By Michael Borella —
There is a theme running through many patent-eligibility disputes that is analogous to baiting-and-switching. One party has claims that recite an invention. The other party characterizes those claims at a high level or generalizes them to the point that much of the actual claim language is largely ignored. Then, the other party argues that the claims as generalized — their patent-eligibility alter ego — are invalid under 35 U.S.C. § 101 for whatever reason.
This technique can be remarkably effective. It is also intellectually dishonest, as the thing that is rendered invalid is not what the patentee has claimed, it is the alter ego. But the alleged invalidity of a claim's alter ego is imputed to the actual claim. Thus, a claim can be invalid if it can be made to look like something that is invalid, rather than actually being invalid itself. In the worst case, an otherwise valid claim can be rendered invalid through this argumentative technique.
One might think that patent challengers would not get away with such pulling of the wool over a court's eyes very often. But that would be incorrect. This dubious practice has been a winning argument in the Federal Circuit so many times that it is now firmly baked into § 101 jurisprudence.
Case in point, Repifi sued Intellicentrics in the Eastern District of Texas, alleging infringement of U.S. Patent No. 10,304,268. The District Court found the claims ineligible for patenting under § 101, and dismissed the case on the pleadings. Repifi appealed.
In Alice Corp. v. CLS Bank Int'l, the Supreme Court set forth a two-part test to determine whether claims are directed to patent-eligible subject matter under § 101. One must first decide whether the claim at hand involves a judicially-excluded law of nature, a natural phenomenon, or an abstract idea. If so, then one must further decide whether any element or combination of elements in the claim is sufficient to ensure that the claim includes an inventive concept amounting to significantly more than the judicial exclusion. But elements or combinations of elements that are well-understood, routine, and conventional will not lift the claim over the § 101 hurdle. While this inquiry is generally carried out as a matter of law, factual issues can come into play when determining whether something is well-understood, routine, and conventional.
In practice, either part of the Alice test can be satisfied when a claim recites a specific, technical advance over the prior art. The Federal Circuit made this explicitly clear for part two in Dropbox Inc. v. Synchronoss Techs. Inc., holding that "an inventive concept exists when a claim recites a specific, discrete implementation of the abstract idea where the particular arrangement of elements is a technical improvement over the prior art." Similar reasoning can be pieced together for part one through a synthesis of Federal Circuit decisions since 2014.
Claim 1 of the '268 patent was deemed representative. Its actual claim language recites:
1. A method for credentialing visitors to an access-controlled environment by an access administrator, comprising the steps of:
(a) providing a smart-phone based credentialing platform having global positioning system (GPS) capability;
(b) providing an electronic badge having a display having electronically controlled and changeable indicia thereon, the badge adapted communicate with a smart-phone;
(c) enrolling a visitor into the credentialing platform by entering visitor information based on requirements of the administrator;
(d) approving, by the administrator, that the requirements of the step of enrolling are met;
(e) requesting, by the visitor, at least one location for which access is desired and submitting the at least one location to the administrator via the credentialing platform, said location having a pre-defined area;
(f) approving, by the administrator, the request for access at the at least one location;
(g) checking in on the smart-phone, by the visitor, via the credentialing platform, to establish check-in data including check-in time and date by the visitor, wherein the check-in data is recorded by the credentialing platform;
(h) communicating between the smart-phone and the electronic badge, indicia data for forming a display image on the display on the electronic badge;
(i) displaying on the badge display indicia showing access by the visitor is authorized to the location during the specific time interval;
(j) recording, by the credentialing platform, geo-location data of the visitor during the visitor's presence in the pre-defined area;
(k) checking out of the system when the visitor departs the pre-defined area of the at least one location, establishing check-out data, including checkout time and date and geo-location;
(l) recording, by the credentialing platform, the check-in data, the geo-location data and the checkout data of the visitor; and
(m) removing from the badge display, the indicia showing access by the visitor is authorized.
Right out of the gate, the Court noted that "[t]he parties agree that the claimed invention relates to the field of managing visitor access to access-controlled environments like hospitals, health care facilities, office buildings, and the like." That characterization should send off warnings to the § 101-cautious, as it describes the invention's business and administrative contribution rather than its technical contribution.
Nonetheless, the Federal Circuit went on to apply part one of Alice. In doing so, it agreed with the District Court that the patent is directed to "the abstract idea of credentialing visitors and checking them in and out of an access-controlled environment."
And there we have the alter ego. The Court found that this alter ego of the claims was "a well-established business practice, a method for organizing human activity, and an abstract idea." The Court went on to state "the automation of the credentialling process using existing technology such as smart phones and electronic badges . . . does not save claim 1 from targeting an abstract concept," and that "the automation of this conventional human process to make it more efficient is itself an abstract idea."
And that was it for part one. When viewed at such a high level, the claim's alter ego does seem abstract. But that abstraction was introduced by the Court rather than the claim itself. Do conventional credentialing processes include the checking in, communicating, and displaying steps as claimed? If findings of fact were made, they are not in this decision. Consequently, we are left with circular reasoning — the claim is abstract because the Court only considers an abstracted version of it.
Moving on to part two of Alice, the Court — to its credit — considered at least some of the claim language. It noted that "the '268 patent specification acknowledges that an electronic badge is a well-known device that can, for example, be implemented using a commercially available smart card" and that these devices could communicate with smartphones. But then the Court concludes that "the claims merely recite the use of conventional abilities of a conventional electronic badge."
On its face, the Court's reasoning is problematic and conclusory. The mere existence of smart cards that can communicate with smartphones does not establish that that all features of the checking in, communicating, and displaying are well-understood, routine, or conventional. The Court goes on to dismiss Repifi's arguments regarding the improvements provided by the invention stating "we agree with the district court that these advantages and improvements identified in the specification all stem from the automation of a historically human process and cannot save the claims at Alice step two."
In other words, even if the invention does provide improvements over the prior art, the improvements are still abstract. Or, you don't get an inventive concept from the combination of abstract ideas.
So the Court finds the alter ego invalid, and the claim falls with it. The suit was dismissed on a Rule 12(b)(6) motion, with the asserted claims affirmed as invalid. Their crime? Being able to be too easily fictionalized.
Repifi Vendor Logistics, Inc. v. Intellicentrics, Inc. (Fed. Cir. 2022)
Nonprecedential disposition
Panel: Circuit Judges Taranto, Hughes, and Stoll
Opinion by Circuit Judge Stoll
Patent Docs 