[00:00:27] Speaker 02: Councilor Tiller, you have reserved four minutes of time for the vote. [00:00:32] Speaker 02: I have, Your Honor. [00:00:34] Speaker 00: Okay, you may proceed. [00:00:34] Speaker 00: Thank you, Your Honor. [00:00:36] Speaker 00: May it please the Court, Council? [00:00:39] Speaker 00: My name is Steve Tiller. [00:00:39] Speaker 00: I'm here representing the appellant, Max Ratty. [00:00:43] Speaker 00: The lower court, the Southern District of New York, held that the invention claimed in the 250 patent is directed at the abstract ideas of collecting, analyzing, and storing data. [00:00:55] Speaker 00: It is far more than that. [00:00:57] Speaker 00: This characterization of the invention is an overgeneralization that is completely untethered from the patent claims. [00:01:03] Speaker 02: Indeed, if you look at... Just to get everything going here, because we're all familiar with the background and all, what is the unique signature? [00:01:15] Speaker 00: It's a combination of a lot of information that is, so there are, as claim two points out specifically, but it's also in claim one, your honor, there are analysis components, LIDAR, spectroscope, spectral imagers, HD cameras, scales, mechanisms of movement. [00:01:36] Speaker 00: There is all of these components. [00:01:40] Speaker 00: And I'm going to use diamonds as the example since it appears. [00:01:44] Speaker 02: Correct. [00:01:56] Speaker 00: It's a, it's a spec, think of it as a map, essentially, a 3D map showing all the anomalies and flaws and color changes and everything, all of the differences. [00:02:10] Speaker 00: And again, I'm gonna use diamonds, but this can work for a lot of different objects, watches, paint, you know, drawings, paintings, things of that nature. [00:02:20] Speaker 00: But since De Beers. [00:02:22] Speaker 02: How about, can it work for a shoe? [00:02:25] Speaker 02: Does a shoe have a unique signature? [00:02:29] Speaker 00: I don't know about a shoe, Your Honor. [00:02:30] Speaker 00: I think it probably does, because there are always, even when... So let me change the example for half a second. [00:02:39] Speaker 02: I would think that it does have one, because it seems to me that the unique signature is a digital image that's got various components, and it's a digital image that's composed [00:02:53] Speaker 02: The composition of which are different types of data, like the spectral imaging. [00:03:01] Speaker 02: It has that. [00:03:02] Speaker 02: It's got the 3D image. [00:03:05] Speaker 02: So am I correct that the unique signature is [00:03:08] Speaker 02: this sophisticated digital image of this object? [00:03:11] Speaker 00: Yes. [00:03:12] Speaker 00: Yes, Your Honor. [00:03:13] Speaker 00: It's looking at the object in a number of different ways, essentially a 360 view, 3D view, and it's analyzing all of the different flaws, anomalies, color changes, and create... Okay, so then we have it at the end of the process, we have this digital image, this sophisticated digital image. [00:03:35] Speaker 02: What happens next is comparing that to another image in blockchain or within this peer-to-peer network that's discussed, but it's comparing it to the same type of, structurally the same type of image of another object or the same object at a later time, correct? [00:03:57] Speaker 00: Correct, Your Honor. [00:03:57] Speaker 02: And it compares those two images. [00:04:00] Speaker 02: Correct. [00:04:01] Speaker 02: Why isn't this then, [00:04:04] Speaker 02: the claims are directed to comparing one digital image with another. [00:04:11] Speaker 00: But it's much, much more than that, Your Honor. [00:04:14] Speaker 02: We just agreed, I thought, that at the end of the day, what we have here, when we put this method in process, is we have a digital image. [00:04:24] Speaker 02: Now, it may be sophisticated, but it's basically a picture. [00:04:29] Speaker 00: Well, it's composed of and it's put together between a lot of information that humans couldn't analyze, they can't analyze. [00:04:40] Speaker 00: This is not looking at sort of everything that's within sort of the human visible spectrum. [00:04:45] Speaker 00: That's why you need laser. [00:04:47] Speaker 00: That's why you need spectral imagers. [00:04:49] Speaker 00: That's why you need HD cameras. [00:04:51] Speaker 01: Professor, you agree that just reciting additional details is not alone sufficient to survive a [00:04:59] Speaker 01: one-on-one motion to dismiss, right? [00:05:01] Speaker 00: Well, I think conceptually, yes, Your Honor, that is true. [00:05:05] Speaker 00: I think this Court and the Supreme