Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca13-15-01417/USCOURTS-ca13-15-01417-0/pdf.json

Parties Involved:
AV Automotive, L.L.C.
Appellee
Google, Inc.
Not party
TLI Communications LLC
Appellant

Document Text:

United States Court of Appeals 

for the Federal Circuit ______________________ 

IN RE: TLI COMMUNICATIONS LLC PATENT 

LITIGATION

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

TLI COMMUNICATIONS LLC,

Plaintiff-Appellant

v.

AV AUTOMOTIVE, L.L.C., HALL AUTOMOTIVE, 

LLC, YAHOO! INC., TUMBLR, INC., TWITTER, INC., 

PINTEREST, INC., IMGUR LLC, SHUTTERFLY, 

INC., TRIPADVISOR INC., TRIPADVISORY LLC, 

SNAPCHAT INC., 

CAPITAL ONE FINANCIAL CORPORATION, 

CAPITAL ONE, N.A., CAPITAL ONE SERVICES,

LLC, VINE LABS, INC.,

Defendants-Appellees

APPLE INC., WHI INC., GOOGLE, INC., 

FACEBOOK, INC., INSTAGRAM, LLC, YELP, INC., 

DROPBOX INC., IAC/INTERACTIVECORP, 

CITYGRID MEDIA LLC, VIMEO LLC,

Defendants

______________________ 

2015-1372, -1376, -1377, -1378, -1379, -1382, -1383, -1384, 

-1385, -1417, -1419, -1421

______________________ 

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2 TLI COMMUNICATIONS LLC v. AV AUTOMOTIVE, L.L.C. 

Appeals from the United States District Court for the 

Eastern District of Virginia in Nos. 1:14-md-02534-TSEJFA, 1:14-cv-00136-TSE-JFA, 1:14-cv-00137-TSE-JFA, 

1:14-cv-00138-TSE-JFA, 1:14-cv-00139-TSE-JFA, 1:14-cv00140-TSE-JFA, 1:14-cv-00142-TSE-JFA, 1:14-cv-00785-

TSE-JFA, 1:14-cv-00788-TSE-JFA, 1:14-cv-00790-TSEJFA, 1:14-cv-00791-TSE-JFA, 1:14-cv-00842-TSE-JFA,

Judge T. S. Ellis III.

______________________ 

Decided: May 17, 2016

______________________ 

 ROBERT ALAN WHITMAN, Mishcon de Reya New York 

LLP, New York, NY, argued for plaintiff-appellant. Also 

represented by MICHAEL DEVINCENZO, MARK STEWART 

RASKIN, CHARLES WIZENFELD. 

MARK A. LEMLEY, Durie Tangri LLP, San Francisco, 

CA, argued for defendants-appellees CityGrid Media LLC, 

IAC/InterActiveCorp, Imgur LLC, Pinterest, Inc., Shutterfly, Inc., Snapchat Inc., TripAdvisor Inc., TripAdvisory 

LLC, Tumblr, Inc., Twitter, Inc., Vimeo LLC, Vine Labs, 

Inc., Yahoo! Inc. Also represented by ZAC COX, ALEXANDRA 

HELEN MOSS. 

JOSHUA BRYSON BRADY, Williams Mullen, PC, 

McLean, VA, for defendants-appellees AV Automotive, 

LLC, Hall Automotive, LLC.

ROBERT A. ANGLE, Troutman Sanders LLP, Richmond, 

VA, for defendants-appellees Capital One Financial 

Corporation, Capital One, N.A., Capital One Services, 

LLC.

______________________ 

Before DYK, SCHALL, and HUGHES, Circuit Judges.

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TLI COMMUNICATIONS LLC v. AV AUTOMOTIVE, L.L.C. 3

HUGHES, Circuit Judge. 

