Monday, March 08, 2021

CAFC hands out another 101 loss in Enco Systems

The outcome:

ENCO Systems, Inc. owns U.S. Patent No. 7,047,191, titled “Method and System for Providing Automated Captioning for AV Signals.” ENCO sued DaVincia, LLC in the United States District Court for the Eastern District of Missouri, alleging that DaVincia infringed the ’191 patent. The district court held that the ’191 patent claims are invalid under 35 U.S.C. § 101. ENCO Systems, Inc. v. DaVincia, LLC, 447 F. Supp. 3d 916 (E.D. Mo. 2020). We affirm

The background

The district court explained that the claims “suffer[] from the same high-level generalities and broad-form functional terminology” that this court rejected as ineligible under § 101 in University of Florida Research Foundation, Inc. v. General Electric Co., 916 F.3d 1363 (Fed. Cir. 2019). ENCO, 447 F. Supp. 3d at 922. The district court then determined that the claims do not include an “inventive concept” beyond the abstract idea because they rely on “selfdescribed conventional computer components” arranged for functional purposes without a “particularized and concrete” configuration. Id. at 922–23. Based on those determinations, the court dismissed ENCO’s case with prejudice. Id. at 923. The court subsequently denied ENCO’s motion for reconsideration and request for leave to amend its complaint.

We review a district court’s dismissal for failure to state a claim under the law of the regional circuit, which here requires that we review the district court’s dismissal de novo and take all facts alleged in the complaint as true. See Univ. of Fla., 916 F.3d at 1367; Kelly v. City of Omaha, 813 F.3d 1070, 1075 (8th Cir. 2016). Subject-matter eligibility under § 101 is a question of law based on underlying facts. See Aatrix Software, Inc. v. Green Shades Software, Inc., 882 F.3d 1121, 1125 (Fed. Cir. 2018). “Like other legal questions based on underlying facts, this question may be, and frequently has been, resolved on a Rule 12(b)(6) . . . motion where the undisputed facts, considered under the standards required by that Rule, require a holding of ineligibility under the substantive standards of law.” SAP America, Inc. v. InvestPic, LLC, 898 F.3d 1161, 1166 (Fed. Cir. 2018).

We are not bound by internally precedential decisions of the Patent Trial and Appeal Board that seek to follow this court’s precedents, which we apply directly. See In re Rudy, 956 F.3d 1379, 1383 (Fed. Cir. 2020). In any event, the Board in Hannun ruled patent eligible claims that recited automatic speech-recognition methods that were “directed to a specific implementation” of processing data by measuring tailored parameters identified within audio files. Hannun, 2020 WL 7407450, at *5. No such specificity exists here. We conclude that the claims of the ’191 patent are directed to an abstract idea.


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