[00:00:01] Speaker 01:
The next case for argument is 18-1071, Inray Baxter.

[00:00:24] Speaker 01:
You all are being very efficient in changing the guard here.

[00:00:26] Speaker 01:
We appreciate it.

[00:00:28] Speaker 02:
We're working on it, Your Honor.

[00:00:30] Speaker 02:
May I proceed?

[00:00:30] Speaker 01:
Yes, please.

[00:00:31] Speaker 02:
May I please the court?

[00:00:32] Speaker 02:
This is an appeal from a PTAP decision finding Baxter's 092 application claims ineligible for patent protection under section 101.

[00:00:42] Speaker 02:
The 092 application generally focuses on automating steps and preparing prescription medication with the goal of getting the right medication prepared the right way to the right person at the right time.

[00:00:54] Speaker 02:
Accuracy and efficiency are critical here because mistakes and delay can result in patient death.

[00:01:00] Speaker 02:
Like the claims that this court found patent-eligible in the Phales, Macro, Core Wireless, and Trading Technology cases, the 092 application claims recite a specific technological improvement over prior systems.

[00:01:13] Speaker 04:
Unlike Phales, this case, for example, the workstations, you're trying to claim on appeal that there's some sort of specialty thing.

[00:01:21] Speaker 04:
But I thought that the patent pretty clearly stated these are prior art workstations that

[00:01:28] Speaker 04:
They can be adapted for a particular purpose, such as to include automated pill counters, automated syringe preparation.

[00:01:34] Speaker 04:
I mean, it seems like, unlike Thales, which involved a new and different combination of sensors, this seems like it's just a combination of prior art technology.

[00:01:49] Speaker 02:
Your Honor, I believe it was Appendix 49 where it describes in the specification what the

[00:01:56] Speaker 02:
claimed automated workstations are.

[00:01:57] Speaker 02:
And you're right.

[00:01:58] Speaker 02:
They're automated pill counters.

[00:02:00] Speaker 02:
They can include automated syringe preparation stations and automated IV compounding stations, which Baxter, with respect, will submit are not generic computer components.

[00:02:09] Speaker 04:
These are not generic computer components, but they're generic prior art stations.

[00:02:13] Speaker 04:
All of these things existed in the prior art in this field.

[00:02:16] Speaker 04:
There's nothing inventive about them.

[00:02:19] Speaker 02:
In this application, we did not claim to invent the actual workstations.

[00:02:24] Speaker 04:
No, in fact, the application says they're prior art, right?

[00:02:27] Speaker 04:
That these are your typical prior art workstations.

[00:02:30] Speaker 02:
Not typical, but they are prior.

[00:02:31] Speaker 02:
I mean, they were known.

[00:02:32] Speaker 02:
So I would say they're conventional, or they were used, or that everyone had them.

[00:02:36] Speaker 02:
In fact, if we look at the board's 103 obviousness conclusion, where they found the claimed combination of structure and function.

[00:02:43] Speaker 04:
The workstation can't be the inventive concept that takes you outside of Alice, because the workstation in this case is admittedly a prior art

[00:02:53] Speaker 04:
used workstation?

[00:02:55] Speaker 02:
Your Honor, the evolution of the automated workstation is, yes, it was revolutionary to have the automated workstations, the syringe compounders, the IV prep stations.

[00:03:08] Speaker 02:
Then the question became, in the evolution of the technology, how do you fit them in and integrate them into a pharmacy that was typically driven by paper process, printed prescription labels?

[00:03:18] Speaker 02:
How do you walk into a tangible physical room that had automated workstations,

[00:03:23] Speaker 02:
and that had manual workstations that were driven on a separate system, driven on paper where they could be lost or they could be destroyed, and then you would lose work product and potentially hurt somebody.

[00:03:33] Speaker 02:
How do you make this all play nice?

[00:03:35] Speaker 02:
How do you integrate the manual paper-driven workstations and the automated workstations so you don't have duplicative tasks, duplicative work?

[00:03:43] Speaker 02:
How do you put it all together in one place so that you can further integrate it into inventory systems and take steps that were not being done before, for example, priority

[00:03:53] Speaker 02:
inventory and tracking, how you make that all work together so then you can add efficiency to the system that wasn't there.

[00:03:59] Speaker 02:
And that's really what we're focusing on for the invention.

