[00:00:18] Speaker 04: Council tell sure you reserve five minutes of time for rebuttal. [00:00:21] Speaker 04: Yes, your honor. [00:00:22] Speaker 04: Okay. [00:00:22] Speaker 04: We're ready to start. [00:00:24] Speaker 00: I'm ready to start Good morning your honors the district court below aired in resolving factual issues Excuse me a claim instruction issue [00:00:39] Speaker 00: at the rule 12b6 stage, which under this court's precedent, in cases like Atrix, Self-Spin, National Alternatives, requires reversal and remand for further proceedings. [00:00:50] Speaker 00: The case comes to the court on a very, what I would consider a highly unique posture. [00:00:55] Speaker 00: Most of the cases that this court takes in from the district court level, [00:00:58] Speaker 00: are claims that were from the late 90s throughout the 2000s that were examined and allowed prior to the Alice Doctrine. [00:01:08] Speaker 00: In this case, the rejection by the examiner below under 101 came at the end of 2016, and the claim amendments were expressly considered by the examiner here. [00:01:19] Speaker 00: The issues before this court are issues that the examiner [00:01:22] Speaker 00: expressly considered and found the specificity of the amendments got us around 101. [00:01:30] Speaker 00: In self-spend this court itself said that at the 101 determination phase patents are presumed valid. [00:01:37] Speaker 00: We have an original complaint at paragraph 13 that talks about the unconventionality of this method. [00:01:44] Speaker 00: We have 35 amended paragraphs, or excuse me, 35 paragraphs in the amended complaint that talk in great detail about what I think most of us know. [00:01:53] Speaker 00: We all know what the prior process for real estate showing was, but we describe it in detail. [00:01:59] Speaker 00: We talk about the new method in Claim 7, which is even the district court several times admits it's a different method, but then goes on to just find it conventional with no citation to evidence. [00:02:11] Speaker 00: So there is a substantial record that this patent was not conventional and is far different from the technology that predated it. [00:02:22] Speaker 00: It's quite frankly perplexing how a district court judge on this record could not send this case on to further proceedings, including claim construction. [00:02:31] Speaker 01: Well, let's start from the premise [00:02:33] Speaker 01: The court concluded that this claim is about texting a customer a key code so the customer can let themselves into a house on sale. [00:02:43] Speaker 01: So a property manager doesn't have to go out there and open the front door for the customer. [00:02:50] Speaker 01: So it's just about sending information to someone so that they can enter a premises. [00:02:57] Speaker 00: I think that's an oversimplification of the claim. [00:02:59] Speaker 01: But I know that's your position, but I guess [00:03:04] Speaker 01: Let's talk specifics now as to what is the problem with that. [00:03:10] Speaker 00: The method overall, and again, as was cautioned in Alice, and this court said it too, it's easy to boil any patent down to some basic principle. [00:03:20] Speaker 00: But here, the conventional method for conducting real estate was the realtor and I, we have to work out of time. [00:03:27] Speaker 00: We go meet, and the realtor has a code. [00:03:30] Speaker 00: He enters a static code into a lockbox, and we look at the property together. [00:03:34] Speaker 00: No one ever thought that the technology for doing what the claim now covers has been around. [00:03:39] Speaker 00: Somebody could have done this a long time ago. [00:03:41] Speaker 01: Well, here's a hypothetical. [00:03:42] Speaker 01: What if the claim said, oh, I'm your real estate agent, but I'm not going to be able to come to the house with you. [00:03:50] Speaker 01: So I'm going to text you the key code, and you can get in yourself and take a look around. [00:03:56] Speaker 01: Would that be patent eligible? [00:03:58] Speaker 00: No, it would not, in my view. [00:04:01] Speaker 00: But it's a static code. [00:04:02] Speaker 00: That's simply the same, that's the