[00:00:00] Speaker 02:
Our next argument is Island Intellectual Property versus TD Ameritrade, Med-Al, 2023, 13, 18, and 1441.

[00:00:10] Speaker 02:
Mr. Delaportis.

[00:00:11] Speaker 02:
Thank you, Your Honor.

[00:00:16] Speaker 01:
May it please the Court, I'm here on behalf of the Appellant Island Intellectual Property.

[00:00:22] Speaker 01:
We're appealing today from the District Court's grant of summary judgment on patent and eligibility in the 286 patent, 551 and 821.

[00:00:30] Speaker 01:
I'd like to start with 286, and I'd like to address the two-part Alice test.

[00:00:35] Speaker 01:
But I'd like to do something unusual and flip it, because something extraordinary happened below.

[00:00:39] Speaker 01:
And with respect to 286, there was no two-second-step Alice analysis.

[00:00:47] Speaker 01:
The magistrate Payne skipped right over it.

[00:00:50] Speaker 02:
Let's look at the claims.

[00:00:52] Speaker 02:
It's managing funds.

[00:00:55] Speaker 02:
It's moving data around.

[00:00:58] Speaker 02:
It's what you and I probably do at home with spreadsheets.

[00:01:03] Speaker 02:
This is all abstract.

[00:01:05] Speaker 01:
It's much more than that, Your Honor.

[00:01:07] Speaker 01:
So what we're talking about here are computerized deposit sweep systems.

[00:01:10] Speaker 01:
Computerized deposit sweep systems have never been done at home.

[00:01:15] Speaker 01:
They've never been done by pen and paper.

[00:01:17] Speaker 01:
You started deposit sweeps back in the 80s.

[00:01:20] Speaker 01:
They've always been done with massive mainframe computers.

[00:01:23] Speaker 01:
It's akin to the internet.

[00:01:25] Speaker 01:
There is no way deposit sweeps have ever been done.

[00:01:27] Speaker 01:
They necessarily require computers.

[00:01:30] Speaker 01:
And in fact, we put them alike.

[00:01:32] Speaker 04:
The steps to get to deposit sweeps, that's what we said.

[00:01:41] Speaker 04:
It just involves aggregating data, moving money around, making deposits, making withdrawals possible.

[00:01:50] Speaker 01:
It's actually much more than that.

[00:01:51] Speaker 01:
I think this is akin to Your Honor's dissent in Amdocs.

[00:01:56] Speaker 03:
What's the much more?

[00:01:59] Speaker 01:
Let's start with the 286 patent.

[00:02:03] Speaker 01:
The 286 patent has a few things which everyone has found unique and has never been done before.

[00:02:09] Speaker 01:
It has an unconventional and non-routine interest allocation model.

[00:02:14] Speaker 01:
It applies those to aggregated

[00:02:17] Speaker 01:
accounts, which again, never been done before.

[00:02:19] Speaker 01:
Their expert says it's never been done before, and it does it in a way to provide pro-red interest.

[00:02:24] Speaker 01:
And the reason this was so complicated was because you had one set of banks who were only doing their accounting on the aggregate level.

[00:02:31] Speaker 01:
You have individuals who need their accounting on the individual level, and nobody knew how to do that.

[00:02:37] Speaker 01:
It was such a technical challenge that American Express, this is in their answer, by the way, American Express, who's incredibly technically sophisticated, they came to us

[00:02:46] Speaker 01:
and said, how can we program our computers to do this?

[00:02:49] Speaker 01:
And we designed the 286 patent.

[00:02:51] Speaker 01:
We designed it for American Express.

[00:02:53] Speaker 01:
And they became their program chart.

[00:02:54] Speaker 03:
How does the patent tell you how to program a computer?

[00:02:56] Speaker 01:
I'm sorry?

[00:02:57] Speaker 01:
How does the patent tell you how to program the computer?

[00:03:00] Speaker 01:
Oh, I'm sorry.

[00:03:01] Speaker 01:
It does it two ways.

[00:03:02] Speaker 01:
One, it's basically its process flows.

[00:03:04] Speaker 01:
And second, it's database structure.

[00:03:06] Speaker 01:
So all these banks, they have an army of coders.

