[00:00:49] Speaker 04:
Okay, the next argued case is number 16-26-22, Gonzalez against New Life Ventures.

[00:00:56] Speaker 04:
Mr. Fuller, you're ready.

[00:01:21] Speaker 02:
Thank you, Your Honor, and good morning.

[00:01:24] Speaker 02:
May it please the Court.

[00:01:27] Speaker 02:
The patent claims that are at issue in this appeal are patent eligible under 35 U.S.C.

[00:01:32] Speaker 02:
101.

[00:01:34] Speaker 02:
They are not directed to ineligible abstract ideas.

[00:01:38] Speaker 02:
They have been tested by the jury below, found valid and infringed under 102, 103, and infringed by the defendant.

[00:01:49] Speaker 02:
The patents at issue identify

[00:01:51] Speaker 02:
confront and solve a very specific, very real problem in the internet search arts at the time of the invention in 2000.

[00:02:02] Speaker 02:
Specifically, what the patents identify as the problem solved is the problem of far too many irrelevant search results that are provided in return to a searcher when a word search was performed.

[00:02:16] Speaker 03:
Well, you know, I confess that the analogy was somewhat

[00:02:20] Speaker 03:
done to death by the other side.

[00:02:22] Speaker 03:
But is it not true that you have right in your own written description an analogy to a library?

[00:02:29] Speaker 03:
Isn't that what you're saying?

[00:02:30] Speaker 03:
You're doing something, and you even said to the examiner that this is just a very traditional concept, but we're just doing it on a computer.

[00:02:41] Speaker 02:
Sure.

[00:02:42] Speaker 02:
What the patentee did in the illustration that is in paragraph two of those specifications

[00:02:49] Speaker 02:
was he used a metaphor to describe the scope of the problem that he was confronted.

[00:02:53] Speaker 02:
Metaphor just to illustrate the scope of the problem.

[00:02:56] Speaker 02:
We have all of this information that needs to be found.

[00:02:59] Speaker 02:
And the closest he could come to was to say, look, OK, if you have a library full of information, what's the best way to solve this?

[00:03:07] Speaker 02:
Is the best way to solve this to just go word search everything, which is what search engines did at the time?

[00:03:13] Speaker 02:
Or do you do something different?

[00:03:14] Speaker 02:
He did something different.

[00:03:17] Speaker 02:
In the analogy or the metaphor that your honor is referring to, he says, what a hypothetical librarian might do in that situation would be to put information about all of these books on a card, right?

[00:03:32] Speaker 02:
And so what the defendants have taken that to mean is a run of the mill library card catalog.

[00:03:37] Speaker 02:
Mr. Gonzalez repeatedly throughout the specification, throughout the file wrapper prosecution uses the word label to refer to

[00:03:45] Speaker 02:
the run-of-the-mill common ordinary meaning of the word label, something that is on a package or on a book or on a card that describes something.

[00:03:55] Speaker 02:
But we know from the court's claim construction order in this case, in which the defendant below argued that digital label should carry its plain and ordinary meaning, the court construed it differently.

[00:04:08] Speaker 02:
The court said, it's not a plain and ordinary label.

[00:04:11] Speaker 02:
What Gonzales has done is something different from a plain and ordinary label.

[00:04:15] Speaker 02:
The court's construction of digital label is something symbolic of unambiguous qualitative information about an item or a thing.

[00:04:25] Speaker 02:
That's an unconventional use of the term.

[00:04:27] Speaker 03:
Isn't that what the index cards would also show in a library?

[00:04:31] Speaker 03:
Something symbolic?

[00:04:33] Speaker 02:
There's nothing symbolic on a card.

[00:04:35] Speaker 02:
What's on a card is information.

[00:04:36] Speaker 02:
And actually what Mr. Gonzalez teaches is the opposite of a traditional card that might be found in a library, which is just the information.

[00:04:46] Speaker 02:
It's just the information itself.

[00:04:47] Speaker 02:
There's nothing symbolic on the card.

[00:04:50] Speaker 02:
What Mr. Gonzalez teaches is in his search protocol, we're going to ignore the information.

[00:04:56] Speaker 02:
We're not going to do a search based on the information.

[00:04:59] Speaker 02:
We're going to do something unconventional, something new, something specific.

[00:05:04] Speaker 02:
We're going to use digital labels, which are by definition.

[00:05:07] Speaker 02:
I'm sorry.

[00:05:07] Speaker 03:
I worked in a library, so I may be a nerd.

[00:05:10] Speaker 03:
But the library cards had symbolic information about how you could find that

[00:05:16] Speaker 03:
book in the particular places in the library?

[00:05:20] Speaker 02:
That would be, if your honor is referring to the numerical numbering system on the card, the numerical numbering system on the card isn't symbolic of the information that's on the card.

[00:05:32] Speaker 02:
That is more akin to what Mr. Gonzalez would call a category tree, wherein as your honor in experience would know, that it's a nested category, right?

[00:05:40] Speaker 02:
You have these numbers that eventually funnel down into a specific

[00:05:44] Speaker 02:
genre of books and all those books are put in the same place.

[00:05:47] Speaker 02:
Mr. Gonzalez says these types of category trees are rigid and unacceptable for purposes of online searching.

[00:05:54] Speaker 02:
And he distinguishes and disparages the category tree structure specifically.

