Braemar Manufacturing, LLC v. the Scottcare Corporation

Case: 19-2263 Document: 55 Page: 1 Filed: 07/01/2020
NOTE: This disposition is nonprecedential.
United States Court of Appeals
for the Federal Circuit
______________________
BRAEMAR MANUFACTURING, LLC, CARDIONET,
LLC,
Plaintiffs-Appellants
v.
THE SCOTTCARE CORPORATION, AMBUCOR
HEALTH SOLUTIONS, INC.,
Defendants-Appellees
______________________
2019-2263
______________________
Appeal from the United States District Court for the
Eastern District of Pennsylvania in No. 2:12-cv-02516-
PBT, Judge Petrese B. Tucker.
______________________
Decided: July 1, 2020
______________________
RYAN C. MORRIS, Sidley Austin LLP, Washington, DC,
argued for plaintiffs-appellants. Also represented by
CHING-LEE FUKUDA, BRADFORD J. BADKE, TODD MATTHEW
SIMPSON, New York, NY; NATHAN A. GREENBLATT, Palo
Alto, CA.
KEVIN DOOLEY KENT, Conrad O'Brien, Philadelphia,
PA, argued for defendants-appellees. Also represented by
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2 BRAEMAR MANUFACTURING, LLC v. THE SCOTTCARE
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JOHN GUERNSEY, MEGHAN A. FARLEY, ANDREW S.
GALLINARO.
______________________
Before LOURIE, DYK, and CHEN, Circuit Judges.
LOURIE, Circuit Judge.
Braemar Manufacturing, LLC and CardioNet, LLC
(collectively “CardioNet”) appeal from two decisions of the
United States District Court for the Eastern District of
Pennsylvania holding that the asserted claims of U.S. Pa-
tents 7,941,207 (“the ’207 patent), 7,212,850 (“the ’850 pa-
tent”), 7,907,996 (“the ’996 patent”), and 7,587,237 (“the
’237 patent”) are ineligible for patent under 35 U.S.C.
§ 101. CardioNet, LLC v. ScottCare Corp., 388 F. Supp. 3d
442 (E.D. Pa. 2019); CardioNet, LLC v. ScottCare Corp.,
325 F. Supp. 3d 607 (E.D. Pa. 2018).
In light of our recent decisions in CardioNet, LLC v.
InfoBionic, Inc., No. 20-1018 (Fed. Cir. July 1, 2020), and
CardioNet, LLC v. InfoBionic, Inc., 955 F.3d 1358 (Fed. Cir.
2020), we affirm as to the ’850 and ’996 patents, vacate the
district court’s judgment of ineligibility of the asserted
claims of the ’207 patent, and remand for further
proceedings on the ’207 patent. Because we conclude that
the asserted claims of the ’237 patent recite patent-
ineligible subject matter, we affirm the district court’s
decision with respect to that patent.
BACKGROUND
CardioNet owns the ’207, ’850, ’996, and ’237 patents
(collectively “the asserted patents”), which are generally di-
rected to systems and methods for cardiac monitoring. In
2012, CardioNet sued The ScottCare Corporation
(“ScottCare”) for infringement of the asserted patents in
the Eastern District of Pennsylvania. Subsequently in
2015, CardioNet sued InfoBionic, Inc. for infringement of
the ’850 and ’996 patents in the District of Massachusetts.
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In 2017, CardioNet brought an additional claim against In-
foBionic in the District of Massachusetts for infringement
of the ’207 patent.
On May 4, 2017, the Massachusetts district court is-
sued an order determining that certain claims of the ’850
and ’996 patents are ineligible for patent under 35 U.S.C.
§ 101. CardioNet, LLC v. InfoBionic, Inc., 2017 WL
1788650 (D. Mass. 2017) (“’850/’996 Mass. Decision”).
Thereafter, in this case, ScottCare filed a motion for judg-
ment on the pleadings as to the ’850 and ’996 patents, ar-
guing that CardioNet was collaterally estopped from
continuing to assert infringement of those patents based on
the determination of ineligibility in the ’850/’996 Mass. De-
cision. The Pennsylvania district court granted
ScottCare’s motion on July 12, 2018. CardioNet, LLC v.
