[00:00:01] Speaker 07:
Let's try to get the seating right on this next case.

[00:00:05] Speaker 07:
The next case for argument is 18-11-32, Unilock versus ADP.

[00:01:24] Speaker 07:
All right, Mr. Foster, whenever you're ready.

[00:01:27] Speaker 04:
Thank you, Your Honor.

[00:01:28] Speaker 04:
Please, the court.

[00:01:30] Speaker 07:
There's a lot going on in these cases.

[00:01:33] Speaker 07:
But we've got, in addition to all of the patents, and it's involved in the underlying merits case, we've got this separate standing issue.

[00:01:42] Speaker 07:
So we don't want to spend all day here.

[00:01:44] Speaker 07:
I'll ask you to spend maybe two minutes of your time at the outset on the standing question, the constitutional standing question.

[00:01:53] Speaker 04:
Yes, Your Honor.

[00:01:54] Speaker 04:
I'll start wherever you want.

[00:01:56] Speaker 04:
The standing question we did, Unalak, did submit a brief last week.

[00:02:01] Speaker 04:
And I'll respond to any specific questions.

[00:02:03] Speaker 07:
OK, well, one specific question I have is just to make sure, because we've got a lot of paper involved in this case.

[00:02:10] Speaker 07:
Does your position on this agreement rest on the fact that I'm looking at Section 2.1 at the end of that, that the third parties here under Section E

[00:02:22] Speaker 07:
are really the same as the indemnity that it doesn't?

[00:02:26] Speaker 07:
I think, as I understand the other side's argument, they think this third party's referenced in E is everybody else in the world.

[00:02:33] Speaker 07:
And your position is that no, it is only connected to the indemnity.

[00:02:39] Speaker 07:
So you can answer whether I've got this issue correct or not.

[00:02:43] Speaker 04:
The short answer is yes.

[00:02:44] Speaker 04:
Your Honor will note the contractual argument, 21E you referred to, uses the phrase third party.

[00:02:49] Speaker 04:
The third party phrase appears in section four as well, dealing with indemnification.

[00:02:54] Speaker 04:
That's a contractual argument.

[00:02:56] Speaker 04:
We're an appellate court.

[00:02:57] Speaker 04:
I don't know how you're going to deal with that, but yes, it is our position on the legal thing.

[00:03:01] Speaker 04:
We also have a factual issue.

[00:03:03] Speaker 04:
We don't think there was indemnification obligation, and that'll be tried in the district court in East Texas at some point.

[00:03:10] Speaker 03:
What about Uniloc 2017 LLC?

[00:03:13] Speaker 03:
If I think that they are necessary in order for you to proceed, because if I don't believe

[00:03:18] Speaker 03:
that substantially all rights were transferred.

[00:03:21] Speaker 03:
What do we do about that?

[00:03:23] Speaker 03:
Do we order?

[00:03:24] Speaker 03:
I mean, there's a federal rule that says you're supposed to make a motion for it.

[00:03:27] Speaker 03:
You didn't make one.

[00:03:28] Speaker 03:
But then you sent this declaration.

[00:03:30] Speaker 03:
The company president says, if we have to be added, we consent to be added.

[00:03:33] Speaker 03:
But you didn't file a motion to add them.

[00:03:34] Speaker 03:
So I'm not sure what to do.

[00:03:36] Speaker 04:
Yeah, I wasn't sure what to do either, Your Honor, when this issue came up in several cases.

[00:03:40] Speaker 04:
In the district court, there's a rule, 25C.

[00:03:43] Speaker 03:
But there's a FRAP rule, too.

[00:03:46] Speaker 04:
I didn't see it, but 25C said you don't have to move, you can, you don't, but the... PRAP Rule 43.

[00:03:53] Speaker 04:
Excuse me?

[00:03:54] Speaker 03:
PRAP Rule 43, Federal Rule of Appellate Procedure 43.

[00:03:57] Speaker 04:
Okay, Your Honor.

[00:03:58] Speaker 03:
It says you have to move.

[00:04:00] Speaker 03:
You didn't move.

[00:04:00] Speaker 03:
So you're going to do that after court today?

[00:04:02] Speaker 03:
Maybe a short piece of paper?

[00:04:04] Speaker 03:
You want to do it orally right now?

[00:04:06] Speaker 04:
I can move right now, Your Honor.

[00:04:07] Speaker 03:
Okay, I consider that a motion that was made and we'll take it under advisement.

[00:04:10] Speaker 03:
So you're moving just to be clear.

[00:04:13] Speaker 03:
that Uniloc 2017 LLC be joined to this appeal if necessary.

[00:04:18] Speaker 04:
Yes, Your Honor.

[00:04:19] Speaker 04:
That's in a footnote in our brief saying that since I also represent Uniloc 2017, on their behalf, Uniloc 2017 would consent to being added if the court wanted.

[00:04:29] Speaker 04:
Do you want to move on to the merits now?

[00:04:32] Speaker 04:
Yes.

[00:04:32] Speaker 04:
OK.

[00:04:35] Speaker 04:
Starting with the merits.

[00:04:37] Speaker 04:
IBM was a big factor in the industry in 1998.

[00:04:41] Speaker 04:
They came up with a new way to redesign the networks in large companies where individual users would move to various, they're called clients, client stations.

[00:04:53] Speaker 04:
And you might have different users working from any particular client station.

[00:04:57] Speaker 04:
There are a lot of problems involved in that kind of situation.

[00:05:00] Speaker 04:
IBM had new ways to do it.

