Monday, October 04, 2021

Mark Lemley loses in CosmoKey case

MARK A. LEMLEY, of Durie Tangri LLP, San Francisco, CA, argued for the losing defendant-appellee.

CosmoKey Solutions GmbH & Co. KG appeals the United States District Court for the District of Delaware’s entry of judgment on the pleadings holding that the asserted claims of CosmoKey’s U.S. Patent No. 9,246,903 are ineligible under 35 U.S.C. § 101. The district court held that the asserted claims are directed to abstract ideas and fail to provide an inventive concept. We conclude that the claims of the ’903 patent are patent-eligible under Alice step two because they recite a specific improvement to a particular computer-implemented authentication technique. Accordingly, we reverse the decision of the district court.


The district court’s reliance on column 1, lines 15–53 as allegedly admitting that these steps were routine or conventional is misplaced. While column 1, lines 30–46 describes three prior art references, none teach the recited claim steps. To the contrary, the specification describes the prior art references as disclosing: (1) sending a prompt to a user to confirm the transaction followed by the user’s mobile device sending a confirmation signal; (2) using a user’s mobile device for activating and deactivating a credit card; and (3) sending a token to the user’s terminal from which a transaction has been requested followed by the user’s mobile device capturing the image and sending it back to the authentication device via a second communication channel. Id. at col. 1 ll. 30–46. Read in context, the rest of the passage cited by the district court makes clear that the claimed steps were developed by the inventors, are not admitted prior art, and yield certain advantages over the described prior art. The district court erred in its interpretation of this passage. This is particularly so given the procedural posture of Duo’s motion for judgment under Rule 12(c), which requires the district court to draw all reasonable inferences in favor of CosmoKey. Allstate, 667 F.3d at 390.

The concurring opinion by Judge Reyna:

I concur with the majority decision to reverse the district court’s judgment that the ’903 Patent is patent ineligible under 35 U.S.C. § 101. I conclude that, under Alice step one, the subject claims are directed to patent-eligible subject matter. I do not agree, however, with the majority’s analysis or its application of law. In sum, the majority skips step one of the Alice inquiry and bases its decision on what it claims is step two. I believe this approach is extraordinary and contrary to Supreme Court precedent. It turns the Alice inquiry on its head


The Alice inquiry should be viewed as a loose filter that prevents the patenting of abstract ideas, lest free thinking itself become a form of chattel. There should be no exclusivity to abstractness under the law. Of course, preemption is a primary underlying concern, but so are the concepts of inventiveness and innovation. To this end, step one serves several important purposes, chief among them being that a patent must lay bare that which is claimed. To echo Judge Rich’s declaration: “[T]he name of the game is the claim.” Giles S. Rich, Extent of Protection and Interpretation of Claims—American Perspectives, 21 Int’l Rev. of Indus. Prop. & Copyright L. 497, 499 (1990)). In terms of Alice, step one is about the claim.

At step one, we examine whether the claim is directed to patent-ineligible subject matter. Among other things, this examination permits us to distinguish between claims that recite mere concepts, functions or results (abstract ideas) from those that, through claimed limitations, chart the specific means for achieving such concepts, functions or results. Ancora Techs., Inc. v. HTC Am., Inc., 908 F.3d 1343, 1347 (Fed. Cir. 2018). As a result, our case law has developed specific circumstances that help guide the question of abstraction. See id. at 1347–48 (collecting cases). For example, generally, if a claim is directed to a specific technological solution to a technological problem, it is not directed to an abstract idea. See Enfish, LLC v. Microsoft Corp., 822 F.3d 1327, 1336 (Fed. Cir. 2016).


We should not lose sight, as my colleagues have in this case, that the “question of abstraction is whether the claim is ‘directed to’ the abstract idea itself.” Data Engine Techs. LLC v. Google LLC, 906 F.3d 999, 1011 (Fed. Cir. 2018).


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