[00:00:00] Speaker 04:
Our next case is also per DMCO. This is next track, 2025-12-15. Ms. Eddy, when you're ready.

[00:00:14] Speaker 04:
Now, these are different patents, correct?

[00:00:18] Speaker 00:
Correct, Your Honor. I think there were two overlapping patents in here, but the claims asserted in the overlapping patents are different.

[00:00:28] Speaker 00:
So this appeal involves two materially different claim groups.

[00:00:34] Speaker 01:
Are the patents expired now?

[00:00:36] Speaker 00:
Yes. My understanding is they are all expired at this point. Okay. These different claim groups were improperly combined by the district court as representative, and all of the claim groups were invalidated.

[00:00:50] Speaker 00:
Let's start with Rule 12.

[00:00:53] Speaker 00:
Per diem specifically alleged...

[00:00:57] Speaker 00:
The claims implemented concrete improvements to computerized ELD fleet management operations through synchronized ELD triggering and administrative control.

[00:01:09] Speaker 00:
But after recognizing Per Diem's allegations in the pleadings at Appendix 7 through 9, the Court discounted them and reduced the claims to generalized information management and record keeping, which was improper at the pleading stage.

[00:01:25] Speaker 00:
Atrix and Berkheimer recognized that technological characterizations and confidentiality disputes cannot be resolved at Rule 12.

[00:01:35] Speaker 00:
Turning to the representative claims issue here, the district court correctly held initially that Nextrack had failed to meet its prima facie burden.

[00:01:45] Speaker 00:
That's at 14 and 16 of the record.

[00:01:48] Speaker 00:
In fact, Nextrack's analysis had two big problems. NextTrack did not identify the claims of the purported representative patents. It just identified the patents. And NextTrack did not provide any analysis of how those patents are representative of claims in other patents.

[00:02:05] Speaker 00:
And that should have ended the inquiry.

[00:02:07] Speaker 03:
Well, as I understand it, NextTrack's position was it identified the patent's But those are the same patents that the district judge ultimately settled on, except the district judge identified claims one of each of those two patents. Isn't that correct? That is correct. All right. So the flaw in Nextrack's presentation was that it didn't specifically named Claim 1 of each of those two patents. That's one of its flaws. It had more than one. Okay, but that... Yes.

[00:02:38] Speaker 03:
Your argument that you were blindsided, in effect, by what the district court did, which was to select Claims 1 of each of those patents, the background of that is they selected the two patents. They just didn't name Claim 1.

[00:02:54] Speaker 00:
They didn't name Claim 1, and they failed to... analyze how materially different limitations were properly ignored under a 101 analysis.

[00:03:07] Speaker 03:
But that's your general objection to what the district court came up with by way of a representative claim analysis, as I understand it.

[00:03:17] Speaker 00:
It's more detailed than that. But, yes, first of all, we object that the district court held that there was no prima facie case. because there was no distinguishing analysis provided at all by per diem. And then we object because the district court provided that analysis. So backing up for a minute. So they had the burden. They had the burden to show why different claim limitations should be excused under this eligibility doctrine. And they did not do that at all. We knew that.

[00:03:48] Speaker 00:
We addressed the claims that they addressed. in their, I'm sorry, the patents that they addressed in their motion. And we showed how those patents were not the same, and we showed how another claim, for example, claim 44 of another patent, had many different limitations.

[00:04:06] Speaker 00:
So we met our burden. That's the end of it. Now the district court did something more. So the district court didn't have the opportunity of the party's dispute to before them of these different claim limitations because it wasn't raised.

[00:04:23] Speaker 01:
The district court then... Well, the district court had your opposition, which talked about why the two claims that the defendant analyzed were, in your view, materially different. And you also identified that one claim 44.

[00:04:41] Speaker 01:
And then the district court, I think consistent with our content extraction opinion...

[00:04:47] Speaker 01:
undertook its own independent analysis.

[00:04:51] Speaker 01:
So in terms of opportunity to respond, you did file an opposition and a surreply, and you've made arguments to us on appeal with your own claim table, identifying other claims that you would have presented below. So I guess what I'm trying to figure out is where did you... lose your opportunity in light of all of that.

[00:05:20] Speaker 00:
So when we looked at what they presented, we responded to what they presented, which was two different claims. We responded to those claims. It wasn't our burden to pull out every limitation that was different and analyze it. Indeed, that's their burden, and they didn't do it. And for us to pull that out specifically in our opposition, we were like shooting at rainbows. We don't know what their argument would have been because they didn't raise it. So we responded to what they raised, and indeed, there was no prima facie case.