[00:05:03] Speaker 04:
They filed a bunch of patent applications in December 14, 1998, outlining their new ideas, and they ultimately got

[00:05:10] Speaker 04:
This was a pleadings motion.

[00:05:16] Speaker 04:
So it's based primarily on what's in the patent.

[00:05:19] Speaker 04:
And the patents laid out problems with prior art, how what IBM was doing was different from that, and what the claims are and what the differences were.

[00:05:29] Speaker 03:
Why don't we jump to the 446 patent?

[00:05:32] Speaker 03:
What did the district court say the abstract idea was in that one?

[00:05:38] Speaker 04:
Let me turn my notes in the 446, Your Honor.

[00:05:41] Speaker 04:
I don't want to confuse someone else.

[00:05:48] Speaker 04:
Sorry.

[00:05:50] Speaker 03:
Well, we laid this out in our... I just asked you to tell me what did the district court hold was the abstract idea

[00:06:02] Speaker 03:
for claim one of the 466 packs.

[00:06:04] Speaker 04:
It didn't define the outstripping.

[00:06:07] Speaker 03:
I thought it did.

[00:06:07] Speaker 03:
I thought it did on page 838 of the appendix where it said, quote, providing a user-specific desktop interface that includes establishing display regions associated with application programs for which the user is authorized.

[00:06:21] Speaker 03:
And in response to the user selection, I'm going to start laughing because I have to probably take three breaths to get all of this out.

[00:06:27] Speaker 03:
And I'm not certain how providing a user-specific desktop interface

[00:06:31] Speaker 03:
could possibly be an abstract idea.

[00:06:33] Speaker 03:
This is a friendly question, if you're not understanding.

[00:06:37] Speaker 04:
Thank you for honor.

[00:06:38] Speaker 04:
And I was trying to be kind to the district court when our brief, we said that.

[00:06:42] Speaker 02:
I didn't get anywhere near the end of what the district court said was the abstract idea.

[00:06:46] Speaker 02:
I got to about halfway.

[00:06:49] Speaker 04:
We did make that point.

[00:06:50] Speaker 04:
This is an overview, so I don't want to pick on the district court.

[00:06:53] Speaker 04:
But yeah, that doesn't sound like an abstract idea to me at all.

[00:06:56] Speaker 04:
And we did say that in our brief.

[00:06:58] Speaker 04:
That's part of the issues we have heard.

[00:07:00] Speaker 04:
trying on oral argument to focus on what the invention is and what was claimed and not pick apart what the district court did, but we did lay those things out in our brief.

[00:07:11] Speaker 04:
If I might, in preparing for this argument, I reviewed all of the Federal Circuit opinions since the Alice case in which there was a holding that a claim was drawn to an abstract idea.

[00:07:22] Speaker 04:
There are 34 of them, and 23 of them deal with the selecting, analyzing, reporting, and displaying information.

[00:07:30] Speaker 04:
which obviously doesn't apply here.

[00:07:32] Speaker 04:
Eight of them are cases where the inventor simply put on a computer what had been done by human beings that doesn't apply here.

[00:07:38] Speaker 04:
And there were three oddballs that didn't fall into those baskets dealing with the rules of card games and one which talked about the mental idea.

[00:07:46] Speaker 04:
So when you're a company like IBM and you come out with redesign a network and design claims that are drawn to it,

[00:07:53] Speaker 07:
Okay, can I just interrupt just because we're running out of time and I'm having, I mean, I think there's daylight between the individual claims here and different arguments to be made and they fall in different categories.

[00:08:05] Speaker 07:
So let's turn to the 293 if you don't mind.

[00:08:07] Speaker 04:
293 sure.

[00:08:08] Speaker 07:
It seems to me that the only purported invention, so tell me if I'm missing stuff here, is using the file packet and this segment.

[00:08:20] Speaker 07:
And as far as I can tell, reading the spec, I mean, there's a lot of stuff in the spec about prior and what's the invention.

[00:08:28] Speaker 07:
But these were already known in the ARC, right?

[00:08:32] Speaker 07:
File packet and the segment configured.

[00:08:37] Speaker 04:
Respectfully, Your Honor, file packet is a term which was in the prior ARC.

[00:08:40] Speaker 04:
Which was?

[00:08:41] Speaker 04:
File packet just means a file.

[00:08:44] Speaker 04:
But this was different than what we're doing in the ART because this had program in it to configure the application so it could be activated from a central location in the network.

[00:08:56] Speaker 04:
At least that's the way it was described in the patent.

[00:08:59] Speaker 05:
In what sense is either the network or any of the client specified in claim one of the 293 patent

[00:09:10] Speaker 05:
performing a different function in the sense of the Enfish case, for example.

[00:09:16] Speaker 04:
My understanding, and I'm not a computer scientist, is that they put programming in the file packet to configure the network so that it could be a single application.

[00:09:28] Speaker 04:
You could access the application from the target, from the user, could access it through the target server.

[00:09:38] Speaker 05:
I mean, the server is doing what servers do, the computer is doing what servers do, and the network is doing what networks do.

[00:09:47] Speaker 05:
The only difference is the programming.

[00:09:51] Speaker 05:
Absolutely.

[00:09:52] Speaker 03:
Does the programming, in this case, improve the functioning of the network?

[00:09:57] Speaker 04:
Yeah, that's exactly it, Your Honor.

[00:09:59] Speaker 03:
Because we've held that when innovation like this improves the functioning of the computer, for example, like Enfish,

[00:10:07] Speaker 03:
where the particular data platform, I can't remember the specific details, but I do remember there were assertions in the specification that it reduced memory allocation, sped up processing, things like that.

