[00:00:00] Speaker 00: Thank you, Your Honors. [00:00:09] Speaker 00: As I noted in a moment ago, the patents [00:00:16] Speaker 00: The key aspect of ByteMark's patents here is really an improvement in computer technology to solve the problem of moving large masses of population on and off various transportation systems, and to overcome the barcoding challenge, barcoding LCD monitors, which is ineffective, time-consuming, inefficient if it even works. [00:00:41] Speaker 00: The patents, the 993 and 967 patents, [00:00:44] Speaker 00: The claims of the 967-993 patents were found to be valid at the patent office and patent eligible. [00:00:54] Speaker 00: In particular, the claims of the 993 patent was reviewed by an expert, by a 101 expert at the patent office. [00:01:03] Speaker 00: We requested that specifically because of the controversies and inconsistencies of the law and application of the law in this area of the law. [00:01:11] Speaker 00: And in light of the 101 experts review, which is not usual that happens at the office, the claims were found to meet that standard. [00:01:19] Speaker 00: There's a public policy interest for the innovation community to be able to rely on patents that are found valid by the patent office, and especially when they're reviewed by experts in the particular field. [00:01:35] Speaker 00: The district court, in this particular case, in finding that these claims were not eligible, [00:01:42] Speaker 00: be able to even address what the appropriate legal standard is, and which under Berkheimer and Progeny and under ChargePoint versus SEMA Connect, 920 Federal Third, Federal Circuit 2019, and many other cases, make clear that with respect to ALICE, the step two of the ALICE analysis, whether or not there's an inventive concept [00:02:08] Speaker 00: The court needs to consider the facts. [00:02:12] Speaker 00: And if there are disputes of facts here, in this case, there's no citation to Bytemark's non-challenge expert, Dr. Godesman, who found that, in fact, this particular set of claim elements of these patents and a combination of these claim elements [00:02:28] Speaker 00: was in fact a improvement of computer technology over the barcoding technology. [00:02:34] Speaker 00: Those facts and the testimony of the expert in this case, Bightmark's expert, was never discussed or analyzed under step two. [00:02:40] Speaker 00: And let alone considering the fact that the court has now established and clarified that it's the challenger that must prove invalidity [00:02:50] Speaker 00: or step two of ALICE by clear and convincing evidence. [00:02:53] Speaker 00: So Biomark didn't have the burden to prove that the patents were valid. [00:02:56] Speaker 00: They already were found valid by the patent office. [00:02:59] Speaker 00: And we had competing testimony of two experts on this subject, never considered by the district court, never even referenced appropriate standard, let alone that, never applied the relevant standard, just concluded that because the court found that step one of ALICE [00:03:16] Speaker 00: that this is an abstract idea was met, and then therefore it followed that step too was met. [00:03:22] Speaker 00: I mean, in this case, we also have a situation where CBMs were filed at the patent office later. [00:03:31] Speaker 01: They weren't instituted, right? [00:03:33] Speaker 00: They were not instituted. [00:03:34] Speaker 01: That's right. [00:03:34] Speaker 01: They didn't actually analyze the warning. [00:03:37] Speaker 00: Yes, you're correct. [00:03:39] Speaker 00: They weren't instituted, and mainly because they weren't filed to be financial [00:03:43] Speaker 00: methods or financial technology related technology product or service. [00:03:54] Speaker 00: Yes, your honor. [00:03:56] Speaker 00: We also had in a separate case in the Southern District of New York, Judge Gardeffi reviewed these same claim elements and he found that the improvement [00:04:05] Speaker 00: And this is, again, pointing to the fact that there is a factual dispute. [00:04:08] Speaker 00: The court denied a motion to dismiss, pointing that he found that there was a suggestion that the improvement over barcode technology and the use of tokens and visual validation did suggest an improvement in technology that would be eligible for 101. [00:04:28] Speaker 00: And he dismissed a challenge there. [00:04:34] Speaker 00: have competing expert testimony, we have related applications on the same specification that the district court we argued inappropriately relied on that were later granted, just recently granted, this past summer were