same traditional method except the, and it wouldn't be infringing either, by the way, because it's a static code. [00:04:10] Speaker 00: So it would not infringe our claims. [00:04:11] Speaker 00: If that's considered auto entry, that would be another method for not infringing the patent. [00:04:15] Speaker 00: But I would not think that merely a realtor faxing or texting a static code just because the realtor couldn't show up would be patentable. [00:04:28] Speaker 00: I would agree if that's the point of your question that that's not patentable. [00:04:31] Speaker 00: But our client thought of a, and that would be addressing a particular circumstance where a realtor maybe got delayed for some reason, traffic for example. [00:04:41] Speaker 00: I don't even know if their code of conduct would allow it, by the way. [00:04:43] Speaker 01: I would imagine as a realtor... What if there was another claim limitation that said, and then the realtor goes and reprograms the lock at the end of the day? [00:04:55] Speaker 00: Again, I wouldn't think that that would be patentable, but, you know, that hasn't been before. [00:04:58] Speaker 00: I mean, somebody could file a patent on that. [00:05:00] Speaker 01: What if there was another limitation that said, and then a magic server remotely reprograms the lock? [00:05:08] Speaker 00: If you start to get into technology that would allow someone to send a code and then you're going to reprogram it, that might be patentable. [00:05:16] Speaker 00: You're getting into specific territory. [00:05:17] Speaker 00: I mean, the test is, what was conventional? [00:05:22] Speaker 00: What was the conventional method? [00:05:23] Speaker 00: We have a new method, and it's by the Patent Office been deemed to get passed. [00:05:27] Speaker 02: You seem to be skipping right to step two and not focusing on [00:05:31] Speaker 02: the abstract idea this patent is directed to, and then discussing what beyond that abstract idea is unconventional. [00:05:40] Speaker 02: You just want to look at it all and say, well, nobody thought about doing it this way before, but don't we have to, under ALICE step one first, decide what the abstract idea is, and then decide whether there's any non-conventional elements added to that abstract idea, not whether the abstract idea itself is non-conventional. [00:05:59] Speaker 00: That is correct, Your Honor. [00:06:02] Speaker 00: There's, you know, if you look at a case like Enfish, we put the specificity in step one, and we don't reach step two. [00:06:08] Speaker 00: In this case, the district court judge found that the abstract concept is automated entry. [00:06:14] Speaker 00: I don't have a problem with that finding in step one, and I would agree that that would be an abstract idea and proceed to step two. [00:06:20] Speaker 04: So you concede step one? [00:06:21] Speaker 00: I would be willing to concede step one, but the specificity of the claim can't be ignored. [00:06:27] Speaker 00: So whether, as in an Enfish analysis, we put that specificity. [00:06:30] Speaker 02: It was unconventional then. [00:06:32] Speaker 02: After you assume that this type of automated entry is an abstract idea, what's non-conventional? [00:06:40] Speaker 02: You didn't invent smart locks or lock boxes. [00:06:44] Speaker 02: You didn't invent the idea of sending people text. [00:06:48] Speaker 02: I don't see anything in here that's not using conventional equipment or conventional technology. [00:06:54] Speaker 00: There is no conventional lockbox which understands and opens in response to durational codes. [00:06:59] Speaker 00: There's no evidence of that. [00:07:01] Speaker 00: At this stage, our Rule 12-6 motion, where we've alleged that that is unconventional, never done before, that's enough. [00:07:08] Speaker 04: So you're claiming an apparatus. [00:07:11] Speaker 04: You invented the lockbox. [00:07:14] Speaker 00: The apparatus is part of the ordered combination. [00:07:16] Speaker 00: Yes, it's specifically called for in Claim 7 in combination with technology that's going to generate a durational code, provide it to the user, and then the user goes to the site and works