LLC v. Amazon.com Inc., Amazon Digital Services, Inc., Defendants–Appellees

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United States Court of Appeals, Federal Circuit.

Affinity Labs of Texas, LLC, Plaintiff–Appellant v. Amazon.com Inc., Amazon Digital Services, Inc., Defendants–Appellees

2015–2080

    Decided: September 23, 2016

Before Prost, Chief Judge, Bryson and Wallach, Circuit Judges. 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. J. David Hadden, Fenwick & West, LLP, Mountain View, CA, argued for defendants-appellees. Also represented by Todd Richard Gregorian, Saina S. Shamilov; Ravi Ragavendra Ranganath, Adam Michael Lewin, San Francisco, CA; Gabriel Bell, Gregory G. Garre, Latham & Watkins LLP, Washington, DC; Jeffrey H. Dean, Amazon.com, Inc., Seattle, WA.

This appeal is related to the appeal in Affinity Labs of Texas, LLC v. DirecTV et al., No. 2015–1845, ––– F.3d ––––, 2016 WL 5335501 (Fed. Cir. 2016), decided today. Although the patents at issue in the two cases are different, they share a similar specification. Because the legal issues presented in the two cases are closely related, our discussion of the governing legal principles in that case will not be repeated here, except to the extent that the difference between the claims in the two cases calls for a somewhat different legal analysis.

I

The patent in suit, U.S. Patent No. 8,688,085 (“the '085 patent”), is entitled “System and Method to Communicate Targeted Information.” The abstract describes the patent as directed to a “method for targeted advertising” in which an advertisement is selected for delivery to the user of a portable device based on at least one piece of demographic information about the user.

Despite the title of the patent and the description in the abstract, only three sentences in the specification and only one of the 20 claims deal with targeted advertising.1 The rest of the specification and claims are directed to media systems that deliver content to a handheld wireless electronic device.

Claim 14 of the '085 patent is representative 2 and provides as follows:

A media system, comprising:

a network based media managing system that maintains a library of content that a given user has a right to access and a customized user interface page for the given user;

a collection of instructions stored in a non-transitory storage medium and configured for execution by a processor of a handheld wireless device, the collection of instructions operable when executed: (1) to initiate presentation of a graphical user interface for the network based media managing system; (2) to facilitate a user selection of content included in the library; and (3) to send a request for a streaming delivery of the content; and

a network based delivery resource maintaining a list of network locations for at least a portion of the content, the network based delivery resource configured to respond to the request by retrieving the portion from an appropriate network location and streaming a representation of the portion to the handheld wireless device.

Stated more succinctly, claim 14 is directed to a network-based media system with a customized user interface, in which the system delivers streaming content from a network-based resource upon demand to a handheld wireless electronic device having a graphical user interface.

Affinity sued Amazon.com Inc. and Amazon Digital Services, Inc., alleging that they infringed the '085 patent by marketing the Amazon Music system, which allows customers to stream music from a customized library. The Amazon entities moved for the entry of judgment on the pleadings, arguing that the asserted claims were not directed to patentable subject matter.

The magistrate judge recommended that judgment be entered in the Amazon entities' favor. Following the two-stage inquiry for patent eligibility 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 '085 patent is directed to an abstract idea—“delivering selectable media content and subsequently playing the selected content on a portable device.”

Turning to the next step of the eligibility analysis, the magistrate judge found that the claims of the '085 patent do not contain an “inventive concept.” Instead, he concluded, the claims are directed to applying the abstract idea “to the Internet and a generic, electronic device—in this case, a wireless handheld device operating as a ‘ubiquitous information-transmitting medium, not a novel machine’ ” (citing Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709, 716–17 (Fed. Cir. 2014)). The magistrate judge also found that the components recited in the claims are generic. He explained that the “network based media managing system” is a generic database and that the “non-transitory storage medium” could be any kind of memory.

The magistrate judge rejected Affinity's argument that the customized user interface supplies the inventive concept to the claimed invention. The user interface limitation, the magistrate judge explained, does not identify “any specific technology or instructions that explain how the device can do what it purports to do or direct the practitioner how to carry out the claims.”

The district court agreed with the magistrate judge's recommendation and entered judgment against Affinity. The court agreed with the magistrate judge that the '085 patent claims are directed to the abstract idea of “delivering selectable media content and subsequently playing the selected content on a portable device.” The court also agreed that the claims do not supply an inventive concept as “[t]he '085 Patent solves no problems, includes no implementation software, designs no system. The mere statement that the method is performed by computer does not satisfy the test of inventive concept.”

II

A

We begin by addressing the first step of the Mayo/Alice inquiry: whether the claims of the '085 patent are directed to an “abstract idea.” Like the district court, we hold that the concept of delivering user-selected media content to portable devices is an abstract idea, as that term is used in the section 101 context.

The district court's conclusion is consistent with our approach to the “abstract idea” step in prior cases. For example, In re TLI Communications LLC Patent Litigation, 823 F.3d 607 (Fed. Cir. 2016), involved a patent on a method for uploading digital images from a cellular telephone to a server, which would then classify and store the images.

