Damages for Some Foreign Uses are Available, Provided you Prove Your Case

In BrumField v. IBG LLC, [2022-1630] (Fed. Cir. 2024), the Federal Circuit affirmed the district court judgment that U.S. Patent Nos. 6,766,304 and 6,772,132 were valid and infringed, and U.S. Patent Nos. 7,676,411 and 7,813,996 were invalid under 35 U.S.C. § 101. The patents describe assertedly improved graphical user interfaces for commodity trading and methods for placing trade orders using those interfaces.

The Federal Circuit agreed that the asserted claims of the ’411 and ’996 patents claim ineligible subject matter. The Court said that are directed to abstract ideas, and they add nothing (no inventive concept) that transforms them into claims to eligible subject matter. The asserted claims are directed to abstract ideas, and they add nothing (no inventive concept) that transforms them into claims to eligible subject matters.

The claims focus on the receipt and display of certain market information (bids and offers) in a manner that newly helps users see the information for use in making trades. But the combination of receipt and display of information, even of a particular type, and use of the information to engage in the funda-mental economic practice of placing an order, are abstract ideas.Further, nothing in the claims, understood in light of the speci-fication, calls for anything but preexisting computers and displays, programmed using techniques known to skilled artisans, to present the new arrangement of information.

With respect to the damage award, TT argued that the district court should have applied the extraterritoriality analysis articulated by the Supreme Court in WesternGeco, rather than more restrictive principles the district court drew from Power Integrations. The district court was reluctant to conclude, on its own, that WesternGeco displaces Power Integrations as the required framework of analysis for this case, involving 35 U.S.C. § 271(a) and a reasonable royalty. the Federal Circuit agreed with TT, but concluded that, even under the WesternGeco framework, the evidence offered by TT’s expert was properly excluded.

Federal Circuit Agrees that “The Invention” is the invention

In Chewy, Inc. v. International Business Machines Corp., [2022-1756] (Fed. Cir. 2024), the Federal Circuit affirmed in part. reversed in part, and remanded the distirct court’s summary judgment of non-infringement of claims of U.S. Patent No. 7,072,849, and summary judgment that claims of U.S. Patent No. 7,076,443 were directed to ineligible subject matter.

Non-Infringement of U.S. Patent No. 7,072,849

Claim 1 of the ‘849 patent stated:

Infringement of the claims ‘849 patent turned on whether the claims to improvements in web-based advertising required “prefetching” an advertising object, even though these words are not set forth in the claim. The “Summary of Invention” said:

‘849 patent, 3:6-21. The “Description of the Preferred Embodiment: said:

‘849 patent, 33:16-27.


‘849 patent, 34:38-44. The Federal Circuit concluded that in light of these “repeated descriptions of the present invention, a skilled artisan would understand the claimed invention requires pre-fetching of advertising objects,” citing Verizon Servs. Corp. v. Vonage Holdings Corp., 503 F.3d 1295, 1308 (Fed. Cir. 2007) (“When a patent . . . describes the features of the ‘present invention’ as a whole, this description limits the scope of the invention.”).

IBM tried to rely on Absolute Software, Inc. v. Stealth Signal, Inc., 659 F.3d 1121,
1136–37 (Fed. Cir. 2011), where the Federal Circuit explained that the use of the phrase “present invention” or “this invention” is not always limiting, such as where the references to a certain limitation as being the “invention’ were re not uniform, or where other portions of the intrinsic evidence do not support applying the limitation to the entire patent. However, the Federal Circuit said that these “narrow exceptions” referenced in Absolute Software were not applicable, because the ’849 patent uniformly referred to the pre-fetching of advertising objects as an aspect of the invention as a whole.

