Affinity Labs of Tex., LLC v. DIRECTV, LLC

• Decision Date: 23 September 2016
• Docket Number: 2015-1847,2015-1848,2015-1846,2015-1845
• Citation: 838 F.3d 1253,120 U.S.P.Q.2d 1201
• Parties: Affinity Labs of Texas, LLC, Plaintiff-Appellant v. DIRECTV, LLC, DIRECTV Digital LLC, MLB Advanced Media, Inc., MlB Advanced Media, L.P., NBA Media Ventures, LLC, Turner Digital Basketball Services, Inc., NHL Interactive Cyber Enterprises, LLC, NHL Enterprises, Inc., NHL Enterprises, L.P., Defendants-Appellees
• Court: U.S. Court of Appeals — Federal Circuit

838 F.3d 1253
120 U.S.P.Q.2d 1201

Affinity Labs of Texas, LLC, Plaintiff-Appellant
v.
DIRECTV, LLC, DIRECTV Digital LLC, MLB Advanced Media, Inc., MlB Advanced Media, L.P., NBA Media Ventures, LLC, Turner Digital Basketball Services, Inc., NHL Interactive Cyber Enterprises, LLC, NHL Enterprises, Inc., NHL Enterprises, L.P., Defendants-Appellees

2015-1845
2015-1846
2015-1847
2015-1848

United States Court of Appeals, Federal Circuit.

Decided: September 23, 2016

Cyrus Alcorn Morton , Robins Kaplan LLP, Minneapolis, MN, argued for plaintiff-appellant. Also represented by Ronald James Schutz, Patrick M. Arenz, Brenda L. Joly, Benjamen Linden .

David B. Weaver , Baker Botts, LLP, Austin, TX, argued for all defendants-appellees. Defendants-appellees NBA Media Ventures, Turner Digital Basketball Services, Inc., NHL Interactive Cyber Enterprises, LLC, NHL Enterprises, Inc., NHL Enterprises, L.P. also represented by Christopher Granaghan ; Jeffrey Ta-Hwa Han, Vinson & Elkins LLP , Austin, TX; Hilary L. Preston , New York, NY.

Darin W. Snyder , O'Melveny & Myers LLP, San Francisco, CA, for defendants-appellees DIRECTV, LLC, DIRECTV Digital LLC.

Nathan K. Cummings , Cooley LLP, Reston, VA, for defendants-appellees MLB Advanced Media, Inc., MLB Advanced Media, L.P.

Before Prost, Chief Judge, Bryson and Wallach, Circuit Judges.

Bryson, Circuit Judge.

I

Affinity Labs of Texas, LLC, is the owner of U.S. Patent No. 7,970,379 (“the '379 patent”). The patent contains two independent claims, one a system claim and the other a method claim. The claims are directed to streaming regional broadcast signals to cellular telephones located outside the region served by the regional broadcaster. Representative claim 1 of the '379 patent, the independent system claim, recites as follows:

1. A broadcast system, comprising:

a network based resource maintaining information associated with a network available representation of a regional broadcasting channel that can be selected by a user of a wireless cellular telephone device; and

a non-transitory storage medium including an application configured for execution by the wireless cellular telephone device that when executed, enables the wireless cellular telephone device:

838 F.3d 1256

to present a graphical user interface comprising at least a partial listing of available media sources on a display associated with the wireless cellular telephone device, wherein the listing includes a selectable item that enables user selection of the regional broadcasting channel;

to transmit a request for the regional broadcasting channel from the wireless cellular telephone device; and

to receive a streaming media signal in the wireless cellular telephone device corresponding to the regional broadcasting channel, wherein the wireless cellular telephone device is outside of a broadcast region of the regional broadcasting channel, wherein the wireless cellular telephone device is configured to receive the application via an over the air download.

Stripped of excess verbiage, claim 1 is directed to a broadcast system in which a cellular telephone located outside the range of a regional broadcaster (1) requests and receives network-based content from the broadcaster via a streaming signal, (2) is configured to wirelessly download an application for performing those functions, and (3) contains a display that allows the user to select particular content.¹

Affinity sued the nine defendants, alleging that they infringed the '379 patent by marketing a system that allows customers to receive regional radio broadcasts on their cellphones even when their cellphones are outside the regions reached by the stations' broadcast signals. The defendants moved to dismiss the complaints for failure to state a claim, arguing that the asserted claims were not directed to patentable subject matter.

