Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca13-19-01000/USCOURTS-ca13-19-01000-0/pdf.json

Parties Involved:
Customedia Technologies, LLC
Appellant
DISH Network Corporation
Appellee
DISH Network LLC
Appellee

Document Text:

United States Court of Appeals 

for the Federal Circuit ______________________

CUSTOMEDIA TECHNOLOGIES, LLC,

Appellant

v.

DISH NETWORK CORPORATION, DISH NETWORK 

LLC,

Appellees

______________________

2018-2239

______________________

Appeal from the United States Patent and Trademark 

Office, Patent Trial and Appeal Board in No. CBM2017-

00023.

--------------------------------------------------

CUSTOMEDIA TECHNOLOGIES, LLC,

Appellant

v.

DISH NETWORK CORPORATION, DISH NETWORK 

LLC,

Appellees

______________________

2019-1000

______________________

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2 CUSTOMEDIA TECHS., LLC v. DISH NETWORK CORP.

Appeal from the United States Patent and Trademark 

Office, Patent Trial and Appeal Board in No. CBM2017-

00032.

______________________

Decided: March 6, 2020

______________________

RAYMOND WILLIAM MORT, III, The Mort Law Firm, 

PLLC, Austin, TX, argued for appellant. 

 ELIOT DAMON WILLIAMS, Baker Botts LLP, Palo Alto, 

CA, argued for appellees. Also represented by GEORGE 

HOPKINS GUY, III; ALI DHANANI, MICHAEL HAWES, Houston, 

TX. 

 ______________________

Before PROST, Chief Judge, DYK and MOORE, Circuit 

Judges.

MOORE, Circuit Judge.

Customedia Technologies, LLC appeals the Patent 

Trial and Appeal Board’s final written decisions holding 

claims 1–6, 8, 17, and 23 of U.S. Patent No. 8,719,090 and 

claims 1–4, 6–7, 16–19, 23–24, 26–28, 32–36, and 41 of U.S. 

Patent No. 9,053,494 ineligible under 35 U.S.C. § 101 and 

finding claims 1 and 5 of the ’090 patent unpatentable under 35 U.S.C. § 102. Because the claims are ineligible under § 101, we affirm the Board’s determinations. We do not

reach the Board’s § 102 findings. 

BACKGROUND

The ’090 and ’494 patents, which share a specification,

disclose comprehensive data management and processing 

systems. ’090 Patent at 3:3–7, 17–21. According to the 

specification, these systems comprise a remote AccountTransaction Server (ATS) and a local host Data

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Management System and Audio/Video Processor Recorderplayer (VPR/DMS), e.g., a cable set-top box. Id. at 4:15–19,

21:44–49. Broadcasters and other content providers transmit advertising data via the ATS to a local VPR/DMS. Id.

at 31:1–6. The advertising data may then be selectively

recorded in programmable storage sections in the 

VPR/DMS according to a user’s preferences. Id. at 31:3–6, 

32:7–21. These storage sections may be “reserved, rented, 

leased or purchased from end user[s], content providers, 

broadcasters, cable/satellite distributor, or other data communications companies administering the data products 

and services.” Id. at 31:44–49, 60–64. For example, a cable 

distributor may provide customers with a cable set-top box

with built-in storage sections that may be leased or sold to 

advertisers. Id. at 31:64–32:4. Claim 1 of the ’090 patent 

recites:

1. A data delivery system for providing automatic 

delivery of multimedia data products from one or 

more multimedia data product providers, the system comprising: 

a remote account transaction server for providing 

multimedia data products to an end user, at least 

one of the multimedia data products being specifically identified advertising data; and

a programmable local receiver unit for interfacing 

with the remote account transaction server to receive one or more of the multimedia data products 

and for processing and automatically recording the 

multimedia data products, said programmable local receiver unit including at least one individually 

controlled and reserved advertising data storage 

section adapted specifically for storing the specifically identified advertising data, said at least one 

advertising data storage section being monitored 

and controlled by said remote account transaction 

server and such that said specifically identified 

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advertising data is delivered by said remote account transaction server and stored in said at least 

one individually controlled and reserved advertising data storage section.

’090 patent at Claim 1. 

