from the United States District Court for the Eastern
District of Virginia in No. l:10-cv-00910-LMB-TRJ, Judge
Leonie M. Brinkema.
CALVIN Walden, Wilmer Cutler Pickering Hale and Dorr LLP, New
York, NY, argued for plaintiff-appellant. Also represented by
Brittany Blueitt Amadi, Gregory H. Lantier, James Quarles
III, Washington, DC.
Pandya, Wiley Rein, LLP, Washington, DC, argued for
defendants-appellees. Also represented by Scott A. Felder,
James Harold Wallace, Jr., Eric Harold Weisblatt.
NEWMAN, Plager, and REYNA, Circuit Judges.
Plager, Circuit Judge.
a patent case, in which the outcome turns on the application
of the 'abstract idea' test, a judicially-created
limitation on patent eligibility under § 101 of the
Patent Act, 35 U.S.C. § 101.
Amdocs (Israel) Limited ("Amdocs") sued
Defendants-Appellees Openet Telecom, Inc. and Openet Telecom
Ltd. (collectively, "Openet") for infringing four
U.S. Patents, Nos. 7, 631, 065 ("'065 patent");
7, 412, 510 ("'510 patent"); 6, 947, 984
("'984 patent"); and 6, 836, 797
("'797 patent"). In the wake of Alice Corp.
v. CLS Bank International, 134 S.Ct. 2347 (2014), the
district court granted Openet's motion for judgment on
the pleadings, finding that the patents were not directed to
patent eligible subject matter under § 101. Amdocs
reasons we shall explain, we reverse and remand for further
History and Technology
we need not recapitulate every detail of these patents, we
describe them sufficiently for purposes of this opinion.
Additional background is available in our opinion from the
prior appeal in this case. See Amdocs (Israel) Ltd. v.
Openet Telecom, Inc., 761 F.3d 1329, 1331-36 (Fed. Cir.
2014) (Amdocs 7").
patents in suit concern, inter alia, parts of a system
designed to solve an accounting and billing problem faced by
network service providers. Each patent descends from U.S.
Patent Application No. 09/442, 876, which issued as U.S.
Patent No. 6, 418, 467. One of the patents in suit, the
'797 patent, issued as a result of a continuation-in-part
application, while the other three patents issued as a result
of continuation applications.
'065 patent concerns a system, method, and computer
program for merging data in a network-based filtering and
aggregating platform as well as a related apparatus for
enhancing networking accounting data records. The '510
patent concerns a system, method, and computer program for
reporting on the collection of network usage information. The
'984 patent concerns a system and accompanying method and
computer program for reporting on the collection of network
usage information from a plurality of network devices. The
'797 patent concerns a system, method, and computer
program for generating a single record reflecting multiple
services for accounting purposes.
patent's written description describes the same system,
which allows network service providers to account for and
bill for internet protocol ("IP") network
communications. The system includes network devices;
information source modules ("ISMs"); gatherers; a
central event manager ("CEM"); a central database;
a user interface server; and terminals or clients. See,
e.g., '065 patent at 4:29-33, 43-54.
devices represent any devices that could be included on a
network, including application servers, and also represent
the source of information accessed by the ISMs. Id.
at 5:10-26. The ISMs act as an interface between the
gatherers and the network devices and enable the gatherers to
collect data from the network devices. Id. at
5:33-35. The ISMs represent modular interfaces that send IP
usage data in real time from network devices to gatherers.
Id. at 5:35-39. Gatherers can be hardware and
software installed on the same network segment as a network
device or on an application server itself to minimize the
data traffic impact on a network; gatherers "gather the
information from the ISMs." Id. at 6:54, 58-64.
Gatherers also normalize data from the various types of ISMs
and serve as a distributed filtering and aggregation system.
Id. at 7:5-8. The CEM provides management and
control of the ISMs and gatherers, and the CEM can perform
several functions including performing data merges to remove
redundant data. Id. at 8:13-67. The central database
is the optional central repository of the information
collected by the system and is one example of a sink for the
data generated by the system. Id. at 9:1-5. The user
interface server allows multiple clients or terminals to
access the system, and its primary purpose is to provide
remote and local platform independent control for the system.
Id. at 10:5- 12.
these components are arrayed in a distributed architecture
that minimizes the impact on network and system resources.
Id. at 3:56-65. Through this distributed
architecture, the system minimizes network impact by
collecting and processing data close to its source.
Id. The system includes distributed data gathering,
filtering, and enhancements that enable load distribution.
