Patent ineligibility in Ericsson v TCL

Ericsson v TCL Communication Technology Holdings began in 2015 when Ericsson filed suit alleging infringement of five patents against TCL (Case No. 18-2003, 2020 WL 1856498 [Fed Cir, Apr 14, 2020]). TCL successfully challenged four of the patents through inter partes review.

The fifth patent, US Patent No. 7,149,510, stayed in the suit. Before the district court, TCL moved for summary judgment of invalidity against the ’510 patent under 35 USC §101, asserting that its claims are patent-ineligible.

The court disagreed, holding that the claims are directed to eligible subject matter and recite an inventive concept. At trial, Ericsson asserted only claims 1 and 5 of the ’510 patent. The jury found that TCL had wilfully infringed the two claims and awarded damages, and the district court entered judgment against TCL.

On appeal, TCL argued to the Federal Circuit that, among other things, the district court erred in holding the two ’510 patent claims valid under §101. The Federal Circuit reversed the district court under §101, holding that the claims are directed to an abstract idea and do not include an inventive concept that would support patent eligibility.

Because the claims are invalid under §101, the Federal Circuit vacated the district court’s judgment and did not reach the other issues on appeal.

Waiver

The Federal Circuit first analysed whether TCL had waived its §101 argument—Ericsson had argued that federal and Fifth Circuit precedent required a post-trial motion to be filed with the district court.

The Federal Circuit disagreed. Instead, it held that the district court’s §101 holding, based on an analysis of the claim language and case law “was not dependent on any factual issues that were or could have been raised at trial”.

The Federal Circuit held, relying on its own precedent, that the argument was not waived. The court found that the procedural posture was the same as Lighting Ballast Control v Philips Electronics North America, 790 F.3d 1329, 1337 (Fed Cir, 2015). There, the court held that “when the district court denied the movant’s motion for summary judgment, it did not conclude that issues of fact precluded judgment; it effectively entered judgment of validity to the non-movant”.

Here, the court held that when the district court denied summary judgment under §101, it determined the ’510 patent was directed to patent-eligible subject matter.

Accordingly, the district court’s denial of summary judgment was appealable. Following its precedent, the Federal Circuit held that TCL had not waived its argument.

The Federal Circuit also determined that the Fifth Circuit’s precedent supported this holding. The Federal Circuit rejected the argument that Fifth Circuit precedent was such that “following a jury trial on the merits, the Fifth Circuit has jurisdiction to hear an appeal of the district court’s legal conclusions in denying summary judgment, but only if it is sufficiently preserved in a Rule 50 motion”.

The Federal Circuit determined that the district court’s denial of summary judgement, determining that the claims were not invalid under §101, “effectively granted summary judgment of eligibility to Ericsson”. So, the Federal Circuit found the §101 issue was reviewable under Fifth Circuit law without a post-trial motion.

The Federal Circuit next explained that, under both Federal and Fifth Circuit law, it has the discretion to review issues that have been waived. Here, the Federal Circuit found that the patent ineligibility issue was briefed, argued, and decided by the district court, and then briefed and argued again before the Federal Circuit, and that no new issues were present on appeal.

“The court reasoned that although the claims contained ‘technical jargon’, many of the limitations amount to nothing more than this abstract idea.”

The Federal Circuit, therefore, found that the district court’s decision was fully litigated and decided, without any reliance on evidence at trial. The Federal Circuit exercised its discretion, to the extent necessary, to review the summary judgment decision.

Patent ineligibility

Alice/Mayo step one

The Federal Circuit’s holding on the merits followed its §101 precedent: claims directed to ineligible subject matter, an abstract idea, are not patentable without additional elements that transform the nature of the claims into a patent-eligible application.

To determine the question of eligibility here, the Federal Circuit applied the two-step framework of Mayo and Alice. Under this framework, the Federal Circuit first looks to the claims and determines “whether the claims at issue are directed to a patent-ineligible concept” such as an abstract idea.

Here, the Federal Circuit concluded that claims 1 and 5 are directed to the abstract idea of “controlling access to, or limiting permission to, resources”.

The court reasoned that although the claims contained “technical jargon”, many of the limitations amount to nothing more than this abstract idea. In its analysis, the Federal Circuit considered the plain language of claim 1, the limitation that the “security access manager is the decision entity”.

According to the specification, this combined decision entity/security access manager can be the same as the claimed “interception module”. Because the security access manager/decision entity/interception module is the only component of the claimed “access controller”, the court found that all four components collapse into “an access controller for controlling access”.

The court further found that the access controller performs the function of “receiving a request” and then “determining if the request should be granted”. Without anything more to describe how access is controlled, the court found that “the claims are silent as to how access is controlled”.

Claiming functions “without limiting them to technical means for performing the functions that are arguably an advance does not make a claim eligible at [Alice] step one”.

Alice/Mayo step two

If the claims are determined to be directed to ineligible subject matter under Alice step one, the court moves to step two and considers “the elements of each claim both individually and as an ordered combination” to “search for an inventive concept”. Such an inventive concept may support patent eligibility.

However, after considering various arguments, the Federal Circuit determined that none of the remaining claimed elements is sufficient to transform the ’510 patent claims “into anything more than a generic computer for performing the abstract idea of controlling access to resources”.

Even assuming that the collection of claimed elements led to a more efficient way of controlling access to resources, the court relied on its precedent that “merely adding computer functionality to increase the speed or efficiency of the process does not confer patent eligibility on an otherwise abstract idea”.

Essentially, “when a claim does no more than require a generic computer to perform generic computer functions, as here, the claims lack an inventive concept sufficient to demonstrate eligibility at [Alice] step two”.

Summary

Based on the above two-step analysis under Alice/Mayo, the Federal Circuit reversed the district court under §101.

Finnegan acted for TCL Communication in this case.

Jeffrey D Smyth is a partner at Finnegan. He can be contacted at: jeffrey.smyth@finnegan.com.

Max Mauldin is an associate at Finnegan. He can be contacted at: maxwell.mauldin@finnegan.com

Joseph Myles is an associate at Finnegan. He can be contacted at: joseph.myles@finnegan.com