are directed to systems and methods that were unconventional in the one thousand nine hundred seven timeframe in which the invention was made the invention solved technical problems associated with computerized incentive program systems eligible subject matter that is also novel and non obvious the district court erred in holding otherwise on summary judgment in one nine hundred ninety seven there were numerous can skim puter ised incentive program systems in existence are being proposed these systems offered opportunities no doubt but they also presented real challenges in the real world computer networks allowed access to a very diverse customer base spread across a very wide geographical reach is it like to say that the part of their interruption but what is it right to say that the abstract idea here is providing an incentive award program on a computer network well we that's what the district court found and we disagree with that in fact we believe that was the sort of the first place where the court erred in its  analysis and what's wrong with that understanding identification of the abstract idea involved in this claim it's it's far too broad in general relative to the actual claim limitations your honor the actual claim limitations clearly show that the claim as a whole is not simply a computerized version of the broad concept of an incentive program there are many many types of incentive program hopes well maybe that would be the proper argument first step two  on whether or not you have an inventive concept but as for step one i mean we have to go through this step two step framework i think and step one is trying to figure out you know what is the abstract idea so what would you say in response to step one well i still believe that even in step one alice and the other cases instruct that we are looking at what is the abstract idea embodied in the claims and so the claims are still relevant in step one these claims have numerous specific limitations that show that they clearly are not simply directed to an abstract idea of all computerized incentive programs now and we've that with this in detail in our in our brief the limitations include specific details of the system architecture of claim one the relationship between the award for film and have been usually doesn't that i hear which isn't it doesn't really get to what judge chen was talking about in this colloquy with you the inventive concept part of it it's it's difficult for me to see how at the step one face we don't have anything more here than just a two but before i do that i do want to sort of hold my ground on my argument that in step one it is improper to define the abstract ideas broadly as a district court and and the importance of that in my view under the case law is that what alice is ultimately instructing is that conventional abstract ideas to conventional practices do not become patent eligible by adding routine components and functions in order to practice the conventional idea then the question becomes when we look at the claims as a whole and as individual claimant limitations do the claims preempt the entire abstract idea or even a majority of it and clearly here they do not if the abstract idea is the broad idea of a computerized incentive program there are many many many computerized incentive programs that are not crimped it when we consider the specific claim limitations the claims themselves establish that the fact that there were dozens of prior hatten cited against the patent to other types of computerized incentive i really need to still answer judge newman section one hundred three question but the preemption angle that you're presenting only takes you so far and that's not really a complete answer because i can think of the ultra marshall case for example that was an eleven step method for you know streaming video content on the internet you know there are eleven steps going on there and you know i think it's fair to say that that claim did not preempt all ways of streaming video content in exchange for watching a commercial and nevertheless even though it didn't preempt the abstract idea per se it was still nevertheless invalid under section one hundred one the the difference i believe your honor between the facts of the case and effects here is that ultimately the steps and ultra mercial were simply the sort of the computer required components to computerize the conventional practice of a fundamental longstanding practice of using advertising as a as a as a currency medium and here we don't have that situation here the steps of this claim defin entirely new method and system to operate and that set of programs so even if you remove all the computer components and look at the actual methodology involved there was no evidence in the record that  that type of an incentive program where the sponsor controls the selection of individual wards for individual consumers and dictates the fulfillment details in the manner that the claim requires and communication with inventory data to be able to integrate the business data with the incentive program strategy there was no evidence in the record that that method was conventional whether practice manually or through any prior computer system and that takes us out of these other cases where conventional activity was simply computerized even with numerous steps to your question your honor about one hundred three the district court overstepped its bounds and became a fact finder in the face of a record full of genuinely disputed material facts regarding the proper interpretation of the two primary piece of prayer or the lopping scraggy the evidence of commercial success and other secondary considerations of non obvious the evidence of whether there would have been a motivation to modify the teachings of the law but in view of scraggy and this not only made his summary judgment under one of the three proper but it also infected the analysis under one to one because the district court relied on some of that same evidence as justification for a the finding that these claims really did do relate to conventional conventional practiced activity what the court should have done is recognize that on this record this issue was none of these issues were appropriate to resolve and summary judgment we submitted a qualified declaration of a qualified technical expert mr sure what he analyzed the prayer in detail it was safeways burden of proof on all these issues they submitted no expert testimony whatsoever they simply made a lawyer argument about how they interpreted the lopper reference and the scraggy reference why it supposedly would have been obvious to combine the two the district court largely ignored mr sherbets proffered expert opinion the district court identified three computers of the developer reference as being the whole system but when it came to this issue of the host system and this for film and program having to communicate with an imagery management system the district court in a very