[00:00:00] Speaker 05:
This is number 19, 1235, personal beasties group, LLC versus Nike, Inc.

[00:00:07] Speaker 05:
Mr. Ulrich.

[00:00:09] Speaker 01:
Thank you, Your Honor.

[00:00:20] Speaker 01:
May it please the court.

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Your honors, we're here today because the district court improperly dismissed the appellate suit on 101's grounds.

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The lower court's errors fall primarily into two areas.

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First, in the Alice analysis, the district court oversimplified the claims of the patent and failed to consider all of the elements in combination for step one, and then failed to consider individual elements in step two.

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This oversimplification was especially egregious with respect to the character limitation, which I'll address in more detail later.

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More generally, the court ignored the language of the statute and binding precedent, which holds that technical improvements to prior art systems are generally patentable.

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So starting with the step one of the Alice analysis, this is where the oversimplification is most important.

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The district court started, in its opinion, by boiling down

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the claims of the patent to a system for simply collecting and analyzing data and providing feedback.

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And it dismissed individual limitations, finding they didn't make the claims non-abstract.

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But as we know, virtually everything a computer does can be boiled down to the collection, analysis, and display of data.

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The most fatal oversimplification, however,

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was in characterizing the character limitation merely as a means to display a result or to substitute for displaying the words good job.

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As I'll discuss shortly, this oversimplification ignores two specific claim limitations and overlooks the fact that the character is a specific structure that serves a specific function.

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So basically, the lower court got the Alice test backwards.

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You've instructed the lower courts before that in the ALICE inquiry, they should not oversimplify the claims by looking at them generally and failing to account for specific requirements.

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You've also instructed them that all of the claims must be considered in combination in step one of the analysis.

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So what the district court should have done is first consider all of the claim elements in combination to determine whether the claim was directed to an abstract idea.

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As I said, the district court did exactly what courts have been warned against, which is oversimplifying.

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The reduction of the character limitation to merely a display or a substitute for saying good job misunderstands the very nature of the character requirement and ignores two claim limitations.

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This character, again, is a specific structure with a specific function.

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So if we look at claim one,

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The fourth limitation requires that the character, quote, has different appearances based on the first set of personal data and in response to an input signal.

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So this is the part of the claim where the character's appearance is based on the results, whether it's weight loss or smoking cessation or whatever behavior is being modified.

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The final element of claim one, however, goes on to say that the appearance of the character is controlled to encourage the user to perform desired responses.

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What exactly does that mean?

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If we look in the specification, the final three paragraphs of column six tell us that.

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And what we see there is that these two limitations are more than a simple substitute for saying good job or giving someone a pat on the back.

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This is a two-way interaction, and the character's appearance is changed to better engage the user.

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As in the data engines technologies case, the complexities of the system are hidden

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under ordinary, everyday metaphors.

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So specifically, what we find in column 6 of the specification, it discloses a non-utility interaction.

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that non-utility interaction is specifically not related to the status of behavior modification project.

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So those non-utility interactions have nothing at all to do with whether or not you've lost your weight or ceased smoking or whatever it is you're trying to do.

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But those non-utility interactions are designed to improve the user's intimacy with the character.

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So it's a two-way street, not simply saying good job or giving someone a smiley face.

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The specification also discloses transitions between wake and idle states.

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And the specification says that this is to avoid monotony with the character.

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It further goes on to describe the character as becoming unique to the user through modification of the algorithm using neural net and learning algorithms.

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And are you suggesting that all

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or some of those complexities are part of a proper claim construction?

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I am, Your Honor.

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Or they could be.

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We didn't get to that stage of the case.

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Did you ask for a claim construction that would add a lot of those kinds of richness into this last clause of the claim one?

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At this stage of the case, Your Honor, we were just at the 12b6 stage.

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And so we did not ask for any claim constructions.

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You're into your rebuttal time here.

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OK.

[00:05:46] Speaker 01:
I apologize, Your Honor.

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Let me just conclude by saying this character is not the same as human coaching.

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In coaching, the coach generally is not the one that changes to satisfy the user, which in this case it does.

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And with that, I will sit down and reserve the rest of my time for rebuttal.

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Thank you.

[00:06:12] Speaker 02:
Good morning your honors and may it please the court Stanley Panikowski on behalf of Nike the judgment should be affirmed your honors because the 915 patent claims fell both steps of the Alice test the claims fell Alice step one because they are directed to the abstract idea of collecting data analyzing data and providing feedback based on predetermined behavioral pattern rules and

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The claims also fail Alice Step 2 because the claims use only generic computer technology in a conventional way to provide feedback for behavior modification.

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On Alice Step 1, Your Honors, this case falls squarely within this Court's precedence, holding that claims focused on data collection, analysis, and display of the results are directed to an abstract idea.

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That is what we have as the basic thrust of the claims here.

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Claim one that is at issue describes inputting data, maintaining data, generating an analysis of that data, communicating the results of the analysis, and displaying those results.

