No Mixed Signals: Delaware Court Finds Data Transmission Patent Invalid Under Section 101

Holland & Knight LLP

Holland & Knight LLP

In Zyrcuits IP LLC v. Acuity Brands, Inc., No. CV 20-1306-CFC, 2021 WL 3287801, at *1 (D. Del. Aug. 2, 2021), Zyrcuits IP sued a number of defendants in the U.S. District Court for the District of Delaware, alleging infringement of U.S. Patent No. 6,671,307. The patent, titled "Spread-Spectrum High Data Rate System and Method," describes applying signal codes to blocks of interleaved data for spread-spectrum transmission. Zyrcuits asserted claim 4 which recites:

[a] spread-spectrum method improvement for sending data over a communications channel, comprising the steps of:

storing, at a transmitter, N bits of interleaved data as stored data, with N a number of bits in a symbol;

selecting, at said transmitter in response to the N bits of stored data, a chip-sequence signal from a plurality of 2N chip-sequence signals, as an output chip-sequence signal; and

transmitting, at said transmitter, the output chip-sequence signal as a radio wave, at a carrier frequency, over said communications channel, as a spread-spectrum signal.

As the court noted, the claim describes "grouping together data that may come from multiple sources, applying a single chip-sequence code to the grouped data, and then transmitting the code by radio wave." The defendants moved to dismiss, arguing that the asserted claim was directed to ineligible subject matter under Section 101.

At Alice step 1, the court found that the asserted claim was directed to storing data, selecting a signal based on the stored data and then transmitting the signal. Zyrcuits argued that the asserted claim teaches a technical solution to the problem of spread-spectrum signal transmission without using parallel codes. And while the U.S. Court of Appeals for the Federal Circuit has explained that claims directed to forms of data collection and manipulation are not directed to an abstract idea if they offer technical improvements, "Zyrcuits fails to identify in its briefing any particular technical solution in the asserted patent."

The court found this unsurprising because the "language of claim 4 lacks technical specificity" and, in short, "is directed to the idea of applying a signal code to a block of interleaved data" without providing "any guidance on how to accomplish this idea."

At Alice step 2, the court found that claim 4 provides no inventive concept because "the claim simply takes an abstract idea for transmitting data and implements it 'at a transmitter' as a 'radio wave' over a 'communication channel.'" Zyrcuits argued that there were factual disputes, but the court disagreed. "Zyrcuits cannot artificially create a dispute of fact by making conclusory allegations."

Accordingly, the District of Delaware held that the patent is invalid under Section 101 and granted the defendants' motions to dismiss.

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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