[00:00:00] Speaker 01:
next case for argument is twenty two dash one three nine zero hand software versus stage mister hundle hundle right hudnall hudnall before the end

[00:00:14] Speaker 00:
Good morning, Your Honors.

[00:00:15] Speaker 00:
May it please the Court.

[00:00:17] Speaker 00:
The district court's order dismissing Hansa's first amended complaint at the Rule 12 stage should be reversed because the asserted claims in this case pass the two-step test for determining eligibility, and the plausible allegations in the first amended complaint, which the district court did not address, should have precluded dismissal.

[00:00:39] Speaker 00:
I want to focus my time today on explaining why the claims recite satisfied step two of the eligibility test and show how the factual allegations in the complaint show that what is claimed was not well understood, routine, or conventional.

[00:00:55] Speaker 00:
I'd also like to address the district courts invalidating all claims of the two patents at issue here.

[00:01:03] Speaker 00:
So first, if we could turn to claim one of the 559 patent,

[00:01:07] Speaker 00:
And as your honors probably know, the two patents here relate to an accounting software.

[00:01:13] Speaker 00:
The 559 dealing with receivables, account receivables.

[00:01:17] Speaker 00:
The 560 dealing with accounts payable.

[00:01:22] Speaker 00:
Claim one.

[00:01:22] Speaker 00:
recites an inventive concept because it respites a specific combination of steps in a specific order.

[00:01:29] Speaker 00:
And in order to illustrate this, I'm going to use an example.

[00:01:33] Speaker 00:
There was some mention of home maintenance earlier today, so I'll use an example of having a lawn company and a sprinkler company to illustrate how these claims recite an inventive concept.

[00:01:49] Speaker 00:
So first

[00:01:52] Speaker 00:
element, but there's three critical elements of this claim.

[00:01:54] Speaker 00:
The first one deals with the detail lines that go on the invoice that you receive.

[00:01:58] Speaker 00:
So for example, if you have a lawn company and a sprinkler company, the lawn company charges $600, the sprinkler company charges $400.

[00:02:06] Speaker 00:
There'd be an invoice for $1,000, but both of those detail lines for each of the two companies would appear on the invoice.

[00:02:16] Speaker 00:
The second step in the order here is adding multi-company

[00:02:21] Speaker 00:
balancing lines to the accounting program so that accounts receivable can be accurately reported.

[00:02:30] Speaker 00:
And when I say balancing lines, there is some dispute here as to what's being referred to by a balancing line, but I want to make clear that what Hans is talking about when it says balancing lines here

[00:02:41] Speaker 00:
that this is the line that takes that $1,000 invoice.

[00:02:45] Speaker 00:
And when you reflect the amount that's on the two companies' balance sheets, instead of reflecting the $1,000,

[00:02:52] Speaker 00:
uh... for the along companies uh... accounts receivable actually reflects the correct amount six hundred dollars there's a balance there's a there's a line that's added by the software that will reduce that six thousand dollars to six hundred dollars so the accounts receivable actually shows six hundred dollars and its equity would be six hundred dollars as well similarly on the sprinkler company side of the balance sheet you would have a four hundred dollar

[00:03:20] Speaker 00:
credit, because it's $400 for its services.

[00:03:23] Speaker 00:
And that would be its accounts receivable.

[00:03:25] Speaker 00:
And then $400 would be its current earnings on the liability side.

[00:03:29] Speaker 00:
Then you receive payment for the invoice, $1,000.

[00:03:32] Speaker 00:
That's the next step of the claim.

[00:03:34] Speaker 00:
And then finally, and this is probably the most critical element of the claim, is the adding of the due to do from lines at the time of payment in order to accurately reflect the accounts receivable for the two companies.

[00:03:47] Speaker 00:
And so what would happen in this situation is that when you receive the $1,000 payment from the client, the software will then reflect $1,000 paid to the long company, because the client's only going to pay one of the two companies.

[00:04:03] Speaker 00:
You'll pay the loan company the thousand dollars.

[00:04:05] Speaker 00:
It will go into its bank account, reflect that as the accounts receivable.

[00:04:09] Speaker 00:
It will then use a due two line, add a due two line to the balance sheet to reduce that by the $400 that's owed to the sprinkler company.