granted by the USPTO on this exact same specification, finding that they did meet the new guidelines of patentability. [00:05:03] Speaker 00: The court looked at an office action, I say the court, the district court, looked at an office action on some of these claims, on these other related applications and found that because they were preliminarily rejected under 101, that meant that that somehow supported finding it's not eligible. [00:05:17] Speaker 00: All those applications and patent claims, most of all those claims were ultimately found to be eligible in the patents issued. [00:05:23] Speaker 00: So you got the same claims and the same specification, very similar. [00:05:28] Speaker 00: Claims and technology being found just as of six months ago by the USPTO to be eligible You got a federal judge in New York who looks at this as I just suggest eligibility under 101 You got factual disputes here between competing experts on whether or not Alice step to whether or not these elements alone in combination are an inventive concept and [00:05:52] Speaker 00: You have a 101 expert at the USPTO reviewing the 993 patent, finding it to be meeting the qualification, and you have no analysis whatsoever of the facts, even the articulation of the legal standard and application of the legal standard. [00:06:11] Speaker 00: And then you also have to make things worse. [00:06:14] Speaker 00: you have this no analysis of representative claims. [00:06:18] Speaker 00: There are different dependent claims that have different claim elements. [00:06:22] Speaker 00: For example, most notably, we pointed out in our brief claim 13, which speaks to the visual validation being transmitted without internet connection, for example. [00:06:32] Speaker 00: There was no analysis as how claim one was representative of the dependent claims. [00:06:39] Speaker 00: no analysis there, just a cross the board invalidation of all these claims. [00:06:44] Speaker 00: ByteMark is a company that's a practicing entity, is the first to bring this technology to market. [00:06:50] Speaker 00: After ByteMark brought this to market, companies throughout the country have followed the same technology as a new way of [00:06:57] Speaker 00: commercial ticketing from Honolulu, Toronto to Dallas, all over the country. [00:07:04] Speaker 00: So this was a real breakthrough and a solution to an old problem that was already using computer technology, was using barcoding. [00:07:15] Speaker 00: So this goes directly at the center of, as an example case of when [00:07:23] Speaker 00: and improvement in computer technology solves a real problem and uses technology in a novel way, again, with the tokens, the transfer of the visual validation object, after authentication, at the server level, and all the other security features. [00:07:38] Speaker 00: And there are so many factual disputes here. [00:07:41] Speaker 00: And so I'll save the rest of my time for rebuttal, unless there's any questions. [00:07:46] Speaker 00: Thank you. [00:07:47] Speaker 00: Thank you. [00:07:50] Speaker 02: Mr. Lallone? [00:08:10] Speaker 02: Morning, Your Honors. [00:08:11] Speaker 02: May it please the Court. [00:08:12] Speaker 02: My name is Doug Alone. [00:08:12] Speaker 02: I'm here with my co-counsel, Mr. Fleuler and Mr. Donahue today. [00:08:16] Speaker 02: The case here really focuses on, did the non-moving party here satisfy the Berkheimer standard of identifying a material issue in dispute as to step one and step two of Alice? [00:08:30] Speaker 02: Here, the underlying Court said they failed to meet their rebuttal burden of identifying a material issue in dispute as to step one and step two. [00:08:39] Speaker 02: And we agree, and our paper is very clear on that particular point. [00:08:43] Speaker 02: What I want to point out real quick is that [00:08:48] Speaker 02: When the patent owner here failed on both steps of ALIS, the lower court was correct to find that the claims were directed towards the abstract idea of verifying the authenticity of the ticket. [00:08:59] Speaker 02: And I want to show a few points in the specification that brings home that point that maybe it's not clear on the underlying record. [00:09:08] Speaker 02: So I want to clarify that. [00:09:09] Speaker 02: Then secondly, they fail on the ALIS step because this is nothing more than a generic use [00:09:15] Speaker 02: of computer technology and the claims add nothing more. [00:09:18] Speaker 02: There's no inventive concept identified in the claim elements. [00:09:22] Speaker 02: And that's what the cases before us here require us to