[00:03:08] Speaker 01:
Where's that in the claims?

[00:03:10] Speaker 01:
So let me take out the claim, Your Honor.

[00:03:14] Speaker 01:
We use the lettering from our brief, if that's helpful to the court.

[00:03:19] Speaker 01:
So the claim basically, I'm going to take 286 patent claim one, basically has three parts and then a little bit of what I call a nub.

[00:03:27] Speaker 01:
A and B is what you call account management.

[00:03:32] Speaker 01:
And it's unique and unconventional.

[00:03:33] Speaker 01:
No one was doing it before us, but that's not why we got this patent.

[00:03:36] Speaker 01:
We had done it with earlier patents.

[00:03:38] Speaker 01:
Only we were doing it, but that's why we got it.

[00:03:40] Speaker 01:
Then you get to C, D, and E.

[00:03:42] Speaker 01:
CDNE is structuring the database.

[00:03:44] Speaker 01:
That tells the coders, basically, what inputs you need to put where.

[00:03:48] Speaker 01:
And this, again, the experts showed.

[00:03:50] Speaker 01:
And when we maintained, these are unique database structures, what we believe is akin to ENFISH.

[00:03:57] Speaker 01:
And then you get to what the examiner said was unique, never been done before.

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In fact, the prior art taught away from it.

[00:04:05] Speaker 01:
And that's FGNH.

[00:04:08] Speaker 01:
FGNH is our interest allocation model.

[00:04:11] Speaker 01:
And what our interest allocation model does is it shows these coders, whoever they are, how to apply tiered interest rates in an aggregated account.

[00:04:23] Speaker 01:
So an aggregate account, it's like sometimes they're called pooled accounts, sometimes they're called underboss accounts.

[00:04:34] Speaker 03:
What does it tell you?

[00:04:36] Speaker 03:
There's a special idea here about computer programming.

[00:04:41] Speaker 01:
If we just said, give people tiered interest rates, that would be a result.

[00:04:47] Speaker 01:
What FG and H do is tell the programmers how to do it.

[00:04:51] Speaker 01:
Which page are we talking about?

[00:04:54] Speaker 01:
So this is a claim one, the 286 patent.

[00:04:56] Speaker 01:
What page are the appendix?

[00:04:58] Speaker 01:
Oh, sorry.

[00:05:11] Speaker 02:
But it's just calculation, isn't it?

[00:05:14] Speaker 02:
There are a lot of very smart ideas that are, because they're just ideas, they're abstract.

[00:05:22] Speaker 01:
Sorry.

[00:05:22] Speaker 01:
Sorry, Your Honor.

[00:05:24] Speaker 01:
Claim ones on 248.

[00:05:25] Speaker 01:
It's also going to be brief.

[00:05:26] Speaker 01:
I'm sorry.

[00:05:26] Speaker 01:
I'm sorry, Judge Lori.

[00:05:27] Speaker 01:
You were saying?

[00:05:29] Speaker 02:
It may be very clever, but it's simply calculation.

[00:05:35] Speaker 02:
And it's multiple accounts and multiple interest rates.

[00:05:40] Speaker 01:
The explanation is,

[00:05:42] Speaker 01:
that this was a technical challenge that the computers couldn't do.

[00:05:46] Speaker 01:
We were already doing sweeps on computers.

[00:05:49] Speaker 01:
They couldn't figure out how to do that.

[00:05:50] Speaker 01:
We just have to look at the examiner's allowance, which talks about this.

[00:05:54] Speaker 01:
This isn't us.

[00:05:55] Speaker 03:
This is the... Where's the claim telling you how to program the computer?

[00:05:59] Speaker 03:
It just tells you the result that you want.

[00:06:03] Speaker 03:
What is the programming invention?

[00:06:07] Speaker 01:
As I said earlier, there's three parts.

[00:06:09] Speaker 01:
And the is telling you how to manage my page.

[00:06:12] Speaker 01:
Oh, I'm sorry Tom line Yes, yes, your honor So we are on Appendix page 248 claim one of the 286 patent and that's column 27 and it begins on what looks like line 11 and so what we did is we

[00:06:35] Speaker 01:
We lettered the paragraphs.

[00:06:37] Speaker 01:
So basically, the first two maintaining paragraphs, those tell you how to structure the accounts.