TLI Communications LLC alleges that the defendants 

infringe a patent relating to a method and system for 

taking, transmitting, and organizing digital images. The 

district court dismissed the complaint after concluding 

that the patent-in-suit fails to claim patent-eligible subject matter under 35 U.S.C. § 101, and that, in the alternative, claims 1, 25, and their dependent claims are 

invalid for failing to recite sufficient structure as required 

by 35 U.S.C. § 112 ¶ 6. Because we agree with the district 

court that the patent-in-suit claims no more than the 

abstract idea of classifying and storing digital images in 

an organized manner, we affirm the district court’s judgment and do not reach the § 112 ¶6 issue.

I 

In 2014, TLI Communications LLC (TLI) filed a series 

of actions in the District of Delaware and the Eastern 

District of Virginia, alleging that the defendants infringed 

U.S. Patent No. 6,038,295 (the ’295 patent) by making, 

selling, and/or using products and services that allow 

uploading of digital photos from a mobile device, such as a 

cell phone. The Judicial Panel on Multidistrict Litigation 

consolidated the cases for pre-trial purposes in the Eastern District of Virginia.

The ’295 patent “relates generally to an apparatus for 

recording of a digital image, communicating the digital 

image from the recording device to a storage device, and 

to administering the digital image in the storage device.” 

’295 patent, col. 1 ll. 7–10. The specification notes that a 

“wide variety of data types” can be transmitted, including 

audio and image stills. Id. at col. 1 ll. 15–26. Moreover, 

“[s]o called cellular telephones may be utilized for image 

transmissions,” id. at col 1 ll. 31–34, and, at the time of 

the invention, it was known how to “digitize, compress 

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4 TLI COMMUNICATIONS LLC v. AV AUTOMOTIVE, L.L.C. 

graphs,” id. at col 1 ll. 35–42. Further, the specification 

recognizes that the prior art taught “[a]n image and audio 

communication system having a graphical annotation 

capability . . . in which voice, data and image communications are used in telephone systems.” Id. at col 1 ll. 52–

59. But, “[w]hen a large number of digital images are 

recorded and are to be archived in a central computer 

unit, then the organization of the data base becomes a 

problem.” Id. at col 1 ll. 43–45. “In particular, the problems of locating the data of an image data file increase as 

the number of images to be archived increases.” Id. at col. 

1 ll. 46–48. The invention seeks to solve this problem “by 

providing for recording, administration and archiving of 

digital images simply, fast and in such way that the 

information therefore may be easily tracked.” Id. at col. 1 

ll. 64–66.

More specifically, the invention teaches manually or 

automatically assigning “classification data,” such as a 

date or timestamp, to digital images and sending those 

images to a server. The server then extracts the classification data and stores the digital images, “taking into 

consideration the classification information.” Id. at col. 2 

ll. 35–45. Claim 17 is representative:

17. A method for recording and administering 

digital images, comprising the steps of:

recording images using a digital pick up 

unit in a telephone unit,

storing the images recorded by the digital 

pick up unit in a digital form as digital 

images,

transmitting data including at least the 

digital images and classification information to a server, wherein said classification information is prescribable by a user 

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TLI COMMUNICATIONS LLC v. AV AUTOMOTIVE, L.L.C. 5

of the telephone unit for allocation to the 

digital images,

receiving the data by the server,

extracting classification information which 

characterizes the digital images from the 

received data, and

storing the digital images in the server, 

said step of storing taking into consideration the classification information.

Id. at col. 10 ll. 1–17. Independent claims 1 and 25 recite 

substantially the same concept but do so in the context of 

an apparatus or system. Claim 1 includes a “means for 

allocating classification information prescribed by a user 

of said at least one telephone unit to characterize digital 

images obtained by said digital pick up unit.” Likewise, 

claim 25 recites a “means . . . to allocate information in 

the corresponding digital still image data.” Claims 10 and 

11 add an “image analysis unit” and a “control unit” to the 

features of claim 1. 

The defendants filed a motion to dismiss for failure to 

state a claim, arguing that the ’295 patent is drawn to 

patent-ineligible subject matter. The district court 

agreed, concluding that the claims are directed to “the 

abstract idea of taking, organizing, classifying, and storing photographs.” J.A. 16. The district court declined to 

give patentable weight to the claims’ recitation of a telephone unit or a server, or to the “means for allocating” 

limitation in claims 1 and 25. As a result, the district 

court granted the defendants’ motion to dismiss.

