Plausible allegations that a claimed network arrangement was unconventional defeat a Rule 12 eligibility motion

2022-09-28Fed. Cir.

Cooperative Entertainment, Inc. v. Kollective Technology, Inc., 50 F.4th 127 (Fed. Cir. Sept. 28, 2022) (precedential) (Moore, C.J., joined by Lourie and Stark, JJ.), reversing Cooperative Entertainment, Inc. v. Kollective Technology, Inc., 544 F. Supp. 3d 890 (N.D. Cal. 2021) (Davila, J.), No. 5:20-cv-07273-EJD

United States Patent No. 9,432,452 claims a system for peer-based content sharing: a content delivery server and a peer-to-peer dynamic network of peer nodes that consume the same content within a predetermined time, distributed outside controlled networks and content distribution networks, with content segmentation based on trace routes. The United States District Court for the Northern District of California dismissed under Rule 12(b)(6), holding every claim ineligible under Section 101 of Title 35 of the United States Code as the abstract idea of preparing and transmitting content to peers over a network. The Federal Circuit reversed in an opinion by Chief Judge Moore, joined by Judges Lourie and Stark, without reaching step one. At step two it found two alleged inventive concepts in claim 1, the dynamic network of nodes consuming the same content outside a content distribution network and the use of trace routes to segment content, and held the specification and the amended complaint plausibly alleged both to be unconventional, citing the specification's statement that "The prior art fails to provide video streaming over P2P networks outside the structure and control of CDNs" and the examiner's reasons for allowance. Whether the claimed network is well-understood, routine or conventional is a question of fact that cannot be resolved on the pleadings. The court held only that the allegations preclude dismissal, not that the claims are eligible.

What it changesThe allegations that saved this patent were sentences already in the specification and the prosecution history, repeated in the complaint. A machine learning application should therefore state in plain terms which arrangement of components is new, what the prior systems did instead, and what the arrangement improves, in sentences the patentee can later plead as fact: that prior systems ran inference centrally rather than on the devices consuming the output, that no prior system segmented the work the way this one does, that the arrangement reduces cost or latency. Claim the arrangement itself, including the structural relationship between the components, because the panel relied on claim 1 delineating both structure and function. The limit is that this decision secures a factual dispute at the Rule 12 stage and nothing more; the same claim can still be held ineligible on summary judgment if the evidence shows the arrangement was conventional, so the specification's assertions should be ones the engineering team can support with evidence when asked.

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Burbage Law is the practice of Jon Burbage, a registered patent attorney. 342 United States patents have issued from applications he wrote; the full list is on the Patents page. More about Jon Burbage.

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