[00:00:02] Speaker 00: We are, Your Honor. [00:00:26] Speaker 01: It should hopefully be a fun discussion. [00:00:30] Speaker 01: May it please the Court. [00:00:31] Speaker 01: The district court erred in this case by invalidating the five patents ensued under Section 101 on a Rule 12b-6 motion to dismiss. [00:00:39] Speaker 02: The court incorrectly concluded that... Kennedy What claims did you specifically argue be below? [00:00:43] Speaker 02: I mean, we're not going to analyze 242 claims separately. [00:00:51] Speaker 01: What are your representative claims? [00:00:55] Speaker 01: We identified a number in the complaint and some additional ones in the 12b6 opposition brief. [00:01:00] Speaker 01: And I would be happy to identify which ones those are. [00:01:02] Speaker 01: But I think the bigger issue is that the district court didn't even look at the claims that we had identified. [00:01:08] Speaker 01: It instead, and I'm looking at appendix page four here, it's attempted to identify the core concept that underlined all five of these patents. [00:01:17] Speaker 01: They do have different claims of different scope. [00:01:19] Speaker 01: And indeed, they come from four different specifications. [00:01:22] Speaker 01: So we believe that here it was, [00:01:24] Speaker 01: too much of a reduction to reduce all five patents to a single core concept. [00:01:29] Speaker 01: You're not alleging there's any question of fact that would preclude a decision on a motion to dismiss, are you? [00:01:36] Speaker 01: We are, Your Honor. [00:01:37] Speaker 02: What's your question of fact? [00:01:39] Speaker 01: Your Honor, if we look in the complaint, and this is at appendix page 1004, 1003, 1004, the allegation in the complaint was that the patents in the suit that ordered combination [00:01:51] Speaker 01: components provided an inventive concept by improving the functioning of devices like toys. [00:01:57] Speaker 01: And that's paragraph 16 at the top of page 1004 of the appendix. [00:02:02] Speaker 01: Paragraph 17 goes on to state that the technologies claimed presented new and unique advantages over the state of the art at the time, which was 1998. [00:02:11] Speaker 01: And at the time of the invention, the technologies were innovative. [00:02:15] Speaker 01: I think this presents a fairly similar circumstance to some of the court's recent opinions, which post-date the briefing in this case, in a case like Atrix, where the complaint, here the original complaint as opposed to an amended complaint. [00:02:27] Speaker 01: But the complaint presents an argument that the technology was not conventional at the time of invention. [00:02:33] Speaker 01: And that should have been interpreted in the light most favorable to dialware at the 12b6 stage of the case. [00:02:42] Speaker 03: When you say the technology is not conventional, you're not talking about the specific components, though, are you? [00:02:50] Speaker 03: No, I'm not, Your Honor. [00:02:51] Speaker 03: Right. [00:02:51] Speaker 03: You agree that all the components. [00:02:53] Speaker 03: And I have a bunch of different claims sitting in front of me, but the one at least I'd like you to talk about, because I think it's the most difficult one for me, is claim one of the 963, the twig kit, as opposed to all the method claims. [00:03:08] Speaker 03: How do you distinguish [00:03:11] Speaker 03: that claim from TLI, our decision in TLI. [00:03:16] Speaker 03: And I'm going to ask this question of your friend on the other side and compare it to our decision in Thales. [00:03:23] Speaker 03: Because it seems to me that those two cases look at very similar things and come to, I won't say inconsistent, but certainly different conclusions based upon what they're looking at in terms of what the abstract idea is and how it's implemented. [00:03:37] Speaker 01: Certainly, Your Honor. [00:03:38] Speaker 01: So to answer your question regarding TLI first, [00:03:41] Speaker 01: I think actually the claims here, claim one, really does show how this case is different from TLI. [00:03:48] Speaker 01: In TLI, the court, as you know, held that the patent was ineligible in part because it relied on truly generic components, a truly generic technological environment. [00:03:58] Speaker 01: And that was a server that did just what servers always do, a telephone that did just what telephones always do. [00:04:05] Speaker 01: In fact, the telephone was simply a source of digital images. [00:04:08] Speaker 01: I think the telephone could just as easily have been a digital camera. [00:04:13] Speaker 01: What we have here are combinations of components that actually lead to a new component, which is the new toy. [00:04:18] Speaker 01: A toy that, for example, a goose that you wind up and it walks around on the table is a different toy from a toy that can hear that goose and move to follow it based on detecting a physician. [00:04:27] Speaker 00: Can I just get some clarification at that point? [00:04:29] Speaker 00: I don't want to interrupt the judge. [00:04:31] Speaker 00: But as I understand it, your