Source: https://www.patentdocs.org/2016/11/amdocs-israel-limited-v-openet-telecom-inc-fed-cir-2016.html?cid=6a00d83451ca1469e201b8d23eb61c970c
Timestamp: 2020-07-11 05:42:04
Document Index: 391112646

Matched Legal Cases: ['§ 101', '§ 101', '§ 101', '§ 101', '§ 101', '§ 112', '§ 101', '§ 101', '§ 101', '§ 101', '§ 101']

Patent Docs: Amdocs (Israel) Limited v. Openet Telecom, Inc. (Fed. Cir. 2016)
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Amdocs sued Openet in the Eastern District of Virginia, alleging infringement of U.S. Patent Nos. 7,631,065, 7,412,510, 6,947,984, and 6,836,797. Openet moved for judgment on the pleadings on the grounds that all four patents were invalid under 35 U.S.C. § 101 as being directed to patent-ineligible subject matter. The District Court granted the motion and Amdocs appealed.
The patents-in-suit relate to an accounting and billing system for network service providers. In the words of the Federal Circuit:
The '065 patent concerns a system, method, and computer program for merging data in a network-based filtering and aggregating platform as well as a related apparatus for enhancing networking accounting data records. The '510 patent concerns a system, method, and computer program for reporting on the collection of network usage information. The '984 patent concerns a system and accompanying method and computer program for reporting on the collection of network usage information from a plurality of network devices. The '797 patent concerns a system, method, and computer program for generating a single record reflecting multiple services for accounting purposes.
The inventions allow the service providers to bill for Internet Protocol (IP) traffic. The distributed nature of the disclosed systems "minimizes the impact on network and system resources," and "minimizes network impact by collecting and processing data close to its source." Particularly, "[e]ach patent explains that this is an advantage over prior art systems that stored information in one location, which made it difficult to keep up with massive record flows from the network devices and which required huge databases."
Judge Plager wrote the majority decision, which was joined by Judge Newman. Judge Reyna dissented.
Upon review of the Alice test, the Court noted that "there is considerable overlap between step one and step two, and in some situations this analysis could be accomplished without going beyond step one," but also admitted that "there is no such single, succinct, usable definition or test" for what an 'abstract idea' encompasses. Rather than wringing its hands over this lack of grounding, the Court observed that "the decisional mechanism courts now apply is to examine earlier cases in which a similar or parallel descriptive nature can be seen."
Undertaking this comparative endeavor, the Court briefly reviewed cases dealing with related subject matter. In Digitech Image Techs v. Elecs. for Imaging, Inc., Content Extraction & Transmission v. Wells Fargo Bank, and In re TLI Commc'ns LLC Patent Litig., the Court found claims ineligible. But in DDR Holdings v. Hotels.com and BASCOM Global Internet Servs. v. AT&T Mobility, the Court found claims to be eligible.
Turning to the patents-in-suit, the Court noted that it would take into consideration the District Court's claim construction, as well as the patents' written descriptions. While the Court reviewed all four patents in detail, we will focus on representative claims from only two.
a. The '065 Patent
Claim 1 of the '065 patent recites:
The Court observed that, on its face, this claim shares commonalities with claims from all five of the cases cited above, but it is closer to those of DDR Holdings and BASCOM than the others. Thus, while involving the potentially abstract notions of organizing information, recognizing data, and classifying information found ineligible in Digitech, Content Extraction, and TLI, the claim went beyond these mere concepts.
Particularly, the Court focused on the term "enhance," which was construed as "to apply a number of field enhancements in a distributed fashion." According to the District Court, this meant that "the network usage records are processed close to their sources before being transmitted to a centralized manager." The Federal Circuit found this distributed processing to be "a critical advancement over the prior art" because (as stated in the specification of the '065 patent) in the prior art "all the network information flows to one location, making it very difficult to keep up with the massive record flows from the network devices and requiring huge databases." Thus, in the Court's view "this claim entails an unconventional technological solution (enhancing data in a distributed fashion) to a technological problem (massive record flows which previously required massive databases)."
The Court then went to great lengths to distinguish this claim over those of Digitech and Content Extraction, the claims in those cases being broader, more preemptive, generic, ordinary, and lacking inventive concepts. The Court also drew parallels between claim 1 and that of BASCOM, noting that "when all limitations are considered individually and as an ordered combination, they provide an inventive concept through the use of distributed architecture."
Thus, claim 1 was found to be patent-eligible, apparently meeting the requirements of both steps of the Alice test.
b. The '510 Patent
Representative claim 16 of the '510 patent recites:
The Court viewed this claim as requiring "that the network usage information is collected in real-time from a plurality of network devices at a plurality of layers and is filtered and aggregated before being completed into a plurality of data records." Again relying on claim construction, the Court noted that the term "completing" was construed to mean "enhance a record until all required fields have been populated" where "enhance" has the same meaning as it did for the '065 patent.
The Court also reviewed the claims in light of the specification. Particularly, "[t]he written description explains that the distributed architecture allows the system to efficiently and accurately collect network usage information in a manner designed for efficiency to minimize impact on network and system resources." As detailed in the specification, doing so has a number of purported advantages over the prior art. Thus, as was the case for the '065 patent, the Court found this claim to satisfy both steps of the Alice test because it recited a technological improvement and involved an inventive ordered combination of components.
c. The Remaining Patents
The Court found the '984 and '797 patents to be eligible based on reasoning similar to that discussed above. Therefore, all of the Amdocs patents passed muster under § 101, and the District Court's ruling was reversed.