do. [00:09:25] Speaker 02: Look at the claim elements to see if there's anything more added. [00:09:31] Speaker 02: If I could direct your attention to the patent specification, I just want to focus on step one, where the lower court found that there was the abstract idea here was on verifying the authenticity of the ticket. [00:09:44] Speaker 02: If I could direct the court's attention to APPX 103, please. [00:09:48] Speaker 02: That is column one of the 967 patent. [00:09:51] Speaker 02: The 967 patent and the 993 both use the same spec. [00:09:57] Speaker 02: If we look at column 1, line 34 and 35, they're talking about the prior art systems that this patent here is supposed to have improved upon. [00:10:09] Speaker 02: Column 1, 35 of the 967 patent talks about [00:10:12] Speaker 02: looking at the paper ticket and tearing it in half. [00:10:15] Speaker 02: What they were talking about here is that the problem with the old systems is that the scanning process was fraught with error, and the time taken to verify the electronic ticket forked seeds the old system. [00:10:25] Speaker 02: That is, taking a paper ticket, you hand it to the ticket taker, they tear the ticket in half, that's the old technology. [00:10:31] Speaker 02: If you look up above, the next technology that this patent claims to improve upon is found again in column one, line 28, [00:10:40] Speaker 02: where it says, in one example of the prior art, an electronic ticket is displayed as a barcode on the recipient's telephone display screen. [00:10:49] Speaker 02: The telephone is then placed on a scanner, and et cetera. [00:10:55] Speaker 02: You can see that yourself. [00:10:57] Speaker 02: This is the prior technology that this was supposed to replace. [00:11:00] Speaker 02: Now, let's zoom forward. [00:11:02] Speaker 02: Let's look at the applicant's, the patent owner's own language and specification. [00:11:07] Speaker 02: Column 2, line 25. [00:11:10] Speaker 02: It's referencing, however, when the ticket is to be taken, the verification is determined by a larger visual object than a human can perceive without a machine scanning it. [00:11:21] Speaker 02: So basically, the improvement here is taking a picture, and we see the picture, which is found on APX 91. [00:11:29] Speaker 02: And this is right in Magistrate Payne's underlying decision, which Judge Gilstrap affirmed. [00:11:34] Speaker 02: If we look at APX 91, [00:11:36] Speaker 02: The alleged invention here is putting a picture on your phone of a sailboat. [00:11:43] Speaker 02: That's the visual validation display object. [00:11:47] Speaker 02: Your Honor, this concept that's presented here under the step one analysis is nothing more than the abstract idea of verifying the authenticity of the ticket and nothing more. [00:11:58] Speaker 02: And there was no question of fact on that point. [00:11:59] Speaker 02: In fact, if we look at what the opposing party here indicated with respect to what the claims are directed towards, which is what we're supposed to look at down below the lower court. [00:12:14] Speaker 02: The bite mark here, excuse me, said the claims are not directed to an abstract idea where the claim solution is necessarily rooted in computer technology in order to overcome a problem specifically arising in the realm of computers. [00:12:28] Speaker 02: They shifted. [00:12:28] Speaker 02: You see that there's nothing in the specification in the front where I talk about. [00:12:32] Speaker 02: They're not talking about improved computer technology because that's not the invention here. [00:12:36] Speaker 02: They've shifted during the litigation to try to talk about that's the eureka moment. [00:12:41] Speaker 02: This is something [00:12:43] Speaker 02: well-founded in computer technology, but that's not the case. [00:12:46] Speaker 02: And that's not the record before us. [00:12:48] Speaker 02: Now, let's look at the actual facts. [00:12:53] Speaker 02: I believe I heard the appellant say there was no challenge faxed by the experts. [00:12:57] Speaker 02: Can I direct you to the record of what the experts actually said? [00:13:01] Speaker 02: If you look at APPX 3398 and APPX 3397, we see one paragraph statement [00:13:12] Speaker 02: by the expert, Dr. Gossman. [00:13:18] Speaker 02: And in one long paragraph is their assessment of step one and step two. [00:13:24] Speaker 02: So bottom of page 3397, you see where it says, the claims of the patents do not involve a method of doing business, but rather involves a unique use of technology to improve the way servers and computers communicate with the transformation information, et