by simply stating the principle that abstract idea while adding the words compute it the answer to that question is no and we know that from the benson case the supreme court has already told us in how do you know it's an abstract value your honor there may be live finds of abstract ideas in this case we would submit that it is easy a method that can be performed entirely in the human mind or with the aid of merely a pencil and paper is an abstract idea this court said that in the cyber source case the supreme court said that in the benson kick the supreme court reiterated that in the blue states the p t o agrees with that standard the that section twenty one row six says that abstract and purely mental mean the same thing and the p t o in this very key make that determination as to these claims when the five t they are abstract ideas alice amended the claims to add electronic good judgement a computer and on that basis they were granted so we know two things from the p t o s own action here first these claims these claims these patents claim only abstract gives you a couple of parts about what kinds of information a computer coupled to said data storage unit said communications controller that is configured to do the quality that doesn't just sound like somebody saying a method with maybe a ix seventy m p manufactured by time microsystems each processing unit runs operational system software such as on my current systems of s four point one point two i felt that location software the application software is shown in the flow charts accompanying the scatman i e figures a through sixteen figures eighteen through forty which contain details flow charts that would certainly satisfy anybody's predilections regarding an algorithm disclosure for software purposes  that's an abstract idea i want one rejection of course not real reason why with adding software and be limiting the functionality of that computer suddenly convert that computer into an abstract because you're with a method claim which is what we have here and whether a system and a computer plane appended to the method claim drafted to avoid diagnose you know correlating diagnose and so forth that claim would have been no more patent ellett but we submit then the claim that the supreme court in fact invalidated the the addition of the generic system in undescribed undisclosed claims system doesn't add anything to him at that point so in a pattern like this we have to start with the method point to answer your question in good moore's i think there are other kinds of patents in which what is actually being claimed is the computing device or even the programming of a as the elements of klein's full computer implement that's correct term now let me understand the extent of your agreements here are you agreeing that we should treat those claims as computer implemented solely for purposes of this if you want  or for all purposes in the case and i ask you that because if we should reverse on patent eligibility based upon that concession will the case go back will the district court construe those claims and what happens if the just report construes those claims and says well no there is no computer implementation here what happens then do you reassert the one on one argument your honor we have conceded for a computer but as i read what the district point said and he used the word assuming a very broad construction i think she meant narrow construction actually when you think about a fight but that she said that you conceded that that the term shadow of credit and debit records and transactions all recite and like chronic implementation on a computer or some other electronic device and then she later pointed out that even at the mark when stage you said that let's assume that with the my question ask you this with respect to claim sixty eight of the seventy mile path and that's that's a data processing system claim guestroom what what if that claim instead of reciting a data processing system which cited a data processing server and then went on to claim a storage unit and then instead of the limitation a computer coupled to the storage unit that is configured to do this that and the other it said a hard wired electrical circuits configured to do this that me other would there be any question whatsoever of one on one patent eligibility i think at that level of abstraction that level of  simply a token computer tagged onto an abstract idea as more pointed out there are specific limitations as to the way the this method is performed in the system and using  software to accomplish a practical result your honor i absolutely agree that there are computer systems claims computer software claims circuitry claims all of which are patent eligible we haven't challenged any of those we have made the point over and over again and neither alex or the government counties and the claim i just read to you was a computer system claim that articulate four pieces of hardware and a specification discloses at least sixteen different things that we could be used in each of mayo has changed the law from what it used to be when these patents were enacted the recitation of a computer in the computer judge moore was not that's the basis on which p t o granted these claims and the government now takes the position of the united states government quote the recitation in a claim that alabama that is the rasterize are optimized for the smooth oscilloscope presentation i think like the resource for patent looks a lot more like a method for an improvement in computer technology that under the benson flew your line of cases would pass muster so i don't think it did overrule allopaths outcome i think the whole i think the reasoning out has not survived in this board back to bill t of course recognizes the reasoning about that has not survived years but the outcome probably they like to talk a lot about they never read you they never tell you about this quote which is a page one of those one two he says quote in an abstract says it is possible to perform the business method of doing these things that is maintaining accounts adjusting accounts or providing a structure without a computer in fact if you'd done this a hundred years ago which of course we have to look at you would have done it in a non electronic manner using various precomputing tools such as an abacus or handwritten ledgers so you're talking about a method distraught and  it is fairly true with its double entry bookkeeping which every account can do is all they've claimed and they don't claim any number of transactions the claim would read on a two party single trade so you don't need a pencil and paper or ok all that is being talked about is when a bilateral transactions the intermediary debits and credits the account