Cyberfone Systems, LLC v. CNN Interactive Group, Inc. (Fed. Cir. 2014)

by McDonnell Boehnen Hulbert & Berghoff LLP
Contact

CNNIn 2011, Cyberfone sued CNN and 80 other defendants in the U.S. District Court for the District of Delaware for infringement of U.S. Patent No. 8,019,060.  On the defendants' motion for summary judgment, the District Court held the claims of the '060 patent invalid under 35 U.S.C. § 101 as being directed to patent-ineligible subject matter.  In a non-precedential ruling, the Federal Circuit panel of Judges Lourie, Dyk, and Wallach affirmed.

Claim 1 of the '060 patent recites:

A method, comprising:
    obtaining data transaction information entered on a telephone from a single transmission from said telephone;
    forming a plurality of different exploded data transactions for the single transmission, said plurality of different exploded data transactions indicative of a single data transaction, each of said exploded data transactions having different data that is intended for a different destination that is included as part of the exploded data transactions, and each of said exploded data transactions formed based on said data transaction information from said single transmission, so that different data from the single data transmission is separated and sent to different destinations; and
    sending said different exploded data transactions over a channel to said different destinations, all based on said data transaction information entered in said single transmission.

After dispensing with the usual overview of § 101 case law, Judge Dyk, writing for the panel, applied the two-step analysis of Mayo v. Prometheus.  First, he concluded that claim 1 involves an abstract idea.  He characterized this abstract idea as "collecting information in classified form, then separating and transmitting that information according to its classification."  Next, he examined the remaining limitations of claim 1 to determine whether "additional substantive limitations . . . narrow, confine, or otherwise tie down the claim so that, in practical terms, it does not cover the full abstract idea itself."

In its defense, Cyberfone asserted that claim 1 meets both prongs of the machine or transformation test of Bilski v. Kappos, and therefore meets the requirements of § 101 for this reason.  Particularly, Cyberfone took the position that claim 1 requires a telephone, contending that it is a specific machine integral to the claimed method.  However, in line with reasoning of several Federal Circuit judges, Judge Dyk warned that "[f]or a machine to impose a meaningful limit . . . it must play a significant part in permitting the claimed method to be performed [and] simply implementing an abstract concept on a computer, without meaningful limitations to that concept, does not transform a patent-ineligible claim into a patent-eligible one."

To determine whether the claimed telephone is indeed significant to the claim, Judge Dyk looked to the specification of the '060 patent.  He focused on text that states that the invention relates to "a transaction entry device which can selectively operate in a telephone mode and a transaction entry mode."  While in the telephone mode, "the transaction entry device operates as a conventional telephone," but in the transaction entry mode, "menus are used to navigate the user to forms which facilitate the entry of data."  From this distinction, Judge Dyk concluded that "the telephone does not obtain data when it is functioning as a telephone, only when in an unclaimed mode of operation."

In contrast to Judge Dyk's conclusion, the '060 patent does not state that the telephone and transaction entry modes are mutually exclusive.  Rather, at col. 6, line 53 through col. 7, line 14, the '060 patent describes how these modes can be used together.  Particularly, the telephone mode requires use of a telephone line for telephony calling, while the transaction entry mode would also use such a telephone line for modem-based data transaction.  However, the specification notes that "[i]n telephone mode, one or more lines may be connected so as to allow simultaneous use of the transaction entry device without interfering with the modem connection."  Therefore, the '060 explicitly permits the telephone to obtain data when it is functioning as a telephone.

Furthermore, Judge Dyk stated that the obtaining of data is "an unclaimed mode of operation."  Perplexingly, the first element of claim recites "obtaining data transaction information entered on a telephone."   Claim 1 goes on to recite how this data is processed and used.  Therefore, it is unclear how Judge Dyk attained this interpretation of the claim, especially since the claim itself makes no mention of the device being in either mode.  Does Judge Dyk's reasoning, taken to its logical extreme, mean that my cell phone is no longer a cell phone when I use the keypad to enter a number, but suddenly becomes one again when I press "send" to call that number?

Regardless, Judge Dyk went on to state that "the recited telephone can be a range of different machines: a conventional telephone, a portable telephone, [or] a battery operated portable device which is a cross between a laptop computer and a cellular telephone." (Citations omitted.)  Based on these broad definitions of the term "telephone," Judge Dyk concluded that "[t]he telephone recited in claim 1 is not a specific machine, and adds nothing of significance to the claimed abstract idea."  Cyberfone argued further that the claimed step of "sending said different exploded data transactions over a channel to said different destinations" required a specific machine, but Judge Dyk found this point unconvincing, asserting that "Cyberfone provides no guidance as to what particular machine is required to perform the function of the recited channel."

Finally, Cyberfone attempted to invoke the transformation prong of the machine or transformation test, in that the "exploded data transactions involve such a transformation."  Judge Dyk, however, was skeptical, and stated that "the exploding step effects no meaningful transformation because it merely makes the originally-gathered information accessible to different destinations without changing the content or its classification.  Nor does the particular configuration of steps -- obtaining, separating, and then sending information -- confer patentability."

For the second time in two months, the Federal Circuit has come down with a non-precedential opinion that serves to further illustrate the Court's position on § 101 and computer-implemented technologies (see Smartgene, Inc. v. Advanced Biological Laboratories, SA).  In this case, the plain text of the specification appears to contradict the panel's reasoning.  Perhaps the panel used uncited information in the record to reach its conclusion?

One factor that may have worked against Cyberfone is the structure of the claim.  Claim 1 requires "obtaining data transaction  . . . from [a] telephone," and "sending . . . exploded data transactions over a channel to said different destinations."  However, it is not clear which of these devices (the telephone or the destinations) performs the steps of the claim.  In other words, claim 1 could be viewed as a disembodied method, perhaps one that could be performed by a human.  In that light, the § 101 rejection of the claim has a stronger basis in precedent.

Regardless, patent drafters might find Judge Dyk's conclusion of the telephone not being a specific device troublesome.  It is very common for the specification of a computing-related patent to define a "computing device" or a "communication device" to include embodiments such as a personal computer, tablet computer, cell phone, or any other type of computer with networking capabilities.  This is done in order to provide a basis for arguing (e.g., in a Markman brief) that the term should be construed broadly.  Will the Federal Circuit adopt the reasoning of this non-precedential opinion to hold such language against the applicant in § 101 analyses?

Cyberfone Systems, LLC v. CNN Interactive Group, Inc. (Fed. Cir. 2014)
Panel: Circuit Judges Lourie, Dyk, and Wallace
Opinion by Corcuit Judge Dyk

 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© McDonnell Boehnen Hulbert & Berghoff LLP | Attorney Advertising

Written by:

McDonnell Boehnen Hulbert & Berghoff LLP
Contact
more
less

McDonnell Boehnen Hulbert & Berghoff LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.
Feedback? Tell us what you think of the new jdsupra.com!