Court have said that. [00:05:08] Speaker 00: But this is not a situation where that's all that's going on here. [00:05:14] Speaker 00: And I think what is important here is [00:05:17] Speaker 00: You know, this court many, many times has said, well, is the invention simply something that has been done traditionally by humans and you're just applying it on a computer? [00:05:30] Speaker 00: That is not the case here. [00:05:31] Speaker 00: This has never traditionally been done by humans. [00:05:34] Speaker 00: Humans can't see these images. [00:05:38] Speaker 00: This is, again, bringing together LIDAR and spectral image and HD camera to do something that's never been done before. [00:05:45] Speaker 00: And your honor, [00:05:46] Speaker 00: You don't need to hear me just say that. [00:05:49] Speaker 00: You don't need to hear my client just say that. [00:05:51] Speaker 00: You can hear the defendants or the appellees say that. [00:05:56] Speaker 00: We cite to a number of statements that both the beers and BCG makes in their marketing talking about what a significant breakthrough this is. [00:06:06] Speaker 01: This is really great. [00:06:07] Speaker 01: I believe one of your arguments is that you contend that there were specific facts that needed to be developed. [00:06:12] Speaker 01: before the district court could properly rule on something like a motion to dismiss. [00:06:17] Speaker 01: So what were those facts that you contended? [00:06:20] Speaker 00: I would point specifically to step two of Alice, Your Honor, the inventive concept. [00:06:25] Speaker 00: Here, to determine whether something is an inventive concept, I think you would have needed to talk to De Beers. [00:06:34] Speaker 00: Why did you think this was an inventive concept? [00:06:36] Speaker 00: Why do you think this is such a breakthrough? [00:06:38] Speaker 00: How is this so different from anything else that has ever been done before? [00:06:43] Speaker 00: This truly, using the blockchain, [00:06:46] Speaker 00: for the self, to follow the self-providence of items had never been done before. [00:06:55] Speaker 00: Using the block. [00:06:56] Speaker 02: It seems to me that's the underlying idea of blockchain. [00:07:01] Speaker 00: No, the underlying idea of blockchain, your honor, as I understand it, is to track digital transactions. [00:07:08] Speaker 00: So the one we all know about is. [00:07:10] Speaker 02: And the word that you use in the brief is [00:07:15] Speaker 00: Self-provenance is, I think, the important part. [00:07:18] Speaker 02: That's what the blockchain is all about. [00:07:23] Speaker 02: At that, you're not claiming the blockchain, right? [00:07:27] Speaker 00: No, we're not claiming it. [00:07:29] Speaker 00: My client did not invent the blockchain. [00:07:31] Speaker 00: I would agree with that. [00:07:35] Speaker 01: Did you ever plead in the operative complaint the facts that you believe would be relevant to this sort of analysis? [00:07:43] Speaker 00: All of the statements from De Beers and BCG about how groundbreaking this technology, about how this is an incredible platform for the industry, that's all in our complaint. [00:07:54] Speaker 00: We pulled those from the complaint. [00:07:56] Speaker 01: Could you point me to the key pages of the appendix that would reflect that? [00:08:01] Speaker 00: I don't have the complaint. [00:08:03] Speaker 00: I don't have the full appendix in front of me. [00:08:05] Speaker 00: I apologize for that. [00:08:08] Speaker 02: Counselor, you should come on. [00:08:15] Speaker 00: Let me, Your Honor, because I'm pretty sure I have them written down. [00:08:21] Speaker 00: So in June of 2020, [00:08:29] Speaker 00: Neil Ventura, De Beers Group's Executive Vice President of Strategy and Innovation, said that this is arguably our most ambitious undertaking. [00:08:35] Speaker 00: It combines a number of different technologies. [00:08:37] Speaker 00: It is a great platform. [00:08:39] Speaker 00: This is a journey that is new to us and is new to the industry. [00:08:42] Speaker 00: That's at Appendix 344 and 346. [00:08:46] Speaker 00: There was an industry award, the Juilliard's Industry Award, touting what an incredible [00:08:54] Speaker 00: breakthrough this was. [00:08:56] Speaker 00: That's it, appendix 349. [00:08:59] Speaker 00: I think it's at 344 as well, where the De Beers declared that the Tracer project team, Tracer being the allegedly infringing device, the Tracer project team has demonstrated that it can successfully track a diamond through the value chain. [00:09:18] Speaker 00: This is a significant breakthrough. [00:09:22] Speaker 