Del. District Court uses Alice Against Two-Way Media’s Monitoring Media Streams Patents in Suit against Comcast, Verizon

It appears Two-Way Media may have had unlucky timing in their recent suit against Comcast and Verizon.  A Delaware district court opinion paralleled the analysis on claims directed to “real-time performance monitoring of an electric power grid” from a recent Federal Circuit decision and found four of Two-Way’s patents related to “metering the forwarding of real-time streaming media” as claiming patent-ineligible subject matter.

While Two-Way may eventually prove patent eligibility on their pending appeal of this decision, Judge Andrews’s characterization of the claimed “monitoring” as abstract undeniably mirrors the analysis in Electric Power Group, LLC v. Alstom S.A., No. 2015-1778, 2016 WL 4073318 (Fed. Cir. Aug. 1, 2016).

Two-Way Media Ltd. filed suit against Comcast, NBCUniversal, and Verizon in United States District Court for the District of Delaware, alleging infringement of five patents (one dismissed separately). The defendants moved for Judgment on the Pleadings under F.R.C.P.  12(c), asserting the plaintiff failed to state a claim upon which relief can be granted because the patents-at-issue allegedly claim ineligible subject matter. Generally, the defendants, consolidated together to Comcast and Verizon, argued that patents are “directed to the abstract idea of ‘monitoring the delivery of information’” and that the recited steps “do not, separately or as an ordered combination, amount to significantly more than an instruction to apply the abstract idea using a generic computer.”

Two-Way argued, generally, that the claims are patent eligible at step one of the Mayo test because they are directed to “specific computer architectures for metering the forwarding of real-time streaming media over a network.”

Judge Andrews, relying on Two-Way’s claim construction, granted the motion and found the asserted claims of the’ 187, ‘005, ‘622, and ‘686 patents as directed to patent-ineligible subject matter under 35 U.S.C. § 101.

instance, claim 1 of the ‘622 patent recites:

1. A method for monitoring the forwarding of real-time information to at least one user having access to a communications network comprising:
generating delivery-commencement indications of real-time information forwarded to the user by means of the communications network, wherein the real-time information comprises a plurality of packets forwarded over the communications network to the user,
verifying the operational status of the user’s access to the communications network during delivery of the real-time information, and
generating delivery-termination indications of the real-time information forwarded to the user.

Two-Way asserted the claim is “limited to a specific implementation for streaming real-time information over a packet-switched network” and the invention “overcomes the challenges of providing real-time streaming media over traditional packet-based networks.”

The court responded that “[m]onitoring the delivery of real-time information to a user or users is similar to concepts previously found to be abstract” and cited BASCOM‘s “filtering content on the Internet” and Electric Power Group‘s “on collecting information, analyzing it, and displaying certain results of the collection and analysis” as examples of abstract ideas. The court also said that limiting the claims to the environment of “real-time stream delivery over packet-based networks” was “insufficient to transform them into patent-eligible applications of the abstract idea to which they are directed.”  A summary of the Alice analysis for each patent follows:

Title Directed to… No Inventive concept
US 5,778,187 Multicasting method and apparatus “(1) sending information, (2) directing the sent information, (3) monitoring receipt of the sent information, and (4) accumulating records about receipt of the sent information.” “Even if l accept that the architecture described in the patent  specification is designed to solve the technological problems of load, bottlenecking, and inadequate records, the fact remains that the claims do not recite the mechanism by which those problems are solved…”
US 5,983,005 Multicasting method and apparatus
US 6,434,622 Multicasting method and apparatus “monitoring the delivery of real-time information to a user or users” “Limiting the claims to the particular technological environment of ‘real-time stream delivery over packet-based networks’ is insufficient …”
US 7,266,686 Multicasting method and apparatus “measuring the delivery of real-time information for commercial purposes” “That the patent discusses the invention in the context of a specific network transmission mode in real-time, one-to-many media streams on a computer network does not supply an inventive concept because the claims do not specify a technological improvement to measuring information delivery using such a network.”