Judge Reyna's dissent is nearly as long as the majority opinion, and was written in the style of a majority opinion. Thus, this case may have been a close call, with Judge Newman being swung to Judge Plager's side late in the game.
Judge Reyna took issue with the majority not identifying abstract ideas to which the claims are directed, as well as the majority's liberal importation of limitations from the specification. Particularly, the distributed architecture that the majority gave so much weight in its § 101 analysis does not literally appear in the claims.
But ultimately, Judge Reyna agreed with the majority's position on the '510 and '984 patents. His dissenting view is focused on the '065 and '797 patents.
After a discussion of the patents-in-suit, Judge Reyna noted that "it is apparent that a desired goal, absent structural or procedural means for achieving that goal, is an abstract idea." While abstract ideas need not be claimed as goals, Judge Reyna believes that the Supreme Court has clearly established that claims directed to no more than aspirational goals are abstract. Judge Reyna also warned that field-of-use limitations and extra-solution activity are "illusory limitations" that "describe only procedure or structure common to every means of accomplishing a given result, also cannot provide an inventive concept."
Turning to the patents, Judge Reyna made it clear that the written descriptions of each disclose patent-eligible network monitoring embodiments. But, citing Synopsys v. Mentor Graphics Corp., he wrote that "the [§ 101] inquiry is not whether the specifications disclose a patent-eligible system, but whether the claims are directed to a patent ineligible concept." (Arguably, this mischaracterizes Synopsys and the majority to an extent, because the point being made in Synopsys is that arbitrarily complex details from the specification cannot save an otherwise abstract claim, while the majority relied on Enfish for the notion that an improvement described in the specification can be read into the claims.)
Regarding claim 1 of the '065 patent, Judge Reyna found that it "discusses only very broad, high-level functionality rather than details about how exactly that functionality is implemented, providing no information about the structure of the software," and thus contains no physical or digital structure. Instead, the claim "defines the program product using only functional limitations" with "no specific process for accomplishing the abstract goal of combining data from two sources."
Judge Reyna objected to the majority's interpretation of "enhance" to mean applying the claimed functions "in a distributed fashion." He believes that the latter term has no context in the claims, and the claim fails to specify any components or structure that can be distributed. Therefore, Judge Reyna would have found claim 1 to be ineligible.
While Judge Reyna discussed claim 16 of this patent in depth, ultimately he concluded that the claim recites enough detail to be eligible. Particularly, the claim recites that "the network information is collected from a specific source . . . the distributed system operates on the collected information by applying two specific types of functions - filtering and aggregating [and the] information is further processed by enhancing it in a distributed fashion." Importantly, claim 16 recites the network devices over which the enhancements take place.
Thus, like the claims of Enfish and McRO v. Bandai Namco Games, claim 16 is "directed to a particular process that improves upon the manner in which systems collect and process network usage information, and the claimed process is limited in a specific way." Thus, Judge Reyna agreed with the majority, at least in its conclusion that the claim passes step one of Alice.
Here we see something of a split in the Federal Circuit. The majority's decision was driven by looking beyond the plain language of the claims, but relying on construed claim terms to do so, as well as improvements over the prior art discussed in the specifications. Such an approach is consistent with those of Enfish and McRO, but apparently does not please all judges on the Court. Particularly, it is unclear whether there are any limits, under § 101, as to how much any alleged improvements from a patent's specification can be read into its claims.
The majority also took issue with Judge Reyna's position that claiming only an aspirational goal results in patent-ineligible claims. In response, Judge Plager wrote that:
[Y]ears ago the Supreme Court outlawed such broad 'ends' or function claiming as inconsistent with the purposes of the Patent Statute. Congress, however, a few years later softened the rule. Patentees could write claim language to broadly describe the purpose or function of their invention, and when they did the claim would not cover the bare function or goal, however performed, but only as limited to the particular means (and equivalents) for implementing that function or goal as described by the patentee in the patent's specification.
This of course refers to means-plus function claiming under § 112 ¶ 6. While following Judge Reyna's advice and drafting claims that recite specific steps often leads to those claims being better able to withstand a § 101 challenge, there is no absolute requirement to do so. For instance, the eligible claims in Enfish were in means-plus-function form.
Regardless, this outcome underlines the importance of claim construction, even in § 101 cases. A favorable claim construction can tip the patent-eligibility analysis in favor of the patentee, while an unfavorable ruling can doom the subject claims to abstract idea perdition. Ironically, many district courts have taken the non-precedential advice of Judge Mayer in Ultramercial v. Hulu, and carried out the § 101 analysis prior to construction. Under 2016 standards, some of the patents invalidated in such a fashion may have had different outcomes.
Still, despite Enfish, BASCOM, McRO, and this case providing a respite of sorts for patentees by clearing some of the § 101 fog, we are still only one en banc Federal Circuit decision or Supreme Court case away from going back to that murky landscape.
Amdocs (Israel) Ltd. v. Openet Telecom, Inc. (Fed. Cir. 2016)
Panel: Circuit Judges Newman, Plager, and Reyna
Opinion by Circuit Judge Plager; dissenting opinion by Circuit Judge Reyna
Posted at 10:38 PM in Federal Circuit, Patentable Subject Matter | Permalink
"Still, despite Enfish, BASCOM, McRO, and this case providing a respite of sorts for patentees by clearing some of the § 101 fog, we are still only one en banc Federal Circuit decision or Supreme Court case away from going back to that murky landscape."
Couldn't agree more. I could predict patent-eligibility now better with a Ouija board.
Posted by: EG | November 28, 2016 at 08:03 AM