[00:10:21] Speaker 03:
So how does this improve the network and where, if anywhere, in the 293 patent does it say that?

[00:10:28] Speaker 03:
Where does it articulate the improvements?

[00:10:31] Speaker 04:
What it says in the record, Your Honor, is that now you can control us all from one location.

[00:10:36] Speaker 04:
I recall that as being the advantage that's satisfied by the 293 patent.

[00:10:41] Speaker 07:
But that's part of the abstract idea, right?

[00:10:44] Speaker 07:
I'm focusing on the claims now.

[00:10:46] Speaker 07:
We'll go to the spec later.

[00:10:47] Speaker 07:
But there's nothing in the claim language that seems to say that.

[00:10:53] Speaker 07:
And certainly our cases say if you've got an abstract idea, the inventive concept is not drawn to, well, this is the first time we've done it in this particular case.

[00:11:04] Speaker 07:
So tell me in the claims.

[00:11:06] Speaker 07:
Responding still to Judge Moore's question, because I'm just trying to understand your answer.

[00:11:12] Speaker 04:
You're talking about still in 293, right?

[00:11:14] Speaker 07:
Yes.

[00:11:14] Speaker 04:
OK, I just turned to claim one.

[00:11:20] Speaker 04:
This paragraph that begins, preparing a file packet is what was added during the process in history to distinguish it from prior art.

[00:11:27] Speaker 07:
Right, but the file packet, at least it's in the art.

[00:11:31] Speaker 07:
It's in the art, right?

[00:11:33] Speaker 04:
Well, it's a file.

[00:11:35] Speaker 04:
Yes, but it's the following language, including a segment configured to initiate registration operations for the application program with the target on-demand server.

[00:11:44] Speaker 04:
What the patent says is that is not how the prior art did it.

[00:11:49] Speaker 04:
This was added during the prosecution history, and the examiner couldn't find that in the prior art, and he allowed the claims to issue.

[00:11:55] Speaker 07:
So is there anything in the specification that discusses any technical improvements about file packets, how they're created, how they're sent, are they received?

[00:12:04] Speaker 07:
Because I couldn't find anything.

[00:12:07] Speaker 07:
Can you point us?

[00:12:10] Speaker 04:
I hate to sound unprepared.

[00:12:11] Speaker 04:
That's the kind of thing I sit down and look over to answer.

[00:12:15] Speaker 04:
Not knowing in advance, you'd be asking how this aspect of the 293 patent.

[00:12:18] Speaker 04:
I will point out, though, that this was the provision which was added during the file history, and it was discussed

[00:12:24] Speaker 04:
back and forth as to why it provided advantages over the ER.

[00:12:28] Speaker 07:
I'm sorry, I didn't hear what your last phrase was.

[00:12:31] Speaker 04:
It was discussed with the examiner how this provision, which was added during the final history, differentiated the IBM way from the way the prior ER did it.

[00:12:41] Speaker 04:
I'm sorry, Judge Moore?

[00:12:42] Speaker 03:
Well, let me see if I can help you with the 293 or at least tell you what I understood

[00:12:49] Speaker 03:
the nature of its invention to be and you can correct me or you can continue to say that you're just not prepared to answer whatever is fine.

[00:12:56] Speaker 03:
But I didn't think this was about file packets or a patent that was claiming novelty in file packets.

[00:13:03] Speaker 03:
I thought it was about what file packets allow the network to do, how the network can operate more efficiently by virtue of these file packets, how the applications get updated centrally because of them and it allows users to access the applications from any client as a result of all this.

[00:13:18] Speaker 03:
So it's not that the individual components were necessarily not conventional, but their use put together in a different way afforded significant network improvements and increases.

[00:13:31] Speaker 03:
That's what I understood the fact.

[00:13:32] Speaker 04:
You said much more elegantly and accurately than I could have, Your Honor.

[00:13:35] Speaker 07:
Thank you.

[00:13:36] Speaker 07:
You want to point us to something in the specification that does that?

[00:13:39] Speaker 04:
I'm sorry.

[00:13:40] Speaker 04:
I can't hear you, Your Honor.

[00:13:41] Speaker 07:
I mean, the district court said, and I don't know if he had a site to the specification,

[00:13:46] Speaker 07:
He concluded that the packets include a segment configured to initiate registration operations that is regularly, quote, activity of commercial network management software as described in the specification itself.

[00:14:00] Speaker 07:
So do you have a site for the specification?

[00:14:04] Speaker 04:
Not on the fly, Your Honor.

[00:14:05] Speaker 04:
I can't do that.

[00:14:05] Speaker 04:
I'm sorry.

[00:14:07] Speaker 05:
Can you turn to the 466 patent and tell me what is the improvement

[00:14:15] Speaker 05:
represented by the method of claim one.

[00:14:20] Speaker 05:
What is the improved functioning or the improvement that would avoid this being considered simply an abstract idea?

[00:14:33] Speaker 04:
Thank you, Your Honor.

[00:14:34] Speaker 04:
The language I use is claim to advance because it seems to be the language the circuit is now picking up to define what something is directed to.

[00:14:43] Speaker 04:
The claim to advance the 466 patent, there were several aspects to the IBM way.

[00:14:48] Speaker 04:
One was to, of course, you start with an application on a server in the network.

[00:14:53] Speaker 04:
But the idea was to provide mobility to users by a user now logs into a terminal, wherever it is, and then the server sends a desktop, a desktop interface unique to that user.