Dish Network Corporation and Dish Network LLC (collectively, DISH) petitioned for review of claims 1–8, 17, and 

23 of the ’090 patent and claims 1–7, 16–19, 23–28, 32–36, 

39, 41, and 43 of the ’494 patent pursuant to the Transitional Program for Covered Business Method Patents 

(CBM review). Leahy-Smith Am. Invents Act, Pub. L. No. 

112-29, § 18(a) 125 Stat. 284, 329–31 (2011) (AIA). The 

Board instituted CBM review in each case and issued final 

written decisions holding claims 1–8, 17, and 23 of the ’090 

patent and claims 1–4, 6–7, 16–19, 23–24, 26–28, 32–36, 

and 41 of the ’494 patent ineligible under 35 U.S.C. § 101. 

In addition to holding the claims ineligible under § 101, the 

Board found claims 1, 5, and 7 of the ’090 patent unpatentable under 35 U.S.C. § 102 and claim 7 of the ’090 patent 

unpatentable under 35 U.S.C. § 112. The Board held that 

DISH failed to prove that alternatively, claims 1–8, 17, and 

23 of the ’090 patent are unpatentable under 35 U.S.C. 

§ 103 as obvious over U.S. Patent Nos. 5,774,170 (Hite) and 

4,607,346 (Hill). Customedia timely appealed the Board’s 

determinations under §§ 101 and 102.1 DISH cross-appealed the Board’s determinations under §103.2 We have 

1 Customedia does not appeal the Board’s determination that claim 7 of the ’090 patent is ineligible under 

§ 101. Customedia also does not appeal the Board’s findings that claim 7 of the ’090 patent was unpatentable under 

§§ 102 and 112.

2 DISH’s cross-appeal was voluntarily dismissed on 

February 6, 2019. Customedia Techs., LLC v. DISH Network Corp., DISH Network LLC, Appeal No. 18-2309, D.I. 

4. 

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jurisdiction under 28 U.S.C. § 1295(a)(4)(A).

DISCUSSION

We review the Board’s legal conclusions de novo and its 

factual findings for substantial evidence. Samsung Elecs. 

Co. v. Elm 3DS Innovations, LLC, 925 F.3d 1373, 1380 

(Fed. Cir. 2019). Eligibility under 35 U.S.C. § 101 is a question of law, based on underlying facts. SAP Am., Inc. v. 

InvestPic, LLC, 898 F.3d 1161, 1166 (Fed. Cir. 2018). 

Section 101 provides that “[w]hoever invents or discovers any new and useful process, machine, manufacture, or 

composition of matter, or any new and useful improvement 

thereof,” may obtain a patent. 35 U.S.C. § 101. The Supreme Court has held that “[l]aws of nature, natural phenomena, and abstract ideas are not patent eligible.” Alice 

Corp. Pty. Ltd. v. CLS Bank Int’l, 573 U.S. 208, 216 (2014) 

(quoting Assoc. for Molecular Pathology v. Myriad Genetics, 

Inc., 569 U.S. 576, 589 (2013)). We follow the Supreme 

Court’s two-step framework for determining patent-eligibility under § 101. Id. at 217. First, we determine whether 

the claims are directed to a “patent-ineligible concept,” 

such as an abstract idea. Id. If so, we “consider the elements of each claim both individually and ‘as an ordered 

combination’ to determine whether the additional elements 

‘transform the nature of the claim’ into a patent-eligible application.” Id. (quoting Mayo Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66, 78–79 (2012)). 

I. Alice Step One

At Alice step one, we must determine whether the 

claims are directed to an abstract idea. Alice, 573 U.S. at

217. For example, in Bilski v. Kappos, the Supreme Court 

held ineligible claims directed to the concept of risk hedging, an abstract idea it described as “a fundamental economic practice long prevalent in our system of commerce.” 

561 U.S. 593, 611 (2010). And in Alice, the Supreme Court 

made clear that the invocation of a computer does not 

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necessarily transform an abstract idea into a patent-eligible invention. 573 U.S. at 223. There, the Supreme Court 

held ineligible claims directed to a method of exchanging

financial obligations using a computer system as a thirdparty intermediary. Id. at 218–21. The Court explained

that the claims were merely implemented “using some unspecified, generic computer” and did not “purport to improve the functioning of the computer itself.” Id. at 225–

26. Not infrequently, patentees, like Customedia, latch on 

to this language from Alice and claim that their claims do 

“improve the functioning of the computer itself.” Here, for 

instance, Customedia argues that its claims are eligible because they “provide for improvements to the operation and 

functioning of computer systems.” Appellant’s Br. 71, Nos. 

