Customedia Technologies, LLC v. Dish Network Corporation

Case: 18-2239       Document: 96           Page: 1       Filed: 03/06/2020




   United States Court of Appeals
       for the Federal Circuit
                     ______________________

        CUSTOMEDIA TECHNOLOGIES, LLC,
                   Appellant

                                    v.

 DISH NETWORK CORPORATION, DISH NETWORK
                     LLC,
                   Appellees
            ______________________

                           2018-2239
                     ______________________

     Appeal from the United States Patent and Trademark
 Office, Patent Trial and Appeal Board in No. CBM2017-
 00023.
                --------------------------------------------------
        CUSTOMEDIA TECHNOLOGIES, LLC,
                   Appellant

                                    v.

 DISH NETWORK CORPORATION, DISH NETWORK
                     LLC,
                   Appellees
            ______________________

                           2019-1000
                     ______________________
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 2              CUSTOMEDIA TECHS., LLC v. DISH NETWORK CORP.




     Appeal from the United States Patent and Trademark
 Office, Patent Trial and Appeal Board in No. CBM2017-
 00032.
                  ______________________

                   Decided: March 6, 2020
                   ______________________

    RAYMOND WILLIAM MORT, III, The Mort Law Firm,
 PLLC, Austin, TX, argued for appellant.

     ELIOT DAMON WILLIAMS, Baker Botts LLP, Palo Alto,
 CA, argued for appellees. Also represented by GEORGE
 HOPKINS GUY, III; ALI DHANANI, MICHAEL HAWES, Houston,
 TX.
                 ______________________

     Before PROST, Chief Judge, DYK and MOORE, Circuit
                          Judges.
 MOORE, Circuit Judge.
     Customedia Technologies, LLC appeals the Patent
 Trial and Appeal Board’s final written decisions holding
 claims 1–6, 8, 17, and 23 of 

U.S. Patent No. 8,719,090

 and
 claims 1–4, 6–7, 16–19, 23–24, 26–28, 32–36, and 41 of 

U.S. Patent No. 9,053,494

 ineligible under 

35 U.S.C. § 101

 and
 finding claims 1 and 5 of the ’090 patent unpatentable un-
 der 

35 U.S.C. § 102

. Because the claims are ineligible un-
 der § 101, we affirm the Board’s determinations. We do not
 reach the Board’s § 102 findings.
                        BACKGROUND
     The ’090 and ’494 patents, which share a specification,
 disclose comprehensive data management and processing
 systems. ’090 Patent at 3:3–7, 17–21. According to the
 specification, these systems comprise a remote Account-
 Transaction Server (ATS) and a local host Data
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 CUSTOMEDIA TECHS., LLC v. DISH NETWORK CORP.                3



 Management System and Audio/Video Processor Recorder-
 player (VPR/DMS), e.g., a cable set-top box. Id. at 4:15–19,
 21:44–49. Broadcasters and other content providers trans-
 mit advertising data via the ATS to a local VPR/DMS. Id.
 at 31:1–6. The advertising data may then be selectively
 recorded in programmable storage sections in the
 VPR/DMS according to a user’s preferences. Id. at 31:3–6,
 32:7–21. These storage sections may be “reserved, rented,
 leased or purchased from end user[s], content providers,
 broadcasters, cable/satellite distributor, or other data com-
 munications companies administering the data products
 and services.” Id. at 31:44–49, 60–64. For example, a cable
 distributor may provide customers with a cable set-top box
 with built-in storage sections that may be leased or sold to
 advertisers. Id. at 31:64–32:4. Claim 1 of the ’090 patent
 recites:
     1. A data delivery system for providing automatic
     delivery of multimedia data products from one or
     more multimedia data product providers, the sys-
     tem comprising:
     a remote account transaction server for providing
     multimedia data products to an end user, at least
     one of the multimedia data products being specifi-
     cally identified advertising data; and
     a programmable local receiver unit for interfacing
     with the remote account transaction server to re-
     ceive one or more of the multimedia data products
     and for processing and automatically recording the
     multimedia data products, said programmable lo-
     cal receiver unit including at least one individually
     controlled and reserved advertising data storage
     section adapted specifically for storing the specifi-
     cally identified advertising data, said at least one
     advertising data storage section being monitored
     and controlled by said remote account transaction
     server and such that said specifically identified
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 4              CUSTOMEDIA TECHS., LLC v. DISH NETWORK CORP.