during the day and make a net payment at the end of that judgment imbedded in your question if i may be presumptuous in the court for the panel opinion is that you wrote you say there are many other ways to do that that is to keep accounts and write them we challenge that proposition in the inventor to shoot in alice's comeback and admitted they only know of one other way to do it and they cited a very interesting article the shall or dissertation which is quoted in their brief which said that from multi party multilateral multinational currency settlements which is what we're involved with here there are only two ways known to the world to do it real time row settlement which is what the fed wire does every trade is immediately entered and closed and that's the way central banks typically do it operating the same time zone or those are the only two ways to do what is involved here ok they don't dispute that look at page forty of their brief though that the other alternative states so we talk about preemption they're claiming that settlement and i would challenge mr perlman when he gets up here my friend there is no way to do a net settlement a county without a shadow credit record this is simple double entry bookkeeping when you all bought a house i assume if you had a hud one statement that the shadow debit and credit record you got the taxes in the utilities and everything that comes  a bottom line of the money flows one way or the other the escrow agent holds it that's being played in this patch it is abstract it is simple it is not complicated and it is preemptive and adding bolting on a general purpose computer undescribed any computer running any hard drive in any telephone without software to actually do it this is important your honour's there are companies in this country and others that spend tremendous amounts of resources money a business plan and now create this court with the royalties which is what they're doing you know i can have a great idea of self driving cars it's a great idea but google is investing a billion dollars to actually bring it to reality and if they do they'll probably get  run it but the person who just wrote down the idea and brought it to the p t o couldn't and one thing that bill's going mayo do and there are divisions of opinions i understand that i understand that there are differences of view on that but one same suppose to take care of what you're describing now absolutely your honor and if we ever got test one the one here alice has got all kinds of problems on obviousness on unable men and everything else that is a logical way to look at the p and i've actually written briefs making the point myself however the solicitor general made that argument to the supreme court in mail and for better or for worse but they told us what to do they rejected that they said no we're not going to rely on  three that that has to have independent life you they didn't say exactly at the timing although in every one of one cases reported over decided almost everyone this quarter decided it had been the first issue in the case for good reason because it's a legal question that can be decided on the claims in th i think we'll hear next from mr kelly i want to hear from you and then we'll have  to create a bright line test that can be used in all cases and we go from the useful concrete and tangible task that we had about a decade ago machine or transformation test we had several years ago and we look from those tests of the supreme court guidance and we've come away from that with a clear understanding that a bright line test is not workable in this situation that the only clear understanding you came away with no no your honor it's not  we come to another understand which is that we also can't look to the draughtsman's are to take a claim and push it into the eligibility circles that we have to dig into the claims themselves the fact that a claim to plea recites uter along with only thing that needs to be done in order to assess the one on one question yes the claim has to be construed we have to know what the claim means we have to know the computers there and how it's connected to the other elements but then we think that we have to have an additional quest strapped idea your honor the supreme court was clear in mail that just because a claim or cite something that may not be a law of nature does not mean it's a claim to a law of nature the fact claim is to the system itself and all four elements are detail descriptions of hardware it seems hard to me to say oh well that's just insignificant part of this claim because the claim is to a computer well if the claim is truly to a system and  that's how the claim is true then and there are further findings that the system is what's happening in the claim then i think we agree with you the problem is your honor if you take an abstract idea and simply write a system however detailed you want to write system at the end of the day if the system is just there to add on to the idea for the purposes of making an eligible we think that the supreme court has clearly stated that that is not enough you have to look deeper into the claims to see if the system and the steps are inseparable like this court has said in cases like research corp or sir can the ideas in the claim be separated from the system separated from the g p s structure separated from the computer that puts  k as to how much detail of flesh or whatever state of the art and the prior art but where does one one fit in because it does seem as if you're saying that if it fails when i was three it's probably an abstract idea because it's too broad and we would hope to make everybody gentian at once at the same step the other part of your question perhaps your honor is how do we separate out the particular details in the claim from the other rule that we've suggested which is the form of the cla be much simpler to reach than the one to one issue but we don't think that the one of two analysis is a proxy for the one i don't know what we think should be done when the one i want to now says is looked at is the claim should first be construed and then after the claim is construed there's a deeper step there's a step of deciding to what extent the hardware does the computer do all the other them and patients in the claim become an inseparable whole to the rest of the claim that could be considered an abstract idea and if it is inseparable then you have an eligible invention but if in cases like these are tracked scuse me or property bank for cyber source where what's happening is that you have a stand alone in the claim not just an abstract claim but a claim for an abstract not in the computer is added simply for the purposes of getting the job done or because you have to have a computer