cetera, et cetera. [00:13:38] Speaker 02: I won't bore you. [00:13:39] Speaker 02: I want to point you to the actual record evidence that the appellant put forth in the record to support their step one and step two analysis. [00:13:48] Speaker 01: By contrast, if I can direct you to... So you're saying the discussion here on page 3397 is the actual evidence that they relied on? [00:13:56] Speaker 02: Correct. [00:13:57] Speaker 02: Okay. [00:13:57] Speaker 02: Correct. [00:13:59] Speaker 02: If you look at the evidence that the court considered, [00:14:03] Speaker 02: With respect to the step one analysis by the moving party here, which was my client, Wasabi, I direct your attention to Dr. Sigurd's declaration, APPX 406, and also his declaration, APPX 1862. [00:14:22] Speaker 02: There are pages and pages of analysis by our expert [00:14:28] Speaker 02: regarding the fact that the computers here, for example, paragraph 59 found on page 406, our expert said, the asserted claims all utilize computers merely as tools to execute a fundamental economic practice or method of organizing human activities. [00:14:47] Speaker 01: Can I interrupt you for a minute? [00:14:49] Speaker 01: I think your point here is that they're talking in very general terms. [00:14:53] Speaker 01: They haven't identified anywhere where this tokenization technique is new and novel or something different or they had, in order to be able to avoid the use of barcodes, they had to come up with something that was technically different. [00:15:05] Speaker 01: In implementing this idea, there was nothing [00:15:10] Speaker 01: that they had to do new technically. [00:15:12] Speaker 01: There's nothing more under the standard. [00:15:14] Speaker 02: And this was the case we just heard before us, the SAP America and Best Pick case. [00:15:20] Speaker 02: On the part one analysis, this court looked at an abstract idea of collecting information. [00:15:25] Speaker 02: OK, we talked about that. [00:15:26] Speaker 02: That didn't satisfy part one. [00:15:28] Speaker 02: That's on par with this here. [00:15:30] Speaker 02: In part two, under SAP, which, of course, we're talking about the electric power case, step two, there's nothing significantly more. [00:15:38] Speaker 02: Merely presenting results, which is what we were talking about in electric power, we cite that in our case, merely presenting results is not anything significantly more. [00:15:46] Speaker 02: Here, merely presenting the figure five boat on your... But I think they're not relying on the boat necessarily for their... [00:15:57] Speaker 01: They're not talking about the display of the boat being the thing that's technically different. [00:16:01] Speaker 01: I think they're trying to say that what's technically different is that back-end process of sending the token and then having it validated and then having something sent back. [00:16:11] Speaker 01: Right? [00:16:12] Speaker 01: Isn't? [00:16:12] Speaker 01: I mean, maybe I'm misunderstanding. [00:16:14] Speaker 01: I think that's fair, Your Honor. [00:16:15] Speaker 01: I feel like you're simplifying a little bit by just focusing on the boat. [00:16:18] Speaker 02: Right, so let's focus on the step two analysis. [00:16:21] Speaker 02: Is there anything more? [00:16:22] Speaker 02: So let's look at the actual evidence pointing back to their declarant at 3397 and 3398. [00:16:31] Speaker 02: Nothing in the one paragraph provided by their expert provides anything more with respect to a particular claim element. [00:16:39] Speaker 02: And I don't want to repeat what's in our briefs, but we were pretty clear about they didn't meet their burden under step one and step two. [00:16:46] Speaker 02: We, as the moving party, and this is a pretty clear Berkheimer case, I think, our motion for summary judgment. [00:16:53] Speaker 02: We had a very well-developed record down below. [00:16:55] Speaker 02: We had depositions, we had declarations, interrogatories, document requests, we had claim construction, which the claims are not at dispute here. [00:17:03] Speaker 02: The record down below is very, very well-developed. [00:17:07] Speaker 02: And the court properly found this is not even a close case, if you look at Magistrate Payne's report and recommendation. [00:17:15] Speaker 02: He filed no material issue in dispute on either step one or step two. [00:17:19] Speaker 02: Does the court have any question on step one or step two? [00:17:24] Speaker 02: Anything further? [00:17:25] Speaker 02: I'm sorry? [00:17:26] Speaker 02: Anything further? [00:17:28] Speaker 02: Give me one