RECOGNICORP, LLC v. NINTENDO CO., LTD.855 F.3d 1322 (2017)

RECOGNICORP, LLC, Plaintiff -Appellant
v.
NINTENDO CO., LTD., Nintendo of America, Inc., Defendants-Appellees.

United States Court of Appeals, Federal Circuit.

Decided: April 28, 2017.

BACKGROUND

1. The '303 Patent U.S. Patent No. 8,005,303 ("'303 patent") patent is entitled "Method and Apparatus for Encoding/Decoding Image Data.". It teaches a method and apparatus for building a composite facial image using constituent parts.

Prior to the invention disclosed in the '303 patent, composite facial images typically were stored in file formats such as "bitmap," "gif," or "jpeg." But these file formats required significant memory, and compressing the images often resulted in decreased image quality. Digital transmission of these images could be difficult. The '303 patent sought to solve this problem by encoding the image at one end through a variety of image classes that required less memory and bandwidth, and at the other end decoding the images.

Encoding

Decoding

Claim 1 reads: 

“A method for creating a composite image, comprising:

displaying facial feature images on a first area of a first display via a first device associated with the first display, wherein the facial feature images are associated with facial feature element codes;

selecting a facial feature image from the first area of the first display via a user interface associated with the first device, wherein the first device incorporates the selected facial feature image into a composite image on a second area of the first display, wherein the composite image is associated with a composite facial image code having at least a facial feature element code and wherein the composite facial image code is derived by performing at least one multiplication operation on a facial code using one or more code factors as input parameters to the multiplication operation; and

reproducing the composite image on a second display based on the composite facial image code.”

Natural Phenomena

In March 2015, Nintendo filed a motion for judgment on the pleadings, asserting that the claims were ineligible under 35 U.S.C. § 101. Section 101 provides that "[w]hoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor...." There is an exception to that general principle: subject matter directed to laws of nature, natural phenomena, or abstract ideas is not patent-eligible.

Referring to Alice Corp. v. CLS Bank Int'l, ___ U.S. ___, 134 S.Ct. 2347, 2354, 189 L.Ed.2d 296 (2014) the Court states that the Supreme Court has established a two-step test to determine whether patent claims are directed to ineligible subject matter. In the first step, it is determined whether the claims at issue are directed to one of the patent-ineligible concepts. If the answer in step one is yes, it is then asked, what else is there in the claims before us? In other words, step two asks whether the patent claims an inventive concept sufficient to transform the claimed abstract idea into a patent-eligible application.

DISCUSSION

A. Alice Step One

The Court stated under the first step of Alice, 573 U.S. 208 (2014) United States Supreme Court when deciding whether the claims are directed at an abstract idea, the inquiry often is whether the claims are directed to a specific means or method for improving technology or whether they are simply directed to an abstract end-result. If the claims are not directed to an abstract idea, the inquiry ends.

Abstract Idea

Image by rawpixel.com

The Court concluded that claim 1 is directed to the abstract idea of encoding and decoding image data. It claims a method whereby a user displays images on a first display, assigns image codes to the images through an interface using a mathematical formula, and then reproduces the image based on the codes.

This method reflects standard encoding and decoding, an abstract concept long utilized to transmit information. Organizing, displaying, and manipulating data encoded for human- and machine-readability is directed to an abstract concept. Morse code, ordering food at a fast food restaurant via a numbering system, and Paul Revere's "one if by land, two if by sea" signaling system all exemplify encoding at one end and decoding at the other end. 

Mathematical Formula

RecogniCorp argued that claiming the use of a mathematical formula does not necessarily render a patent ineligible. The Court agreed. In Diamond v. Diehr, 450 U.S. 175, 101 S.Ct. 1048, 67 L.Ed.2d 155 (1981), the Supreme Court held that despite a method claim's recitation of a mathematical formula, "a physical and chemical process for molding precision synthetic rubber products falls within the § 101 categories of possibly patentable subject matter."

