point of sale system through a remote processor system. [00:17:44] Speaker 00: Nothing is said about the remote processor system requiring some sort of anything other than their standard [00:17:52] Speaker 00: computer systems, but that's besides the point. [00:17:56] Speaker 03: The technology here, the reason why looking at the ALICE test, there's an inventive concept here, is because there's non-routine programming required by the claims in order to make the advancements so that the point of sale terminal could communicate with the remote seller system. [00:18:13] Speaker 03: That didn't happen before. [00:18:15] Speaker 03: And for Bed Bath & Beyond to say, well, look at common sense, and that's what the judge is allowed to use, [00:18:22] Speaker 03: The court has held that if common sense is going to be applied by the district court, the district court has to dot the i's and connect the t's. [00:18:30] Speaker 03: So for an appeal, you can see the rationale. [00:18:34] Speaker 03: Wrap it up, Mr. Warriner. [00:18:36] Speaker 03: You're going to wrap it up? [00:18:37] Speaker 03: Yes. [00:18:37] Speaker 03: The district court did not do that here. [00:18:40] Speaker 03: The district court's opinion is conclusory. [00:18:43] Speaker 03: Without looking at any facts, it's all based on conjecture. [00:18:47] Speaker 03: I'm going to give you a minute on the rebuttal. [00:18:50] Speaker 03: Thank you, Dr. Warriner. [00:18:56] Speaker 00: Mr. Conrad, I'm going to treat you the same way I treated Mr. Weinblatt. [00:19:02] Speaker 00: I'm going to start out by asking, you're claiming that his invention is an abstract idea. [00:19:09] Speaker 00: Isn't that right? [00:19:10] Speaker 00: That's correct, Your Honor. [00:19:11] Speaker 00: That's your case. [00:19:12] Speaker 00: Define for me what you understand to be an abstract idea, please. [00:19:17] Speaker 01: Yes, Your Honor, and that's the question, isn't it? [00:19:19] Speaker 01: An abstract idea is [00:19:24] Speaker 01: An idea that's divorced from the means or structure for carrying out that idea. [00:19:32] Speaker 00: An idea that is divorced from the means or structure for carrying out that idea. [00:19:41] Speaker 01: That's right. [00:19:43] Speaker 01: So a good example, and we're going to go way back for this one. [00:19:46] Speaker 00: Let's not go to a good example. [00:19:48] Speaker 00: Let's simply apply it to the invention before us. [00:19:53] Speaker 00: Their idea is to have a local merchant accept payment for goods ordered from a remote seller. [00:20:04] Speaker 00: Isn't that right? [00:20:05] Speaker 00: That's correct. [00:20:05] Speaker 00: Basically what it's all about. [00:20:08] Speaker 00: And the way they want to do it is through this computer system with some sort of code. [00:20:16] Speaker 00: That's the means. [00:20:17] Speaker 00: And the structure is the routine business [00:20:22] Speaker 00: interaction by computer. [00:20:25] Speaker 00: That idea is not divorced from the means and the structure. [00:20:30] Speaker 00: It's incorporated right into the means and the structure. [00:20:33] Speaker 00: So I think you've just defined yourself out of a case. [00:20:36] Speaker 01: Well, I disagree, Your Honor. [00:20:38] Speaker 01: It's a question of degree, and it's one that really depends upon the context of every case. [00:20:44] Speaker 01: It's a degree of means or structure. [00:20:46] Speaker 01: That's right. [00:20:47] Speaker 01: It's a look at the invention as a whole that the patentee has described. [00:20:52] Speaker 01: And has the patentee developed a means for accomplishing their idea that is of the sort that the patent laws are intended to protect? [00:21:04] Speaker 01: Because if you have a means that's so broad that it is the kind you see here where it is simply receiving information or transmitting information, without a new way of doing that, that is an advancement of the arts, [00:21:21] Speaker 01: then the patentee simply hasn't invented... He hasn't described it adequately. [00:21:26] Speaker 01: Well, perhaps, Your Honor, maybe he did describe it in the specification, but what he may have done, which is what we have here in this case, is he's claimed the broad idea. [00:21:37] Speaker 01: So perhaps the patentee may have said... He wasn't broad about his ideas. [00:21:40] Speaker 00: The idea is quite specific. [00:21:43] Speaker 01: Well, I disagree that it's quite specific, Your Honor. [00:21:45] Speaker 01: I'll give you one example. [00:21:46] Speaker 01: Okay. [00:21:48] Speaker 