[00:00:00] Speaker 01:
The first case for argument this morning is 22-1898, return mail versus United States.

[00:00:07] Speaker 01:
Mr. Fabricat.

[00:00:11] Speaker 02:
Good morning, Your Honors.

[00:00:12] Speaker 02:
May it please the Court?

[00:00:14] Speaker 02:
We're here on a motion for summary judgment, which was granted by the Court of Claims with respect to the issue of patent matter subject patentability under 101.

[00:00:28] Speaker 02:
And that's the only issue on this appeal.

[00:00:32] Speaker 02:
The court's obviously familiar with the fact that this case has been to this court previously.

[00:00:36] Speaker 02:
Went up to the United States Supreme Court on the issue of whether the government was a person that could institute a CBM proceeding.

[00:00:44] Speaker 02:
The case was reversed and vacated in order of vacating the prior decision of the Federal Circuit.

[00:00:50] Speaker 02:
And the case was remanded to the Court of Claims, where it began anew, where there was discovery

[00:00:57] Speaker 02:
And then ultimately, the government brought a motion for summary judgment.

[00:01:03] Speaker 02:
We believe that the court erred in granting the motion for summary judgment because we believe there were clearly factual issues remaining with respect under Burkheim to the very important factually intensive issues

[00:01:16] Speaker 02:
concerning specifically routine, conventional, well-known, and understood.

[00:01:22] Speaker 01:
Yes.

[00:01:22] Speaker 01:
Step one of Alice is a question of law, correct?

[00:01:24] Speaker 02:
It is a question of law.

[00:01:25] Speaker 02:
But I do believe, Your Honor, that there are factual issues which relate to step one.

[00:01:30] Speaker 02:
For example, I want to address step one first.

[00:01:34] Speaker 02:
Claims 42 and 44, which are the two claims that issue, are directed to a specific improvement in return mail processing technology.

[00:01:43] Speaker 02:
Now, if in fact they're directed not to the process of returning mail information is abstract.

[00:01:51] Speaker 02:
No one disputes that.

[00:01:52] Speaker 02:
That process is abstract.

[00:01:54] Speaker 02:
But this was an innovative and specific improvement and an application on how to do it in a way that had never been done before.

[00:02:02] Speaker 02:
And we think that is a factual issue underlying the question of law.

[00:02:07] Speaker 02:
Was there?

[00:02:08] Speaker 01:
What is that thing that was never done before that is included in the complaint?

[00:02:12] Speaker 02:
Yes, Your Honor.

[00:02:13] Speaker 02:
What was never done before are the steps of the claims, the elements.

[00:02:19] Speaker 02:
There had never been decoding of information on the mail item.

[00:02:25] Speaker 02:
And I'm not even getting into, Your Honor, what type of decoder or what kind of scanner.

[00:02:29] Speaker 02:
I'm talking about the steps of the claim itself.

[00:02:32] Speaker 02:
There had never been mail which was decoded

[00:02:35] Speaker 02:
And then sent for delivery.

[00:02:38] Speaker 01:
But you didn't invent decoding?

[00:02:40] Speaker 02:
No, Your Honor.

[00:02:41] Speaker 02:
But encoding and decoding had never been used in the process of providing return mail information.

[00:02:50] Speaker 04:
You're not the first one that put a barcode on a letter, right?

[00:02:54] Speaker 04:
Letter envelope.

[00:02:56] Speaker 02:
I believe we are the first one to put a barcode on a letter whose sole purpose

[00:03:03] Speaker 02:
was to provide returned mail information, the process of how you handle returned mail.

[00:03:08] Speaker 02:
And I think it's very important to understand, Your Honors, that in the prior art, in what was known, mail was all sent out for delivery.

[00:03:18] Speaker 02:
And there was a process by which

[00:03:21] Speaker 02:
The Postal Service would research to see whether before that mail was delivered, and we're talking about all the mail, whether before it was delivered, whether it should be diverted and not even attempted to be delivered.

[00:03:34] Speaker 02:
And that was a huge, very, very intensive process, looking at all mail to see whether there was a mail forward that had been submitted to the post office or other reasons why the mail couldn't be delivered.

