Intellectual Ventures I LLC v. Erie Indemnity Company ( 2017 )

United States Court of Appeals
for the Federal Circuit
______________________
INTELLECTUAL VENTURES I LLC,
INTELLECTUAL VENTURES II LLC,
Plaintiffs-Appellants
v.
ERIE INDEMNITY COMPANY, ERIE INSURANCE
EXCHANGE, ERIE INSURANCE PROPERTY &
CASUALTY COMPANY, ERIE INSURANCE
COMPANY, FLAGSHIP CITY INSURANCE
COMPANY, ERIE FAMILY LIFE INSURANCE
COMPANY, OLD REPUBLIC GENERAL
INSURANCE GROUP, INC., OLD REPUBLIC
INSURANCE COMPANY, OLD REPUBLIC TITLE
INSURANCE GROUP, INC., OLD REPUBLIC
NATIONAL TITLE INSURANCE COMPANY,
Defendants-Appellees
______________________
2016-1128, 2016-1132
______________________
Appeals from the United States District Court for the
Western District of Pennsylvania in Nos. 1:14-cv-00220-
MRH, 2:14-cv-01130-MRH, Judge Mark R. Hornak.
______________________
Decided: March 7, 2017
______________________
2 INTELLECTUAL VENTURES I LLC V. ERIE INDEMNITY CO.
CHRISTIAN JOHN HURT, Nix Patterson & Roach LLP,
Dallas, TX, argued for plaintiffs-appellants. Also repre-
sented by DEREK TOD GILLILAND, Daingerfield, TX.
GREGORY H. LANTIER, Wilmer Cutler Pickering Hale
and Dorr LLP, Washington, DC, argued for defendants-
appellees Erie Indemnity Company, Erie Insurance
Exchange, Erie Insurance Property & Casualty Company,
Erie Insurance Company, Flagship City Insurance Com-
pany, Erie Family Life Insurance Company. Also repre-
sented by RICHARD ANTHONY CRUDO, JAMES QUARLES, III;
MONICA GREWAL, Boston, MA; DAVID CHARLES MARCUS,
Los Angeles, CA.
VERNON M. WINTERS, Sidley Austin LLP, San Fran-
cisco, CA, argued for defendants-appellees Old Republic
General Insurance Group, Inc., Old Republic Insurance
Company, Old Republic Title Insurance Group, Inc., Old
Republic National Title Insurance Company. Also repre-
sented by ALEXANDER DAVID BAXTER; ERIK JOHN CARLSON,
Los Angeles, CA; RUSSELL E. CASS, Chicago, IL.
______________________
Before PROST, Chief Judge, WALLACH and CHEN, Circuit
Judges.
PROST, Chief Judge.
Intellectual Ventures I LLC and Intellectual Ventures
II LLC (collectively, “IV”) appeal from a final decision of
the United States District Court for the Western District
of Pennsylvania finding all claims of U.S. Patent No.
6,510,434 (“’434 patent”), U.S. Patent No. 6,519,581 (“’581
patent”), and U.S. Patent No. 6,546,002 (“’002 patent”)
ineligible under 35 U.S.C. § 101, and dismissing IV’s
infringement claims of the ’581 patent for lack of stand-
ing. For the reasons discussed below, we affirm-in-part,
vacate-in-part, and remand-in-part.
INTELLECTUAL VENTURES I LLC V. ERIE INDEMNITY CO. 3
I
IV sued Erie Indemnity Company, Erie Insurance Ex-
change; Erie Insurance Property & Casualty Company;
Erie Insurance Company; Flagship City Insurance Com-
pany; Erie Family Life Insurance Company (collectively,
“Erie”); Old Republic General Insurance Group, Inc.; Old
Republic Insurance Company; Old Republic Title Insur-
ance Group, Inc.; Old Republic National Title Insurance
Company; Highmark, Inc.; Hm Insurance Group, Inc.; Hm
Life Insurance Company; Highmark Casualty Insurance
Company; and Hm Casualty Insurance Company (collec-
tively, “Appellees”), alleging infringement of the ’581
patent, the ’434 patent, and the ’002 patent (collectively,
“patents-in-suit”) in the United States District Court for
the Western District of Pennsylvania. In response, Appel-
lees moved to dismiss IV’s ’581 patent infringement
claims under Rule 12(b)(1) for lack of standing. Appellees
also moved under Rule 12(b)(6), arguing that the claims of
the ’581, ’434, and ’002 patents are directed to ineligible
subject matter under 35 U.S.C § 101.
After concluding that IV did not own the rights to the
’581 patent, the district court granted Appellees’ motion
under 12(b)(1) for lack of standing. In reaching this
conclusion, the district court found that a particular
assignor did not assign any rights in or to the then-
pending application to the ’581 patent, thus breaking a
chain in ownership of the patent. J.A. 24. Moreover, the
district court dismissed IV’s infringement claims under
Rule 12(b)(6), finding that all claims of the three patents-
in-suit were ineligible under § 101. J.A. 77. In its appeal,
IV argues that the district court erred in dismissing its
claims under Rule 12(b)(1) and 12(b)(6). We have juris-
diction under 28 U.S.C. § 1295(a)(1).
II
On appeal, IV raises a number of issues regarding the
proceedings below: (1) IV appeals the district court’s
4 INTELLECTUAL VENTURES I LLC V. ERIE INDEMNITY CO.
dismissal of its infringement claims of the ’581 patent for
lack of standing and its determination that the ’581
patent is directed to ineligible subject matter under § 101;
(2) IV appeals the district court’s determination that the
’434 patent is directed to ineligible subject matter under
§ 101; and (3) IV appeals the district court’s determina-
tion that the ’002 patent is directed to ineligible subject
matter under § 101. We take each issue in turn.
