Court Opinion

ID: 2654753
Source: CourtListenerOpinion
Date Created: 2014-02-27 01:02:04.7647+00
Date Added: 2024-06-11T12:58:51.487525
License: Public Domain

NOTE: This disposition is nonprecedential.

 United States Court of Appeals
     for the Federal Circuit
               ______________________

         CYBERFONE SYSTEMS, LLC,
  (formerly known as LVL Patent Group, LLC),
               Plaintiff-Appellant,

                          v.

      CNN INTERACTIVE GROUP, INC., CBS
INTERACTIVE, INC., FOX NEWS NETWORK, LLC,
   FOX SOCCER CHANNEL, LLC, FOX SPORTS
    INTERACTIVE MEDIA, LLC, TWENTIETH
    CENTURY FOX FILM CORPORATION, IGN
     ENTERTAINMENT, INC., WARNER BROS
       ENTERTAINMENT, INC., UNIVISION
INTERACTIVE MEDIA, INC., HOME BOX OFFICE,
   INC., DOW JONES & CO., INC., DOW JONES
  LOCAL MEDIA GROUP, INC., HULU, LLC, AND
               FLIXSTER, INC.,
              Defendants-Appellees,

                        AND

NBA PROPERTIES, INC., NBA MEDIA VENTURES,
 LLC, NFL ENTERPRISES, LLC, NETFLIX, INC.,
YAHOO! INC., SKYPE, INC., TWITTER, INC., YELP!
     INC., AND LINKEDIN CORPORATION,
              Defendants-Appellees,

                        AND

                 GROUPON, INC.,
2            CYBERFONE SYSTEMS v. CNN INTERACTIVE GROUP

                  Defendant-Appellee,

                         AND

    UNITED AIRLINES, INC., INTERCONTINENTAL
    HOTELS CORPORATION, AND SIX CONTINENTS
                 HOTELS, INC.,
               Defendants-Appellees,

                         AND

            SOUTHWEST AIRLINES CO.,
                Defendant-Appellee,

                         AND

        AVIS BUDGET GROUP, INC., HERTZ
    CORPORATION, ORBITZ WORLDWIDE, LLC, AND
           PURE BIZ SOLUTIONS, LLC,
               Defendants-Appellees,

                         AND

         MARRIOTT INTERNATIONAL, INC.,
               Defendant-Appellee,

                         AND

    HILTON WORLDWIDE, INC., HILTON HOTELS
     CORPORATION, AND HILTON GARDEN INNS
             MANAGEMENT, LLC,
              Defendants-Appellees,

                         AND

     AMERICAN AIRLINES, INC., IMDB.COM, INC.,
     PLAYFIELD APPS COMPANY, AMAZON.COM,
CYBERFONE SYSTEMS v. CNN INTERACTIVE GROUP               3

        INC., AND AMAZON SERVICES, LLC,
                      Defendants.
                ______________________

                    2012-1673, -1674
                 ______________________

    Appeals from the United States District Court for the
District of Delaware in Nos. 11-CV-0829 and 11-CV-0831,
Judge Sue L. Robinson.
                 ______________________

               Decided: February 26, 2014
                ______________________

     MARC A. FENSTER, Russ August & Kabat, of Los Ange-
les, California, argued for plaintiff-appellant. With him
on the brief were PAUL A. KROEGER and FREDRICKA UNG.

     STEVEN LIEBERMAN, Rothwell, Figg, Ernst &
Manbeck, PC, of Washington, DC argued for all defend-
ants-appellees. With him on the brief were SHARON
DAVIS, BRIAN ROSENBLOOM, and R. ELIZABETH BRENNER-
LEIFER, for CBS Interactive Inc., et al.; SUSAN M. COLETTI,
Fish & Richardson P.C., of Wilmington, Delaware, for
Avis Budget Group, Inc., et al.; STEPHEN E. BASKIN,
Kilpatrick Townsend & Stockton LLP, of Washington, DC,
for United Airlines, Inc.; J. CHRISTOPHER CARRAWAY and
KRISTIN L. CLEVELAND, Klarquist Sparkman, LLP, of
Portland, Oregon, for LinkedIn Corp., et al.; JACK B.
BLUMENFELD and KAREN JACOBS LOUDEN, Morris, Nich-
ols, Arsht & Tunnel, LLP, of Wilmington, Delaware for
Hilton Garden Inns Management, LLC, et al.; JOHN
CUDDIHY and BRIAN M. KOIDE, Crowell & Moring LLP, of
Washington, DC, for Marriott International, Inc.; KIRIN K.
GILL, JAMES C. YOON and RYAN R. SMITH, Wilson Sonsini
Goodrich & Rosati P.C., of Palo Alto, California, for
Groupon Inc.; GEORGE L. MURPHY, JR., Kilpatrick Town-
4             CYBERFONE SYSTEMS v. CNN INTERACTIVE GROUP