The magistrate judge recommended that the motion to dismiss be granted. Following the two-stage inquiry for patentability set forth by the Supreme Court in Mayo Collaborative Services v. Prometheus Laboratories, Inc. , –––U.S. ––––, 132 S.Ct. 1289, 182 L.Ed.2d 321 (2012), and Alice Corp. v. CLS Bank International, ––– U.S. ––––, 134 S.Ct. 2347, 189 L.Ed.2d 296 (2014), the magistrate judge found that the '379 patent was directed to an “abstract idea” and that the claims did not contain an “inventive concept.”

The purpose of the '379 patent, the magistrate judge explained, “is the dissemination of regionally broadcasted content to users outside the region.” That purpose, he held, is a “fundamental economic and conventional business practice” that is both “well-known and historically long-standing”; he therefore concluded that the claims were directed to an abstract idea.

The magistrate judge next found that the claims of the '379 patent do not contain an inventive concept such that they do more than claim the ineligible idea itself. He explained that the patent “merely takes the abstract idea ... and applies it to a generic, electronic device, in this case—a wireless cellular telephone.” He then concluded that the components of claim 1 are merely “routine and generic

838 F.3d 1257

processing and storing capabilities of computers generally,” and that the claimed functions—storing information in memory, executing a program, and sending and receiving data—can all be performed by a generic computer: “There is not a non-generic function or component contained in the claims that sets forth the blueprint with any degree of specificity of how to disseminate regional broadcast content to a user outside the region over a wireless, cellular telephone device.”

In response to Affinity's assertion that the downloadable application is an inventive concept, the magistrate judge observed that the patent “merely states that the application ‘enables' the device to present a graphical user interface so a user can select what data that user wants to stream”; the patent is “devoid of any teaching or blueprint explaining how the device can do what it purports to do.” The “bottom line,” he explained, “is that Claim 1 takes the abstract idea and says ‘apply it’ to a wireless, cellular telephone device acting as a generic computer.”

The magistrate judge also rejected Affinity's argument based on the graphical user interface limitation in claim 1. He ruled that the graphical user interface limitation merely recites a generic computer component and does not contribute an inventive concept to the claim.

The district court accepted the magistrate judge's recommendation and entered judgment against Affinity. The court agreed with the magistrate judge that the '379 patent is directed to an abstract idea. In particular, the court agreed that the purpose of the claimed invention—to disseminate regionally broadcast content to users outside the region—is a well-known, longstanding business practice, and that the claims directed to that purpose are not tangible and concrete. The court also agreed that the claimed “downloadable application with graphical user interface” does not qualify as an “inventive concept.”

II

The framework for determining whether a particular patent claim is directed to patentable subject matter is by now familiar. Section 101 of the Patent Act provides that “[w]hoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title.” 35 U.S.C. § 101. The Supreme Court has held that the broad language of that provision is subject to an implicit exception for “laws of nature, natural phenomena, and abstract ideas,” which are not patentable. Alice , 134 S.Ct. at 2354.

The Supreme Court has devised a two-stage framework to determine whether a claim falls outside the scope of section 101. The prescribed approach requires a court to determine (1) whether the claim is directed to a patent-ineligible concept, i.e., a law of nature, a natural phenomenon, or an abstract idea, and if so, (2) whether the elements of the claim, considered “both individually and ‘as an ordered combination,’ ” add enough to “ ‘transform the nature of the claim’ into a patent-eligible application.” Alice , 134 S.Ct. at 2355 (quoting Mayo , 132 S.Ct. at 1297–98 ). In the context of claims that are challenged as containing only abstract ideas, those two stages are typically referred to as the “abstract idea” step and the “inventive concept” step.

The “abstract idea” step of the inquiry calls upon us to look at the “focus of the claimed advance over the prior art” to determine if the claim's “character as a whole” is directed to excluded subject matter.

838 F.3d 1258

The “inventive concept” step requires us to look with more specificity at what the claim elements add, in order to determine “whether they identify an ‘inventive concept’ in the application of the ineligible subject matter” to which the claim is directed. Elec. Power Grp., LLC v. Alstom S.A. , No. 2015–1778, 830 F.3d 1350, 1353, 2016 WL 4073318, at *3 (Fed. Cir. Aug. 1, 2016) ; see also Enfish, LLC v. Microsoft Corp. , 822 F.3d 1327, 1335 (Fed. Cir. 2016) ; Genetic Techs. Ltd. v. Merial L.L.C. , 818 F.3d 1369, 1375–76...