Cooperative Entertainment, Inc. v. Kollective Tech, Inc., — F.4th — (Fed. Cir. 2022)
This pro-patentee eligibility decision offers some ideas for patentees seeking to help ensure that their patents survive eligibility challenges. The district court dismissed the case for lack of eligibility. On appeal, the Federal Circuit has reversed.
We know that eligibility is a question of law, but the doctrine at times requires examination of underlying questions of fact. Berkheimer v. HP, Inc., 881 F.3d 1360 (Fed. Cir. 2018) (J.Moore). That distinction is important at the motion to dismiss stage.
An accused infringer’s motion to dismiss is only appropriate when “there are no plausible factual disputes after drawing all reasonable inferences from the intrinsic and Rule 12 record in favor of the” patentee. Slip Op. Here, that “intrinsic record” is the patent document and the “Rule 12 record” is the complaint. In its amended complaint, the patentee alleged two “inventive concepts.” These include (1) a dynamic peer-to-peer network designed to “consume the same content within a predetermined time” and are controlled by a a content distribution network; and (2) the use of trace routs in content segmentation. The complaint particularly notes that those novel features were discussed by the examiner in the reasons for allowance. In addition, the patent application itself treats these features as important improvements to content distribution systems.
To be clear, I don’t know whether or not these features count as “inventive concepts” under Alice. But, all that is required at the pleading stage of a case are allegations that make the patentee’s claim plausible. And the allegations here seem to to at least meet that low standard. The appellate decision finds some importance in the fact that the intrinsic evidence recognizes the inventive concept as inventive.
The specification explains how claim 1’s dynamic P2P network structure is different from and improves upon the prior art.
The patent repeatedly explains that the “prior art fails …” and that the feature “does not exist in the prior art.” The specification also notes how the invention solves a network capacity problem. Although the opinion focuses on these features, it does not explain how important it is for the patent documents to expressly call out their innovative features. Bottom line here though is that these allegations (as supported by the intrinsic record) establish a plausible showing that the patent covers an patent eligible inventive concept under Alice Step 2.
The district court had sided with the accused infringer and dismissed the case on eligibility grounds. The district court first concluded that the claims were directed to the abstract idea of peer-to-peer communication via computer network. And that the alleged inventive concepts were “merely” implementing that generic idea using conventional technology. On appeal, that dismissal was reversed. But, the appellate panel refused to pass judgment on the district court’s Alice Step 1 opinion. This leaves the eligibility fight still alive at the district court.
We do not decide today that the claims are patent eligible under § 101. We hold only that there are plausible factual allegations that the claims include inventive concepts, and that is enough to preclude dismissal.
Slip Op. On remand, the parties will need to present evidence (likely to a jury) on whether the patent is directed toward an inventive concept. In addition, the district court will be asked to reconsider its Alice Step 1 determination.
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The decision is authored by Chief Judge Moore and joined by Judges Lourie and Stark. Meredith Martin Addy (AddyHart) argued for the patentee; Michael Dowler (Park Vaughan) for the defendant-appellee.