because everybody in the field using computer has it has to do more number of different things that the fact finder can look at we've suggested three of these factors weighed favor of eligibility those factors would be where the stats make the computer work better as a computer where the computer doesn't because  faster computers faster well that's an interesting question on if you had an algorithm that actually made the computer work better if you figured out that for example certain steps might be higher energy steps than others to interlace your higher energy steps with your lower energy step to the computer would use less energy and be more efficient i think that would be that would be an eligible way to improve the processing of the computer but if your invention is the particular mathematical formula that you're going to implement with  depend on the facts of the case in the claim as written and as you posted it might very well be eligible if someone can figure out how to make the computer do something you could not do much more with that with every new software program d every software program reconfigured the computer take off the back pull out the chips that aren't necessary changes and that is the heart of judge rich's national purpose computers an allopath do you reject that yes we do not reject the totality of what allopathy said but we we do think that you need to look deeper into that case that allopath case there was a very special thing going on in that case and under the facts of that case that may very well have been eligible for what we do reject the notion that simply adding a general purpose computer plus software such that you have now a special purpose computer for work you want to implement in hardware in hardware that that alone makes it eligible regardless of the details of the computer regardless of how well the computer would you say the general purpose computer plus software would never be eligible for patent protection i let you know sceptically just told us that software patents are yet i did not is not going to give you an eligible claim who's doing gym between bugs a computer being simply a token host solution implementation or whether the computer is part of the  idea from almost any convention and we can look to the first half of the nineteenth century morris when he invented the telegraph claimed it in a variety of ways and one of the ways claimed it was at an abstract idea the idea of using electro ve force to create characters at a distance the fact that there's an abstract idea behind the invention does not answer the eligibility question at all what answers the question is the claim what's claims and how the plane parts work together as a whole thank you mr kelly thank you see that you are good morning macy's the court i think at least the one aspect of the case the fundamental disconnect between myself and mr perry is the level of generality with which he reads our claims we have not claimed the idea that the district court identified as using a neutral intermediary to exchange obligations we cannot claim the idea of using a computer as a neutral intermediary nor we claim of a machine under the statute under the sprint or in this court case law is a concrete thing consisting of parts we are then faced but do you think there's a difference between as i asked before a freestanding a computer a machine claim and one hatch to a method behind as we have fear where it's clear that the machine is simply a reconfiguration of the method claim rich may or may not fall that there's a difference between that and a free standing computer claim examines on its own merits for purposes the one of the one in the abstract idea exception i do not believe there's any distinction between those two let me give you an example i think eliminates my reasoning that it is similar to what judge moore brought up earlier if i were to claim a computer coupled to a data storage unit full stop and assume i was the first there is no debate that is a machine and that is not simply an abstract idea and no one in th case is articulated the basis under which that would simply be an abstract idea it cannot be an argue that if i further limit that claim by specifying what the computer does that it becomes an abstract idea gravity it i mean that's sort of an interesting machine thing to really claiming the process of  so i guess i'm struggling a little with inside politics but i do not think that you can claim the idea of gravity but i think it's important to note in this case we haven't claimed any idea two ways in your brief to say multiple other words right so what are the what's the third one since you've gotten multiple other sir let me let me actually clarify we put two in our in our brief the same exchange institution don't use shadow mountain just directly make the exchange the different exchange institution where the computer instantaneously checked and just operates in the room or the count of the shuttle going up the shuttle or dissertation is actually a see also for us where they feel less consider three different ways of doing it work which were not close to where they were they were they had a way centrally job harnessing the payment systems that different exchange institutions use and you've set up the computer to say when side one of this transaction is set to go it doesn't go until type two of the same transaction that to go and you accounts which are not the real world accounts for the exchange adjusting those accounts are doing the exchange only in the shadow accounts not in the the end result is affecting the exchange but the method is not to be it is not claiming the exchange only explaining the way of doing it your way of doing it and if i can if marking affected international exchange that i cla you i understand and there are i guess what i would say that may be that the method that you have visioned in the method that we have patented in the numerous other methods known and unknown out there all come from the same kernel of an idea that you want some sort intermediary or some thought of process in place to make sure the transaction goes through but the prohibition on claiming abstract ideas is on playing the idea of doing it not a particular way doing so we may if i'm understanding your question this be done by the computer why can't well putting aside that our claims method is built for a computer implementation requires a computer if you wanted to the question is is it impossible to do something like this with ledger entries or something with a human without a computer of course it is possible to do that but the law is not unless it's impossible to do something like the claim without a computer a particular computer implementation of it must be abstract particular shadow