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The next argued case is number 17-13-76, Intellectual Ventures One against FTD Companies and J.Crew.

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Mr. Hurt.

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Thank you, Your Honor.

[00:01:18] Speaker 00:
Good morning.

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May it please the court.

[00:01:21] Speaker 00:
My name is Christian Hurt.

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I'm here this morning on behalf of Intellectual Ventures.

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This is an Alice appeal.

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involves two patents, the 715 patent and the 370 patent.

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I'd like to focus on the 715 patent today and, time permitted, move on to the 370 patent.

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The 715 patent claims eligible subject matter, and that's evidenced by three points in the PTAD's institution decision in parallel CBM proceedings.

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First, the claims address a technical problem with computer networks.

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prior computer architectures did not sufficiently allow a user to access and view both public and private data simultaneously.

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And the PTAB references this in appendix A305 to 306.

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Second, that problem required a technical solution to facilitate the delivery of integrated public and private data from disparate websites.

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And third, that solution in the 715 patent

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as was the case in DDR Holdings, is necessarily rooted in computer technology in order to overcome a problem specifically arising in the realm of computer networks, and the PTAS specifically made that finding on A306.

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And as this court is held in multiple cases,

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when patents check those boxes, they're eligible for patent protection.

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Yes, Your Honor.

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I want to understand what claims we're really looking at.

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You say that the court erred in concluding that certain claims were representative, but why do you say that they weren't representative?

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Specifically the 715 patent, there's really two sets of independent claims, claims 20 and claims 35.

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Both have in them the inventive

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aspect of this case which is the integration and delivery of public and private data from the backend server and that's recited in claim 20 from delivering from the network to a user system and it's expressly also in claim 35.

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So why is claim 20 not representative?

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I believe it is but we've separately argued each of the claims in the ALICE analysis requires that.

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I think claim 20 and claim 35 do

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have that same aspect and are going to rise and fall together.

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So we argued them separately because they are separate claims.

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But your statement then in your brief that they weren't representative, you agree now that they're representative, that claim 20 is representative?

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Right, that's correct.

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Under our view of the claims, claim 20 is a representative claim on which to assess eligibility of the independent claims.

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Okay, so where in the 715 does it say that the computer has to perform the integrating step?

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So in the 715 patent in particular in claim 20, there's the recitation of a network and that method is performed in the network and each of the steps are performed by the backend computer system.

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And that's in both the preamble and each of those elements.

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And as the PTAB concluded and found in A306 that assessing that same claim, claim 20, that this patent is an improvement in how computer systems function and use the words of DDR Holdings that it was necessarily rooted in computer technology.

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So that's part of this record and something that the rule 12

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stage of viewing the patent in the lightmost favor of the patent owner.

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So you're saying it's the preamble that says that the computer has to perform the integrating step?

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Well, it's the preamble as well as the actual language of the claim.

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So where?

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Okay, so even if the preamble is limiting, the preamble just talks about delivering data over a network.

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It doesn't

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expressly state how or to what extent a computer is performing the integrating step?

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The integration as read in light of the specification is in the computer and this is why we argued claim 35 separately because that claim expressly teaches or recites that the host computer, the application server that's in the back end is what performs the integration and one ordinary skill in the art would read claim 20

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as requiring each of these steps in a computer.

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I don't think that's disputed by J.Crew in this case or was something that the district was found.

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The specification says that the computer equipment is generic.

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It says a user may use any input device such as a keyboard, mouse, kiosk, personal digital assistant, handheld computer, cellular phone, and the like.

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Or it could be used in conjunction with any type of personal computer, network computer, workstation.

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I mean, what is it in the specification that recites anything other than generic computer equipment?

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So the system your honor is referencing is the user system, which is what receives the information.

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The host system is what delivers it.

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And the specification does describe the user system and the host system, like most software patents,

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as being able to run on what was existing at the time.

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So the inventive piece, which is what the PTAB found and it's necessarily rooted in computer technology finding, is the new use of this computer system, this unconventional method of being able to deliver public and private data by taking them from two different sources and integrating them in the back end.

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But where in the spec does it describe the integration step?

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It describes the integration step in a few different places and it is fairly high level where it mentions integrating the public data and the private data.

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There's a detailed or a more detailed description in connection with Figure 3 which shows private data and public data and then

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Those two are aggregated through some aggregation utilities, which ultimately coalesce in an interactive promotion service that delivers the integrated data.

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And that is the level of detail.

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And it's about the same level of detail as DDR Holdings, in which you had a claim that recited a host component that had web pages in it with the original store's website.

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And when someone clicked on the link, there would just be a check to see, was this the link that would send the user to a third-party website?

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And if so, generate a hybrid web page.

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And that was the level of detail in that one.

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What is it about Figure 3 that you think is meaningful?

