[00:00:00] Speaker 01:
Our first argued case is real-time adaptive screening versus Sling TV and Dish, 2021-22-68, Mr. LeDoux.

[00:00:22] Speaker 00:
Good morning, and may it please the court, Brian Liddell from Russ Augustin Cabot on behalf of the appellant real-time adaptive streaming.

[00:00:30] Speaker 00:
The district court in this case made two critical errors in its Section 101 analysis, each of which independently warrant a reversal here.

[00:00:41] Speaker 00:
Both at step one, the directed to inquiry, and at step two, the inventive step or inventive concept inquiry.

[00:00:49] Speaker 00:
The district court made significant errors that are each independently sufficient to support reversal.

[00:00:56] Speaker 00:
At the step one inquiry, the district court

[00:01:00] Speaker 00:
actually didn't clearly identify what it was identifying as the supposed idea to which the claim was directed.

[00:01:06] Speaker 00:
It seemed to recite the formulation offered by the defendant to the extent that that's what it was accepting.

[00:01:16] Speaker 00:
That formulation, which recited

[00:01:22] Speaker 00:
selecting a data compression technique based on characteristics of the data or words to that effect, that oversimplifies and ignores significant elements of the claim and fails to capture the inventive concepts that are contained therein.

[00:01:38] Speaker 01:
Council, has this patent expired?

[00:01:41] Speaker 00:
This patent, Your Honor, I believe has expired at this time.

[00:01:45] Speaker 00:
Let me just confirm.

[00:01:46] Speaker 01:
That goes back to 2002.

[00:01:49] Speaker 00:
Yes, that is my understanding.

[00:01:50] Speaker 01:
Is there other litigation going on other than the underlying district court suit?

[00:01:59] Speaker 00:
I don't believe there remains any other district court litigation on this particular patent.

[00:02:05] Speaker 01:
If memory serves, this is the only case remaining on this patent.

[00:02:13] Speaker 00:
There is a PTAB

[00:02:17] Speaker 00:
appeal process from an ex parte re-exam that has issued a decision on invalidity that is still subject, it was very recently issued, it's still subject to appeal and discussion before this court.

[00:02:29] Speaker 01:
Just to get the label on it.

[00:02:30] Speaker 00:
Of course.

[00:02:32] Speaker 04:
Did the PTO find it invalid?

[00:02:35] Speaker 00:
The PTO did find it invalid, not anything to do with section 101.

[00:02:39] Speaker 00:
Sure.

[00:02:41] Speaker 00:
prior art issues.

[00:02:42] Speaker 00:
And notably, the PTO applied a much broader construction of one of the key terms, the throughput term, than the district court here.

[00:02:52] Speaker 00:
Indeed, the PTAF characterized an even broader construction than the district court's construction as the narrower version that it was not adopting.

[00:03:00] Speaker 00:
Basically, the TTAB used a construction that contemplated throughput as a pre-existing condition of a communication channel, essentially the fixed state of how much data could pass through it as opposed to the district court's construction which referenced pending requests or pending access requests, which is a more dynamic and changeable characteristic of a communications channel.

[00:03:24] Speaker 00:
And that's what the specification discusses as well.

[00:03:27] Speaker 00:
That's also a subject of dispute with the PTAB obviously, but not for this appeal particularly, because the construction here was not challenged in this appeal.

[00:03:38] Speaker 03:
Just another lay of the land point.

[00:03:39] Speaker 03:
There's no dispute over the representative claim analysis.

[00:03:43] Speaker 03:
We only have to consider claim one, right?

[00:03:45] Speaker 00:
I would disagree with that in the sense that I think we've discussed both claims one and nine.

[00:03:50] Speaker 00:
Nine is obviously very similar to claim one.

[00:03:54] Speaker 00:
It does include some additional aspects that seem to have been

[00:03:59] Speaker 03:
Do you make an argument in the blue brief that the district court erred in treating claim one as representative?

[00:04:05] Speaker 00:
Yes, and we discussed claim nine, for example.

[00:04:07] Speaker 00:
Well, it's noted on the cover of the blue brief or the inside cover, but also page 45 of the blue brief addresses claim nine.

[00:04:15] Speaker 00:
So we did discuss that.

[00:04:17] Speaker 00:
I think, as I noted, they are very similar.