[00:06:00] Speaker 02:
And so his concept to use digital labels, which are symbolic of information about a website, is fundamentally different in operation and far more flexible

[00:06:13] Speaker 02:
and eliminates the problem that he confronted in the art, and that is too many search results that aren't relevant to what the searcher was actually looking for.

[00:06:23] Speaker 02:
So we disagree completely with the premise that defendant is putting forward that a card catalog does the same thing.

[00:06:30] Speaker 03:
So point to me then in your written description where you think this, what you refer to as a specific implementation of a technological solution to a technical problem

[00:06:42] Speaker 03:
can be found?

[00:06:45] Speaker 02:
Certainly.

[00:06:46] Speaker 02:
I'll be referring to the 665 patent, which specification begins in the appendix at 139.

[00:06:54] Speaker 02:
The problem that is addressed, as the court is aware, is at column one and rolls into column two, where Mr. Gonzalez talks about the existence in the art of too many search results.

[00:07:08] Speaker 02:
Owners of websites cannot get their websites found.

[00:07:11] Speaker 02:
Searchers cannot find what they're looking for.

[00:07:13] Speaker 02:
The specific implementation of digital labels, for example, in column three, which is appendix page 140, talks about this gathering sequence and then that information is converted into something new that didn't exist in the art before and doesn't exist on a card catalog, for example.

[00:07:31] Speaker 02:
We're going to convert that into something new, a digital label.

[00:07:34] Speaker 02:
The digital label then, per the claims, is what is used to conduct the search, not the information.

[00:07:42] Speaker 02:
And that is the opposite of what happens with it.

[00:07:44] Speaker 03:
So you refer to column one going into column two, and that's just some background.

[00:07:49] Speaker 03:
I don't know what you're pointing to.

[00:07:51] Speaker 03:
So where is the technological solution to the technological problem that you say puts you in Enfish?

[00:07:57] Speaker 02:
Well, in column three, beginning at line 25, for example, at appendix page 140, is exactly where Mr. Gonzalez talks about converting things to a digital label.

[00:08:10] Speaker 02:
He also says that

[00:08:12] Speaker 02:
further down in column three, between lines 50 and 56 for example, talks about the advancement where using the digital labels structure, what the searcher is looking for can surely be found in a high relevance list instead of hidden in a sea of irrelevance.

[00:08:31] Speaker 02:
That identifies his solution to the problem and then in the claims we know that his solution involves multiple steps, primarily among those is

[00:08:41] Speaker 02:
We're going to get our information from the owner of the information or the creator of the website.

[00:08:48] Speaker 02:
That's step one.

[00:08:49] Speaker 02:
That information is then converted into something new, which is symbolic of the information.

[00:08:54] Speaker 02:
That's the second aspect of the claim.

[00:08:56] Speaker 02:
Then, according to the asserted claims, when a search is conducted, the search is conducted for and based upon the labels, the symbols, not upon the information itself.

[00:09:09] Speaker 02:
which is what all of the existing search technologies at the time would do.

[00:09:13] Speaker 02:
And what Mr. Gonzalez says is because the words themselves, the information themselves or the information itself is vague and ambiguous.

[00:09:23] Speaker 02:
You don't know what words mean out of context.

[00:09:25] Speaker 02:
So his digital labels put context to the terms and that makes them more specific and eliminates the unnecessary irrelevant search results.

[00:09:39] Speaker 02:
So I'm not, did I answer your honor's question?

[00:09:44] Speaker 03:
I still don't see the technological solution to the technological problem.

[00:09:51] Speaker 03:
I see that you say it's on a computer, but I am not getting from the written description or the claims that the discussion of the technology, the way the technology is done

[00:10:08] Speaker 03:
differently or somehow gives you some advantage over what would be the abstract idea?

[00:10:14] Speaker 02:
Sure.

[00:10:16] Speaker 02:
Because it's a software implementation, the advance in the technology is the way the software functions.

[00:10:23] Speaker 02:
And we know that software claims can advance non-abstract advances.

[00:10:28] Speaker 04:
Another aspect of the same approach, which is troubling, there isn't here, just as collect the information.

[00:10:35] Speaker 04:
I don't see any algorithm or the

[00:10:38] Speaker 04:
the next technological step of implementation of the generalizations.

[00:10:44] Speaker 04:
And that seems to be what the district judge also was concerned about.

[00:10:51] Speaker 02:
Well, if you're talking about the specific aspect of the claims where the information is collected, is that what the question is?

[00:10:59] Speaker 04:
To understand what led the district court to decide, as a matter of law, this did not meet the requirements.

[00:11:08] Speaker 02:
Well, the district court, the magistrate judge identified multiple aspects of the claims that were non-ordinary, non-abstract.

[00:11:18] Speaker 02:
The district court judged then in a three-sentence analysis under step one to said, this is just abstract because a human could do it.

[00:11:29] Speaker 02:
And that was the end of the analysis under step one.

[00:11:32] Speaker 02:
As far as the technological steps

[00:11:37] Speaker 02:
Being a software implementation, that's the advance in the technology.

[00:11:42] Speaker 02:
It's a software art.

[00:11:43] Speaker 03:
You're saying we're doing this with software.

[00:11:46] Speaker 03:
I hear you say those words, but where's the software implementation described in the PAP?

[00:11:51] Speaker 02:
Okay.