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Because you never cited Figure 3 in your briefs.

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We cited... Figure 6.

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Well, Figure 6 is the ultimate delivery of the integrated data

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which the public data portion and the private data portion shown on the screen.

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Some of the backend for that on the integration step is in Figure 3.

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So Figure 6 is what the user is seeing when the system integrates the private data, which in Figure 6 is specific account data associated with the credit card, the balance, things like that, and the public data, which is the my finance

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I'm sorry, the Mike Cards graph, which is promotional information that's going to be determined by that private card data.

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But the description of the integration is the most detailed it is in Figure 3, and it is at a high level in the patent.

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But that does not doom the claims, or otherwise it would have doomed the DDR Holdings patent.

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And the PTAB in Appendix 306 would not have concluded

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and one agreed with IV that this patent solved the technical problem, that technical problem required a technical solution, and that this patent was necessarily... But there was no 101 analysis done by the PTAB in connection with the CBM determination, was it?

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That is correct, but there were discussion and findings that were issued, and just because it was in connection with the technological invention, rather than Alice analysis,

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does not mean those findings can't bear on the Alice analysis.

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So copying, for instance, is evidence that can be used for secondary considerations evidence.

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But that same copying evidence also bears on willfulness and induced infringement.

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And that's the analysis that we put forth here is the specific language used by the PTAB, especially the language that is right out of DDR hold-ins about the computer roots of this patent to solve a problem specifically arising

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and computer systems with a particular solution is certainly indicative that this patent is eligible, especially when we're at the Rule 12 stage and the district court has to credit that.

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So yes, it was not an Alice analysis, but this particular finding certainly can carry over into an Alice analysis.

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Can you show me where in the written description in describing Figure 3, even if we're looking at Figure 3,

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explains how the integration step occurs.

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So the closest, Your Honor, is in column 10.

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It talks about right at the bottom, 57 through column 11.

[00:11:26] Speaker 04:
We're in column 10.

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Beginning right around lines 57.

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In this description, the term integration is not used, but what is described is the data flow in column in figure three.

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And the discussion goes from column 10, line 57, through column 11, line 65.

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And what it's discussing, and again, it does not mention specifically integration, but is the flow

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The word integrating is not there, but the flow of data from the transactional assets 302, which is the private information, that's the my account information, the private data, and the public, the content assets, which is the public information, and it shows how that data flows through the aggregation's utilities and is ultimately delivered as integrated data in Figure 3.

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that there's not a specific discussion about using the word integrated in that.

[00:12:35] Speaker 03:
What's unconventional about what's described here?

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What's unconventional about the 715 patent is that... No, no, this... In figure 3?

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Figure 3 in column 10 to 11.

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What's unconventional about this description?

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The unconventional, the part that is unconventional is

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taking those two sets of data and integrating them in the backend for delivery on a network so they can be viewed on a single screen simultaneously.

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So there's nothing unconventional about the how to do it?

[00:13:10] Speaker 00:
Well, under the record in the 715 patent, in the prior art, there wasn't particularly a way to do this.

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If your honor is referencing, is there

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new hardware here.

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They didn't invent a new way of doing this, right?

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It's just the idea of doing it.

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There's no description of invention as to how to do it.

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How to do the integration?

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Yeah.

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So the specification just mentions that the data is integrated in the backend.

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That's as much of the how that's in the pen.

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at the final output is your back end?

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No, back in the host server.

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So it's delivered as a single integrated data to the... But it doesn't explain how that occurs.

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It does not in detail explain the integration.

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It teaches that the sources of the data, where to obtain them from, that it is integrated.

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But if that were fatal to this patent, it would have also been fatal to the patent in DDR holdings, which didn't teach how to generate in the claim, at least,

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the hybrid webpage, just the one was generated.

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And that was sufficient on a full trial record.

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In this case, we're at the Rule 12b-6 stage with the PTABS findings that mirror the findings in DER Holden's.

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That evidence should have been credited by the district court and it wasn't, had it been, that defeats a Rule 12b motion.

[00:14:40] Speaker 02:
But you're not saying the district court was bound by that, are you?

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At the Rule 12 stage, the court has to credit, has to view

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patent in the light most favorable to the patentee.

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If we were at summary judgment and there was other evidence in the record, sure, the court can come to a contrary conclusion.

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But when you're looking outside the patent and that's all that is out there is the PTAB findings, which are intrinsic to the patent, that should have been sufficient to defeat a Rule 12 plausibility motion.

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Unless the court has further questions, I'm into my rebuttal time.

[00:15:11] Speaker 04:
Thank you, Your Honor.

[00:15:21] Speaker 04:
Mr. Berland.

[00:15:23] Speaker 01:
May it please the court.

[00:15:26] Speaker 01:
The district court, with respect to both of these patents, carefully and correctly ruled that they were ineligible under ALICE.

