NOTE: This disposition is nonprecedential.

 

United States Court of Appeals 

for the Federal Circuit ______________________ 

MAX A. RADY,

Plaintiff-Appellant

v.

THE BOSTON CONSULTING GROUP, INC., DE 

BEERS UK LTD.,

Defendants-Appellees

______________________ 

2022-2218

______________________ 

Appeal from the United States District Court for the 

Southern District of New York in No. 1:20-cv-02285-ALCBCM, Judge Andrew L. Carter.

______________________ 

Decided: March 27, 2024 

______________________ 

STEVEN EDWARD TILLER, Whiteford, Taylor & Preston, 

LLP, Baltimore, MD, argued for plaintiff-appellant. Also 

represented by PETER JAMES DAVIS; KEVIN HROBLAK, Ice 

Miller LLP, Baltimore, MD. 

 BRIAN ROBERT MATSUI, Morrison & Foerster LLP, 

Washington, DC, argued for all defendants-appellees. Defendant-appellee Boston Consulting Group, Inc. also represented by SHAUN PATRICK DELACY, KYLE W.K. MOONEY, 

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2 RADY v. BOSTON CONSULTING GROUP, INC. 

New York, NY.

 CHRISTOPHER P. BORELLO, Venable LLP, New York, 

NY, for defendant-appellee De Beers UK Ltd. Also represented by JOSHUA DANIEL CALABRO. 

 ______________________ 

Before REYNA, MAYER, and CUNNINGHAM, Circuit Judges.

PER CURIAM. 

Max A. Rady appeals an order of the United States District Court for the Southern District of New York dismissing his patent infringement claim after concluding that his 

asserted patent claimed ineligible subject matter under 35 

U.S.C. § 101. For the reasons discussed below, we affirm.

I. BACKGROUND

Rady owns U.S. Patent No. 10,469,250 (the “’250 patent”), which is directed to “a framework [for] record[ing] to 

a blockchain” the “unique identification[s] (signatures) of 

physical items which have unique, random properties.” 

’250 patent, Abstract. The claimed invention involves 

scanning a physical item, such as a gemstone, determining 

its unique pattern of imperfections, i.e., the item’s “signature,” and then recording that signature to a blockchain if 

the physical object has not previously been registered. Id.

col. 1 ll. 22–53. The patent purports to solve problems related to asset provenance and asset and supply chain management. Id. col. 3 l. 33–col. 5 l. 43. Claim 1 of the ’250 

patent recites:

1. A network node comprising:

one or more processing devices;

a storage device, coupled to the one or more processing devices and storing instructions for execution by at least some of the one or more processing 

devices;

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a communications subsystem, coupled to the one or 

more processing devices, to communicate with at 

least one or more other nodes of a peer-to-peer network; and

item analysis components coupled to the one or 

more processing devices, the item analysis components comprising at least one imaging device configured to determine spectral analysis data and 3D 

scan data from measurements generated by the 

item analysis components;

wherein the one or more processing devices operate 

to configure the network node to:

analyze an instance of a physical item using the 

item analysis components to determine a unique 

signature for the instance, the unique signature determined using 3D spatial mapping to define the 

unique signature from the spectral analysis data 

and 3D scan data generated by the item analysis 

components for the physical item;

determine, using the unique signature, whether 

the instance of the physical item is previously recorded to a blockchain maintained by the peer-topeer network to provide item tracking and authentication services, comparing the unique signature 

generated by the network node to previously recorded unique signatures using 3D spatial analysis 

techniques, rotating in virtual space features of the 

physical item defined in the unique signature to determine a match with features defined in the previously recorded unique signatures; and

record the instance of the physical item to the 

blockchain in response to the determining whether 

the instance is previously recorded. 

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4 RADY v. BOSTON CONSULTING GROUP, INC. 

Id. col. 19 ll. 15–51.*

In March 2020, Rady filed suit against The Boston Consulting Group, Inc. and De Beers UK Ltd. (collectively, 

“BCG”), alleging infringement of the ’250 patent. BCG 

thereafter filed a motion to dismiss Rady’s infringement 

claim pursuant to Federal Rule of Civil Procedure 12(b)(6). 