     advertising data is delivered by said remote ac-
     count transaction server and stored in said at least
     one individually controlled and reserved advertis-
     ing data storage section.
 ’090 patent at Claim 1.
     Dish Network Corporation and Dish Network LLC (col-
 lectively, DISH) petitioned for review of claims 1–8, 17, and
 23 of the ’090 patent and claims 1–7, 16–19, 23–28, 32–36,
 39, 41, and 43 of the ’494 patent pursuant to the Transi-
 tional Program for Covered Business Method Patents
 (CBM review). Leahy-Smith Am. Invents Act, 

Pub. L. No. 112-29, § 18

(a) 

125 Stat. 284

, 329–31 (2011) (AIA). The
 Board instituted CBM review in each case and issued final
 written decisions holding claims 1–8, 17, and 23 of the ’090
 patent and claims 1–4, 6–7, 16–19, 23–24, 26–28, 32–36,
 and 41 of the ’494 patent ineligible under 

35 U.S.C. § 101

.
 In addition to holding the claims ineligible under § 101, the
 Board found claims 1, 5, and 7 of the ’090 patent unpatent-
 able under 

35 U.S.C. § 102

 and claim 7 of the ’090 patent
 unpatentable under 

35 U.S.C. § 112

. The Board held that
 DISH failed to prove that alternatively, claims 1–8, 17, and
 23 of the ’090 patent are unpatentable under 

35 U.S.C. § 103

 as obvious over U.S. Patent Nos. 5,774,170 (Hite) and
 4,607,346 (Hill). Customedia timely appealed the Board’s
 determinations under §§ 101 and 102. 1 DISH cross-ap-
 pealed the Board’s determinations under §103. 2 We have


     1   Customedia does not appeal the Board’s determi-
 nation that claim 7 of the ’090 patent is ineligible under
 § 101. Customedia also does not appeal the Board’s find-
 ings that claim 7 of the ’090 patent was unpatentable under
 §§ 102 and 112.
     2   DISH’s cross-appeal was voluntarily dismissed on
 February 6, 2019. Customedia Techs., LLC v. DISH Net-
 work Corp., DISH Network LLC, Appeal No. 18-2309, D.I.
 4.
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 CUSTOMEDIA TECHS., LLC v. DISH NETWORK CORP.                5



 jurisdiction under 

28 U.S.C. § 1295

(a)(4)(A).
                         DISCUSSION
     We review the Board’s legal conclusions de novo and its
 factual findings for substantial evidence. Samsung Elecs.
 Co. v. Elm 3DS Innovations, LLC, 

925 F.3d 1373, 1380

 (Fed. Cir. 2019). Eligibility under 

35 U.S.C. § 101

 is a ques-
 tion of law, based on underlying facts. SAP Am., Inc. v.
 InvestPic, LLC, 

898 F.3d 1161, 1166

 (Fed. Cir. 2018).
      Section 101 provides that “[w]hoever invents or discov-
 ers any new and useful process, machine, manufacture, or
 composition of matter, or any new and useful improvement
 thereof,” may obtain a patent. 