[00:04:18] Speaker 00:
And then similarly on the sprinkler company's balance sheet,

[00:04:21] Speaker 00:
What will happen is it will get accounts receivable for you.

[00:04:24] Speaker 02:
I appreciate your recitation, but the clock is running.

[00:04:27] Speaker 02:
So all of this recitation is intended to persuade us that there is a step two inventive concept.

[00:04:34] Speaker 02:
Correct.

[00:04:35] Speaker 02:
So can you talk about that in particular while you're going through what the claims say?

[00:04:39] Speaker 00:
Sure.

[00:04:42] Speaker 00:
So it's those three steps, Your Honor, that have to have in that specific order, the detail lines, the balancing lines, the adding the due to from at the time of payment, that allows you to accurately reflect the accounts receivable of both companies of this multi-company entity.

[00:04:59] Speaker 00:
So the lawn company and the sprinkler company

[00:05:01] Speaker 00:
are both under the umbrella of a larger company.

[00:05:04] Speaker 00:
In order to actually reflect the accounts receivable for both of those companies individually, you have to follow these steps.

[00:05:10] Speaker 00:
You have to follow it in this order, right?

[00:05:14] Speaker 00:
other multi-company.

[00:05:15] Speaker 02:
But these are the steps that the district court concluded were abstract under step one, right?

[00:05:21] Speaker 02:
Under step one.

[00:05:22] Speaker 02:
So you're using, I thought our case law suggests that you can't use the abstract idea in connection with establishing an inventive concept at step two.

[00:05:32] Speaker 02:
Do you disagree with that?

[00:05:34] Speaker 00:
Somewhat, I disagree with that.

[00:05:37] Speaker 00:
So first, the district company.

[00:05:39] Speaker 02:
Maybe you could help us by just telling us, so what is the inventive concept here?

[00:05:42] Speaker 00:
The inventive concept is accurately reflecting the accounts receivable or accounts payable balance of two distinct companies of a multi-company enterprise.

[00:05:53] Speaker 02:
And how is that different from what the district court concluded?

[00:05:59] Speaker 02:
at least, was the abstract idea.

[00:06:02] Speaker 00:
In two respects, Your Honor.

[00:06:03] Speaker 00:
First, the district court's description of the abstract idea was just merely using balancing lines to improve financial reporting.

[00:06:09] Speaker 00:
So that's not what we've claimed.

[00:06:11] Speaker 00:
But second and more importantly is what the claims recite is a specific ordered combination of steps that add more to what that abstract idea is.

[00:06:26] Speaker 00:
And the factual allegations in the First Amendment complaint support that, which the district court did not consider.

[00:06:32] Speaker 00:
That's what I wanted to get to next.

[00:06:38] Speaker 00:
So one of the unique facts of this case, Your Honors, is that Hans makes its own products.

[00:06:44] Speaker 00:
Sage Intag makes a product.

[00:06:45] Speaker 00:
And they actually had a conversation in 2008 between the inventor of the Hans solution, which is called the B1 financials, and Sage, and met with Sage.

[00:06:56] Speaker 00:
I'm sorry, actually at the time it was Intag before Sage acquired Intag.

[00:07:01] Speaker 00:
And the inventor here, Mr. Geliman, explained to Sage in a meeting

[00:07:08] Speaker 00:
all the problems that existed with existing multi-company software for balancing AR and AP of two distinct entities.

[00:07:18] Speaker 00:
And he asked them, and this is alleged in paragraph 27 of the First Amendment Complaint at appendix 252,

[00:07:28] Speaker 00:
He asked them whether Intex program at the time was capable of automatically reconciling the AR and AP of two distinct companies of a multi-company enterprise.

[00:07:40] Speaker 00:
And as alleged in paragraph 28 of the First Amendment complaint, the sage personnel at the time indicated that that would be too hard to do.

[00:07:49] Speaker 00:
And so we think that that provides evidence that what is claimed here, this order combination of steps, this specific order requiring a due to due from at the time of payment being the third step, that this shows that this was not well understood.

[00:08:03] Speaker 00:
Sage or Intech at the time was a leading software maker.

[00:08:06] Speaker 00:
This was before the patents in suit, a few months before the patents in suit were filed.

[00:08:10] Speaker 00:
And they couldn't do it.

[00:08:11] Speaker 00:
Their product couldn't do it.