Although the claim at issue in that case recited physical components such as a telephone unit and a server, the court noted that “not every claim that recites concrete, tangible components escapes the reach of the abstract-idea inquiry,” and it pointed out that the specification made clear that the recited physical components “merely provide a generic environment in which to carry out the abstract idea of classifying and storing digital images in an organized manner.” Id. at 611. The court added that “the specification's emphasis that the present invention ‘relates to a method for recording, communicating and administering [a] digital image’ underscores that [the claim at issue] is directed to an abstract concept.” Id. The TLI court concluded that, as in this case, the claims were directed to “the use of conventional or generic technology in a nascent but well-known environment, without any claim that the invention reflects an inventive solution to any problem presented by combining the two.” Id. at 612.

Similarly, in Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709 (Fed. Cir. 2014), we found the process of allowing a consumer to receive copyrighted media in exchange for watching a selected advertisement was an abstract idea. The idea in this case is even broader and more abstract than the idea in Ultramercial: The '085 patent covers streaming content generally, not even including an additional feature such as exchanging the consumer's access to the streaming content for the consumer's viewing of an advertisement.

Affinity contends that the '085 patent embodied a concrete technological innovation because, as of its priority date (March 28, 2000), wireless streaming of media was not “routine, conventional, or well-known.” The patent, however, does not disclose any particular mechanism for wirelessly streaming content to a handheld device. The specification describes the function of streaming content to a wireless device, but not a specific means for performing that function. Claim 14, in turn, recites (1) a “media managing system” that maintains a library of content, (2) a “collection of instructions” that are “operable when executed” by a handheld wireless device to request streaming delivery of the content, and (3) a “network based delivery resource” that retrieves and streams the requested content to the handheld device. At that level of generality, the claims do no more than describe a desired function or outcome, without providing any limiting detail that confines the claim to a particular solution to an identified problem. The purely functional nature of the claim confirms that it is directed to an abstract idea, not to a concrete embodiment of that idea. See Elec. Power Grp., LLC v. Alstom S.A., No. 2015–1778, slip op. 12 (“[T]he essentially result-focused, functional character of claim language has been a frequent feature of claims held ineligible under § 101.”).3

In addressing the first step of the section 101 inquiry, as applied to a computer-implemented invention, it is often helpful to ask whether the claims are directed to “an improvement in the functioning of a computer,” or merely “adding conventional computer components to well-known business practices.” Enfish, LLC v. Microsoft Corp., 822 F.3d 1327, 1338 (Fed. Cir. 2016). The claims of the '085 patent fall into the latter category.

Affinity contends that the magistrate judge improperly engaged in fact-finding when he stated that the idea of delivering media content to a wireless portable device is one of long standing. It is not debatable, however, that the delivery of media content to electronic devices was well known long before the priority date of the '085 patent, and Affinity does not argue otherwise. The magistrate judge cited transistor radios and portable televisions as commonplace examples of the delivery of audio media to portable electronic devices. An example of technology that is even closer to the idea underlying the '085 patent is the delivery of selectable prerecorded messages to callers on demand in services such as dial-a-prayer and dial-a-joke, which were available long before the invention of cellular telephones or the Internet.

While Affinity criticizes the magistrate's making factual findings on a motion for judgment on the pleadings, the practice of taking note of fundamental economic concepts and technological developments in this context is well supported by our precedents. See, e.g., OIP Techs., Inc. v. Amazon.com, Inc., 788 F.3d 1359, 1362–63 (Fed. Cir. 2015) (affirming district court's finding on a motion to dismiss that “offer-based price optimization” is a fundamental economic concept and that the claimed computer-based implementation of that idea is routine and conventional); Content Extraction & Transmission LLC v. Wells Fargo Bank, Nat'l Ass'n, 776 F.3d 1343, 1347 (Fed. Cir. 2014) (affirming district court's finding on a motion to dismiss that the claims were directed to the well-known abstract idea of “1) collecting data, 2) recognizing certain data within the collected data set, and 3) storing that recognized data in a memory”).

Affinity also objects to the magistrate judge's conclusion that the claims merely set forth “routine and generic processing and storing capabilities of computers generally.” Yet the claim terms to which the magistrate judge referred, such as a “network based media management system” and a “graphical user interface,” are simply generic descriptions of well-known computer components. See In re TLI Commc'ns LLC Patent Litig., 823 F.3d at 611 (physical components such as a telephone and a server “merely provide a generic environment in which to carry out the abstract idea”); Mortg. Grader, Inc. v. First Choice Loan Servs. Inc., 811 F.3d 1314, 1324–25 (Fed. Cir. 2016) (claims reciting an “interface,” “network,” and “database” are directed to an abstract idea). Affinity makes no claim that it invented any of those components or their basic functions, nor does it suggest that those components, at that level of generality, were unknown in the art as of the priority date of the '085 patent.

