United States: Abstract Ideas Cannot Be Permitted To Burden The "Basic Tools Of Modern-Day Commercial And Social Interaction"

In a case originally filed in 2012, Judge Amy Totenberg granted Judgment on the Pleadings in favor of United Parcel Service, Inc. ("UPS"), and against Mobile Telecommunications Technologies, LLC ("MTel"), relating to U.S. Patent No. 5,786,748 (the '748 Patent). The patent, filed in 1997 and issued on July 28, 1998, addressed a method to track packages and provide status information with text messages. This case has been the subject of two earlier blog posts: " Court Recognizes Alice Decision Potentially Impacts Case by Allowing LateMotion for Judgment on Pleadings" (Order of August 4, 2015) and " Court Delivers Markman Order in UPS Case On Order ofText Message Deliveries" (Order of March 17, 2014).

In reciting the standard for granting a Motion for Judgment on the Pleadings, the Court concluded: "In essence, the pleading 'must contain sufficient factual matter, accepted as true, to "state a claim to relief that is plausible on its face."'" Order, p. 2, quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009), quoting in turn Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007).

This case is unusual in that the July 2015 Motion for Judgment on the Pleadings followed a fully briefed Summary Judgment Motion on which a Special Master's recommendation had already issued (on March 25, 2015). Noting that the motion "perhaps could have been filed sooner," the Court nevertheless found the issue would likely be raised at trial and the Supreme Court case of Alice Corp. Pty. Ltd. v. CLS Bank Int'l, et al., 134 S. Ct. 2347 (2014), could be dispositive.

The Court recognized that "[s]triking the proper balance in identifying those 'abstract ideas' that are too ephemeral to be patentable is not an easy task." Undaunted, the Court undertook this task with regard to the '748 Patent, which claimed a method for providing notification by wireless communications of an express mail delivery undelivered by the appointed time.

In assessing whether MTel's patent addressed an abstract idea the Court tried to "detect the beating heart of the patent, its animating function." Bancorp Servs., L.L.C. v. Sun Life Assur. Co. of Canada (U.S.), 687 F.3d 1266, 1279 (Fed. Cir. 2012).

The Court noted the two-part test identified by Alice. First, is the claim "directed to an abstract idea or other patent-ineligible concept." Alice at 2355. Second, does the claim add "an 'inventive concept' that includes an element or combination of elements that is 'sufficient to ensure that the patent in practice amounts to significantly more' than the abstract idea itself." Id. at 2355. Describing in general terms a series of conventional steps will not suffice. Id. at 2357.

Judge Totenberg found the recent case of Wireless Media Innovations, LLC v. Maher Terminals, LLC, 100 F.Supp.3d 405, 417 (D.N.J. 2015) aff'd per curiam 208 WL 463218 (Fed. Cir. Feb. 8, 2016), persuasive and strikingly similar. In Wireless Media specifying monitoring details relating to the location and load status of shipping containers did not "overcome the fact that the core of the claim was about a basic organizational business process." Id. The Court distinguished method patents that addressed "a specific piece of technology or technological problem." Order at 10.

Judge Totenberg found that the animating goal of the '748 Patent was to notify customers whether a package had arrived or not. "Delivery notification is . . . the kind of conventional business practice long 'prevalent in our system of commerce.'" Order at 11. The patent "concerns a longstanding 'method of organizing human activity.'" Order at 12.

Having found that the '748 Patent addressed an abstract idea, the Court next addressed whether it contained an "inventive concept" to carry it "across the threshold of patentability." Order at 12. An "inventive concept" is required in order "to ensure that the claim is more than a drafting effort designed to monopolize the abstract idea." Alice at 2357. Time after time the introduction of a computer configured to practice the method has been found insufficient. Order at 13. The Court further noted that the "machine or transformation" test is no longer "sufficient by itself." Order n. 2 citing Vehicle Intelligence and Safety, LLC v. Mercedes-Benz USA, LLC, 2015 WL 9461707, at *4 (Fed. Cir. Dec. 28, 2015). Judge Totenberg found a concurring opinion of Judge Mayer particularly relevant to her analysis: "generic computers and the internet are 'the basic tools of modern-day commercial and social interaction,' and their use should remain 'free to all men and reserved exclusively to none.'" Order at 15, quoting Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709, 723 (Fed. Cir. 2014) (Mayer, J., concurring).

The "inventive concept" addition is determined by quality not quantity. Order at 16. The Court noted that MTel's limitations only served to illustrate that its purpose was to capture a specific technological implementation of a known business practice. Arguments that UPS could perform the function of the patent with voice-communications and not just text ran against MTel's arguments that the concept was innovative. Order at 17-19.

In rejecting MTel's arguments that UPS's assertion of Section 101 was waived by its tardiness, the Court noted that patent eligibility is a question of law, and thus MTel was not prejudiced on the merits by an inability to develop the factual record. Order at 21. However, the Court noted its wide discretion in awarding costs and referenced the additional costs incurred by MTel as a result of UPS's delay in affording the parties an opportunity to engage in settlement discussions before a final order is entered.

The case is Mobile Telecommunications Technologies, LLC v. United Parcel Service, Inc., No. 1:12-cv-03222-AT, Dkt. 161, entered in the U.S. District Court for the Northern District of Georgia, Atlanta Division, on March 24, 2016, by U.S. District Judge Amy Totenberg.

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