[00:08:13] Speaker 00:
And their own personnel said it would be too hard to do.

[00:08:16] Speaker 02:
Do we have any cases where that has been an issue?

[00:08:19] Speaker 02:
There's a case called Accenture, right?

[00:08:23] Speaker 02:
Dealing with the complexity and I think they, but any other cases or Accenture, what cases helped you out on the notion that historically the other side or even anyone or the industry has recognized the complexity of the difficulty of doing something that

[00:08:45] Speaker 02:
is appropriately considered in the context of meningococcal.

[00:08:50] Speaker 00:
Sure, I think the line of cases from, well, specific to your question, I'm not aware of a case that answers your specific question, but I think the line of cases, atrix, cell spin, more recently cooperative, they all say that

[00:09:08] Speaker 00:
In order to look at the claim, and if there's an inventive concept residing in the claim, and what we're saying here is the inventive concept is this specific order of steps that reside in the claim, which Sage thought was too hard to do, then you have to look at the evidence of whether it was well understood, not well understood, routine, or conventional.

[00:09:29] Speaker 00:
That's what we have here.

[00:09:32] Speaker 00:
And I think, as I said before, I think our facts are unique because we did have this initial conversation, Hans had this initial conversation with Sage.

[00:09:41] Speaker 00:
In addition, Mr. Galliman, the inventor here, researched the art, and that's what's alleged in paragraph 30 of the complaint.

[00:09:48] Speaker 00:
He researched the commercially available products at the time to determine whether there were any other products that could accurately balance AR and AP for two companies of a multi-company enterprise.

[00:09:58] Speaker 00:
And he couldn't find any.

[00:10:00] Speaker 01:
Council, you said that you wanted to also reach the issue of invalidating all the claims versus just one, and I think it's 31 to 33.

[00:10:09] Speaker 01:
Correct, Your Honor.

[00:10:11] Speaker 01:
Do you want to go ahead and move on to that issue?

[00:10:14] Speaker 00:
I do.

[00:10:15] Speaker 00:
So I think the key here on this issue, Your Honor, is that Sage cites no case where a party can unilaterally do a Rule 12 motion

[00:10:24] Speaker 00:
and validate all claims of the asserted patent without asserting a counterclaim.

[00:10:28] Speaker 02:
And which just as a follow up to the chief's question, which claims are you saying were beyond the scope of your first complaint?

[00:10:38] Speaker 00:
Right.

[00:10:38] Speaker 00:
So the first amended complaint only had claims 1, 31, 32, and 33.

[00:10:43] Speaker 02:
And what more did the district court?

[00:10:45] Speaker 00:
Invalidating the entirety of the patent.

[00:10:49] Speaker 00:
So all claims of both patents.

[00:10:55] Speaker 04:
Is that because you had some kind of infringement chart attached to the complaint or something like that?

[00:11:01] Speaker 04:
That only, even though the language of the complaint talked about one or more claims, narrowed it in the attachment?

[00:11:08] Speaker 00:
Correct.

[00:11:08] Speaker 00:
So in the body of the complaint, it only identified claims 1, 31, 32, 33.

[00:11:12] Speaker 00:
The charts only identified claims 1, 31, 32, 33.

[00:11:18] Speaker 00:
We represented at the hearing at the district court level that we were only asserting claims 1, 31, 32, and 33.

[00:11:26] Speaker 00:
We sought

[00:11:27] Speaker 00:
leave to amend and file a second amendment complaint to add additional claims, claims two and seven, that got Sage opposed it.

[00:11:35] Speaker 00:
So clearly, they thought that those two claims were not in the complaint.

[00:11:38] Speaker 00:
The district court denied the motion, so those claims weren't considered in the complaint.

[00:11:46] Speaker 02:
What led the district court to conclude otherwise?

[00:11:48] Speaker 02:
Was it because, I mean, I think you did say in the complaint several times right in various places, one or more claims of the asserted patents.

[00:11:57] Speaker 02:
Is that what you think?

[00:11:59] Speaker 02:
I mean, in the absence of Exhibit C, which Judge Hughes mentioned, in the absence of Exhibit C being attached to the amended complaint, it would have been fair or game for the district court to do what he did.

[00:12:11] Speaker 00:
Well, I think your first question was, what did the district court rely on?

