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19 February 2018Patents

Coca-Cola leaves inventor feeling flat after patent win

The US Court of Appeals for the Federal Circuit has confirmed that four patents relating to inventory tracking that were asserted against Coca-Cola are invalid.

Judge Moore delivered the non-precedential decision on Friday, February 16 in the appeals court, affirming the findings made by the US District Court for the Northern District of Georgia in December 2016.

Fred Sawyer, the founder and owner of Automated Tracking Solutions (ATS), is the inventor of four patents relating to the tracking of inventory (US patent numbers 7,551,089; 7,834,766; 8,842,013; and 8,896,449).

According to the decision, Sawyer claimed that prior art inventory control systems had “significant drawbacks” and his invention reduces human responsibility by providing “an automatic locating and tracking system”, integrating radio frequency identification (RFID) technology into the manual process of inventory tracking.

ATS alleged that Coca-Cola, through its relationship with ValidFill, infringed the patents by “using RFID to monitor and track” beverages through ValidFill’s beverage dispending technology.

In response the soft drinks corporation claimed the four patents are “directed to nothing more than an abstract idea” and are therefore invalid. Coca-Cola submitted a motion for judgment, relying on the argument that ATS’s patents failed to meet the eligibility criteria set out in 2014 in the Alice test.

The US Supreme Court laid down a two-part test in Alice. First, the question of whether the patent’s claim relates to an abstract idea. If so, the second stage asks whether the claim amounts to “significantly more” than the abstract idea, turning it into a patent-eligible application of that idea.

ATS said Coca-Cola “misapplied” the Alice test, maintaining the inventive concept of the tracking system.

The district court found the focus of ATS’s patent claims to be on collecting and analysing data. The patent specification “does not address how the RFID technology itself” is an improvement on previous computer capabilities.

The patent claims refer to elements relating to “a generic computer” and lack “any additional elements that transform the abstract idea into a patent-eligible invention”.

ATS maintained its inventive claims on appeal.

Moore confirmed the lower court’s ruling that “the claims do not use these conventional RFID components in a non-conventional combination”, and do not therefore satisfy the Alice test.

The court had further “concerns” relating to the “breadth” of ATS’s claims, which do not refer to any particular configuration or arrangement of the RFID components.

“We do not see any error in the district court’s conclusion that the asserted claims are directed to an abstract idea”, he said. “The asserted claims are directed to patent-ineligible subject matter under section 101”.

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