Court Opinion

ID: 4245923
Source: CourtListenerOpinion
Date Created: 2018-02-16 17:00:43.076148+00
Date Added: 2024-06-11T14:16:47.682523
License: Public Domain

NOTE: This disposition is nonprecedential.

  United States Court of Appeals
      for the Federal Circuit
                ______________________

   AUTOMATED TRACKING SOLUTIONS, LLC,
             Plaintiff-Appellant

                           v.

           THE COCA-COLA COMPANY,
                Defendant-Appellee
              ______________________

                      2017-1494
                ______________________

   Appeal from the United States District Court for the
Northern District of Georgia in No. 1:15-cv-04348-WSD,
Judge William S. Duffey, Jr.
                ______________________

              Decided: February 16, 2018
               ______________________

   ROBERT EVAN SOKOHL, Sterne Kessler Goldstein &
Fox, PLLC, Washington, DC, argued for plaintiff-
appellant. Also represented by NIRAV DESAI, LORI A.
GORDON, PAULINE PELLETIER.

   SCOTT J. PIVNICK, Alston & Bird LLP, Washington,
DC, argued for defendant-appellee. Also represented by
ALAN SHANE NICHOLS, SIRAJ M. ABHYANKAR, Atlanta, GA.
                ______________________
2        AUTOMATED TRACKING SOLS., LLC   v. THE COCA-COLA CO.

    Before MOORE, WALLACH, and STOLL, Circuit Judges.
STOLL, Circuit Judge.
    The Coca-Cola Company moved for judgment on the
pleadings that Automated Tracking Solutions, LLC’s
(“ATS’s”) asserted claims are not directed to patent-
eligible subject matter under 35 U.S.C. § 101 (2012). The
district court granted Coca-Cola’s motion and ATS ap-
peals. Given the specific facts in the record before us,
including the patentee’s admissions, we affirm the district
court’s judgment of ineligibility.
                        BACKGROUND
    Dr. Fred H. Sawyer is the founder and owner of ATS
and the sole named inventor on all four patents ATS
asserts against Coca-Cola: U.S. Patent Nos. 7,551,089;
7,834,766; 8,842,013; and 8,896,449 (collectively, “Assert-
ed Patents”). As defined in ATS’s own complaint, the
patents are directed to “inventory control.” J.A. 225 ¶ 11;
see J.A. 225–34 (“Am. Compl.”). ATS argued that, conven-
tionally, inventory control processes had been performed
by hand or not all. Id. ¶¶ 11, 12. Dr. Sawyer sought to
integrate radio frequency identification (“RFID”) technol-
ogy into these manual processes. To this end, he “de-
signed and built an operable system for performing
[inventory control] functions” that was the genesis of the
Asserted Patents. Id. ¶ 14.
   All four Asserted Patents are titled “Method and Ap-
paratus for Tracking Objects and People” and share a
common specification. 1 As ATS explains in its complaint,

     1  The ’013 and ’449 patents are continuations of the
applications that led to the ’766 patent, which in turn is a
continuation of the application that led to the ’089 patent.
For ease of reference, we cite the ’089 patent when dis-
cussing the common specification.
AUTOMATED TRACKING SOLS., LLC   v. THE COCA-COLA CO.       3

the Asserted Patents relate to processes and systems to
perform the functions of “identification, tracking, location,
and/or surveillance of tagged objects anywhere in a facili-
ty or area.” Id. ¶¶ 14. The common specification states
that prior art inventory control systems had significant
drawbacks and that the claimed invention “reduce[s]
human responsibility” and provides “an automatic locat-
ing and tracking system.” ’089 patent col. 1 ll. 48, 63.
     To achieve this, Dr. Sawyer incorporated RFID tech-
nology into his claimed invention. RFID is “a means of
storing and retrieving data through electromagnetic
transmission to a radio frequency compatible integrated
circuit.” Id. at col. 3 ll. 8–10. As to hardware, an RFID
system could be as simple as just three components: a
scanner, 2 a transponder, and a computer. Id. at col. 3
ll. 10–12. Indeed, at the time of the invention, various
companies, including Microchip, SCS, Intermec, and
Texas Instruments, were already manufacturing RFID
products and providing a great deal of explanatory mate-
rial. Id. at col. 3 ll. 5–7. According to the specification,
the inventions used RFID technology, computer pro-
gramming, database applications, networking technolo-
gies, and hardware elements to achieve the stated goal of
locating, identifying, tracking, and surveilling objects. Id.
at col. 2 ll. 45–50.
    With this understanding of the common specification,
we turn to the claims. In a § 101 analysis, courts may
evaluate representative claims. See Content Extraction &
Transmission LLC v. Wells Fargo Bank, Nat’l Ass’n,
776 F.3d 1343, 1348 (Fed. Cir. 2014). To that end, ATS
identified four representative claims in its Opposition to
Defendant’s Motion for Judgment on the Pleadings—one
independent claim to represent each patent: claim 49 of

