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The last case this morning is DKR Consulting versus Shopify, 2024-22-79.

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Good morning, counsel.

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Mr. Springer.

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Morning, Your Honor.

[00:00:33] Speaker 01:
Good morning, Your Honor.

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May it please the court?

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The district court's 101 order dismissing these claims of Rule 12 was improper and should be reversed here on de novo review.

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The court ignored the clear and convincing evidence standard.

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It ignored the Rule 12 standard.

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And its 101 analysis was entirely improper.

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The claims here are not directed to abstract ideas.

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If we look at claim one of the 785 pattern, for example, which is on the APPX 47, the claim one specifically claims an embeddable buy button builder that not only executes on a first server, but also generates an embeddable buy button with a specific configuration, one that displays a hyperlink and a representation of an item that was selected from a digital inventory to be listed for sale.

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It also claims embedding the buy button into a website that is specifically executed by a different server, not operated by the buy button provider.

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In our brief, we nicknamed this feature as the embedding element.

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If we look at also claim one of the 995 patent, Your Honor, which is on page 77 of the appendix, that patent claim

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describes a widget builder that executes on an application server and generates a by button widget within a product listing and also includes the product image and metadata That's received from another source.

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This is the widget builder as we described our brief Going back to claim one of the seven eight five patent your honor page 47 again of the appendix and

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That claim also describes displaying an e-commerce store within the website where the buy button is embedded, which is again executed by a separate server than the embeddable buy button itself.

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This is the store display element that we describe in our brief.

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All three of these patents describe all three of these features.

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They claim all three of these features in one way or another.

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Language here, Your Honor, is not merely functional.

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It's not results-oriented because the claims here as a whole articulate a specific method for embedding a buy button for an e-commerce store using the claimed features that I just described above.

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Or in the case of the 995 patent and the 237 patent, they claim a specific system or architecture for generating an e-commerce store using those claimed features.

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And it's important here as well, Your Honor, on the results-oriented question to look at the exact technical problem that's articulated in the patent as being solved by these claims.

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Can I just ask you, so you make some use of the DDR case, not surprisingly.

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So why is there

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enough specificity of means here that brings this into the same, puts this on the same side of the step two line that the court found the claim in DDR was.

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Sure, it's particularly relevant here, Your Honor, again, to consider the exact problem that's being solved by the patents itself.

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That, I believe, is relevant to the functional and results-oriented question.

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So again, the 785 patent on page 39 of the appendix, column 1, 57, through column 2, line 17, it describes the technical problem

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I'm sorry, would you just say the columns and line numbers again?

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Sure, no problem.

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Column 1, line 57, through column 2, line 17.

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785.

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785.

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This is page 39 of the appendix.

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So it describes that the technical problem addressed by the patents is the limitations of conventional web widgets at that time.

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Those web widgets lacked the inventive features of the DKR patents.

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and thus made them incapable of being used as self-contained e-commerce platforms.

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We noted this as well in the underlying district court case in our opposition brief.

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That's page 295 of the appendix.

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So again, in other words.

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Maybe I missed it.

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I didn't hear anything that I would call specific in what you just said.

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This is the problem.

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This is the I was articulating the technical problem.

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That's being Stated in the patent so I am getting there daughter.

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I'll get there But in other words conventional web widgets did not enable an e-commerce platform That was self-contained from the host website to be opened and accessed while the customer remained on the host website That's that's the technical problem.

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That's being addressed by the patents

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So the point here is these specific technical features, and again, the specific method for embedding a buy button and the specific system or architecture that generates the e-commerce store, that's what the claims as a whole are directed to.

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and they rely on the specific claim features that I mentioned earlier, the embedding element, the widget builder, and the store display element, to solve that problem of enabling a widget to be used as a self-contained e-commerce platform.

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The spec describes these features as technical and unconventional improvements to web widgets.

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As a catch-all, for example, I'm looking at column 18 of the 7.5 patent, line 16 through 18, which is page 47 of the appendix.

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That states that each of the foregoing embodiments illustrate how a portable web widget enables commerce through an embedded e-commerce store.

