[00:00:00] Speaker 00:
The next case for argument is 24-1280, Surge Tech versus Google.

[00:00:07] Speaker 00:
Mr. Bollinger, good morning.

[00:00:12] Speaker 02:
Please proceed.

[00:00:12] Speaker 02:
Good morning, and may it please the court.

[00:00:15] Speaker 02:
My name is James Bollinger, and I'm counsel for Surge Tech in this case.

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It involves a group of patents in district court that were found to be endowed on eligibility grounds and all

[00:00:29] Speaker 02:
invalidated on year 12, 12C.

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The patents include claims and an advanced computer network that is involved in architecture for managing online bookings for transportation services.

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It provides an inventive interface layer that sits between vendors of online transportation services

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and a group of what's called distribution channels.

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It is, in fact, an intelligence layer because of the programming logic that is embedded in it that allows for the management functions that the layer provides.

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Claim convention is not, however, a computer-implemented abstract idea.

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The technical improvement here is revealed by computing.

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Well, a computer is central to what you call as the architecture.

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Exactly.

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Yes.

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So you get a computer.

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And you have a computer.

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Yes.

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and in fact, a specially programmed computer to manage the interactions between the two networks that it's involved in communicating to the vendors on one side and the distribution channel.

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It's a generic computer.

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It is.

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It is a computer that has a capability that is not itself part of any invention here.

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So I'm not sure if it was a generic computer.

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It was a computer that existed at the time.

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Right.

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Just to be clear, it's just a regular computer.

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Well, it had special IO interfaces, and it also included a relational database that allowed for real-time communications between the various parties that were involved in the transactions that this computer manages.

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Just to continue on that point, what you just said is basically true of

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all of the computer-assisted, network-assisted cases that we have repeatedly found in the absence of anything else.

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All computers are specially programmed.

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And lots and lots of them have relational databases like Excel, which I think the patent here refers to.

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I didn't see anything in the claims that say,

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Here is some new kind of internal functioning of the computer that something other than something, you know, off-the-shelf computers can be programmed to do, including what appears on a screen, and keep a relational database, keep a record of

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how many sales are coming from, you know, Connecticut and how many are coming from Texas and figure out, boy, it looks like Texas, one goes up like this and the Connecticut goes down like this.

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So put more of the product into Texas, which is, that's what this patent is about, right?

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This patent is about that, but it's also about the magic that the program does provide to the various elements in the computer network.

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And it allows for

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communications at real-time network speeds and responses to those communications in real time also.

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And that turns out to be critical in this case.

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And that's why, while I don't think that there are any specialized components, there's a number of this court's decisions that recognize that the invention relied, was resided in the software and the manipulation of those

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standard off-the-shelf components.

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I'm not sure that that really properly describes the components here under a little 12 motion that existed in 2007.

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So remember, in 2007, Netflix was still delivering

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DVDs by mail.

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The iPhone had just been released.

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This is an appreciable time in the world, certainly in networks and network design.

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And there's a number of cases since then where this court has recognized distributed networks and monitors and things like that that are in those networks.

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That may be true, but the principle or the doctrine of supply and demand, that's been around for ages.

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more than ages.

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And in fact, that was one of my points that I wanted to raise today.

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And I'm glad you asked it, because we disagree with the notion that supply and demand is an abstract idea.

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The principle of supply and demand extends from Adam Smith's work in The Wealth of Nations from 1776.

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It is a probably the most important economic principle.

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It stands there next to gravity and maybe even perhaps relativity to suggest that... And you're not claiming that principle, right?

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We're not claiming anything to do with the principle.

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But we do, just like we're inventing that's what it's directed to.

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You're not claiming that, but the invention's directed to supply and demand.

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It is not directed to supply and demand.

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It is directed to managing online bookings by tracking what's happening in individual distribution channels.

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And whatever happens to those individual distribution channels,

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Whatever forces are at play there, this picks up and then adjusts pricing and adjusts inventory based on those changes.

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Now it could be one of those distribution channels.

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It seems to me you've just described what supply and demand is about.

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I disagree with that.

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I will say it's supply and demand forces are at play whenever there's a free market at the end of that distribution channel, and they're selling and buying and transacting these transportation services.