    2  ATS uses “reader” and “scanner” interchangeably.
See Appellant Br. 5 n.3.
4       AUTOMATED TRACKING SOLS., LLC   v. THE COCA-COLA CO.

the ’089 patent; claim 1 of the ’766 patent; claim 1 of the
’013 patent; and claim 1 of the ’449 patent. 3 J.A. 1168–70.
    The district court, however, adopted Coca-Cola’s pro-
posal to select only two of the above claims as representa-
tive claims: (1) claim 49 of the ’089 patent to represent the
claims of the ’089 and ’013 patents; and (2) claim 1 of the
’766 patent to represent the claims of the ’766 and ’449
patents. ATS conceded at oral argument that the district
court’s selection of these two representative claims was
proper. Oral Arg. at 35:25–32, http://oralarguments.cafc.
uscourts.gov/default.aspx?fl=2017-1494.mp3.        ATS also
conceded that the district court’s decision not to analyze
ATS’s two additional proposed representative claims
(claim 1 of the ’013 patent and claim 1 of the ’449 patent)
did not affect the § 101 analysis. Id. at 35:32–42. Accord-
ingly, we restrict our analysis to the claims ATS agrees
are representative: claim 49 of the ’089 patent and claim 1
of the ’766 patent.
    Representative claim 1 of the ’766 patent recites:
    1. A system for locating, identifying and/or track-
    ing of an object, the system comprising:
        a first transponder associated with the ob-
        ject;
        a reader that is configured to receive first
        transponder data via a radio frequency
        (RF) signal from the first transponder;

    3   ATS’s complaint lists its asserted claims as “in-
cluding, but not limited to” these four enumerated claims.
The parties have not disputed that invalidation of these
four asserted claims—or even the two analyzed claims
discussed below—would support the district court’s grant
of judgment on the pleadings in this case.
AUTOMATED TRACKING SOLS., LLC   v. THE COCA-COLA CO.      5

       an antenna in communication with the
       reader and having a first coverage area;
       a processor coupled to the reader, wherein
       the processor is configured to receive the
       first transponder data from the reader and
       to generate detection information based on
       the received first transponder data, the
       detection information comprising first
       sighting and last sighting of the first tran-
       sponder in the first coverage area; and
       a storage device that is configured to store
       the detection information.
’766 patent col. 20 l. 58 – col. 21 l. 6 (emphases added). 4
The district court granted Coca-Cola’s motion for judg-
ment on the pleadings that all asserted claims are patent-
ineligible under § 101. Automated Tracking Sols., LLC v.
Coca-Cola Co., 223 F. Supp. 3d 1278, 1292 (N.D. Ga.
2016) (“Ineligibility Op.”) (citing Alice Corp. Pty. v. CLS
Bank Int’l, 134 S. Ct. 2347, 2355 (2014)). Under Alice
step one, the district court concluded that the representa-
tive claims were directed to the patent-ineligible abstract
idea of “collecting data, analyzing it, and determining the
results based on the analysis of data.” Id. at 1289. The
district court determined under Alice step two that the
claims lacked an inventive concept because nothing in the
claim limitations or their ordered combination was suffi-
cient to transform the abstract idea into a patent-eligible
application. Id. at 1290. Accordingly, the district court
held all four patents ineligible under § 101.
   ATS appeals.      We have jurisdiction pursuant to
28 U.S.C. § 1295(a)(1).