While many patent practitioners may not necessarily agree with these characterizations, the court tries to differentiate from Two-Way’s arguments by declaring that “the claims do not recite a mechanism” to process the media streams. This attempt to demonstrate a distinction between allegedly claiming the goal of a solution to a problem versus a solution to a problem is not new, but may be gaining traction.

The Alice analysis of Two-Way closely follows a CAFC case from two weeks prior, Electric Power, where the court characterized the claimed invention as “performing real-time performance monitoring of an electric power grid by collecting data from multiple data sources, analyzing the data, and displaying the results.” The opinion was issued on August 15, 2016, after submission of a Joint Claim Construction Brief on July 20, 2016, and almost a year after the defendants moved for judgment on September 4, 2015. One report indicates oral argument took place on October 29, 2015, so it is unclear if either party was able to address Electric Power directly.

As a quick review on Electric Power, a CAFC panel affirmed patent ineligibility for U.S. Patent Nos. 7,233,843, 8,060,259, and 8,401,710 (claim 12 as representative) under § 101. Applying the two-prong Alice test, the court found that claims focused on “collecting information, analyzing it, and displaying certain results of the collection and analysis” were directed to an abstract idea as each of the steps were akin to recent precedent.  For the second prong, the court characterizes the lengthy claim as listing different types of information and source, but “merely selecting information, by content or source, for collection, analysis, and display does nothing significant to differentiate a process from ordinary mental processes.”  (h/t Patent Docs)

Notably, before concluding, the Electric Power panel invoked the Central District of California’s opinion, stating (emphasis added):

The district court in this case wrapped up its application of the Supreme Court’s framework by invoking an important common-sense distinction between ends sought and particular means of achieving them, between desired results (functions) and particular ways of achieving (performing) them. The court identified the problem addressed by the patents: “Here, the problem is the need to monitor and analyze data from multiple distinct parts of a power grid.” J.A. 30. But, the court reasoned, “there is a critical difference between patenting a particular concrete solution to a problem and attempting to patent the abstract idea of a solution to the problem in general.” Id. Electric Power Group’s asserted claims, the court observed, do the latter: rather than claiming “some specific way of enabling a computer to monitor data from multiple sources across an electric power grid,” some “particular implementation,” they “purport to monopolize every potential solution to the problem”—any way of effectively monitoring multiple sources on a power grid. Id. Whereas patenting a particular solution “would incentivize further innovation in the form of alternative methods for achieving the same result,” the court concluded, allowing claims like Electric Power Group’s claims here would “inhibit[] innovation by prohibiting other inventors from developing their own solutions to the problem without first licensing the abstract idea.” Id.

Clearly, the panel believes an alleged “goal” to solve a problem is not enough for subject matter eligibility.

Another recent Federal Circuit opinion, TDE Petroleum Data Solutions v. AKM Enterprise, Inc., No. 2016-1004 (Fed. Cir. Aug. 15, 2016) (nonprecedential), found the oil well monitoring claims “generally reciting ‘collecting information, analyzing it, and displaying certain results of the collection and analysis.’” Citing Electric Power throughout, the TDE panel concluded that “claim 1 simply recites generic computer functions that amount to nothing more than the goal of determining the state of an oil well operation.” [see CAFC Affirms TDE’s Oil Patent as Ineligible Under 101].

In other words, it was a tough few weeks for “monitoring” patents.

While the claims at issue in Two-Way certainly recite aspects of networks—arguably with improvements to the technology inherent in the methods—Judge Andrews appears to either (i) believe that “the claims do not specify a technological improvement to measuring information delivery using such a network” or (ii) adopt the defendants’ position that the networks are inherent in the very idea of monitoring transmitted information in any technological context.

Either way, it’s likely a position that is more comfortable to take after seeing the panels in Electric Power and TDI address claims involving the alleged goals of monitoring and analyzing data.

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  1. Pingback: Patent Riffs and Links for 11-3-17: Two-Way Media and Eligibility Update

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