[00:06:45] Speaker 01:
Again, this is for coders.

[00:06:46] Speaker 01:
This isn't telling what the result is.

[00:06:50] Speaker 01:
No, it's telling the coders how to.

[00:06:51] Speaker 01:
It's a process flow, Your Honor.

[00:06:52] Speaker 01:
It's telling people how to program the software.

[00:06:55] Speaker 04:
Well, these instructions that you want us to believe, they're not in the claims.

[00:07:03] Speaker 04:
When you look at the claims itself,

[00:07:05] Speaker 04:
And you look at paragraphs 10 through 65 of column 27, just out of the 286 pattern.

[00:07:16] Speaker 04:
You're talking about maintaining a plurality of accounts.

[00:07:21] Speaker 02:
Yes.

[00:07:21] Speaker 04:
Maintaining funds for those accounts.

[00:07:25] Speaker 04:
Maintaining or accessing computer and electronic database.

[00:07:30] Speaker 04:
Receiving electronic transaction data.

[00:07:33] Speaker 04:
updating respective balance of funds, determining electronically the sufficiency of client funds.

[00:07:43] Speaker 01:
That last one you read around is the interest allocation model.

[00:07:48] Speaker 01:
And doing that with tiered accounts was our invention.

[00:07:52] Speaker 04:
we don't believe you know if you were to obtain a pen on this, you would practically have exclusive rights to the entire system of banking or checking, keeping a check at home or

[00:08:05] Speaker 01:
No, Your Honor.

[00:08:06] Speaker 01:
This was very specific.

[00:08:07] Speaker 04:
The specificity that you're pointing to is not in the claim.

[00:08:11] Speaker 04:
And I am going to just look at the claim first and ask you, what is the claim directed to?

[00:08:18] Speaker 01:
The claim is directed to an interest allocation model used with tiered accounts for non-pro-rata interest in a computerized deposit sweep system.

[00:08:29] Speaker 04:
So what does that mean?

[00:08:31] Speaker 04:
It simply means to maintain separate accounts

[00:08:34] Speaker 04:
that are interest-bearing, that permit the banker or an individual to make deposits and withdraw deposits, and that their deposits are insured up to $100,000 by the FDIC.

[00:08:48] Speaker 01:
Actually, this is about enhanced insurance.

[00:08:50] Speaker 04:
What happens here is... Would you agree with what my assessment here?

[00:08:55] Speaker 01:
No, no.

[00:08:56] Speaker 01:
Not at all, Your Honor.

[00:08:57] Speaker 01:
Well, show me then the claims, then, where I was wrong.

[00:09:00] Speaker 01:
OK.

[00:09:00] Speaker 01:
So where we talk about...

[00:09:03] Speaker 01:
Determining electronically for each of the plurality of counts in the subset of a client accounts of a respective interest rate for a plurality of interest rates in interest allocation procedure now those accounts Those are we have to tell you how to do it's telling to make a calculation within the aggregated account It's just telling how to make these to make a particular calculation based on

[00:09:29] Speaker 01:
Yeah, based at least in part on the updated balance of the funds associated with the respective client account at the time.

[00:09:38] Speaker 01:
So these are for use in an aggregate.

[00:09:41] Speaker 01:
So what happens is, I go to a broker, right?

[00:09:43] Speaker 01:
And I have my money sitting there.

[00:09:45] Speaker 01:
And I don't want my money sitting there if I'm not buying stocks or bonds.

[00:09:48] Speaker 01:
I want to get some interest.

[00:09:49] Speaker 01:
And sometimes I want to get, it was 100 when this was invented, it's now 250.

[00:09:54] Speaker 01:
So what they do is you can get your account, you can sweep it to various accounts.

[00:09:59] Speaker 01:
and get some interest.

[00:10:00] Speaker 01:
But the bank on the other end, the program banks, remember this is a program, they didn't want to deal with a thousand accounts.

[00:10:06] Speaker 01:
So the invention we came up with for the parent is you put them all in an aggregated account and it makes the accounting such that the computers at the banks can handle it because they're just dealing with one aggregated account, one set of interest.

[00:10:18] Speaker 01:
Okay, but then you've got customers and the customers are like, well, I want my interest.