[00:04:02] Speaker 02:
Additionally, for claims 2, 3, and 32, after we determine that the prescription dose is being sent to a manual workstation, we're then selecting the specific instructions on how to prepare that dose.

[00:04:19] Speaker 02:
and sending it to the automated work or the manual workstation.

[00:04:21] Speaker 01:
That could have been done manually.

[00:04:23] Speaker 01:
It may have not been terribly efficient, but all of that could be done manually, correct?

[00:04:29] Speaker 02:
Aspects of that could have been done manually.

[00:04:31] Speaker 02:
So with the paper-driven process, there was human error.

[00:04:34] Speaker 02:
And by automating the assignment, the centralized assignment and management, we are eliminating human error that could not have been removed before.

[00:04:42] Speaker 01:
So you think in our case, though, when we say this could have been done pen and pencil manually, that doesn't include things which you were telling us?

[00:04:51] Speaker 01:
There could be errors in a manual accomplishment of something that are fixed by the computer.

[00:04:58] Speaker 01:
So that would be sufficient to say that it's not an abstract idea in its patentable subject matter?

[00:05:04] Speaker 02:
Your Honor, what we're saying is that it couldn't have been done before, at least in part because of the human error.

[00:05:10] Speaker 02:
And that, in and of itself, is solving a very specific problem that was part of the computerized, or basically integration of automated workstations into a pharmacy.

[00:05:21] Speaker 02:
And consistent with this court's decision in prison.

[00:05:25] Speaker 04:
If I'm mistaken, it just sounds like you just automated something to make it more accurate as opposed to manually.

[00:05:31] Speaker 04:
It seems the chief judge asked the same question, I guess, that I have, which is,

[00:05:37] Speaker 04:
How isn't that already precluded by our case law, which says simply automating something that can be done manually isn't sufficient?

[00:05:45] Speaker 02:
Your Honor, again, we still have the human error aspect of it, which we can't remove.

[00:05:49] Speaker 02:
Humans are not capable of preventing human error.

[00:05:51] Speaker 02:
That's not something that we could do.

[00:05:52] Speaker 01:
That would be true of everything you say.

[00:05:54] Speaker 01:
It could be done with pencil and paper.

[00:05:56] Speaker 01:
It might not be as efficient.

[00:05:58] Speaker 01:
You could eliminate the human error in doing something manually by taking it much slower.

[00:06:05] Speaker 01:
So that's the distinction.

[00:06:08] Speaker 01:
And you could say that about every automation of every function.

[00:06:12] Speaker 01:
Because in theory, it does avoid what might necessarily be some examples of human error.

[00:06:18] Speaker 01:
I don't understand.

[00:06:19] Speaker 01:
Is there any case where we've sort of taken that out and saying that's efficient?

[00:06:24] Speaker 01:
The elimination of human error because we think statistically the computer does this better than humans?

[00:06:31] Speaker 01:
Faster?

[00:06:32] Speaker 02:
Your Honor, so in the Bancorp case, 687 F3, 1266, the court held that prior to the information age, a computer did not describe a device.

[00:06:44] Speaker 02:
It was a job title.

[00:06:46] Speaker 02:
By its nature, the device can do anything that the person did manually, but it does it faster and more efficient.

[00:06:51] Speaker 02:
And in certain instances, for example, in this case in Thales, there were people, computers, and they made a movie about it, Hidden Figures.

[00:07:01] Speaker 02:
that literally sat in a room and calculated sending astronauts in space.

[00:07:05] Speaker 02:
For Thales, where we're doing F-35, what mattered and why, at least my understanding of why the court found this to be not an abstract idea, was that it allowed the computer to do something more accurately in that it was in a time-constrained situation.

[00:07:21] Speaker 02:
So determining the position of a moving F-35, doing that accurately, was important.

[00:07:27] Speaker 02:
And you needed close, real-time accurate results.

[00:07:29] Speaker 02:
It would be less efficient or less of an invention if three weeks later we came back and said your F35 was at this position three weeks ago.

[00:07:38] Speaker 02:
It may not be as helpful.

[00:07:39] Speaker 02:
Accuracy also matters, for example, in this case, the court's case in trading technologies, where the graphic user interface was determined at a more accurate price.

[00:07:53] Speaker 01:
And so there are certain- I know Judge Moore already asked you about fails, but fails specifically, repeatedly,

[00:07:59] Speaker 01:
refers to the lack of conventionality in the claimed arrangement.

