we have three cases scheduled for argument this morning the first case is dealer track versus huber two thousand and nine fifteen sixty six thank you good morning good morning communications medium in the eight forty one patent to the interpretation of the central processing means in certain claims of the the eight forty one patent and third whether the method claimed in the four twenty seven patent constitutes pat subject matter of perception one let me turn first to the communications me i think the district court and the parties recognize that the phrase communications medium can hasn't generally conveys the meeting of a network for transferring data or a medium for dated traffic and there was no question that in one thousand nine hundred five as it is today that is what the internet did the only question i think i suggest transmitted that it wasn't anything else so the question properly framed i suggest is whether the eight forty one patent itself excluded the clearly excluded the internet from a term that would otherwise be feeling at least there you are going to question whether it was in i don't think there was any dispute that if communications medium is if the meaning of that phrase is understood to be a network for transfer data it was also understood at the time that the internet was a network for transferring data so the question is is there anything in the eight forty one patent which teaches persons of ordinary skill in the art that you know in the univers one patent incorporates that by reference and this court has ruled that with related patents and these two patents were clearly related the same terms should have the same meaning unless there is something in the specification which clearly teaches to the contrary  lack that amended patent is incorporated by reference into the eight forty one pat maybe it was improperly well maybe it was but it is disclosed by reference at least in the a forty one  communications medium could take a variety of other forms for example a local area network satellite communications network fast forward the internet ordinary telephone lines were privately slides itself teaches that the term communications medium is not limited to the particular examples as the district court you contend rony asleep concluded the last it in the same passage in the a forty one patent lists the various examples that admittedly not in this case including the internet they conclude although i should add that the they do refer to a wide area network and i think the evidence was that the internet is an example of a wide area network so in once in that sense at least the district court was incorrect in saying that the internet wasn't listed by name but what it was the white every network dinger the clock is running quickly and i'd like you to turn to the four to seven patents so we can address the one i want to issue sure in and in what sense  if you were was an algorithm a mathematical formula which when calculated provided useful information whether it was multiple parties in efficient ways to deal through an intermediary not only the underlying abstract idea not not it not the claim construction that the district judge apply the district judge under the circumstances it would be particularly if you take into account the disclosure in the four zero three patent which is expressly incorporated by reference i think the district judge was correct in saying that you can't read the specifications of the four zero three patent and the four twenty seven patent and not come away with the conclusion that this is not just the idea only way i'm not sure what your answer is to my question is the answer that it you know the proper interpretation even of that plane in light of the specification is that it is it is not the idea for example sending credit application simultaneously to a number of other lenders or think if it ha simultaneity the kind of method that is described in those claims being carried out without the kind of well made it network that is involved and either waiting for a response or letting them send it on to somebody else no i'd say that probably isn't aig that by itself is not patentable that was a recognised need that's why this ordinated system is pat double it goes sorry there there's no specific algorithm versus the concept of using a computer to assist in the process and i suggest that's not true if the if as the district court i think overlooked the four zero three specification is incorporated by reference it isn't just the idea of using a computer it is the specific algorithms that are clearly disclosed in the four of three patent that disclose a particular technology for achieving the idea not just in the the machine test one of the ways in which it did it was by virtue of the algorithms i think it's  a starting of page forty eight of our brief we say that they are tied to a particular machine what i didn't see any reference to work out or will smith i'm not sure he said that best specifically but i think that's i think that's implicit in in the district courts but let me ask the question a little bit differently are today if i take it you agreed that i time we'll give you some more ok if it's all we have cost standard computer that may not be enough to meet the machine that well it may but may or may not i think after versus kappos if the computer is doing indeed whether it's a general purpose computer or specialist computer well the computer is doing it before it is serving as a powerful calculator calculating an algorithm calculating a formula i think i think that follows from that the supreme court's decision if it is not otherwise if it is if it prevents if the presence of the machine the computer prevents you know  otherwise be an abstract idea here for example you know i'm flipping