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And claim one, moreover, describes only generic conventional computer technology and no particular assertively inventive technology for implementing that abstract idea.

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a base module that contains a feedback interface and a display unit, a database, and a controller.

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That's it.

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No technical details are claimed.

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And because PBG did not ask for any claim construction at the 12b6 stage, that argument is waived.

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But even if the entire specification had been directly incorporated into the claims, we would still have an abstract idea here under cases like Capital One, Electric Power, and Affinity Labs.

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So your point is that even if you read in all the specification you don't see a technological

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development here.

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Is that what I understand you to be saying?

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That is correct, Your Honor.

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Neither in the specification nor in the claims is there any, as the Court said in Electric Power, particular assertively inventive technological contribution.

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The only asserted innovation here is at most in the realm of the abstract idea of behavioral modification, a social science, which the Supreme Court said in ALS you cannot claim

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principles of social sciences and just say we're going to implement them with conventional computer technology.

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Likewise, the court in SAP versus Investpick said that no matter how groundbreaking

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or innovative or even brilliant an assertive invention may be in the finance field, it's still just an innovation in the realm of abstract ideas.

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And that is the only assertive innovation that we have here.

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And the problem with this specification is that the specification even goes beyond this court's cases like TLI, internet patents,

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an in-charge point that have pointed to the absence of a disclosure of technological details for the solution in the specification.

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The 915 patent here does those cases one better.

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It actually admits that the display technology described only at a vague functional level is pervasive and known.

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You're on appendix page 26 at column one, line 30.

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It refers to the personal handheld wireless device that's used as pervasive.

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Now that is the base module of claim one.

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And the base module contains the feedback interface and the display unit.

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So all of the display technology is in this base module, which is only described in the specification as a pervasive handheld wireless device.

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Or alternatively, at column four, lines 55 to 57, appendix page 27, alternatively, a known personal computer can be used as the base module.

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Nowhere else is there any particular improvement to computer functionality, any technical solution to a technological problem disclosed anywhere in the specification.

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Even, Your Honor, the paragraphs at column six, appendix page.

[00:10:27] Speaker 02:
Yes, Your Honor.

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Do you think that the analysis or even the result might be different if, say, I don't know, somebody created a system in a large law firm so that the managing partner is getting electronic

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feedback of how much time is being spent on Westlaw, how much time is being spent with documents for a particular client.

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And there's the little face of the managing partner on the associate's screen that says, aren't you working on this for rather a long time?

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Or could you please switch to some other device?

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And maybe even to make it richer, the managing partner says, how about lunch?

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To develop a personal relationship.

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Know your honor I don't think that that hypothetical claim would be any more inventive in the sense required by Alice than what we have here because one you would still only be using generic computer technology in a conventional way you would need to disclose.

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some sort of technological solution, some sort of limited mathematical rules like we had in McRoe that are then used to improve a technological process to get a better technical result and where that technological process is different from the way humans have done it before and not like in this case an unfair warning IP where behavioral modification is performed the same way that humans do it.

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It's simply saying, do it on a computer, which violates the most fundamental precept of ALIS.

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And also, Your Honor, in the hypothetical, even to the extent that that might be innovative, it's still only an innovation in the abstract realm of, again, behavioral modification or perhaps organizational management.

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And we know from ALIS and SAP that that's not enough.

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And we also know that from BSG Techs.

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where the court said the inquiry is not whether the claims are unconventional as a whole.

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What you look to under this court's precedent is, is there any unconventional technology that's being used to affect a technical solution?

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And if there's not, then the claim fails both steps of the Alice test.

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And your honor, in this regard, I think that electric power, Capital One, and Affinity Labs are especially instructive because

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Like the asserted inventive concept in this case, the asserted inventive concept in those cases all dealt with a form of display.

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And in electric power, this court said, even if you look at the display limitation, and even if you interpret it to require a time-synchronized display of information, there is still nothing

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in the patent that suggests that the display technology was anything other than readily available.

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And again, here, Your Honor.

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We have cases, though, where we've said the display technology could be inventive, right?

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Like, McRoe is an example of that.

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Yes, your honor.

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And McRoe is a perfect contrast for this case because there were very specific mathematical rules disclosed in the patent that improve the technical process.

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The problem in McRoe was that the existing animation techniques relied on human subjective input and therefore were less efficient

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clunkier, produce less realistic results.

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And the inventors in McGraw said, we're going to try to solve this technological problem that we see in the physical displays by replacing the human subjective input with automated mathematical rules, which were described in detail in the claim and the various variables and the functions and relationships between them.

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And then those mathematical rules were applied to achieve an improved technical result.

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as well as to permit the automation of further tasks.

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And here we have nothing like that.

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The discussion of the predetermined behavioral rules

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in the specification at column four, lines 50 to 54, simply say that the predetermined behavioral rules can be just about anything you want to achieve in improving your life patterns.

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Lose weight, stop smoking, go to the gym more.

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They're not, not only not described in any kind of detail in the claims or specification, but they're also not technological rules that are being used as were the rules in McGrow to improve

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to achieve an improved technical result.