[00:08:05] Speaker 02:
The parts were all conventional, but they are in a different place.

[00:08:10] Speaker 02:
So the inertial sensors in Thales.

[00:08:12] Speaker 03:
But yours doesn't do that.

[00:08:13] Speaker 03:
You're not saying that this is an unconventional arrangement of all these prior art equipment.

[00:08:20] Speaker 03:
All you're doing is automating it to provide, as you say, greater accuracy.

[00:08:25] Speaker 03:
But haven't we repeatedly held that just because a computer can enable something to be done faster, better, quicker, or even for some abstract ideas at all, isn't enough to make it patent eligible?

[00:08:43] Speaker 02:
I've seen cases both ways, Your Honor, where, for example, an OIP, I believe, does say using a- Can you give me an example of the case where we've said, here is an abstract idea, and

[00:08:55] Speaker 03:
It's going to be run on conventional computer or otherwise equipment.

[00:08:59] Speaker 03:
And it's patent eligible because it couldn't have been done without a computer.

[00:09:10] Speaker 02:
Couldn't have been done.

[00:09:11] Speaker 02:
None are coming to mind right now, Your Honor.

[00:09:13] Speaker 02:
Perhaps I can address a rebuttal.

[00:09:15] Speaker 03:
I mean an example where an abstract idea is done on a routine arrangement of devices, and it works better

[00:09:25] Speaker 03:
that we've said it's eligible.

[00:09:28] Speaker 03:
Let me just suggest, I don't think Dale says that.

[00:09:31] Speaker 02:
No, Your Honor.

[00:09:32] Speaker 02:
If we're talking about if the court determines that I'm dealing with an abstract idea, and your question was using it on a computer or a different arrangement makes it better, that would seem to align with the Bascom case, where the filtering on the internet, the servers, they were all conventional, unknown.

[00:09:51] Speaker 02:
And here, moving the filtering

[00:09:53] Speaker 03:
BASCOM was, again, an unconventional arrangement of the way that process worked.

[00:10:01] Speaker 03:
It wasn't just automating a conventional process.

[00:10:05] Speaker 03:
It was an unconventional way of approaching that issue.

[00:10:09] Speaker 02:
OK.

[00:10:11] Speaker 02:
I would agree with that.

[00:10:13] Speaker 02:
Your Honor, I don't think we're dealing with a situation where we have conventional equipment arranged in a conventional way in the pharmacy.

[00:10:22] Speaker 03:
Wait.

[00:10:23] Speaker 03:
I don't understand what you're saying.

[00:10:24] Speaker 03:
I thought you conceded about five minutes ago that all the equipment here is prior art equipment, that you didn't invent anything new.

[00:10:34] Speaker 02:
In this application, I conceded that yes, the equipment was known, but that doesn't mean it was rate.

[00:10:40] Speaker 02:
That's conventionally how it was used in the pharmacy.

[00:10:46] Speaker 01:
Why don't we hear from the other side, and we'll save your rest of your time.

[00:10:50] Speaker 02:
Certainly, Your Honor.

[00:10:50] Speaker 02:
Thank you.

[00:11:02] Speaker 00:
Good morning, your honors.

[00:11:09] Speaker 00:
May it please the court?

[00:11:11] Speaker 00:
Applying the two-step framework of ALICE, the board and the examiner correctly determined that Baxter's claims, which are essentially running a pharmacy that's been automated, are patented and eligible under Section 101.

[00:11:25] Speaker 00:
As this court has asked my friend on the other side, there is nothing here

[00:11:31] Speaker 00:
besides the abstract idea of receiving and managing dose order preparations and the generic computer implementation of that abstract idea.

[00:11:41] Speaker 04:
If the workstation were a whole new device, this could be a different situation, right?

[00:11:44] Speaker 00:
That's correct.

[00:11:45] Speaker 00:
If there was some, if their ordered combination of steps somehow improved the actual technology that was underlying the invention and their specification, their claims,

[00:11:58] Speaker 00:
explain that, then perhaps, yes, perhaps Baxter could have had an application that was patent eligible.

[00:12:05] Speaker 04:
But just using a computer or an otherwise prior art device to simply make something quicker and more accurate we've consistently held that's not eligible, right?