Id. at 4:33-42. This allows data to reside close to
the information sources, thereby reducing congestion in
network bottlenecks, while still allowing data to be
accessible from a central location. Id. at 4:35-39.
Each patent explains that this is an advantage over prior art
systems that stored information in one location, which made
it difficult to keep up with massive record flows from the
network devices and which required huge databases. See,
e.g., id. at 4:39-42.
2010, Amdocs sued Openet for patent infringement in the
United States District Court for the Eastern District of
Virginia. Amdocs asserted that Openet infringed claims 1, 4,
7, 13, and 17 of the '065 patent; claims 16, 17, and 19
of the '510 patent; claims 1, 2, 7, 8, and 13 of the
'984 patent; and claims 1, 2, 7, 8, and 19 of the
answer and counterclaim, Openet alleged invalidity,
unenforceability, and non-infringement. The parties filed
motions addressing claim construction and summary judgment.
The district court granted Openet's motion for summary
judgment of non-infringement and Amdocs's motion for
summary judgment of no inequitable conduct. Upon motions of
the parties, which the court granted, certain claim
constructions were made. However, the court denied the
parties' motions for summary judgment with respect to
validity. The court later issued an opinion explaining its
bases for its non-infringement and inequitable conduct
summary judgment rulings, while also providing its claim
constructions. Am docs appealed the trial court's
judgment to this court.
appeal, we affirmed two claim constructions and vacated and
modified another construction. We approved of the district
court's construction of "enhance" to mean
"to apply a number of field enhancements in a
distributed fashion." Amdocs I, 761 F.3d at
1338-40. In so doing, we approved of the district court's
"reading the 'in a distributed fashion' and the
'close to the source' of network information
requirements into the term 'enhance.'"
Id. at 1340. We also approved of the construction of
"completing" to mean "enhance a record until
all required fields have been populated." Id.
we vacated the district court's construction of
"single record represents each of the plurality of
services" as "one record that includes customer
usage data for each of the plurality of services used by the
customer on the network" but not including records that
aggregated usage data. Id. We substituted a plain
meaning interpretation that allowed for the inclusion of a
plurality of services by aggregation. Id. at
1340-41. As a result, we reversed the grant of summary
judgment with respect to the '065 patent, the '510
patent, and the '984 patent and vacated the grant of
summary judgment with respect to the '797 patent.
Id. at 1341-43.
the time the case was before us on appeal from the district
court, the Supreme Court issued its opinion in
Alice. Following the remand from this court in
Amdocs I, Openet moved for judgment on the pleadings
by arguing that, pursuant to Alice, all asserted
claims were ineligible under § 101. In response, Amdocs
argued that Openet's motion was procedurally barred and
contrary to the law of the case.
district court permitted the motion because it had not
resolved whether the patents were directed to ineligible
subject matter under § 101 and because, even if the
issue had been addressed, the court stated that
Alice "represented a change, or a significant
clarification, of the law." Amdocs (Israel) Ltd. v.
Openet Telecom, Inc., 56 F.Supp.3d 813, 819 (E.D. Va.
course, the district court granted Openet's motion and
invalidated the asserted claims of all four patents as
ineligible under § 101. Amdocs appeals. We have
jurisdiction pursuant to 28 U.S.C. § 1295(a)(1).
review a grant of judgment on the pleadings under the
procedural law of the regional circuit. Allergan, Inc. v.
Athena Cosmetics, Inc., 640 F.3d 1377, 1380 (Fed. Cir.
2011). The Fourth Circuit reviews a grant of judgment on the
pleadings without deference, applying the same standard as a
motion to dismiss pursuant to Fed.R.Civ.P. 12(b)(6).
Burbach Broad. Co. of Del. v. Elkins Radio Corp.,
278 F.3d 401, 405-06 (4th Cir. 2002). Therefore, we assume
the facts alleged in the complaint are true and draw all
reasonable factual inferences in favor of the nonmovant.
Id. We review the district court's determination
of patent eligibility under § 101 without deference, as
a question of law. DDR Holdings, LLC v. Hotels.com,
L.P., 773 F.3d 1245, 1255 (Fed. Cir. 2014).
Doctrine: The statutory rule governing patent
eligibility-that is, the criteria for identifying inventions
that are eligible to be patented-is found in § 101 of
the Patent Act. As recodified by Congress in 1952, § 101
provides that "[w]hoever invents or discovers any new
and useful process, machine, manufacture, or composition of
matter, or any new and useful improvement thereof, may obtain
a patent therefor, subject to the conditions and requirements
of this title."
obvious that the subject matter described in § 101 is
expansive. As the Supreme Court has observed, the
"subject-matter provisions of the patent law have been
cast in broad terms to fulfill the constitutional and
statutory goal of promoting 'the Progress of Science and
the useful Arts.'" Diamond v. Chakrabarty,
447 U.S. 303, 315 (1980) (quoting U.S. Const, art. I, §
8, cl. 8).
this broad mandate, judicial gloss on the law of patent
eligibility has long recognized that certain fundamental
principles are not included in that broad statutory grant.