it the other way the machine doesn't add anything so it fails the machine all right and it still be and if so what if or limit if all that is involved is an abstract idea and the case is the niche the supreme court has discussed what is an abstract idea consists primarily of mathematical formulas what i'm really asking is if it fails the machine test is necessarily an abstract idea or can it fail with machine test and still not be an abstract i don't know the answer to that when i'm pretty sure that this doesn't feel the machine test but the answer is i don't know i mean the it is huge you say that you don't think this claimed invention in terms of acting ability what the computer does here you know it did the same but the the central processor does is function as a traffic cop it takes instructions and it takes about sending receiving them as construed by the district court that whatever the computer needed what they quote interpreted computer aided to mean was that the computer and indeed the court identified it's the central processor it carries out each step of the method and i think to understand what that means one must refer back to the four zero three specification which describes in considerable detail how the for how the central processor carries out these functions of serving as a traffic cop circulating the information sending it in accordance with the instructions provided by like you know if you want if you if you want to officially deal with multiple parties do it through an intermediary i mean that that's one expression of sort of the underlying abstract i if that is what it does yes it is so if you'll accept that that's the abstract idea that underlines this then is your argument that well this is the nonetheless patent eligible technology that allows a dealer to accomplish something that was not feasible before this technology which is to greatly accelerate the process of sharing information by making use of what was at the time novel networking technology it is the creation the invention if you will of a technological way to implement an idea which distinguishes this case from simply an attempt to patent an abstract idea that you can take any technology and abstract from it and say the goal is to achieve xx but what's invented here is the technology to implement x as opposed to the cases where a technology all the technology does is do something that in theory a human being with pen paper and fine could do you would argue that t the difficulty here of course is that the supreme court instructs that we should take guidance from benson fluke and deer and these claims that seem to be don't really i wouldn't say that because it's the computer was the tech not it was not a technological solution in the sense that it was just the computer functioning as a sophisticated calculator it was not and that is not enough includes the internet in this in this and our position of course is that it's not internet is not british and communications medium in the key to this we think is the prosecution history you go to the prosecution history and it demonstrates that the applicants knew that the term communications embrace the internet what did they do because of this they sought to add the word internet into the specification into places to broaden the meaning of death by example of communications medium to embrace the internet and when they did that the examiner because they also went tried to add the word in to certain claims this caught the examiners attention and it required that the word be removed not only from the claims but from the specification and that's key now one thing i want to point out is the deal the track had this is  primary argument regarding the meaning of internet as whether it's in communication beam or not and do you track had to briefs and thirty thousand some odd words or thirty thousand some odd times to comment on this issue in their briefs and they say not one word about the prosecuti nothing the patent specification that includes the internet that's right and there's nothing that necessarily says the imp there's nothing it says the internet is not part of communications medium but a person of ordinary school in new york reading that would recognize that the internet was not a communications medium by virtue of what the patent says elsewhere it says and does talk about a wide area network exactly and isn't that what the internet is not in the context of this patent and you learn that what would you think they would think in two thousand and eleven they might think i thought in one thousand nine hundred five conceivably they might think it might include the internet but there's no evidence of that in this patent and no evidence of record that anyone didn't think of it as being the internet but importantly when you look at what happened in the prosecution history the prosecutions history when they added the word internet they added it after the words or other forms so that the patent would have said if the examiner had allowed it why we're a network comma the through arm of network including and then they make the list the internet so that they said that the internet was and other form of network from wide area network and they're telling every telling the public that internet is not the same thing as the win of this patent whatever else it may be in the abstract it was not the land of this patent what are they telling the public by incorporat amendment later and the reach and and the fact is if before if the eight forty one specification actually did incorporate the four zero three patent with the word internet in there what wasn't the word internet in the application at the time that the incorporation by reference was made yes that at the time that the incorporation of the application was