00: quote from De Beers. [00:09:25] Speaker 00: And while I understand that sometimes step two can be analyzed without facts, I'm not discrediting the fact that that has happened at times. [00:09:39] Speaker 00: Here, I think we have a very unique situation where not only is it the inventor saying this, but the defendant is saying the same thing. [00:09:51] Speaker 00: This is the accused device that they are touting. [00:09:55] Speaker 00: And the inventive concept is something very real here. [00:10:00] Speaker 00: This had never been done before. [00:10:06] Speaker 00: take some information, put it on a computer so you can do it faster. [00:10:10] Speaker 01: Do you believe that the alleged invention claimed provides a technical solution to a technological problem? [00:10:16] Speaker 00: I do. [00:10:17] Speaker 01: Okay. [00:10:18] Speaker 01: Tell me what that is. [00:10:19] Speaker 00: I do. [00:10:19] Speaker 00: It's obviously an incredibly technological solution to, you know, again, using LIDARs and spectral imagers and HD cameras to [00:10:34] Speaker 00: and the ability to then take not only the diamond itself and confirm its signature over and over and over again, but to be able to then determine when diamonds are cut, when child stones are cut, and when these stones are polished, [00:10:56] Speaker 00: to be able to then determine, not only do we know what that child stone is, but we know from what original stone that child stone came from, and then can then trace that back to a mine in Botswana, or a mine in South Africa, or what's very prevalent right now, mines from Russia. [00:11:20] Speaker 00: The US is trying to keep diamonds that originate from Russia from getting into the supply chain [00:11:25] Speaker 01: I'm not sure if I'm totally following. [00:11:27] Speaker 01: What exactly is the technical solution to the technological problem? [00:11:33] Speaker 00: So the technological problem is being able to have self-provenance. [00:11:39] Speaker 00: of items, to be able to track an item based on the characteristics of the item, as opposed to, your honor, using QR codes. [00:11:48] Speaker 00: QR codes are applied to items. [00:11:52] Speaker 00: As opposed to RFIDs, those are applied to items. [00:11:56] Speaker 00: As opposed to etchings, etchings were traditionally a way to follow diamonds through the supply chain. [00:12:01] Speaker 00: But as soon as that etching gets [00:12:04] Speaker 00: polished off or as soon as a child diamond is cut, that action is no longer there. [00:12:09] Speaker 00: The RFID tag can be changed, it can be manipulated. [00:12:13] Speaker 00: The QR code, it can be changed, it can be manipulated. [00:12:17] Speaker 00: What we have here is the ability to [00:12:22] Speaker 00: Determines self-providence that the item itself is telling you this is me. [00:12:29] Speaker 00: This is where I came from That's the Technological problem that had never been able to be solved before your honor. [00:12:37] Speaker 00: I see that I'm in my Time in my time Okay, thank you judge so you have this problem that Has that lots of [00:12:52] Speaker 00: industries have struggled with, the whole idea of counterfeiting, the whole idea of provenance is a major problem. [00:13:01] Speaker 00: Now we have this incredibly, quite frankly I would call it slick, technological solution of being able to have the item itself [00:13:13] Speaker 00: self-providence, to be able to have the item itself tell everyone, this is me, this is where I came from, these are my child, these are my children, essentially, for lack of a better term, my children's stones. [00:13:27] Speaker 00: This had never been done before. [00:13:30] Speaker 00: This was a problem that had been facing a lot of different industries, and De Beers and PCG itself said, this is a problem that's been facing our industry. [00:13:38] Speaker 00: Thank you, Your Honor. [00:13:52] Speaker 03: Thank you, Your Honor. [00:13:52] Speaker 03: May it please the court, Brian Matsui for the appellees. [00:13:56] Speaker 03: The district court correctly concluded that Reddy's claims are ineligible under section 101. [00:14:00] Speaker 03: At ALICE step one, Mr. Reddy's claims are directed to the abstract idea of collecting, analyzing, and recording data, such as a digital image here. [00:14:10] Speaker 03: And they recite no inventive concept at step two. [00:14:13] Speaker 03: They just recite the use of conventional technology without improving the technology itself. [00:14:19] Speaker 03: Now, the reason why we know this is if we look at the claims themselves, [00:14:22] Speaker 02: Couldn't you say