MODERN TELECOM SYSTEMS LLC v 
EARTHLINK, INC.

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MODERN TELECOM SYSTEMS LLC v EARTHLINK, INC., 

US 6,504,886

US 6,332,009

US 6,570,932

US 6,163,570

US 7,062,022

US 5,970,100

Summary

Claims of US patents 6,504,886, 6,332,009, 6,570,932, 6,163,570, 7,062,022 and 5,970,100 in the name of Modern Telecom Systems LLC were found to be patent eligible subject matter under 35 USC 101 because it was not shown that the claims lacked an inventive step, and the specific steps recited in the patents do not pre-empt all inventions concerning communicating between modems.

Comments

  • A solution that is necessarily routed in computer technology in order to overcome a problem specifically arising in the realm of computer networks is patent eligible.
  • Software must be patent eligible, unless it falls within one of the exceptions.

Broad description of the invention

The patent concerns software that controls the way a user modem communicates with a telephone company modem.

Characteristic Claim

A method of communicating a learning sequence, said method comprising:

receiving a first parameter specifying a number of segments in said learning sequence;

receiving a second parameter specifying a sign pattern of each of said segments;

receiving a third parameter specifying a training pattern of each of said segments, wherein said training pattern is indicative of an ordering of a reference symbol and a training symbol in each of said segments;

constructing said learning sequence based on said parameters; and transmitting said learning sequence.

Details

Section 101 of the Patent Act provides that a patent may be obtained for “any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof.” 35 U.S.C. § 101. The Supreme Court has “long held that this provision contains an important implicit exception: Laws of nature, natural phenomena, and abstract ideas are not patentable.” Alice Corp. Pty. v. CLS Bank Int’l, ___ U.S. ___, 134 S. Ct. 2347, 2354, 189 L. Ed. 2d 296 (2014). “The concern that drives this exclusionary principle” is “one of pre-emption.” Id. In other words, the concern is “`that patent law not inhibit further discovery by improperly tying up the future use of’ these building blocks of human ingenuity.” Id. (quoting Mayo Collaborative Servs. v. Prometheus Labs., Inc., ___ U.S. ___, 132 S. Ct. 1289, 1301, 182 L.Ed.2d 321 (2012)). Alice warns courts, however, to “tread carefully in construing this exclusionary principle lest it swallow all of patent law,” because “[a]t some level, `all inventions . . . embody, use, reflect, rest upon, or apply laws of nature, natural phenomena, or abstract ideas.'” Id. (quoting Mayo, 132 S. Ct. at 1293).

In Alice, the Court followed the framework it established in Mayo “for distinguishing patents that claim laws of nature, natural phenomena, and abstract ideas from those that claim patent-eligible applications of those concepts.” Id. at 2355. First, the court asks “whether the claims at issue are directed to one of those patent-ineligible concepts.” Id. If so, the court then “consider[s] the elements of each claim both individually and `as an ordered combination’ to determine whether the additional elements `transform the nature of the claim’ into a patent-eligible application.” Id. (quoting Mayo, 132 S. Ct. at 1298, 1297). In this second step, the court looks for an “inventive concept” — that is, “an element or combination of elements that is `sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the [ineligible concept] itself.'” Id. (quoting Mayo, 132 S. Ct. at 1294).

This standard is easier to articulate than it is to apply. “The line between a patentable `process’ and an unpatentable `principle’ is not always clear.” Parker v. Flook, 437 U.S. 584, 589 (1978). The Federal Circuit has referred to § 101 jurisprudence as a “murky morass.” MySpace, Inc. v. GraphOn Corp., 672 F.3d 1250, 1259 (Fed. Cir. 2012) (suggesting, in dicta, that “courts could avoid the swamp of verbiage that is § 101” by addressing patentability defenses under §§ 102, 103, and 112 before addressing patent eligibility under § 101). Judge Pfaelzer recently lamented that “Supreme Court decisions on § 101 often confuse more than they clarify.” California Inst. of Tech. v. Hughes Commc’ns Inc., 2014 WL 5661290, at *3 (C.D. Cal. Nov. 3, 2014); see also MySpace, Inc., 672 F.3d at 1259 (“Our opinions spend page after page revisiting our cases and those of the Supreme Court, and still we continue to disagree vigorously over what is or is not patentable subject matter.”). Pinning down the exclusion for “abstract ideas” can be particularly challenging. See MySpace, Inc., 672 F.3d at 1259 (“When it comes to explaining what is to be understood by `abstract ideas’ in terms that are something less than abstract, courts have been less successful.”).

Under the first step of the Mayo test, the Court must determine whether the patent claims at issue are directed to abstract ideas.

As an initial matter, the Court notes that, “identifying the precise nature of the abstract idea” to which Plaintiff’s patent claims are directed “is not as straightforward as in Alice or some of [the Federal Circuit’s] other recent abstract idea cases.” DDR Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245, 1257 (Fed. Cir. 2014). For example, the claims in Alice were directed to the abstract idea of intermediated settlement, “i.e., the use of a third party to mitigate settlement risk,” and “simply instruct[ed] the practitioner to implement the abstract idea . . . on a generic computer.” Alice, 134 S. Ct. at 2356, 2359. In Ultramercial, 772 F.3d at 715, the claims were directed to the abstract idea of “using advertisement as an exchange or currency.” In buySAFE, 765 F.3d at 1355, the claims simply invoked a generic computer to implement the abstract concept of “creating a contractual relationship — a `transaction performance guaranty’ — that is beyond question of ancient lineage.” In Content Extraction, 776 F.3d at 1347, the claims were “drawn to the abstract idea of 1) collecting data, 2) recognizing certain data within the collected data set, and 3) storing that recognized data in a memory.” In Digitech Image Technologies, LLC v. Electronics for Imaging, Inc., 758 F.3d 1344, 1351 (Fed. Cir. 2014), the claims simply recited “a process of taking two data sets” — which were “generated by taking existing information . . . and organizing this information into a new form” — and “combining them into a single data set.”