moment. [00:17:35] Speaker 02: I would say, I have five minutes. [00:17:38] Speaker 02: I don't mean to bore you. [00:17:39] Speaker 02: But this case is on par with Smart Systems and Planet Bingo, which is a case relied upon by the lower court. [00:17:48] Speaker 02: This case is distinguishable from Ancora and Fish and Thales. [00:17:52] Speaker 02: We've identified those and talked about those in our pleadings down below. [00:17:56] Speaker 02: There simply is no technological improvement here. [00:18:00] Speaker 02: And they did meet their standard. [00:18:03] Speaker 02: We ask for a firmness on the underlying decision. [00:18:05] Speaker 02: Thank you. [00:18:07] Speaker 02: OK, thank you. [00:18:07] Speaker 02: Mr. Kahane? [00:18:19] Speaker 00: Masabi's claim that Dr. Godesman, Baymark's expert, did not address the barcoding and the problems with LCD screens and the elements is demonstratively false. [00:18:33] Speaker 00: I have various citations. [00:18:35] Speaker 00: Dr. Godesman specifically testified that, quote, the patents involve a unique use of technology to improve [00:18:42] Speaker 00: the way servers and computers communicate with and transfer information with remote devices in the context of implementing visual validation ticketing, appendix 2781 to 2782. [00:18:52] Speaker 00: The use of tokens as disclosed in the claims provide non-conventional security protocols, appendix 2781 to 2782. [00:18:59] Speaker 00: The combination of claim elements taught by ByteMark's inventions and patents is a new and useful improvement of existing technology that was not known at the time of the invention and amounts to a significantly more [00:19:10] Speaker 00: more than merely distributing and visually validating electronic tickets, appendix 2730, appendix 2750 through 2751. [00:19:20] Speaker 00: Prior to the 967 patent, quote, it was not known to have a previously purchased electronic ticket that is activated by a service system determining that a received token which is associated with a request to verify a purchase of a previously purchased electronic ticket is valid. [00:19:35] Speaker 00: and transmitting to the user's computer device a data file, including a visual validation display object, configured to be readily recognizable by a ticket taker, Appendix 2733. [00:19:44] Speaker 00: BiMark's invention provided an early solution to the need for distributing electronic ticketing in a practical, efficient, and secure manner, Appendix 2730. [00:19:52] Speaker 00: The problem with the earlier systems was that, this is my last quote, the problem with the earlier systems that was the computer scanning processes fraught with error as barcode scanners were not designed to read [00:20:03] Speaker 00: lit LCD screens, appendix 2750 to 2751. [00:20:07] Speaker 00: The bite mark inventions eliminated the need to use barcode scanners on LCD displays and improved the ticket verification process, appendix 2730, appendix 2750 to 2751. [00:20:21] Speaker 00: So I'm not sure what the representation was a few moments ago. [00:20:24] Speaker 00: There was a plethora of specific [00:20:26] Speaker 00: very detailed testimony by Dr. Godesman that was never considered by the district court judge. [00:20:32] Speaker 00: Clearly what I just covered here, which is out of the record, and this is all the testimony of our expert, going through very specific claim elements and pointing to these very specific claim elements in the claims of the 967 and 993 and pointing out that these claim elements in combination specifically disclose an improvement over the existing technology of scanning-lit LCT monitors. [00:20:57] Speaker 00: None of this evidence, which was competing and contradictory to Masabi's expert, was ever analyzed. [00:21:07] Speaker 00: The court never identified what legal standard he was to analyze this under, that it was a clear and convincing evidence standard that was required to be analyzed. [00:21:17] Speaker 00: Masabi's counsel keeps on arguing that we never met our burden. [00:21:20] Speaker 00: Excuse me, the burden, the patents are presumed valid, Your Honors. [00:21:25] Speaker 00: The patents are presumed valid. [00:21:27] Speaker 00: And it was Masabi's burden to prove invalidity or failing to be eligible under the clear and convincing standard. [00:21:38] Speaker 00: And with such detailed testimony by a qualified expert whose qualifications were never challenged, a doctor, an expert, PhD, computer science in this very field, putting forward [00:21:53] Speaker 00: very specifically why this is an improvement in technology. [00:21:56] Speaker 