[00:12:15] Speaker 00:
I don't think there's any analysis in the district court's opinion as to what was used to define that.

[00:12:21] Speaker 00:
But as I started, we think that whatever the district court did was unjustified because Sage hadn't asserted a counterclaim.

[00:12:29] Speaker 00:
And there was all these other indications that we were only asserting, Plains 1, 3133.

[00:12:32] Speaker 04:
When they filed the Rule 12 motion and said these are all invalid, did you

[00:12:37] Speaker 04:
specifically tell the district court, you can only rule on these claims?

[00:12:42] Speaker 04:
At the hearing, yes, we did.

[00:12:44] Speaker 04:
But not in your papers?

[00:12:45] Speaker 02:
I don't think there's a reference to that in the papers.

[00:12:48] Speaker 02:
So the opposition brief did not call that out.

[00:12:52] Speaker 04:
I mean, doesn't that kind of partially explain why the district court might have been confused about whether all of the claims were at issue or not?

[00:13:00] Speaker 00:
Perhaps, but we don't know, because there's nothing in the opinion that tells us that.

[00:13:04] Speaker 04:
Well, there's nothing in your opposition brief that says, oh, you should only concentrate on these claims.

[00:13:10] Speaker 04:
And they said you should concentrate on all of them.

[00:13:14] Speaker 04:
Why isn't that a problem for you?

[00:13:17] Speaker 04:
I mean, to me, that sounds like you're edging close to forfeiture of that argument.

[00:13:21] Speaker 00:
Well, actually, I think they're hedging towards forfeiture of the argument, because what they would have needed to done

[00:13:30] Speaker 00:
in their motion papers would be to argue that there was a case of controversy as to those claims, that they didn't argue that.

[00:13:38] Speaker 00:
But on top of that, Your Honor, as I said, we did raise it at the hearing.

[00:13:43] Speaker 00:
There were several other indications that I've listed that indicated that only claims 31 through 33 were at issue.

[00:13:50] Speaker 02:
And also the futility argument.

[00:13:52] Speaker 02:
I mean, when you tried to amend the claims,

[00:13:55] Speaker 02:
the judge said it would be futile.

[00:13:57] Speaker 02:
He didn't say, what do you mean amend them?

[00:14:00] Speaker 02:
They're already in here.

[00:14:01] Speaker 00:
I wouldn't say, well.

[00:14:04] Speaker 02:
That was a friendly question.

[00:14:08] Speaker 00:
I don't think he denied our motion for leave to amend to include the additional claims.

[00:14:13] Speaker 00:
So I read that as saying that claims two and seven weren't in the case, because we weren't allowed to add them to the case, because that's what we were seeking to do.

[00:14:22] Speaker 02:
That was my point.

[00:14:24] Speaker 01:
OK, why don't you say if there are

[00:14:28] Speaker 03:
Chief Judge Moore, I'd like to begin with the conversation we were just having about the procedural history here and the back and forth on the claims.

[00:14:37] Speaker 03:
I think, as the panel noted, Hans's both its initial complaint and its first amended complaint

[00:14:44] Speaker 03:
Could be read either way.

[00:14:45] Speaker 03:
Certainly, there were charts that only analyzed for independent claims.

[00:14:48] Speaker 03:
That's not uncommon in patent actions.

[00:14:50] Speaker 03:
But then when we look at the text and the counts, they specifically said one or more claims.

[00:14:55] Speaker 03:
There was no language of restriction.

[00:14:57] Speaker 01:
Well, actually, there is.

[00:14:58] Speaker 01:
One or more claims in the very next sentence is Sage's infringement is detailed in exhibit C to this complaint.

[00:15:03] Speaker 01:
So the very sentence that says one or more claims is followed by the sentence that directs you to the infringement chart, which only identifies one claim for the one patent and three claims for the other.

[00:15:13] Speaker 03:
That's absolutely correct.

[00:15:14] Speaker 03:
And we, I think, reasonably read that as saying, here's an illustration of Sage's infringement.

[00:15:19] Speaker 03:
It is in the chart.

[00:15:20] Speaker 01:
Well, actually, when you say you reasonably read it, you apparently didn't reasonably read it that way when you filed your motion.