[00:15:06] Speaker 04:
And on the desktop interface will be icons for the applications to which that user

[00:15:11] Speaker 04:
has authorization, the user then selects the app, and then the application is sent, is not executed on the server, but is sent down to the client for execution.

[00:15:23] Speaker 04:
Those instances are all in the claims.

[00:15:26] Speaker 04:
That was not the way the prior art did it.

[00:15:29] Speaker 04:
And the advantages were defined in the 466 patent as providing mobility to this inter-corporate system.

[00:15:37] Speaker 05:
It sounds like something that

[00:15:40] Speaker 05:
computers regularly do, that computers regularly interact with the user, sitting at the client, and provide the associated set of application programs.

[00:15:55] Speaker 05:
It's what everybody does every day, sitting in front of a computer.

[00:15:58] Speaker 04:
Every day in 2019?

[00:16:01] Speaker 07:
Just to amend Judge Lin's point, I thought you said and that you conceded, I don't want to call it a concession,

[00:16:08] Speaker 07:
engrave that it was conventional for client work stations to be connected to servers over a network.

[00:16:14] Speaker 07:
Installing, distributing, receiving, and providing programs over a network represented standard computer functionality.

[00:16:22] Speaker 07:
I'm quoting from your bravery.

[00:16:25] Speaker 04:
Yes, Your Honor, but in 1999, although servers were connected to users, it didn't work out this way.

[00:16:33] Speaker 04:
It was not a situation then where that you had a user go to any terminal

[00:16:38] Speaker 04:
and get an interface where his authorized applications were displayed.

[00:16:44] Speaker 04:
People forget that.

[00:16:46] Speaker 04:
That's why you have to look at the record here.

[00:16:48] Speaker 03:
Well, doesn't the patent actually expressly say it?

[00:16:51] Speaker 03:
Why don't you pull out the 466 patent?

[00:16:54] Speaker 03:
You want me to pull it out, Your Honor?

[00:16:55] Speaker 03:
Yeah, I do.

[00:16:56] Speaker 03:
I'm going to help you.

[00:16:58] Speaker 03:
I wish you were doing it, but... I have it, Your Honor.

[00:17:08] Speaker 03:
What about, let's see, in column one, lines 43 to 56, do you lay out there the problems with the network architecture as it existed in 1999 that this patent is going to solve?

[00:17:27] Speaker 05:
Yes, your honor.

[00:17:27] Speaker 03:
And then on column 16, starting at line 60, do you then explain how this patent solves those problems?

[00:17:36] Speaker 03:
I mean, I think it's in many places, probably, but those were the first two that jumped to mind to me.

[00:17:43] Speaker 07:
I'm sorry.

[00:17:43] Speaker 07:
You were referring to column 16?

[00:17:46] Speaker 07:
Mm-hmm.

[00:17:54] Speaker 04:
I'd also refer to the court in the chapter and verse.

[00:17:57] Speaker 04:
We tried to set this forth in our briefing as to specific columns and lines where the advantages of each bet were set forth.

[00:18:04] Speaker 04:
But you're right, I can't do that on the fly.

[00:18:07] Speaker 04:
Thank you, Your Honor.

[00:18:09] Speaker 07:
Well, why don't we reserve some time for about one minute.

[00:18:26] Speaker 01:
Meng Shi.

[00:18:27] Speaker 01:
Thank you.

[00:18:27] Speaker 01:
Meng Shi with Sussman Godfrey on behalf of Appellate Defender, Incorporated.

[00:18:32] Speaker 01:
I'm here to address

[00:18:34] Speaker 01:
three points today, the standing issue, the 466 patent and the 766 patent.

[00:18:39] Speaker 07:
On the standing issue, just very quickly... And just to be clear, so are you just doing standing or are you here to respond to the 101 issues?

[00:18:46] Speaker 01:
101 issues as well, but for two out of the four patents.

[00:18:49] Speaker 07:
Okay, tell us which two so we'll know what to ask you and what to ask your friend.

[00:18:52] Speaker 01:
Yes, the 466 and the 766.

[00:18:55] Speaker 07:
Okay, all right, why don't you spend a minute

[00:18:58] Speaker 07:
Or so on the standing question, maybe just on the points we've talked about.

[00:19:03] Speaker 01:
Yes, we object to their motion to join UNILOC 2017 LLC as an indispensable party.

[00:19:11] Speaker 01:
We actually disagree that this is a prudential standing issue at all.

[00:19:15] Speaker 01:
It would not be proper to substitute 2017 LLC now because we haven't even seen the assignment agreement from UNILOC Luxembourg, UNILOC USA.

[00:19:26] Speaker 01:
or to Unilog 2017 LLC.

[00:19:29] Speaker 01:
We can ascertain that it is in fact in its assignment where Unilog 2017 LLC is standing in the shoes of Unilog Luxembourg or USA and would be a tremendous prejudice to appellees for the court to grant this motion.

[00:19:44] Speaker 01:
So at the very least, I would request supplemental briefing on this FRAP 43 motion that they are making today.

[00:19:51] Speaker 07:
But are you also in the alternative making the argument that we should just, is there a basis for our just rejecting the motion wholesale as opposed to?

[00:19:59] Speaker 01:
Absolutely.

[00:20:01] Speaker 01:
We actually think that there is at least a prudential standing defect here, but more importantly, there is a constitutional standing defect.

[00:20:10] Speaker 01:
The prudential standing is only an independent reason to conclude that, you know, the court should dismiss this appeal.