[00:04:21] Speaker 00:
Claim 9 is obviously an apparatus claim that includes aspects of the controller and how the controller functions within the system to perform some of these aspects.

[00:04:29] Speaker 04:
But if claim 1 is ineligible because it's abstract, then claim 9, just adding a controller, doesn't make it eligible, right, under our precedent?

[00:04:39] Speaker 00:
I think that's probably correct that the two are similar enough.

[00:04:44] Speaker 00:
I would disagree, obviously, that claim one is a subtract.

[00:04:46] Speaker 00:
No, I understand.

[00:04:47] Speaker 04:
I guess I'm just trying to understand if you're arguing that there's any distinction and that nine can stand if one falls.

[00:04:55] Speaker 00:
Well, to the extent that the argument is made and advanced that, and I think my friend advances this argument in its brief, that the system is purely sort of an abstract mental process, not tied to computers, things of that nature, I think Claim 9 is different in that respect.

[00:05:14] Speaker 00:
that claim nine is very clearly a system claim within a computer system.

[00:05:19] Speaker 00:
The controller does anchor that in computer technology.

[00:05:23] Speaker 00:
We think claim one is obviously also anchored in computer technology.

[00:05:26] Speaker 00:
And that's clear from both the specification and the claim.

[00:05:29] Speaker 04:
Well, I understand that.

[00:05:29] Speaker 04:
But saying it's anchored in computer technology doesn't make it eligible if it's just a do it on a computer claim.

[00:05:36] Speaker 00:
Agreed.

[00:05:36] Speaker 00:
And this is not a just do it on a computer claim.

[00:05:39] Speaker 04:
No, no, no.

[00:05:39] Speaker 04:
But I didn't really get a clear answer.

[00:05:43] Speaker 04:
If one is invalid because it's an abstract idea, there's no additional inventive concept, then nine is ineligible, too, because it's just done on a controller.

[00:05:54] Speaker 04:
Are you arguing something else?

[00:05:56] Speaker 00:
No, I think I understand your point, Your Honor.

[00:05:59] Speaker 00:
I think that's correct.

[00:06:00] Speaker 00:
Like I said, the only hesitation I have is if we're talking about suggesting that one is

[00:06:07] Speaker 00:
abstract because it's untethered to computer technology in some way.

[00:06:11] Speaker 00:
And I don't think that was your honor's point.

[00:06:14] Speaker 00:
That would be a distinction.

[00:06:15] Speaker 00:
But otherwise, no, I think that's correct.

[00:06:18] Speaker 03:
Most of the briefing is directed to step one, but I'm concerned about step two.

[00:06:23] Speaker 03:
You seem to think that there is some material fact dispute.

[00:06:29] Speaker 03:
Tell me as best as you can, what is that material fact dispute, and is it genuine?

[00:06:35] Speaker 03:
Is there really enough evidence in the record that a reasonable jury could side with you on it?

[00:06:40] Speaker 00:
Yes, Your Honor, and thank you.

[00:06:41] Speaker 00:
I think much like the

[00:06:44] Speaker 00:
Various of this court's cases, including cooperative entertainment, this is a case that does have significant fact issues at step two that the district court failed to even acknowledge.

[00:06:55] Speaker 00:
The evidence in the record, I think there were a number of things, but the most significant I would point to is the opinions offered from Dr. Ryan, the expert for real time.

[00:07:06] Speaker 00:
He offered a number of opinions about this, I think,

[00:07:13] Speaker 00:
Perhaps the most significant with respect to step two is found at paragraph 1297 of his submission, which is at page 3075 to 76 of the appendix.

[00:07:25] Speaker 00:
And he's explaining why the combination of elements within the claim, the ordered combination of this claim, was unconventional and really differed from the conventional configurations of compression systems in the art.

[00:07:38] Speaker 00:
He notes that conventional systems essentially use a one size fits all compression approach in which compression was always performed to just get the sort of smallest resulting size of data.

[00:07:51] Speaker 00:
In other words, whatever gets you the most compression, that's all you do.

[00:07:55] Speaker 00:
And he noted that it was a very distinct and different approach and an inventive approach to alter that compression system by looking at both the nature of the data that's being compressed and the throughput of the system as it's being compressed to alter the compression that's used to perhaps use one that maybe doesn't compress it as much but avoids bottlenecks in the system by compressing it faster.