U.S. Patent No. 7,076,443 is Directed to Ineligible Subject Matter

The district court held at Alice step one the asserted claims were directed to the abstract idea of identifying advertisements based on search results. The Federal Circuit agreed, noting that it has held claims to targeted advertising were directed to an abstract idea at Alice step one. IBM argued its claims recited a specific solution to unique technical problems arising from advertising over a computer network. The Federal Circuit rejected this argument, noting that the claims were not directed to any challenges unique to computer networks, or specific improvements to the functionality of the computer itself. The claims merely recite the concept of identifying advertisements based on search results, without any specificity as to how this is accomplished. The Federal Circuit said that even accepting that the claimed invention improves the specificity and relevancy of online advertisements, this “is at most an improvement to the abstract concept of targeted advertising wherein a computer is merely used as a tool.”

Computer-Readable Recording Medium Is Not a Transitory Medium

In Sequoia Technology, LLC v. Dell, Inc., [2021-2263, 2021-2264, 2021-2265, 2021-2266] (April 12, 2022), the Federal Circuit disagreed with the district court’s claim construction for “computer-readable recording medium,” and thus reverses the district court’s ineligibility determination under 35 U.S.C. § 101. In addition, the Federal Circuit agreed with the district court’s claim construction for “disk partition” and “logical volume,” and thus affirmed the district court’s noninfringement determination.

The magistrate judge adopted and construed “computer-readable recording medium” to include transitory media (i.e., signals or waves),base upon the specification, which discusses “computer readable medium” as “including” a list of items—none of which are transitory— and interpreted that language as leaving the door open for media that could be transitory.

The Federal Circuit noted at the outset that the claim language does not actually recite a “computer-readable medium” or CRM. Instead, it more narrowly recites “computer-readable recording medium storing instructions. The Court said that a person of ordinary skill would not understand transitory signals, such as carrier waves, to record or store instructions in memory systems. This is because transitory signals, by their very nature, are fleeting and do not persist over time. Other elements in the claim confirm that the claim is directed to hardware as opposed to transitory waves or signals.  The Federal Circuit found that the claim language demonstrates that claim 8 is not directed to a transient signal, but rather to a non-transient storage medium.

The Federal Circuit then turned to the specification, which discloses only non-transitory media.  The Court said the use of a term denoting a nonexhaustive list does not eviscerate our obligation to construe terms in the context of the entire patent. The context

here makes clear that the term “computer-readable recording medium” cannot encompass transitory media.

The Federal Circuit declared that its decision rests solely on the intrinsic evidence, and that it was unpersuaded by arguments to the contrary, which rest on extrinsic evidence.  The Court further noted that not only was this extrinsic evidence was inconsistent with the intrinsic evidence and also based on different express definitions of CRM in patent specifications directed to different inventions.

The Federal Circuit disagreed with the district court’s claim construction and, consequently, reversed the district court’s holding that claims 8–10 are ineligible under § 101.

Storing and Displaying Video is an Abstract Idea

In Hawk Technology Systems, LLC v. Castle Retail, LLC, [2022-1222] (February 17, 2022), the Federal Circuit affirmed the dismissal of the suit because the asserted patent claims of U.S. Patent No. 10,499,091 on a method of viewing multiple simultaneously displayed and
stored video images on a remote viewing device of a video surveillance system were directed to ineligible subject matter and therefore invalid under 35 U.S.C. § 101.

The district court concluded that the ’091 patent claims were directed to the abstract idea of “storing and displaying video,” and the Federal Circuit agreed, noting that the claims are similar to those it has found to be directed to abstract ideas. The Court noted that in Adaptive Streaming Inc. v. Netflix, Inc., 836 F. App’x 900, 903 (Fed. Cir. 2020), it held that “encoding and decoding image data and . . . converting formats, including when data is received from one medium and sent along through another, are by themselves abstract

While Hawk characterized its invention as a solution to a technical problem in multi-format digital video product systems, the Federal Circuit pointed out that even a specification full of technical details about a physical invention may nonetheless conclude with claims that claim
nothing more than the broad law or abstract idea underlying the claims. The claims fail to recite a specific solution to make the alleged improvement— conserving bandwidth while preserving quality—“concrete” and at most recite abstract data manipulation.