   4   For reasons explained below, we do not recite rep-
resentative claim 49 of the ’089 patent in full here.
6      AUTOMATED TRACKING SOLS., LLC   v. THE COCA-COLA CO.

                       DISCUSSION
    We apply the procedural law of the regional circuit
when reviewing a district court’s grant of a motion for
judgment on the pleadings under Federal Rule of Civil
Procedure 12(c). Merck & Co. v. Hi–Tech Pharmacal Co.,
482 F.3d 1317, 1320 (Fed. Cir. 2007). The Eleventh
Circuit reviews a grant of judgment on the pleadings de
novo. Cannon v. City of W. Palm Beach, 250 F.3d 1299,
1301 (11th Cir. 2001). “Judgment on the pleadings is
appropriate where there are no material facts in dispute
and the moving party is entitled to judgment as a matter
of law.” Perez v. Wells Fargo N.A., 774 F.3d 1329, 1335
(11th Cir. 2014) (internal quotation marks and citation
omitted). “In determining whether a party is entitled to
judgment on the pleadings, we accept as true all material
facts alleged in the non-moving party’s pleading, and we
view those facts in the light most favorable to the non-
moving party.” Id. We must deny a judgment on the
pleadings if a comparison of the averments in the compet-
ing pleadings reveals a material dispute of fact. Id.
    Patent eligibility under § 101 is a question of law that
may contain underlying issues of fact. See Berkheimer v.
HP Inc., No. 2017-1437, 2018 WL 774096, at *5 (Fed. Cir.
Feb. 8, 2018) (citing Mortg. Grader, Inc. v. First Choice
Loan Servs. Inc., 811 F.3d 1314, 1325 (Fed. Cir. 2016)).
We review the district court’s ultimate conclusion on
patent eligibility de novo. See Intellectual Ventures I LLC
v. Capital One Fin. Corp., 850 F.3d 1332, 1338 (Fed. Cir.
2017). We look to the test articulated in Alice to deter-
mine whether a claim is eligible for patenting under
§ 101. See 134 S. Ct. at 2355. Pursuant to Alice’s two-
part test, we decide first “whether the claims at issue are
directed to” a patent-ineligible concept, namely a law of
nature, natural phenomena, or abstract idea. Id. at 2354–
55. If the answer is yes, we then consider the claim
elements, both individually and as an ordered combina-
tion, to determine whether they contain an “inventive
AUTOMATED TRACKING SOLS., LLC    v. THE COCA-COLA CO.     7

concept” sufficient to “‘transform the nature of the claim’
into a patent-eligible application.” Id. at 2355 (quoting
Mayo Collaborative Servs. v. Prometheus Labs., Inc.,
566 U.S. 66, 72–73, 78 (2012)).
     This case reminds us that we are a “court of review,
not of first view.” Cutter v. Wilkinson, 544 U.S. 709, 718
n.7 (2005). As a general rule, we cannot consider claims
and arguments that were not presented to the district
court. See Singleton v. Wulff, 428 U.S. 106, 120 (1976).
As discussed above, ATS limited its eligibility arguments
to certain representative independent claims, agreeing
that eligibility of the remaining claims would stand and
fall with those representative claims. See In re Kaslow,
707 F.2d 1366, 1376 (Fed. Cir. 1983). Thus, we must
confine our review to these representative claims.
                             I
     The Alice step-one analysis requires us to consider the
claims “in their entirety to ascertain whether their char-
acter as a whole is directed to excluded subject matter.”
Internet Patents Corp. v. Active Network, Inc., 790 F.3d
1343, 1346 (Fed. Cir. 2015). On their face, the repre-
sentative claims are directed to systems “for locating,
identifying and/or tracking of” an object using RFID
components. ’766 patent, claim 1; ’089 patent, claim 49.
The common specification further describes the back-
ground of the invention as related to “locating and track-
ing” objects, and that the claimed invention “reduce[s]
human responsibility” and provides “an automatic locat-
ing and tracking system.” ’089 patent col. 1 l. 15 – col. 2
l. 22. As discussed further below, the claims achieve this
by collecting data from sensors, analyzing that data, and
determining results based on the analysis of data. For
the reasons that follow, we conclude that the claims are
directed to an abstract idea under Alice step one.
    ATS’s primary argument is that the representative
claims are analogous to the patent-eligible claims in
8      AUTOMATED TRACKING SOLS., LLC   v. THE COCA-COLA CO.