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So again, obviously for Alice, we have to start with what the claims are talking about.

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But we also have to keep in mind what the exact technical problem that the claims are directed to, as the patent articulates.

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So again, there's lots of explanation, additional explanation about the technical features in the claims, in the specification, and it describes how they solve that technical problem.

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Your honor mentioned DDR case law as well demonstrates that the claim is valid here at step one as this court this court found in DDR

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that those claims address the problem of, quote, retaining website visitors that if adhering to the routine conventional functioning of internet hyperlink protocol would be instantly transported away from a host's website after clicking on an advertisement and activating a hyperlink.

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This court also specifically found that that problem was, quote, specifically arising in the realm of computer networks.

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and that the claim solution was thus necessarily rooted in computer technology in order to overcome that problem.

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So in other words, if the problem is one that's rooted in computer technology, it makes sense that whatever solution to that problem would also be rooted in computer technology.

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And that is very important here, Your Honor, because it's the same exact problem that's addressed by the claims here in the DKR patents.

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But I want to be very clear.

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Our point on DDR is not that any claim, no matter how it's worded, is non-abstract so long as it addresses a problem that arises in computer technology.

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That's not our point.

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Our point with DDR is that when it's considered, when it's applied to these claims, in view of the litany of other cases that have found eligibility of computer technologies at step one,

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It removes any doubt that these claims are actually eligible at step one, because it's directed to the same exact technical problem as DDR.

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Unilock in the Conan Klicka case, excuse me.

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Call it Phillips.

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Phillips.

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Unilock in the Phillips case further support this point.

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Unilock reaffirmed the exact findings that this court made in the DDR case

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and also further concluded that, quote, claims that focus on specific assertive improvements in computer capabilities and are directed to improvements in the functionality of a network or platform are patent eligible at step one.

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And the Phillips case indicated that software inventions that make non-abstract improvements to existing technological processes in computer technology are eligible at step one.

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There were web widgets at the time of the DKR patents or the DKR invention.

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Web widgets existed, but they could not be used as a self-contained e-commerce platform because they did not have the specific claimed inventive features that the DKR patent claims have.

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Sure.

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Can I ask you this question?

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So I don't have the exact priority date of the DDR patent, but it must be considerably before the 2010 priority date of these patents, right?

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I believe so, Your Honor.

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They're six and seven million numbers, so those are very old.

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Does it make any difference if this kind of screen in screen problem result in DDR was not conventional at the priority date for the DDR patents, but by 2010, maybe it is conventional and you therefore have to do something else?

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Not something different.

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Well, yeah, something else that would be an inventive concept in producing that result of having a buy button that is inside a web page.

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And you don't lose the web page when you work the buy button.

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Sure.

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So I believe the question, Your Honor, is basically what's conventional changes over time.

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What's conventional changes over time.

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I think that's a fair point.

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But the fact that one solution, meaning in the DDR case, did not.

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The fact that it solved the technical problem it described in a particular way doesn't mean that there cannot be another solution to the same technical problem.

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GDR solution from camera for the fire case data is either 99.

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I believe I was in council mentioned in their brief That doesn't mean that that was the only way to solve that technical problem the point here is that That same technical problem maybe in a slight variance still existed in 2010 and DK are Invented another solution to a similar technical problem

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And I think it's important here as well, Your Honor, to point out the opposing counsel at the district court hearing, they even acknowledged that the subject matter of these claims is patent eligible.

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I direct the court's attention to page 339 of the appendix, where opposing counsel in response to a colloquy with the judge said, quote, yes, very much you could patent, for example, the computer functionality that allows you to create a buy button.

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That's right in our claims, Your Honor.

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The 785 patent, claim one, says, quote, generating by the first server the embeddable buy button.

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So it's clear, even to the opposing counsel, that these claims are not directed to an abstract idea.

[00:13:29] Speaker 03:
Enter your rebuttal.

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You can continue or save it.

[00:13:33] Speaker 01:
I just want to mention a few points really quickly, Your Honor.

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I think it's very important here, in view of the district court's extremely brief dismissal, they totally ignored the clear and convincing evidence standard.