At Alice step two, the Federal Circuit said that the district court found that the claims, “read in light of the specification, do not show a technological improvement in video storage and display because the limitations can be implemented using generic computer elements,” and that the “specification and claims do not explain or show how the monitoring and storage is improved, except by using already existing computer and camera technology,” and thus the claims failed at Alice step two. The Federal Circuit agreed.

Again, Hawk argued that the claims recite an inventive solution, but the Federal Circuit said that even if the claims achieved the purported solution, they only use generic functional language to do so and require nothing other than conventional computer and network components operating according to their ordinary functions. The Federal Circuit said that it recognize that the claims include “parameters,” but the claims fail to specify precisely what the parameters are and the parameters at most concern abstract data manipulation image formatting and compression.

The Federal Circuit therefore found that the ’091 patent claims fail to transform the abstract idea into something more and thus fail Alice step two. The Court that held that the ’091 patent is patent ineligible because its claims are directed to an abstract idea and fail to
transform that abstract idea into patent-eligible subject matter.

Posted in 101

Isolating Naturally Occurring Nicotinamide Riboside Did Not Make the Composition Patentable

In Chromadex, Inc. v. Elysium Health, Inc., [2022-1116] (February 13, 2023), the Federal Circuit affirmed the grant of summary judgment that the asserted claims of U.S. Patent No. 8,197,807 on dietary supplements containing isolated nicotinamide riboside are directed to unpatentable subject matter.

The district court construed several claim terms including “isolated nicotinamide riboside” to mean “nicotinamide riboside that is separated or substantially free from at least some other components associated with the source of nicotinamide riboside.” The district court concluded that the claims were directed to a natural phenomenon, namely, “compositions
comprising isolated nicotinamide riboside, a naturally occurring vitamin present in cow milk.”

The only difference between at least one embodiment within the scope of the claim and natural milk is that the NR in the former is isolated. The asserted claims do not have characteristics markedly different from milk. Both the claimed compositions and milk “increase NAD+ biosynthesis upon oral administration.

The Federal Circuit noted that the claims cover several different composition embodiments, some of which are structurally different from milk. However, the claims also encompass—as both parties agree—at least one embodiment that covers milk, except that the NR element is “isolated.” Because the claims are broad enough to encompass a product of nature, it is invalid under § 101.

Chromadex argud that the claims, in fact, possess markedly different characteristics that render them patent-eligible. Chromadex bases this argument on two main points: (1) “NR is found in milk in only trace amounts,” i.e., one part per million; and (2) “what little NR is found in milk is not bioavailable” because it is bound to the lactalbumin whey protein. However, the Federal Circuit found this argument unpersuasive first because the claims do not require that the NR, specifically, increase NAD+, and milk increases NAD+ biosynthesis (albeit because it contains tryptophan rather than because of the trace amounts of NR), but that is the only therapeutic effect that the claims require. Second, the claims simply do not reflect the distinctions Chromadex relied upon: they do not require any specific quantity of isolated NR, and the district court’s construction for “isolated [NR],” which Appellants do not challenge on appeal, does not require that the NR be separated from the lactalbumin whey protein but only from “some of the other components associated with the source of [NR].”

The Federal Circuit said that the act of isolating the NR by itself, no matter how difficult or brilliant it may have been (although the specification makes clear that it was conventional), similarly does not turn an otherwise patent-ineligible product of nature into a patentable invention.

Posted in 101

§101: Why We Won’t Have Nice Things

In a recent IP Watchdog panel discussion incluing Harness Dickey’s new CEO Ray Millien, Faegre Drinker’s Robert Stoll, Schwegman Lundberg & Woessner’s Russ Slifer, and AddyHart’s Benjamin Cappel, Ray Millien posited that the only obstacle to autonomous cars is software, but given the present state of §101 jurisprudence, “once someone solves that problem, it’s an abstract idea.