[00:10:22] Speaker 01:
And maybe the bank wants to give a different interest for one versus the other.

[00:10:25] Speaker 01:
And this is a program flow on how to do it.

[00:10:27] Speaker 01:
Now, if I could go briefly beyond the claim, because that's step two, I know that there was no step two analysis here.

[00:10:34] Speaker 01:
We have a lot of evidence that even if you find that it's abstract under step one, under step two, the court's required to do an analysis.

[00:10:43] Speaker 01:
They can't skip over it.

[00:10:44] Speaker 01:
If you read this here, there's a two sentence analysis that was provided on claim 286 by Magistrate Payne.

[00:10:51] Speaker 01:
And Judge Gilstrap added nothing to that.

[00:10:53] Speaker 01:
He simply said, Judge Magistrate Payne got it right.

[00:10:56] Speaker 01:
There's no step two analysis in the report.

[00:10:59] Speaker 01:
We had inventor testimony showing how this was designed to resolve a technical challenge of processing millions of transactions simultaneously.

[00:11:08] Speaker 01:
We had expert testimony.

[00:11:09] Speaker 01:
We had their expert who said it was novel.

[00:11:12] Speaker 02:
This is an expired patent, isn't it?

[00:11:14] Speaker 02:
What's that?

[00:11:14] Speaker 02:
This is an expired patent.

[00:11:16] Speaker 02:
Yes, sir.

[00:11:16] Speaker 02:
It goes back to 1998.

[00:11:17] Speaker 02:
The other one goes back to 1998.

[00:11:19] Speaker 02:
That's been a lot more since then.

[00:11:21] Speaker 01:
286 goes to 2002.

[00:11:25] Speaker 01:
The 551 goes to 1998.

[00:11:27] Speaker 01:
Yeah, so we're talking about mastering computer problems at the time.

[00:11:31] Speaker 01:
Computers are probably better now, I assume.

[00:11:34] Speaker 01:
But at the time, these were real technical challenges.

[00:11:36] Speaker 01:
The computers can handle it.

[00:11:38] Speaker 01:
But with 286, there is no step to analysis.

[00:11:42] Speaker 01:
There needs to be, because we had legions of evidence we put before there.

[00:11:46] Speaker 01:
Under Berkheimer, they should have been considered.

[00:11:48] Speaker 01:
This court has often said that you have to consider the evidence.

[00:11:51] Speaker 01:
You can't just ignore it.

[00:11:53] Speaker 02:
You are into your rebuttal time.

[00:11:56] Speaker 02:
You can continue or save it.

[00:11:58] Speaker 01:
I'm going to take two more minutes, Your Honor, if I may.

[00:12:00] Speaker 01:
So what we have here is this court has often said it's incumbent upon the court below to state their reasons.

[00:12:11] Speaker 01:
And even if you think claim one, this is abstract.

[00:12:13] Speaker 01:
We still go to claim two.

[00:12:14] Speaker 01:
I believe Your Honor once said, claim two of step two.

[00:12:17] Speaker 01:
Step two is the lifeline.

[00:12:19] Speaker 01:
That's a quote from Amdocs, maybe.

[00:12:22] Speaker 01:
So claim that life is the lifeline where no one threw us a lifeline here because we have lots of evidence of inventiveness and That was never considered we had inventor testimony, which talked about how these things worked.

[00:12:37] Speaker 01:
We had expert testimony We had the examiner's allowance and I'd like to just greet for the examiner's allowance just because he nailed it What he says is the closest prior art.

[00:12:47] Speaker 01:
This was something called the Anken patent before we came said

[00:12:52] Speaker 01:
actually taught away from this and complains about the complexity involved in computing the interest earned at each participating bank institution.

[00:13:02] Speaker 02:
He's talking about 103, isn't he?

[00:13:04] Speaker 01:
Well, he's not talking about eligibility necessarily, but what he's finding is that the closest prior art teaches away and complains about the complex ability in computing.

[00:13:14] Speaker 01:
Everybody understood this was about computing.

[00:13:16] Speaker 01:
Now, maybe the court in its

[00:13:20] Speaker 01:
and it's 56, had it done one, whatever, found all these things don't create a material dispute of fact.

