One Key Lesson from Dropbox Losing on 3 Key Patents
In Dropbox Inc., Ornicus Holdings, LLC v. Synchronoss Technologies, Inc., No. 19-1765 (Fed. Cir., Jun 19, 2020), the US Court of Appeals for the Federal Circuit heard an appeal on patent eligibility of three patents, providing a non-precedential but insightful opinion on proper construction of claims under 35 U.S.C. §101. The Federal Circuit held all three patents not directed to patent-eligible subject matter.
Dropbox and its subsidiary Ornicus Holdings collectively sued Synchronoss Technologies in June 2018 for the alleged infringement of three patents: No. 6,178,505 (the ‘505 patent), No. 6,058,399 (the ‘399 patent), and No. 7,567,541 (the ‘541 patent). Synchronoss motioned to dismiss the claims on the grounds that they were not patent eligible under 35 U.S.C. §101 and therefore invalid. The US District Court for the Northern District of California agreed with Synchronoss, finding all three patents not directed to patent-eligible subject matter. Dropbox appealed. Upon review, the Federal Circuit affirmed, additionally addressing “an issue common to all three patents: the sufficiency of Drop-box’s factual allegations of the patents’ inventiveness.”
35 U.S.C. §101 allows inventors to obtain a patent on “any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof.” This provision, as interpreted by the courts, does not include inventions directed toward “laws of nature, natural phenomena, and abstract ideas” (Mayo Collaborative Services v. Prometheus Labs. Inc., No. 10-1150, S. Ct., March 20, 2012). To assess whether a claim falls within this exception category of 35 U.S.C. §101, the Supreme Court formulated a two-prong test in Alice Corp. v. CLS Bank International, No. 13-298 (S. Ct., June 19, 2014). In step one of Alice, it is determined whether a claim is directed toward an “abstract idea” or otherwise patent-ineligible subject matter. Should the claim not be found directed to patent-ineligible subject matter, it is patent eligible under 35 U.S.C. §101. Only should the claim fail to pass muster in step one do the courts proceed to step two, seeking a “saving inventive concept” to determine whether the additional claim elements alone, or proposed as a combination, render the claim from abstractness to a patent eligible idea.
‘505 patent
The ‘505 patent claims relates to an apparatus for providing data security associated with a user in response to a request for data from the user. The representative Claim 1 recites:
1. Apparatus that provides an information resource in response to a request from a user, the request including an identification of the user according to a mode of identification and the apparatus comprising:
access control information including a sensitivity level associated with the resource and
a trust level associated with the mode of identification; and
an access checker which permits the apparatus to provide the resource only if the trust level for the mode of identification is sufficient for the sensitivity level of the resource.
Turning to step one of Alice, the Federal Circuit found that “the claimed advance, the ‘access checker’ element, … offers nothing but a functional abstraction.” Turning to the specification, the Court found it to “largely treat the ‘access filter’ as a black box,” disclosing few details that explain its construction and methodology. Quoting Ancora Technologies, Inc. v. HTC America, Inc., No. 18-1404 (Fed. Cir., November 16, 2018), ‘improving security … can be a non-abstract computer-functionality improvement if done by a specific technique that departs from earlier approaches to solve a specific computer problem.’ Citing ’505 Patent at col. 2 l. 55–60 (“describing the access filter as ‘a set of software and hardware components in the computer system which checks all requests from outside the internal network for information stored inside the internal network and only sends a request on into the internal network if it is from a source that has the right to access the information’”). Dropbox pointed to the specification of the ‘505 patent, asserting that it solved a technological problem. But the Court held that the recitation of the technical problem by itself is not enough. The Court held that the “patent has to describe how to solve the problem in a manner that encompasses something more than the “principle in the abstract.”
Failing to find a specific disclosed technique for the claimed ‘access filter,’ the Federal Circuit proceeded to step two of Alice, and found that again due to the lack of a disclosed “specific, discrete implementation of the abstract idea,” the claims failed to provide an inventive concept. Quoting BASCOM Global Internet Services, Inc. v. AT&T Mobility LLC, No. 15-1763 (Fed. Cir., June 27, 2016), the Federal Circuit ruled that “an ‘inventive concept’ exists when a claim ‘recite[s] a specific, discrete implementation of the abstract idea’ where the ‘particular arrangement of elements is a technical improvement over [the] prior art.’” The asserted claims failed to provide this implementation as, per Amdocs (Isr.) Ltd. v. Openet Telecom, Inc., No. 15-1180 (Fed. Cir., November 1, 2016), the claims must “describe a specific, unconventional technological solution, narrowly drawn to withstand preemption concerns, to a technological problem.” The vague language in the specifications and lack of clarity of the black box did not pass muster under these preemption concerns.
‘399 patent
The ‘399 patent claims a method for combining a user interface of a website with a file transfer network connection. Representative claims 1 and 25 recite:
1. A method of synchronizing an interactive connection and a non-interactive data transfer connection between a client and a service provider, comprising:
creating an interactive connection;
creating a data transfer connection; and
generating a single session ID for the two connections, which ID associates between the two connections.