Though over the years these principles have been described in
differing terms, in today's vernacular these exceptions
are called "[T]aws of nature, natural phenomena, and
abstract ideas." Alice, 134 S.Ct. at 2354
(quotation marks and citation omitted); see also Le Roy
v. Tatham, 55 U.S. 156, 183 (1853) (Nelson, J.,
dissenting) (tracing the "proper subject-matter of a
patent" to at least the British case oiBoulton v.
Bull, 2 H. Bl. 463, 126 Eng. Rep. 651 (C.P. 1795)).
two-step framework, set out by the Supreme Court for
distinguishing patents that claim so-called laws of nature,
natural phenomena, and abstract ideas from those that claim
patent-eligible applications of those concepts, is now
familiar law. See Alice, 134 S.Ct. at 2355
(following Mayo Collaborative Servs. v. Prometheus Labs.,
Inc., 132 S.Ct. 1289 (2012)). This framework is
sometimes collectively referred to as Alice/Mayo.
we determine whether "the claims at issue are directed
to one of those patent-ineligible concepts."
Id. If so, we next consider elements of each claim
both individually and "as an ordered combination"
to determine whether the additional elements
"'transform the nature of the claim' into a
patent-eligible application." Id. (quoting
Mayo, 132 S.Ct. at 1298, 1297).
Court describes step two of this analysis as a search for an
"inventive concept"-i.e., an element or ordered
combination of elements that is "sufficient to ensure
that the patent in practice amounts to significantly more
than a patent upon the [ineligible concept] itself."
Id. (quoting Mayo, 132 S.Ct. at 1294).
Cases: Our cases generally follow the step one/step two
Supreme Court format, reserving step two for the more
comprehensive analysis in search of the 'inventive
concept.' Recent cases, however, suggest that there is
considerable overlap between step one and step two, and in
some situations this analysis could be accomplished without
going beyond step one. See Enfish, LLC, v. Microsoft
Corp., 822 F.3d 1327, 1334-36 (Fed. Cir. 2016); see
also Elec. Power Grp., LLC v. Alstom S.A., 830 F.3d
1350, 1353 (Fed. Cir. 2016) ("the two stages involve
overlapping scrutiny of the content of the claims . . . [and]
there can be close questions about when the inquiry should
proceed from the first stage to the second); BASCOM Glob.
Internet Servs., Inc. v. AT&T Mobility LLC, 827 F.3d
1341, 1349 (Fed. Cir. 2016) ("[T]he claims and their
specific limitations do not readily lend themselves to a
step-one finding that they are directed to a nonabstract
idea. We therefore defer our consideration of the specific
claim limitations' narrowing effect for step two.").
the more detailed analysis is undertaken at step one or at
step two, the analysis presumably would be based on a
generally-accepted and understood definition of, or
test for, what an 'abstract idea' encompasses.
However, a search for a single test or definition in the
decided cases concerning § 101 from this court, and
indeed from the Supreme Court, reveals that at present there
is no such single, succinct, usable definition or test. The
problem with articulating a single, universal definition of
'abstract idea' is that it is difficult to fashion a
workable definition to be applied to as-yet-unknown cases
with as-yet-unknown inventions. That is not for want of
trying; to the extent the efforts so far have been
unsuccessful it is because they often end up using
alternative but equally abstract terms or are overly
of a definition, then, the decisional mechanism courts now
apply is to examine earlier cases in which a similar or
parallel descriptive nature can be seen-what prior cases were
about, and which way they were decided. See, e.g., Elec.
Power Grp., 830 F.3d at 1353-54. That is the classic common
law methodology for creating law when a single governing
definitional context is not available. See generally
Karl N. Llewellyn, The Common Law Tradition: Deciding Appeals
(1960). This more flexible approach is also the approach
employed by the Supreme Court. See Alice, 134 S.Ct.
at 2355-57. We shall follow that approach here.
dissent, in its discussion of the majority opinion's
approach, states that the analysis in which the majority
engages involves a comparison "of the asserted claims in
this case to the claims at issue in some, but not all, of the
cases where we have addressed patent eligibility."