A
1
First, we consider the district court’s dismissal of IV’s
infringement claims under Rule 12(b)(1) as they relate to
the ’581 patent. Our review of the district court’s dismis-
sal for lack of standing under 12(b)(1) is de novo. Abbott
Point of Care Inc. v. Epocal, Inc., 666 F.3d 1299, 1302
(Fed. Cir. 2012). We apply state law to contractual dis-
putes and interpretations of the parties’ patent assign-
ment agreements. 1 Semitool, Inc. v. Dynamic Micro Sys.
1 We note that there are certain instances where
Federal Circuit law is intimately bound up in the contract
interpretation issue. For example, we have held that
“[t]he question of whether or not an agreement provides
for automatic assignment is a matter of federal [patent]
law.” SiRF Tech., Inc. v. Int’l Trade Comm’n, 601 F.3d
1319, 1326 (Fed. Cir. 2010). “Although state law governs
the interpretation of contracts generally . . . the question
of whether a patent assignment clause creates an auto-
matic assignment or merely an obligation to assign is
intimately bound up with the question of standing in
patent cases. We have accordingly treated it as a matter
of federal law.” Abraxis Bioscience, Inc. v. Navinta LLC,
625 F.3d 1359, 1364 (Fed. Cir. 2010) (quoting DDB Techs.,
L.L.C. v. MLB Advanced Media, L.P., 517 F.3d 1284, 1290
(Fed. Cir. 2008); see Speedplay, Inc. v. Bebop, Inc., 211
INTELLECTUAL VENTURES I LLC V. ERIE INDEMNITY CO. 5
Semiconductor Equip. GmbH, 444 F.3d 1337, 1341 (Fed.
Cir. 2006). For this particular dispute, California law
applies. See Erie Resp. Br. 6 (noting that the parties
executed the agreement underlying this matter in Cali-
fornia); Appellants’ Br. 18 (recognizing party agreement
that California law governs). Because contract interpre-
tation is a legal determination, the parties’ contract
dispute is reviewed without deference on appeal. Semi-
tool, 444 F.3d at 1341.
The ’581 patent issued from a continuation patent ap-
plication of U.S. Patent No. 6,236,983 (“’983 patent”). 2
After a series of assignments, the rights to the ’581 patent
(then, a pending application) and the ’983 patent were
assigned to AllAdvantage.com. J.A. 837–54. This as-
signment agreement expressly assigned the ’983 patent
and any continuation of that patent to AllAdvantage.com.
The parties do not dispute that this assignment covered
the then-pending application to the ’581 patent and that
AllAdvantage.com owned both that application and its
parent (the ’983 patent) upon execution of this agreement.
See, e.g., Erie Resp. Br. 5–6. Less than six months later,
F.3d 1245, 1253 (Fed. Cir. 2000) (stating that while the
ownership of patent rights is typically a question exclu-
sively for state courts, the question of whether contractual
language effects a present assignment of patent rights, or
an agreement to assign rights in the future, is resolved by
Federal Circuit law). As explained below, however, IV
has not persuaded us that this case implicates such
exceptions and indeed, admitted that California law
governs the contract interpretation inquiry. Accordingly,
we analyze the contract interpretation issue under Cali-
fornia law.
2 Because we do not reach the issue of patent-
eligibility of the ’581 patent, we did not include a sum-
mary of the technology of the patent in this opinion.
6 INTELLECTUAL VENTURES I LLC V. ERIE INDEMNITY CO.
AllAdvantage.com assigned various patents (including the
’983 patent) and certain pending applications to Alset.
J.A. 805–06 (“the Alset Agreement”). Although this
agreement expressly identified the various patents and
pending applications subject to assignment—including
the ’983 patent and several of its pending foreign patent
application counterparts—it did not explicitly list the ’581
patent’s then-pending application. Id.In addition to its express identification and assign-
ment of particular assets, this agreement included a more
general grant clause: “Assignor, does hereby assign unto
Assignee, all right, including common law rights, title and
interest in the United States of America . . . in and to said
patents together with the goodwill of the business symbol-
ized by said patents and applications and registrations
thereof.” J.A. 806. Approximately one year after the
execution of this agreement, the U.S. Patent and Trade-
mark Office (“PTO”) issued the ’581 patent. Several years
later, Alset assigned the ’581 patent to an IV entity that
later recorded that assignment with the PTO. J.A. 862–
64. In light of this framework, the district court held that
Alset did not convey title to the ’581 patent. J.A. 24. We
conclude that the Alset Agreement did not include an
assignment of rights to the ’581 patent and therefore
affirm the district court’s Rule 12(b)(1) dismissal on that
ground.
Under Title 35, only patentees and their successors in
title to a patent may bring an action for infringement. 35
U.S.C. §§ 261, 281. IV argues that although the Alset
Agreement did not expressly identify the ’581 patent’s
then-pending application, the agreement transferred title
because the parties intended for the assignment to cover
this asset. To demonstrate intent, IV identifies two
portions of the agreement’s general grant clause it be-
lieves support its positon (reproduced below with empha-
sis added to the two areas of IV’s focus): “Assignor, does
hereby assign unto Assignee, all right, including common
INTELLECTUAL VENTURES I LLC V. ERIE INDEMNITY CO. 7
law rights, title and interest in the United States of
America . . . in and to said patents together with the
goodwill of the business symbolized by said patents and
applications and registrations thereof.” J.A. 806. Specifi-
cally, IV argues that the “in and to said patents” and
“goodwill of the business symbolized by said patents”
portions of this clause each—individually and inde-
pendently—support its position. We disagree.
Under California law, “[a] contract must be so inter-
preted as to give effect to the mutual intention of the
parties as it existed at the time of contracting, so far as
the same is ascertainable and lawful.” Cal. Civ. Code
§ 1636 (West 2016). “The language of a contract is to
govern its interpretation, if the language is clear and
explicit, and does not involve an absurdity.” Id. § 1638.