In an effort to show that claim 14 is not directed to an abstract idea, Affinity focuses in particular on the recitation of a “customized user interface” in that claim. For support, Affinity cites passages in the specification that describe embodiments in which a user may elect to have a customized interface such as a radio dial, a playlist, or targeted advertising based on demographic information provided by the user. See '085 patent, col. 10, ll. 10–26; col. 11, ll. 5–35. This court, however, has held that “customizing information based on ․ information known about the user” is an abstract idea. Intellectual Ventures I LLC v. Capital One Bank (USA), 792 F.3d 1363, 1369 (Fed. Cir. 2015). The court in the Intellectual Ventures I case explained that tailoring of content based on information about the user—such as where the user lives or what time of day the user views the content—is an abstract idea that is as old as providing different newspaper inserts for different neighborhoods. Id.

The term “customized user interface,” as used in the '085 patent, is not limited to any particular form of customization, but covers the general idea of customizing a user interface. Like the basic concept of tailoring content to a user, as in Intellectual Ventures I, the basic concept of customizing a user interface is an abstract idea.

B

Turning to the second step of the Mayo/Alice inquiry, we conclude that there is nothing in the claims or the specification of the '085 patent that constitutes a concrete implementation of the abstract idea in the form of an “inventive concept.” Alice, 134 S.Ct. at 2355; Mayo, 132 S.Ct. at 1294.

As noted, representative claim 14 is written in largely functional terms, claiming “a collection of instructions” that perform the functions of displaying a selection of available content on a graphical user interface and allowing the user to request streaming of that content. The claims thus do not go beyond “stating [the relevant] functions in general terms, without limiting them to technical means for performing the functions that are arguably an advance over conventional computer and network technology.” Elec. Power Grp., slip op. at 2.

Features such as network streaming and a customized user interface do not convert the abstract idea of delivering media content to a handheld electronic device into a concrete solution to a problem. The features set forth in the claims are described and claimed generically rather than with the specificity necessary to show how those components provide a concrete solution to the problem addressed by the patent.

In particular, claim 14 requires a “network based delivery resource,” but that does not make the claim a patent-eligible implementation of an abstract idea. The specification makes clear that any technology capable of wireless communication of audio information to the device would be covered. See '085 patent, col. 4, ll. 41–45 (“The present invention advantageously allows for several different embodiments of wirelessly communicating selected audio information to [an] electronic device ․ and is not limited to any specific configuration described below.”).

The only putatively narrowing limitation in that result-focused claim is the limitation requiring that the “network based media managing system” have “a customized user interface page for the given user.” But neither the claim nor the specification reveals any concrete way of employing a customized user interface. The specification simply states that a user interface can be customized “in a plurality of ways” by allowing users to select and receive “on-demand customized audio information.” Id., col. 16, ll. 21–22, 25–26. That disclosure and the accompanying “customized user interface” limitation in the claim do not constitute a concrete application of the abstract idea of delivering content to a wireless device and thus do not embody an “inventive concept,” as that term has been used in the Mayo/Alice line of cases.

In sum, the patent in this case is not directed to the solution of a “technological problem,” Alice, 134 S.Ct. at 2358, nor is it directed to an improvement in computer or network functionality, see In re TLI Commc'ns LLC Patent Litig., 823 F.3d at 612. It claims the general concept of streaming user-selected content to a portable device. The addition of basic user customization features to the interface does not alter the abstract nature of the claims and does not add an inventive component that renders the claims patentable. We therefore uphold the district court's judgment that the claims of the '085 patent are not eligible for patenting.

AFFIRMED

FOOTNOTES

1.   The only portion of the specification that deals with targeted advertising reads: “A user may also provide demographic information allowing advertisers to access the demographic information and provide advertisements based upon the demographic information. For example, an advertiser may want to target Hispanic females in the 21–25 year old age group. Through providing demographic information to advertisers, when a user logs into [the depicted homepage] selective advertising can be ‘targeted’ for a group of users.” '085 patent, col. 10, ll. 18–26. The only claim dealing with targeted advertising is claim 5, which is directed to the media system of claim 1, “further comprising a targeted advertising component configured to communicate an advertisement to the given user based at least in part on a demographic of the given user.”

2.   The district court treated claim 14 as representative. Although Affinity has not conceded that claim 14 is representative of the remaining claims, it has not shown how independent claims 1 and 8 differ materially from claim 14. Moreover, while Affinity refers in passing to several of the dependent claims, it presents no substantive argument as to the separate patentability of those claims. Because Affinity has failed to present “any meaningful argument for the distinctive significance of any claim limitations” other than those in claim 14, Electric Power Group, LLC v. Alstom S.A., No. 2015–1778, ––– F.3d ––––, 2016 WL 4073318 (Fed. Cir. Aug. 1, 2016), slip op. at 4, we treat claim 14 as representative of all the claims for purposes of this appeal.

3.   Affinity argues that the district court erred in disregarding the statement of its expert that streaming content to a portable device was novel as of the priority date of the '085 patent. But the eligibility finding does not turn on the lack of novelty of the claim; it turns on the fact that the claim is drawn to any embodiment of an abstract idea. The district court therefore properly disregarded the expert's statement.

Bryson, Circuit Judge.

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