[00:00:00] Speaker 02:
Our next case is USA Data versus Data Widget in ePrint Works International, 2022-1326.

[00:00:11] Speaker 02:
Is it Mr. Scalione?

[00:00:16] Speaker 02:
Have I pronounced your name correctly?

[00:00:18] Speaker 01:
You have, Your Honor.

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

[00:00:19] Speaker 02:
Please proceed.

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

[00:00:21] Speaker 01:
My name is Greg Scalione.

[00:00:23] Speaker 01:
I'm appearing on behalf of the Appellants Data Widget LLC and ePrint Works International LLC.

[00:00:30] Speaker 01:
The question before the court is the validity of the 557 patent.

[00:00:35] Speaker 01:
It was presented to the U S district court for the district of Arizona on a motion for judgment on the pleadings under rule 12 C. The district judge taking all the facts in the pleadings is true, found that the patent was invalid and it constituted an abstract idea.

[00:00:55] Speaker 01:
And as a matter of law found that our claim was not plausible.

[00:00:59] Speaker 01:
That was dismissed.

[00:01:00] Speaker 01:
Other claims as a cascading effect of that determination were also dismissed.

[00:01:06] Speaker 01:
And thus, we're here before you on this appeal.

[00:01:09] Speaker 01:
We're asking you to, in your de novo review, to find that we did state a plausible claim, reverse the dismissal and allow the case to proceed.

[00:01:21] Speaker 01:
I'd like to focus on the prior art.

[00:01:25] Speaker 01:
I believe that will demonstrate that this was not an abstract idea.

[00:01:30] Speaker 01:
Um, there is references made to prior human mailing list, going back to the civil war.

[00:01:37] Speaker 01:
Um, although I think that may be interesting, I think the prior art should really start with the Microsoft PI 615 patent, which was granted in 2009.

[00:01:47] Speaker 00:
That art... I just want to also make sure I understand some of the statements you made in your brief, if that's okay.

[00:01:54] Speaker 01:
Yes.

[00:01:54] Speaker 00:
Could you look at what would be page 26?

[00:01:59] Speaker 00:
of the blue brief.

[00:02:02] Speaker 01:
Yes, Your Honor.

[00:02:05] Speaker 00:
And at least when I was reading it, you say here in the paragraph that begins in part, you say the claims are directed to selling individually tailored customer-specific data sets.

[00:02:18] Speaker 00:
And taken out of context, such a claim would be a patent-eligible abstract idea.

[00:02:24] Speaker 00:
Now, I don't know if I'm misinterpreting it, but it seemed like you were essentially saying

[00:02:29] Speaker 00:
that you agree the claims are directed to an abstract idea.

[00:02:33] Speaker 00:
Is my interpretation accurate?

[00:02:35] Speaker 01:
No.

[00:02:36] Speaker 01:
Tell me why it's not.

[00:02:39] Speaker 01:
The context of the interplay of these three connections does result in the sale of specific data sets.

[00:02:48] Speaker 01:
But the process in which that is accomplished, I believe, is innovative in the sense that we configured a variety of machines

[00:02:58] Speaker 01:
to create a new way of inserting a data widget at the very beginning of the process so that there now are three connections.

[00:03:08] Speaker 01:
Before, under the PI patent, there was only one connection that allowed the ultimate transaction to occur.

[00:03:18] Speaker 01:
And so we believe the configuration of the machines, three different connections, allow for an improvement in the technology or the process of the machines.

[00:03:29] Speaker 01:
So the end result is there will be a purchase and sale of data, but it's the technology, it's the web-to-print technology that facilitates that.

[00:03:39] Speaker 01:
I believe in a new and unique way that is distinct from the Microsoft Pi 615 pattern.

[00:03:47] Speaker 01:
I thought you told the district court that this didn't involve an improvement to computer functionality.

[00:03:53] Speaker 01:
It does not involve

[00:03:55] Speaker 01:
In terms of the actual function of the computer, it does not change that functionality.

[00:04:00] Speaker 01:
What it does is it configures three different computer components in a way that the system is improved.