[00:13:25] Speaker 01:
But that's not in either Magister Payne's decision or Judge Gilstrap's decision.

[00:13:30] Speaker 01:
That's not in there.

[00:13:31] Speaker 04:
Briefly, what would you, what's your argument under step two?

[00:13:36] Speaker 04:
What is it about the claims, the claim advance, the specification that transforms the abstract ID under step one into something that's patent eligible?

[00:13:46] Speaker 01:
Your Honor, there was a unique technological challenge here.

[00:13:49] Speaker 01:
Computers of the time, we're talking 2002, could not handle these massive transactions.

[00:13:55] Speaker 01:
And if we look at the inventor testimony we have, there's just a line from it I'd like to read for you, even though I know I'm using up all my time.

[00:14:03] Speaker 03:
How did you change the computer to make it handle these massive transactions?

[00:14:07] Speaker 01:
This is software.

[00:14:08] Speaker 01:
So basically, this software allows the computer to go.

[00:14:10] Speaker 01:
We don't change the hardware.

[00:14:11] Speaker 01:
This is not a hardware invention.

[00:14:13] Speaker 04:
But it's a regular computer, right?

[00:14:16] Speaker 04:
It's a regular computer that's processing software.

[00:14:21] Speaker 01:
Whatever computers banks use, what we talked about in our invention is these inventions, this software design, should be what we use to call readily integrable, integratable into the existing computer systems.

[00:14:33] Speaker 04:
So it's the bank's computers that does this super processing.

[00:14:38] Speaker 04:
That's correct.

[00:14:39] Speaker 01:
That's correct.

[00:14:41] Speaker 04:
That's not what this invention is about.

[00:14:43] Speaker 01:
Now, you know, as we point this out, we have another case before Judge Forrest.

[00:14:47] Speaker 04:
You can't claim that what the bachelors are doing is you can't use that to support your step to

[00:14:56] Speaker 04:
in the analyst analysis?

[00:14:58] Speaker 01:
No, we're not, Your Honor.

[00:14:59] Speaker 01:
What we're saying is we're showing the banks how to create computer systems using their hardware, wherever they buy their hardware from, to process transactions that they were never previously able to process.

[00:15:11] Speaker 01:
These are millions of transactions a day that are happening simultaneously.

[00:15:16] Speaker 01:
This is not some sort of ledger.

[00:15:19] Speaker 01:
These can only be done on computers.

[00:15:22] Speaker 01:
As Judge Forrest found, the claims on their face require, quote,

[00:15:26] Speaker 01:
controlled interaction between the intermediate banks, the source banks who deal with the customers, and the program banks which hold the aggregated accounts.

[00:15:34] Speaker 01:
That was a factual finding from Judge Forrest.

[00:15:37] Speaker 01:
Judge Gilstrap said, well, that's pre-alice.

[00:15:40] Speaker 01:
OK, it's pre-alice.

[00:15:41] Speaker 01:
It's still a factual finding.

[00:15:43] Speaker 01:
You had to grapple with it.

[00:15:44] Speaker 01:
In real time data, the court talked about, if another judge disagrees, you got to at least address it.

[00:15:49] Speaker 02:
Counsel, as you might see, your red light is on.

[00:15:52] Speaker 01:
I'll save 30 seconds.

[00:15:53] Speaker 02:
You don't have 30 seconds left.

[00:15:55] Speaker 02:
Oh, sorry.

[00:15:57] Speaker 02:
We will give you a minute of republicance.

[00:15:58] Speaker 01:
Thank you.

[00:15:59] Speaker 01:
I appreciate your honor.

[00:16:11] Speaker 00:
Good morning, your honors.

[00:16:17] Speaker 00:
I think the most important thing to say is that most of what I just heard, millions of transactions, process flow, et cetera, is not in the claims.

[00:16:29] Speaker 00:
The claims don't require millions of transactions.

[00:16:33] Speaker 00:
And even if they did, handling millions of transactions is what computers are good at.

[00:16:37] Speaker 00:
adding up accounts, adding up transactions, summing them up over many, many accounts.

[00:16:41] Speaker 00:
That's exactly what computers are for, and they've been doing that for decades in banks.