[00:03:47] Speaker 02:
What this invention claims 42 and 44 of this patent do

[00:03:51] Speaker 02:
is all of the mail is sent out for delivery.

[00:03:56] Speaker 02:
None of it is researched by the Postal Service.

[00:04:01] Speaker 02:
Only when the delivery fails, which is a small subset of the universe of mail, are those failed items then brought to a facility and decoded to see

[00:04:16] Speaker 02:
What is to happen?

[00:04:17] Speaker 02:
What did the sender want to happen?

[00:04:20] Speaker 02:
So it's really not a question for step one of what kind of barcode encoder, what kind of decoder.

[00:04:28] Speaker 02:
It's the elements of this claim themselves, which created a process, by the way, which has been adopted by the United States Postal System as the most successful system for how return mail is handled.

[00:04:41] Speaker 02:
Return mail is an operating business.

[00:04:43] Speaker 02:
It's been operating for over 20 years.

[00:04:45] Speaker 02:
This is a business which they operate in competition with the United States Postal Service, who we believe is infringing the claims of the patent.

[00:04:53] Speaker 02:
And so on step one, we believe there are factual issues.

[00:04:57] Speaker 02:
In fact,

[00:04:59] Speaker 05:
Just so I understand, when you scan the barcode, there will be information there.

[00:05:06] Speaker 05:
And it could tell you that the sender, if there's an updated mailing address, whether the sender wants the updated mailing address.

[00:05:17] Speaker 05:
Is that right?

[00:05:18] Speaker 02:
That's one of the types of answers.

[00:05:20] Speaker 02:
The sender might want the updated mailing address.

[00:05:23] Speaker 02:
The sender might not want the updated mailing address.

[00:05:26] Speaker 05:
I guess what I'm wondering is, if

[00:05:29] Speaker 05:
If instead of a barcode printed on the envelope, what if it was just printing something else, some other signal?

[00:05:36] Speaker 05:
Like a smiley face.

[00:05:37] Speaker 05:
And the smiley face tells you, okay, this sender wants updated mailing information if it turns out that this particular piece of mail is undeliverable.

[00:05:48] Speaker 05:
and i think you know it is it it it's directed exactly on the issue the factual issue here i agree that if the mail item had something simple and they said it's nothing more than just communicating some kind of information there whether it's a barcode or some other indisha like a smiley face and and that you one would decode because you would understand you translate the smiley face to all right this person if this mail is undeliverable with like an updated address for the recipient

[00:06:19] Speaker 05:
Again, that kind of invention, would that be patent eligible?

[00:06:27] Speaker 05:
Because now I've stripped out any need for a scanner or a database or anything like that.

[00:06:37] Speaker 02:
I think there's a step one question and a step two question both contained in what you asked.

[00:06:42] Speaker 02:
I think for step one... What I'm asking is,

[00:06:45] Speaker 05:
is a non-computer implemented version of this method of updating mailing addresses patent eligible?

[00:06:56] Speaker 02:
I think if there were absolutely nothing which was part of this invention other than what a human could put on that and what a human could read with their own eyes without having to decode something which is data and something a human mind is not capable of performing,

[00:07:15] Speaker 02:
OK, then I don't think there would be a specific improvement of the abstract concept.

[00:07:21] Speaker 01:
But you didn't invent decoding.

[00:07:22] Speaker 01:
So are you suggesting that as a matter of law or fact that decoding somehow, because it's an electronic term, makes the difference between eligibility and ineligibility?

[00:07:34] Speaker 01:
Because I recall we got a lot of cases in 101 that involved electronic stuff.

[00:07:40] Speaker 01:
And that hasn't been the way to save a claim from ineligibility.

[00:07:45] Speaker 02:
I think it matters what the decoding is being done for.

[00:07:49] Speaker 02:
In some applications that are unrelated to return mail, it may very well be just part of an abstract idea or concept.

[00:07:57] Speaker 02:
But here, the entire, taken as a whole, Claim 42, the elements of the claim

[00:08:03] Speaker 02:
lay out a procedure, a process, a method that had never been done before.

[00:08:07] Speaker 05:
But we agreed just a few minutes ago that a human implemented version of this claim method would not be patent eligible.