[00:15:25] Speaker 01:
Because in your motion on page 487 of the appendix, you says, Hans's amended complaint does not assert any of the patent's various dependent claims against Sage.

[00:15:34] Speaker 01:
Regardless, nothing in those dependent claims changes the above analysis.

[00:15:38] Speaker 01:
Your own motion did not read that language as putting the dependent claims an issue, because you specifically said otherwise in your own motion.

[00:15:49] Speaker 03:
So what I think the motion, how it was intended, and I take the point that the text is of course what it is, neither be a complaint nor the First Amendment complaint articulate or enumerate any claims beyond the independent claims.

[00:16:02] Speaker 03:
However, we are in a notice pleading system civil procedure to be safe,

[00:16:07] Speaker 03:
We filed a motion saying we're articulating our arguments on section 101, subject matter ineligibility, for all claims.

[00:16:15] Speaker 04:
Why didn't you file a counterclaim to be saved?

[00:16:18] Speaker 03:
We filed a rule 12 motion in lieu of answering or filing a counterclaim.

[00:16:22] Speaker 03:
We believe that's procedurally appropriate.

[00:16:24] Speaker 04:
Let's just assume we read the complaint as being confined to the ones that are in the attachment.

[00:16:31] Speaker 04:
Then the district court was wrong to enter

[00:16:34] Speaker 04:
judgment against all of them, right?

[00:16:37] Speaker 03:
I think we have to look at that in context of how things later proceeded.

[00:16:40] Speaker 04:
No, no, no.

[00:16:41] Speaker 04:
Answer my hypothetical.

[00:16:43] Speaker 04:
Let's assume that we find that the complaint was limited to the claims asserted in the infringement chart.

[00:16:51] Speaker 04:
Then

[00:16:52] Speaker 04:
those other claims aren't part of this case, so without a counterclaim from you, the district court shouldn't have granted a 12b motion on those.

[00:17:01] Speaker 04:
Is that right?

[00:17:02] Speaker 03:
As I understand the hypothesis that's being given, it's to hypothesize that there was no case of controversy as to the other claims.

[00:17:08] Speaker 03:
Under that hypothesis, yes, the district court can of course only reach those claims.

[00:17:12] Speaker 04:
And if that's the case, then we have to vacate and remand that portion of the judgment.

[00:17:16] Speaker 03:
Again, under this hypothesis, I think that would be appropriate.

[00:17:20] Speaker 03:
I do think the record does, of course, show Hans saying, by the way, Hans believes there is infringement.

[00:17:26] Speaker 04:
How much does it really matter?

[00:17:27] Speaker 04:
I mean, if these claims ever get asserted, the dependent claims ever get asserted against you, you're just going to file another 12b motion for lack of eligibility, aren't you?

[00:17:37] Speaker 03:
A third one, yeah.

[00:17:38] Speaker 03:
And I think that was what the district court was noting, was that we had filed two already.

[00:17:42] Speaker 03:
Hance came to the hearing and announced that they actually believed there was infringement of dependent claims.

[00:17:48] Speaker 03:
They didn't say there was no case or controversy as to those claims.

[00:17:50] Speaker 01:
Well, that was when they were trying to get claims two and seven added into the case, and the district court didn't allow them to.

[00:17:56] Speaker 01:
So of course, they had to make a case for why they should be allowed to get dependent claims added to the case.

[00:18:02] Speaker 03:
I think we have a complex hypothesis.

[00:18:04] Speaker 03:
You know, we're starting with Judge Hughes' hypothetical and moving forward from there.

[00:18:08] Speaker 03:
We believe that the district court read the complaint and the amended complaint as raising a case or controversy as to all claims in the patents.

[00:18:17] Speaker 03:
And he, if you think the opinion that he says, says that, he does analyze the defendant and that's the completeness.

[00:18:23] Speaker 03:
But we think the fairest reading of that complaint, particularly when read in the context of Hans's commentary at the hearing, is that Hans believes there was a case of controversy for claims beyond the independent claim.

[00:18:35] Speaker 02:
But when they raised the second amended claim, which consisted of two and seven, two of those,

[00:18:41] Speaker 02:
He didn't say, you didn't say, well, these are already there.

[00:18:45] Speaker 02:
Why do you need to amend a complaint to do it?

[00:18:47] Speaker 02:
The district court said it would be futile, right?

