[00:00:00] Speaker 01: And we'll proceed with case number 19-2313, Alfonso, Inc., against Free Stream Media Corporation. [00:00:09] Speaker 01: Mr. Chatterjee. [00:00:11] Speaker 02: Good morning, Your Honors. [00:00:13] Speaker 02: May it please the Court? [00:00:14] Speaker 02: This is Neil Chatterjee, as Your Honor said, and I represent the appellant, Alfonso. [00:00:19] Speaker 02: The district court was wrong to say that the 755 patent violated Section 101 merely because it engaged in a mathematical operation. [00:00:29] Speaker 02: namely what the patent describes as a lift metric. [00:00:32] Speaker 02: The patent does considerably more than that. [00:00:36] Speaker 02: What the district court failed to do is that it ignored the fact that the 755 patent actually claimed how to obtain specific types of data needed from two different sets of content, how to make sure you have the right data using a technical technique it described as a matching engine. [00:00:56] Speaker 02: And then it provided a specific way to calculate from this metric using that data. [00:01:02] Speaker 02: The Supreme Court in Diamond v. Deer, as well as this court on numerous occasions, including the Tallis case, have repeatedly held that a mathematical formula can be patentable when someone isn't seeking to prevent all uses of the formula, but instead when you're talking about a specific type of application, and particularly one such as here, where it's rooted in a technical problem. [00:01:26] Speaker 02: For those reasons, we ask that this court reverse the Mr. Court's decision. [00:01:32] Speaker 00: Mr. Cattery, this is Judge Stoll. [00:01:35] Speaker 00: I'm sorry to jump in so quickly, but I think you know where you're going, but I think, you know, looking at claim one, one problem I'm having is I think we need to know what exactly is the alleged technical problem that came with automating the calculation of the list metric. [00:01:55] Speaker 00: And more so, you know, how is that specifically claimed? [00:02:01] Speaker 00: The solution to that technical problem, that technical solution to that technical problem, how is it specifically claimed in claim one? [00:02:11] Speaker 02: Thank you, Your Honor. [00:02:13] Speaker 02: The answer to that's fairly straightforward here. [00:02:16] Speaker 02: This court recently decided a case called Packet Intelligence, which was 965, 7th and 1299. [00:02:24] Speaker 02: And the way that this court described the technical problem, which is the same one here, is the fact that network-based communications are disjointed. [00:02:34] Speaker 02: That was the word that this court used. [00:02:36] Speaker 02: And by disjointed, you have an advertisement, digital advertisement, that is sent at a different time from the time that an audiovisual communication is sent over a network. [00:02:48] Speaker 02: And the problem with that is that the devices [00:02:51] Speaker 02: may actually, or these two pieces of content, will arrive at devices at different times through a network-based communication. [00:03:01] Speaker 02: And you don't necessarily know how to tie the two together. [00:03:06] Speaker 02: So what the patent describes is it describes two pieces of a technical solution. [00:03:10] Speaker 02: The first thing you do is you need to identify for each one of these two disjointed communications what devices they actually went to. [00:03:21] Speaker 02: But then the patent describes that that's not enough. [00:03:23] Speaker 02: What the patent says is because this is a disjointed communication, you don't know if the advertisement arrived at the audiovisual device before or after the audiovisual communication. [00:03:38] Speaker 02: And so what the patent says is it says you have to eliminate the instances where the advertisement arrived before the audiovisual content. [00:03:50] Speaker 02: And the patent actually describes, the specification describes as that being a specific thing that you need to look out for because what the patent specification is doing is it says one of ordinary skill in the art may not know it has to filter out this information of an advertisement reaching beforehand. [00:04:10] Speaker 02: And so the patent teaches that you actually have to get rid of the advertisements that reach ahead of time [00:04:17] Speaker 02: and instead focus only on when, I'm sorry, the audio-visual communication. [00:04:25] Speaker 02: You have to make sure that the lift is only being measured if the ad-lib delivered first. [00:04:32] Speaker 02: And that's the technical solution, and it's really one that's reflected in computer networking problems, Your Honor. [00:04:41] Speaker 00: Another... What language that