00: Does that not alone create a question of fact? [00:22:00] Speaker 00: How has Masabi proven by clear and convincing evidence that these claim elements in combination, the transfer of the token, [00:22:08] Speaker 00: and the validation and authentication of a token, and the transfer of visual validation object, as Judge Stoll pointed out, yes, it's not about a boat. [00:22:16] Speaker 00: The boat is just an example of a visual image. [00:22:19] Speaker 00: And by the way, the image, as the patent specification states, it's a combination of colors and images. [00:22:26] Speaker 00: But that's the end result of the implementation of the claim elements. [00:22:31] Speaker 00: That's one word. [00:22:33] Speaker 00: The boat is just the one word in the claim, the visual validation object. [00:22:38] Speaker 00: And what Massabi has tried to argue here is that the word visual validation object, which is one word of all these claim elements, that equals the invention. [00:22:47] Speaker 00: That's not at all the invention. [00:22:48] Speaker 00: The invention, as Your Honor pointed out, is this process of getting this image in a secure way. [00:22:54] Speaker 00: We all would agree here that an image to enter a venue has been around for 1,000 years maybe. [00:23:01] Speaker 00: That's not what we're talking about is how can you combine sort of efficiencies and practicalities of old school, efficient, quick eyesight recognizable tickets with the security features that you can get that image within minutes of entering the venue and it can't be hacked in a practical and inexpensive way. [00:23:22] Speaker 00: And nobody did this. [00:23:23] Speaker 00: Nobody did this until in the United States. [00:23:27] Speaker 00: Nobody did this on a large scale like ByteMark did it. [00:23:31] Speaker 00: Then everybody else started to do it. [00:23:33] Speaker 00: This was a solution. [00:23:34] Speaker 00: There was commercial success. [00:23:36] Speaker 00: It's not that it's not a factor in 101, but it goes to 103. [00:23:40] Speaker 00: Commercial success was a new way to efficiently move crowds by using a secured process of very specific elements of moving a token, validating the token, [00:23:53] Speaker 00: And in dependence of validation of the token, transmitting the visual validation object. [00:23:59] Speaker 00: Like the case Baskin Globe Internet versus AT&T, 827, Federal Third, 1341, this court held in 2016 that even though the website filtering's technology was already around, the court held that the fact that there was an improvement by centralizing the filtering and selecting how it was going to be filtered [00:24:24] Speaker 00: That was an improvement that solved the problem in protecting security information, not giving employees access to particular information and other kinds of considerations that was sufficient to meet eligibility. [00:24:38] Speaker 00: And the smart case that is referenced, smart systems case, that was a case completely distinguishable. [00:24:44] Speaker 00: That was a financial, non-conventional financial data case, basically using bank card data [00:24:52] Speaker 00: as the same bank card data that we all have, and then just using that as the authenticating features for ticketing. [00:24:58] Speaker 00: First of all, as we know, the petitions were denied. [00:25:01] Speaker 00: This is not a covered business method to start with. [00:25:05] Speaker 00: These are not covered business method. [00:25:06] Speaker 00: The patent obviously determined these are not covered business method. [00:25:08] Speaker 00: That's just as a matter of context. [00:25:10] Speaker 00: But also, we're not using, this is not even an improvement of barcode technology, which bascially would suggest that even an improvement of existing computer technology could satisfy eligibility. [00:25:22] Speaker 00: But this is not even that. [00:25:23] Speaker 00: This is a whole new way, sophisticated way. [00:25:26] Speaker 00: And the market has also acknowledged that it's new. [00:25:29] Speaker 00: Once ByteMark did this, then everybody else started to do it. [00:25:32] Speaker 00: Now across the country, people are using this visual validation ticketing, using various variations of this token validation process. [00:25:41] Speaker 00: Nobody ever else did it. [00:25:43] Speaker 00: It solves a problem in the market. [00:25:45] Speaker 00: And it's clearly eligible. [00:25:46] Speaker 00: And the related patent applications. [00:25:49] Speaker 00: Thank you very much. [00:25:50] Speaker 02: Thank both counsel. [00:25:51] Speaker 02: The case is submitted.