[00:11:53] Speaker 02:
For example, back to column three at lines 25 to 35 is an example of the coding that would be required.

[00:12:01] Speaker 02:
We also have

[00:12:03] Speaker 03:
Because this can be affected with almost any programming language capable of handling instructions.

[00:12:08] Speaker 02:
That's right.

[00:12:09] Speaker 03:
In the form of, if A, then B. That's the conversion step.

[00:12:13] Speaker 02:
Yes, Your Honor.

[00:12:14] Speaker 00:
Okay.

[00:12:15] Speaker 00:
And then the searching step is, because you've created in the conversion step a fairly unnatural, that is non-ordinary language code, MNSH, is it?

[00:12:28] Speaker 00:
Yes.

[00:12:28] Speaker 00:
The searching is just searching for that and you'll get a very small subset of what you would get if you searched for, what does it stand for, schools offering scholarships to minorities.

[00:12:42] Speaker 02:
That's exactly the advance that Mr. Gonzalez advances.

[00:12:46] Speaker 00:
So it's just searching.

[00:12:48] Speaker 00:
It's the ordinary process of searching, but you've created or allowed subscribers to create kind of new artificial terminology, which radically shrinks the universe of what will come up because people don't ordinarily use the word or the concatenation of symbols M-N-S-E-H in order

[00:13:12] Speaker 02:
That is certainly the advantage that the claims achieve is what your honor is saying.

[00:13:19] Speaker 02:
And that is the technological implementation in the code that says, okay, instead of searching for this word, which is what the ordinary expectation would be, I am going to, instead of searching the data, I'm going to search something that I have created separate and apart from the data that symbolizes the data.

[00:13:41] Speaker 02:
which will eliminate all of the ambiguity.

[00:13:44] Speaker 02:
Yes, your honor, that is precisely correct.

[00:13:46] Speaker 03:
Like you have an example, you have a Chinese restaurant and if you search the whole country, you might not get that one, but if you search Chinese restaurants in New York City, it might come up.

[00:13:56] Speaker 03:
So how is that?

[00:13:58] Speaker 03:
I don't understand the technological solution to the technological problem there.

[00:14:05] Speaker 02:
I keep repeating myself.

[00:14:08] Speaker 02:
I don't know that I can describe the technological advance any more clearly.

[00:14:12] Speaker 03:
You're just saying if you put more data in, if you narrow your search site, then you can make the search more precise.

[00:14:23] Speaker 02:
Well, Gonzales does describe what's described as a host website.

[00:14:28] Speaker 02:
Not all the claims are limited to a host website.

[00:14:30] Speaker 02:
A host website would be

[00:14:31] Speaker 02:
a set of websites that have something in common, for example, all of the restaurants, right?

[00:14:36] Speaker 02:
So that's one element to the claims.

[00:14:38] Speaker 02:
Not all the claims are directed to a host website.

[00:14:40] Speaker 02:
Certainly, there's no requirement in the claims, and Mr. Gonzalez is not limited himself to the situation that you're honored to describe this example in the specification, where you have just by function of having a smaller subgroup of sites, by definition, you're going to get better results.

[00:14:56] Speaker 02:
What Mr. Gonzalez talks about is

[00:15:00] Speaker 02:
The better results are achieved not because I'm just searching a smaller subset of websites.

[00:15:07] Speaker 02:
Mr. Gonzales talks about searching all websites on the internet.

[00:15:10] Speaker 02:
But the result and the advancement and the benefit is achieved because I am no longer searching for the information.

[00:15:18] Speaker 02:
My search is not based on information, which is ambiguous.

[00:15:22] Speaker 02:
My search is based on something new, which the court has construed as being an unconventional label.

[00:15:29] Speaker 02:
something that is symbolic of information.

[00:15:31] Speaker 02:
And that is where the advance in the art comes into play is in the fact that we're using something symbolic.

[00:15:38] Speaker 02:
We're not using the information.

[00:15:40] Speaker 02:
It's a fundamental paradigm shift in the way the information websites were found at the time.

[00:15:45] Speaker 04:
Let's hear from the other side.

[00:15:47] Speaker 04:
We'll save you a few minutes.

[00:16:02] Speaker 04:
Brown.

[00:16:08] Speaker 01:
Good morning, Your Honours.

[00:16:09] Speaker 01:
May it please the court?

[00:16:12] Speaker 01:
I'll begin by jumping right in on this issue of symbolic.

[00:16:15] Speaker 01:
And does this symbolic somehow make a label special and something different from what has been known for years in library cards and in supermarkets on bags of potato chips, as they say in the file history?

[00:16:27] Speaker 01:
And the answer is no.

[00:16:28] Speaker 01:
There's nothing about this symbolic that makes anything different or anything special.

[00:16:33] Speaker 01:
So even if we were to just set aside the question and assume that there's nothing symbolic on a library card, which is not correct.

[00:16:40] Speaker 01:
There are things which are symbolic on a library card.

[00:16:42] Speaker 01:
But if we were to just set that aside, if you were to take the information on a library card and put it into a computer, it's necessarily become symbolic by that fact.

[00:16:54] Speaker 01:
You have ones and zeros in a computer which are now representing the information that is on the library card.

[00:17:00] Speaker 01:
And you would search for those ones and zeros in the computer whenever you did a search in any kind of database that has been around since the 70s as we showed.

