Electronic Communication Technologies, LLC v. ShoppersChoice.com, LLC (Fed. Cir. 2020)

McDonnell Boehnen Hulbert & Berghoff LLP

McDonnell Boehnen Hulbert & Berghoff LLP

Electronic Communication Technologies (ECT) sued ShoppersChoice in the Southern District of Florida for allegedly infringing claim 11 of U.S. Patent No. 9,373,261.  The claim recites:

11.  An automated notification system, comprising:
    one or more transceivers designed to communicate data;
    one or more memories;
    one or more processors; and
    computer program code stored in the one or more memories and executed by the one or more processors, the computer program code comprising:
        code that enables a first party associated with a personal communication device (PCD) to input or select authentication information for use in connection with a subsequent notification communication session involving advance notice of a delivery or pickup of a good or service at a stop location by a mobile thing (MT);
        code that causes storage of the authentication information;
        code that monitors location or travel information in connection with the MT;
        code that causes initiation of the notification communication session to the PCD with the one or more transceivers, in advance of arrival of the MT at the stop location, based at least in part upon the location or travel information associated with the MT;
        code that, during the notification communication session, provides the authentication information to the PCD that indicates to the first party that the notification communication session was initiated by an authorized source; and
        code that, during the notification communication session, enables the first party to select whether or not to engage in a communication session with a second party having access to particulars of the pickup or delivery.

ShoppersChoice moved that the claim was invalid under 35 U.S.C. § 101, and the District Court granted this judgment on the pleadings.  ECT appealed.

In Alice Corp. v. CLS Bank Int'l, the Supreme Court set forth a two-part test to determine whether claims are directed to patent-eligible subject matter under § 101.  One must first decide whether the claim at hand involves a judicially-excluded law of nature, a natural phenomenon, or an abstract idea.  If so, then one must further decide whether any element or combination of elements in the claim is sufficient to ensure that the claim amounts to significantly more than the judicial exclusion.  But elements or combinations of elements that are well-understood, routine, and conventional will not lift the claim over the § 101 hurdle.  While this inquiry is generally carried out as a matter of law, factual issues can come into play when determining whether something is well-understood, routine, and conventional.

Notably, procedure for the proper application of this test with the abstract idea exception has been inconsistently defined and is confusing in practice.  A potentially more workable definition of patent eligibility is that a claim is directed to an abstract idea if all of its elements are either non-specific, address a non-technical problem, or known in the art.  Thus, a claim is more likely to survive a § 101 challenge if it has three qualities:  specificity, a technical problem that it solves, and some degree of novelty.

Applying part one of Alice, the Court rapidly determined that the claim is directed to the abstract idea of "providing advance notification of the pickup or delivery of a mobile thing."  Particularly, the Court agreed with the District Court judge that "business practices designed to advise customers of the status of delivery of their goods have existed at least for several decades, if not longer."  And as we know from Alice, claims to longstanding business practices are given a dim view under § 101.

ECT argued that the claimed invention incorporated security enhancements, such as authentication of the notification communication session.  But the Court found these features to be claimed, and described in the specification, at so high a level that they could be virtually anything.  Therefore, they did not render the claim any less abstract.  Furthermore, "the process of recording authentication information . . . and including that information in a subsequent communication with the customer is abstract not only because it is a longstanding commercial practice, but also because it amounts to nothing more than gathering, storing, and transmitting information."

ECT also argued that its procedural openness and success at the USPTO should be factored into the § 101 inquiry.  ECT noted that the application "sailed through" the USPTO with "complete and total transparency."  Moreover, ECT requested that the USPTO reconfirm its findings of patentability under § 101 after receiving a notice of allowance, which the USPTO did.  Nonetheless, it should be surprising to absolutely nobody that the Federal Circuit does not put much weight on what the USPTO thinks about § 101 in any given matter.  The Court wrote:

These specific details relating to the procedure of prosecution before the USPTO bear no relationship to the subject matter to which claim 11 is directed and do not negate the fact that claim 11 is directed to longstanding business practices.  Nor do ECT's purported diligence and good faith during patent prosecution before the USPTO in any way shield the patent's claims from Article III review for patent eligibility.

Accordingly, the Court found the claim abstract and moved on to step two of Alice.  Here, it found that claim 11 did not pass muster "[b]ecause [it] is specified at a high level of generality, is specified in functional terms, and merely invokes well-understood, routine, conventional components and activity to apply the abstract idea identified previously."

ECT made an interesting argument, stating that in another § 101 case, the Court "held a far shorter, far less enabled claim valid."  The Court shot down this comparison, stating that "patent eligibility turns on the content of the claims, not merely on the number of words recited in the claims."  The Court went on to observe that "just because a patent claim is enabled does not mean that the claim is patent eligible—subject matter eligibility and enablement are separate inquiries, irrespective of any overlap between the two."

So the Court seems to be affirming that there is -- or at least can be -- some commonality between the § 101 and § 112(b) inquiries.  But this commonality is not fleshed out any further.  For that matter, the Court's earlier statements also imply overlap between the analyses of § 101 and § 112(f), but again we are left to guess as to the extent and implications of any such overlap.

Finally, ECT argued that the District Court should have construed the claims before rendering a § 101 decision.  But ECT did not identify any terms needing construction, so the Court dismissed this notion and held that claim 11 does not meet the requirements of § 101.

Electronic Communication Technologies, LLC v. ShoppersChoice.com, LLC (Fed. Cir. 2020)
Panel: Chief Judge Prost and Circuit Judges Dyk and Wallach
Opinion by Circuit Judge Wallach

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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