accounts credit debit and the actual transaction between the two is often peter implemented if we were to read the claim and say you know what that's not really apparent time since claim construction is something we need to know when we rea send it back to the district court and then without doing any guidance that would be the result would be different if the assumption were incorrect but i think that was the fundamental issue here is because the specifications described the shadow records as electronic data file out if it did not require a computer we would need some sort of additional marking proceeding to figure out what other machine it might require because it's the definition of the shadow record in the specification is the electronic i guess a direct answer to that question would be there's nothing in the record on that but i would say that the two methods mr perry points out in this document actually are three men that were cited by the overtimes with my question i guess your honor i have the difficulty i'm having is we don't claim the is it possible to perform that method without infringing your coins yes because that method is the first of the possibility that felix consider and they ultimately adopted the third and the third is the one infringes our are i also would say the international standard even exists now the way it is recommended to be done is there any way of doing that without infringing your point i don't know the answer that question on it but i would say that that should not determine whether in one thousand nine hundred three when we filed the patent application and laid out a particular computerized way to go about doing this before c l s they were came online before the international standard with every adopted is simply an abstract idea but the direct answer is i don't know the answer to your question let me  let me go to the point that mr perry made about the creativity requirement i think he called it from mail because i think we fundamentally disagree on what the supreme court saying in nail and as we read mayo for the supreme court is that when you have a claim that involved in some major way a lot of nature or an abstract idea you have to have other elements in the claim that suffices to show that the claim as a whole is to significantly more than the abstract idea itself and the question is not is each individual elements or even all of those elements invented in the sense that mr perry is using it but rather do they do they have a significance to the claim as a whole such that you're not just simply claiming the law of nature itself i think that from the fact that the court in mayo expressly quoted the provisions of the year where the supreme court said that all of the elements of a claim are well known and in common use it is still possible for a process combining them to be patentable it seems to me that acceptance of that concept undermined the argument that we see and feel less an opening brief and less so in the reply that the relevant question here is is the computer conventional is it conventional to have an account is it conventional to make adjustments to account conventionalities in may of one of the staff was relevant because the patentee conceded that these were well known routine steps that necessarily would have to have been done in order to use a law of nature and so the fact that those steps were known with the relevant term and whether the claim was to significantly more than the abstract idea itself when you perform that analysis here are claims to significantly more than just the abstract idea of using a neutral intermediary we have a computer that requires special programming not an off the shelf program as still a suggestion every if we lay out great detail in the  ication how to go about configuring the computer and out that says that creates a new machine configured by its programming rather than by a partner that serves to demonstrate that our method playing our system claims our media claims are all to significantly more than the abstract idea itself which is why the district court erred in this case in the panel with corrections in our view but let me say that even if such that it is not just a claim to an abstract idea but to a application of that idea the statute itself says that a new use of an existing machine is eligible if within the definition of a process under section one hundred we agree with that your claim is to a mathematical formula merely tagging on and it's impute or will perform the calculation is not significantly different than claiming the abstract idea itself and it will fall under benson and would fall under view but our claim is not to some calculation or calculating some number and the computer in our claim does not simply speed an underlying calculation that our computerized method in our would agree with you that all we've done is identify the concept and set and use the computer in the concept but that is not open to the claims we find one particular way of using a computer just change obligations a certain way to achieve the goal you identified of minimizing risk if your honor you would oppose people around the country and do it in some different way you wouldn't infringe our claim and nothing that we do in our playing preclude others from coming up with new methods of using computers or exchange obligation or using other methods not about a particular exchange of which we have one particular way we document that we started with jessica evidence that there are multiple ways to do it had three different ways identified but there's nothing in the record to suggest that in the universe of all possible ways ever and i don't think that the analysis turns here on whether because we came up with our idea and it's the best idea that however but it doesn't but i can tell you what the other two options were in the paper that we cited if that is the question the first option was that the state computer system interacts with the part of the real world accounts not shadow councils we have it and set up to coordinate payments from the accounts such either both go or only one goes by using the payment system the other way that is in this dissertation that feel less published about it some history it what the system doesn't track what each party is obligated to pay in to cover their net obligations or in the course of the day and there's a deadline for them to pay that in and if they tell you what they then they get back from the system what they're owed from other people but if they don't pay you and what they owe they don't get anything back and so the for and then the third model is the one steal it ultimately adopted which infringes our claim which is the settlement  not new we don't make those invented them but what you have