you're relying on? [00:04:45] Speaker 02: Yes, I can. [00:04:47] Speaker 02: There were two different questions, Your Honor. [00:04:49] Speaker 02: Perhaps I can answer Judge Stoll's question first. [00:04:53] Speaker 04: Yes, that was my question as well. [00:04:57] Speaker 02: In the claim language, Your Honor, as far as the audiovisual devices and the digital ad, those are claim elements 1A, and then there's a sub-A1, a 1A1 [00:05:15] Speaker 02: through 1A3 and then 1B123. [00:05:18] Speaker 02: And then if you look at the claim language in the lift metric, which is claim element D sub 1, it specifically talks about that the way you're calculating the lift metric is associated with audiovisual devices that played the audiovisual content associated with the digital ad after the digital ad was delivered. [00:05:49] Speaker 02: Judge Lynn, did you have another question? [00:05:51] Speaker 02: I'm sorry. [00:05:52] Speaker 02: I didn't mean to jump the gun there. [00:05:55] Speaker 04: No, no. [00:05:55] Speaker 04: That was the question, and that was what I was looking for. [00:05:59] Speaker 04: Thank you. [00:06:01] Speaker 02: Thank you, Your Honor. [00:06:01] Speaker 02: And if I can, I would also like to point to the area of the specification where they identified the specific problem. [00:06:09] Speaker 02: The portion of the specification where they identified the specific problem is in column five, line 14, [00:06:16] Speaker 02: through 18, as well as column 6, line 51 to 57. [00:06:25] Speaker 02: This networking problem is really what is at the core of why this is an inventive technology. [00:06:34] Speaker 02: We described this at the district court. [00:06:37] Speaker 02: Now, the way that the patent describes it, but turning to Alice's step one, is that [00:06:44] Speaker 02: It really talks about creating a database structure, two separate ones, one for the audiovisual communication and one for the advertisement. [00:06:56] Speaker 02: And both of these digital advertisements are actually monitored through what the patent describes as a monitored audiovisual device, which is defined in the specification at column two, line 29 through 31. [00:07:14] Speaker 02: And these monitored audiovisual devices will collect a whole variety of data. [00:07:20] Speaker 02: But the patent says, look at three specific units of data. [00:07:25] Speaker 02: One of them is, what is the content that was delivered? [00:07:29] Speaker 02: The second is, what is the device that it was delivered to? [00:07:33] Speaker 02: And the third one, and this one's the particularly critical one we were just talking about, is to know the time of the delivery. [00:07:41] Speaker 02: Because that time of delivery is what addresses this disjointed communication. [00:07:49] Speaker 00: In the responsive brief, the red brief... The delivery of the program versus the time of the delivery of the ad. [00:08:01] Speaker 00: Is that correct? [00:08:01] Speaker 02: I'm sorry, Your Honor. [00:08:02] Speaker 02: You were very, very faint when you said something, so I didn't hear what you said. [00:08:08] Speaker 00: Sorry about that. [00:08:12] Speaker 00: I apologize. [00:08:15] Speaker 00: What I was trying to say was, so I understand correctly Mr. Chatterjee, that the key to the invention is the difference in the time for the program content versus the time for the digital ad. [00:08:31] Speaker 00: Yes, Your Honor. [00:08:33] Speaker 00: That certainly is an important part. [00:08:37] Speaker 02: The fact that there's this matching server, Your Honor, that also marries together these two disjointed communications is an important component because... So that's the unique identifier, right? [00:08:49] Speaker 00: Or is it the unique identifier or the identification of the device? [00:08:55] Speaker 02: Your Honor, so I would say that there are two critical aspects of this invention. [00:09:01] Speaker 02: One is the one that we talked about, which is the timestamp that attaches under section 1, the client element, 1A3 and 1B3. [00:09:12] Speaker 02: But then in element 1C, there is a matching server that actually ties the two together. [00:09:19] Speaker 02: So it says this audio visual communication and this app were delivered to the same device. [00:09:25] Speaker 02: And then in 1D, they eliminate those timing [00:09:30] Speaker 02: elements where the digital ad was received after the audiovisual program was watched. [00:09:39] Speaker 00: Okay, thank you. [00:09:43] Speaker 02: Now, what the respondent does here is they actually give a brick-and-mortar example of coupons being given at a grocery store. [00:09:55] Speaker 02: But in many ways, the example they provide