Dissent at 1. As earlier noted, applying prior precedents of
the court to the current case is indeed the common law
approach for deciding cases, including patent cases-i.e.,
applying the law to comparable facts. See, e.g.,
Alice, 134 S.Ct. at 2355-60 (relying on precedent with
respect to step one and step two); Elec. Power Grp.,
830 F.3d at 1353-56 (same). Furthermore, discussing in an
opinion only the most relevant prior opinions, rather than
every prior opinion in an actively-litigated field, is a
necessary discipline if opinions are to be read, rather than
dissent offers a different paradigm for identifying an
abstract idea: "it is apparent that a desired goal
(i.e., a 'result or effect'), absent structural or
procedural means for achieving that goal, is an abstract
idea." Dissent at 6-7. The dissent focuses on the
difference between 'means' and 'ends.'
Id. at 6. We note that, though not in terms of
'abstract idea' but rather adequacy of definition,
years ago the Supreme Court outlawed such broad
'ends' or function claiming as inconsistent with the
purposes of the Patent Statute. Congress, however, a few years
later softened the rule. Patentees could write claim language
to broadly describe the purpose or function of their
invention, and when they did the claim would not cover the
bare function or goal, however performed, but only as limited
to the particular means (and equivalents) for implementing
that function or goal as described by the patentee in the
of course, is the "means-plus-function" practice
codified in 35 U.S.C. § 112 ¶6 (now § 112(f)).
The dissent's paradigm would seem similar, but differs in
significant respects. Though § 112 ¶ 6 permits the
'means' to be found in the patentee's
"specification, " meaning the written description
and the claims of the patent, the dissent would save the
patent's eligibility under § 101 only if the claim
at issue itself explicitly states the necessary
'means.' In the dissent's step two, we must find
"a particular means for accomplishing an underlying
goal" through careful "limitation-by-limitation
analysis" of the claim. Id. at 9. We commend
the dissent for seeking a creative way of incorporating
aspects of well-known doctrine in the search for what is an
'abstract idea, ' but that is not now the law, either
in statute or in court decision. At best, as this court has
previously stated, the dissent's analysis may be
"one helpful way of double-checking the application of
the Supreme Court's framework to particular
claims-specifically, when determining whether the claims meet
the requirement of an inventive concept in
application." Elec. Power Grp., 830 F.3d at 1356.
begin, then, with an examination of eligible and ineligible
claims of a similar nature from past cases. For example, in
Digitech, one of the representative claims described
a process of organizing information through mathematical
correlations with merely generic gathering and processing
activities. See Digitech Image Techs., LLC v. Elecs. for
Imaging, Inc., 758 F.3d 1344, 1350 (Fed. Cir. 2014). The
claim at issue:
A method of generating a device profile that describes
properties of a device in a digital image reproduction system
for capturing, transforming or rendering an image, said
generating first data for describing a device dependent
transformation of color information content of the image to a
device independent color space through use of measured
chromatic stimuli and device response characteristic
generating second data for describing a device dependent
transformation of spatial information content of the image in
said device independent color space through use of spatial
stimuli and device response characteristic functions; and
combining said first and second data into the device profile.
Id. at 1351 (quoting patent at issue).
the court did not parse the analysis into discrete step one
and step two stages, it found that this claim recited an
"ineligible abstract process of gathering and combining
data that does not require input from a physical device"
and that "the two data sets and the resulting device
profile are ineligible subject matter." Id. The
court observed that "[w]ithout additional limitations, a
process that employs mathematical algorithms to manipulate
existing information to generate additional information is
not patent eligible." Id. The court determined
that the claim was ineligible.
in Content Extraction, the court examined a
representative claim reciting:
A method of processing information from a diversity of types
of hard copy documents, said method comprising the steps of:
(a) receiving output representing a diversity of types of
hard copy documents from an automated digitizing unit and
storing information from said diversity of types of hard copy
documents into a memory, said information not fixed from one
document to the next, said receiving step not preceded by
scanning, via said automated digitizing unit, of a separate
document containing format requirements; (b) recognizing
portions of said hard copy documents corresponding to a first
data field; and
(c) storing information from said portions of said hard copy
documents corresponding to said first data field into memory
locations for said first data field.
Content Extraction & Transmission LLC v. Wells Fargo
Bank, Nat'lAss'n, 776 F.3d 1343, 1345 (Fed. Cir.
step one, the court characterized all of the claims at issue
(which were similar to the representative claim) as being
directed to the abstract idea of "1) collecting data, 2)
recognizing certain data within the collected data set, and
3) storing that recognized data in a memory."