18-2239, -2309. We do not agree. The claims at issue here

are directed to the abstract idea of using a computer to deliver targeted advertising to a user, not to an improvement 

in the functioning of a computer.

Claim 1 of the ’090 patent recites a “data delivery system for providing automatic delivery of . . . specifically 

identified advertising data.” ’090 patent at Claim 1. The 

advertising data is received and processed by a “programmable local receiver unit,” which includes at least one “individually controlled and reserved advertising data storage 

section adapted specifically for storing the specifically identified advertising data.”3 Id. Customedia argues that by 

3 In its final written decision, the Board stated that 

the “reserved advertising data storage section” limitation 

does “not require an advertising data storage section that 

actively precludes or excludes anything other than the specifically identified advertising data” or “any specific structure, such as separate portions that are allocated to a user 

or a data supplier.” J.A. 7–8, 48. Customedia challenges 

this construction on appeal, arguing that the 

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providing a reserved and dedicated section of storage, the 

claimed invention improves the data delivery system’s ability to store advertising data, transfer data at improved 

speeds and efficiencies, and prevent system inoperability 

due to insufficient storage. In short, by dedicating a section 

of the computer’s memory to advertising data, the claimed 

invention ensures memory is available for at least some advertising data. This does not, however, improve the functionality of the computer itself. Even if we accept 

Customedia’s assertions, the claimed invention merely improves the abstract concept of delivering targeted advertising using a computer only as a tool. This is not what the 

Supreme Court meant by improving the functioning of the 

computer itself nor is it consistent with our precedent applying this concept. 

In Enfish, LLC v. Microsoft Corp., for example, we held 

patent eligible claims reciting a self-referential database 

that improved the way computers stored and retrieved 

data in memory. 822 F.3d 1327, 1337–39 (Fed. Cir. 2016). 

We concluded the claims did not invoke a computer merely 

as a tool, but rather improved the way the computer itself 

operated and handled data, allowing more efficient launching and adaptation of databases. Id. at 1336–37. We therefore held that the “plain focus of the claims is on an 

improvement to computer functionality itself, not on economic or other tasks for which a computer is used in its 

ordinary capacity.” Id. at 1336. As in Enfish, we held 

programmable local receiver unit is structurally configured, via a processor and software, to control and limit access to the advertising data storage section such that it 

stores only advertising data. Appellant’s Br. 13–25, Nos. 

18-2239, -2309; Appellant’s Reply Br. 6–7, 16–17, No. 18-

2239. Because Customedia’s proposed construction does 

not change the eligibility of the claims under § 101, we do 

not reach the merits of its claim construction arguments.

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patent eligible claims in Visual Memory LLC v. NVIDIA 

Corp. that were directed to “an improved computer memory 

system.” 867 F.3d 1253, 1259–60 (Fed. Cir. 2017). We 

noted that the claims “focus[ed] on a ‘specific asserted improvement in computer capabilities,’” namely the accommodation of different types of processors without 

compromising performance, “instead of ‘on a process that 

qualifies as an abstract idea for which computers are invoked merely as a tool.’” Id. (quoting Enfish, 822 F.3d at 

1336). More recently in Koninklijke KPN N.V. v. Gemalto 

M2M GmbH, we evaluated claims directed to a system for 

generating check data that enabled the detection of persistent systematic errors that prior art systems could not detect. 942 F.3d 1143, 1151 (Fed. Cir. 2019). In holding the 

claims patent eligible, we stated that the claimed invention

“improve[d] the functioning of the overall technological 

process of detecting systematic errors in data transmissions.” Id. at 1151–52. 

To be a patent-eligible improvement to computer functionality, we have required the claims to be directed to an 

improvement in the functionality of the computer or network platform itself. In Ancora Techs. Inc. v. HTC America, Inc., for example, we held that claims directed to 

storing a verification structure in computer memory were 

directed to a non-abstract improvement in computer functionality because they improved computer security. 908 

F.3d 1343, 1347–49 (Fed. Cir. 2018). We determined the 

claims addressed the “vulnerability of license-authorization software to hacking” and were thus “directed to a solution to a computer-functionality problem.” Id. at 1349. 