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The word convincing is only mentioned in DKR's opposition brief.

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It's not mentioned in the court order.

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It wasn't even mentioned in Shopify's briefs.

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And that's clear when you look at the order, Your Honor.

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It presupposed Shopify's abstract idea.

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Instead of looking exactly what the claims say, there's very little scant analysis of what the district court interpreted the actual claims as.

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And it also failed to draw

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the facts, which includes statements in the patents themselves, in DKR's favor, which is required at the Rule 12 stage.

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So with that, Your Honor, I'll save the rest of my time.

[00:14:36] Speaker 03:
We will save it for you.

[00:14:41] Speaker 03:
Mr. Landier.

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Good morning, Your Honors, and may it please the Court.

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Greg Landier on behalf of Appellee Shopify.

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Your honor, these are patents that state on their face that they are about enabling people to sell products using the internet.

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They don't recite anything in the claims that improves the functioning of computers.

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They don't recite anything that improves or purports to improve the functioning of the internet.

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These types of claims are at the heart of the Supreme Court's and this court's long line

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of jurisprudence saying that you cannot obtain a patent on the idea of using the internet to sell things or to market things.

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The specific improvement here is the use of web widgets, which are admitted in the patent in columns one and two to be a well-known technology that predates the patents.

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in a way that the patents say they haven't been used before, and that is to sell product.

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The patents say that web widgets have been used to provide weather information or sports scores or other things, but that they haven't been used to market things to the full degree that they could be.

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And so really, the patents, to jump off of something that opposing counsel said,

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The patents don't state that there's a problem.

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The patents just state that there's an opportunity.

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What the patents state is that social media has come into the fore.

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People are using social media to do e-commerce, to try to market products to others.

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But that really for viral distribution, email has been the methodology that's been used.

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And the patents say there's an opportunity here.

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We already have these web widgets.

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As the patent clearly states at column two, lines one and two, those web widgets could already be embedded on virtually any website.

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And what we can do is use those web widgets to list product information.

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and include a buy button.

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So if somebody wants to purchase that product, they could press that link, and up will come the credit card screen where they can enter their information, tell us how many of these things they want, and pay for those products.

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I'd like to address just a few points that were made during opposing counsel's presentation.

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What about the operate on a separate server piece of the claim?

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Yes, Your Honor, a few points on that.

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First, I think it's important to understand what the two servers are doing.

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It's only in the claims of the 785 patent.

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The two servers are not in the other two patents.

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But in the claims of the 785 patent, the thing that's identified as the first server is doing all the work of what the patents talk about.

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And it could be multiple servers itself, because the figures of the patent show that.

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The second server is, for example, the New York Times server or the website server that's going to be the broader thing that the individual's reading when the pop-up comes from the first server.

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So I think that's important because, Your Honors, when you read these patents, there's no description whatsoever of anything about that second server.

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as used in the claims, other than to say, we already know that web widgets can be embedded on virtually any website.

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But described that way, I think, is at least makes me think, and other people too, of DDR.

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Two separate back-end systems providing information on the same screen.

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And that one survived.

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I understand, I think, the connection you're drawing, Your Honor.

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I think there are a variety of clear distinctions from DDR.

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To address Your Honor's question, the DDR priority date was 1998.

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The priority date here is 2010.

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Obviously, in the e-commerce field, things that were arguably unconventional in 1998

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were not still unconventional 12 years later.

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The DDR claims, while useful for e-commerce, were not directed to commercial activity.

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They were directed, and I should say that DDR is a step two case.

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I think that opposing counsel was arguing it at step one.

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DDR didn't ultimately reach step one.

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It went to step two.

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And what it found was we have a particular limitation

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in the claim, this hybrid webpage limitation, and that inserting a server into the middle of a process that predated the patents, that is the process of clicking on a hyperlink and then being taken to somebody else's webpage, was unconventional because a person wouldn't have expected that if you clicked on a hyperlink that's telling you it's going to take you to somebody else's webpage,

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that, in fact, there'd be this other server sitting in the background that would create a completely new web page that's different from the way that the internet previously worked.

