Court Opinion

ID: 4665967
Source: CourtListenerOpinion
Date Created: 2021-03-09 16:01:17.282577+00
Date Added: 2024-06-11T08:02:46.217203
License: Public Domain

Case: 20-1995   Document: 44     Page: 1   Filed: 03/08/2021

        NOTE: This disposition is nonprecedential.

   United States Court of Appeals
       for the Federal Circuit
                 ______________________

                ENCO SYSTEMS, INC.,
                  Plaintiff-Appellant

                            v.

                   DAVINCIA, LLC,
                   Defendant-Appellee
                 ______________________

                       2020-1995
                 ______________________

    Appeal from the United States District Court for the
 Eastern District of Missouri in No. 1:19-cv-00039-SNLJ,
 Judge Stephen N. Limbaugh, Jr.
                  ______________________

                 Decided: March 8, 2021
                 ______________________

     BRAD SMITH, Endurance Law Group PLC, Jackson, MI,
 for plaintiff-appellant. Also represented by MATTHEW L.
 CUTLER, Harness, Dickey & Pierce, P.L.C, St. Louis, MO;
 JAMES BRADLEY LUCHSINGER, Troy, MI.

     DENNIS J. ABDELNOUR, Honigman LLP, Chicago, IL, for
 defendant-appellee. Also represented by J. MICHAEL
 HUGET, Ann Arbor, MI.
                 ______________________
Case: 20-1995      Document: 44      Page: 2     Filed: 03/08/2021

2                           ENCO SYSTEMS, INC.   v. DAVINCIA, LLC

     Before TARANTO, CHEN, and STOLL, Circuit Judges.
 TARANTO, Circuit Judge.

      ENCO Systems, Inc. owns U.S. Patent No. 7,047,191,
 titled “Method and System for Providing Automated Cap-
 tioning for AV Signals.” ENCO sued DaVincia, LLC in the
 United States District Court for the Eastern District of
 Missouri, alleging that DaVincia infringed the ’191 patent.
 The district court held that the ’191 patent claims are in-
 valid under 35 U.S.C. § 101. ENCO Systems, Inc. v. DaVin-
 cia, LLC, 447 F. Supp. 3d 916 (E.D. Mo. 2020). We affirm.
                                 I
                                 A
     The ’191 patent describes an audio-visual (AV) caption-
 ing system and method “using a speech-to-text processing
 system and associating the caption data with the AV sig-
 nal.” ’191 patent, col. 2, lines 17–23. Offering a solution to
 what it describes as costly and error-prone human tran-
 scription, the ’191 patent’s system includes several compo-
 nents that work in concert to present captioned text
 accurately. Id., col. 3, lines 11–52. The ’191 patent ex-
 plains that incoming audio can be separated from the
 whole of a video camera’s AV signal and processed by a
 speech-to-text processing system, which converts an audio
 signal into text using “conventional speech-to-text soft-
 ware.” Id., col. 3, line 53 through col. 4, line 23. Thereafter,
 an encoder processes the received text “to produce a cap-
 tioned AV signal by associating the text data with the orig-
 inal AV signal,” id., col. 4, lines 37–45, before that
 captioned AV signal is sent to a display device for presen-
 tation to a user, id., col. 5, line 62 through col. 6, line 2. See
 also id., col. 6, line 16 through col. 7, line 26 (describing Fig.
 2). At least one embodiment of the ’191 patent includes an
 “autoflush counter” as part of the speech-to-text processor
 that sets “[discrete] time intervals” by which the system
Case: 20-1995    Document: 44       Page: 3   Filed: 03/08/2021