35 U.S.C. § 101

. The Su-
 preme Court has held that “[l]aws of nature, natural phe-
 nomena, and abstract ideas are not patent eligible.” Alice
 Corp. Pty. Ltd. v. CLS Bank Int’l, 

573 U.S. 208

, 216 (2014)
 (quoting Assoc. for Molecular Pathology v. Myriad Genetics,
 Inc., 

569 U.S. 576, 589

 (2013)). We follow the Supreme
 Court’s two-step framework for determining patent-eligi-
 bility under § 101. Id. at 217. First, we determine whether
 the claims are directed to a “patent-ineligible concept,”
 such as an abstract idea. Id. If so, we “consider the ele-
 ments 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 ap-
 plication.” Id. (quoting Mayo Collaborative Servs. v. Pro-
 metheus Labs., Inc., 

566 U.S. 66

, 78–79 (2012)).
                       I. Alice Step One
     At Alice step one, we must determine whether the
 claims are directed to an abstract idea. Alice, 573 U.S. at
 217. For example, in Bilski v. Kappos, the Supreme Court
 held ineligible claims directed to the concept of risk hedg-
 ing, an abstract idea it described as “a fundamental eco-
 nomic practice long prevalent in our system of commerce.”
 

561 U.S. 593

, 611 (2010). And in Alice, the Supreme Court
 made clear that the invocation of a computer does not
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 6              CUSTOMEDIA TECHS., LLC v. DISH NETWORK CORP.




 necessarily transform an abstract idea into a patent-eligi-
 ble invention. 573 U.S. at 223. There, the Supreme Court
 held ineligible claims directed to a method of exchanging
 financial obligations using a computer system as a third-
 party intermediary. Id. at 218–21. The Court explained
 that the claims were merely implemented “using some un-
 specified, generic computer” and did not “purport to im-
 prove the functioning of the computer itself.” Id. at 225–
 26. Not infrequently, patentees, like Customedia, latch on
 to this language from Alice and claim that their claims do
 “improve the functioning of the computer itself.” Here, for
 instance, Customedia argues that its claims are eligible be-
 cause they “provide for improvements to the operation and
 functioning of computer systems.” Appellant’s Br. 71, Nos.
 18-2239, -2309. We do not agree. The claims at issue here
 are directed to the abstract idea of using a computer to de-
 liver targeted advertising to a user, not to an improvement
 in the functioning of a computer.
      Claim 1 of the ’090 patent recites a “data delivery sys-
 tem for providing automatic delivery of . . . specifically
 identified advertising data.” ’090 patent at Claim 1. The
 advertising data is received and processed by a “program-
 mable local receiver unit,” which includes at least one “in-
 dividually controlled and reserved advertising data storage
 section adapted specifically for storing the specifically iden-
 tified advertising data.” 3 Id. Customedia argues that by



     3    In its final written decision, the Board stated that
 the “reserved advertising data storage section” limitation
 does “not require an advertising data storage section that
 actively precludes or excludes anything other than the spe-
 cifically identified advertising data” or “any specific struc-
 ture, such as separate portions that are allocated to a user
 or a data supplier.” J.A. 7–8, 48. Customedia challenges
 this construction on appeal, arguing that the
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 CUSTOMEDIA TECHS., LLC v. DISH NETWORK CORP.                7



 providing a reserved and dedicated section of storage, the
 claimed invention improves the data delivery system’s abil-
 ity to store advertising data, transfer data at improved
 speeds and efficiencies, and prevent system inoperability
 due to insufficient storage. In short, by dedicating a section
 of the computer’s memory to advertising data, the claimed
 invention ensures memory is available for at least some ad-
 vertising data. This does not, however, improve the func-
 tionality of the computer itself. Even if we accept
 Customedia’s assertions, the claimed invention merely im-
 proves the abstract concept of delivering targeted advertis-
 ing using a computer only as a tool. This is not what the
 Supreme Court meant by improving the functioning of the
 computer itself nor is it consistent with our precedent ap-
 plying this concept.
     In Enfish, LLC v. Microsoft Corp., for example, we held
 patent eligible claims reciting a self-referential database
 that improved the way computers stored and retrieved
 data in memory. 

822 F.3d 1327

, 1337–39 (Fed. Cir. 2016).
 We concluded the claims did not invoke a computer merely
 as a tool, but rather improved the way the computer itself
 operated and handled data, allowing more efficient launch-
 ing and adaptation of databases. 