[00:05:54] Speaker 00:
Now, when the district court went on and did its own analysis...

[00:05:59] Speaker 00:
That didn't have the benefit of an adversarial positioning because it did its analysis and it never gave either party a chance to respond. We did present in our reply brief some of those limitations and how we would have responded had we had the opportunity. But there's another problem with the district court's analysis that I think is important. Oh, I wanted to address content extraction, too. You mentioned content extraction and That case actually involved a waiver or a non-opposition to representative claims.

[00:06:30] Speaker 00:
But here, there can be no doubt that Per Diem has always challenged this representative claim analysis. The content extraction is not exactly on point here.

[00:06:43] Speaker 00:
There's another problem to the district court's analysis, and that problem is the district court didn't analyze any claims either. The district court looked at the common specification. Let me take that back. Wrong case. The district court, when it analyzed the claims, it did so at a very high level of extraction. It removed, it extracted elements and took them out of their environment with the rest of the claim limitations. So you couldn't really...

[00:07:14] Speaker 00:
you couldn't really, well, we didn't have an opportunity to analyze it, but to me, that is an error that the district court made that also would require reversal if you get past the fact that there was never a prima facie case made in the first place.

[00:07:33] Speaker 00:
Your Honor, under TXEC, materially different claim limitations can't be ignored. And Next Track and the district court never explained why those limitations would be immaterial to eligibility, and that's their duty.

[00:07:49] Speaker 00:
So in looking at the consequences of collapsing these materially different claim structures, it becomes especially clear under ALICE Step 1.

[00:08:00] Speaker 04:
How many claims are asserted in this case?

[00:08:09] Speaker 00:
That is on page seven of our opening brief, where we provide a table. One, two, three.

[00:08:19] Speaker 00:
Eighteen claims, I believe.

[00:08:22] Speaker 00:
Eighteen claims over five patents, and these patents had two materially different structures. One was a server-related set of patents. We call those the enterprise patent claims. And the other set of patents was related to the device, the electronic logging device that is on the tracked vehicle.

[00:08:43] Speaker 04:
There would have been a lot of analysis for the district court that would have gone through each claim limitation.

[00:08:51] Speaker 04:
You sued on all these patents, and so you created the issues So it's not surprising that the court might have taken some shortcuts.

[00:09:03] Speaker 00:
Understood, Your Honor. However, if we had been provided with the position that what the differences were that they were asserting were immaterial, then we would have responded to that. But we responded precisely to what they argued. And again, they didn't meet their burden.

[00:09:24] Speaker 03:
Now, you said there were two categories of But I thought that what the district court did was to claim one of the 689 patent representative of the enterprise-centric patents and claim one of the 662 representative of the device-centric patents, right? That's correct. So doesn't that take care of the global problem that you just alluded to of there being some patents that were device-centric and some enterprise-centric?

[00:09:55] Speaker 00:
It doesn't, Your Honor, because the district court didn't separate them out that way. The district court took these and then merged its analysis.

[00:10:04] Speaker 03:
But wasn't that his determination that 689 was representative of certain... Wasn't that directed to the enterprise-centric claims? Yes.

[00:10:24] Speaker 00:
The court did not identify that, but yes, we would say that that is an enterprise claim.

[00:10:30] Speaker 03:
So I'm having a hard time seeing where the error is there on the part of the court.

[00:10:34] Speaker 00:
Because the court, not the claims that the court chose to be representative, it's the analysis that the court did that, number one, we didn't have a chance to respond to, and number two, that the court merged these two different structures and at a high level found that they didn't satisfy Alice.

[00:10:54] Speaker 00:
For example, Your Honor, the District Court isolated these general concepts and ignored the claim limitations that define how the claims operate.

[00:11:07] Speaker 03:
Now, you're making, in part, a due process argument based on the courts having not adopted the approach suggested by your... In both cases, Your Honor. But we handle that kind of issue... all the time, and district courts do as well, that, for example, in the claim construction area, each side may have its own proposed claim construction, and the district court may come up with a third option, frequently comes up with a third option that's different from either.

[00:11:38] Speaker 03:
That's not a violation of due process, is it?

[00:11:43] Speaker 00:
The claim construction argument, Your Honor, is a bit different, because Well, I mean, the short answer to the question is no, it's not. No, the claim construction argument is not.