[00:17:08] Speaker 03:
But his point would be that that is too high in abstraction because he's not just talking about searching for a book.

[00:17:17] Speaker 03:
He's saying that you can search for categories of books and you can provide all kinds of sub data.

[00:17:26] Speaker 03:
So I want a book.

[00:17:28] Speaker 03:
I also want

[00:17:29] Speaker 03:
a mystery, but I want a mystery written by a certain category of author.

[00:17:35] Speaker 03:
I want it within a period of years, and I want to have it addressing a particular time frame.

[00:17:47] Speaker 03:
I mean, that's a lot more information than you would get on a library card.

[00:17:55] Speaker 01:
The way you put it there, that is absolutely true, Your Honor.

[00:17:57] Speaker 01:
There are many layers of categories in a way.

[00:18:00] Speaker 01:
I think the Library of Congress number comes very close to what you just said, because it says within this category, it's within fiction.

[00:18:07] Speaker 01:
And then within fiction, it might be historical fiction.

[00:18:09] Speaker 01:
And within that, it might be mysteries related to the French Revolution or something like that.

[00:18:14] Speaker 01:
So there is a drilling down that occurs in the Library of Congress.

[00:18:16] Speaker 03:
But his point is that on the computer, he says at this point in time, that really all you could do is keyword searches.

[00:18:25] Speaker 03:
And a keyword search, as we all know, having been frustrated by keyword searches, don't get you all that far.

[00:18:32] Speaker 03:
Don't narrow things as much as you might want to narrow them.

[00:18:35] Speaker 01:
So I want to make two points in response to that.

[00:18:37] Speaker 01:
I think, number one, it's factually incorrect, and we've shown that in the record.

[00:18:41] Speaker 01:
So there were sophisticated database searches available at the time.

[00:18:46] Speaker 01:
Mr. Gonzalez had self-admitted in his testimony that he didn't invent multi-parameter searching.

[00:18:50] Speaker 01:
That was already available.

[00:18:52] Speaker 01:
It was already being done on computers.

[00:18:53] Speaker 01:
The sequel article that we put in the record also shows that.

[00:18:57] Speaker 01:
So factually, I think that's incorrect.

[00:19:00] Speaker 01:
I also want to address the fact that that's just not required by any of the claims.

[00:19:04] Speaker 01:
So the claims here require a single parameter in the search.

[00:19:09] Speaker 01:
And in none of this argument did you hear anything saying what you just described in your hypothetical and connecting that to the claims.

[00:19:15] Speaker 01:
So even if Mr. Gonzalez had had that in mind, which I dispute, but even if he had, that's not what we're arguing about here.

[00:19:22] Speaker 01:
What we're arguing about here is what do these claims require?

[00:19:25] Speaker 01:
And just to explain the point in particular, the most specific claim, I think there would be no dispute that in the 807 patent, the second patent, the claims only require a single digital label.

[00:19:40] Speaker 01:
And that would be male or female.

[00:19:43] Speaker 01:
I think the patent uses the example of a 0 to indicate male and a 1 to indicate female.

[00:19:52] Speaker 01:
closest that they come to any sort of multi-parameter labeling is in the 665 patent, where in claim one, and this is on page APPX0150, you do have to gather multi-parameter qualitative data.

[00:20:09] Speaker 01:
But when you get down to the element which requires the search, so the gathering, that's the first element in claim one.

[00:20:16] Speaker 01:
If you go down to the

[00:20:18] Speaker 01:
element that starts with manipulation in claim one of the 665 patent.

[00:20:23] Speaker 01:
It says that you have to match parameters stipulated by an entity conducting a search and representing the digital labels, and here's the critical language, according to at least one of the presence of, absence of, numerical or other value contained in, numerical or other value not contained in, any one, all, and any configuration of the labels.

[00:20:46] Speaker 01:
So in other words, if there is a presence of a variable in any one of the labels, you've satisfied the language in the 665 pattern.

[00:20:57] Speaker 01:
There's no requirement that you have to conduct a multi-variable search.

[00:21:01] Speaker 01:
And the dependent claims don't do that either?

[00:21:04] Speaker 01:
Correct, John.

[00:21:05] Speaker 01:
None of the claims that are issued do that.

[00:21:13] Speaker 01:
Though I would submit that that's not even pertinent.

[00:21:16] Speaker 01:
Because even if there were a requirement that you had to do a multivariable search in the claims, and that was what we were arguing about, number one, that's still possible with library cards.

[00:21:26] Speaker 01:
Number two, it's admitted that it's old technology admitted by their inventor, demonstrated by the uncontested evidence.

[00:21:33] Speaker 01:
So if it's routine and conventional to use a database to perform a multivariable search, that routine conventional technology can't be used to demonstrate that they came up with some sort of technological invention.

[00:21:46] Speaker 01:
I think what's particularly important here is when you look at the record, it's unambiguous that the sole inventor stated repeatedly in his provisional application, in his patent itself, and in the file history that what he was doing was taking something which was old and well known by his own testimony and his own statements and applying it to a new context, the context of websites on the internet.

[00:22:11] Speaker 00:
Can I ask this?

[00:22:13] Speaker 00:
My general recollection is that

[00:22:16] Speaker 00:
the context in which we have said, and the Supreme Court indicated in Alice, of taking something from outside the computer world and saying, use a computer to do it, maybe had the following difference from this case.