Id.

 at 1336–37. We there-
 fore held that the “plain focus of the claims is on an
 improvement to computer functionality itself, not on eco-
 nomic or other tasks for which a computer is used in its
 ordinary capacity.” 

Id. at 1336

. As in Enfish, we held



 programmable local receiver unit is structurally config-
 ured, via a processor and software, to control and limit ac-
 cess to the advertising data storage section such that it
 stores only advertising data. Appellant’s Br. 13–25, Nos.
 18-2239, -2309; Appellant’s Reply Br. 6–7, 16–17, No. 18-
 2239. Because Customedia’s proposed construction does
 not change the eligibility of the claims under § 101, we do
 not reach the merits of its claim construction arguments.
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 8              CUSTOMEDIA TECHS., LLC v. DISH NETWORK CORP.




 patent eligible claims in Visual Memory LLC v. NVIDIA
 Corp. that were directed to “an improved computer memory
 system.” 

867 F.3d 1253

, 1259–60 (Fed. Cir. 2017). We
 noted that the claims “focus[ed] on a ‘specific asserted im-
 provement in computer capabilities,’” namely the accom-
 modation of different types of processors without
 compromising performance, “instead of ‘on a process that
 qualifies as an abstract idea for which computers are in-
 voked merely as a tool.’” 

Id.

 (quoting Enfish, 

822 F.3d at 1336

). More recently in Koninklijke KPN N.V. v. Gemalto
 M2M GmbH, we evaluated claims directed to a system for
 generating check data that enabled the detection of persis-
 tent systematic errors that prior art systems could not de-
 tect. 

942 F.3d 1143

, 1151 (Fed. Cir. 2019). In holding the
 claims patent eligible, we stated that the claimed invention
 “improve[d] the functioning of the overall technological
 process of detecting systematic errors in data transmis-
 sions.” 

Id.

 at 1151–52.
     To be a patent-eligible improvement to computer func-
 tionality, we have required the claims to be directed to an
 improvement in the functionality of the computer or net-
 work platform itself. In Ancora Techs. Inc. v. HTC Amer-
 ica, Inc., for example, we held that claims directed to
 storing a verification structure in computer memory were
 directed to a non-abstract improvement in computer func-
 tionality because they improved computer security. 

908 F.3d 1343

, 1347–49 (Fed. Cir. 2018). We determined the
 claims addressed the “vulnerability of license-authoriza-
 tion software to hacking” and were thus “directed to a so-
 lution to a computer-functionality problem.” 

Id. at 1349

.
 Likewise, in Finjan, Inc. v. Blue Coat System, Inc., we held
 that claims to a “behavior-based virus scan” provided
 greater computer security and were thus directed to a pa-
 tent-eligible improvement in computer functionality. 

879 F.3d 1299

, 1304–06 (Fed. Cir. 2018). In Data Engine Techs.
 LLC v. Google LLC, we held patent eligible claims reciting
 “a specific method for navigating through three-
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 CUSTOMEDIA TECHS., LLC v. DISH NETWORK CORP.                 9



 dimensional electronic spreadsheets” because the claimed
 invention “improv[ed] computers’ functionality as a tool
 able to instantly access all parts of complex three-dimen-
 sional electronic spreadsheets.” 

906 F.3d 999

, 1007–08
 (Fed. Cir. 2018); see also Core Wireless Licensing S.A.R.L.
 v. LG Elecs., Inc., 

880 F.3d 1356

, 1359–63 (Fed. Cir. 2018)
 (holding patent eligible claims reciting an improved user
 interface for electronic devices that improved the efficiency
 of the electronic device, particularly those with small
 screens”). And in SRI Int’l, Inc. v. Cisco Sys. Inc., we held
 patent eligible claims directed to an improved method of
 network security “using network monitors to detect suspi-
 cious network activity . . . generating reports of that suspi-
 cious activity, and integrating those reports using
 hierarchical monitors.” 