[00:12:13] Speaker 00:
That's correct.

[00:12:13] Speaker 00:
That's correct.

[00:12:14] Speaker 00:
That's simply the case.

[00:12:15] Speaker 00:
And if there are no further questions, I'll yield the rest of my time.

[00:12:20] Speaker 00:
Thank you.

[00:12:20] Speaker 00:
Thank you, Your Honors.

[00:12:26] Speaker 01:
Sir?

[00:12:27] Speaker 01:
You're up again.

[00:12:38] Speaker 02:
That was fast, Your Honor.

[00:12:39] Speaker 02:
May I proceed?

[00:12:41] Speaker 02:
Please.

[00:12:41] Speaker 02:
So Your Honor, I think that perhaps maybe a point of clarification.

[00:12:46] Speaker 02:
We're talking about devices that were known previously in the arts.

[00:12:49] Speaker 02:
So for example, the automated compounding stations.

[00:12:53] Speaker 02:
Their use was not necessarily conventional.

[00:12:55] Speaker 02:
Is it the court's position that anything known in the prior art is conventional and generic, and therefore not eligible for patent subject matter, the inclusion of it?

[00:13:10] Speaker 01:
Are you asking us questions?

[00:13:11] Speaker 01:
That's not the way it works.

[00:13:13] Speaker 02:
No, I guess it's more rhetorical.

[00:13:14] Speaker 02:
So under Berkheimer, the court found that just because something was known in the prior art, a reference in the prior art, doesn't mean that it was conventional, well-known, and routine.

[00:13:26] Speaker 02:
And in this case, they used the combination of the automated pharmacy equipment with the specific steps claimed.

[00:13:34] Speaker 01:
I thought our cases did say, to answer your question, that you can't use the abstract idea to make something that was otherwise conventional non-conventional.

[00:13:45] Speaker 01:
In other words,

[00:13:46] Speaker 01:
Yeah, everybody else used it for 1,000 other things, but we are using it with this abstract idea, and that's what makes it non-conventional.

[00:13:54] Speaker 01:
I think our case law indicates that we don't agree with that.

[00:13:59] Speaker 01:
Do you have any cases that say otherwise?

[00:14:04] Speaker 01:
That the application of a conventional function on an abstract idea makes it non-conventional?

[00:14:12] Speaker 02:
So again, Your Honor, for Alice step two, and we're going back to Bascom,

[00:14:17] Speaker 02:
where, again, filtering was known, the servers were known, the equipment was known.

[00:14:23] Speaker 02:
Again, it was just moving it in a different location, moving the filtering.

[00:14:26] Speaker 02:
So changing one aspect of the functionality and moving it from the local computer to an internet service provider server, that was determined to add an inventive concept under LSTEP 2, which allowed it to be patent-eligible.

[00:14:42] Speaker 02:
Here, Your Honor, even if the court determines that on LSTEP 1,

[00:14:47] Speaker 02:
that the 092 application claims recite an abstract idea, we would respectfully submit that sufficient inventive concept under ALICE step two that would at least allow us under BASCOM or the court's decisions in AMDOTS that would allow us to obtain patent eligibility for the 019 application claims.

[00:15:06] Speaker 02:
For AMDOTS, for example, there was a limitation that was enhancing a record

[00:15:14] Speaker 02:
that allowed the court to turn to be eligible or to provide an inventive concept sufficient for patent eligibility.

[00:15:21] Speaker 02:
Here, looking at claims 2, 3, and 32 of the 092 application, we are enhancing a dose order record by associating a specific dose set of instructions for the manual workstation to prepare.

[00:15:34] Speaker 02:
And so again, we're enhancing the dose order, which, at least under the parallel to the court's decision in Amdocs,

[00:15:40] Speaker 02:
would allow us to obtain patent eligibility for an inventive concept under ALICE Step 2.

[00:15:46] Speaker 02:
Similarly, for BASCOM, even if all of our elements are the structure and function known in the ONI 2 application, like BASCOM, we move the filtering limitation from after the label printer to before the label printer, handle it electronically instead of paper, which, again, we respectfully submit would allow for patent eligibility.

[00:16:09] Speaker ?:
Anything else?

[00:16:10] Speaker 02:
No, Your Honor.

[00:16:11] Speaker 01:
Thank you.

[00:16:12] Speaker 01:
We thank both sides and the case is submitted.