Consider what technologies §101 is holding back, and imagine what technologies §101 will hold back if this problem is not corrected. Patent lawyers of the future might one day read something like this:

In In re Erickson,* (Fed. Cir. 2124), the Federal Circuit issued a Rule 36 affirmance of the decision of the PTAB affirming the Examiner’s rejection of all of the pending claims of Emory Erickson’s application 31/239484 entitled “Teleportation System and Methods.”  The PTAB opinion explained that the claimed invention, which Mr. Erickson calls a “Transporter,” is directed to a teleportation apparatus and a method for “nearly instantaneously” moving an object from one location to another.  Mr. Erickson apparently provided a practical demonstration of his invention during a recent outage of the USPTO’s EFS system, delivering his Applicant’s Brief on Appeal to the USPTO via his “Transporter,” together with the $50,000 fee (37 CFR 1.17(zz)) for non-electronic filings.

Transporting Goods is an Abstract Idea

The Board began its analysis with the familiar two-step test from the classic Alice Corp. v. CLS Bank Int’l, 134 S. Ct. 2347, 2354 (2014), which requires at step one a determination whether the claims are directed to an abstract idea, and if so, at step two to a determination whether the claim is directed to “something more.”  The Board noted that the Examiner found that the claims were directed to the abstract idea of “transporting goods,” and the Board agreed, citing GT Nexus, Inc. v. Inttra, Inc., 2015 WL 6747142 (N.D.Cal. 2015)(“the shipping of goods is a conventional business practice ‘long prevalent in our system of commerce.’”)

Operation in the Real World Does not Make Idea Less Abstract

While Erickson argued that the Transporter would “result in life altering consequences,” the Board said that while laudable, it does not render the system or method any less abstract, citing University of Florida Research Foundation, Inc. v. General Electric Company, 916 F.3d 1363 (Fed. Cir. 2019). The Board considered the case to be similar to Smart Systems Innovations, LLC v. Chicago Transit Authority, 873 F.3d 1364, 124 U.S.P.Q.2d 1441 (Fed. Cir. 2017), where the patent owner’s arguments that the invention operated “in the tangible world” and satisfied “a public demand for more convenient travel that did not exist in the prior art” did not save the claims from being directed to an abstract idea.

Novelty of Components Does Not Make Idea Less Abstract

The Board also rejected the arguments that the Transporter, and in particular its Heisenberg compensator, had never before existed, citing Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709 (Fed. Cir. 2014)(“We do not agree with Ultramercial that the addition of merely novel or non-routine components to the claimed idea necessarily turns an abstraction into something concrete. In any event, any novelty in implementation of the idea is a factor to be considered only in the second step of the Alice analysis.”). “It is well-settled that mere recitation of concrete, tangible components is insufficient to confer patent eligibility to an otherwise abstract idea.” TLI Communications LLC v. AV Automotive, L.L.C., 823 F.3d 607, 118 U.S.P.Q.2d 1744 (Fed. Cir. 2016).

Lack of Preemtion Does not Make Idea Less Abstract

The Board also dismissed Erickson’s argument that the claimed invention did not preempt all methods of transporting goods, citing buySAFE, Inc. v. Google, Inc., 765 F.3d 1350, 1355 (Fed.Cir.2014) (collecting cases). A narrow claim directed to an abstract idea, however, is not necessarily patent-eligible, for “[w]hile preemption may signal patent ineligible subject matter, the absence of complete preemption does not demonstrate patent eligibility.” Ariosa Diagnostics, Inc. v. Sequenom, Inc., 788 F.3d 1371, 1379 (Fed. Cir. 2015).

