Takeaway:

• Claims directed to a streaming audio/visual data service are ineligible subject matter under 35 U.S.C. § 101 if the claims are only directed to abstract ideas and contain no additional elements that transform the claims into patent-eligible subject matter, such as directing the claims to a particular scalable network architecture that itself leads to an improvement in the functioning of the system.

Procedural Posture: Patentee appealed the District Court for the District of Delaware’s grant of the alleged infringer’s motion for judgment on the pleadings finding that that claims of the asserted patents are directed to patent ineligible subject matter under 35 U.S.C. § 101.  CAFC affirmed.

Synopsis:

• Claim Construction: The patents-in-suit are entitled “Multicasting Method and Apparatus,” and generally relate to a system for streaming audio/visual data over a communications system, including the Internet. The patentee argued before the District Court that the alleged infringer’s motion for judgment on the pleadings was premature, because claim construction was necessary to evaluate whether the representative claims were eligible under § 101. The patentee provided proposed claim constructions for certain terms of the asserted patents, which the District Court adopted for deciding the motion.  The CAFC upheld the District Court’s determination that it could decide the motion using the patentee’s own claim construction.

• Invalidity – The ’187 Patent and ’005 Patent: Regarding the ’187 Patent and ’005 Patent, the District Court determined at Alice Step 1 that the patents are directed to the abstract idea of (1) sending information, (2) directing the sent information, (3) monitoring receipt of the sent information, and (4) accumulating records about receipt of the sent information. The CAFC agreed with this construction, stating that the claims require the functional results of “converting,” “routing,” “controlling,” “monitoring,” and “accumulating records,” but do not sufficiently describe how to achieve these results in a non-abstract way.  The CAFC disagreed with the patentee that its proposed claim constructions sufficiently tie the claims to particular scalable network architecture, finding instead that the patentee’s construction fails to indicate how the claims are directed to a scalable network architecture that itself leads to an improvement in the functioning of the system.  At Alice Step 2, the District Court determined that the claims did not recite an inventive concept, finding that, although the specification might recite a system architecture, the claims do not recite any system architecture, even taking into account the patentee’s proposed constructions. The CAFC agreed, finding that “[n]othing in the claims or their constructions, including the use of ‘intermediate computers’ requires anything other than conventional computer and network components operating according to their ordinary functions.”  Further, the CAFC saw no inventive concept in the order or combination of the patents’ limitations, because the claims use a conventional ordering of steps with conventional technology to achieve the desired result.

• ’622 Patent and ’686 Patent: The District Court concluded at Alice Step 1 that the ’622 patent was directed to the abstract idea of monitoring the delivery of real-time information to a user or users, and the ’686 patent was directed to the abstract idea of measuring the delivery of real-time information for commercial purposes. The patentee argued on appeal that the District Court erred by oversimplifying the claims down to merely their preamble and failing to recognize that the claims solve technical problems.  The CAFC disagreed, finding no error in the District Court citing to the preamble in its review of whether the claims are directed to an abstract idea.  The CAFC further agreed with the District Court that the claims at issue in the ’622 Patent and the’686 Patent are similar to other concepts found to be abstract.  The District Court also found that the claims did not contain an inventive concept under Alice Step 2.  The CAFC agreed with the District Court that nothing in the claims requires anything other than conventional computer and network components operating according to their ordinary functions.  The CAFC further found that the steps are organized in a conventional way—data are first processed, sent, and once sent, information about the transmission is recorded—and thus lacked an inventive concept in the ordered combination of steps.