[00:11:53] Speaker 00:
And here, we're dealing with a Rule 12 environment. We are on the pleadings. We queued up our opposition to 101 once we knew it was raised, but then the sand shifted, and we weren't allowed to respond. The simple fact that Nextrack failed its... prima facie case doesn't allow the court to then do its own analysis that is entirely divorced from the claims itself, taking the abstraction to a level that removes the limitations.

[00:12:31] Speaker 00:
And if we'd had a chance to respond, we would have mentioned that and we would have applied the law, and that's what we didn't have an opportunity to do.

[00:12:39] Speaker 00:
Looking at ALICE Step 1, Your Honors, oh my goodness.

[00:12:43] Speaker 04:
Well, you're into your bottle time. You can continue if you wish.

[00:12:47] Speaker 00:
No, Your Honors, I will. Mr. Oliver.

[00:12:50] Speaker 02:
Good morning again, and may it please the court. Thank you.

[00:13:06] Speaker 02:
In this case, the claims at issue are directed to the federal rules requiring commercial drivers to track their hours of service, which rules were in effect before these patents were filed.

[00:13:17] Speaker 02:
The complaint not only admits to this, but confirms that the claims are intended to automate tasks that commercial drivers conventionally perform using paper. Tellingly, as we see, the primary argument on appeal is the representative claim issue. Because of that and its discussion, I'll start there.

[00:13:33] Speaker 02:
I'd like to correct or clarify a few things.

[00:13:38] Speaker 02:
The next track motion below did identify representative claims. I know that the court's decision said that they were not identified. However, there's some important facts that I think need to be clear. What the motion said, and this is in the appendix at 883, is that this motion addresses representative claims of the 662 and 689 patents. What followed was a specific discussion of claim one of each of those patents. So what the motion said is we're going to address representative claims from each patent.

[00:14:09] Speaker 02:
Here's claim one of this patent. Here's claim one of the next patent. So there was an identification of claim one of each patent in that regard. And I'll also note critically that Per diem acknowledged the identification of claim 1 of each of those patents. Specifically, in its opposition brief below, in appendix at 970, per diem stated whether the two claims it, meaning Nextract, identifies in the 662 and 689 patents are representative. And I went on to say in the next page at 971, next track's motion only sets forth 662 patent claim 1 and goes on to note the identification of 689 patent claim 1.

[00:14:52] Speaker 02:
So contrary to that one-off statement in the decision below that no claims were identified as representative, claims were identified, that identification was acknowledged.

[00:15:03] Speaker 03:
Now, did you say that those claims were identified as representative Of the claims of those two patents?

[00:15:11] Speaker 02:
No, those were identified as the representative claims across the patents.

[00:15:14] Speaker 03:
I misheard you then. I thought you had said that they represented only the claims of those two patents.

[00:15:20] Speaker 02:
No, no. I was trying to make clear that there were specific claims of those two patents identified as the representative claims. Those representative claims were representative across all of the patents.

[00:15:30] Speaker 03:
I understand.

[00:15:32] Speaker 02:
And I'll make one other note before I forget it because I think it's important. There was a mention of whether or not a prima facie case was made. We have to trust that a district court judge knows the difference of when a prima facie case has been made such that he or she may proceed. I'll note, importantly in this case, the judge made a determination concerning the representative and specifically said – I the court am going to proceed with the representative claims for most of the patents.

[00:16:03] Speaker 02:
However, on one of the patents that was asserted in the litigation below the 595 patent, the court stated in a footnote, I don't think there's been enough done for that one, and therefore I am not going to consider the 595 patent and deny the motion with respect to that one patent. So the district court made a delineation of a prime official case has been made such that I may move forward with these patents, but not enough for the 595 patent.

[00:16:31] Speaker 03:
Now the 595, I take it, was dismissed.

[00:16:34] Speaker 02:
After the judge decided that not enough had been made to move forward with that.

[00:16:41] Speaker 03:
For finality purposes, that was out of the case.

[00:16:45] Speaker 02:
It was ultimately dismissed so that this appeal could be brought.

[00:16:49] Speaker 01:
I think you need to be a little more careful here. Yes, the district court ruled out 595 as being part of being encompassed by your designated representative claims, but the district court still criticized your arguments for why these two claims are automatically representative of all the other asserted claims, and that is why the district court said it did its own independent analysis.

[00:17:23] Speaker 02:
Yeah, certainly the decision below took both sides to task on their representative claims.

[00:17:28] Speaker 01:
So in that way, one could Read the district court order as concluding you did not make your prima facie case.