[00:16:46] Speaker 00:
That was admitted on this record.

[00:16:49] Speaker 00:
I think the one central thing I want to draw Your Honor's attention to is that Island admitted in its briefing

[00:16:57] Speaker 00:
that its supposedly amazing interest calculation and its claims, it admitted that its claims cover any interest calculation by any computer with any database, as long as it's done in a way that allocates a different return to two different investors whose money is held in the same aggregated account.

[00:17:19] Speaker 00:
So that's the supposed innovation, giving a different return to two different investors whose money is in the same aggregated account.

[00:17:26] Speaker 00:
And then you can calculate that with any database, any computer, et cetera.

[00:17:30] Speaker 00:
They admitted that, and if you look at it.

[00:17:32] Speaker 04:
Not to say that it's real germane to the issue, but how novel is this concept of deposit sweeps?

[00:17:38] Speaker 00:
It's not, Your Honor.

[00:17:39] Speaker 00:
So Merrill Lynch was doing deposit sweeps from the 1980s.

[00:17:43] Speaker 00:
The record contains, if you look at page,

[00:17:48] Speaker 00:
Four of our briefs.

[00:17:50] Speaker 00:
There's a citation to an American Bank article from 1983.

[00:17:53] Speaker 00:
That's APX 780.

[00:17:56] Speaker 00:
And it talks about how Merrill is doing deposit sweeps to 12 different banks to provide the extra FDIC coverage that you get from sweeping to many banks.

[00:18:05] Speaker 00:
So that would have been $1.2 million at the time.

[00:18:07] Speaker 02:
Did we have that Merrill Lynch patent before us years ago and uphold it?

[00:18:13] Speaker 00:
Oh.

[00:18:15] Speaker 00:
That I do not know, Your Honor.

[00:18:17] Speaker 00:
I do not know.

[00:18:18] Speaker 00:
But I think that you did.

[00:18:20] Speaker 02:
But your answer probably is that the law changed at the Supreme Court.

[00:18:26] Speaker 00:
So the Merrill patent is very old.

[00:18:28] Speaker 00:
It came two decades before this patent.

[00:18:30] Speaker 00:
And yes, Alice was after that.

[00:18:32] Speaker 00:
Alice is directly relevant to that.

[00:18:35] Speaker 02:
Now, is there no room for clever software moving data around?

[00:18:44] Speaker 02:
in today's 101 world?

[00:18:49] Speaker 00:
I would not say that, but this case is not that case.

[00:18:53] Speaker 00:
This case is very simple.

[00:18:54] Speaker 00:
It doesn't need to be decided on anything other than its own facts.

[00:18:57] Speaker 00:
And here we have an admission that it covers any computer, any database that calculates interest within aggregated accounts.

[00:19:05] Speaker 00:
That's squarely within the facts about.

[00:19:08] Speaker 02:
So how does it become specific?

[00:19:11] Speaker 02:
Put in zeros and ones?

[00:19:14] Speaker 02:
Object code, source code, is that how it becomes specific in general?

[00:19:21] Speaker 00:
I don't think I'm prepared to tell you, Your Honor, how you could do that.

[00:19:25] Speaker 00:
What I am prepared to tell you is that wasn't done here.

[00:19:28] Speaker 00:
If you read these specifications, there's nothing innovative about a computer in these specifications.

[00:19:34] Speaker 00:
They say you use an Oracle database, or you buy one from IBM.

[00:19:38] Speaker 02:
If the specification had algorithms in it, would that have made a difference?

[00:19:44] Speaker 00:
So a mathematical algorithm, absolutely not.

[00:19:46] Speaker 00:
So a new interest rate calculation implemented on a generic computer, this court's precedent is very clear that implementing a new abstract idea with a generic computer component is not patentable.

[00:19:57] Speaker 00:
So the answer to that is no.

[00:20:03] Speaker 00:
I'll just give this APX citations to their admission that these claims cover any calculation.

[00:20:09] Speaker 00:
It's 309 and 310 and APX 964.

[00:20:14] Speaker 00:
I'll also just state quickly that we do not agree that the district court skipped step two.

[00:20:19] Speaker 00:
There's a discussion of that by the magistrate in the R&R at APPX 10.