[00:22:38] Speaker 00:
This case is one in which the computer context, namely the internet context,

[00:22:43] Speaker 00:
already had a well-established, contrary, different arrangement, rather than taking a process for selling out in the world and saying, put the information on a computer.

[00:23:05] Speaker 00:
This is saying the internet search systems that are in place and everybody is using

[00:23:15] Speaker 00:
are actually established and different from what has gone on in the non-internet world.

[00:23:22] Speaker 00:
Let's do the old world in the new world.

[00:23:27] Speaker 00:
Is there anything to be made of that?

[00:23:32] Speaker 00:
I think that's what they're trying to do in invoking DDR and Bascom, which are probably the two most relevant cases

[00:23:45] Speaker 00:
that there was a way that the internet was set up.

[00:23:49] Speaker 00:
And in those two cases, somebody did something different, say, change that.

[00:23:54] Speaker 00:
And this is like that, even if the change comes from something familiar.

[00:23:59] Speaker 01:
I agree that that's the story they're trying to tell, that my opponent is trying to tell.

[00:24:03] Speaker 01:
I don't agree that it's correct, or even remotely correct.

[00:24:08] Speaker 01:
You can tell from within the context of the patent itself that that's not correct.

[00:24:12] Speaker 01:
It's inconsistent with the patent.

[00:24:13] Speaker 01:
The patent itself talks about performing a word search within what it calls a hybrid digital label in column six.

[00:24:22] Speaker 01:
Second of all, there's a direct admission from the inventor that searching for single parameter digital labels was commonplace before his invention.

[00:24:31] Speaker 01:
And it was not something he admitted.

[00:24:34] Speaker 01:
I'm sorry, not something that he invented.

[00:24:37] Speaker 01:
So I don't agree with the sort of factual premise.

[00:24:39] Speaker 01:
I do think that is the story that they're trying to tell in order to draw the analogy that you just described.

[00:24:45] Speaker 01:
But number one, it's factually incorrect.

[00:24:47] Speaker 01:
And number two, I don't think it works because I don't think even if it were true, it would bring this case into the kind of situation that you had in Bascom or DDR.

[00:24:56] Speaker 01:
So I think something that's very important to understand is my sense from reading the 101 cases,

[00:25:04] Speaker 01:
is that there's a very big difference between a situation where someone has created a new algorithm.

[00:25:10] Speaker 01:
And the algorithm may not be patentable on its own, but they've taken that new algorithm and they've put it in the context of a specific process.

[00:25:16] Speaker 01:
That type of case where the abstract idea or the unpatentable part of the claim is new is a very different situation, where what you have is an idea like you had in Alice, where it was something as a financial practice that had been going on for a very, very long time.

[00:25:32] Speaker 01:
And then they've taken that old abstract idea and tried to clothe it in the language of a computer and a database and the internet and argue that it is now something that is patentable.

[00:25:43] Speaker 01:
I would submit that there's a different weighing that occurs.

[00:25:46] Speaker 01:
And I'm not sure I can articulate very well how the federal circuit, your court, has done.

[00:25:53] Speaker 01:
But I think that's a very different thing.

[00:25:54] Speaker 01:
And I think that what happened in Bascom and DDR, the two cases that you are describing, and I think it comes out in the way that you described it,

[00:26:02] Speaker 01:
is there was a sense that the unpatentable part of those claims was something that was unconventional and different.

[00:26:11] Speaker 01:
Here, nothing could be further from the truth.

[00:26:13] Speaker 01:
There is expressed admission by the Swole inventor that he didn't invent it, that it was commonplace beforehand.

[00:26:21] Speaker 01:
He draws analogy in his patent to library cards.

[00:26:26] Speaker 01:
in the file history.

[00:26:28] Speaker 03:
He may concede that digital labeling was not something he invented, but his point is that he believes he invented a better way to search those labels once they are put in place.

[00:26:45] Speaker 01:
I don't think that's correct.

[00:26:47] Speaker 01:
The quotes are in our brief.

[00:26:48] Speaker 01:
I can read them again.

[00:26:49] Speaker 01:
I don't think that's correct at all.

[00:26:51] Speaker 01:
So this search for the symbolic label

[00:26:55] Speaker 01:
To quote from the patent, it says, an example of two-parameter labeling is to label a list of people.

[00:27:02] Speaker 01:
In computer field A, place a 0 or a 1 to indicate if a person is a male or a female.

[00:27:08] Speaker 01:
And when he talks about how to do the search, he says, and this is in column 3.

[00:27:17] Speaker 01:
I'm not finding it immediately.

[00:27:18] Speaker 01:
It's in column 3, and it says, you scan the database.

[00:27:21] Speaker 01:
So scanning a database for something like a one or a zero that's representative of something, there's just no way he's going to argue that that is novel.

[00:27:30] Speaker 01:
It's clearly not.

[00:27:31] Speaker 01:
It's not something that he invented.

[00:27:33] Speaker 01:
He admits he didn't invent even multi-parameter searching through a database.

[00:27:37] Speaker 01:
Again, that's in our briefs.

[00:27:39] Speaker 03:
Do you want to get to your cross-appeal before you sit down?

[00:27:42] Speaker 01:
Yes, Your Honor.

[00:27:45] Speaker 01:
So I think fundamentally the issue on the cross-appeal.

[00:27:47] Speaker 00:
Let me just ask this question.