TLI appeals. We have jurisdiction under 28 U.S.C. 

§ 1295(a)(1).

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II

We apply regional circuit law to the review of motions 

to dismiss for failure to state a claim under Rule 12(b)(6). 

Content Extraction & Transmission LLC v. Wells Fargo 

Bank, Nat’l Ass’n, 776 F.3d 1343, 1346 (Fed. Cir. 2014). 

The Fourth Circuit reviews challenges to a dismissal for 

failure to state a claim de novo. Burbach Broad. Co. of 

Del. V. Elkins Radio Corp., 278 F.3d 401, 406 (4th Cir. 

2002).. We review the district court’s patent eligibility 

determination under § 101 de novo. OIP Techs., Inc. v. 

Amazon.com, Inc., 788 F.3d 1359, 1362 (Fed. Cir. 2015). 

A patent may be obtained for “any new and useful 

process, machine, manufacture, or composition of matter, 

or any new and useful improvement thereof.” 35 U.S.C. 

§ 101. The Supreme Court has “long held that this provision contains an important implicit exception[:] Laws of 

nature, natural phenomena, and abstract ideas are not 

patentable.” Ass’n for Molecular Pathology v. Myriad 

Genetics, Inc., 133 S. Ct. 2107, 2116 (2013) (quoting Mayo 

Collaborative Servs. v. Prometheus Labs., Inc., 132 S. Ct. 

1289, 1293 (2012)). Under the now familiar two-part test 

described by the Supreme Court in Alice, “[w]e must first 

determine whether the claims at issue are directed to a 

patent-ineligible concept,” such as an abstract idea. Alice 

Corp. Pty. Ltd. v. CLS Bank Int’l, 134 S. Ct. 2347, 2355 

(2014). If so, we must then “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, 132 S. Ct. at 1298, 1297). For the reasons 

set forth below, we find that the claims are directed to the 

abstract idea of classifying and storing digital images in 

an organized manner and fail to add an inventive concept 

sufficient to confer patent eligibility. 

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A 

Turning to Alice step one, “[w]e must first determine 

whether the claims at issue are directed to a patentineligible concept,” such as an abstract idea. See Alice, 

134 S. Ct. at 2355. “At step one of the Alice framework, it 

is often useful to determine the breadth of the claims in 

order to determine whether the claims extend to cover a 

‘fundamental . . . practice long prevalent in our system . . . .’” Intellectual Ventures I LLC v. Capital One 

Bank (USA), 792 F.3d 1363, 1369 (Fed. Cir. 2015) (quoting Alice, 134 S. Ct. at 2356). But in determining whether 

the claims are directed to an abstract idea, we must be 

careful to avoid oversimplifying the claims because “[a]t 

some level, ‘all inventions . . . embody, use, reflect, rest 

upon, or apply laws of nature, natural phenomena, or 

abstract ideas,’” Alice, 134 S. Ct. at 2354 (quoting Mayo, 

132 S. Ct. at 1293). Cf. Diamond v. Diehr, 450 U.S. 175, 

189 n.12 (1981) (cautioning that overgeneralizing claims, 

“if carried to its extreme, make[s] all inventions unpatentable because all inventions can be reduced to 

underlying principles of nature which, once known, make 

their implementation obvious.”). However, not every 

claim that recites concrete, tangible components escapes 

the reach of the abstract-idea inquiry. See, e.g., Alice, 134 

S. Ct. at 2360 (claims that recite general-purpose computer components are nevertheless “directed to” an abstract 

idea); Content Extraction, 776 F.3d at 1347 (claims reciting a “scanner” are nevertheless directed to an abstract 

idea); Mortg. Grader, Inc. v. First Choice Loan Serv. Inc., 

811 F.3d 1314, 1324–25 (Fed. Cir. 2016) (claims reciting 

an “interface,” “network,” and a “database” are nevertheless directed to an abstract idea). 