that it improves in the field of determining the provenance of goods? [00:14:31] Speaker 03: I mean, I think that you could say that this could be a good idea that might make it better for tracking diamonds. [00:14:38] Speaker 03: But the mere fact that you have a good idea that's an abstract idea doesn't make it patent eligible. [00:14:44] Speaker 03: That's what this court has said, that you could have a good idea as to how to do an algorithm. [00:14:48] Speaker 02: I'm not saying that it's a good idea. [00:14:50] Speaker 02: But if it improves, if it improves in the field of determining the provenance of this, [00:14:58] Speaker 03: So I don't think that that would take it out of the realm of abstract idea or make it a non-conventional use of technology. [00:15:06] Speaker 03: The point that this court looks to is whether or not there's a technological problem. [00:15:10] Speaker 03: This is a technological solution to a technological problem. [00:15:13] Speaker 03: In other words, the claims need to improve the technology itself. [00:15:18] Speaker 02: And the claims here, if we- That's not entirely correct. [00:15:23] Speaker 02: That's not the outest test. [00:15:25] Speaker 02: We're looking at where the claims are directed to and the eligible subject matter, right? [00:15:32] Speaker 03: Certainly, Your Honor. [00:15:33] Speaker 02: And then after that we're looking at the claim advance and we're going to answer that question. [00:15:37] Speaker 02: We look at the patent as a whole. [00:15:39] Speaker 02: We look at the specification. [00:15:45] Speaker 02: I agree. [00:15:46] Speaker 02: If I was to look at this, at the claims, and say that they're directed to the improvement of determining the problem of merchandise in the marketplace, wouldn't that be a sufficient enough statement to take me out of the ineligible context? [00:16:08] Speaker 03: I don't think so. [00:16:09] Speaker 03: Not when you would say, well, how is it improving the prominence of these goods in the industry? [00:16:15] Speaker 03: And the way it's doing it is it's basically getting information about the good, and then it's comparing that information about the good in a database, like a ledger you would, and then determining whether or not that good has been out there before. [00:16:31] Speaker 03: That's an abstract idea. [00:16:35] Speaker 03: You could say that it's improving. [00:16:37] Speaker 03: A lot of claims that this court has found are ineligible could be described in such a way where it's improving the way to identify transactions or to identify individuals for transactions. [00:16:52] Speaker 03: And that even sounds more technological than what we have here, which is basically taking any sort of item and then saying that now we can figure out, take images of it. [00:17:04] Speaker 03: and then compare the images to other images that were already in the blockchain and then recording. [00:17:10] Speaker 02: You heard me ask a friend on the other side whether my view of the claims being such that basically we're creating a digital image of an object and we're comparing that later to another digital image [00:17:34] Speaker 02: for the same object. [00:17:38] Speaker 02: Would that be a correct observation? [00:17:40] Speaker 03: I think that that's probably the correct characterization of what's going on here. [00:17:44] Speaker 03: If we look at the claims themselves, it says at appendix 27, if we look at claim [00:17:51] Speaker 03: One, for example, if we go a little bit past the wherein clause, it says analyze an instance of a physical item using item analysis components. [00:18:00] Speaker 03: And then the next clause down says determine, using the unique signature, whether the instance of the physical item is previously reviewed. [00:18:07] Speaker 02: Let's review what the unique signature is. [00:18:10] Speaker 03: Well, I think that it applies to sort of anything is what they're talking about. [00:18:14] Speaker 03: So yes, it could be, if you're talking about a diamond, it could be any flaws or imperfections that would allow you to determine whether or not this is the same diamond. [00:18:23] Speaker 03: I think that they mentioned that it could be paintings. [00:18:25] Speaker 03: You might be able to tell brushstrokes. [00:18:26] Speaker 03: I guess it could be my watch. [00:18:28] Speaker 03: You could look at my watch and see how it is. [00:18:30] Speaker 03: But that's no different than any sort of other sort of ledger that you would do. [00:18:34] Speaker 03: by taking a look at an item and then recording it. [00:18:38] Speaker 03: But I think what's important here, just