01: In this case, let's talk about the code, for example. [00:21:51] Speaker 01: What is the code? [00:21:54] Speaker 01: Is it anything specific in this case? [00:21:57] Speaker 01: It's not. [00:21:58] Speaker 01: There's actually statements in the patent that describe how the code really could be anything for identifying the catalog merchant or identifying the product. [00:22:08] Speaker 00: I assume he would use an R for remote and an L for local. [00:22:14] Speaker 00: That's a code. [00:22:15] Speaker 00: That's simple enough. [00:22:16] Speaker 00: It is a code. [00:22:16] Speaker 00: He doesn't have to spell that out, does he? [00:22:18] Speaker 00: Wouldn't someone of ordinary skill like me know how to do that? [00:22:22] Speaker 01: Well, you may know how to do that, but what are you going to foreclose if that's what you're allowing the patentee to patent? [00:22:30] Speaker 01: If you're saying, let's use a code. [00:22:33] Speaker 01: Codes have been used for the longest time. [00:22:35] Speaker 00: Well, your argument is his claim. [00:22:38] Speaker 00: By the way, do we look at the claim to determine what it is that's the abstract idea, or do we look at the invention [00:22:45] Speaker 00: as described in the written description and in all of the various 74 claims in this particular patent. [00:22:55] Speaker 01: Yes. [00:22:55] Speaker 01: You start with the claims because that's the definition of what is the scope of the invention being claimed. [00:23:02] Speaker 01: But you have to look at it in the context of the entire patent. [00:23:06] Speaker 01: And we know that because we have to understand what these words are. [00:23:09] Speaker 00: What is it he's trying to say? [00:23:10] Speaker 00: So doing it that way, your argument, and it's perfectly [00:23:16] Speaker 00: sounds like a good argument is that they don't spell it out in enough detail. [00:23:22] Speaker 00: In the claims? [00:23:22] Speaker 00: In the claims. [00:23:24] Speaker 00: They don't explain what the code is. [00:23:26] Speaker 01: Well, they don't explain how to use the code to accomplish the idea of what they want to use it for. [00:23:33] Speaker 00: So in this case... Wait a minute, I don't understand that sentence. [00:23:36] Speaker 00: Let's assume the code is either an R for remote or an I for local, and the local guy puts in an R indicating [00:23:45] Speaker 00: This payment is for the remote order I sent you earlier. [00:23:48] Speaker 00: They all understand that. [00:23:49] Speaker 00: What's wrong with that? [00:23:52] Speaker 00: What do you mean that doesn't work? [00:23:56] Speaker 01: Well, all you've done is something that we've done for the history of mankind, which is talk to each other. [00:24:02] Speaker 00: Isn't that an obviousness problem? [00:24:04] Speaker 01: Your honor, there is some overlap. [00:24:07] Speaker 00: Are you overlapping obviousness into indefinite or abstract idea? [00:24:12] Speaker 01: I don't think you have a way to get around the fact that there is some overlap. [00:24:18] Speaker 01: And this has been said by the Supreme Court as well that 101 is more of a wholesome concern about what do you believe the patent laws are intended to protect in order to preclude [00:24:32] Speaker 01: what could be wonderful inventions coming out within the scope of what you've claimed without precluding all those possible inventions. [00:24:41] Speaker 01: Now, the patent laws are intended to protect excluding certain kinds of inventions. [00:24:47] Speaker 01: And the benefit from that may be that there are ways to get around it that could be beneficial to society by having people try to invent new ways of doing the same thing. [00:24:59] Speaker 01: When you claim all the ways of doing the same thing, [00:25:02] Speaker 01: Then that's where 101 has stepped in and said, no, no, no. [00:25:09] Speaker 01: What you've got here is really just an idea. [00:25:12] Speaker 01: There's a lot of different ways of doing this idea, but what you've claimed is the idea. [00:25:17] Speaker 00: No, he claims that you go into the local merchant with your credit card. [00:25:24] Speaker 00: I mean, I don't know how much more specific you can get. [00:25:28] Speaker 00: What alternatives is he [00:25:32] Speaker 00: blocking by saying, go into the local merchant who's already made a contract with the remote retailer, remote provider. [00:25:43] Speaker 00: First, they have to have a contract. [00:25:44] Speaker 00: Well, that's pretty specific. [00:25:46] Speaker 02: How is that not a standard business method as well? [00:25:49] Speaker 02: I'm sorry, you're on. [00:25:50] Speaker 02: I said, how is that not a standard business method? [00:25:53] Speaker 01: How is what not a standard business method? [00:25:55] Speaker 01: What Judge Plager just described to you. [00:26:00] Speaker 01: things that are done in business. [00:26:02] Speaker 01: That's correct. [00:26:04] Speaker 02: Here, the patentee has blocked all patent standard business method, can you, because it's an abstract idea. [00:26:12] Speaker 01: This is one of those cases where we can just generally describe it as a business method. [00:26:20] Speaker 04: Why not? [00:26:20] Speaker 04: I mean, it's a method for paying for a remote [00:26:25] Speaker 04: order on site. [00:26:26] Speaker 04: I mean, it sounds like a payment method. [00:26:29] Speaker 04: It sounds to me indistinguishable from some of our other cases in the Supreme Court cases where you've had things like hedging or sureties, and sometimes you put them on a computer. [00:26:39] Speaker 04: And that's not enough to make them patent eligible. [00:26:43] Speaker 01: You're right, Art. [00:26:44] Speaker 01: I'll take that back. [00:26:45] Speaker 01: It is a business method in a sense, but there are different kinds, for example. [00:26:48] Speaker 01: There may be financial products, for example. [00:26:54] Speaker 01: There may be software that's simply telling the computer to do something without anything about the computer being special other than it'll do it for you. [00:27:05] Speaker 01: And then there are contractual arrangements, legal intangibles about how do you organize humans to communicate together and to work together. [00:27:17] Speaker 01: So when you speak of business methods, there's a lot of different kinds. [00:27:20] Speaker 01: This one is more about [00:27:22] Speaker 01: an overlap between legal intangibles and organizing human activity. [00:27:28] Speaker 01: There are a remote seller and a local seller, and the local seller accepts payment on behalf of the remote seller. [00:27:35] Speaker 01: That's it. [00:27:36] Speaker 01: And all they've done here in this patent is dress it up with computer technology. [00:27:43] Speaker 01: The goal, I don't want to speak to the motive, but the effect of that is that let's have a big business idea [00:27:52] Speaker 01: which is just a small variation on what has been done before. [00:27:57] Speaker 01: So maybe no one's done it before, but that's only because they didn't do it, not because it's necessarily an advancement of anything. [00:28:05] Speaker 01: Let's claim computers doing all this. [00:28:10] Speaker 01: And what you've done in modern society is preempt all ways of doing this. [00:28:16] Speaker 01: And I want to point out, [00:28:17] Speaker 01: I don't believe I've seen anything in the briefing or the record, and even the expert testimony which touches on preemption that the appellant put in the record. [00:28:26] Speaker 01: Nowhere is there a, I don't believe a statement, or at least no persuasive showing that remote sellers having a local seller accept payment on their behalf, maybe when computers are used. [00:28:47] Speaker 01: But that's been precluded. [00:28:50] Speaker 01: In every sense of the word, that scenario, that agency relationship. [00:28:55] Speaker 01: It goes on all the time. [00:28:57] Speaker 01: It goes on all the time in other contexts, in the context of a financial transaction. [00:29:02] Speaker 00: It may well be that his so-called invention is obvious. [00:29:07] Speaker 00: The claims are indefinite under 112. [00:29:09] Speaker 00: It's obvious under 103. [00:29:12] Speaker 00: Uh, it probably is anticipated under 102. [00:29:16] Speaker 00: There's enough of that going on. [00:29:18] Speaker 00: You wouldn't have a big problem, but I don't know why that makes it abstract. [00:29:23] Speaker 00: It just makes it invalid, but it doesn't make it abstract. [00:29:27] Speaker 00: I'm trying to understand why of all the weaponry that's available to a defendant who's being sued by a crappy invention. [00:29:39] Speaker 00: Why do you go to 101 when you've got 102, 103, and 112 functional? [00:29:47] Speaker 01: 101, as the Supreme Court has laid it out in the standards that it set for us, is more of a wholesome look at this. [00:29:55] Speaker 01: And there's in some sense a policy perspective where you have to look at the full patent, the full context of what the patent says is the environment. [00:30:07] Speaker 01: and