[00:27:50] Speaker 00:
It seems to me, fairly enough, you just described and had to do some work to describe the difficulties of identifying the precise boundaries of cases like DDR and Bascom.

[00:28:10] Speaker 00:
Doesn't that tell you that it was not exceptional for them to think they could overcome the 101 hurdle in this case?

[00:28:24] Speaker 00:
Because even by 2016, there were significant areas of grayness.

[00:28:36] Speaker 01:
Your honor, the answer to that would be yes, if that was the only evidence that we have.

[00:28:40] Speaker 01:
But it's not.

[00:28:42] Speaker 01:
And the core evidence that we have here is that Mr. Gonzalez knowingly pursued claims to a client.

[00:28:51] Speaker 04:
The other thing they stress, of course, is that the jury went their way.

[00:28:56] Speaker 04:
It's very difficult, isn't it, to say that in the context of everything that gets here, it was so exceptional as to require attorney's fees.

[00:29:07] Speaker 04:
Is there an answer to that?

[00:29:08] Speaker 01:
My answer to that, Your Honor, would be to come back to the same thing.

[00:29:10] Speaker 01:
We didn't have an equitable conduct claim in front of the jury, but what we have now is very clear evidence that he made false statements to the Patent Office about what he did.

[00:29:20] Speaker 03:
You say very clear evidence.

[00:29:21] Speaker 03:
I think that's a little of a stretch.

[00:29:22] Speaker 03:
You said that at trial he was shown the eBay system and he said, well, yeah, that

[00:29:31] Speaker 03:
I didn't invent that, and that was there.

[00:29:33] Speaker 03:
But there's no evidence that he knew about that at the time that he was applying for this patent.

[00:29:38] Speaker 01:
Let me be very precise about what I think the most important evidence is.

[00:29:41] Speaker 01:
I'm going to read you three passages, and I'll give you the citations for them.

[00:29:46] Speaker 01:
So he stated to the patent office, there is no prior art at all for website labels.

[00:29:51] Speaker 01:
That's 1617, APPX 1617.

[00:29:55] Speaker 01:
There's the quote I've already mentioned.

[00:29:57] Speaker 01:
He said that while labels are common in physical form,

[00:30:00] Speaker 01:
It has not heretofore been used or proposed in digital form for websites.

[00:30:06] Speaker 01:
That's 1375.

[00:30:07] Speaker 01:
And then again, the simple fact is that websites do not have labels.

[00:30:11] Speaker 01:
1615.

[00:30:14] Speaker 01:
He has admitted, and I can read it as well, that he did not invent digital labels for websites.

[00:30:22] Speaker 01:
That admission is squarely inconsistent, which each of the three- But I thought in context what he was saying, he now realizes he didn't.

[00:30:30] Speaker 03:
The time he said that, he's not saying he knew that it was a lie.

[00:30:33] Speaker 01:
I see.

[00:30:33] Speaker 01:
I'm sorry I misunderstood your question.

[00:30:35] Speaker 01:
There is an argument about eBay, which we are also pressing and we made in the briefs.

[00:30:40] Speaker 01:
The quotes that I just referred to here and the quote where he admits that digital labeling was in fact commonplace had nothing to do with eBay.

[00:30:48] Speaker 01:
In fact, if you look at that passage, which is 1879 and then also

[00:30:59] Speaker 01:
2090.

[00:31:01] Speaker 01:
If you look at these two passages, he was talking about the Yahoo website, not about eBay.

[00:31:06] Speaker 01:
And he admits that Yahoo had digital labels and that it was commonplace.

[00:31:10] Speaker 00:
Right, but that's not the full extent of the claims, right?

[00:31:12] Speaker 00:
He has that the claims require digital labels plus, right?

[00:31:20] Speaker 00:
People's sources creating them and so on.

[00:31:23] Speaker 01:
Correct, Your Honor.

[00:31:24] Speaker 01:
So just the admission that

[00:31:26] Speaker 01:
He didn't invent digital labels, doesn't invalidate the claims because there are other elements.

[00:31:31] Speaker 01:
But what it does do is show that when he said at least three times, and I think they're more in the briefs, there is no prior art at all for website labels.

[00:31:40] Speaker 01:
It has not heretofore been used or proposed in digital form for websites.

[00:31:45] Speaker 01:
The simple fact is that websites do not have labels.

[00:31:48] Speaker 01:
When he makes those statements to the patent office, he knows they're false.

[00:31:52] Speaker 01:
And that makes this case different.

[00:31:54] Speaker 01:
That's important.

[00:31:55] Speaker 01:
The title of this patent

[00:31:57] Speaker 01:
is digital labels for websites.

[00:32:00] Speaker 01:
It's the core of what he is arguing he invented.

[00:32:05] Speaker 01:
Mr. Fuller got up here and argued that the fundamental thing is something about digital labels are special because they're symbolic, and that's what makes this case patentable.

[00:32:15] Speaker 01:
It's the core of it, and he knows he didn't invent it, and he admitted that in his deposition, and he admitted it in trial.

[00:32:21] Speaker 01:
Now, we got to trial.

[00:32:24] Speaker 01:
We shouldn't have got to trial.

[00:32:26] Speaker 01:
We filed a motion nine months before trial, before a claim construction hearing, making our 101 argument.

[00:32:33] Speaker 01:
That was not ruled on.