argument is [00:04:36] Speaker 00: that this is a technological improvement because it applies communication in the field of toys. [00:04:43] Speaker 00: So it's not taking the technology out in the step two analysis. [00:04:47] Speaker 00: It's not saying we've got some brand new technology. [00:04:50] Speaker 00: It's just this technology has not previously been applied and used with respect to toys, right? [00:04:58] Speaker 01: Pretty much correct, Your Honor. [00:04:59] Speaker 00: Isn't that not Mayo or CLS? [00:05:02] Speaker 00: My understanding of step two in Mayo and CLS is you're not looking. [00:05:07] Speaker 00: I mean, applying it to the new concept, applying computer arbitration, you could have made the same thing. [00:05:16] Speaker 00: But it seems to me the Supreme Court's analysis rested on the additional thing that you were bringing in and the additional technology, not on the fact that applying that technology to toys or [00:05:27] Speaker 00: arbitration would be somehow different and unique and not done before. [00:05:32] Speaker 00: Do you understand what I'm saying, and do you agree that that's what the case law calls for? [00:05:36] Speaker 01: I think I agree with you on both of those points, Your Honor. [00:05:38] Speaker 01: Where I would disagree would be the framing of that as using existing technology and just simply applying it in a new way. [00:05:46] Speaker 01: What the allegation is and our argument is that by applying that technology, it actually requires particular applications that lead to a new [00:05:55] Speaker 01: improved toy, and that reflects a practical application. [00:05:58] Speaker 03: And one of the key differences between this case and... So are you arguing this is eligible at step one as well as step two? [00:06:08] Speaker 01: We are, Your Honor. [00:06:09] Speaker 01: We certainly are. [00:06:10] Speaker 01: It has become a little more difficult to determine whether an improvement in the field, whether it be computers or toys, is a step one or a step two inquiry, but we're arguing that [00:06:20] Speaker 01: as in, for example, Thales or Endear, to go back to your question about Thales, that this would meet step one. [00:06:27] Speaker 03: I should know this, but I didn't reread it this morning. [00:06:30] Speaker 03: Is Thales a step one or a step two case? [00:06:33] Speaker 01: I believe it was a step one case, Your Honor. [00:06:36] Speaker 01: It was something that the court compared to being analogous to Deer. [00:06:39] Speaker 03: OK, so let me get you back to this Tleikik claim and Tail-I. [00:06:45] Speaker 03: Why isn't this the same thing? [00:06:48] Speaker 03: Or let me ask you the other question. [00:06:50] Speaker 03: Your logic about this is doing all this with these toys creates a new toy. [00:06:55] Speaker 03: Why didn't implementing the organization and coding software in TLI create a new camera? [00:07:06] Speaker 01: I think that it goes back to the court's guidance in ALICE regarding the ubiquity of general purpose computers. [00:07:13] Speaker 01: We certainly have elements here that are computer type elements. [00:07:17] Speaker 03: Sure, but TLI wasn't just [00:07:18] Speaker 03: computer was a camera with a microprocessor or something very, very similar. [00:07:24] Speaker 03: What's the difference between a camera with a microprocessor and a toy with a microprocessor? [00:07:31] Speaker 01: I think the difference is that the camera with the microprocessor was itself a conventional item. [00:07:36] Speaker 01: Here the toy is not a conventional toy as was the state of the art in 1998. [00:07:40] Speaker 01: The microphone was conventional, the actuator was conventional, but when you combine those components together you get a non-conventional toy. [00:07:48] Speaker 01: And that's the environment in which this alleged method of communication. [00:07:53] Speaker 03: What's not conventional about a toy with a microphone and a microprocessor? [00:07:59] Speaker 03: The allegation and the complaint in our... The addition of the microprocessor that can do this software? [00:08:05] Speaker 03: Well, in part, it's when you read the... But isn't that the... I don't want to belabor this, but this is my problem, is it sounds a lot like TLI to me because [00:08:16] Speaker 03: I think at the time of the TLI patent, people weren't necessarily putting microprocessors in camera to do the encoding and the like. [00:08:24] Speaker 03: But the court still looked at the fact that it was basically just using a computer to implement an abstract idea. [00:08:33] Speaker 01: That's correct. [00:08:34] Speaker 01: And I think that that is part of the difference, John. [00:08:35] Speaker 01: I think there's a greater concern in cases under 101 where we're using generic computer functionality. [00:08:40] Speaker 01: And that's not what Detroit has. [00:08:44] Speaker 03: It doesn't. [00:08:44] Speaker 03: I mean, where does it say in the claim that it's anything other than, I mean, you don't even describe what it is, but I assume an analyzer or the actuator are just some