The Groundbreaking, Innovative, and Brilliant Can Still Be Abstract

While the Board found Erickson’s practical demonstrations of teleportation were “impressive,” but said that even accepting that the techniques claimed are “[g]roundbreaking, innovative, or even brilliant,” that is not enough for eligibility. Ass’n for Molecular Pathology v. Myriad Genetics, Inc., 569 U.S. 576, 591, 133 S.Ct. 2107, 186 L.Ed.2d 124 (2013); accord buySAFE, Inc. v. Google, Inc., 765 F.3d 1350, 1352 (Fed. Cir. 2014). Nor was it enough for subject-matter eligibility that claimed techniques be novel and nonobvious in light of prior art, passing muster under 35 U.S.C. §§ 102 and 103. See Mayo Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66, 89–90, 132 S.Ct. 1289, 182 L.Ed.2d 321 (2012); Synopsys, Inc. v. Mentor Graphics Corp., 839 F.3d 1138, 1151 (Fed. Cir. 2016) (“[A] claim for a new abstract idea is still an abstract idea. The search for a § 101 inventive concept is thus distinct from demonstrating § 102 novelty.”); Intellectual Ventures I LLC v. Symantec Corp., 838 F.3d 1307, 1315 (Fed. Cir. 2016) (same for obviousness).

The Board concluded that no matter how much of an advance in the field the claims recite, the advance lies entirely in the realm of abstract ideas, with no plausibly alleged innovation in the non-abstract application realm. An advance of that nature is ineligible for patenting.
SAP America, Inc. v. Investpic, LLC, 890 F.3d 1016, 126 U.S.P.Q.2d 1638 (Fed. Cir. 2018).

At Alice Step II, the Board found that most of the components were conventional off-the-shelf electronic and computer componets, adn thust there was no “something more” to save the claims.

* In the Star Trek universe, the transporter was invented in the early 22nd century by Dr. Emory Erickson, who also became the first human to be successfully transported.

Given Ray Millien’s prediction that the solution to autonomous vehicles may turn out to be an unpatentable abtract idea, we should all be concerned about what technologies may be overlooked or at least dealyed because the current application of §101 is interfereing with the incentives the patent system is supposed to provide to encourage their development and disclosure. While the transporter example above may be too far fetched, as Millien points out the threat to the progress of science and the useful arts is not.

Posted in 101

Insufficient Specificity to Constitute an Improvement to Computer Functionality

In Universal Secure Registry LLC v. Apple, Inc., [2020-2044] (August 26, 2021), the Federal Circuit affirmed the dismissal under Rule 12(b)(6) that U.S. Patent Nos. 8,856,539; 8,577,813; 9,100,826; and 9,530,137 asserted by Universal Secure Registry because the four asserted patents were ineligible under 35 U.S.C. § 101.

Although the patents are otherwise unrelated, they are directed to similar technology—securing electronic payment transactions.  The district found the patents ineligible under both prongs of the Alice test, explaining that the claimed invention was directed to the abstract idea of “the secure verification of a person’s identity” and that the patents do not disclose an inventive concept—including an improvement in computer functionality— that transforms the abstract idea into a patent-eligible application.

The Federal Circuit began by noting that in cases involving authentication technology, patent eligibility often turns on whether the claims provide sufficient specificity to constitute an improvement to computer functionality itself.  Analyzing the claims of the four patents separately, the Federal Circuit determined that they were directed to abstract ideas, and did not include anything more to remove the claims from the realm of abstract ideas.

Posted in 101

The the Step that Can Be Performed in The Human Mind is a Telltale Sign of Abstraction

In Personaweb Technologies LLC v. Google LLC, [2020-1543, 2020-1553, 2020-1554] (August 12, 2021), the Federal Circuit affirmed the district court’s judgment on the pleadings that various
claims of U.S. Patent Nos. 7,802,310, 6,415,280, and 7,949,662 were ineligible for patenting, and therefore invalid, under 35 U.S.C. § 101. The patents relate to data-processing systems that assign each data item a substantially unique name that depends on the item’s content—a content-based identifier.

The Federal Circuit began its review at Step 1 of the Alice inquiry, deciding whether the claim is directed to a patent-ineligible concept. The Court evaluated the focus of the claimed advance over the prior art’ to determine if the claim’s “character as a whole” is directed to excluded
subject matter. The Federal Circuit agreed with the district court that the patents are directed to a three-step process: (1) using a content-based identifier generated from a hash or message digest function, (2) comparing that content-based identifier against another content-based identifier or a request for data; and (3) providing access to, denying access to, or deleting data. The Federal Circuit concluded that the claims are directed to the use of an algorithm-generated contentbased identifier to perform the claimed data-management functions (including controlling access to data items (the ’310 patent), retrieving and delivering copies of data items (the ’280 patent), and marking copies of data items for deletion (the ’662 patent).