 ENCO SYSTEMS, INC.   v. DAVINCIA, LLC                       3

 will process portions of an AV signal. Id., col. 8, lines 13–
 21.
     Claim 1 of the ’191 patent recites:
     1. A method for providing captioning in an AV sig-
     nal, the method comprising:
     selecting a number of lines of caption data which
     can be displayed at one time;
     determining a type of a caption encoder being used
     with a speech-to-text processing system;
     retrieving settings for the speech-to-text processing
     system to communicate with the caption encoder
     based on the identification of the caption encoder;
     automatically identifying a voice and speech pat-
     tern in an audio signal from a plurality of voice and
     speech patterns with the speech-to-text processing
     system;
     training the speech-to-text processing system to
     learn one or more new words in the audio signal;
     directly translating the audio signal in the AV sig-
     nal to caption data automatically with the speech-
     to-text processing system, wherein the direct trans-
     lation is adjusted by the speech-to-text processing
     system based on the training and the identification
     of the voice and speech pattern;
     associating the caption data with the AV signal at
     a time substantially corresponding with the con-
     verted audio signal in the AV signal from which the
     caption data was directly translated with the
     speech-to-text processing system, wherein the as-
     sociating further comprises synchronizing the cap-
     tion data with one or more cues in the AV signal;
     and
Case: 20-1995     Document: 44      Page: 4      Filed: 03/08/2021

4                           ENCO SYSTEMS, INC.   v. DAVINCIA, LLC

     displaying the AV signal with the caption data at
     the time substantially corresponding with the con-
     verted audio signal in the AV signal, wherein the
     number of lines of caption data which is displayed
     is based on the selection.
 Id., col. 10, lines 18–50. The ’191 patent includes twenty-
 one claims in total; among them are independent appa-
 ratus claims 8 and 15, whose limitations are similar to
 those of method claim 1. See id., col. 11, lines 8–35; id., col.
 12, lines 1–35.
                                B
      ENCO sued DaVincia on March 7, 2019, in the Eastern
 District of Missouri for infringement of the ’191 patent. On
 May 13, 2019, DaVincia filed a motion to dismiss under
 Rule 12(b)(6), arguing in relevant part that the ’191 patent
 claimed patent-ineligible subject matter under 35 U.S.C.
 § 101. Applying the framework of Alice Corp. Pty. Ltd. v.
 CLS Bank International, 573 U.S. 208 (2014), the district
 court first determined that the claims are directed to the
 abstract idea of automated stenography processes imple-
 mented on a computer. ENCO, 447 F. Supp. 3d at 921–22.
 The district court explained that the claims “suffer[] from
 the same high-level generalities and broad-form functional
 terminology” that this court rejected as ineligible under
 § 101 in University of Florida Research Foundation, Inc. v.
 General Electric Co., 916 F.3d 1363 (Fed. Cir. 2019).
 ENCO, 447 F. Supp. 3d at 922. The district court then de-
 termined that the claims do not include an “inventive con-
 cept” beyond the abstract idea because they rely on “self-
 described conventional computer components” arranged
 for functional purposes without a “particularized and con-
 crete” configuration. Id. at 922–23. Based on those deter-
 minations, the court dismissed ENCO’s case with
 prejudice. Id. at 923. The court subsequently denied
 ENCO’s motion for reconsideration and request for leave to
 amend its complaint. See ENCO Systems, Inc. v. DaVincia,
Case: 20-1995    Document: 44        Page: 5   Filed: 03/08/2021

 ENCO SYSTEMS, INC.   v. DAVINCIA, LLC                       5

 LLC, No. 1:19-cv-00039, 2020 WL 2129680, at *2 (E.D. Mo.
 May 5, 2020).
    ENCO timely appealed. We have jurisdiction under 28
 U.S.C. § 1295(a)(1).
                                II
     On appeal, ENCO argues that the claims of the ’191
 patent are not directed to an abstract idea and, in any
 event, include inventive concepts. We disagree.
      We review a district court’s dismissal for failure to
 state a claim under the law of the regional circuit, which
 here requires that we review the district court’s dismissal
 de novo and take all facts alleged in the complaint as true.
 See Univ. of Fla., 916 F.3d at 1367; Kelly v. City of Omaha,
 813 F.3d 1070, 1075 (8th Cir. 2016). Subject-matter eligi-
 bility under § 101 is a question of law based on underlying
 facts. See Aatrix Software, Inc. v. Green Shades Software,
 Inc., 882 F.3d 1121, 1125 (Fed. Cir. 2018). “Like other legal
 questions based on underlying facts, this question may be,
 and frequently has been, resolved on a Rule 12(b)(6) . . .
 motion where the undisputed facts, considered under the
 standards required by that Rule, require a holding of inel-
 igibility under the substantive standards of law.” SAP
 America, Inc. v. InvestPic, LLC, 898 F.3d 1161, 1166 (Fed.
 Cir. 2018).
     Section 101 provides that “[w]hoever invents or discov-
 ers any new and useful process, machine, manufacture, or
 composition of matter, or any new and useful improvement
 thereof, may obtain a patent therefor, subject to the condi-
 tions and requirements of this title.” 35 U.S.C. § 101. But
 § 101 “contains an important implicit exception: Laws of
 nature, natural phenomena, and abstract ideas are not pa-
 tentable.” Alice, 573 U.S. at 216 (internal quotation marks
 omitted). “A claim falls outside § 101 where (1) it is di-
 rected to a patent-ineligible concept, i.e., a law of nature,
 natural phenomenon, or abstract idea, and (2), if so, the
Case: 20-1995    Document: 44      Page: 6     Filed: 03/08/2021