When (as here) “a contract is reduced to writing, the
intention of the parties is to be ascertained from the
writing alone, if possible.” Id. § 1639. A court also may
consider evidence extrinsic to a contract under certain
circumstances. See, e.g., Wolf v. Superior Court, 8 Cal.
Rptr. 3d 649, 656 (Cal. Ct. App. 2004) (citing the Califor-
nia Supreme Court).
At the outset, first we must determine whether and to
what extent the parties’ extrinsic evidence affects the
meaning of these two portions of this clause. “Where the
meaning of the words used in a contract is disputed, the
. . . court must provisionally receive any proffered extrin-
sic evidence which is relevant to show whether the con-
tract is reasonably susceptible of a particular meaning.”
Id. at 655 (citation and internal quotation marks omitted)
(citing the California Supreme Court). Thus, contract
interpretation under California law is a two-step process.
“First the court provisionally receives (without actually
admitting) all credible evidence concerning the parties’
intentions to determine ‘ambiguity,’ i.e., whether the
language is ‘reasonably susceptible’ to the interpretation
urged by a party.” Id. at 656 (citation omitted). “If in
8 INTELLECTUAL VENTURES I LLC V. ERIE INDEMNITY CO.
light of the extrinsic evidence the court decides the lan-
guage is ‘reasonably susceptible’ to the interpretation
urged, the extrinsic evidence is then admitted to aid in
the second step—interpreting the contract.” Id. (citation
omitted).
IV identifies extrinsic evidence that it contends
shapes the meaning of the “in and to” and the “goodwill of
the business symbolized” language and demonstrates that
the parties originally intended to assign the ’581 patent.
Specifically, IV observes that upon execution, Alset rec-
orded the assignment at the PTO and represented in its
terminal disclaimer that it owned all the rights to the ’581
patent. Moreover, IV notes that Alset filed updated power
of attorneys and paid the ’581 patent’s issuance fee.
Upon provisional consideration of the extrinsic evi-
dence IV proffered, we agree with the district court’s
conclusion that there is no ambiguity within the Alset
Agreement that could render it reasonably susceptible to
IV’s interpretation. The assignment itself expressly listed
the seventeen patents and applications that the parties
intended to transfer, with clear language that conveyed
the rights, “in and to,” and “goodwill of the business
symbolized by,” those explicitly identified assets.
J.A. 806. In the context of this agreement, IV’s proffered
evidence neither resolves any ambiguity nor shapes the
meaning of the words contained within the general grant
clause. Although this evidence may lead one to reasona-
bly conclude that Alset believed it owned the ’581 patent
at some later point in time, it would be error for us to
rewrite the parties’ agreement to include that which was
plainly not included. Indeed,
[i]f the plain language of the instrument is unam-
biguous, a court may not “read into” the document
additional terms in order to conform its meaning
to what the court’s “intuition” tells it the parties
must have intended. Rather, the court “is simply
INTELLECTUAL VENTURES I LLC V. ERIE INDEMNITY CO. 9
to ascertain and declare what is in terms or in
substance contained therein, not to insert what
has been omitted, or to omit what has been in-
serted . . . .”
PV Little Italy, LLC v. MetroWork Condo. Assn., 210 Cal.
App. 4th 132, 135 (2012) (citing Cal. Civ. Proc. Code
§ 1858 (West 2016)). Taken together, the Alset Agree-
ment is not reasonably susceptible to IV’s proffered inter-
pretation and, thus, we need not consider the extrinsic
evidence advanced by IV. 3 See Producers Dairy Delivery
Co. v. Sentry Ins. Co., 718 P.2d 920, 925 (Cal. 1986)
(explaining that a court should not consider extrinsic
evidence “if the evidence offered would not persuade a
reasonable man that the instrument meant anything
other than the ordinary meaning of its words” (alterna-
tions, citation, and internal quotation marks omitted)).
Because we conclude that IV’s extrinsic evidence does not
lend this clause reasonably susceptible to IV’s interpreta-
tions, we move to IV’s two specific arguments applying a
plain meaning interpretation to the contract. See Wolf,
114 Cal. App. 4th at 1356.
First, regarding “in and to said patents,” IV argues
that the agreement automatically incorporated rights to
3 Even if we considered the extrinsic evidence, we
agree with the district court that the evidence “speaks to
Alset’s belief in its ownership” of the ’581 patent and
Alset’s actions holding “itself out as the owner of the ’581
patent after executing the Alset Agreement,” but it says
nothing about “AllAdvantage’s intent aside from its
decision to do nothing to assert further ownership inter-
est.” IV, 134 F. Supp. 3d at 894. Indeed, some of the
extrinsic evidence demonstrates that, when the other
parties in the chain-of-title wanted to assign continuation
applications like the application leading to the ’581 pa-
tent, they knew how to do so. See id.
10 INTELLECTUAL VENTURES I LLC V. ERIE INDEMNITY CO.
the then-pending ’581 application because as a continua-
tion, it is necessarily bound to the same inventive subject
matter of its parent. IV predicates its argument on the
patents’ familial relationship because the grant clause
conveyed rights “in and to” the subject matter of the
parent patent (not simply just title to it). We conclude
that the “in and to said patents” language does not sup-
port IV’s position. Patents, applications for patents, or
any interest therein, must be assigned by an instrument
in writing. 35 U.S.C. § 261. In assigning ownership
rights here, the parties limited their written instrument
to the seventeen patents and applications expressly listed
in that agreement. J.A. 805–06 (including the ’983 pa-
tent, but not the then-pending ’581 patent’s application).