kind of microprocessor. [00:08:58] Speaker 01: Well, the actuator is actually something that causes the physical response. [00:09:01] Speaker 01: So it's the interface between detecting some property of another toy's motion and then causing the second toy to move to follow that first toy. [00:09:09] Speaker 01: So that is a good example, actually, of something that is not a generic computer component. [00:09:13] Speaker 01: I think, for example, in TLI, if you had had a classification system where the, for example, you classify information about where a photo was taken, and then the computer moved on wheels to move itself to the location based on that classification, I think that would have been a very different case. [00:09:30] Speaker 01: It would have been something that was very different from generic computer implementation. [00:09:34] Speaker 01: And so that's, I think, what we have here. [00:09:36] Speaker 01: We have these toys performing specific physical behaviors in response to any analysis of the acoustic signal. [00:09:43] Speaker 01: It's not that they have the signal in the claim, just like in many of the past cases. [00:09:48] Speaker 01: The signal in the claim does not defeat its eligibility. [00:09:51] Speaker 01: It's the fact that it applies it to create these new toys that are more fun to play with because they have these physical behaviors. [00:09:57] Speaker 01: And that's not generic computer functionality. [00:10:00] Speaker 03: At least for claim one. [00:10:02] Speaker 03: Yeah, and I think some of the dependent claims... If you look at some of the method claims, they seem to be at a much higher level of abstraction. [00:10:09] Speaker 03: I think you start to run into problems with those. [00:10:12] Speaker 01: Well, you know, I would agree with you, Your Honor. [00:10:14] Speaker 03: I mean, I'm just looking down at the page of what's in front of me, but if you look at claim 19 of the 517, it doesn't have anything about an actuator. [00:10:23] Speaker 03: All it is is programming the first toy to generate a single, transmit the signal, the second toy to receive it, and then producing a response. [00:10:33] Speaker 01: I would agree with you, Your Honor, that that would certainly present a closer case compared to, for example, in the same patent claim 23, which requires that you have the toy move or toy move in appendage. [00:10:44] Speaker 01: So for example, it could be one of those little cat toys that you see that moves its arm like this. [00:10:50] Speaker 01: I think that is a much more specific implementation that would present a better case under 101. [00:10:55] Speaker 01: And again, this goes back in part to the fact that despite the fact that we identified a number of claims from each patent, both in the complaint [00:11:02] Speaker 01: and the opposition. [00:11:03] Speaker 01: The district court didn't really engage with these differences and it tried to look at these patents all as a piece. [00:11:09] Speaker 01: I would agree with you that the 963 patent presents the strongest case for eligibility here because every claim is expressly limited to a toy kit where the toys have actuators and perform these physical behaviors. [00:11:21] Speaker 01: I think some of the other claims in the 517 patent, for example, claim 23, but also claim 16 [00:11:27] Speaker 01: which talks about a specific implementation using a directional microphone. [00:11:31] Speaker 01: So it does actually put some meat on the bones of what the non-generic implementation is in the toy that allows it to analyze and respond to these signals. [00:11:40] Speaker 01: And this is not a case where we have to scour the specification for disclosure about how these things are actually working. [00:11:47] Speaker 01: You had mentioned the analyzer. [00:11:49] Speaker 01: The specifications do give quite a bit of detail about how the analyzer detects the position of other toys and detects their direction of motion, for example. [00:11:57] Speaker 01: The 963 patent, I believe it's at appendix page 65 and 67, talks about different types of microphones, plurality of microphones sensing sound with different frequency coming from different parts of the toy. [00:12:12] Speaker 02: The patents talk about analyzing signal properties. [00:12:16] Speaker 02: How are they analyzed? [00:12:18] Speaker 02: How does the analysis perform? [00:12:20] Speaker 01: Well, so there is a software component. [00:12:22] Speaker 01: For example, at appendix page 67, what you see is [00:12:26] Speaker 01: Description of some of the equations that the microphones would actually use to detect it can be done in a couple ways one way is Doppler shift And so for example when a toy is moving towards you at 11 different frequencies from when it's moving away from you, right? [00:12:41] Speaker 01: Excuse me, how is that done? [00:12:44] Speaker 01: How is that done? [00:12:45] Speaker 01: The microphone is actually sensing, you know the frequency and then the analyzer is a software hardware [00:12:52] Speaker 01: an integrated circuit, perhaps, that interfaces