[00:04:11] Speaker 02:
Software?

[00:04:14] Speaker 01:
Software is involved.

[00:04:15] Speaker 01:
Totally software?

[00:04:17] Speaker 01:
The data widget is software and then there are machines, the servers, that allow for the connections and then there's APIs between the various servers.

[00:04:29] Speaker 01:
So the configuration of all of those and the connectivity of those is what we're saying as a system is new and unique and did not exist before.

[00:04:38] Speaker 01:
It's not that the computers didn't exist before, it's that the system in which they were configured did not exist before.

[00:04:45] Speaker 01:
So under Pi, it teaches that there was a single line of connection via the internet that between the customer's computer, so they're at their home or office, they're on a website, and they're connecting via the internet to the printer's server computer system.

[00:05:04] Speaker 01:
And the customer's computer does not connect or have interaction directly with the data seller.

[00:05:11] Speaker 01:
So what the Pi

[00:05:13] Speaker 00:
So are you essentially contending that there's an inventive concept in the form of a data extraction widget and its arrangement within a system of machines?

[00:05:22] Speaker 00:
Is that your argument at bottom on inventive concept?

[00:05:28] Speaker 01:
It is a unique way.

[00:05:30] Speaker 01:
I would say it is the data widget placed on the web server or the website of the printer in combination with it's the

[00:05:41] Speaker 01:
plurality of APIs that then connect the three direct connections so that all three are communicating directly, bilaterally, and simultaneously.

[00:05:52] Speaker 01:
And that configuration never existed before.

[00:05:55] Speaker 01:
And that's what we're saying is the innovative concept here.

[00:05:59] Speaker 01:
So the Pi patent only placed the printer server's computer was between the customer's computer and the data seller.

[00:06:10] Speaker 01:
What's missing from Pi is the data widget being placed on the printer's website.

[00:06:16] Speaker 01:
And our system allows the three different connections so they can access the printer and order the types of postcards, figure out the postage.

[00:06:29] Speaker 01:
There's that connection.

[00:06:31] Speaker 01:
There's the connection directly to the data seller so that they can go in and say, I want all dentists within 10 miles of this location because I want to sell them

[00:06:41] Speaker 01:
I want to send an advertisement to sell them some type of equipment.

[00:06:45] Speaker 01:
The other connection is between the printer and the data provider such that if that customer orders a list, it's not a stagnant list.

[00:06:55] Speaker 01:
That list can be updated by the data provider.

[00:06:58] Speaker 01:
They may update or verify addresses or a moving dentist went to a new location in real time.

[00:07:07] Speaker 01:
that connection communicates simultaneously back to the printer after the customer made the order to update the address so that when the postcards go out, they go out with the most current real-time information.

[00:07:19] Speaker 01:
And this sense of real-time or simultaneous exchange of information between the three is articulated within the patent itself.

[00:07:30] Speaker 01:
That is at Appendix 28 in Column 2.

[00:07:35] Speaker 01:
Real-time and simultaneous is mentioned three times.

[00:07:39] Speaker 01:
This multi-directional is also mentioned in column two as well.

[00:07:45] Speaker 01:
The use of a plurality of APIs configured in this unique way is in column one and in column five.

[00:07:54] Speaker 01:
In terms of taking the facts as true that what I'm describing is unique or unconventional, I believe the patent at appendix 29 in column three

[00:08:05] Speaker 01:
Therein are three examples of something that was unconventional and did not exist before, and it relates to the arrangement of the computer devices.

[00:08:17] Speaker 01:
I find it somewhat interesting, although the court can give the weight it wishes to, but the patent examiner, looking at the same material, not giving us the benefit of the doubt of accepting our facts as true, but just reviewing the prior art, found that

[00:08:35] Speaker 01:
Our invention provided significantly more, that's a direct quote from Appendix 285, provided significantly more than an abstract idea.

[00:08:46] Speaker 01:
And also on that same page, the examiner found that there were meaningful limitations to the scope of the claim.