[00:32:34] Speaker 01:
We were never given permission to file our summary judgment motion until two weeks before trial.

[00:32:40] Speaker 01:
That finally occurred.

[00:32:41] Speaker 01:
The judge held the trial before resolving.

[00:32:45] Speaker 03:
Right.

[00:32:45] Speaker 03:
And the magistrate judge actually thought that this was 101 eligible.

[00:32:49] Speaker 01:
Correct, Your Honor.

[00:32:50] Speaker 01:
Correct, Your Honor.

[00:32:52] Speaker 03:
Doesn't that indicate that maybe even if

[00:32:55] Speaker 03:
you're right under 101 in the long run that reasonable minds could differ on that?

[00:33:02] Speaker 01:
I think you'd have to read the opinion in order to fairly assess that.

[00:33:05] Speaker 01:
But let's suppose that reasonable minds could differ on the 101 issue.

[00:33:09] Speaker 01:
I think this is similar to the question Judge Taranto asked me.

[00:33:11] Speaker 01:
What makes this case different from just a 101 case is here we have an inventor who's admitted that something is true that is directly inconsistent with something he repeatedly told the patent office in order to get his patent.

[00:33:25] Speaker 01:
That is evidence of bad faith in pursuing this case.

[00:33:28] Speaker 01:
That's a very, very significant fact.

[00:33:31] Speaker 01:
When you add into the fact there were 13 settlements, and that's a lot, 13 settlements, for an average of $65,000, which is less than 10% of the cost of defense.

[00:33:41] Speaker 01:
If you look at the AIPLA evidence that we put in, the average cost of defending a patent case against a non-practicing entity where the amount is at less than a million dollars, so all the minimum categories, the average cost was $820,000.

[00:33:54] Speaker 03:
Well, right.

[00:33:55] Speaker 03:
I mean, I was the one who wrote some of the opinions that said this is a factor that the court could consider.

[00:34:03] Speaker 03:
But, you know, it could all so be true that he thought his best case was against you all.

[00:34:09] Speaker 03:
And he funded that case by smaller settlements.

[00:34:12] Speaker 03:
That doesn't make it necessarily bad faith.

[00:34:16] Speaker 03:
I mean, he got pretty far.

[00:34:18] Speaker 03:
The jury said you weren't frenting.

[00:34:22] Speaker 01:
I think all of that is true, Your Honor.

[00:34:23] Speaker 01:
None of it by itself.

[00:34:25] Speaker 01:
might get us there.

[00:34:26] Speaker 01:
But I think when you put it together, it does get us there.

[00:34:29] Speaker 01:
At a minimum, the district court should have looked at the fact that there are all these statements that were made to the patent office that are admitted to be false.

[00:34:38] Speaker 01:
That's very important.

[00:34:39] Speaker 01:
When you combine that with all these nuisance value settlements.

[00:34:44] Speaker 01:
And the argument in response is, well, we made it to trial.

[00:34:47] Speaker 01:
The reason we made it to trial is because our client refused to settle.

[00:34:51] Speaker 01:
And it can't be held against us that we refuse to settle.

[00:34:54] Speaker 01:
We did everything that we should have done.

[00:34:57] Speaker 01:
Long before the case got into discovery, before depositions were taken, before claim construction, we had saw a commission.

[00:35:04] Speaker 03:
But if you were so sure that he didn't invent it, then why did the jury not rule in your favor under 102 and 103?

[00:35:12] Speaker 01:
I should have tried a better case, Your Honor.

[00:35:17] Speaker 04:
Right.

[00:35:18] Speaker 04:
Let's hear from the other side and you get a bit of rebuttal on the cross-appeal.

[00:35:24] Speaker 04:
Okay, let's see.

[00:35:32] Speaker 04:
Mr. Fuller, you can respond to the cross-appeal or use your time on the merits.

[00:35:38] Speaker 02:
Am I limited to the cross-appeal at this moment, Your Honor?

[00:35:41] Speaker 02:
Okay.

[00:35:42] Speaker 02:
Or can I address some of the points he made relative to the 101 issue?

[00:35:48] Speaker 02:
Well, whatever you need to tell us.

[00:35:50] Speaker 02:
Okay.

[00:35:50] Speaker 02:
Thank you, Your Honor.

[00:35:52] Speaker 02:
First of all, we know from cases like Diamond v. Gere that even something like a mathematical equation, even something that may have been technically old, can still be put to a new and useful patent eligible result.

[00:36:09] Speaker 02:
And that is exactly to the extent we believe what my co-part just said, that everything was old.

[00:36:16] Speaker 02:
Gonzales didn't have been anything new.

[00:36:18] Speaker 02:
Well, even still, you can take something that may have been individually known in the art.

[00:36:24] Speaker 02:
That is not the test.

[00:36:25] Speaker 02:
We don't take individual pieces from a claim, discount them, and then say what's left.

[00:36:31] Speaker 02:
We'll look at the claim as an entire ordered combination set of steps.

[00:36:35] Speaker 02:
And in this case, what we have is Mr. Gonzalez inventing something patent eligible, which we've discussed.

[00:36:48] Speaker 02:
This is not a novelty case.

[00:36:49] Speaker 02:
We're not here on 102, 103.

[00:36:50] Speaker 02:
That seems to be what Mr. Brown wants to go to.

[00:36:55] Speaker 02:
The question is not, did he invent something new and non-obvious?

