Patent Claims for Abstract "Conditional Action" Held Ineligible Subject Matter

November 22, 2013

In UbiComm LLC v. Zappos IP Inc., No. 1-13-cv-01029 (D. Del. Nov. 13, 2013), the court dismissed the asserted patent claims as being directed at an abstract idea that was patent ineligible. Plaintiff UbiComm LLC ("UbiComm") alleged that Zappos IP Inc.'s ("Zappos") websites infringed method claims of United States Patent No. 5,603,054 ("'054 patent"). Zappos moved to dismiss the asserted claims as ineligible subject matter.

The patent describes the invention as "a method for superimposing prespecified locational, environmental, and contextual controls on user interactions, including interactions of mobile users, with computational resources of a distributed computer system and with equipment residing on processes running on said system." Claim 1 of the '054 patent, the only independent claim, reads:

1. A method of triggering a selected machine event in a system including a multiplicity of computer controlled machines and a multiplicity of users, each computer controlled machine being capable of performing a one of the multiplicity of types of machine events, some of the computer controlled machines being stationary and others of the computer controlled machines being mobile, the method comprising the steps of:
selecting a type of machine event to be triggered;

selecting triggering properties of said system necessary for triggering said selected machine event;

selecting triggering conditions of an identified user necessary for triggering said selected machine event;

perceiving said triggering conditions;

determining whether said triggering properties are met; and

triggering said selected machine event when the triggering properties are met and the triggering conditions are perceived.

Defendant Zappos argued that the '054 patent claimed "the abstract idea of conditional action -- i.e., the basic concept of conditioning one action on the existence of another action or circumstance." Conversely, UbiComm contended that the patent was "directed towards a method of triggering concrete machine events (e.g. sending a defined message based on an updated user condition) within a system of computer operated machines..."The court favored Zappos' view that the '054 patent claimed the fundamental concept of a conditional action.

The applicable standard on a motion to dismiss is that a patent claim can be found to be ineligible subject matter if the "only plausible reading of the patent must be that there is clear and convincing evidence of ineligibility." Ultramercial, Inc. v. Hulu, LLC, 722 F.3d 1335, 1339 (Fed. Cir. 2013) (emphasis in original). After stating the broad scope of patentable subject matter under § 101, the court noted the important exceptions, i.e. "laws of nature, physical phenomena, and abstract ideas," that are intended to protect the "basic tools of scientific and technological work." UbiComm LLC, slip. op. at 3, citing Ultramercial, Inc. at 1341 and Mayo Collaborative Servs. v. Prometheus Labs, Inc., 132 S. Ct. 1289, 1293 (2012). While a process is not unpatentable simply because it contains a law of nature of mathematical formula, the application of such a law or formula must contain an "inventive concept" that takes it beyond a "well-understood, routine, conventional activity, previously engaged in by those in the field." UbiComm LLC, slip. op. at 4, citing Mayo at 1299.

The court applied the Federal Circuit's two-step test for patent eligibility set forth in Accenture Global Servs, GmbH v. Guidewire Software, Inc., 728 F.3d 1336, 1341 (Fed. Cir. 2013), which requires the court to (1) identify whether the claimed invention fits within one of the four statutory classes set out in § 101 and (2) assess whether any of the judicially recognized exceptions to subject-matter eligibility apply. If the court determines that the claim embodies an abstract idea, then:

[T]he court must determine whether the claim poses any risk of preempting an abstract idea. To do so the court must first identify and define whatever fundamental concept appears wrapped up in the claim. Then, proceeding with the preemption analysis, the balance of the claim is evaluated to determine whether additional substantive limitations narrow, confine, or otherwise tie down the claim so that, in practical terms, it does not cover the full abstract idea itself.

UbiComm LLC, slip. op. at 4-5, citing Accenture Global Servs.

In analyzing Claim 1, the court found that it was merely an embodiment of a conditional action because its steps "simply describe a conditional action, an action that is triggered based upon a predefined parameter." Citing the policy considerations of Mayo, and recognizing that a conditional action is a basic tool used in many disciplines from medicine to economics (e.g., "Increase price when customer demand is greater than supply"), the court found that it should be protected as an abstract idea because its patenting would impede innovation more than it would promote it. The court also pointed out that the claimed conditional action was more fundamental and abstract than other ideas that have been held unpatentable, such as hedging (citing Bilski v. Kappos, 130 S. Ct. 3218, 3231 (2010)) and processing information through a clearinghouse (citing Dealertrack, Inc. v. Huber, 674 F.3d 1315, 1334 (Fed. Cir. 2012)).

Having determined that the claims cover an abstract idea, the court performed the preemption analysis and concluded that the idea of a conditional action had not been sufficiently limited by the patent claim to prevent them from covering the "full abstract idea itself." The patentee argued that that the method went beyond an abstract idea because it was sufficiently tied to particular machines that carried out the method (i.e. a system of mobile devices and stationary computers). However, the court made clear that the use of an abstract idea (i.e., conditional action) in a generic computing environment was not a meaningful limitation that would merit patent protection. The court cited numerous Federal Circuit decisions to support this proposition, including Dealertrack (explaining that "[s]imply adding a 'computer aided' limitation to a claim covering an abstract concept, without more, is insufficient to render the claim patent eligible") and Bancorp Servs., L.L.C. v. Sun Life Assur. Co. of Canada (U.S.), 687 F.3d 1266, 1278 (Fed. Cir. 2012) ("To salvage an otherwise patent-ineligible process, a computer must be integral to the claimed invention, facilitating the process in a way that a person making calculations or computations could not.")

Particularly instructive was the reasoning in CLS Bank Int'l. v. Alice Corp. Pty. Ltd., 717 F.3d 1269, 1302 (Fed. Cir. 2013), which also dealt with abstract ideas applied to computer systems:

The key to this inquiry is whether the claims tie the otherwise abstract idea to a specific way of doing something with a computer, or a specific computer for doing something; if so, they likely will be patent eligible, unlike claims directed [to] nothing more than the idea of doing that thing on a computer. While no particular type of limitation is necessary, meaningful limitations may include the computer being part of the solution, being integral to the performance of the method, or containing an improvement in computer technology.

Having found that UniComm failed to meet this standard, the court held that the limitations added to the '054 patent were insufficient to transform a conditional action into a patentable idea, and granted defendant's motion to dismiss under § 101.