[00:08:20] Speaker 04:
That sounds to me like you're saying your expert said the abstract idea was unconventional.

[00:08:26] Speaker 04:
I know you disagree on step one that this is an abstract idea.

[00:08:31] Speaker 04:
But let's assume that we agree with the district court that as a matter of law, the idea of selecting a compression algorithm based upon what kind of input is coming in to toggle back and forth is an abstract idea.

[00:08:46] Speaker 04:
What you just said is your expert said,

[00:08:50] Speaker 04:
Choosing between the two is unconventional, but that's the abstract idea.

[00:08:55] Speaker 04:
That's not enough at step two, is it?

[00:08:57] Speaker 00:
Well, so two things.

[00:08:59] Speaker 04:
You don't need to argue on step one.

[00:09:01] Speaker 04:
I get it.

[00:09:01] Speaker 04:
You have an argument on step one.

[00:09:02] Speaker 04:
We can talk about that.

[00:09:03] Speaker 04:
But assuming that step one is abstract, what additional invented concept is there in this patent in either of these claims beyond just the idea of what it says here, choosing between compression algorithms based upon certain parameters?

[00:09:20] Speaker 00:
And I think the two are interrelated, obviously, because the supposed abstract idea the district's court relied on was choosing a compression algorithm based on a characteristic of the data, i.e.

[00:09:36] Speaker 00:
some parameter or information about the data.

[00:09:39] Speaker 00:
And what Dr. Ryan is talking about is there's something more in the claim than that because the claim doesn't just look at a characteristic of the data.

[00:09:47] Speaker 00:
It also looks at the system's ongoing throughput, the number of pending requests, and may use what is not the optimal compression algorithm based on the characteristic of the data if the status of the system, the throughput, has changed to a condition that would warrant a different algorithm or a different compression approach.

[00:10:07] Speaker 00:
And that's not part of the district court's formulation of the abstract idea at all.

[00:10:13] Speaker 00:
The district court completely omitted that and left out that key claim element, which is a step one problem as well.

[00:10:19] Speaker 00:
But if we accept the district court's formulation for step one, what Dr. Ryan is talking about is there's more to the claim than that that should be considered in step two.

[00:10:30] Speaker 00:
You can't change the abstract idea approach for step two and sort of look at it one way for one and a different way

[00:10:36] Speaker 04:
I'm still having a problem understanding why what you're telling me is just not abstract.

[00:10:42] Speaker 04:
I mean usually when these kind of claims survive and they rarely do it's because there's a specific implementation and it tells you in detail

[00:10:52] Speaker 04:
what the parameters are, and when you change the parameters.

[00:10:55] Speaker 04:
This just has very general things, saying here are a bunch of categories, not even a bunch of categories, but there's categories, and you choose between them based upon parameters.

[00:11:04] Speaker 04:
But it doesn't tell you how.

[00:11:08] Speaker 04:
It just gives you the idea of doing it.

[00:11:10] Speaker 04:
This seems to me quintessentially within all of our 101 jurisprudence.

[00:11:14] Speaker 00:
So I would disagree with that in a couple steps, Your Honor.

[00:11:18] Speaker 00:
First of all, it does tell you how.

[00:11:20] Speaker 00:
It tells you that you might have a set of compression algorithms or compression approaches that might fit particular data types.

[00:11:29] Speaker 00:
And that you change those based on the system conditions, and it does describe how you make those changes.

[00:11:34] Speaker 04:
Where in the claims does it do that?

[00:11:36] Speaker 00:
So the claims describe making the changes.

[00:11:39] Speaker 00:
The advantages of doing so and the reasons why and the ways in which you do so are elucidated extensively in specification.

[00:11:49] Speaker 00:
For example, at columns 13 and 16, the patent has a lengthy discussion of how you might decide, as one example, that if the compression algorithm is an asymmetric algorithm that is very slow to compress,

[00:12:06] Speaker 00:
but fast to decompress, that's an advantageous algorithm to use during compression if there's not a backup in the system.

[00:12:16] Speaker 00:
But if the system backlogs, that can create problems, and you should switch to, for example, a symmetric algorithm that is faster in the compression step so that it resolves that bottleneck even though you might not be achieving as an ideal level of compression on the storage side.