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So in effect, what the court was saying is that the internet conventionally worked in one way as a network, and there's a limitation in these claims in DDR that's unconventional in the way that the network works.

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There's nothing analogous in the claims of the DKR patents that when the DKR patents show you a buy button that says buy from Amazon.

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where you can use Amazon Payments, takes your right to Amazon's transaction processing page.

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That's in figure 13 in the accompanying text.

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When the patents say, this is a web widget that you're receiving from the Acme company, that's where it's coming from.

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There's no thing here where you think you're going one place and you're going somewhere different.

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That's just not part of the claims in this patent.

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Does that address your question your honor?

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I don't want to address a different question, okay?

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One thing that opposing counsel said and I think it's an important distinction is

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is that he said that your honor should look to appendix 39, column 1, lines 57, to column 2, line 17, to understand what the problem was here.

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I think he called it a technical problem, or the exact technical problem.

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And then he said that when you read that, you'll see that it states that web widgets were, quote, incapable of performing the functions that are described in the DKR patents.

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That's not what the patent says.

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The patent doesn't say that web widgets as they existed were incapable of doing anything.

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What it says, and this is at column two, line eight, is that they were not being used for that purpose.

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So again, these patents are not about a problem that presented itself in a technical field.

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They are about what the inventors thought was an opportunity to use existing conventional technology in order to more effectively sell products on the internet or using social media.

[00:22:33] Speaker 00:
There was a

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Suggestion raised that when I argued this to the district court, I said that these patents are directed to a non-abstract idea.

[00:22:45] Speaker 00:
And the citation, I think, was to appendix page 339.

[00:22:48] Speaker 00:
I did not say that, Your Honor.

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I'd stand by the distinction I was making to the district court, which is that if these patents were about how to create a buy button technologically, and they said,

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Previously, nobody could figure out how to create a link that would take you to a transaction processing screen.

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But we have technologically figured out how you can architect a system to do that.

[00:23:18] Speaker 00:
And they described that.

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And they claimed it.

[00:23:21] Speaker 00:
Then that's patent eligible.

[00:23:23] Speaker 00:
That you could get a patent on an improved, that would be like DDR.

[00:23:27] Speaker 00:
You could get an improvement to the way that the internet works as a network.

[00:23:32] Speaker 00:
you enabled something technically to happen that could not happen before it's not what these claims are these claims are surely functionally written using the familiar configured to type language to say

[00:23:45] Speaker 00:
use a server that's configured to do x, y, and z, and then it just spells out the functions, doesn't say anything about how to do any of those functions.

[00:23:55] Speaker 00:
And as the titles of the patents make clear, as the statement of the field of the invention makes clear,

[00:24:04] Speaker 00:
as the preambles and the remaining limitations of all the claims make clear.

[00:24:09] Speaker 00:
These claims are directed to the idea of providing an e-commerce store or a product listing that features a buy button that when depressed brings up a transaction processing screen so that the product can be purchased.

[00:24:27] Speaker 00:
They're no different than

[00:24:28] Speaker 00:
no different in terms of the analysis than the claims that were invalidated in custom media, in Trinity information, or in freestream media, just to name a few of the cases that I think have very similar analyses to what we have here, particularly in regard to a patent owner asserting that something is non-conventional.

[00:24:55] Speaker 00:
But there being no support in the patent specification for that or in fact the patent specification refuting that.

[00:25:03] Speaker 00:
And I think that it's important here that the court recall that your case law makes clear that you do not need to credit an allegation that's made in a brief or in a complaint or elsewhere if

[00:25:19] Speaker 00:
It is not consistent with what's in the specification of the patents itself, or it's not consistent with what's in the claims of the patent itself.

[00:25:30] Speaker 00:
And when you look at this patent, this specification.

[00:25:35] Speaker 02:
I assume you don't think that it matters what their expert

[00:25:43] Speaker 02:
said and then what the expert said then got put into the amended complaint.

[00:25:50] Speaker 02:
Assume I were to read that.

[00:25:52] Speaker 02:
This is admittedly changing the language.