ScottCare Corp., 325 F. Supp. 3d 607, 613 (E.D. Pa. 2018).
On September 11, 2018, ScottCare filed an additional
motion for judgment on the pleadings, arguing that the as-
serted claims of the ’207 and ’237 patents are ineligible for
patent under § 101. Before the Pennsylvania district court
ruled on ScottCare’s motion, the Massachusetts district
court issued a second order determining that claims 1–3, 7,
10–12, and 22 of the ’207 patent are ineligible for patent
under § 101. CardioNet, LLC v. InfoBionic, Inc., 348 F.
Supp. 3d. 87 (D. Mass. 2018) (“’207 Mass. Decision”). In
this case, CardioNet also asserted claims 8, 9, 21, and 23 of
the ’207 patent. ScottCare filed additional briefing in the
Pennsylvania district court arguing that CardioNet was
collaterally estopped from continuing to assert infringe-
ment of all asserted claims of the ’207 patent based on the
’207 Mass. Decision, including the claims that were not spe-
cifically addressed by the Massachusetts district court.
On July 11, 2019, the Pennsylvania district court
granted ScottCare’s motion. CardioNet, LLC v. ScottCare
Corp., 388 F. Supp. 3d 442 (E.D. Pa. 2019) (“’207/’237 Pa.
Decision”). Regarding the ’207 patent, the district court
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held that CardioNet was collaterally estopped from assert-
ing claims 1–3, 7, 10–12, and 22 of the ’207 patent based on
the ’207 Mass. Decision. Id. at 460. The court held that
CardioNet was also collaterally estopped from asserting
claims 8, 9, 21, and 23, which were not addressed in the
’207 Mass. Decision, because the court determined that the
differences between those claims and the previously-adju-
dicated claims do not materially alter the question of valid-
ity under § 101. Id. at 462–66.
Regarding the ’237 patent, the court determined that
the asserted claims are ineligible for patent under § 101.
The district court treated claims 25 and 37 as representa-
tive of those asserted, and CardioNet does not challenge
that determination on appeal. Claim 37 recites:
37. An article comprising one or more machine-
readable media storing instructions operable to
cause one or more machines to perform operations
for monitoring a cardiac biological signal using
electrocardiographic monitoring instrumentation,
the operations comprising:
receiving a cardiac biological signal that includes
information describing events, wherein events
comprise periods in time when an information con-
tent of the cardiac biological signal is of increased
relevance to a particular purpose and the events
are demarcated by periods of time that are not of
increased relevance to the particular purpose;
determining a measure of merit of information de-
scribing each event, wherein the measure of merit
embodies both the severity of the cardiac condition
indicated by the information describing the event
and an amount of noise in the information describ-
ing the event;
comparing the measure of merit of information de-
scribing the event with a merit criterion;
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transmitting, for medical purposes, information de-
scribing a first proper subset of the events that
have measures of merit meeting the merit criterion
to a remote medical receiver; and
discarding information describing a second proper
subset of the events that have measures of merit
that fail to meet the merit criterion.
’237 patent col. 18 l. 59–col. 20 l. 3.
The district court considered the claims of the ’237 pa-
tent under the Supreme Court’s two-step Alice framework
for determining patent-eligibility. At step one, the court
determined that the claims are directed to the abstract idea
of “collecting, classifying, or otherwise filtering data into
different groups based on identifying characteristics and
transmitting relevant information for review.” ’207/’237
Pa. Decision, 388 F. Supp. 3d at 454. At step two, the court
concluded that “[t]he claim elements, individually or collec-
tively, recite performing the abstract idea with conven-
tional technology and fail to provide any specific, inventive
technological improvement.” Id. at 456.
The district court entered final judgment of patent in-
validity of the ’207, ’237, ’850, and ’996 patents in favor of
ScottCare, and CardioNet appealed. We have jurisdiction
under 28 U.S.C. § 1295(a)(1).
DISCUSSION
We review a district court’s grant of judgment on the
pleadings under Rule 12(c) according to the law of the re-
gional circuit. Allergan, Inc. v. Athena Cosmetics, Inc., 640
F.3d 1377, 1380 (Fed. Cir. 2011) (citing Imation Corp. v.