proves too much. [00:09:59] Speaker 02: Because they don't talk anything about network communication. [00:10:02] Speaker 02: If I'm handing out advertisements before someone goes into a store and someone makes a purchase, there's no question that it happened before someone went into the store. [00:10:11] Speaker 02: But in network-based communication, that isn't the case. [00:10:15] Speaker 02: Information is sent across networks in a disjointed or asynchronous way, and you have to have a technical way to actually make an evaluation. [00:10:27] Speaker 02: Two other cases here are particularly relevant, the SRI and the Andox case. [00:10:33] Speaker 02: Both of those are actually discussed in the recent packet intelligence case. [00:10:38] Speaker 02: And in both those cases, you're dealing with the same sort of problems that are inherent in computer networking situations. [00:10:46] Speaker 02: The case that the respondent relies on primarily is an SAP case, but the SAP case [00:10:54] Speaker 02: is not applicable here because in both the SAP case and that line, which includes the electric power group case, those really don't specify the particular types of information you need to look at. [00:11:09] Speaker 02: They don't talk anything about how do you evaluate and determine whether they are false positive and how do you address them with your technical solution. [00:11:19] Speaker 02: And for those reasons, the case that the district court relied upon primarily, which is the SAP case, is not applicable here. [00:11:29] Speaker 02: Turning briefly to our step two, Your Honors, this is again an ordered combination. [00:11:37] Speaker 02: We've already had a dialogue about how each one of these elements of the claim makes a material difference [00:11:44] Speaker 02: in the structure of solving a problem rooted in computer networks. [00:11:50] Speaker 02: And one other case that we discussed in our papers, and I'll point Your Honors to, is the Tallis case, which specifically talked about solving problems in new and unexpected ways. [00:12:01] Speaker 02: I see that I'm just about out of time, Your Honor, unless you have other questions, I'll reserve the remainder of my comments for rebuttal. [00:12:11] Speaker 01: Okay. [00:12:13] Speaker 01: Anything else in the panel for the case in chief? [00:12:16] Speaker 01: No. [00:12:16] Speaker 01: Thank you. [00:12:17] Speaker 01: Thank you. [00:12:18] Speaker 01: All right. [00:12:19] Speaker 01: We'll hear from the other side. [00:12:20] Speaker 01: Mr. Nelson. [00:12:22] Speaker 03: Thank you, Your Honor. [00:12:23] Speaker 03: May it please the Court, this is William Nelson on behalf of Free Stream Media, which we refer to as Samba. [00:12:30] Speaker 03: Your Honors, this Court has drawn a hard distinction between claims that are directed to an improvement in a device [00:12:40] Speaker 03: or a network on the one hand, and to method claims on the other, which themselves merely claim performing an abstract idea that's implemented using computers. [00:12:53] Speaker 03: The former type of claim can be patent eligible, and this court has found such claims eligible in cases like Nfish and digital memory. [00:13:01] Speaker 03: The latter, those that simply recite performing an abstract idea using [00:13:07] Speaker 03: computer components that are generic are not patent eligible. [00:13:12] Speaker 03: And that fundamental distinction eliminates the 755 patent claims under step one. [00:13:18] Speaker 03: Now you've heard Alfonso today and you've seen in its brief that it has tried to fit the claims of the 755 patent into the category of claims directed to an improvement in computers or networks, but they don't fit at all. [00:13:32] Speaker 03: The claims are not directed to an improved computer or network, [00:13:36] Speaker 03: but to a purported improvement in an abstract idea in calculating lift, using computers to perform that abstract idea. [00:13:45] Speaker 03: The claims themselves, and you heard counsel for Alfonso discuss at length the specifications, but really the focus here has to be on what the claims are directed to. [00:13:55] Speaker 03: And those claims make plain that they're directed to the abstract idea of measuring the effectiveness of an advertisement through steps that are [00:14:05] Speaker 03: describing the specification as routine of data gathering, of analysis, and mathematical calculations implemented on computer components that the specification confirms are generic and conventional. [00:14:19] Speaker 00: Council, what is your specific response to the reliance on the elements like unique identifiers and content identifier and, you know, recording the time of delivery