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Abstract Idea Needs More Than Generic Functional Language

Posted by James Juo | Feb 22, 2023 | 0 Comments

Under the “Alice” test, a claim falls outside § 101 if (1) it is directed to a patent-ineligible concept like an abstract idea, and (2) lacks elements sufficient to transform the claim into a patent-eligible application. SAP Am., Inc. v. InvestPic, LLC, 898 F.3d 1161, 1166–67 (Fed. Cir. 2018) (granting Rule 12(c) motion finding that patent claims directed to “performing statistical analysis” were not directed to patent-eligible subject matter).

Hawk Tech. Sys., LLC v. Castle Retail, LLC

Hawk Technology Systems, LLC sued Castle Retail, LLC in the Western District of Tennessee for patent infringement based on Castle Retail's use of security surveillance video operations in its grocery stores. Hawk Tech. Sys., LLC v. Castle Retail, LLC, No. 22-1222 (Fed. Cir. Feb. 17, 2023). The patent-in-suit was directed to “high-quality, reduced data rate streaming video product and monitoring system.”

The district court granted a Rule 12(b)(6) motion dismissing the patent infringement action under Section 101. Hawk then appealed the dismissal to the Federal Circuit.

Alice Step One

With respect to the first step of Alice, the Federal Circuit agreed with the district court that the patent claims were directed to the abstract idea of “storing and displaying video.”

            The claims are directed to a method of receiving, displaying, converting, storing, and transmitting digital video “using result-based functional language.” Two-Way Media Ltd. v. Comcast Cable Commc'ns, LLC, 874 F.3d 1329, 1337 (Fed. Cir. 2017). They require the functional results of . . . “converting one or more of the video source images into a selected video format,” . . . .

Encoding and decoding image data, and converting formats, “are by themselves abstract ideas.” Adaptive Streaming Inc. v. Netflix, Inc., 836 F. App'x 900, 903 (Fed. Cir. 2020) (collecting cases).

Hawk contended that the patent provides a solution for “a multi-format digital video product system” to the technical problem of “conserving bandwidth while preserving data.” Hawk argued that its solution was a “specific implementation,” which can be achieved “by performing special data conversion of the video streams” and by digitizing and converting data to “change the nature of the data.”

The Federal Circuit, however, found that the claims themselves do not disclose performing any “special data conversion” or otherwise describe how the alleged goal of “conserving bandwidth while preserving data” is achieved.

Nor, as the district court found, do the claims (or the specification) explain “what th[e] [claimed] parameters are or how they should be manipulated.”

The claims failed to recite how the purported invention improves the functionality of video surveillance systems. Instead, the claims were “at such a level of result-oriented generality” that they amount to “a mere implementation of an abstract idea.”

Alice Step Two

As for Alice step two, Federal Circuit also agreed with the district court that the claim limitations can be implemented using generic computer elements, and that the “specification and claims do not explain or show how the monitoring and storage is improved, except by using already existing computer and camera technology.”

            Hawk argues that the claims recite an inventive solution—one “that achieves . . . the benefit of transmitting the same digital image to different devices for different and perhaps divergent purposes, while using the same bandwidth,” and that “reference[s] specific tools (such as an analog-to-digital converter, where necessary), specific parameters (such as three different sets of temporal and spatial parameters), and even specific frame rates (such as 24 frames per second).” Appellant's Br. 31–32 (citing '091 patent at claim 1 and claim 6). But even if the claims achieved this purported solution, they “only use[] generic functional language to” do so and require nothing “other than conventional computer and network components operating according to their ordinary functions” (e.g., a “personal computer,” “storage device,” “external viewing device,” etc.). Two-Way Media, 874 F.3d at 1339 (citation omitted).

            We recognize that the claims include “parameters.” But the claims fail to specify precisely what the parameters are and the parameters at most concern abstract data manipulation—image formatting and compression. Hawk does not dispute that the claims recite conventional components . . . . Simply stated, “[n]othing in the claims, understood in light of the specification, requires anything other than off-the-shelf, conventional computer, network, 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).

The Federal Circuit concluded that the claims of the patent-in-suit fail to transform the abstract idea into something more.

Professor Crouch has stated that this case “highlights the current state of the law.”

Thomas P. Howard, LLC litigates patents nationwide including in Colorado.

About the Author

James Juo

James Juo is an experienced intellectual property attorney. He has successfully litigated various intellectual property disputes involving patents, trademarks, copyrights, and trade secrets. He also has counseled clients on the scope and validity of patent and trademark rights.


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