[00:17:36] Speaker 02:
I would argue, Your Honor, that what that indicates is the judge found that there was not enough to prove representativeness, but there was enough for the court to move forward and make its own determination. And as you noted, courts may make its own determination in certain instances. So I think the 595 is the court saying you haven't met your threshold for that one, you have met your threshold, even though I don't like what you did, you did enough for us to consider the representative claims issue.

[00:18:08] Speaker 02:
Once that happens, the case law makes clear that it becomes the burden of the patent owner to identify other claim limitations outside of the representative claims and present meaningful arguments as to their distinctive significance relative to the one-on-one analysis. And one other point I just want to make for this case, you mentioned Claim 44, Your Honor.

[00:18:34] Speaker 02:
That was actually, I believe, in the companion case earlier. In this case that is being argued right now, in response to the representative claims – and again, what the patent owner is required to do is identify features outside the representative claims – What the patent owner did instead was to take the two representative claims and compare them to each other. But that is not an identification of features outside of the representative claims. Those were the claims that were actually addressed below.

[00:19:05] Speaker 02:
So the court was correct to find that the patent owner did not make any meaningful argument concerning any features outside of the identified representative claims, let alone ones that were came to the ultimate analysis.

[00:19:26] Speaker 02:
For those reasons, the court was correct to proceed under the representative claims, and I'll note with respect to the due process argument.

[00:19:39] Speaker 02:
I think the due process argument is a little bit odd, and I'd like to just note some language in the blue brief at 35.

[00:19:46] Speaker 02:
Per diem admits, and I'll just read the language. While per diem was on notice of and responded directly to Nextrack's representative claim theory, per diem was not on notice of the district court's in se ipso examination and had no opportunity to respond to that. The argument that seemed to be presented on due process here is Yes, Per Diem was aware of Nextrack's argument concerning representative claims. And in fact, as I noted below, they acknowledge the identification of the claims from the 689 and 662.

[00:20:24] Speaker 02:
But they seem to be arguing, even though they had notice of those issues, meaning the issue to be decided, are these claims from these two patents representative, that somehow they were entitled to the court's examination of the issue. And that is simply not a proper analysis of due process. That's essentially saying, yes, I was aware of the issue to be decided, but I am denied due process unless I know the court's ultimate determination on that issue before I submit my briefs. And that's a simply unworkable standard.

[00:20:55] Speaker 02:
For properness of due process, the question is whether or not per diem had notice of the issues. And because per diem acknowledged the issues in the briefing below, namely whether those two claims of those two patents were representative and did respond to it, they were afforded notice of the issue to be decided. They simply did not provide a meaningful rebuttal. And for that reason, we believe the court's reliance on representative claims is proper.

[00:21:24] Speaker 02:
With respect to what claims were asserted below, I still believe that that is an unclear issue because the complaint below, and this is an Appendix 443, Paragraph 131, talking about the 662, said at least one or more claims of the 662 patent. So I don't know that the record below makes clear that the complaint is was limiting itself to certain claims.

[00:21:56] Speaker 01:
What about the second page of the district court's order, at A3, where it summarized the claims?

[00:22:04] Speaker 01:
It summarized... And identified the 18 claims that are issued here.

[00:22:11] Speaker 02:
Well, our motion addressed more than those, and we believe those were at issue. The court certainly seemed to maybe believe that there were not all of the claims at issue. But again, perhaps this is all one water under the bridge given the expiration of patents.

[00:22:29] Speaker 02:
But we believe that our motion addressed all of the claims in all of the patents.

[00:22:39] Speaker 02:
Okay.

[00:22:41] Speaker 01:
With that... Did you have a counterclaim in this case?

[00:22:49] Speaker 02:
No, it was a motion to dismiss. With that, I'm happy to address the merits. I know that my friend on the other side didn't get a chance to get into the merits and I should be rebutting, so I don't know if the court wants me to get into any of those issues.

[00:23:03] Speaker 04:
You're entitled to a principal argument.

[00:23:07] Speaker 02:
I'll just make a few points on the step one and step two. The court did find an abstract idea.

[00:23:19] Speaker 02:
That is the collecting, recording, tracking, managing, and so forth of information related to vehicle tracking. These are abstract ideas because, again, like the case we had earlier this morning, it is just about a company keeping track of where its cars are. There's nothing more. There's no invention of any new technology for doing so. In fact, the specification admits that existing mobile devices using existing GPS technology are to be used.

[00:23:50] Speaker 02:
And I'll note with respect to step one, even on appeal in the blue brief at 45, Per Diem admits that the enterprise-centric claims are directed to controlling access to event information under multiple levels of administrative privilege. This is an admission that what is really at the heart of these claims is the tracking of information and the management of information.