[00:08:15] Speaker 05:
It would just be an abstract idea of a process of updating mailing address information.

[00:08:22] Speaker 05:
So then the next question is, OK, well, does a computer-implemented version of that same set of steps all of a sudden make it patent eligible?

[00:08:31] Speaker 05:
And I think we've said many times that simply doing an otherwise ineligible process on a computer is not good enough.

[00:08:41] Speaker 02:
I think it depends on what the human... You gave an example of a smiley face.

[00:08:45] Speaker 02:
I don't think it's as simple, and I don't concede that anything that a human could put on there

[00:08:51] Speaker 02:
or anything that a human could read would take it, would put it within this abstract concept idea.

[00:08:58] Speaker 02:
Because there's more to the claim.

[00:09:00] Speaker 02:
There's more to the process and the method than that.

[00:09:03] Speaker 03:
Was there a claim construction of any of the terms, like decoding, encoded, and so on?

[00:09:13] Speaker 02:
There was a claim construction hearing.

[00:09:17] Speaker 02:
And at the claim construction hearing,

[00:09:19] Speaker 02:
The judge made clear that certain terms were electronic.

[00:09:21] Speaker 03:
Well, certain are, toward the end of the claim, are expressly electronic.

[00:09:26] Speaker 03:
That's not in dispute.

[00:09:28] Speaker 03:
I'm asking about the steps before that, right?

[00:09:30] Speaker 03:
Sending an email saying, here's the new address.

[00:09:34] Speaker 03:
That would be electronic.

[00:09:35] Speaker 03:
And the last, I guess, penultimate claim element says electronically transferring the sender information.

[00:09:41] Speaker 03:
And there's one about on a network.

[00:09:44] Speaker 03:
What about the coding decoding?

[00:09:47] Speaker 03:
Did that have a claim construction, or was one requested?

[00:09:51] Speaker 02:
The judge stated in the claim construction order that decoding was an electronic.

[00:09:57] Speaker 02:
was decoding was electronic.

[00:09:59] Speaker 02:
That is stated in the claim construction order, which is part of the record in this case.

[00:10:06] Speaker 02:
And so we have its appendix 1948, where the court states that the electronic terms decoding and electronically transmitted are used.

[00:10:20] Speaker 02:
So I think the one that really matters here that wasn't

[00:10:23] Speaker 02:
really addressed by the Court of Claims.

[00:10:26] Speaker 02:
In fact, the Court of Claims did something different.

[00:10:28] Speaker 02:
The Court of Claims talked about how a human could decode.

[00:10:32] Speaker 02:
And it was actually inconsistent with the words used in the claim construction language is that decoding is an electronic term.

[00:10:39] Speaker 02:
And electronic term, and now particularly with respect to the issues raised by the second step,

[00:10:45] Speaker 01:
uh... if the coding as we believe is an electronic term humans are capable of decoding the types of information that are involved with uh... so you're saying that eligibility is determined if you have an electronic term even though you didn't invent decoding but because it's electronic a human can't perform it and therefore it's eligible under 101 is that your argument?

[00:11:09] Speaker 02:
No, Your Honor, on step two, where we get into the arguments and the factual analysis with respect to a person of an ordinary skill in the return mail field back at the time of the application, was it well understood, conventional, or routine

[00:11:28] Speaker 02:
to do the steps, including decoding, which are set forth in the claims.

[00:11:34] Speaker 02:
And we believe that was a factual analysis.

[00:11:37] Speaker 02:
Obviously, experts on both sides.

[00:11:39] Speaker 02:
We had an esteemed expert, a senior professor, more than 30 years' experience, who explained in detail in his declaration why those steps of the claim 42 and 44 were not, at the time, well-known, understood, and routine.

[00:11:57] Speaker 01:
You're into your rebuttal, so I'm going to hear from the other side.

[00:11:59] Speaker 02:
Yes, Your Honor.

[00:12:00] Speaker 02:
Thank you, Your Honor.

[00:12:10] Speaker 00:
May it please the Court.

[00:12:12] Speaker 00:
What Return Mail Inc.

[00:12:14] Speaker 00:
RMI is asking you to do is to put aside this Court's precedence and admissions in the specification, intrinsic evidence,

[00:12:25] Speaker 00:
and focus on what their expert says, extrinsic evidence.