[00:20:27] Speaker 00:
He is extending the analysis from the 551 patent to the 286 patent and explaining that the result is no different.

[00:20:34] Speaker 00:
Then there's a several page discussion of step two.

[00:20:36] Speaker 04:
Your opponent on the other side says that

[00:20:38] Speaker 04:
whatever analysis is provided by to skill strap or the magistrate that it was insufficient or doesn't exist.

[00:20:47] Speaker 04:
Is that correct?

[00:20:48] Speaker 04:
What's your response to that?

[00:20:50] Speaker 00:
So my response to that is that is not correct.

[00:20:53] Speaker 00:
And I will give you a quote, you a few brief passages to explain why that's not true.

[00:20:59] Speaker 00:
The central point

[00:21:01] Speaker 00:
that both the RNR and Judge Gilstrap made is that when the alleged innovation is in the realm of the abstract, an improved interest calculation, an improved method of managing funds, and there's no evidence that it was implemented in any way other than with a generic computer component or generic database, the law establishes that's not enough.

[00:21:22] Speaker 00:
So even if it was an improvement in managing funds,

[00:21:26] Speaker 00:
The specifications demonstrate that it was implemented with generic software, generic computer.

[00:21:30] Speaker 04:
But what about something like evidence of commercial success?

[00:21:35] Speaker 00:
So evidence of commercial success has been credited when it is tied to the claims and it's tied to an improvement that is not itself abstract.

[00:21:44] Speaker 00:
The evidence that was presented here is evidence that they came up with an advance in the field of finance.

[00:21:50] Speaker 00:
But they would have to show that there was something in the claims that improved a computer in a way that wasn't using an abstract idea.

[00:21:59] Speaker 00:
And they haven't done that, and they can't do that.

[00:22:02] Speaker 04:
So it seems to me a lot of times that the arguments we hear are that there's an attempt to keep the language that's being used technical.

[00:22:15] Speaker 04:
When I first read this pen, what I saw as a pen that claimed advance is that it helps you make more money and it safeguards your money because now you can deposit money in multiple accounts.

[00:22:27] Speaker 04:
You have the ability to make multiple withdrawals out of high-yielding accounts and they were all FDIC insured.

[00:22:41] Speaker 04:
You know, I mean, maybe that is a system that does that.

[00:22:46] Speaker 04:
Maybe that's not abstract, if it's tied in a step two with commercial success.

[00:22:53] Speaker 04:
And you have everyone in the Wall Street explaining, this is a great system, because we're not making a bunch of money.

[00:23:01] Speaker 00:
So first of all, what you just described, Your Honor, was all done by Merrill Lynch in the 1980s, two decades before this.

[00:23:07] Speaker 00:
So we wouldn't concede that everything you just described was some great invention.

[00:23:12] Speaker 00:
But even if it was, right, there would need to be something about the operation of the computer.

[00:23:17] Speaker 00:
It would need to be tied to something specific.

[00:23:19] Speaker 04:
How about one field need?

[00:23:20] Speaker 04:
How about if they had evidence showing that?

[00:23:24] Speaker 00:
So again, these factors that we're talking about, they have to be tied to something that's legally relevant.

[00:23:28] Speaker 03:
Those are obviousness factors, not 101 factors, right?

[00:23:32] Speaker 00:
That's true.

[00:23:33] Speaker 00:
But even if you were to analogize between the two- Have we ever done that?

[00:23:38] Speaker 00:
So there's no analogy drawn that I've seen, but I have seen, and the cases are cited, where there was consideration of commercial success in the context of 101.

[00:23:49] Speaker 00:
But there only when it was tied to

[00:23:54] Speaker 00:
an advance that was not itself abstract.

[00:23:57] Speaker 00:
It doesn't matter.

[00:23:58] Speaker 00:
In fact, this court has said the opposite.

[00:24:00] Speaker 00:
It has said repeatedly that no matter how groundbreaking an advance is in the field of the abstract.

[00:24:06] Speaker 00:
And so you've uncovered a piece of fetal, I forget what the fetal DNA case exactly is, but it was

[00:24:13] Speaker 00:
undisputed that this was a groundbreaking advance in the biological field.

[00:24:18] Speaker 00:
But unfortunately, the advance was abstract.