of the ad and the time of delivery of the audio content and comparing those. [00:14:37] Speaker 00: What is your specific response to that? [00:14:39] Speaker 00: Is it your position that those are abstract? [00:14:42] Speaker 00: Is it your position that those are well known? [00:14:44] Speaker 00: What is your position? [00:14:46] Speaker 03: Really two things, Your Honor. [00:14:49] Speaker 03: entirety of the computer components and the elements recited in the claim are described and confirmed in the specification as entirely generic. [00:15:00] Speaker 03: With respect to the first and second databases, the specification first confirms that the present invention may be implemented with any combination of hardware and software. [00:15:11] Speaker 03: That's in appendix 146. [00:15:13] Speaker 03: The first database and the second database [00:15:16] Speaker 03: are confirmed by the specification to be entirely generic. [00:15:20] Speaker 03: The specification says that data structures may be stored in any suitable form. [00:15:25] Speaker 00: Council, just let me interrupt you for a second. [00:15:28] Speaker 00: Let's say that I think that something, if it's a technical improvement, even if it's software, and even if it's on conventional database, it still could be a technical improvement. [00:15:39] Speaker 00: So why exactly are these claim limitations that I'm referring to, why aren't they a technical improvement? [00:15:46] Speaker 03: because they recite and counsel has still identified no improvement to the operation of computers or computer networks rather than an improvement perhaps in the performance of an abstract idea. [00:16:01] Speaker 03: There is no disclosed improvement in the operation of computers in line with the cases where this court has found claims patent eligible. [00:16:11] Speaker 03: The unique identifier that is recited in the claims [00:16:15] Speaker 03: one learns in the specification that any unique identifier can be used as long as there is a way to capture it. [00:16:23] Speaker 03: The content identifier as described in the specification is simply identifying a TV show, so its name will do. [00:16:30] Speaker 03: There is no improvement in the operation of computers disclosed there. [00:16:35] Speaker 03: Council for Alfonso spent a significant amount of time describing why time [00:16:40] Speaker 03: affects an improvement or the storage of time affects an improvement. [00:16:45] Speaker 03: It creates no improvement in the operation of computers and computer networks. [00:16:48] Speaker 03: The relevance of time in the claims is so that the calculation of Lyft can verify whether or not a viewer of a television program also saw the ad before they viewed that program. [00:17:03] Speaker 03: The time must be recorded for both so that the [00:17:07] Speaker 03: the Lyft calculation can identify only those monitored devices that first saw an ad, then viewed the program, because that's essential to the calculations of Lyft. [00:17:20] Speaker 03: Nothing that Council has identified describes any technical improvement whatsoever. [00:17:25] Speaker 03: There is no how. [00:17:26] Speaker 03: Council referred to the structure of the database as [00:17:29] Speaker 03: The claims require no particular structure for the databases that store data. [00:17:34] Speaker 03: They only recite storing particular kinds of data. [00:17:37] Speaker 03: There is no improvement in those databases. [00:17:42] Speaker 03: And again, counsel drew your attention to decisions like packet intelligence, like Amdocs and SRI. [00:17:55] Speaker 03: those claims, the claims found patent eligible in those cases, are nothing like the claims of the 755 patent. [00:18:03] Speaker 03: In each of those cases, the claims themselves, not a few blinds in the specification, but the claims themselves were directed to a specific improvement in the operation of computers and computer networks. [00:18:17] Speaker 03: There is nothing like that here. [00:18:21] Speaker 03: For instance, in Andox, [00:18:23] Speaker 03: the claims were themselves directed to an enhanced accounting record that the court, in accordance with the construction provided by the district court, entailed a distributed architecture in which accounting records were processed close to their sources before being transmitted to a centralized manager. [00:18:40] Speaker 03: There is nothing like that in the 755 claims. [00:18:44] Speaker 03: There is no improved architecture, no improved computer, and no computer system. [00:18:50] Speaker 03: Very little and in fact none of Alfonso's technical sounding jargon is actually found in the 755 patent claims. [00:18:59] Speaker 03: In the brief there's discussion of probabilistic assessments, the system learning over time, device graphs, none of that appears in the claims or is required by the claims. [00:19:10] Speaker 03: The mashing engine of the claim, which Councilor Alfonso said used advanced techniques [00:19:16] Speaker 03: is described in the claims simply as performing matching, which the specification confirms is entirely generic and conventional. [00:19:28] Speaker 03: If there are no further questions on step one, I'll proceed to step two. [00:19:33] Speaker 01: Okay. [00:19:35] Speaker 03: I'll proceed. [00:19:38] Speaker 03: Under step two, these claims can be patent eligible only if they recite sufficient additional inventive elements. [00:19:46] Speaker 03: such that there's somehow something significantly more than an abstract idea here. [00:19:51] Speaker 03: There is no inventive concepts here in these claims. [00:19:54] Speaker 03: The claims recite only conventional computer equipment, performing routine functional steps. [00:20:01] Speaker 03: There's a server in communication with a couple of databases, and nothing here [00:20:11] Speaker 03: appears other than conventional hardware, software, and computing techniques well known in the art. [00:20:17] Speaker 03: Alfonso doesn't appear to dispute that each element of the claims taken alone is conventional. [00:20:21] Speaker 03: Instead, its position appears to be that the claims are all unconventional taken as an ordered combination. [00:20:28] Speaker 03: That position is insupportable in light of what the claims actually say and what the specification discloses. [00:20:34] Speaker 03: The evidence from the claims and specification, both here and before the district court, [00:20:40] Speaker 03: shows that the 755 patent claims recite only generic computer components operating with respect to each other in conventional ways in performing routine steps of collecting, storing, and analyzing data in the expected way and in the expected order of operations with each other. [00:20:59] Speaker 03: Data is collected, it is retrieved, and then a mathematical calculation is performed on it using generic and conventional computer components. [00:21:09] Speaker 03: None of that provides an inventive concept which can lift these claims into patent eligibility. [00:21:20] Speaker 03: Alfonso, again, has never explained for step two what is actually unconventional about the recited sequence of operations in the claims or how those operations, either taken singly or in combination, [00:21:37] Speaker 03: causes any computer to behave in unexpected ways or causes the functioning of these components to be functioning in any unconventional way as the claims in cases where this was found under step two claims are patent eligible. [00:21:54] Speaker 03: There's nothing in the claims to be found. [00:22:00] Speaker 03: Finally, [00:22:01] Speaker 03: With respect to the question of whether there are disputed factual issues that prevent entry of judgment on the pleadings, there are none. [00:22:09] Speaker 03: There were none before the district court, and there are none here as to whether the 755 patent claim elements were anything other than well understood, routine, and conventional. [00:22:21] Speaker 03: The patent itself raises no fact issue concerning conventionality. [00:22:25] Speaker 03: The only statement regarding conventionality is [00:22:31] Speaker 03: made in the specification is that conventional techniques for measuring the effectiveness of such campaigns are inadequate. [00:22:40] Speaker 03: But that creates no factual issue. [00:22:42] Speaker 03: It is a mere conclusion. [00:22:44] Speaker 03: There is nothing in the specification that describes what those conventional techniques were, why they were inadequate, or how the claimed invention addresses those inadequacies, let alone that it addresses them in some unconventional way. [00:22:58] Speaker 03: Alfonso, before the district court, proposed no claim construction which would have imported any of the things you heard today into the claims themselves. [00:23:07] Speaker 03: The complaint before the district court raises no disputed question of materials back that preclude judgment against Alfonso at the rule 12th stage. [00:23:18] Speaker 03: That complaint alleges only that Samba infringes the claims by collecting and storing information and calculating a lift metric. [00:23:26] Speaker 03: I wanted just to circle back to one thing I heard from counsel today before I conclude my presentation, and that is the idea that some of the elements of the claims such as a unique identifier are a technological solution or somehow an improvement. [00:23:42] Speaker 