[00:25:55] Speaker 02:
Each of the paragraphs says Dr. I don't remember his name.

[00:25:58] Speaker 00:
Dr. Keller.

[00:25:59] Speaker 02:
Dr. Keller said the following about what's not conventional and so on.

[00:26:03] Speaker 02:
Assume that I were to read that as just taking Dr. Keller out of it, just

[00:26:08] Speaker 02:
allegations that, and now just the same words about what was not unconventional, why, in your view, would that not be enough for them to pass go on step two?

[00:26:24] Speaker 00:
Because, Your Honor, and the court said this, for example, in cell spin.

[00:26:29] Speaker 00:
It applied it in IBM Zillow.

[00:26:33] Speaker 00:
I think it also applied it in Trinity.

[00:26:35] Speaker 00:
The court has said if you have allegations that are wholly divorced from the patent specification itself, then you're not going to credit those on a motion to dismiss.

[00:26:49] Speaker 00:
And you can grant a motion to dismiss over it.

[00:26:50] Speaker 00:
Secured Mail Solutions is another case where I think that happened, Your Honors.

[00:26:55] Speaker 00:
And here, I think it's important to remember what the structure of this written description is.

[00:27:00] Speaker 00:
Columns one and two describe the background technology and state what the opportunity is.

[00:27:09] Speaker 00:
Starting at column three, we have the detailed description of what the invention is.

[00:27:15] Speaker 00:
And your honor, there's no description starting in column three or anywhere else in the patent about how to create a web widget, about how to create a buy button, about how to do any of these things.

[00:27:26] Speaker 00:
There's no description whatsoever about any difficulty in getting a web widget onto any website or onto all websites.

[00:27:37] Speaker 00:
All there is in that portion of the detailed description is a description of what content

[00:27:43] Speaker 00:
You might want to include on your web widget, you might want to have a picture, you might want to have a product description.

[00:27:49] Speaker 00:
If it's a song, you might want to give a little sample of the song so people can listen to a portion of it.

[00:27:56] Speaker 00:
And then a description of what pre-existing technologies you can use for your buy button, including Amazon, PayPal, and a variety of others that are identified in the patent.

[00:28:11] Speaker 00:
So Your Honors,

[00:28:15] Speaker 00:
I don't think that these claims present a close call on subject matter eligibility.

[00:28:22] Speaker 00:
The patents are clearly directed to including a clickable buy button in an e-commerce store to facilitate payment.

[00:28:29] Speaker 00:
And that's exactly what's claimed.

[00:28:31] Speaker 00:
And it's all that's claimed.

[00:28:34] Speaker 00:
So unless your honors have any additional questions, I will be seated.

[00:28:39] Speaker 03:
Thank you.

[00:28:39] Speaker 00:
Thank you, your honors.

[00:28:41] Speaker 03:
Mr. Springer has a minute left.

[00:28:46] Speaker 01:
I'll be quick, Your Honors.

[00:28:49] Speaker 01:
As you've heard from the arguments today and probably the briefs as well, so much of this case turns on conventionality.

[00:28:56] Speaker 01:
That's exactly the reason why it was the district court's responsibility to further develop these facts about conventionality.

[00:29:03] Speaker 01:
This is a clear and convincing evidence standard that the patent must be invalidated by.

[00:29:09] Speaker 01:
Where is the analysis in the court action?

[00:29:12] Speaker 01:
The court's entire analysis of 101 was less than four pages of a 14-page order.

[00:29:18] Speaker 01:
The rest of the order is just devoted to reciting legal standards in the background.

[00:29:23] Speaker 01:
That's one of our major points here, Your Honor, is that at Rule 12, when facts are supposed to be construed in favor of the complainant,

[00:29:33] Speaker 01:
It was the district court's responsibility to give some additional analysis here.

[00:29:37] Speaker 01:
Just as an example about the DDR case, it's a question of fact whether it was still conventional in 2010 at the time of the DKR patents as to whether that technical problem that was solved by DDR still existed.

[00:29:54] Speaker 03:
See that my time's expired Thank you counsel thank your counsel cases submitted and that concludes today's arguments