Likewise, in Finjan, Inc. v. Blue Coat System, Inc., we held 

that claims to a “behavior-based virus scan” provided 

greater computer security and were thus directed to a patent-eligible improvement in computer functionality. 879 

F.3d 1299, 1304–06 (Fed. Cir. 2018). In Data Engine Techs. 

LLC v. Google LLC, we held patent eligible claims reciting

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dimensional electronic spreadsheets” because the claimed 

invention “improv[ed] computers’ functionality as a tool 

able to instantly access all parts of complex three-dimensional electronic spreadsheets.” 906 F.3d 999, 1007–08 

(Fed. Cir. 2018); see also Core Wireless Licensing S.A.R.L. 

v. LG Elecs., Inc., 880 F.3d 1356, 1359–63 (Fed. Cir. 2018) 

(holding patent eligible claims reciting an improved user 

interface for electronic devices that improved the efficiency 

of the electronic device, particularly those with small 

screens”). And in SRI Int’l, Inc. v. Cisco Sys. Inc., we held 

patent eligible claims directed to an improved method of 

network security “using network monitors to detect suspicious network activity . . . generating reports of that suspicious activity, and integrating those reports using 

hierarchical monitors.” 930 F.3d 1295, 1303 (Fed. Cir. 

2019). We concluded that the “focus of the claims was on 

the specific asserted improvement in computer capabilities,” namely “providing a network defense system that 

monitors network traffic in real-time to automatically detect large-scale attacks.” Id. at 1303–04. 

We have held that it is not enough, however, to merely

improve a fundamental practice or abstract process by invoking a computer merely as a tool. For example, in Affinity Labs. of Texas, LLC v. DIRECTV, LLC, we held that 

claims to a method of providing out-of-region access to regional broadcasts were directed to an abstract idea. 838 

F.3d 1253, 1258 (Fed. Cir. 2016). We determined the 

claims were not a patent-eligible improvement in computer 

functionality because they simply used cellular telephones 

“as tools in the aid of a process focused on an abstract idea.” 

Id. at 1262; see also In re TLI Commc’ns LLC Patent Litig.,

823 F.3d 607, 611 (Fed. Cir. 2016) (holding ineligible claims 

reciting concrete physical components merely as “a generic 

environment in which to carry out the abstract idea of classifying and storing digital images in an organized manner”). Likewise, in Intellectual Ventures I LLC v. Capital

One Bank (USA), we held that claims reciting a system for 

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providing web pages tailored to an individual user were directed to an abstract idea. 792 F.3d 1363, 1369–70 (Fed. 

Cir. 2015). We held that “claiming the improved speed or

efficiency inherent with applying the abstract idea on a 

computer” was insufficient to render the claims patent eligible as an improvement to computer functionality. Id. at 

1367, 1370; see also Ultramercial, Inc. v. Hulu, LLC, 772 

F.3d 709, 715–16 (Fed. Cir. 2014) (holding that displaying 

an advertisement in exchange for access to copyrighted material is an abstract idea). And in SAP Am., Inc. v. InvestPic, LLC, we held patent ineligible claims directed to 

“selecting certain information, analyzing it using mathematical techniques, and reporting or displaying the results 

of the analysis.” 898 F.3d 1161, 1167–68 (Fed. Cir. 2018). 

We determined the claims were focused not on a physicalrealm improvement to computers as tools but rather an improvement in wholly abstract ideas. Id. at 1168.

We have also held that improving a user’s experience

while using a computer application is not, without more, 

sufficient to render the claims directed to an improvement 

in computer functionality. For example, in Trading 

Techs. I, we held patent ineligible claims directed to a computer-based method for facilitating the placement of a 

trader’s order. Trading Techs. Int’l, Inc. v. IBG LLC, 921 

F.3d 1084, 1092–93 (Fed. Cir. 2019) (Trading Techs. I). 