930 F.3d 1295, 1303

 (Fed. Cir.
 2019). We concluded that the “focus of the claims was on
 the specific asserted improvement in computer capabili-
 ties,” namely “providing a network defense system that
 monitors network traffic in real-time to automatically de-
 tect large-scale attacks.” 

Id.

 at 1303–04.
     We have held that it is not enough, however, to merely
 improve a fundamental practice or abstract process by in-
 voking a computer merely as a tool. For example, in Affin-
 ity Labs. of Texas, LLC v. DIRECTV, LLC, we held that
 claims to a method of providing out-of-region access to re-
 gional broadcasts were directed to an abstract idea. 

838 F.3d 1253, 1258

 (Fed. Cir. 2016). We determined the
 claims were not a patent-eligible improvement in computer
 functionality because they simply used cellular telephones
 “as tools in the aid of a process focused on an abstract idea.”
 

Id. at 1262

; see also In re TLI Commc’ns LLC Patent Litig.,
 

823 F.3d 607, 611

 (Fed. Cir. 2016) (holding ineligible claims
 reciting concrete physical components merely as “a generic
 environment in which to carry out the abstract idea of clas-
 sifying and storing digital images in an organized man-
 ner”). Likewise, in Intellectual Ventures I LLC v. Capital
 One Bank (USA), we held that claims reciting a system for
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 10             CUSTOMEDIA TECHS., LLC v. DISH NETWORK CORP.




 providing web pages tailored to an individual user were di-
 rected to an abstract idea. 

792 F.3d 1363

, 1369–70 (Fed.
 Cir. 2015). We held that “claiming the improved speed or
 efficiency inherent with applying the abstract idea on a
 computer” was insufficient to render the claims patent eli-
 gible as an improvement to computer functionality. 

Id. at 1367, 1370

; see also Ultramercial, Inc. v. Hulu, LLC, 

772 F.3d 709

, 715–16 (Fed. Cir. 2014) (holding that displaying
 an advertisement in exchange for access to copyrighted ma-
 terial is an abstract idea). And in SAP Am., Inc. v. In-
 vestPic, LLC, we held patent ineligible claims directed to
 “selecting certain information, analyzing it using mathe-
 matical techniques, and reporting or displaying the results
 of the analysis.” 

898 F.3d 1161

, 1167–68 (Fed. Cir. 2018).
 We determined the claims were focused not on a physical-
 realm improvement to computers as tools but rather an im-
 provement in wholly abstract ideas. 

Id. at 1168

.
     We have also held that improving a user’s experience
 while using a computer application is not, without more,
 sufficient to render the claims directed to an improvement
 in computer functionality. For example, in Trading
 Techs. I, we held patent ineligible claims directed to a com-
 puter-based method for facilitating the placement of a
 trader’s order. Trading Techs. Int’l, Inc. v. IBG LLC, 

921 F.3d 1084

, 1092–93 (Fed. Cir. 2019) (Trading Techs. I).
 Although the claimed display purportedly “assist[ed] trad-
 ers in processing information more quickly,” we held that
 this purported improvement in user experience did not “im-
 prove the functioning of the computer, make it operate
 more efficiently, or solve any technological problem.” Id.;
 see also Trading Techs. Int’l, Inc. v. IBG LLC, 

921 F.3d 1378, 1381

, 1384–85 (Fed. Cir. 2019) (Trading Techs. II)
 (holding that claims “focused on providing information to
 traders in a way that helps them process information more
 quickly” did not constitute a patent-eligible improvement
 to computer functionality).
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 CUSTOMEDIA TECHS., LLC v. DISH NETWORK CORP.              11



      In sum, “software can make non-abstract improve-
 ments to computer technology just as hardware improve-
 ments can.” Enfish, 

822 F.3d at 1335

. But to be directed
 to a patent-eligible improvement to computer functionality,
 the claims must be directed to an improvement to the func-
 tionality of the computer or network platform itself. See,
 e.g., 

id.