03: That is not the case. [00:23:43] Speaker 03: The specification confirms that unique identifiers, content identifiers, [00:23:50] Speaker 03: are all generic components of a system that can be used to calculate Lyft. [00:23:55] Speaker 03: At Appendix 142, Column 4, the specification tells us that any unique identifier can be used in the context of these claims. [00:24:06] Speaker 03: There is nothing unconventional there. [00:24:08] Speaker 03: There is no improvement in the operation of computers or computer networks. [00:24:12] Speaker 03: There is simply performing the abstract idea using components that this specification confirms are generic. [00:24:18] Speaker 03: If there are no further questions from the court, I will conclude my presentation. [00:24:22] Speaker 01: Any more questions for Mr. Nelson from the panel? [00:24:26] Speaker 03: No, thank you. [00:24:27] Speaker 01: No, thank you. [00:24:28] Speaker 01: Thank you, Mr. Nelson. [00:24:30] Speaker 01: Mr. Chatterjee? [00:24:32] Speaker 02: Thank you, Your Honor. [00:24:34] Speaker 02: And I'll use my remaining time, unless Your Honor has got questions, to address a couple of points raised in Mr. Nelson's argument. [00:24:42] Speaker 02: The first point that Mr. Nelson made, which I have an issue with, is [00:24:48] Speaker 02: He said that this does not improve the operation of computers in any way and isn't rooted in computer technology. [00:24:57] Speaker 02: However, this solution addresses a specific problem reflected in computer networking, and one could make the same argument that Mr. Nelson made in the Amdocs case and the DVR case, as well as the packet intelligence case. [00:25:13] Speaker 02: This court found in each one of those instances [00:25:17] Speaker 02: that the patent claims involved patentable subject matter. [00:25:21] Speaker 02: The Andox case, which was one of the cases we discussed at length in the lower court, actually deals with collecting information from two disparate locations and then putting it into what it calls an enhanced record. [00:25:35] Speaker 02: And it was that enhanced record that was rooted in networking technology that this court found was patentable subject matter. [00:25:44] Speaker 02: I wanted to turn briefly back to a question Judge Stoll asked me during my preliminary remarks related to the unique identifier. [00:25:54] Speaker 02: That was also an issue that Mr. Nelson raised. [00:25:56] Speaker 02: That is indeed an important part of the patent. [00:26:00] Speaker 02: And the specification actually talks about how one can determine that you're actually identifying the device correctly. [00:26:08] Speaker 02: And it talks about instances where you might have multiple computers on the same [00:26:14] Speaker 02: home IP network, or the same network, or if someone were to move to, say, a free public Wi-Fi network, and how you can do the device identification to identify specific devices. [00:26:28] Speaker 02: And we discussed this in detail at the lower court, that both the unique identifier and the time were important aspects of this invention, and they were rooted in technology. [00:26:39] Speaker 02: The one last point I'd like to make is this concept of abstractness [00:26:44] Speaker 02: that Mr. Nelson presented. [00:26:46] Speaker 02: One way to think about abstractness is whether or not this particular application would preempt all uses in the field. [00:26:55] Speaker 02: And here it does not. [00:26:57] Speaker 02: For example, one could calculate a lift metric without filtering out the false positives due to time at all. [00:27:04] Speaker 02: One could do that. [00:27:05] Speaker 02: It may not give us accurate information, but it certainly would give information. [00:27:10] Speaker 02: One could also run an ad campaign one week and then not run an ad campaign another week and see how the audio viewership changed between those two weeks. [00:27:20] Speaker 02: Those are each kinds of list metrics one could calculate that wouldn't be covered by the patent at all. [00:27:26] Speaker 02: So there's no preemption issue here. [00:27:28] Speaker 02: And that's a good indication that this is not a preempted or abstract claim and instead are talking about highly particularized technical solutions. [00:27:39] Speaker 02: So with that, Your Honors, I'll submit unless you have further questions. [00:27:43] Speaker 01: Okay. [00:27:43] Speaker 01: Any more questions, Mr. Tavitie? [00:27:46] Speaker 04: Uh, no. [00:27:46] Speaker 04: Thank you. [00:27:47] Speaker 01: Okay. [00:27:48] Speaker 01: Thank you. [00:27:49] Speaker 01: Thanks to both counsels. [00:27:51] Speaker 01: The case is taken under submission.