with a lockbox that's never existed before. [00:07:29] Speaker 04: But you would agree that the lockbox already, that's conventional. [00:07:33] Speaker 00: A conventional lock box that receives static codes. [00:07:36] Speaker 00: The lock box of our patent is not conventional and if there's going to be a disagreement about that, that's something that should have been the subject of claim construction. [00:07:43] Speaker 04: I'm just trying to help you out. [00:07:44] Speaker 04: I appreciate that. [00:07:47] Speaker 04: So you're dealing with technology, right? [00:07:50] Speaker 04: operates the box. [00:07:51] Speaker 04: This is a technology enabled box. [00:07:53] Speaker 00: It's absolutely technology enabled. [00:07:55] Speaker 00: It has to be. [00:07:56] Speaker 00: It's undisputed that a traditional lock box can't receive a duration code. [00:08:02] Speaker 02: If you invented a smart lock box, why aren't we talking about that patent claim versus this method claim? [00:08:11] Speaker 02: If you're saying that what's unconventional is this smart lock box [00:08:16] Speaker 02: then where's the claim on that? [00:08:19] Speaker 02: I mean, that's a piece of equipment that [00:08:23] Speaker 02: that seems to be completely divorced from an abstract idea. [00:08:28] Speaker 02: Did you actually invent a smart lockbox? [00:08:30] Speaker 02: Is that what this patent's about? [00:08:32] Speaker 00: Well, we certainly did invent the smart lockbox by our view. [00:08:34] Speaker 01: Our biggest... Where does that disclose in the specification? [00:08:37] Speaker 01: I mean, this is a pretty thin specification. [00:08:41] Speaker 00: Column 8 talks about the fact that the lockbox has to be programmed to receive durational codes. [00:08:47] Speaker 01: If you also look at Figure 12... Can you point it out to me? [00:08:51] Speaker 00: Yes, Your Honor. [00:08:55] Speaker 00: And we have, in our reply brief, I'm going to answer the question directly, but in our reply brief, we have a whole section on the spec that discusses the lockbox and its ability to receive durational codes. [00:09:08] Speaker 00: But column A. In the appendix, I am at A61. [00:09:18] Speaker 00: And it's lines 5 through, like, 12. [00:09:24] Speaker 00: In block 183, shown in figure 10, the server 11 communicates with lockbox to allow the visitor to enter during the specified time period and before the time of expiration. [00:09:35] Speaker 00: And that talks about the code. [00:09:36] Speaker 00: If you look at figure 12 of the patent, [00:09:43] Speaker 00: If you look at figure 12, box 95, it talks about the code expires in one hour. [00:09:49] Speaker 01: Can you give me a question, please? [00:09:50] Speaker 01: So I mean, I'm lost. [00:09:52] Speaker 01: I mean, I really don't understand at the moment what are the contents of this technology-enabled lockbox. [00:10:01] Speaker 01: I think at one point in one of your briefs, in blue brief 24, you say that, [00:10:11] Speaker 01: your special lock box either already contains the list of time-specified codes or otherwise can be pre-configured and synchronized with the software providing the automated entry information to facilitate self-showing. [00:10:27] Speaker 00: It can be performed either way. [00:10:28] Speaker 01: So I guess the concern I have is that this is starting to feel post hoc, that you're now imagining different kinds of embodiments of what this [00:10:40] Speaker 01: black box, lock box is doing when the claim is really directed to a problem. [00:10:49] Speaker 01: And the problem is, how do we let customers in by themselves without requiring property manager to let them in? [00:10:57] Speaker 01: And then, oh, we don't want them to be able to get into the house permanently, so let's make sure that the key code is a temporary key code. [00:11:08] Speaker 01: But then there is no explanation further on what is the lockbox and what is inside the lockbox. [00:11:16] Speaker 01: And I don't know if the lockbox is what you're saying here in page 24 of your brief. [00:11:22] Speaker 01: I mean, that's not what your spec says. [00:11:25] Speaker 01: I mean, I don't know if the lockbox