[00:08:53] Speaker 01:
And we're reviewing the same exact prosecution history and the same exact pie pattern and our pattern.

[00:09:02] Speaker 01:
The court found, now taking all the facts as true, found that our claim was not even plausible.

[00:09:10] Speaker 01:
And I would suggest that if the court had applied the correct standard, it had to come much closer to what the patent examiner found, based on the reading of the materials before it, that it needed to take as true.

[00:09:24] Speaker 01:
So we believe that the combination of the data widget being placed

[00:09:32] Speaker 01:
in the website of the printer as well as the configuration of the computers and the plurality of APIs did create an innovative prior non-existing process that greatly improved the web-to-print technology.

[00:09:51] Speaker 00:
Are you arguing that the district court is somehow bound by these examiner statements you were pointing us to?

[00:09:56] Speaker 01:
They're not bound.

[00:09:57] Speaker 01:
I just find it interesting that an examiner

[00:10:01] Speaker 01:
under no standard to give us the benefit of the facts.

[00:10:04] Speaker 01:
Looking at the same facts made a finding that there was significant improvement that goes well beyond an abstract idea.

[00:10:13] Speaker 01:
The district judge looking at exactly the same material, now having to take all statements as true to our benefit, found that our claim wasn't even plausible.

[00:10:23] Speaker 01:
And that's... Examiners are following PTO guidelines, which are not consistent with our law, right?

[00:10:32] Speaker 01:
That's true, but in looking at facts, in evaluating facts, if I get the benefit at a 12C scope and standard of review of all facts interpreted in favor of my clients, which I am entitled to, I'm just suggesting that it's hard to believe that both the examiner and on appeal,

[00:10:51] Speaker 01:
that someone looking at the same material reached basically the opposite conclusion.

[00:10:57] Speaker 01:
And so I think with the benefit of the facts, we stated a plausible claim.

[00:11:02] Speaker 01:
I'll reserve time.

[00:11:04] Speaker 02:
We will save it for you.

[00:11:05] Speaker 03:
Thank you.

[00:11:06] Speaker 02:
Mr. LaCorte.

[00:11:06] Speaker 02:
Thank you.

[00:11:09] Speaker 03:
May it please the court.

[00:11:10] Speaker 03:
At ALICE step one, of course, the court here at De Novo as the district court below in Arizona reviewed the patent claims

[00:11:21] Speaker 03:
to determine at step one whether an abstract idea was what the claims were directed to.

[00:11:27] Speaker 03:
The abstract idea here, there's very little dispute about it and I'll make a point of some admissions that are very important in this regard that Judge Cunningham, you noted.

[00:11:39] Speaker 03:
The abstract idea is the information exchange between an e-commerce site, a data seller with a database and a customer for a transaction involving printing or direct mail services.

[00:11:51] Speaker 02:
But the claims recite a system with a server, an e-commerce server and a database server.

[00:11:59] Speaker 02:
These are physical items, right?

[00:12:02] Speaker 03:
They are physical items as claimed.

[00:12:04] Speaker 02:
And then the widget is software.

[00:12:08] Speaker 02:
But if the widget is describing something new that hadn't been done before, does that render the claims not abstract?

[00:12:21] Speaker 03:
No, for this reason.

[00:12:22] Speaker 03:
The claims with regard to the widget are so broadly recited that it is virtually claiming software in the fashion or function of what software does.

[00:12:36] Speaker 03:
So for the claims, there's an e-commerce vendor website that comprises a generic processor and memory on a server, physical machines, but those are conventional machines.

[00:12:50] Speaker 03:
a data seller comprising a generic database, data server, and generic processor and memory, and then the software is claimed only as a black box widget that enables direct connections.

[00:13:03] Speaker 03:
And if you look at columns three and four in the specification of the 557 patent, it illustrates the abstract nature of the widget.

[00:13:14] Speaker 03:
While the specification must yield to the claims, at column three, excuse me, column one, line 53, the linchpin of the system, the widget, enables two-way exchanges of information.

[00:13:29] Speaker 03:
That's what software does.