[00:24:15] Speaker 02:
Some of the arguments that have been made...

[00:24:20] Speaker 02:
by Per Diem concerning this is that things such as synchronization should take the claims out of step one. However, this court has repeatedly said that synchronization alone is itself an abstract idea, absent some underlying detail on how the computers operate and use that. So synchronizing alone simply does not move the ball.

[00:24:45] Speaker 02:
Per diem also argues that it uses ID codes and therefore that should remove it from an abstract idea. But as this court noted in electronic communications, authentication information such as ID codes does not save a claim from the step one analysis. Levels of administrative privilege are just hierarchies of humans and who's in control. And then I'd also note one other argument that's made is that Per Diem believes that there's geofencing recited in the claims, which there is, but somehow that removes this from being an abstract idea.

[00:25:20] Speaker 02:
However, that idea was rejected by this court in not only electronic communications, but also in Sanderling management-cited NERP briefs and automated tracking.

[00:25:29] Speaker 03:
I'm sorry, what was the second case?

[00:25:30] Speaker 02:
Sanderling management.

[00:25:33] Speaker 02:
Oh, yes.

[00:25:35] Speaker 02:
With respect to step two...

[00:25:40] Speaker 02:
The court carefully considered and rejected the arguments that Per Diem presented, particularly in the appendix at 40, where the court looked at synchronization and said there's nothing here that really changes the step two analysis. With respect to Per Diem's argument concerning the hierarchy of privileges, the court again noted the argument and rejected it. And finally, with respect to the idea of using an administrator, that's simply not a technological advance that changes the analysis under step two in the court. was correct in that regard to reject that.

[00:26:12] Speaker 02:
And again here, just looking at example at the 662 patent, we have recitation of a computing device, a database, and a display. No particular arrangement required, no particular structure required, no underlying computer operations that would meaningfully give any hook for a step two analysis that could change the ultimate And for that reason, we believe the court below is correct in its finding that the claims are unpatentable.

[00:26:43] Speaker 02:
Absent any questions?

[00:26:45] Speaker 04:
Thank you, counsel. Ms. Addy has some little bubble time. Thank you.

[00:26:55] Speaker 00:
A couple of points, Your Honor. First, we responded to what Next Track raised. And you can see that in our opposition brief for the District Court at Appendix 971 to 973. And yes, we did distinguish the 662 from the 689 because that's what they raised and we showed the differences and they didn't raise anything else.

[00:27:19] Speaker 00:
At the District Court, the District Court didn't understand the differences between these and that they were structural differences.

[00:27:30] Speaker 00:
But the district court, but I think it's important to look at the claims, and I'll go directly to ALICE Step 2 to do this.

[00:27:39] Speaker 00:
ALICE Step 2 requires that the combination of all these limitations be considered as an inventive concept. And while co-counsel said there was no organization and syncing had no specific concept, detail, that is actually not accurate. And if you look at Claim 1, for example, Claim 1 is a computing device.

[00:28:02] Speaker 03:
This is Claim 1 of which patent?

[00:28:04] Speaker 00:
Oh, I'm so sorry. This is Claim 1 of the 662, and I'm looking at page 24 of the district court decision because it's just easier to read where it's reprinted there. If you look at claim one, it's talking about a device. It's talking about a driver that uses the device, and it's talking about the specifics of how that device is configured to the server system. It talks about vehicle conditions and the specific conditions that the vehicle has to be in in order to synchronize.

[00:28:38] Speaker 00:
Number one, the driver has to power on, and number two, the vehicle has to be moving. And that's important. That's an important distinction because if it just powers on, you may get inaccurate logging about whether the person was driving.

[00:28:54] Speaker 00:
Additionally, if you look further down in the claim, it says record the driving event based on the movement driving event that occurs after the power on. Again, specifics as to what is synchronizing here. And at Rule 12, it's improper to disregard our complaint where we specifically pled that the ordered combination was inventive. I contrast that in my last few seconds with the 689 patent, which is at 26 of the decision, and that patent is talking about a server and it's talking about what happens on the server with the administrators and how they specifically communicate the driver administrator and the ELD administrator and you can look through that and see for example at B it's interfacing the ELD is configured to interface with the computing device to enable the driver administrator to log on so there's much more detail here that was not addressed and Three of the claims in these set of five claims were not even talked about at all, just those two.

[00:30:04] Speaker 04:
Thank you to both counsel.