determine is this really something that's going to be protected? [00:30:10] Speaker 01: Because it may be new. [00:30:11] Speaker 01: It may never have been done before. [00:30:13] Speaker 01: And maybe it's obvious, but the statute and the case law has set forth rigorous tests to put forth whether or not it's obvious. [00:30:23] Speaker 01: We're not saying necessarily it's obvious. [00:30:26] Speaker 01: There are some overlaps for sure, but we're not saying that. [00:30:29] Speaker 01: So there are other tests. [00:30:30] Speaker 01: That hasn't been litigated. [00:30:31] Speaker 01: I'm sorry, Your Honor. [00:30:32] Speaker 00: That issue has not been litigated. [00:30:34] Speaker 01: It was not reached a finality in the court. [00:30:37] Speaker 01: There was expert reports, for sure. [00:30:39] Speaker 01: Are those issues still pending? [00:30:41] Speaker 01: No, Your Honor. [00:30:42] Speaker 01: The 101 issue resolved the case. [00:30:45] Speaker 01: Resolved the litigation? [00:30:46] Speaker 01: Yes. [00:30:48] Speaker 01: Okay. [00:30:49] Speaker 01: So there are definitely other avenues that if the patent truly is a bad patent, that ultimately the accused infringer could prevail. [00:30:59] Speaker 01: That's a lot of hoops. [00:31:02] Speaker 01: That's a lot of hoops in an expensive forum. [00:31:05] Speaker 01: And 101 is a quick killer. [00:31:09] Speaker 01: Assuming, Your Honor, that there is in the patent some good statements about the fact that they've done everything conventionally. [00:31:19] Speaker 01: They've used only conventional methods. [00:31:21] Speaker 01: And you can look at it and you say they really are just, they're going for the big idea [00:31:26] Speaker 01: And they're not really trying to be specific about what it is about how they're going to do that idea. [00:31:31] Speaker 01: And that's demonstrated in the claim. [00:31:33] Speaker 01: So under the Supreme Court's case law, 101 has shown to be an effective and efficient way to resolve bad patents. [00:31:45] Speaker 01: Whereas, sure, maybe they could have been weeded out through other statutory methods. [00:31:51] Speaker 01: But in the current framework, that's an expensive proposition. [00:31:58] Speaker 01: And your honor, I want to address the issue that appellant raised about the asserted claims. [00:32:07] Speaker 01: It was a surprise to hear that today about the appellant wanting to vacate some claims, because that was nowhere in the briefing. [00:32:15] Speaker 01: And I think the reason is that the way it was put forth in the briefing was not to parse out the claims, but rather to look at some of the claims, which were before the district court. [00:32:26] Speaker 02: Your opposing counsel argued that you've conceded to this point. [00:32:31] Speaker 01: No, Your Honor. [00:32:31] Speaker 01: We pointed out that because they've raised these claims in the appeal as being distinguishable, but they didn't below, maybe there could be a situation where they believe that those are not assertive. [00:32:51] Speaker 01: We did not see that in the record below. [00:32:54] Speaker 01: So we at least told the court about this. [00:32:57] Speaker 01: But looking below, it's clear that all the claims at least were issued as the way it was litigated below. [00:33:04] Speaker 01: At no point did the appellant ever say that these claims were not at issue in the 101 appeal. [00:33:11] Speaker 01: The parties briefed on all the claims. [00:33:15] Speaker 01: We set forth in the lower court briefing, we set forth representative claims [00:33:20] Speaker 01: at least one of which wasn't asserted against any party, we moved for invalidity of all the claims. [00:33:27] Speaker 01: And the appellant responded in the briefing in the lower court opposing all of the claims. [00:33:34] Speaker 01: And all the claims were at issue because the patentee's complaint said at least claim 25 is infringed. [00:33:42] Speaker 01: So that puts all the claims at issue. [00:33:44] Speaker 01: And our counterclaim for invalidity was an encounter claim for all the claims. [00:33:49] Speaker 01: At no point during the case below, prior to the decision, did appellant ever tell the court, no, these claims are not at issue. [00:33:58] Speaker 01: We're going to ask the court not to rule on those claims. [00:34:02] Speaker 00: Well, indeed, if the invention, however defined, is an abstract idea, then all of the claims that hang onto it would be invalid, wouldn't they? [00:34:12] Speaker 00: Your Honor, it could be. [00:34:13] Speaker 