[00:13:31] Speaker 03:
It is involving a single API or any alternative communication method, the patentee's words, at column three in the specification, or suitable alternative communication method.

[00:13:44] Speaker 02:
Are these claims still the abstract absent Alice?

[00:13:50] Speaker 03:
Well, that's a very fair question.

[00:13:52] Speaker 03:
It's hard to divorce Alice from 101 eligibility.

[00:13:56] Speaker 03:
But I think even under Mayo's framework, even under the Section 101 itself, the 557 claims claim generic hardware and software for the sake of communication.

[00:14:10] Speaker 03:
And that is the scope of the claims.

[00:14:12] Speaker 03:
I can't imagine.

[00:14:14] Speaker 03:
a more non-inventive concept and more abstract idea.

[00:14:18] Speaker 03:
And the specification does give us an indication of the abstract nature of the claims.

[00:14:26] Speaker 03:
Before the 557 patent, a data seller and an e-commerce vendor or print shop had to communicate with each other.

[00:14:35] Speaker 03:
If it wasn't a one-stop shop, and the patentee makes it clear it never has been,

[00:14:41] Speaker 03:
there is direct communication between the two.

[00:14:44] Speaker 03:
So to your question, Judge Lurie, imagine that a conference room configured to enable direct communication between three parties, this triangulated communication method claimed in the patent, is the widget.

[00:15:00] Speaker 03:
A data seller, a print shop, and a customer, like the sandwich shop example in the specification, communicate.

[00:15:10] Speaker 03:
All the claims referred to is a direct communication between those three parties accomplished by what is conventional servers, databases, and hardware.

[00:15:22] Speaker 03:
Imagine the widget is a Zoom meeting where the data seller allows the Sandwich Shop customer to see the data on a PowerPoint slide and quote a price for it and provide it to the print shop to mail the mailers.

[00:15:39] Speaker 02:
Do you say the court as an entity is a widget with respect to the two of you?

[00:15:45] Speaker 03:
I would say this is a perfect example of the three-way communication, that triangulation that is claimed in the patent.

[00:15:52] Speaker 03:
My learned opposing counsel and I are two lines of communication with this panel.

[00:15:57] Speaker 03:
You have a database of our briefs.

[00:15:59] Speaker 03:
We are accessing and pointing to that data.

[00:16:01] Speaker 03:
And you are making a not a purchase decision, but a decision on the merits.

[00:16:07] Speaker 03:
This system reminds me a lot of legal research when I was a law student a century ago.

[00:16:12] Speaker 03:
where there is access to a third-party database through a host site in order to find a data subset cases cited in a brief.

[00:16:21] Speaker 03:
The point is that this court has long held in case after case that the extraction, gathering, analysis, and presentation of data from one database remote from a host is long held not only conventional but abstract.

[00:16:40] Speaker 03:
I want to point out one case that we cited in the briefs that when I read it every time, I think of the 557 patent.

[00:16:47] Speaker 03:
It is the CX loyalty case that this court just decided a couple of years ago.

[00:16:52] Speaker 03:
It was a rewards program with a remote database that contained the information about the rewards.

[00:16:58] Speaker 03:
It was a system with multiple APIs, in other words, interfaces that allowed the customer

[00:17:05] Speaker 03:
the retailer and the reward system to interact with communication, exchange information, and for the customer to use points directly communicating with the retailer for the purchase.

[00:17:18] Speaker 03:
If you review your decision and your analysis of APIs, both from the step one abstract basis and step two, is there an inventive concept, it reads literally on the arguments that the appellant is making here.

[00:17:34] Speaker 03:
The electric power group case is another perfect example of a remote database that is used in order for the electric power grid and electric power entities to be able to communicate across networks and monitor and exchange data and act accordingly.

[00:17:55] Speaker 03:
In another case that we also cited in the briefs,

[00:17:59] Speaker 03:
is the charge point case.

[00:18:01] Speaker 03:
Owning an electric vehicle, I used this system.