is simply something that communicates with some remote server and the remote server then [00:11:35] Speaker 01: tells the lockbox, yes, that code that just got punched in is a good code, so go ahead and open the door. [00:11:43] Speaker 01: I mean, and so it's more of a dummy lockbox than anything else. [00:11:47] Speaker 01: But the problem here is that the patent, the claims are directed to something else. [00:11:53] Speaker 01: And the fact that there's a lockbox reference, there's nothing in the claim nor the specification that tells me that this lockbox is the heart of the invention that is some kind of specialized dynamic lockbox. [00:12:10] Speaker 01: And that's the concern I have. [00:12:12] Speaker 00: Well, that's a fair question, of course. [00:12:14] Speaker 00: The answer to it and it comes back to the question that you asked Judge Hughes, which is this is an overall, our client's business is the overall method. [00:12:22] Speaker 00: The overall method which deviates from a conventional practice that's known as pled in our complaint was [00:12:30] Speaker 00: renter and realtor go together at a coordinated time and the realtor enters the code. [00:12:35] Speaker 00: The paradigm shift here, and it is a paradigm shift, is that the method is now a computer generates a durational code which is given to the user after there's an authentication process. [00:12:48] Speaker 00: The user can then go to the lockbox and enter the code. [00:12:51] Speaker 00: I don't think the lockbox, once you know the idea, the lockbox is not going to be something that's difficult to create. [00:12:59] Speaker 00: however there's coordination between between the the server and the lockbox and it could be the claim doesn't require whether it would have to be a communication link or whether it could just been pre-programmed we do it either way when you talk about that coordination it reminds me of SIPCO versus Emerson are you familiar with that I am familiar with that case your honor is this case like that like SIPCO [00:13:29] Speaker 00: I don't think, in a sense, I mean, it is in the sense that, again, we have an unconventional method here. [00:13:36] Speaker 00: I mean, there's no question that we know the prior method. [00:13:38] Speaker 00: We have changed the method. [00:13:40] Speaker 00: All that Alice requires is we have specific steps that define our method. [00:13:44] Speaker 00: The district court judge says that it covers all of automated entry. [00:13:48] Speaker 00: But it doesn't cover all of that automated entry, because I could have an app that I show up at the property and I hit I'm here, and the realtor communicates and hits open door. [00:13:56] Speaker 01: I still don't know what's inside the lockbox. [00:13:58] Speaker 00: It's it's software. [00:14:00] Speaker 00: I mean, that's that's the problem. [00:14:01] Speaker 01: How does it actually operate? [00:14:02] Speaker 00: What's going to receive a signal a code in response to that code? [00:14:05] Speaker 00: It's going to probably look at a lookup table. [00:14:07] Speaker 01: Okay, probably look at a lookup table. [00:14:10] Speaker 01: Where's the lookup table in the lockbox? [00:14:12] Speaker 00: Yes, that's an but that's an enablement issue. [00:14:14] Speaker 00: That's a section 112 issue not 101. [00:14:17] Speaker 01: Well, what I don't understand is what is your invention? [00:14:21] Speaker 01: And now I'm scared that you're asking us to infer an inventive concept. [00:14:26] Speaker 00: I'm not. [00:14:27] Speaker 00: It's a method claim which says that you receive this durational code, then you go to the property where there's a lockbox, you put in a durational code. [00:14:37] Speaker 00: It used to be a static code. [00:14:39] Speaker 00: Lockboxes understanding a code is not a big deal, but you put in the durational code instead of a static code, and it lets you in for a predetermined period of time. [00:14:47] Speaker 04: All right. [00:14:47] Speaker 04: You're into your rebuttal time. [00:14:49] Speaker 04: I realize I'm well into it, so thank you. [00:14:51] Speaker 04: I'm only restoring time. [00:14:51] Speaker 04: We took your