to take a step back, is all these claims do is they just recite components and then a result. [00:18:46] Speaker 03: They basically say, I think they pointed to claim two, even though they hadn't made any arguments about claim two, a spectral imager, a light source, a range scanner. [00:18:56] Speaker 03: And all those things are just components [00:19:00] Speaker 03: and that aren't actually saying that you're supposed to use them in any specific way. [00:19:05] Speaker 03: And that's what this court looks to when that's step one. [00:19:09] Speaker 02: There is a configuration of one of the processing devices. [00:19:13] Speaker 02: Do you see that? [00:19:15] Speaker 02: Which is we're in one or more of the processing devices operating to configure the network node. [00:19:26] Speaker 02: Yes. [00:19:26] Speaker 02: That's taking a conventional approach. [00:19:31] Speaker 02: and making a difference, I suppose. [00:19:35] Speaker 03: Well, I think that's just using the computer is all that's doing. [00:19:40] Speaker 03: And it's using the computer then to analyze. [00:19:43] Speaker 03: I think that clause that you're pointing to, Your Honor, is right before the analyze paragraph and then the determine paragraph and the record. [00:19:51] Speaker 03: And so all it's taking there is using a computer and then using it [00:19:57] Speaker 03: to basically get the images and then compare them on the blockchain. [00:20:01] Speaker 03: And I think that it's important here just to recognize that this is conceded that this is ordinary use of technology, because when you look at the specification itself, it talks about these various components at appendix 21, column eight, and it talks about, like, at around line 32, a spectral imager, [00:20:25] Speaker 03: And then it points down at the end of the paragraph, such measurements are described in the paper. [00:20:30] Speaker 03: And it cites a paper. [00:20:32] Speaker 03: And then it goes, laser projector and laser receiver at line 38. [00:20:38] Speaker 03: And then at the end of the paragraph, it says, such measurements are also described [00:20:42] Speaker 03: in the paper 3D imaging. [00:20:44] Speaker 03: So it's right there just talking about the ordinary use of technology to take these images. [00:20:53] Speaker 03: What this court has found, patents passing step one and step two, they are improving technology in some way. [00:21:02] Speaker 03: that they might be in DDR, they have a web page that is an unconventional way in which people were searching the internet because it doesn't direct you to a new website. [00:21:13] Speaker 03: When you have just the combination of equipment, like you had in cases like content extraction, which might be sort of interesting in the sense that it took a check, figured out the data in the check, and then could record data about the check, [00:21:29] Speaker 01: So what is your response to opposing counsel's argument that there needed to be some sort of discovery of actual development and that's why there shouldn't have been a grant of the motion dismissed on 101 grounds? [00:21:41] Speaker 03: Well, I think there's two problems with that argument. [00:21:43] Speaker 03: The first is they can't point to any allegations at all, or even the pages they pointed to are just basic broad statements about the tracer product. [00:21:54] Speaker 03: But they don't tie any of those statements to actual elements [00:21:57] Speaker 03: that would be elements of the claim. [00:21:59] Speaker 03: They would need to actually show that that was some sort of improvement of technology. [00:22:04] Speaker 03: Again, that gets me back to the fact that if you have an abstract idea, if you come up with an idea and that's a good idea, that doesn't mean that you're entitled to a patent on it if it's ineligible under section 101. [00:22:17] Speaker 03: And so that's why this court has said, like in SAP, something can be groundbreaking, but you still [00:22:22] Speaker 03: aren't entitled to have a patent under section 101 on it. [00:22:28] Speaker 03: And the second point I would make, Your Honor, on these additional allegations that they could conceivably make, which I don't know what they would be, the specification that I point to really sort of debunks any sort of notion that you could have allegations that would show that this would be an improvement upon technology itself, because they're just reciting the ordinary conventional technology [00:22:52] Speaker 03: And they're telling you to use it in the way in these prior publications used it and that they incorporated by reference. [00:23:00] Speaker 03: I think