The Supreme Court focused not on the presence of a mathematical formula but on the subject matter of the claims as a whole. The Court concluded that a claim containing a mathematical formula satisfies § 101 when it implements or applies that formula in a structure or process which, when considered as a whole, is performing a function which the patent laws were designed to protect. Diehr is distinguishable because, outside of the math, claim 1 of the '303 patent is not directed to otherwise eligible subject matter. Adding one abstract idea (math) to another abstract idea (encoding and decoding) does not render the claim non-abstract.

The Court distinguished Enfish, LLC v. Microsoft Corp., 822 F.3d 1327, 1338 (Fed. Cir. 2016), In that unlike Enfish, claim 1 does not claim a software method that improves the functioning of a computer. It claims a "process that qualifies as an `abstract idea' for which computers are invoked merely as a tool."

The Court stated this case is similar to Digitech Image Technologies, LLC v. Electronics for Imaging, Inc., 758 F.3d 1344 (Fed. Cir. 2014). There, the claims of the challenged patent were directed to the abstract idea of organizing information through mathematical correlations. A process that started with data, added an algorithm, and ended with a new form of data was directed to an abstract idea. In this case, the '303 patent claims a method whereby a user starts with data, codes that data using "at least one multiplication operation," and ends with a new form of data. The Court concluded that there is no material difference between the Alice step one analysis in Digitech and the analysis here. 

B. Alice Step Two 

In step two of the Alice inquiry, the Court stated we search for an inventive concept sufficient to `transform the nature of the claim into a patent-eligible application.' McRO, 837 F.3d at 1312 (quoting Alice, 134 S.Ct. at 2355). To save a patent at step two, an inventive concept must be evident in the claims. See Alice, 134 S.Ct. at 2357 ("[W]e must examine the elements of the claim to determine whether it contains an `inventive concept.'" (emphasis added)); Synopsys, Inc. v. Mentor Graphics Corp., 839 F.3d 1138, 1149 (Fed. Cir. 2016) ("The § 101 inquiry must focus on the language of the Asserted Claims themselves.").

RecogniCorp contended that the combination of claim elements, i.e., the "particular encoding process using the specific algorithm disclosed" in the patent "transforms" the abstract idea into a patentable invention. RecogniCorp also points out the "facial feature element codes" and "pictorial entity symbols" disclosed in the '303 patent claims. The Court disagreed. In DDR Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245, 1259 (Fed. Cir. 2014) we found that the patent claims satisfied Alice step two because "the claimed solution amounts to an inventive concept for resolving [a] particular Internet-centric problem." 773 F.3d 1245, 1259 (Fed. Cir. 2014). Claim 1 of the '303 patent contains no similar inventive concept. Nothing "transforms" the abstract idea of encoding and decoding into patent-eligible subject matter. Alice, 134 S.Ct. at 2357. Nor does the presence of a mathematical formula dictate otherwise. As we explained above, claim 1 is directed to the abstract idea of encoding and decoding. The addition of a mathematical equation that simply changes the data into other forms of data cannot save it.

RecogniCorp has not alleged a particularized application of encoding and decoding image data. Indeed, claim 1 does not even require a computer; the invention can be practiced verbally or with a telephone. J.A. 28 (col. 4 ll. 59-63); J.A. 32 (col. 11 ll. 53-59). Independent claim 36 claims the use of a computer, but it does exactly what we have warned it may not: tell a user to take an abstract idea and apply it with a computer. Versata Dev. Grp., Inc. v. SAP Am., Inc., 793 F.3d 1306, 1332 (Fed. Cir. 2015).

In sum, the claims of the '303 patent lack an inventive concept that transforms the claimed subject matter from an abstract idea into a patent-eligible application. Alice, 134 S.Ct. at 2357.

CONCLUSION

The claims of the '303 patent are directed to encoding and decoding image data, an abstract idea. The claims provide no inventive concept to render them eligible under § 101. 

COSTS

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