made the word but the application is what is as filed this is for purposes of section one twenty to relate earlier finding date you don't have to use the words the subject matter is incorporated by reference to my knowledge i believe that's correct however so we hear those words were use but in relation to the application not the application really didn't cooperate with the op patent for three patent with its reference to internet by reference if it didn't quite right that then the examiner shouldn't have had to and wouldn't wouldn't have ordered that the lesion of the word internet because it was already in the a forty one patent by reference y z examine it watering to belief of the word internet if it's been properly incorporated that examiner wouldn't have done that and they wouldn't have acquiesced if there's the fact that the prosecution history required the removal of this word and that they acquiesced shows that it wasn't to when it was in the land by virtue of how they inserted it proves on the record that the for all three patent with its word internet wasn't corporate it by reference either and because of this because it was no matter and their expert testified that the only reason that could begin it could have been ordered deleted that he could see in the record was that it was new  then in court the claim term was can strewed in that context to not incorporate not include the new matter that was ordered to be deleted that is exactly our case here the final comment consistent with this the word grabbing is a claim limitation in all claims there's no evidence whatsoever that the gene the system of route one does routing in the sense of being sequencing an order of sending a credit application and it's a consequence there can be no information as a matter of law because that was our position on summary judgment the exact the court misconstrued routing there's no assertion by bill attracted if the more in your honour's the analysis of the section one hundred one issue is exactly as judge dyke expressed in his questions to counsel the way you look at the four twenty seven patent for compliance with section one hundred one is to first read the claim limitations without computer aided in the preamble and ask whether those limitations express patent eligible subject matter if they do not then you ask yourself does the words computer aided in the preamble added think significant want why do you ignore the computer aided language the computer aided language is in the the first thing that you need to do is try to determine whether the vulcanizing rubber and we know we know there's at least one case that dealt with that news a well let's let's just punch through and find out what's that essential underlying concept here and then will conclude whether the balkanizing makes any difference i'm not suggesting that the first thing you do is look at the essentially the underlying concept you have the words computer aided in the preamble of this claim the in the referring to the use of a machine was reflected throughout the limitations so when you look at the limitations themselves it was the supreme court concluded that you were not dealing with an abstract concept you were dealing with a method that was essentially tied to a particular machine for curing rubber in this case when you look at the limitations of the claims without computer aided what you have and what counsel admitted was essential the abstract concept that preempts the entire concept of soliciting credit for multiple lenders through an intermediary now that why is that an abstract idea i can see that the abstract idea might specific it's talking about applying that idea in the context of seeking approval for a loan application does that make a difference i don't think so your honor i mean essentially you are talking about the entire  entire field of seeking a loan application from multiple lenders and it isn't that is because if it application i mean the idea for example of going through an intermediary is something where you know i could say well if i want to make official use of my lunch hour i could ask my secretary to go out and get me a sandwich at the first sandwich place that doesn't have a line it's the same concept here going an intermediary to approach multiple sources but that's just that's a different application than this one being the intermediary here could be anything from an email to a fax to a courier if if you look at what is claimed it's essentially data gathering and forwarding data and waiting for a response and the only thing that is application specific is that you put it in the lending context i don't think and i think the cases support that that is not specific enough and tied specifically enough to a particular application to take it beyond an abstract idea  the let me ask you the same question i pose in general to let's assume it fails the machine test that's basically what you're telling me is is that necessarily mean it's an abstract idea by definition i don't think by definition it means it's an abstract idea i think if you read the bill ski decision it the bill ski case does leave room which built the supreme court decision became that correct i think that the supreme court left open the possibility that if you fail the machine test that you still have to look to see whether there is an abstract idea or not i think this particular patent does not come close to it to falling within what has to be a fairly narrow circumstance under which a patent fails the machine test and yet still is patentable because it's not an abstract idea sentially preempt an entire concept in the abstract whether you're talking about an algorithm or simply an idea that's expressed as a series of steps and  lee approved of this court's expression of the machine