between the microphone and the actuator. [00:12:57] Speaker 01: Yeah, perhaps. [00:12:58] Speaker 01: I think that to the extent that there's any issue there, that would be more of a 112 issue to see if the support is there. [00:13:05] Speaker 01: But certainly, compared to other cases as court has seen, where the claims preside just simply producing a response, these claims give quite a bit of detail, the 963 and the 517 particularly, about what those responses need to be and also help guide [00:13:20] Speaker 01: what the actuator and the analyzer would need to do. [00:13:22] Speaker 01: If it's going to be a leader-follower functionality, you need to use that directional microphone to detect the sound from another toy and then move towards that toy. [00:13:31] Speaker 01: It is relatively simple programming to do that. [00:13:36] Speaker 01: I don't think there's a 112 issue there, but that would be the framework for the analysis. [00:13:51] Speaker 04: Good morning. [00:13:53] Speaker 04: Your honor, you raised a couple of questions at the outset in terms of the representative claims. [00:13:57] Speaker 04: From our standpoint, I think the court should follow what happened at automated tracking here on the opposition to the motion to dismiss. [00:14:06] Speaker 04: They identified exemplary claims. [00:14:08] Speaker 04: They didn't use the word representative, but it seemed to have the same effect. [00:14:12] Speaker 04: So we think those representative or exemplary claims are the claims that the court can look at here to decide holistically on the patents. [00:14:20] Speaker 04: You also asked about whether they were preserving a fact question, as it were. [00:14:27] Speaker 04: And they cited to page 1004 of the appendix, which is in the complaint. [00:14:32] Speaker 04: But the only thing that's explained there is the observations about how they overcame the prior art. [00:14:38] Speaker 04: They merely observed that some elements were missing in the prior art. [00:14:41] Speaker 04: They don't make any effort. [00:14:42] Speaker 04: There's no allegation that there was something that was not well understood. [00:14:49] Speaker 04: that was not routine, you know, any of the factors here that are necessary for them to establish. [00:14:54] Speaker 00: But the burden is on you, not on them. [00:14:56] Speaker 00: I mean, they don't have to... You have to prove that it's conventional, routine, etc. [00:15:02] Speaker 04: Yes, that's correct, Your Honor, and there's no... I don't think there's any doubt. [00:15:06] Speaker 04: So when looking at that, you of course look at the complaint and look at specifications and the claims as a whole, and then the specific elements. [00:15:14] Speaker 04: Here, when you look at the specifications in particular, it's very clear that we're dealing with wholly [00:15:19] Speaker 04: generic equipment. [00:15:20] Speaker 03: There are literally dozens of sites in the specification, but for instance... That seems true with respect to toy, because they certainly don't define toy, and with respect to microphone and the like. [00:15:37] Speaker 03: But what about an actuator? [00:15:40] Speaker 04: Well, all they say about an actuator is it's something that acts. [00:15:44] Speaker 04: This is about as generic as you can get. [00:15:47] Speaker 04: They have an analyzer that analyzes. [00:15:50] Speaker 04: They have an actuator that has a motor couple to it to engage in some kind of response. [00:15:55] Speaker 04: I mean, this court has said repeatedly that when you're dealing with claim language that is functional in nature. [00:16:02] Speaker 03: So in your view, the actuator is just some kind of processor that's then attached to a conventional motor that can operate the toy. [00:16:10] Speaker 04: Yes. [00:16:10] Speaker 04: And the specification, to the extent it talks about it, talks about it in that fashion. [00:16:16] Speaker 02: doesn't have to have a processor. [00:16:18] Speaker 02: An actuator can be purely mechanical. [00:16:20] Speaker 04: Yes. [00:16:21] Speaker 04: Right. [00:16:21] Speaker 04: But in some of the claims, it talks about the actuator making the decision on what the response is. [00:16:25] Speaker 04: So in that respect, it needs a processor. [00:16:27] Speaker 04: But all of these terms that we're using right now are the most generic of terms. [00:16:33] Speaker 04: And it has the additional problem of being wholly functional in nature. [00:16:38] Speaker 04: All of these claims talk about responding, sending, receiving. [00:16:44] Speaker 04: I mean, one of the claims literally uses the word's function. [00:16:48] Speaker 04: The first function is sending. [00:16:49] Speaker 04: The second function is receiving. [00:16:51] Speaker 04: And that's always been a telltale sign for this Court that we're talking about something that's directed to an abstract idea, in this case, sending, receiving, and responding to signals. [00:17:04] Speaker 04: And we did what I think is an interesting exercise with regard to the [00:17:12] Speaker 04: Claim 19 of the 517, I'm