Although the claimed display purportedly “assist[ed] traders in processing information more quickly,” we held that 

this purported improvement in user experience did not “improve the functioning of the computer, make it operate 

more efficiently, or solve any technological problem.” Id.;

see also Trading Techs. Int’l, Inc. v. IBG LLC, 921 F.3d 

1378, 1381, 1384–85 (Fed. Cir. 2019) (Trading Techs. II)

(holding that claims “focused on providing information to 

traders in a way that helps them process information more 

quickly” did not constitute a patent-eligible improvement 

to computer functionality). 

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In sum, “software can make non-abstract improvements to computer technology just as hardware improvements can.” Enfish, 822 F.3d at 1335. But to be directed 

to a patent-eligible improvement to computer functionality, 

the claims must be directed to an improvement to the functionality of the computer or network platform itself. See, 

e.g., id. 1336–39; DDR Holdings, LLC v. Hotels.com, L.P., 

773 F.3d 1245, 1257–59 (Fed. Cir. 2014). Thus, this inquiry 

“often turns on whether the claims focus on ‘the specific asserted improvement in computer capabilities . . . or, instead, on a process that qualifies as an “abstract idea” for 

which computers are invoked merely as a tool.’” Finjan, 

879 F.3d at 1303 (quoting Enfish, 822 F.3d at 1335–36). 

Against this background, we agree with the Board that

the claims here are not directed to a patent-eligible improvement to computer functionality. The claims of the 

’090 and ’494 patents do not enable computers to operate 

more quickly or efficiently, nor do they solve any technological problem. They merely recite reserving memory to ensure storage space is available for at least some advertising 

data. The specification is silent as to any specific structural or inventive improvements in computer functionality 

related to this claimed system. See, e.g., ’090 patent at 

30:57–67, 3:47–50. The only improvements identified in 

the specification are generic speed and efficiency improvements inherent in applying the use of a computer to any 

task. Therefore, the claimed invention is at most an improvement to the abstract concept of targeted advertising

wherein a computer is merely used as a tool. This is not an 

improvement in the functioning of the computer itself. 

II. Alice Step Two

At Alice step two, we “consider the elements of each 

claim both individually and ‘as an ordered combination’ to 

determine whether the additional elements ‘transform the 

nature of the claim’ into a patent-eligible application.” Alice, 573 U.S. at 218, (quoting Mayo, 566 U.S. at 78–79). 

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Step two “looks more precisely at what the claim elements 

add” to determine if “they identify an inventive concept in 

the application of the ineligible matter to which . . . the 

claim is directed.” SAP, 898 F.3d at 1167. 

At step two, the Board held that the elements of the 

claims, considered individually and as an ordered combination, fail to recite an inventive concept. We agree. Aside 

from the abstract idea of delivering targeted advertising, 

the claims recite only generic computer components, including a programmable receiver unit, a storage device, a 

remote server and a processor. See, e.g., ’090 patent at 

Claim 1. The specification acknowledges that the storage 

device “may be any storage device for audio/video information known in the art” and the receiver unit may include

“any digital or analog signal receiver and/or transmitter capable of accepting a signal transmitting any kind of digital 

or broadcast information.” Id. at 15:4–6, 24:26–34. Such 

generic and functional hardware is insufficient to render 

eligible claims directed to an abstract idea. Alice, 573 U.S. 

at 226. 

Customedia argues that the claims are eligible under 

Alice step two because the use of a programmable receiver 

to dedicate a section of storage for storing only “specifically 

identified advertising data” was innovative over prior art 

approaches. However, the invocation of “already-available 

computers that are not themselves plausibly asserted to be 

an advance . . . amounts to a recitation of what is well-understood, routine, and conventional.” SAP, 898 F.3d at

1170. The ’090 and ’494 patent claims’ invocation of a conventional receiver is insufficient to supply the required inventive concept. Thus, we conclude the Board did not err 

in holding the claims of the ’090 and ’494 patents ineligible 

under § 101. 

CONCLUSION

We have considered Customedia’s remaining arguments and find them unpersuasive. For the foregoing 

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reasons, we conclude that claims 1–6, 8, 17, and 23 of the 

’090 patent and claims 1–4, 6–7, 16–19, 23–24, 26–28, 32–

36, and 41 of the ’494 patent are ineligible under § 101 and 

therefore affirm the Board’s decisions.

AFFIRMED

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