Texas Patent Litigation Monthly Wrap-Up: December 2021

This post summarizes two federal patent decisions from Texas courts that issued in December 2021. In the first decision, Judge Albright granted a motion to dismiss under a § 101 challenge. The second decision looks at a comparable § 101 analysis by Judge Gilstrap. This summary focuses on the Alice step one analysis performed by each court.

Health Discovery Corp. v. Intel Corp., No. 6:20-cv-666, Dkt. No. 66 (W.D. Tex. Dec. 27, 2021) — granting motion to dismiss under § 101, Judge Albright

Plaintiff Health Discovery Corp. ("HDC") filed a lawsuit against Intel for infringement of U.S. Patent Nos. 7,117,188, 7,542,959, 8,095,483, and 10,402,685 (collectively, the "Asserted Patents") related to innovative technology for using machine learning to identify relevant patterns in datasets. Dkt. 66 at 1-2. Intel moved to dismiss the complaint under Rule 12(b)(6) of the Federal Rules of Civil Procedure, arguing the claims are invalid under 35 U.S.C. § 101. Id. at 2.

The claims of the Asserted Patents are directed to conducting feature ranking, selection, and reduction using a support vector machine ("SVM") to facilitate recursive feature elimination ("RFE") processes on a large dataset. This process classifies, weighs, ranks, and then eliminates criterion until a threshold is met. The invention can purportedly be used to "provide subsets of genes that are both smaller and more discriminant," which is "beneficial in confirming recent discoveries in research or in suggesting avenues for research or treatment." Dkt. 66 at 4 (quoting '188 patent at 39:52-54, 2:51-60).

Patent eligible subject matter is defined in § 101 as "any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof," with the following exceptions: laws of nature, natural phenomena, and abstract ideas. 35 U.S.C. § 101; see Diamond v. Diehr, 450 U.S. 175, 185 (1981). Judge Albright noted some of the issues and inconsistencies amongst different courts applying the two-step approach established in Alice Corp. Pty. v. CLS Bank Int'l, 573 U.S. 208 (2014). Dkt. 66 at 5-6. Alice step one requires determining whether the claims are "directed to" a judicial exception, and if so, step two requires considering whether the elements of each claim "transform the nature of the claim into a patent eligible application." Dkt. 66 at 5 (quoting Alice, 573 U.S. at 217).

Addressing the procedural context of a possible dismissal for § 101 at the 12(b)(6) stage, Judge Albright stated "accused infringers ... face an uphill scrabble," but ultimately Intel was able to surmount these obstacles. Dkt. 66 at 7.

In conducting Alice step one analysis, Judge Albright paid particular attention to whether the claims are directed to a "specific means or method that improves [that] relevant technology." Dkt. 66 at 9 (quoting McRO, Inc. v. Bandai Namco Games Am. Inc., 837 F.3d 1299, 1314 (Fed. Cir 2016). In this analysis, the court compared the situation where the relevant technology is characterized as an abstract idea like a mathematical concept, technique, analysis or algorithm with the situation where the technology is a discrete device, system, or method. Dkt. 66 at 10. In the first situation, the claims generally satisfy Alice step one, but in the second, the claims are most often patent eligible. Id. at 10.

To differentiate between these two categories, the court looked at four recent Federal Circuit opinions: Stanford II, SAP, CardioNet, and Koninklijke. Id. at 11. In Stanford II and SAP, the Federal Circuit found the mathematical nature of the claims invalid under § 101, while in the CardioNet and Koninlijke cases, the court upheld the claims. Id. Acknowledging that "[e]fforts to reconcile these opinions illustrate the difficulty in applying Alice with any consistency," Judge Albright ultimately found that the present claims cover subject matter much closer to SAP and Stanford II. Id. at 19-20. Following these two Federal Circuit cases, the court found that the claims satisfy Alice step one because the written description merely describes improving a mathematical analysis. Id. at 20-21 ("Like the claims in Stanford II and SAP, the claims here merely produce data with improved quality relative to that produced by conventional mathematical methods."). HDC argued that the patents recite allegations directed to "improving an existing technological or computer functionality," but the court found the claims directed to the abstract mathematical concept of SVM-RFE. Id. at 21-22.

Moving next to Alice step two, the court looked to the patent claims to see if they contained an inventive concept sufficient to transform the claimed idea into patent eligible material. Id. at 23. Here, there was no inventive concept. Id. at 23. It was insufficient to argue that the concept was "important" or "groundbreaking." Id. at 23-25. Consequently, the court granted the motion to dismiss as the patent claims were ineligible under § 101.

Infernal Tech., LLC, Inc. v. Sony Interactive Entertainment LLC, No. 2:19-CV-00248, Dkt. No. 356 (E.D. Tex. Dec. 6, 2021) — denying § 101 challenge, Judge Gilstrap

Although this case arises in a different context from the case discussed above, the pivotal analysis similarly revolved around Alice step one. This dispute arose after a jury considered Alice step two and found the technology was "well-understood, routine, and conventional." Dkt. 356 at 1. The court then evaluated Alice step one and upheld the patent claims.

Plaintiff Infernal Technology asserted U.S. Patent No. 6,362,822 and 7,061,488 against Defendant Sony Interactive Entertainment ("SIE"). The asserted claims cover a shadow rendering method for use in a computer. Id. at 3.

In conducting this Alice step one evaluation, the court considered if the claims, in light of the specification, focus "on a specific asserted improvement in computer capabilities, or, instead on a process that qualifies as an abstract idea for which computers are invoked merely as a tool." Dkt. 356 at 2 (quoting Packet Intelligence LLC v. NetScout Sys., Inc., 965 F.3d 1299, 1309 (Fed. Cir. 2020).

On the one hand, SIE argued that the claims are directed to the abstract idea of collecting and performing mathematical operations on data related to light falling on a region, and the claims neither improve the functionality of the computer or the existing technological process. Dkt. 356 at 4. On the other hand, Infernal argued that the claims greatly reduce the calculation to render graphics and can provide more efficient and higher quality means to produce realistic graphics. Id. at 4-5.

The court agreed with Infernal and found the asserted claims are not directed to an abstract idea but rather to an improvement for rendering lighting and shadows in computer graphics. Id. at 6. The court explained that this is not a case of simply taking "a known mathematical formula that was previously done by pencil and paper and introduce[ing] a computer as a tool." Id. at 6 (quoting Uniloc USA, Inc. v. LG Elecs. USA, Inc., 957 F.3d 1303, 1308 (Fed. Cir. 2020)). Judge Gilstrap further explained that "the analysis comes down to whether or not the claim itself is directed to an abstract idea. In this case, the answer is no." Id. at 7. Unlike in cases cited by SIE, the invention in question actually improves graphics rendering and "is not simply the gathering of data" or "using the computer as a tool to implement an abstract idea." Id. at 7-8. As such, the claims at issue do not falter at Alice step one and are valid.