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There's no question about that.

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But what if there's a denial of service at one of those distribution channels?

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If there's a denial of service at that distribution channel, it shuts down.

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Inventory is moved to other channels immediately.

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Is that supply and demand?

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No, that has nothing to do with supply and demand.

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That is an artificial event that this system compensated for and therefore it's relying on.

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So I kind of look at other technologies.

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Crystal growth.

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It relies on gravity.

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You do crystal growth in a gravitational field.

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You rely on gravity so that the crystals grow a certain way, but they're not in any way directed to gravity.

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That's not part of it.

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And so my point here is that because of the breadth of the alleged abstract idea,

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It's impossible, unless you are doing like Morris's claim, you know, communicate by electromagnetic means, by any electromagnetic means.

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That's not here.

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And in fact, it's so attenuated from supply and demand, other events play a huge role in how the sales data is collected and processed afterwards.

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And so my thought on that is,

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The one point I wanted to make is that these techniques are part of this claim.

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our technological nature, and the way we know that is because what was done before was essentially useless.

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They had no interface to the distribution channels that was effective.

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The patent – the only evidence on this is the patent itself, and it describes them as being practically impossible to manage and based on ad hoc rules.

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That's it.

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That's all we know about how

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vendors, and they talk about hotels and short-term accommodations as being the principal example, would move inventory into the marketplace of, and the other, who knows how they did it?

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It was probably email or by telephone in 2007.

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Blocks of time.

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It looks like to me that the way this patent talks about hotels, big blocks of, and locked in, that it couldn't do.

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It couldn't make adjustments to price, or at least there's no evidence that they did that.

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They had no ability to – the record doesn't show any ability in the prior art to manipulate inventories within individual channels, and there's no ability to

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to actually accumulate information about what your competitors are doing and using that aggregated data and deciding what to do with your pricing.

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And the fact is that the system does that.

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It does receive composite information from multiple channels on how things are working in each channel for a number of vendors.

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No way they had any ability to do that before.

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And that's a powerful, robust data stream that now is controlling how those vendors' inventory is being moved into the distribution channel.

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So using, and I appreciate that it seems like,

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The idea here is that – How about you go to step two?

[00:10:11] Speaker 02:
Yeah.

[00:10:12] Speaker 02:
Let me just do one thing, and then I'll go right to step two.

[00:10:14] Speaker 02:
All right.

[00:10:15] Speaker 02:
The step – the one thing on step one I wanted to address is two things, really.

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The first is that the benefits I talked about, they – it can detect surges in distribution channels, which could never have been done before and is incredibly powerful, as Uber demonstrates every day.

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It can also –

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be scaled to hundreds, if not thousands, of distribution channels, which was impossible before.

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And while the district court judge recognized that, the district court concluded that it's not in the claims.

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But the reality is that this court has a number of times identified benefits from computer software that wasn't in the claims, yet led to

[00:11:01] Speaker 02:
eligibility.

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And the one I'd point out is the Amdocs case, as an example.

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There's several others, the SRI case and others that did the same thing.

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Now, we do have claim construction concerns.

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We think that the district court made some mistakes and didn't apply to claim construction as we proposed.

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And I'm more than able to answer questions about, real-time, how important it is here.

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And there's been some recent cases, the cooperative case by this court, suggesting that, in certain circumstances, real-time processing, not only is it important, it's critical for what's being attended to.

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The other one is the distribution channel.

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And then the last one is means plus function claims, where the district court dismissed them as more broad than the generalized statements that were in the claims.

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I wanted to clarify one thing.

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The parties had resolved their dispute as it related to the scope of those claims.

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The only thing left on means by function that was debated is whether they were indefinite.

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So that's why they were withdrawn from the claims construction debate.

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They aren't withdrawn from eligibility, as defendants have suggested.

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On step two, we're obviously arguing there's a number of points we could make.

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In time, I would point out that in step two, everything in step one, all those capabilities, I think, are critical.

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But more importantly, it's the ordered combination.

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And their arguments, they have to bring the proof.

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And in 2007, there's no indication they're able to satisfy that burden of proof with what they contain.

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are these generic terms that are used in the patent describing systems that have existed, and combination systems.