It does not mention either the application that led to the
’581 patent or the ’581 patent itself, J.A. 805–06, a point
that IV concedes, Appellants’ Br. 22. It does not disclose
that continuation applications or other family members of
the enumerated patents are assigned. J.A. 805–06. That
several patent applications appear in the Alset Agree-
ment suggests that, if AllAdvantage intended to convey
the application leading to the ’581 patent to Alset, it knew
how to do so.
Turning to the broader language of the agreement, IV
has not demonstrated that the rights “in and to” a partic-
ular patent automatically include its child applications.
Rather, IV seems to conflate the meaning of the word
“patent,” as used in the agreement, with “invention”; the
latter which we held conveyed rights to continuation
applications. See DDB Techs., 517 F.3d at 1290. Thus,
this language did not convey any rights, and a conclusion
otherwise would directly conflict with the plain language
of the agreement. For example, if the “in and to said
patents” language automatically conveyed the rights to all
applications within the family of those expressly identi-
fied, the agreement need not list the ’983 patent’s foreign
counterpart applications either. But as Erie correctly
INTELLECTUAL VENTURES I LLC V. ERIE INDEMNITY CO. 11
observes, the agreement listed three of the ’983 patent’s
foreign applications. J.A. 805; Erie Resp. Br. 31. The
agreement did not, however, list the then-pending ’581
patent application. J.A. 805–06. We thus conclude that
the “in and to said patents” language did not convey any
rights to the ’581 patent.
Second, regarding the “goodwill of the business sym-
bolized by said patents and applications” portion of the
agreement, IV argues the goodwill assigned here includes
the right to commercialize or license the patented inven-
tion through the expiration of the ’983 patent as part of
its patent monopoly. To support this contention, IV refers
again to the terminal disclaimer Alset filed and cites Scott
Paper Co. v. Marcalus Manufacturing Co., 326 U.S. 249(1945). IV relies on this case to support its position that
the exclusion of the ’581 patent would necessarily devalue
this goodwill if it were unable to commercialize the inven-
tion without risk of infringing the ’581 patent. IV main-
tains if legal title to the common inventive subject matter
were severed, Alset could not receive the goodwill relating
to the enjoyment of the patent monopoly in the ’983
patent unless it received rights to the ’581 patent as well.
Similar to the “in and to said patents” portion dis-
cussed above, we conclude that the agreement’s “goodwill
of the business symbolized by said patents and applica-
tions” portion did not transfer title to the ’581 patent as
well. IV largely predicates its arguments on the assump-
tion that the agreement assigned the goodwill of the ’983
patent itself. It did not. Rather, the plain language of the
agreement assigned the “goodwill of the business symbol-
ized by [the ’983 patent].” J.A. 806 (emphasis added). At
best, this portion of the Alset Agreement assigned the
goodwill of the resulting commercial exploitation of the
patent. Indeed, IV’s citation to Scott Paper actually
supports the conclusion that goodwill is something other
than the patent instrument itself. In that case, the Su-
preme Court referred to the goodwill in the context of “the
12 INTELLECTUAL VENTURES I LLC V. ERIE INDEMNITY CO.
patented article or product.” Scott Paper, 326 U.S. at 256.
In other words, goodwill here refers to the goodwill result-
ing from the commercial exploitation of the products
covered by the ’983 patent. But IV’s commercial exploita-
tion of the ’983 patent bears no relevance to the ’581
patent instrument itself. Because goodwill cannot sweep
in patents not expressly listed in the parties’ agreement,
this portion of the grant clause did not transfer any rights
in the ’581 patent either. 4
Because we conclude that the Alset Agreement did not
convey any rights to the ’581 patent, IV lacked standing to
bring suit on that patent. Accordingly, we affirm the
district court’s Rule 12(b)(1) dismissal for lack of stand-
ing.
2
In addition to finding that IV lacked standing to as-
sert infringement of the ’581 patent against Erie and Old
Republic, the district court concluded that the ’581 patent
is directed to an abstract idea and otherwise lacks an
inventive concept, such that it is patent-ineligible under
§ 101. See IV, 134 F. Supp. 3d at 909–17. We must
vacate this aspect of the district court’s decision.
Because IV lacks standing to assert infringement of
the ’581 patent, we may not address that patent’s validity
under § 101. When the party that filed suit is not the
“patentee” under § 281 and otherwise fails to join the
patentee to the suit, we dismiss all claims based on the
subject patent. See, e.g., Diamond Coating Techs., LLC v.
4 Because we do not subscribe to IV’s interpretation
of the assignment, i.e., assigning goodwill to the patent
instrument itself, we express no opinion as to whether the
assignment of goodwill of a patent itself would have been
effective in transferring the rights to the parent’s uniden-
tified child application.
INTELLECTUAL VENTURES I LLC V. ERIE INDEMNITY CO. 13
Hyundai Motor Am., 823 F.3d 615, 618–19 (Fed. Cir.
2016). And when the patentee has not joined the action,
we may not consider the merits of an affirmative defense
directed to the patent in question, such as patent-
eligibility under § 101. See, e.g., Bd. of Trs. of Leland
Stanford Junior Univ. v. Roche Molecular Sys., Inc., 583
F.3d 832, 848–49 (Fed. Cir. 2009) (“Stanford . . . lacks
standing to assert its claims of infringement . . . . Thus,
the district court lacked jurisdiction over Stanford’s
infringement claim and should not have addressed the
validity of the patents. . . . The district court’s grant of
summary judgment of invalidity is therefore vacated, and
the case is remanded with instructions to dismiss Stan-
ford’s claim for lack of standing.” (citation omitted)).
Without the patentee joining suit, courts may not make
findings about the ’581 patent against which the patentee
has had no opportunity to defend. We therefore vacate
the district court’s summary judgment order of invalidity
as to this patent and remand with instructions to dismiss
all claims based on the ’581 patent.
B
Next, IV appeals the district court’s dismissal of its
patent infringement claims relating to the ’434 patent for
reciting ineligible subject matter under § 101.