[00:20:17] Speaker 01:
And the constitutional point is that Uniloc lost its constitutional standing when, on March 13, 2018, IBM regained the reversionary right to license the patents at issue to the appellees.

[00:20:30] Speaker 01:
And this is a holding that would be compelled by the court's cases in YAV versus Motorola, Lumineira versus Lyon, and Speedplay versus Bebop.

[00:20:44] Speaker 07:
But can I just ask you what I asked your friend on the other side, which is, is your argument the factual component of your argument?

[00:20:51] Speaker 07:
Well, it's not factual.

[00:20:52] Speaker 07:
It's construing the contract.

[00:20:54] Speaker 07:
But insofar as the contract, does your argument rest on our concluding that section 21E and the reference to third parties is a broader category than just the indemnity referenced in that same 2E section?

[00:21:09] Speaker 01:
Yes, that's one of the factual issues that we would want the court to decide right now, but we don't really think that... What kind of fact law, because we're construing a contract, but never mind.

[00:21:20] Speaker 01:
Yes, that's true.

[00:21:20] Speaker 01:
It's, yes, a legal issue.

[00:21:23] Speaker 01:
We don't really think that there's a factual dispute as to that.

[00:21:27] Speaker 01:
Actually, when Unilock submitted the Etchigoen Declaration, it was improper for the court to consider the party's intent.

[00:21:35] Speaker 01:
It's parole evidence and under New York law, which is what the contract should be construed,

[00:21:39] Speaker 01:
The court should not be considering parole evidence to create an ambiguity where there is none, and especially where Unilock has not contended that there is an ambiguity in the contract.

[00:21:58] Speaker 01:
And on the factual issue, parole evidence aside, we think that it's clear on the face of the contract that third parties and indemnities refer not to the same thing.

[00:22:09] Speaker 01:
Third parties under 2.1 is very broad and can include any party that's involved in any activities that's relating to the defense enforcement or licensing under any of these IBM patents by UNLOC.

[00:22:21] Speaker 01:
The term indemnity under Section 2.1, which is the same provision, refers only to IBM subsidiaries or licensees who were sued by UNLOC knowing that such a party had been an IBM licensee.

[00:22:35] Speaker 01:
The use of these very different terms in a single contract and actually in this single provision 2.1 here means that the terms are to be accorded very different meanings and that's a standard contract interpretation law.

[00:22:47] Speaker 07:
Okay, turning to the 466 patent which we've already kind of covered with your friend.

[00:22:53] Speaker 07:
Is this the one where the district court gave this to find the abstract idea in kind of an overwhelming way?

[00:23:01] Speaker 07:
So what do we do with that?

[00:23:03] Speaker 01:
I think you should read that as the abstract idea.

[00:23:06] Speaker 01:
So the district court actually, we counted the words and there's 45 words in the formulation of the abstract idea.

[00:23:13] Speaker 01:
And we believe that.

[00:23:15] Speaker 03:
It's not a helpful statement by you.

[00:23:17] Speaker 03:
I don't understand.

[00:23:18] Speaker 01:
In other words, the district court went very narrow.

[00:23:23] Speaker 03:
Not helpful to your case is all I mean.

[00:23:25] Speaker 03:
I don't understand how an abstract idea

[00:23:29] Speaker 03:
could begin with providing a user-specific desktop interface.

[00:23:34] Speaker 03:
What about that sounds abstract?

[00:23:37] Speaker 01:
A user-desktop interface and the provision there... User-specific?

[00:23:41] Speaker 01:
User-specific, yes.

[00:23:43] Speaker 01:
Well, most desktop interfaces would be user-specific since it would be queued to the user unless it didn't have the icons for the downloading of the application.

[00:23:53] Speaker 01:
But our position is

[00:23:55] Speaker 01:
The district court went very narrow and into the minutiae in formulating this abstract idea and still found that patent ineligible.

[00:24:02] Speaker 01:
And under the court's precedent in Apple versus Amara, trading tax, these kinds of interfaces, which, by the way, this patent is moving on.

[00:24:10] Speaker 03:
Yes, because if you go into the minutiae and you don't actually look at an abstract idea, it makes it much easier to survive step two, right?

[00:24:18] Speaker 03:
Because we've held that the thing that's not conventional, well understood, or routine

[00:24:24] Speaker 03:
can't be the abstract idea, that can't be what saves your claim.

[00:24:28] Speaker 03:
So if the district court basically articulates all the elements of the claim as the abstract idea, you've eliminated step two of Alice.

[00:24:37] Speaker 03:
So I don't think going to this level of minutiae, first off, I don't think this articulates an abstract idea.

[00:24:43] Speaker 03:
For you to prevail, you've got to tell me an actual abstract idea, because nothing about this seems abstract to me.

[00:24:50] Speaker 01:
We think that providing a user-specific desktop interface

[00:24:54] Speaker 01:
for the management of or in distribution of applications would be the abstract idea in the alternative.

[00:25:02] Speaker 01:
But we do not think that the district court is wrong in formulating a more specific version of the abstract idea.

[00:25:12] Speaker 01:
On the issue of advantages regarding network architecture, we believe that all these technological advantages have been imported from the spec

[00:25:21] Speaker 01:
And what the court should really do is look at the claims to find out that these are not technical improvements at all to the prior art.

[00:25:29] Speaker 01:
The claimed advance under affinity labs is just another way of understanding what a technical improvement is.

[00:25:38] Speaker 01:
But a desktop interface unique to user icons for selection, selecting those icons and then sending an application to the client for execution.