[00:12:31] Speaker 00:
I would disagree that that's not in the claims.

[00:12:34] Speaker 04:
Can you point me to the language in the claims?

[00:12:36] Speaker 00:
The claims speak to having multiple compression algorithms available of

[00:12:49] Speaker 00:
Having asymmetric algorithms, which the specification explains, can often be slower to compress, faster to decompress, as I was just discussing, and that you select the algorithm you're using based not only on the characteristic of the data, but on the throughput of the system, which the district court defined as the pending number of requests or data access requests to the system.

[00:13:09] Speaker 00:
So I do think those things are in the claim.

[00:13:12] Speaker 01:
Counsel, you're willing to your rebuttal, John?

[00:13:14] Speaker 01:
You can save it.

[00:13:15] Speaker 01:
I'll continue.

[00:13:16] Speaker 00:
I'm happy to save it, Your Honor, and return it rebuttal.

[00:13:19] Speaker 01:
Thank you.

[00:13:21] Speaker 01:
Mr. Schratzer.

[00:13:22] Speaker 02:
Good morning, Your Honors.

[00:13:23] Speaker 02:
Adam Schratzer on behalf of the Dish and Sling Appellees, and may it please the Court.

[00:13:28] Speaker 02:
Your Honors, I'd like to go straight to Judge Stark's question with respect to whether there is, in fact, a genuine issue here.

[00:13:37] Speaker 02:
And I'll start where Mr. LaDoll started, which was at, I believe it was 3075 in the appendix.

[00:13:47] Speaker 02:
And this is Dr. Boveck's opinions offered with respect to their opposition to this summary judgment motion at 1297.

[00:13:54] Speaker 02:
At 1297,

[00:13:59] Speaker 02:
Dr. Bovic is discussing the ordered combination, but no specific ordered combination.

[00:14:04] Speaker 02:
The words just sort of appear there, but they're not tied to any specific ordered combination.

[00:14:10] Speaker 02:
Dr. Bovic goes on to discuss things like secondary indicia of non-obviousness,

[00:14:15] Speaker 02:
other patents that appeared later in the field, but there is nothing in this expert report that's tied to the claim language or the specific order of combination or even the throughput, the throughput limitation perhaps being unconventional in and of itself.

[00:14:33] Speaker 03:
Did the district court consider this expert opinion that the plaintiffs offered?

[00:14:39] Speaker 02:
So in the opinion itself, Judge Jackson did not specifically cite back to Dr. Ryan's report here.

[00:14:49] Speaker 02:
That very well could have been because Dr. Ryan's report, which was offered with the opposition, it was actually offered months earlier, months before Dr. Bobak's declaration in support of Dish's summary judgment motion.

[00:15:01] Speaker 02:
So what happened there was that counsel, for real time, snippeted out portions of Dr. Bovich's months earlier expert report and then presented that as the rebuttal.

[00:15:14] Speaker 03:
Doesn't the district court have an obligation?

[00:15:16] Speaker 03:
This is a summary judgment motion, right?

[00:15:20] Speaker 03:
Correct, it is a summary judgment.

[00:15:21] Speaker 03:
So doesn't the district court have an obligation to consider all the evidence presented to it in the record?

[00:15:28] Speaker 03:
draw all inferences, reasonable inferences, against you as the non-moving party, and then say, is there a factual dispute that the jury could go either way on as to whether step two is satisfied or not?

[00:15:42] Speaker 03:
Doesn't the district court have to do that, and did it do it here?

[00:15:47] Speaker 02:
Two points.

[00:15:49] Speaker 02:
Yes, the district court certainly has an obligation to apply the typical standards under summary judgment that you recited there, Judge Stark.

[00:15:58] Speaker 02:
But the district court here also, under this case, or this court's decision in CX Loyalty, or CX Loyalty, I believe, does not have an obligation to further consider Ipsy Dixit expert opinions offered with merely conclusory

[00:16:14] Speaker 02:
observations regarding ordered combinations and nothing specific explaining the specific order combination or how or why that order combination.

[00:16:23] Speaker 03:
Does the district court at least have to tell us that it's rejecting that expert testimony as purely ipsy dixit or conclusory and did the district court do that here?

[00:16:33] Speaker 02:
I don't think the district court has to tell us that in a specific opinion.