[00:12:29] Speaker 00:
Now, to the specific points that my colleague mentioned, first of all, the first issue about whether decoding, irregardless of whether decoding is done by a person or a computer, the notion of decoding data that represents what the person, what the sender, what the subscriber chose

[00:12:53] Speaker 00:
what they chose is not an inventive step.

[00:12:58] Speaker 00:
It cannot be an inventive step.

[00:13:01] Speaker 00:
There are two relevant cases that stand for that proposition.

[00:13:05] Speaker 03:
Just at the threshold, which you just adverted to, do you have a view about whether the encoding, decoding language in claim 42

[00:13:16] Speaker 03:
does, is restricted to some sort of electronic process?

[00:13:22] Speaker 00:
It is not.

[00:13:23] Speaker 00:
And I will point the court to the appendix 19D.

[00:13:29] Speaker 00:
The claim construction.

[00:13:30] Speaker 00:
Sorry, what?

[00:13:30] Speaker 00:
The appendix 1933.

[00:13:31] Speaker 00:
1933, OK.

[00:13:33] Speaker 03:
1948 is actually about different claims, but something.

[00:13:37] Speaker 00:
It is correct.

[00:13:38] Speaker 00:
And it was in the context of a different claim, claim 39, that the court said the return mail service provider of claim 39 is an electronic term because it does things such as the electronic term.

[00:13:53] Speaker 03:
And in 1933, the decoded data is just information converted into usable form.

[00:13:58] Speaker 00:
Actually, those are the two competing constructions that the parties put forward.

[00:14:02] Speaker 00:
So neither party specifically sought a construction seeking an electronic decoding.

[00:14:08] Speaker 00:
And the specific site in the record is, I believe, 1951 to 1953 is where the court analyzes the decoding term as it appears in Claim 42.

[00:14:21] Speaker 00:
And there it concludes on 1953.

[00:14:25] Speaker 00:
simply construing decoding to be deciphering information into a usable form.

[00:14:31] Speaker 00:
That would include the example of understanding that a smiley face means I want this or I don't want this.

[00:14:37] Speaker 00:
Now, just based on this court's precedence, we would submit that Recogamy Corp and Secured Mail stand for the proposition that encoding a user request, whether it is I want updated information or something else, is

[00:14:56] Speaker 00:
is a generic conventional use of the abstract idea of encoding and decoding.

[00:15:01] Speaker 00:
Recogny Court refers to ordering by a numbering system at a fast food restaurant.

[00:15:06] Speaker 00:
In secured mail, there was a case that issued after this court's prior return mail case.

[00:15:17] Speaker 00:
There, one of the sets of patents

[00:15:20] Speaker 00:
included in a fixed marking that related to the sender, the receiver, and the shipping method.

[00:15:26] Speaker 00:
The shipping method is akin to a service type, whether you want a return receipt, a delivery confirmation, or an updated address.

[00:15:35] Speaker 00:
So just based on these court's precedents, that cannot give birth to an inventive concept.

[00:15:49] Speaker 01:
Your friend, as I think you point out in your brief, they use the term ordered combination 25 times in their brief.

[00:15:55] Speaker 01:
What do you understand them to mean by ordered combination?

[00:16:00] Speaker 00:
We agree that in step two, you look at the limitations individually and you look at them as an ordered combination.

[00:16:07] Speaker 00:
they've never specifically cited this is a method claim and method claims we do not presume any specific ordering unless there's a claim construction that states as much or that there's something inherent in the claim there's some logical or grammical reason to think so one of the points that they make on their step two analysis is the idea of decoding after an attempted

[00:16:35] Speaker 00:
a failure to deliver.

[00:16:38] Speaker 00:
What the parties are referring to as 42C must happen after 42B.

[00:16:44] Speaker 00:
We do not read the claim to be that narrow.

[00:16:47] Speaker 00:
But even

[00:16:47] Speaker 00:
So we do not read.

[00:16:49] Speaker 01:
Assume it was.

[00:16:50] Speaker 01:
Assume there was some sequence.

[00:16:53] Speaker 00:
Sure.