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And I think one of the few points of agreement between the parties is that this is a straightforward application of ALICE to both of these patents.

[00:15:42] Speaker 01:
I think the line of questioning from the panel has been enumerated a number of points that I wanted to make as well.

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First, we've established that claim 20 of the 715 patent is representative.

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And the claim language claims only the abstract idea of combining data from two sources for delivery to a user.

[00:16:01] Speaker 01:
The district court correctly noted, and as Judge O'Malley noted, there's no language in the specification that ties this to specific computer equipment.

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It literally describes computer equipment as any computer equipment, a network as any network, a data store as any data store.

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And in that respect, there is no web focus which Intellectual Ventures attempts to read into that claim language, trying to bring it within the scope of DDR holdings, which addressed a specific problem with implementation of web technology.

[00:16:33] Speaker 01:
All we have here is the basic idea of issuing a bank statement or a credit card statement that contains certain general data, public data that is available to the general public, the latest interest rate offer from the bank, and private data.

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defined as transaction history or balance records, something that only an account holder would need to have.

[00:16:53] Speaker 02:
What's your response to his argument that this is more like DDR Holdings?

[00:17:02] Speaker 01:
With respect, as I mentioned, in the DDR Holdings case, that addressed a specific problem with web technology of how to retain visitors on the site who are expressing interest in a third-party website.

[00:17:15] Speaker 01:
The panel that addressed that case found there was sufficient innovation in computer technology to overcome the Alice hurdle here.

[00:17:25] Speaker 01:
By contrast here, we have claim language that says simply as the court is held in a number of other cases, what you're doing is taking an abstract idea and instructing your reader to perform it on a computer, performing routine functions with generic equipment in a known environment.

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And under a number of cases from this court and Alice,

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that doesn't get you over the hurdle in section 101.

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This case is distinguishable from DDR on that basis.

[00:17:51] Speaker 02:
Well, you've got the claim chart that DDR Holdings comparison chart that appears in the blue brief at pages 22 and 23.

[00:18:03] Speaker 02:
What is your response to those comparisons?

[00:18:06] Speaker 01:
Well, those are comparisons, as your line of questioning indicated, those are comparisons between

[00:18:11] Speaker 01:
what the court held to be the claims of the DDR patent and the specification of the 715 patent, language that does not automatically get imported into the claims, which are the focus of the analysis.

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When one looks at the broad claim language, even coupled with the specification language, which is an equally high level of generality, the only way that they get to a comparison is to take specific details from the specification

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implicitly read those into the claims and then attribute them to the claims.

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And that's not the proper way of reading the claims and that's not the proper context for these claims.

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What's your response to the fact that he says that in DDR holdings they didn't explain the how, they just explained ultimately what the solution is?

[00:19:04] Speaker 01:
Well, I would say that the solution in DDR holdings, the solution as described there

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was implicated in the technological innovation.

[00:19:13] Speaker 03:
Was there any issue about the how in DDR?

[00:19:16] Speaker 03:
I didn't have it in front of me, and I don't recall that there was.

[00:19:19] Speaker 03:
Was there an issue about that?

[00:19:21] Speaker 01:
I would agree with Your Honor that that was not specifically addressed, but to the extent that one wants to contrast it to... An authority if it wasn't addressed.

[00:19:29] Speaker 01:
I would certainly agree with that, Your Honor.

[00:19:31] Speaker 01:
And I would say that, as I've said, DDR was focused on the problem solution issue, as opposed to

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here where we have an abstract idea implemented on general purpose computer equipment.

[00:19:47] Speaker 01:
With respect to the purported inventive concept, the contrast between public data and private data, the district court quite rightly ruled that that was the subjective, those were subjective criteria.

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It was the bank that decided we're going to label certain data public, we're going to label certain data private, and we're going to then integrate those into a single document that resembles nothing more than a bank statement.

[00:20:10] Speaker 01:
And that kind of subjective component based on business logic doesn't surmount the ALICEP II hurdle either.

[00:20:22] Speaker 01:
With respect to the board decision and its impact, if any, on the district court, Intellectual Ventures has not cited and cannot cite an authority that this is a binding ruling that the district court was obligated to follow.

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And it's not clear what it would mean for the district court to follow that ruling because it was addressing a jurisdictional issue at a different stage of the proceeding.

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The record in this case shows that with respect to a third patent that has since dropped out of the case, this is at APPX 321 to 325, the board decided to institute a covered business method review and then proceeded to perform the ALIS analysis in the two steps to conclude that the claims of that patent were more likely patented.

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ineligible than not.

[00:21:07] Speaker 01:
The reason the board didn't get to that decision point with respect to the 715 patent is it decided it didn't have the authority to make that judgment.