one example to point to is the 3D imaging that they've talked about in the brief. [00:23:06] Speaker 03: If we look at appendix 19, column 4 at line 38, [00:23:14] Speaker 03: It says, the diamond is then reoriented in virtual space through similar techniques and described in three... Sure, I'm sorry, Your Honor, I apologize. [00:23:27] Speaker 03: Column four, line 38. [00:23:29] Speaker 03: The diamond is then reoriented in virtual space, and it talks about this technique. [00:23:34] Speaker 03: And then at the end, it says, for some 3D graphical rendering techniques, reference may be had to, [00:23:40] Speaker 03: And then it cites a prior article that it incorporates by reference. [00:23:45] Speaker 01: What would you summarize as to what the claims are directed to and then also what is the alleged event of concept that they're calling? [00:23:55] Speaker 03: I mean, I think that the claims are directed to collecting, analyzing, and recording information. [00:24:01] Speaker 03: I mean, I think that that's very clear just from the words of the claim, and they don't provide any details about how you would do this in some sort of technologically improving manner. [00:24:11] Speaker 03: Your second question was, I'm sorry, Your Honor. [00:24:14] Speaker 01: What if any alleged inventive concept are they claiming? [00:24:18] Speaker 03: Well, I don't think that there is any inventive concept they're pointing to because they're just talking about using this technology precisely the way it had been used in the past. [00:24:27] Speaker 03: And when you look at this court's precedent where it's found [00:24:30] Speaker 03: an inventive concept like the cell spin case, for example, you talked about the unconventional use of technology where the connection between the camera and the mobile device allowed the camera then to be smaller because it didn't have to have all this network equipment that was loaded into it. [00:24:48] Speaker 03: That's not something that you could find here when you're just talking about the conventional use of this ordinary technology. [00:24:55] Speaker 03: And so I don't think that there was any inventive concept that they could have here. [00:24:59] Speaker 03: And they certainly don't have anything that's in the claims here. [00:25:02] Speaker 03: Because the claims effectively just recite these components and results without going into specific steps that would need to be taken. [00:25:11] Speaker 03: If the court has no further questions, we would ask the court to affirm. [00:25:27] Speaker 00: I think council is doing exactly what this court has told parties not to do. [00:25:37] Speaker 00: They're looking at every single individual element and saying, hey, you're just doing it the same way it used to be done. [00:25:47] Speaker 00: But that's not the analysis that should be done. [00:25:50] Speaker 00: The analysis is to look the invention as a whole. [00:25:54] Speaker 00: As a whole, this is the use of sophisticated components [00:26:00] Speaker 00: in a non-conventional, non-generic way that had never been done before. [00:26:07] Speaker 00: I point to appendix 19, column 3, line approximately 37 through the rest of that paragraph at lines 52. [00:26:17] Speaker 00: There was a discussion about how the blockchain had not been able to really be used [00:26:24] Speaker 00: for digital or for physical assets. [00:26:27] Speaker 00: This had never been done before because of the problems and the reasons I had stated earlier. [00:26:33] Speaker 00: To be able to then make, to accomplish that goal, to be able to have the item self authenticate or self provenance itself. [00:26:43] Speaker 00: and then to put that on the blockchain, not as a, to track a physical asset was unique, different, had never been done before. [00:26:53] Speaker 00: And to say that this patent doesn't provide details about how to get this done, the inventive concept, Judge Cunningham, that you were talking about, you know, I point to, [00:27:03] Speaker 00: And I will clearly admit some of this is way beyond my technological skill set. [00:27:08] Speaker 00: But I point to appendix 24 and 25, starting at column 13, line 40, all the way through column 15, line 37. [00:27:20] Speaker 00: That goes through excruciating detail of how this has to be done. [00:27:26] Speaker 00: And so this patent, this spec, which the court never looked at, never even talked about, in fact, the court never even looked at the, didn't even talk about the claims in its opinion, does go through the sufficient detail to provide for an inventive concept. [00:27:42] Speaker 00: And I see that my time is done.