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On the idea of an ordered combination, their response is basically, it's logical.

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And with that, I'll reserve the rest of my time.

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If you have any questions.

[00:12:55] Speaker 02:
Thank you.

[00:12:55] Speaker 02:
Thank you.

[00:13:09] Speaker 02:
Good morning.

[00:13:11] Speaker 02:
May it please the Court, Mark Ryder for Uber Technologies.

[00:13:15] Speaker 02:
There's a lot to respond to there, but I think that this case really boils down to very, very simple principles.

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One, I heard counsel at the beginning say that this was not an abstract idea just implemented on a computer.

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It is.

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It was.

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Your Honor's asked about whether there was anything

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in the patent or whether these were generic computers.

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And if we look at the 598 patent, Appendix 52, what is the definition of computer that's in the patent?

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Any apparatus capable of carrying out data processing functions and includes computer systems, smartphones, tablets, other handheld devices.

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Server is another aspect that allows the main computer in Figure 1 to be connected to the internet or to the other computers.

[00:14:08] Speaker 00:
That doesn't answer the question, however, does it, about whether there's some technological improvement?

[00:14:14] Speaker 02:
I think it does, Your Honor, with respect, because there is nothing in the patent, there's nothing in the specification that says these are special computers, that there is any advancement in these computers that are used in a different way.

[00:14:26] Speaker 02:
For example, we heard about Amdocs just a moment ago.

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Amdocs, the claim had an enhancement in it.

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There is nothing in the claims here that talks about a computer with any kind of enhancement,

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or any kind of technological difference other than using the definition that is in the specification.

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And with respect to server, it's even broader.

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Any other data processing apparatus.

[00:14:50] Speaker 02:
We were talking about generic computing systems that were available in 2007 with nothing in the specification that says that these are in any way special, in any way program special, or do anything special.

[00:15:05] Speaker 02:
And when you talk about the databases,

[00:15:08] Speaker 02:
are stored in these generic computers.

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They're just generic databases, relational databases.

[00:15:14] Speaker 02:
And the specification goes on to say, well, we can look at Excel, for example, at appendix 38, again, looking at the 5, 9, 8 pattern.

[00:15:23] Speaker 02:
So when we talk about whether or not there's anything, and I know I've kind of skipped to step two, but when we talk about whether there is anything really unique or technologically different here, there is not.

[00:15:34] Speaker 02:
And we can just look at the specification.

[00:15:36] Speaker 02:
We can just look at the intrinsic evidence, and we see that.

[00:15:40] Speaker 02:
When we talk about going back to step one, is this about an abstract idea?

[00:15:46] Speaker 02:
Is this about supply and demand?

[00:15:48] Speaker 02:
Well, we can look at the 999 patent at appendix 71, the second paragraph of the first column.

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It will be appreciated that the efficient selection of channels for such inventory can allow vendors to achieve a selling price that corresponds with demand.

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for the inventory.

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In this way, an optimum price and supply of the inventory in each channel is achieved.

[00:16:15] Speaker 02:
It's about supply and demand.

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Says that right in the background of the invention.

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And we go to the prosecution history, Appendix 691.

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And when we look at the parent application, and the applicants at that point were trying to overcome a reference called remit that the examiner had identified.

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What the applicant said is, this principle is in contrast, the principle being the prior art, is in contrast to the presently claimed subject matter, which adjusts the price or adjusts the number of allocations to an extent that is dependent on comparison between certain sales characteristics or parameters.

[00:16:55] Speaker 02:
In other words, the applicant says, the adjustment is governed largely by supply and demand.

[00:17:03] Speaker 02:
This patent is all about

[00:17:05] Speaker 02:
supply and demand.

[00:17:06] Speaker 02:
It's all about doing it on generic equipment.

[00:17:09] Speaker 02:
And we can take it and look at it in a different way as well.

[00:17:14] Speaker 02:
It's also about data collection.

[00:17:15] Speaker 02:
We talked about this in our briefs, is that you can look at this in one of two ways.

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We have the abstract idea, the fundamental economic principle of supply and demand implemented in a very logical way.

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Or we can also look at data collection.