[00:24:21] Speaker 02:
Well, that's not abstraction.

[00:24:24] Speaker 02:
That's natural law.

[00:24:26] Speaker 00:
You're right.

[00:24:31] Speaker 00:
But the analogy, I believe, holds.

[00:24:33] Speaker 00:
If there is an advance in natural law,

[00:24:37] Speaker 00:
No matter how groundbreaking the advance, that advance in natural law doesn't confer patentability.

[00:24:42] Speaker 02:
The Supreme Court talked about an invented step, didn't they, in step two?

[00:24:46] Speaker 02:
Yes, sir.

[00:24:47] Speaker 02:
Which sounds like 103, obviousness.

[00:24:50] Speaker 02:
In fact, the statute in 1952 was to get rid of the old language of invention and put in the non-obviousness test.

[00:25:02] Speaker 02:
That's not a question.

[00:25:05] Speaker 00:
I won't respond to it, Your Honor.

[00:25:09] Speaker 02:
Anything further?

[00:25:10] Speaker 00:
Nothing further unless you have further questions.

[00:25:13] Speaker 02:
Thank you.

[00:25:15] Speaker 02:
Mr. Teleportis has indicated you have used up all your time, but we will give you a minute to respond.

[00:25:24] Speaker 01:
It's greatly appreciated, Your Honor.

[00:25:26] Speaker 01:
Just a couple points very quickly.

[00:25:29] Speaker 01:
They now say, oh, this is just regular banking.

[00:25:31] Speaker 01:
What they told the judge on claim construction was that a person of skill in the art needed three years of computer expertise in order to understand these patents.

[00:25:40] Speaker 01:
So that's referenced in the claim construction ruling, which is a 280 to 297.

[00:25:46] Speaker 01:
So they've shifted back and forth here, and we think the original position was the correct one.

[00:25:52] Speaker 01:
I also just want to note that

[00:25:53] Speaker 01:
With regards to the technology, and your honor mentioned it, maybe not commercial success, but one thing that has been found relevant is marketplace demand and rapid industry adoption.

[00:26:04] Speaker 01:
We know that one business that

[00:26:07] Speaker 01:
rapidly adopted it was TD Ameritrade.

[00:26:09] Speaker 01:
When we got their code during discovery, they actually referenced in their code reserve funds, which is our client.

[00:26:16] Speaker 01:
They basically copied everything from us.

[00:26:18] Speaker 01:
They didn't do it before.

[00:26:19] Speaker 01:
They did it afterwards.

[00:26:20] Speaker 01:
Merrill Lynch, the record is very clear.

[00:26:22] Speaker 01:
It's not on this appeal.

[00:26:23] Speaker 01:
Merrill Lynch did something completely different.

[00:26:25] Speaker 01:
They did deposit sweeps.

[00:26:27] Speaker 01:
Just to understand what it is, and this is straight from page 1263.

[00:26:32] Speaker 01:
This is the inventor testimony.

[00:26:34] Speaker 01:
At the time, the sophisticated information technology required to perform these complex and calculation-intensive systems was cost prohibitive for most businesses, requiring state-of-the-art computers, which in turn could cost tens of millions of dollars.

[00:26:48] Speaker 01:
During a single business day, the account management technology software must be able to arrange or manage databases so as to instantaneously allocate billions of dollars... Which says nothing about abstraction.

[00:27:00] Speaker 02:
Computerized deposit... Your time has expired.

[00:27:03] Speaker 02:
We have your argument.

[00:27:04] Speaker 01:
Okay, last line.

[00:27:05] Speaker 01:
Computerized deposit sweep systems pre-2003 were simply not up to the task.

[00:27:10] Speaker 01:
That was the technological challenge.

[00:27:12] Speaker 01:
It's on 1263.

[00:27:14] Speaker 01:
It's at least a fact issue.

[00:27:15] Speaker 01:
It was never considered by the court below.

[00:27:17] Speaker 01:
And Your Honor, we would hope that you would send it back under Berkheimer for a proper Rule 56 analysis.

[00:27:23] Speaker 01:
Thank you.

[00:27:23] Speaker 02:
Thank you, counsel.

[00:27:24] Speaker 02:
The case is submitted.