[00:25:46] Speaker 01:
That is, like Judge Lin stated before,

[00:25:49] Speaker 01:
Computers regularly do this in 2019 and back in 1998 as well.

[00:25:54] Speaker 01:
And as Judge Moore pointed out in gray, appellants actually conceded this.

[00:26:01] Speaker 01:
Installing, distributing, maintaining, downloading, these are all broad categories.

[00:26:08] Speaker 01:
And we believe that on the routine and conventional point, appellants have waived that argument because it was not raised below.

[00:26:20] Speaker 01:
And in any event, in terms of the specification and what's in the specification, there's mentioning of the Tivoli system, the Microsoft Zen system, all of these systems were able to have this method.

[00:26:36] Speaker 07:
When you say it was not raised below, are we looking at, there's just too many papers associated with this case, but are we looking at, I don't even

[00:26:49] Speaker 07:
It was an opposition file to the motion to dismiss.

[00:26:53] Speaker 07:
So when you're saying it was waived, you're saying that that would have been their opportunity to raise it.

[00:26:58] Speaker 01:
Yes, absolutely.

[00:26:59] Speaker 01:
And they would not be able to point that out.

[00:27:01] Speaker 07:
You're not talking about the complaint or anything like that.

[00:27:03] Speaker 07:
You're talking about the opposition to the motion.

[00:27:05] Speaker 01:
Yes, yes, the briefing.

[00:27:06] Speaker 01:
Any lack of evidence was really Unalak's own doing.

[00:27:10] Speaker 01:
The evidence regarding what was not considered well understood routine or conventional was never before the district court, who was only presented with a patent.

[00:27:19] Speaker 01:
the very limited allegations in the complaints and unilux arguments, and the specification does not state that the claim method is not well understood, routine, or conventional in 1998.

[00:27:31] Speaker 03:
Who has the obligation or the burden to establish, in this case?

[00:27:37] Speaker 01:
To establish 101 eligibility?

[00:27:40] Speaker 01:
Sure.

[00:27:41] Speaker 01:
That would be the appellants.

[00:27:44] Speaker 03:
You think the appellants have the burden at the district court to prove that their patent is eligible?

[00:27:49] Speaker 03:
That their patent is not ineligible.

[00:27:51] Speaker 03:
You think they have the burden of proving their patent is not ineligible?

[00:27:55] Speaker 03:
Absolutely.

[00:27:56] Speaker 01:
Upon the motion by the defendants.

[00:27:59] Speaker 03:
What am I missing?

[00:28:00] Speaker 03:
A challenge to validity is the burden of persuasion is always upon... The burden of persuasion rests with us, but the evidentiary burden rests with them.

[00:28:13] Speaker 03:
Why?

[00:28:15] Speaker 03:
I think that's what Alice said.

[00:28:37] Speaker 01:
evidence or any kind of factual dispute regarding what was well-known, understood, or conventional back in 1998.

[00:28:44] Speaker 01:
So we didn't even have a chance to rebut what would have been that evidence.

[00:28:48] Speaker 01:
They didn't put forward the evidence at all.

[00:28:51] Speaker 03:
I understand 101 is an affirmative defense in this case, correct?

[00:28:55] Speaker 03:
Yes.

[00:28:55] Speaker 03:
But you still think they have the burden?

[00:28:58] Speaker 01:
On this issue, yes.

[00:28:59] Speaker 03:
OK.

[00:28:59] Speaker 07:
But this issue not being the entire eligibility of one who won on the questions regarding whether or not

[00:29:06] Speaker 07:
when they're referring to a computer that it was something other than routine and conventional.

[00:29:11] Speaker 03:
So I understand this because this is just blowing my mind.

[00:29:13] Speaker 03:
I've never heard anyone say this before.

[00:29:15] Speaker 03:
So just make sure I understand this.

[00:29:16] Speaker 03:
The Supreme Court articulated a two-part test that must be proven to find claims ineligible.

[00:29:22] Speaker 03:
And you're saying your burden is only part one.

[00:29:24] Speaker 03:
And if you meet part one, you win unless they disprove part two.

[00:29:29] Speaker 01:
Well, they're supposed to come back with evidence that says

[00:29:32] Speaker 01:
That contradicts it.

[00:29:32] Speaker 03:
I mean, this is what- Billy, you don't have a burden of proving it is well-understood, routine, and conventional.

[00:29:37] Speaker 03:
They have a burden of proving it's not.

[00:29:39] Speaker 01:
They have to raise it as an issue of fact.

[00:29:41] Speaker 01:
And it was not disputed for well.

[00:29:43] Speaker 03:
This is at the pleading stage.

[00:29:45] Speaker 01:
Yes, but they have to- They really can't put in evidence.

[00:29:48] Speaker 01:
They should have well-pleaded allegations in the complaint about what was not well-understood, routine, or conventional, or the fact that their invention was not well-understood, routine, or conventional.

[00:30:00] Speaker 05:
Well, maybe they have some obligation to raise a question about a question of fact, but the burden has to be on the party challenging the validity of the patent.

[00:30:11] Speaker 01:
Yes, the burden is on us to bring the Rule 12 motion in order to defeat patent eligibility.

[00:30:16] Speaker 01:
I do not disagree with that.

[00:30:18] Speaker 01:
Maybe I did not make myself clear earlier.

[00:30:20] Speaker 07:
OK, let's move to the other side, the other council.

[00:30:32] Speaker 00:
Thank you, Your Honors.

[00:30:32] Speaker 00:
May I please the Court?