We review the district court’s dismissal under Rule
12(b)(6) according to the law of the regional circuit.
Content Extraction & Transmission LLC v. Wells Fargo
Bank, Nat’l Assn., 776 F.3d 1343, 1346 (Fed. Cir. 2014).
The Third Circuit applies a de novo standard of review to
motions to dismiss under Rule 12. Sands v. McCormick,
502 F.3d 263, 267 (3d Cir. 2007). Patent eligibility under
§ 101 is an issue of law to which we review without defer-
ence. OIP Techs., Inc. v. Amazon.com, Inc., 788 F.3d
1359, 1362 (Fed. Cir. 2015).
Section 101 of the Patent Act defines patent-eligible
subject matter: “Whoever invents or discovers any new
14 INTELLECTUAL VENTURES I LLC V. ERIE INDEMNITY CO.
and useful process, machine, manufacture, or composition
of matter, or any new and useful improvement thereof,
may obtain a patent therefore, subject to the conditions
and requirements of this title.” 35 U.S.C. § 101. In
interpreting this statutory provision, the Supreme Court
has held that its broad language is subject to an implicit
exception for “laws of nature, natural phenomena, and
abstract ideas,” which are not patentable. Alice Corp. v.
CLS Bank Int’l, 134 S. Ct. 2347, 2355 (2014).
To determine whether the exception applies, the Su-
preme Court has set forth a two-step inquiry. Specifical-
ly, a court must determine: (1) whether the claim is
directed to a patent-ineligible concept, i.e., a law of na-
ture, a natural phenomenon, or an abstract idea; and if so,
(2) whether the elements of the claim, considered “both
individually and ‘as an ordered combination,’” add enough
to “‘transform the nature of the claim’ into a patent-
eligible application.” Id. (quoting Mayo Collaborative
Servs. v. Prometheus Labs., Inc., 132 S. Ct. 1289, 1297–98
(2012)). Applying this two-step process to claims chal-
lenged under the abstract idea exception, we typically
refer to step one as the “abstract idea” step and step two
as the “inventive concept” step. Affinity Labs of Tex., LLC
v. DIRECTV, LLC, 838 F.3d 1253, 1257 (Fed. Cir. 2016).
Under the “abstract idea” step we must evaluate “the
‘focus of the claimed advance over the prior art’ to deter-
mine if the claim’s ‘character as a whole’ is directed to
excluded subject matter.” Id. (citation omitted). If the
concept is directed to a patent-ineligible concept, we
proceed to the “inventive concept” step. For that step we
must “look with more specificity at what the claim ele-
ments add, in order to determine ‘whether they identify
an “inventive concept” in the application of the ineligible
subject matter’ to which the claim is directed.” Id. at
1258 (quoting Elec. Power Grp. v. Alstom S.A., 830 F.3d
1350, 1353 (Fed. Cir. 2016)).
INTELLECTUAL VENTURES I LLC V. ERIE INDEMNITY CO. 15
Turning to the invention, the ’434 patent contains
twenty-eight claims relating to methods and apparatuses
that use an index to locate desired information in a com-
puter database. According to the patent, prior art data-
base searching methods were inefficient and often
returned many false positives. ’434 patent col. 1 ll. 40–44.
The patent explains that a prior art database search for
records containing the term “Ford,” for example, may
return hits related to the Ford Company, Ford Theatre
and the Ford brand of trucks. Thus, a searcher interested
only in information related to Ford trucks would need to
sift through a potentially large number of false hits to
locate the desired information.
The ’434 patent proposes to search the database using
an index, which “is essentially a guide to the records of
the database.” Id. at col. 2 ll. 39–41. According to the
’434 patent, every record in the database is associated
with one or more descriptive terms. For example, a
database record for a restaurant that serves Chinese food,
accepts AMERICAN EXPRESS and offers valet parking
could be associated with the terms “Chinese,”
“AMERICAN EXPRESS,” and “valet parking.” Id. at col.
7 ll. 46–55. The database index in turn organizes this
information using a series of “tags,” notably category tags
and domain tags. The “category” tags comprise a group-
ing of similar terms. For example, a “Cuisine” category
tag could include the terms “Chinese,” “Mexican,” and
“American.” And the “domain” tags describe a grouping of
similar categories. A “Restaurant” domain tag could
include categories such as the “Cuisine” category, as well
as other categories relevant to Restaurants, such as
“Payment Option” and “Amenities.” Each record in the
database includes an index component that identifies the
category and domain tags associated with that record. In
the preferred embodiment, each tag is written in the well-
16 INTELLECTUAL VENTURES I LLC V. ERIE INDEMNITY CO.
known eXtensible Markup Language (XML). 5 Id. at col. 9
ll. 14–17. Each tag also has an associated metafile that
provides additional information about the tag, such as its
relationship to other tags and its place in the index’s
hierarchical structure.
When the system receives a search request, a set of
tags that corresponds to the request is somehow identified
by the system. And the system uses that set of tags to
search for records that have an index component identify-
ing the same set of tags. In other words, if the user
looking for a restaurant searches for “American with valet
parking,” the claimed system would identify and return
database records having both “Cuisine” and “Amenities”
tags in their associated index component. If those tags
have associated metafiles, the system may utilize the
available metadata to help refine the search. The system
may, for example, determine that the term “American” is
also associated with other category tags, such as “Brand,”
“Language,” and the like. The system may then attempt
to resolve the ambiguity by querying the user to choose
cuisine or brand before returning the database records.
IV identifies independent claims 1 and 19 as exempla-
ry methods of creating and searching a database, respec-
tively. Claim 1 provides:
1. A method for creating a database and an index
to search the database, comprising the steps of:
creating the index by defining a plurality of XML
tags including domain tags and category tags;
5 We provide a more detailed summary of XML in
our opinion in the companion appeal. Intellectual Ven-
tures I LLC v. Capital One Financial Corp., Nos. 2016-
1077, slip op. at 10–11 (Fed. Cir. March 7, 2017).