Although determining whether the patents in suit are directed to an abstract idea is not as easy as the cases discussed above, under the Federal Circuit’s broad formulation of the first step of the Mayo test, see, e.g., Ultramercial, 772 F.3d at 715 (combination of steps in patent claim “recites an abstraction — an idea, having no particular concrete or tangible form”), one could conceivably conclude that all process or method patents, like the patents in suit, are directed to an abstract idea.[2] In fact, even cases Plaintiff relies on found the patents in suit directed to patent-ineligible subject matter. See Hughes Commc’ns, 2014 WL 5661290, at *15; Card Verification Solutions, LLC v. Citigroup Inc., 2014 WL 4922524, at *4 (N.D. Ill. Sept. 29, 2014) (“Even when looking at the patent in the light most favorable to Card Verification, it is directed toward a patent-ineligible abstract idea.”).

The representative claims of the Learning Sequence Patents (claim 5 of the ‘866 and claim 44 of the ‘009 patent) describe a method of communicating certain descriptors, signals, data, etc. between two devices (presumably modems) over a data communication channel. The representative claims of the Power Level Calculation Patents (claim 7 of the ‘932 patent and claim 1 of the ‘570 patent) describe using specific formulas to calculate modem power levels in signals transmitted over a data communication channel. The representative claim of the Fast Start-Up Patent (claim 1 of the ‘022 patent) describes a method of reducing startup latency between two devices configured to communicate with each other over a data communication channel. The representative claim of the Spectrum Frequency Patent (claim 1 of the ‘100 patent) describes a method for error correction in data communication channel impairment. Each of these methods is conceptual in nature. Ultimately, however, the Court need not decided whether the patents are “directed to” an abstract idea because, as discussed below, Defendants have failed to meet their burden of establishing that the patents in suit lack an inventive concept such that they are no more than a patent on an abstract idea.

Step Two of the Mayo Test

Under the second step of the Mayo test, the Court considers whether the elements of each claim, either individually or “as an ordered combination,” include an “inventive concept” such that “`the patent in practice amounts to significantly more than a patent upon the [ineligible concept] itself.'” Alice, 134 S. Ct. at 2355 (quoting Mayo, 132 S. Ct. at 1294).

Defendants argue that each of the representative patent claims lack an inventive concept. Defendants’ argument amounts to a recitation of the elements of each representative claim followed by a conclusory characterization of the claims as “unlimited,” “so abstract and sweeping as to cover any and all uses of them,” and “recit[ing] nothing more than an ineligible concept.” See generally Motion, 10-21.[3] Defendants correctly point out that the patents concern software that controls the way a user modem communicates with a telephone company modem. However, Defendants have failed to demonstrate that the specific steps recited in the patents pre-empt all inventions concerning communicating between two modems.

The claims here “do not merely recite the performance of some business practice known from the pre-Internet world along with the requirement to perform it on the Internet.” See DDR Holdings, 773 F.3d at 1257. Cf. Content Extraction, 776 F.3d at 1347 (“The concept of data collection, recognition, and storage is undisputedly well-known. Indeed, humans have always performed these functions. And banks have, for some time, reviewed checks, recognized relevant data such as the amount, account number, and identity of account holder, and stored that information in their records.”). Instead, like the claims in DDR Holdings, Plaintiff’s claims appear to describe a solution that is “necessarily rooted in computer technology in order to overcome a problem specifically arising in the realm of computer networks.” DDR Holdings, 773 F.3d at 1257. Thus, the patent claims here are at least potentially distinguishable from the patents in the cases cited by Defendants. For example, unlike in Content Extraction, Ultramercial, and buySAFE, here there is no record of the technology described in the patents being well-known at the time of filing or simply involving performance of “well-understood, routine, and conventional activities commonly used in the industry.” See Content Extraction, 776 F.3d at 1348. Cf. id. ([Patentee] conceded at oral argument that the use of a scanner or other digitizing device to extract data from a document was well-known at the time of filing, as was the ability of computers to translate the shapes on a physical page into typeface characters.”); Ultramercial, 772 F.3d at 716 (“[E]ach of those eleven steps merely instructs the practitioner to implement the abstract idea with `routine, conventional activit[ies], which is insufficient to transform the patent-ineligible abstract idea into patent-eligible subject matter.” (second alteration in original)); buySAFE, 765 F.3d at 1355 (holding that the subject of the patent claims was “beyond question of ancient lineage”).

Defendants emphasize the “software focus” of the patents as if recent Federal Circuit cases support a rule that software is categorically patent-ineligible. The Court does not interpret the cases that way and, instead, agrees with the conclusion in Hughes Commc’ns that “software must be eligible under § 101.” Hughes Commc’ns, 2014 WL 5661290, at *7 (emphasis added).

Ultimately, Defendants bear the burden of making clear “[t]he line between a patentable `process’ and an unpatentable `principle'” in the context of Plaintiff’s patent claims. Flook, 437 U.S. at 589; see also DDR Holdings, 773 F.3d at 1255 (“Distinguishing between claims that recite a patent-eligible invention and claims that add too little to a patent-ineligible abstract concept can be difficult, as the line separating the two is not always clear.”).

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