Court Opinion

ID: 4180406
Source: CourtListenerOpinion
Date Created: 2017-06-23 15:06:08.598011+00
Date Added: 2024-06-11T09:36:38.450180
License: Public Domain

NOTE: This disposition is nonprecedential.

  United States Court of Appeals
      for the Federal Circuit
                ______________________

           PRISM TECHNOLOGIES LLC,
                Plaintiff-Appellant

                           v.

                T-MOBILE USA, INC.,
               Defendant-Cross-Appellant
                ______________________

                 2016-2031, 2016-2049
                ______________________

    Appeals from the United States District Court for the
District of Nebraska in No. 8:12-cv-00124-LES-TDT,
Senior Judge Lyle E. Strom.
                ______________________

                Decided: June 23, 2017
                ______________________

    PAUL J. ANDRE, Kramer Levin Naftalis & Frankel
LLP, Menlo Park, CA, argued for plaintiff-appellant. Also
represented by LISA KOBIALKA; MARK BAGHDASSARIAN,
JONATHAN CAPLAN, AARON M. FRANKEL, CRISTINA
MARTINEZ, New York, NY; ANDRE J. BAHOU, Prism Tech-
nologies, LLC, Brentwood, TN.

    DANIEL J. THOMASCH, Gibson, Dunn & Crutcher LLP,
New York, NY, argued for defendant-cross appellant. Also
represented by KATHERINE QUINN DOMINGUEZ, JOSH
2               PRISM TECHNOLOGIES LLC   v. T-MOBILE USA, INC.

KREVITT; JORDAN BEKIER, BLAINE H. EVANSON, Los Ange-
les, CA.
               ______________________

    Before PROST, Chief Judge, LOURIE and SCHALL, Circuit
                           Judges.
PROST, Chief Judge.
    Prism Technologies LLC appeals from a final decision
of the United States District Court for the District of
Nebraska denying its motions for new trial and judgment
as a matter of law. T-Mobile USA, Inc. cross-appeals the
district court’s final decision denying its motions for
judgment as a matter of law. We affirm-in-part and
reverse-in-part the district court’s order as it relates to T-
Mobile’s issues on cross-appeal and dismiss Prism’s
appeal as moot.
                              I
    These appeals involve U.S. Patent Nos. 8,127,345 and
8,387,155 (collectively, “patents-in-suit”). The ’155 patent
is a continuation of the ’345 patent. Both patents relate
generally to security systems for use with computer
networks that provide a secure transaction system
adapted for use with untrusted networks, such as the
Internet. ’345 patent col. 1 ll. 15–19. Claim 1 of the ’345
patent is representative: 1
      1. A method for controlling access, by at least
      one authentication server, to protected computer
      resources provided via an Internet Protocol net-
      work, the method comprising:

      1 Prism does not dispute that claim 1 of the ’345 pa-
tent is representative, at least for the purposes of its
appeal. Appellant’s Br. 15.
PRISM TECHNOLOGIES LLC     v. T-MOBILE USA, INC.                 3

    receiving, at the at least one authentication server
        from at least one access server, identity data
        associated with at least one client computer
        device, the identity data forwarded to the at
        least one access server from the at least one
        client computer device with a request from the
        at least one client computer device for the pro-
        tected computer resources;
    authenticating, by the at least one authentication
       server, the identity data received from the at
       least one access server, the identity data being
       stored in the at least one authentication serv-
       er;
    authorizing, by the at least one authentication
       server, the at least one client computer device
       to receive at least a portion of the protected
       computer resources requested by the at least
       one client computer device, based on data as-
       sociated with the requested protected comput-
       er resources stored in at least one database
       associated with the at least one authentication
       server; and
    permitting access, by the at least one authentica-
       tion server, to the at least the portion of the
       protected computer resources upon successful-
       ly authenticating the identity data and upon
       successfully authorizing the at least one client
       computer device.
Id. at col. 34 ll. 17–42. The invention thus relates to
systems and methods that control access to protected
computer resources by authenticating identity data, i.e.,
unique identifying information of computer components.
Id. at col. 1 l. 60–col. 2 l. 24; see also id. at col. 34 ll. 49–51
(claim 5) (reciting identity data of “hardware compo-
nents”). If the authentication server successfully authen-
ticates the client computer and determines that it is
4              PRISM TECHNOLOGIES LLC   v. T-MOBILE USA, INC.