Thales Visionix Inc. v. United States, 850 F.3d 1343 (Fed.
Cir. 2017). There, the claims recited a system for tracking
the motion of an object relative to a moving reference
frame, comprising inertial sensors mounted on the
tracked object and the moving reference frame, and a
third element to receive the sensors’ signals and deter-
mine the orientation of the object. See id. at 1345–46. We
found the claims patent-eligible under Alice step one
because they were “directed to systems and methods that
use inertial sensors in a non-conventional manner to
reduce errors in measuring the relative position and
orientation of a moving object on a moving reference
frame.” Id. at 1348–49; see id. at 1347 (explaining that
claims that function differently from “conventional”
technologies may be found non-abstract under step one
and citing Enfish LLC v. Microsoft Corp., 822 F.3d 1327,
1337 (Fed. Cir. 2016)).
    ATS argues that, like the claimed arrangement of
sensors in Thales, the claims here “specify a particular
configuration for using the electromagnetically transmit-
ted data to more accurately and systematically determine
the location, identity, and movement of transponders
among antenna coverage areas using specially pro-
grammed readers, storage devices, and processors config-
ured to perform those functions.” Appellant Br. 42
(emphases added). Our problem with ATS’s argument
does not lie with its contention that claims directed to
specialized components of an RFID system or a special-
ized arrangement of components in an RFID system
should be patent-eligible. Rather, our concerns lie with
ATS’s portrayal of the breadth of the representative
claims. The representative claims simply do not require a
particular configuration or arrangement of RFID system
components. Nor do the representative claims require
multiple antenna coverage areas. Some of the dependent
claims may well recite such elements, but our review is
limited to the representative claims.
AUTOMATED TRACKING SOLS., LLC   v. THE COCA-COLA CO.       9

     For example, representative claim 1 of the ’766 patent
is directed to an RFID system that detects and stores
transponder IDs and associated detection information to
determine the “first sighting and last sighting of the first
transponder in the first coverage area.” ’766 patent
col. 20 l. 57 – col. 21 l. 6 (claim 1). The system comprises
just a few elements: an antenna with a first coverage
area, a first transponder, a reader, a processor, and a
storage device. The claim does not recite any “particular
configuration” or specialized arrangement of the RFID
system components. It does not specify the relative
location of the claimed components. It only requires a
single antenna, and does not specify a particular configu-
ration for the antenna to achieve the allegedly more
systematic determination of the location, identity, and
movement of the transponders. See Appellant Br. 42. At
oral argument, ATS even conceded that all RFID anten-
nas have coverage areas, and that the claimed antenna in
representative claim 1 does not differ from conventional
RFID antennas in that regard. Oral Arg. at 6:23–50. For
these reasons, we conclude that claim 1 of the ’766 patent
is directed to an abstract idea under Alice step one.
    As to the second representative claim, claim 49 of the
’089 patent, ATS concedes that it does not claim a “cover-
age area.” Oral Arg. at 6:23–50. Nor does claim 49 recite
any additional elements beyond those found to be directed
to an abstract idea under our analysis of claim 1 of the
’766 patent. We thus conclude that claim 49 is also di-
rected to an abstract idea under Alice step one. Given the
record and ATS’s concession that the two claims analyzed
by the district court are representative of all the claims in
all four patents, we do not see any error in the district
court’s conclusion that the asserted claims are directed to
an abstract idea.
10      AUTOMATED TRACKING SOLS., LLC   v. THE COCA-COLA CO.