[00:16:37] Speaker 02:
The district court did not do that here.

[00:16:39] Speaker 02:
And that dovetails into the second point I wanted to make, Your Honor, which is going back to sort of the step one analysis that we were discussing.

[00:16:47] Speaker 02:
It's not just the recitation of the abstract idea that appears at page five of the appendix.

[00:16:53] Speaker 02:
Also, Judge Jackson at page 11 of the appendix

[00:16:57] Speaker 02:
he considered this throughput limitation, and he said selecting the compression algorithm based upon the throughput is itself an abstract idea.

[00:17:05] Speaker 02:
And we know from this case, or this court's precedent, that the abstract idea cannot alone supplant any other normal

[00:17:15] Speaker 02:
type of unconventional solution at the step two analysis.

[00:17:19] Speaker 02:
And so having determined that the throughput limitation itself and selecting a compression algorithm based upon throughput was itself abstract, there needed to be something more in the record.

[00:17:32] Speaker 02:
Now, when we talk about something more in the record and what Realtime actually pointed to, I want to take the court to Realtime's arguments below.

[00:17:44] Speaker 02:
And this is in your appendix at page 3015.

[00:17:54] Speaker 02:
So below, Your Honors.

[00:17:57] Speaker 02:
Real-time argued that the ordered combination was asymmetric compressors, two or more compressors, and selecting compressors based upon a parameter of video or audio data and a throughput of the communications channel.

[00:18:11] Speaker 02:
Those claim limitations, compressors, do not appear in the 610 patent.

[00:18:16] Speaker 02:
Those limitations appear in other patents.

[00:18:19] Speaker 02:
But to the extent Realtime was pointing to claim language that does not appear in the 610 patent, the court was not required to consider that.

[00:18:28] Speaker 02:
And certainly with respect to Dr. Bovic's opinions, his opinions,

[00:18:33] Speaker 02:
were not specifically tied to what Realtime told us was its ordered combination and therefore there's no error with respect to the District Court's decision here in not citing Dr. Ryan's Ipsi-Dixit testimony.

[00:18:53] Speaker 03:
Dr. Bowick's your expert, right?

[00:18:55] Speaker 03:
Dr. Bowick is District Sling's expert, yes.

[00:18:58] Speaker 03:
Right.

[00:18:58] Speaker 03:
So help me on this.

[00:19:00] Speaker 03:
At page 813, the district court says, I find Dr. Bowick persuasive.

[00:19:06] Speaker 03:
My interpretation of 610 patent in the case is cited in this order as buttressed by certain opinions of Dr. Alan Bowick, which I find to be persuasive.

[00:19:15] Speaker 03:
Can the district court do that on a summary judgment motion?

[00:19:18] Speaker 03:
Find the moving party's expert persuasive?

[00:19:22] Speaker 02:
I don't think the district court is necessarily supposed to weigh the evidence.

[00:19:27] Speaker 02:
I think the question is whether there is a genuine issue of material fact.

[00:19:30] Speaker 02:
And here, there is just no genuine issue.

[00:19:33] Speaker 02:
So even if it were, if he did consider it persuasive, there was no genuine issue with respect to what was left on the evidentiary record.

[00:19:41] Speaker 02:
And so ultimately, that's what drove the district court's conclusion here, is not just the abstractness of the abstract idea of step one, but also that the throughput limitation in and of itself was also abstract.

[00:19:59] Speaker 02:
And having failed to provide an actual order combination that actually exists in the claims, there was an error here by the court in not considering that further.

[00:20:09] Speaker 02:
This court reached the same conclusion in Hawke Technology.

[00:20:13] Speaker 02:
There, Hawke made the argument that the ordered combination had not been considered.

[00:20:21] Speaker 02:
And Chief Judge McCalla of the Western District of Tennessee, in his opinion, in fact, didn't set forth an ordered combination analysis.

[00:20:32] Speaker 02:
And what this court determined is that there was no error there because the patentee had failed to set forth particularly what their ordered combination was.

[00:20:43] Speaker 02:
Just as occurred here in this briefing, in the blue brief, where the same compressor limitations were set forth, they don't exist in 610 patent.

[00:20:53] Speaker 02:
And the concession was made in the gray brief at pages 25 and 26.