[00:30:34] Speaker 00:
I'd be happy to address your questions about the 293, specifically with regard to the segment configure to initiate.

[00:30:41] Speaker 00:
Your Honors, I think it's important to understand that the 293 is describing technology that existed before.

[00:30:50] Speaker 00:
The segment initiated to configure is a portion of the file packet.

[00:30:55] Speaker 00:
A file packet, as my friend here acknowledged, is just the way that network

[00:31:01] Speaker 00:
computers talk to each other.

[00:31:03] Speaker 00:
The segment configured to initiate is a portion of a file packet.

[00:31:07] Speaker 00:
Now the claim is not directed to an improved file packet, to an improved segment to configure.

[00:31:14] Speaker 05:
But it is directed to a way of improving the operation of a networked arrangement, is it not?

[00:31:24] Speaker 00:
It is, your honor, but the mechanism for doing that, this file packet, is simply

[00:31:31] Speaker 00:
a standard mechanism for a network server to communicate with a client.

[00:31:37] Speaker 00:
And the segment configured is specifically identified in the specification as including an import data file and a call to an import program.

[00:31:46] Speaker 00:
These are standard mechanisms that can be programmed in Java that were known at the time.

[00:31:53] Speaker 00:
And so what was happening here was simply a rearranging of the responsibilities

[00:31:59] Speaker 00:
within the network.

[00:32:00] Speaker 05:
Isn't that the point?

[00:32:04] Speaker 05:
File packet may have been a conventional thing, but the specific way in which these things are arranged and how they function provides improved functionality of the whole network arrangement.

[00:32:19] Speaker 00:
Well, Your Honor, respectfully, I don't believe that it improves.

[00:32:23] Speaker 00:
It grants a technological benefit.

[00:32:27] Speaker 00:
There is some business benefit to be gleaned, and this is what the district court acknowledged, that the system administrator doesn't need to visit with each and every user to say, how would you like this configured?

[00:32:37] Speaker 00:
And by the way, I'm going to impose these restrictions on the system.

[00:32:40] Speaker 00:
But the way the system is working is the same as it's always worked.

[00:32:44] Speaker 00:
The server is sending file packets to the client.

[00:32:46] Speaker 00:
The client is sending information back.

[00:32:48] Speaker 00:
That's all that's happening.

[00:32:49] Speaker 00:
The fact that the file packet includes a segment configured to initiate registration, all that's saying is there's some

[00:32:57] Speaker 00:
splash page that's going to appear on the server for the user to log in.

[00:33:02] Speaker 00:
But that's not changing the functionality of the network in a technological way.

[00:33:06] Speaker 00:
That's only improving the business efficiency in the sense that maybe there's less manpower that's required.

[00:33:12] Speaker 00:
But that's why this particular patent is very clearly directed to an abstract idea that's not saved by any sort of technological advance in the specific claims.

[00:33:23] Speaker 07:
And the claims are quite broad, right?

[00:33:25] Speaker 00:
The claims are incredibly broad, Your Honor.

[00:33:28] Speaker 07:
All right, and what was the other patent you were going to talk about?

[00:33:31] Speaker 00:
Your Honor, the other patent is the 578.

[00:33:33] Speaker 00:
OK.

[00:33:33] Speaker 00:
Your Honors, with regard to the 578, the 578 is directed to two-tier customization.

[00:33:46] Speaker 00:
I believe the district court correctly identified this patent as being essentially an automation of the customization process that existed in the prior art.

[00:33:58] Speaker 00:
The computer network is being used as a tool here.

[00:34:01] Speaker 00:
And the specific elements of the claims are all very general functions that are within the purview of any generic computer hardware.

[00:34:11] Speaker 00:
You've got a mechanism for installing an application program, obtaining configurable preferences, and executing an application.

[00:34:20] Speaker 05:
The patent itself.

[00:34:21] Speaker 05:
But again, you're parsing the claim and then talking about individual parts of the claim.

[00:34:29] Speaker 05:
But it's the overall combination that presents a new and arguably improved functionality of the network.

[00:34:41] Speaker 05:
Isn't that right?

[00:34:42] Speaker 00:
Well, Your Honor, again, I would respectfully disagree, in part because when you look at the claim, claim one in particular just refers to an application launcher program.

[00:34:52] Speaker 00:
There is in claim two the additional element of a configuration management program.

[00:34:57] Speaker 00:
These are the two.

[00:34:58] Speaker 00:
kind of hooks, I think, that Uniloc is relying on.

[00:35:01] Speaker 00:
If you look at the specification, the specification makes clear that the application launcher program can be anything from a URL all the way to the application itself, the entire application.

[00:35:12] Speaker 00:
Similarly, the configuration management program can be almost anything.

[00:35:16] Speaker 00:
It can be as little as a configuration screen.

[00:35:21] Speaker 00:
And I have specification sites for these facts if you're interested, Your Honor.

[00:35:25] Speaker 00:
It can be a configuration screen, or it can be an entire module that gets passed down.

[00:35:29] Speaker 00:
So I think the very breadth of options available to satisfy this claim established that there is nothing here that's a technological advance.

[00:35:39] Speaker 00:
It's basically saying, you can customize this type of operation between a network server and a network client by doing it at the server side.

[00:35:51] Speaker 00:
You can do it at the client side.

[00:35:52] Speaker 00:
You can do it however you want.

[00:35:53] Speaker 00:
And all it's doing is using the network as a tool to affect that customization process so that what the user sees and what the network administrator sends to the user are what they should be.