The Federal Circuit said that these functions are mental processes that “can be performed
in the human mind” or “using a pencil and paper” — a telltale sign of abstraction. The fact that the process are performed in a computer environment didn’t transfigure the idea out of the
realm of abstraction.

The Federal Circuit recognized that the step-one inquiry looks to the claims character
as a whole rather than evaluating each claim limitation in a vacuum, but said the claims are clearly focused on the combination of those abstract-idea processes, and stringing together the claimed steps by adding one abstract idea to another amounts merely to an abstract
idea. The Federal Circuit concluded that “[t]he claims as a whole, then, are directed to a medley of mental processes that, taken together, amount only to a multistep mental process.” Ultimately, the focus of the claims is not on an improvement in computers as tools, but on certain independently abstract ideas that use computers as tools.” In other words, the claims focus on mere automation of manual processes using generic computers.

At Step Two the Federal Circuit undertook a search for an inventive concept—i.e., an element or combination of elements that is sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the ineligible concept itself. Personalweb argued that the claims contain an inventive concept because they “recite an application that makes inventive use of cryptographic hashes—a use that was neither conventional nor routine prior to the patents.” However, the Federal Circuit said this was not something “more,” let alone anything “significantly more,” than the abstract idea itself. Ultimately, the Federal Circuit said “The district court had it right: there is ‘nothing “inventive” about any claim details, individually or in combination, that are not themselves abstract ideas.’”

The Federal Circuit affirmed the judgment of invalidity

Posted in 101

Claims are No Nose of Wax; Infringement Determined Under Same Construction as Validity

In Data Engine Technologies LLC v.  Google LLC, [2021-1050] (August 26, 2021) the Federal Circuit affirmed summary judgment of non-infringement of U.S. Patent Nos. 5,590,259; 5,784,545; and 6,282,551 directed to systems and methods for displaying and navigating three-dimensional electronic spreadsheets.

The preamble of the claims at issue recited: “In an electronic spreadsheet system for storing and manipulating information, a computer-implemented method of representing a three-dimensional spreadsheet on a screen display.”  In defeating a prior 101 challenge, DET argued that the invention solved a problem unique to three-dimensional spreadsheets.  On remand, Google asked the district court for a determination whether the claim preamble was a limitation, and if so, what it meant.  The district court held that the preamble was limiting, and required a mathematical relation among cells on different spreadsheets, whereupon Google moved for summary judgment of non-infringement since its accused product was not a three-dimensional spreadsheet.  The district court granted summary judgment, and DET appealed.

On appeal there was no dispute that Google did not infringe under the district court’s construction of “three-dimensional spreadsheet,” the issue being whether the preamble is in fact limiting and, if so, whether the district court’s construction of three-dimensional spreadsheet was correct.  The Federal Circuit noted that DET’s assertion that the preamble term “three-dimensional spreadsheet” is not limiting effectively seeks to obtain a different claim construction for purposes of infringement than the Federal Circuit applied (at DET’s insistence) in holding the claims eligible under § 101.  Noting that a  claim is not a nose of wax, the Federal Circuit said a patentee relies on language found in the preamble to successfully argue that its claims are directed to eligible subject matter, it cannot later assert that the preamble term has no patentable weight for purposes of showing infringement. Thus the Federal Circuit concluded that the preamble term “three-dimensional spreadsheet” was limiting.