                             II
    Under the second step of the Alice analysis, we exam-
ine the claim limitations “more microscopically,” Electric
Power Group, LLC v. Alstom S.A., 830 F.3d 1350, 1354
(Fed. Cir. 2016), to determine whether they contain
“additional features” sufficient to “‘transform the nature
of the claim’ into a patent-eligible application.” Alice,
134 S. Ct. at 2355, 2357 (quoting Mayo, 566 U.S. at 78).
“Mere recitation of concrete, tangible components is
insufficient to confer patent eligibility to an otherwise
abstract idea. Rather, the components must involve more
than performance of well-understood, routine, conven-
tional activit[ies] previously known to the industry.” In re
TLI Commc’ns LLC Patent Litig., 823 F.3d 607, 613 (Fed.
Cir. 2016) (citing Alice, 134 S. Ct. at 2359 (internal quota-
tions omitted)).
    Our analysis of the representative claims here uncov-
ers no inventive concept in the individual claim limita-
tions or their ordered combination. The representative
claims are quite broad, reciting uses of RFID system
components recognized in the specification to be routine
and conventional. The claims do not use these conven-
tional RFID components in a non-conventional combina-
tion or arrangement. Instead, the claims merely disclose
collecting data from a particular source—RFID tran-
sponders—and analyzing that data. Whether we view the
claim elements individually or as an ordered combination,
the claims do not contain an inventive concept sufficient
to confer patent eligibility.
    ATS argues that, at the time of the invention, RFID
was a developing technology and that the district court
erred in resolving a disputed fact question—whether the
claims recite routine and conventional uses of an RFID
system—in Coca-Cola’s favor. We have held that “wheth-
er a claim element or combination of elements is well-
understood, routine and conventional to a skilled artisan
AUTOMATED TRACKING SOLS., LLC   v. THE COCA-COLA CO.    11

in the relevant field is a question of fact.” Berkheimer,
2018 WL 774096, at *5. Furthermore, we must accept all
plausible factual allegations in ATS’s complaint as true.
See FairWarning IP, LLC v. Iatric Sys., Inc., 839 F.3d
1089, 1097 (Fed. Cir. 2016). But the complaint alleges
nothing to support ATS’s contention that RFID was a
developing technology. See generally Am. Compl. Nor
does the complaint allege that any of the hardware com-
ponents in the representative claims—either alone or in
combination as a system—are anything but well-
understood, routine, and conventional. See id.
    Nor does the specification support ATS’s contention
that there is a factual dispute regarding whether the
claims recite routine and conventional RFID components.
We acknowledge that the specification states that “the
RFID technology employed by the present invention is a
rapidly developing technology.” ’089 patent col. 3 ll. 4–5.
But the specification also more pointedly indicates that
the recited components of the claimed RFID system were
conventional. Id. at col. 3 ll. 4–5, 10–12. Indeed, the
specification states that a conventional “simple RFID
system may be composed of three components: a scanner,
a transponder, and a computer.” Id. at col. 3 ll. 10–12.
These are the same conventional components recited in
the representative claims. On the record before us, it was
not improper for the district court to conclude that the
claims were ineligible on the pleadings. The complaint at
issue has no allegations, which when accepted as true,
would even create a factual issue, and ATS’s specification
indicates that the components of the claimed invention
are conventional.
     Because representative claim 49 of the ’089 patent is
broader than representative claim 1, we conclude that it
also does not add an inventive concept under Alice step
two. Given the record and ATS’s concession that the two
claims analyzed by the district court are representative of
all the claims in all four patents, we do not see any error
12      AUTOMATED TRACKING SOLS., LLC   v. THE COCA-COLA CO.

in the district court’s conclusion that the asserted claims
do not possess an inventive concept sufficient to confer
patent eligibility. Nor do we see any error in the district
court’s ultimate conclusion that the asserted claims are
directed to patent-ineligible subject matter under § 101.
                          CONCLUSION
     We have considered ATS’s remaining arguments and
find them unpersuasive. Our analysis in this appeal rests
heavily on ATS’s selection of representative claims and
admissions in oral argument. On these unique facts, we
affirm the district court’s grant of Coca-Cola’s motion for
judgment on the pleadings that the asserted claims of
ATS’s Asserted Patents are ineligible under § 101 because
they are directed to unpatentable subject matter.
                          AFFIRMED
                            COSTS
     Costs to Appellee.