 1336–39; DDR Holdings, LLC v. Hotels.com, L.P.,
 

773 F.3d 1245

, 1257–59 (Fed. Cir. 2014). Thus, this inquiry
 “often turns on whether the claims focus on ‘the specific as-
 serted improvement in computer capabilities . . . or, in-
 stead, on a process that qualifies as an “abstract idea” for
 which computers are invoked merely as a tool.’” Finjan,
 

879 F.3d at 1303

 (quoting Enfish, 822 F.3d at 1335–36).
      Against this background, we agree with the Board that
 the claims here are not directed to a patent-eligible im-
 provement to computer functionality. The claims of the
 ’090 and ’494 patents do not enable computers to operate
 more quickly or efficiently, nor do they solve any technolog-
 ical problem. They merely recite reserving memory to en-
 sure storage space is available for at least some advertising
 data. The specification is silent as to any specific struc-
 tural or inventive improvements in computer functionality
 related to this claimed system. See, e.g., ’090 patent at
 30:57–67, 3:47–50. The only improvements identified in
 the specification are generic speed and efficiency improve-
 ments inherent in applying the use of a computer to any
 task. Therefore, the claimed invention is at most an im-
 provement to the abstract concept of targeted advertising
 wherein a computer is merely used as a tool. This is not an
 improvement in the functioning of the computer itself.
                      II. Alice Step Two
      At Alice step two, we “consider the 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.” Al-
 ice, 573 U.S. at 218, (quoting Mayo, 566 U.S. at 78–79).
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 12             CUSTOMEDIA TECHS., LLC v. DISH NETWORK CORP.




 Step two “looks more precisely at what the claim elements
 add” to determine if “they identify an inventive concept in
 the application of the ineligible matter to which . . . the
 claim is directed.” SAP, 

898 F.3d at 1167

.
     At step two, the Board held that the elements of the
 claims, considered individually and as an ordered combina-
 tion, fail to recite an inventive concept. We agree. Aside
 from the abstract idea of delivering targeted advertising,
 the claims recite only generic computer components, in-
 cluding a programmable receiver unit, a storage device, a
 remote server and a processor. See, e.g., ’090 patent at
 Claim 1. The specification acknowledges that the storage
 device “may be any storage device for audio/video infor-
 mation known in the art” and the receiver unit may include
 “any digital or analog signal receiver and/or transmitter ca-
 pable of accepting a signal transmitting any kind of digital
 or broadcast information.” 

Id.

 at 15:4–6, 24:26–34. Such
 generic and functional hardware is insufficient to render
 eligible claims directed to an abstract idea. Alice, 573 U.S.
 at 226.
     Customedia argues that the claims are eligible under
 Alice step two because the use of a programmable receiver
 to dedicate a section of storage for storing only “specifically
 identified advertising data” was innovative over prior art
 approaches. However, the invocation of “already-available
 computers that are not themselves plausibly asserted to be
 an advance . . . amounts to a recitation of what is well-un-
 derstood, routine, and conventional.” SAP, 

898 F.3d at 1170

. The ’090 and ’494 patent claims’ invocation of a con-
 ventional receiver is insufficient to supply the required in-
 ventive concept. Thus, we conclude the Board did not err
 in holding the claims of the ’090 and ’494 patents ineligible
 under § 101.
                         CONCLUSION
    We have considered Customedia’s remaining argu-
 ments and find them unpersuasive. For the foregoing
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 CUSTOMEDIA TECHS., LLC v. DISH NETWORK CORP.             13



 reasons, we conclude that claims 1–6, 8, 17, and 23 of the
 ’090 patent and claims 1–4, 6–7, 16–19, 23–24, 26–28, 32–
 36, and 41 of the ’494 patent are ineligible under § 101 and
 therefore affirm the Board’s decisions.
                        AFFIRMED