sorry. [00:17:16] Speaker 03: Yeah, no, I'm just going to ask you. [00:17:18] Speaker 03: Yes. [00:17:19] Speaker 03: So a toy, let's say you're the first person to come up with the idea of a toy that makes noise. [00:17:26] Speaker 03: You say, oh, I'm going to put a music box inside of a toy and you pull a string and it makes noise. [00:17:31] Speaker 03: That's patent eligible, right? [00:17:33] Speaker 04: Depending on how the claim is phrased, it could or could not be. [00:17:37] Speaker 03: I mean, you can make it very simple. [00:17:39] Speaker 03: You can say a toy that includes [00:17:42] Speaker 03: music-making device that operates to make music embedded in the toy if you interact with it in a certain way? [00:17:51] Speaker 04: I don't necessarily believe that that would be patting the ball under Alice at its progeny. [00:17:56] Speaker 03: So you think a toy that makes noise is an abstract idea? [00:18:02] Speaker 04: Well, you know, that would be a [00:18:07] Speaker 03: a harder Alice case because it would be hard to... Honestly, you're not going to be very helpful to me if you're not even going to start off agreeing that that is eligible. [00:18:16] Speaker 03: Because to me, if your argument for an eligibility on that is that we're looking at the abstract idea of something of making noise, then that's an over-reducted view of that claim. [00:18:29] Speaker 03: Let's just assume it's not just the abstract idea of making noise, but there's enough in there to be a physical component. [00:18:36] Speaker 03: So a toy that makes noise is eligible. [00:18:39] Speaker 03: OK. [00:18:39] Speaker 04: Yes. [00:18:40] Speaker 04: I agree with all that. [00:18:42] Speaker 04: Those are fair observations. [00:18:43] Speaker 04: Because at that point, on step one, it's hard to identify what the actual abstract idea is so you never really get to the inventive concept. [00:18:52] Speaker 03: Well, that's the problem with this case. [00:18:54] Speaker 03: I mean, at least I'm looking mostly at the toy kit, the CLEM-1 and 963, which is the most problematic for me. [00:19:01] Speaker 03: It has a lot of stuff in it that looks an awful lot like deer to me. [00:19:06] Speaker 03: It certainly has some kind of abstract idea within it about toys communicating with each other and responding to signals and the like, but it's two toys operating in a system together. [00:19:18] Speaker 03: And the abstract idea that may be embedded in this somewhere improves and creates a new toy system, doesn't it? [00:19:29] Speaker 04: It does because of the abstract idea itself. [00:19:32] Speaker 03: But isn't that deer? [00:19:34] Speaker 03: I mean, deer is a rubber curing system, I think, I haven't read in a while, that is improved by the application of a natural law. [00:19:43] Speaker 04: Yeah, I think the interesting contrast is deer and fluke. [00:19:47] Speaker 04: In deer, it was patent-eligible subject matter because it wasn't just the case of taking the mathematical formula and plugging it into an existing process. [00:19:59] Speaker 04: and then saying, that's it. [00:20:01] Speaker 04: What they did there was they embedded it more deeply into the process. [00:20:05] Speaker 04: They explained how to use the formula. [00:20:07] Speaker 04: They explained the results that came from it and the significance of those results as it differed from what happened before. [00:20:13] Speaker 03: The contrast... Why don't they do all that here? [00:20:16] Speaker 03: They talk about two toys with microphones and receivers and the like. [00:20:20] Speaker 03: They reference software and actuator that allows one toy to send a signal. [00:20:25] Speaker 03: the other toy to respond to that signal in a certain way based upon that response. [00:20:30] Speaker 03: I mean, I know it's not very specific about the kinds of actions and things like that, but I don't think it has to say, you know, in detail, if you get this response, you'll move your arm. [00:20:41] Speaker 03: And if you get this response, you'll open your mouth. [00:20:43] Speaker 03: That seems to me to be stuff a skilled artist would know how to program. [00:20:49] Speaker 04: Well, so when we're looking at the 963, when we're looking first to see whether it's directed toward an abstract idea, and we see what the limitations are, the limitations are all directed toward receiving the signal, analyzing the signal, responding to the signal, having an actuator controlling the response, and then providing a response. [00:21:13] Speaker 04: So from a directed toward standpoint, it's clear that the entire [00:21:19] Speaker 04: focus of the patent is on this idea of two devices going back and forth and communicating. [00:21:26] Speaker 03: But I, and... And why isn't that patent eligible? [00:21:29] Speaker 03: If you're the first person to come up with a notion that, oh, we have this universe of toys out here that makes noises and even talks and things like that, but nobody's ever thought of putting a receiver in, in these toys and having them actually talk and respond to each other, why isn't that patent