In its motion to dismiss, BCG asserted that “the claims of 

the ’250 patent are directed to the patent-ineligible abstract idea of collecting, processing, and storing data to 

track physical items” and they “do not improve anything 

about computer technology itself.” J.A. 196.

In granting BCG’s motion, the district court stated that 

while Rady’s claimed system “record[s] a fingerprint for a 

gemstone” to a blockchain, the patent does “not improv[e] 

the functionality of storing and processing data on a blockchain.” J.A. 5. The court noted, moreover, that “a blockchain is merely a ledger maintained and verified through a 

peer-to-peer network, and [Rady] d[id] not describe how the 

patent improves blockchains.” J.A. 5–6. Furthermore, according to the court, “tracking physical objects do[es] not 

make [the] claims any less abstract.” J.A. 5.**

Rady then filed a timely appeal with this court. We 

have jurisdiction under 28 U.S.C. § 1295(a)(1).

* Because Rady has not adequately developed any eligibility arguments about claims of the ’250 patent other 

than claim 1, we treat claim 1 as representative.

 

** In addition to patent infringement claims, Rady’s 

Second Amended Complaint contained breach of contract 

and trade secret misappropriation claims. See J.A. 183–86. 

After the district court entered its order dismissing his infringement claims, Rady agreed to dismiss, with prejudice, 

his breach of contract and trade secret misappropriation 

claims. See J.A. 728–29.

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II. DISCUSSION

A. Standard of Review

We apply regional circuit law when reviewing 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). “In the Second Circuit, grant of a motion 

to dismiss is reviewed de novo to determine whether the 

claim is plausible on its face, accepting the material factual 

allegations in the complaint and drawing all reasonable inferences in favor of the plaintiff.” Ottah v. Fiat Chrysler, 

884 F.3d 1135, 1141 (Fed. Cir. 2018) (first citing Ashcroft 

v. Iqbal, 556 U.S. 662, 678 (2009); and then citing Johnson 

v. Priceline.com, Inc., 711 F.3d 271, 275 (2d Cir. 2013)).

B. Patent Eligibility

Section 101 defines patent-eligible subject matter as 

“any new and useful process, machine, manufacture, or 

composition of matter, or any new and useful improvement 

thereof.” 35 U.S.C. § 101. It has been long recognized that 

this language excludes “[l]aws of nature, natural phenomena, and abstract ideas.” Ass’n for Molecular Pathology v. 

Myriad Genetics, Inc., 569 U.S. 576, 589 (2013) (“Myriad”) 

(quoting Mayo Collaborative Servs. v. Prometheus Lab’ys, 

Inc., 566 U.S. 66, 70 (2012)); see also Alice Corp. v. CLS 

Bank Int’l, 573 U.S. 208, 216 (2014).

The Supreme Court has articulated a two-stage framework to determine whether a claim falls outside the scope 

of section 101. See Alice, 573 U.S. at 217–18. In the first 

stage, a court must determine whether the claim at issue 

is directed to a patent-ineligible concept, such as an abstract idea. Id. at 217. If so, the court, in the second stage, 

must assess whether the elements of the claim, considered 

both individually and as an ordered combination, are sufficient to “‘transform the nature of the claim’ into a patenteligible application” of the concept. Id. (quoting Mayo, 566 

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6 RADY v. BOSTON CONSULTING GROUP, INC. 

U.S. at 78). This second stage of the eligibility analysis is 

often referred to as the “search for an ‘inventive concept’—

i.e., an element or combination of elements that is ‘sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the [ineligible concept] 

itself.’” Id. at 217–18 (alteration in original) (quoting 

Mayo, 566 U.S. at 72–73).

C. Alice Step One

The Alice step-one analysis requires us to consider the 

claims “in their entirety to ascertain whether their character as a whole is directed to excluded subject matter.” Internet Pats. Corp. v. Active Network, Inc., 790 F.3d 1343, 

1346 (Fed. Cir. 2015). “[W]hile the specification may help 

illuminate the true focus of a claim, when analyzing patent 

eligibility, reliance on the specification must always yield 

to the claim language in identifying that focus.” ChargePoint, Inc. v. SemaConnect, Inc., 920 F.3d 759, 766 (Fed. 

Cir. 2019).