[00:16:54] Speaker 00:
Even if the claim was to be read in the order in which it is written, where the steps 42A through 42G happened serially, that is a conventional routine ordering.

[00:17:08] Speaker 00:
We can look at it.

[00:17:09] Speaker 00:
First of all, 42A is similar to the first step in secured mail, where you're having a mail piece with a destination address and it encoded data on it.

[00:17:22] Speaker 00:
Then, the next step is something that's always happened.

[00:17:26] Speaker 00:
As long as the Postal Service has delivered mail, there's been an undeliverable mail.

[00:17:34] Speaker 00:
42C,

[00:17:40] Speaker 00:
42C, the step of decoding that data after you recognize that there is an undeliverable mail is a simple, is the natural thing to do.

[00:17:54] Speaker 00:
You're not going to want to, you don't need to

[00:17:58] Speaker 00:
determine what the user's request is for undeliverable mails if the mail has been delivered properly.

[00:18:06] Speaker 00:
So there's no need to do 42C before 42B.

[00:18:10] Speaker 00:
It's more natural.

[00:18:11] Speaker 00:
You're analyzing, you're decoding the relevant subset.

[00:18:19] Speaker 01:
like it would have been obvious to do this in this sort of sequence.

[00:18:23] Speaker 01:
And we're not dealing with obvious sequences.

[00:18:26] Speaker 00:
In addition to being obvious, we also think it's conventional and routine to identify the relevant subset.

[00:18:31] Speaker 00:
And that's what 42C is doing after the placement of 42C, after the placement of 42B.

[00:18:37] Speaker 00:
That's what's happening there.

[00:18:39] Speaker 00:
And then steps of 42D and E are the processing of that, which are akin to the authenticating that happened in the secured mail.

[00:18:46] Speaker 00:
Once you get the mail piece

[00:18:48] Speaker 00:
In secured mail, you'd authenticate it by comparing the barcode with what you had stored previously and match it here.

[00:18:56] Speaker 00:
You're decoding the user's request and determining what the person wanted.

[00:19:02] Speaker 00:
And then the last two steps are just conventional post-processing steps that you're fulfilling the user's request.

[00:19:10] Speaker 05:
I suppose if all of these steps really amount to an abstract idea, any aspect that's

[00:19:18] Speaker 05:
being computerized is just the mere invocation of a generic computer to perform that abstract sub-step, then it doesn't really matter whether any given step or any sequence of any of these steps is, quote-unquote, conventional well-understood routine.

[00:19:38] Speaker 00:
That's correct.

[00:19:39] Speaker 00:
And the step two analysis, when you're looking at

[00:19:46] Speaker 00:
whether something is routine, conventional, and well-known, you don't necessarily look at, this is to echo what you're saying, you don't necessarily look at whether a computer doing that was routine, conventional, and well-known if there was a human analog to it.

[00:20:03] Speaker 00:
And that there certainly was.

[00:20:05] Speaker 00:
The specification explains how in the past people would

[00:20:13] Speaker 00:
receive return mail, then they would search, they would try to determine what the reason is for it, that it failed delivery.

[00:20:22] Speaker 00:
They would look at databases and then they would use that.

[00:20:26] Speaker 00:
Now what they added here is an encoded data on top of that.

[00:20:29] Speaker 00:
That is simply used to make the

[00:20:32] Speaker 00:
computer can have that data where it can be in claim 42 it's what does the user want in claim 44 it's also what is the destination address by storing the what is the the original destination address or what is the intended destination address in a coded way where you can quickly capture that and you can use it for further processing quickly that's the point that's what that's that's what this patent

[00:21:04] Speaker 00:
That's what the patent discusses, but that is simply using computers which always operate on encoded data.

[00:21:11] Speaker 00:
And it's using that in that normal sense.

[00:21:18] Speaker 00:
If there are no further questions, I'll see the balance of my time.

[00:21:34] Speaker 02:
Your Honor, with respect to the issue of the meaning of decoding, while it's true in the claim construction that was with respect to a different set of claims, no one specifically asked for claim 42 or 44 what the term decoding meant.

[00:21:49] Speaker 02:
The judge in his claim construction order says that decoding and transmitting are electronic terms.