INTELLECTUAL VENTURES I LLC V. ERIE INDEMNITY CO. 17
creating a first metafile that corresponds to a first
domain tag;
and creating the database by providing a plurality
of records, each record having an XML index com-
ponent.
Id. at col. 15 ll. 38–45. Claim 19 provides:
19. A method for searching a database of infor-
mation, comprising the steps of:
receiving a request for information from a client,
the request having a first term;
identifying a first XML tag that is associated with
the first term;
determining whether a first metafile corresponds
to the first XML tag;
if the first metafile corresponds to the first XML
tag, then transmitting the first XML tag, the first
metafile and query code to the client;
once the client conducts a query by executing the
query code using the first XML tag and the first
metafile, then receiving query results including a
first set of XML tags from the client;
combining the first set of XML tags into a key;
using the key to search the database to locate rec-
ords including the first set of XML tags; and de-
livering the records.
Id. at col. 17 ll. 43–63. Thus, IV contends “[t]he heart of
the ’434 patent is improved computer database search
technology that utilizes an index constru[ct]ed of tags and
metadata to facilitate searches.” Appellants’ Br. 46–47.
18 INTELLECTUAL VENTURES I LLC V. ERIE INDEMNITY CO.
1
Under step one, we agree with the district court that
the invention is drawn to the abstract idea of “creating an
index and using that index to search for and retrieve
data.” J.A. 63. As the patent itself observes, the inven-
tion relates to “locating information in a database, and . . .
using an index that includes tags and metafiles to locate
the desired information.” Id. at col. 1 ll. 24–26. This type
of activity, i.e., organizing and accessing records through
the creation of an index-searchable database, includes
longstanding conduct that existed well before the advent
of computers and the Internet. For example, a hardcopy-
based classification system (such as library-indexing
system) employs a similar concept as the one recited by
the ’434 patent. There, classifiers organize and cross-
reference information and resources (such as books,
magazines, or the like) by certain identifiable tags, e.g.,
title, author, subject. Here, tags are similarly used to
identify, organize, and locate the desired resource.
We have previously held other patent claims ineligible
for reciting similar abstract concepts that merely collect,
classify, or otherwise filter data. For example, in In re
TLI Communications LLC Patent Litigation, we conclud-
ed that the concept of classifying data (an image) and
storing it based on its classification is abstract under step
one. 823 F.3d 607, 611 (Fed. Cir. 2016). In Content
Extraction, we similarly held that the concept of data
collection, recognition, and storage abstract as well. 776
F.3d at 1347. More recently, in Bascom Global Internet
Services, Inc. v. AT&T Mobility LLC, we held that a claim
to a “content filtering system for filtering content re-
trieved from an Internet computer network” was directed
to an abstract idea. 827 F.3d 1341, 1348–49 (Fed. Cir.
2016). Here, the claimed creation of an index used to
search and retrieve information stored in a database is
similarly abstract.
INTELLECTUAL VENTURES I LLC V. ERIE INDEMNITY CO. 19
IV argues that the claims of the ’434 patent are drawn
to a specific search architecture that improves how com-
puter databases function, just like the self-referential
table claims at issue in Enfish, LLC v. Microsoft Corp. 822
F.3d 1327 (Fed. Cir. 2016). In support of its argument, IV
relies heavily on the fact that many of the claims, includ-
ing representative claims 1 and 19, are directed expressly
to building an index using XML tags. IV’s reliance on this
known markup language to tether the claimed invention
to a specific type of database architecture, however, is
unavailing. As an initial matter, not all claims recite
these XML tags. Independent claim 7, for example,
recites a method of searching a database of records using
an index without the need for this XML-based tag. ’434
patent col. 16 ll. 10–23. And the patent itself recognizes
that the invention is not necessarily limited to XML
language. See id. at col. 15 ll. 19–23 (“Although the
present invention has been described in connection with
the XML language, those skilled in the art will realize
that the invention can also be practiced using other
languages that use tags and support the association of a
file . . . .”).
Moreover, even if all the claims were so limited, mere-
ly using XML tags—as opposed to other kinds of tags—to
build an index is still abstract. The claims are not focused
on how usage of the XML tags alters the database in a
way that leads to an improvement in the technology of
computer databases, as in Enfish. Instead, the claims
simply call for XML-specific tags in the index without any
further detail. The patent concedes that the XML tags
were previously known in the art. Id. at col. 8 l. 67–col. 9
l. 4 (observing that “XML is a syntax for creating a
markup language that uses a set of tags” that comprises a
standard that is maintained by the World Wide Web
Consortium). The focus of the claims, therefore, remains
at a high level on searching a database using an index.
20 INTELLECTUAL VENTURES I LLC V. ERIE INDEMNITY CO.
The inclusion of XML tags as the chosen index building
block, with little more, does not change that conclusion.
Because we agree with the district court that the
heart of the claimed invention lies in creating and using
an index to search for and retrieve data, we conclude that
the claims here are directed to an abstract concept under
Alice and its progeny and, thus, move to step two.
2
In applying step two of the Alice analysis, we must
“determine whether the claims do significantly more than
simply describe [the] abstract method” and thus trans-
form the abstract idea into patentable subject matter.
Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709, 715 (Fed.
Cir. 2014). We look to see whether there are any “addi-
tional features” in the claims that constitute an “inventive
concept,” thereby rendering the claims eligible for patent-
ing even if they are directed to an abstract idea. Alice,
134 S. Ct. at 2357. Those “additional features” must be
more than “well-understood, routine, conventional activi-
ty.” Mayo, 132 S. Ct. at 1298.