We agree with the district court that, at step one, the 

claims of the ’250 patent are directed to an abstract idea. 

See J.A. 5. Claim 1 requires identifying a physical item’s 

unique pattern of physical imperfections, or “signature,” 

and then recording that information to a blockchain if the 

object has not been previously registered. ’250 patent 

col. 19 ll. 15–51. As we have often emphasized, however, 

claims directed to gathering and storing data, without 

more, are impermissibly abstract. See, e.g., Int’l Bus. 

Machs. Corp. v. Zillow Grp., Inc., 50 F.4th 1371, 1378 (Fed. 

Cir. 2022) (explaining that this court has “repeatedly held 

claims directed to collection of information, comprehending 

the meaning of that collected information, and indication 

of the results, all on a generic computer network operating 

in its normal, expected manner to be abstract” (citation and 

internal quotation marks omitted)); In re Killian, 45 F.4th 

1373, 1382 (Fed. Cir. 2022) (explaining that because 

“[i]nformation as such is an intangible,” claims directed to 

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RADY v. BOSTON CONSULTING GROUP, INC. 7

“gathering and analyzing information of a specified content, then displaying the results without any particular assertedly inventive technology for performing those 

functions is an abstract idea” (alteration in original) (citation and internal quotation marks omitted)).

We note, moreover, that identifying items by their 

unique physical features is a long-standing and well-established practice. See, e.g., Bilski v. Kappos, 561 U.S. 593, 

611 (2010) (concluding that claims covering “the basic concept of hedging, or protecting against risk” described “a 

fundamental economic practice long prevalent in our system of commerce and taught in any introductory finance 

class” and were therefore directed to “an unpatentable abstract idea” (citation and internal quotation marks omitted)); Solutran, Inc. v. Elavon, Inc., 931 F.3d 1161, 1167 

(Fed. Cir. 2019) (concluding that claims reciting a method 

for electronically processing checks were patent ineligible 

and explaining that “[t]he desire to credit a merchant’s account as soon as possible” was a “long-standing commercial 

practice”). As the specification of the ’250 patent acknowledges, it has been long understood that many physical objects have unique “small-scale imperfections.” ’250 patent 

col. 5 l. 19. Diamonds, for example, have “carbon imperfections/carbon flaws” that “are unique in 3D space in the diamond’s shape and type.” Id. col. 3 ll. 55–56. Indeed, 

Rady’s specification incorporates by reference a jewelry 

website that explains that diamonds can be identified by 

their unique imperfections. Id. col. 3 ll. 56–59 (incorporating by reference J.A. 268–70).

The fact that Rady’s patent describes the use of specialized hardware does not, standing alone, mean that his 

claims are not directed to an abstract idea. As we have 

previously recognized, “claims are not saved from abstraction merely because they recite components more specific 

than a generic computer.” BSG Tech LLC v. BuySeasons, 

Inc., 899 F.3d 1281, 1286 (Fed. Cir. 2018); see also Universal Secure Registry LLC v. Apple Inc., 10 F.4th 1342, 1352 

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8 RADY v. BOSTON CONSULTING GROUP, INC. 

(Fed. Cir. 2021) (concluding that claims were directed to an 

abstract idea notwithstanding the fact that they recited the 

use of a “biometric sensor”); In re TLI Commc’ns LLC Pat. 

Litig., 823 F.3d 607, 611 (Fed. Cir. 2016) (concluding that 

a claim was directed to an abstract idea notwithstanding 

the fact that it “require[d] concrete, tangible components 

such as a telephone unit and a server” because “the specification ma[de] clear that the recited physical components 

merely provide[d] a generic environment in which to carry 

out the abstract idea of classifying and storing digital images in an organized manner” (internal quotation marks 

omitted)); Content Extraction, 776 F.3d at 1347 (concluding 

that claims were directed to an abstract idea notwithstanding the fact that they required the use of a scanner).

From an eligibility perspective, the principal shortcoming in Rady’s claims is that they “recite generic steps and 

results—as opposed to a specific solution to a technological 

problem,” Universal Secure Registry, 10 F.4th at 1355. 

Claim 1 of the ’250 patent recites, in broad terms, the use 

of “item analysis components” to gather “spectral analysis 

data and 3D scan data” about the unique imperfections 

present in physical objects. ’250 patent col. 19 ll. 23–28. 