Id. at 1347. The court commented that data
collection, recognition, and storage were "undisputedly
well-known." Id. Under step two, the court
found no limitations that, considered alone and in an ordered
combination, transformed the claim into a patent-eligible
application of an abstract idea. Id. at 1347-48. The
court observed that the role of a computer in a
computer-implemented invention would only be meaningful in a
§ 101 analysis if it involved more than the performance
of "well-understood, routine, [and] conventional
activities previously known to the industry."
Id. (quoting Alice, 134 S.Ct. at 2359). The
court noted that all of the limitations at issue involved
well-known, routine, and conventional functions of computers
and scanners. Id. at 1348-49. The claims were
recently, in In re TLI, the court examined a
representative claim that recited:
A method for recording and administering digital images,
comprising the steps of:
recording images using a digital pick up unit in a telephone
storing the images recorded by the digital pick up unit in a
digital form as digital images,
transmitting data including at least the digital images and
classification information to a server, wherein said
classification information is prescribable by a user of the
telephone unit for allocation to the digital images,
receiving the data by the server,
extracting classification information which characterizes the
digital images from the received data, and
storing the digital images in the server, said step of
storing taking into consideration the classification
In re TLI Commc'ns LLC Patent Litig., 823 F.3d
607, 610 (Fed. Cir. 2016).
step one, the court found that the claims were directed to
the abstract idea of "classifying and storing digital
images in an organized manner." Id. at 613.
Also under step one, the court found that the claims were not
directed to a specific improvement in computer functionality,
but instead were directed to the "use of conventional or
generic technology in a nascent, but well-known environment,
without any claim that the invention reflect[ed] an inventive
solution to any problem presented by combining the two."
Id. at 612. Under step two, the court found that the
claims did not recite any limitations that when considered
individually and as an ordered combination transformed the
abstract idea into a patent-eligible application of that
idea. Instead, the recited components and functions were
well-understood, routine, conventional activities previously
known in the industry. See id. at 613-14. The
components were described in "vague, functional"
terms that were insufficient to confer eligibility and failed
to provide the requisite details to implement the claimed
abstract idea. Id. at 615.
ineligible claims in the preceding cases may be contrasted
with eligible claims in other cases. For example, in DDR
Holdings, the court found that the asserted claims did
not recite a step or function performed by a computerized
mathematical algorithm but were instead focused on a
challenge particular to the Internet. DDR Holdings,
773 F.3d at 1257. The representative claim recited:
system useful in an outsource provider serving web pages
offering commercial opportunities, the system comprising:
(a) a computer store containing data, for each of a plurality
of first web pages, defining a plurality of visually
perceptible elements, which visually perceptible elements
correspond to the plurality of first web pages;
(i) wherein each of the first web pages belongs to one of a
plurality of web page owners;
(ii) wherein each of the first web pages displays at least
one active link associated with a commerce object associated
with a buying opportunity of a selected one of a plurality of
(iii) wherein the selected merchant, the out-source provider,
and the owner of the first web page displaying the associated
link are each third parties with respect to one other;
(b) a computer server at the outsource provider, which
computer server is coupled to the computer store and
(i) receive from the web browser of a computer user a signal
indicating activation of one of the links displayed by one of
the first web pages;
(ii) automatically identify as the source page the one of the
first web pages on which the link has been activated;
(iii) in response to identification of the source page,
automatically retrieve the stored data corresponding to the
source page; and
(iv) using the data retrieved, automatically generate and
transmit to the web browser a second web page that displays:
(A) information associated with the commerce object
associated with the link that has been activated, and (B) the
plurality of visually perceptible elements visually
corresponding to the source page.
Id. at 1249-50.
court observed that the "claimed solution [was]
necessarily rooted in computer technology in order to
overcome a problem specifically arising in the realm of
computer networks." Id. at 1257. Analyzing the
claims under step two, the court noted when the claim
limitations were taken together as an ordered combination,
they recited an invention that was not merely "the
routine or conventional use of the Internet."
Id. at 1259.
recently, in BASCOM, the court examined several
claims including the following claim:
1. A content filtering system for filtering content retrieved
from an Internet computer network by individual controlled
access network accounts, said filtering system comprising:
a local client computer generating network access requests
for said individual controlled access network accounts;
at least one filtering scheme;
a plurality of sets of logical filtering elements; and
a remote ISP server coupled to said client computer and said
Internet computer network, said ISP server associating each
said network account to at least one filtering scheme and at
least one set of filtering elements, said ISP server further
receiving said network access requests from said client
computer and executing said ...