6                         ENCO SYSTEMS, INC.   v. DAVINCIA, LLC

 particular elements of the claim, considered both individu-
 ally and as an ordered combination, do not add enough to
 transform the nature of the claim into a patent-eligible ap-
 plication.” SAP America, 898 F.3d at 1166–67 (internal
 quotation marks omitted).
                              A
      Under the first step of the Alice framework, we con-
 sider “what the patent asserts to be the ‘focus of the
 claimed advance over the prior art.’” Solutran, Inc. v. Ela-
 von, Inc., 931 F.3d 1161, 1168 (Fed. Cir. 2019) (quoting Af-
 finity Labs of Tex., LLC v. DIRECTV, LLC, 838 F.3d 1253,
 1257 (Fed. Cir. 2016)). In this case, claim 1, together with
 the specification, makes clear that the focus of the claimed
 advance is simply the abstract idea of automating the AV-
 captioning process. That process, consisting of converting
 audio to text and associating the text with corresponding
 video, is not itself asserted to be an advance over the prior
 art. The focus is not any specific improved computer tech-
 niques for performing those functions—functions intrinsic
 to the concept of AV captioning—but simply the use of com-
 puters to “conserve human resources” by automating work
 otherwise performed through human labor. Univ. of Fla.,
 916 F.3d at 1367. 1
     “‘[C]laiming the improved speed or efficiency inherent
 with applying the abstract idea on a computer’ [is] insuffi-
 cient to render the claims patent eligible.” Customedia
 Techs., LLC v. Dish Network Corp., 951 F.3d 1359, 1364

     1   Although ENCO contends on appeal that claim 1 is
 not representative, see ENCO Opening Br. 11, it provided
 no separate argument regarding dependent claims 3, 7, 10,
 13, 14, and 21 (requiring “timers,” “counters,” and time-re-
 lated thresholds) in the district court and therefore for-
 feited such argument. We therefore treat claim 1 as
 representative. See Affinity Labs, 838 F.3d at 1256 n.1.
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 ENCO SYSTEMS, INC.   v. DAVINCIA, LLC                      7

 (Fed. Cir. 2020) (quoting Intell. Ventures I LLC v. Capital
 One Bank (USA), 792 F.3d 1363, 1367, 70 (Fed. Cir. 2015)).
 In University of Florida, we held claims focused just on re-
 placing “pen and paper methodologies” with “data synthe-
 sis technology”—without a focus on specific, assertedly
 improved processing techniques—to be directed to an ab-
 stract idea. 916 F.3d at 1367. The same focus is evident
 here, not just from the non-specific nature of the claim lan-
 guage, but from the specification. See ’191 patent, col. 1,
 lines 24–56 (in describing the asserted advance, focusing
 on the fact that in prior-art systems, “captions are either
 typed-in from a script or are typed in real-time by stenog-
 raphers” or “an individual listens to a recorded audio signal
 and manually inputs the caption information as text in a
 computer”). The advance is only at the abstract level of
 computerization because claim 1 fails to set forth specific
 techniques for processing the data, instead reciting known
 computer techniques for automation of known processes.
 See Univ. of Fla., 916 F.3d at 1368; see also In re Moha-
 patra, No. 2020–1935, 2021 WL 408755, at *3 (Fed. Cir.
 Feb. 5, 2021) (“[T]his court has frequently looked to
 whether the claims are sufficiently concrete or specific to
 be directed to a patent-eligible process rather than a pa-
 tent-ineligible result.”); cf. McRO, Inc. v. Banda Namco
 Games America Inc., 837 F.3d 1299, 1313 (Fed. Cir. 2016)
 (finding claims not to be directed to an abstract idea where
 claims were “limited to rules with specific characteristics”
 and “set out meaningful requirements for the first set of
 rules” for the creation of better animation images, as con-
 firmed by the specification (internal quotation marks omit-
 ted)).
      ENCO suggests that the Patent and Trademark Of-
 fice’s recently designated “informative” decision, Ex parte
 Hannun, No. 2018-003323, 2019 WL 7407450 (P.T.A.B.
 Apr. 1, 2019) (previously captioned Ex parte Linden), re-
 quires a finding that the ’191 patent claims are not focused
 on abstract subject matter. ENCO Opening Br. 29–31. We
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8                            ENCO SYSTEMS, INC.    v. DAVINCIA, LLC