send & Stockton LLP, of Atlanta, Georgia, for Interconti-
nental Hotels Corporation, et al.; THOMAS L. HALKOWSKI,
Fish & Richardson P.C., of Wilmington, Delaware, for
Pure Biz Solutions, LLC; and MAX CICCARELLI, J.
MICHAEL HEINLEN and JUSTIN S. COHEN, Thompson &
Knight, LLP, of Dallas, Texas, for Southwest Airlines Co.
Of counsel were NEIL J, MCNABNAY and THOMAS H.
REGER II, Fish & Richardson P.C., of Dallas, Texas, for
Avis Budget Group, Inc., et al.; KLAUS H. HAMM, Klar-
quist Sparkman, LLP, of Portland, Oregon, for LinkedIn
Corp., et al; AUDRA A. DIAL and VAIBHAV P. KADABA,
Kilpatrick Townsend & Stockton LLP, of Atlanta, Geor-
gia, for Intercontinental Hotels Corporation, et al; and
CHRISTOPHER D. MAYS, Wilson Sonsini Goodrich & Rosati,
P.C., of Palo Alto, California, for Groupon, Inc.
                   ______________________

     Before LOURIE, DYK, and WALLACH, Circuit Judges.
DYK, Circuit Judge.
    Cyberfone Systems, LLC (“Cyberfone”) is the assignee
of U.S. Patent No. 8,019,060 (“the ’060 patent”). The
district court held that the patent claims ineligible matter
and is invalid under 35 U.S.C. § 101 (2012). We affirm.
                       BACKGROUND
    The ’060 patent relates to methods and a system for
capturing and storing data. In September 2011, Cyberfone
sued eighty-one defendants, alleging, inter alia, infringe-
ment of the ’060 patent. In May 2012, multiple defendants
moved for summary judgment on the ground that the ’060
patent claimed unpatentable subject matter under § 101.
Claim 1 is representative of the asserted claims:
    1. A method, comprising:
    obtaining data transaction information en-
      tered on a telephone from a single trans-
      mission from said telephone;
CYBERFONE SYSTEMS v. CNN INTERACTIVE GROUP                5

    forming a plurality of different exploded data
       transactions for the single transmission,
       said plurality of different exploded data
       transaction[s] indicative of a single data
       transaction, each of said exploded data
       transactions having different data that is
       intended for a different destination that is
       included as part of the exploded data
       transactions, and each of said exploded da-
       ta transactions formed based on said data
       transaction information from said single
       transmission, so that different data from
       the single data transmission is separated
       and sent to different destinations; and
    sending said different exploded data transac-
      tions over a channel to said different desti-
      nations, all based on said data transaction
      information entered in said single trans-
      mission.
’060 patent col. 24 ll. 40–57. These steps require obtaining
data, “exploding” the data, i.e., separating it into compo-
nent parts, and sending those parts to different destina-
tions. The court found that the subject matter of the ’060
patent was “nothing more than a disembodied concept of
data sorting and storage” and granted summary judgment
of invalidity under § 101. CyberFone Sys., LLC v. Cellco
P’ship, 885 F. Supp. 2d 710, 719 (D. Del. 2012). Cyberfone
appealed.
    We have jurisdiction pursuant to 28 U.S.C.
§ 1295(a)(1). We review the grant of a summary judgment
de novo. United States v. Great Am. Ins. Co. of N.Y., 738
F.3d 1320, 1329 (Fed. Cir. 2013). Section 101 patent
eligibility is a question of law that we review de novo.
Bancorp Servs. v. Sun Life Assurance Co. of Can., 687
F.3d 1266, 1273 (Fed. Cir. 2012).
6             CYBERFONE SYSTEMS v. CNN INTERACTIVE GROUP