 Turning to the district court’s construction of “three-dimensional spreadsheet,” the parties agreed that a three-dimensional spreadsheet requires cells “arranged in a 3-D grid,” but not on whether it also requires “a mathematical relation among cells on different spreadsheet pages,” as required by the district court’s construction.  The Federal Circuit found that neither the claims themselves nor the prosecution history answered the question of whether a three-dimensional spreadsheet requires a mathematical relation among cells on different spreadsheets.  However, based upon the prosecution history, the Federal Circuit agreed with the district court that the preamble term “three-dimensional spreadsheet” requires a mathematical relation.  During prosecution of the application that led to the ’259 patent, the applicants provided an explicit definition of a “true” three-dimensional spreadsheet and distinguished prior art under this definition.  Giving effect to this express definition in the prosecution history, the Federal Circuit determined that the claims require a three-dimensional spreadsheet that “defines a mathematical relation among cells on the different pages.”  The Federal Circuit rejected DET’s arguments that the statements did not rise to the level or clear and unmistakable disclaimer,  noting that consistent with the public notice function of the prosecution history, the public is entitled to rely on these statements as defining the scope of the claims.

Definitions can be very helpful to the patent applicants in giving concrete meaning to the claims, but they can also be very limiting. It’s not that applicants should not use definitions, but that they should be used cautiously. A definition that seems harmless in one context, can be disasterous in another context.

A Patent Infringement Complaint Simply Must State a Plausible Claim to Relief

In Bot M8 LLC v. Sony Corporation of America, [2020-2218] (July 13, 2021), the Federal Circuit found no error in the district court’s “directing” Bot M8 to file a first amended complaint, or in dismissing Bot M8’s claims of infringement of U.S. Patent Nos. 8,078,540 and 8,095,990 for failure to state a plausible claim of infringement. However, the Federal Circuit held that the district court erred in finding Bot M8’s allegations as to U.S. Patent Nos. 7,664,988 and 8,112,670 were insufficient. The Federal Circuit found that the district court acted within its discretion in denying Bot M8’s motion to file a second amended complaint, as well as the subsequent order denying leave to move for reconsideration. Finally the Federal Circuit affirmed the granting summary judgment as to the invalidity of the U.S. Patent No. 7,338,363 under 35 USC 101. The asserted patents all relate to gaming machines and are directed to casino, arcade, and video games generally.

To survive a motion to dismiss under Rule 12(b)(6), the Federal Circuit said a complaint must “contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face. The district court instructed counsel for Bot M8 that it must explain in the complaint every element of every claim that you say is infringed and/or explain why it can’t be done. The Federal Circuit disagreed with the district court’s approach and reiterate that a plaintiff need not ‘prove its case at the pleading stage. The Federal Circuit said a plaintiff is not required to plead infringement on an element-by-element basis. Instead, it is enough that a complaint place the alleged infringer on notice of what activity is being accused of infringement.

The relevant inquiry under Iqbal/Twombly is whether the factual allegations in the complaint are sufficient to show that the plaintiff has a plausible claim for relief. The plausibility standard is not akin to a probability requirement, but it asks for more than a sheer possibility that a defendant has acted unlawfully. In other words, a plausible claim must do more than merely allege entitlement to relief; it must support the grounds for that entitlement with sufficient factual content.

The Federal Circuit agreed with the district court that Bot M8’s allegations as to the ’540 and ’990 patents were conclusory and at times contradictory, but found that the court erred in dismissing the allegations as to the ’988 and ’670 patents. With respect to the ’988 and ’670 patents, the court simply required too much.

With respect to the ‘363 Patent, and Federal Circuit agreed that the claims recite the abstract idea of increasing or decreasing the risk-to-reward ratio, or more broadly the difficulty, of a multiplayer game based upon previous aggregate results. The Federal Circuit further found that the claims leave open how to accomplish this, and the specification provides hardly any more direction. The district court said, and the Federal CIrcuit further found that the claim merely recites result-oriented uses of conventional computer devices and that, at bottom, nei-ther the patent specification, patent owner, or patent owner’s experts articulate a technological problem solved by the ’363 patent.” After careful consideration, the Federal Circuit discerned no error in the district court’s § 101 analysis, and found no need to discuss that analysis in any detail.