[00:36:59] Speaker 02:
The question is, at this juncture, is what Mr. Gonzalez claims eligible to even get through the front door and be considered for 102, 103?

[00:37:11] Speaker 02:
We have this coarse filter of 101, and we believe Mr. Gonzalez is satisfied

[00:37:15] Speaker 02:
at least step one of the Mayo test in that his invention is not abstract.

[00:37:22] Speaker 02:
But even if we get to the step two of the test, we believe that he has inventive concepts added to that that take it beyond the realm of abstract, and that's all in our briefs.

[00:37:34] Speaker 02:
As to the attorney's fees question, to your point, Judge O'Malley, at minimum,

[00:37:45] Speaker 02:
At minimum, reasonable minds can differ on the one-on-one question.

[00:37:50] Speaker 02:
We have Magistrate Judge Payne who wrote a very well-reasoned report.

[00:37:54] Speaker 02:
I do invite, Your Honor, to read Judge Payne's opinion because I think it's very instructive to where this Court is today.

[00:38:00] Speaker 02:
Judge Payne considered step one in its entirety far more completely, quite frankly, than Judge Gilstrap did in his order

[00:38:09] Speaker 02:
where he found the claims to be non-patent eligible.

[00:38:12] Speaker 02:
And then on top of that, even though he found the claims to be eligible under step one, he continued on to step two and said, even if the claims are drawn to an abstract idea, I still find the claims have enough to get them to, A, avoid the preemption question, which is the overriding concern behind the exclusionary rule in the first place.

[00:38:34] Speaker 02:
The Gonzalez claims are very specific.

[00:38:38] Speaker 02:
They do not.

[00:38:39] Speaker 02:
preempt some building block of ingenuity like looking for information on the internet.

[00:38:45] Speaker 02:
To the extent they preempt anything, they preempt exactly what the patent law says they can preempt.

[00:38:51] Speaker 02:
They preempt only what is claimed.

[00:38:54] Speaker 02:
They preempt a method where you A, source information directly from the owner or creator of a website, very narrowly.

[00:39:03] Speaker 02:
Then they preempt

[00:39:05] Speaker 02:
the conversion of that information into something symbolic.

[00:39:09] Speaker 02:
Again, very narrow, not a building block.

[00:39:12] Speaker 02:
Then, to make it even more specific and concrete, he says, we're going to search based on the labels, not on the information.

[00:39:20] Speaker 02:
This is not a case where preemption is a concern.

[00:39:23] Speaker 02:
Council hasn't even argued preemption.

[00:39:26] Speaker 02:
Judge Gilstrap, in his opinion, the word preemption doesn't even appear in the order.

[00:39:33] Speaker 02:
Judge Gilstrap didn't consider preemption at all, which again is the overriding concern of the 101 exclusionary rule.

[00:39:42] Speaker 02:
If the court has any questions on the attorney's fees issue, I'd be glad to answer them.

[00:39:52] Speaker 02:
But plainly, there was no inequitable conduct claim made.

[00:39:57] Speaker 02:
Mr. Gonzalez did what every patentee does in the patent office.

[00:40:03] Speaker 02:
He argued, my claims are novel.

[00:40:07] Speaker 02:
My claims are non-obvious.

[00:40:09] Speaker 02:
And as the court recognized, the jury in Texas agreed.

[00:40:13] Speaker 02:
There is nothing extraordinary or exceptional about this case to the extent the court even reaches the attorney's fees question.

[00:40:21] Speaker 02:
The court should completely reject and affirm there was no abuse of discretion on the part of Judge Gilstreet.

[00:40:30] Speaker 04:
OK.

[00:40:30] Speaker 04:
Thank you.

[00:40:34] Speaker 04:
Mr. Brown, you get the last word, but the last point in the discretionary standard is something you need to overcome.

[00:40:50] Speaker 01:
I'll make two points.

[00:40:52] Speaker 01:
The first is, I don't think reasonable minds can differ on the 101 question in this particular case, given all the evidence in this case.

[00:41:03] Speaker 01:
with the statements that were made in the summer of the invention drawing an analogy to a library card, with the statement made squarely to the examiner repeatedly that this is taking an idea that is already common in physical form and putting it only into digital form.

[00:41:20] Speaker 01:
Given that, I don't think there is room for reasonable minds to differ on the 101 question.

[00:41:26] Speaker 01:
And on the attorney's fees question,

[00:41:30] Speaker 01:
I just want to come back again.

[00:41:31] Speaker 01:
It is not a situation where all he said is, oh, my patent is new.

[00:41:37] Speaker 01:
He made statements to the patent office, which have been directly contradicted by what he was forced to admit in his deposition in the case.

[00:41:44] Speaker 01:
I think that is an unusual situation when the inventor admits

[00:41:48] Speaker 01:
that he didn't invent the core piece of what he claims to have invented, what he titled his patents, what he told the patent office repeatedly he invented, and he admits he didn't invent it.

[00:41:58] Speaker 01:
That is unusual and that makes this an exceptional case.

[00:42:03] Speaker 01:
Thank you.

[00:42:04] Speaker 04:
Any more questions?

[00:42:05] Speaker 04:
Any more questions?

[00:42:06] Speaker 04:
Thank you.

[00:42:07] Speaker 04:
Thank you both.

[00:42:08] Speaker 04:
The case is taken under submission.