Evaluating the representative claims 1 and 19, we
agree with the district court that they lack an “inventive
concept” that transforms the abstract idea of creating an
index and using that index to search for and retrieve data
into a patent-eligible application of that abstract idea.
J.A. 66–67. IV again argues that the claimed contribution
lies in the utilization of an index constructed of specific
XML tags and metadata to facilitate searches. But the
recitation of an index employing XML tags to navigate a
computerized database is simply not enough to transform
the patent-ineligible abstract idea here into a patent-
eligible invention. See Alice, 134 S. Ct. at 2357 (“[C]laims,
which merely require generic computer implementation,
fail to transform [an] abstract idea into a patent-eligible
invention.”).
INTELLECTUAL VENTURES I LLC V. ERIE INDEMNITY CO. 21
The patent admits that an index is simply “a guide
that is used to locate information stored in a database.”
’434 patent col. 2 ll. 39–41. Furthermore, we fail to see
how the patentee’s use of a well-known tag, i.e., XML
tag—to form an index—sufficiently transforms the claims
into a patent eligible invention. While limiting the index
to XML tags certainly narrows the scope of the claims, in
this instance, it is simply akin to limiting an abstract idea
to one field of use or adding token post solution compo-
nents that do not convert the otherwise ineligible concept
into an inventive concept. See Bilski v. Kappos, 561 U.S.
593, 612 (2010). Similarly, the metafiles associated with
these tags do not transform the claim into something
beyond a conventional computer practice for facilitating
searches. Indeed, the ’434 patent describes these meta-
files as mere indicators that provide additional infor-
mation about the tags hierarchical structure in the index.
Id. at col. 2 ll. 60–62. The use of metafiles to build the
claimed index is yet another natural consequence of
carrying out the abstract idea in a computing environ-
ment and is, therefore, also insufficient to transform a
patent-ineligible abstract idea into a patent-eligible
invention. In this case, the claims do not sufficiently
recite how the inclusion of XML tags or metadata leads to
an improvement in computer database technology
through some “non-conventional and non-generic ar-
rangement of known, conventional pieces.” Bascom, 827
F.3d at 1349–52.
Moreover, the remaining limitations recite routine
computer functions, such as the sending and receiving
information to execute the database search, e.g., receiving
a request for information and delivering records. These
are no more than the “performance of ‘well-understood,
routine, [and] conventional activities previously known to
the industry.’” Content Extraction, 776 F.3d at 1347–48
(citation omitted). Thus, while the claims necessarily
cabin the idea of categorical data search and retrieval to a
22 INTELLECTUAL VENTURES I LLC V. ERIE INDEMNITY CO.
computer environment, the claimed computer functionali-
ty can only be described as generic or conventional.
Accordingly, evaluating these claimed elements either
individually or as an ordered combination, we conclude
that claimed steps recite no more than routine steps
involving generic computer components and conventional
computer data processing activities to accomplish the
well-known concept of creating an index and using that
index to search for and retrieve data.
C
Third, and finally, IV appeals the district court’s dis-
missal of IV’s claims relating to the ’002 patent for recit-
ing ineligible subject matter under § 101.
The ’002 patent contains forty-nine claims relating to
systems and methods for accessing a user’s remotely
stored data and files. The inventor of the ’002 patent
perceived a need to improve the accessibility of data
stored across a user’s disparate electronic devices. The
specification explains “[i]t is not uncommon for many
users to have multiple computers, PDAs, and other com-
puter-related devices. Each individual computer or PDA
may include specific menu items and bookmarks that do
not exist in another computer or PDA.” ’002 patent col. 2
ll. 35–40. “For example, a computer used at work may be
the only device that includes a spreadsheet program while
a computer used at home may be the only device that
includes bookmarked URLs. Thus, the user will not have
access to the bookmarks from the user’s work computer
and likewise, will not have access to the spreadsheet
program from the user’s home computer.” Id. at col. 2
ll. 40–46.
To solve this problem, the ’002 patent discloses a “mo-
bile interface” that can be called up on the user’s comput-
er or mobile device. That mobile interface displays a
plurality of pointers to user-specific resources and infor-
INTELLECTUAL VENTURES I LLC V. ERIE INDEMNITY CO. 23
mation stored on the user’s various devices. These point-
ers, “similar to bookmarks used in web browsers,” ’002
patent at col. 8 l. 34, purportedly allow the user to re-
trieve and access remotely stored documents, applica-
tions, images and the like, irrespective of the user’s
location or device. 6 Claim 40 is representative:
40. A system for storing and accessing user specif-
ic resources and information, the system compris-
ing:
a network for accessing the user specific resources
and information stored in a network server;
and a local device communicating with the net-
work and having a local memory and a mobile in-
terface, wherein the local memory also includes
user specific resources and information, and the
mobile interface includes pointers corresponding
to the user specific resources and information that
are stored either on the local device or the net-
work server, wherein the pointers provide links to
access the corresponding user specific resources
and information.
Id. at col. 19 l. 47–col. 20 l. 6. In other words, the claimed
invention is directed to a “mobile interface” on a user’s
device that is capable of accessing the user’s data stored
anywhere, whether on the user’s device or elsewhere on a
remote network server.
6 Broadly speaking, in object-oriented program-
ming, pointers are objects that point to a particular value
stored in memory by referencing its memory address. In
the context of the invention, a pointer includes a reference
to a type of menu item that a system can access on a
computer, handheld device, or a server. ’002 patent
col. 1 ll. 36–38.
24 INTELLECTUAL VENTURES I LLC V. ERIE INDEMNITY CO.
1
In analyzing the claims under step one, the district
court determined that the invention is drawn to the idea
of “remotely accessing user specific information.” J.A. 72.
