fans used their bank cards in mass transit to go watch the first world series games in wrigley field since the one nine hundred forty s these commuters took the bank cards out of their pockets so that the cleveland  yes for this case takes place in chicago they took the cards out of their pockets and tapped it against the card reader at the turnstile the card reader analyzed embedded circuitry inside the card and almost instantly sets whether keep the turnstile locked or to open it up and let these commuters go watch their carbs in action this technology was not available just three years ago now we're here today because the district court thought that this type of getting system was too abstract to be patented we think that was in error and i'd like to consider the claims of the six one seven patent to illustrate  well there was also another problem connectivity sometimes there's a lack of connectivity but this speeds up because it happens right at the entry at the turnstile so it's one thing to say for i mean for decades people could use their thank cards at a ticket machine or at a ticket booth they would have to wait in line to pay and they could do it that way and the conventional way as the pattern explains and as  rs prior art explains the conventional way for the transaction to be evaluated was to hop through several networks the acquiring bank the issuing bank things like that what these claims have is  the value ation locally the norm was to do it remotely through several networks but here in the claims and unconventional approach is to evaluate the transaction locally so the inventors locally he said if you do if you store information there it will be in secure and susceptible of being hacked saunders says you better do that evaluation through store the information far away at the distant remote networks belonging to the banks but the inventors wanted to speed up the process so they checked it at the white list locally the district court acknowledged that this sped up the process the allow people to use their cards at the entry gate that that's under speeded and the inventions here had three benefits they they solved that there were problems that were recognized how to do it quickly enough how to secure the data and the inventions here took unconventional approaches to doing all that let's let's look at that the last assertion you just made unconventional bank card criminal i am assuming when i go to the grocery store and i slide a card that will machine that's a bank card terminal it's not being used to a bank card reader processor memory access control or aren't these all conventional standing alone in isolation these components were were not novel but i mean the deer and technological processes can i respond to a couple of things your honor noted i mean first of all the setting matters here when people are at the grocery store or when you're at the rest waiting for you know to pay your bill to the restaurant you can wait the seconds that it takes but there's a unique need for speed when you're rushing to catch your train so at at that meeting and at the entry gate at the turnstile you can't wait all that time so the locally that certainly i understand that and it seems to me that doing it locally the absence of having to go through a network or having to wade through the internet and all of the things that you know you have to go through if you tried something at a grocery store or at a restaurant right the question is where is that in the claims while the we don't claim the effect we don't think we have to claim you don't claim the absence of enough or or the or eight local you know processor or aerator at a local place or something of that sort but the evaluation takes place we claim in the system claims the architecture necessary to do the local the local evaluation in the method claims the actions take place we don't claim the result is not if there is the novelty of what you are claiming that is the use of the bank card i mean it seems to me that that's the focus of the one that when i when i asked the question one of the claims directed to the first thing it takes me to and it seems that the focus of the claims is the use of the bank card for the death of occasion the use of a bank card to control access to a trans it's ok this is for example when i am at the airport and i go up to the kiosk and i'm flying american airlines and i put my credit card in their my credit card gives me access to the american airline doesn't mean i've paid for anything or i've done anything but it's already give me the access to the system that's really the novelty of your of your appendage and well there are three i think there are three improvements that the combinations provide here one of them that we've been focused on is speed but that's a function of where the evaluation takes place that's that was important in bascom that was important in amdocs but also the inventors here improved on the conventional process in other ways too and another question is what what will the process be what will we compare the card against in prior art that offend the systems checked credit cards against blacklist these are lists of bad invalid carts that's what the defendants prior art does the inventors here recognize that black lists are of limited val they only check historically bad cards modern fraudsters in the specification discusses this modern fraudsters have cards at their disposal that can generate a new number each time really let me ask you something claims in issue only claimed the function or the result and not the how to hear we actually we don't claim the result will effect the the our own things didn't claim the effect of keeping  keeping the user's attention amdocs two days ago didn't claim the effect of avoiding bottlenecks these claims claimed systems they told you how to do it and that had a benefit and a result here we claim the architecture the components the hardware components that achieve these results they make the conventional process faster but those components are claimed as being a couple to each other ye super form that result but doesn't necessarily say directly coupled or locally coupled or coupled without a network or coupled without delay or any well if this is the claims we been talking about a goodly couple they