authorized, the system provides protected computer
resources to that device over an untrusted network, such
as the Internet. Id. at col. 3 ll. 47–64.
     Prism sued T-Mobile for infringement of the patents-
in-suit in the district court. After filing its answer and
counterclaims, T-Mobile moved for summary judgment of
patent ineligibility under 35 U.S.C. § 101, and Prism
cross-moved for summary judgment of patent eligibility.
The court granted Prism’s motion, denied T-Mobile’s, and
the case proceeded to trial. Finding in T-Mobile’s favor,
the jury rendered a verdict of non-infringement of all
asserted claims. J.A. 50–52. Prism moved for a new trial,
citing what it perceived as T-Mobile’s attempts to “con-
fuse[] and misle[a]d the jury” by rearguing the court’s
claim construction. J.A. 38746. Additionally, it filed a
motion for judgment as a matter of law (“JMOL”) of
infringement. T-Mobile similarly moved for JMOL on two
motions, one seeking an exceptional-case finding under 35
U.S.C. § 285 and the other for patent ineligibility under
35 U.S.C. § 101. The court denied all post-verdict motions
and these appeals followed. We have jurisdiction under 28
U.S.C. § 1295(a)(1).
                            II
    On appeal, Prism asks the court to vacate the verdict
and remand for a new trial on the issue of infringement.
On cross-appeal, T-Mobile seeks a reversal of the district
court’s finding of subject-matter eligibility under § 101
and its denial of T-Mobile’s request for an exceptional-
case finding under § 285. We turn first to T-Mobile’s
cross-appeal.
                            A
    Patent eligibility under 35 U.S.C. § 101 is an issue of
law reviewed de novo. Accenture Glob. Servs., GmbH v.
Guidewire Software, Inc., 728 F.3d 1336, 1340–41 (Fed.
Cir. 2013). To determine patent eligibility, we apply a
PRISM TECHNOLOGIES LLC   v. T-MOBILE USA, INC.              5

two-step process under Alice Corp. Party v. CLS Bank
International, 134 S. Ct. 2347, 2355 (2014). See also
Affinity Labs of Tex., LLC v. DIRECTV, LLC, 838 F.3d
1253, 1257 (Fed. Cir. 2016) (referring to step one as the
“abstract idea” step and step two as the “inventive con-
cept” step). We review denial of JMOL motions under
regional circuit law—here, the Eighth Circuit. See Revolu-
tion Eyewear, Inc. v. Aspex Eyewear, Inc., 563 F.3d 1358,
1370 (Fed. Cir. 2009). The Eighth Circuit reviews a dis-
trict court’s denial of a motion for JMOL de novo. See
Walsh v. Nat’l Comput. Sys., Inc., 332 F.3d 1150, 1158
(8th Cir. 2003).
     On cross-appeal, T-Mobile argues that the asserted
claims recite ineligible subject matter because they:
(1) are directed to the abstract idea of controlling access to
resources; and (2) are non-inventive because they recite
generic computer hardware running generic computer
software that performs the abstract functions routine to
the process of restricting access. We agree.
     Under step one, the district court properly concluded
that the asserted claims are directed to the abstract idea
of “providing restricted access to resources.” J.A. 32.
Although Prism contends that these claims cover a con-
crete, specific solution to a real-world problem, it does not
proffer a persuasive argument in support of this conclu-
sion. As T-Mobile correctly observes, the asserted claims
are directed to an abstract process that includes:
(1) receiving identity data from a device with a request for
access to resources; (2) confirming the authenticity of the
identity data associated with that device; (3) determining
whether the device identified is authorized to access the
resources requested; and (4) if authorized, permitting
access to the requested resources. See Cross-Appellant’s
Principal & Resp. Br. 57–59 (“T-Mobile Response”)
(providing various pre-computer-age corollaries for which
humans similarly restrict and provide access to re-
sources). The patents-in-suit thus are directed to the
6              PRISM TECHNOLOGIES LLC   v. T-MOBILE USA, INC.

