Iron Gate Security, Inc. v. Lowe's Companies, Inc. (S.D.N.Y. 2016)

Iron Gate, holder of U.S. Patent No. 7,203,693, sued Lowe's in the Southern District of New York, alleging infringement.  Lowe's moved to dismiss under Rule 12(b)(6), contending that the claims of the patent failed to meet the patent-eligibility requirements of 35 U.S.C. § 101.

Claim 1 of the patent recites:

A method for use in indexing, in a database, data associated with a domain-specific event, the method comprising the steps of:
    processing sensor data obtained in accordance with the event in real time, the sensor data comprising motion data of one or more objects or one or more people associated with the domain-specific event;
    obtaining pre-existing data associated with the domain specific event; and
    indexing data associated with the domain-specific event in the database, contemporaneous with capture of the data associated with the domain-specific event being indexed, based on at least a portion of the processed real time sensor data and at least a portion of the obtained pre-existing data, wherein the indexing step further comprises generating an index usable to retrieve at least a portion of the data associated with the domain-specific event by creating one or more cross-indexes between at least a portion of the processed real time sensor data and at least a portion of the obtained pre-existing data.

According to the patent, "none of the existing multimedia data indexing techniques permit indexing to be accomplished substantially concurrently or contemporaneously with the capture of the multimedia data."  The claimed invention "introduces a new paradigm of converting a real world event in real time into a rich multimedia database by processing data from multiple sensors observing the event."  This results in purported improvements of "(i) immersion in a virtual environment where the viewer can choose to view any part of the event from any desired viewpoint at any desired speed; (ii) the ability to visualize statistics and implicit information that is hidden in media data; (iii) the ability to search for, retrieve, compare and analyze content including video sequences, virtual replays and a variety of new visualizations; and (iv) the ability to access this information in real time over diverse networks."  In an illustrative example, the patent describes video capture of a tennis match, through which sensor and pre-existing data may include "match-set-game hierarchy data, camera parameter data, player and tournament information, baseline, service line, net information, score / winner / ace information, and 3D environment models."

In Alice Corp. v. CLS Bank, the Supreme Court stated that compliance with § 101 requires use of a two-prong test.  First, one must first determine whether the claim at hand is directed to a judicially-excluded law of nature, a natural phenomenon, or an abstract idea.  If so, then one must further determine whether any element, or combination of elements, in the claim is sufficient to ensure that the claim amounts to significantly more than the judicial exception.  But generic computer implementation of an otherwise abstract process does not qualify as "significantly more."  A goal of this test is to prevent one from patenting one of the judicial exclusions, and thereby preempting others from using this basic scientific tool.

Lowe's contended that the invention was directed to the unpatentable abstract idea of "organizing data using an index so that newly obtained data can be associated with pre-existing data for purposes of subsequent retrieval."  According to Lowe's, such activity could be performed mentally, the claim did not include anything in addition to this concept other than generic computer components, and the invention did not improve over the prior art.

Iron Gate rebutted by arguing that the patent involves "a specific methodology for real-time retrieval of data by processing motion data from a sensor in real time, indexing data from the sensor contemporaneously with its capture based on the processed real-time sensor data and pre-existing data, and generating an index by cross-indexing based on that data."  This, according to Iron Gate, was an improvement to data access and storage technology, and provides a solution to the problem of real-time retrieval of multimedia data.

In discussing the Alice test, the Court distinguished between the eligibility requirements of § 101 and the novelty requirements of § 102.  Particularly, "that a true invention may not be novel is a question for § 102, not § 101," and that the judicial exclusions to patent-eligibility are "not intended to preclude protection for a genuine invention that teaches an improvement and is directed to solving a particular problem, even if the invention invokes or builds upon, for example, an abstract idea."

Reviewing prong one, the Court interpreted the main thrust behind Alice and its progeny as "determin[ing] whether the claim moves beyond a long-understood concept or simply seeks to monopolize one by masking it through the medium of technology."  To do this, a court must ask "whether the claims are directed to a specific implementation to a solution to a problem."  Importantly, "[t]he point is not to deem ineligible any task or concept that can possibly be envisioned or performed by the human mind."

With respect to prong two, the Court stated that "the objective is to determine whether the claims provide a solution to a problem; it is not intended to replace the requirements for validity (e.g., utility, novelty, nonobviousness)."  Synthesizing the case law, the Court produced a list of questions relevant to the prong two inquiry:

(1) Is there an improvement recited?
(2) Is there a benefit recited?
(3) Is something new recited?
(4) Does the patent have one or more particular applications?
(5) What are the steps and limits to be followed in applying the invention?

Applying Alice, the Court found that Lowe's high-level description of the claims mischaracterized the invention therein.  According to the Court, Lowe's would "require the Court to read Alice in a way that essentially swallows all of patent law," which is not the objective of prong one.  Referring to the recent Enfish v. Microsoft decision, the Court noted that "a court should not construe a patent at too high a level of generality, nor should it broadly find all improvements in computer-related technology to be directed to abstract ideas."  Doing so would leave little opportunity for any claim to be patent-eligible.

Particular elements of claim 1, such as "the limitations of processing motion data from a sensor in real time, indexing data from the sensor at the same time as its capture along with pre-existing data, and generating an index by cross-indexing the real-time data against the pre-existing data" led the Court to conclude that the patent is directed to "particular improvements over prior art multimedia data indexing techniques that render such data accessible in real time."  In the Court's view, this resulted in the invention being designed to solve a problem that exists within the technological realm, rather than just implement the abstract idea of indexing data.

Further, the Court found that the patent was not directed to "the addition of conventional computer components to well-known business practices, computer implementation of a mathematical formula, generalized steps (existing outside of the realm of computers) to be performed through conventional computer activity, or other concepts that can be formulated and implemented entirely within the human mind."  Notably, the Court refused to make any factual findings regarding whether the claimed invention could be performed in the human mind at this early stage of the proceedings, but it left open the possibility that Lowe's could bring this challenge again at a later date.

In addressing prong two, the Court reprimanded Lowe's for "asking the Court to compare the '693 Patent to prior art in the field of multimedia data indexing."  The Court declined to take this approach, noting that it "must accept the specification's assertions—at least with respect to the claimed invention's advantages over prior art—to be true on their face."  Further, even if "a patent claim adds little to prior art . . . does not mean that the claim lacks an inventive concept vis-à-vis an abstract idea."

The Court also discussed the similarities between the prong one and prong two analyses post-Enfish.  Observing that "it is easier to separate the two steps in recitation than in application and that the two steps could arguably be collapsed into a single one," the Court found that "many of the same aspects that support the determination that the '693 Patent is not directed to an abstract idea at Alice step one also support the conclusion that, even if it were so directed, the claims nonetheless contain an inventive concept."  Thus, the claims were determined to be patent-eligible, and Lowe's motion was denied.

With the rapidly evolving § 101 landscape, it is often difficult to determine whether a District Court's reasoning will be influential on other courts.  Here, the discussion of mental activities is in line with the recent Federal Circuit McRo v. Bandai decision (therein the inquiry was deemed to be not whether a claimed process can be carried out mentally, but whether it has been carried out mentally), and therefore is likely a sign of things to come.  Additionally, the Court is interpreting Enfish as requiring, when at the pleadings stage, that courts take as given any purported improvements that a patent's specification set forth.  As a consequence, including an elucidation of such improvements in a specification (as is now common practice) may effectively short circuit § 101 challenges in a motion to dismiss.  However, the door remains open for the challenger to dispute such assertions during and after discovery.

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.

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