Rady’s patent, however, does not purport to have invented 

any new measurement techniques or measurement devices 

to identify such imperfections. Instead, it relies upon existing devices, such as a “[s]pectral imager,” “[l]aser projector,” “laser receiver,” and “[x]enon light source,” to analyze 

these imperfections. Id. col. 8 ll. 32–47.

Rather than providing any significant details regarding how these various item analysis components function 

to determine an object’s “unique signature,” id. col. 1 ll. 47–

48, the specification simply incorporates by reference a 

prior publication which discloses “an end-to-end measurement system for capturing spectral data on 3D objects,” 

J.A. 220, and which explains how components such as spectral imagers, J.A. 221–23, laser scanning systems, J.A. 

225–26, and a xenon light source, J.A. 225–26, can be used 

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RADY v. BOSTON CONSULTING GROUP, INC. 9

to analyze and identify various physical objects, including 

“minerals,” J.A. 226. See ’250 patent col. 8 ll. 32–47. Rady’s 

specification then goes on to explain that, in the claimed 

invention, spectral imagers, laser scanning systems, and 

light sources are used as “described in” this prior publication. Id.; see also id. col. 4 ll. 38–50 (explaining that a diamond can be reoriented in virtual space using techniques 

similar to those described in a previously published article). In essence, Rady’s specification “underscores the . . . 

abstract nature of the idea embodied in [his] claims,” Affinity Labs of Tex., LLC v. DIRECTV, LLC, 838 F.3d 1253, 

1259 (Fed. Cir. 2016), because rather than purporting to 

disclose any technological improvement to the item analysis components, it confirms that such devices are used in 

the same manner as they have been used in the past.

The specification makes clear, moreover, that the 

claimed invention relies on the conventional use of existing 

blockchain technology. It explains that existing “[b]lockchain technologies implement distributed ledgers on peerto-peer networks,” ’250 patent col. 1 ll. 6–7, and notes that

“[b]lockchains provide a way to trace unique digital items 

without reliance on a third party,” id. col. 1 ll. 11–12. It 

further describes widely-used standard protocols for constructing and operating blockchains. Id. col. 7 ll. 46–57 (describing the existing “Blockchain Authentication and Trust 

Module (BATM) framework”). Rather than purporting to 

disclose any new type of blockchain or any improvement in 

blockchain functionality, the specification incorporates by 

reference papers describing conventional blockchain construction and performance. Id. col. 7 ll. 20–25, 46–57 (incorporating by reference J.A. 272–82 and J.A. 386–91). 

The specification recognizes, moreover, that blockchain 

technology has previously been used in connection with the 

management of “physical assets.” Id. col. 3 ll. 36–37.

On appeal, Rady asserts that “counterfeiting is a widespread economic problem that results in billions of dollars 

in lost revenue each year, exposing individuals and 

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10 RADY v. BOSTON CONSULTING GROUP, INC. 

corporations to heightened health, safety, and cybersecurity risks from fraudulent materials and defective parts.” 

Appellant’s Br. 10. He further states that “[a]n application 

to confirm the provenance of gemstones . . . allow[s] stones 

to be traced by their unique characteristics, allowing banks 

and lenders to identify any ‘double spending’ of stones.” Id.

at 11. In his view, his “claimed invention is the first use 

case that pairs the use of a non-invasive, unique, non-reproducible identifier for the unique identification, authentication [and] self-provenance of individual physical items, 

with blockchain technology, thus enabling the supply chain 

management to reap the full benefits of blockchain technology and succeed in combating counterfeiting.” Id. at 35.

Rady’s claimed system may be useful in preventing the 

counterfeiting of gemstones, but utility is not the measure 

of patent eligibility. See Myriad, 569 U.S. at 591 (explaining that “[g]roundbreaking, innovative, or even brilliant 

discovery does not by itself satisfy the § 101 inquiry”). 

Rady’s claims are directed to an abstract idea because they 

do not purport to solve any technological problem, but instead use existing imaging and blockchain technology in 

predictable ways to address the economic problem of counterfeit goods. In effect, Rady’s claims rely on existing technological tools to gather and record data but disclose no 

purported improvement in the tools themselves. See Elec. 