Koninklijke Philips Elecs. N.V., 586 F.3d 980, 985 (Fed. Cir.
2009)). The Third Circuit reviews orders granting judg-
ment on the pleadings de novo. Zimmerman v. Corbett, 873
F.3d 414, 417 (3d Cir. 2017) (citing Allah v. Al–Hafeez, 226
F.3d 247, 249 (3d Cir. 2000)).
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I. ’207 Patent
This court recently reversed the ’207 Mass. Decision
and held that claims 1–3, 7, 10–12, and 22 of the ’207 are
patent-eligible. CardioNet, LLC v. InfoBionic, Inc., 955
F.3d 1358 (Fed. Cir. 2020). Here, CardioNet has also as-
serted claims 8, 9, 21, and 23. Because the judgment un-
derlying the district court’s application of collateral
estoppel has been reversed, we vacate the district court’s
judgment of ineligibility of all of the asserted claims of the
’207 patent and remand for further proceedings.
II. ’850 and ’996 Patents
This court recently affirmed the ’850/’996 Mass. Deci-
sion holding that claims 1–3, 5–6, 8–9, 21, and 31–32 of the
’850 patent and claims 12 and 23 of the ’996 patent are pa-
tent-ineligible. CardioNet v. InfoBionic, Inc., No. 20-1018,
slip op. at 2 (Fed. Cir. July 1, 2020). Here, CardioNet has
asserted claims 31 and 32 of the ’850 patent and claims 1,
12, and 23 of the ’996 patent. Because the judgment un-
derlying the district court’s application of collateral estop-
pel has been affirmed and CardioNet does not otherwise
argue that the district court erred in its application of the
doctrine, we affirm the district court’s judgment of invalid-
ity of claims 31 and 32 of the ’850 patent and claims 12 and
23 of the ’996 patent. Because claim 1 of the ’996 patent
recites materially indistinct subject matter from claim 12,
we affirm the district court’s judgment of invalidity of that
claim as well.
III. ’237 Patent
We now address the eligibility of the asserted claims of
the ’237 patent. Patent eligibility under § 101 is an issue
of law that may involve underlying issues of fact. See Berk-
heimer v. HP Inc., 881 F.3d 1360, 1365 (Fed. Cir. 2018) (cit-
ing Mortg. Grader, Inc. v. First Choice Loan Servs. Inc., 811
F.3d 1314, 1325 (Fed. Cir. 2016)). We review the district
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court’s ultimate conclusion on patent eligibility de novo.
Id.
To determine whether a patent claims eligible subject
matter, we follow the Supreme Court’s familiar two-step
framework. See Alice Corp. v. CLS Bank Int’l, 573 U.S.
208, 217 (2014); Mayo Collaborative Servs. v. Prometheus
Labs., Inc., 566 U.S. 66, 70–73 (2012). First, we determine
whether the claims are directed to a law of nature, natural
phenomena, or abstract idea. Alice, 573 U.S. at 217. If not,
then the claims are patent-eligible, and the inquiry is over.
If so, we proceed to the second step and determine whether
the claims nonetheless include an “inventive concept” suf-
ficient to “‘transform the nature of the claim’ into a patent-
eligible application.” Id. (quoting Mayo, 566 U.S. at 72–73,
78).
The ’237 patent is entitled “Biological Signal Manage-
ment” and describes methods for selectively transmitting
or discarding data acquired from a cardiac signal based on
relevance. The methods begin by receiving a cardiac signal
and identifying “events” in the received signal. ’237 patent
col. 8 ll. 34–39. An event is a period in time when the in-
formation content of the signal “is deemed to be of in-
creased relevance to a particular purpose.” Id. col. 4 ll. 21–
23. Events are classified into categories based on identified
characteristics, and what is referred to as a “measure of
merit” is determined for each event. Id. col. 8 ll. 39–43. A
measure of merit is “a valuation of an event when applied
to a particular purpose.” Id. col. 8 ll. 44–46. The measure
of merit can be based on, among other factors, the severity
of the event and the amount of noise in the signal during
the event. Id. col. 10 ll. 52–54. For each event, the meas-
ure of merit is compared to a “merit criterion” and, if the
measure of merit is less than the merit criterion, the event
is discarded. Id. col. 8 ll. 65–67.