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And the district court is not bound to follow, and it's not clear how it would follow, a jurisdictional determination by the board that if valid, the patent claimed a technical invention rather than primarily a business method.

[00:21:35] Speaker 01:
With respect to the 370 patent, unless the court has further questions on 715, we have a similar situation where computer implementation appears there as with the 715 patent, only in the preamble.

[00:21:52] Speaker 01:
Generally not viewed as limiting, but that's neither here nor there for present purposes.

[00:21:57] Speaker 01:
And it describes the abstract idea of recommending products to customers based on past purchase history of an item of interest to a consumer.

[00:22:06] Speaker 01:
It's the scenario in which I'm in a bookstore.

[00:22:07] Speaker 01:
I have a copy of Moby Dick that I'm going to buy.

[00:22:09] Speaker 01:
The clerk recalls that people who buy Moby Dick also buy the scarlet letter and recommends that to me.

[00:22:16] Speaker 01:
We're taking that idea and we're implementing it on a computer.

[00:22:19] Speaker 01:
And that basic step of computer implementation doesn't survive the ALICE test.

[00:22:27] Speaker 01:
At most, it provides an improvement in speed and efficiency, the kind that Intellectual Ventures versus Capital One demonstrates does not create an inventive concept.

[00:22:38] Speaker 01:
And similarly, the inventive concept that Intellectual Ventures points to with respect to that patent is tied to the claim language of filter data, which just like public and private data from the 715 patent is defined solely as a product of interest to a customer.

[00:22:56] Speaker 01:
Namely, it's the subjective input of the customer that determines the business logic of what gets recommended.

[00:23:01] Speaker 01:
There's nowhere in the patent is there an improvement in computer technology, let alone an algorithm, software algorithm adequately described.

[00:23:14] Speaker 01:
And I'm open to questions from the panel on any issues relating to the patents, but otherwise concluded my remarks.

[00:23:22] Speaker 04:
Thank you, Mr. Berland.

[00:23:23] Speaker 01:
Thank you, Your Honor.

[00:23:38] Speaker 04:
Mr. Hirch.

[00:23:40] Speaker 00:
Very briefly, Your Honor.

[00:23:43] Speaker 00:
Judge O'Malley's question about DDR holdings, I think, was particularly instructive because J.Crew's distinction was, well, in our case, we're trying to distinguish why this is a technical solution.

[00:23:56] Speaker 00:
They discussed the how in DDR, didn't they?

[00:23:59] Speaker 00:
The how does not appear to be an issue in DDR holdings, but if it was an issue or had been

[00:24:08] Speaker 00:
That was not fatal to the claims.

[00:24:11] Speaker 00:
But there was no, as far as I can tell, anything in the opinion about the how.

[00:24:17] Speaker 00:
But DDR Holdings is still precedent of this court, and I think applies to this case.

[00:24:22] Speaker 00:
And the only distinction was, in our case, we're relying on the specification for providing the problem.

[00:24:29] Speaker 00:
Well, the problem that DDR Holdings sought came from the specification, and this court is held in multiple cases.

[00:24:36] Speaker 02:
But the claims are what defines

[00:24:39] Speaker 02:
patent eligibility, correct?

[00:24:40] Speaker 00:
That is correct.

[00:24:41] Speaker 00:
There's a little bit of confusion.

[00:24:42] Speaker 02:
Isn't that a little bit of a problem with your chart in that you compare the spec to DDR's claims.

[00:24:48] Speaker 02:
You don't compare your claims to their claims.

[00:24:51] Speaker 00:
I disagree with that on the chart.

[00:24:54] Speaker 00:
The question is, what was the technical advance?

[00:24:56] Speaker 00:
And that's the problem solution analysis in DDR.

[00:24:59] Speaker 00:
And to determine, well, what was the problem you were trying to solve?

[00:25:03] Speaker 00:
That almost always comes from the specification.

[00:25:06] Speaker 00:
Then when you look at, well, what's the solution?

[00:25:08] Speaker 00:
That's when the claims come in.

[00:25:10] Speaker 00:
And what's the advance in the solution?

[00:25:12] Speaker 00:
That also comes from the specification.

[00:25:15] Speaker 00:
And that's what this chart in our brief is getting at, because the problem in DDR, like in every other patent, or most patents, is from the spec.

[00:25:23] Speaker 00:
The claims show the advance in the question of determining, do we have a real technological invention, technical problem, technical solution that's necessarily rooted in computer technology?

[00:25:35] Speaker 00:
You have to look to the rest of the patent to determine that.

[00:25:37] Speaker 00:
I'm over my time unless the court has any other questions.

[00:25:40] Speaker 04:
I will sit down.

[00:25:42] Speaker 00:
Thank you.

[00:25:43] Speaker 04:
Thank you both.

[00:25:44] Speaker 04:
The case is taken under submission.