                        DISCUSSION
    An inventor may obtain a patent 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 established that
section 101 impliedly bars patents on “‘laws of nature,
natural phenomena, and abstract ideas.’” Mayo Collabo-
rative Servs. v. Prometheus Labs., Inc., 132 S. Ct. 1289,
1293 (2012) (alteration in original removed) (quoting
Diamond v. Diehr, 450 U.S. 175, 185 (1981)). The Court
has explained that “‘[a] principle, in the abstract, is a
fundamental truth; an original cause; a motive; these
cannot be patented, as no one can claim in either of them
an exclusive right.’” Bilski v. Kappos, 130 S. Ct. 3218,
3230 (2010) (alteration in original) (quoting Gottschalk v.
Benson, 409 U.S. 63, 67 (1972) (internal quotation marks
omitted)); see also Mayo, 132 S. Ct. at 1301 (“‘the basic
tools of scientific and technological work’” are not patent-
able (quoting Benson, 409 U.S. at 67)).
     Patents that merely claim well-established, funda-
mental concepts fall within the category of abstract ideas.
See Bilski, 130 S. Ct. at 3231 (“‘Hedging is a fundamental
economic practice long prevalent in our system of com-
merce and taught in any introductory finance class.’”
(quoting In re Bilski, 545 F.3d 943, 1013 (Fed. Cir. 2008)
(Rader, J., dissenting), aff’d sub nom. Bilski, 130 S. Ct.
3218 (2010))). Applying that rule, the Supreme Court has
rejected an attempt to patent the basic concept of hedging
risk. Id. Our court as well has held that other basic con-
cepts are not patent-eligible. See, e.g., Fort Props., Inc. v.
Am. Master Lease LLC, 671 F.3d 1317, 1318, 1322–23
(Fed. Cir. 2012) (enabling tax-free property exchanges);
Bancorp, 687 F.3d at 1277 (administering and tracking
life insurance policy values); Dealertrack, Inc. v. Huber,
674 F.3d 1315, 1330–34 (Fed. Cir. 2012) (applying for
credit); CyberSource Corp. v. Retail Decisions, Inc., 654
CYBERFONE SYSTEMS v. CNN INTERACTIVE GROUP                7

F.3d 1366, 1367–68, 1376–77 (Fed. Cir. 2011) (verifying
credit card transactions); In re Comiskey, 554 F.3d 967,
970–71, 981 (Fed. Cir. 2009) (conducting arbitration); In
re Schrader, 22 F.3d 290, 291, 293–94 (Fed. Cir. 1994)
(bidding at an auction).
      Claim 1 recites steps of (1) “obtaining data transac-
tion information entered on a telephone from a single
transmission from said telephone;” (2) “forming a plurali-
ty of different exploded data transactions . . . formed
based on said data transaction information from said
single transmission, so that different data from the single
data transmission is separated and sent to different
destinations;” and (3) “sending said different exploded
data transactions . . . to said different destinations, all
based on said data transaction information entered in
said single transmission.” ’060 patent col. 24 ll. 41–57. 1
We agree with the district court that the ’060 patent
involves an abstract idea, as in Bilski. Like protecting
against risk, using categories to organize, store, and
transmit information is well-established. Here, the well-
known concept of categorical data storage, i.e., the idea of
collecting information in classified form, then separating
and transmitting that information according to its classi-
fication, is an abstract idea that is not patent-eligible.

   1     Cyberfone argues that claim construction must
precede the § 101 analysis, but does not explain which
terms require construction or how the analysis would
change. It merely points to claim language that we con-
sider here. There is no requirement that the district court
engage in claim construction before deciding § 101 eligi-
bility. See Bancorp, 687 F.3d at 1273 (“[W]e perceive no
flaw in the notion that claim construction is not an invio-
lable prerequisite to a validity determination under
§ 101.”).
8             CYBERFONE SYSTEMS v. CNN INTERACTIVE GROUP