On appeal, CardioNet argues that the asserted claims
are not directed to an abstract idea, but rather to improved
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electrocardiographic monitoring systems. According to
CardioNet, the claimed methods increase the relevance of
data presented to physicians by automatically identifying
and discarding less clinically-significant events. Even if di-
rected to an abstract idea, CardioNet argues that the meas-
ure of merit—a new algorithm “unlike anything available
in the cardiac-monitoring field”—is an inventive concept
that transforms the claims into a patent-eligible applica-
tion. Appellants’ Br. 51.
ScottCare responds that the claims are directed to the
abstract idea of collecting, classifying, and filtering data.
And because the claims merely implement those steps us-
ing conventional computer technology, ScottCare argues,
they do not contain an inventive concept.
We agree with ScottCare. For computer-implemented
method claims, whether the claims are directed to an ab-
stract idea at Alice step one “often turns on whether the
claims focus on ‘the specific asserted improvement in com-
puter capabilities . . . or, instead, on a process that qualifies
as an abstract idea for which computers are invoked merely
as a tool.’” Finjan, Inc. v. Blue Coat Sys., Inc., 879 F.3d
1299, 1303 (Fed. Cir. 2018) (quoting Enfish, LLC v. Mi-
crosoft Corp., 822 F.3d 1327, 1335–36 (Fed. Cir. 2016)).
Here, the purported improvement is the abstract idea of
classification and filtering of data, not an improvement in
the functioning of computer capabilities. On their face, the
claims are directed to collecting (“receiving a cardiac bio-
logical signal”), classifying (“classifying the events”), and
filtering data into groups based on identifying characteris-
tics (“determining a measure of merit,” “comparing the
measure of merit”), and transmitting the data for review.
Claims that “merely collect, classify, or otherwise filter
data” are ineligible for patent under § 101. Intellectual
Ventures I LLC v. Erie Indem. Co., 850 F.3d 1315, 1327
(Fed. Cir. 2017).
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CardioNet argues that the claims are drawn to specific
technological improvements, but nothing in the claims re-
quires more than generic data manipulation. For example,
the written description explains that events can be catego-
rized based on identifying characteristics and includes ta-
bles associating exemplary characteristics with event
categories. ’237 patent col. 4 ll. 34–42. Thus, categorizing
events amounts to nothing more than matching character-
istics to predefined categories. Similarly, the patent dis-
closes two methods for determining the measure of merit.
Like event categorization, a first method operates based on
a simple lookup table, where event categories are matched
to a predetermined grade of severity. Id. col. 9 ll. 59–62. A
second method determines severity by selecting and apply-
ing a particular equation associated with the appropriate
event category. Id col. 10 ll. 4–24. Both methods require
only basic data processing, and neither is the sort of im-
provement to computer functionality that can make soft-
ware claims non-abstract. Accordingly, we conclude that
the claims are directed to the abstract idea of collecting,
classifying, and filtering data.
Having concluded that the claims are directed to an ab-
stract idea, we consider whether the claims describe an in-
ventive concept at step two. CardioNet principally argues
that the “measure of merit” is an inventive concept suffi-
cient to transform the claims into a patent-eligible applica-
tion. However, as explained above, the measure of merit
amounts at most to the execution of a mathematical for-
mula or selection from a lookup table. The measure of
merit, then, is no more than a mental process, capable of
performance in the human mind or with pen and paper,
and is therefore itself an abstract idea. See Intellectual
Ventures I LLC v. Symantec Corp., 838 F.3d 1307, 1318
(Fed. Cir. 2016). The remaining claim limitations recite
only routine data manipulation, which can be performed by
a generic computing device. Accordingly, whether consid-
ered individually or as an ordered combination, the claims
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recite only the implementation of abstract ideas with con-
ventional techniques and do not recite an inventive con-
cept.
CONCLUSION
For the foregoing reasons, the judgment of the district
court is affirmed as to the ’237, ’850, and ’996 patents, va-
cated as to the ’207 patent, and remanded for further pro-
ceedings on the ’207 patent.
AFFIRMED-IN-PART, VACATED-IN-PART, AND
REMANDED