eligible? [00:21:49] Speaker 03: Because isn't that a different type of toy, a toy that merely talks and a toy that actually understands what's being said to it in response? [00:22:00] Speaker 03: I mean, not understanding any kind of like conscious sense, obviously, but they communicate with each other and take specific actions. [00:22:08] Speaker 03: Why isn't that an eligible new kind of toy? [00:22:11] Speaker 04: I think we could look at a lot of the Alice Progeny cases and see [00:22:16] Speaker 04: instances where the abstract idea improved the environment in which it was operating. [00:22:21] Speaker 04: We could see in automated tracking, RFID being used for tracking objects improved that environment, but still, that was not strong enough. [00:22:32] Speaker 04: In ERI, XML tags improved database searching, but that was not good enough. [00:22:38] Speaker 04: The reason that they were not good enough was because I think the case law is quite clear that the... Well, that's because they just [00:22:45] Speaker 03: improved the operation of a computer rather than created a new type of computer or a new type of database. [00:22:54] Speaker 03: But why isn't toys that talk to each other a new type of toy rather than just improvement? [00:23:04] Speaker 04: In West U, it would be a new type of telephone unit, right? [00:23:09] Speaker 04: And so there are a number of cases where the phones are improved, where you have tangible [00:23:14] Speaker 04: Things that are improved, they tend not to be as stark as toys. [00:23:17] Speaker 04: They tend to be technical product. [00:23:19] Speaker 04: But the products themselves are better products because of the addition of the idea. [00:23:24] Speaker 03: Isn't it actually, most of those cases, I don't recognize all the ones you're referencing, but most of the ones I'm familiar with is the computer makes the abstract idea operate more efficiently, not the abstract idea makes the computer a new computer. [00:23:41] Speaker 03: What about infish? [00:23:43] Speaker 04: There are those cases, right, that talk about... Those are the easiest Alice cases, I think, where you just have an idea and you say, hey, let's do it on a computer, right? [00:23:55] Speaker 04: And the Court has been very clear that that can't be enough. [00:23:58] Speaker 04: But those are not the only cases. [00:23:59] Speaker 04: I mean, in automatic traffic, automatic tracking, the claims claim an antenna and all kinds of peripheral hardware for the tracking process, which would be improved by the U.S. [00:24:11] Speaker 04: by the use of RFID. [00:24:13] Speaker 04: Westview was peripherals that had microphones and speakers almost identical to this case in terms of the overall unit. [00:24:22] Speaker 04: TLI was a telephone unit. [00:24:23] Speaker 04: It wasn't just a computer. [00:24:24] Speaker 03: What about Thales? [00:24:27] Speaker 04: So Thales follows on Dear. [00:24:30] Speaker 04: I think you asked the question whether it was just step one or step two. [00:24:32] Speaker 04: It was neither, I think, really, as a practical matter, because it was so close to Dear that it just kind of fell on all fours for Deal for this court. [00:24:41] Speaker 04: But for Deere, excuse me. [00:24:43] Speaker 03: But Thales was... Well, I mean, if you have to put it in a box, it's step one, right? [00:24:48] Speaker 03: I mean, I know Deere is pre-Alice, but if you look at Deere and the way it's articulated, it's not step two. [00:24:56] Speaker 03: It's a step one case. [00:24:57] Speaker 04: Yeah, I think it most closely falls into step one. [00:25:00] Speaker 04: I would agree if we have to put it into a box. [00:25:01] Speaker 04: But that was a very, that was a very different case than this case, because there you had [00:25:07] Speaker 04: a unique configuration of sensors. [00:25:10] Speaker 04: So you had an original problem where you were getting inaccurate data with regard to tracking moving objects relative to other moving platforms, right? [00:25:19] Speaker 04: So what the patent... It was a particular configuration, generic components, a particular configuration. [00:25:25] Speaker 04: Yes. [00:25:26] Speaker 04: So they took sensors and changed the manner in which they were configured to fundamentally change the entire analysis. [00:25:35] Speaker 04: So there was a physical change, sensors were changed in terms of how they were used and result in, rather than doing an analysis of the moving object relative to the Earth, they did a mathematical analysis of the moving object relative to gravitational forces. [00:25:51] Speaker 04: So there you had a very specific technical problem and a very specific technical solution which had a both physical and a [00:25:59] Speaker 04: conceptual nature to it. [00:26:00] Speaker 03: The problem is, depending on how you describe these claims, you can come up with the same thing here. [00:26:07] Speaker 03: You never had toys that could talk to each other before. [00:26:09] Speaker 03: That's a specific technical problem. [00:26:12] Speaker 03: They use a specific configuration