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And in electric power, going back to the display technology there, here the 915 patent does the patent in electric power one better.

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Not only is there no suggestion that there's any inventive display technology here, any improvement to it,

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But again, the patent also admits in the specification passages that I cited that the display technologies that are part of the base module are pervasive and known.

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And finally, Your Honors, to address the references to column six of the specification at appendix 28,

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even there in describing the character and the way that the character either shows relief, disturbance, or neutrality in response to how much the user is deviated from the projected success path, that is no different from how a human life coach or a doctor or a parent or a friend is going to perform those tasks in terms of seeing how good or bad a job you're doing and then providing some indication of

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feedback and merely using computers as tools now to communicate that feedback without any even arguable technological improvement and without any plausible factual allegation in a complaint of a technological improvement is simply not enough to meet the Alice test and even

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at line 50 of column 6 of the specification in talking about the algorithm that governs the character's reactions, all that the specification says is that you use known neural net or other learning algorithms.

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There's not even a specification of the algorithms or rules there, much less in the claims and nothing technological about any of it.

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And unless the court has further questions, Nike asks that the judgment of the district court be affirmed.

[00:16:41] Speaker 02:
Thank you, Your Honors.

[00:16:41] Speaker 02:
Thank you.

[00:16:43] Speaker 05:
Mr. Dickema, you have a little over four minutes, I think.

[00:16:51] Speaker 05:
I think it's four and a half minutes.

[00:16:55] Speaker 04:
Thank you, Your Honors.

[00:16:57] Speaker 04:
May it please the Court?

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Nike's argument ignores several key features of both the patent and the briefing in this case.

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First,

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Nike argued that no technical details are claimed in the 915 patent.

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This ignores the character limitation, which is the subject of the fourth and fifth limitations of claim one.

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The character limitation, contrary to Nike's arguments, is a specific function claimed in all of the relevant claims for a specific purpose, which is interacting with the user, as was previously discussed, in a two-way fashion.

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Nike also ignores the fact that

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This patent is not an abstract idea attempting to claim coaching or advice or something like that.

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It is an improvement on a prior existing technological system, the Borg patent 446, which is both cited in the briefs and included here in the appendix.

[00:17:57] Speaker 00:
I forget.

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How is it an improvement over that?

[00:17:59] Speaker 00:
I remember reading that in your brief.

[00:18:01] Speaker 00:
Could you rewind me?

[00:18:02] Speaker 04:
Yes, Your Honor.

[00:18:04] Speaker 04:
The Borg patent is a static display.

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if the Borg patent is where this concept of the smiley face came from.

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In the Borg patent, the communication with the user is merely a smiley face.

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The Borg patent discloses the smiley face being depicted on a watch.

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In contrast, in the 915 patent, the character is interactive.

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It both responds to what the user has done or achieved.

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Again, that's weight loss or smoking cessation or whatever.

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The character also

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changes its appearance and adapts to further encourage the user in some of the ways that Mr. Yerrick argued before.

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Your argument is that because there's a patent already on the prior with the watch and the smiley face, this is a technological improvement over that patent.

[00:18:53] Speaker 04:
Yes, Your Honor.

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35 USC 101 says clearly, whoever invents or discovers any new and useful process or machine or any new and useful improvement thereof may receive a patent.

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In this court, as advised courts on several occasions, precedent has recognized that specific technological modifications to solve a problem

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or improve the functioning of known systems generally produce patent-eligible subject matter.

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That's from the trading tax case.

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And that's exactly what happened here, Your Honor.

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Your Honors, I'm sorry.

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The 915 patent discloses and identifies prior art systems, including the Borg patent.

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The specification then identifies shortcomings with those systems.

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including that it's passive and lacks engagement with the user.

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It doesn't convince the user to pay attention to it and follow its instructions.

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The specification of the 915 patent then lays out a solution for these shortcomings, specifically that the information can be input into the system by more varied means, that it can be transmitted wirelessly between different parts of the system, and that, most importantly,

[00:20:04] Speaker 04:
There will be a character that interacts with the user and that the character's behavior and appearance is responsive both to whether the user is achieving the goal and also to whether the user is paying attention to the character.

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The 915 patent then claims those specific technological improvements.

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It does not broadly claim user modification or broadly claim coaching or anything of the sort, it claims only

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specific implementations of this technological system and improvement on the Borg system that include the display character limitation.

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In this way, this patent is most closely related to several precedents of this court, including micro, data engine technologies versus Google, and also core wireless licensing.

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In response to Nike's arguments that

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Patents are claims that simply claim means of displaying information without making a technological leap in LCD technology or programming complexity.

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That's simply not true if we look at either data engine technologies, which was about tabs on a spreadsheet, or core wireless licensing, which was about the display of menus.

[00:21:22] Speaker 04:
OK.

[00:21:22] Speaker 04:
I think we're out of time.

[00:21:23] Speaker 05:
Thank you, Mr. Dachman.

[00:21:24] Speaker 04:
Thank you, Your Honor.