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And we see that in

[00:17:34] Speaker 02:
their opening brief at page six, they talk about aggregating data, analyzing that data, and spitting new data out.

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No different than what was seen in Parker v. Flute, for example, in the Supreme Court years ago.

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And what we see in Trinity, and we see in electric power, is taking data, collecting data, doing some algorithm on that data, and then spitting new data out.

[00:17:56] Speaker 02:
And we didn't hear anything about performance indicator.

[00:18:00] Speaker 02:
We heard a little bit about how

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the system purportedly can adjust for things, but the claims don't tell us how.

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And the district court was correct to point that out.

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There is no definition of performance indicator that tells us how.

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And in fact, what's really interesting about this, because that is, I think, what search takers said both below and here, that the performance indicator lets this detection and this adjustment happen.

[00:18:29] Speaker 02:
The definition of performance indicator below was indicator of performance.

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That was it.

[00:18:35] Speaker 01:
So and then – What about the means plus function claims?

[00:18:41] Speaker 02:
So first on claim construction, we believe there was a forfeiture.

[00:18:46] Speaker 02:
After district court, there was never any argument that claim construction mattered.

[00:18:51] Speaker 02:
Very beginning of their brief, they say claim construction should occur, but they don't point out any specific term.

[00:18:57] Speaker 02:
And particularly, the means of dysfunction terms, as you said, Judge Durante, nothing about that matters.

[00:19:04] Speaker 02:
So there is a forfeiture below.

[00:19:07] Speaker 00:
And here, they- Didn't the court adopt- I'm just messing this up with another case.

[00:19:12] Speaker 00:
I thought the court ultimately adopted their claim to instruction.

[00:19:15] Speaker 02:
The court, yes.

[00:19:16] Speaker 02:
The court said that Judge Williams in Delaware said, I've looked at their construction, and it doesn't matter.

[00:19:23] Speaker 02:
It doesn't help them.

[00:19:24] Speaker 02:
And at Appendix 15, Footnote 5, he does say, looking at their construction, for example, of distribution channel, it's even broader than Uber's construction.

[00:19:35] Speaker 02:
So what he said is, I've looked at it, and he had the benefit, unlike many other cases that are ruled on 12C, he had the benefit of all the claim construction briefing.

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And hours and hours, we took many hours of claim construction argument.

[00:19:49] Speaker 02:
He took all of that, and he said, they haven't shown me anything that makes a difference

[00:19:53] Speaker 02:
I've looked at their construction, and it doesn't help them.

[00:19:56] Speaker 02:
So whether or not, Your Honor, he actually adopted it, he took it into account, he recognized it, and he said, they haven't told me how it helps.

[00:20:04] Speaker 00:
Well, now you can answer Judge Taranto's question about means plus function.

[00:20:07] Speaker 00:
OK.

[00:20:07] Speaker 02:
Well, I thought I had answered it, but if not, I apologize, is that they didn't, in the same respect, they didn't raise it below, and they haven't identified how it makes a difference.

[00:20:18] Speaker 02:
And if we look at examples, for example, the performance indicator, again, I was using that.

[00:20:23] Speaker 02:
Their definition of performance indicator on the means for determining a performance indicator was literally, well, virtually the entire patent.

[00:20:34] Speaker 02:
We look at appendix 646 and 647, which is where they have their construction of the means for determining a performance indicator.

[00:20:42] Speaker 02:
And that was columns three, four, five, six, seven, eight, nine, to 10, 13, 14, many of the tables, and almost all of the figures,

[00:20:54] Speaker 02:
And as the district court explained, and then they tacked on at the end an equivalence thereof.

[00:20:59] Speaker 02:
So they didn't identify anything specific in the means terms.

[00:21:03] Speaker 02:
We look at the Accenture case, for example, and look at the means terms here, the means claims.

[00:21:09] Speaker 02:
We have claim one of the 598 patent that talks about all very functional language process or linking and allocating and so on and so forth.

[00:21:19] Speaker 02:
And the only thing that we see in claim 21, which has a means, this is means for

[00:21:24] Speaker 02:
allocating means for linking.

[00:21:27] Speaker 02:
There's no difference here.