inconsistent manner relied instead on a computer that's located at a retail store which the court's own analysis did not identify as being the host part of the whole system he then noted that in the lapa this computer at the retail store communicates with an image for a minute and system but that doesn't match the architecture of the claims the claims require a whole system with person skilled in the art this court has made clear that in other than simple cases that type of evidence is very important this is not a simple case these are complicated computer systems involving many different components and frankly the district court just mis read and misapplied what the law was complex architecture really was showing relative to the claims he made similar errors in analyzing whether what is in a word database could be considered the cemetery management system that claims require both an award database and separately recites at this fulfillment application communicates with a conditions that exist so that the sponsor can very readily determine which awards to offer to which consumers which locations that was a technical advance over the are there was evidence in the record of course you need to check the inventory before you direct the customer to a location to pick up their award and so the fact that a system has automated pooling of knowledge of what's available what kinds of awards are available to give and where are they located to give it to be given to a customer it what's what's so unique and special about that well your question really the point you made about the district courts really really highlights the problem here that the district court as huge as you just mentioned said well if of course a retailer w call for thousands and thousands of customers and thousands and thousands of different companies that correct i grew older and i think the point i made below was that this claim as written broadly it covers fairly simple embodiments practice in these claims well i don't really agree that the claim is directed to simple embodiments because the red with the record shows is that there that there was a complete separation in function and structure between the systems retailers used to run incentive programs and the systems they used to run the rest of their operations or even torii systems did was essentially bring those two systems together in a way that allowed retailers of all sizes to much better coordinate the logistics and the use of business intelligence and in running these programs in a much more effective way it was overwhelming evidence in the world of the inventive concept boils down to before assigning out awards checking the inventory to make sure the awards are there know the inventive concepts we look at the claim as a whole it's a combination of a system in which the sponsor of the program controls the selection of individual awards for individual consumers that are personalized to the consumers demographic and psychographic preferences and also does so using a system that can communicate with the inventory data in order to allow the sponsor to make good decisions in that targeting and the system requires that the sponsor get in and dictate exactly where that consumer can pick up that particular award and the evidence of the record in the record is that there were no prior systems that did that and in the real world because they couldn't they didn't do that there were real challenges associated with operating these large incentive program systems i agree with you the claim is not limited to any particular size but i submit that it is still relevant to look at real world evidence of the commercial impact of this invention a commercial success that allowed companies like safeway to achieve the lack of any such system in the one thousand nine hundred seven time frame when the invention was applied for and the one of the alice test and boil down the claims to their essence or the heart of the claims in exactly the way that your price and did oh and so i don't think that we can find any error and all in the way he treated the inventive concept here particularly when we compare it to the run of cases that this court has decided what do you think the supreme court meant with respect to problem one when it said that the question to be asked as to decide whether the claim is directed to an abstract idea and so therefore it's not just about the bare attempt in isolation to figure out what must be the underlying abstract idea claim but instead to try to determine above and beyond that whether the claim itself is directed that abstract idea what do you think supreme court is getting at well i can only say in terms of opinion the court seemed to be looking at conceptually what did the claim relate to when you looked at all the specific elements of it and there are of course they reduced it to  intermediated settlement risk as the proper description of the claim under prong was my question is can you imagine a situation where claimed invention what ultimately survive under one hundred one because  the two step framework had not been met because you don't always try to just merely find whether there's an abstract idea i think the question is is the claim directed to an abstract idea it doesn't say locate the underlying abstract idea so if the way the problem one is is framed it suggests does it not that there's a possibility that there are claims out there that are not directed to an abstract idea i think it suggests that but it still comes down to a matter of construction of the claims themselves on whether you end up there i mean that seems to be the lesson from the cases not only alice from this quarter as well so it's theoretically possible i suppose to draft away from the abstract conduct content concept but we certainly don't have that when you take a look at the claims here i think even if you moved beyond that to the second step of alice there is no detail in the claims here and there is no specificity that sets forth an inventive concept and certainly the claims as drafted here are directed to an abstract context cept in fact that the pattern admits that it says it's a commonplace ordinary practice and to me that fits well within the concepts that this court has articulated as common ordinary me a little bit in looking at both this case in the various cases could have been decided in this course in the wake of of alice and so forth but when we're looking at probably to the supreme court says we look for an inventive concept correct l not obvious not anticipated other words we where do we draw the line in the inventive concept inquiry but talking what's an inventive concept and whether we're in a one zero two zero one three situation i've just been szell would tell us that novelty alone is not going to provide us with the inventive concept we knew there that there were some very specific limitations even limitations far more we had was a set of limitations that called for a specialized computer to perform