[00:18:50] Speaker 02:
Partly because the result would be futile, because they're not significantly different than the claims that had been asserted.

[00:18:58] Speaker 02:
But that seems a little intention with suggesting that all of these claims were in the complaint in the first place.

[00:19:06] Speaker 03:
I agree that the district court's opinion doesn't recite that overlap between the asserted claims as an aspect of his futility determination.

[00:19:13] Speaker 03:
But I think when we look at the full record, it does look like the district court believed further pleading amendments would be futile.

[00:19:20] Speaker 03:
I'd also like to add, if there's a judgment on these claims that's hands-broad against my client,

[00:19:27] Speaker 03:
They're going to have a preclusion problem down the line.

[00:19:30] Speaker 02:
Well, I was going to suggest that, too.

[00:19:31] Speaker 02:
I mean, when you're talking about the claims brought, you're talking about the limited independent claims.

[00:19:37] Speaker 02:
Thank you, Judge.

[00:19:37] Speaker 02:
There might be a preclusion issue, at least with your client, maybe not with another defendant.

[00:19:43] Speaker 02:
Thank you.

[00:19:44] Speaker 02:
That's the point I was trying to make.

[00:19:45] Speaker 01:
Well, I mean, not only would there be a preclusion problem, if they try to assert these dependent claims against you at a later point in time, I would think you could bring an antitrust counterclaim against them

[00:19:53] Speaker 01:
asserting claims that are indistinct from, you know, the claims are already adjudicated ineligible if that's the conclusion we reach.

[00:20:00] Speaker 01:
So I would think that while all of this might be a bit of an exercise in something that doesn't matter, to be honest with you, whether we invalidate the dependent claims, which may not be proper, or whether we reinstate them, but if we hold the independent claims unenforceable, ineligible, then I don't see

[00:20:20] Speaker 01:
how your client's at any risk going forward.

[00:20:22] Speaker 01:
And if it is, it seems to me it could be a frivolous litigation claim by you.

[00:20:27] Speaker 03:
Certainly our client would look at all options available to it where this to happen.

[00:20:30] Speaker 03:
I think the hypothetical does bring us back to the Alice inquiry, which I do want to make sure we talk about a little bit.

[00:20:37] Speaker 02:
And in so doing, he addressed, as I understood it, all of step two.

[00:20:44] Speaker 02:
And it seemed to me to sound entirely like he was addressing the abstract idea.

[00:20:52] Speaker 02:
And that's all there was there.

[00:20:54] Speaker 02:
And secondly, could you just address the comment that he emphasized, which is that you all said it was too hard to do.

[00:21:01] Speaker 03:
Thank you.

[00:21:02] Speaker 03:
I'll take the latter one first, if I may.

[00:21:04] Speaker 03:
We are at the pleading stage.

[00:21:05] Speaker 03:
Well pleaded allegations are taken as true.

[00:21:08] Speaker 03:
And so we have not put energy into disputing that.

[00:21:12] Speaker 03:
My client has investigated this and does dispute that in fairly strong terms.

[00:21:15] Speaker 02:
Well, let's assume it were true.

[00:21:16] Speaker 02:
Does that sink your case?

[00:21:18] Speaker 03:
No, I don't think it does.

[00:21:20] Speaker 03:
And the reason why it doesn't is that even as pled and then as further alleged in the second amended complaint, those allegations don't establish any nexus between what's actually in Hans's claims and what's this alleged conversation that happened between a Hans employee and an intact employee.

[00:21:39] Speaker 03:
Hans has claimed a very particular set of steps.

[00:21:43] Speaker 03:
We think they're abstract and lacking in an inventive concept.

[00:21:47] Speaker 03:
Whether an employee at Intact thought that that abstract idea was hard to implement or not does not speak to the presence of either abstractness at step one or inventive concept at step two.

[00:22:01] Speaker 03:
And I want to emphasize, Judge Post, I think you directed my colleague to this court's precedent on step two.

[00:22:08] Speaker 03:
The BSG case we cite, we cite other cases in that line.

[00:22:11] Speaker 03:
Alice itself says that the inventive concept stage, you're not looking at the entire claim.

[00:22:17] Speaker 03:
That would be akin to a novelty inquiry, an obviousness inquiry.