We agree with this conclusion. As the patent itself ob-
serves, the invention provides “a system and method that
allows a user to access specific documents, files, programs
. . . from any computer device located in a geographic
location.” ’002 patent col. 3 l. 66–col. 4 l. 4. Remotely
accessing and retrieving user-specified information is an
age-old practice that existed well before the advent of
computers and the Internet.
IV argues that the claimed mobile interface is a par-
ticular software-driven machine that performs specific
operations to solve a problem unique to the field of com-
puter networks. Yet the claimed invention does not recite
any particular unique delivery of information through this
mobile interface. Rather, it merely recites retrieving the
information through the mobile interface. Nor do the
claims describe how the mobile interface communicates
with other devices or any attributes of the mobile inter-
face, aside from its broadly recited function. Thus, the
mobile interface here does little more than provide a
generic technological environment to allow users to access
information. And as we have previously observed, “[a]n
abstract idea does not become nonabstract by limiting the
invention to a particular field of use or technological
environment, such as the Internet.” Intellectual Ventures
I LLC v. Capital One Bank (USA), 792 F.3d 1363, 1366
(Fed. Cir. 2015) (“Intellectual Ventures I”). We conclude
therefore that the ’002 patent’s concept of remotely ac-
cessing user-specific information is abstract, and thus
fails under step one.
2
Under step two, we conclude that the claims recite no
“inventive concept” to transform the abstract idea of
INTELLECTUAL VENTURES I LLC V. ERIE INDEMNITY CO. 25
remotely accessing user-specific information into a patent
eligible application of that abstract idea. Rather, the
claims merely recite generic, computer implementations
of the abstract idea itself.
IV places great emphasis on the claims’ recitation of a
mobile interface and its associated pointers. IV argues
that the ’002 patent overrides the routine use of pointers,
e.g., in the context of a local system, by intelligently
accessing and combining them through the mobile inter-
face to retrieve remotely-stored data. See, e.g., Appel-
lants’ Br. 62 (“All of the claims are limited to a specific
use of multiple pointers to retrieve the user-specific data
via a mobile interface in a network with a server and local
de[v]ice.”). According to IV, this provides users with
access to their files and data from any location irrespec-
tive of the device used.
We, however, conclude that the claims do not suffi-
ciently recite an inventive concept that transforms the
abstract idea into a patent-eligible invention. The recited
use of a mobile interface and pointers to retrieve user
information evidences nothing more than a “generic
computer implementation” of the abstract idea that is
insufficient to transform a patent-ineligible abstract idea
into a patent-eligible invention. Alice, 134 S. Ct. at 2357.
The ’002 patent does not provide an inventive solution to
a problem in implementing the idea of retrieving user-
specified information; it simply recites that the abstract
idea will be implemented using the conventional compo-
nents and functions generic to electronic mobile devices.
These recited features are simply “conventional steps,
specified at a high level of generality.” Ultramerical, 772
F.3d at 716 (citation omitted).
The claimed mobile interface is so lacking in imple-
mentation details that it amounts to merely a generic
component (software, hardware, or firmware) that per-
mits the performance of the abstract idea, i.e., to retrieve
26 INTELLECTUAL VENTURES I LLC V. ERIE INDEMNITY CO.
the user-specific resources. Further, this interface pro-
vides no more than similar user interfaces recited in
claims that we have previously held ineligible. See, e.g.,
Intellectual Ventures I, 792 F.3d at 1369–70; Internet
Patents Corp. v. Active Network, Inc., 790 F.3d 1343,
1344–45, 1348–49 (Fed. Cir. 2015). As in those cases, the
’002 patent’s interface merely provides a generic, func-
tionally recited component “tasked with tailoring infor-
mation and providing it to the user.” Intellectual Ventures
I at 1370–71. And the mobile interface’s incorporation of
pointers is not sufficient to transform the abstract concept
either. The mobile interface relies on these pointers to
retrieve user resources and information over the network
so that a user may view them. But receiving transmitted
data over a network and displaying it to a user merely
implicates purely conventional activities that are the
“most basic functions of a computer.” Alice, 134 S. Ct. at
2359. As the ’002 patent observes, pointers themselves
are conventional, as is the manner in which the claims
employ them in conjunction with the mobile interface.
’002 patent col. 1 ll. 34–38.
Finally, we find unconvincing IV’s argument that the
claimed mobile interface and pointers carry out more than
their routine functions because they allow users to re-
trieve previously inaccessible information, regardless of
location or format. Nowhere do the claims recite elements
or components that describe how the invention overcomes
these compatibility issues. Although the patent itself
describes in general terms the ability to access user-
specific resource and information from any computer, e.g.,
’002 patent col. 3 l. 66–col. 4 l. 4, neither the specification
nor the claims cabin the invention specifically in terms of
solving these compatibility issues. Rather, the systems
and methods recited merely relate to obtaining remote
information by displaying a mobile interface at the local
device and retrieving the user-specific resources and
information using pointers. See, e.g., id. at col. 17 ll. 9–
INTELLECTUAL VENTURES I LLC V. ERIE INDEMNITY CO. 27
21. Without an explanation of the “mechanism” for “how
the result is accomplished,” this purported feature of the
invention cannot supply an inventive concept. Internet
Patents, 790 F.3d at 1348; see also Elec. Power Grp., 830
F.3d at 1356 (noting that claims that are “so result-
focused, so functional, as to effectively cover any solution
to an identified problem” are frequently held ineligible
under § 101). In short, the ’002 patent identifies a need,
but the claims fail to provide a concrete solution to ad-
dress that need.
Accordingly, these claims fail under step two as well
and are thus ineligible under § 101. 7
CONCLUSION
For the foregoing reasons, we affirm the district court.
AFFIRMED-IN-PART, VACATED-IN-PART, AND
REMANDED-IN-PART
7 Although we only address representative claim
40, we have reviewed the remaining claims and conclude
nothing in addition to the elements recited in claim 40
transforms the abstract idea into patentable subject
matter.