could be crosstown they could have to go could have to go through a network there could be all kinds of delay associated with that i've you know i'm trying to focus on the claim language and whether the claim language gives you hope to hang on to make the argument you're making or the claims are to a bank are terminal and i think any fair reading of that i mean no one identified as a claim construction issue w bank card terminal could be distributed all over the world that i think but isn't isn't that the central if you're going to boy the latency problem that you're trying to overcome i think bank cart terminal has thing that this that the other way that the claims improved on the conventional existing prophecies was data security and the other thing that the defendant prior art has is they store blacklists and they don't talk about  a security at all these are only bad cards so they didn't need to protect them and they don't mention that challenge at all the one reference that talks about the security of the data that will be stored locally is saunders couldn't figure out how to secure historical card information that's why he said you can't do this locally you have to do it through remote distant networks or by many of the claims you require hashi a security mechanism that will protect the information stored at the bank card terminal so we made it more secure faster and more robust with the whiteness let me we let me direct your focus to our step one step one determining whether the claims are directed to an abstract idea of courts or having a terrible time trying to figure out how to do that and the risk in all of this is that determining whether the claims are directed to an abstract idea in many ways seems to be a totally abstract arbitrary process and so what do you think the test should be in determining whether a claim is directed to an abstract idea and let me try to break it down into two two parts to that person one what's the proper way to characterize a of the district court characterized it as using a bank card to access mass transit is that the right characterization how many things in that claim do you overlook or ignore or yeah yeah it's i'm going yes it's of you have an idea how how we i mean well maybe you could say well this claim is directed to ending access to a transit system that's ultimately what it's all about what level do we go in step one in identifying what the claim is direct yeah i agree obviously it's a vexing problem and litigants and the court i think is struggling with that it was mentioned in the dot's opinion two days ago how do we do this but almost every one of our opinions yet wrestles with this issue yes and i don't think we have yet to articulate yeah something that has meaningful guidance so in this case and the district court characterize it a few ways your honor mentioned one it also said pain with the bank car or paying for a transit ride with a credit card you know we have think on your opinion evidence is the problem that i'm having yes how do we decide so all of this out one of the ways i think the internet talks about trying to figure out what the basic character of the patent is and it says you look at the patent as a whole you look at the prior art and you look at the attempts to improve on the prior  this case we think the district court however it was characterized really reduced the claims to overgeneralize just commuters had and he is what i'm trying to get at  what what the claims are directed to for purposes of our step one you do the following i think it's a little bit holistic and you need to look at the specification what it says about the problems it was trying to solve the prior art that it was trying to improve on and you have to look at the claim language and it i think it's necessarily a little bit of a holistic approach to try and find the basic character and in this claim elements working together these hardware elements unable the transit system to make it happen we have the interface that at some point has downloaded the historical data the whitelist in this case of known good cards different than what's in the defendant's prior are then there's the memory of the processor sends those to the memory the memory stores this historical white list of of good known cards then the bank card reader will evaluate the currently presented car and this is all at the terminal gate the product the bank card reader does that is connected to the processor the processor is able to take that information and evaluate it with the memory these are all coupled together and the memory is is also coupled to the processor which is  the second interface which controls access he got to disagree with the district court's characterization of the claims as either using a bank card to excess mass transit or paying for a subway or bus ride with a credit card yes because those all encompass even just paying at a ticket machine and waiting on line to do that that's not what these are about these are about what more when you add in terms of what  this record should have characterized these kind i think the first step characterization is controlling access to the transit system by enabling the use of the bank card directly at the terminal gate not with the vendor not  so but but the use of the bank card locally speeds up the process the use of the white list is an advantage over the prior art because it's more potent than the blacklist that was in the conventional prior art generic computer processor cited there's no improvements the functioning of the credit card or the credit card equipment there's no improvements the functioning of the minutes transit equip their devices you know as district court actually held  raised before and it seems to me the entire process of assessing whether a claim is directed to an abstract idea itself is abstract i would agree that your honor and wholly arbitrary that's that's what i'm having trouble with in these cases you know everybody involved the advocates the judge the court of appeals we're all trying to make a judgment as to whether a claim is directed to something that is abstract on our end we're using all sorts of rationalization and maybe that's what it ultimately comes down to but it just strikes me as being so terribly arbitrary that it's almost not