time, so. [00:14:53] Speaker 04: Thank you, Your Honor. [00:14:54] Speaker 04: Yes. [00:14:56] Speaker 03: May it please the Court. [00:14:58] Speaker 03: My name is Lauren Mills. [00:14:59] Speaker 03: I represent Tenant Turner. [00:15:01] Speaker 03: The issue here is patentability, not novelty. [00:15:04] Speaker 03: You have to jump over a 101 before you ever get to 102 or 112. [00:15:08] Speaker 03: And they have failed to jump over 101. [00:15:10] Speaker 04: They conceded 101 today. [00:15:13] Speaker 04: I think they conceded step one. [00:15:16] Speaker 03: Step one of Alice. [00:15:17] Speaker 03: Step one of Alice. [00:15:20] Speaker 03: I mean, this is clearly a method of organizing human activity. [00:15:24] Speaker 03: It's implemented on entirely generic devices. [00:15:28] Speaker 02: What about your friend's argument that actually [00:15:31] Speaker 02: The lockbox here is completely unconventional. [00:15:36] Speaker 03: Well, unconventional is a novelty issue, not a patentability issue. [00:15:40] Speaker 02: Well, but it's step two. [00:15:41] Speaker 02: It's also part of the step two analysis. [00:15:43] Speaker 03: I don't think that they claim an apparatus. [00:15:44] Speaker 03: This is a method claim. [00:15:46] Speaker 03: And if they're going to claim an apparatus, they better claim some structure. [00:15:50] Speaker 03: And the only structure in this, we called it in our brief a black box. [00:15:53] Speaker 03: It's actually, in the patent, a white box. [00:15:56] Speaker 03: But that is the only structure shown for it. [00:15:58] Speaker 03: And the way it works is not smartness at the lockbox level. [00:16:02] Speaker 03: It's smartness back at the server level. [00:16:04] Speaker 03: Because it seems to be communicating back and forth with a server at some level. [00:16:09] Speaker 03: So it's different than what was described here by my friend was actually disclosed in the patent. [00:16:13] Speaker 03: And so the court got this right. [00:16:17] Speaker 03: It's shocking that the patent was granted after Alice. [00:16:20] Speaker 03: The examiner instantly recognized the abstract nature of it, but bought the argument that by actually eliminating part of the automated process and sending the person a text message that they didn't have to manually punch in, that somehow [00:16:36] Speaker 03: made it patentable under Alice. [00:16:38] Speaker 03: So much for a technology-enabled lockbox if it takes the manual step to make this patentable. [00:16:42] Speaker 04: So it kind of eliminates the middleman here. [00:16:46] Speaker 03: That's what it does. [00:16:46] Speaker 03: That's what all of these method patents do that have been struck down under Alice. [00:16:50] Speaker 04: Are you familiar with the case Zipco? [00:16:52] Speaker 03: I'm not. [00:16:53] Speaker 03: I think that this case is actually like this court's decision at charge point almost a year ago. [00:16:59] Speaker 03: And it's a case that Judge Dumar focused on when it was at the district court level in front of Judge Garpis. [00:17:04] Speaker 03: And that had to do with a network for basically charging Teslas or other electronic cars, electric cars. [00:17:12] Speaker 03: And the analogy is exactly the same. [00:17:14] Speaker 03: It's an interesting method, coordinated by software, implemented on purely generic devices. [00:17:21] Speaker 03: And there's another case that this is like that way predates Alice, which is Wyeth versus Stone in 1840. [00:17:29] Speaker 03: It's a method of ice cutting. [00:17:32] Speaker 03: And if you look at the patent, and that's actually a fascinating read, they actually disclose in the specifications lots of really detailed methods of ice cutting. [00:17:40] Speaker 03: But the claims were at such a broad level, the court said, as the famous justice story said, no way. [00:17:46] Speaker 03: You cannot claim at that level of abstraction. [00:17:50] Speaker 03: And 101 didn't exist, but in the precursor, you cannot claim a patent at that level of abstraction. [00:17:57] Speaker 03: And that's exactly what's going on here. [00:18:00] Speaker 03: They're trying to preempt the entire