[00:18:04] Speaker 03:
It gathers information from a remote database and in real time exchanges the information over network connections and direct connections for three parties to interact and accommodate or facilitate the charging of an electric vehicle.

[00:18:23] Speaker 03:
All of these time and again principles, concepts have been held by this court abstract.

[00:18:30] Speaker 03:
I want to take a moment to talk about the admissions and what I read on page 26 of the opening brief with the same conclusion, Judge Cunningham, that you noted.

[00:18:42] Speaker 03:
And there are more admissions from the appellate that are relevant, as one noted by Judge Dyke in regard to the hearing below.

[00:18:51] Speaker 03:
Judge Reyes specifically asked counsel, is there an improvement to the computer technology?

[00:18:58] Speaker 03:
The answer was no.

[00:18:59] Speaker 03:
They are defined by their own parameters.

[00:19:03] Speaker 03:
This is just the widget.

[00:19:05] Speaker 03:
The admission at page 26 of the opening brief that selling data subsets in a web-to-print format is patent-eligible in some contexts, but not in our context.

[00:19:18] Speaker 03:
Well, their context is defined by the claims.

[00:19:21] Speaker 03:
And the claims are connecting servers and data for exchange with a customer to order a direct mail campaign.

[00:19:29] Speaker 03:
With regard to step two, when you look at the claims, and this again was covered in this court's analysis in Charge Point and CX Loyalty, the claims provide the court, the finder, no basis for an inventive concept, something more that transforms the claimed system into a patent-eligible concept.

[00:19:54] Speaker 02:
You don't think we need to get to step two?

[00:19:57] Speaker 03:
I'm sorry?

[00:19:59] Speaker 02:
Skip the question.

[00:20:01] Speaker 02:
I answered it myself.

[00:20:02] Speaker 03:
Well, with regard to step two, the claims give you no, there's no saving additional feature.

[00:20:10] Speaker 03:
It's simply devoid.

[00:20:12] Speaker 03:
And I understand counsel relies on the Microsoft pie prior art and some real-time efficiencies delineated in the specification.

[00:20:23] Speaker 03:
Those are missing from the claims.

[00:20:25] Speaker 03:
There's no temporal real-time graphic user interface.

[00:20:29] Speaker 03:
The claims don't even relate to an API.

[00:20:31] Speaker 03:
It's any direct connection, which is any method of communication.

[00:20:36] Speaker 03:
And there's nothing that saves the claims from the claiming of abstract principles in regard to the system.

[00:20:48] Speaker 03:
And we've cited numerous cases, including the CX loyalty and charge point cases for the fact that APIs and conventional generic components taken as an ordered combination or separately do not provide the extra inventive concept.

[00:21:08] Speaker 03:
I showered the briefing in the argument.

[00:21:10] Speaker 03:
I've been in this case from the beginning.

[00:21:12] Speaker 03:
I've never seen a position from the appellant as what is the inventive concept except the black box software.

[00:21:20] Speaker 03:
It is software that enables three-way communication.

[00:21:23] Speaker 03:
And that can't be a 101 eligible something more under Alice in its progeny.

[00:21:30] Speaker 00:
For completeness, do you want to respond to the examiner's statement that your opposing counsel has been relying on?

[00:21:36] Speaker 03:
Yes, and there was much emphasis on that below and some contention that Judge Reyes below, who has an engineering background and is very dialed into the prosecution history, fumbled that by considering the patent implausible.

[00:21:55] Speaker 03:
That is not how I read the district court decision and the examiner's statement

[00:22:00] Speaker 03:
was given whatever weight it deserved, which we contend is very little for the following reasons.

[00:22:06] Speaker 03:
A.

[00:22:07] Speaker 03:
Of course, the court is not bound by the examiner's statements.

[00:22:12] Speaker 03:
Otherwise, there wouldn't be any 101 invalidation.

[00:22:15] Speaker 03:
B, the Mayo framework and memo in 2017 that the examiner was relying on in the US Patent Office is different than the multitude of data points and analyses and case law that we've cited in the briefs.