[00:36:10] Speaker 03:
OK, so in this pattern, in column five, can you please turn to line 65?

[00:36:22] Speaker 03:
This is the 578 patent.

[00:36:25] Speaker 00:
This is appendix page 65.

[00:36:27] Speaker 00:
Okay.

[00:36:30] Speaker 03:
So where it says accordingly the present invention provides for management of configuration application programs in a network environment from a central on-demand server location while allowing for user preferences.

[00:36:42] Speaker 03:
The next sentence says

[00:36:43] Speaker 03:
This provides for reduced cost and increased uniformity in managing software in a network environment by delivering configured applications when demanded by the user.

[00:36:53] Speaker 03:
It further provides an essentially hardware transparent ability.

[00:36:57] Speaker 03:
How are these not improvements to the network?

[00:37:00] Speaker 00:
Your Honor, again, these are improvements to the way that the network is managed by the people.

[00:37:05] Speaker 00:
by the network administrator.

[00:37:06] Speaker 03:
The network administrator's interaction with the end user is definitely... No, you've changed the way the network delivers information to make it more efficient for the end user, but it was a change to the network, wasn't it?

[00:37:19] Speaker 00:
I don't believe so, Your Honor, because... Is it a change to the human beings?

[00:37:24] Speaker 00:
It's a change to the way that the human beings are interacting, certainly, Your Honor.

[00:37:27] Speaker 03:
No, really?

[00:37:27] Speaker 03:
Because I understood this to be a claim

[00:37:31] Speaker 03:
to a network and the software on a network, not a claim to human interactions.

[00:37:36] Speaker 00:
You're right, Your Honor.

[00:37:37] Speaker 00:
I apologize if I mischaracterize the claim.

[00:37:41] Speaker 00:
The point is that there is no change to the way that the network is functioning.

[00:37:45] Speaker 00:
There is only a change to the way the information is being exchanged.

[00:37:49] Speaker 05:
The way the information is being exchanged is permitted or established by the way the network is configured.

[00:38:01] Speaker 05:
Well, Your Honor... The network works better and provides the ability to have this improved functionality because of the way it's configured, correct?

[00:38:13] Speaker 00:
Well, the improved functionality, Your Honor, is really related to the ability of the network administrator to administer the network, not to how the network itself is presenting applications to the user, because the network administrator could individually set up

[00:38:31] Speaker 00:
each user's computer.

[00:38:32] Speaker 00:
But this patent is directed to automation of that process.

[00:38:38] Speaker 05:
But what I'm getting at is all of these improvements are because of the way the network is configured.

[00:38:46] Speaker 00:
Well, Your Honor, I'm not sure because the claim is so broadly drafted and includes these terms which can basically encompass any aspect of the program.

[00:38:58] Speaker 03:
If you're not sure, this is 12b6 of the pleading stage.

[00:39:01] Speaker 03:
If you're not sure, because claim construction hasn't occurred yet, why are we here on a 12b6?

[00:39:08] Speaker 00:
Well, Your Honor, there was a claim construction issue that was raised.

[00:39:12] Speaker 00:
There has been a claim construction order in this case.

[00:39:14] Speaker 00:
I know that it's not part of the record on this motion.

[00:39:17] Speaker 03:
But this is... That doesn't answer my question at all.

[00:39:19] Speaker 03:
My question is really clear.

[00:39:21] Speaker 03:
My question is you're standing here telling us you're not sure whether this claim covers improvements to the network.

[00:39:28] Speaker 03:
And I think inherent in your answer is your understanding that if that's the case, we're probably talking about eligible subject matter.

[00:39:34] Speaker 03:
And you're not sure, because you're not positive what the claim scope is.

[00:39:38] Speaker 03:
That's what I understood you to have said.

[00:39:39] Speaker 00:
Your Honor, I may have misspoken if that was your impression.

[00:39:41] Speaker 00:
What I was trying to say is that the claim is drafted extremely broadly.

[00:39:45] Speaker 00:
And according to the specification, for example, the application launcher program, which is a key element to claim one of this patent, in the specification is described.

[00:39:54] Speaker 00:
It can be basically anything.

[00:39:56] Speaker 00:
It can be a URL.

[00:39:58] Speaker 00:
or it can be the entire application.

[00:40:00] Speaker 00:
None of that is beyond a generic or conventional mechanism that already existed.

[00:40:07] Speaker 00:
The specification explicitly explains that this environment, this network management environment, they call it the Tivoli system, the TME, it allowed for network and server communication.

[00:40:18] Speaker 00:
This is affecting network and server communication, either in the form of the entire application, a subset of the application,

[00:40:26] Speaker 00:
a subset of the configuration module, that the claim scope is relevant only in the sense that it illustrates that this is an abstract idea that does not provide a technological advance.

[00:40:50] Speaker 04:
Thank you.

[00:40:51] Speaker 04:
I reserved two minutes when I filled out a form a couple weeks ago because I wanted to have the opportunity

[00:40:56] Speaker 04:
Let you ask me any questions.

[00:40:59] Speaker 04:
If the court has no questions, I will then summarize and rebuttal.

[00:41:05] Speaker 04:
I think it's important that if you write an opinion in this case, that you make clear that on the first step of Alice, what you're looking for is the claimed advance.

[00:41:15] Speaker 04:
And if that's clear, I think it will help the professional law.

[00:41:19] Speaker 07:
Thank you.

[00:41:19] Speaker 07:
Questions?

[00:41:20] Speaker 07:
Thank you.

[00:41:21] Speaker 07:
We thank both sides and the cases submitted.