00: By definition. [00:34:15] Speaker 01: But not necessarily, your honor, because it could be that in some claims the patentee gets very specific about the way that they want it to be done. [00:34:22] Speaker 01: And that specificity has reached the threshold beyond which it is now an eligible invention. [00:34:28] Speaker 00: That doesn't change it from being abstract. [00:34:31] Speaker 00: That's step two of Alice. [00:34:33] Speaker 00: That's where you take an abstract invention and you somehow make it concrete. [00:34:38] Speaker 00: That's different from whether it's abstract in step one. [00:34:43] Speaker 00: There's a lot of confusion around that. [00:34:45] Speaker 00: Let's stay with the first question, because you never got to step two. [00:34:50] Speaker 01: Yes, your honor. [00:34:50] Speaker 01: I see where you're going. [00:34:52] Speaker 01: OK, so maybe in that claim that even though it's very specific, one can see a nugget of what an abstract idea is, what the patentee was going for. [00:35:01] Speaker 01: And you can say that's the abstract idea. [00:35:03] Speaker 01: The Mayo's test is, as you point out, a two-step framework. [00:35:11] Speaker 01: may have gotten it right, may have gotten it wrong as to what the idea is that's abstract. [00:35:16] Speaker 01: But there's a second test, a second step. [00:35:19] Speaker 01: Which was never gotten to in this case. [00:35:22] Speaker 01: I disagree, Your Honor. [00:35:23] Speaker 01: The court did make a finding that there is nothing in the claims that made them special to take it out. [00:35:32] Speaker 01: It wasn't as explicit as saying step two has not been met. [00:35:35] Speaker 02: But the court did say, for example, lack meaningful limitations on the ad [00:35:41] Speaker 02: All claims of 582 lack, quote, meaningful limitations on the abstract idea. [00:35:47] Speaker 01: Close quote. [00:35:47] Speaker 01: That's perfect recitation of what step two is, Your Honor. [00:35:51] Speaker 01: That's right. [00:35:52] Speaker 01: He also said on A7, none of the 582 patents claims are restricted to any specific inventive ways of storing codes and databases or electronically applying them. [00:36:02] Speaker 01: So that's with more specificity, but that's also rationale under step two of Alice in Mayo. [00:36:10] Speaker 01: Pass my time, Your Honors, unless you have further questions, I ask the court respectfully to affirm the decision. [00:36:24] Speaker 02: You've got a minute, Mr. Warren. [00:36:25] Speaker 03: I'll try to address as many points as I can within that minute. [00:36:28] Speaker 03: The disreport statement that none of the claims are invented in ways, that's a conflation of the analysis of 101, 102, and 103, because he didn't consider any facts. [00:36:37] Speaker 03: It was all based on uncorroborated assertions [00:36:40] Speaker 03: Bed Bath & Beyond. [00:36:42] Speaker 03: Next, Fox Group v. [00:36:43] Speaker 03: 3, cited by Bed Bath & Beyond, 700 F. [00:36:45] Speaker 03: 3rd, 1300, says that what matters is whether the parties are on notice of the asserted claims. [00:36:52] Speaker 03: And here, the parties were on notice of the asserted claims before the district court's opinion came out. [00:37:00] Speaker 03: For Alice Step 2, regarding the event of concept, if there's something more than a claim on the purported abstract idea, Step 2 of Alice is satisfied. [00:37:09] Speaker 03: The claims here [00:37:10] Speaker 03: are more than the abstract idea that the court has mentioned today, because there is this code that's being generated by the remote seller that's then transferred over to the point of sale system at the local seller and then used in order to process a local payment. [00:37:28] Speaker 03: I ran out of time. [00:37:28] Speaker 03: I have one more point, if I can make it, Your Honor. [00:37:31] Speaker 03: You've got five seconds. [00:37:33] Speaker 03: OK. [00:37:33] Speaker 03: The code that Judge Blager was asking about, the R and L, [00:37:38] Speaker 03: That's not a code in accordance with one of ordinary skill in the art, because that is not a code that's used to identify the remote order and then determine a price of that remote order. [00:37:49] Speaker 00: I was just trying to be helpful. [00:37:51] Speaker 00: By the way, my comment about your invention was not a comment about your invention. [00:37:56] Speaker 00: It was just to get his attention. [00:37:58] Speaker 03: That's appreciated, Your Honor. [00:37:59] Speaker 03: Thank you very much, Your Honor.