On June 25, 2019, the Court of Appeals for the Federal Circuit handed down CellSpin Soft, Inc. v. Fitbit, Inc.,[1] in what is an important case dealing with patent-eligibility under 35 U.S.C. §101, further hardening by the Fed Circuit that factual allegations in the pleadings can support patent-eligibility. Further, Cellspin held that issued patents are presumptively both valid and patent-eligible.
Cellspin owns U.S. Patent Nos. 8,738,794 (‘794), 8,892,752 (‘752), 9,258,698 (‘698) and 9,749,847 (‘847), which all share the same specification, and are directed to connecting a digital camera with a mobile device that can be published automatically to a website.
Claim 1 of the ‘794 patent was deemed representative, with portions of the claim in italics for emphasis:
1. A method for acquiring and transferring data from a Bluetooth enabled data capture device to one or more web services via a Bluetooth enabled mobile device, the method comprising:
providing a software module on the Bluetooth enabled data capture device;
providing a software module on the Bluetooth enabled mobile device;
establishing a paired connection between the Bluetooth enabled capture device and the Bluetooth enabled mobile device;
acquiring new data in the Bluetooth enabled data capture device, wherein new data is data acquired after the paired connection is established;
detecting and signaling the new data for transfer to the Bluetooth enabled mobile device, wherein detecting and signaling the new data for transfer comprises:
determining the existence of new data for transfer, by the software module on the Bluetooth enabled data capture device; and
sending a data signal to the Bluetooth enabled mobile device, corresponding to existence of new data, by the software module on the Bluetooth enabled data capture device automatically, over the established paired Bluetooth connection, wherein the software module on the Bluetooth enabled mobile device listens for the data signal sent from the Bluetooth enabled data capture device, wherein if permitted by the software module on the Bluetooth enabled data capture device, the data signal sent to the Bluetooth enabled mobile device comprises a data signal and one or more portions of the new data;
transferring the new data from Bluetooth enabled data capture device to the Bluetooth enabled mobile device automatically over the paired Bluetooth connection by the software module on the Bluetooth enabled data capture device;
receiving, at the Bluetooth enabled mobile device, the new data from the Bluetooth enabled data capture device;
applying, using the software module on the Bluetooth enabled mobile device, a user identifier to the new data for each destination web service, wherein each user identifier uniquely identifies a particular user of the web service;
transferring the new data received by the Bluetooth enabled mobile device along with a user identifier to the one or more web services, using the software module on the Bluetooth enabled mobile device;
receiving, at the one or more web services, the new data and user identifier from the Bluetooth enabled mobile device, wherein the one or more web services receive the transferred new data corresponding to a user identifier; and
making available, at the one or more web services, the new data received from the Bluetooth enabled mobile device for public or private consumption over the internet, wherein one or more portions of the new data correspond to a particular user identifier.
Cellspin filed a dozen complaints in federal court alleging patent infringement of its patents against several digital camera makers, Fitbit, Inc., Moov, Inc., Nike, Inc. and Fossil, Inc., among others. The defendants filed an omnibus motion to dismiss under F.R.C.P. Rule 12(b)(6), which was granted by the district court.
The Fed Circuit panel was composed of Judges Lourie, O’Malley, and Taranto, with Judge O’Malley writing for a unanimous court. She noted that the district court found the ‘794 patent as being directed to the abstract idea of “acquiring, transferring, and publishing data and multimedia content on one or more websites.” The panel agreed with this finding, which is Step One of the Alice patent-eligibility analysis.
Judge O’Malley also noted that the district court found the ‘794 patent did not recite any inventive concept, which is Step Two of the Alice analysis. The district court had concluded that the ‘794 claim elements, e.g., the data capture device and Bluetooth enabled mobile device, represent just generic computer components performing “as expected according to their ordinary use.”
Further, while the district court noted there was a factual dispute about whether various combinations in the ‘794 patent claims amounted elements that were “well-understood, routine and conventional,” it disregarded this notion because, distinguishing Berkheimer,[2] the dispute arose in a post-complaint motion to dismiss, rather than at the summary judgment stage, as it was in Berkheimer.
Here, Judge O’Malley disagreed with the district court.
Cellspin’s allegations [in its complaints] identify several ways in which its application of capturing, transferring, and publishing data was unconventional. For example, Cellspin’s amended complaints noted that prior art devices included “a capture device with built in mobile wireless Internet” . . . [which were] bulky, expensive in terms of hardware, and expensive in terms of requiring a user to purchase an extra and/or separate cellular service for the data capture device. Against this backdrop, Cellspin alleged that it was unconventional to separate the steps of capturing and publishing data so that each step would be performed by a different device linked via a wireless, paired connection.
She faulted the district court in basing its Step Two analysis on a lack of support in the specification. However, consistent with Aatrix,[3] she determined that allegations in the complaint were sufficient enough to warrant patent-eligible claims-in-dispute as potentially being inventive.
She further determined:
Patentees who adequately allege their claims contain inventive concepts survive a §101 eligibility analysis under Rule 12(b)(6) . . . The district court [] erred by ignoring this principle, implicit in Berkheimer and explicit in Aatrix, that factual disputes about whether an aspect of the claims is inventive may preclude dismissal at the pleadings stage under §101.
In the clearest language possible, Judge O’Malley wrote:
To the extent the district court departed from this principle by concluding that issued patents are presumed valid but not presumed patent eligible, it was wrong to do so.
Because an alleged infringer must allege patent-ineligibility as a defense, the infringer must attack the patent’s validity. However, all issued patents remain presumptively valid and patent-eligible until held ineligible by a federal court.
[1] ___F.3d___ (Fed. Cir. 2019) (slip op.), vacating and remanding, 316 F. Supp. 3d 1138, 1143 (N.D. Cal. 2018).
[2] See Berkheimer v. HP Inc., 881 F.3d 1360 (Fed. Cir. 2018).
[3] See Aatrix Software, Inc. v. Green Shades Software, Inc., 882 F.3d 1121, 1128 (Fed. Cir. 2018).