Power Grp., LLC v. Alstom S.A., 830 F.3d 1350, 1354 (Fed. 

Cir. 2016) (concluding that claims were directed to an abstract idea where their “focus” was not on “an improvement 

in computers as tools, but on certain independently abstract ideas that use computers as tools”); see also Trading 

Techs. Int’l, Inc. v. IBG LLC, 921 F.3d 1084, 1093 (Fed. Cir. 

2019) (concluding that claims were directed to an abstract 

idea because they did “not improve the functioning of the 

computer, make it operate more efficiently, or solve any 

technological problem”).

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D. Alice Step Two

Turning next to Alice step two, we conclude that Rady’s 

claims fail to recite any elements that, either individually 

or as an ordered combination, transform the abstract idea 

of gathering and storing data about the unique imperfections of a physical object into a patent-eligible application 

of that idea. See Alice, 573 U.S. at 217. Rady argues that 

his “claims are directed to the inventive combination of 

multiple item analyses components to capture” the unique 

imperfections in physical objects. Appellant’s Br. 39. We 

do not find this argument persuasive. Rady’s patent does 

not meaningfully explain how the various “item analysis 

components,” ’250 patent col. 19 l. 23, are configured and 

combined, much less purport to combine those components 

in an inventive way. See TLI Commc’ns, 823 F.3d at 615 

(emphasizing that “vague, functional descriptions of . . . 

components are insufficient to transform [an] abstract idea 

into a patent-eligible invention”).

Nor does Rady plausibly allege that recording information about the unique imperfections of a physical object 

on a blockchain, rather than another type of ledger, supplies an inventive concept. As discussed previously, Rady’s 

patent does not purport to disclose any novel type of blockchain or other decentralized network. It does not, moreover, disclose any improved or otherwise unconventional 

technique for storing data on a blockchain. In this regard, 

the fact that the patent describes recording a particular 

type of information—data about the unique pattern of imperfections in a physical object—to a blockchain does not

mean that it improves the underlying blockchain technology. See BSG Tech, 899 F.3d at 1288 (explaining that “an 

improvement to the information stored by a database is not 

equivalent to an improvement in the database’s functionality”). Thus, because the claims of the ’250 patent use conventional item analysis components and existing

blockchain technology to implement the abstract idea of 

gathering and storing information about physical objects, 

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12 RADY v. BOSTON CONSULTING GROUP, INC. 

they fail to supply the inventive concept required at Alice

step two. See Trinity Info Media, LLC v. Covalent, Inc., 72 

F.4th 1355, 1367 (Fed. Cir. 2023) (explaining that this 

court has “found no inventive concept where claims merely 

recited ‘generic features’ or ‘routine functions’ to implement the underlying abstract idea” (citations omitted)).

E. Motion to Dismiss

We reject, moreover, Rady’s contention that the district 

court prematurely resolved the eligibility question. “Like 

other legal questions based on underlying facts, [the eligibility] question may be, and frequently has been, resolved 

on a Rule 12(b)(6) or (c) motion where the undisputed facts, 

considered under the standards required by that Rule, require a holding of ineligibility under the substantive standards of law.” SAP Am., Inc. v. InvestPic, LLC, 898 F.3d 

1161, 1166 (Fed. Cir. 2018). In response to BCG’s Rule 

12(b)(6) motion, Rady asserted that his claimed invention 

passed muster under section 101 because it relied upon 

specialized sensors, J.A. 327–28, and “solv[ed] a complicated and long[-]standing problem plaguing many industries,” J.A. 335. Because Rady failed to present nonconclusory allegations that his patent disclosed any specific 

technical improvements to computers, measurement devices, blockchains, or any other technology, however, the 

district court properly resolved the eligibility question at 

the pleadings stage. See, e.g., Simio, LLC v. FlexSim Software Prods., Inc., 983 F.3d 1353, 1365 (Fed Cir. 2020) (“We 

disregard conclusory statements when evaluating a complaint under Rule 12(b)(6).”). We have considered Rady’s 

remaining arguments but do not find them persuasive.

III. CONCLUSION

Accordingly, the order of the United States District 

Court for the Southern District of New York is affirmed.

AFFIRMED

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