In reversal of 101 decision for patent owner, Netflix scores win at CAFC

In reversal of 101 decision for patent owner, Netflix scores win at CAFC

The CAFC said that the claim’s calling for collecting and combining information for presentation to the rendering device does not provide a focus on an advance in non-abstract ideas

The U.S. Court of Appeals for the Federal Circuit (CAFC) partially overturned a district court’s decision supporting GoTV Streaming, LLC’s patents as eligible, finding instead that they were invalid under Section 101. The opinion, authored by Judge Taranto, also upturned the district court’s finding that the claims were invalid for indefiniteness but the panel found they were directed to an abstract idea and therefore evacuated the district court’s summary judgment of no encouragement and its denial of GoTV’s motion for a new trial on damages, ordering the district court to enter judgment for Netflix, Inc., ending the case.

GoTV’s claims that Netflix directly overstepped and encouraged overstepping of claims of its US patent numbers 8478245, 8989715, and 8103865. The patents share a written description and are each titled “Server Method and System for Rendering Content on a Wireless Device”.

Netflix was sued by GoTV in 2022 and Netflix moved for judgement on the pleadings that all three patents’ claims claim patent-ineligible subject matter. GoTV opposed and also suggested that the court convert the motion to one for summary judgment. Ultimately, the district court denied Netflix’s motion, finding that the claims were not directed to ineligible subject matter at Alice step one. In its claim constructions however, the district court agreed with Netflix that “a phrase common to all claims of the ’865 patent—'discrete low level rendering command’—is indefinite” and hence held all of the claims invalid as indefinite under 35 U.S.C. § 112(b).

A number of arguments were made on appeal by GoTV and Netflix cross-appealed the district court’s Section 101 ruling. As the cross-appeal issue was dispositive if decided in Netflix’s favor, the CAFC began with that. First though, the CAFC addressed the district court’s claim constructions because they were pertinent to the ineligibility analysis.

With regards to claim construction, the district court concluded that “discrete low level rendering command” is indefinite was in dispute and the CAFC adopted GoTV’s construction of that phrase as meaning “[a] discrete rendering command that is tailored based on wireless device capability”. GoTV’s proposed construction was rejected by the district court as it would make redundant considerable portions of the specification and claims. Especially, the sentence: “As such, precompiled basic commands are discrete rendering commands that are tailored based on wireless device capability tailored based on the rendering capability of the client 210” would be superfluous when replacing GoTV’s construction.

The CAFC reportedly explained: “If the court found redundancy based simply on the repeated ‘tailored’ word, such a repetition in a substitution exercise is not a substantial basis for deeming a relevant artisan to be confused about claim scope.”

The CAFC reportedly finally concluded that a relevant artisan “reading the claims in the context of the specification,” would understand “discrete low level rendering command” to comport with GoTV’s construction. Hence, the CAFC overturned the district court’s indefiniteness ruling.

The CAFC then went on to the eligibility analysis, first recalling its extensive caselaw and approach to assessing whether claims are directed to an abstract idea under Section 101. In light of those precedents, the CAFC reportedly found that here, “the representative claim is directed to the abstract idea of a template set of specifications—generic in at least some respects (claim 1 requires only two such respects)—that can be tailored (in at least one respect) for final production of the specified product (here an image) to fit the user’s constraints”.

GoTV argued that the claims represent improvements to computers/networks while the CAFC reportedly said, “the claim’s calling for collecting and combining information for presentation to the rendering device does not provide a focus on an advance in non-abstract ideas”.

Rejecting GoTV’s arguments about the claim requiring “specific data structures”, CAFC reportedly said, “[t]here is no improvement of computer/network operations in their ordinary functions, just the use of ordinary functions as a tool for executing the abstract idea”.

After deciding the claim fails Alice step one, the CAFC went on to step two, but found no inventive concept present, and rejected GoTV’s attempt to point to its expert testimony’s conclusions about how it satisfies step two. The opinion reportedly explained: “It does not, and could not, identify claimed concrete implementations that go beyond the result-focused and functionally described computer processes apparent from the above-recited claim constructions. And conclusory assertions about the speed and efficiency benefits of using ordinary computer and network functionality do not suffice at Alice step two.”

Having decided the claims to be ineligible on Netflix’s cross-appeal, the CAFC did not have to address GoTV’s appeal but admitted its “substantial arguments that the district court committed error” on two contentions. First, while it did not weigh in on whether GoTV was correct, it said that its argument that “a patentee may plead and press an inducement charge in an amended complaint and rely, for the knowledge element of inducement, on the knowledge the defendant gained from the original complaint” was adequately substantial that it was worth vacating the district court’s grant of summary judgment of no induced infringement. Second, GoTV argued that the district court abused its discretion in allowing Netflix to make certain presentations regarding its hypothetical damages’ determination.