[00:21:28] Speaker 02:
And so what this court has said in Accenture is the eligibility issue doesn't turn on how one drafts the claims.

[00:21:36] Speaker 02:
One has to look at what the claims actually say.

[00:21:38] Speaker 02:
One has to look at what's incorporated within those claims.

[00:21:42] Speaker 02:
And the means plus function terms here don't help, so to speak, because they haven't identified neither at the district court nor to this court where, in those terms, they make a difference.

[00:21:53] Speaker 01:
We heard a little bit about just to see if I'm thinking along the right lines.

[00:22:01] Speaker 01:
So on the one that you spoke about, the performance indicator with the extremely extensive reference to the spec,

[00:22:13] Speaker 01:
The right 101 inquiry would be that it's obviously not the case that the means is a combination of everything that's in that spec and, in fact, covers multiple individual things that are in the spec.

[00:22:32] Speaker 01:
And as long as some of that is itself abstract, then the claim fails.

[00:22:41] Speaker 02:
I think I understand your question.

[00:22:47] Speaker 01:
You said that the claim construction position on that particular means referred to, I don't know, a dozen or 13 different columns, not consecutive.

[00:22:59] Speaker 01:
There's a break in there.

[00:23:01] Speaker 01:
And suppose all of that said,

[00:23:06] Speaker 01:
Suppose those 12 columns said you have to do this and this and this and this and it went on for a very very long time then there would be a single means now that might start to get very concrete Which would help them on their 101 position?

[00:23:27] Speaker 02:
It might, but it doesn't here.

[00:23:30] Speaker 01:
Because it's not written as do this, and this, and this, and this.

[00:23:34] Speaker 01:
It says do this, or this, or this.

[00:23:36] Speaker 01:
You can do this.

[00:23:37] Speaker 01:
You can do these other things.

[00:23:39] Speaker 01:
And as long as in that group is something, standalone something that is abstract, then the claim covers, even that means false function claim, covers something abstract.

[00:23:51] Speaker 02:
Correct.

[00:23:51] Speaker 01:
Yes.

[00:23:52] Speaker 02:
I just wanted to get the logic.

[00:23:53] Speaker 02:
Right.

[00:23:54] Speaker 02:
Yes.

[00:23:56] Speaker 02:
That's actually absolutely right.

[00:23:58] Speaker 02:
I pointed to the performance indicator, the means floor, because as I said, the non-smear construction for performance indicator was indicator of performance.

[00:24:08] Speaker 02:
And what they've done with the means floor is just taken everything just like

[00:24:13] Speaker 02:
their non-moons construction was, indicator of performance.

[00:24:16] Speaker 02:
It's an abstract concept of trying to identify some way of measuring performance, and there is nothing in the claim, whether we look at it from means plus function format, or we look at it in a non-means plus function format, that tells one of skill in the art

[00:24:32] Speaker 02:
How do they measure that?

[00:24:34] Speaker 02:
And they've pointed to, in their brief, some formulas.

[00:24:38] Speaker 02:
Those formulas in themselves are abstract.

[00:24:41] Speaker 02:
And we know from many cases of this court that just doing math, or from the Supreme Court, just doing math on generic machines in an abstract way doesn't save the claims.

[00:24:50] Speaker 02:
But the math that they want to do is how many products are sold over a period of time versus how many products are totally available.

[00:24:58] Speaker 02:
That's supply and demand.

[00:24:59] Speaker 02:
That's how are these selling here based on the supply I have and the price that I provided.

[00:25:06] Speaker 02:
And we go to OIP.

[00:25:08] Speaker 02:
And it's the same thing.

[00:25:09] Speaker 02:
And if we compare the claims of OIP to the claims here, which is what the district court did correctly, OIP found that

[00:25:17] Speaker 02:
Optimizing price was an abstract idea, and the way in which that was done on the claims was send out a price, get some data back, run some statistics, send out a new price.

[00:25:29] Speaker 02:
Same thing happens here.

[00:25:30] Speaker 02:
Send the inventory out, see how people are buying it or not, make an adjustment, reprice or reallocate.

[00:25:39] Speaker 02:
And there's nothing that tells one or two in the art how to do that.