On its face, representative claim 17 is drawn to the 

concept of classifying an image and storing the image 

based on its classification. While claim 17 requires concrete, tangible components such as “a telephone unit” and 

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a “server,” the specification makes clear that the recited 

physical components merely provide a generic environment in which to carry out the abstract idea of classifying 

and storing digital images in an organized manner. And 

the specification’s emphasis that the present invention 

“relates to a method for recording, communicating and 

administering [a] digital image” underscores that claim 

17 is directed to an abstract concept. ’295 patent, col. 1 

ll. 10–12. TLI’s characterization of the claimed invention 

also supports our conclusion at step one. In its briefs, TLI 

essentially parrots the disclosure of the ’295 patent, 

asserting that claim 17 is “directed to a method for recording and administering digital images.” Appellant’s Br. 28.

We recently clarified that a relevant inquiry at step 

one is “to ask whether the claims are directed to an improvement to computer functionality versus being directed to an abstract idea.” See Enfish, LLC v. Microsoft 

Corp., No. 2015-2044, slip op. at *11 (Fed. Cir. May 12, 

2016). We contrasted claims “directed to an improvement 

in the functioning of a computer” with claims “simply 

adding conventional computer components to well-known 

business practices,” or claims reciting “use of an abstract 

mathematical formula on any general purpose computer,” 

or “a purely conventional computer implementation of a 

mathematical formula,” or “generalized steps to be performed on a computer using conventional computer activity.” Id. at *16–17. Contrary to TLI’s arguments on 

appeal, the claims here are not directed to a specific 

improvement to computer functionality. Rather, they are 

directed to the use of conventional or generic technology 

in a nascent but well-known environment, without any 

claim that the invention reflects an inventive solution to

any problem presented by combining the two. According 

to the ’295 patent, the problem facing the inventor was 

not how to combine a camera with a cellular telephone, 

how to transmit images via a cellular network, or even 

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how to append classification information to that data. 

Nor was the problem related to the structure of the server 

that stores the organized digital images. Rather, the 

inventor sought to “provid[e] for recording, administration 

and archiving of digital images simply, fast and in such 

way that the information therefore may be easily 

tracked.” ’295 patent, col. 1 ll. 62–65. 

The specification does not describe a new telephone, a 

new server, or a new physical combination of the two. 

The specification fails to provide any technical details for 

the tangible components, but instead predominately 

describes the system and methods in purely functional 

terms. For example, the “telephone unit” of the claims is 

described as having “the standard features of a telephone 

unit,” id. at col. 5 ll. 54–58, with the addition of a “digital 

image pick up unit for recording images,” id. at col. 5 ll. 

58–61, that “operates as a digital photo camera of the 

type which is known,” id. at col. 6. ll. 1–2. Put differently, the telephone unit itself is merely a conduit for the 

abstract idea of classifying an image and storing the 

image based on its classification. Indeed, the specification 

notes that it “is known” that “cellular telephones may be 

utilized for image transmission,” id. at col. 1 ll. 31–34, 

and existing telephone systems could transmit pictures, 

audio, and motion pictures and also had “graphical annotation capability,” id. at col. 1 ll. 52–59.

Likewise, the server is described simply in terms of 

performing generic computer functions such as storing, 

receiving, and extracting data. See, e.g., id. at col. 5 ll. 1–

4 (“The server [ ] is a computer system which serves for 

organizing a database which includes a large number of 

digital images as well as classification information [ ] 

which may potentially be allocated to the digital images.”). “The server includes a reception unit, an analysis 

unit which analyzes the data that is sent from the telephone unit with respect to classification information, . . . 

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as well as a memory for storing the digital images.” Id. at 

col 2 ll. 28–32. But the functions of the server are described in vague terms without any meaningful limitations. See, e.g., id. at col. 5 ll. 4–13 (“The server A 

includes . . . [a] receiving unit EE for receiving the data 

sent from the telephone unit TE . . . and an analysis unit 

AE . . . which extracts the classification information from 

data received by the server S.”). In other words, the focus 

of the patentee and of the claims was not on an improved 

telephone unit or an improved server.