[00:22:32] Speaker 03:
C, most importantly, Judge Cunningham, those claims

[00:22:36] Speaker 03:
that the examiner was commenting on are not the claims at bench.

[00:22:41] Speaker 03:
Those claims expressly in the prosecution history had numerous references to the configurations of APIs in different servers

[00:22:55] Speaker 03:
facilitating specific extraction of data and communication.

[00:23:00] Speaker 03:
One could argue that's still 101 and eligible, but it's irrelevant because those claims are not what's before you.

[00:23:07] Speaker 03:
When you look at column three of the specification, the direct connections, which were the APIs in the old claim set, is any method of communication.

[00:23:18] Speaker 03:
So it's even broader than the APIs.

[00:23:21] Speaker 03:
And the examiner, of course, did not render a comment on the claims in that state.

[00:23:27] Speaker 03:
So all the more reason to give it less weight, if any weight at all.

[00:23:31] Speaker 03:
I'll only close by saying the abstract nature of the claims and the lack of inventive concept is similar to the numerous analogous cases that we've cited in the brief.

[00:23:47] Speaker 03:
And I will only point out that at no point in the opening brief or the reply brief is there any distinguishment of those cases.

[00:23:56] Speaker 03:
There is no counter argument except we said the word system enough that it should be an eligible system, and we never say the word generic, so they can't be generic.

[00:24:05] Speaker 03:
That's not how this works.

[00:24:07] Speaker 03:
There has been no reasonable reasoned distinguishment of the ample case law that we've cited in support of our positions.

[00:24:15] Speaker 03:
I appreciate the opportunity for this direct communication.

[00:24:19] Speaker 03:
Thank you.

[00:24:19] Speaker 03:
That concludes my review.

[00:24:20] Speaker 02:
Thank you, counsel.

[00:24:22] Speaker 02:
Mr. Scalioli has some time left.

[00:24:26] Speaker 01:
Just one point of further elaboration.

[00:24:30] Speaker 01:
On page 26, we do indicate that the patent is directed towards selling individually tailored customer-specific data sets.

[00:24:40] Speaker 01:
It does have that direction.

[00:24:41] Speaker 01:
But Alice, and we've quoted that on the same page,

[00:24:45] Speaker 01:
that a claim that integrates the building blocks of an abstract idea to a new and useful end remains patent eligible.

[00:24:54] Speaker 01:
And it is those building blocks that is the foundation of our claim.

[00:25:01] Speaker 01:
Did we build upon that abstract idea in a new and useful way?

[00:25:05] Speaker 01:
And we believe we did because never before, and they've put nothing in the record and they can cite nothing in the record,

[00:25:14] Speaker 01:
that there was ever before this invention, a data widget that was inserted into the website that allowed for three different connections, all simultaneously functioning together.

[00:25:27] Speaker 01:
It had never happened before.

[00:25:29] Speaker 01:
That is new and it is useful to the web to print technology.

[00:25:35] Speaker 01:
So they want to focus on where computers designed and improved.

[00:25:39] Speaker 01:
It is the system and the insertion of this data widget

[00:25:43] Speaker 01:
and the unique formatting or structuring of those systems that allowed this to happen.

[00:25:50] Speaker 01:
And it had not existed before.

[00:25:52] Speaker 01:
There's nothing in the record to suggest that it existed before.

[00:25:55] Speaker 01:
So it at least is new.

[00:25:58] Speaker 01:
And in our brief, we cite, I believe, about eight or nine ways that it was useful.

[00:26:04] Speaker 01:
So we believe we met the ALICE standard of building on an abstract idea in a new and useful way.

[00:26:12] Speaker 01:
It is, and this is what the examiner said, quote, the inventive thrust lies within the data widget and its arrangement within the system so as to enable communication and extraction of data between different components of the systems rather than just selling data and print services.

[00:26:36] Speaker 01:
So with that, we'll submit the rest of the brief.

[00:26:38] Speaker 01:
Thank you.

[00:26:39] Speaker 02:
Thank you counsel, the case is submitted.

[00:26:41] Speaker 01:
Thank you very much.