[00:25:42] Speaker 02:
And that's critical both in the means context as well as the non-means context.

[00:25:47] Speaker 02:
So at the end, what we have here is we can look at this either as an abstract idea in the context of a fundamental economic principle in supply and demand, or we can look at this as an abstract idea in simply managing data.

[00:26:02] Speaker 02:
We send data out.

[00:26:03] Speaker 02:
We do some unknown algorithm on that data.

[00:26:06] Speaker 02:
We send data out again.

[00:26:09] Speaker 02:
Abstract idea under Trinity electric power.

[00:26:12] Speaker 02:
And we do all of this on generic computers.

[00:26:16] Speaker 02:
Fifth, nothing disclosed that says there's any technological innovation here.

[00:26:20] Speaker 02:
And in fact, page three of the opening brief, they talk about it just being a business problem.

[00:26:25] Speaker 02:
And I'm not suggesting that all business methods, Supreme Court has said in Bilsky that they're not, per se, ineligible.

[00:26:33] Speaker 02:
But here, there is nothing that takes them out of the realm of ineligibility.

[00:26:39] Speaker 02:
Thank you.

[00:26:40] Speaker 02:
Thank you.

[00:26:53] Speaker 02:
I just wanted to respond on the 112.6 means for the performance.

[00:27:00] Speaker 02:
They did agree that it was the same function.

[00:27:04] Speaker 02:
The specification can only narrow that, because it's the examples in the specification, the details that actually – and in this case, while there were – I think it was 19 or 20 citations to a 40-column specification, to a whole string, 12 tables, five different examples.

[00:27:23] Speaker 02:
means for performance was the same in each one of those examples, even though it was cited in the plan construction briefs over and over again, it was the same concept.

[00:27:34] Speaker 02:
And therefore, it was a narrowed version

[00:27:37] Speaker 02:
There are only two equations in the entire specification for how to do the performance rating.

[00:27:41] Speaker 02:
In addition, it's pretty simple, isn't it?

[00:27:45] Speaker 01:
It is.

[00:27:45] Speaker 01:
There's no question about it.

[00:27:46] Speaker 01:
You're getting lots and lots of demand in Dallas.

[00:27:49] Speaker 02:
But that's why it's not monopolizing the supply and demand principle.

[00:27:55] Speaker 02:
Two things on that I wanted to mention.

[00:27:56] Speaker 02:
The first is they keep saying a fundamental economic principle.

[00:28:01] Speaker 02:
Dozens of decisions by the courts, fundamental economic principle.

[00:28:05] Speaker 02:
There's no decisions.

[00:28:06] Speaker 02:
We worked.

[00:28:07] Speaker 02:
The decisions on the most famous father, Bilski, on hedging, it's called a fundamental economic practice.

[00:28:13] Speaker 02:
It's a much narrower concept than supply and demand.

[00:28:17] Speaker 02:
And they used supply and demand and coupled it with other things, recognizing the problem.

[00:28:23] Speaker 02:
They coupled it with managing supply and demand.

[00:28:24] Speaker 02:
We don't manage supply and demand.

[00:28:27] Speaker 02:
The dear molding operation doesn't manage the Arrhenius equation.

[00:28:34] Speaker 02:
It manages a mold.

[00:28:36] Speaker 02:
We manage online bookings across distribution channels.

[00:28:41] Speaker 02:
So I think that was wrong.

[00:28:42] Speaker 02:
Excel is a – you can't use Excel to do these types of things.

[00:28:46] Speaker 02:
Excel is a presentation graphics spreadsheet, and it was used to

[00:28:52] Speaker 02:
make the tables that were used in the specification so that we could explain the concepts.

[00:28:56] Speaker 02:
There's nothing wrong with that.

[00:28:58] Speaker 02:
And that shouldn't tie or suggest that this is something much simpler than it is.

[00:29:03] Speaker 02:
It requires real-time processing to accomplish the things that we're trying to accomplish.

[00:29:09] Speaker 02:
And I appreciate your patience, and thank you for your time.

[00:29:12] Speaker 00:
We thank both sides.

[00:29:13] Speaker 00:
The case is submitted.

[00:29:14] Speaker 00:
That concludes our proceeding to this meeting.