[00:21:01] Speaker 02:
Unless there are further questions.

[00:21:02] Speaker 03:
I have a couple more.

[00:21:05] Speaker 03:
Real-time analogizes this case, I think, to visual memory.

[00:21:10] Speaker 02:
Why is that analogy not persuasive?

[00:21:13] Speaker 02:
So that analogy is not persuasive because the visual memory claims included a specific hardware structure tying the processor there to various memories and cache memories.

[00:21:27] Speaker 02:
There's a prefetch cache,

[00:21:28] Speaker 02:
I think there was a couple of different cache memories.

[00:21:33] Speaker 02:
And the inventive concept there was being able to use a processor which would dynamically understand how to store different data at different levels and different caches.

[00:21:44] Speaker 02:
And so that particular, those particular claims were not abstract at step one.

[00:21:52] Speaker 02:
And that's not this case here.

[00:21:54] Speaker 02:
This case falls squarely within step one.

[00:21:57] Speaker 03:
One more.

[00:21:58] Speaker 03:
Help me on this.

[00:21:59] Speaker 03:
The district court wrote at page A14, the absence of details as to how the invention would work is evident without resort to any disputed issues of fact.

[00:22:12] Speaker 03:
What do you think that means?

[00:22:13] Speaker 02:
Well, I think that means that when you look to the claim language,

[00:22:18] Speaker 02:
The claim language does not have the detail about how this invention will work or why it would resolve what Mr. LaDalle states is the bottlenecking problem.

[00:22:33] Speaker 02:
This court heard about the bottlenecking problem in the two-way media case.

[00:22:37] Speaker 02:
It was argued, I think in the argument, it was 11 minutes and 25 seconds in that argument.

[00:22:43] Speaker 02:
And bottlenecking did not persuade the court in two-way media, and it shouldn't here as well.

[00:22:51] Speaker 02:
Just one point of housekeeping.

[00:22:53] Speaker 02:
If the court were to write in this case, at the great brief at page 30,

[00:22:59] Speaker 02:
Real-time raises an argument for this first time with respect to claim four.

[00:23:04] Speaker 02:
I just want to note for the court that claim four was not asserted and it is not a part of the record on the appeal.

[00:23:13] Speaker 02:
Just for purposes of a little bit of housekeeping there.

[00:23:17] Speaker 02:
Thank you, Your Honors.

[00:23:19] Speaker 02:
Thank you, Counsel.

[00:23:19] Speaker 01:
We'll rest on the briefs.

[00:23:23] Speaker 01:
Mr. Vidal has a couple minutes.

[00:23:34] Speaker 00:
Thank you, Your Honor.

[00:23:36] Speaker 00:
A couple of points.

[00:23:37] Speaker 00:
First of all,

[00:23:39] Speaker 00:
Getting back to this question about the step two inquiry, it is clear from the record, and I think Judge Stark's questions are well taken, that the district court did not appear to even consider the evidence presented by the patentee about the inventive concept and the distinction from the supposed abstract idea.

[00:24:00] Speaker 00:
I would also argue that as to step one, and something my friend addressed,

[00:24:06] Speaker 00:
Analysis of the claim and then the separate analysis of the throughput limitation as a different analysis or asserting that that by itself is an abstract idea is not an analysis of the claim as an ordered combination.

[00:24:20] Speaker 00:
It's an analysis of independent elements that is not what this court mandates.

[00:24:25] Speaker 00:
And finally I think to your question about visual memory this case is very analogous to visual memory in many respects I think the claim there does not recite many of the things that were argued a moment ago by my friend and further I think there's a little bit of Having it both ways in the briefing in the red brief

[00:24:49] Speaker 00:
visual memory noted that it's appropriate to look to the specification to understand what the claims are directed to as part of the step one analysis what problems they're addressing are those technical problems and pointed to a great deal of material and specification including computer code that wasn't part of the claims as being important to understanding that analysis here

[00:25:13] Speaker 00:
On the flip side, my friends argue in their red brief that we have to look only at the claims and we should never look to the specification, though they distinguish visual memory by pointing to things that are in the specification.

[00:25:27] Speaker 00:
We think that the information in the specification does inform the problem and the technical nature of the problem to which these claims are directed.

[00:25:36] Speaker 00:
I'm happy to answer any questions if there are further questions.