For these same reasons, the claims are not directed to 

a solution to a “technological problem” as was the case in

Diamond v. Diehr, 450 U.S. 175 (1981). See OIP Techs., 

788 F.3d at 1364 (“[W]e must read Diehr in light of Alice, 

which emphasized that Diehr does not stand for the 

general proposition that a claim implemented on a computer elevates an otherwise ineligible claim into a patenteligible improvement.”). Nor do the claims attempt to 

solve “a challenge particular to the Internet.” DDR 

Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245, 1256–

57 (Fed. Cir. 2014); cf. Intellectual Ventures I, 792 F.3d at 

1371 (because the patent claims at issue did not “address 

problems unique to the Internet, . . . DDR has no applicability.”). 

Instead, the claims, as noted, are simply directed to 

the abstract idea of classifying and storing digital images 

in an organized manner. Consistent with the Supreme 

Court’s rejection of “categorical rules” to decide subject 

matter eligibility, Bilski v. Kappos, 561 U.S. 604, 610 

(2010), we have applied the “abstract idea” exception to 

encompass inventions pertaining to methods of organizing 

human activity. See, e.g., Intellectual Ventures I, 792 F.3d 

at 1367 (finding the claim at issue “not meaningfully 

different from the ideas found to be abstract in other 

cases before the Supreme Court and our court involving 

methods of organizing human activity”). Here, we find 

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that, like the claims at issue in Content Extraction which

were directed to “collecting data,” “recognizing certain 

data within the collected data set,” and “storing the 

recognized data in memory,” 776 F.3d at 1347, attaching 

classification data, such as dates and times, to images for 

the purpose of storing those images in an organized 

manner is a well-established “basic concept” sufficient to 

fall under Alice step 1. Lastly, although the claims limit 

the abstract idea to a particular environment—a mobile 

telephone system—that does not make the claims any less 

abstract for the step 1 analysis. See OIP Techs., 788 F.3d 

at 1362–63.

B 

Turning to the second step in our analysis, we find 

that the claims fail to recite any elements that individually or as an ordered combination transform the abstract 

idea of classifying and storing digital images in an organized manner into a patent-eligible application of that 

idea. It is well-settled that mere recitation of concrete, 

tangible components is insufficient to confer patent eligibility to an otherwise abstract idea. Rather, the components must involve more than performance of “‘wellunderstood, routine, conventional activit[ies]’ previously 

known to the industry.” Alice, 134 S. Ct. at 2359 (quoting 

Mayo, 132 S.Ct. at 1294). We agree with the district court 

that the claims’ recitation of a “telephone unit,” a “server”, 

an “image analysis unit,” and a “control unit” fail to add 

an inventive concept sufficient to bring the abstract idea 

into the realm of patentability. 

As an initial matter, TLI argues that, even if known 

in the prior art, the components recited in the claims 

cannot be “conventional” within the meaning of the Alice 

absent fact-finding by the court. While we must be mindful of extraneous fact finding outside the record, particularly at the motion to dismiss stage, here we need to only 

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look to the specification, which describes the telephone 

unit and server as either performing basic computer 

functions such as sending and receiving data, or performing functions “known” in the art. In other words, as will 

be discussed below, the claimed functions are “wellunderstood, routine, activit[ies]’ previously known to the 

industry.” Id. at 2359 (quoting Mayo, 132 S. Ct. at 1294).

We turn first to the “telephone unit.” The claims 

identify a telephone unit with a digital pick up device. In 

its briefing, TLI suggests that this is akin to a “camera 

phone” and is a core feature of the invention sufficient to 

transform the claims into patent-eligible subject matter. 

But TLI abandoned this position at argument, conceding 

that the telephone unit itself is not an inventive concept 

sufficient to confer patent eligibility. See, e.g., Oral Argument at 2:09–14, 9:11–34, 8:20–30 (April 7, 2016), 

available at http://oralarguments.cafc.uscourts.gov/

default.aspx?fl=2015-1372.mp3. In any event, the specification confirms that the telephone unit itself behaves as 

expected: when it is not “be[ing] used as a ‘normal telephone’ to make calls,” ’295 patent, col. 6 ll. 13–14, the 

telephone unit’s “digital image pick up unit operates as a 

digital photo camera of the type which is known,” id. at 

col. 6 ll. 1–2, compresses images according to known 

methods, id. at col. 6 ll. 5–8, and transmits image data 

and classification data according to known methods, id. at 

col. 1 ll. 31–34, 52–59. In other words, the telephone unit 

simply provides the environment in which the abstract 

idea of classifying and storing digital images in an organized manner is carried out.