of conventional items and program it in a way to allow them to do something that had never been done before. [00:26:22] Speaker 03: Why isn't that ails? [00:26:26] Speaker 04: Because Thales, the abstract idea was the mathematical formula, right? [00:26:31] Speaker 04: And it was just integrated into a much bigger solution. [00:26:35] Speaker 02: Here, the difference- The mathematical formula in Thales also made the process more efficient. [00:26:42] Speaker 02: Right. [00:26:42] Speaker 02: It reduced it from three steps to two steps, which in the context of the invention was a big step forward. [00:26:51] Speaker 04: Right, and it made it more accurate as well. [00:26:53] Speaker 04: It had many benefits. [00:26:55] Speaker 04: And that case was really about, I think, the mere fact that you're using a mathematical formula doesn't take an otherwise patentable claim and make it ineligible. [00:27:04] Speaker 04: The differentiation, I think, to try and get to your point is when the technical problem is merely the absence of the abstract idea and the technical solution is adding the abstract idea, that kind of solution has not [00:27:23] Speaker 04: been held up in any case that we've seen. [00:27:25] Speaker 03: But if you take that logic to its extreme, then it seems to me you're saying, no matter how you write this claim one of the 963, if this is the first person that's ever come up with the idea of toys that react to each other, never been done before, the only thing, and that's the main idea to make it an invention, it's never going to be an eligible invention. [00:27:52] Speaker 04: depending on time and context, that may be so, right? [00:27:56] Speaker 03: I mean there was a... Why does time and context matter? [00:27:59] Speaker 04: Because there could have been challenges associated with that that they overcame. [00:28:02] Speaker 04: Like this would be a very different case if for some reason, okay, we're in a toy environment, we're with children, there are challenges associated in some way with the manner of wireless communications in that environment. [00:28:14] Speaker 04: They identified that challenge and they came up with a solution, a technical solution to that technical problem. [00:28:21] Speaker 04: That's very [00:28:23] Speaker 04: That would be eligible. [00:28:25] Speaker 04: But if it is just, just, hey, I have a good idea, let's use this abstract idea in this different environment, then that is merely a field restriction. [00:28:36] Speaker 02: My problem is that looking at it from an overview, what the patent does is substitute for the kid. [00:28:44] Speaker 02: Because whether it's little Billy saying, [00:28:52] Speaker 02: the two toys are talking to each other because he's pretending they're talking to them. [00:28:57] Speaker 02: That's an abstract idea, but it happens all the time. [00:29:01] Speaker 04: Right. [00:29:02] Speaker 04: And if I, I know I'm out of time, but if I could just address your point in one more way, you know, we are embarking on the age of the internet of things, right? [00:29:09] Speaker 04: I can, I can replace some of these claims with toys and put in refrigerator and cell phone, right? [00:29:15] Speaker 04: And, and, and they will still work. [00:29:18] Speaker 04: So if we're going to get to a place where [00:29:20] Speaker 03: Why isn't that eligible? [00:29:23] Speaker 03: If you're the first person to come up with a smart refrigerator that can send messages to your phone that says, you need milk, you need eggs, you need orange juice, why isn't that a new invention as opposed to a dumb refrigerator? [00:29:38] Speaker 04: And I imagine Samsung, which sells that now, has patent applications out there. [00:29:43] Speaker 04: But the patent applications, if properly framed, are going to be associated with the technological challenges associated with that. [00:29:49] Speaker 04: not the idea itself. [00:29:50] Speaker 04: Because if you're going to start doing that with the idea itself, we're going to have cars talking to stop signs. [00:29:55] Speaker 03: We're going to have cars... But I imagine the technological challenges to that are all implemented using very conventional stuff. [00:30:03] Speaker 03: They use a conventional refrigerator. [00:30:06] Speaker 03: They use microprocessors and things to send data signals to your phone. [00:30:11] Speaker 03: They probably use all kinds of sensors that are pre-existing in the refrigerator to detect whether you have milk or orange juice or the like. [00:30:21] Speaker 03: And the question will be? [00:30:21] Speaker 03: What they've done is they've ordered them all in a new way to accomplish something that nobody's ever thought of in the first place. [00:30:28] Speaker 03: I mean, this eligibility stuff, if you start looking at it in that sense, just seems to sweep in a whole lot of innovation. [00:30:38] Speaker 04: Yeah, I guess my reaction to that is if they faced technical challenges in doing that, they're entitled to get a patent on the solution that they came up with. [00:30:48] Speaker 04: But if it is just