    Nonetheless, Cyberfone argues that the subject mat-
ter of the ’060 patent cannot be an abstract idea because a
human, unaided by devices, could not perform the steps
recited in claim 1. Although methods that can be per-
formed in the human mind alone are not eligible for
patent protection, Cybersource, 654 F. 3d at 1373, the
category of patent-ineligible abstract ideas is not limited
to methods that can be performed in the human mind. See
Bilski, 130 S. Ct. at 3230 (“[T]he prohibition against
patenting abstract ideas ‘cannot be circumvented by
attempting to limit the use of the formula to a particular
technological environment’ . . . .”(quoting Diamond v.
Diehr, 450 U.S. 175, 191–92 (1981))).
    Finding the abstract idea itself to be ineligible subject
matter is not the end of the inquiry. See Mayo, 132 S. Ct.
at 1297 (“[D]o the patent claims add enough . . . to allow
the processes they describe to qualify as patent-eligible
processes that apply natural laws?”). The second step in
the § 101 analysis requires determining whether “‘addi-
tional substantive limitations . . . narrow, confine, or
otherwise tie down the claim so that, in practical terms, it
does not cover the full abstract idea itself.’” Accenture
Global Servs., GmbH v. Guidewire Software, Inc., 728
F.3d 1336, 1341 (Fed. Cir. 2013) (quoting CLS Bank Int’l
v. Alice Corp. Pty. Ltd., 717 F.3d 1269, 1282 (Fed. Cir.
2013) (citing Mayo, 132 S. Ct. at 1300; Bilski, 130 S. Ct. at
3231; Diehr, 450 U.S. at 187)).
   Cyberfone argues that claim 1 2 is sufficiently limited
by the machinery it requires and transformations it

    2  In the district court, Cyberfone did not preserve
arguments concerning claim 18 (except to the extent that
the same arguments apply to claim 1). In its summary
judgment brief, Cyberfone described claim 1 as “the
exemplary claim in the complaints,” and only mentioned
CYBERFONE SYSTEMS v. CNN INTERACTIVE GROUP                    9

effects, which Bilski recognizes is a “useful and important
clue” to patentability. 130 S. Ct. at 3227. We have held
that a process is patent-eligible if it is “tied to a particular
machine or apparatus” or “transforms a particular article
into a different state or thing.” SiRF Tech. v. Int’l Trade
Comm’n, 601 F. 3d 1319, 1332 (Fed. Cir. 2010) (internal
quotations omitted). For “a machine to impose a meaning-
ful limit . . . it must play a significant part in permitting
the claimed method to be performed.” Id. at 1333. By
contrast, “simply implementing an abstract concept on a
computer, without meaningful limitations to that concept,
does not transform a patent-ineligible claim into a patent-
eligible one.” Accenture, 728 F.3d at 1345.
    Cyberfone asserts that the method of claim 1 requires
a “telephone,” and that it is a specific machine that plays
an integral role in the method. But the specification
explains that “[w]hen in telephone mode, the telephone
operates in a conventional manner.” ’060 patent col. 2 ll.
63–65. The telephone can only obtain data “in the trans-
action entry mode, [when] menus are used to navigate the
user to forms which facilitate the entry of data.” ’060
patent col. 1 ll. 34–35. Thus, the telephone does not obtain
data when it is functioning as a telephone, only when in
an unclaimed mode of operation. Moreover, the recited
telephone can be a range of different machines: “a conven-
tional telephone,” ’060 patent col. 2, l. 61; “a portable
telephone,” ’060 patent col. 2 l. 57; “a battery operated
portable device which is a cross between a laptop comput-
er and a cellular telephone,” ’060 patent col. 13 ll. 24–25.
The “telephone” recited in claim 1 is not a specific ma-
chine, and adds nothing of significance to the claimed

claim 18 in a footnote. J.A. 238. In the footnote, Cyberfone
made no substantive arguments that would differentiate
claim 18 from claim 1.
10           CYBERFONE SYSTEMS v. CNN INTERACTIVE GROUP

abstract idea. Cyberfone also asserts that the reference in
claim 1 to sending exploded data transactions over a
channel “requires an additional specific machine.” Appel-
lant’s Br. at 30. However, Cyberfone provides no guidance
as to what particular machine is required to perform the
function of the recited channel.
    Cyberfone next argues that the claims are sufficiently
limited by the transformation that results from “explod-
ing” data transactions, i.e., sending information, in whole
or in part, gathered from one source to different destina-
tions. We have held that “the mere collection and organi-
zation of data . . . is insufficient to meet the
transformation prong of the test.” Cybersource, 654 F. 3d
at 1370. Here, the exploding step effects no meaningful
transformation because it merely makes the originally-
gathered information accessible to different destinations
without changing the content or its classification. Nor
does the particular configuration of steps—obtaining,
separating, and then sending information—confer patent-
ability. As in Mayo, the “ordered combination adds noth-
ing” because it follows from the underlying idea of
categorical information storage. 132 S. Ct. at 1298.
    We agree with the district court that the ’060 patent
claims ineligible subject matter—an abstract idea—and
that the patent is invalid under § 101.
                      AFFIRMED