[00:21:56] Speaker 02:
And I don't think that there's a sound argument that once the court

[00:22:01] Speaker 02:
concludes that these are electronic terms, that they should be any differently determined or construed with respect to other claims that use the same word.

[00:22:09] Speaker 02:
So I do think the court made clear that this was electronic.

[00:22:13] Speaker 02:
And I do think the court ignored that when the court looked at the intrinsic record to determine whether or not some judgment was appropriate.

[00:22:23] Speaker 02:
With respect to the ordered combination of claims here, it is impossible to read claim 42 as an example.

[00:22:31] Speaker 02:
and not perform the steps in order.

[00:22:33] Speaker 02:
And I mean, it's inherent.

[00:22:36] Speaker 02:
Because obviously, unless you encode first, and the encoding is on the mail piece, you can't decode.

[00:22:43] Speaker 02:
And once you decode, and the claims require this, then the decoded data creates output data.

[00:22:51] Speaker 02:
So it has to happen in that sequence.

[00:22:53] Speaker 02:
You have to have encoded mail.

[00:22:56] Speaker 02:
You have to have it identified as undeliverable, because that's what this entire invention, and that's the only thing this entire invention addresses.

[00:23:05] Speaker 02:
And then it's decoded and creates output data.

[00:23:08] Speaker 02:
So the combination here is the invention, and I don't think

[00:23:13] Speaker 02:
While it's true that there was no request in claim construction that the court deemed this an ordered combination, it's inherent in the elements, the six elements of the claim itself, that they can't really be done in any other way.

[00:23:26] Speaker 02:
And therefore, and this is, I think, the heart of my argument, and that is when you look at the elements of this claim 42 and 44, those elements are what was not previously known

[00:23:42] Speaker 02:
conventional, performed in the return mail industry.

[00:23:48] Speaker 02:
A person at the time, and we're talking about 1997, was the date of the prior process prior to this filing of the patent application.

[00:23:58] Speaker 02:
It had never been done.

[00:24:00] Speaker 02:
In one sentence, can you just articulate the inventive concept here?

[00:24:04] Speaker 02:
Yes, sure.

[00:24:05] Speaker 02:
The inventive concept was finding a solution to

[00:24:12] Speaker 02:
returned mail information from just a subset of all of the mail that is sent out for delivery.

[00:24:20] Speaker 02:
And these elements tell you how to do that.

[00:24:22] Speaker 02:
And they give you a process, a method for how to do that.

[00:24:25] Speaker 02:
Previously, all the mail had to be researched.

[00:24:28] Speaker 02:
millions upon millions of pieces at a great expense.

[00:24:31] Speaker 05:
I'm just looking for one sentence on what it is.

[00:24:34] Speaker 02:
Well, yes.

[00:24:36] Speaker 02:
In any event, to me, that is what the inventive concept is.

[00:24:39] Speaker 02:
And I think the problem here was, by taking it away from return mail on summary judgment, we never had an opportunity for a trial where the experts would testify live, where the witnesses would appear live, where they would be subject to cross-examination, where we would have

[00:24:55] Speaker 02:
the best evidence with respect to what was done previously, whether or not this was a specific improvement to what had been done previously, to the abstract concept.

[00:25:06] Speaker 02:
And then moving to step two, all of the things which make up these elements, which we believe each one of them.

[00:25:12] Speaker 02:
Yes, did encoding exist in the abstract?

[00:25:16] Speaker 02:
Of course it did.

[00:25:17] Speaker 02:
Did decoding exist in the abstract?

[00:25:20] Speaker 02:
Of course.

[00:25:21] Speaker 02:
But it never existed together in combination

[00:25:24] Speaker 02:
in sequence in the return mail industry.

[00:25:28] Speaker 02:
And this has been a giant cost savings for the United Postal Service, for the US Postal Service.

[00:25:35] Speaker 02:
It went from over $1.50 or so per piece of mail to determine what to do with undelivered mail down to a fraction of a penny.

[00:25:43] Speaker 02:
That's the invention.

[00:25:45] Speaker 02:
That's the inventive concept.

[00:25:47] Speaker 01:
Time is up.

[00:25:48] Speaker 01:
Thank you.

[00:25:49] Speaker 01:
Thank you both sides in the case system.