25. Apparatus for uploading data files, comprising:
a file upload connection server;
an interactive connection server; and
a synchronizer which synchronizes the operation of respective connections formed by the file upload connection server and by the interactive connection server.
The district court found the claims to be directed to “the abstract idea of exchanging data using a computer. The claimed advancement was to generating a single session ID for the two connections, which ID associates between the two connections. This the court held “is simply a label by which the connections are identified[,] . . . hardly a specific improvement on computer functionality or a nongeneralized computer activity” but “the well-known and abstract concept of data recognition.” The court noted that claim 25 is more specific and adds a notion of synchronizer. However, the synchronizer was not defined structurally and instead was only defined in terms of functionality. Therefore, the court held that the claims are directed to an abstract idea and do not include a saving inventive concept. The Federal Circuit agreed. At step one of Alice, the Federal Court again found the asserted claims lacking of specific technological improvements. The Court noted that “[n]othing in the claims—or the specification’s definition of the claimed elements—delineates the session ID or the synchronizer in a manner providing a specific technique for how these ‘combin[e] the advantages of the FTP and WWW sessions while avoiding their respective drawbacks,’ as Dropbox suggests … Instead, the claims and written description relate to the functional result of the claimed abstractions.” As per Diamond v. Diehr, No. 79-1112 (Supr. Ct., March 3, 1981), “the ‘novelty’ of any element or steps in a process, or even of the process itself, is of no relevance in determining whether the subject matter of a claim falls within the § 101 categories of possibly patentable subject matter.” Thus lacking specific technological solutions, and with potential novelty of the claims irrelevant, the asserted claims failed to pass muster under step one.
In step two of Alice, the Federal Circuit found that “just like with the ’505 patent, the claims merely apply an abstract idea using conventional and well-understood techniques; such claims do not contain an inventive concept at step two.” Dropbox argued that the ’399 patent describes a result of an “unconventional hybrid creation: one that combined the advantages of prior-art technologies without their disadvantages.” However, the Court noted that the ’399 patent does not meaningfully claim or even describe this “hybrid creation.” Specifically, the ‘399 patent does not describe how the “single session ID” or “synchronizer” embody this purported inventive concept.
‘541 patent
The final contested patent, the ‘541 patent, claims, per Dropbox, “a unified tag and data structure”. The representative Claim 1 recites:
1. A method for backing up data stored on a mobile customer premises equipment comprising the steps of:
storing data at the mobile customer premises equipment;
formatting the data stored at the mobile customer premises equipment into fields by determining data fields, identifying which portions of said data correspond to a respective data field, and tagging said data[;]
transmitting the data with a user ID from the mobile customer premises equipment across a mobile network to a server for storage;
retrieving said data from said server across a mobile network in response to one of an expiration of time and request from said mobile customer premises equipment by transmitting said data to said mobile customer premises equipment; and
transmitting said data to said mobile customer premises equipment by transmitting the data in more than one information signal and sequentially numbering each of said information signals.
The district court found claim 1 to be directed to an abstract idea because it recites essentially the same process as a person manually transferring data from one mobile device to another, with the person herself acting as the “server.” The district court also noted that the ‘541 patent describes each of the elements of the claim to be generic computer component without any explanation or technical details how they improve the functionality of the computer. The court also noted that the elements either alone or in combination do not have a saving inventive concept. The Federal Circuit agreed. Once more, under step one of Alice the Federal Circuit found that the claims were directed to a result rather than to a specific solution for a technological problem. Pointing to Two-Way Media Ltd. v. Comcast Cable Communications LLC, No.s 16-2531 | 16-2532 (Fed. Cir., November 1, 2017), the Federal Circuit noted that the asserted claims provided “less of ‘a specific means or method’ than ‘a result or effect that itself is the abstract idea and merely invokes generic processes and machinery.’”
Similarly in step two, the Federal Circuit found no saving inventive concept. It found that “no data structures[as claimed by Dropbox as the inventive concept]—much less any inventive data structures—are evident in the claims,” notwithstanding the fact that the vague and potentially preemptive wording of the specification imply the lack of novelty of the data structure. The Federal Circuit reiterated that, again per Two-Way Media v. Comcast, ‘[t]o save a patent at step two, an inventive concept must be evident in the claims.’
Dropbox further argued that it provided “sufficient factual allegations” of inventive concepts for all three patents to defeat the motion to dismiss. The Federal Circuit again affirmed the District Court’s decision, stating that “Dropbox’s complaint asserts only conclusory allegations insufficient to survive a motion to dismiss.” Dropbox failed to point to details in the specifications to support their arguments, and also failed to raise arguments supported by the content of the claims.
Ultimately the District Court and Federal Circuit’s review of the asserted patents highlighted not only the need for specificity of the inventive concept in the construction of claims, but the need for specificity of factual arguments made in regards to the inventiveness of claims.
Practice Notes: Claims must recite how the technical solution overcomes the technical problem. The technical problem should be described in the specification along with the technical solution and the manner in which the technical solution overcomes the technical problem. The advantages of the technical solution should also be highlighted in the specification. Avoid describing the key claim elements as generic computer functionality or associated with a black box. Instead, describe the key inventive concept with specificity, including specific technological details on how the claimed system is able to achieve the claimed improvements.