Likewise, the server fails to add an inventive concept 

because it is simply a generic computer that “administer[s]” digital images using a known “arbitrary data bank 

system.” Id. at col. 5 ll. 45–46. But “[f]or the role of a 

computer in a computer-implemented invention to be 

deemed meaningful in the context of this analysis, it must 

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involve more than performance of ‘well-understood, routine, [and] conventional activities previously known to the 

industry.’” Content Extraction, 776 F.3d at 1347–48

(quoting Alice, 134 S. Ct at 2359). Here, the server simply 

receives data, “extract[s] classification information . . . 

from the received data,” and “stor[es] the digital images . . . taking into consideration the classification information.” See ’295 patent, col. 10 ll. 1–17 (Claim 17). 

These steps fall squarely within our precedent finding 

generic computer components insufficient to add an 

inventive concept to an otherwise abstract idea. Alice, 

134 S. Ct. at 2360 (“Nearly every computer will include a 

‘communications controller’ and a ‘data storage unit’ 

capable of performing the basic calculation, storage, and 

transmission functions required by the method claims.”); 

Content Extraction, 776 F.3d at 1345, 1348 (“storing 

information” into memory, and using a computer to 

“translate the shapes on a physical page into typeface 

characters,” insufficient confer patent eligibility); Mortg. 

Grader, 811 F.3d at 1324–25 (generic computer components such as an “interface,” “network,” and “database,” 

fail to satisfy the inventive concept requirement); Intellectual Ventures I, 792 F.3d at 1368 (a “database” and “a 

communication medium” “are all generic computer elements”); BuySAFE v. Google, Inc., 765 F.3d 1350, 1355

(Fed. Cir. 2014) (“That a computer receives and sends the 

information over a network—with no further specification—is not even arguably inventive.”).

Dependent claims 10 and 11 respectively recite an 

“image analysis unit for determining quality of the digital 

images” and a “control unit for controlling resolution of 

digital images.” These components purportedly analyze 

the image data sent from the telephone unit to determine 

the quality of the image sent, and if certain criteria are 

met, instruct the telephone unit to resend the image. 

While these units purport to add additional functionality 

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to the server, ’295 patent, col. 5 ll. 14–32, the specification

limits its discussion of these components to abstract 

functional descriptions devoid of technical explanation as 

to how to implement the invention. For example, the 

“image analysis unit” predictably analyzes the digital 

images to “determine[ ] the quality of the digital image 

provided to the server.” Id. at col. 5 ll. 14–16; see also id.

at col 8 ll. 24–26. And, the “control unit” predictably 

“controls” various aspects of the claimed functionality. It 

“controls the image resolution of the digital images” using 

known image compression techniques, id. at col. 5 ll. 21–

24, and it “controls the transmission rate during transmission of the data via the transmission system,” id. at 

col. 5 ll. 30–33. Such vague, functional descriptions of 

server components are insufficient to transform the 

abstract idea into a patent-eligible invention.

In sum, the recited physical components behave exactly as expected according to their ordinary use. Although

the claims recite that the abstract idea of classifying and 

storing digital images in an organized manner is carried 

out in a telephone system, the ’295 patent fails to provide 

the requisite details necessary to carry out that idea. 

Just as “[s]teps that do nothing more than spell out what 

it means to ‘apply it on a computer’ cannot confer patenteligibility,” Intellectual Ventures I, 792 F.3d at 1371–72

(citing Alice, 134 S. Ct. at 2359), here, steps that generically spell out what it means to “apply it on a telephone 

network” also cannot confer patent eligibility. Thus, we 

find that the ’295 patent is directed to patent-ineligible 

subject matter and we affirm the district court’s judgment.

AFFIRMED

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