is shadow records which are electronic records for use in a particular computerized message which is always claimed and always prevent anyone from doing and i do think that there is a distinction that the panel pointed out that i think put this in terms of these i found to be clear the distinction is whether a claim to draw into a specific way of doing something with a computer which is what we have as opposed to nothing more than the idea of doing that thing with a computer and i think that is a critical distinction and i think that distinguishes a number of the cases that mr perry has cited and i think it is what makes clear in this case that all of our claims method system and media are not to an abstract idea but to a particular application let me take you back to the state question that was posed here with respect to them what what do you believe that that should  matter in our view bob the overarching test for any claim is is the claim with all its limitations taken as a whole to significantly more than just an abstract idea as applied to the computer context the question as we see it is is the computer playing a significant role in permitting the claimed invention to be performed or is the computer simply there to do a calculation faster or simply there to print out  result and it seems to me that important when you look at that test not to indulge in what we saw in the reply brief which was the sort of focusing in two granularly on the back of welp of course computer store data a method of exchanging obligation set up for use on a computer and the computer is central to that method it creates and maintains the shadow accounts adjust them only a particular criteria are met a particular order issues instruction to complete the transaction it is applying computer technology in a way that is beyond what we saw in the bank for case which was a claim to a series of mathematical computations at the end you essentially had and the computer will do the calculation here you see the computer with a girl this is a very detailed play that doesn't  is no accident or inadvertent well the claim the claim requires a computer whether it's the work computer or not because of the presence of the shadow records and given our specification there's no getting around that disclaimer part of the computer at my station whether it's there or not and i would say that if the words are future when the claim mr perry will be taking a different position well known well i think that your last point isn't it made me strong by the fact that he takes the same position on that system claims which clearly have a lot of tangible physical components to them i guess my question to you it isn't it's a case like every patent case where we ought to look clean my claims make the sweeping judgment based on either the is does the claim properly construed require the use of a computer or not is the computer in hock gerba in the clinic i was on the specially programmed point i make two point one year mr perry say this is all off the shelf stuff you cannot go down to best buy and pick up a computer that does you have to specially program this computer are particular way to make it do this and are specifications laid out in great detail how to go about particularly program computer is not part of the point right the claim tells you how the computer have to be configured and the specification tells you how to go about doing that configure have to do the steps described in the bat there's no special program write well there's of detail that we have with all the description that we have in the flow chart that we have and there's no evidence at all in the record by the way that would be insufficient for a skilled artisan to use it to practice this claim that we have to write the entire specification into the claim that would be a great departure from the sport usual approach to playing construction certainly anything and in this context let me just make one final point because my my time is winding down we saw either we have overcome the presumption by showing that there are a standard of applied or that the levy is a different question than eligibility therefore the preservers doesn't bother we've overcome it either way we narrow in you in your briefs you argued strenuously the test for determining when a computer is a man is invention is more than an abstract idea depends on whether it contains some sort of an invented concept i didn't hear you in your to simply reciting a computer general purpose computer is not enough because judge when it does not add significantly more in this context of a computer is a neutral as it was in the direction that if the process is seal as bank settles five trillion dollars in trade a day computers are a part of that for efficiency sake however merely claiming that something a computer does a computational function that could be done by pencil and paper which their experts that doesn't change now has but just as douglas said forty years ago remains true today a computational device does it does what you can do in head and hands faster doesn't lend any thing to pat to anything either it is a neutral and that is the computer that is recited here and that we know by the way from prosecution history the all talk and i have to come back to this the hedging method in bills from the applicant represented to the supreme court that it would run on a computer it refired complex whether that made no difference the supreme court and i would submit to you that if we said a computer system configured to hedge a good energy transactions against weather futures the supreme court would not have come out differently and i would come back to mayo which is freeport rightly or wrongly said that patent is invalid running it on the computer had nothing to do with that and certainly a computer would have made the correlation and the ass a more accurate and efficient predictive you're doing a large volume of program these guys haven't written a program there could be an actual programs computer that does these days that's a different world that's research technology that allopaths the outcome of about another reading about that that's not this case your honor i absolutely agree with you that there are such things as software patents and hardware patent as just to claim these aren't that not the ones you keep pointing at maybe not the want to keep pointing at the method claims some of which don't even use the work computer but the harder challenge for me as you've clearly garnered today acknowledge that however bolting on any computer without disclosed software programming or a logic flow that would allow a person skilled in the art to program the computer there is no computer that they have invented they don't have a product they are