[00:22:20] Speaker 03:
You're looking at those elements that have been added to the claim that go beyond the concept found to be patent-ineligible.

[00:22:28] Speaker 03:
And I think that's where the analysis that's being advanced by Hans really starts to fall apart.

[00:22:37] Speaker 03:
Proposals about inventive concept really do reduce back to an allegation that the fundamental idea here is novel.

[00:22:45] Speaker 03:
And with all respect, that's not the inquiry at step two.

[00:22:48] Speaker 03:
At step two, we submit under BSG and ALIS.

[00:22:52] Speaker 03:
We look at the implementation of that idea.

[00:22:55] Speaker 03:
We look at the collateral elements in the claim that go beyond that idea.

[00:22:59] Speaker 03:
And we examine, are those parts?

[00:23:02] Speaker 03:
unconventionable or otherwise sufficient to confer patent eligibility here, those elements recite things like a processor doing things processors traditionally do, a multi-company accounting system doing things multi-company accounting systems traditionally do, and a user interface doing what a user interface traditionally does.

[00:23:21] Speaker 03:
So we would submit there's no grounds for a determination of unconventionality at step two of Alice.

[00:23:28] Speaker 03:
I do think that this approach is consistent with what we've seen elsewhere.

[00:23:33] Speaker 03:
By letter, my colleague advised the court of the cooperative entertainment case.

[00:23:37] Speaker 03:
We don't view cooperative entertainment as inconsistent with anything that's being advanced here.

[00:23:42] Speaker 03:
Cooperative entertainment looks at a fairly detailed claim and says at step two,

[00:23:48] Speaker 03:
we see detailed elements that are not coming from the underlying potentially abstract concept that can provide that inventive concept.

[00:23:58] Speaker 03:
And you don't see anything like that in Hans's claims.

[00:24:01] Speaker 03:
With that, I'm happy to answer any other questions about the district court's opinion.

[00:24:06] Speaker 03:
We do believe it should be affirmed in full.

[00:24:08] Speaker 03:
If there's no further questions, we'll rest on the briefs.

[00:24:11] Speaker 01:
Thank you, Mr. Corky.

[00:24:13] Speaker 01:
Mr. Cudnell, you have some rebuttal time.

[00:24:16] Speaker 00:
Thank you, Your Honors.

[00:24:18] Speaker 00:
First, I just wanted to correct something that I said earlier on which claims were in the case point or issue.

[00:24:25] Speaker 00:
At appendix 528 in our request in our opposition to their motion, our request for leave to men, which was included in our opposition to the motion, we did say that

[00:24:39] Speaker 00:
handspeaks leave to file a Second Amendment complaint, including additional relevant materials and addressing any independent, and sorry, any dependent claims that may be proper.

[00:24:47] Speaker 00:
So I think I said earlier that we didn't specifically say that there was a reference to the dependent claims in the motion, but there was at least that sentence that I just read.

[00:24:59] Speaker 00:
Now addressing the last points that my friend just addressed, specifically the BSG case.

[00:25:09] Speaker 00:
So we do not read BSG as saying you take the claim, and then once you identify the abstract idea that's in the claim, you white out all that language.

[00:25:18] Speaker 00:
And now you need to look and see what's left.

[00:25:21] Speaker 00:
We don't read BSG that way.

[00:25:22] Speaker 00:
In fact, if you look at BSG, BSG says that you still need to do the step two analysis.

[00:25:27] Speaker 00:
You still need to consider whether, at step two, what's recited in the claim is either well understood routine or conventional.

[00:25:35] Speaker 00:
And that's what we have here.

[00:25:37] Speaker 00:
And with respect to my friend's point about there being no nexus, as to what we're saying is the inventive concept, there is a nexus.

[00:25:46] Speaker 00:
And it's described in the First Amendment complaint.

[00:25:49] Speaker 00:
Again, looking at paragraph 27, it said, Mr. Gelman asked whether the in-tech program was capable of providing automatic reconciliation in real time

[00:26:00] Speaker 00:
accurate reporting of AP and or AR financial data or records of each entity in a multi-company enterprise.

[00:26:09] Speaker 00:
He said that right to the intact personnel, and then similarly... Okay, Mr. Hudnell, thank you very much.

[00:26:14] Speaker 01:
You're out of time.