 disagree. We are not bound by internally precedential de-
 cisions of the Patent Trial and Appeal Board that seek to
 follow this court’s precedents, which we apply directly. See
 In re Rudy, 956 F.3d 1379, 1383 (Fed. Cir. 2020). In any
 event, the Board in Hannun ruled patent eligible claims
 that recited automatic speech-recognition methods that
 were “directed to a specific implementation” of processing
 data by measuring tailored parameters identified within
 audio files. Hannun, 2020 WL 7407450, at *5. No such
 specificity exists here. We conclude that the claims of the
 ’191 patent are directed to an abstract idea.
                                  B
     The claims also fail under the second step of the Alice
 framework because they do not set forth an inventive con-
 cept that would transform their subject matter into some-
 thing more than the abstract idea.
     The claims do not incorporate anything more beyond
 conventional computing hardware and software, which do
 not transform the subject matter into an eligible applica-
 tion of the abstract idea. The specification, with respect to
 each part of the system, including the audio-to-text conver-
 sion, explains that “conventional” components and tech-
 niques can be used. See, e.g., ’191 patent, col. 3, lines 53–
 56; id., col. 4, lines 17–20; id., col. 4, lines 37–41; id., col. 5,
 lines 13–16; id., col. 9, line 67 through col. 10, line 5. 2 No
 factual issues preclude deciding § 101 eligibility in this
 case under Rule 12(b)(6). See Secured Mail Sols. LLC v.
 Universal Wilde, Inc., 873 F.3d 905, 913 (Fed. Cir. 2017)
 (“In ruling on a 12(b)(6) motion, a court need not ‘accept as
 true allegations that contradict matters properly subject to

     2   Even the “training” required by claim 1 is described
 in the specification by reference to the available “Dragon”
 speech-to-text software. See ’191 patent, Fig. 3; id., col. 3,
 lines 53–56; id., col. 7, lines 31–40.
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 ENCO SYSTEMS, INC.   v. DAVINCIA, LLC                       9

 judicial notice or by exhibit,’ such as the claims and the pa-
 tent specification.” (citation omitted)). Understood in light
 of the specification, representative claim 1 of the ’191 pa-
 tent requires nothing more than “off-the-shelf, conven-
 tional computer . . . and display technology for gathering,
 sending, and presenting the desired information.” Elec.
 Power Grp., LLC v. Alstom S.A., 830 F.3d 1350, 1355 (Fed.
 Cir. 2016).
     ENCO also argues that the Board’s decision not to in-
 stitute DaVincia’s parallel petition for an inter partes re-
 view on obviousness grounds undermines our conclusion.
 See ENCO Opening Br. 34; ENCO Reply Br. 19–20. It does
 not. We have explained that satisfying the requirements
 of non-obviousness does not imply eligibility under § 101,
 including under the second step of the Alice inquiry, be-
 cause what may be non-obvious can still be abstract. See
 Chamberlain Grp., Inc. v. Techtronic Indus. Co., 935 F.3d
 1341, 1348–49 (Fed. Cir. 2019); SAP America, 898 F.3d at
 1163.
     We have considered ENCO’s remaining arguments and
 find them unpersuasive.
                               III
    For the foregoing reasons, we affirm the district court’s
 grant of DaVincia’s motion to dismiss.
                          AFFIRMED