test as a useful clue and looking at this court's precedents on how you apply that machine tests and i think them when most instructive cases is in out where the court said that a general purpose computer doesn't satisfy the machine test but if it specifically program for a particular application it does and the facts of our case illustrate exactly why the does not satisfy that particular machine test it counsel said that the patent follows algorithms that are contained in the specification well if you look at those obdurate thems which are in figures eight  it's simply a repeat of the claim language excluding the computer implemented language in the preamble and in this case what dealer track did they asserted infringement against my client finance express who has a loan application system that system at one time included its software program and software in a processor that all loud the element applications to go in a way that was described in the patent namely at substantially the same time to a number of potential looters in the industry that's known as shotgunning before the four twenty seven patent issued my client took that software out of its general purpose computer now you would have thought that that would well they said look this patent is broad enough to essentially cover the mental idea of a dealer deciding how fast and in what sequence to present but things on a computer and if they mentally decide that and then press the buttons on a computer that infringes these claims well that's exactly the kind of abstract idea that is not patentable just because somebody adds a computer into a process and makes the idea occurred or implement an idea much more quickly that's not passed patentable and i think what you're essentially have here is the claim in bilski with the words computer aided in the preamble and the supreme court i think if one thing comes cyber source claim claim to that was considered by this court on tuesday where the words over the internet were added into the preamble it's the same sort of situation you have computer aided in the no there has been no addressing one zero two one zero three s that everything is in terms of is that right and the obviousness question address i don't believe that it was addressed on summary judgment if that will be that that was going to be an issue at trial and then the court found that the patent didn't satisfy much your honor mr rogers suggested that the claims of the four twenty seven patent could be satisfied by just a message human messenger on a bicycle i think the short answer to that is not under the claim construction that the district court adopted which was the claim construction i should add that the defendant splurged on the court be it before this court's decision the district court ruled that every step of the four twenty seven method had to be carried out by not only not just a computer but the central processor that's referenced in the port twenty seven patent described in further detail  say four three but before i did that's the only way to make sense of what the district court did because the central processor is in fact described in the four zero three patent much more something in the four twenty seven patent itself or twenty seven was a continuation in part that expressly incorporated by reference but did not repeat all of the disclosure in the four zero three pack and you're correct the district court did not refer to the four zero three disclosure and considering the claim but i suggest as the only way to make sense of what the what the district court did when it construed computer aided to mean every step carried out by the central processor  i don't think it is so clear that the that there is that the supreme court certainly did not identify what is in the gap between abstract idea and the machine test you know and that is what this court is is obviously struggling and i wish i could give more help to the court the only help that i can give to the court in dealing with that is to look to the cases in which the supreme court found an abstract idea even if there is a machine in the form of a computer involved and the only way i can make sense of those cases is to say that if it will be machine is doing is carrying out the calculation of the algorithm or the formula which is the claim to which is really claimed invention that's not enough to take what is otherwise three issues on the four twenty seven patent have not been resolved so they will be open and remain and if this court chooses to remain and let me just make one brief comment on the other claim terms that were involved in the eight forty one i'm not going to you know argue the claim construction here i don't have enough time and i'm happy i'm happy to rely on my brief i do want to address the the waiver argument  argues that we only argued none infringement under our klink construction or at least the claim construction that the district court adopted and they say because we didn't argue claim construction and not infringe we did not argue infringement under the alternative claim constructions you can simply affirm if you agree with them on their claim construction i suggest first of well as we explain in our brief we did address not infringement even under some of their cla constructions but more important is this court ruled in the johns hopkins case it can't be a waiver to fail to cite prior art to make arguments against the claim construction that had not yet been adopted unfortunately the summary judgment briefing took place before the district court had adopted a claim construction so if you agree with route once claim construction i suggest the proper course is to remain thank you thank you very much and i don't think across the field was addressed so i don't think there's really