useful maybe we should just bypass step one and say well it's directed to so and so and let's just look to see whether there's any structure that's had something that's not common for the some of the more recent cases certainly have lend themselves to such an interpretation they do seem to be conflating the two steps in the alice framework in terms of whether the improvements functionality is a step one consideration when it's a step to consideration contrast again fish with the basket on this edition you have any insights as to a better articulation of how we a characterization of these claims is right thank you characterized as they are using a bank card to access mass transit or paying for a subway or bus ride with a credit card and he says no it should include valid in your questions and language of the claims doesn't add that particular directly or local requirements to this abstract idea fact in their brief themselves pellant characterize it as these in this case using a bank card to access mass transit then you decide well is that directed to an abstract idea and i go see if the if the claim is characterized as processing storing scanning these are all abstract ideas here it's using a bank card to excess mass transit what's abstract about i'm not getting in step two as to whether there's something in the claim that aired trying to focus on step one what abstract about in this in the sense of you know setting up a hedge fund or providing escrow accounts or multiplying or storing or processing those are all abstract concepts i'm having trouble with just saying that using a bank card to access mass transit is abstract and help your thinking on this what what if what if the conclusion was well using a token to access mass transit and certainly that would not be using a token to access a mass transit system using that would be an abstract i need yes your honor because you're talking about a concept you're not talking about a particular function now if it's only using a it it's just the functionality and nothing more that's correct your own sense that depends on what you characterize and what that is if what you're characterizing what the concept is is a well known business practice authorization or something that actually was implemented in the seventies and eighties and much later in the credit card event on credit cards were first introduced back in the one nine hundred fifty s and sixty's local verification was how credit cards worked the clerk received a credit card was subscribed to less than the bake issuers of card numbers and every time you received their credit card the clerk was presented with that credit card they would take that credit card they compare it to this book they received solicit received and  the only speed improvement it's being realized is being realized by taking that concept by taking action it was done by a clerk in the fifty's and putting it on a generic computer that's the speed improvement cons and and if you can just say a credit card or if you just identify a characteristic of a computer and sister just to be sure there's nothing being written on a credit card this this plan does not require writing anything on the credit is not real and this goes all the way back to fluke you know they said they tried to say well we're not just taking this for me they were applying it to alarm system monitoring and click make clear no just applying the abstract idea to feel abused is not make it any less abstract appellate here alleges a handful of wedge nine preemptive uses but again that's not a scarcely relevant year dating back to fluke again going past a fluke the supreme court found claims that were ineligible despite the fact that they quote do not however cover every conceivable application of the formula and similarly in the ip technologies case they identified roughly a dozen different supposin not preempted uses of the abstract idea and the course they're also said claims that the claims are not preempt all price optimization or may be limited to a particular setting do not make them any less abstract the same announced last year just because they've identified this piece three or four and what they allege are non printed uses of this abstract idea that would not be covered by the claims does not make that idea any less abstract so sum up your arse the district court and what i would characterize as a very well reasoned and very thoughtful opinion got this one right these claims are directed to an abstract idea and there's nothing invested whatsoever about the routine components and processes used in each to implement the abstract idea i'd like to respond to a couple of points firstly we did not take an old brick and mortar process here and just automated the process was already networked and computerized there wasn't an employee behind t rifling through ten million paper records looking to see if the commuters cart was approved it was already networked and computerized and we made it better i want to also point out what happened before you were allowed to use a credit card or a bank card at the gate you had to use a traditional mechanism like a transit ticket or pass but that meant you had to carry around a separate thing and find it and in your pocket in your bag the benefit of using bank cards here is that everyone's got him you don't need to carry around something else that was something that transect or wanted but it provided its own set he drew three you haven't done anything to the bank or not to the the bank or all of the say this is generated and there's the other process that figures out if i got enough money or not given yes but the location of where valuation per occurs is becoming a recurring theme here in two days ago the court approved of a patent because it shit one of the unconventional things was where the processing took place near the data sources like here in basque arm where the evaluation occurred  of your claim is on the bad part you're not claiming the this the that the ability or the the function of a payment no it's not about payment thought about so benefit was avoiding bottlenecks elsewhere in the system we here claim an architecture that is faster more secure and more robust and what defendants point to to try and show that we were convention ok thank you for thank you very