field. [00:18:03] Speaker 03: And it's claimed at too broad a level to be patentable. [00:18:05] Speaker 03: They don't get over Section 101. [00:18:07] Speaker 03: I believe you understand the rest of my argument, unless you have any further questions. [00:18:13] Speaker 03: Thank you. [00:18:14] Speaker 03: We ask that it be affirmed. [00:18:14] Speaker 03: Thank you. [00:18:22] Speaker 04: Thank you, Your Honor. [00:18:24] Speaker 00: I don't know if we'll need it all or not, but I do want to make sure that I answer the questions before the court. [00:18:29] Speaker 00: I mean, this is really important. [00:18:32] Speaker 00: I mean, it's our client invested in the patent system, had an examiner look at this patent, and agreed it was passed 102, passed 103, passed 112, and passed 101. [00:18:43] Speaker 00: and specifically required us to add limitations, so it's a specific method. [00:18:47] Speaker 00: They entered the market, and nobody even believed the method was viable. [00:18:51] Speaker 00: And that's all in the record. [00:18:54] Speaker 00: And then ultimately, after three or four years, we proved the method's viable, and now people want to use it. [00:18:58] Speaker 00: Under ALICE, the question is, is our method specific enough? [00:19:02] Speaker 00: And Judge Chen, I also want to add that more support in the record for the lockbox is at column two, lines 51 to 60, talking about the code and how it has to receive the code. [00:19:16] Speaker 00: But this is a real invention. [00:19:19] Speaker 00: I mean, we have an examiner that has looked at this. [00:19:21] Speaker 00: We've pled 35 paragraphs of complaint that talk about the conventional method, the new method, how it's different. [00:19:30] Speaker 00: There's no evidence of a lockbox that's ever existed like this before in combination with an overall rental method. [00:19:37] Speaker 00: And your honor, we could have a lockbox patent claim. [00:19:39] Speaker 00: But what our client's mostly concerned about is competition from people like Zillow that are now starting to use this. [00:19:45] Speaker 00: And so they are worried about the overall process and running a business based on this and all of the benefits that it produces. [00:19:54] Speaker 00: All that Alice forbids is that you can't have a patent directed to the idea itself. [00:19:59] Speaker 00: The idea itself found in step one is automated entry. [00:20:02] Speaker 00: In step two, you would have to add in the technology that has durational codes. [00:20:07] Speaker 00: You have to add in a method step that involves [00:20:10] Speaker 00: not the realtor putting in the code, which is the traditional method, but now the user putting in the code, and it's a durational code in connection with a lockbox that recognizes durational codes that's never existed before. [00:20:22] Speaker 00: There's this discussion about the devices are generic. [00:20:26] Speaker 00: Enfish is software running on a generic computer that created a self-referential table. [00:20:31] Speaker 00: MCRO is software, animation software with phenom rules running on a generic computer. [00:20:39] Speaker 00: The law is not that because you use generic components that it's unpatentable. [00:20:42] Speaker 00: The question is, do we have a new, useful, and non-obvious method that complies with Section 112 and has the specificity required by 101 to not be a patent to the ID itself? [00:20:56] Speaker 00: This claim meets it. [00:20:58] Speaker 00: The Patent Office has looked at it specifically and said that our additions meet 101. [00:21:04] Speaker 00: And at the Rule 12 stage, there should be enough for us to be able to move on with the case to determine, let them prove that lock boxes that receive durational codes in combination with the rest is conventional. [00:21:15] Speaker 00: Let them prove that the conventional method encompasses this. [00:21:18] Speaker 00: But at this point, the case should move forward. [00:21:20] Speaker 00: So I appreciate your time. [00:21:21] Speaker 00: If the court doesn't have any further questions, I'll rest. [00:21:23] Speaker 04: Okay, thank you. [00:21:25] Speaker 04: Thank you.