abstract idea of “providing restricted access to resources.”
See In re TLI Commc’ns LLC Patent Litig., 823 F.3d 607,
613 (Fed. Cir. 2016); Intellectual Ventures I LLC v. Capi-
tal One Bank (USA), 792 F.3d 1363, 1367 (Fed. Cir. 2015).
    Turning to step two, the district court concluded that
the asserted claims “include inventive concepts to ensure
that [the] patents in practice are more than just patents
on restricting access to resources” because they “modify
the way the Internet functions to provide secure access
over a protected computer resource.” J.A. 34. Here, the
district court erred. The asserted claims merely recite a
host of elements that are indisputably generic computer
components. See ’345 patent col. 34 ll. 17–42 (claim 1)
(requiring an “authentication server,” “access server,”
“Internet Protocol network,” “client computer device,” and
“database”). Shifting the focus away from these generic
components, Prism points to the recited “identity data”
(such as a hardware identifier), the inclusion of which, it
contends, “represents a specific and novel solution to a
real problem and provides real benefits.” Appellant’s
Reply & Cross-Appeal Resp. Br. 24. According to Prism,
by combining these components with hardware identity
data, the asserted claims “yield[] a novel, effective solu-
tion to real-world problems, which industry came to adopt
several years after Prism’s inventions.” Id. at 50. But this
does not rise to the level of an inventive concept.
    The patents-in-suit themselves demonstrate the con-
ventional nature of these hardware identifiers. See, e.g.,
’345 patent col. 19 ll. 5–29 (citing third-party conventional
identifiers). And there is no indication that their inclusion
produces “a result that overrides the routine and conven-
tional” use of this known feature. DDR Holdings, LLC v.
Hotels.com, L.P., 773 F.3d 1245, 1258 (Fed. Cir. 2014).
Viewed as an ordered combination, the asserted claims
recite no more than the sort of “perfectly conventional”
generic computer components employed in a customary
manner that we have previously held insufficient to
PRISM TECHNOLOGIES LLC   v. T-MOBILE USA, INC.            7

transform the abstract idea into a patent-eligible inven-
tion. Intellectual Ventures I LLC v. Symantec Corp., 838
F.3d 1307, 1321 (Fed. Cir. 2016). Because these claims
fail step two as well, we conclude that they recite patent-
ineligible subject matter under § 101. 2 Accordingly, we
reverse the district court’s § 101 ruling.
                             B
    Next, we turn to T-Mobile’s challenge regarding the
court’s denial of an exceptional-case finding under 35
U.S.C. § 285. An exceptional case is “simply one that
stands out from others with respect to the substantive
strength of a party’s litigating position (considering both
the governing law and the facts of the case) or the unrea-
sonable manner in which the case was litigated.” Octane
Fitness, LLC v. Icon Health & Fitness, Inc., 134 S. Ct.
1749, 1756 (2014). District courts determine whether a
case is exceptional on a case-by-case basis, considering
the totality of the circumstances. Id. On appeal, we review
for an abuse of discretion. Highmark Inc. v. Allcare
Health Mgmt. Sys., Inc., 134 S. Ct. 1744, 1747 (2014).
    T-Mobile advances three grounds to support its theory
that the district court erred: First, it argues that Prism’s
case “was exceptionally weak” based on its infringement
theory and assertion of claims that cover patent-ineligible
subject matter under § 101, T-Mobile Response 67–69;
second, that Prism deliberately elicited testimony to
obscure the facts that demonstrate non-infringement, id.
at 70–73; and third, that Prism presented an entirely new
and unsupported infringement theory during closing
argument, id. at 74–75. For these reasons, T-Mobile
contends that the district court abused its discretion by
denying its motion. We disagree.

   2     Having concluded that the asserted claims are in-
eligible under § 101, we dismiss Prism’s appeal as moot.
8              PRISM TECHNOLOGIES LLC   v. T-MOBILE USA, INC.

    T-Mobile’s decision to forego summary judgment of
non-infringement belies its arguments regarding the
purported weakness of Prism’s infringement position. And
its explanation that it elected “to build a trial record”
instead does not provide a credible justification for this
decision. Cross-Appellant’s Reply Br. 18 n.3; see also
Oral Arg. 27:55–28:05, http://oralarguments.cafc.uscourts.
gov/mp3/2016-2031.mp3 (observing that the judge would
have denied its motion by indicating that factual disputes
remain). Further, when previously asserting these pa-
tents, Prism prevailed twice against T-Mobile’s competi-
tors, withstanding non-infringement and validity
defenses. This weighs in Prism’s favor as well. Finally,
although we reverse the district court’s patent-eligibility
determination here, that alone does not demonstrate that
it abused its discretion when determining that T-Mobile
was not entitled to a § 285 exceptional-case finding under
these particular facts. We thus affirm the court’s § 285
ruling.

                          CONCLUSION
     We reverse the district court on § 101 patent eligibil-
ity, affirm its denial of an exceptional-case determination
under § 285, and dismiss Prism’s appeal as moot.
    AFFIRMED-IN PART, REVERSED-IN-PART, AND
              DISMISSED-IN-PART
                            COSTS
     Costs to T-Mobile.