ordinary business functions or carry them out more efficiently and there the supreme court told us that's not enough so i don't think that the inventive concept can be satisfied simply because we have novelty on the one hand or a specialized computer that makes it more efficient on the other that much we know at the other end of the spectrum we know from d d r we know from research corporation and we know from the deer case that if you have disclosures or limitations in the claims that alter the way the computer performs a d d or the provide a technical advancement in the way the computer functions and that's research corporation or that you non obvious invention i think i think that's possible i don't think you can get it out of the claims in this case by any stretch of the imagination if you follow the suit do focus on the claims here i mean  interesting evolution of how section one hundred one is being treated in every different case under fron facts and on different details which have led to generalize the statements which we then try to apply and it seems to me that to help focus on the correctness of the summary judgments here because there were on the three grounds a jury spawn two section one of three and each of the steps here relates to well understood conventional activity computers are hosting using computers and networks to communicate using databases to manage there is nothing in the claims about improving computers themselves while improving the operation of computers because of a problem that arises from computers that the other side and i are going to get one of three from the other sites th interesting twist here the report inventive concept is the integration of two information systems one is the inventory management system and the other one is the incentive rewards program and those too information systems hadn't really been a joining before and there integrating them together and by doing so you get a much more robust system overall so claims themselves that explains what that communication is how it's accomplished or that is accomplished as a matter of fact your honor but anything more than automation using computers the claims don't basic proposition that's offered by the other side is that expert testimony was provided here in required here in order to determine both issues and of of whether the patent was obvious in light of the prior art and second and as we know from k s r in the following cases expert testimony is not required on either one of these issues when the motivation to combine is apparent from the prior art wh alternatively where the problem to be solved is one that doesn't involve technological analysis where an expert needs to explain some functioning which is also true here there is nothing like that  in this patent we're in these claims and in fact the detail in judge bryson's analysis demonstrates his understanding of the art and his comprehension of it which led him to the conclusions on this turning to mr sherwood's declaration we find three things there that are relevant one hundred three the first is he doesn't analyze the prior art references in any great detail in a link they get the ration he talks a lot about the claims and he makes a number of legal arguments but he doesn't make a real nitty gritty comparison with the prior art in the fashion the judge price and it's not a technological explanation and that the ration it is it is more aligned with an argument about what the claims mean and so that to me it is not a function for an expert either and said it was at least apparent to an ordinary person in the art that the combination of the lap and stroke he would have led you to say there is nothing non obvious if you will when you have a case where the prior art lead you to this conclusion it is not immune from summary judgment and it certainly isn't immune from summary judgment just because  anticipation analysis that judge bryson made for precisely the same reasons he followed the plain disclosure specifically in the lap of he aligned them very specifically with the limitations and disclosures in the patent that we see there that sure would desperation can change that it can't it can't change with the lap of claims number one and number two the differences that are offered up to the sponsor an administrator and inventory management system simply don't exist at the lap and discloses fully an inventory management system and it is clear under that the lap of patent as mr sure with the finally to the claims here you will not see the kind of content that is necessary in the claims are the beginning in the end of the analysis to create an invented concept consistent with alice ultra mercial and in the remaining cases questions if we are defining the abstract idea as broadly as a court yet that court should have been recognized that under step two these claims do not simply claim the abstract idea itself and that is the purpose of step two under alice to determine if there's an inventive concept that gives us comfort that the claim is not simply claiming a computerized version of the abstract idea itself using routine functions and routine components that is the preemption issue that alice is concerned with because we don't want to take conventional ideas of the public realm simply by saying well i'm the first one to do it on a computer and that's not what this claim does at all these claims are much more specific  than they do not simply computer ice all versions of incentive program systems and then what the court should have recognized is that this claim is eligible under want to won and as other cases have noted we still have one or two in one of three to test the validity of a claim and enter one of two hundred three the court should have recognized this is not a record upon which the grant of summary judgment is proper they have a clear and convincing evidence burden of proof they tried to prove it with nothing more than lawyer argument we just heard more of that they discount sure which declaration is supposedly not detailed enough it's an extraordinary detailed analysis of the prayer art from the perspective of a person of skill in the art and the agreed qualifications of that person are not possessed by safeways lawyers and with all due respect the district court doesn't possess those qualifications either and it showed because he  misread some of the fundamental aspects of what the two pieces of prior art were disclosing and he got the anticipation wrong because of that his obviousness analysis was the same kind of conclusory hindsight analysis that this court has repeatedly cautioned is improper in one sentence what is the inventive inventive concept is providing a system where the sponsor controls the selection of the award consumer and the fulfillment for parameters in conjunction with the use of real time inventory data from and they were tremendous and system that was inventive it solved very real problems in the industry and it's not disclosed in either of these