going to be... Yes, however they may phrase it, but if it's just going to be, I, because I'm the first one that came up with the idea that a car can communicate with a stop sign, I could get a patent for that? [00:31:03] Speaker 03: I mean, the preemption is the... I agree entirely, but the problem with your argument is [00:31:08] Speaker 03: claim one, the toy system isn't, I'm just claiming the idea of toys communicating with each other. [00:31:14] Speaker 03: It has very specific configuration of the various components. [00:31:20] Speaker 03: I don't know how, I mean, what else would you do to claim one to make this, assuming that a new toy system is eligible, what else would you add to that claim? [00:31:29] Speaker 03: Sorry, I know I'm going over time, but what else would you add to that claim to make it eligible? [00:31:36] Speaker 04: I think the only thing that can make something like Claim One eligible is if there is a technological problem and solution. [00:31:44] Speaker 04: There is no such thing here because the only problem that they've found is not a problem, it's just the idea of using an abstract idea in a different environment. [00:32:08] Speaker 01: I'd like to make one procedural point and one substantive point. [00:32:12] Speaker 01: My friend on the other side mentioned the description of something as an exemplary claim. [00:32:17] Speaker 01: And in the context of the 12b6 motion and the fact issues, I just want to point the court to appendix pages 1061 to 62. [00:32:24] Speaker 01: With 242 claims, Dialware did its best to call out the limitations from all the claims it believed were relevant. [00:32:31] Speaker 01: And so the bottom of 1061 said, Hasbro largely overlooks the differences between the individual patents and claims. [00:32:38] Speaker 01: and focuses improperly at a macroscopic level of abstraction. [00:32:42] Speaker 01: And then in the footnote on 1062 said, we're using exemplary claims, but this is a 12b6 motion. [00:32:47] Speaker 01: We're trying our best to advance the case for the judge and don't want that to count against us if we wanted to assert more claims. [00:32:55] Speaker 01: The district judge then did not actually consider any of the claims, even the ones that Dioware did identify. [00:33:00] Speaker 01: It instead tried to find a core that was underneath all of those claims. [00:33:05] Speaker 01: On the substantive point, I think [00:33:07] Speaker 01: that Judge Hughes' questions about Deere are what show something interesting about these claims. [00:33:13] Speaker 01: Some of the 963 claims are, I think, fairly clear on this point. [00:33:17] Speaker 01: Just like in Deere, and I'll just read the language from Deere, Deere says that the appellant did not want to foreclose the use of the equation, but instead in connection with a series of steps. [00:33:29] Speaker 01: Those include installing rubber in a press, closing the mold, constantly determining the temperature of the mold, [00:33:35] Speaker 01: constantly recalculating the appropriate cure time through the use of the formula in a digital computer and automatically opening the press at the proper time. [00:33:41] Speaker 03: Is that how you distinguish TLI from DR in this case, that there are specific steps there, whereas TLI was directed very generally at the idea [00:33:52] Speaker 03: of coding and classifying data packets, I think. [00:33:55] Speaker 01: I think that is a good way to distinguish it. [00:33:57] Speaker 01: This is not a generic computer case. [00:33:59] Speaker 01: It's a case where the specific steps matter because they're tied to the toys themselves and to the modes of interactive play. [00:34:05] Speaker 03: Except that, again, some of your claims just don't even come close on that front, right? [00:34:09] Speaker 03: Like claim 19 that we talked about earlier on the 517 about programming, receiving a signal, that sounds a lot more like TLI to me. [00:34:19] Speaker 01: Your Honor, we can accept that that's a closer claim. [00:34:21] Speaker 01: And again, it goes back to the district court's decision not to look at the patents differently. [00:34:26] Speaker 01: I would submit that, for example, the 297 patent is really directed to somewhat different subject matter and shouldn't have been considered part and parcel with the 963 patent. [00:34:35] Speaker 01: I think that the 963 and some of the claims of the 517 that do recite these specific physical behaviors and some of the 929 patent claims present a much stronger case. [00:34:44] Speaker 01: And if the court were to reverse on those, we believe that would be appropriate. [00:34:49] Speaker 01: But at the very least, given the allegations and the complaint that this improves the toys, we believe that at least on the 12b6 standard, where it's our opponent's burden to bring clear and convincing evidence to overcome the presumption of validity, that we would survive a 12b6 challenge and warrant a vacate and remand. [00:35:06] Speaker 01: Thank you. [00:35:06] Speaker 01: Thank you. [00:35:07] Speaker 01: Thank both sides for the case submitted.